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Exhibit 10.30    
    

 
  LOAN AGREEMENT    
    

        THIS LOAN AGREEMENT (this "Agreement") is entered into effective as of September 25, 2006 (the "Effective Date") between DAVID S. WOOD, a married
man ("Mr. Wood"), and CARDIONET, INC., a California corporation ("CardioNet"), with reference to the following facts: 

        A.    Mr. Wood
is currently an employee, but not an officer of director, of CardioNet. Mr. Wood was recently hired by CardioNet, and as a result of such
employment, Mr. Wood must relocate from his residence at 2440 West 24th Street in Minneapolis, Minnesota (the "Minnesota Residence") to near CardioNet's offices in
Conshohocken, Pennsylvania. 

        B.    Mr. Wood
desires to borrow Two Hundred Thousand Dollars ($200,000) from CardioNet (the "Pennsylvania Downpayment Advance") to be used as a downpayment to enable
Mr. Wood to acquire a new residence near CardioNet's offices in Conshohocken, Pennsylvania (the "Pennsylvania Residence"). 

        C.    In
addition, Mr. Wood desires to borrow up to Five Thousand Dollars ($5,000) per calendar month, for an aggregate of up to six (6) calendar months, or up to
an additional Thirty Thousand Dollars ($30,000), from CardioNet (collectively, the "Minnesota Maintenance Advances"), to reimburse Mr. Wood for certain qualifying expenses of maintaining his
Minnesota Residence while he is residing at the Pennsylvania Residence, until the Minnesota Residence is sold. 

        D.    The
Pennsylvania Downpayment Advance and the Minnesota Maintenance Advances, in the aggregate amount of up to Two Hundred and Thirty Thousand Dollars ($230,000)
(individually, an "Advance" and collectively, the "Advances"), shall be evidenced by a Promissory Note (the "Note") in the form requested by CardioNet. 

        E.    In
making the Advances, Mr. Wood is fully aware that CardioNet is relying on the inducements and representations of Mr. Wood set forth in this Agreement,
including the preceding recitals. 

        NOW,
THEREFORE, in consideration of the mutual promises, representations, warranties, covenants and conditions contained in this Agreement, the parties agree as follows: 

        1.     Adoption of Recitals. The parties to this Agreement hereby adopt all of the recitals set forth
above as true, and acknowledge and agree that CardioNet is proceeding in making the Advances strictly in reliance thereon. 

        2.     Advances. CardioNet agrees to loan to Mr. Wood the full amount of the Advances, which
amount shall be used by Mr. Wood solely for the specified purposes set forth in the recitals. CardioNet will disburse the Advances to Mr. Wood by means of a corporate check as such
expenses are incurred, provided the following conditions precedent have been satisfied. 

        3.     Disbursement of Advances. The parties agree that CardioNet shall not be obligated to disburse any
of the Advances to Mr. Wood until each of the following conditions precedent have been met: 

        (a)   CardioNet
holds the executed original Note; and 

        (b)   CardioNet
has received a written request from Mr. Wood for such Advance (a "Disbursement Request") executed by Mr. Wood in a form satisfactory to
CardioNet, which shall include Mr. Wood's written representation that a downpayment is owing on the Pennsylvania Residence, or that a qualifying expense attributable to the Minnesota Residence
has been incurred by Mr. Wood in such amount. 

        4.     Qualifying Expenses. Mr. Wood shall not request the Pennsylvania Downpayment Advance unless
and until such downpayment is due pursuant to the terms of a fully executed purchase and sale agreement for the purchase of residential property to be occupied by Mr. Wood near CardioNet's
offices in Philadelphia, Pennsylvania. A qualifying expense attributable to the Minnesota Residence shall consist of any of the following expenses of maintaining the Minnesota Residence, incurred at
such 

 

time
as Mr. Wood is residing at the Pennsylvania Residence: (i) monthly scheduled mortgage payments; (ii) real property taxes; (iii) homeowner's insurance premiums;
(iv) utilities; and (v) other bona fide expenses of maintaining the Minnesota Residence. Under no circumstances shall Mr. Wood request reimbursement of such expenses greater than
Five Thousand Dollars ($5,000) per calendar month, or for more than six (6) calendar months, or an aggregate amount of Thirty Thousand Dollars ($30,000). 

        5.     Repayment of Advances. Mr. Wood agrees to repay CardioNet, or its order, in accordance with
the terms of the Note, the full amount of the Advances, and interest thereon as provided in the Note, on or before the earliest to occur (the "Maturity Date") of: (i) March 31, 2009 (the
"Stated Maturity Date"); (ii) upon Mr. Wood becoming an officer or director of CardioNet (unless such advances have been approved by CardioNet's shareholders as provided in California
Corporations Code Section 315); (iii) upon the effectiveness of a registration statement filed by CardioNet under the Securities Act of 1933, as amended, covering the registration of
CadioNet's common stock (an "Initial Public Offering"); or (iv) upon the effective date of any voluntary resignation by Mr. Wood as an employee of CardioNet. Mr. Wood will make
said payment to CardioNet at its corporate headquarters, or order. Each payment shall be credited first to unpaid costs of collection following a default, second to interest at the default rate, third
to interest at the stated rate, and the balance, if any, to principal, and interest shall thereupon cease upon the principal so credited. 

        6.     Payment of Interest. Mr. Wood agrees that, in accordance with the Note, the Advances shall
bear interest at the rate of five and 13/100ths percent (5.13%) per annum, based on a 365/366 day year, as applicable, from the date hereof until the Note is paid in full. All accrued but
unpaid interest on the Advances shall be due and payable at the same time as the Advances. In the event that the Advances are not fully paid as of the Maturity Date, all of the remaining Advances and
all accrued but unpaid interest thereon shall thereafter bear interest at the default rate of twelve percent (12%) per annum until paid in full. Such default interest represents a reasonable sum
considering all of the circumstances existing on the date of this Note, and represents a fair and reasonable estimate of the additional costs that will be sustained by CardioNet due to the failure of
Mr. Wood to make timely payment. The parties further agree that proof of actual damage would be costly or inconvenient. 

        7.     Anticipated Repayment from Bonuses. It is anticipated by the parties that
the Advances, and the interest thereon, will be paid from the bonuses that Mr. Wood expects to earn from CardioNet with respect to calendar years 2006 through 2008. However, Mr. Wood
acknowledges and agrees that the Advances, and interest thereon, must be paid to CardioNet regardless of whether Mr. Wood earns any such bonuses, and regardless of whether such bonuses are
sufficient in amount to repay the Advances and pay the interest thereon. Mr. Wood hereby authorizes CardioNet to apply any and all bonuses which would otherwise be payable to Mr. Wood,
to instead be applied toward repayment of the Advances, and payment of any other amounts owing to CardioNet under this Agreement (including any required withholdings), until all such amounts are paid
in full. 

        8.     No Assurance of Bonuses or Continued Employment. Nothing contained in this
Agreement shall constitute any assurance to Mr. Wood that any bonus or bonuses shall be paid to Mr. Wood, or that Mr. Wood's employment is other then "at will" and may be
terminated at any time, with or without cause. 

        9.     Compliance with Laws. The parties both agree to comply with any applicable
federal or state income tax reporting and withholding requirements regarding the Advances and the interest thereon. 

        10.   Usury Savings Clause. All agreements between the parties to this
Agreement are expressly limited so that in no event whatsoever, whether by reason of any Advance made under this Agreement, or otherwise, shall the amount paid or agreed to be paid to CardioNet for
the use, forbearance or detention of the money to be advanced under this Agreement exceed, the highest lawful rate permissible under applicable usury laws. 

2

 

        11.   Costs of Collection. All amounts due under this Agreement and the Note
shall be payable in lawful money of the United States of America and in immediately available funds. Mr. Wood promises to pay all costs of collection, including reasonable attorneys' fees and
costs, which may be paid or incurred in the enforcement of all or any part of this Agreement or the Note, whether or not a suit is filed. 

        12.   Mr. Wood's Representations. Mr. Wood has expressly represented to CardioNet as an
inducement to CardioNet to make the Advances that Mr. Wood will be using the proceeds for the express purposes described above. CardioNet is specifically relying upon Mr. Wood's
representations that neither Mr. Wood, nor anyone related to Mr. Wood, intends to continue to occupy the Minnesota Residence as a personal residence. Based on these representations and
the exemption provided pursuant to 15 U.S.C. §1603(3), the parties acknowledge and agree that this loan transaction is exempted from the Truth in Lending Laws pertaining to consumer
residential loans as set forth in 15 U.S.C. §1601 et seq. 

        13.   Notice. Any notice to either party provided for in this Agreement shall
be given by personal delivery, facsimile transmission or by mailing such notice by first class or certified mail, return receipt requested, addressed as follows: 

	 	If to CardioNet:	 	CardioNet, Inc.

1010 Second Avenue, Suite 700

San Diego, California 92101

Attention: James M. Sweeney

                  Chairman and CEO
	

 	

If to Mr. Wood	
 	

David S. Wood

CardioNet, Inc.

227 Washington Street, Suite 300

Conshohocken, Pennsylvania 19428

Either party may change its address by written notice to the other party. Mailed notices shall be deemed delivered and received three (3) days after deposit in
accordance with this provision in the United States mail. 

        14.   Time of Essence. Time is of the essence for all purposes under this Agreement. 

        15.   Severability. Should any one or more of the provisions of this Agreement, or of any instrument or
agreement entered into pursuant to this Agreement, be determined to be illegal or unenforceable, all other provisions of this Agreement shall be given effect separately from the provision or
provisions determined to be illegal or unenforceable, and shall not be affected thereby. 

        16.   Headings. The headings of the paragraphs of this Agreement have been
inserted for convenience of reference only and do not constitute a part of this Agreement. 

        17.   Governing Law. It is the intention of the parties that the laws of the State of California shall
govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties, as such laws are applied to the agreements entered into and to be
performed entirely within the state of California. 

        18.   Venue. In the event that any cause of action, lawsuit or other proceeding is brought by either
party of this Agreement because of an alleged dispute, breach or misrepresentation in connection with or arising under this agreement, any court of competent jurisdiction in San Diego County shall be
the sole and exclusive venue for such causes of action, lawsuit or proceeding. 

        19.   Attorneys' Fees. In the event that either of the parties to this Agreement commences any
litigation or arbitration against the other party by reason of any claimed breach of this Agreement or 

3

 

dispute
over its interpretation, the prevailing party, as determined by the court or other body having jurisdiction, shall be entitled to have and recover from the non-prevailing party, as
determined by the court or other body having jurisdiction, all reasonable costs and expenses incurred or sustained by such prevailing party in connection with such suit or action, including without
limitation attorneys' fees and court costs. 

        20.   Integration; Assignment; and Amendment. This Agreement, any exhibits attached to this Agreement
and the documents referred to in this Agreement between the parties on the subject matter of this Agreement, and integrate all of the understandings, representation and inducements made between the
parties, and neither party shall be liable or bound to the other party in any manner as to the subject matter in this Agreement, except as specifically set forth in this Agreement, any exhibits
attached to this Agreement and the documents referred to in this Agreement. Mr. Wood may not assign any of his rights, or delegate any of his duties, under this Agreement, without CardioNet's
prior written consent. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of, and be enforceable by, successors and permitted assigns, heirs and personal
representatives. This Agreement may not be amended or supplemented without the written consent of both of the parties. 

        21.   Counterparts; Facsimiles. This Agreement may be executed in counterparts, with the same effect as
if both of the parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together, and shall constitute one and the same instrument. Facsimile
signatures shall be deemed original signatures for all purposes. 

        22.   Independent Counsel. The parties acknowledge and agree that counsel for CardioNet has drafted
this Agreement solely on behalf of, and at the direction of, CardioNet, Mr. Wood acknowledges that he is entitled to be represented by counsel of his own choosing in connection with this
Agreement, and he has been advised to seek advice from his own independent counsel regarding the tax, economic and other consequences of the transactions set forth in this Agreement. Mr. Wood
hereby acknowledges that he has sought advice from independent counsel regarding this agreement, or has willingly and knowingly chosen not to do so. 

4

 

        IN
WITNESS WHEREFORE, the parties have caused this Agreement to be executed on the date first above written. 

	 	 	"Mr. Wood"
	

 	
 	

/s/  DAVID S. WOOD      
 David S. Wood
	

 	
 	

"CardioNet"
	

 	
 	

CARDIONET, INC., a California Corporation
	 	 	 	 
	 	 	By:	/s/  JAMES M. SWEENEY      
 James M. Sweeney, Chairman and CEO

5

QuickLinks

Exhibit 10.30

LOAN AGREEMENTExhibit 10.2

 

 

GRAMERCY REAL ESTATE CDO 2007-1, LTD.,

as Issuer

GRAMERCY REAL ESTATE CDO 2007-1 LLC,

as Co-Issuer

GKK LIQUIDITY LLC,

as Advancing Agent

AND

WELLS FARGO BANK, NATIONAL ASSOCIATION,

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

Custodial Securities Intermediary, Backup Advancing Agent and Notes Registrar

INDENTURE

Dated as of August 8, 2007

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE 1

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  Section 1.1

  	
  Definitions.

  	
  3

  
	
  Section 1.2

  	
  Assumptions as to Pledged Obligations.

  	
  89

  
	
  Section 1.3

  	
  Interest Calculation Convention.

  	
  91

  
	
  Section 1.4

  	
  Rounding Convention.

  	
  91

  
	
  Section 1.5

  	
  Servicing Override.

  	
  92

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
   

  	
   

  	
   

  
	
  THE NOTES

  	
   

  
	
   

  	
   

  
	
  Section 2.1

  	
  Forms Generally.

  	
  93

  
	
  Section 2.2

  	
  Forms of Notes and Certificate of Authentication.

  	
  93

  
	
  Section 2.3

  	
  Authorized Amount; Stated Maturity; Denominations.

  	
  94

  
	
  Section 2.4

  	
  Execution, Authentication, Delivery and Dating.

  	
  95

  
	
  Section 2.5

  	
  Registration, Registration of Transfer and Exchange.

  	
  96

  
	
  Section 2.6

  	
  Mutilated, Defaced, Destroyed, Lost or Stolen Note.

  	
  105

  
	
  Section 2.7

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

  	
  106

  
	
  Section 2.8

  	
  Persons Deemed Owners.

  	
  117

  
	
  Section 2.9

  	
  Cancellation.

  	
  118

  
	
  Section 2.10

  	
  Global Securities; Temporary Notes.

  	
  118

  
	
  Section 2.11

  	
  U.S. Tax Treatment of Notes.

  	
  119

  
	
  Section 2.12

  	
  Authenticating Agents.

  	
  120

  
	
  Section 2.13

  	
  Forced Sale on Failure to Comply with Restrictions.

  	
  121

  
	
  Section 2.14

  	
  No Gross-Up.

  	
  122

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
   

  	
   

  	
   

  
	
  CONDITIONS PRECEDENT; PLEDGED OBLIGATIONS

  	
   

  
	
   

  	
   

  
	
  Section 3.1

  	
  General Provisions.

  	
  123

  
	
  Section 3.2

  	
  Security for Notes.

  	
  125

  
	
  Section 3.3

  	
  Transfer of Pledged Obligations.

  	
  127

  

 

i

 

	
  ARTICLE 4

  	
   

  
	
   

  	
   

  	
   

  
	
  SATISFACTION AND DISCHARGE

  	
   

  
	
   

  	
   

  
	
  Section 4.1

  	
  Satisfaction and Discharge of Indenture.

  	
  134

  
	
  Section 4.2

  	
  Application of Trust Money.

  	
  135

  
	
  Section 4.3

  	
  Repayment of Monies Held by Paying Agent.

  	
  135

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
   

  	
   

  	
   

  
	
  REMEDIES

  	
   

  
	
   

  	
   

  
	
  Section 5.1

  	
  Events of Default.

  	
  136

  
	
  Section 5.2

  	
  Acceleration of Maturity; Rescission and Annulment.

  	
  139

  
	
  Section 5.3

  	
  Collection of Indebtedness and Suits for Enforcement by Trustee.

  	
  141

  
	
  Section 5.4

  	
  Remedies.

  	
  145

  
	
  Section 5.5

  	
  Preservation of Assets.

  	
  147

  
	
  Section 5.6

  	
  Trustee May Enforce Claims Without Possession of Notes.

  	
  148

  
	
  Section 5.7

  	
  Application of Money Collected.

  	
  148

  
	
  Section 5.8

  	
  Limitation on Suits.

  	
  149

  
	
  Section 5.9

  	
  Unconditional Rights of Noteholders to Receive Principal and Interest.

  	
  149

  
	
  Section 5.10

  	
  Restoration of Rights and Remedies.

  	
  150

  
	
  Section 5.11

  	
  Rights and Remedies Cumulative.

  	
  150

  
	
  Section 5.12

  	
  Delay or Omission Not Waiver.

  	
  150

  
	
  Section 5.13

  	
  Control by the Controlling Class.

  	
  150

  
	
  Section 5.14

  	
  Waiver of Past Defaults.

  	
  151

  
	
  Section 5.15

  	
  Undertaking for Costs.

  	
  151

  
	
  Section 5.16

  	
  Waiver of Stay or Extension Laws.

  	
  152

  
	
  Section 5.17

  	
  Sale of Assets.

  	
  152

  
	
  Section 5.18

  	
  Action on the Notes.

  	
  153

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
   

  	
   

  	
   

  
	
  THE TRUSTEE

  	
   

  
	
   

  	
   

  
	
  Section 6.1

  	
  Certain Duties and Responsibilities.

  	
  154

  
	
  Section 6.2

  	
  Notice of Default.

  	
  156

  
	
  Section 6.3

  	
  Certain Rights of Trustee.

  	
  157

  
	
  Section 6.4

  	
  Not Responsible for Recitals or Issuance of Notes.

  	
  158

  
	
  Section 6.5

  	
  May Hold Notes.

  	
  159

  
	
  Section 6.6

  	
  Money Held in Trust.

  	
  159

  
	
  Section 6.7

  	
  Compensation and Reimbursement.

  	
  159

  
	
  Section 6.8

  	
  Corporate Trustee Required; Eligibility.

  	
  160

  
	
  Section 6.9

  	
  Resignation and Removal; Appointment of Successor.

  	
  161

  
	
  Section 6.10

  	
  Acceptance of Appointment by Successor.

  	
  162

  

 

ii

 

	
  Section 6.11

  	
  Merger, Conversion, Consolidation or Succession to Business of Trustee.

  	
  163

  
	
  Section 6.12

  	
  Co-Trustees and Separate Trustee.

  	
  163

  
	
  Section 6.13

  	
  Certain Duties of Trustee Related to Delayed Payment of Proceeds.

  	
  164

  
	
  Section 6.14

  	
  Representations and Warranties of the Trustee.

  	
  165

  
	
  Section 6.15

  	
  Requests for Consents.

  	
  166

  
	
  Section 6.16

  	
  Withholding.

  	
  166

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 7.1

  	
  Payment of Principal and Interest.

  	
  167

  
	
  Section 7.2

  	
  Maintenance of Office or Agency.

  	
  167

  
	
  Section 7.3

  	
  Money for Note Payments to be Held in Trust.

  	
  168

  
	
  Section 7.4

  	
  Existence of the Issuer and Co-Issuer.

  	
  170

  
	
  Section 7.5

  	
  Protection of Assets.

  	
  172

  
	
  Section 7.6

  	
  Notice of Any Amendments.

  	
  173

  
	
  Section 7.7

  	
  Performance of Obligations.

  	
  173

  
	
  Section 7.8

  	
  Negative Covenants.

  	
  174

  
	
  Section 7.9

  	
  Statement as to Compliance.

  	
  176

  
	
  Section 7.10

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

  	
  177

  
	
  Section 7.11

  	
  Successor Substituted.

  	
  180

  
	
  Section 7.12

  	
  No Other Business.

  	
  180

  
	
  Section 7.13

  	
  Reporting.

  	
  180

  
	
  Section 7.14

  	
  Calculation Agent.

  	
  181

  
	
  Section 7.15

  	
  Certain Tax Matters Regarding Assets.

  	
  182

  
	
  Section 7.16

  	
  Maintenance of Listing.

  	
  183

  
	
  Section 7.17

  	
  Post-Closing Purchases.

  	
  184

  
	
  Section 7.18

  	
  Purchases by the Collateral Manager.

  	
  184

  
	
  Section 7.19

  	
  Provision Regarding Certain Tax Information.

  	
  184

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  
	
   

  	
   

  	
   

  
	
  SUPPLEMENTAL INDENTURES

  	
   

  
	
   

  	
   

  
	
  Section 8.1

  	
  Supplemental Indentures Without Consent of Securityholders.

  	
  184

  
	
  Section 8.2

  	
  Supplemental Indentures with Consent of Securityholders.

  	
  186

  
	
  Section 8.3

  	
  Execution of Supplemental Indentures.

  	
  189

  
	
  Section 8.4

  	
  Effect of Supplemental Indentures.

  	
  189

  
	
  Section 8.5

  	
  Reference in Notes to Supplemental Indentures.

  	
  189

  
	
  Section 8.6

  	
  Certain Consents Required for all Supplemental Indentures.

  	
  190

  

 

iii

 

	
  ARTICLE 9

  	
   

  
	
   

  	
   

  	
   

  
	
  REDEMPTION OF SECURITIES; REDEMPTION PROCEDURES

  	
   

  
	
   

  	
   

  
	
  Section 9.1

  	
  Clean-up Call; Tax Redemption and Optional Redemption.

  	
  191

  
	
  Section 9.2

  	
  Auction Call Redemption.

  	
  192

  
	
  Section 9.3

  	
  Notice of Redemption.

  	
  193

  
	
  Section 9.4

  	
  Notice of Redemption or Maturity by the Issuer.

  	
  194

  
	
  Section 9.5

  	
  Notes Payable on Redemption Date.

  	
  195

  
	
  Section 9.6

  	
  Mandatory Redemption.

  	
  195

  
	
  Section 9.7

  	
  Special Amortization.

  	
  196

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCOUNTS, ACCOUNTINGS AND RELEASES

  	
   

  
	
   

  	
   

  
	
  Section 10.1

  	
  Collection of Money; Custodial Account.

  	
  197

  
	
  Section 10.2

  	
  Collection Accounts.

  	
  197

  
	
  Section 10.3

  	
  Payment Account.

  	
  199

  
	
  Section 10.4

  	
  Delayed Funding Obligations Account.

  	
  200

  
	
  Section 10.5

  	
  Expense Account.

  	
  201

  
	
  Section 10.6

  	
  Asset Hedge Account.

  	
  202

  
	
  Section 10.7

  	
  Interest Advances.

  	
  202

  
	
  Section 10.8

  	
  Reports by Parties.

  	
  206

  
	
  Section 10.9

  	
  Reports; Accountings.

  	
  206

  
	
  Section 10.10

  	
  Release of Pledged Collateral Debt Securities; Release of Assets.

  	
  215

  
	
  Section 10.11

  	
  Reports by Independent Accountants.

  	
  216

  
	
  Section 10.12

  	
  Reports to Rating Agencies.

  	
  217

  
	
  Section 10.13

  	
  [Reserved].

  	
  218

  
	
  Section 10.14

  	
  Certain Procedures.

  	
  218

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  
	
   

  	
   

  	
   

  
	
  APPLICATION OF MONIES

  	
   

  
	
   

  	
   

  
	
  Section 11.1

  	
  Disbursements of Monies from Payment Account.

  	
  220

  
	
  Section 11.2

  	
  Trust Accounts.

  	
  233

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  
	
   

  	
   

  	
   

  
	
  SALE OF COLLATERAL DEBT SECURITIES

  	
   

  
	
   

  	
   

  
	
  Section 12.1

  	
  Sales of Collateral Debt Securities.

  	
  234

  
	
  Section 12.2

  	
  Replenishment Criteria and Trading Restrictions.

  	
  237

  
	
  Section 12.3

  	
  Conditions Applicable to all Transactions Involving Sale or Grant.

  	
  239

  

 

iv

 

	
  Section 12.4

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

  	
  240

  
	
  Section 12.5

  	
  Modifications to Collateral Quality Tests, Par Value Coverage Tests or
  Special Amortization.

  	
  243

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  
	
   

  	
   

  	
   

  
	
  NOTEHOLDERS’ RELATIONS

  	
   

  
	
   

  	
   

  
	
  Section 13.1

  	
  Subordination.

  	
  244

  
	
  Section 13.2

  	
  Standard of Conduct.

  	
  250

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 14.1

  	
  Form of Documents Delivered to the Trustee.

  	
  251

  
	
  Section 14.2

  	
  Acts of Securityholders.

  	
  252

  
	
  Section 14.3

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

  	
  252

  
	
  Section 14.4

  	
  Notices to Noteholders; Waiver.

  	
  254

  
	
  Section 14.5

  	
  Effect of Headings and Table of Contents.

  	
  255

  
	
  Section 14.6

  	
  Successors and Assigns.

  	
  255

  
	
  Section 14.7

  	
  Severability.

  	
  255

  
	
  Section 14.8

  	
  Benefits of Indenture.

  	
  256

  
	
  Section 14.9

  	
  Governing Law.

  	
  256

  
	
  Section 14.10

  	
  Submission to Jurisdiction.

  	
  256

  
	
  Section 14.11

  	
  Counterparts.

  	
  257

  
	
  Section 14.12

  	
  Liability of Co-Issuers.

  	
  257

  
	
  ARTICLE 15 

  	
   

  
	
   

  	
   

  	
   

  
	
  ASSIGNMENT OF COLLATERAL DEBT SECURITIES PURCHASE
  AGREEMENTS, COLLATERAL MANAGEMENT AGREEMENT, ASSET SERVICING AGREEMENT AND
  THE CDO SERVICING AGREEMENT

  	
   

  
	
   

  	
   

  
	
  Section 15.1

  	
  Assignment of Collateral Debt Securities Purchase Agreement, the
  Collateral Management Agreements, the Asset Servicing Agreement and the CDO
  Servicing Agreement.

  	
  258

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
   

  
	
   

  	
   

  	
   

  
	
  HEDGE AGREEMENT AND OTHER PROVISIONS

  	
   

  
	
   

  	
   

  
	
  Section 16.1

  	
  Issuer’s Obligations under Hedge Agreement.

  	
  261

  

 

v

 

	
  Section 16.2

  	
  Collateral Debt Securities Purchase Agreements.

  	
  265

  
	
  Section 16.3

  	
  Cure Rights.

  	
  265

  
	
  Section 16.4

  	
  Purchase Right; Majority Preferred Shares Holder.

  	
  266

  
	
  Section 16.5

  	
  Representations and Warranties Related to Subsequent Collateral Debt
  Securities.

  	
  267

  
	
  Section 16.6

  	
  Operating Advisor; Additional Debt.

  	
  268

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
   

  
	
   

  	
   

  	
   

  
	
  ADVANCING AGENT

  	
   

  
	
   

  	
   

  
	
  Section 17.1

  	
  Liability of the Advancing Agent.

  	
  269

  
	
  Section 17.2

  	
  Merger or Consolidation of the Advancing Agent.

  	
  269

  
	
  Section 17.3

  	
  Limitation on Liability of the Advancing Agent and Others.

  	
  269

  
	
  Section 17.4

  	
  Representations and Warranties of the Advancing Agent.

  	
  270

  
	
  Section 17.5

  	
  Resignation and Removal; Appointment of Successor.

  	
  271

  
	
  Section 17.6

  	
  Acceptance of Appointment by Successor Advancing Agent.

  	
  272

  

 

vi

 

SCHEDULES

 

	
  Schedule A

  	
   

  	
  Moody’s Recovery Rate Assumptions

  
	
  Schedule B

  	
   

  	
  Standard & Poor’s Recovery Matrix

  
	
  Schedule C

  	
   

  	
  Standard & Poor’s Non-Eligible Notching Asset
  Types

  
	
  Schedule D

  	
   

  	
  Standard & Poor’s Eligible Notching Asset Types

  
	
  Schedule E

  	
   

  	
  Test Matrices

  
	
  Schedule F

  	
   

  	
  Gramercy Real Estate CDO 2007-1 Collateral Debt
  Securities Listing

  
	
  Schedule G

  	
   

  	
  LIBOR

  
	
  Schedule H

  	
   

  	
  List of Authorized Officers of Collateral Manager

  
	
  Schedule I

  	
   

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

  
	
  Schedule J

  	
   

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

  
	
  Schedule K

  	
   

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

  
	
  Schedule L

  	
   

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

  
	
  Schedule M

  	
   

  	
  Form of Representations and Warranties Re:
  Collateral Debt Securities Consisting of CMBS Securities, Single Asset
  Mortgage Securities, Single Borrower Mortgage Securities and Rake Bonds

  
	
  Schedule N

  	
   

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

  
	
  Schedule O

  	
   

  	
  [RESERVED]

  
	
  Schedule P

  	
   

  	
  [RESERVED]

  
	
  Schedule Q

  	
   

  	
  Form of Participation Agreement Provision

  
	
  Schedule R

  	
   

  	
  Primary Servicing Agreements

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Global Security

  
	
  Exhibit B

  	
   

  	
  Form of Certificated Security

  
	
  Exhibit C

  	
   

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

  
	
  Exhibit D

  	
   

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

  
	
  Exhibit E-1

  	
   

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

  
	
  Exhibit E-2

  	
   

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

  

 

vii

 

	
  Exhibit F

  	
   

  	
  [RESERVED]

  
	
  Exhibit G

  	
   

  	
  [RESERVED]

  
	
  Exhibit H

  	
   

  	
  [RESERVED]

  
	
  Exhibit I

  	
   

  	
  [RESERVED]

  
	
  Exhibit J

  	
   

  	
  [RESERVED]

  
	
  Exhibit K

  	
   

  	
  Form of Trust Receipt

  
	
  Exhibit L

  	
   

  	
  Form of Request for Release of Documents and Receipt

  
	
  Exhibit M

  	
   

  	
  Form of Information Request from Beneficial Owners
  of Notes

  
	
  Exhibit N

  	
   

  	
  Origination Agreement

  

 

viii

INDENTURE, dated as of
August 8, 2007, by and among GRAMERCY REAL ESTATE CDO 2007-1, LTD., a Cayman
Islands exempted company with limited liability (the “Issuer”), GRAMERCY REAL ESTATE CDO 2007-1 LLC, a
limited liability company formed under the laws of Delaware (the “Co-Issuer”), WELLS
FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trustee,
paying agent, calculation agent, transfer agent, custodial securities
intermediary, backup advancing agent and notes registrar (herein, together with
its permitted successors and assigns in the trusts hereunder, the “Trustee”) and GKK
LIQUIDITY LLC (“GKK Liquidity”),
a Delaware limited liability company, as advancing agent (herein, together with
its permitted successors and assigns in the trusts hereunder, the “Advancing Agent”).

PRELIMINARY STATEMENT

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

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

GRANTING CLAUSES

The Issuer hereby Grants
to the Trustee, for the benefit and security of the Secured Parties, all of its
right, title and interest in, to and under, in each case, whether now owned or
existing, or hereafter acquired or arising (other than Excepted Assets), (a)
the Collateral Debt Securities listed in the Schedule of Closing Date
Collateral Debt Securities which the Issuer purchases on the Closing Date and
causes to be delivered to the Trustee (directly or through an agent or bailee)
herewith, all payments thereon or with respect thereto and all Collateral Debt
Securities which are delivered to the Trustee (directly or through an agent or
bailee) after the Closing Date pursuant to the terms hereof and all payments
thereon or with respect thereto, (b) the rights of the Issuer under each Hedge
Agreement, (c) the Payment Account, the Interest Collection Account, the
Principal Collection Account, the Asset Hedge Account, the Expense Account, the
Delayed Funding Obligations Account, the Custodial Account and all Eligible
Investments purchased with funds on deposit therein, each Hedge Termination
Account, each Hedge Collateral Account and all related security entitlements
and all income from the investment of funds in any of the foregoing, (d) the
rights of the Issuer under each Collateral Debt Securities Purchase Agreement
(including any Collateral Debt Securities Purchase Agreement entered into after
the Closing Date), the Insurance Policy (solely with respect to the Class A-2
Notes), the Collateral Management Agreement, the Asset Servicing Agreement, the
CDO Servicing Agreement and any other primary or special servicing agreement,
(e) all Cash or Money delivered to the Trustee (or its bailee) in respect of the
Notes or the Assets, (f) all other investment property, accounts, instruments
and general intangibles in

 

 

which the Issuer
has an interest, other than the Excepted Assets and (g) all proceeds with
respect to the foregoing clauses (a)-(f). 
The collateral described in the foregoing clauses (a)-(g) is referred to
as the “Assets.”  For the avoidance of
doubt, the Assets shall not include the Excepted Assets.  Such Grants are made, however, in trust, to
secure the Notes (except for the Grant of the Insurance Policy, which shall
secure only the Class A-2 Notes) and each Hedge Agreement, subject to the
Priority of Payments, equally and ratably without prejudice, priority or
distinction between any Note and any other Note by reason of difference in time
of issuance or otherwise, except as expressly provided in this Indenture, and
to secure (i) the payment of all amounts due on and in respect of the Notes and
each Hedge Agreement in accordance with their terms, (ii) the payment of all
other sums payable under this Indenture and (iii) compliance with the
provisions of this Indenture, all as provided in this Indenture.  The foregoing Grant shall, for the purpose of
determining the property subject to the lien of this Indenture (but not for the
purpose of determining compliance with any of the Par Value Coverage Tests or
compliance by the Issuer with any of the other provisions hereof), be deemed to
include any securities and any investments granted by or on behalf of the
Issuer to the Trustee for the benefit of the Noteholders and each Hedge
Counterparty, whether or not such securities or such investments satisfy the
criteria set forth in the definitions of “Collateral Debt Security” or “Eligible
Investment,” as the case may be.

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

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

 

2

 

ARTICLE
1

DEFINITIONS

Section 1.1             Definitions.

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

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

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

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

“Accountant’s Report”:  A report of a firm of Independent certified
public accountants of recognized national reputation appointed by the Issuer
pursuant to Section 10.9(a), which may be the firm of independent
accountants that reviews or performs procedures with respect to the financial
reports prepared by the Issuer or the Collateral Manager.

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

“Acquired Property”:  Any real property located in metropolitan New
York or Washington, D.C. in which the Issuer acquires a direct or indirect interest
by foreclosure or other

 

3

 

similar conveyance, or by
transfer in lieu thereof, as a result of the Issuer’s ownership of a related
Collateral Debt Security.

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

“Actual Rating”:  With respect to any CMBS Security, the
actual, expressly monitored, outstanding public rating assigned by a Rating
Agency without reference to any other rating by another Rating Agency and which
rating by its terms addresses the full scope of the payment promise of the
obligor on such CMBS Security.

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

“Advancing Agent Fee”:  The fee payable quarterly in arrears on each
Payment Date to the Advancing Agent in accordance with the Priority of
Payments, equal to 0.01% per  annum on the Aggregate Outstanding Amount of the Class A
Notes and the Class B Notes on such Payment Date prior to giving effect to
distributions with respect to such Payment Date.

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

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

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

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

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

 

4

 

“Aggregate Collateral Balance”:  The aggregate Principal Balance of (i)
Collateral Debt Securities and (ii) Eligible Investments purchased with
Principal Proceeds.

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

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

“Applicable
Break-Even Loss Rate”  :The Class A-1
Break-Even Loss Rate, the Class A-2 Break-Even Loss Rate, the Class A-3
Break-Even Loss Rate, the Class B-FL Break-Even Loss Rate, the Class B-FX
Break-Even Loss Rate, the Class C-FL Break-Even Loss Rate, the Class C-FX
Break-Even Loss Rate, the Class D Break-Even Loss Rate, the Class E Break-Even
Loss Rate, the Class F Break-Even Loss Rate, the Class G-FL Break-Even Loss
Rate, the Class G-FX Break-Even Loss Rate, the Class H-FL Break-Even Loss Rate,
the Class H-FX Break-Even Loss Rate, the Class J Break-Even Loss Rate or the
Class K Break-Even Loss Rate, as applicable.

“Applicable Recovery Rate”:  The lower of (a) the Moody’s Recovery Rate
and (b) the S&P Recovery Rate, as applicable; provided, however,
with respect to clause (b) only, (i) to the extent that the Aggregate Principal
Balance of Loans backed or otherwise invested in properties located in the
State of New York exceeds 55.0% and is less than or equal to 60.0% of the Aggregate
Principal Balance of the Loans as of the Closing Date on such Measurement Date,
the applicable percentage set forth in Schedule B (the Standard & Poor’s
Recovery Matrix) hereto with respect to such portion of such Loans that exceeds
55.0% and is less than or equal to 60.0% of the Aggregate Principal Balance of
the Loans as of the Closing Date on such Measurement Date shall be deemed to be
reduced by 5.0% and (ii) to the extent that the Aggregate Principal Balance of
Loans that are collateralized or backed by interests on Hospitality Properties
exceeds 37.5% and is less than or equal to 40.0% of the Aggregate Principal
Balance of the Loans as of the Closing Date on such Measurement Date, the
applicable percentage set forth in Schedule B (the Standard & Poor’s
Recovery Matrix) hereto with respect to such portion of such Loans that exceeds
37.5% and is less than or equal to 40.0% of the Aggregate Principal Balance of
the Loans as of the Closing Date on such Measurement Date shall be deemed to be
reduced by 5.0%.

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

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

“Asset Hedge
Account”:  The account established
pursuant to Section 10.6 hereof.

 

5

 

“Asset Hedge
Schedule”:  With regard to each
Non-Quarterly Pay Asset, a schedule prepared by the Collateral Manager and
delivered to the Trustee and each of the Rating Agencies not less than one
Business Day prior to the date of acquisition thereof by the Issuer which sets
forth with regard to such Non-Quarterly Pay Asset (x) the portion of each
scheduled payment of interest in respect of such Non-Quarterly Pay Asset that
is to be deposited in the Collection Account when received in cash by the
Issuer, (y) the portion of such payment that is to be deposited in the Asset
Hedge Account on such date and (z) the amount that is to be transferred from
the Asset Hedge Account to the Collection Account on or prior to the third
Business Day prior to each quarterly Payment Date in respect of such
Non-Quarterly Pay Asset in accordance with Section 10.6 hereof, such that
such schedule will have the effect of synthetically converting non-quarterly
coupon payments in respect of each Non-Quarterly Pay Asset referred to therein
into quarterly coupon payments.  The
Asset Hedge Schedule may be amended from time to time by the Collateral
Manager; provided that written notice of any such amendments are
delivered to the Trustee and the Rating Agencies.

“Asset Servicing Agreement”:  The asset servicing agreement, to be dated as
of or following the Closing Date, among the Issuer, the Special Servicer, the
Collateral Manager and the Trustee.

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

“Assumed
Maturity”:  The first day of the
Auction Call Period.

“Assumed Portfolio”:  The portfolio with characteristics developed
in accordance with the Eligibility Criteria and Collateral Quality Tests for
purposes of determining the Class A-1 Break-Even Loss Rate, the Class A-2
Break-Even Loss Rate, the Class A-3 Break-Even Loss Rate, the Class B-FL
Break-Even Loss Rate, the Class B-FX Break-Even Loss Rate, the Class C-FL
Break-Even Loss Rate, the Class C-FX Break-Even Loss Rate, the Class D
Break-Even Loss Rate, the Class E Break-Even Loss Rate, the Class F Break-Even
Loss Rate, the Class G-FL Break-Even Loss Rate, the Class G-FX Break-Even Loss
Rate, the Class H-FL Break-Even Loss Rate, the Class H-FX Break-Even Loss Rate,
the Class J Break-Even Loss Rate and the Class K Break-Even Loss Rate.

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

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

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

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

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

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

 

6

 

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

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

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

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

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

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

“Avoidance Claim”:  The meaning specified in Section 6.1(h)
hereof.

“Backup Advancing Agent”:  Wells Fargo Bank, National Association, a
national banking association, solely in its capacity as Backup Advancing Agent
hereunder, or any successor Backup Advancing Agent; provided that any
such successor Backup Advancing Agent must be a financial institution having a
long-term debt rating from each Rating Agency at least equal to “A-” or “A2,”
as applicable, or a short-term debt rating at least equal to “A-1,” “P-1,” or “F1”
as applicable.

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

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

 

7

 

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

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

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

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

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

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

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

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

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

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

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

“Cash Security
Exposures”:  The meaning specified in
the definition of Fitch Loan Diversity Index Score.

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

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

 

8

 

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

“CDO Servicing
Agreement”:  The servicing agreement,
to be dated as of or following the Closing Date, among the Issuer, the
Co-Issuer, Situs, the Collateral Manager, the Trustee and the Advancing Agent.

“Class”:  The Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class B-FL Notes, Class B-FX Notes, Class C-FL Notes, the
Class C-FX Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G-FL Notes, the Class G-FX Notes, the Class H-FL Notes, the Class H-FX
Notes, the Class J Notes or the Class K Notes, as applicable.

“Class A
Defaulted Interest Amount”:  The
Class A-1 Defaulted Interest Amount, the Class A-2 Defaulted Interest Amount
and the Class A-3 Defaulted Interest Amount collectively.

“Class A Notes”:  The Class A-1 Notes, the Class A-2 Notes and
the Class A-3 Notes collectively.

“Class A-1 Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class A-1 Break-Even Loss Rate” in
the S&P Test Matrix based on the scenario chosen by the Collateral Manager
as currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P’s assumptions on recoveries and timing and to the
Priority of Payments, will result in sufficient funds remaining for the timely
payment of interest and the ultimate payment of principal of the Class A-1
Notes.

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

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

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

“Class A-1 Notes”:  The Class A-1 First Priority Senior Secured
Floating Rate Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

“Class A-1 Rate”:  With respect to any Class A-1 Note, the
floating per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to
three-month LIBOR for the related Interest Accrual Period plus 0.28% per annum.

 

9

 

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

“Class A-2
Break-Even Loss Rate”:  At any time,
the maximum percentage of defaults as set forth in the row entitled “Class A-2
Break-Even Loss Rate” in the S&P Test Matrix based on the scenario chosen
by the Collateral Manager as currently applicable to the applicable Collateral
Quality Tests and the Collateral Debt Securities in accordance with the
Collateral Management Agreement that the Assumed Portfolio should be able to
sustain, which after giving effect to S&P’s assumptions on recoveries and
timing and to the Priority of Payments, will result in sufficient funds
remaining for the timely payment of interest and the ultimate payment of
principal of the Class A-2 Notes.

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

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

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

“Class A-2 Note
Insurer”:  MBIA Insurance
Corporation, and its successors in interest.

“Class A-2 Note
Premium”:  The monthly fee paid to
the Class A-2 Note Insurer, as set forth in the Insurance Agreement.

“Class A-2 Notes”:  The Class A-2 Second Priority Senior Secured
Floating Rate Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

“Class A-2 Rate”:  With respect to any Class A-2 Note, the
floating per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to LIBOR for
the related Interest Accrual Period plus 0.38% per annum.

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

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

 

10

 

“Class A-3
Break-Even Loss Rate”:  At any time,
the maximum percentage of defaults as set forth in the row entitled “Class A-3
Break-Even Loss Rate” in the S&P Test Matrix based on the scenario chosen
by the Collateral Manager as currently applicable to the applicable Collateral
Quality Tests and the Collateral Debt Securities in accordance with the
Collateral Management Agreement that the Assumed Portfolio should be able to
sustain, which after giving effect to S&P’s assumptions on recoveries and
timing and to the Priority of Payments, will result in sufficient funds
remaining for the timely payment of interest and the ultimate payment of
principal of the Class A-3 Notes.

“Class A-3 Defaulted Interest Amount”:  As of each Payment Date, the accrued and
unpaid amount due to holders of the Class A-3 Notes on account of any
shortfalls in the payment of the Class A-3 Interest Distribution Amount with
respect to any preceding Payment Date or Payment Dates, together with interest
accrued thereon (to the extent lawful).

“Class A-3 Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class A-3 Notes on account of interest equal to the product of
(i) the Aggregate Outstanding Amount of the Class A-3 Notes with respect to the
related Interest Accrual Period, (ii) the actual number of days in such
Interest Accrual Period divided by 360 and (iii) the Class A-3 Rate.

“Class A-3 Loss Differential”:  At any time, the rate calculated by
subtracting the Class A-3 Scenario Loss Rate from the Class A-3 Break-Even Loss
Rate at such time.

“Class A-3 Notes”:  The Class A-3 Third Priority Senior Secured
Floating Rate Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

“Class A-3 Rate”:  With respect to any Class A-3 Note, the
floating per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to LIBOR for
the related Interest Accrual Period plus 0.60% per annum.

“Class A-3 Scenario Loss Rate”:  At any time, an estimate of the cumulative
default rate for the Current Portfolio or the Proposed Portfolio, as
applicable, consistent with the then current rating of the Class A-3 Notes by
S&P, determined by application of the applicable S&P CDO Monitor at
such time.

“Class A-3 Subordinate Interests”:  The meaning specified in Section 13.1(b)
hereof.

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

“Class A/B Par Value Coverage Test”:  The test that shall be met as of any
Measurement Date on or after the Closing Date on which any Class A Notes or
Class B Notes remain Outstanding if the Class A/B Par Value Ratio on such
Measurement Date is equal to or greater than 103.77%.

 

11

 

“Class B
Defaulted Interest Amount”:  The
Class B-FL Defaulted Interest Amount and the Class B-FX Defaulted Interest
Amount collectively.

“Class B Notes”:  The Class B-FL Notes and the Class B-FX Notes
collectively.

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

“Class B-FL Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class B-FL Break-Even Loss Rate” in
the S&P Test Matrix based on the scenario chosen by the Collateral Manager
as currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P’s assumptions on recoveries and timing and to the
Priority of Payments, will result in sufficient funds remaining for the timely
payment of interest and the ultimate payment of principal of the Class B-FL
Notes.

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

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

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

“Class B-FL Notes”:  The Class B-FL Fourth Priority Floating Rate
Term Notes, due 2056, issued by the Issuer and the Co-Issuer pursuant to
this Indenture.

“Class B-FL Rate”:  With respect to any Class B-FL Note, the
floating per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to LIBOR for
the related Interest Accrual Period plus 0.85% per annum.

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

“Class B-FX Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class B-FX Break-Even Loss Rate” in
the S&P Test Matrix based on the scenario chosen by the Collateral Manager
as currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement that the Assumed Portfolio should be able to sustain, which

 

12

 

after giving effect to
S&P’s assumptions on recoveries and timing and to the Priority of Payments,
will result in sufficient funds remaining for the timely payment of interest
and the ultimate payment of principal of the Class B-FX Notes.

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

“Class B-FX Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class B-FX Notes on account of interest equal to the product of
(i) the Aggregate Outstanding Amount of the Class B-FX Notes with respect to
the related Interest Accrual Period, (ii) the number of days in such Interest
Accrual Period (assuming a year comprised of twelve 30-day months) divided by
360 and (iii) the Class B-FX Rate.

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

“Class B-FX Notes”:  The Class B-FX Fourth Priority Fixed Rate
Term Notes, due 2056, issued by the Issuer and the Co-Issuer pursuant to
this Indenture.

“Class B-FX Rate”:  With respect to any Class B-FX Note, the
fixed per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to 6.00%.

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

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

“Class C
Defaulted Interest Amount”:  The
Class C-FL Defaulted Interest Amount and the Class C-FX Defaulted Interest
Amount collectively.

“Class C Notes”:  The Class C-FL Notes and the Class C-FX Notes
collectively.

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

“Class C-FL Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class C-FL Break-Even Loss Rate” in
the S&P Test Matrix based on the scenario chosen by the Collateral Manager
as currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P’s assumptions on recoveries and timing and to the
Priority of Payments, will result in sufficient funds remaining for the
ultimate payment of interest and principal of the Class C-FL Notes.

 

13

 

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

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

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

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

“Class C-FL Notes”:  The Class C-FL Fifth Priority Floating Rate
Capitalized Interest Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

“Class C-FL Rate”:  With respect to any Class C-FL Note, the
floating per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to LIBOR for
the related Interest Accrual Period plus 1.40% per annum.

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

“Class C-FX Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class C-FX Break-Even Loss Rate” in
the S&P Test Matrix based on the scenario chosen by the Collateral Manager
as currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P’s assumptions on recoveries and timing and to the Priority
of Payments, will result in sufficient funds remaining for the ultimate payment
of interest and principal of the Class C-FX Notes.

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

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

 

14

 

“Class C-FX Interest Distribution Amount”:  On each Payment Date, the amount due to Holders
of the Class C-FX Notes on account of interest equal to the product of (i) the
Aggregate Outstanding Amount (including any Class C-FX Capitalized Interest) of
the Class C-FX Notes with respect to the related Interest Accrual Period, (ii)
the number of days in such Interest Accrual Period (assuming a year comprised
of twelve 30-day months) divided by 360 and (iii) the Class C-FX Rate.

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

“Class C-FX Notes”:  The Class C-FX Fifth Priority Fixed Rate
Capitalized Interest Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

“Class C-FX Rate”:  With respect to any Class C-FX Note, the
fixed per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to 6.00%.

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

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

“Class C/D/E Par Value Coverage Test”:  The test that shall be met as of any
Measurement Date on or after the Closing Date on which any Class C Notes, Class
D Notes or Class E Notes remain Outstanding if the Class C/D/E Par Value Ratio
on such Measurement Date is equal to or greater than 103.11%.

“Class D Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class D Break-Even Loss Rate” in the
S&P Test Matrix based on the scenario chosen by the Collateral Manager as
currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P’s assumptions on recoveries and timing and to the
Priority of Payments, will result in sufficient funds remaining for the
ultimate payment of interest and principal of the Class D Notes.

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

“Class D Defaulted Interest Amount”:  On or after any Payment Date on which no
Class A Notes, Class B Notes or Class C Notes are Outstanding, any interest on
the Class D

 

15

 

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

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

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

“Class D Notes”:  The Class D Sixth Priority Floating Rate
Capitalized Interest Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

“Class D Rate”:  With respect to any Class D Note, the floating
per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to LIBOR for
the related Interest Accrual Period plus 1.55% per annum.

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

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

“Class E Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class E Break-Even Loss Rate” in the
S&P Test Matrix based on the scenario chosen by the Collateral Manager as
currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P’s assumptions on recoveries and timing and to the
Priority of Payments, will result in sufficient funds remaining for the
ultimate payment of interest and principal of the Class E Notes.

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

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

“Class E Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class E Notes on account of interest equal to the product of (i)
the Aggregate Outstanding Amount (including any Class E Capitalized Interest)
of the Class E Notes with

 

16

 

respect to the related
Interest Accrual Period, (ii) the actual number of days in such Interest
Accrual Period divided by 360 and (iii) the Class E Rate.

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

“Class E Notes”:  The Class E Seventh Priority Floating Rate
Capitalized Interest Term Notes, due 2056, issued by the Issuer and the
Co-Issuer pursuant to this Indenture.

“Class E Rate”:  With respect to any Class E Note, the
floating per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to LIBOR for
the related Interest Accrual Period plus 1.90% per annum.

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

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

“Class F Break-Even Loss Rate”:  At any time, means, at any time, the maximum
percentage of defaults as set forth in the row entitled “Class F Break-Even
Loss Rate” in the S&P Test Matrix based on the scenario chosen by the
Collateral Manager as currently applicable to the applicable Collateral Quality
Tests and the Collateral Debt Securities in accordance with the Collateral
Management Agreement that the Assumed Portfolio should be able to sustain,
which after giving effect to S&P’s assumptions on recoveries and timing and
to the Priority of Payments, will result in sufficient funds remaining for the
ultimate payment of interest and principal of the Class F Notes.

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

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

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

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

“Class F Notes”:  The Class F Eighth Priority Floating Rate
Capitalized Interest Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

 

17

 

“Class F Rate”:  With respect to any Class F Note, the
floating per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to LIBOR for
the related Interest Accrual Period plus 2.50% per annum.

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

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

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

“Class F/G/H Par Value Coverage Test”:  The test that shall be met as of any
Measurement Date on or after the Closing Date on which any Class F Notes, Class
G Notes or Class H Notes remain Outstanding if the Class F/G/H Par Value Ratio on such
Measurement Date is equal to or greater than 102.05%.

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

“Class G
Defaulted Interest Amount”:  The Class
G-FL Defaulted Interest Amount and the Class G-FX Defaulted Interest Amount
collectively.

“Class G Notes”:  The Class G-FL Notes and the Class G-FX Notes
collectively.

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

“Class G-FL Break-Even Loss Rate”:  At any time, means, at any time, the maximum
percentage of defaults as set forth in the row entitled “Class G-FL Break-Even
Loss Rate” in the S&P Test Matrix based on the scenario chosen by the
Collateral Manager as currently applicable to the applicable Collateral Quality
Tests and the Collateral Debt Securities in accordance with the Collateral
Management Agreement that the Assumed Portfolio should be able to sustain,
which after giving effect to S&P’s assumptions on recoveries and timing and
to the Priority of Payments, will result in sufficient funds remaining for the
ultimate payment of interest and principal of the Class G-FL Notes.

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

 

18

 

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

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

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

“Class G-FL Notes”:  The Class G-FL Ninth Priority Floating Rate
Capitalized Interest Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

“Class G-FL Rate”:  With respect to any Class G-FL Note, the
floating per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to LIBOR for
the related Interest Accrual Period plus 3.00% per annum.

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

“Class G-FX Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class G-FX Break-Even Loss Rate” in
the S&P Test Matrix based on the scenario chosen by the Collateral Manager
as currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P’s assumptions on recoveries and timing and to the
Priority of Payments, will result in sufficient funds remaining for the
ultimate payment of interest and principal of the Class G-FX Notes.

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

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

 

19

 

“Class G-FX Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class G-FX Notes on account of interest equal to the product of
(i) the Aggregate Outstanding Amount (including any Class G-FX Capitalized
Interest) of the Class G-FX Notes with respect to the related Interest Accrual
Period, (ii) the number of days in such Interest Accrual Period (assuming a
year comprised of twelve 30-day months) divided by 360 and (iii) the Class G-FX
Rate.

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

“Class G-FX Notes”:  The Class G-FX Ninth Priority Fixed Rate
Capitalized Interest Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

“Class G-FX Rate”:  With respect to any Class G-FX Note, the
fixed per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to 6.00%.

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

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

“Class H
Defaulted Interest Amount”:  The
Class H-FL Defaulted Interest Amount and the Class H-FX Defaulted Interest
Amount collectively.

“Class H Notes”:  The Class H-FL Notes and the Class H-FX Notes
collectively.

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

“Class H-FL Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class H-FL Break-Even Loss Rate” in
the S&P Test Matrix based on the scenario chosen by the Collateral Manager
as currently applicable to the applicable Collateral Quality Tests and the Collateral
Debt Securities in accordance with the Collateral Management Agreement that the
Assumed Portfolio should be able to sustain, which after giving effect to
S&P’s assumptions on recoveries and timing and to the Priority of Payments,
will result in sufficient funds remaining for the ultimate payment of interest
and principal of the Class H-FL Notes.

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

“Class H-FL Defaulted Interest Amount”:  On or after any Payment Date on which no
Class A Notes, Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes or Class G Notes are Outstanding, any interest on the Class H-FL
Notes (other than Class H-FL Capitalized Interest) that is due and payable but
is not punctually paid or duly provided for

 

20

 

on or prior to the due
date therefor and which remains unpaid, together with interest accrued thereon
(to the extent lawful).

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

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

“Class H-FL Notes”:  The Class H-FL Tenth Priority Floating Rate
Capitalized Interest Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

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

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

“Class H-FX Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class H-FX Break-Even Loss Rate” in
the S&P Test Matrix based on the scenario chosen by the Collateral Manager
as currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P’s assumptions on recoveries and timing and to the
Priority of Payments, will result in sufficient funds remaining for the
ultimate payment of interest and principal of the Class H-FX Notes.

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

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

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

 

21

 

Interest Accrual Period
(assuming a year comprised of twelve 30-day months) divided by 360 and (iii)
the Class H-FX Rate.

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

“Class H-FX Notes”:  The Class H-FX Tenth Priority Fixed Rate
Capitalized Interest Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

“Class H-FX Rate”:  With respect to any Class H-FX Note, the
fixed per annum rate at which interest accrues
on such Note for any Interest Accrual Period, which shall be equal to 6.00%.

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

“Class J Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class J Break-Even Loss Rate” in the
S&P Test Matrix based on the scenario chosen by the Collateral Manager as
currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P’s assumptions on recoveries and timing and to the
Priority of Payments, will result in sufficient funds remaining for the
ultimate payment of interest and principal of the Class J Notes.

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

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

“Class J Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class J Notes on account of interest equal to the product of (i)
the Aggregate Outstanding Amount (including any Class J Capitalized Interest)
of the Class J Notes with respect to the related Interest Accrual Period, (ii)
the number of days in such Interest Accrual Period (assuming a year comprised
of twelve 30-day months) divided by 360 and (iii) the Class J Rate.

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

“Class J Notes”:  The Class J Eleventh Priority Fixed Rate
Capitalized Interest Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

 

22

 

“Class J Rate”:  With respect to any Class J Note, the fixed per annum rate at which interest accrues on such Note for
any Interest Accrual Period, which shall be equal to 6.00%.

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

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

“Class K Break-Even Loss Rate”:  At any time, the maximum percentage of
defaults as set forth in the row entitled “Class K Break-Even Loss Rate” in the
S&P Test Matrix based on the scenario chosen by the Collateral Manager as
currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement that the Assumed Portfolio should be able to sustain, which after
giving effect to S&P’s assumptions on recoveries and timing and to the
Priority of Payments, will result in sufficient funds remaining for the
ultimate payment of interest and principal of the Class K Notes.

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

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

“Class K Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class K Notes on account of interest equal to the product of (i)
the Aggregate Outstanding Amount (including any Class K Capitalized Interest)
of the Class K Notes with respect to the related Interest Accrual Period, (ii)
the number of days in such Interest Accrual Period (assuming a year comprised
of twelve 30-day months) divided by 360 and (iii) the Class K Rate.

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

“Class K Notes”:  The Class K Twelfth Priority Fixed Rate
Capitalized Interest Term Notes, due 2056, issued by the Issuer and the Co-Issuer
pursuant to this Indenture.

“Class K Rate”:  With respect to any Class K Note, the fixed per annum rate at which interest accrues on such Note for
any Interest Accrual Period, which shall be equal to 6.00%.

“Class K Scenario Loss Rate”:  At any time, an estimate of the cumulative
default rate for the Current Portfolio or the Proposed Portfolio, as applicable,
consistent with the then

 

23

 

current rating of the
Class K Notes by S&P, determined by application of the applicable S&P
CDO Monitor at such time.

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

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

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

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

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

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

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

“Closing Date”:  August 8, 2007.

“Closing Date CMBS Securities”: 
CMBS Securities included in the initial pool of Collateral Debt
Securities purchased by the Issuer on or prior to the Closing Date.

“Closing Date CMBS Proceeds”: 
Sale Proceeds, Unscheduled Principal Payments and other Principal
Proceeds arising from Closing Date CMBS Securities.

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

 

24

 

specific to the
particular obligors and upon whether, in the case of loans bearing interest at
a fixed rate, such loans or securities include an effective prepayment premium.

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

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

“Co-Issuer”:  Gramercy Real Estate CDO 2007-1 LLC, a
limited liability company formed under the laws of Delaware, until a successor
Person shall have become the Co-Issuer pursuant to the applicable provisions of
this Indenture, and thereafter “Co-Issuer” shall mean such successor Person.

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

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

“Collateral
Assignment of Swap Documents”:  The
Collateral Assignment of Swap Documents, dated as of the Closing Date, by and
between the Issuer, as assignor, and Wells Fargo Bank, National Association, as
assignee, as amended, supplemented or otherwise modified from time to time in
accordance with its terms.

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

“Collateral Debt Security”
or “Collateral Debt Securities”:  Any loan, security or other obligation (other
than Eligible Investments) owned by the Issuer (including those acquired after
the Closing Date) that complied with the Eligibility Criteria as of (i) the
date the Issuer entered into the irrevocable and binding commitment to purchase
such security, in the case of the

 

25

 

purchase of any CMBS
Security or (ii) the date of purchase of such loan, security or other
obligation, in the case of the purchase of any other Specified Type of asset.

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

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

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

“Collateral
Manager Securities”:  All Securities
beneficially owned by the Collateral Manager or any affiliate thereof or an
account or fund for which the Collateral Manager or an affiliate thereof acts
as the investment adviser (with discretionary authority).

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

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

“Collateral Quality Tests”:  The tests that are satisfied if, as of any
Measurement Date, in the aggregate, the Collateral Debt Securities purchased
or, with respect to CMBS

 

26

 

Securities, irrevocably
committed to be purchased (and not sold), as applicable, comply with all of the
requirements set forth below:

(i)            the
Aggregate Principal Balance of Loans backed or otherwise invested in properties
located in any single U.S. state does not exceed 25.0% of the Aggregate
Principal Balance of the Loans as of the Closing Date, except that (A) 60.0% of
the Aggregate Principal Balance of the Loans as of the Closing Date may consist
of Loans backed or otherwise invested in properties located in the State of New
York, (B) 50.0% of the Aggregate Principal Balance of the Loans as of the
Closing Date may consist of Loans backed or otherwise invested in properties
located in the State of California, (C) 35.0% of the Aggregate Principal
Balance of the Loans as of the Closing Date may consist of Loans backed or
otherwise invested in properties located in the northern region of the State of
California (which, for the avoidance of doubt, together with the percentage
described in the following clause (D), may not exceed 50.0% of the Aggregate
Principal Balance of the Loans as of the Closing Date), (D) 35.0% of the
Aggregate Principal Balance of the Loans as of the Closing Date may consist of
Loans backed or otherwise invested in properties located in the southern region
of the State of California (which, for the avoidance of doubt, together with
the percentage described in the preceding clause (C), may not exceed 50.0% of
the Aggregate Principal Balance of the Loans as of the Closing Date), (E) 40%
of the Aggregate Principal Balance of the Loans as of the Closing Date may
consist of Loans backed or otherwise invested in properties located in
Washington, D.C. and (F) 25% of the aggregate Principal Balance of the Loans as
of the Closing Date may consist of Loans backed or otherwise invested in
properties located in the State of Texas; provided that for the purposes
of clauses (C) and (D) above, “northern region” and “southern region” shall be
determined by the Collateral Manager in its reasonable business judgment;

(ii)           the
Aggregate Principal Balance of all Collateral Debt Securities issued by any
single issuer does not exceed 10.0% of the Aggregate Collateral Balance
(provided that, for avoidance of doubt, with respect to any Loan, the issuer of
such Loan shall be deemed to be the borrower of such Loan);

(iii)          the
Aggregate Principal Balance of all Collateral Debt Securities with respect to
which the underlying property is located outside of the United States or a
commonwealth, territory or possession of the United States does not exceed 5.0%
of the Aggregate Collateral Balance;

(iv)          the
Aggregate Principal Balance of all Collateral Debt Securities with respect to
which the related issuer is incorporated or organized under the laws of Aruba,
the Bahamas, Bermuda, the British Virgin Islands, Canada, the Cayman Islands,
the Channel Islands, Guernsey, Jersey, Luxembourg, Mexico or the Netherlands
Antilles does not exceed 5.0% of the Aggregate Collateral Balance;

(v)           the
Aggregate Principal Balance of Loans that are collateralized or backed by
interests on any single Property Type does not exceed 5.0% of the Aggregate
Principal Balance of the Loans as of the Closing Date; provided
that:  (A) 60.0% of the Aggregate Principal
Balance of the Loans as of the Closing Date may consist of Loans that are

 

27

 

collateralized
or backed by interests on any Urban Office Property or Suburban Office
Property; (B) 40.0% of the Aggregate Principal Balance of the Loans as of the
Closing Date may consist of Loans that are collateralized or backed by
interests on any Multi-Family Properties; (C) 40.0% of the Aggregate
Principal Balance of the Loans as of the Closing Date may consist of Loans that
are collateralized or backed by interests on Retail Properties; (D) 40.0% of
the Aggregate Principal Balance of the Loans as of the Closing Date may consist
of Loans that are collateralized or backed by interests on Hospitality
Properties; (E) 25.0% of the Aggregate Principal Balance of the Loans as of the
Closing Date may consist of Loans that are collateralized or backed by
interests on Industrial Properties; and (F) 20.0% of the Aggregate Principal
Balance of the Loans as of the Closing Date may consist of Loans that are
collateralized or backed by interests on Other Properties (provided, for
the avoidance of doubt, that not more than 5.0% of the Aggregate Principal
Balance of the Loans as of the Closing Date may consist of Loans that are any
other single Property Type);

(vi)          if
the Collateral Debt Security is a Principal Only Security or an Interest Only
Security with respect to which the Rating Agency Condition for S&P has not
been satisfied, the Aggregate Amortized Cost (which accreted cost shall not
exceed par) of all such Principal Only Securities or Interest Only Securities
does not exceed an amount equal to 5.0% of the Aggregate Collateral Balance,
respectively;

(vii)         without
satisfaction of the Rating Agency Condition with respect to S&P, the Aggregate
Principal Balance of all (A) Whole Loans, Mezzanine Loans and Subordinate Whole
Loans that are not serviced by a servicer on S&P’s Select Servicer List and
(B) B Notes and Participations with respect to which the related Underlying
Term Loans, A Notes or B Notes, as applicable, are not serviced by a servicer
on S&P’s Select Special Servicer List does not exceed 5.0% of the Aggregate
Collateral Balance; provided that such percentage and dollar limitations
may be increased after the Closing Date upon satisfaction of the Rating Agency
Condition with respect to S&P;

(viii)        the
aggregate Principal Balance of all Whole Loans (and Subordinate Whole Loans)
that are not serviced pursuant to the CDO Servicing Agreement does not exceed
10.0% of the Aggregate Collateral Balance;

(ix)           the
Aggregate Principal Balance of all CMBS Securities with a stated maturity later
than the Stated Maturity of the Notes does not exceed 5.0% of the Aggregate
Collateral Balance;

(x)            the
Aggregate Principal Balance of all CMBS Securities with a stated maturity later
than the Stated Maturity of the Notes does not exceed 5.0% of the Aggregate
Collateral Balance;

(xi)           the
Aggregate Principal Balance of Delayed Draw Term Loans does not exceed 5.0% of
the Aggregate Collateral Balance;

(xii)          no
CMBS Securities purchased with Replenishment Proceeds are rated below “Baa3” by
Moody’s, “BBB-” by S&P or “BBB-” by Fitch;

 

28

 

(xiii)         the
Aggregate Principal Balance of CMBS Securities purchased with Replenishment
Proceeds does not exceed 10.0% of the Aggregate Collateral Balance;

(xiv)        (A)
the floating/fixed rate mismatch between Floating Rate Notes and the Fixed Rate
Securities (other than Covered Fixed Rate Securities) and (B) the
fixed/floating rate mismatch between the Fixed Rate Notes and the Floating Rate
Securities (other than Covered Floating Rate Securities), in the aggregate,
does not exceed 5.0% of the Aggregate Collateral Balance;

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

(xvi)        the
Moody’s Recovery Test is satisfied;

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

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

(xix)         the
Herfindahl Diversity Test is satisfied;

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

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

(xxii)        the
Weighted Average Life Test is satisfied;

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

(xxiv)       the
S&P Recovery Test is satisfied;

(xxv)        the Fitch
Loan Diversity Index Test is satisfied; and

(xxvi)       the
Fitch Poolwide Expected Loss Test is satisfied.

At all times, if a
Collateral Quality Test exceeds any maximum allowable percentage described
above due to a decrease in the Aggregate Collateral Balance, any such
Collateral Quality Test will not be reported as failing for the purposes of any
Monthly Reports to be prepared under this Indenture, so long as the relevant
amount in such Collateral Quality Test does not exceed the stated maximum
allowable percentage based on the Aggregate Collateral Balance of the Initial
Collateral Debt Securities.

On or after the Closing
Date, the Collateral Manager will have the option to elect which of the
scenarios set forth in the Moody’s Test Matrix will apply for purposes of the
Moody’s Maximum Rating Factor Test, the Moody’s Recovery Test, the Minimum
Weighted Average Spread Test, the Minimum Weighted Average Coupon Test and the
Herfindahl Diversity Test with respect to Moody’s going forward.  On the Closing Date, the Collateral Manager
will be required to elect which scenario will initially apply.  Thereafter, on five Business Days’ notice to
the Trustee and Moody’s, the Collateral Manager may elect to have a

 

29

 

different scenario
apply, so long as the Collateral Quality Tests are satisfied after such
election.  In no event will the
Collateral Manager be obligated to elect to have a different scenario apply.

On or after the Closing
Date, the Collateral Manager will have the option to elect which of the
scenarios set forth in the S&P Test Matrix will apply for purposes of the
Minimum Weighted Average Spread Test, the Minimum Weighted Average Coupon Test,
the S&P Recovery Test and the Applicable Scenario Loss Rate with respect to
S&P going forward.  On the Closing
Date, the Collateral Manager will be required to elect which scenario will
initially apply.  Thereafter, on five
Business Days’ notice to the Trustee and S&P, the Collateral Manager may
elect to have a different scenario apply, so long as the Collateral Quality
Tests are satisfied after such election. 
In no event will the Collateral Manager be obligated to elect to have a
different scenario apply.

On or after the Closing
Date, the Collateral Manager will have the option to elect which of the
scenarios set forth in the Fitch Test Matrix will apply for purposes of the
Fitch Poolwide Expected Loss Test, the Minimum Weighted Average Spread Test and
the Minimum Weighted Average Coupon Test going forward.  On the Closing Date, the Collateral Manager
will be required to elect which scenario will initially apply.  Thereafter, on five Business Days’ notice to
the Trustee and Fitch, the Collateral Manager may elect to have a different
scenario apply, so long as the Collateral Quality Tests are satisfied after
such election.  In no event will the
Collateral Manager be obligated to elect to have a different scenario apply.

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

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

“Company Administrative Expenses”:  All fees, expenses and other amounts due or
accrued with respect to any Payment Date and payable by the Issuer or the
Co-Issuer to (i) the Trustee pursuant to Section 6.7 hereof or any
co-trustee appointed pursuant to this Indenture (including amounts payable by
the Issuer as indemnification pursuant to this Indenture), (ii) the Company
Administrator under the Company Administration Agreement (including amounts
payable by the Issuer as indemnification pursuant to the Company Administration
Agreement) and to provide for the costs of liquidating the Issuer following
redemption of the Notes, (iii) the LLC Managers (including indemnification),
(iv) the Independent accountants, agents and counsel of the Issuer for
reasonable fees and expenses (including amounts payable in connection with the
preparation of tax forms on behalf of the Issuer and the Co-Issuer) and any
registered office and government filing fees, (v) the Rating Agencies for fees
and expenses in connection with any rating (including the annual fee payable
with respect to the monitoring of any rating) of the Notes, including fees and
expenses due or accrued in connection with any credit estimate or rating of the
Collateral Debt Securities, (vi) the Collateral Manager under this Indenture
and the Collateral Management Agreement, (vii) the Collateral Manager or other
Persons as indemnification pursuant to the Collateral Management Agreement,
(viii) the Advancing Agent or other Persons as indemnification pursuant to Section
17.3, (ix) each member of the Advisory Committee (including amounts payable
as indemnification) under each agreement between such

 

30

 

Advisory Committee member
and the Issuer (and the amounts payable by the Issuer to each member of the
Advisory Committee as indemnification pursuant to each such agreement), (x) the
Preferred Shares Paying Agent pursuant to the Preferred Shares Paying Agency
Agreement, (xi) any other Person in respect of any governmental fee, charge or
tax in relation to the Issuer or the Co-Issuer (in each case as certified by an
Authorized Officer of the Issuer or the Co-Issuer to the Trustee) and (xii) any
other Person in respect of any other fees or expenses (including
indemnifications) permitted under this Indenture and the documents delivered
pursuant to or in connection with this Indenture and the Notes and any
amendment or other modification of any such documentation (including without
limitation any indemnification of the Dealers), in each case unless expressly
prohibited under this Indenture (including, without limitation, the payment of
all transaction fees and all legal and other fees and expenses required in
connection with the purchase of any Collateral Debt Securities or any other transaction
authorized by this Indenture and any amounts due in respect of the listing of
any Notes on the Irish Stock Exchange); provided that Company
Administrative Expenses shall not include (a) amounts payable in respect of the
Notes, (b) amounts payable under any Hedge Agreement and (c) any Collateral
Management Fee payable pursuant to the Collateral Management Agreement.

“Company Administrator”:  Maples Finance Limited, a licensed trust
company incorporated in the Cayman Islands, as administrator pursuant to the
Company Administration Agreement, unless a successor Person shall have become
administrator pursuant to the Company Administration Agreement, and thereafter,
Company Administrator shall mean such successor Person.

“Controlling Class”:  First (A) (i) if no Surety Event has occurred
and is continuing, the Class A-1 Notes and the Class A-2 Note Insurer (voting
for such purpose as a single class), so long as any Class A-1 Notes and/or
Class A-2 Notes are Outstanding or (ii) if a Surety Event has occurred and is
continuing, the Class A-1 Notes and the Class A-2 Notes, so long as any Class
A-1 Notes and Class A-2 Notes are Outstanding, then the Class A-2 Notes, and
then (B) the Class A-3 Notes, so long as Class A-3 Notes are Outstanding, then
the Class B Notes, so long as Class B Notes are Outstanding, then the Class C
Notes, so long as any Class C Notes are Outstanding, then the Class D Notes, so
long as any Class D Notes are Outstanding, then the Class E Notes, so long as
any Class E Notes are Outstanding, then the Class F Notes, so long as any Class
F Notes are Outstanding, then the Class G Notes, so long as any Class G Notes
are Outstanding, then the Class H Notes, so long as any Class H Notes are
Outstanding, then the Class J Notes, so long as any Class J Notes are
Outstanding, then the Class K Notes, so long as any Class K Notes are
Outstanding, and after the Notes are no longer Outstanding, the Preferred
Shares.

“Corporate Trust Office”:  The principal corporate trust office of the
Trustee, currently located at (i) for Note transfer purposes, Wells Fargo
Center, Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479,
Attention:  Corporate Trust Services —
Gramercy Real Estate CDO 2007-1, Ltd. and (ii) for all other purposes, 9062 Old
Annapolis Road, Columbia, Maryland 21045, Attention:  CDO Trust Services — Gramercy Real Estate CDO
2007-1, Ltd., telephone number (410) 884-2000, or such other address as the
Trustee may designate from time to time by notice to the Noteholders, the
holders of the Preferred Shares, the Collateral Manager, the Rating Agencies,
the Issuer and each Hedge Counterparty or the principal corporate trust office
of any successor Trustee.

 

31

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

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

“Credit Risk Security”:  Any Collateral Debt Security that, in the
Collateral Manager’s reasonable business judgment, has a significant risk of
declining in credit quality or, with a lapse of time, becoming a Defaulted
Security; provided that, during any Limited Discretion Period a CMBS
Security shall not be a Credit Risk Security unless (A) in the Collateral
Manager’s reasonable business judgment, such CMBS Security has a significant
risk of declining in credit quality or, with a lapse of time, becoming a
Defaulted Security and (B) either (x) such CMBS Security has been downgraded by
Moody’s at least one or more rating subcategories since it was acquired by the
Issuer or placed by Moody’s on a watch list with negative implications since
the date on which such CMBS Security was purchased by the Issuer or (y) such
CMBS Security has experienced an increase in credit spread of 10% or more of
the credit spread at which such CMBS Security was purchased by the Issuer,
determined by reference to an applicable index selected by the Collateral
Manager

“Credit Tenant
Lease”:  A lease related to and
securing a commercial mortgage loan that is dependent principally on the
payment by the related tenant or guarantor, if any, of lease or rental payments
and other payments due under the terms of such lease and therefore the
performance of the related tenant.

“Credit Tenant
Lease Loan”:  A commercial loan that
is secured by a first lien on commercial real estate and an assignment of lease
or rental payments and other payments due from tenants under the terms of the
related Credit Tenant Lease.

32

 

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

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

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

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

“Dealers”:  Wachovia Capital Markets, LLC, Goldman, Sachs
& Co. Citigroup Global Markets Inc., Morgan Stanley & Co. Incorporated
and Deutsche Bank Securities, Inc..

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

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

(i)            with
respect to a Preferred Equity Security (1) with respect to which there has
occurred and is continuing a payment default (after giving effect to any
applicable grace period but without giving effect to any waiver); provided,
however, that notwithstanding the foregoing, a Preferred Equity Security
shall not be deemed to be a Defaulted Security as a result of (A) the related
issuer’s failure to pay dividends or distributions on the initial due date
therefor, if the Collateral Manager or the Issuer consents to extend the due
date when such dividend or distribution is due and payable, and such dividend
or distribution is paid on or before such extended due date (provided
that such dividend or distribution is paid not more than sixty (60) days (or if
the due date for such dividend or distribution was previously so extended, not
more than thirty (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 (2) years after the
redemption or purchase date required under such agreement (that is, the
original redemption or purchase date under such agreement as extended by all
extensions of such date that the issuer or affiliate of the issuer of the
Preferred

 

33

 

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

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

 

34

 

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

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

 

35

 

Single
Asset Mortgage Security, Single Borrower Mortgage Security or Rake Bond as a
Defaulted Security or (B) as to which there has been a failure to pay interest
in whole or in part for the lesser of (x) one year or (y) six consecutive
payment periods (if such CMBS Security, Single Asset Mortgage Security, Single
Borrower Mortgage Security or Rake Bond is rated (or privately rated for
purposes of the issuance of the Securities) “BBB” or higher by S&P or
Fitch, or “Baa3” or higher by Moody’s) even if by its terms it provides for the
deferral and capitalization of interest thereon;

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

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

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

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

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

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

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

 

36

 

“Determination Date”:  With respect to the initial Payment Date, November 9th,
2007, and thereafter
quarterly on the 4th Business Day prior to each
Payment Date.

“Discount CMBS
Security”:  (i) Any CMBS Security
(other than a Defaulted Security) that is a Floating Rate Security and has a
Moody’s Rating of “Aa” or higher acquired by the Issuer after the Closing Date
for an acquisition price of less than 92% of the Principal Balance of such
Collateral Debt Security, unless the market value for such Collateral Debt
Security equals or exceeds 95% of the Principal Balance of such Collateral Debt
Security (as certified by the Collateral Manager to the Trustee) for 60
consecutive days, (ii) any CMBS Security (other than a Defaulted Security) that
is a Fixed Rate Security and has a Moody’s Rating of “Aa” or higher acquired by
the Issuer after the Closing Date for an acquisition price of less than 85% of
the Principal Balance of such Collateral Debt Security, unless the market value
for such Collateral Debt Security equals or exceeds 90% of the Principal
Balance of such Collateral Debt Security (as certified by the Collateral
Manager to the Trustee) for 60 consecutive days and (iii) any CMBS Security
(other than a Defaulted Security) that has a Moody’s Rating below “Aa” acquired
by the Issuer after the Closing Date for an acquisition price of less than 75%
of the Principal Balance of such Collateral Debt Security, unless the market
value for such Collateral Debt Security equals or exceeds 85% of the Principal
Balance of such Collateral Debt Security (as certified by the Collateral
Manager to the Trustee) for 60 consecutive days; provided that no
Closing Date CMBS Security shall be a Discount CMBS Security.

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

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

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

“Double B Rated
CMBS Security”:  Any CMBS Security
with an Actual Rating from S&P greater than or equal to “BB-” but less than
or equal to “BB+” or an Actual Rating from Moody’s greater than or equal to “Ba3”
but less than or equal to “Ba1.”

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

“Due Period”:  With respect to any Payment Date, the period
commencing on the day immediately succeeding the second preceding Determination
Date (or commencing on the Closing Date, in the case of the Due Period relating
to the first Payment Date) and ending on and including the Determination Date
immediately preceding such Payment Date; provided, however, that
any payments received by the Issuer pursuant to any Hedge Agreement and/or any
payments received by the Issuer or the Trustee pursuant to the Insurance Policy
or the Insurance Agreement after the end of a Due Period but on or prior to the
related Payment Date shall be

 

37

 

deemed to have been
received by the Issuer or the Trustee, as applicable, during the Due Period
related to such Payment Date.

“Eligibility Criteria”:  The criteria set forth below, which if
satisfied with respect to any loan, security other obligation as of (i) the
date the Issuer entered into the irrevocable and binding commitment to purchase
such security, with respect to CMBS Securities or (ii) the date of purchase,
with respect to Loans and Preferred Equity Securities, as evidenced by an
Officer’s Certificate of the Collateral Manager delivered to the Trustee as of
the date of such acquisition shall make such asset eligible for purchase by the
Issuer as a Collateral Debt Security:

(i)                            it
is a Loan, security or other obligation related to commercial real estate;

(ii)                           it
is issued by an issuer, or with respect to each Loan, the obligor is,
incorporated or organized under the laws of the United States or a
commonwealth, territory or possession of the United States or under the laws of
Aruba, the Bahamas, Bermuda, the British Virgin Islands, Canada, the Cayman
Islands, the Channel Islands, Guernsey, Jersey, Luxembourg, Mexico or the
Netherlands Antilles;

(iii)                          with
respect to each Loan (other than a Mezzanine Loan) the underlying property
securing such Loan is located in the United States or a commonwealth, territory
or possession of the United States or in Aruba, the Bahamas, Bermuda, the
British Virgin Islands, Canada, the Cayman Islands, the Channel Islands,
Guernsey, Jersey, Luxembourg, Mexico or the Netherlands Antilles; provided
that for any country not rated AAA by S&P, (1) political risk insurance in
an amount not less than the outstanding principal balance of such Collateral
Debt Security for the full term of the Collateral Debt Security is in place,
(2) the issuer (or trustee or servicer, as applicable) is permitted under the
relevant laws of the related jurisdiction, to foreclose on the collateral
securing such Collateral Debt Security, (3) the issuer under such Collateral
Debt Security is obligated, under the relevant underlying documents, to deliver
all rent and/or receipts and collections related to the property securing such
Collateral Debt Security to one or more lockbox accounts held in the United
States and (4) if such Collateral Debt Security provides for the payment to the
issuer to be made in a currency other than U.S. Dollars, the issuer maintains a
currency hedge in connection with such Collateral Debt Security in a notional
amount not less than the outstanding principal balance of such Collateral Debt
Security, which currency hedge shall otherwise be in compliance with S&P’s
criteria as evidenced by satisfaction of the Rating Agency Condition;

(iv)                          with
respect to each CMBS Security, substantially all the loans backing such
Collateral Debt Security are secured by collateral substantially all of which
is located in the United States or a commonwealth, territory or possession of
the United States;

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

 

38

 

(vi)                          except
with respect to any Interest Only Security, it provides for the repayment of
principal at not less than par no later than upon its maturity or upon
redemption, acceleration or its full prepayment;

(vii)                         it
has a Moody’s Rating, an S&P Rating (and, unless otherwise agreed by
S&P, such S&P Rating does not include the subscript “t”) and, except
for Loans and Preferred Equity Securities, a Fitch Rating;

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

(ix)                           (A)
if it is a Loan (excluding an ARD Loan), no commercial mortgage loan
underlying, securing or constituting such Collateral Debt Security has a
maturity date (including any extension option) that is later than ten (10)
years prior to the Stated Maturity, (B) if it is a CMBS Security, such CMBS
Security (without regard to the maturities of any collateral underlying such
CMBS Security) does not have a rated final maturity later than five (5) years
after the Stated Maturity; provided that, if it has a rated final
maturity later than the Stated Maturity, it is rated at least “A3” by Moody’s,
(C) if it is an ARD Loan, (i) the anticipated repayment date of such ARD Loan
is not later than twenty (20) years prior to the Stated Maturity and (ii) the
new maturity date is not scheduled to occur later than five (5) years prior to
the Stated Maturity and (D) if it is a Preferred Equity Security, the date
(after giving effect to all permissible extensions thereof) by which all
distributions on such Preferred Equity Security attributable to the return of
capital by its governing documents are required to be made is not later than
ten (10) years prior to the Stated Maturity (after giving effect to all
anticipated settlement concerns in connection with such return of capital);

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

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

(xii)                          other
than any Loan with respect to which the Collateral Manager has a reasonable
indication from the related borrower that it plans to prepay such Loan, it is
not the subject of (i) 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
(ii) any solicitation by an issuer of such

 

39

 

security or any other Person to amend, modify or waive
any provision of such security or any related Underlying Instruments, and has
not been called for redemption;

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

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

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

(xvi)                        except
with respect to Delayed Draw Term Loans, it shall not require the Issuer or any
other Person to make any future payments after the initial purchase thereof;

(xvii)                       if
it is a Delayed Draw Term Loan, an amount equal to the aggregate amount of the
Issuer’s remaining commitments with respect to such Delayed Draw Term Loan is
deposited into the Delayed Draw Funding Obligations Account on the date such
Delayed Draw Term Loan is acquired by the Issuer;

(xviii)                      its
acquisition shall comply with Section 206 of the Advisers Act;

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

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

(xxi)                         it
is not a Defaulted Security, a Written Down Security or a Credit Risk Security
(as determined by the Collateral Manager after reasonable inquiry);

(xxii)                        if
it is a Participation, (a) it is a real estate related Participation subject to
the Collateral Management Agreement, and the actions of the Collateral Manager
thereunder will be subject to override by the Special Servicer to the extent
set forth in the Asset Servicing Agreement, (b) either (i) the Underlying Term
Loan, A Note or B Note has been included in a transaction that would be
classified as a CMBS Conduit Security or a CMBS Large Loan Security or (ii) the
Underlying Term Loan is serviced pursuant to a commercial mortgage servicing
arrangement, which includes the standard servicing provisions found in CMBS
Securities transactions, and the servicer under such commercial mortgage
servicing arrangement (A) has been rated at least “Average” by S&P and at
least “CMS3” or “CPS3” by Fitch or (B) has acted as special servicer or as
primary servicer in a CMBS Securities transaction which Moody’s has rated, (c)
the

 

40

 

requirements set forth in this Indenture regarding the
representations and warranties with respect to the Underlying Term Loan, the
Underlying Mortgaged Property (as applicable) and the Participation have been
met, (d) the terms of the Underlying Instruments are consistent with the terms
of similar Underlying Instruments in the CMBS industry and (e) (except for the
Loans identified as Loan Number 9 and 11 on Schedule F attached hereto)
the Participating Institution is a “special purpose vehicle” meeting S&P’s
then current published criteria for bankruptcy remote special purpose entities;
provided that a securitization trust, a CDO issuer or a similar
securitization vehicle and each of Gramercy Warehouse Funding I LLC, a Delaware
limited liability company, and Gramercy Warehouse Funding II LLC, a Delaware
limited liability company, shall be deemed to be a “special purpose vehicle”
for purposes of the Eligibility Criteria;

(xxiii)                       if
it is a B Note, it is (a) a real estate related B Note subject to the
Collateral Management Agreement, and the actions of the Collateral Manager
thereunder will be subject to override by the Special Servicer to the extent
set forth in the Asset Servicing Agreement, (b) either (i) the related A Note
has been included in a transaction that would be classified as a CMBS Conduit
Security or a CMBS Large Loan Security or (ii) the B Note is serviced pursuant
to a commercial mortgage servicing arrangement, which includes the standard
servicing provisions found in CMBS Securities transactions, and the servicer
under such commercial mortgage servicing arrangement (A) has been rated at
least “Average” by S&P and at least “CMS3” or “CPS3” by Fitch or (B) has
acted as special servicer or as primary servicer in a CMBS Securities
transaction which Moody’s has rated, (c) the requirements set forth in this
Indenture regarding the representations and warranties with respect to the
Underlying Term Loan, the Underlying Mortgaged Property (as applicable) and the
B Note have been met and (d) the terms of the Underlying Instruments are
consistent with the terms of similar Underlying Instruments in the CMBS
industry;

(xxiv)                       if
it is a Mezzanine Loan or a Preferred Equity Security, (a) the Mezzanine Loan
or Preferred Equity Security is serviced pursuant to (A) the CDO Servicing
Agreement or (B) a commercial mortgage servicing arrangement, which includes
the standard servicing provisions found in CMBS Securities transactions, and
the servicer under such commercial mortgage servicing arrangement (A) has been
rated at least “Average” by S&P and at least “CMS3” or “CPS3” by Fitch or
(B) has acted as special servicer or as primary servicer in a CMBS Securities
transaction which Moody’s has rated, (b) the requirements set forth in this
Indenture regarding the representations and warranties with respect to the
Underlying Term Loan, the Underlying Mortgaged Property (as applicable) and the
Mezzanine Loan or the Preferred Equity Security, as applicable, have been met
and (c) the terms of the Underlying Instruments are consistent with the terms
of similar Underlying Instruments in the CMBS industry with respect to
Mezzanine Loans or Preferred Equity Securities, as applicable;

(xxv)                        if
it is a Whole Loan (or a Subordinate Whole Loan) (a) it is a real estate
related Loan that is serviced pursuant to (A) the CDO Servicing Agreement or
(B) a commercial mortgage servicing arrangement, which includes the standard
servicing provisions found in CMBS Securities transactions, and the servicer
under such commercial mortgage servicing arrangement (A) has been rated at
least “Average” by

 

41

 

S&P and at least “CMS3” or “CPS3” by Fitch or (B)
has acted as special servicer or as primary servicer in a CMBS Securities
transaction which Moody’s has rated, (b) the requirements set forth in this
Indenture regarding the representations and warranties with respect to the Loan
and the Underlying Mortgaged Property (as applicable) have been met, (c) the
terms of the Underlying Instruments are consistent with the terms of similar
Underlying Instruments in the CMBS industry with respect to Whole Loans and
Subordinate Whole Loans, and (d) in the case of any Whole Loan (or a
Subordinate Whole Loan) in the form of a senior participation, the
Participating Institution is either a “special purpose vehicle” meeting S&P’s
then current published criteria for bankruptcy remote special purpose entities
or a grantor trust formed to hold the Loan in connection with the transaction
contemplated by this Indenture; provided that a securitization trust, a
CDO issuer or a similar securitization vehicle shall be deemed to be a “special
purpose vehicle” for purposes of the Eligibility Criteria;

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

(xxvii)                      if
it is a Non-Quarterly Pay Asset, it is included on an Asset Hedge Schedule;

(xxviii)                     it
is one of the Specified Types;

(xxix)                       if
it is a Loan, it does not provide for any ground-up construction;

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

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

(xxxii)                      if
it is an Interest Only Security, the Rating Agency Condition with respect to
Moody’s has been satisfied with respect to the acquisition of such Interest
Only Security;

(xxxiii)                     if
it is a Principal Only Security, the Rating Agency Condition with respect to
Moody’s has been satisfied with respect to the acquisition of such Principal
Only Security;

(xxxiv)                     its
acquisition would not cause Gramercy Investment to fail to qualify as a REIT
under the Code (unless the Issuer has previously received an opinion of
Cadwalader, Wickersham & Taft LLP or another nationally recognized tax
counsel experienced in such matters opining that the Issuer shall be treated as
a foreign corporation that shall not be treated as engaged in a trade or
business in the United States for U.S. federal income tax purposes, in which
case the acquisition, ownership, enforcement and disposition of such Collateral
Debt Securities shall not cause the Issuer

 

42

 

to be treated as a foreign corporation that shall be
treated as engaged in a trade or business in the United States for U.S. federal
income tax purposes);

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

(xxxvi)                     (A)
if it is a CMBS Security, at the time it was issued at least one class of the
related issuer’s securities was rated “AAA” (or the equivalent) by one or more
nationally recognized statistical rating organizations and (B) if it is a
Closing Date CMBS Security, it is rated at least “Aa1” by Moody’s; and

(xxxvii)                    it
does not provide for any payments which are or will be subject to deduction or
withholding for or on account of any withholding or similar tax, unless the
issuer of such security is required to make “gross up” payments that 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;

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

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

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

(ii)           demand
and time deposits in, certificates of deposit of, bankers’ acceptances issued
by, or federal funds sold by, any depository institution or trust company
incorporated under the laws of the United States or any state thereof or the
District of Columbia (including the Trustee or the commercial department of any
successor Trustee, as the case may be; provided  that
such successor otherwise meets the criteria specified herein) and subject to
supervision and examination by federal and/or state banking authorities so long
as the commercial paper and/or the debt obligations of such depositary
institution or trust company (or, in the case of the principal depositary
institution in a holding company system, the commercial paper or debt
obligations of such holding company) at the time of such investment or
contractual commitment providing for such investment have a credit rating not
less than “Aa2” by Moody’s, “A+” by Fitch and “A+” by S&P, in the case of
long-term debt obligations, and “P-1” by Moody’s, “F1” by Fitch

 

43

 

and
“A-1+” by S&P for Eligible Investments which have a maturity of thirty (30) days or less;

(iii)          unleveraged
repurchase or forward purchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or guaranteed by
an agency or instrumentality of the United States, in either case entered into
with a depository institution or trust company (acting as principal) described
in clause (ii) above (including the Trustee or the commercial department of any
successor Trustee, as the case may be; provided  that
such Person otherwise meets the criteria specified herein) or entered into with
a corporation (acting as principal) whose long-term rating is not less than “Aa2”
by Moody’s, “AA” by Fitch and “AAA” by S&P (for so long as any Notes rated
by S&P are Outstanding) or whose short-term credit rating is not less than “P-1”
by Moody’s, “F1” by Fitch and “A-1+” by S&P for Eligible Investments which
have a maturity of thirty (30) days
or less (for so long as any Notes rated by S&P are Outstanding); provided  that the issuer thereof must also have at the time of such
investment a long-term credit rating of not less than “Aa2” by Moody’s, “A+” by
Fitch and “AAA” by S&P (for so long as any Notes rated by S&P are
Outstanding);

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

(v)           commercial
paper or other similar short-term obligations (including that of the Trustee or
the commercial department of any successor Trustee, as the case may be, or any
Affiliate thereof; provided  that such
Person otherwise meets the criteria specified herein) having at the time of
such investment a credit rating of “P-1” by Moody’s, “F1” by Fitch and “A-1+”
by S&P or “A-1” by S&P for Eligible Investments which have a maturity
of thirty (30) days or less (for so long
as any Notes rated by S&P are Outstanding); provided  that the issuer thereof must also have at the time of such
investment a senior long-term debt rating of not less than “Aa2” by Moody’s, “AA”
by Fitch and “AA” by S&P (for so long as any Notes rated by S&P are
Outstanding);

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

 

44

 

Outstanding);
provided, further that such agreement be approved by the Class
A-2 Note Insurer;

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

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

provided that, except in the case of clauses
(iv), (vii) and (viii) above, such obligations shall have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change; provided,
further, that mortgage-backed securities and Interest Only Securities
shall not constitute Eligible Investments; and provided, further, that (a) Eligible Investments acquired
with funds in the Collection Accounts shall include only such obligations or
securities as mature no later than the Business Day prior to the next Payment
Date succeeding the acquisition of such obligations or securities, (b) Eligible
Investments shall not include obligations bearing interest at inverse floating
rates, (c) Eligible Investments shall not cause the Issuer to fail to be treated
as a Qualified REIT Subsidiary (unless the Issuer has previously received an
opinion of Cadwalader, Wickersham & Taft LLP or other nationally recognized
tax counsel experienced in such matters opining that the Issuer will be treated
as a foreign corporation that will not be treated as engaged in a trade or
business in the United States for U.S. federal income tax purposes, in which
case the investment will not cause the Issuer to be treated as a foreign
corporation that will be treated as engaged in a trade or business in the
United States for U.S. federal income tax purposes), (d) Eligible Investments
shall not be subject to deduction or withholding for or on account of any
withholding or similar tax, unless the payor is required to make “gross up”
payments that 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, (e) Eligible Investments shall not be purchased for a price in
excess of par and shall not have an S&P rating which contains a subscript “r,”
“t,” “p,” “pi” or “q” and (f) Eligible Investments shall not include Margin
Stock.

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

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

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

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

 

45

 

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

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

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

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

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

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

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

“Fitch”:  Fitch, Inc., Fitch Ratings, Ltd. and their
subsidiaries including Derivative Fitch, Inc. and Derivative Fitch Ltd. and any
successors thereto.

“Fitch
Indicative Poolwide Expected Loss”: 
The output generated by the Collateral Manager and reported to the
Trustee on a quarterly basis, using Fitch’s CREL Surveyor model as applied to
all Collateral Debt Securities.

“Fitch Loan
Diversity Index Score”:  The amount,
determined by the Collateral Manager on any Measurement Date, equal to the sum
of the series of products obtained for each Collateral Debt Security, by
squaring the quotient of (x) the Principal Balance on such Measurement Date of
each such Collateral Debt Security (and each Cash Security Exposure, if any)
and (y) the aggregate Principal Balance of all Collateral Debt Securities (and
all Cash Security Exposures, if any) on such Measurement Date, multiplied by
10,000.  For purposes of this definition,
on the relevant Measurement Date, the sum of the aggregate amount held in cash
in any account other than the Delayed Funding Obligations Account shall be
divided into one or more “Cash Security Exposures.”  Each Cash Security Exposure shall be sized in
an amount equal to the result obtained by averaging the Principal Balance of
all Collateral Debt Securities on such Measurement Date; provided, that
if the Available Amount on such Measurement Date is less than such average, or
if there is a portion of the Available Amount remaining in an

 

46

 

amount less than such
average, the Cash Security Exposure or the additional Cash Security Exposure,
as applicable, represented thereby shall be sized in the actual amount of such
Available Amount or portion thereof.

“Fitch Loan
Diversity Index Test”:  A test that
shall be satisfied on any Measurement Date if the Fitch Loan Diversity Index
Score is less than or equal to 370.

“Fitch Poolwide
Expected Loss”:  The output generated
using Fitch’s CREL Surveyor model as applied to all Collateral Debt
Securities.  For any given month, the
Fitch Poolwide Expected Loss equals the Fitch Indicative Poolwide Expected
Loss, unless otherwise updated by Fitch.

“Fitch Poolwide
Expected Loss Test” means a test that shall be satisfied on any Measurement
Date if the Fitch Poolwide Expected Loss of the Collateral Debt Securities and
Eligible Investments is equal to or less than the percentage set forth in the
row entitled “Poolwide Expected Loss” in the Fitch Test Matrix based on the
scenario chosen by the Collateral Manager as currently applicable to the
applicable Collateral Quality Tests and the Collateral Debt Securities in
accordance with the Collateral Management Agreement.

“Fitch Post-Acquisition
Compliance Test”:  The test that
shall be satisfied if the Fitch Poolwide Expected Loss Test is satisfied.

“Fitch
Post-Acquisition Failure”:  The
meaning specified in Section 12.2(e) hereof.

“Fitch Rating”:  With respect to any Collateral Debt Security,
except for Loans and Preferred Equity Securities, the Fitch Rating shall be
determined as follows:

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

(B)   if such Collateral Debt Security is not rated
by Fitch and a rating is published by both S&P and Moody’s, the Fitch
Rating shall be the lower of such ratings; and, except with respect to any
Loan, 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; or

(C)   if the Fitch Rating cannot be assigned in
accordance with clauses (A) or (B) above, the Issuer or the Collateral Manager
(on behalf of the Issuer) shall apply to Fitch for a credit assessment which
thereafter shall be the Fitch Rating;

provided that (x) if such Collateral Debt Security has been put on rating watch
negative for possible downgrade by any Rating Agency, then the rating used to
determine the Fitch Rating under either of clauses (A) or (B) above shall be
one rating subcategory below such rating by that Rating Agency, (y) if such
Collateral Debt Security has been put on rating watch positive for possible
upgrade by any Rating Agency, then the rating used to determine the Fitch
Rating under either of clauses (A) or (B) above shall be one rating subcategory
above such rating by that

 

47

 

Rating Agency and (z)
notwithstanding the rating definition described above, Fitch reserves the right
to issue a rating estimate for any Collateral Debt Security at any time.

“Fitch Test
Matrix”  The table set forth in Schedule
E hereto relating to the Fitch Poolwide Expected Loss Test, the Minimum
Weighted Average Spread Test and the Minimum Weighted Average Coupon Test with
respect to Fitch.

“Fixed Rate Excess”:  As of any Measurement Date, a fraction
(expressed as a percentage) the numerator of which is equal to the product of
(i) the greater of zero and the excess, if any, of the Weighted Average Coupon
for such Measurement Date over, with respect to Moody’s, the number set forth
in the row entitled “Minimum Weighted Average Coupon” in the Moody’s Test
Matrix, with respect to S&P, the number set forth in the row entitled “Minimum
Weighted Average Coupon” in the S&P Test Matrix, and with respect to Fitch,
the number set forth in the row entitled “Minimum Weighted Average Coupon” in
the Fitch Test Matrix, in each case based on the scenario chosen by the
Collateral Manager as currently applicable to the applicable Collateral Quality
Tests and the Collateral Debt Securities in accordance with the Collateral
Management Agreement and (ii) the Aggregate Principal Balance of all Collateral
Debt Securities that are Fixed Rate Securities (excluding all Defaulted
Securities and Written Down Securities) and the denominator of which is the
Aggregate Principal Balance of all Collateral Debt Securities that are Floating
Rate Securities (excluding all Defaulted Securities and Written Down
Securities), multiplying the resulting figure by 360 and then dividing by 365.

“Fixed Rate
Notes”:  The Class B-FX Notes, the
Class C-FX Notes, the Class G-FX Notes, the Class H-FX Notes, the Class J Notes
and the Class K Notes.

“Fixed Rate Security”:  Any Collateral Debt Security (including,
without limitation, an Above Cap Security) other than a Floating Rate Security;
provided that any Covered Floating Rate Security may, at the sole
discretion of the Collateral Manager, be deemed to be a Fixed Rate Security for
purposes of calculating the Fixed Rate Excess, Spread Excess, Weighted Average
Coupon and Weighted Average Spread.

“Floating Rate
Notes”:  The Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes, the Class B-FL Notes, the Class C-FL
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G-FL
Notes and the Class H-FL Notes.

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

 

48

 

payable by the Issuer
under the applicable swap agreement minus (d) the applicable London interbank
offered rate.

“Form-Approved
Liability Hedge”:  A Liability Hedge
entered into with respect to a Covered Fixed Rate Security or a Covered
Floating Rate Security (i) the documentation of which substantially conforms
(but for the amount and timing of periodic payments, the notional amount, the
effective date, the termination date and other similarly necessary changes) to
a form for which satisfaction of the Rating Agency Condition was previously
received in respect of the Notes (as certified to the Trustee by the Collateral
Manager); provided  that (x) any
Rating Agency may withdraw its approval of a form at any time and (y) such form
does not provide for an upfront payment by the Issuer to the related Hedge
Counterparty, and (ii) for which the Issuer has provided each Rating Agency
with written notice of the purchase of the related Collateral Debt Security
within five Business Days after such purchase.

“GAAP”:  The meaning specified in Section 6.3
hereof.

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

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

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

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

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

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

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

 

49

 

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.

“Green Loan”:  Green Loan Services LLC, a Delaware limited
liability company.

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

“Hedge Agreement”:  One or more interest rate cap agreements,
interest rate floor agreements, Interest Rate Swap Agreements or similar
agreements (including Liability Hedges), including any related ISDA Master
Agreement and hedge confirmations, entered into between the Issuer and one or
more Hedge Counterparties from time to time and any additional or replacement
interest rate cap or swap agreements or other agreements that address interest
rate exposure, entered into from time to time between the Issuer and each Hedge
Counterparty in accordance with the terms hereof, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.

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

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

“Hedge Counterparty Collateral Threshold
Rating”:  With respect
to a Person as an issuer or with respect to the debt of such Person, as the
case may be, (i) such rating as shall be satisfactory to S&P (for so long
as any Class of Notes is Outstanding and is rated by S&P) and Moody’s (for
so long as any Class of Notes is Outstanding and is rated by Moody’s) and (ii)
a short-term rating of at least “F1” by Fitch and a long term rating of at
least “A” by Fitch, or if no short-term rating exists, then a long term rating
of at least “A” by Fitch (for so long as any Class of Notes is Outstanding and
is rated by Fitch) at the time of entering into the applicable Hedge Agreement
and as specifically set forth in the related Hedge Agreement; provided
that should a Rating Agency effect an overall downward adjustment of its
short-term or long-term ratings, then the applicable Hedge Counterparty
Collateral Threshold Rating shall be downwardly adjusted accordingly; provided,
further, that any adjustment to a rating shall be subject to the prior
written consent of the applicable Rating Agency.

 

50

 

“Hedge Counterparty Credit Support”:  With respect to any Hedge Agreement, the ISDA
Credit Support Annex executed in connection with such Hedge Agreement.

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

“Hedge Counterparty Required Rating”:  With respect to a Person as an issuer or with
respect to debt of such Person, (i) a short-term rating of at least “P2” and a
long-term rating of at least “A3” by Moody’s (for so long as any Notes are
Outstanding and are rated by Moody’s), or a long-term-rating of at least “A3”
by Moody’s if such Person has a long-term rating only (for so long as any Notes
are Outstanding and are rated by Moody’s), (ii) (A) with respect to financial
institutions, a short-term rating of at least “A-2” by S&P (for so long as
any Notes are Outstanding and are rated by S&P), or a rating of at least “BBB+”
by S&P if such Person has a long-term rating only (for so long as any Notes
are Outstanding and are rated by S&P) or (B) with respect to any entity
that is not a financial institution, a short-term rating of at least “A-1” by
S&P (for so long as any Notes are Outstanding and are rated by S&P), or
a rating of at least “A+” by S&P if such Person has a long-term rating only
(for so long as any Notes are Outstanding and are rated by S&P) and (iii) a
short-term rating of at least “F2” by Fitch and a long-term rating of at least “BBB+”
by Fitch (for so long as any Notes are Outstanding and are rated by Fitch), or
a long-term rating of at least “BBB+” by Fitch if such Person has a long-term
rating only (for so long as any Notes are Outstanding and are rated by Fitch); provided
that should a Rating Agency effect an overall downward adjustment of its
short-term or long-term ratings, then the applicable Hedge Counterparty
Required Rating shall be downwardly adjusted accordingly; provided,  further, that any adjustment to a rating shall be
subject to the prior written consent of the applicable Rating Agency.

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

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

“Herfindahl Diversity Test”:  A test that shall be satisfied if on any
Measurement Date the Herfindahl Score for the Collateral Debt Securities is
greater than the number set forth in the row entitled “Herfindahl Diversity
Score” in the Moody’s Test Matrix based on the scenario chosen by the
Collateral Manager as currently applicable to the applicable Collateral Quality
Tests and the Collateral Debt Securities in accordance with the Collateral
Management Agreement.  In the event that
Cash has been received in respect of Principal Proceeds of the Collateral Debt
Securities since the immediately preceding Measurement Date but has not been
reinvested in additional Collateral Debt Securities as of the current
Measurement Date, the Herfindahl Diversity Test also shall be deemed satisfied
on the current Measurement Date notwithstanding a Herfindahl Score equal to or
less than the number set forth in the row entitled “Herfindahl Diversity Score”
in the Moody’s Test Matrix based on the scenario chosen by the Collateral
Manager as currently applicable to the applicable Collateral Quality Tests and
the Collateral Debt Securities in accordance with the Collateral Management
Agreement, if (i) the

 

51

 

Herfindahl Test
was satisfied or deemed satisfied on the immediately preceding Measurement Date
and (ii) the reason for the failure on the current Measurement Date is the
existence of such Cash.  Similarly, if
the Herfindahl Diversity Test was not satisfied or deemed satisfied on the
immediately preceding Measurement Date and the Herfindahl Score has worsened as
of the current Measurement Date, the Herfindahl Score as of the immediately
preceding Measurement Date shall be deemed to have been maintained on the
current Measurement Date to the extent that the reason for such worsened
Herfindahl Score is the existence of such Cash.

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

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

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

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

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

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

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

 

52

 

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

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

“Initial Purchaser”:  Each of Wachovia Capital Markets and Goldman,
Sachs & Co.

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

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

“Insurance
Agreement”:  The insurance and
reimbursement agreement, dated as of the Closing Date, among the Issuer and the
Class A-2 Note Insurer, as amended, restated, supplemented or otherwise
modified from time to time.

“Insurance
Policy”:  Solely with respect to the
Class A-2 Notes, the unconditional and irrevocable guarantee as to scheduled
payments of interest and principal due and payable to the holders thereof
pursuant to a financial guarantee insurance policy issued by the Class A-2 Note
Insurer.

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

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

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

“Interest Distribution Amount”:  Each of the Class A-1 Interest Distribution
Amount, the Class A-2 Interest Distribution Amount, the Class A-3 Interest
Distribution Amount, the Class B-FL Interest Distribution Amount, the Class
B-FX Interest Distribution Amount, Class C-FL Interest Distribution Amount, the
Class C-FX Interest Distribution Amount, the Class D Interest Distribution
Amount, the Class E Interest Distribution Amount, the Class F Interest
Distribution Amount, the Class G-FL Interest Distribution Amount, the Class
G-FX Interest Distribution Amount, the Class H-FL Interest Distribution Amount,
the Class H-FX

 

53

 

Interest Distribution
Amount, the Class J Interest Distribution Amount and the Class K Interest
Distribution Amount.

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

“Interest Proceeds”:  With respect to any Payment Date, (a) the sum
(without duplication) of (i) all Cash payments of interest (including any
amount representing the accreted portion of a discount from the face amount of
an Eligible Investment) or dividends and other distributions (but excluding distributions
on Preferred Equity Securities attributable to the return of capital by their
governing documents) received during the related Due Period on the Collateral
Debt Securities other than Defaulted Securities (net of the Servicing Fee and
other amounts payable in accordance with each Servicing Agreement) and Eligible
Investments, including, in the Collateral Manager’s commercially reasonable
discretion (exercised as of the trade date), the accrued interest received in
connection with a sale of such Collateral Debt Securities or Eligible
Investments (to the extent such accrued interest was not applied to the
purchase of Substitute Collateral Debt Securities), in each case, excluding any
accrued interest included in Principal Proceeds pursuant to clause (a)(iv), (v)
or (vii) of the definition of Principal Proceeds, (ii) all make whole premiums,
yield maintenance or any interest amount paid in excess of the stated interest
amount of a Collateral Debt Security received during the related Due Period, (iii)
all amendment and waiver fees, late payment fees, commitment fees, exit fees,
extension fees and other fees and commissions received by the Issuer during
such Due Period in connection with such Collateral Debt Securities and Eligible
Investments (other than, in each such case, fees and commissions received in
connection with the restructuring of a Defaulted Security or default of
Collateral Debt Securities and Eligible Investments and, for the avoidance of
doubt, any origination fees paid by a related borrower), (iv) all payments
pursuant to any Hedge Agreement for the Payment Date immediately following such
Due Period (excluding any amounts payable by the Issuer upon a termination
under any Hedge Agreement during such Due Period), (v) all amounts to be transferred
by the Trustee from the Asset Hedge Account to the Collection Account in
respect of such Payment Date pursuant to the related Asset Hedge Schedules,
(vi) funds in the Expense Account designated as Interest Proceeds by the
Collateral Manager pursuant to Section 10.5(a), (vii) funds remaining on
deposit in the Expense Account upon redemption of the Notes in whole, pursuant
to Section 10.5(a), (viii) except for distributions on Preferred Equity
Securities attributable to the return of capital by their governing documents
and other than as specified in item (i) above, all proceeds received in respect
of equity features, if any, of the Collateral Debt Securities, (ix) with
respect to any Defaulted Security sold by the Issuer during the related Due Period,
the excess, if any, of the amount received by the Issuer in connection with
such sale and the par amount of such Defaulted Security, (x) any payments
received in respect of Interest Only Securities to the extent they were
purchased with Interest Proceeds, (xi) all payments of principal on Eligible
Investments purchased with proceeds of items (a)(i), (ii) and (iii) of this
definition, (xii) any excess proceeds received in respect of a Collateral Debt
Security after required fixed payments are made on other classes of securities
senior to such Collateral Debt Security to the extent such proceeds are
designated as “Interest Proceeds” by the Collateral Manager in its sole
discretion and (xiii) amounts drawn on the Class A-2 Note Insurer pursuant to
the Insurance Policy in respect of payments of interest on the Class A-2 Notes,
which amounts shall only be applied to the payment of the Class A-2 Notes in

 

54

 

accordance with Section
11.1(a)(i)(7); provided the Collateral Manager may designate as
Interest Proceeds all amounts received by the Issuer with respect to the
disposition of a Collateral Debt Security described in clause (c) of the
definition of Spread Appreciated Security in excess of the Principal Balance thereof
(or, in the case of a Preferred Equity Security, all accrued and unpaid
dividends or other distributions not attributable to the return of capital by
its governing documents); provided, further that that Interest
Proceeds shall in no event include any payment or proceeds specifically defined
as “Principal Proceeds” in the definition thereof; minus (b)(i) the aggregate
amount of any Nonrecoverable Advances that were previously reimbursed to the
Advancing Agent or the Trustee, in its capacity as Backup Advancing Agent, and
the aggregate amount of any Nonrecoverable Cure Advances reimbursed to the
Collateral Manager during the related Due Period from Interest Proceeds and
(ii) the aggregate amount of any Hedge Payment Amounts that were previously
paid to the applicable Hedge Counterparty from Interest Proceeds during the
related Due Period.  For the avoidance of
doubt, Servicing Fees are netted out of amounts received in respect of
Collateral Debt Securities, and are not included in the definition of “Interest
Proceeds” and are not payable pursuant to the Priority of Payments.

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

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

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

“Irish Paying
Agent”:  Maples and Calder Listing
Services Limited, or any successor Irish Paying Agent under the Irish Paying
Agent Agreement.

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

“Issuer”:  Gramercy Real Estate CDO 2007-1, Ltd., an
exempted company incorporated with limited liability under the laws of the
Cayman Islands, until a successor Person shall have become the Issuer pursuant
to the applicable provisions of this Indenture, and thereafter “Issuer” shall
mean such successor Person.

“Issuer
Insolvency Proceeding”:  The
commencement, after the date hereof, of any bankruptcy, insolvency,
readjustment of debt, reorganization, marshaling of assets and liabilities or
similar proceedings by or against the Issuer, or the commencement, after the
date hereof, of any proceedings by or against the Issuer for the winding up or
liquidation of its affairs, or the consent, after the date hereof, to the
appointment of a trustee, conservator, receiver or liquidator in any
bankruptcy, insolvency, readjustment of debt, reorganization, marshaling of
assets and liabilities or similar proceedings of or relating to against the
Issuer.

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

 

55

 

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

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

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

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

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

(e)           if
the Collateral Debt Security related to such Liability Hedge is not a Defaulted
Obligation and such Collateral Debt Security is called or prepaid, such
Liability Hedge shall be terminated; provided that if any unscheduled
Hedge Payment Amount is payable by the Issuer solely as a result of the early
termination of such Liability Hedge and is not offset by any amount payable by
the relevant Hedge Counterparty, (i) such Liability Hedge may only be
terminated if the Rating Agency Condition with respect to Moody’s and S&P
shall have been satisfied in connection with such termination, (ii) any such
Hedge Payment Amount shall first be paid from any call, redemption and
prepayment premiums received from such Collateral Debt Security and (iii) any
remaining amount so payable shall be paid in accordance with the Priority of Payments;

(f)            except
upon satisfaction of the Rating Agency Condition with respect to Moody’s and
S&P, each Liability Hedge entered into in respect of an ARD Loan shall be

 

56

 

for
a term that terminates at least three years after the anticipated repayment
date of such ARD Loan; and

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

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

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

“Limited
Discretion Period”:  A period that
(a) begins on the date that Moody’s has withdrawn or reduced its ratings on any
of the Class A Notes or Class B Notes by one or more subcategories below the
ratings in effect on the Closing Date (including any placement on “credit watch”
with negative implications) and (b) ends on the date that Moody’s has upgraded
any such reduced rating or reinstated any such withdrawn rating of the Class A
Notes or Class B Notes to at least their initial ratings.

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

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

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

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

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

“Majority”:  With respect to:

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

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

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

“Make-Whole
Amount”:  With respect to the Fixed
Rate Notes subject to an Optional Redemption prior to the Assumed Maturity, an
amount equal to the excess, if any, of (i)

 

57

 

the present value of the
remaining payments of principal and interest on such Class of Notes calculated
by the Collateral Manager in accordance with then existing accepted financial
practices (A) assuming that the entire remaining outstanding principal balance
of such Class of Notes shall be paid in a single payment on the Assumed
Maturity and that each payment of interest shall be made on its related Payment
Date and (B) using a discount factor equal to the Reinvestment Yield for such
Class of Notes over (ii) the outstanding principal balance of such Class of
Notes, but in no event shall any Make-Whole Amount be less than zero.

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

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

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

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

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

“Maturity
Extension Requirements”:  The
requirements that shall be satisfied with respect to any maturity date
extension if the maturity date is extended (i) in the case of Loans other than
ARD Loans, to a new maturity date that is (A) not more than two (2) years after
the original maturity date and (B) not less than ten (10) years prior to the
Stated Maturity and (ii) in the case of ARD Loans, such that (A) the
anticipated repayment date shall not be less than twenty (20) years prior to
the Stated Maturity and (B) the new maturity date is not less than 3 years
prior to the Stated Maturity; provided, however, that notwithstanding the requirements in the foregoing
clauses (i) and (ii), Maturity Extension Requirements shall be deemed satisfied
with respect to any extensions as to which the Rating Agency Condition has been
satisfied.

“Measurement Date”:  Any of the following:  (i) the date of acquisition (or, in the case
of an acquisition of any CMBS Security, the date on which the Issuer
irrevocably commits to purchase such security) or disposition of any Collateral
Debt Security, (ii) any date on which

 

58

 

any Collateral Debt
Security becomes a Defaulted Security, (iii) each Determination Date, (iv) the
last Business Day of each calendar month (other than any calendar month in
which a Determination Date occurs) and (v) with reasonable notice to the Issuer
and the Trustee, any other Business Day that any Rating Agency or the Holders
of at least 66 2/3% of the Aggregate Outstanding Amount of any Class of Notes
requests be a “Measurement Date”;
provided  that if any such date would
otherwise fall on a day that is not a Business Day, the relevant Measurement
Date shall be the immediately preceding Business Day; and provided, further that in no event shall a Measurement Date
occur on or before the Closing Date.

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

“Minimum Weighted Average Coupon Test”:  A test that shall be satisfied on any
Measurement Date if the Weighted Average Coupon as of such Measurement Date for
Collateral Debt Securities is greater than or equal to, with respect to Moody’s,
the number set forth in the row entitled “Minimum Weighted Average Coupon” in
the Moody’s Test Matrix, with respect to S&P, the number set forth in the
row entitled “Minimum Weighted Average Coupon” in the S&P Test Matrix, and
with respect to Fitch, the number set forth in the row entitled “Minimum
Weighted Average Coupon” in the Fitch Test Matrix, in each case based on the
scenario chosen by the Collateral Manager as currently applicable to the
applicable Collateral Quality Tests and the Collateral Debt Securities in
accordance with the Collateral Management Agreement.

“Minimum Weighted Average Spread Test”:  A test that shall be satisfied as of any
Measurement Date if the Weighted Average Spread as of such Measurement Date for
Collateral Debt Securities is greater than or equal to, with respect to Moody’s,
the number set forth in the row entitled “Minimum Weighted Average Spread” in
the Moody’s Test Matrix, with respect to S&P, the number set forth in the
row entitled “Minimum Weighted Average Spread” in the S&P Test Matrix, and
with respect to Fitch, the number set forth in the row entitled “Minimum
Weighted Average Spread” in the Fitch Test Matrix, in each case based on the
scenario chosen by the Collateral Manager as currently applicable to the
applicable Collateral Quality Tests and the Collateral Debt Securities in
accordance with the Collateral Management Agreement.

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

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

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

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

“Moody’s
Maximum Rating Factor Test”:  A test
that shall be satisfied as of any Measurement Date if the Weighted Average
Moody’s Rating Factor of the Collateral Debt Securities is equal to or less
than the number set forth in the row entitled “Maximum WARF” in the Moody’s
Test Matrix based on the scenario chosen by the Collateral Manager as currently
applicable to the applicable Collateral Quality Tests and the Collateral Debt
Securities in

 

59

 

accordance with the
Collateral Management Agreement.  In
determining compliance with the Moody’s Maximum Rating Factor Test, Loans with
respect to obligors incorporated or organized under the laws of a jurisdiction
outside of the United States will be submitted to Moody’s for estimated
ratings, and the estimated ratings assigned by Moody’s to such Collateral Debt
Securities will be used in determining compliance with the Moody’s Maximum
Rating Factor Test.  For purposes of
calculating the Moody’s Maximum Rating Factor Test, to the extent that cash has
been received in respect of Principal Proceeds of the Collateral Debt Securities
and (i) has not been reinvested in additional Collateral Debt Securities or
(ii) has been invested in Eligible Investments, the Moody’s Rating Factor
applicable to such cash or Eligible Investments shall be that Moody’s Rating
Factor corresponding to the Moody’s Rating applicable to the Collateral Debt
Securities from which such Principal Proceeds have been received immediately
prior to receipt of such Principal Proceeds.

“Moody’s
Post-Acquisition Compliance Test”:  A
test that shall be satisfied if the Moody’s Maximum Rating Factor Test is
satisfied.

“Moody’s
Post-Acquisition Failure”:  The
meaning specified in Section 12.2(c) hereof.

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

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

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

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

(B)           with respect to any CMBS Large Loan
Security not rated by Moody’s, the Issuer or the Collateral Manager on behalf
of the Issuer

 

60

 

shall request Moody’s to assign a rating to such CMBS
Large Loan Security on a case-by-case basis; and

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

(iii)          if
such Collateral Debt Security is a Mezzanine Loan, no notching is permitted and
the Moody’s Rating shall be the rating so assigned by Moody’s;

provided  that (x) the rating of either S&P or Fitch used to
determine the Moody’s Rating pursuant to any of clauses (ii) or (iii) above
shall be (a) a public rating that addresses the obligation of the obligor (or
guarantor, where applicable) to pay principal of and interest on the relevant
Collateral Debt Security in full and is monitored on an ongoing basis by the
relevant Rating Agency or (b) if no such public rating is available, a rating
determined pursuant to a method determined by Moody’s on a case-by-case basis
and (y) the Aggregate Principal Balance of Collateral Debt Securities the Moody’s
Rating of which is based on an S&P rating or a Fitch rating may not exceed
20% of the Aggregate Principal Balance of all Collateral Debt Securities; provided,
further, that the Moody’s Rating of any Collateral Debt Security shall
be reduced one subcategory to the extent it is on credit watch with negative
implications and increased one subcategory to the extent it is on credit watch
with positive implications; provided, further, however,
that notwithstanding any of the foregoing provisions to the contrary, the
Collateral Manager may, consistent with Moody’s published criteria for
underwriting and tranching of commercial real estate loans, use its estimated
ratings for Collateral Debt Securities representing up to 20% of the Aggregate
Collateral Balance; provided that in connection with the foregoing, the
Collateral Manager on behalf of the Issuer may apply for an estimated rating
from Moody’s within 10 Business Days after the date on which the Issuer
purchases a Collateral Debt Security.

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

	
  Moody’s Rating

  	
   

  	
  Moody’s Rating

  Factor

  	
   

  	
  Moody’s Rating

  	
   

  	
  Moody’s Rating

  Factor

  	
   

  
	
  Aaa

  	
   

  	
  1

  	
   

  	
  Ba1

  	
   

  	
  940

  	
   

  
	
  Aa1

  	
   

  	
  10

  	
   

  	
  Ba2

  	
   

  	
  1,350

  	
   

  
	
  Aa2

  	
   

  	
  20

  	
   

  	
  Ba3

  	
   

  	
  1,766

  	
   

  
	
  Aa3

  	
   

  	
  40

  	
   

  	
  B1

  	
   

  	
  2,220

  	
   

  
	
  A1

  	
   

  	
  70

  	
   

  	
  B2

  	
   

  	
  2,720

  	
   

  
	
  A2

  	
   

  	
  120

  	
   

  	
  B3

  	
   

  	
  3,490

  	
   

  
	
  A3

  	
   

  	
  180

  	
   

  	
  Caa1

  	
   

  	
  4,770

  	
   

  
	
  Baa1

  	
   

  	
  260

  	
   

  	
  Caa2

  	
   

  	
  6,500

  	
   

  
	
  Baa2

  	
   

  	
  360

  	
   

  	
  Caa3

  	
   

  	
  8,070

  	
   

  
	
  Baa3

  	
   

  	
  610

  	
   

  	
  Ca or lower

  	
   

  	
  10,000

  	
   

  

 

“Moody’s Recovery Rate”:  With respect to any Collateral Debt Security
on any Measurement Date, an amount equal to (A) if the Specified Type of
Collateral Debt Security is

 

61

 

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

“Moody’s
Recovery Test”:  A test that shall be
satisfied as of any Measurement Date if the Moody’s Weighted Average Recovery
Rate is greater than or equal to the number set forth in the row entitled “Minimum
Weighted Average Recovery Rate” in the Moody’s Test Matrix based on the
scenario chosen by the Collateral Manager as currently applicable to the
applicable Collateral Quality Tests and the Collateral Debt Securities in
accordance with the Collateral Management Agreement.  For purposes of determining whether the Moody’s
Recovery Test has been satisfied, the Moody’s Recovery Rate with respect to
proceeds from any Collateral Debt Security which have not been reinvested shall
be the Moody’s Recovery Rate associated with such Collateral Debt Security.

“Moody’s Special Amortization Pro Rata
Condition”:  A
condition that shall be satisfied with respect to any Payment Date if either
(i)(a) the aggregate Principal Balance of the Collateral Debt Securities as of
the related Determination Date is greater than an amount equal to 60% of the
aggregate Principal Balance of the Collateral Debt Securities on the Closing Date
and (b) the Minimum Weighted Average Coupon Test, the Minimum Weighted Average
Spread Test, the Weighted Average Life Test, the Herfindahl Test, the Moody’s
Maximum Rating Factor Test, the Pro Rata Principal Coverage Test and the Moody’s
Recovery Test are satisfied as of the related Determination Date or (ii) the
Rating Agency Condition has been satisfied with respect to Moody’s.

“Moody’s Test
Matrix” means the table set forth in Schedule E hereto relating to
the Moody’s Maximum Rating Factor Test, the Moody’s Recovery Test, the Minimum
Weighted Average Spread Test, the Minimum Weighted Average Coupon Test and the
Herfindahl Diversity Test with respect to Moody’s.

“Moody’s
Weighted Average Extended Maturity Test”: 
A test that shall be satisfied on any Measurement Date if the Extended
Weighted Average Maturity of the Collateral Debt Securities as of such
Measurement Date is ten (10) years or less.

“Moody’s
Weighted Average Initial Maturity Test”: 
A test that shall be satisfied on any Measurement Date if the Initial
Weighted Average Maturity of the Collateral Debt Securities as of such
Measurement Date is ten (10) years or less.

“Moody’s
Weighted Average Recovery Rate”:  The
number obtained by summing the products obtained by multiplying the Principal
Balance of each Collateral Debt Security by

 

62

 

its Moody’s Recovery
Rate, and dividing such sum by the aggregate Principal Balance of all such
Collateral Debt Securities.

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

(i)            the
Aggregate Principal Balance on such Measurement Date of the CMBS Securities
(except Defaulted Securities);

(ii)           the
Aggregate Principal Balance on such Measurement Date of the Loans and Preferred
Equity Securities (except Defaulted Securities);

(iii)          the
Aggregate Principal Balance of all Principal Proceeds held as Cash and Eligible
Investments and all Cash and Eligible Investments held in the Delayed Funding
Obligations Account; and

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

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

“Non-call
Period”:  The period from the Closing
Date to and including the Business Day immediately preceding the Payment Date
in August, 2010, during which the Issuer is not permitted to exercise an
Optional Redemption as described in Section 9.1(c) hereof.

“Non-Core
Property Type”:  Any Other
Properties.

“Non-Offered
Notes”:  Collectively, the Class J
Notes and the Class K Notes.

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

“Non-Quarterly
Pay Asset”:  Any Collateral Debt
Security (other than a Defaulted Security) that pays interest less frequently
than quarterly.

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

“Nonrecoverable Cure Advance”:  Any Cure Advance previously made or proposed
to be made pursuant to Section 16.3 hereof with respect to any
Collateral Debt Security that the Collateral Manager (subject to the applicable
provisions of the Asset Servicing Agreement) has determined in its sole
discretion, exercised in good faith, that the amount so

63

 

advanced or proposed to
be advanced will not be ultimately recoverable from collections from the
specific Collateral Debt Security with respect to which such Cure Advance was
made or proposed to be made.

“Note Interest
Rate”:  With respect to the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes, the Class H Notes, the Class J Notes and the Class K Notes, the Class
A-1 Rate, the Class A-2 Rate, the Class A-3 Rate, the Class B-FL Rate, the
Class B-FX Rate, the Class C-FL Rate, the Class C-FX Rate, the Class D Rate,
the Class E Rate, the Class F Rate, the Class G-FL Rate, the Class G-FX Rate,
the Class H-FL Rate, the Class H-FX Rate, the Class J Rate and the Class K
Rate, respectively.

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

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

“Notes”:  The Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class B-FL Notes, Class B-FX Notes, Class C-FL Notes, the
Class C-FX Notes, the Class D Notes, the Class E Notes, the Class F Notes,
Class G-FL Notes, Class G-FX Notes, the Class H-FL Notes, the Class H-FX Notes,
the Class J Notes and the Class K Notes, collectively, authorized by, and
authenticated and delivered under, this Indenture or any supplemental indenture.

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

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

“Notional
Amount”:  In respect of the Preferred
Shares, the per share notional amount of $1.00. 
The aggregate Notional Amount of the Preferred Shares on the Closing
Date shall be $32,450,000.

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

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

“Officer”:  With respect to any corporation or limited
liability company, including the Issuer, the Co-Issuer and the Collateral
Manager, any Director, the Chairman of the Board of Directors, the President,
any Senior Vice President any Vice President, the Secretary, any

 

64

 

Assistant Secretary, the
Treasurer, any Assistant Treasurer, General Partner of such entity; and with
respect to the Trustee, any Trust Officer.

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

“Opinion of Counsel”:  A written opinion addressed to the Trustee
and each Rating Agency in form and substance reasonably satisfactory to the
Trustee, each Rating Agency (and each Hedge Counterparty, if applicable,
pursuant to the provisions below) of an attorney at law admitted to practice
before the highest court of any state of the United States or the District of
Columbia (or the Cayman Islands, in the case of an opinion relating to the laws
of the Cayman Islands), which attorney may, except as otherwise expressly provided
in this Indenture, be counsel for the Issuer, and which attorney shall be
reasonably satisfactory to the Trustee. 
Whenever an Opinion of Counsel is required hereunder, such Opinion of
Counsel may rely on opinions of other counsel who are so admitted and so
satisfactory which opinions of other counsel shall accompany such Opinion of
Counsel and shall either be addressed to the Trustee and each Rating Agency or
shall state that the Trustee and each Rating Agency shall be entitled to rely
thereon; provided, however,
that such Opinion of Counsel shall be addressed to each Hedge Counterparty (or
each Hedge Counterparty may rely on such Opinion of Counsel) to the extent that
such Opinion of Counsel relates to or affects the interests of each Hedge
Counterparty.

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

“Origination
Agreement”:  That certain amended and
restated origination agreement, dated as of April 19, 2006, between SLG and Gramercy Capital Corp.,
as modified by the Origination Agreement Side Letter, dated as of August 8, 2007, among SLG, Gramercy Capital Corp., GKK
Manager LLC and the Issuer.  A copy of
the Origination Agreement is attached hereto as Exhibit N.

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

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

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

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

(ii)           Notes
or portions thereof for whose payment or redemption funds in the necessary
amount have been theretofore irrevocably deposited with the Trustee or the
Paying Agent in trust for the Holders of such Notes pursuant to Section
4.1(a)(ii); provided  that if such
Notes or portions thereof are to be

 

65

 

redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;

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

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

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

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

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

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

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

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

 

66

“Participation”:  One or more participation interests in a
mortgage loan secured by a mortgage on a commercial real estate property that
is senior, pari passu or subordinate to other
interests in such loan and which may be further participated into sub-participations.

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

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

“Payment Date”:  With respect to each Class of Notes, November 15,
2007, and thereafter
quarterly on each February 15th, May 15th, August 15th  and November 15th  (or if such day is not a Business Day,
the next succeeding Business Day) to and including the Stated Maturity related
to such Class unless redeemed or repaid prior thereto.

“Permitted Cash
Purchase”:  The meaning specified in Section
12.1(b) hereof.

“Permitted
Investment”:  An Eligible Investment
and any other security rated at least “A-” by S&P and “Aa2” by Moody’s.

“Permitted
Transfer”:  A transfer, in whole but
not in part, to a party that meets the following requirements:

(A)          the transferee is a recognized dealer
in interest rate swaps organized under the laws of the United States of America
or a jurisdiction located in the United States of America (or another
jurisdiction reasonably acceptable to the Issuer and the Trustee under this
Indenture) that, at the time of the transfer, maintains (or its proposed
guarantor maintains) the Hedge Counterparty Collateral Threshold Rating from
each Rating Agency on its unsecured and unsubordinated debt, deposit or letter
of credit obligations;

(B)           each Rating Agency confirms in writing
that such transfer will not result in a reduction or withdrawal of its then
current rating of any outstanding Class of Notes with respect to which it has
previously issued a rating;

(C)           neither an event of default with
respect to the transferee nor a termination event would exist immediately after
the transfer;

(D)          the transferee executes and delivers a
written agreement reasonably satisfactory to the Issuer and the Trustee in
which the transferee, among other things, legally and effectively accepts all
the rights and assumes all the obligations under the related swap documents;

(E)           as of the time of the transfer, such
transfer would not cause the related swap documents to become subject to
withholding tax; and

(F)           such transfer otherwise complies with
the terms of this Indenture.

 

67

 

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

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

“Pledged Collateral Debt Security”:  On any date of determination, any Collateral
Debt Security that has been Granted to the Trustee and not been released from
the lien of this Indenture pursuant to Section 10.8 hereof.

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

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

“Preferred
Shareholder”:  A registered owner of
Preferred Shares as set forth in the share register maintained by the Share
Registrar.

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

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

“Preferred
Shares Distribution Amount”:  Any
remaining Interest Proceeds and Principal Proceeds, if any, to be released from
the lien of this Indenture and paid (upon standing order of the Issuer) to the
Preferred Shares Paying Agent for deposit into the Preferred Shares
Distribution Account for distribution, subject to the terms of the Preferred
Shares Paying Agency Agreement and the requirements of Cayman Islands law, to
the holders of the Preferred Shares after payment by the Trustee of all
distributions which take priority pursuant to Section 11.1(a).

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

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

 

68

 

applicable provisions of
the Preferred Shares Paying Agency Agreement, and thereafter Preferred Shares
Paying Agent shall mean such successor Person.

“Primary
Servicer”:  Each servicer listed
opposite the related Collateral Debt Securities on Schedule R hereto, as
such schedule may be amended from time to time.

“Prime Interest
Rate”:  The annual rate of interest
published in The Wall Street Journal from time
to time as the “Prime Rate.”  If more
than one “Prime Rate” is published in The Wall Street Journal
for a day, the average of such “Prime Rates” shall be used, and such average
shall be rounded up to the nearest one-eighth of one percent (0.125%).  If the “Prime Rate” contained in The Wall Street Journal is not readily ascertainable, the
Collateral Manager shall select an equivalent publication that publishes such “Prime
Rate,” and if such “Prime Rates” are no longer generally published or are
limited, regulated or administered by a governmental authority or
quasigovernmental body, then the Collateral Manager shall select, in its
reasonable discretion, a comparable interest rate index.

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

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

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

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

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

(v)           the
Principal Balance of any Written Down Security shall exclude any portion of the
principal balance of such security that (x) has been written down as a result
of a “realized loss,” “collateral support deficit,” “additional trust fund
expense” or other event that under the terms of such security results in a
write-down of principal balance (in each case, which has not been written up
subsequent thereto) or (y) would be affected by an appraisal reduction;

 

69

 

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

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

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

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

“Principal Proceeds”:  With respect to any Payment Date, (a) the sum
(without duplication) of (i) all principal payments (including prepayments and
Unscheduled Principal Payments) received during the related Due Period
(excluding those previously reinvested or designated by the Collateral Manager
for reinvestment in Collateral Debt Securities) on (A) Eligible Investments
(other than Eligible Investments purchased with Interest Proceeds, Eligible
Investments in the Expense Account and Eligible Investments in the Delayed
Funding Obligations Account and any amount representing the accreted portion of
a discount from the face amount of an Eligible Investment) and (B) Collateral
Debt Securities as a result of (1) a maturity, scheduled amortization,
mandatory prepayment or mandatory sinking fund payment on a Collateral Debt Security,
(2) optional redemptions, prepayments, exchange offers or tender offers made at
the option of the issuer thereof, (3) recoveries on Defaulted Securities or (4)
any other principal payments with respect to Collateral Debt Securities (not
included in Sale Proceeds), (ii) all distributions on Preferred Equity
Securities attributable to the return of capital by their governing documents,
(iii) all fees and commissions received during such Due Period in connection
with Eligible Investments and the restructuring or default of such Eligible
Investments, (iv) any interest received during such Due Period on such
Collateral Debt Securities or Eligible Investments to the extent such interest
constitutes proceeds from accrued interest purchased with Principal Proceeds
other than accrued interest purchased by the Issuer on or prior to the Closing
Date and interest included in clause (a)(i) of the definition of Interest
Proceeds, (v) Sale Proceeds received during such Due Period in respect of sales
(excluding those proceeds previously reinvested or currently being reinvested
in Collateral Debt Securities in accordance with the Transaction Documents,
excluding accrued interest included in Sale Proceeds (unless such accrued
interest was purchased with Principal Proceeds) that are designated by the
Collateral Manager as Interest Proceeds in accordance with clause (a)(i) of the
definition of Interest Proceeds and excluding certain Sale Proceeds designated
as Interest Proceeds in accordance with the definition of Interest Proceeds),
(vi) all Cash payments of interest or dividends received during such Due Period
on Defaulted Securities, (vii) any interest received during such Due Period on
a Written Down Security to the extent such interest constitutes accrued
interest on the excess of the principal amount of such Written Down Security
over the Principal Balance of such Written Down Security, (viii) any proceeds
resulting from (A) the termination (in whole or in part) of any Hedge Agreement
during such Due Period to the extent such proceeds are received from the
related Hedge Counterparty to such Hedge Agreement and to the extent such
proceeds exceed the cost of entering into a replacement Hedge Agreement in
accordance with the requirements set forth in Section 16.1(a) hereof,
(B) payments received from

 

70

 

a replacement Hedge
Counterparty to the extent such proceeds exceed the amount owed to a previous
Hedge Counterparty in connection with the termination of the related Hedge
Agreement and (C) all amounts transferred from each Hedge Termination Account
pursuant to Section 16.1(g) hereof, (ix) during the Replenishment
Period, the Special Amortization Amount, if any, (x) funds transferred to the
Principal Collection Account from the Delayed Funding Obligations Account in
respect of amounts previously held on deposit in respect of unfunded
commitments for Delayed Draw Term Loans that have been sold or otherwise
disposed before such commitments thereunder have been drawn or as to which
excess funds remain, (xi) all amounts received during such Due Period in
respect of Defaulted Securities (other than any amounts included in the
definition of “Interest Proceeds” pursuant to item (ix) of the definition
thereof), (xii) any payments received in respect of Interest Only Securities to
the extent they were purchased with Principal Proceeds, (xiii) any excess
proceeds received in respect of a Collateral Debt Security after required fixed
payments are made on other classes of securities senior to such Collateral Debt
Security to the extent such proceeds are designated as “Principal Proceeds” by
the Collateral Manager in its sole discretion, (xiv) all other payments
received in connection with the Collateral Debt Securities and Eligible Investments
that are not included in Interest Proceeds; provided  that
in no event shall Principal Proceeds include any proceeds from the Excepted
Assets and (xv) amounts drawn on the Class A-2 Note Insurer pursuant to the
Insurance Policy in respect of payments of principal on the Class A-2 Notes,
which amounts shall only be applied to the payment of the Class A-2 Notes in
accordance with Section 11.1(a)(ii)(2)(b) or 11(a)(ii)(2)(e);
minus (b)(i) the aggregate amount of any Nonrecoverable Advances that were
previously reimbursed to the Advancing Agent or the Trustee, in its capacity as
Backup Advancing Agent, and the aggregate amount of any Nonrecoverable Cure
Advances reimbursed to the Collateral Manager from Principal Proceeds during
the related Due Period and (ii) the aggregate amount of any Hedge Payment
Amounts that were previously paid to the applicable Hedge Counterparty from
Principal Proceeds during the related Due Period as a result of the early
termination of the related Liability Hedge from any call, redemption and
prepayment premiums in accordance with clause (e) of the definition of
Liability Hedge.

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

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

“Property Type”:  means each of the following types of
property:  (i) Diversified Properties,
(ii) Hospitality Properties, (iii) Industrial Properties, (iv) Mixed Use
Properties, (v) Mortgaged Properties, (vi) Multi-Family Properties, (vii)
Retail Properties, (viii) Self Storage Properties, (ix) Suburban Office
Properties, (x) Urban Office Properties, (xi) Warehouse Properties and (xii)
Other Properties.

The following are
the meaning of various property types specified in the definition of “Property Type” above:

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

 

71

 

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

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

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

(v)           “Mortgaged
Property” or “Mortgaged Properties” means mortgages and real estate
property interests; provided, however, when used in connection
with a Mezzanine Loan, “Mortgaged Property” means the real estate property
interests securing the underlying mortgage loan or the collateral for the
Mezzanine Loan, as the situation dictates;

(vi)          “Multi-Family Properties”
means multi-family dwellings such as apartment blocks, condominiums and
cooperative owned buildings, and includes manufactured housing and mobile home
parks;

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

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

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

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

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

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

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

 

72

 

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

“Pro Rata
Principal Coverage Ratio”:  As of any
Determination Date, the ratio (expressed as a percentage) based on the ratio of
(x) to (y), where (x) is the Net Outstanding Portfolio Balance as of such
Determination Date and (y) is the sum of the Aggregate Outstanding Amount of
the Class A Notes and Class B Notes as of such Determination Date.

“Pro Rata
Principal Coverage Test”:  Such test
shall be met as of any Determination Date if the Pro Rata Principal Coverage
Ratio as of such Determination Date is greater than or equal to 103.02%.

“Pro Rata
Special Amortization Modification”: 
The meaning specified in Section 12.5 hereof.

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

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

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

“QIB”:  A “qualified institutional buyer” as defined
in Rule 144A under the Securities Act.

“QRS S1 Corp.”:  Gramercy Investment QRS S1 Corp., a wholly
owned subsidiary of Gramercy Investment.

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

“Qualified REIT Subsidiary”: 
A corporation that, for U.S. federal tax purposes, is wholly-owned by a
real estate investment trust under Section 856(i) of the Internal Revenue Code
of 1986, as amended.

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

“Rating Agency”:  Each of S&P, Moody’s and Fitch and any
successor thereto, or, with respect to Pledged Obligations generally, if at any
time S&P, Moody’s or Fitch or any such successor ceases to provide rating
services with respect to the Notes or certificates similar to the Notes, any
other nationally recognized investment rating agency selected by the Issuer and

 

73

 

reasonably satisfactory
to each Hedge Counterparty and a Majority of the Notes voting as a single
Class.

“Rating Agency Condition”:  With respect to any proposed action or
matter, the receipt by the Trustee of confirmation in writing from the
applicable Rating Agencies that the then current ratings on the Notes, as applicable,
shall not be reduced, qualified or withdrawn as a result of such action or
matter; provided, however, that “Rating Agencies” shall be deemed
to not include Fitch unless the proposed action or matter relates to any
amendment or modification, or any proposed amendment or modification, to any
Transaction Document, and in any such case notification shall be provided to
Fitch within 30 days following such amendment or modification.

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

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

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

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

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

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

Class A-3
Notes.  The redemption price of the Class A-3 Notes
shall be calculated on the related Determination Date and shall be equal to the
Aggregate Outstanding Amount of the Class A-3 Notes to be redeemed, together
with the Class A-3 Interest Distribution Amount (plus any Class A-3 Defaulted
Interest Amount) due on that day of redemption.

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

Class
B-FX Notes.  The redemption price of the Class B-FX Notes
shall be calculated on the related Determination Date and shall be equal to the
Aggregate Outstanding

 

74

 

Amount of the Class B-FX
Notes to be redeemed, together with the Class B-FX Interest Distribution Amount
(plus any Class B-FX Defaulted Interest Amount) due on that day of redemption,
plus, in the event of an Optional Redemption occurring at any time prior to the
Assumed Maturity, the applicable Make-Whole Amount.

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

Class
C-FX Notes.  The redemption price of the Class C-FX Notes
shall be calculated on the related Determination Date and shall be equal to the
Aggregate Outstanding Amount of the Class C-FX Notes to be redeemed, together
with the Class C-FX Interest Distribution Amount (plus any Class C-FX
Capitalized Interest and any Class C Defaulted Interest Amount) due on that day
of redemption, plus, in the event of an Optional Redemption occurring at any
time prior to the Assumed Maturity, the applicable Make-Whole Amount.

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

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

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

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

Class
G-FX Notes.  The redemption price of the Class G-FX Notes
shall be calculated on the related Determination Date and shall be equal to the
Aggregate Outstanding Amount of the Class G-FX Notes to be redeemed, together
with the Class G-FX Interest Distribution Amount (plus any Class G-FX
Capitalized Interest and any Class G-FX Defaulted

 

75

 

Interest Amount) due on
that day of redemption, plus, in the event of an Optional Redemption occurring
at any time prior to the Assumed Maturity, the applicable Make-Whole Amount.

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

Class
H-FX Notes.  The redemption price of the Class H-FX Notes
shall be calculated on the related Determination Date and shall be equal to the
Aggregate Outstanding Amount of the Class H-FX Notes to be redeemed, together
with the Class H-FX Interest Distribution Amount (plus any Class H-FX
Capitalized Interest and any Class H-FX Defaulted Interest Amount) due on that
day of redemption, plus, in the event of an Optional Redemption occurring at
any time prior to the Assumed Maturity, the applicable Make-Whole Amount.

Class J
Notes.  The redemption price of the Class J Notes
shall be calculated on the related Determination Date and shall be equal to the
Aggregate Outstanding Amount of the Class J Notes to be redeemed, together with
the Class J Interest Distribution Amount (plus any Class J Capitalized Interest
and any Class J Defaulted Interest Amount) due on that day of redemption, plus,
in the event of an Optional Redemption occurring at any time prior to the
Assumed Maturity, the applicable Make-Whole Amount.

Class K
Notes.  The redemption price of the Class K Notes
shall be calculated on the related Determination Date and shall be equal to the
Aggregate Outstanding Amount of the Class K Notes to be redeemed, together with
the Class K Interest Distribution Amount (plus any Class K Capitalized Interest
and any Class K Defaulted Interest Amount) due on that day of redemption, plus,
in the event of an Optional Redemption occurring at any time prior to the
Assumed Maturity, the applicable Make-Whole Amount.

Preferred
Shares.  The redemption price for the Preferred Shares
shall be calculated on the related Determination Date and shall be equal to the
sum of all net proceeds and Cash, if any, remaining after redemption of the
Notes and payments of all amounts and expenses described under subclauses (1)
through (5), (25),
(26) and (27) of Section 11.1(a)(i); provided  that
if there are no such net proceeds or Cash remaining, the redemption price for
the Preferred Shares shall be equal to $0.

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

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

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

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

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

 

76

 

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

“Reimbursement
Rate”:  A rate per annum
equal to the Prime Interest Rate, as such Prime Interest Rate may change from
time to time.

“Reinvestment
Asset Information”:  The meaning
specified in Section 12.2(b) hereof.

“Reinvestment Yield”:  With respect to the Fixed Rate Notes, the
Reinvestment Yield applied in calculating any Make-Whole Amount shall be the
yield to maturity implied by (i) reported yields for actively traded U.S.
Treasury securities having a maturity equal to the Assumed Maturity, as
reported on page 5 on the Dow Jones Telerate (or any successor page on such
service) as of 10:00 a.m. (New York City time) on the seventh Business Day
preceding the related Redemption Date or (ii) if such yields are not reported
or are not ascertainable, the Treasury Constant Maturity Series Yields reported
for the latest day for which such yields have been so reported as of the tenth
Business Day preceding such Redemption Date, in Federal Reserve Statistical
Release H.15 (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Assumed Maturity
(such implied yield to be determined, if necessary, by (a) converting U.S.
Treasury bill quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the actively
traded U.S. Treasury security with the maturity closest to and greater than the
Assumed Maturity and (2) the actively traded U.S. Treasury security with the
maturity closest to and less than the Assumed Maturity).

“Replenishable
Assets”:  All Collateral Debt
Securities other than the Closing Date CMBS Securities.

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

“Replenishment Period”:  The period beginning on the Closing Date and
ending on and including the first to occur of the following events or
dates:  (i) the end of the Due Period
related to the Payment Date in August 2012; (ii) the end of the Due Period related
to the Payment Date immediately following the date on which the Collateral
Manager (with the written consent of Holders of the Majority of the Preferred
Shares) notifies the Trustee that, in light of the composition of Collateral
Debt Securities, general market conditions and other factors, investments in
additional Collateral Debt Securities within the foreseeable future would be
either impractical or not beneficial to the Issuer and the holders of the
Preferred Shares; (iii) the end of the Due Period related to the date on which
all of the Securities are redeemed as described herein under Section 9.1;
and (iv) the date on which the principal of and accrued and unpaid interest on
the Notes are declared immediately due and payable pursuant to Section 5.2
hereof following the occurrence of an Event of Default.

“Replenishment
Proceeds”:  Sale Proceeds,
Unscheduled Principal Payments and other Principal Proceeds arising from
Replenishable Assets.

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

 

77

 

“Requested Tax
Information”:  The meaning specified
in Section 7.19 hereof.

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

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

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

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

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

“S&P CDO Monitor
Test”:  A test that shall be
satisfied on any Measurement Date if, after giving effect to any purchase or
sale of a Collateral Debt Security (or both), as the case may be, (i) the Class
A-1 Loss Differential, the Class A-2 Loss Differential, the Class A-3 Loss
Differential, the Class B-FL Loss Differential, the Class B-FX Loss
Differential, the Class C-FL Loss Differential, the Class C-FX Loss
Differential, the Class D Loss Differential, the Class E Loss Differential, the
Class F Loss Differential, the Class G-FL Loss Differential, the Class G-FX
Loss Differential, the Class H-FL Loss Differential, the Class H-FX Loss Differential,
the Class J Loss Differential or the Class K Loss Differential, as the case may
be, of the Proposed Portfolio is equal to or greater than zero or (ii) the
Class A-1 Loss Differential, the Class A-2 Loss Differential, the Class A-3
Loss Differential, the Class B-FL Loss Differential, the Class B-FX Loss
Differential, the Class C-FL Loss Differential, the Class C-FX Loss
Differential, the Class D Loss Differential, the Class E Loss Differential, the
Class F Loss Differential, the Class G-FL Loss Differential, the Class G-FX
Loss Differential, the Class H-FL Loss Differential, the Class H-FX Loss
Differential, the Class J Loss Differential or the Class K Loss Differential,
as the case may be, of the Proposed Portfolio is greater than or equal to the
Class A-1 Loss Differential, the Class A-2 Loss Differential, the Class A-3
Loss Differential, the Class B-FL Loss Differential, the Class B-FX Loss
Differential, the Class C-FL Loss Differential, the Class C-FX Loss
Differential, the Class D Loss Differential, the Class E Loss Differential, the
Class F Loss Differential, the Class G-FL Loss Differential, the Class G-FX
Loss Differential, the Class H-FL Loss Differential, the Class H-FX Loss
Differential, the Class J Loss Differential or the Class K Loss Differential,
as the case may be, of the Current Portfolio, as such test may be updated by
S&P in its discretion.

“S&P
Post-Acquisition Compliance Test”:  A
test that shall be satisfied if the S&P CDO Monitor Test is satisfied.

“S&P
Post-Acquisition Failure”:  The
meaning specified in Section 12.2(d) hereof.

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

 

78

 

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

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

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

(iv)          notwithstanding
anything to the contrary contained in clauses (ii) and (iii) above, the
Collateral Manager may apply for an estimated rating from S&P within ten
(10) Business Days after the date on which the Issuer purchases a Collateral
Debt Security and use its estimated rating of such Collateral Debt Security
based on prior feedback from S&P from similar Collateral Debt Securities
until S&P assigns a rating to such security; provided that the
aggregate Principal Balance of Collateral Debt Securities that may be given a
rating based on this paragraph (iv) may not exceed 20% of the Aggregate
Collateral Balance.

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

 

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Security under Clause
A of Schedule B (the Standard & Poor’s Recovery Matrix) hereto,
corresponding to the S&P Rating at the time of issuance of such Collateral
Debt Security).

“S&P
Recovery Test”:  A test that shall be
satisfied on any Measurement Date, if the S&P Weighted Average Recovery
Rate as of such Measurement Date is equal to or greater than (a) the percentage
set forth in the row entitled “AAA Weighted Average Recovery” in the S&P
Test Matrix based on the scenario chosen by the Collateral Manager as currently
applicable to the applicable Collateral Quality Tests and the Collateral Debt
Securities in accordance with the Collateral Management Agreement, with respect
to the Class A Notes, (b) the percentage set forth in the row entitled “AA
Weighted Average Recovery” in the S&P Test Matrix based on the scenario
chosen by the Collateral Manager as currently applicable to the applicable
Collateral Quality Tests and the Collateral Debt Securities in accordance with
the Collateral Management Agreement, with respect to the Class B Notes, (c) the
percentage set forth in the row entitled “A Weighted Average Recovery” in the
S&P Test Matrix based on the scenario chosen by the Collateral Manager as
currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement, with respect to the Class C Notes, the Class D Notes and the Class E
Notes, (d) the percentage set forth in the row entitled “BBB Weighted Average
Recovery” in the S&P Test Matrix based on the scenario chosen by the
Collateral Manager as currently applicable to the applicable Collateral Quality
Tests and the Collateral Debt Securities in accordance with the Collateral
Management Agreement, with respect to the Class F Notes, the Class G Notes and
the Class H Notes, (e) the percentage set forth in the row entitled “BB
Weighted Average Recovery” in the S&P Test Matrix based on the scenario
chosen by the Collateral Manager as currently applicable to the applicable
Collateral Quality Tests and the Collateral Debt Securities in accordance with
the Collateral Management Agreement, with respect to the Class J Notes and (f)
the percentage set forth in the row entitled “CCC Weighted Average Recovery” in
the S&P Test Matrix based on the scenario chosen by the Collateral Manager
as currently applicable to the applicable Collateral Quality Tests and the
Collateral Debt Securities in accordance with the Collateral Management
Agreement, with respect to the Class K Notes.

“S&P Special Amortization Pro Rata
Condition”:  A
condition that shall be satisfied with respect to any Payment Date if (a) the
aggregate principal balance of the Collateral Debt Securities as of the related
Determination Date is greater than an amount equal to 60% of the aggregate
principal balance of the Collateral Debt Securities on the Closing Date and (b)(1)
the Pro Rata Principal Coverage Test has been satisfied on the related and each
prior Determination Date or (2) if the Pro Rata Principal Coverage Test has
failed to be satisfied on any previous Determination Date, subsequent to such
failure, (x) the Pro Rata Principal Coverage Ratio as of the related
Determination Date equals or exceeds the Pro Rata Principal Coverage Ratio in
existence on the Closing Date or (y) the Pro Rata Principal Coverage Test is
satisfied as of the related Determination Date without applying Principal
Proceeds on any previous Payment Date; provided that, if any Class of
Notes rated investment grade by S&P as of the Closing Date is downgraded by
two or more subcategories after the Closing Date, such condition shall not be
satisfied until such time as the S&P rating of such Class of Notes is
restored to a rating equal to or higher than the rating of such Class of Notes
on the Closing Date.

 

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“S&P Test
Matrix”  The table set forth in Schedule
E hereto relating to the Minimum Weighted Average Spread Test, the Minimum
Weighted Average Coupon Test, the S&P Recovery Test and the Applicable
Break-Even Loss Rate with respect to S&P:

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

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

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

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

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

“Secured
Parties”:  Collectively, the Trustee,
the Noteholders, each Hedge Counterparty (for so long as it is a party under
its Hedge Agreement), the Class A-2 Note Insurer and the Collateral Manager,
each as their interests appear in applicable Transaction Documents.

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

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

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

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

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

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

 

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

“Senior Collateral Management Fee”:  The fee payable quarterly in arrears on each
Payment Date to the Collateral Manager pursuant to this Indenture and the
Collateral Management Agreement, equal to (a) 0.05% per annum of the amount
described in clause (i) of the definition of Net Outstanding Portfolio Balance
plus (b) 0.10% per annum of the sum of the amounts described in clauses (ii)
through (iv) of the definition of Net Outstanding Portfolio Balance, to the
extent funds are available for such purpose in accordance with the Priority of
Payments calculated for each Interest Accrual Period assuming a 360-day
year with twelve 30-day months.

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

“Servicing
Agreement”:  Each of the CDO
Servicing Agreement, the Asset Servicing Agreement and any other servicing
agreement entered into by the Issuer, the Collateral Manager and any other
servicer.

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

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

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

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

“Single B Rated
CMBS Security”:  Any CMBS Security
with an Actual Rating from S&P greater than or equal to “B-” but less than
or equal to “B+” or an Actual Rating from Moody’s greater than or equal to “B3”
but less than or equal to “B1.”

“Single
Borrower Mortgage Security”:  A
commercial mortgage pass-through certificate or similar security backed
primarily by one or more mortgage loans to the same

 

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borrower (or affiliated
borrowers) on one or more commercial properties included in a securitization.

“Situs”:  SitusServ L.P.

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

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

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

“Special
Servicer”:  Green Loan or any
successor special servicer.

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

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

“Spread Appreciated Security”:  (a) Any Collateral Debt Security (other than
a Closing Date CMBS Security) which, in the Collateral Manager’s reasonable
business judgment, has significantly improved in credit quality or value since
it was acquired by the Issuer, (b) any Collateral Debt Security (other than a
Closing Date CMBS Security) that has been upgraded or put on a watch list for
possible upgrade by one or more rating subcategories by one or more Rating
Agencies since it was acquired by the Issuer or (c) (i) any Collateral Debt
Security (other than a Closing Date CMBS Security) which has achieved a
reduction in the per annum interest rate on such
security (in the case of a Fixed Rate Security), or in the spread over the
applicable index or benchmark rate (in the case of a Floating Rate Security),
due to the satisfaction of certain performance triggers set forth in the
related Underlying Instrument or (ii) any other security with respect to which
the per annum interest rate or the spread
over the applicable index, as applicable, has been reduced since its
acquisition by the Issuer as a result of the amendment of its related
Underlying Instrument; provided, that, for the avoidance of doubt, no
Closing Date CMBS Security shall constitute a Spread Appreciated Security; provided,
further that, during any Limited Discretion Period a CMBS Security shall
not be a Spread Appreciated Security unless (A) in the Collateral Manager’s reasonable
business judgment, such CMBS Security has significantly improved in credit
quality or value since it was acquired by the Issuer and (B) either (x) the
criteria set forth in subclause (b) or subclause (c) of this definition is
satisfied or (y) such CMBS Security has experienced a decrease in credit spread
of 10% or more of the credit spread at which such CMBS Security was purchased
by the Issuer, determined by reference to an applicable index selected by the
Collateral Manager.

“Spread Excess”:  As of any Measurement Date, a fraction
(expressed as a percentage), the numerator of which is equal to the product of
(a) the greater of zero and the excess, if any, of the Weighted Average Spread
for such Measurement Date over, with respect to Moody’s, the number set forth
in the row entitled “Minimum Weighted Average Spread” in the Moody’s Test
Matrix, with respect to S&P, the number set forth in the row entitled “Minimum
Weighted Average Spread” in the S&P Test Matrix, and with respect to Fitch,
the number set forth in the row entitled “Minimum Weighted Average Spread” in
the Fitch Test Matrix, in each case based on the scenario chosen by the
Collateral Manager as currently applicable to the

 

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applicable Collateral
Quality Tests and the Collateral Debt Securities in accordance with the
Collateral Management Agreement and (b) the Aggregate Principal Balance of all
Collateral Debt Securities that are Floating Rate Securities (excluding all
Defaulted Securities and Written Down Securities) and the denominator of which
is the Aggregate Principal Balance of all Collateral Debt Securities that are
Fixed Rate Securities (excluding all Defaulted Securities and Written Down
Securities), multiplying the resulting figure by 365 and then dividing by 360.

“Stated Maturity”:  The Payment Date occurring in July 2056.

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

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

“Subordinate Collateral Management Fee”:  The fee payable quarterly in arrears on each
Payment Date to the Collateral Manager pursuant to this Indenture and the
Collateral Management Agreement, in an amount equal to 0.15% per annum of the
sum of the amounts described in clauses (ii) through (iv) of the definition of
Net Outstanding Portfolio Balance, to the extent funds are available for such purpose
in accordance with the Priority of Payments calculated for each Interest
Accrual Period assuming a 360-day year with twelve 30-day months.

“Subordinate Interests”:  The Class A-2 Subordinate Interests, the
Class A-3 Subordinate Interests, the Class B Subordinate Interests, the Class C
Subordinate Interests, the Class D Subordinate Interests, the Class E
Subordinate Interests, the Class F Subordinate Interests, the Class G
Subordinate Interests, the Class H Subordinate Interests, the Class J Subordinate
Interests and/or the Class K Subordinate Interests, as the context may require.

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

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

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

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

 

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“Surety Event”:  The occurrence of any of the following
events:

(a)           the
failure of the Class A-2 Note Insurer to pay when, as and in the amounts
required, any amount payable under the Insurance Policy, and the continuation
of such failure unremedied for two (2) Business Days; or

(b)           the
Class A-2 Note Insurer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations.

“Tax Event”:  Means (i) any obligor is, or on the next
scheduled payment date under any Collateral Debt Security, shall be, required
to deduct or withhold from any payment under any Collateral Debt Security to
the Issuer for or on account of any tax for whatever reason and such obligor is
not required to pay to the Issuer such additional amount as is necessary to
ensure that the net amount actually received by the Issuer (free and clear of
taxes, whether assessed against such obligor or the Issuer) shall equal the
full amount that the Issuer would have received had no such deduction or withholding
been required, (ii) any jurisdiction imposes net income, profits or similar tax
on the Issuer, (iii) the Issuer is required to deduct or withhold from any
payment under a Hedge Agreement for or on account of any tax and the Issuer is
obligated to make a gross up payment (or otherwise pay additional amounts) to
the Hedge Counterparty, (iv) a Hedge Counterparty is required to deduct or
withhold from any payment under a Hedge Agreement for or on account of any tax
for whatever reason and such Hedge Counterparty is not required to pay to the
Issuer such additional amount as is necessary to ensure that the net amount
actually received by the Issuer (free and clear of taxes, whether assessed
against such obligor or the Issuer) shall equal the full amount that the Issuer
would have received had no such deduction or withholding been required or (v)
the Issuer fails to maintain its status as a Qualified REIT Subsidiary and has
not received an opinion of Cadwalader, Wickersham & Taft LLP, or another
nationally recognized tax counsel experienced in such matters that the Issuer
shall be treated as a foreign corporation that shall not be treated as engaged
in a trade or business in the United States for U.S. federal income tax
purposes.

“Tax Materiality Condition”:  The condition that shall be satisfied if
either (i) as a result of the occurrence of a Tax Event, a tax or taxes are
imposed on the Issuer or withheld from payments to the Issuer and with respect
to which the Issuer receives less than the full amount that the Issuer would
have received had no such deduction occurred, and such amount exceeds, in the
aggregate, U.S. $1,000,000 during any 12-month period or (ii) the Issuer fails
to maintain its status as a Qualified REIT Subsidiary.

“Tax Opinion”:  A written opinion addressed to the Issuer, in
form and substance reasonably satisfactory to the Issuer, of Cadwalader,
Wickersham & Taft LLP or another nationally recognized U.S. tax counsel,
admitted to practice (or a law firm with one or more partners admitted to
practice) before the highest court of any state of the United States or the
District of Columbia and experienced in such matters for which such Tax Opinion
is sought.

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

 

85

 

“Total Auction
Call Redemption Price”:  The
Aggregate Principal Balance of (i) all Collateral Debt Securities and (ii)
Eligible Investments designated by the Collateral Manager pursuant to Section
9.2(b) for sale in connection with an Auction Call Redemption.

“Total Par
Value Haircut Amount”:  As of any
date, the sum of (a) for the aggregate Principal Balance of Triple B Rated CMBS
Securities, 5.0% of the aggregate Principal Balance of such CMBS Securities in
excess of 5.0% of the Aggregate Collateral Balance; (b) for the aggregate
Principal Balance of Double B Rated CMBS Securities, 10.0% of the aggregate
Principal Balance of such CMBS Securities; (c) for the aggregate Principal
Balance of Single B Rated CMBS Securities, 20.0% of the aggregate Principal
Balance of such CMBS Securities; and (c) for the aggregate Principal Balance of
Triple C Rated CMBS Securities, 50.0% of the aggregate Principal Balance of
such CMBS Securities.  For purposes of
calculating the Total Par Value Haircut Amount, (i) all CMBS Securities with an
Actual Rating above “BBB” from S&P or an Actual Rating above “Baa2” from
Moody’s shall be excluded, (ii) if a CMBS Security falls under more than one of
the above categories, the category resulting in the lowest reduction in
Principal Balance shall apply to such CMBS Security and (iii) the Principal
Balance of any Discount CMBS Security shall be the original acquisition price
of such Discount CMBS Security.

“Total Redemption Price”:  The amount equal to funds sufficient to pay
all amounts and expenses described under clauses (1) through (5), (25), (26) and (27) of Section
11.1(a)(i) and to redeem all Notes at their applicable Redemption Prices.

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

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

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

“Triple B Rated
CMBS Security”:  Any CMBS Security
with an Actual Rating from S&P greater than or equal to “BBB-” but less
than or equal to “BBB” or an Actual Rating from Moody’s greater than or equal
to “Baa3” but less than or equal to “Baa2.”

“Triple C Rated
CMBS Security”:  Any CMBS Security
with an Actual Rating from S&P less than or equal to “CCC+” or an Actual
Rating from Moody’s of less than or equal to “Caa1.”

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

 

86

 

Services Group of the
Corporate Trust Office because of his knowledge of and familiarity with the
particular subject.

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

“UCC”:  The applicable Uniform Commercial Code.

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

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

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

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

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

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

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

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

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

“Weighted Average Coupon”:  As of any Measurement Date, (a) the number
obtained (rounded up to the next 0.001%) by (i) summing the products obtained
by multiplying (x) the current interest rate on each Collateral Debt Security
that is a Fixed Rate Security (excluding all Defaulted Securities and Written
Down Securities) (less any applicable Servicing Fees) by (y) the Principal
Balance of each such Collateral Debt Security and (ii) dividing such sum by the
Aggregate Principal Balance of all Collateral Debt Securities that are Fixed
Rate

 

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Securities (excluding all
Defaulted Securities and Written Down Securities) (less any applicable
Servicing Fees) plus (b) if the amount obtained pursuant to clause (a) is less
than the applicable percentage set forth in the Moody’s Test Matrix, with
respect to Moody’s, the S&P Test Matrix, with respect to S&P, or the
Fitch Test Matrix, with respect to Fitch, in each case corresponding to the
scenario elected by the Collateral Manager, the Spread Excess, if any, as of
such Measurement Date.  For purposes of
this definition, to the extent that Cash has been received in respect of
Principal Proceeds of the Collateral Debt Securities and (i) has not been
reinvested in additional Collateral Debt Securities or (ii) has been invested
in Eligible Investments, such Cash or Eligible Investments shall be deemed to
be such Collateral Debt Securities from which Principal Proceeds have been
received to the extent that such Collateral Debt Securities were Fixed Rate
Securities.  For purposes of this
definition, as of any date of determination, a Floating Rate Security that is a
Covered Fixed Rate Security shall, at the Collateral Manager’s sole discretion,
be deemed to be either a Fixed Rate Security or a Floating Rate Security.  For the avoidance of doubt, any capitalized
interest in respect of any Partially Deferred Loan shall be disregarded for
purposes of calculating the Weighted Average Coupon.

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

“Weighted Average Life Test”:  With respect to any Collateral Debt
Securities, a test that shall be satisfied as of any Measurement Date if the
Weighted Average Life of such Collateral Debt Securities as of such Measurement
Date is less than or equal to ten (10) years.

“Weighted Average Moody’s Rating Factor”:  The amount determined by summing the products
obtained by multiplying the Principal Balance of each Collateral Debt Security
(excluding Defaulted Securities and Written Down Securities) and the amount of
Cash and Eligible Investments by their Moody’s Rating Factors, dividing such
sum by the Aggregate Principal Balance of all such obligations and rounding the
result up to the nearest whole number; provided, however, to the
extent that Cash has been received in respect of Principal Proceeds of the
Collateral Debt Securities and (i) has not been reinvested in additional
Collateral Debt Securities or (ii) has been invested in Eligible Investments,
the Moody’s Rating Factor applicable to such Cash or Eligible Investments shall
be that Moody’s Rating Factor corresponding to the Moody’s Rating applicable to
the Collateral Debt Securities from which such Principal Proceeds have been
received immediately prior to receipt of such Principal Proceeds.

“Weighted Average Spread”:  As of any Measurement Date, (a) the number
obtained (rounded up to the next 0.001%), by (i) summing the products obtained
by multiplying (x) the stated spread above LIBOR at which interest accrues on
each Collateral Debt Security that is a Floating Rate Security (excluding
Defaulted Securities and Written Down Securities) (less any applicable
Servicing Fees) as of such date by (y) the Principal Balance of such Collateral
Debt Security as of such date, and (ii) dividing such sum by the Aggregate
Principal Balance of all Collateral Debt Securities that are Floating Rate
Securities (excluding all Defaulted Securities and Written Down Securities)
(less any applicable Servicing Fees) plus (b)

 

88

 

if the amount obtained
pursuant to clause (a) is less than the applicable percentage set forth in the
Moody’s Test Matrix, with respect to Moody’s, the S&P Test Matrix, with
respect to S&P, or the Fitch Test Matrix, with respect to Fitch, in each
case corresponding to the scenario elected by the Collateral Manager, the Fixed
Rate Excess, if any, as of such Measurement Date.  For purposes of this definition, to the
extent that Cash has been received in respect of Principal Proceeds of the
Collateral Debt Securities and (i) has not been reinvested in additional
Collateral Debt Securities or (ii) has been invested in Eligible Investments,
such Cash or Eligible Investments shall be deemed to be such Collateral Debt
Securities from which Principal Proceeds have been received to the extent that
such Collateral Debt Securities were Floating Rate Securities.  For purposes of this definition, as of any
date of determination, a Fixed Rate Security that is a Covered Floating Rate
Security shall, at the Collateral Manager’s sole discretion, be deemed to be
either a Floating Rate Security or a Fixed Rate Security.  For the avoidance of doubt, any capitalized
interest in respect of any Partially Deferred Loan shall be disregarded for
purposes of calculating the Weighted Average Spread.

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

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

Section 1.2             Assumptions
as to Pledged Obligations.

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

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

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

 

89

 

for payment on the
Notes and of expenses of the Issuer and the Co-Issuer pursuant to the Priority
of Payments and (ii) any such amounts received in prior Due Periods that were
not disbursed on a previous Payment Date and do not constitute amounts which
have been used as reimbursement with respect to a prior Interest Advance
pursuant to the terms of this Indenture.

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

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

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

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

(h)      For purposes of
calculating the Weighted Average Coupon in respect of Fixed Rate Securities
that are subject to any Servicing Agreement, the current interest rates in
respect of such Fixed Rate Securities shall be adjusted to reflect the amount
of interest withheld by or on behalf of the related servicer in respect of such
Fixed Rate Securities as a part of its Servicing Fee.  For purposes of calculating the Weighted
Average Spread in respect of Floating Rate Securities that are subject to any
Servicing Agreement, the stated spreads above LIBOR in respect of such Floating
Rate Securities shall be adjusted to reflect the

 

90

 

amount of interest
withheld by or on behalf of the related servicer in respect of such Floating
Rate Securities as a part of its Servicing Fee.

(i)       Notwithstanding anything
to the contrary set forth in the Eligibility Criteria, in the event of a
conflict between the terms of the Eligibility Criteria set forth in paragraphs
(xxii), (xxiii), (xxiv) and (xxv) of the definition thereof and the Collateral
Quality Test set forth in paragraph (vii) of the definition thereof, the terms
of the Collateral Quality Test set forth in paragraph (vii) of the definition
thereof shall be controlling.

(j)       Notwithstanding anything
to the contrary set forth in the Collateral Quality Tests, in the event of a
conflict between the terms of the Eligibility Criteria set forth in paragraph
(xxv) of the definition thereof and the Collateral Quality Test set forth in
paragraph (viii) of the definition thereof, the terms of the Eligibility
Criteria set forth in paragraph (xxv) of the definition thereof shall be
controlling.

(k)      Notwithstanding anything
to the contrary set forth herein, to the extent that, as of any date of
determination, the Collateral Manager elects to treat a Floating Rate Security
that is a Covered Fixed Rate Security as a Fixed Rate Security or a Floating
Rate Security for purposes of calculating the Weighted Average Spread as of
such date of determination, such Collateral Debt Security shall be treated in
the same way (i.e., as elected by the Collateral Manager for purposes of
calculating Weighted Average Spread) for purposes of calculating the Weighted
Average Coupon, as of such date of determination.

(l)       Notwithstanding anything
to the contrary set forth herein, to the extent that, as of any date of
determination, the Collateral Manager elects to treat a Fixed Rate Security
that is a Covered Floating Rate Security as a Floating Rate Security or a Fixed
Rate Security for purposes of calculating the Weighted Average Coupon as of
such date of determination, such Collateral Debt Security shall be treated in
the same way (i.e., as elected by the Collateral Manager for purposes of calculating
Weighted Average Coupon) for purposes of calculating the Weighted Average
Spread, as of such date of determination.

Section 1.3             Interest
Calculation Convention.

All calculations of
interest hereunder that are made with respect to the Floating Rate Notes shall
be made on the basis of the actual number of days during the related Interest
Accrual Period divided by 360.  All
calculations of interest hereunder that are made with respect to the Fixed Rate
Notes shall be made on the basis of the actual number of days during the
related Interest Accrual Period (based on a year of twelve 30-day months)
divided by 360.

Section 1.4             Rounding
Convention.

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

 

91

 

Section 1.5             Servicing
Override.

For the avoidance of
doubt, in the case of any decision or action required or permitted to be taken
by the Collateral Manager hereunder, any such action shall be subject to
override by the Special Servicer to the extent set forth in the Collateral
Management Agreement and the Asset Servicing Agreement.

 

92

 

ARTICLE
2

THE
NOTES

Section 2.1             Forms
Generally.

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

Section 2.2             Forms
of Notes and Certificate of Authentication.

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

(b)      Global Securities and
Certificated Notes.

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

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

 

93

 

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

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

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

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

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

Section 2.3             Authorized
Amount; Stated Maturity; Denominations.

(a)      The aggregate principal
amount of Notes that may be authenticated and delivered under this Indenture is
limited to $1,067,550,000, except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Notes
pursuant to Sections 2.5, 2.6 or 8.5 hereof.

Such Notes shall
be divided into ten (10) Classes having designations and original principal
amounts as follows:

	
  Designation

  	
   

  	
  Original

  Principal

  Amount

  	
   

  
	
  Class A-1 First
  Priority Senior Secured Floating Rate Term Notes, Due 2056

  	
   

  	
  $

  	
  704,000,000

  	
   

  
	
  Class A-2 Second
  Priority Senior Secured Floating Rate Term Notes, Due 2056

  	
   

  	
  $

  	
  121,000,000

  	
   

  
	
  Class A-3 Third
  Priority Senior Secured Floating Rate Term Notes, Due 2056

  	
   

  	
  $

  	
  116,600,000

  	
   

  

 

94

 

	
  Class B-FL
  Fourth Priority Floating Rate Term Notes, Due 2056

  	
   

  	
  $

  	
  29,500,000

  	
   

  
	
  Class B-FX
  Fourth Priority Fixed Rate Term Notes, Due 2056

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
  Class C-FL Fifth
  Priority Floating Rate Capitalized Interest Term Notes, Due 2056

  	
   

  	
  $

  	
  20,150,000

  	
   

  
	
  Class C-FX Fifth
  Priority Fixed Rate Capitalized Interest Term Notes, Due 2056

  	
   

  	
  $

  	
  3,500,000

  	
   

  
	
  Class D Sixth
  Priority Floating Rate Capitalized Interest Term Notes, Due 2056

  	
   

  	
  $

  	
  4,400,000

  	
   

  
	
  Class E Seventh
  Priority Floating Rate Capitalized Interest Term Notes, Due 2056

  	
   

  	
  $

  	
  4,950,000

  	
   

  
	
  Class F Eighth
  Priority Floating Rate Capitalized Interest Term Notes, Due 2056

  	
   

  	
  $

  	
  9,350,000

  	
   

  
	
  Class G-FL Ninth
  Priority Floating Rate Capitalized Interest Term Notes, Due 2056

  	
   

  	
  $

  	
  2,950,000

  	
   

  
	
  Class G-FX Ninth
  Priority Fixed Rate Capitalized Interest Term Notes, Due 2056

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  Class H-FL Tenth
  Priority Floating Rate Capitalized Interest Term Notes, Due 2056

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  Class H-FX Tenth
  Priority Fixed Rate Capitalized Interest Term Notes, Due 2056

  	
   

  	
  $

  	
  5,150,000

  	
   

  
	
  Class J Eleventh
  Priority Fixed Rate Capitalized Interest Term Notes, Due 2056

  	
   

  	
  $

  	
  13,750,000

  	
   

  
	
  Class K Twelfth
  Priority Fixed Rate Capitalized Interest Term Notes, Due 2056

  	
   

  	
  $

  	
  8,250,000

  	
   

  

(b)      The Notes shall be
issuable in minimum denominations of U.S.$400,000 and integral multiples of
U.S.$1,000 in excess thereof (plus any residual amount).

Section 2.4             Execution,
Authentication, Delivery and Dating.

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

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

 

95

 

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

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

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

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

Section 2.5             Registration,
Registration of Transfer and Exchange.

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

If a Person other than
the Trustee is appointed by the Issuer and the Co-Issuer as Notes Registrar,
the Issuer and the Co-Issuer shall give the Trustee prompt written notice of
the appointment of a successor Notes Registrar and of the location, and any
change in the location, of the Notes Registrar, and the Trustee shall have the
right to inspect the Notes Register at all reasonable times and to obtain
copies thereof and the Trustee shall have the right to rely upon a certificate
executed on behalf of the Notes Registrar by an Officer thereof as to the names
and addresses of the Holders of the Notes and the principal amounts and numbers
of such Notes.

 

96

 

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

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

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

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

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

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

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

(c)      No Offered Note may be
offered, sold, resold or delivered, within the United States or to, or for the
benefit of, U.S. Persons except in accordance with Section 2.5(e) below
and in accordance with Rule 144A to QIBs who are Qualified Purchasers
purchasing for their own account or for the accounts of one or more QIBs who
are Qualified Purchasers, for which the purchaser is acting as fiduciary or
agent.  The Offered Notes may be offered,
sold, resold or delivered, as the case may be, in offshore transactions to
non-U.S. Persons in reliance on Regulation S. 
None of the Issuer, the Co-Issuer, the Trustee or any other Person may
register the Notes under the Securities Act or any state securities laws.

(d)      Upon final payment due on
the Stated Maturity of a Note, the Holder thereof shall present and surrender
such Note at the Corporate Trust Office of the Trustee or at

 

97

 

the office of the
Paying Agent (outside the United States if then required by applicable law in
the case of a Note in definitive form issued in exchange for a beneficial
interest in a Regulation S Global Security pursuant to Section 2.10).

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

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

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

(iii)     Rule 144A Global Security to Regulation
S Global Security.  If a holder of a
beneficial interest in a Rule 144A Global Security wishes to transfer all or a
part of its interest in such Rule 144A Global Security to a Person who wishes
to take delivery thereof in the form of a Regulation S Global Security, such
holder may, subject to the terms hereof and the rules and procedures of
Euroclear, Clearstream, Luxembourg or the Depository, as the case may be,
exchange or cause the exchange of such interest for an equivalent beneficial
interest in a Regulation S Global Security of the same Class.  Upon receipt by the Trustee, as Notes
Registrar, of (A) instructions from Euroclear, Clearstream, Luxembourg or the Depository,
as the case may be, directing the Trustee, as

 

98

 

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

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

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

(C)     Subject to satisfaction of
the conditions set forth in subparagraph (D) of this Section 2.5(e)(iv),
a Non-Offered Note represented by a Certificated Note may be transferred to a
Person other than a U.S. Person in the form of a Certificated Note upon receipt
by the Trustee, as Notes Registrar, of a certificate substantially in the form
of Exhibit E-1 hereto given by the prospective transferee of such
beneficial interest and stating, among other things, that such transferee
acquiring such interest in a Regulation S Global Security is a not a U.S.
Person and that such transfer is being made pursuant to Rule 903 or 904 under
Regulation S.  In connection with any such
transfer, such prospective

 

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transferee shall
be deemed to have made the applicable representations contained in Section
2.5(g) hereof.

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

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

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

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

(ii)      The owner understands that the Notes are
being offered only in a transaction not involving any public offering in the
United States within the meaning of

 

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the Securities
Act, the Notes have not been and shall not be registered under the Securities
Act, and, if in the future the owner decides to offer, resell, pledge or
otherwise transfer the Notes, such Notes may only be offered, resold, pledged
or otherwise transferred in accordance with this Indenture and the applicable
legend on such Notes set forth in Exhibits A and B, as
applicable.  The owner acknowledges that
no representation is made by the Issuer, the Co-Issuer or the Dealers, as the
case may be, as to the availability of any exemption under the Securities Act
or any state securities laws for resale of the Notes.

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

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

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

 

101

(vi)    Unless a prospective Holder of an Offered
Note otherwise provides another representation acceptable to the Trustee, the
Collateral Manager, the Issuer and the Co-Issuer, each Holder of an Offered
Note, by its acquisition thereof, shall be deemed to have represented to the
Issuer, the Co-Issuer, the Collateral Manager and the Trustee that either (A)
no part of the funds being used to pay the purchase price for such Offered
Notes constitutes an asset of any “employee benefit plan” (as defined in
Section 3(3) of ERISA) or “plan” (as defined in Section 4975(e)(1) of the Code)
that is subject to Title I of ERISA or Section 4975 of the Code or any other
plan which is subject to any federal, state or local law (“Similar Law”) that is
substantially similar to Section 406 of ERISA or Section 4975 of the Code (each
a “Benefit Plan”),
or an entity whose underlying assets include plan assets of any such Benefit
Plan, or (B) its acquisition and holding of such Note do not and will not
constitute or result in a non-exempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code, or in the case of any Benefit Plan
subject to Similar Law, do not and will not result in a non-exempt violation of
Similar Law.  No Non-Offered Note may be
transferred to a Benefit Plan or an entity whose underlying assets include
assets of any Benefit Plan.

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

(viii)  The owner is not a member of the public in the
Cayman Islands, within the meaning of Section 194 of the Cayman Islands
Companies Law (2007 Revision), unless the Issuer has been listed on the Cayman
Islands Stock Exchange.

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

 

102

 

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

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

(xi)     The owner, if not a “United States person”
(as defined in Section 7701(a)(30) of the Code), either:  (A) is not a bank (within the meaning of Section
881(c)(3)(A) of the Code); (B) is a bank and has provided an IRS Form W-8ECI
representing that all payments received or to be received by it from the Issuer
are effectively connected with the conduct of a trade or business in the United
States; or (C) is a bank and is eligible for benefits under an income tax
treaty with the United States that eliminates U.S. federal income taxation of
U.S. source interest not attributable to a permanent establishment in the
United States and the Issuer is treated as a fiscally transparent entity (as
defined in Treasury Regulations section 1.894-1(d)(3)(iii)) under the laws of
owner’s jurisdiction with respect to payments made on the Offered Notes held by
the owner.

(xii)    The owner acknowledges that it is its intent
and that it understands it is the intent of the Issuer that, for purposes of
U.S. federal income, state and local income and franchise tax and any other
income taxes, for so long as Gramercy Investment or a direct or indirect
wholly-owned subsidiary of Gramercy Investment owns 100% of the Non-Offered
Notes, the Issuer’s ordinary shares and Preferred Shares, the Issuer will be
treated as a Qualified REIT Subsidiary of Gramercy Investment and the Notes
will be treated as indebtedness solely of Gramercy Investment and the Issuer’s
ordinary shares and Preferred Shares will be treated as equity of the Gramercy
Investment; the owner agrees to such treatment and agrees to take no action
inconsistent with such treatment.

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

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

 

103

 

applicable hereto as to
compliance with the transfer restrictions. 
The owner must inform a prospective transferee of the transfer
restrictions.

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

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

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

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

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

 

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

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

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

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

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

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

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

 

105

 

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

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

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

(c)      The Class A-3 Notes shall
accrue interest during each Interest Accrual Period at the Class A-3 Rate.  Interest on each Class A-3 Note shall be due
and payable on each Payment Date immediately following the related Interest
Accrual Period in the proportion that the outstanding principal amount of such
Class A-3 Note bears to the Aggregate Outstanding Amount of all Class A-3
Notes; provided, however, that the payment of interest on the
Class A-3 Notes is subordinated to the payment on each Payment Date of the
interest due and payable on the Class A-1 Notes and the Class A-2 Notes,
(including any Class A-1 Defaulted Interest Amount and any Class A-2 Defaulted
Interest Amount) and certain other amounts in accordance with the Priority of
Payments.

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

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

 

106

 

any Class A
Defaulted Interest Amount and Class B Defaulted Interest Amount) and certain
other amounts in accordance with the Priority of Payments.

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

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

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

 

107

 

is due (excluding any
previously deferred Class D Capitalized Interest) but not paid on the Class D
Notes, the failure to pay such interest shall constitute an Event of Default
hereunder.

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

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

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

For so long as any
Class E Notes are Outstanding, any payment of interest due on the Class F Notes
which is not available to be paid (“Class F Capitalized Interest”) in accordance with
the Priority of Payments on any Payment Date shall not be considered “due and
payable” for the purpose of Section 5.1(a) hereof (and the failure to
pay such Class F

 

108

 

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

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

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

 

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

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

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

 

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

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

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

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

 

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

(m)     Upon any Optional
Redemption, Tax Redemption, Auction Call Redemption or Clean-up Call, all net
proceeds from such liquidation and all available Cash (other than the Issuer’s
right, title and interest in the Excepted Assets), after the payment of (x) the
Redemption Prices of the Notes and (y) the amounts and the expenses referred to
in clauses (1) through (33) of Section 11.1(a)(i) and clauses (1)
through (15) of Section 11.1(a)(ii) will be distributed by Trustee to
the Preferred Shares Paying Agent for distribution to the holders of the
Preferred Shares in accordance with the Preferred Shares Paying Agency
Agreement, whereupon the Preferred Shares will be cancelled and deemed paid in
full for all purposes.

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

(o)      The principal of each
Class of Notes matures at par and is due and payable on the Stated Maturity,
unless the unpaid principal of such Class of Notes becomes due and payable at
an earlier date by declaration of acceleration, call for redemption or otherwise;
provided,  however, that the payment
of principal of the Class A-2 Notes (other than payment of principal pursuant
to Sections 9.6 or 9.7) may only occur after the principal of the
Class A-1 Notes has been paid in full and is subordinated to the payment on
each Payment Date of the principal and interest due and payable on the Class
A-1 Notes and other amounts in accordance with the Priority of Payments and any
payment of principal of the Class A-2 Notes which is not paid in accordance
with the Priority of Payments, on any Payment Date, shall not be considered “due
and payable” solely for purposes of Section 5.1(b) until the Payment
Date on which such principal may be paid in accordance with the Priority of
Payments or all of the Class A-1 Notes have been paid in full; provided,  further,  that the
payment of principal of the Class A-3 Notes (other than payment of principal
pursuant to Sections 9.6 or 9.7) may only occur after the
principal of the Class A-1 Notes and the Class A-2 Notes has been paid in full
and is subordinated to the payment on each Payment Date of the principal and
interest due and payable on the Class A-1 Notes and the Class A-2 Notes, and
other amounts in accordance with the Priority of Payments and any payment of
principal of the Class A-3 Notes which is not paid, in accordance with the
Priority of Payments, on any Payment Date, shall not be considered “due and
payable” solely for purposes of Section 5.1(b) until the Payment Date on
which such principal may be paid in accordance with the Priority of Payments or
all of the Class A-1 Notes and Class A-2 Notes have been paid in full; provided,  further,  that the
payment of principal of the Class B Notes (other than payment of principal
pursuant to Sections 9.6 or 9.7) may only occur after the
principal of the Class A Notes has been paid in full and is subordinated to the
payment on each Payment Date of the principal and interest due and payable on
the Class A Notes, and other amounts in accordance with the Priority of
Payments and any payment of principal of the Class B Notes which is not paid,
in accordance

 

112

 

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

 

113

 

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

 

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

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

(q)      Payments in respect of
interest on and principal of the Notes shall be payable by wire transfer in
immediately available funds to a Dollar account maintained by the Holder or its
nominee; provided that the Holder has provided wiring instructions to
the Trustee on or before the related Record Date or, if wire transfer cannot be
effected, by a Dollar check drawn on a bank in the United States, or by a
Dollar check mailed to the Holder at its address in the Notes Register.  The Issuer expects that the Depository or its
nominee, upon receipt of any payment of principal or interest in respect of a
Global Security held by the Depository or its nominee, shall immediately credit
the applicable Agent Members’ accounts with payments in amounts proportionate
to the respective beneficial interests in such Global Security as shown on the
records of the Depository or its nominee. 
The Issuer also expects that payments by Agent Members to owners of
beneficial interests in such Global Security held through Agent Members will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in the names of
nominees for such customers.  Such
payments will be the responsibility of the Agent Members.  Upon final payment due on the Maturity of a
Note, the Holder thereof shall present and surrender such Note at the Corporate
Trust Office of the Trustee or at the office of the Paying Agent (outside of
the United States if then required by applicable law in the case of a
Certificated Note issued in exchange for a beneficial interest in the
Regulation S Global Security) on or prior to such Maturity.  None of the Issuer, the Co-Issuer, the Trustee
or the Paying Agent will have any responsibility or liability with respect to
any records maintained by the Holder of any

 

115

 

Note with respect
to the beneficial holders thereof or payments made thereby on account of
beneficial interests held therein.  In
the case where any final payment of principal and interest is to be made on any
Note (other than on the Stated Maturity thereof) the Issuer or, upon Issuer
Request, the Trustee, in the name and at the expense of the Issuer shall, not
more than thirty (30) nor fewer than five
Business Days prior to the date on which such payment is to be made, mail to
the Persons entitled thereto at their addresses appearing on the Notes
Register, a notice which shall state the date on which such payment will be
made and the amount of such payment per U.S.$400,000 initial principal amount
of Notes and shall specify the place where such Notes may be presented and
surrendered for such payment.

(r)       Subject to the
provisions of Sections 2.7(a) through (l) hereof, Holders of
Notes as of the Record Date in respect of a Payment Date shall be entitled to
the interest accrued and payable in accordance with the Priority of Payments
and principal payable in accordance with the Priority of Payments on such
Payment Date.  All such payments that are
mailed or wired and returned to the Paying Agent shall be held for payment as
herein provided at the office or agency of the Issuer and the Co-Issuer to be
maintained as provided in Section 7.2 (or returned to the Trustee).

(s)      Interest on any Note
which is payable, and is punctually paid or duly provided for, on any Payment
Date shall be paid to the Person in whose name that Note (or one or more
predecessor Notes) is registered at the close of business on the Record Date
for such interest.

(t)       Payments of principal to
Holders of the Notes of each Class shall be made in the proportion that the
Aggregate Outstanding Amount of the Notes of such Class registered in the name
of each such Holder on such Record Date bears to the Aggregate Outstanding
Amount of all Notes of such Class on such Record Date.

(u)      Interest accrued with
respect to the Notes shall be calculated as described in the applicable form of
Note attached hereto.

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

(w)     Notwithstanding anything
contained in this Indenture to the contrary, the obligations of the Issuer and
the Co-Issuer under the Notes and this Indenture are non-recourse obligations
of the Issuer and the Co-Issuer payable solely from the Assets (including,
solely with respect to the Class A-2 Notes, from payments received under the
Insurance Policy (which payments are available solely for the Class A-2 Notes and
not for any other Securities)) and following realization of the Assets, the
obligations of the Co-Issuers and any claims of the Noteholders, the Trustee,
any other Secured Party or any third party beneficiary of this Indenture shall
be extinguished and shall not revive thereafter.  No recourse shall be had for the payment of
any amount owing in respect of the Notes against any Officer, director,
employee, shareholder, limited partner or incorporator of the Issuer, the
Co-Issuer or any of

 

116

 

their respective
successors or assigns for any amounts payable under the Notes or this
Indenture.  It is understood that the
foregoing provisions of this paragraph shall not (i) prevent recourse to the
Assets for the sums due or to become due under any security, instrument or
agreement which is part of the Assets or (ii) constitute a waiver, release or
discharge of any indebtedness or obligation evidenced by the Notes or secured
by this Indenture (to the extent it relates to the obligation to make payments
on the Notes) until such Assets have been realized, whereupon any outstanding
indebtedness or obligation in respect of the Notes shall be extinguished and
shall not revive thereafter.  It is
further understood that the foregoing provisions of this paragraph shall not
limit the right of any Person to name the Issuer or the Co-Issuer as a party
defendant in any Proceeding or in the exercise of any other remedy under the
Notes or this Indenture, so long as no judgment in the nature of a deficiency
judgment or seeking personal liability shall be asked for or (if obtained)
enforced against any such Person or entity.

(x)      Subject to the foregoing
provisions of this Section 2.7, each Note delivered under this Indenture
and upon registration of transfer of or in exchange for or in lieu of any other
Note shall carry the rights of unpaid interest and principal that were carried
by such other Note.

(y)      Notwithstanding any of
the foregoing provisions with respect to payments of principal of and interest
on the Notes (but subject to Section 2.7(o)), if the Notes have become
or been declared due and payable following an Event of Default and such
acceleration of Maturity and its consequences have not been rescinded and
annulled and the provisions of Section 5.5 are not applicable, then
payments of principal of and interest on such Notes shall be made in accordance
with Section 5.7 hereof.

(z)      Payments in respect of
the Preferred Shares as contemplated by Sections 11.1(a)(i)(34) and 11.1(a)(ii)(16)
shall be made by the Trustee to the Preferred Shares Paying Agent.

Section 2.8             Persons
Deemed Owners.

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

 

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Section 2.9             Cancellation.

All Notes surrendered for
payment, registration of transfer, exchange or redemption, or deemed lost or
stolen, shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and shall be promptly canceled by the Trustee and may
not be reissued or resold.  No Notes
shall be authenticated in lieu of or in exchange for any Notes canceled as
provided in this Section 2.9, except as expressly permitted by this
Indenture.  All canceled Notes held by
the Trustee shall be destroyed or held by the Trustee in accordance with its
standard retention policy unless the Issuer and the Co-Issuer shall direct by
an Issuer Order that they be returned to them.

Section 2.10           Global
Securities; Temporary Notes.

(a)      In the event that the
Depository notifies the Issuer and the Co-Issuer that it is unwilling or unable
to continue as Depository for a Global Security or if at any time such
Depository ceases to be a “Clearing Agency” registered under the Exchange Act
and a successor depository is not appointed by the Issuer within ninety (90)
days of such notice, the Global Securities deposited with the Depository
pursuant to Section 2.2 hereof shall be transferred to the beneficial
owners thereof subject to the procedures and conditions set forth in this Section
2.10.

(b)      Any Global Security that
is transferable to the beneficial owners thereof pursuant to Section 2.10(a)
above shall be surrendered by the Depository to the Trustee’s Corporate Trust
Office together with necessary instruction for the registration and delivery of
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class B-FL Notes, Class B-FX
Notes, Class C-FL Notes, Class C-FX Notes, Class D Notes, Class E Notes, Class
F Notes, Class G-FL Notes, Class G-FX Notes, Class H-FL Notes and Class H-FX
Notes in definitive registered form without interest coupons to the beneficial
owners (or such owner’s nominee) holding the ownership interests in such Global
Security.  Any such transfer shall be
made, without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Security, an equal aggregate principal
amount of Certificated Notes of the same Class and authorized
denominations.  Any Certificated Notes
delivered in exchange for an interest in a Global Security shall, except as
otherwise provided by Section 2.5(f), bear the applicable legend set
forth in Exhibit A or B, as applicable, and shall be subject to
the transfer restrictions referred to in such applicable legend.  The Holder of each such registered individual
Global Security may transfer such Global Security by surrendering it at the
Corporate Trust Office of the Trustee, or at the office of the Paying Agent or
Irish Paying Agent.

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

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

 

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Pending the preparation
of Certificated Notes pursuant to this Section 2.10, the Issuer and the
Co-Issuer may execute and, upon Issuer Order, the Trustee shall authenticate
and deliver, temporary Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class
B-FL Notes, Class B-FX Notes, Class C-FL Notes, Class C-FX Notes, Class D
Notes, Class E Notes, Class F Notes, Class G-FL Notes, Class G-FX Notes, Class
H-FL Notes or Class H-FX Notes that are printed, lithographed, typewritten,
mimeographed or otherwise reproduced, in any authorized denomination,
substantially of the tenor of the Certificated Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the Officers executing such Certificated Notes may determine, as
conclusively evidenced by their execution of such Certificated Notes.

If temporary Certificated
Notes are issued, the Issuer and the Co-Issuer shall cause permanent
Certificated Notes to be prepared without unreasonable delay.  The Certificated Notes shall be printed,
lithographed, typewritten or otherwise reproduced, or provided by any
combination thereof, or in any other manner permitted by the rules and
regulations of any applicable notes exchange, all as determined by the Officers
executing such Certificated Notes.  After
the preparation of Certificated Notes, the temporary Notes shall be
exchangeable for Certificated Notes upon surrender of the applicable temporary
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class B-FL Notes, Class B-FX
Notes, Class C-FL Notes, Class C-FX Notes, Class D Notes, Class E Notes, Class
F Notes, Class G-FL Notes, Class G-FX Notes, Class H-FL Notes or Class H-FX
Notes at the office or agency maintained by the Issuer and the Co-Issuer for
such purpose, without charge to the Holder. 
Upon surrender for cancellation of any one or more temporary Class A-1
Notes, Class A-2 Notes, Class A-3 Notes, Class B-FL Notes, Class B-FX Notes,
Class C-FL Notes, Class C-FX Notes, Class D Notes, Class E Notes, Class F
Notes, Class G-FL Notes, Class G-FX Notes, Class H-FL Notes or Class H-FX
Notes, the Issuer and the Co-Issuer shall execute, and the Trustee shall
authenticate and deliver, in exchange therefor the same aggregate principal
amount of Certificated Notes of authorized denominations.  Until so exchanged, the temporary Class A-1
Notes, Class A-2 Notes, Class A-3 Notes, Class B-FL Notes, Class B-FX Notes,
Class C-FL Notes, Class C-FX Notes, Class D Notes, Class E Notes, Class F
Notes, Class G-FL Notes, Class G-FX Notes, Class H-FL Notes or Class H-FX Notes
shall in all respects be entitled to the same benefits under this Indenture as
Certificated Notes.

Section 2.11           U.S.
Tax Treatment of Notes.

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

(b)      For U.S.
federal, state and local income and franchise tax purposes, the Issuer agrees,
and each Holder of a Note or any interest therein, by virtue of its purchase or
other acquisition of such Note or interest therein, shall be deemed to have
agreed, to treat the Notes as debt and the Issuer as a Qualified REIT
Subsidiary.

(c)      If the Issuer
is treated as a foreign corporation that is not a Qualified REIT Subsidiary and
is not engaged in a United States trade or business, the Issuer shall not file,
or

 

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cause to be filed, any income or franchise tax return in the United
States or any state of the United States unless it shall have obtained advice
from Cadwalader, Wickersham & Taft LLP or an opinion of other nationally
recognized U.S. tax counsel experienced in such matters prior to such filing
that, under the laws of such jurisdiction, the Issuer is required to file such
income or franchise tax return.

(d)      Each Holder of Notes
shall timely furnish to the Issuer, the Co-Issuer or its agents any U.S.
federal income tax form or certification (such as IRS Form W-8BEN
(Certification of Foreign Status of Beneficial Owner) (with Part III marked),
IRS Form W-8IMY (Certification of Foreign Intermediary Status), IRS Form W-9
(Request for Taxpayer Identification Number and Certification), or IRS Form
W-8ECI (Certification of Foreign Person’s Claim for Exemption from Withholding
on Income Effectively Connected with Conduct of a U.S. Trade or Business) or
any successors to such IRS forms that the Issuer, the Co-Issuer or its agents
may reasonably request and shall update or replace such forms or certification
in accordance with its terms or its subsequent amendments.

(e)      If the Issuer
is no longer a Qualified REIT Subsidiary and is treated as a foreign
corporation that will not be treated as engaged in a trade or business in the
United States for U.S. federal income tax purposes, in the case of the
Preferred Shares and any Class of Notes that is deemed equity for U.S. federal
income tax purposes by the Internal Revenue Service (the “IRS”), if the
Holder of such Security so requests, the Issuer agrees to timely provide each
Holder of such a Security with any tax information that such Holder reasonably
requires in order to comply with any applicable U.S. Federal income tax
reporting or filing requirements, including, without limitation, a PFIC Annual
Information Statement, as
described in Treasury Regulation §1.1295-1(g) (or any successor
Treasury Regulation or IRS release or notice).

(f)       If the Issuer
is no longer a Qualified REIT Subsidiary and is treated as a foreign
corporation that will not be treated as engaged in a trade or business in the
United States for U.S. federal income tax purposes, in the case of the
Preferred Shares and any Class of Notes that is deemed equity for U.S. federal
income tax purposes by the Internal Revenue Service (the “IRS”), if the
Holder of such Security so requests, upon the request of any such Holder, any information that such Holder reasonably requests to assist such Holder with regard to any filing requirements such Holder may have as a result of the Issuer
being classified as a “controlled foreign corporation” for U.S. federal income
tax purposes.

Section 2.12           Authenticating
Agents.

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

 

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Any corporation or
banking association into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation or banking
association resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authenticating Agent, shall be the successor of
such Authenticating Agent hereunder, without the execution or filing of any
further act on the part of the parties hereto or such Authenticating Agent or
such successor corporation.  Any
Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee, the Issuer and the Co-Issuer.  The Trustee may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination to
such Authenticating Agent, the Issuer and the Co-Issuer.  Upon receiving such notice of resignation or
upon such a termination, the Trustee shall promptly appoint a successor
Authenticating Agent and shall give written notice of such appointment to the
Issuer.

The Trustee agrees to pay
to each Authenticating Agent appointed by it from time to time reasonable
compensation for its services, and reimbursement for its reasonable expenses
relating thereto and the Trustee shall be entitled to be reimbursed for such
payments, subject to Section 6.7 hereof. 
The provisions of Sections 2.9, 6.4 and 6.5 hereof
shall be applicable to any Authenticating Agent.

Section 2.13           Forced
Sale on Failure to Comply with Restrictions.

(a)      Notwithstanding anything
to the contrary elsewhere in this Indenture, any transfer of a Note or interest
therein to a U.S. Person who is determined not to have been both a QIB and a Qualified
Purchaser at the time of acquisition of the Note or interest therein shall be
null and void and any such proposed transfer of which the Issuer, the Co-Issuer
or the Trustee shall have notice may be disregarded by the Issuer, the
Co-Issuer and the Trustee for all purposes.

(b)      If the Issuer determines
that any Holder of a Note has not satisfied the applicable requirement
described in Section 2.13(a) above (any such person a “Non-Permitted Holder”),
then the Issuer shall promptly after discovery that such Person is a
Non-Permitted Holder by the Issuer, the Co-Issuer or the Trustee (and notice by
the Trustee or the Co-Issuer to the Issuer, if either of them makes the
discovery), send notice to such Non-Permitted Holder demanding that such
Non-Permitted Holder transfer its interest to a Person that is not a
Non-Permitted Holder within thirty (30) days
of the date of such notice.  If such
Non-Permitted Holder fails to so transfer its Note or interest therein, the
Issuer shall have the right, without further notice to the Non-Permitted
Holder, to sell such Note or interest therein to a purchaser selected by the
Issuer that is not a Non-Permitted Holder on such terms as the Issuer may
choose.  The Issuer, or the Trustee
acting on behalf of the Issuer, may select the purchaser by soliciting one or
more bids from one or more brokers or other market professionals that regularly
deal in securities similar to the Note, and selling such Note to the highest
such bidder.  However, the Issuer or the
Trustee may select a purchaser by any other means determined by it in its sole
discretion.  The Holder of such Note, the
Non-Permitted Holder and each other Person in the chain of title from the
Holder to the Non-Permitted Holder, by its acceptance of an interest in the
Note, agrees to cooperate with the Issuer and the Trustee to effect such
transfers.  The proceeds of such sale,
net of any commissions, expenses and taxes due in connection with such sale
shall be remitted to the Non-Permitted Holder. 
The terms

 

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and conditions of
any sale under this Section 2.13(b) shall be determined in the sole
discretion of the Issuer, and the Issuer shall not be liable to any Person
having an interest in the Note sold as a result of any such sale of exercise of
such discretion.

Section 2.14           No Gross-Up.

(a)      The Issuer
shall not be obligated to pay any additional amounts to the Holders or
beneficial owners of the Notes as a result of any withholding or deduction for,
or on account of, any present or future taxes, duties, assessments or
governmental charges.

 

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ARTICLE
3

CONDITIONS
PRECEDENT; PLEDGED OBLIGATIONS

Section 3.1             General
Provisions.

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

(a)      an Officer’s Certificate
of the Issuer (i) evidencing the authorization by Board Resolution of the
execution and delivery of this Indenture, the Collateral Management Agreement,
each Hedge Agreement and related documents, the execution, authentication and
delivery of the Notes and specifying the Stated Maturity of each Class of
Notes, the principal amount of each Class of Notes and the applicable Note
Interest Rate of each Class of Notes to be authenticated and delivered, and
(ii) certifying that (A) the attached copy of the Board Resolution is a true
and complete copy thereof, (B) such resolutions have not been rescinded and are
in full force and effect on and as of the Closing Date, (C) the Officers
authorized to execute and deliver such documents hold the offices and have the
signatures indicated thereon and (4) at least U.S.$32,450,000 of proceeds on
account of the sale on the Closing Date of the Preferred Shares shall have been
received;

(b)      an Officer’s Certificate
of the Co-Issuer (i) evidencing the authorization by Board Resolution of the
execution and delivery of this Indenture and related documents, the execution,
authentication and delivery of the Notes and specifying the Stated Maturity of
each Class of Notes, the principal amount of each Class of Notes and the
applicable Note Interest Rate of each Class of Notes to be authenticated and
delivered, and (ii) certifying that (A) the attached copy of the Board
Resolution is a true and complete copy thereof, (B) such resolutions have not
been rescinded and are in full force and effect on and as of the Closing Date
and (C) the Officers authorized to execute and deliver such documents hold the
offices and have the signatures indicated thereon;

(c)      (i) either (A) certificates
of the Issuer or other official document evidencing the due authorization,
approval or consent of any governmental body or bodies, at the time having
jurisdiction in the premises, together with an Opinion of Counsel of the Issuer
that no other authorization, approval or consent of any governmental body is
required for the valid issuance of such Notes or (B) an Opinion of Counsel of
the Issuer reasonably satisfactory in form and substance to the Trustee that no
such authorization, approval or consent of any governmental body is required
for the valid issuance of such Notes except as may have been given; and

(ii)      either (A) certificates of the Co-Issuer
or other official document evidencing the due authorization, approval or
consent of any governmental body or bodies, at the time having jurisdiction in
the premises, together with an Opinion of

 

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Counsel of the
Co-Issuer that no other authorization, approval or consent of any governmental
body is required for the valid issuance of such Notes or (B) an Opinion of
Counsel of the Co-Issuer reasonably satisfactory in form and substance to the
Trustee that no such authorization, approval or consent of any governmental
body is required for the valid issuance of such Notes except as may have been
given;

(d)      opinions of Cadwalader,
Wickersham & Taft LLP, special U.S. counsel to the Issuer, the Co-Issuer
and the Collateral Manager (which opinions may be limited to the laws of the
State of New York and the federal law of the United States and may assume,
among other things, the correctness of the representations and warranties made
or deemed made by the owners of Notes pursuant to Sections 2.5(g) and (h))
dated the Closing Date in a form satisfactory to the Initial Purchasers and the
Trustee;

(e)      an opinion of Maples and
Calder, Cayman Islands counsel to the Issuer (which opinion shall be limited to
the laws of the Cayman Islands), dated the Closing Date in a form satisfactory
to the Initial Purchasers and the Trustee;

(f)       an opinion of counsel to
each Hedge Counterparty, dated the Closing Date in a form satisfactory to the
Initial Purchasers and the Trustee;

(g)      opinions of Clifford
Chance US LLP, (i) special tax counsel to Gramercy Investment regarding its
qualification and taxation as a REIT, substantially in the form of Exhibit K
attached hereto, (ii) special counsel to Gramercy Investment, as the Seller,
dated the Closing Date and (iii) special counsel to the Advancing Agent, dated
the Closing Date in a form satisfactory to the Initial Purchasers and the
Trustee;

(h)      an opinion of counsel to
the Class A-2 Note Insurer, dated the Closing Date, in a form satisfactory to
the Initial Purchasers and the Trustee;

(i)       an Officer’s
Certificate, given on behalf of the Issuer and without personal liability,
stating that the Issuer is not in Default under this Indenture and that the
issuance of the Notes will not result in a breach of any of the terms,
conditions or provisions of, or constitute a Default under, the Governing Documents
of the Issuer, any indenture or other agreement or instrument to which the
Issuer is a party or by which it is bound, or any order of any court or
administrative agency entered in any Proceeding to which the Issuer is a party
or by which it may be bound or to which it may be subject; that all conditions
precedent provided in this Indenture relating to the authentication and
delivery of the Notes applied for and all conditions precedent provided in the
Preferred Shares Paying Agency Agreement relating to the issuance by the Issuer
of the Preferred Shares have been complied with;

(j)       an Officer’s Certificate
stating that the Co-Issuer is not in Default under this Indenture and that the
issuance of the Securities will not result in a breach of any of the terms,
conditions or provisions of, or constitute a Default under, the Governing
Documents of the Co-Issuer, any indenture or other agreement or instrument to
which the Co-Issuer is a party or by which it is bound, or any order of any
court or administrative agency entered in any Proceeding to which the Co-Issuer
is a party or by which it may be bound or to which it may be subject; that all
conditions precedent provided in this Indenture relating to the

 

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authentication and
delivery of the Notes applied for have been complied with; and that all
expenses due or accrued with respect to the offering or relating to actions
taken on or in connection with the Closing Date have been paid;

(k)      an executed counterpart
of the initial Collateral Debt Securities Purchase Agreement and the Collateral
Management Agreement;

(l)       an executed copy of each
Hedge Agreement;

(m)     executed copies of the
Insurance Policy and the Insurance Agreement;

(n)      an executed counterpart of
the Preferred Shares Paying Agency Agreement;

(o)      an opinion of counsel to
the Trustee, dated the Closing Date in a form satisfactory to the Initial
Purchasers;

(p)      an Accountant’s Report
confirming the following information as of the Closing Date:  (i) the information (other than the Principal
Balance and the Purchase Price) with respect to each Collateral Debt Security
set forth on the Schedule of Closing Date Collateral Debt Securities by
reference to such sources as shall be specified therein and (ii) specifying the
procedures undertaken by the accountants to review data and computations
relating to the foregoing;

(q)      an Officer’s Certificate
from the Collateral Manager (i) confirming that each Collateral Debt Security
set forth on Schedule F attached hereto meets the Eligibility Criteria
and that Schedule F correctly lists the Collateral Debt Securities to be
Granted to the Trustee on the Closing Date, and (ii) stating the Aggregate
Principal Amount of the Collateral Debt Securities;

(r)       evidence of preparation
for filing at the appropriate filing office in the District of Columbia of a
financing statement executed on behalf of the Issuer relating to the perfection
of the lien of this Indenture;

(s)      an Issuer Order executed
by the Issuer and the Co-Issuer directing the Trustee to (i) authenticate the
Notes specified therein, in the amounts set forth therein and registered in the
name(s) set forth therein and (ii) deliver the authenticated Notes as directed
by the Issuer and the Co-Issuer; and

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

Section 3.2             Security
for Notes.

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

(a)      Grant of Security
Interest; Delivery of Collateral Debt Securities.  The Grant pursuant to the Granting clauses of
this Indenture of all of the Issuer’s right, title and

 

125

 

interest in and to
the Assets and the transfer of all Collateral Debt Securities acquired in
connection therewith purchased by the Issuer on the Closing Date (as set forth
in the Schedule of Closing Date Collateral Debt Securities) to the Trustee,
without recourse (except as expressly provided in each applicable Collateral
Debt Security Purchase Agreement), in the manner provided in Section 3.3(a)
and the crediting to the Custodial Account by the Custodial Securities
Intermediary of such Collateral Debt Securities shall have occurred;

(b)      Certificate of the
Issuer.  A certificate of an
Authorized Officer of the Issuer given on behalf of the Issuer and without
personal liability, dated as of the Closing Date, shall be delivered to the
Trustee, to the effect that, in the case of each Collateral Debt Security
pledged to the Trustee for inclusion in the Assets on the Closing Date and
immediately prior to the delivery thereof on the Closing Date:

(i)       the Issuer is the owner of such
Collateral Debt Security free and clear of any liens, claims or encumbrances of
any nature whatsoever except for those which are being released on the Closing
Date;

(ii)      the Issuer has acquired its ownership in
such Collateral Debt Security in good faith without notice of any adverse
claim, except as described in paragraph (i) above;

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

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

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

(vi)    the Collateral Debt Securities included in
the Assets satisfy the requirements of the definition of Eligibility Criteria
and the requirements of Section 3.2(a); and

(vii)   the Grant pursuant to the Granting Clauses of
this Indenture shall result in a first priority security interest in favor of
the Trustee for the benefit of the Holders of the Notes and each Hedge
Counterparty in all of the Issuer’s right, title and interest in and to the
Collateral Debt Securities pledged to the Trustee for inclusion in the Assets
on the Closing Date.

(c)      Rating Letters.  The Trustee shall receive a letter signed by
each Rating Agency and confirming that (i) the Class A-1 Notes have been rated “Aaa”
by Moody’s, “AAA” by S&P and “AAA” by Fitch, (ii) the Class A-2 Notes have
been rated “Aaa” by Moody’s, “AAA” by S&P and “AAA” by Fitch, (iii) the
Class A-3 Notes have been rated “Aaa” by Moody’s, “AAA” by S&P and “AAA” by
Fitch, (iv) the Class B-FL Notes have

 

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been rated at
least “Aa2” by Moody’s, at least “AA” by S&P and at least “AA” by Fitch,
(v) the Class B-FX Notes have been rated at least “Aa2” by Moody’s, at least “AA”
by S&P and at least “AA” by Fitch, (vi) the Class C-FL Notes have been
rated at least “A+” by S&P and at least “A+” by Fitch, (vii) the Class C-FX
Notes have been rated at least “A+” by S&P and at least “A+” by Fitch,
(viii) the Class D Notes have been rated at least “A” by S&P and at least “A”
by Fitch, (ix) the Class E Notes have been rated at least “A-” by S&P and
at least “A-” by Fitch, (x) the Class F Notes have been rated at least “BBB+”
by S&P and at least “BBB+” by Fitch, (xi) the Class G-FL Notes have been
rated at least “BBB” by S&P and at least “BBB” by Fitch, (xii) the Class
G-FX Notes have been rated at least “BBB” by S&P and at least “BBB” by
Fitch, (xiii) the Class H-FL Notes have been rated at least “BBB-” by S&P
and at least “BBB-” by Fitch, (xiv) the Class H-FX Notes have been rated at
least “BBB-” by S&P and at least “BBB-” by Fitch, (xv) the Class J Notes
have been rated at least “BB-” by S&P and at least “BB-” by Fitch and (xvi)
the Class K Notes have been rated at least “CCC-” by S&P, and that such
ratings are in full force and effect on the Closing Date.

(d)      Accounts.  Evidence of the establishment of the Payment
Account, the Collection Account, the Interest Collection Account, the Principal
Collection Account, the Delayed Funding Obligations Account, the Expense
Account, each Hedge Collateral Account, each Hedge Termination Account and the
Custodial Account shall be provided to the Trustee.

(e)      Deposit to Expense
Account.  On the Closing Date, the
Issuer shall deposit into the Expense Account from the gross proceeds of the
offering of the Securities, approximately $150,000.

(f)       Deposit to Delayed
Funding Obligations Account.  On the
Closing Date, the Issuer shall make no deposit into the Delayed Funding
Obligations Account.

(g)      Issuance of Preferred
Shares.  The Issuer shall have
delivered to the Trustee evidence that the Preferred Shares have been, or
contemporaneously with the issuance of the Notes will be, (1) issued by the
Issuer and (2) acquired in their entirety by QRS S1 Corp.

Section 3.3             Transfer
of Pledged Obligations.

(a)      Wells Fargo Bank,
National Association is hereby appointed as Securities Intermediary (in such
capacity, the “Custodial Securities Intermediary”) to hold all Pledged
Obligations delivered to it in physical form at its office in Minneapolis,
Minnesota.  Any successor to such
Securities Intermediary shall be a U.S. state or national bank or trust company
that is not an Affiliate of the Issuer or the Co-Issuer and has capital and
surplus of at least U.S.$100,000,000. 
Subject to the limited right to relocate Pledged Obligations set forth
in Section 7.5(b), the Custodial Securities Intermediary, as a
Securities Intermediary, shall hold all Collateral Debt Securities in the
Custodial Account and Eligible Investments and other investments purchased in
accordance with this Indenture in the respective Accounts in which the funds
used to purchase such investments are held in accordance with Article 10,
and, in respect of each Account (other than the Preferred Shares Distribution
Account), the Trustee shall have entered into an agreement with the Issuer and
the Securities Intermediary (the “Securities Accounts Control Agreement”)
providing, inter alia, that the establishment

 

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and maintenance of
such Account will be governed by a law satisfactory to the Issuer, the Trustee
and the Custodial Securities Intermediary. 
To the maximum extent feasible, Pledged Obligations shall be transferred
to the Trustee as Security Entitlements in the manner set forth in clause (i)
below.  In the event that the measures
set forth in clause (i) below cannot be taken as to any Pledged Obligations,
such Pledged Obligation may be transferred to the Trustee in the manner set
forth in clauses (ii) through (vii) below, as appropriate.  The security interest of the Trustee in
Pledged Obligations shall be perfected and otherwise evidenced as follows:

(i)       in the case of such Pledged Obligations
consisting of Security Entitlements by (A) the Issuer causing the Custodial
Securities Intermediary, in accordance with the Securities Accounts Control
Agreement, to indicate by book entry that a Financial Asset has been credited
to the Custodial Account and (B) the Issuer causing the Custodial Securities
Intermediary to agree pursuant to the Securities Accounts Control Agreement
that it will comply with Entitlement Orders originated by the Trustee with
respect to each such Security Entitlement without further consent by the
Issuer;

(ii)      in the case of Pledged Obligations that
are “uncertificated securities” (as such term is defined in the UCC) to the
extent that any such uncertificated securities do not constitute Financial
Assets forming the basis of Security Entitlements by the Trustee pursuant to
clause (i) (the “Uncertificated Securities”), by the Issuer (A) causing
the issuer(s) of such Uncertificated Securities to register on their respective
books the Trustee as the registered owner thereof upon original issue or
transfer thereof or (B) causing another Person, other than a Securities
Intermediary, either to become the registered owner of such Uncertificated
Securities on behalf of the Trustee, or such Person having previously become
the registered owner, to acknowledge that it holds such Uncertificated
Securities for the Trustee;

(iii)     in the case of Pledged Obligations
consisting of Certificated Securities in registered form to the extent that any
such Certificated Securities do not constitute Financial Assets forming the
basis of Security Entitlements acquired by the Trustee pursuant to clause (i)
(the “Registered Securities”), by the Issuer (A) causing (1) the Trustee
to obtain possession of such Registered Securities in the State of Minnesota or
(2) another Person, other than a Securities Intermediary, either to acquire
possession of such Registered Securities on behalf of the Trustee, or having
previously acquired such Registered Securities, in either case, in the State of
Minnesota to acknowledge that it holds such Registered Securities for the
Trustee and (B) causing (1) the endorsement of such Registered Securities to
the Trustee by an effective endorsement; or (2) the registration of such
Registered Securities in the name of the Trustee by the issuer thereof upon its
original issue or registration of transfer;

(iv)    in the case of Pledged Obligations
consisting of Certificated Securities in bearer form to the extent that any
such Certificated Securities do not constitute Financial Assets forming the
basis of Security Entitlements acquired by the Trustee pursuant to clause (i)
(the “Bearer Securities”), by the Issuer causing (A) the Trustee to
obtain possession of such Bearer Securities in the State of Minnesota or (B)
another Person, other than a Securities Intermediary, either to acquire
possession of such Bearer

 

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Securities on
behalf of the Trustee or, having previously acquired possession of such Bearer
Securities, in either case, in the State of Minnesota to acknowledge that it
holds such Bearer Securities for the Trustee;

(v)     in the case of Pledged Obligations that
consist of Money or Instruments (the “Minnesota Collateral”), to the extent that any
such Minnesota Collateral does not constitute a Financial Asset forming the
basis of a Security Entitlement acquired by the Trustee pursuant to clause (i),
by the Issuer causing (A) the Trustee to acquire possession of such Minnesota
Collateral in the State of Minnesota or (B) another Person (other than the
Issuer or a Person controlling, controlled by, or under common control with,
the Issuer) (1) to (x) take possession of such Minnesota Collateral in the
State of Minnesota and (y) authenticate a record acknowledging that it holds
such possession for the benefit of the Trustee or (2) to (x) authenticate a
record acknowledging that it will hold possession of such Minnesota Collateral
for the benefit of the Trustee and (y) take possession of such Minnesota
Collateral in the State of Minnesota;

(vi)    in the case of Pledged Obligations that
consist of UCC Accounts or General Intangibles (“Accounts Receivable”),
by the Issuer (A) notifying, or causing the notification of, the account
debtors (as such term is defined in Section 9-102(a) of the UCC) for
such Accounts Receivable of the security interest of the Trustee in such Accounts
Receivable and causing the Securities Intermediary to credit such Accounts
Receivable to the Custodial Account and to treat such Accounts Receivable as
Financial Assets within the meaning of Article 8 of the UCC and (B) to the
extent that doing so would be effective to perfect a security interest in such
Accounts Receivable under the UCC as in effect at the time of transfer of such
Accounts Receivable to the Trustee hereunder, filing or causing the filing of a
UCC financing statement that encompasses such Accounts Receivable with the
Recorder of Deeds of the District of Columbia and such other offices as
applicable; and

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

(b)      The Issuer hereby
authorizes the filing of UCC financing statements describing as the collateral
covered thereby “all of the debtor’s personal property and assets,”

 

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or words to that
effect, notwithstanding that such wording may be broader in scope than the
Assets described in this Indenture.

(c)      Without limiting the
foregoing, the Issuer and the Trustee on behalf of the Bank agree, and the Bank
shall cause the Custodial Securities Intermediary, to take such different or
additional action as the Trustee may reasonably request in order to maintain
the perfection and priority of the security interest of the Trustee in the
event of any change in applicable law or regulation, including Articles 8 and 9
of the UCC and Treasury Regulations governing transfers of interests in
Government Items (it being understood that the Trustee shall be entitled to
rely upon an Opinion of Counsel, including an Opinion of Counsel delivered in
accordance with Section 3.1(d), as to the need to file any financing
statements or continuation statements, the dates by which such filings are
required to be made and the jurisdictions in which such filings are required to
be made).

(d)      Without limiting any of
the foregoing,

(i)       in connection with each Grant of a
Collateral Debt Security hereunder, the Issuer shall deliver (or cause to be
delivered by the applicable Seller) to the Custodial Securities Intermediary
(A) the original of any note (or a copy of such note together with a lost note
affidavit), certificate or other instrument constituting or evidencing such
Collateral Debt Security and any other Underlying Instrument related to such
Collateral Debt Security the delivery of which is necessary in order to perfect
the security interest of the Trustee in such Collateral Debt Security granted
pursuant to this Indenture and (B) copies of the other Underlying Instruments
then in possession of the Issuer;

(ii)      from time to time upon the request of the
Trustee or Collateral Manager, the Issuer shall deliver (or cause to be
delivered) to the Custodial Securities Intermediary any Underlying Instrument
in the possession of the Issuer and not previously delivered hereunder
(including originals of Underlying Instruments not previously required to be
delivered as originals) and as to which the Trustee or Collateral Manager, as
applicable, shall have reasonably determined to be necessary or appropriate for
the administration of such Collateral Debt Security hereunder or under the
Collateral Management Agreement or for the protection of the security interest
of the Trustee under this Indenture;

(iii)     in connection with any delivery of
documents to the Custodial Securities Intermediary pursuant to clauses (i) and
(ii) above, the Trustee shall deliver to the Collateral Manager, on behalf of
the Issuer, a Trust Receipt in the form of Exhibit K acknowledging the
receipt of such documents by the Custodial Securities Intermediary and that it
is holding such documents subject to the terms of this Indenture;

(iv)    from time to time upon request of the
Collateral Manager, the Custodial Securities Intermediary shall, upon delivery
by the Collateral Manager of a duly completed Request for Release in the form
of Exhibit L hereto, release to the Collateral Manager such of the
Underlying Instruments then in its custody as the Collateral Manager reasonably
so requests.  By submission of any such
Request for Release, the Collateral Manager shall be deemed to have represented
and warranted that it has determined, in accordance with the Collateral Manager
Servicing Standard, that the

 

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requested release
is necessary for one or more of the purposes described in clause (ii) above.  The Collateral Manager shall return to the
Custodial Securities Intermediary each Underlying Instrument released from
custody pursuant to this clause (iv) within twenty (20) Business Days of
receipt thereof (except such Underlying Instruments as are released in
connection with a sale, exchange or other disposition, in each case only as
permitted under this Indenture, of the related Collateral Debt Security that is
consummated within such 20-day period). 
Notwithstanding the foregoing provisions of this clause (iv), (A) any
note, certificate or other instrument evidencing a Pledged Collateral Debt
Security shall be released only for the purpose of (1) a sale, exchange or
other disposition of such Pledged Collateral Debt Security that is permitted in
accordance with the terms of this Indenture or (2) presentation, collection,
renewal or registration of transfer of such Collateral Debt Security and (B)
the Custodial Securities Intermediary may refuse to honor any Request for
Release following the occurrence of an Event of Default under this Indenture.

(e)      As of the Closing Date
(with respect to the Assets) and each date on which an Asset is acquired (only
with respect to the Asset so acquired) the Issuer represents and warrants as
follows:

(i)       this Indenture creates a valid and
continuing security interest (as defined in the UCC) in the Assets in favor of
the Trustee for the benefit of the Noteholders and each Hedge Counterparty,
which security interest is prior to all other liens, and is enforceable as such
against creditors of and purchasers from the Issuer;

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

(iii)     the Issuer has acquired its ownership in
such Assets in good faith without notice of any adverse claim as defined in
Section 8-102(a)(1) of the UCC as in effect on the date hereof;

(iv)    other than the security interest granted to
the Trustee for the benefit of the Noteholders and each Hedge Counterparty
pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted
a security interest in or otherwise conveyed any of the Assets;

(v)     the Issuer has not authorized the filing of
and is not aware of any financing statements against the Issuer that include a
description of collateral covering the Assets other than any financing
statement relating to the security interest granted to the Trustee for the
benefit of the Noteholders and each Hedge Counterparty hereunder or that has
been terminated; the Issuer is not aware of any judgment or Pension Benefit
Guarantee Corporation lien and tax lien filings against the Issuer;

(vi)    the Issuer has received all consents and
approvals required by the terms of each Asset and the Underlying Instruments to
grant to the Trustee its interest and rights in such Asset hereunder;

 

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(vii)   the Issuer has caused or will have caused,
within ten (10) days, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in the Assets granted to the Trustee for
the benefit of the Noteholders and each Hedge Counterparty hereunder;

(viii)  each Asset is an Instrument, a General Intangible
or a Certificated Security or Uncertificated Security or has been and will have
been credited to a Securities Account;

(ix)     the Custodial Securities Intermediary has
agreed to treat all assets credited to the Securities Account as Financial
Assets;

(x)      the Issuer has delivered a fully executed
Securities Accounts Control Agreement pursuant to which the Custodial
Securities Intermediary has agreed to comply with all instructions originated
by the Trustee relating to the Custodial Account without further consent of the
Issuer; the Custodial Account is not in the name of any person other than the
Issuer or the Trustee; the Issuer has not consented to the Securities
Intermediary of the Custodial Account to comply with Entitlement Orders of any
person other than the Trustee;

(xi)     (A) all original executed copies of each
promissory note or other writings that constitute or evidence any pledged
obligation that constitutes Instruments have been delivered to the Custodial
Securities Intermediary for the benefit of the Trustee, (B) the Issuer has
received a written acknowledgement from the Custodial Securities Intermediary
that the Custodial Securities Intermediary is acting solely as agent of the
Trustee and (C) none of the promissory notes or other writings that constitute
or evidence such collateral has any marks or notations indicating that they
have been pledged, assigned or otherwise conveyed by the Issuer to any Person
other than the Trustee;

(xii)    (A) the Collection Accounts, the Delayed
Funding Obligations Account, each Hedge Termination Account, each Hedge
Collateral Account, the Expense Account and the Payment Account (collectively,
the “Deposit Accounts”) constitute “deposit accounts” within the meaning
of the UCC, (B) the Issuer has taken all steps necessary to cause the Trustee
to become the customer and account holder of the Deposit Accounts, (C) other
than the security interest granted to the Trustee pursuant to this Indenture,
the Issuer has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Deposit Accounts, and (D) the Deposit Accounts
are not in the name of any person other than the Issuer or the Trustee.  The Issuer has not consented to the bank
maintaining the Deposit Accounts to comply with the instructions of any person
other than the Trustee; and

(xiii)   the Issuer has established procedures such
that any Eligible Investments purchased with funds withdrawn from the Deposit
Accounts will be either (i) credited to a Securities Account over which the Trustee
will have a first priority perfected security interest, (ii) purchased in the
name of the Trustee, or (iii) held in another manner

 

132

 

sufficient to
establish the Trustee’s first priority perfected security interest over such
Eligible Investments.

(f)       The Trustee shall only
invest in Eligible Investments which the applicable Custodial Securities
Intermediary agrees to credit to the applicable account.  To the extent any Eligible Investment shall
not be delivered to the Trustee by causing the Custodial Securities
Intermediary to create a Security Entitlement in the Securities Account in
favor of the Trustee, the Issuer shall deliver an Opinion of Counsel to the
Trustee to the effect that any other delivery will effect a first priority
security interest in favor of the Trustee in such Eligible Instrument.

 

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ARTICLE
4

SATISFACTION
AND DISCHARGE

Section 4.1             Satisfaction
and Discharge of Indenture.

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

(a)      either:

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

(ii)      all Notes not theretofore delivered to the
Trustee for cancellation (A) have become due and payable, (B) will become due
and payable at their Stated Maturity within one year or (C) are to be called
for redemption pursuant to Sections 9.1 or 9.2 under an
arrangement satisfactory to the Trustee for the giving of notice of redemption
by the Issuer and the Co-Issuer pursuant to Section 9.4 and the Issuer
or the Co-Issuer, in the case of clauses (A), (B) or (C) of this subsection
(ii), has irrevocably deposited or caused to be deposited with the Trustee, in
trust for such purpose, Cash or non-callable direct obligations of the United
States of America; provided  that the
obligations are entitled to the full faith and credit of the United States of
America or are debt obligations which are rated “Aaa” by Moody’s, “AAA” by
Fitch and “AAA” by S&P in an amount sufficient, as verified by a firm of
certified public accountants which are nationally recognized, to pay and
discharge the entire indebtedness (including, in the case of a redemption
pursuant to Sections 9.1 or 9.2, the Redemption Price) on such
Notes not theretofore delivered to the Trustee for cancellation, for principal
and interest to the date of such deposit (in the case of Notes which have
become due and payable), or to the Stated Maturity or the Redemption Date, as
the case may be (and in each case in respect of the Notes, subject to the
Priority of Payments); provided,  further,
that any such deposit of funds with the Trustee in satisfaction of this
Indenture shall be subject to the Rating Agency Condition;

 

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provided, however, this subsection (ii) shall not apply if an election
to act in accordance with the provisions of Section 5.5(a) shall have
been made and not rescinded;

(b)      (i) the Issuer has paid
or caused to be paid or provided for (to the satisfaction of the Person
entitled thereto) all other sums payable hereunder and under the Collateral
Management Agreement, Preferred Shares Paying Agency Agreement, the Company
Administration Agreement, the Insurance Policy and the Insurance Agreement and
(ii) all Hedge Agreements then in effect have been terminated and Issuer has
paid all amounts, including payments due and payable in connection with such
termination and has paid all other outstanding amounts, including any
outstanding payments due and payable for any previously terminated Hedge
Agreement.

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

Notwithstanding the
satisfaction and discharge of this Indenture, the rights and obligations of the
Issuer, the Co-Issuer, the Trustee, and, if applicable, the Noteholders, as the
case may be, under Sections 2.7, 4.2, 5.4(d), 5.9, 5.18,
6.7, 7.3 and 14.12 hereof shall survive.

Section 4.2             Application
of Trust Money.

All Monies deposited with
the Trustee pursuant to Section 4.1 shall be held in trust and applied
by it in accordance with the provisions of the Notes and this Indenture to the
payment of the principal and interest, either directly or through the Paying
Agent, as the Trustee may determine, to the Person entitled thereto of the
principal and interest for whose payment such Money has been deposited with the
Trustee; but such Money need not be segregated from other funds except to the
extent required herein or when commingling of funds is prohibited by law.

Section 4.3             Repayment
of Monies Held by Paying Agent.

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

 

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ARTICLE
5

REMEDIES

Section 5.1             Events
of Default.

“Event of Default,”
wherever used herein, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

(a)      a default in the payment
of any interest on any Note when the same becomes due and payable (provided
that (a) if any Class A Notes or Class B Notes are Outstanding, solely for the
purposes of this Section 5.1(a), no interest shall be “due and payable”
on any Class C Notes, Class D Notes, Class E Notes, Class F Notes, Class G
Notes, Class H Notes, Class J Notes or Class K Notes, (b) if any Class C Notes
are Outstanding, solely for the purposes of this Section 5.1(a), no
interest shall be “due and payable” on any Class D Notes, Class E Notes, Class
F Notes, Class G Notes, Class H Notes, Class J Notes or Class K Notes, (c) if
any Class D Notes are Outstanding, solely for the purposes of this Section
5.1(a), no interest shall be “due and payable” on any Class E Notes, Class
F Notes, Class G Notes, Class H Notes, Class J Notes or Class K Notes, (d) if
any Class E Notes are Outstanding, solely for the purposes of this Section
5.1(a), no interest shall be “due and payable” on any Class F Notes, Class
G Notes, Class H Notes, Class J Notes or Class K Notes, (e) if any Class F Notes
are Outstanding, solely for the purposes of this Section 5.1(a), no
interest shall be “due and payable” on any Class G Notes, Class H Notes, Class
J Notes or Class K Notes, (f) if any Class G Notes are Outstanding, solely for
the purposes of this Section 5.1(a), no interest shall be “due and
payable” on any Class H Notes, Class J Notes or Class K Notes, (g) if any Class
H Notes are Outstanding, solely for the purposes of this Section 5.1(a),
no interest shall be “due and payable” on any Class J Notes or Class K Notes,
(h) if any Class J Notes are Outstanding, solely for the purposes of this Section
5.1(a), no interest shall be “due and payable” on any Class K Notes, (i) if
any Class K Notes are Outstanding, solely for the purposes of this Section
5.1(a), no dividends or other distributions shall be payable on the
Preferred Shares, in each case unless such amount is available pursuant to the
Priority of Payments), in each case, which default continues for a period of
three (3) Business Days or, in the case of a default in payment due to an
administrative error or omission by the Trustee or Paying Agent, which default
continues for five (5) Business Days;

(b)      a default in the payment
of principal (or the related Redemption Price, if applicable) of any Class A-1
Note when the same becomes due and payable, at its Stated Maturity or any
Redemption Date, or if there are no Class A-1 Notes Outstanding a default in
the payment of principal (or the related Redemption Price, if applicable) of
any Class A-2 Note when the same becomes due and payable, at its Stated
Maturity or any Redemption Date, or if there are no Class A-2 Notes
Outstanding, a default in the payment of principal (or the related Redemption
Price, if applicable) of any Class A-3 Note when the same becomes due and
payable at its Stated Maturity or any Redemption Date, or if there are no Class
A-3 Notes

 

136

 

Outstanding, a
default in the payment of principal (or the related Redemption Price, if
applicable) of any Class B Note when the same becomes due and payable at its
Stated Maturity or any Redemption Date, or if there are no Class B Notes
Outstanding, a default in the payment of principal (or the related Redemption
Price, if applicable) of any Class C Note (including any Class C Capitalized
Interest) when the same becomes due and payable at its Stated Maturity or any
Redemption Date, or if there are no Class C Notes Outstanding, a default in the
payment of principal (or the related Redemption Price, if applicable) of any
Class D Note (including any Class D Capitalized Interest) when the same becomes
due and payable at its Stated Maturity or any Redemption Date, or if there are
no Class D Notes Outstanding, a default in the payment of principal (or the
related Redemption Price, if applicable) of any Class E Note (including any
Class E Capitalized Interest) when the same becomes due and payable at its
Stated Maturity or any Redemption Date, or if there are no Class E Notes
Outstanding, a default in the payment of principal (or the related Redemption
Price, if applicable) of any Class F Note (including any Class F Capitalized
Interest) when the same becomes due and payable at its Stated Maturity or any
Redemption Date, or if there are no Class F Notes Outstanding, a default in the
payment of principal (or the related Redemption Price, if applicable) of any
Class G Note (including any Class G Capitalized Interest) when the same becomes
due and payable at its Stated Maturity or any Redemption Date, or if there are
no Class G Notes Outstanding, a default in the payment of principal (or the
related Redemption Price, if applicable) of any Class H Note (including any
Class H Capitalized Interest) when the same becomes due and payable at its
Stated Maturity or any Redemption Date, if there are no Class H Notes
outstanding, a default in the payment of principal (or the related Redemption
Price, if applicable) of any Class J Note (including any Class J Capitalized
Interest) when the same becomes due and payable at its Stated Maturity or any
Redemption Date, or if there are no Class J Notes outstanding, a default in the
payment of principal (or the related Redemption Price, if applicable) of any
Class K Note (including any Class K Capitalized Interest) when the same becomes
due and payable at its Stated Maturity or any Redemption Date (or in the case
of a default in payment due to any administrative error or omission by the
Trustee or the Paying Agent, such default continues for a period of five (5)
Business Days);

(c)      the failure on any
Payment Date to disburse amounts available in the Payment Account in accordance
with the Priority of Payments set forth under Section 11.1(a) (other
than a default in payment described in clause (a) or (b) above), which failure
continues for a period of three (3) Business Days or, in the case of a failure
to disburse such amounts due to an administrative error or omission by the
Trustee or Paying Agent, which failure continues for five (5) Business Days;

(d)      either the Issuer, the
Co-Issuer or the pool of Assets becomes an investment company required to be
registered under the Investment Company Act;

(e)      a default in the
performance, or breach, of any other covenant or other agreement (other than
the covenant to meet or improve the Collateral Quality Tests or the Par Value
Coverage Tests) of the Issuer or the Co-Issuer hereunder or any representation
or warranty of the Issuer or the Co-Issuer hereunder or in any certificate or
other writing delivered pursuant hereto or in connection herewith proves to be
incorrect in any material respect when made, and the continuation of such
default or breach for a period of thirty (30)

 

137

 

days (or, if such
default, breach or failure has an adverse effect on the validity, perfection or
priority of the security interest granted hereunder, fifteen (15) days) after
either the Issuer, the Co-Issuer or the Collateral Manager has actual knowledge
thereof or after notice thereof to the Issuer, the Co-Issuer and the Collateral
Manager by the Trustee or to the Issuer, the Co-Issuer, the Collateral Manager
and the Trustee by Holders of at least 25% of the Aggregate Outstanding Amount
of the Controlling Class; provided that a default in the performance by
the Issuer of the obligations imposed on it by this Indenture in connection
with the entry into a replacement Hedge Agreement upon the early termination of
a Hedge Agreement shall not be an Event of Default if the Rating Agency
Condition has been satisfied;

(f)       the entry of a decree or
order by a court having competent jurisdiction adjudging the Issuer or the
Co-Issuer as bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Issuer or the Co-Issuer under the Bankruptcy Code, or any bankruptcy,
insolvency, reorganization or similar law enacted under the laws of the Cayman
Islands or any other applicable law, or appointing a receiver, liquidator,
assignee, or sequestrator (or other similar official) of the Issuer or the
Co-Issuer or of any substantial part of its property, respectively, or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of sixty (60) consecutive
days;

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

(h)      one or more final
judgments being rendered against the Issuer or the Co-Issuer which exceed, in
the aggregate, U.S. $1,000,000 (or such lesser amount as any Rating Agency may
specify) and which remain unstayed, undischarged and unsatisfied for thirty (30) days after such
judgment(s) becomes nonappealable, unless adequate funds have been reserved or
set aside for the payment thereof, and unless (except as otherwise specified in
writing by each Rating Agency) the Rating Agency Condition shall have been
satisfied;

(i)       the Issuer loses its
status as a Qualified REIT Subsidiary, unless (A) within ninety (90) days, the
Issuer either (1) delivers an opinion of tax counsel of nationally recognized
standing in the United States experienced in such matters to the effect that,
notwithstanding the Issuer’s loss of Qualified REIT Subsidiary status, the
Issuer is not, and has not been, an association (or publicly traded
partnership) taxable as a corporation, or is not, and has not been, otherwise
subject to U.S. federal income tax on a net basis and the Noteholders are not
otherwise materially adversely affected by the loss of Qualified REIT
Subsidiary status or (2) receives an amount from the Preferred Shareholders
sufficient to

 

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discharge in full
the amounts then due and unpaid on the Notes and amounts and expenses described
in clauses (1) through (5), (25), (26) and (27) of Section 11.1(a)(i) in
accordance with the Priority of Payments or (B) all Classes of the Notes are
subject to a Tax Redemption announced by the Issuer in compliance with this
Indenture, and such redemption has not been rescinded; or

(j)       so long as the Class A-1
Notes and/or the Class A-2 Note Insurer or the Class A-2 Notes are the
Controlling Class, the Class A/B Par Value Ratio is less than 89.00% on any
Measurement Date.

Upon becoming aware of
the occurrence of an Event of Default, the Issuer shall promptly notify the
Trustee, the Collateral Manager, the Noteholders, the Preferred Shares Paying
Agent, the Preferred Shareholders, each Rating Agency, each Hedge Counterparty
and, for so long as any Notes are listed on the Irish Stock Exchange, the Irish
Paying Agent in writing.  If the
Collateral Manager has actual knowledge of the occurrence of an Event of
Default, the Collateral Manager shall promptly notify, in writing, the
Trustee.  Upon such notification from the
Collateral Manager, the Trustee shall promptly notify the Noteholders, each
Rating Agency and each Hedge Counterparty of the occurrence of such Event of
Default.

Section 5.2             Acceleration
of Maturity; Rescission and Annulment.

(a)      If an Event of Default
shall occur and be continuing (other than an Event of Default specified in Section
5.1(f), 5.1(g) or 5.1(i)), the Trustee may, and shall at the
direction of a Majority, by outstanding principal amount, of (x) in the case of
an Event of Default described in Section 5.1(j), the Controlling Class
(excluding Collateral Manager Securities), (y) in the case of an Event of
Default described in Section 5.1(a), 5.1(b) or 5.1(c), at
any time when the Class A-1 Notes and/or the Class A-2 Note Insurer or the
Class A-2 Notes are the Controlling Class, the Controlling Class (excluding
Collateral Manager Securities) or (z) in any other case, each Class of Notes
voting as a separate Class (excluding Collateral Manager Securities), declare
the principal of and accrued and unpaid interest on all the Notes to be
immediately due and payable (and any such acceleration shall automatically
terminate the Replenishment Period).  If
an Event of Default described in Section 5.1(f),  5.1(g) or 5.1(i)
above occurs, such an acceleration shall occur automatically and without any
further action.  If the Notes are
accelerated, payments shall be made in the order and priority set forth in Sections
11.1(a)(i) and 11.1(a)(ii) hereof.

(b)      At any time after such a
declaration of acceleration of Maturity of the Notes has been made and before a
judgment or decree for payment of the Money due has been obtained by the
Trustee as hereinafter provided in this Article 5, a Majority of each
and every Class of Notes (voting as a separate Class), by written notice to the
Issuer and the Co-Issuer, the Trustee and each Hedge Counterparty, may rescind
and annul such declaration and its consequences if:

(i)       the Issuer or the Co-Issuer has paid or
deposited with the Trustee a sum sufficient to pay:

 

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(A)     all unpaid installments of
interest on and principal of the Notes, that would be due and payable hereunder
if the Event of Default giving rise to such acceleration had not occurred;

(B)     to the extent that payment
of such interest is lawful, interest on the Class C Capitalized Interest at the
Class C Rate, interest on the Class D Capitalized Interest at the Class D Rate,
interest on the Class E Capitalized Interest at the Class E Rate, interest on
the Class F Capitalized Interest at the Class F Rate, interest on the Class G
Capitalized Interest at the Class G Rate, interest on the Class H Capitalized
Interest at the Class H Rate, interest on the Class J Capitalized Interest at
the Class J Rate and interest on the Class K Capitalized Interest at the Class
K Rate;

(C)     all unpaid taxes of the
Issuer and the Co-Issuer, Company Administrative Expenses and other sums paid
or advanced by or otherwise due and payable to the Trustee hereunder;

(D)     with respect to each Hedge
Agreement, any amount then due and payable thereunder; and

(E)      with respect to the
Collateral Management Agreement, any Senior Collateral Management Fee then due
and any Company Administrative Expense due and payable to the Collateral
Manager thereunder.

(ii)      if any Hedge Agreement has been reduced or
terminated, the Rating Agency Condition has been satisfied with respect to such
reduction or termination; and

(iii)     the Trustee has determined that all Events
of Default of which it has actual knowledge, other than the non-payment of the
interest and principal on the Notes that have become due solely by such
acceleration, have been cured and a Majority of the Controlling Class, by
written notice to the Trustee and each Hedge Counterparty has agreed with such
determination (which agreement shall not be unreasonably withheld or delayed)
or waived as provided in Section 5.14.

At any such time that the
Trustee shall rescind and annul such declaration and its consequences as
permitted hereinabove, the Trustee shall preserve the Assets in accordance with
the provisions of Section 5.5 with respect to the Event of Default that
gave rise to such declaration; provided,  however,
that if such preservation of the Assets is rescinded pursuant to Section 5.5,
the Notes may be accelerated pursuant to the first paragraph of this Section
5.2, notwithstanding any previous rescission and annulment of a declaration
of acceleration pursuant to this paragraph.

No such rescission shall
affect any subsequent Default or impair any right consequent thereon.  In addition, no such rescission shall affect
any Hedge Agreement if it has been terminated in accordance with its terms.

 

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(c)      Subject to Sections
5.4 and 5.5, a Majority of the Controlling Class shall have the
right to direct the Trustee in the conduct of any proceedings for any remedy
available to the Trustee; provided that (i) such direction will not
conflict with any rule of law or this Indenture (including the limitations
described in this Section 5 but, solely in the case of proceedings
resulting from an Event of Default described in clause (j) of the definition
thereof, excluding any requirement requiring sufficient proceeds to pay in full
the amounts then due and unpaid on the Notes); (ii) the Trustee may take any
other action not inconsistent with such direction; (iii) the Trustee has been
provided with an indemnity or reasonable security satisfactory to it (and the
Trustee need not take any action that it determines might involve it in
liability or subject it to expense unless it has received such indemnity or
security against such liability or expense); and (iv) any direction to
undertake a sale of the Assets may be made only as described in Section 5.17.  The Trustee shall provide written notice of
the receipt of such direction to each Hedge Counterparty promptly after receipt
thereof.

(d)      As security for the
payment by the Issuer of the compensation and expenses of the Trustee and any
sums the Trustee may be entitled to receive as indemnification by the Issuer,
the Issuer hereby grants the Trustee a lien on the Assets, which lien is senior
to the lien of the Noteholders.  The
Trustee’s lien shall be subject to the Priority of Payments and exercisable by
the Trustee only if the Notes have been declared due and payable following an
Event of Default and such acceleration has not been rescinded or annulled.

(e)      A Majority of the
Controlling Class, may, prior to the time a judgment or decree for the payment
of money due has been obtained by the Trustee, waive any past Default on behalf
of the holders of all the Notes and its consequences in accordance with Section
5.14.

(f)       In determining whether
the holders of the requisite percentage of Notes have given any direction,
notice or consent hereunder, (i) Notes owned by the Issuer, the Co-Issuer or
any Affiliate thereof shall be disregarded and deemed not to be outstanding and
(ii) in relation to (x) any amendment or other modification of, or assignment
or termination of, any of the express rights or obligations of the Collateral
Manager under the Collateral Management Agreement or this Indenture (including
the exercise of any rights to remove the Collateral Manager or terminate the
Collateral Management Agreement or approve or object to a replacement for the
Collateral Manager except as specifically provided in the Collateral Management
Agreement with respect to the termination of the Collateral Manager without
cause and with respect to the replacement of the Collateral Manager) and (y)
the exercise by the Noteholders of their right, in connection with certain
Events of Default, to accelerate amounts due under the Notes, Collateral
Manager Securities shall be disregarded and deemed not to be outstanding.  The Collateral Manager and its Affiliates
shall be entitled to vote Notes held by them, and by accounts managed by them,
with respect to all other matters other than those described in clause (ii)
above.

Section 5.3             Collection
of Indebtedness and Suits for Enforcement by Trustee.

The Issuer covenants that
if a Default shall occur in respect of the payment of any interest on any Class
A-1 Note, the payment of principal on any Class A-1 Note (but only after

 

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interest with
respect to the Class A-1 Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
interest on any Class A-2 Note (but only after interest with respect to the
Class A-1 Notes and any amounts payable pursuant to Section 11.1(a)
having a higher priority have been paid in full), the payment of principal on
any Class A-2 Note (but only after interest with respect to the Class A-2 Notes
and any amounts payable pursuant to Section 11.1(a) having a higher
priority have been paid in full), the payment of interest on any Class A-3 Note
(but only after interest with respect to the Class A-1 Notes and the Class A-2
Notes and any amounts payable pursuant to Section 11.1(a) having a
higher priority have been paid in full), the payment of principal on any Class
A-3 Note (but only after interest and principal with respect to the Class A-1
Notes and the Class A-2 Notes and interest with respect to the Class A-3 Notes
and any amounts payable pursuant to Section 11.1(a) having a higher
priority have been paid in full), the payment of interest on any Class B Note
(but only after interest with respect to the Class A Notes and any amounts
payable pursuant to Section 11.1(a) having a higher priority have been
paid in full), the payment of principal on any Class B Note (but only after
interest and principal with respect to the Class A Notes and interest with
respect to the Class B Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
interest on any Class C Note (but only after interest with respect to the Class
A Notes and the Class B Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
principal on any Class C Note (but only after interest and principal with
respect to the Class A Notes and the Class B Notes and interest with respect to
the Class C Notes and any amounts payable pursuant to Section 11.1(a)
having a higher priority have been paid in full), the payment of interest on
any Class D Note (but only after interest with respect to the Class A Notes,
the Class B Notes and the Class C Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full) or the payment of
principal on any Class D Note (but only after interest and principal with
respect to the Class A Notes, the Class B Notes and the Class C Notes and
interest with respect to the Class D Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
interest on any Class E Note (but only after interest with respect to the Class
A Notes, the Class B Notes, the Class C Notes and the Class D Notes and any
amounts payable pursuant to Section 11.1(a) having a higher priority
have been paid in full), the payment of principal on any Class E Note (but only
after interest and principal with respect to the Class A Notes, the Class B
Notes, the Class C Notes and the Class D Notes and interest with respect to the
Class E Notes and any amounts payable pursuant to Section 11.1(a) having
a higher priority have been paid in full), the payment of interest on any Class
F Note (but only after interest with respect to the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes and the Class E Notes and any
amounts payable pursuant to Section 11.1(a) having a higher priority
have been paid in full), the payment of principal on any Class F Note (but only
after interest and principal with respect to the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes and the Class E Notes and interest
with respect to the Class F Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
interest on any Class G Note (but only after interest with respect to the Class
A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes and the Class F Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
principal on any Class G Note (but only after interest and principal with
respect to the Class A Notes, the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes and the Class

 

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F Notes and
interest with respect to the Class G Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
interest on any Class H Note (but only after interest with respect to the Class
A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes and the Class G Notes and any amounts payable pursuant
to Section 11.1(a) having a higher priority have been paid in full) or
the payment of principal on any Class H Note (but only after interest and
principal with respect to the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes and the Class G
Notes and interest with respect to the Class H Notes and any amounts payable
pursuant to Section 11.1(a) having a higher priority have been paid in
full), the payment of interest on any Class J Note (but only after interest
with respect to the Class A Notes, the Class B Notes, the Class C Notes, the
Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes and the
Class H Notes and any amounts payable pursuant to Section 11.1(a) having
a higher priority have been paid in full) or the payment of principal on any
Class J Note (but only after interest and principal with respect to the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes and the Class H Notes and interest
with respect to the Class J Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
interest on any Class K Note (but only after interest with respect to the Class
A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes and the Class J
Notes and any amounts payable pursuant to Section 11.1(a) having a
higher priority have been paid in full) or the payment of principal on any
Class K Note (but only after interest and principal with respect to the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes and the Class J
Notes and interest with respect to the Class K Notes and any amounts payable
pursuant to Section 11.1(a) having a higher priority have been paid in
full), the Issuer and Co-Issuer shall, upon demand of the Trustee or any
affected Noteholder, pay to the Trustee, for the benefit of the Holder of such
Note, the whole amount, if any, then due and payable on such Note for principal
and interest or other payment with interest on the overdue principal and, to
the extent that payments of such interest shall be legally enforceable, upon
overdue installments of interest, at the applicable interest rate and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee and such Noteholder and their
respective agents and counsel.

If the Issuer or the
Co-Issuer fails to pay such amounts forthwith upon such demand, the Trustee, in
its own name and as Trustee of an express trust, may institute a Proceeding for
the collection of the sums so due and unpaid, and may prosecute such Proceeding
to judgment or final decree, and may enforce the same against the Issuer and
the Co-Issuer or any other obligor upon the Notes and collect the Monies
adjudged or decreed to be payable in the manner provided by law out of the
Assets.

If an Event of Default
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Noteholders by such appropriate
Proceedings as the Trustee shall deem most effectual (if no direction by a
Majority of the Controlling Class is received by the Trustee), or the Trustee
shall proceed to protect and enforce its rights and the rights of the
Noteholders by such Proceedings as the Trustee may be directed by Majority of
the Controlling Class, to protect and enforce any such rights, whether for the

 

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specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Trustee by this Indenture or by law.

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

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

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

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

Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or vote for
or accept or adopt on behalf of any Noteholder, any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of
any Noteholder in any such

 

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Proceeding except,
as aforesaid, to vote for the election of a trustee in bankruptcy or similar
Person.

All rights of action and
of asserting claims under this Indenture, or under any of the Notes, may be
enforced by the Trustee without the possession of any of the Notes or the
production thereof in any trial or other Proceedings relative thereto, and any
action or Proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, shall be applied
as set forth in Section 5.7.

In any Proceedings
brought by the Trustee on behalf of the Holders, the Trustee shall be held to
represent all the Holders of the Notes.

Notwithstanding anything
in this Section 5.3 to the contrary, the Trustee may not sell or
liquidate the Assets or institute Proceedings in furtherance thereof pursuant
to this Section 5.3 unless the conditions specified in Section 5.5(a)
are met.

Section 5.4             Remedies.

(a)      If an Event of Default
shall have occurred and be continuing, and the Notes have been declared due and
payable and such declaration and its consequences have not been rescinded and
annulled, the Issuer and the Co-Issuer agree that the Trustee may, after notice
to the Noteholders and each Hedge Counterparty, and shall, upon direction by a
Majority of the Controlling Class, to the extent permitted by applicable law,
exercise one or more of the following rights, privileges and remedies:

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

(ii)      sell all or a portion of the Assets or
rights of interest therein, at one or more public or private sales called and
conducted in any manner permitted by law and in accordance with Section 5.17
hereof;

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

(iv)    exercise any remedies of a secured party
under the UCC and take any other appropriate action to protect and enforce the
rights and remedies of the Trustee and the Holders of the Notes hereunder; and

(v)     exercise any other rights and remedies that
may be available at law or in equity;

provided,  however,
that the Trustee may not sell or liquidate the Assets or institute Proceedings
in furtherance thereof pursuant to this Section 5.4 unless either of the
conditions specified in Section 5.5(a) is met.

 

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The Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking firm
of national reputation with demonstrated capabilities in structuring and
distributing notes or certificates similar to the Notes as to the feasibility
of any action proposed to be taken in accordance with this Section 5.4
and as to the sufficiency of the proceeds and other amounts receivable with
respect to the Assets to make the required payments of principal of and interest
on the Notes and other amounts payable hereunder, which opinion shall be
conclusive evidence as to such feasibility or sufficiency.

(b)      If an Event of Default as
described in Section 5.1(e) hereof shall have occurred and be
continuing, the Trustee may, and at the request of the Holders of not less than
25% of the Aggregate Outstanding Amount of the Controlling Class shall,
institute a Proceeding solely to compel performance of the covenant or
agreement or to cure the representation or warranty, the breach of which gave
rise to the Event of Default under such Section, and enforce any equitable
decree or order arising from such Proceeding.

(c)      Upon any Sale, whether
made under the power of sale hereby given or by virtue of judicial proceedings,
any Noteholder or Noteholders or Preferred Shareholder or Preferred
Shareholders or the Collateral Manager or any of its Affiliates may bid for and
purchase the Assets or any part thereof and, upon compliance with the terms of
Sale, may hold, retain, possess or dispose of such property in its or their own
absolute right without accountability; and any purchaser at any such Sale may,
in paying the purchase Money, turn in any of the Notes in lieu of Cash equal to
the amount which shall, upon distribution of the net proceeds of such sale, be
payable on the Notes so turned in by such Holder (taking into account the Class
of such Notes).  Such Notes, in case the
amounts so payable thereon shall be less than the amount due thereon, shall be
returned to the Holders thereof after proper notation has been made thereon to
show partial payment.

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

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

(d)      Notwithstanding any other
provision of this Indenture, none of the Trustee, any other Secured Party or
any third party beneficiary of this Indenture may, 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

 

146

 

be deemed to stop,
the Trustee (i) from taking any action prior to the expiration of the
aforementioned one year and one day (or, if longer, the applicable preference
period then in effect) period in (A) any case or proceeding voluntarily filed
or commenced by the Issuer or the Co-Issuer or (B) any involuntary insolvency
proceeding filed or commenced by a Person other than the Trustee, or (ii) from
commencing against the Issuer or the Co-Issuer or any of their respective
properties any legal action which is not a bankruptcy, reorganization,
arrangement, insolvency, moratorium or liquidation proceeding.

Section 5.5             Preservation
of Assets.

(a)      Notwithstanding anything
to the contrary herein, if an Event of Default shall have occurred and be
continuing when any of the Notes are Outstanding, the Trustee shall retain the
Assets securing the Notes, collect and cause the collection of the proceeds
thereof and make and apply all payments and deposits and maintain all accounts
in respect of the Assets and the Notes in accordance with the Priority of
Payments and the provisions of Articles 10, 12 and 13
unless either:

(i)       the Trustee, pursuant to Section
5.5(c), determines that the anticipated proceeds of a sale or liquidation
of the Assets (after deducting the reasonable expenses of such sale or
liquidation) would be sufficient to discharge in full the amounts then due and
unpaid on the Notes (except in the case of an Event of Default described in
clause (j) of the definition thereof as described in Section 5.2(c)),
Company Administrative Expenses due and payable pursuant to clauses (3) and
(25) of Section 11.1(a)(i) and clauses (1) and (7) of Section
11.1(a)(ii), the Senior Collateral Management Fees due and payable pursuant
to clause (4) of Section 11.1(a)(i), the Subordinate Collateral
Management Fees due and payable pursuant to clause (26) of Section
11.1(a)(i), any amounts due and unpaid to each Hedge Counterparty,
including without limitation, any payments (however described) due and payable
by the Issuer under each Hedge Agreement upon a termination of such Hedge
Agreement (including any interest that may accrue thereon), Cure Advances and interest
thereon, and amounts due and payable to the Advancing Agent and the Trustee, in
its capacity as Backup Advancing Agent, in respect of unreimbursed Interest
Advances and Reimbursement Interest, and a Majority of the Controlling Class
agrees with such determination; or

(ii)      the Holders of a Majority of the Aggregate
Outstanding Amount of each Class of Notes (each voting as a separate Class)
(and each Hedge Counterparty and the Class A-2 Note Insurer, unless each shall
be paid in full the amounts due and unpaid, including, without limitation, any
payments (however described) due and payable by the Issuer under each Hedge
Agreement upon a termination of such Hedge Agreement (including any interest
that may accrue thereon)), unless it shall be paid in full the amounts due and
unpaid, direct, subject to the provisions of this Indenture, the sale and
liquidation of the Assets.

The Trustee shall give
written notice of the retention of the Assets to the Issuer, the Co-Issuer, the
Collateral Manager, each Hedge Counterparty, the Class A-2 Note Insurer and the
Rating Agencies.  So long as such Event
of Default is continuing, any such retention pursuant

 

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to this Section
5.5(a) may be rescinded at any time when the conditions specified in clause
(i) or (ii) above exist.

(b)      Nothing contained in Section
5.5(a) shall be construed to require the Trustee to sell the Assets
securing the Notes if the conditions set forth in Section 5.5(a) are not
satisfied.  Nothing contained in Section
5.5(a) shall be construed to require the Trustee to preserve the Assets
securing the Notes if prohibited by applicable law.

(c)      In determining whether
the condition specified in Section 5.5(a)(i) exists, the Collateral
Manager shall obtain bid prices with respect to each Pledged Collateral Debt
Security from two dealers (Independent of the Collateral Manager and any of its
Affiliates) at the time making a market in such Pledged Collateral Debt
Securities (or, if there is only one market maker, then the Collateral Manager
shall obtain a bid price from that market maker or, if no market maker, from a
pricing service).  The Collateral Manager
shall compute the anticipated proceeds of sale or liquidation on the basis of
the lowest of such bid prices for each such Pledged Collateral Debt
Security.  For the purposes of
determining issues relating to the Market Value of the Pledged Collateral Debt
Security and the execution of a sale or other liquidation thereof, the Trustee
may, but need not, retain at the expense of the Issuer and rely on an opinion
of an Independent investment banking firm of national reputation in connection
with a determination (notwithstanding that such opinion will not be the basis
for such determination) as to whether the condition specified in Section
5.5(a)(i) exists.

The Trustee shall
promptly deliver to the Noteholders, the Class A-2 Note Insurer and each Hedge
Counterparty a report stating the results of any determination required to be
made pursuant to Section 5.5(a)(i). 
The Trustee shall make the determinations required by Section
5.5(a)(i) within thirty (30) days
after an Event of Default if requested by a Majority of the Controlling Class.

Section 5.6             Trustee
May Enforce Claims Without Possession of Notes.

All rights of action and
claims under this Indenture or under any of the Notes may be prosecuted and
enforced by the Trustee without the possession of any of the Notes or the
production thereof in any trial or other Proceeding relating thereto, and any
such action or Proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust.  Any
recovery of judgment in respect of the Notes shall be applied as set forth in Section
5.7 hereof.

In any Proceedings
brought by the Trustee (and any Proceedings involving the interpretation of any
provision of this Indenture to which the Trustee shall be a party), in respect
of the Notes, the Trustee shall be held to represent all the Holders of the
Notes.

Section 5.7             Application
of Money Collected.

Any Money collected by
the Trustee with respect to the Notes pursuant to this Article 5 and any
Money that may then be held or thereafter received by the Trustee with respect
to the Notes hereunder shall be applied subject to Section 13.1 hereof
and in accordance with the Priority of Payments set forth in Section 11.1
hereof, at the date or dates fixed by the Trustee.

 

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Section 5.8             Limitation
on Suits.

No Holder of any Notes
shall have any right to institute any Proceedings, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:

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

(b)      except as otherwise
provided in Section 5.9 hereof, the Holders of at least 25% of the then
Aggregate Outstanding Amount of the Controlling Class shall have made written
request to the Trustee to institute Proceedings in respect of such Event of
Default in its own name as Trustee hereunder and such Holder or Holders have
offered to the Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;

(c)      the Trustee for 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 a Majority of the Controlling Class; it being understood and intended
that no one or more Holders of Notes shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture to
affect, disturb or prejudice the rights of any other Holders of Notes of the
same Class or to obtain or to seek to obtain priority or preference over any
other Holders of the Notes of the same Class or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all the Holders of Notes of the same Class subject to and in
accordance with Section 13.1 hereof and the Priority of Payments.

In the event the Trustee
shall receive conflicting or inconsistent requests and indemnity from two or
more groups of Holders of the Controlling Class, each representing less than a
Majority of the Controlling Class, the Trustee in its sole discretion may
determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.

Section 5.9             Unconditional
Rights of Noteholders to Receive Principal and Interest.

Notwithstanding any other
provision in this Indenture (except for Sections 2.7(o) and 2.7(w)),
the Holder of any Class of Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such
Class of Note as such principal, interest and other amounts become due and
payable in accordance with the Priority of Payments and Section 13.1,
and, subject to the provisions of Section 5.4(d) and Section 5.8
to institute Proceedings for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder; provided,  however, that the right of such Holder to institute
proceedings for the enforcement of any such payment shall not be subject to the
25% threshold requirement set forth in Section 5.8(b).

 

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Section 5.10           Restoration
of Rights and Remedies.

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

Section 5.11           Rights
and Remedies Cumulative.

No right or remedy herein
conferred upon or reserved to the Trustee, or to the Noteholders, is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise.  The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.

Section 5.12           Delay
or Omission Not Waiver.

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

Section 5.13           Control
by the Controlling Class.

Notwithstanding any other
provision of this Indenture, if an Event of Default shall have occurred and be
continuing when any of the Notes are Outstanding, a Majority of the Controlling
Class shall have the right to cause the institution of and direct the time,
method and place of conducting any Proceeding for any remedy available to the
Trustee for exercising any trust, right, remedy or power conferred on the
Trustee in respect of the Notes; provided  that:

(a)      such direction shall not
conflict with any rule of law or with this Indenture (including, without
limitation, any provision hereof providing a limitation on the liability of the
Co-Issuers as set forth in Section 2.7(w));

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

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

 

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(d)      any direction to the
Trustee to undertake a Sale of the Assets shall be by the Holders of Notes
secured thereby representing a Majority of the Aggregate Outstanding Amount of
each Class of Notes.

Section 5.14           Waiver
of Past Defaults.

Prior to the time a
judgment or decree for payment of the Money due has been obtained by the
Trustee, as provided in this Article 5, a Majority of each and every
Class of Notes voting as a separate Class may on behalf of the Holders of all
the Notes waive any past Default in respect of the Notes and its consequences,
except a Default:

(a)      in the payment of
principal of any Note;

(b)      in the payment of
interest in respect of the Class A Notes and the Class B Notes and any other
Class of Notes (to the extent such Class of Notes is the Controlling Class at
such time);

(c)      in respect of a covenant
or provision hereof that under Section 8.2 cannot be modified or amended
without the waiver or consent of the Holder of each Outstanding Note adversely
affected thereby; or

(d)      in respect of any
covenant or provision hereof for the individual protection or benefit of the
Trustee (without the Trustee’s express written consent thereto);

provided that a Majority of the Controlling Class alone shall
have the right to waive an Event of Default described in clause (j) of the
definition thereof.

In the case of any such
waiver, the Issuer, the Co-Issuer, the Trustee, and the Holders of the Notes
shall be restored to their former positions and rights hereunder, respectively,
but no such waiver shall extend to any subsequent or other Default or impair
any right consequent thereto.  The
Trustee shall promptly give written notice of any such waiver to the Collateral
Manager, each Noteholder and each Hedge Counterparty.

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

Section 5.15           Undertaking
for Costs.

All parties to this
Indenture agree, and each Holder of any Note by its acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken, or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made
by such party litigant; but the provisions of this Section 5.15 shall
not apply to any suit instituted by the

 

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Trustee, to any
suit instituted by any Noteholder, or group of Noteholders, holding in the
aggregate more than 10% of the Aggregate Outstanding Amount of the Controlling
Class, or to any suit instituted by any Noteholder for the enforcement of the
payment of the principal of or interest on any Note or any other amount payable
hereunder on or after the Stated Maturity (or, in the case of redemption, on or
after the applicable Redemption Date).

Section 5.16           Waiver
of Stay or Extension Laws.

Each of the Issuer and
the Co-Issuer covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants, the
performance of or any remedies under this Indenture; and each of the Issuer and
the Co-Issuer (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.

Section 5.17           Sale
of Assets.

(a)      The power to effect any
sale (a “Sale”)
of any portion of the Assets pursuant to Sections 5.4 and 5.5 hereof
shall not be exhausted by any one or more Sales as to any portion of such
Assets remaining unsold, but shall continue unimpaired until all amounts
secured by the Assets shall have been paid or if there are insufficient
proceeds to pay such amount until the entire Assets shall have been sold.  The Trustee may upon notice to the
Securityholders and each Hedge Counterparty, and shall, upon direction of a
Majority of the Controlling Class, from time to time postpone any Sale by
public announcement made at the time and place of such Sale; provided,  however, that if the Sale is rescheduled for a date
more than three Business Days after the date of the determination by the
Trustee pursuant to Section 5.5 hereof, such Sale shall not occur unless
and until the Trustee has again made the determination required by Section
5.5 hereof.  The Trustee hereby
expressly waives its rights to any amount fixed by law as compensation for any
Sale; provided  that the
Trustee shall be authorized to deduct the reasonable costs, charges and
expenses incurred by it in connection with such Sale from the proceeds thereof
notwithstanding the provisions of Section 6.7 hereof.

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

(c)      If any portion of the
Assets consists of securities issued without registration under the Securities
Act (“Unregistered Securities”),
the Trustee may seek an Opinion of Counsel, or, if no such Opinion of Counsel
can be obtained and with the consent of

 

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a Majority of the
Controlling Class, seek a no action position from the Securities and Exchange
Commission or any other relevant federal or State regulatory authorities,
regarding the legality of a public or private Sale of such Unregistered
Securities.  In no event shall the
Trustee be required to register Unregistered Securities under the Securities
Act.

(d)      The Trustee shall execute
and deliver an appropriate instrument of conveyance transferring its interest
in any portion of the Assets in connection with a Sale thereof.  In addition, the Trustee is hereby
irrevocably appointed the agent and attorney in fact of the Issuer to transfer
and convey its interest in any portion of the Assets in connection with a Sale
thereof, and to take all action necessary to effect such Sale.  No purchaser or transferee at such a Sale
shall be bound to ascertain the Trustee’s authority, to inquire into the
satisfaction of any conditions precedent or see to the application of any
Monies.

(e)      In the event of any Sale
of the Assets pursuant to Sections 5.4 or 5.5, payments shall be
made in the order and priority set forth in Section 11.1(a)(i) and Section
11.1(a)(ii) in the same manner as if the Notes had been accelerated.

Section 5.18           Action
on the Notes.

The Trustee’s right to
seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking or obtaining of or application for any other relief
under or with respect to this Indenture. 
Neither the lien of this Indenture nor any rights or remedies of the Trustee,
or the Noteholders shall be impaired by the recovery of any judgment by the
Trustee against the Issuer or the Co-Issuer or by the levy of any execution
under such judgment upon any portion of the Assets or upon any of the assets of
the Issuer or the Co-Issuer.

 

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ARTICLE
6

THE
TRUSTEE

Section 6.1             Certain
Duties and Responsibilities.

(a)      Except during the
continuance of an Event of Default:

(i)       the Trustee undertakes to perform such
duties and only such duties as are set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and

(ii)      in the absence of manifest error, or bad
faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; provided,  however,
that in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they
substantially conform to the requirements of this Indenture and shall promptly,
but in any event within three Business Days in the case of an Officer’s
Certificate furnished by the Collateral Manager, notify the party delivering
the same if such certificate or opinion does not conform.  If a corrected form shall not have been
delivered to the Trustee within fifteen (15) days after such notice from the
Trustee, the Trustee shall so notify the Noteholders.

(b)      In case an Event of
Default known to the Trustee has occurred and is continuing, the Trustee shall,
prior to the receipt of directions, if any, from a Majority of the Controlling
Class (or other Noteholders to the extent provided in Article 5 hereof),
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person’s own
affairs.

(c)      If, in performing its
duties under this Agreement, the Trustee is required to decide between
alternative courses of action, the Trustee may request written instructions
from the Collateral Manager as to courses of action desired by it.  If the Trustee does not receive such
instructions within two (2) Business Days after it has requested them, it may,
but shall be under no duty to, take or refrain from taking such action.  The Trustee shall act in accordance with
instructions received after such two-Business Day period except to the extent
it has already taken, or committed itself to take, action inconsistent with
such instructions.  The Trustee shall be
entitled to rely on the advice of legal counsel and Independent accountants in
performing its duties hereunder and be deemed to have acted in good faith if it
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(d)      No provision of this
Indenture shall be construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

(i)       this subsection shall not be construed to
limit the effect of subsection (a) of this Section 6.1;

(ii)      the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer, unless it shall be
proven that the Trustee was negligent in ascertaining the pertinent facts;

(iii)     the Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Issuer in accordance with this Indenture
and/or the Controlling Class relating to the time, method and place of
conducting any Proceeding for any remedy available to the Trustee in respect of
any Note or exercising any trust or power conferred upon the Trustee under this
Indenture;

(iv)    no provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers contemplated hereunder, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it (if
the amount of such funds or risk or liability does not exceed the amount
payable to the Trustee pursuant to Section 11.1(a)(i)(3) and Section
11.1(a)(ii)(1) net of the amounts specified in Section 6.7(a)(i),
the Trustee shall be deemed to be reasonably assured of such repayment) unless
such risk or liability relates to its ordinary services under this Indenture,
except where this Indenture provides otherwise; and

(v)     the Trustee shall not be liable to the Noteholders
for any action taken or omitted by it at the direction of the Issuer, the
Co-Issuer, the Collateral Manager, the Controlling Class and/or a Noteholder
under circumstances in which such direction is required or permitted by the
terms of this Indenture.

(e)      For all purposes under
this Indenture, the Trustee shall not be deemed to have notice or knowledge of
any Event of Default described in Sections 5.1(d), 5.1(f), 5.1(g),
5.1(h) or 5.1(i) or any Default described in Section 5.1(e)
unless a Trust Officer assigned to and working in the Corporate Trust Office
has actual knowledge thereof or unless written notice of any event which is in
fact such an Event of Default or Default is received by the Trustee at the
Corporate Trust Office, and such notice references, as applicable, the Notes
generally, the Issuer, the Assets or this Indenture.  For purposes of determining the Trustee’s
responsibility and liability hereunder, whenever reference is made in this
Indenture to such an Event of Default or a Default, such reference shall be
construed to refer only to such an Event of Default or Default of which the
Trustee is deemed to have notice as described in this Section 6.1.

 

155

 

(f)       Whether or not therein
expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of Section 6.1(a), 6.1(b), 6.1(c),
6.1(d) and 6.1(e).

(g)      The Trustee shall, upon
reasonable prior written notice to the Trustee, permit the Issuer, the
Co-Issuer, the Collateral Manager or the Rating Agencies, during the Trustee’s
normal business hours, to examine all books of account, records, reports and
other papers of the Trustee relating to the Notes, to make copies and extracts
therefrom (the reasonable out-of-pocket expenses incurred in making any such
copies or extracts to be reimbursed to the Trustee by such Person) and to
discuss the Trustee’s actions, as such actions relate to the Trustee’s duties
with respect to the Notes, with the Trustee’s officers and employees
responsible for carrying out the Trustee’s duties with respect to the Notes.

(h)      The Trustee shall
promptly notify the Class A-2 Note Insurer of either of the following of which
an officer of the Trustee has received written notice:  (i) the commencement of any Issuer Insolvency
Proceeding or (ii) the making of any claim in connection with an Issuer
Insolvency Proceeding seeking the avoidance (an “Avoidance Claim”) of
any payment of principal of or interest on, the Class A-2 Notes.  The Trustee, on its own behalf and on behalf
of the Class A-2 Noteholders, hereby appoints the Class A-2 Note Insurer as
agent and attorney-in-fact for the Trustee and each such holder in any Issuer
Insolvency Proceeding with respect to such Class A-2 Notes; provided,
that the Class A-2 Note Insurer will have no right to exercise such powers as
agent or attorney-in-fact if a Surety Event has occurred and is continuing
unless and until such Surety Event is cured. 
The Trustee on behalf of the Class A-2 Noteholders, hereby agrees that,
unless a Surety Event has occurred and is continuing, the Class A-2 Note
Insurer may at any time during the continuation of any Issuer Insolvency
Proceeding direct all matters relating to such Issuer Insolvency Proceeding (on
behalf of the Class A-2 Noteholders only), including, without limitation, (x)
all matters relating to any Avoidance Claim, (y) the direction of any appeal of
any order relating to any Avoidance Claim at the expense of the Class A-2 Note
Insurer but subject to reimbursement as provided in the Insurance Policy and
(z) the positing of any surety, supersedeas or performance bond pending any
such appeal.  In addition, and without
limitation to the foregoing, the Class A-2 Note Insurer will be subrogated to,
and the Class A-2 Noteholders shall assign to the Class A-2 Note Insurer as
agent and attorney-in-fact, to the fullest extent permitted by law, the rights
of the Class A-2 Noteholders in any Issuer Insolvency Proceeding that they may
have in directing the Trustee or otherwise acting in accordance with the terms
of this Indenture, including, without limitation, any rights of any party to an
adversary proceeding or action with respect to any court order issued in
connection with any such Issuer Insolvency Proceeding; provided, that
the Class A-2 Note Insurer will have no right to exercise such powers as agent
or attorney-in-fact if a Surety Event has occurred and is continuing.

Section 6.2             Notice
of Default.

Promptly (and in no event
later than three Business Days) after the occurrence of any Default known to
the Trustee or after any declaration of acceleration has been made or delivered
to the Trustee pursuant to Section 5.2, the Trustee shall transmit by
mail to the Collateral Manager, the Irish Paying Agent (for so long as any Notes
are listed on the Irish Stock

 

156

 

Exchange), each
Hedge Counterparty, each Rating Agency (for so long as any Class of Notes is
Outstanding and rated by such Rating Agency) and to all Holders of Notes as
their names and addresses appear on the Notes Register, notice of all Defaults
hereunder known to the Trustee, unless such Default shall have been cured or
waived.

Section 6.3             Certain
Rights of Trustee.

Except as otherwise
provided in Section 6.1:

(a)      the Trustee may rely and
shall be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, note or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;

(b)      any request or direction
of the Issuer or the Co-Issuer mentioned herein shall be sufficiently evidenced
by an Issuer Request or Issuer Order, as the case may be;

(c)      whenever in the
administration of this Indenture the Trustee shall (i) deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s
Certificate or (ii) be required to determine the value of any Assets or funds
hereunder or the Cash flows projected to be received therefrom, the Trustee
may, in the absence of bad faith on its part, rely on reports of nationally
recognized accountants, investment bankers or other persons qualified to
provide the information required to make such determination, including
nationally recognized dealers in securities of the type being valued and
securities quotation services;

(d)      as a condition to the
taking or omitting of any action by it hereunder, the Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken or
omitted by it hereunder in good faith and in reliance thereon;

(e)      the Trustee shall be
under no obligation to exercise or to honor any of the rights or powers vested
in it by this Indenture at the request or direction of any of the Noteholders
pursuant to this Indenture, unless such Noteholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and liabilities
which might reasonably be incurred by it in compliance with such request or
direction;

(f)       the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, note or other paper documents, but the
Trustee, in its discretion, may and, upon the written direction of a Majority
of the Controlling Class or of a Rating Agency, shall make such further inquiry
or investigation into such facts or matters as it may see fit or as it shall be
directed and shall have received indemnification reasonably acceptable to the
Trustee, and, the Trustee shall be entitled, on reasonable prior notice to the
Issuer, the Co-Issuer and the Collateral Manager, to examine the books and
records relating to the Notes and the Assets, as applicable, at the premises of
the Issuer, the Co-Issuer and the Collateral Manager, personally or by agent or
attorney during the Issuer’s, the Co-Issuer’s or

 

157

 

the Collateral
Manager’s normal business hours upon not less than three Business Days’ prior
written notice; provided  that the
Trustee shall, and shall cause its agents to, hold in confidence all such information,
except (i) to the extent disclosure may be required by law by any regulatory
authority and (ii) to the extent that the Trustee, in its sole judgment, may
determine that such disclosure is consistent with its obligations hereunder;

(g)      the Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder (except
with respect to its duty to make any Interest Advance under the circumstances
specified in Section 10.7) either directly or by or through agents or
attorneys; provided  that the
Trustee shall not be responsible for any willful misconduct or negligence on
the part of any agent appointed and supervised, or attorney appointed, with due
care by it hereunder;

(h)      the Trustee shall not be
liable for any action it takes or omits to take in good faith that it
reasonably and prudently believes to be authorized or within its rights or
powers hereunder;

(i)       the Trustee shall not be
responsible for the accuracy of the books or records of, or for any acts or
omissions of, the Depository, any Transfer Agent (other than the Trustee itself
acting in that capacity), Clearstream, Luxembourg, Euroclear, any Calculation
Agent (other than the Trustee itself acting in that capacity) or any Paying
Agent (other than the Trustee itself acting in that capacity);

(j)       the Trustee shall not be
liable for the actions or omissions of the Collateral Manager; and without
limiting the foregoing, the Trustee shall not (except to the extent, if at all,
otherwise expressly stated in this Indenture) be under any obligation to
monitor, evaluate or verify compliance by the Collateral Manager with the terms
hereof or the Collateral Management Agreement, or to verify or independently
determine the accuracy of information received by it from the Collateral Manager
(or from any selling institution, agent bank, trustee or similar source) with
respect to the Collateral Debt Securities; and

(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 in effect from time to time
(“GAAP”), the Trustee shall be entitled to request and receive (and rely
upon) instruction from the Issuer or the accountants appointed pursuant to Section
10.11 as to the application of GAAP in such connection, in any instance.

Section 6.4             Not
Responsible for Recitals or Issuance of Notes.

The recitals contained
herein and in the Notes, other than the Certificate of Authentication thereon,
shall be taken as the statements of the Issuer and the Co-Issuer, and the
Trustee assumes no responsibility for their correctness.  The Trustee makes no representation as to the
validity or sufficiency of this Indenture (except as may be made with respect
to the validity of the Trustee’s obligations hereunder), the Assets or the
Notes.  The Trustee shall not be
accountable for the use or application by the Issuer or the Co-Issuer of the
Notes or the proceeds thereof or any Money paid to the Issuer or the Co-Issuer
pursuant to the provisions hereof.

 

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Section 6.5             May
Hold Notes.

The Trustee, the Paying
Agent, the Notes Registrar or any other agent of the Issuer or the Co-Issuer,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Issuer and the Co-Issuer with the same
rights it would have if it were not Trustee, Paying Agent, Notes Registrar or
such other agent.

Section 6.6             Money
Held in Trust.

Money held by the Trustee
hereunder shall be held in trust to the extent required herein.  The Trustee shall be under no liability for
interest on any Money received by it hereunder except as otherwise agreed upon
with the Issuer and except to the extent of income or other gain on investments
which are deposits in or certificates of deposit of the Trustee in its
commercial capacity and income or other gain actually received by the Trustee
on Eligible Investments.

Section 6.7             Compensation
and Reimbursement.

(a)      The Issuer agrees:

(i)       to pay the Trustee on each Payment Date
in accordance with the Priority of Payments reasonable compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);

(ii)      except as otherwise expressly provided
herein, to reimburse the Trustee (subject to any written agreement between the
Issuer and the Trustee) in a timely manner upon its request for all reasonable
expenses, disbursements and advances (except as otherwise provided herein with
respect to Interest Advances) incurred or made by the Trustee in accordance
with any provision of this Indenture (including securities transaction charges
to the extent not waived due to the Trustee’s receipt of payments from a
financial institution with respect to certain Eligible Investments, as
specified by the Collateral Manager and the reasonable compensation and
expenses and disbursements of its agents and legal counsel and of any
accounting firm or investment banking firm employed by the Trustee pursuant to Section
5.4, 5.5, 6.3, 10.9 or 10.11 hereof, except any
such expense, disbursement or advance as may be attributable to its negligence,
willful misconduct or bad faith);

(iii)     to indemnify the Trustee and its Officers,
directors, employees and agents for, and to hold them harmless against, any
loss, liability or expense incurred without negligence, willful misconduct or
bad faith on their part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
themselves against any claim or liability in connection with the exercise or
performance of any of their powers or duties hereunder; and

(iv)    to pay the Trustee reasonable additional
compensation together with its expenses (including reasonable counsel fees) for
any collection action taken pursuant to Section 6.13 hereof.

 

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(b)      The Issuer may remit
payment for such fees and expenses to the Trustee or, in the absence thereof,
the Trustee may from time to time deduct payment of its fees and expenses
hereunder from Monies on deposit in the Payment Account in accordance with the
Priority of Payments.

(c)      The Trustee in its
capacity as Trustee, Paying Agent, Calculation Agent, Transfer Agent, Custodial
Securities Intermediary, Backup Advancing Agent and Notes Registrar, hereby
agrees not to cause the filing of a petition in bankruptcy against the Issuer
or the Co-Issuer until at least one year and one day or, if longer, the
applicable preference period then in effect after the payment in full of all
Notes issued under this Indenture.  This
provision shall survive termination of this Agreement.

(d)      The Trustee agrees that
the payment of all amounts to which it is entitled pursuant to Subsections
6.7(a)(i), (a)(ii), (a)(iii) and (a)(iv) shall be
subject to the Priority of Payments, shall be payable only to the extent funds
are available in accordance with such Priority of Payments, shall be payable
solely from the Assets and following realization of the Assets, any such claims
of the Trustee against the Issuer, and all obligations of the Issuer, shall be
extinguished and shall not revive thereafter. 
The Trustee will have a lien upon the Assets to secure the payment of
such payments to it in accordance with the Priority of Payments; provided  that the Trustee shall not institute any proceeding for
enforcement of such lien except in connection with an action taken pursuant to Section
5.3 hereof for enforcement of the lien of this Indenture for the benefit of
the Noteholders.

Fees shall be accrued on
the actual number of days in the related Interest Accrual Period.  The Trustee shall receive amounts pursuant to
this Section 6.7 and Sections 11.1(a)(i) and (ii) only to
the extent that such payment is made in accordance with the Priority of
Payments and the failure to pay such amounts to the Trustee will not, by
itself, constitute an Event of Default. 
Subject to Section 6.9, the Trustee shall continue to serve as
Trustee under this Indenture notwithstanding the fact that the Trustee shall
not have received amounts due to it hereunder. 
No direction by a Majority of the Controlling Class shall affect the
right of the Trustee to collect amounts owed to it under this Indenture.

If on any Payment Date
when any amount shall be payable to the Trustee pursuant to this Indenture is
not paid because there are insufficient funds available for the payment
thereof, all or any portion of such amount not so paid shall be deferred and
payable on any later Payment Date on which a fee shall be payable and
sufficient funds are available therefor in accordance with the Priority of
Payments.

Section 6.8             Corporate
Trustee Required; Eligibility.

There shall at all times
be a Trustee hereunder which shall be a corporation organized and doing
business under the laws of the United States of America or of any State
thereof, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least U.S.$200,000,000, subject to
supervision or examination by federal or State authority, having a rating of at
least “A2” by Moody’s, a rating of at least “A” by Fitch and a long-term senior
unsecured debt rating of at least “A+” and a short-term debt rating of at least
“A-1” by S&P and having an office within the United States.  If such corporation publishes

 

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reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this Section
6.8, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published.  If at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 6.8, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article 6.

Section 6.9             Resignation
and Removal; Appointment of Successor.

(a)      No resignation or removal
of the Trustee and no appointment of a successor Trustee pursuant to this Article
6 shall become effective until the acceptance of appointment by the
successor Trustee under Section 6.10.

(b)      The Trustee may resign at
any time by giving written notice thereof to the Issuer, the Co-Issuer, the
Collateral Manager, each Hedge Counterparty, the Noteholders and each Rating
Agency.  Upon receiving such notice of
resignation, the Issuer and the Co-Issuer shall promptly appoint a successor
trustee or trustees by written instrument, in duplicate, executed by an
Authorized Officer of the Issuer and an Authorized Officer of the Co-Issuer,
one copy of which shall be delivered to the Trustee so resigning and one copy
to the successor Trustee or Trustees, together with a copy to each Noteholder,
each Hedge Counterparty and the Collateral Manager; provided  that such successor Trustee shall be appointed only upon
the written consent of a Majority of the Notes (or if there are no Notes
Outstanding, a Majority of the Preferred Shares) or, at any time when an Event
of Default shall have occurred and be continuing or when a successor Trustee
has been appointed pursuant to Section 6.10, by Act of a Majority of the
Controlling Class.  If no successor
Trustee shall have been appointed and an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within thirty (30) days after the giving of
such notice of resignation, the resigning Trustee, the Controlling Class of
Notes or any Holder of a Note, on behalf of himself and all others similarly
situated, may petition any court of competent jurisdiction for the appointment
of a successor Trustee.

(c)      The Trustee is subject to
removal by act of a Majority of the Holders of the Notes (or if there are no
Notes Outstanding, a Majority of the Preferred Shares) or, at any time when an
Event of Default shall have occurred and be continuing or when a successor
Trustee has been appointed pursuant to Section 6.10, by Act of a
Majority of the Controlling Class, upon written notice delivered to the Trustee
and to the Issuer and the Co-Issuer.

(d)      If at any time:

(i)       the Trustee shall cease to be eligible
under Section 6.8 and shall fail to resign after written request
therefor by the Issuer, the Co-Issuer, or by any Holder; or

(ii)      the Trustee shall become incapable of
acting or there shall be instituted any proceeding pursuant to which it could
be adjudged as bankrupt or insolvent or a receiver or liquidator of the Trustee
or of its property shall be appointed or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;

 

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then, in any such case
(subject to Section 6.9(a)), (a) the Issuer or the Co-Issuer, by Issuer
Order, subject to the written consent of each Hedge Counterparty, may remove
the Trustee or (b) subject to Section 5.15, a Majority of the
Controlling Class or any Holder may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

(e)      If the Trustee shall resign,
be removed or become incapable of acting, or if a vacancy shall occur in the
office of the Trustee for any reason, the Issuer and the Co-Issuer, by Issuer
Order, subject to the written consent of each Hedge Counterparty and the
Collateral Manager, shall promptly appoint a successor Trustee.  If the Issuer and the Co-Issuer shall fail to
appoint a successor Trustee within sixty (60) days after such resignation,
removal or incapability or the occurrence of such vacancy, a successor Trustee
may be appointed by Act of a Majority of the Controlling Class delivered to the
Issuer, the Co-Issuer, the Collateral Manager and the retiring Trustee.  The successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede any successor Trustee proposed by the Issuer and the
Co-Issuer.  If no successor Trustee shall
have been so appointed by the Issuer and the Co-Issuer or a Majority of the
Controlling Class and shall have accepted appointment in the manner hereinafter
provided, subject to Section 5.15, each Hedge Counterparty, the
Controlling Class or any Holder may, on behalf of itself or himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.

(f)       The Issuer and the
Co-Issuer shall give prompt notice of each resignation and each removal of the
Trustee and each appointment of a successor Trustee by mailing written notice
of such event by first class mail, postage prepaid, to each Rating Agency, each
Hedge Counterparty, the Preferred Shares Paying Agent and to the Holders of the
Notes as their names and addresses appear in the Notes Register.  Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.  If the Issuer or the Co-Issuer fail to mail
such notice within ten days after acceptance of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be given at the expense
of the Issuer or the Co-Issuer, as the case may be.

Section 6.10           Acceptance
of Appointment by Successor.

Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to the Issuer, the
Co-Issuer, each Hedge Counterparty, the Collateral Manager and the retiring
Trustee an instrument accepting such appointment.  Upon delivery of the required instruments,
the resignation or removal of the retiring Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts, duties and obligations of
the retiring Trustee; but, on request of the Issuer and the Co-Issuer or a
Majority of the Controlling Class or the Collateral Manager or the successor
Trustee, such retiring Trustee shall, upon payment of its charges then unpaid,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and Money held by
such retiring Trustee hereunder, subject nevertheless to its lien, if any,
provided for in Section 6.7(d). 
Upon request of any such successor Trustee, the Issuer and

 

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the Co-Issuer
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts.

No successor Trustee
shall accept its appointment unless at the time of such acceptance such
successor shall be qualified and eligible under this Article 6 and (a)
such successor shall have long term debt rated within the four (4) highest
rating categories by each Rating Agency, and (b) each Rating Agency has
confirmed in writing that the employment of such successor would not adversely
affect the rating on the Notes.

Section 6.11           Merger,
Conversion, Consolidation or Succession to Business of Trustee.

Any corporation or
banking association into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation or banking association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article 6, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto.  In case any of the Notes have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Notes so authenticated with the
same effect as if such successor Trustee had itself authenticated such Notes.

Section 6.12           Co-Trustees
and Separate Trustee.

At any time or times,
including for the purpose of meeting the legal requirements of any jurisdiction
in which any part of the Assets may at the time be located, the Issuer, the
Co-Issuer and the Trustee shall have power to appoint, one or more Persons to
act as co-trustee jointly with the Trustee of all or any part of the Assets,
with the power to file such proofs of claim and take such other actions
pursuant to Section 5.6 herein and to make such claims and enforce such
rights of action on behalf of the Holders of the Notes as such Holders
themselves may have the right to do, subject to the other provisions of this Section
6.12.

Each of the Issuer and
the Co-Issuer shall join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint a
co-trustee.  If the Issuer and the
Co-Issuer do not both join in such appointment within fifteen (15) days after
the receipt by them of a request to do so, the Trustee shall have power to make
such appointment.

Should any written
instrument from the Issuer or the Co-Issuer be required by any co-trustee, so
appointed, more fully confirming to such co-trustee such property, title, right
or power, any and all such instruments shall, on request, be executed,
acknowledged and delivered by the Issuer or the Co-Issuer, as the case may
be.  The Issuer agrees to pay (but only
from and to the extent of the Assets) to the extent funds are available
therefor under subclauses (3) and (25) of Section 11.1(a)(i), for any
reasonable fees and expenses in connection with such appointment.

 

163

Every co-trustee, shall,
to the extent permitted by law, but to such extent only, be appointed subject
to the following terms:

(a)      the Notes shall be
authenticated and delivered and all rights, powers, duties and obligations
hereunder in respect of the custody of securities, Cash and other personal
property held by, or required to be deposited or pledged with, the Trustee
hereunder, shall be exercised solely by the Trustee;

(b)      the rights, powers,
duties and obligations hereby conferred or imposed upon the Trustee in respect
of any property covered by the appointment of a co-trustee shall be conferred
or imposed upon and exercised or performed by the Trustee or by the Trustee and
such co-trustee jointly in the case of the appointment of a co-trustee as shall
be provided in the instrument appointing such co-trustee, except to the extent
that under any law of any jurisdiction in which any particular act is to be
performed, the Trustee shall be incompetent or unqualified to perform such act,
in which event such rights, powers, duties and obligations shall be exercised
and performed by a co-trustee;

(c)      the Trustee at any time,
by an instrument in writing executed by it, with the concurrence of the Issuer
and the Co-Issuer evidenced by an Issuer Order, may accept the resignation of
or remove any co-trustee appointed under this Section 6.12, and in case
an Event of Default has occurred and is continuing, the Trustee shall have the
power to accept the resignation of, or remove, any such co-trustee without the
concurrence of the Issuer or the Co-Issuer. 
A successor to any co-trustee so resigned or removed may be appointed in
the manner provided in this Section 6.12;

(d)      no co-trustee hereunder
shall be personally liable by reason of any act or omission of the Trustee hereunder;

(e)      the Trustee shall not be
liable by reason of any act or omission of a co-trustee; and

(f)       any Act of
Securityholders delivered to the Trustee shall be deemed to have been delivered
to each co-trustee.

Section 6.13           Certain
Duties of Trustee Related to Delayed Payment of Proceeds.

In the event that in any
month the Trustee shall not have received a Scheduled Distribution, (a) the
Trustee shall promptly notify the Issuer and the Collateral Manager in writing
and (b) unless within three Business Days (or the end of the applicable grace
period for such payment, if longer) after such notice such payment shall have
been received by the Trustee, or the Issuer, in its absolute discretion (but
only to the extent permitted by Section 10.2(a)), shall have made
provision for such payment satisfactory to the Trustee in accordance with Section
10.2(a), the Trustee shall request the obligor of such Pledged Obligation,
the trustee under the related Underlying Instrument or paying agent designated
by either of them, as the case may be, to make such payment as soon as
practicable after such request but in no event later than three Business Days
after the date of such request.  In the
event that such payment is not made within such time period, the Trustee,
subject to the provisions of clause (iv) of Section 6.1(d), shall take
such action as the Collateral Manager reasonably shall direct in writing.  Any such action shall

 

164

 

be without
prejudice to any right to claim a Default or Event of Default under this
Indenture.  In the event that the Issuer
or the Collateral Manager requests a release of a Pledged Obligation in
connection with any such action under the Collateral Management Agreement, such
release shall be subject to Section 10.10 and Article 12 of this
Indenture, as the case may be. 
Notwithstanding any other provision hereof, the Trustee shall deliver to
the Issuer or its designee any payment with respect to any Pledged Obligation
received after the Due Date thereof to the extent the Issuer previously made
provisions for such payment satisfactory to the Trustee in accordance with this
Section 6.13 and such payment shall not be deemed part of the Assets.

Section 6.14           Representations
and Warranties of the Trustee.

The Trustee represents
and warrants that:

(a)      the Trustee is a national
banking association with trust powers, duly and validly existing under the laws
of the United States of America, with corporate power and authority to execute,
deliver and perform its obligations under this Indenture, and is duly eligible
and qualified to act as trustee under this Indenture;

(b)      this Indenture has been
duly authorized, executed and delivered by the Trustee and constitutes the
valid and binding obligation of the Trustee, enforceable against it in
accordance with its terms except (i) as limited by bankruptcy, fraudulent
conveyance, fraudulent transfer, insolvency, reorganization, liquidation,
receivership, moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights generally and by general equitable principles,
regardless of whether considered in a proceeding in equity or at law, and (ii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought;

(c)      neither the execution or
delivery by the Trustee of this Indenture nor the performance by the Trustee of
its obligations under this Indenture requires the consent or approval of, the
giving of notice to or the registration or filing with, any governmental
authority or agency under any existing law of the United States of America
governing the banking or trust powers of the Trustee;

(d)      neither the execution,
delivery and performance of this Indenture, nor the consummation of the
transactions contemplated by this Indenture, (i) is prohibited by, or requires
the Trustee to obtain any consent, authorization, approval or registration
under, any law, statute, rule, regulation, or any judgment, order, writ,
injunction or decree that is binding upon the Trustee or any of its properties
or assets, (ii) will violate the provisions of the Governing Documents of the
Trustee or (iii) will violate any provision of, result in any default or
acceleration of any obligations under, result in the creation or imposition of
any lien pursuant to, or require any consent under, any material agreement to
which the Trustee is a party or by which it or any of its property is bound,
the violation of which would have a material adverse effect on the Trustee or
its property; and

(e)      there are no proceedings
pending or, to the best knowledge of the Trustee, threatened against the
Trustee before any Federal, state or other governmental agency,

 

165

 

authority,
administrator or regulatory body, arbitrator, court or other tribunal, foreign
or domestic, which could have a material adverse effect on the Pledged
Obligations or the performance by the Trustee of its obligations under this
Indenture.

Section 6.15           Requests
for Consents.

In the event that the
Trustee receives written notice of any proposed amendment, consent or waiver
under the Underlying Instruments of any Collateral Debt Security (before or
after any default) or in the event any action is required to be taken in
respect to an Underlying Instrument, the Trustee shall promptly contact the
Issuer and the Collateral Manager.  The
Collateral Manager may, on behalf of the Issuer, instruct the Trustee pursuant
to an Issuer Order to, and the Trustee shall, with respect to which a
Collateral Debt Security as to which a consent or waiver under the Underlying
Instruments of such Collateral Debt Security (before or after any default) has
been proposed or with respect to action required to be taken in respect of an
Underlying Instrument, give consent, grant a waiver, vote or exercise any or
all other rights or remedies with respect to any such Collateral Debt Security
in accordance with such Issuer Order.  In
the absence of any instruction from the Collateral Manager, the Trustee shall
not engage in any vote or take any action with respect to such a Collateral
Debt Security.

Section 6.16           Withholding.

If
any amount is required to be deducted or withheld from any payment to any
Noteholder, such amount shall reduce the amount otherwise distributable to such
Noteholder.  The Trustee is hereby
authorized to withhold or deduct from amounts otherwise distributable to any
Noteholder sufficient funds for the payment of any tax that is legally required
to be withheld or deducted (but such authorization shall not prevent the
Trustee from contesting any such tax in appropriate proceedings and legally
withholding payment of such tax, pending the outcome of such proceedings).  The amount of any withholding tax imposed
with respect to any Noteholder shall be treated as Cash distributed to such
Noteholder at the time it is deducted or withheld by the Issuer or the Trustee,
as applicable, 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 6.16.  If any Noteholder wishes to apply for a
refund of any such withholding tax, the Trustee shall reasonably cooperate with
such Noteholder in making such claim so long as such Noteholder agrees to
reimburse the Trustee for any out-of-pocket expenses incurred.  Notwithstanding the foregoing, the Trustee
has no obligation to calculate any withholding amount.

 

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ARTICLE
7

COVENANTS

Section 7.1             Payment
of Principal and Interest.

The Issuer and the
Co-Issuer shall duly and punctually pay the principal of and interest on each
Class of Notes in accordance with the terms of such Notes and this
Indenture.  Amounts properly withheld
under the Code or other applicable law by any Person from a payment to any
Noteholder of interest and/or principal shall be considered as having been
paid, by the Issuer and the Co-Issuer, and, with respect to the Preferred
Shares, by the Issuer, to such Preferred Shareholder for all purposes of this
Indenture.

The Trustee shall, unless
prevented from doing so for reasons beyond its reasonable control, give notice
to each Securityholder of any such withholding requirement no later than ten
days prior to the related Payment Date from which amounts are required (as
directed by the Issuer or the Collateral Manager on behalf of the Issuer) to be
withheld; provided  that despite
the failure of the Trustee to give such notice amounts withheld pursuant to
applicable tax laws shall be considered as having been paid by the Issuer and
the Co-Issuer, as provided above.

Section 7.2             Maintenance
of Office or Agency.

The Issuer and the
Co-Issuer hereby appoint the Trustee as a Paying Agent for the payment of
principal of and interest on the Notes and where Notes may be surrendered for
registration of transfer or exchange and the Issuer and the Co-Issuer hereby
appoint the Trustee, as their agent where notices and demands to or upon the
Co-Issuer in respect of the Notes or this Indenture, or the Issuer in respect
of the Notes or this Indenture, may be served.

The Issuer and the
Co-Issuer hereby appoint the Irish Paying Agent as a Paying Agent for the
payment of principal of and interest on the Notes and to act as their agent
where notices and demands to or upon the Issuer or the Co-Issuer in respect of
the Notes or this Indenture may be served and where Notes may be surrendered
for registration of transfer or exchange.

The Issuer or the
Co-Issuer may at any time and from time to time vary or terminate the
appointment of any such agent or appoint any additional agents for any or all
of such purposes; provided,  however,
that the Issuer and the Co-Issuer, if applicable, will maintain in the Borough
of Manhattan, The City of New York, an office or agency where notices and
demands to or upon the Issuer and the Co-Issuer in respect of the Notes and
this Indenture may be served, and, subject to any laws or regulations
applicable thereto, an office or agency outside of the United States where
Notes may be presented and surrendered for payment; provided,  further, that no paying agent shall be appointed in
a jurisdiction which subjects payments on the Notes to withholding tax.  The Issuer or the Co-Issuer, as the case may
be, shall give prompt written notice to the Trustee, each Rating Agency and the
Noteholders of the appointment or

 

167

 

termination of any
such agent and of the location and any change in the location of any such
office or agency.

If at any time the Issuer
and the Co-Issuer, if applicable, shall fail to maintain any such required
office or agency in the Borough of Manhattan, The City of New York, or outside
the United States, or shall fail to furnish the Trustee with the address
thereof, presentations and surrenders may be made (subject to the limitations
described in the preceding paragraph) at and notices and demands may be served
on the Issuer and the Co-Issuer, and Notes may be presented and surrendered for
payment to the appropriate Paying Agent at its main office and the Issuer and
the Co-Issuer hereby appoint the same as their agent to receive such respective
presentations, surrenders, notices and demands.

Section 7.3             Money
for Note Payments to be Held in Trust.

All payments of amounts
due and payable with respect to any Notes that are to be made from amounts
withdrawn from the Payment Account shall be made on behalf of the Issuer and
the Co-Issuer by the Trustee or a Paying Agent (in each case, from and to the
extent of available funds in the Payment Account and subject to the Priority of
Payments) with respect to payments on the Notes.

When the Paying Agent is
not also the Notes Registrar, the Issuer and the Co-Issuer shall furnish, or
cause the Notes Registrar to furnish, no later than the fifth calendar day
after each Record Date a list, if necessary, in such form as such Paying Agent
may reasonably request, of the names and addresses of the Holders of Notes and
of the certificate numbers of individual Notes held by each such Holder.

Whenever the Paying Agent
is not also the Trustee, the Issuer, the Co-Issuer, and such Paying Agent
shall, on or before the Business Day next preceding each Payment Date or
Redemption Date, as the case may be, direct the Trustee to deposit on such
Payment Date with such Paying Agent, if necessary, an aggregate sum sufficient
to pay the amounts then becoming due pursuant to the terms of this Indenture
(to the extent funds are then available for such purpose in the Payment
Account, and subject to the Priority of Payments), such sum to be held for the
benefit of the Persons entitled thereto and (unless such Paying Agent is the
Trustee) the Issuer and the Co-Issuer shall promptly notify the Trustee of its
action or failure so to act.  Any Monies
deposited with a Paying Agent (other than the Trustee) in excess of an amount
sufficient to pay the amounts then becoming due on the Notes with respect to
which such deposit was made shall be paid over by such Paying Agent to the
Trustee for application in accordance with Article 11.  Any such Paying Agent shall be deemed to
agree by assuming such role not to cause the filing of a petition in bankruptcy
against the Issuer or the Co-Issuer for the non-payment to the Paying Agent of
any amounts payable thereto until at least one year and one day or, if longer,
the applicable preference period then in effect after the payment in full of
all Notes issued under this Indenture.

The initial Paying Agent
shall be as set forth in Section 7.2. 
Any additional or successor Paying Agents shall be appointed by Issuer
Order of the Issuer and Issuer Order of the Co-Issuer with written notice thereof
to the Trustee; provided,  however,
that so long as any Class of the Notes are rated by a Rating Agency and with
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Agent for the
Notes, either (i) such Paying Agent has a long-term debt rating of “Aa3” or
higher by Moody’s, “AA-”or higher by Fitch and “AA-” or higher by S&P or a
short-term debt rating of “P-1” by Moody’s, “F1+” by Fitch and “A1+” by S&P
or (ii) each Rating Agency confirms that employing such Paying Agent shall not
adversely affect the then-current ratings of the Notes.  In the event that such successor Paying Agent
ceases to have a long-term debt rating of “Aa3” or higher by Moody’s, “AA-”or
higher by Fitch or “AA-” or higher by S&P or a short-term debt rating of at
least “P-1” by Moody’s, “F1+” by Fitch and “A-1+” by S&P, the Issuer and
the Co-Issuer shall promptly remove such Paying Agent and appoint a successor
Paying Agent.  The Issuer and the
Co-Issuer shall not appoint any Paying Agent that is not, at the time of such
appointment, a depository institution or trust company subject to supervision
and examination by federal and/or state and/or national banking
authorities.  The Issuer and the Co-Issuer
shall cause the Paying Agent other than the Trustee to execute and deliver to
the Trustee an instrument in which such Paying Agent shall agree with the
Trustee (and if the Trustee acts as Paying Agent, it hereby so agrees), subject
to the provisions of this Section 7.3, that such Paying Agent will:

(a)      allocate all sums
received for payment to the Holders of Notes for which it acts as Paying Agent
on each Payment Date and Redemption Date among such Holders in the proportion
specified in the applicable report or Redemption Date Statement, as the case
may be, in each case to the extent permitted by applicable law;

(b)      hold all sums held by it
for the payment of amounts due with respect to the Notes for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein
provided;

(c)      if such Paying Agent is
not the Trustee, immediately resign as a Paying Agent and forthwith pay to the
Trustee all sums held by it for the payment of Notes if at any time it ceases
to meet the standards set forth above required to be met by a Paying Agent at
the time of its appointment;

(d)      if such Paying Agent is
not the Trustee, immediately give the Trustee notice of any Default by the
Issuer or the Co-Issuer (or any other obligor upon the Notes) in the making of
any payment required to be made; and

(e)      if such Paying Agent is
not the Trustee at any time during the continuance of any such Default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums so
held by such Paying Agent.

The Issuer or the
Co-Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or by Issuer Order
direct the Paying Agent to pay, to the Trustee all sums held by the Issuer or
the Co-Issuer or held by the Paying Agent for payment of the Notes, such sums
to be held by the Trustee in trust for the same Noteholders as those upon which
such sums were held by the Issuer, the Co-Issuer or the Paying Agent; and, upon
such payment by the Paying Agent to the Trustee, the Paying Agent shall be
released from all further liability with respect to such Money.

 

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Except as otherwise
required by applicable law, any Money deposited with the Trustee in trust or
deposited with the Paying Agent for the payment of the principal of or interest
on any Note and remaining unclaimed for two (2) years after such principal or
interest has become due and payable shall be paid to the Issuer; and the Holder
of such Note shall thereafter, as an unsecured general creditor, look only to
the Issuer for payment of such amounts and all liability of the Trustee or the
Paying Agent with respect to such Money (but only to the extent of the amounts
so paid to the Issuer or the Co-Issuer, as applicable) shall thereupon cease; provided,  however, that the Irish Paying Agent, before being
required to make any such payment, shall at the expense of the Issuer cause to
be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in
Dublin, Ireland, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than thirty (30) days from the
date of such publication, any unclaimed balance of such money then remaining
shall be repaid to the Issuer.  The
Trustee or the Paying Agent, before being required to make any such release of
payment, may, but shall not be required to, adopt and employ, at the expense of
the Issuer or the Co-Issuer, as the case may be, any reasonable means of
notification of such release of payment, including, but not limited to, mailing
notice of such release to Holders whose Notes have been called but have not
been surrendered for redemption or whose right to or interest in Monies due and
payable but not claimed is determinable from the records of the Paying Agent,
at the last address of record of each such Holder.

Section 7.4             Existence
of the Issuer and Co-Issuer.

(a)      So long as any Note is
outstanding, the Issuer shall, to the maximum extent permitted by law, maintain
in full force and effect its existence and rights as an exempted company
incorporated with limited liability under the laws of the Cayman Islands and
shall obtain and preserve its qualification to do business as a foreign limited
liability company in each jurisdiction in which such qualifications are or
shall be necessary to protect the validity and enforceability of this
Indenture, the Notes or any of the Assets; provided  that
the Issuer shall be entitled to change its jurisdiction of registration from
the Cayman Islands to any other jurisdiction reasonably selected by the Issuer
so long as (i) such change is not disadvantageous in any material respect to
the Holders of the Notes or the Preferred Shares, (ii) written notice of such
change shall have been given by the Trustee to the Holders of the Notes or
Preferred Shares, the Preferred Shares Paying Agent and each Rating Agency
fifteen (15) Business Days prior to such change, (iii) on or prior to the
fifteenth (15th) Business Day following such notice the Trustee
shall not have received written notice from a Majority of the Controlling Class
or a Majority of the Preferred Shares objecting to such change and (iv) the
Issuer prepares, creates and delivers any documents necessary to maintain the
perfection of a first-priority security interest under this Indenture.  So long as any Note is outstanding, the
Issuer shall maintain at all times at least one director who is Independent of
the Collateral Manager and its Affiliates.

(b)      So long as any Note is
outstanding, the Co-Issuer shall maintain in full force and effect its
existence and rights as a limited liability company organized under the laws of
Delaware and shall obtain and preserve its qualification to do business as a
foreign limited liability company in each jurisdiction in which such
qualifications are or shall be necessary to protect the validity and
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however, that the Co-Issuer shall be entitled to
change its jurisdiction of formation from Delaware to any other jurisdiction
reasonably selected by the Co-Issuer so long as (i) such change is not
disadvantageous in any material respect to the Holders of the Notes, (ii)
written notice of such change shall have been given by the Trustee to the
Holders of the Notes and each Rating Agency fifteen (15) Business Days prior to
such change, (iii) on or prior to the 15th Business Day following such notice
the Trustee shall not have received written notice from a Majority of the
Controlling Class objecting to such change and (iv) the Issuer prepares,
creates and delivers any documents necessary to maintain the perfection of a
first-priority security interest under this Indenture.  So long as any Note is outstanding, the
Co-Issuer shall maintain at all times at least one manager who is Independent
of the Collateral Manager and its Affiliates.

(c)      So long as any Note is
outstanding, the Issuer shall ensure that all corporate or other formalities
regarding its existence are followed (including correcting any known
misunderstanding regarding its separate existence).  So long as any Note is outstanding, the
Issuer shall not take any action or conduct its affairs in a manner that is
likely to result in its separate existence being ignored (other than the Issuer
being treated as a Qualified REIT Subsidiary for income tax purposes) or its
assets and liabilities being substantively consolidated with any other Person
in a bankruptcy, reorganization or other insolvency proceeding.  So long as any Note is outstanding, the
Issuer shall maintain and implement administrative and operating procedures
reasonably necessary in the performance of the Issuer’s obligations hereunder,
and the Issuer shall at all times keep and maintain, or cause to be kept and
maintained, separate books, records, accounts and other information customarily
maintained for the performance of the Issuer’s obligations hereunder, shall
fairly and reasonably allocate and pay any overhead for shared office space
utilized, if any, and shall at all times hold itself out to the public and all
other Persons as a legal entity separate from its equity holders and any other
Person.  Without limiting the foregoing,
so long as any Note is outstanding, (i) the Issuer shall (A) pay its own
liabilities only out of its own funds and (B) use separate stationery, invoices
and checks, (ii) the Issuer shall not have any subsidiaries, and (iii) the
Issuer shall not (A) have any employees, (B) engage in any transaction with any
shareholder that is not permitted under the terms of the Collateral Management
Agreement, (C) pay dividends other than in accordance with the terms of this
Indenture, (D) conduct business under an assumed name (i.e. no DBAs) or (E)
commingle its funds or other assets with those of any other Person, except as
contemplated by this Indenture; provided that the foregoing shall not
prohibit the Issuer from entering into the transactions contemplated by the
Company Administration Agreement with the Company Administrator and the
Preferred Shares Paying Agency Agreement with the Share Registrar.

(d)      So long as any Note is
outstanding, the Co-Issuer shall ensure that all limited liability company or
other formalities regarding its existence are followed (including correcting
any known misunderstanding regarding its separate existence).  The Co-Issuer shall not take any action or
conduct its affairs in a manner, that is likely to result in its separate
existence being ignored or its assets and liabilities being substantively
consolidated with any other Person in a bankruptcy, reorganization or other
insolvency proceeding.  The Co-Issuer
shall maintain and implement administrative and operating procedures reasonably
necessary in the performance of the Co-Issuer’s obligations hereunder, and the
Co-Issuer shall at all times keep and maintain, or cause to be kept and
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information
customarily maintained for the performance of the Co- Issuer’s obligations
hereunder, shall fairly and reasonably allocate and pay any overhead for shared
office space utilized, if any, and shall at all times hold itself out to the
public and all other Persons as a legal entity separate from its equity holders
and any other Person.  Without limiting
the foregoing, (i) the Co-Issuer shall not have any subsidiaries, and (ii) the
Co-Issuer shall not (A) have any employees (other than its managers), (B) join
in any transaction with any member that is not permitted under the terms of the
Collateral Management Agreement, (C) pay dividends other than in accordance
with the terms of this Indenture, (D) conduct business under an assumed name
(i.e. no DBAs) or (E) commingle its funds or other assets with those of any
other Person, except as contemplated by this Indenture.

Section 7.5             Protection
of Assets.

(a)      The Trustee, on behalf of
the Issuer, pursuant to any Opinion of Counsel received pursuant to Section
7.5(d) shall execute and deliver all such Financing Statements,
continuation statements, instruments of further assurance and other
instruments, and shall take such other action as may be necessary or advisable
or desirable to secure the rights and remedies of the Holders, the Class A-2
Note Insurer and each Hedge Counterparty hereunder and to:

(i)       Grant more effectively all or any portion
of the Assets;

(ii)      maintain or preserve the lien (and the priority
thereof) of this Indenture or to carry out more effectively the purposes
hereof;

(iii)     perfect, publish notice of or protect the
validity of any Grant made or to be made by this Indenture (including, without
limitation, any and all actions necessary or desirable as a result of changes
in law or regulations);

(iv)    enforce any of the Pledged Obligations or
other instruments or property included in the Assets;

(v)     preserve and defend title to the Assets and
the rights of the Trustee, the Holders of the Notes and each Hedge Counterparty
in the Assets against the claims of all persons and parties; and

(vi)    pursuant to Sections 11.1(a)(i)(1)
and 11.1(a)(ii)(1), pay or cause to be paid any and all taxes levied or
assessed upon all or any part of the Assets.

The Issuer hereby
designates the Trustee, its agent and attorney-in-fact to execute any Financing
Statement, continuation statement or other instrument required pursuant to this
Section 7.5.  The Trustee agrees
that it shall from time to time execute and cause to be filed Financing
Statements and continuation statements (it being understood that the Trustee
shall be entitled to rely upon an Opinion of Counsel described in Section
7.5(d), at the expense of the Issuer, as to the need to file such Financing
Statements and continuation statements, the dates by which such filings are
required to be made and the jurisdictions in which such filings are required to
be made).

 

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(b)      The Trustee shall not (i)
except in accordance with Section 10.10(a), (b) or (c) and except
for payments, deliveries and distributions otherwise expressly permitted under
this Indenture, remove any portion of the Assets that consists of Cash or is
evidenced by an instrument, certificate or other writing (A) from the
jurisdiction in which it was held at the date as described in the Opinion of
Counsel delivered at the Closing Date pursuant to Section 3.1(d) or (B)
from the possession of the Person who held it on such date or (ii) cause or permit
the Custodial Account or the Custodial Securities Intermediary to be located in
a different jurisdiction from the jurisdiction in which such securities
accounts and Custodial Securities Intermediary were located on the Closing
Date, unless the Trustee shall have first received an Opinion of Counsel to the
effect that the lien and security interest created by this Indenture with
respect to such property shall continue to be maintained after giving effect to
such action or actions.

(c)      The Issuer shall pay or
cause to be paid taxes, if any, levied on account of the beneficial ownership
by the Issuer of any Pledged Obligations that secure the Notes.

(d)      For so long as the Notes
are Outstanding, (i) on July 31, 2012 and (ii) every sixty (60) months after such date, the
Issuer (or the Collateral Manager on behalf of the Issuer) shall deliver to the
Trustee for the benefit of the Trustee, the Collateral Manager, each Hedge
Counterparty and each Rating Agency, at the expense of the Issuer, an Opinion
of Counsel stating what is required, in the opinion of such counsel, as of the
date of such opinion, to maintain the lien and security interest created by
this Indenture with respect to the Assets, and confirming the matters set forth
in the Opinion of Counsel, furnished pursuant to Section 3.1(d), with
regard to the perfection and priority of such security interest (and such
Opinion may likewise be subject to qualifications and assumptions similar to
those set forth in the Opinion delivered pursuant to Section 3.1(d)); provided
that the Issuer shall be required to deliver an Opinion of Counsel with respect
to the foregoing matters within sixty (60) days after any change in the
jurisdiction of organization of the Trustee; and provided, further, that a
Majority of the Controlling Class shall be entitled to direct the Issuer to
deliver an additional Opinion of Counsel with respect to the foregoing matters,
at the expense of such Holders, twice within any such 60-month period.

Section 7.6             Notice
of Any Amendments.

Each of the Issuer and
the Co-Issuer shall give notice to the Rating Agencies of, and satisfy the
Rating Agency Condition with respect to, any amendments to its Governing
Documents.

Section 7.7             Performance
of Obligations.

(a)      Each of the Issuer and
the Co-Issuer shall not take any action, and shall use reasonable commercial
efforts not to permit any action to be taken by others, that would release any
Person from any of such Person’s covenants or obligations under any instrument
included in the Assets, except in the case of enforcement action taken with
respect to any Defaulted Security in accordance with the provisions hereof and
as otherwise required hereby.

 

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(b)      The Issuer or the
Co-Issuer may, with the prior written consent of the Majority of the Notes (or
if there are no Notes Outstanding, a Majority of the Preferred Shares),
contract with other Persons, including the Collateral Manager or the Trustee,
for the performance of actions and obligations to be performed by the Issuer or
the Co-Issuer, as the case may be, hereunder by such Persons and the
performance of the actions and other obligations with respect to the Assets of
the nature set forth in the Collateral Management Agreement by the Collateral
Manager.  Notwithstanding any such
arrangement, the Issuer or the Co-Issuer, as the case may be, shall remain
primarily liable with respect thereto. 
In the event of such contract, the performance of such actions and
obligations by such Persons shall be deemed to be performance of such actions
and obligations by the Issuer or the Co-Issuer; and the Issuer or the Co-Issuer
shall punctually perform, and use reasonable commercial efforts to cause the
Collateral Manager or such other Person to perform, all of their obligations
and agreements contained in the Collateral Management Agreement or such other
agreement.

Section 7.8             Negative
Covenants.

(a)      The Issuer and the
Co-Issuer shall not:

(i)       sell, assign, participate, transfer,
exchange or otherwise dispose of, or pledge, mortgage, hypothecate or otherwise
encumber (or permit such to occur or suffer such to exist), any part of the
Assets, except as otherwise expressly permitted by this Indenture, the
Collateral Assignment of Swap Documents or the Collateral Management Agreement;

(ii)      claim any credit on, make any deduction
from, or dispute the enforceability of, the payment of the principal or
interest payable in respect of the Notes (other than amounts required to be
paid, deducted or withheld in accordance with any applicable law or regulation
of any governmental authority), or assert any claim against any present or
future Noteholder by reason of the payment of any taxes levied or assessed upon
any part of the Assets;

(iii)     (A) incur or assume or guarantee any indebtedness,
other than the Notes and this Indenture and the transactions contemplated
hereby; (B) issue any additional class of securities, other than the Notes, the
Preferred Shares, the ordinary shares of the Issuer and the limited liability
company membership interests of the Co-Issuer; or (C) issue any additional
shares of stock, other than the ordinary shares of the Issuer and the Preferred
Shares;

(iv)    (A) permit the validity or effectiveness of
this Indenture or any Grant hereunder to be impaired, or permit the lien of
this Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations with respect to this Indenture or the Notes, except as may be
expressly permitted hereby, (B) permit any lien, charge, adverse claim,
security interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or burden the
Assets or any part thereof, any interest therein or the proceeds thereof,
except as may be expressly permitted hereby and under the Collateral Assignment
of Swap Documents or (C) take any action

 

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that would permit
the lien of this Indenture not to constitute a valid first priority security
interest in the Assets, except as may be expressly permitted hereby;

(v)     amend the Collateral Management Agreement,
except pursuant to the terms thereof;

(vi)    amend any Servicing Agreement, except
pursuant to the terms thereof;

(vii)   amend the Preferred Shares Paying Agency
Agreement, except pursuant to the terms thereof;

(viii)  to the maximum extent permitted by applicable
law, dissolve or liquidate in whole or in part, except as permitted hereunder;

(ix)     make or incur any capital expenditures,
except as reasonably required to perform its functions in accordance with the
terms of this Indenture and the other Transaction Documents;

(x)      become liable in any way, whether directly
or by assignment or as a guarantor or other surety, for the obligations of the
lessee under any lease, hire any employees or pay any dividends to its
shareholders, except with respect to the Preferred Shares in accordance with
the Priority of Payments and the Preferred Shares Paying Agency Agreement;

(xi)     maintain any bank accounts other than the
Accounts, the Preferred Shares Distribution Account and the bank account in the
Cayman Islands in which (inter alia) the
proceeds of the Issuer’s issued share capital and the transaction fees paid to
the Issuer for agreeing to issue the Securities will be kept;

(xii)    conduct business under an assumed name, or
change its name without first delivering at least thirty (30) days’ prior
written notice to the Trustee, the Noteholders and the Rating Agencies and an Opinion
of Counsel to the effect that such name change will not adversely affect the
security interest hereunder of the Trustee;

(xiii)   engage in any activity that would cause the
Issuer to be treated as a foreign corporation subject to U.S. Federal, state or
local income or franchises tax;

(xiv)   except for any agreements (other than a Hedge
Agreement) involving the purchase and sale of Collateral Debt Securities having
customary purchase or sale terms and documented with customary loan trading
documentation, enter into any agreements unless such agreements contain “non-petition”
and “limited recourse” provisions; or

(xv)    permit the Issuer to sell or otherwise
transfer (or finance) more than 49%, in the aggregate, of the Issuer Ordinary
Shares (or register any such transfer to any other person or entity) without
providing to the Trustee (with a copy to S&P) an Opinion of Counsel with
respect to the non-consolidation of such transferee with the Issuer,
substantially in the form of the non-consolidation opinion delivered on the
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(b)      Neither the Issuer nor
the Trustee shall sell, transfer, exchange or otherwise dispose of Assets, or
enter into or engage in any business with respect to any part of the Assets,
except as expressly permitted or required by this Indenture or the Collateral
Management Agreement.

(c)      The Co-Issuer shall not
invest any of its assets in “securities” (as such term is defined in the
Investment Company Act) and shall keep all of the Co-Issuer’s assets in Cash.

(d)      For so long as any of the
Notes are Outstanding, the Co-Issuer shall not issue any limited liability
company membership interests of the Co-Issuer to any Person other than Gramercy
Investment or a wholly-owned subsidiary of Gramercy Investment.

(e)      The Issuer shall not
enter into any material new agreements (other than any Hedge Agreement, Hedge
Counterparty Credit Support, Collateral Debt Security, Collateral Debt Security
Purchase Agreement or other agreement (including, without limitation, in
connection with the sale of Assets by the Issuer) contemplated by this
Indenture) without the prior written consent of Holders of a Majority of the
Notes and a Majority of the Controlling Class (or if there are no Notes Outstanding,
a Majority of the Preferred Shares) and shall provide notice of all new
agreements (other than any Hedge Agreement, Collateral Debt Security or other
agreement specifically contemplated by this Indenture) to the Holders of the
Notes.  The foregoing notwithstanding,
the Issuer may agree to any new agreements; provided that (i) the
Issuer, or the Collateral Manager on behalf of the Issuer, determines that such
new agreements would not, upon or after becoming effective, adversely affect
the rights or interests of any Class or Classes of Noteholders and (ii) subject
to satisfaction of the Rating Agency Condition.

(f)       As long as any Offered
Note is outstanding, QRS S1 Corp. may not transfer the Preferred Shares to any
other Person.

(g)      For so long as any Offered
Note is Outstanding, QRS S1 Corp. may not sell, transfer or finance any
Non-Offered Note except in accordance with the transfer restrictions set forth
in Section 2.5(e)(iv).

Section 7.9             Statement
as to Compliance.

(a)      On or before January 31,
in each calendar year, commencing in 2008 or immediately if there has been a
Default in the fulfillment of an obligation under this Indenture, the Issuer
shall deliver to the Trustee (which shall deliver a copy to each Hedge
Counterparty and each Rating Agency) an Officer’s Certificate given on behalf
of the Issuer and without personal liability stating, as to each signer
thereof, that, since the date of the last certificate or, in the case of the
first certificate, the Closing Date, to the best of the knowledge, information
and belief of such Officer, the Issuer has fulfilled all of its obligations
under this Indenture or, if there has been a Default in the fulfillment of any
such obligation, specifying each such Default known to them and the nature and
status thereof.

 

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Section 7.10           Issuer
and Co-Issuer May Consolidate or Merge Only on Certain Terms.

(a)      The Issuer shall not
consolidate or merge with or into any other Person or transfer or convey all or
substantially all of its assets to any Person, unless permitted by the
Governing Documents and Cayman Islands law and unless:

(i)       the Issuer shall be the surviving entity,
or the Person (if other than the Issuer) formed by such consolidation or into
which the Issuer is merged or to which all or substantially all of the assets
of the Issuer are transferred shall be an entity organized and existing under
the laws of the Cayman Islands or such other jurisdiction approved by a
Majority of each and every Class of the Notes (each voting as a separate Class)
and a Majority of the Preferred Shares; provided  that
no such approval shall be required in connection with any such transaction
undertaken solely to effect a change in the jurisdiction of registration
pursuant to Section 7.4 hereof; and provided,  further,
that the surviving entity shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee and each Noteholder, the due and
punctual payment of the principal of and interest on all Notes and other
amounts payable hereunder and under each Hedge Agreement and the Collateral
Management Agreement and the performance and observance of every covenant of
this Indenture and under each Hedge Agreement and the Collateral Management
Agreement on the part of the Issuer to be performed or observed, all as
provided herein;

(ii)      each Rating Agency shall have been
notified in writing of each proposed consolidation or merger of the Issuer and
the Trustee shall have received written confirmation from each Rating Agency
that the ratings issued with respect to each Class of Notes shall not be
reduced or withdrawn as a result of the consummation of such transaction;

(iii)     if the Issuer is not the surviving entity,
the Person formed by such consolidation or into which the Issuer is merged or
to which all or substantially all of the assets of the Issuer are transferred
shall have agreed with the Trustee (A) to observe the same legal requirements
for the recognition of such formed or surviving entity as a legal entity
separate and apart from any of its Affiliates as are applicable to the Issuer
with respect to its Affiliates and (B) not to consolidate or merge with or into
any other Person or transfer or convey all or substantially all of the Assets
or all or substantially all of its assets to any other Person except in
accordance with the provisions of this Section 7.10, unless in
connection with a sale of the Assets pursuant to Article 5, Article 9
or Article 12;

(iv)    if the Issuer is not the surviving entity,
the Person formed by such consolidation or into which the Issuer is merged or
to which all or substantially all of the assets of the Issuer are transferred
shall have delivered to the Trustee, each Hedge Counterparty, the Collateral
Manager and each Rating Agency an Officer’s Certificate and an Opinion of
Counsel each stating that such Person is duly organized, validly existing and
in good standing in the jurisdiction in which such Person is organized; that
such Person has sufficient power and authority to assume the obligations set
forth in

 

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subsection (i)
above and to execute and deliver an indenture supplemental hereto for the
purpose of assuming such obligations; that such Person has duly authorized the
execution, delivery and performance of an indenture supplemental hereto for the
purpose of assuming such obligations and that such supplemental indenture is a
valid, legal and binding obligation of such Person, enforceable in accordance
with its terms, subject only to bankruptcy, reorganization, insolvency,
moratorium and other laws affecting the enforcement of creditors’ rights
generally and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); that,
immediately following the event which causes such Person to become the
successor to the Issuer, (A) such Person has good and marketable title, free
and clear of any lien, security interest or charge, other than the lien and
security interest of this Indenture, to the Assets securing, in the case of a
consolidation or merger of the Issuer, all of the Notes or, in the case of any
transfer or conveyance of the Assets securing any of the Notes, such Notes, (B)
the Trustee continues to have a valid perfected first priority security
interest in the Assets securing, in the case of a consolidation or merger of
the Issuer, all of the Notes, or, in the case of any transfer or conveyance of
the Assets securing any of the Notes, such Notes and (C) such other matters as
the Trustee, each Hedge Counterparty, the Collateral Manager or any Noteholder
may reasonably require;

(v)     immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing;

(vi)    the Issuer shall have delivered to the
Trustee, the Preferred Shares Paying Agent, each Hedge Counterparty, the
Collateral Manager and each Noteholder, an Officer’s Certificate and an Opinion
of Counsel each stating that such consolidation, merger, transfer or conveyance
and such supplemental indenture comply with this Article 7 and that all
conditions precedent in this Article 7 provided for relating to such
transaction have been complied with and that no adverse tax consequences will
result therefrom to the Holders of the Notes, the Preferred Shareholders and
any Hedge Counterparty;

(vii)   after giving effect to such transaction, the
Issuer shall not be required to register as an investment company under the
Investment Company Act; and

(viii)  the Issuer has received
advice from Cadwalader, Wickersham & Taft LLP or an opinion of other
nationally recognized U.S. tax counsel experienced in such matters that the
Issuer or the Person referred to in clause (a) either (a) will be treated as a
Qualified REIT Subsidiary or alternatively (b) will not be treated as a foreign
corporation engaged in a U.S. trade or business.

(b)      The Co-Issuer shall not
consolidate or merge with or into any other Person or transfer or convey all or
substantially all of its assets to any Person, unless no Notes remain
Outstanding or:

(i)       the Co-Issuer shall be the surviving
entity, or the Person (if other than the Co-Issuer) formed by such
consolidation or into which the Co-Issuer is merged or to which all or
substantially all of the assets of the Co-Issuer are transferred shall be a

 

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company organized
and existing under the laws of Delaware or such other jurisdiction approved by
a Majority of the Controlling Class; provided  that
no such approval shall be required in connection with any such transaction
undertaken solely to effect a change in the jurisdiction of formation pursuant
to Section 7.4; and provided,  further,
that the surviving entity shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee and each Noteholder, the due and
punctual payment of the principal of and interest on all Notes and the
performance and observance of every covenant of this Indenture on the part of
the Co-Issuer to be performed or observed, all as provided herein;

(ii)      each Rating Agency shall have been
notified in writing of each proposed consolidation or merger of the Co-Issuer
and the Trustee shall have received written confirmation from each Rating
Agency that the ratings issued with respect to each Class of Notes shall not be
reduced or withdrawn as a result of the consummation of such transaction;

(iii)     if the Co-Issuer is not the surviving
entity, the Person formed by such consolidation or into which the Co-Issuer is
merged or to which all or substantially all of the assets of the Co-Issuer are
transferred shall have agreed with the Trustee (A) to observe the same legal
requirements for the recognition of such formed or surviving entity as a legal
entity separate and apart from any of its Affiliates as are applicable to the
Co-Issuer with respect to its Affiliates and (B) not to consolidate or merge
with or into any other Person or transfer or convey all or substantially all of
its assets to any other Person except in accordance with the provisions of this
Section 7.10;

(iv)    if the Co-Issuer is not the surviving
entity, the Person formed by such consolidation or into which the Co-Issuer is
merged or to which all or substantially all of the assets of the Co-Issuer are
transferred shall have delivered to the Trustee and each Rating Agency an
Officer’s Certificate and an Opinion of Counsel each stating that such Person
is duly organized, validly existing and in good standing in the jurisdiction in
which such Person is organized; that such Person has sufficient power and
authority to assume the obligations set forth in subsection (i) above and to
execute and deliver an indenture supplemental hereto for the purpose of
assuming such obligations; that such Person has duly authorized the execution,
delivery and performance of an indenture supplemental hereto for the purpose of
assuming such obligations and that such supplemental indenture is a valid,
legal and binding obligation of such Person, enforceable in accordance with its
terms, subject only to bankruptcy, reorganization, insolvency, moratorium and
other laws affecting the enforcement of creditors’ rights generally and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); such other matters as the
Trustee or any Noteholder may reasonably require;

(v)     immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing;

(vi)    the Co-Issuer shall have delivered to the
Trustee, the Preferred Shares Paying Agent and each Noteholder an Officer’s
Certificate and an Opinion of Counsel

 

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each stating that
such consolidation, merger, transfer or conveyance and such supplemental
indenture comply with this Article 7 and that all conditions precedent
in this Article 7 provided for relating to such transaction have been
complied with and that no adverse tax consequences will result therefrom to the
Holders of the Notes or the Preferred Shareholders; and

(vii)   after giving effect to such transaction, the
Co-Issuer shall not be required to register as an investment company under the
Investment Company Act.

Section 7.11           Successor
Substituted.

Upon any consolidation or
merger, or transfer or conveyance of all or substantially all of the assets of
the Issuer or the Co-Issuer, in accordance with Section 7.10 hereof, the
Person formed by or surviving such consolidation or merger (if other than the
Issuer or the Co-Issuer), or the Person to which such consolidation, merger,
transfer or conveyance is made, shall succeed to, and be substituted for, and
may exercise every right and power of, the Issuer or the Co-Issuer, as the case
may be, under this Indenture with the same effect as if such Person had been
named as the Issuer or the Co-Issuer, as the case may be, herein.  In the event of any such consolidation,
merger, transfer or conveyance, the Person named as the “Issuer” or the “Co-Issuer”
in the first paragraph of this Indenture or any successor which shall
theretofore have become such in the manner prescribed in this Article 7
may be dissolved, wound-up and liquidated at any time thereafter, and such
Person thereafter shall be released from its liabilities as obligor and maker
on all the Notes or Notes, as applicable, and from its obligations under this
Indenture.

Section 7.12           No
Other Business.

The Issuer shall not
engage in any business or activity other than issuing and selling the Notes
pursuant to this Indenture and any supplements thereto, issuing and selling the
Preferred Shares and its ordinary shares in accordance with its Governing
Documents, entering into any Hedge Agreement, the Insurance Agreement, the
Insurance Policy, the related insurance fee letter and the Collateral
Management Agreement, and acquiring, owning, holding and pledging the Assets in
connection with the Notes and such other activities which are necessary,
suitable or convenient to accomplish the foregoing or are incidental thereto or
connected therewith.  The Co-Issuer shall
not engage in any business or activity other than issuing and selling the Notes
pursuant to this Indenture and any supplements thereto and such other
activities which are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith.

Section 7.13           Reporting.

At any time when the
Issuer and/or the Co-Issuer is not subject to Section 13 or 15(d) of the
Exchange Act and is not exempt from reporting pursuant to Rule 12g3-2(b) under
the Exchange Act, upon the request of a Holder or beneficial owner of a Note,
the Issuer and/or the Co-Issuer shall promptly furnish or cause to be furnished
“Rule 144A Information” (as defined below) to such holder or beneficial owner,
to a prospective purchaser of such Note designated by such holder or beneficial
owner or to the Trustee for delivery to such holder or

 

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beneficial owner
or a prospective purchaser designated by such holder or beneficial owner, as the
case may be, in order to permit compliance by such holder or beneficial owner
with Rule 144A under the Securities Act in connection with the resale of such
Note by such holder or beneficial owner. 
“Rule 144A Information” shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto).  The Trustee shall
reasonably cooperate with the Issuer and/or the Co-Issuer in mailing or
otherwise distributing (at the Issuer’s expense) to such Noteholders or
prospective purchasers, at and pursuant to the Issuer’s and/or the Co-Issuer’s
written direction the foregoing materials prepared by or on behalf of the
Issuer and/or the Co-Issuer; provided,  however,
that the Trustee shall be entitled to prepare and affix thereto or enclose
therewith reasonable disclaimers to the effect that such Rule 144A Information
was not assembled by the Trustee, that the Trustee has not reviewed or verified
the accuracy thereof, and that it makes no representation as to such accuracy
or as to the sufficiency of such information under the requirements of Rule
144A or for any other purpose.

Section 7.14           Calculation
Agent.

(a)      The Issuer and the
Co-Issuer hereby agree that for so long as any Notes remain Outstanding there
shall at all times be an agent appointed to calculate LIBOR in respect of each
Interest Accrual Period in accordance with the terms of Schedule G
hereto (the “Calculation Agent”).  The Issuer and the Co-Issuer have initially
appointed the Trustee as Calculation Agent for purposes of determining LIBOR
for each Interest Accrual Period.  The
Calculation Agent may be removed by the Issuer and the Co-Issuer at any
time.  The Calculation Agent may resign
at any time by giving written notice thereof to the Issuer, the Co-Issuer, the
Collateral Manager, each Hedge Counterparty, the Noteholders and each Rating
Agency.  If the Calculation Agent is
unable or unwilling to act as such or is removed by the Issuer and the
Co-Issuer in respect of any Interest Accrual Period, or if the Calculation
Agent fails to determine LIBOR or the Interest Distribution Amount for any
Class of Notes for any Interest Accrual Period, the Issuer and the Co-Issuer
shall, with the prior written consent of each Hedge Counterparty, promptly
appoint as a replacement Calculation Agent a leading bank which is engaged in
transactions in Eurodollar deposits in the international Eurodollar market and
which does not control or is not controlled by or under common control with the
Issuer or the Co-Issuer.  The Calculation
Agent may not resign its duties without a successor having been duly appointed,
and shall promptly inform the Hedge Counterparty of any such appointment.  If no successor Calculation Agent shall have
been appointed within thirty (30) days after giving of a notice of resignation,
the resigning Calculation Agent, each Hedge Counterparty, a Majority of the
Notes or any Holder of a Note, on behalf of himself and all others similarly
situated, may petition a court of competent jurisdiction for the appointment of
a successor Calculation Agent.

(b)      The Calculation Agent
shall be required to agree that, as soon as practicable after 11:00 a.m.
(London time) on each LIBOR Determination Date (as defined in Schedule G
hereto), but in no event later than 11:00 a.m. (New York time) on the London
Banking Day immediately following each LIBOR Determination Date, the
Calculation Agent shall calculate (x) LIBOR for the next Interest Accrual
Period and (y) the amount of interest for such Interest Accrual Period payable
in respect of each U.S. $1,000 principal amount of each Class of Notes (rounded
to the nearest cent, with half a cent being rounded upward) on the related
Payment Date, and shall communicate such rates and amounts to the Issuer, the
Co-

 

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Issuer, the
Trustee, the Collateral Manager, the Paying Agent, each Hedge Counterparty and,
if any Class A Note is in the form of a Regulation S Global Security, to
Euroclear and Clearstream, Luxembourg. 
The Calculation Agent shall also specify to the Issuer and the Co-Issuer
the quotations upon which LIBOR is based, and in any event the Calculation
Agent shall notify the Issuer and the Co-Issuer before 5:00 p.m. (New York
time) on each LIBOR Determination Date if it has not determined and is not in
the process of determining LIBOR and the Interest Distribution Amounts for each
Class of Notes, together with the reasons therefor.  The determination of the Class A-1 Rate,
Class A-2 Rate, the Class A-3 Rate, the Class B-FL Rate, the Class C-FL Rate,
the Class D Rate, the Class E Rate, the Class F Rate, the Class G-FL Rate and
the Class H-FL Rate and the related Class A-1 Interest Distribution Amount,
Class A-2 Interest Distribution Amount, Class A-3 Interest Distribution Amount,
Class B-FL Interest Distribution Amount, Class C-FL Interest Distribution
Amount, Class D Interest Distribution Amount, Class E Interest Distribution
Amount, Class F Interest Distribution Amount, Class G-FL Interest Distribution
Amount and Class H-FL Interest Distribution Amount, respectively, by the
Calculation Agent shall, absent manifest error, be final and binding on all
parties.

Section 7.15           Certain
Tax Matters Regarding Assets.

(a)      The Collateral Manager,
on the Issuer’s behalf, shall not take any action that will result in (i) the
Issuer failing to qualify as a Qualified REIT Subsidiary for federal income tax
purposes (including, but not limited to, (A) the acquisition of any asset if
the ownership of such asset would cause the Issuer to fail to be treated as a
Qualified REIT Subsidiary or (B) an election to treat the Issuer as a “taxable
REIT subsidiary,” (as defined in Section 856(l) of the Code) (ii) or Gramercy
Investment failing to be a REIT for U.S. federal income tax purposes, unless
the Issuer has previously received an opinion of Cadwalader, Wickersham &
Taft LLP or other nationally recognized tax counsel experienced in such matters
opining that the Issuer will be treated as a foreign corporation that will not
be treated as engaged in a trade or business in the United States for U.S.
federal income tax purposes, in which case the Collateral Manager on the Issuer’s
behalf shall not take any action that will cause the Issuer to be treated as a
foreign corporation engaged in a trade or business in the United States for
U.S. federal income tax purposes.

(b)      The Issuer will (x) pay or cause to be
paid any and all taxes levied or assessed upon the Issuer upon or in respect of
all or any part of the Issuer’s assets and timely file all tax returns and
information statements as required, and (y) if required to prevent the
withholding or imposition of U.S. withholding or income tax, deliver or cause
to be delivered IRS Form W-9 or W-8BEN, as appropriate (or
successor or other appropriate applicable form), to each issuer, counterparty
or paying agent with respect to (as applicable) a Collateral Debt Security at
the same time such Collateral Debt Security is purchased or entered into and
shall periodically deliver or cause to be delivered updated forms thereafter
upon notice of the expiration obsolescence of such form.

 

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Section 7.16           Maintenance
of Listing.

(a)      For so long as any of the
Offered Notes remain Outstanding, the Issuer and Co-Issuer shall use all
reasonable efforts to arrange and maintain the listing of the Offered Notes on
the Irish Stock Exchange.

(b)      If the Offered Notes are
listed on the Irish Stock Exchange, the Issuer shall:

(i)       in each calendar year commencing in 2007,
request from the Irish Stock Exchange a waiver of the Irish Stock Exchange’s
requirement to publish annual reports and accounts;

(ii)      submit to the Irish Stock Exchange draft
copies of any proposed amendments to the Governing Documents which would affect
the rights of the Holders of the Offered Notes listed on the Irish Stock
Exchange;

(iii)     pay the annual fee for listing the Offered
Notes on the Irish Stock Exchange, if any; and

(iv)    inform the Irish Stock Exchange if the
rating assigned to any of the Offered Notes is reduced or withdrawn.

(c)      All notices, documents,
reports and other announcements delivered to such Company Announcements Office
shall be in the English language.

(d)      Notwithstanding the
foregoing, if the Collateral Manager on behalf of the Co-Issuers determines
that the maintenance of the listing of any Class of Offered Notes on the Irish
Stock Exchange (or any alternative listing on another securities exchange) is
unduly onerous or burdensome, the Co-Issuers shall have the right to cause such
Class of Offered Notes to be delisted from the Irish Stock Exchange (or such
other securities exchange).  Without
limiting the Collateral Manager’s discretion with respect to any determination
that maintaining or obtaining a listing is unduly onerous or burdensome, the
Collateral Manager may take into account various factors, including any
requirement, resulting from a listing, that either Co-Issuer prepare financial
statements of any particular kind or provide additional disclosure of any
particular kind, in each case including any such requirement arising out of
disclosure or transparency directives of the European Union or any other law or
governmental rule.  Notwithstanding the
foregoing, the consent of a Majority of the Controlling Class shall be required
unless the reason for delisting relates to a legal/compliance, regulatory,
accounting or tax issue.  In the event
any Class of Offered Notes is delisted pursuant to this Section 7.16(d),
the Co-Issuers shall use reasonable efforts to obtain an alternative listing of
such Class of Offered Notes on another securities exchange chosen by the
Collateral Manager; provided, however, if the Collateral Manager
determines that obtaining an alternative listing is unduly onerous or
burdensome, the Co-Issuers shall not obtain an alternative listing for such
Class of Offered Notes.

 

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Section 7.17           Post-Closing
Purchases.

The Issuer agrees that,
for any purchases by the Issuer of Substitute Collateral Debt Securities from
the Collateral Manager or any of its Affiliates, the Issuer shall acquire such
Collateral Debt Securities pursuant to (i) the Collateral Management Agreement
or (ii) such other agreement as the Collateral Manager may reasonably deem
appropriate in accordance with advice of nationally recognized U.S. bankruptcy
counsel.

Section 7.18           Purchases
by the Collateral Manager.

In the event the
Collateral Manager or any of its Affiliates purchases any Collateral Debt
Securities from the Issuer in connection with (i) any redemption of the Notes
or (ii) any auction or sale of Collateral Debt Securities, in each case,
pursuant to Sections 9.1 and 9.2 hereof, the Issuer agrees that
all such purchased Collateral Debt Securities will be held by the Collateral
Manager or its Affiliates in a special purpose entity as to which a
nonconsolidation opinion meeting then-applicable Rating Agency criteria is able
to be rendered, and will not be further transferred except to an unaffiliated
third party or another such special purpose entity.

Section 7.19           Provision
Regarding Certain Tax Information.

Following the Trustee’s
receipt of a request from a Holder of 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, as applicable, for information described in United States Treasury
Regulation Section 1.1275-3(b)(1)(i) related to such Holder of 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, as applicable (pursuant to the terms of such
Class C Note, Class D Note, Class E Note, Class F Note, Class G Note, Class H
Notes, Class J Notes or Class K Notes, as applicable) (such information, the “Requested
Tax Information”), the Trustee shall promptly provide notice of such request
to the Issuer, the Collateral Manager and the Initial Purchasers.  Promptly following the receipt of such notice
by the Issuer, the Issuer shall provide (or cause the Collateral Manager or the
Initial Purchaser to provide) to the Trustee, for provision to such Holder, the
Requested Tax Information subject to such notice.  The Trustee shall not be liable for the
sufficiency or accuracy of such Requested Tax Information.

ARTICLE
8

SUPPLEMENTAL
INDENTURES

Section 8.1             Supplemental
Indentures Without Consent of Securityholders.

Without the consent of
the Holders of any Notes or any Preferred Shareholders, the Issuer, the
Co-Issuer, when authorized by Board Resolutions, and the Trustee, at any time
and from time to time subject to the requirement provided below in this Section
8.1, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

 

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(a)      to evidence the
succession of another Person to the Issuer or the Co-Issuer and the assumption
by any such successor Person of the covenants of the Issuer or the Co-Issuer
herein and in the Notes;

(b)      to add to the covenants
of the Issuer, the Co-Issuer or the Trustee for the benefit of the Holders of
the Notes, Preferred Shareholders, each Hedge Counterparty or to surrender any
right or power herein conferred upon the Issuer or the Co-Issuer;

(c)      to convey, transfer,
assign, mortgage or pledge any property to or with the Trustee, or add to the conditions,
limitations or restrictions on the authorized amount, terms and purposes of the
issue, authentication and delivery of the Notes;

(d)      to evidence and provide
for the acceptance of appointment hereunder by a successor Trustee and to add
to or change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Sections 6.9, 6.10 and 6.12
hereof;

(e)      to correct or amplify the
description of any property at any time subject to the lien of this Indenture,
or to better assure, convey and confirm unto the Trustee any property subject
or required to be subjected to the lien of this Indenture (including, without
limitation, any and all actions necessary or desirable as a result of changes
in law or regulations) or to subject to the lien of this Indenture any
additional property;

(f)       to modify the
restrictions on and procedures for resales and other transfers of Notes to
reflect any changes in applicable law or regulation (or the interpretation
thereof) or to enable the Issuer and the Co-Issuer to rely upon any exemption
from registration under the Securities Act, the Exchange Act or the Investment
Company Act or to remove restrictions on resale and transfer to the extent not
required thereunder;

(g)      to accommodate the
issuance, if any, of Notes in global or book-entry form through the facilities
of DTC or otherwise;

(h)      to enable the Issuer and
the Trustee to rely upon any exemption from registration under the Securities
Act, the Exchange Act or the Investment Company Act or to remove certain
existing restrictions to the extent not required under such exemption;

(i)       otherwise to correct any
inconsistency or cure any ambiguity or mistake;

(j)       to take any action
commercially reasonably necessary or advisable to prevent the Issuer from
failing to qualify as a Qualified REIT Subsidiary or to prevent the Issuer from
being treated as a foreign corporation subject to U.S. federal, state or local
income or franchise tax on a net income tax basis or to prevent the Issuer, the
Holders of the Securities or the Trustee from being treated as a foreign
corporation subject to withholding or other taxes, fees or assessments; provided that such action will not cause the Noteholders to
experience any material change to the timing, character or source of the income
from the Notes; and

 

185

 

(k)      to conform this Indenture
(other than Section 7.18) to the provisions described in the Offering
Memorandum, dated August 6, 2007 (or any supplement thereto).

The Trustee is hereby
authorized to join in the execution of any such supplemental indenture and to
make any further appropriate agreements and stipulations which may be therein
contained, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee’s own rights, duties,
liabilities or immunities under this Indenture or otherwise, except to the
extent required by law.

If any Class of Notes is
Outstanding and rated by a Rating Agency, the Trustee shall not enter into any
such supplemental indenture if, as a result of such supplemental indenture,
such Rating Agency would cause the rating of any such Notes to be reduced or
withdrawn.  At the cost of the Issuer,
for so long as any Class of Notes shall remain Outstanding and is rated by a
Rating Agency, the Trustee shall provide to such Rating Agency a copy of any
proposed supplemental indenture at least fifteen (15) days prior to the execution
thereof by the Trustee, and, for so long as such Notes are Outstanding and so
rated, request written confirmation that such Rating Agency will not, as a
result of such supplemental indenture, cause the rating of any such Class of
Notes to be reduced or withdrawn, and, as soon as practicable after the
execution by the Trustee, the Issuer and the Co-Issuer of any such supplemental
indenture, provide to such Rating Agency a copy of the executed supplemental
indenture.

The Trustee shall not
enter into any such supplemental indenture if, as a result of such supplemental
indenture, the interests of any Holder of Securities would be materially and
adversely affected thereby or such action will cause the Holders of the Notes
to experience any material change to the timing, character or source of the
income from the Notes, unless the Majority of each and every Class of Notes or
the Preferred Shares so affected have approved such Supplemental
Indenture.  The Trustee shall be entitled
to rely upon an Opinion of Counsel provided by and at the expense of the party
requesting such supplemental indenture in determining whether or not the
Holders of Securities would be adversely affected by such change (after giving
notice of such change to the Holders of Securities).  Such determination shall be conclusive and
binding on all present and future Holders of Securities.  The Trustee shall not be liable for any such
determination made in good faith and in reliance upon an Opinion of Counsel
delivered to the Trustee as described in Section 8.3 hereof.

Furthermore, the Trustee
shall not enter into any such supplemental indenture unless the Trustee has
received an Opinion of Counsel from Cadwalader, Wickersham & Taft LLP or
other nationally recognized U.S. tax counsel experienced in such matters that
the proposed supplemental indenture will not cause the Issuer to fail to be
treated as a Qualified REIT Subsidiary or otherwise be treated as a foreign
corporation subject to U.S. federal income tax on a net income tax basis.

Section 8.2             Supplemental
Indentures with Consent of Securityholders.

Except as set forth
below, with the written consent of the holders of not less than a Majority in
Aggregate Outstanding Amount (excluding any Collateral Manager Securities) of
the Notes of each class materially and adversely affected thereby and all of
the Holders of Preferred Shares if materially and adversely affected thereby
and the Controlling Class (but only

 

186

 

for so long as the
Class A-1 Notes and/or the Class A-2 Notes are the Controlling Class) by Act of
said Securityholders delivered to the Trustee and the Co-Issuers and subject to
satisfaction of the Rating Agency Condition, the Trustee and the Co-Issuers may
enter into one or more indentures supplemental hereto to add any provisions to,
or change in any manner or eliminate any of the provisions of, this Indenture
or modify in any manner the rights of the Holders of the Notes of such Class or
the Preferred Shares, as the case may be, under this Indenture.  Unless notified (after giving fifteen (15)
Business Days’ notice of such change to the Holders of each Class of Notes and
the Holders of the Preferred Shares) by Holders of a Majority (excluding any
Collateral Manager Securities) of the Notes of any Class or the Preferred
Shares that such Class will be materially and adversely affected by the
proposed supplemental indenture, the interests of such Class shall be deemed
not to be materially and adversely affected by such proposed supplemental
indenture.  Such determinations shall be
conclusive and binding on all present and future Noteholders and Holders of the
Preferred Shares.  The consent of the
Holders of the Preferred Shares shall be binding on all present and future
Holders of the Preferred Shares.

Without the consent of,
in the case of clauses (a) through (h) and (j) below, all of the holders of
each Outstanding Class of Notes adversely affected, or, in the case of clause
(i) below, all of the Holders of the Controlling Class and in each such case
subject to satisfaction of the Rating Agency Condition, no supplemental
indenture may:

(a)      change the Stated
Maturity of the principal of or the due date of any installment of interest on
any Note, reduce the principal amount thereof or the Note Interest Rate thereon
or the Redemption Price with respect to any Note, change the date of any
scheduled distribution on the Preferred Shares, or the Redemption Price with
respect thereto, or change the earliest date on which any Note may be redeemed
at the option of the Issuer, change the provisions of this Indenture that apply
the proceeds of any Assets to the payment of principal of or interest on Notes
or of distributions to the Preferred Shares Paying Agent for the payment of
distributions in respect of the Preferred Shares or change any place where, or
the coin or currency in which, any Note or the principal thereof or interest
thereon is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the applicable Redemption Date);

(b)      reduce the percentage of
the Aggregate Outstanding Amount of Holders of Notes of each Class or the
Notional Amount of Preferred Shares of Preferred Shareholders whose consent is
required for the authorization of any such supplemental indenture or for any
waiver of compliance with certain provisions of this Indenture or certain
Defaults hereunder or their consequences provided for in this Indenture;

(c)      impair or adversely
affect the Assets except as otherwise permitted in this Indenture;

(d)      permit the creation of
any lien ranking prior to or on a parity with the lien of this Indenture with
respect to any part of the Assets or terminate such lien on any property at any
time subject hereto or deprive the Holder of any Note, or the Holder of any
Preferred Share as an indirect beneficiary, of the security afforded to such
Holder by the lien of this Indenture;

 

187

 

(e)      reduce the percentage of
the Aggregate Outstanding Amount of Holders of Notes of each Class whose
consent is required to request the Trustee to preserve the Assets or rescind
the Trustee’s election to preserve the Assets pursuant to Section 5.5 or
to sell or liquidate the Assets pursuant to Section 5.4 or 5.5
hereof;

(f)       modify any of the
provisions of this Section 8.2, except to increase any percentage of
outstanding Notes whose holders’ consent is required for any such action or to
provide that other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each outstanding Note affected thereby;

(g)      modify the definition of
the term “Outstanding” or the provisions of Sections 11.1 or 13.1
hereof;

(h)      modify or amend any of
the non-petition and limited-recourse provisions set forth herein or in any of
the related Transaction Documents;

(i)       modify the definition of
the term “Collateral Manager Servicing Standard”; or

(j)       modify any of the
provisions of this Indenture in such a manner as to affect the calculation of
the amount of any payment of interest or principal on any Note on any Payment
Date or of distributions to the Preferred Shares Paying Agent for the payment
of distributions in respect of the Preferred Shares on any Payment Date (or any
other date) or to affect the rights of the Holders of Securities to the benefit
of any provisions for the redemption of such Securities contained herein;

provided,  however,
that no supplemental indenture may reduce the permitted minimum denominations
of the Notes or modify any provisions regarding non-recourse or non-petition
covenants with respect to the Issuer and the Co-Issuer.

If any Class of Notes are
Outstanding and rated by a Rating Agency, the Trustee shall not enter into any
such supplemental indenture if, as a result of such supplemental indenture,
such Rating Agency would cause the rating of any such Notes to be immediately
reduced or withdrawn.  At the cost of the
Issuer, for so long as any Class of Notes shall remain Outstanding and is rated
by a Rating Agency, the Trustee shall provide to such Rating Agency a copy of
any proposed supplemental indenture at least fifteen (15) days prior to the
execution thereof by the Trustee, and, for so long as such Notes are Outstanding
and so rated, request written confirmation that such Rating Agency will not, as
a result of such supplemental indenture, cause the rating of any such Class of
Notes to be reduced or withdrawn.

The Trustee shall be
entitled to rely upon an Opinion of Counsel provided by and at the expense of
the party requesting such supplemental indenture in determining whether or not
the Holders of Securities would be adversely affected by such change (after
giving notice of such change to the Holders of Securities).  Such determination shall be conclusive and
binding on all present and future Holders of Securities.  The Trustee shall not be liable for any such
determination made in good faith and in reliance upon an Opinion of Counsel
delivered to the Trustee as described in Section 8.3 hereof.

 

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It shall not be necessary
for any Act of Securityholders under this Section 8.2 to approve the
particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.

Promptly after the
execution by the Issuer, the Co-Issuer and the Trustee of any supplemental
indenture pursuant to this Section 8.2, the Trustee, at the expense of
the Issuer, shall mail to the Securityholders, each Hedge Counterparty, the
Preferred Shares Paying Agent, the Collateral Manager, and, so long as the
Notes are Outstanding and so rated, each Rating Agency a copy thereof based on
an outstanding rating.  Any failure of
the Trustee to publish or mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.

Section 8.3             Execution
of Supplemental Indentures.

In executing or accepting
the additional trusts created by any supplemental indenture permitted by this Article
8 or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture and that all conditions
precedent thereto have been satisfied. 
The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise. 
The Collateral Manager shall be bound to follow any amendment or
supplement to this Indenture of which it has received written notice at least
ten (10) Business Days prior to the execution and delivery of such amendment or
supplement; provided,  however,
that with respect to any amendment or supplement to this Indenture which may,
in the judgment of the Collateral Manager adversely affect the Collateral
Manager, the Collateral Manager shall not be bound (and the Issuer agrees that
it shall not permit any such amendment to become effective) unless the
Collateral Manager gives written consent to the Trustee and the Issuer to such
amendment.  The Issuer and the Trustee
shall give written notice to the Collateral Manager of any amendment made to
this Indenture pursuant to its terms.  In
addition, the Collateral Manager’s written consent shall be required prior to
any amendment to this Indenture by which it is adversely affected.

Section 8.4             Effect
of Supplemental Indentures.

Upon the execution of any
supplemental indenture under this Article 8, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Notes and
Preferred Shares theretofore and thereafter authenticated and delivered
hereunder shall be bound thereby.

Section 8.5             Reference
in Notes to Supplemental Indentures.

Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to this Article
8 may, and if required by the Trustee shall, bear a notice in form approved
by the Trustee as to any matter provided for in such supplemental
indenture.  If the Issuer and the
Co-Issuer shall so determine, new Notes, so modified as to conform in the
opinion of the Trustee and the Issuer and the Co-Issuer to any such
supplemental indenture, may

 

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be prepared and
executed by the Issuer and the Co-Issuer and authenticated and delivered by the
Trustee in exchange for Outstanding Notes.

Section 8.6             Certain
Consents Required for all Supplemental Indentures.

Notwithstanding anything
in this Article 8 to the contrary, so long as the Class A-1 Notes and/or
the Class A-2 Notes or the Class A-2 Note Insurer, as applicable, are the
Controlling Class, the Issuer, the Co-Issuer and the Trustee shall not enter
into any supplemental indenture without obtaining the consent of the Holders of
a Majority of the Controlling Class (such consent not to be unreasonably
withheld); provided that, if the Holders of the Controlling Class or the
Class A-2 Note Insurer, as applicable, do not object to such supplemental
indenture within fifteen (15) Business Days after notice is given, such Holders
shall be deemed to have consented to such supplemental indenture.

Notwithstanding anything
in this Article 8 to the contrary, the Issuer shall not enter into any
such supplemental indenture without the consent of each Hedge Counterparty
(such consent not to be unreasonably withheld), and each Hedge Counterparty
shall not be bound by any such supplemental indenture unless such Hedge
Counterparty shall have given its prior written consent or shall have failed to
respond within 15 Business Days after the Issuer or the Trustee has provided it
with prior written notice thereof.

 

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ARTICLE
9

REDEMPTION
OF SECURITIES; REDEMPTION PROCEDURES

Section 9.1             Clean-up
Call; Tax Redemption; Optional Redemption.

(a)      The Notes may be redeemed
at the option of and at the direction of the Collateral Manager, in whole but
not in part, on any Payment Date (the “Clean-up Call Date”), on or after the Payment
Date on which the Aggregate Outstanding Amount of the Notes has been reduced to
ten percent (10%) of the Aggregate Outstanding Amount of the Notes on the
Closing Date, at a price equal to the applicable Redemption Prices (such
redemption, a “Clean-up Call”);
provided  that any payments due and
payable upon a termination of each Hedge Agreement shall be made on the
Clean-up Call Date in accordance with the terms thereof and this Indenture; and
provided,  further, that the funds
available to be used for such Clean-up Call shall be sufficient to pay (x) the
Redemption Prices of the Notes simultaneously and (y) the amounts and the
expenses described in clauses (1) through (5), (25), (26) and (27) of Section
11.1(a)(i).

(b)      The Notes and the
Preferred Shares shall be redeemable, in whole but not in part, by Act of a
Majority of the Preferred Shares delivered to the Trustee, on the Payment Date
(the “Tax Redemption Date”)
by the Issuer following the occurrence of a Tax Event, if the Tax Materiality
Condition is satisfied, at a price equal to the applicable Redemption Prices
(such redemption, a “Tax
Redemption”); provided  that
any payments due and payable upon a termination of each Hedge Agreement shall
be made in accordance with the terms thereof and this Indenture; and provided,  further, the funds available to be used for such Tax
Redemption shall be sufficient to pay (x) the Redemption Prices of the Notes
simultaneously and (y) the amounts and the expenses described in clauses (1)
through (5), (25), (26) and (27) of Section 11.1(a)(i).  Upon the occurrence of a Tax Event, the
Issuer and the Co-Issuer, at the direction of the Collateral Manager shall
provide written notice thereof to the Trustee, the Irish Paying Agent (for so
long as any Notes are listed on the Irish Stock Exchange), each Hedge
Counterparty and each Rating Agency.

(c)      The Notes shall be
redeemable, in whole but not in part, at a price equal to the applicable
Redemption Price, after the end of the Non-call Period, at the direction of the
Issuer (such redemption, an “Optional
Redemption”) (i) by Act of a Majority of the Preferred Shares
delivered to the Trustee or (ii) at the direction of the Collateral Manager
unless a Majority of the Preferred Shares object; provided,  however, that any payments due and payable upon a
termination of each Hedge Agreement shall be made in accordance with the terms
thereof and this Indenture; and provided,  further,
that the funds available to be used for such Optional Redemption shall be
sufficient to pay the amount necessary to pay (x) the Redemption Prices of the
Notes simultaneously and (y) the amounts and the expenses described in clauses
(1) through (5), (25), (26) and (27) of Section 11.1(a)(i).

(d)      The election by the
Collateral Manager to redeem the Notes pursuant to a Clean-up Call shall be
evidenced by an Officer’s Certificate from the Collateral Manager

 

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directing the
Trustee to make the payment to the Paying Agent of the applicable Redemption
Price of all of the Notes to be redeemed from funds in the Payment Account in
accordance with the Priority of Payments. 
In connection with a Tax Redemption, the occurrence of a Tax Event and
satisfaction of the Tax Materiality Condition shall be evidenced by an Issuer
Order from the Issuer or from the Collateral Manager on behalf of the Issuer
certifying that such conditions for a Tax Redemption have occurred.  The election by the Collateral Manager to
redeem the Notes pursuant to an Optional Redemption shall be evidenced by an
Officer’s Certificate from the Collateral Manager on behalf of the Issuer certifying
that the conditions for an Optional Redemption have occurred.

(e)      A redemption pursuant to Sections
9.1(a), 9.1(b) or 9.1(c) shall not occur unless (1)(i) at
least six (6) Business Days before the scheduled Redemption Date, the
Collateral Manager shall have certified to the Trustee that the Collateral
Manager on behalf of the Issuer has entered into a binding agreement or
agreements, with (A) one or more financial institutions whose long-term
unsecured debt obligations (other than such obligations whose rating is based
on the credit of a person other than such institution) have a credit rating
from each Rating Agency of at least equal to the highest rating of any Notes
then Outstanding or whose short-term unsecured debt obligations have a credit rating
of “P-1” by Moody’s as long as the term of such agreement is ninety (90) days
or less and “A-1” by S&P or (B) one or more Affiliates of the Collateral
Manager, to sell all or part of the Pledged Obligations, not later than the
Business Day immediately preceding the scheduled Redemption Date or (ii) the
Trustee shall have received written confirmation that the method of redemption
satisfies the Rating Agency Condition and (2) the related Sale Proceeds (in
immediately available funds), together with all other available funds
(including proceeds from the sale of the Assets, Eligible Investments maturing
on or prior to the scheduled Redemption Date, all amounts in the Collection
Accounts and available Cash), shall be an aggregate amount sufficient to pay all
amounts, payments, fees and expenses in accordance with the Priority of
Payments due and owing on such Redemption Date.

Section 9.2             Auction
Call Redemption.

(a)      During the period from
and including the Payment Date occurring in August 2016 and to but not including the first
Payment Date on which the Clean-up Call may be exercised (the “Auction Call Period”),
the Notes and the Preferred Shares shall be redeemed, in whole but not in part,
if a Successful Auction is completed (such redemption, an “Auction Call Redemption”),
at their applicable Redemption Prices; provided  that
any payments due and payable upon a termination of each Hedge Agreement shall
be made on the Auction Call Redemption Date in accordance with the terms
thereof and this Indenture; and provided,  further,
that the funds available to be used for such Auction Call Redemption shall be
sufficient to pay the Total Redemption Price. 
An Auction Call Redemption may only occur on a Payment Date occurring in
August  or February
during the Auction Call Period (such Payment Date, the “Auction Call Redemption Date”).

(b)      The Trustee shall sell
and transfer the Collateral Debt Securities and, at the Collateral Manager’s
sole discretion, any Eligible Investments, to the highest bidder for all of the
Collateral Debt Securities and such Eligible Investments, if any (or to each
highest

 

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bidder for one or
more (but not all) of the Collateral Debt Securities and any applicable
Eligible Investments), at the Auction, as long as:

(i)       the Auction has been conducted in
accordance with the Auction Procedures, as evidenced by a certification of the
Collateral Manager;

(ii)      at least one bidder delivers to the
Collateral Manager a bid (which bid may be based upon a fixed spread above or
below a generally recognized price index) for (x) the purchase of all of the
Collateral Debt Securities and any applicable Eligible Investments or (y) the
purchase of each Collateral Debt Security and any applicable Eligible
Investment (which bid may be for one or more (but not all) of the Collateral
Debt Securities or Eligible Investments);

(iii)     based on the Collateral Manager’s
certification to the Trustee of the amount of the cash purchase price of each
bid, the Trustee, in consultation with the Collateral Manager, determines that
the Highest Auction Price would result in a cash purchase price for the
Collateral Debt Securities and any applicable Eligible Investments which shall
be at least equal to the Total Auction Call Redemption Price; and

(iv)    each bidder who offered the Highest Auction
Price for all of the Collateral Debt Securities or for one or more of the
Collateral Debt Securities or any applicable Eligible Investments enters into a
written agreement with the Issuer (which the Issuer shall execute if the
conditions set forth in clauses (i) through (iii) above are satisfied)
obligating the highest bidder for all of the Collateral Debt Securities and any
applicable Eligible Investments (or the highest bidder for one or more (but not
all) of the Collateral Debt Securities or Eligible Investments) to purchase all
(either individually or together with other bidders, as applicable) of the
Collateral Debt Securities and applicable Eligible Investments with the closing
of such purchase (and full payment in Cash to the Trustee) to occur on or
before the tenth Business Day prior to the scheduled Redemption Date.

(c)      If any of the foregoing
conditions is not met with respect to any Auction, or if the highest bidder or
the Collateral Manager, as the case may be, fails to pay the purchase price on
or before the sixth (6th) Business Day following the relevant
Auction Date, (i) the Auction Call Redemption shall not occur on the Payment
Date following the relevant Auction Date, (ii) the Trustee shall give notice of
the withdrawal pursuant to Section 9.3, (iii) subject to subclause (iv)
below, the Trustee shall decline to consummate such sale and shall not solicit
any further bids or otherwise negotiate any further sale of Collateral Debt
Securities or Eligible Investments in relation to such Auction and (iv) unless
the Notes and the Preferred Shares are redeemed in full prior to the next
succeeding Auction Date, or the Collateral Manager notifies the Trustee that
market conditions are such that such Auction is not likely to be successful,
the Trustee shall conduct another Auction on the next succeeding Auction Date.

Section 9.3             Notice
of Redemption.

(a)      In connection with an
Optional Redemption, a Clean-up Call or a Tax Redemption pursuant to Section
9.1 or an Auction Call Redemption pursuant to Section 9.2, the
Trustee on behalf of the Issuer and the Co-Issuer shall (i) set the applicable
Record Date

 

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and (ii) at least
forty-five (45) days prior to the proposed Redemption Date, notify the
Collateral Manager, each Hedge Counterparty, the Class A-2 Note Insurer, the
Rating Agencies and each Preferred Shareholder at such Preferred Shareholder’s
address in the register maintained by the Share Registrar, of such proposed
Redemption Date, the applicable Record Date, the principal amount of Notes to
be redeemed on such Redemption Date and the Redemption Price of such Notes in
accordance with Sections 9.1 or 9.2.  The Redemption Price shall be determined no
earlier than sixty (60) days prior to the proposed Redemption Date.

(b)      Any such notice of an
Auction Call Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption may be withdrawn by the Issuer and the Co-Issuer at the direction of
the Collateral Manager up to the fourth Business Day prior to the scheduled
Redemption Date by written notice to the Trustee, the Irish Paying Agent (for
so long as any Notes are listed on the Irish Stock Exchange), each Hedge
Counterparty, the Class A-2 Note Insurer, each Holder of Notes to be redeemed
and the Collateral Manager only if (i) in the case of an Optional Redemption, a
Clean-up Call or a Tax Redemption the Collateral Manager is unable to deliver
the sale agreement or agreements or certifications referred to in Section
9.1(e), as the case may be or (ii) in the case of an Auction Call
Redemption, the Auction is unable to be consummated pursuant to the Auction
Procedures.

Section 9.4             Notice
of Redemption or Maturity by the Issuer.

Notice of redemption
pursuant to Section 9.1, Section 9.2 or the Maturity of any Notes
shall be given by first class mail, postage prepaid, mailed not less than ten
(10) Business Days (or four (4) Business Days where the notice of an Auction
Call Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption is
withdrawn pursuant to Section 9.3(b)) prior to the applicable Redemption
Date or Maturity, to each Holder of Notes to be redeemed, at its address in the
Notes Register.  In addition, so long as
any Notes are listed on the Irish Stock Exchange, notice of redemption or
Maturity shall be published in the Irish Stock Exchange’s Daily Official List
or as otherwise required by the rules of the Irish Stock Exchange not less than
ten (10) Business Days prior to the applicable Redemption Date or Maturity.

All notices of redemption
shall state:

(a)      the applicable Redemption
Date;

(b)      the applicable Redemption
Price;

(c)      that all the Notes are
being paid in full, and that interest on the Notes shall cease to accrue on the
Redemption Date specified in the notice; and

(d)      the place or places where
such Notes to be redeemed in whole are to be surrendered for payment of the
Redemption Price which shall be the office or agency of the Paying Agent as
provided in Section 7.2.

Notice of redemption
shall be given by the Issuer and Co-Issuer, or at their request, by the Trustee
in their names and at the expense of the Issuer.  Failure to give notice of

 

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redemption, or any
defect therein, to any Holder of any Note shall not impair or affect the
validity of the redemption of any other Notes.

Section 9.5             Notes
Payable on Redemption Date.

Notice of redemption
having been given as aforesaid, the Notes to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after the Redemption Date (unless the Issuer shall
Default in the payment of the Redemption Price and accrued interest) the Notes
shall cease to bear interest on the Redemption Date.  Upon final payment on a Note to be redeemed,
the Holder shall present and surrender such Note at the place specified in the
notice of redemption on or prior to such Redemption Date; provided,  however, that if there is delivered to the Issuer,
the Co-Issuer and the Trustee such security or indemnity as may be required by
them to save each of them harmless (an unsecured indemnity agreement delivered
to the Issuer, the Co-Issuer and the Trustee by an institutional investor with
a net worth of at least U.S.$200,000,000 being deemed to satisfy such security
or indemnity requirement) and an undertaking thereafter to surrender such Note,
then, in the absence of notice to the Issuer, the Co-Issuer and the Trustee
that the applicable Note has been acquired by a bona fide
purchaser, such final payment shall be made without presentation or
surrender.  Payments of interest on Notes
of a Class so to be redeemed whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Notes, or one or more
predecessor Notes, registered as such at the close of business on the relevant
Record Date according to the terms and provisions of Section 2.7(o).

If any Note called for
redemption shall not be paid upon surrender thereof for redemption, the
principal thereof shall, until paid, bear interest from the Redemption Date at
the applicable Note Interest Rate for each successive Interest Accrual Period
the Note remains Outstanding.

Section 9.6             Mandatory
Redemption.

On any Payment Date on
which any of the Par Value Coverage Tests applicable to any Class of Notes was
not met as of the most recent Measurement Date, the Notes shall be redeemed (a “Mandatory Redemption”),
first from Interest Proceeds and then from Principal Proceeds in each case in
accordance with the Priority of Payments in an amount necessary, and only to
the extent necessary, to cause each of the Par Value Coverage Tests to be
satisfied.  Further, each Hedge Agreement
shall be terminated in part in accordance with the terms thereof and any
payments due and payable on the Hedge Agreement in connection with the
termination of the Hedge Agreement shall be made on such Payment Date in
accordance with the terms thereof and this Indenture, including satisfaction of
the Rating Agency Condition.  Such
Principal Proceeds and Interest Proceeds shall be applied to each of the
outstanding Classes of Notes in accordance with its relative seniority in
accordance with the Priority of Payments. 
On or promptly after such Mandatory Redemption, the Issuer and the
Co-Issuer shall certify or cause to be certified to each of the Rating Agencies
and the Trustee whether the Par Value Coverage Tests have been met.

 

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Section 9.7             Special
Amortization.

The Notes may be
amortized in part by the Issuer (at the election and direction of the
Collateral Manager) if, at any time during the Replenishment Period, the
Collateral Manager has been unable, for a period of at least thirty (30)
consecutive days, to identify Substitute Collateral Debt Securities that it
determines would be appropriate and would meet the Eligibility Criteria in
sufficient amounts to permit the reinvestment of all or a portion of the
Replenishment Proceeds on deposit in the Principal Collection Account in
Substitute Collateral Debt Securities. 
The Collateral Manager shall notify the Trustee, the Issuer, the
Co-Issuer, the Class A-2 Note Insurer and each Hedge Counterparty of such
election (a “Special Amortization”)
and the amount to be amortized (such amount, the “Special Amortization Amount”).  On the first Payment Date following the date
on which such notice is given (provided such notice is given by the related
Determination Date), the Special Amortization Amount will be applied to
amortize the Notes in accordance with the Priority of Payments (i) on a pro rata basis (based on the Aggregate Outstanding Amount of
each Class) among all Classes of Notes (without regard to any Capitalized
Interest) if each of the S&P Special Amortization Pro Rata Condition and
the Moody’s Special Amortization Pro Rata Condition is satisfied with respect
to the related Payment Date and the Par Value Coverage Tests are satisfied as
of such Payment Date (after giving effect to Mandatory Redemption Payments
actually made, if any, on such Payment Date) or (ii) sequentially among all
Classes of Notes, if either the S&P Special Amortization Pro Rata Condition
or the Moody’s Special Amortization Pro Rata Condition is not satisfied with
respect to the related Payment Date or the Par Value Coverage Tests are not
satisfied as of such Payment Date (after giving effect to Mandatory Redemption
Payments actually made, if any, on such Payment Date); provided, however,
that all amounts representing recoveries in respect of Defaulted Securities
will be distributed sequentially in any event, in accordance with Section
11.1(a)(ii)(15); and provided, further, that, for the
avoidance of doubt, the Closing Date CMBS Proceeds will not be subject to any
Special Amortization.

 

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ARTICLE
10

ACCOUNTS,
ACCOUNTINGS AND RELEASES

Section 10.1           Collection
of Money; Custodial Account.

(a)      Except as otherwise
expressly provided herein, the Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all Money and other property payable to
or receivable by the Trustee pursuant to this Indenture, including all payments
due on the Pledged Obligations in accordance with the terms and conditions of
such Pledged Obligations.  The Trustee
shall segregate and hold all such Money and property received by it in trust
for the Holders of the Notes and each Hedge Counterparty, and shall apply it as
provided in this Indenture.

(b)      The Trustee shall credit
all Collateral Debt Securities and Eligible Investments (other than Eligible
Investments of the type discussed in clause (vii) of the definition thereof) to
an account designated as the “Custodial Account.”

Section 10.2           Collection
Accounts.

(a)      The Trustee shall, prior
to the Closing Date, establish a segregated trust account which shall be
designated as the “Collection Account” and will consist of two subaccounts, the
“Interest Collection Account” and the “Principal Collection Account”
(collectively, the “Collection
Accounts”), which shall be held in trust in the name of the
Trustee for the benefit of the Noteholders and each Hedge Counterparty, into
which Collection Accounts, as applicable, the Trustee shall from time to time
deposit (i) all amounts, if any, received by the Issuer pursuant to the Hedge
Agreements (other than amounts received by the Issuer by reason of an event of
default or termination event (each as defined in the related Hedge Agreement)
or other comparable event that are required, pursuant to Section 16.1(g)
to be used for the purchase by the Issuer of a replacement Hedge Agreement) and
amounts held in each Hedge Collateral Account pursuant to Section 16.1(e),
(ii) all Sale Proceeds (unless simultaneously reinvested in Substitute Collateral
Debt Securities, subject to the Replenishment Criteria) and (iii) all Interest
Proceeds and all Principal Proceeds.  In
addition, the Issuer may, but under no circumstances shall be required to,
deposit from time to time such Monies in the Collection Accounts as it deems,
in its sole discretion, to be advisable. 
All Monies deposited from time to time in the Collection Accounts
pursuant to this Indenture shall be held by the Trustee as part of the Assets
and shall be applied to the purposes herein provided.  The Collection Accounts shall remain at all
times with the Corporate Trust Office or a financial institution having a
long-term debt rating at least equal to “A-” or “A3,” as applicable, or a
short-term debt rating at least equal to “A-1,” “P-1” or “F1,” as applicable.

(b)      All distributions of
principal or interest received in respect of the Assets, and any Sale Proceeds
from the sale or disposition of a Collateral Debt Security or other Assets
received by the Trustee in Dollars shall be immediately deposited into the
Interest

 

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Collection Account
or the Principal Collection Account, as Interest Proceeds or Principal
Proceeds, respectively (unless, in the case of proceeds received from the sale or
disposition of any Assets, such proceeds are simultaneously reinvested pursuant
to Section 10.2(d) in Substitute Collateral Debt Securities, subject to
the Replenishment Criteria, or in Eligible Investments).  Subject to Sections 10.2(d), 10.2(e)
and 11.2, all such property, together with any securities in which funds
included in such property are or will be invested or reinvested during the term
of this Indenture, and any income or other gain realized from such investments,
shall be held by the Trustee in the Collection Accounts as part of the Assets
subject to disbursement and withdrawal as provided in this Section 10.2.  Subject to Section 10.2(e) by Issuer
Order (which may be in the form of standing instructions), the Issuer or the
Collateral Manager, on behalf of the Issuer, shall at all times direct the
Trustee to, and, upon receipt of such Issuer Order, the Trustee shall, invest
all funds received into the Collection Accounts during a Due Period, and
amounts received in prior Due Periods and retained in the Collection Accounts,
as so directed in Eligible Investments having stated maturities no later than
the Business Day immediately preceding the next Payment Date.  The Trustee, within one Business Day after receipt
of any Scheduled Distribution or other proceeds in respect of the Assets which
is not Cash, shall so notify the Issuer and the Collateral Manager and the
Issuer, or the Collateral Manager on behalf of the Issuer, shall, within five
Business Days of receipt of such notice from the Trustee, sell such Scheduled
Distribution or other non-Cash proceeds for Cash in an arm’s length transaction
to a Person which is not an Affiliate of the Issuer or the Collateral Manager
and deposit the proceeds thereof in the applicable Collection Account for investment
pursuant to this Section 10.2; provided, however,
that the Issuer, or the Collateral Manager on behalf of the Issuer, need not
sell such Scheduled Distributions or other non-Cash proceeds if it delivers an
Officer’s Certificate to the Trustee certifying that such Scheduled
Distributions or other proceeds constitute Collateral Debt Securities or
Eligible Investments.

(c)      If prior to the
occurrence of an Event of Default, the Issuer, or the Collateral Manager on
behalf of the Issuer, shall not have given any investment directions pursuant
to Section 10.2(b), the Trustee shall seek instructions from the Issuer,
or the Collateral Manager on behalf of the Issuer, within three Business Days
after transfer of such funds to the applicable Collection Account.  If the Trustee does not thereupon receive
written instructions from the Issuer, or the Collateral Manager on behalf of
the Issuer, within five Business Days after transfer of such funds to the
applicable Collection Account, it shall invest and reinvest the funds held in
the applicable Collection Account in one or more Eligible Investments described
in clause (ii) of the definition of Eligible Investments maturing no later than
the Business Day immediately preceding the next Payment Date.  If after the occurrence of an Event of
Default, the Issuer, or the Collateral Manager on behalf of the Issuer, shall
not have given investment directions to the Trustee pursuant to Section
10.2(b) for three consecutive days, the Trustee shall invest and reinvest
such Monies as fully as practicable in Eligible Investments described in clause
(ii) of the definition of Eligible Investments maturing not later than the
earlier of (i) thirty (30) days after the date of such investment or (ii) the
Business Day immediately preceding the next Payment Date.  All interest and other income from such
investments shall be deposited in the applicable Collection Account, any gain
realized from such investments shall be credited to the applicable Collection
Account, and any loss resulting from such investments shall be charged to the
applicable Collection Account.  The
Trustee shall not in any way be held liable (except as a result of negligence,
willful misconduct or bad faith) by reason of any insufficiency of such
applicable Collection Account

 

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resulting from any
loss relating to any such investment, except with respect to investments in
obligations of the Trustee or any Affiliate thereof.

(d)      During the Replenishment
Period (and thereafter to the extent necessary to acquire Collateral Debt
Securities pursuant to contracts entered into during the Replenishment Period),
the Collateral Manager on behalf of the Issuer may by Issuer Order direct the
Trustee to, and upon receipt of such Issuer Order the Trustee shall, reinvest
Principal Proceeds in Collateral Debt Securities selected by the Collateral
Manager as permitted under and in accordance with the requirements of Article
12 and such Issuer Order.

(e)      Subject to Section
10.2(f), the Trustee shall transfer to the Payment Account for application
pursuant to Section 11.1(a) and in accordance with the calculations and
the instructions contained in the Notes Valuation Report prepared by the
Trustee on behalf of the Issuer pursuant to Section 10.9(e), on or prior
to the Business Day prior to each Payment Date, any amounts then held in the
Collection Accounts other than (i) Interest Proceeds or Principal Proceeds
received after the end of the Due Period with respect to such Payment Date and
(ii) amounts that the Issuer is entitled to reinvest in accordance with Section
12.2 and which the Issuer so elects to reinvest in accordance with the
terms of this Indenture.

(f)       Notwithstanding
the foregoing, the Trustee shall transfer to the Payment Account from amounts
on deposit in the Interest Collection Account or, solely in the case of clause
(iii) below, the Principal Collection Account, as applicable, such amounts, if any, that are due and
payable to (i) Green Loan in respect of the Green Loan Administrative Fee in
accordance with, and at the times set forth in, the Asset Servicing Agreement,
(ii) Green Loan in respect of any special servicing fees due to Green Loan in
accordance with, and at the times set forth in, the Asset Servicing Agreement
(to the extent such amounts have not otherwise been paid) and (iii) any Hedge
Counterparty, in satisfaction of any Hedge Payment Amount (other than any
amount due and payable by the Issuer under the related Hedge Agreement
following an Event of Default or Termination Event (other than Illegality or
Tax event) (each as defined in the related Hedge Agreement) with respect to
which such Hedge Counterparty is the Defaulting Party or the sole Affected
Party (as defined in the related Hedge Agreement)), if any, then due and
payable to such Hedge Counterparty in accordance with the terms of the related
Hedge Agreement.  Any required
payments to Hedge Counterparties pursuant to clause (iii) of the preceding
sentence shall be made, first, from amounts on deposit in the Interest
Collection Account and, second, to the extent amounts on deposit in the
Interest Collection Account are insufficient, from amounts on deposit in the
Principal Collection Account.  The Trustee shall make each such transfer
on or prior to the Business Day prior to the related payment date.

(g)      Notwithstanding the
foregoing, the Trustee shall deposit a portion, as specified in the related
Asset Hedge Schedules, of all payments of interest received in respect of
Non-Quarterly Pay Assets into the Asset Hedge Account.

Section 10.3           Payment
Account.

(a)      The Trustee shall, prior
to the Closing Date, establish a single, segregated trust account which shall
be designated as the “Payment Account,” which shall be held in trust

 

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for the benefit of
the Noteholders and each Hedge Counterparty and over which the Trustee shall
have exclusive control and the sole right of withdrawal.  Any and all funds at any time on deposit in,
or otherwise to the credit of, the Payment Account shall be held in trust by
the Trustee for the benefit of the Noteholders. 
Except as provided in Article 11, the only permitted withdrawal
from or application of funds on deposit in, or otherwise to the credit of, the
Payment Account shall be (i) to pay the interest on and the principal of the
Notes and make other payments in respect of the Notes in accordance with their
terms and the provisions of this Indenture, (ii) to pay the Preferred Share
Paying Agent for deposit into the Preferred Share Distribution Account for
distributions to the Preferred Shareholders in accordance with the terms and
the provisions of the Preferred Shares Paying Agency Agreement, (iii) upon
Issuer Order, to pay other amounts specified therein, and (iv) otherwise to pay
amounts payable pursuant to and in accordance with the terms of this Indenture,
each in accordance with the Priority of Payments.  The Trustee agrees to give the Issuer and the
Co-Issuer immediate notice if it becomes aware that the Payment Account or any
funds on deposit therein, or otherwise to the credit of the Payment Account,
shall become subject to any writ, order, judgment, warrant of attachment,
execution or similar process.  Neither
the Issuer nor the Co-Issuer shall have any legal, equitable or beneficial
interest in the Payment Account other than in accordance with the Priority of
Payments.  The Payment Account shall
remain at all times with the Corporate Trust Office or a financial institution
having a long-term debt rating by each Rating Agency at least equal to “A-” or “A3,”
as applicable, or a short-term debt rating by each Rating Agency at least equal
to “A-1,”  “P-1” or “F1,” as
applicable.  Amounts in the Payment
Account shall not be invested.

Section 10.4           Delayed
Funding Obligations Account.

(a)      The Trustee shall prior
to the Closing Date establish a single, segregated trust account which shall be
designated as the “Delayed Funding Obligations Account” which shall be held in
trust in the name of the Trustee for the benefit of the Noteholders and each
Hedge Counterparty, into which Delayed Draw Funding Obligations Account the
Trustee shall deposit funds for any additional funding commitments of the
Issuer under any Delayed Draw Term Loans included in the Collateral Debt
Securities.  All amounts in the Delayed
Funding Obligations Account shall be deposited in overnight funds in Eligible
Investments and released to fulfill such commitments.  If a Delayed Draw Term Loan is sold or
otherwise disposed before the full commitment thereunder has been drawn, or if
excess funds remain following the termination of the funding obligation giving
rise to the deposit of such funds in the Delayed Funding Obligations Account,
such Eligible Investments on deposit in the Delayed Funding Obligations Account
for the purpose of fulfilling such commitment shall be transferred to the
Principal Collection Account as Principal Proceeds.  The Delayed Funding Obligations Account shall
remain at all times with the Corporate Trust Office or a financial institution
having a long-term debt rating from each Rating Agency at least equal to “A-”
or “A3,” as applicable, or a short-term debt rating at least equal to “A-1,” “P-1”
or “F1,” as applicable.

(b)      Funds in the Delayed
Funding Obligations Account shall be available solely to fulfill any additional
funding commitments of the Issuer under any Delayed Draw Term Loans included in
the Collateral Debt Securities, and only funds in the Delayed Funding
Obligations Account shall be used for such purpose.  Upon the purchase of any Collateral

 

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Debt Security that
is a Delayed Draw Term Loan, the Collateral Manager shall direct the Trustee to
deposit Principal Proceeds into the Delayed Funding Obligation Account in an
amount equal to the Issuer’s maximum future funding obligation under the terms
of such Delayed Draw Term Loan, and the Principal Proceeds so deposited shall
be considered part of the purchase price of such Delayed Draw Term Loan for
purposes of Article 12.  The
Collateral Manager shall not permit all amounts then on deposit in the Delayed
Funding Obligation Account to be less than the aggregate amount of all future
funding obligations outstanding under the terms of all Delayed Draw Term Loans
that constitute Collateral Debt Securities.

(c)      The Collateral Manager
shall direct the Trustee to withdraw funds from the Delayed Funding Obligation
Account to fund amounts drawn under any Delayed Draw Term Loan.  Pursuant to an Issuer Order, all or a portion
of the funds, as specified in such Issuer Order, on deposit in the Delayed
Funding Obligation Account at any time in excess of the aggregate principal
amount of commitments which may be drawn upon under the Delayed Draw Term Loan
shall be transferred by the Trustee to the Collection Account as Principal
Proceeds.

Section 10.5           Expense
Account.

(a)      The Trustee shall prior
to the Closing Date establish a single, segregated trust account which shall be
designated as the “Expense Account” which shall be held in trust in the name of
the Trustee for the benefit of the Noteholders and each Hedge
Counterparty.  The only permitted
withdrawal from or application of funds on deposit in, or otherwise standing to
the credit of, the Expense Account shall be to pay (on any day other than a
Payment Date) accrued and unpaid Company Administrative Expenses of the Issuer
and the Co-Issuer (other than accrued and unpaid expenses and indemnities
payable to the Collateral Manager under the Collateral Management
Agreement).  On the Closing Date, the
Trustee shall deposit into the Expense Account an amount equal to approximately
U.S.$150,000 from the net proceeds received by the Issuer on such date from the
initial issuance of the Securities. 
Funds in the Expense Account shall be replenished on each Payment Date,
if necessary, in accordance with the Priority of Payments.  On or after the Closing Date, any amount
remaining in the Expense Account may, at the election of the Collateral Manager
be designated as Interest Proceeds.  On
the date on which substantially all of the Issuer’s assets have been sold or
otherwise disposed of, the Issuer by Issuer Order executed by an Authorized
Officer of the Collateral Manager shall direct the Trustee to, and, upon
receipt of such Issuer Order, the Trustee shall, transfer all amounts on
deposit in the Expense Account to the Interest Collection Account for
application pursuant to Section 11.1(a)(i) as Interest Proceeds.  Amounts credited to the Expense Account will
(a) be applied on or prior to the Determination Date preceding the first
Payment Date to pay amounts due in connection with the offering of the
Securities and (b) on the first Payment Date, to the extent the balance of the
Expense Account exceeds $150,000 on the related Determination Date, be
transferred to the Payment Account and applied as Interest Proceeds.

(b)      The Trustee agrees to
give the Issuer immediate notice if it becomes aware that the Expense Account
or any funds on deposit therein, or otherwise to the credit of the Expense
Account, shall become subject to any writ, order, judgment, warrant of
attachment,

 

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execution or
similar process.  The Issuer shall not
have any legal, equitable or beneficial interest in the Expense Account.  The Expense Account shall remain at all times
with the Corporate Trust Office of a financial institution having a long-term
debt rating by each Rating Agency at least equal to “A-” or “Baa1,” as
applicable.

(c)      The Collateral Manager on
behalf of the Issuer may direct the Trustee to, and upon such direction the
Trustee shall, invest all funds in the Expense Account in Eligible Investments
designated by the Collateral Manager. 
All interest and other income from such investments shall be deposited
in the Expense Account, any gain realized from such investments shall be
credited to the Expense Account, and any loss resulting from such investments
shall be charged to the Expense Account. 
The Trustee shall not in any way be held liable (except as a result of
negligence, willful misconduct or bad faith) by reason of any insufficiency of
such Expense Account resulting from any loss relating to any such investment,
except with respect to investments in obligations of the Trustee or any
Affiliate thereof.  If the Trustee does
not receive investment instructions from an Authorized Officer of the
Collateral Manager, the Trustee may invest funds received in the Expense
Account in Eligible Investments of the type described in clause (ii) of the
definition thereto.

Section 10.6           Asset
Hedge Account.

The Trustee shall prior
to the Closing Date establish a single, segregated trust account which shall be
designated as the “Asset Hedge Account” which shall be held in trust in the
name of the Trustee for the benefit of the Issuer.  The only permitted withdrawal from or
application of funds on deposit in, or otherwise standing to the credit of, the
Asset Hedge Account shall be funds received in respect of each payment of
interest in respect of any Non-Quarterly Pay Asset.  On each date on which the Trustee receives a
payment of interest in respect of any Non-Quarterly Pay Asset, the Trustee
shall deposit a portion of the amount received into the Collection Account and
shall deposit the remaining portion in to the Asset Hedge Account in accordance
with the Asset Hedge Schedule.  On the
third Business Day prior to each quarterly Payment Date, the Trustee will
transfer from the Asset Hedge Account to the Collection Account, for
distribution in accordance with the Priority of Payments, the amounts specified
in the Asset Hedge Schedule.  All funds
on deposit in the Asset Hedge Account will be invested in Eligible Investments
in accordance hereto..

Section 10.7           Interest
Advances.

(a)      With respect to each
Determination Date for which the sum of Interest Proceeds and, if applicable,
Principal Proceeds, collected during the related Due Period that are available
to pay interest on the Class A Notes and the Class B Notes in accordance with
the Priority of Payments, are insufficient to remit the interest due and
payable with respect to the Class A Notes and the Class B Notes on the
following Payment Date (the amount of such insufficiency, an “Interest Shortfall”),
the Trustee shall provide the Advancing Agent with written notice of such
Interest Shortfall no later than the close of business on the Business Day following
such Determination Date.  The Trustee
shall provide the Advancing Agent with notice, prior to any funding of an
Interest Advance by the Advancing Agent, of any additional interest remittances
received by the Trustee after delivery of such initial notice that reduce such
Interest Shortfall.  No later than 5:00
p.m. (New York time) on the Business Day

 

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immediately
preceding the related Payment Date (but in any event no earlier than one
Business Day following the Advancing Agent’s receipt of notice of such Interest
Shortfall), the Advancing Agent shall advance the difference between such
amounts (each such advance, an “Interest
Advance”) by deposit of an amount equal to such Interest
Advance in the Payment Account, subject to a determination of recoverability by
the Advancing Agent as described in Section 10.7(b), and subject to a
maximum limit in respect of any Payment Date equal to the lesser of (i) the
aggregate of such Interest Shortfalls that would otherwise occur on the Class A
Notes and the Class B Notes and (ii) the aggregate of the interest payments not
received in respect of Non-Advancing Collateral Debt Securities.  Notwithstanding the foregoing, in no circumstance
shall the Advancing Agent be required to make an Interest Advance in respect of
a Non-Advancing Collateral Debt Security (x) to the extent that the aggregate
outstanding amount of all unreimbursed Interest Advances would exceed the
aggregate outstanding principal amount of the Class A Notes and the Class B
Notes or (y) if the Class A/B Par Value Ratio on the relevant Measurement Date
is less than 100%.  Any Interest Advance
made by the Advancing Agent with respect to a Payment Date that is in excess of
the actual Interest Shortfall for such Payment Date shall be refunded to the
Advancing Agent by the Trustee on the same Business Day that such Interest
Advance was made (or, if such Interest Advance is made prior to final
determination by the Trustee of such Interest Shortfall, on the Business Day of
such final determination).  The Advancing
Agent shall provide the Trustee written notice of a determination by the
Advancing Agent that a proposed Interest Advance would constitute a
Nonrecoverable Advance no later than the close of business on the Business Day
immediately preceding the related Payment Date (or, in the event that the
Advancing Agent did not receive notice of the related Interest Shortfall on the
related Determination Date, no later than the close of business on the Business
Day immediately following the Advancing Agent’s receipt of notice of such
Interest Shortfall).  If the Advancing
Agent shall fail to make any required Interest Advance at or prior to the time
at which distributions are to be made pursuant to Section 11.1(a), the
Trustee, in its capacity as Backup Advancing Agent, shall be required to make
such Interest Advance, subject to a determination of recoverability by the
Trustee as described in Section 10.7(b). 
The Trustee shall be entitled to conclusively rely on any affirmative
determination by the Advancing Agent that an Interest Advance would constitute
a Nonrecoverable Advance.  Based upon
available information at the time, the Trustee, the Collateral Manager or the
Advancing Agent will provide fifteen (15) days prior notice to each Rating
Agency if recovery of a Nonrecoverable Advance would result in an Interest
Shortfall on the next succeeding Payment Date. 
No later than the close of business on the Determination Date related to
a Payment Date on which the recovery of a Nonrecoverable Advance would result
in an Interest Shortfall, the Collateral Manager will provide each Rating
Agency notice of such recovery.

(b)      Notwithstanding anything
herein to the contrary, neither the Advancing Agent nor the Trustee, in its
capacity as Backup Advancing Agent, as applicable, shall be required to make
any Interest Advance unless such Person determines, in its sole discretion,
exercised in good faith that such Interest Advance, or such proposed Interest
Advance, plus interest expected to accrue thereon at the Reimbursement Rate,
will be recoverable from subsequent payments or collections with respect to all
Assets and has determined in its reasonable judgment that the recovery would
not result in an Interest Shortfall.  In
determining whether any proposed Interest Advance will be, or whether any
Interest Advance previously

 

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made is, a
Nonrecoverable Advance, the Advancing Agent or the Trustee, in its capacity as
Backup Advancing Agent, as applicable, will take into account:

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

(ii)      that the related Senior Tranches of any Collateral
Debt Security may be required to be fully paid and any advances (and interest
thereon) made in respect of such Senior Tranches may be required to be fully
reimbursed, prior to any amounts recovered in respect of the Underlying
Mortgaged Properties are allocated or otherwise made available to the
Collateral Debt Securities;

(iii)     the possibility and effects of future
adverse change with respect to the Underlying 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

(iv)    the fact that Interest Advances are intended
to provide liquidity only and not credit support to the Class A-1 Noteholders,
the Class A-2 Noteholders, the Class A-3 Noteholders, the Class B-FL
Noteholders and the Class B-FX Noteholders.

For purposes of any such
determination of whether an Interest Advance constitutes or would constitute a
Nonrecoverable Advance, an Interest Advance shall be deemed to be nonrecoverable
if the Advancing Agent or the Trustee, in its capacity as Backup Advancing
Agent, as applicable, determines that future Interest Proceeds and Principal
Proceeds may be ultimately insufficient to fully reimburse such Interest
Advance, plus interest thereon at the Reimbursement Rate within a reasonable
period of time.  Absent bad faith, the
determination by the Advancing Agent or the Trustee, in its capacity as Backup
Advancing Agent, as applicable, as to the nonrecoverability of any Interest
Advance shall be conclusive and binding on the Holders of the Notes.

(c)      The Advancing Agent and
the Trustee, in its capacity as Backup Advancing Agent, will each be entitled
to recover any previously unreimbursed Interest Advance made by it (including
any Nonrecoverable Advance), together with interest thereon, first, from
Interest Proceeds and second (to the extent that there are insufficient
Interest Proceeds for such reimbursement), from Principal Proceeds to the
extent that such reimbursement would not trigger an additional Interest
Shortfall; provided  that if at any
time an Interest Advance is determined to be a Nonrecoverable Advance, the
Advancing Agent or the Trustee, in its capacity as Backup Advancing Agent,
shall be entitled to recover all outstanding Interest Advances from the
Collection Accounts on any Business Day during any Interest Accrual Period
prior to the related Determination Date (or on a Payment Date prior to any
payment of interest on or principal of the Notes in accordance with the
Priority of Payments).  The Advancing
Agent shall be permitted (but not obligated) to defer or otherwise structure
the timing of recoveries of Nonrecoverable Advances in such manner as the
Advancing Agent determines is in the best interest of the Noteholders as a collective
whole, which may include being reimbursed for Nonrecoverable Advances in
installments.

 

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

(e)      The obligations of the
Advancing Agent and the Trustee to make Interest Advances in respect of the
Collateral Debt Securities will continue through the Stated Maturity, unless
the Class A Notes and the Class B Notes are previously redeemed or repaid in
full.

(f)       In no event will the
Advancing Agent in its capacity as such hereunder or the Trustee, in its
capacity as Backup Advancing Agent hereunder, be required to make Interest
Advances for distributions to the Holders of any Class of Notes other than the
Class A Notes and the Class B Notes, or with respect to any Collateral Debt
Security other than a Non-Advancing Collateral Debt Security, and in no event
will the Advancing Agent or the Trustee, in its capacity as backup advancing
agent, be required to advance any amounts in respect of payments of principal
of any Collateral Debt Security.

(g)      In consideration of the
performance of its obligations hereunder, the Advancing Agent shall be entitled
to receive, at the times set forth herein and subject to the Priority of
Payments, to the extent funds are available therefor, the Advancing Agent
Fee.  In consideration of the Trustee’s
back-up advancing obligations hereunder, the Trustee shall be entitled to
receive, at the times set forth herein and subject to the Priority of Payments,
to the extent funds are available therefore, the Backup Advancing Agent Fee.

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

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

 

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Section 10.8           Reports
by Parties.

The Trustee shall supply,
in a timely fashion, to the Issuer, the Co-Issuer, the Preferred Shares Paying
Agent and the Collateral Manager any information regularly maintained by the
Trustee that the Issuer, the Co-Issuer, the Preferred Shares Paying Agent or
the Collateral Manager may from time to time request with respect to the
Pledged Obligations or the Accounts and provide any other information
reasonably available to the Trustee by reason of its acting as Trustee
hereunder and required to be provided by Section 10.9 or to permit the
Collateral Manager to perform its obligations under the Collateral Management
Agreement.  The Trustee shall forward to
the Collateral Manager and each Hedge Counterparty copies of notices and other
writings received by it from the issuer of any Collateral Debt Security or from
any Clearing Agency with respect to any Collateral Debt Security advising the
holders of such security of any rights that the holders might have with respect
thereto (including, without limitation, notices of calls and redemptions of
securities) as well as all periodic financial reports received from such issuer
and Clearing Agencies with respect to such issuer.  Each of the Issuer and Collateral Manager
shall promptly forward to the Trustee any information in their possession or
reasonably available to them concerning any of the Pledged Obligations that the
Trustee reasonably may request or that reasonably may be necessary to enable
the Trustee to prepare any report or perform any duty or function on its part
to be performed under the terms of this Indenture.

Section 10.9           Reports;
Accountings.

(a)      The Trustee shall monitor
the Assets on an ongoing basis and provide access to the information maintained
by the Trustee to, and upon reasonable request of the Collateral Manager, shall
assist the Collateral Manager in performing its duties under the Collateral
Management Agreement, each in accordance with this Indenture.

(b)      The Trustee shall perform
the following functions during the term of this Agreement:

(i)       Create and maintain a database with
respect to the Collateral Debt Securities (the “Database”);

(ii)      Permit access to the information contained
in the Database by the Collateral Manager and the Issuer;

(iii)     On a monthly basis, monitor and update the
Database for ratings changes;

(iv)    Update the Database for Collateral Debt Securities
or Eligible Investments acquired or sold or otherwise disposed of;

(v)     Prepare and arrange for the delivery to
each Rating Agency, the Collateral Manager, each Hedge Counterparty, the
Initial Purchasers, and upon request therefor, any Holder of a Note shown on
the Note Registrar, any Preferred Shareholder shown on the register maintained
by the Share Registrar, and, for so long as any Notes are listed on the Irish
Stock Exchange, the Irish Paying Agent of the Monthly Reports;

 

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(vi)    Prepare and arrange for the delivery to the
Collateral Manager, each Hedge Counterparty, and upon request therefor, any
Holder of a Note shown on the Notes Register, any Preferred Shareholder shown
on the register maintained by the Share Registrar, the firm of Independent
certified public accountants appointed pursuant to Section 10.11(a)
hereof, each Rating Agency, the Depository (with instructions to forward it to
each of its participants who are holders of any Notes) and, for so long as any
Notes are listed on the Irish Stock Exchange, the Irish Paying Agent, of the
Notes Valuation Report;

(vii)   Assist in preparation and arrange for the
delivery to the Collateral Manager and each Hedge Counterparty of the
Redemption Date Statement;

(viii)  Arrange for the delivery to each Rating Agency
of all information or reports required under this Indenture, including, but not
limited to, providing the applicable Rating Agencies with (A) written notice of
(1) any breaches under any of the Transaction Documents and (2) the termination
or change of any parties to the Transaction Documents, in each case, for which
the Trustee has received prior written notice pursuant to the terms of the
Transaction Document and (B) each Monthly Report in Excel spreadsheet format;
and

(ix)     Assist the Independent certified public
accountants in the preparation of those reports required under Section 10.11
hereof by providing access to the information contained in the Database.

(c)      The Trustee, on behalf of
the Issuer, shall compile and provide or make available on its website
initially located at www.cdolink.com to each Rating Agency, the Class A-2 Note
Insurer, the Collateral Manager, each Hedge Counterparty, the Initial
Purchasers, for so long as any Notes are listed on the Irish Stock Exchange,
and upon request therefor, any Holder of a Note shown on the Notes Register,
any beneficial owner of a Note who provides to the Trustee a certification in
the form of Exhibit M hereto, any Preferred Shareholder shown on the
register maintained by the Share Registrar, not later than the fifth (5th)
Business Day after the first (1st) day of each month (other than a
month in which a Payment Date occurs) commencing in November 2007 (or solely in the case of the first Monthly
Report, the fifth (5th) Business Day), determined as of the last
Business Day of the preceding month, a monthly report (the “Monthly Report”).  The Monthly Report shall contain the
following information and instructions with respect to the Pledged Obligations
included in the Assets based in part on information provided by the Collateral
Manager:

(i)       (1) the Aggregate Principal Balance of
all Collateral Debt Securities, together with a calculation, in reasonable
detail, of the sum of (A) the Aggregate Principal Balance of all Collateral
Debt Securities (other than Defaulted Securities and Written Down Securities)
plus (B) the Principal Balance of each Pledged Obligation which is Written Down
Security and (C) the Principal Balance of each Pledged Obligation which is a
Defaulted Security;

 

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(ii)      the balance of all Eligible Investments
and Cash in each of the Interest Collection Account, the Principal Collection
Account, the Delayed Funding Obligations Account and the Expense Account;

(iii)     the nature, source and amount of any
proceeds in the Collection Accounts, including Interest Proceeds, Principal
Proceeds, Unscheduled Principal Payments and Sale Proceeds, received since the
date of determination of the last Monthly Report;

(iv)    with respect to each Collateral Debt
Security and each Eligible Investment that is part of the Assets, its Principal
Balance, annual interest rate, average life, issuer, Moody’s Rating, S&P
Rating and Fitch Rating;

(v)     the identity of each Collateral Debt
Security that was sold or disposed of pursuant to Section 12.1
(indicating whether such Collateral Debt Security is a Defaulted Security,
Credit Risk Security or otherwise (in each case, as reported in writing to the
Issuer by the Collateral Manager) and whether such Collateral Debt Security was
sold pursuant to Section 12.1(a)(i) or (ii)) or Granted to the
Trustee since the date of determination of the most recent Monthly Report;

(vi)    the identity of each Collateral Debt Security
which became a Defaulted Security, Credit Risk Security or a Written Down
Security since the date of determination of the last Monthly Report;

(vii)   the identity of each Collateral Debt Security
that has been upgraded or downgraded by one or more Rating Agencies;

(viii)  the Aggregate Principal Balance of all Fixed
Rate Securities;

(ix)     the Aggregate Principal Balance of all
Floating Rate Securities;

(x)      based on information provided by the
Collateral Manager, the Aggregate Principal Balance of all Floating Rate
Securities that constitute Covered Fixed Rate Securities;

(xi)     the Aggregate Principal Balance of all
Collateral Debt Securities that are guaranteed as to ultimate or timely payment
of principal or interest;

(xii)    with respect to each Specified Type of
Collateral Debt Security, the Aggregate Principal Balance of all Collateral
Debt Securities consisting of such Specified Type of Collateral Debt
Securities;

(xiii)   based on information provided by the
Collateral Manager, the identity of, and the Aggregate Principal Balance of all
Collateral Debt Securities whose Moody’s Rating is determined as provided in
each clause of the definition of “Moody’s Rating” and the identity of, and the
Aggregate Principal Balance of all Collateral Debt Securities whose S&P
Rating is determined as provided in each of the clauses of the definition of “S&P
Rating,” identifying in reasonable detail the basis for such calculation with
respect

 

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to Collateral Debt
Securities with an S&P Rating assigned pursuant to Annex 1, 2 or 3 of Schedule
D, based on information provided by the Collateral Manager;

(xiv)   with respect to each Collateral Debt
Security, the Aggregate Principal Balance of all Collateral Debt Securities
that are part of the same issuance;

(xv)    the Aggregate Principal Balance of all
Collateral Debt Securities that are securities that provide for periodic
payments of interest less frequently than quarterly;

(xvi)   based upon the information supplied by the
Collateral Manager, the Aggregate Principal Balance of all Collateral Debt
Securities issued by any single issuer (provided that for avoidance of
doubt, with respect to any Loan, the issuer of such Loan shall be deemed to be
the borrower of such Loan);

(xvii)  based upon the information supplied by the
Collateral Manager, the Aggregate Collateral Balance of the Collateral Debt
Securities consisting of CMBS Securities issued in any single calendar year;

(xviii) the Aggregate Principal Balance of all
Collateral Debt Securities (other than CMBS Securities) backed by each single
Property Type based on information provided by the Collateral Manager;

(xix)   the Aggregate Principal Balance of all
Collateral Debt Securities (other than CMBS Securities) that are backed or
otherwise invested in properties located in any single U.S. state (for each
such state) based on information provided by the Collateral Manager;

(xx)    the Class A/B Par Value Ratio, the Class
C/D/E Par Value Ratio and the Class F/G/H Par Value Ratio, and a statement as
to whether the Par Value Coverage Tests are satisfied;

(xxi)   the Moody’s Rating Factor and a statement as
to whether the Moody’s Maximum Rating Factor Test is satisfied;

(xxii)  the Herfindahl Score, the amount of Cash that
has been received in respect of Principal Proceeds of the Collateral Debt
Securities since the immediately preceding Measurement Date but has not been
reinvested in additional Collateral Debt Securities (and what the Herfindahl
score would have been had such Cash in respect of such Principal Proceeds not
existed), a statement as to whether the Herfindahl Test was satisfied or deemed
satisfied on the immediately preceding Measurement Date and a statement as to
whether the Herfindahl Diversity Test is satisfied;

(xxiii) the Weighted Average Coupon and a statement as
to whether the Minimum Weighted Average Coupon Test is satisfied;

(xxiv) the Weighted Average Spread and a statement as
to whether the Minimum Weighted Average Spread Test is satisfied;

 

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(xxv)  the Extended Weighted Average Maturity and a
statement as to whether the Moody’s Weighted Average Extended Maturity Test is
satisfied;

(xxvi) the Initial Weighted Average Maturity and a
statement as to whether the Moody’s Weighted Average Initial Maturity Test is
satisfied;

(xxvii)                based upon information supplied
by the Collateral Manager, the Average Life of each Collateral Debt Security,
the Weighted Average Life and a statement as to whether the Weighted Average
Life Test is satisfied;

(xxviii)               the Class A-1 Loss Differential,
the Class A-2 Loss Differential, the Class A-3 Loss Differential, the Class
B-FL Loss Differential, the Class B-FX Loss Differential, the Class C-FL Loss
Differential, the Class C-FX Loss Differential, the Class D Loss Differential,
the Class E Loss Differential, the Class F Loss Differential, the Class G-FL
Loss Differential, the Class G-FX Loss Differential, the Class H-FL Loss
Differential, the Class H-FX Loss Differential, the Class J Loss Differential
and the Class K Loss Differential of the Current Portfolio and a statement as
to whether the S&P CDO Monitor Test is satisfied;

(xxix)  the S&P Weighted Average Recovery Rate and
a statement as to whether the S&P Recovery Test is satisfied;

(xxx)   a calculation in reasonable detail necessary
to determine compliance with each of the other Collateral Quality Tests;

(xxxi)  the Principal Balance of each Collateral Debt
Security that is on credit watch with negative implications;

(xxxii) the Principal Balance of each Collateral Debt
Security that is on credit watch with positive implications;

(xxxiii)                the amount of the current
portion and the unpaid portion, if any, of the Senior Collateral Management Fee
and the Subordinate Collateral Management Fee with respect to the related
Payment Date;

(xxxiv)               based upon information supplied
by the Collateral Manager, the current ratings of any Hedge Counterparty and
the credit support provider of any Hedge Counterparty;

(xxxv)                the aggregate notional amount as
of the end of such month and each following month for all outstanding
Transactions under all Hedge Agreements which the Issuer has entered into;

(xxxvi)               such other information as the
Collateral Manager, the Trustee or any Hedge Counterparty may reasonably
request;

(xxxvii)              the most recent Fitch Poolwide
Expected Loss Test or Fitch Indicative Poolwide Expected Loss Test, along with
the date of such test and a statement as to

 

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whether the Fitch
Poolwide Expected Loss Test or Fitch Indicative Poolwide Expected Loss Test, as
the case may be, is satisfied; and

(xxxviii)             a statement identifying compliance
or non-compliance with the Eligibility Criteria.

(d)      The Trustee, on behalf of
the Issuer, shall perform the following functions and report to the Issuer, the
Co-Issuer and the Collateral Manager on each Measurement Date:

(i)       Calculate the Class A/B Par Value Ratio
and indicate whether the Class A/B Par Value Coverage Test is met;

(ii)      Calculate the Class C/D/E Par Value Ratio
and indicate whether the Class C/D/E Par Value Coverage Test is met; and

(iii)     Calculate the Class F/G/H Par Value Ratio
and indicate whether the Class F/G/H Par Value Coverage Test is met.

(e)      The Trustee, on behalf of
the Issuer, shall perform the following functions and prepare a report thereof
relating to the most recently ended Due Period determined as of each
Determination Date not later than the Payment Date (the “Notes Valuation Report”),
which shall contain the following information (and the information included in
a Monthly Report), based in part on information provided by the Collateral
Manager:

(i)       Calculate the percentage (based on the
outstanding Aggregate Principal Balances of the Pledged Collateral Debt
Securities) of the Pledged Collateral Debt Securities which have a maturity
date occurring on or prior to each Payment Date;

(ii)      Identify the Principal Proceeds and
Interest Proceeds;

(iii)     Determine the Net Outstanding Portfolio
Balance as of the close of business on the last Business Day of each Due Period
after giving effect to the Principal Proceeds as of the last Business Day of
such Due Period, principal collections received from Collateral Debt Securities
in the related Due Period, the reinvestment of such proceeds in Eligible
Investments during such Due Period and the Collateral Debt Securities that were
released during such Due Period;

(iv)    Determine the Aggregate Outstanding Amount
of the Notes of each Class at the beginning of the Due Period and such
Aggregate Outstanding Amount as a percentage of the original Aggregate
Outstanding Amount of the Notes of such Class, the amount of principal payments
to be made on the Notes of each Class on the next Payment Date, the amount of
any Class C Capitalized Interest on the Class C Notes, the amount of any Class
D Capitalized Interest on the Class D Notes, the amount of any Class E
Capitalized Interest on the Class E Notes, the amount of any Class F
Capitalized Interest on the Class F Notes, the amount of any Class G
Capitalized Interest on the Class G Notes, the amount of any Class H
Capitalized Interest on the Class H Notes, the amount of any Class J
Capitalized Interest on the Class J Notes, the amount of any Class K
Capitalized Interest on the Class K Notes, the Aggregate Outstanding Amount of
the

 

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Notes of each
Class after giving effect to the payment of principal (and with respect to the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes, the Class J Notes and the Class K Notes,
Class C Capitalized Interest, Class D Capitalized Interest, Class E Capitalized
Interest, Class F Capitalized Interest, Class G Capitalized Interest, Class H
Capitalized Interest, Class J Capitalized Interest or Class K Capitalized
Interest, as applicable), on the related Payment Date and such Aggregate
Outstanding Amount as a percentage of the original Aggregate Outstanding Amount
of the Notes of such Class;

(v)     Calculate the Class A-1 Interest
Distribution Amount, the Class A-2 Interest Distribution Amount, the Class A-3
Interest Distribution Amount, the Class B-FL Interest Distribution Amount, the
Class B-FX Interest Distribution Amount, the Class C-FL Interest Distribution
Amount, the Class C-FX Interest Distribution Amount, the Class D Interest
Distribution Amount, the Class E Interest Distribution Amount, the Class F
Interest Distribution Amount, the Class G-FL Interest Distribution Amount, the
Class G-FX Interest Distribution Amount, the Class H-FL Interest Distribution
Amount, the Class H-FX Interest Distribution Amount, the Class J Interest
Distribution Amount and the Class K Interest Distribution Amount for the
related Payment Date and the aggregate amount paid for all prior Payment Dates
in respect of such amounts;

(vi)    With the assistance of the Collateral
Manager, determine the Company Administrative Expenses on an itemized basis,
the Senior Collateral Management Fee and the Subordinate Collateral Management
Fee payable by the Issuer on the related Payment Date;

(vii)   With the assistance of the Collateral Manager
as set forth in Section 10.7(f), determine (A) the balance on deposit in
the Interest Collection Account and the Principal Collection Account at the end
of the related Due Period, (B) the amounts payable from the Collection Accounts
to the Payment Account in order to make payments pursuant to Section
11.1(a)(i) and Section 11.1(a)(ii) on the related Payment Date (the
amounts payable pursuant to each such clause to be set forth and identified
separately) and (C) the balance of Principal Proceeds and the balance of
Interest Proceeds remaining in the Collection Accounts immediately after all
payments and deposits to be made on the related Payment Date;

(viii)  Calculate the amount to be paid to each Hedge
Counterparty and the amount to be paid by each Hedge Counterparty in each case,
specifying (a) the amount to be paid under each Hedge Agreement (other than any
payments due and payable upon a termination of the related Hedge Agreement) and
(b) the amount owing as a result of a termination with respect to each Hedge
Agreement;

(ix)     Calculate the amount to be paid to the
Advancing Agent or the Trustee, as applicable, as reimbursement of Interest
Advances and Reimbursement Interest and calculate the amount of the
Nonrecoverable Advances to be paid to the Advancing Agent or the Trustee, as
applicable;

 

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(x)      Calculate the amount on deposit in the
Expense Account, the Delayed Funding Obligations Account, each Hedge Collateral
Account and each Hedge Termination Account;

(xi)     The nature, source and amount of any
proceeds in the Collection Accounts, including Interest Proceeds, Principal
Proceeds, Unscheduled Principal Payments and Sale Proceeds, received since the
date of determination of the last Monthly Report;

(xii)    With respect to each Collateral Debt
Security and each Eligible Investment that is part of the Assets, its Principal
Balance, annual interest rate, average life, issuer, Moody’s Rating, S&P
Rating and Fitch Rating;

(xiii)   The identity of each Collateral Debt Security
that was sold or disposed of pursuant to Section 12.1 (indicating
whether such Collateral Debt Security is a Defaulted Security, Credit Risk
Security or otherwise (in each case, as reported in writing to the Issuer by
the Collateral Manager) and whether such Collateral Debt Security was sold
pursuant to Section 12.1(a)(i) or (ii)) or Granted to the Trustee
since the date of determination of the most recent Monthly Report; and

(xiv)   The identity of each Collateral Debt Security
which became a Defaulted Security, Credit Risk Security or a Written Down
Security since the date of determination of the last Monthly Report.

(f)       Upon receipt of each
Monthly Report, each Notes Valuation Report and each Redemption Date Statement,
the Collateral Manager shall compare the information contained in its records
with respect to the Pledged Obligations and shall, within five Business Days
after receipt of each such Monthly Report, such Notes Valuation Report or such
Redemption Date Statement, notify the Issuer and the Trustee whether such
information contained in the Monthly Report, the Notes Valuation Report or the
Redemption Date Statement, as the case may be, conforms to the information
maintained by the Collateral Manager with respect to the Pledged Obligations,
or detail any discrepancies.  If any
discrepancy exists, the Trustee, the Issuer and the Collateral Manager shall
attempt to resolve the discrepancy and shall provide notice to a designated
representative of the Controlling Class. 
If such discrepancy cannot be promptly resolved, the Trustee shall cause
the firm of Independent certified public accountants appointed by the Issuer
pursuant to Section 10.11 hereof to review such Monthly Report, Notes
Valuation Report or Redemption Date Statement, as the case may be, and the
Collateral Manager’s records and the Trustee’s records to determine the cause
of such discrepancy.  If such review
reveals an error in the Monthly Report, Notes Valuation Report or Redemption
Date Statement, as the case may be, or the Trustee’s or the Collateral Manager’s
records, the Monthly Report, Notes Valuation Report or Redemption Date
Statement, as the case may be, or the Trustee’s or the Collateral Manager’s
records, shall be revised accordingly and, as so revised, shall be utilized in
making all calculations pursuant to this Indenture.  Each Rating Agency (in each case only so long
as any Class of Notes is rated), the Initial Purchasers and the Collateral
Manager shall be notified in writing of any such revisions by the Trustee on
behalf of the Issuer.

 

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(g)      The Trustee shall prepare
the Notes Valuation Report and shall deliver or make available on its website
initially located at www.cdolink.com such Notes Valuation Report to the
Collateral Manager, each Hedge Counterparty, and upon request therefor, any
Holder of a Note shown on the Notes Register, any beneficial owner of a Note
who provides to the Trustee a certification in the form of Exhibit M
hereto, any Holder of a Preferred Share shown on the register maintained by the
Share Registrar, the firm of Independent certified public accountants appointed
pursuant to Section 10.11(a) hereof, each Rating Agency, the Depository
(with instructions to forward it to each of its participants who are holders of
any Notes) and, for so long as any Offered Notes are listed on the Irish Stock
Exchange, the Irish Paying Agent not later than the related Payment Date.  All information made available on the Trustee’s
website will be restricted and the Trustee will only provide access to such
reports to those parties entitled thereto pursuant to this Indenture.  In connection with providing access to its
website, the Trustee may require registration and the acceptance of a
disclaimer.  Questions regarding the
Trustee’s website can be directed to the Trustee’s customer service desk at
(301) 815-6600.

The Notes Valuation
Report shall also contain the following statements:

“Instruction to Participant:  Please
send

this to the beneficial owners of the Offered Notes”

Reminder to Owners of each Class
of Offered Notes:

Each owner or beneficial
owner of Offered Notes must be either (A) a Person who is a qualified
institutional buyer as defined in Rule 144A under the Securities Act of 1933
and a Qualified Purchaser as defined by the Investment Company Act of 1940 or
(B) not a U.S. Person, and if a Person satisfying the requirements of the
immediately foregoing clause (A), can represent as follows:

(i)       it is not a broker-dealer which owns and
invests on a discretionary basis less than U.S.$25,000,000 in securities of
unaffiliated issuers;

(ii)      it is not a participant-directed employee
plan such as a 401(k) plan;

(iii)     it is acting for its own account or for the
account of another who is a qualified institutional buyer and a qualified
purchaser that is not included in (i) or (ii) above;

(iv)    it is not formed for the purpose of
investing in the Notes;

(v)     it, and each account for which it holds the
Notes, shall hold at least the minimum denomination therefor; and

(vi)    it will provide notice of these transfer
restrictions to any transferee from it.

(h)      Each Notes Valuation
Report (after approval by the Collateral Manager after giving effect to any
revisions thereto in accordance with Section 10.9(f)) shall constitute
instructions from the Collateral Manager, on behalf of the Issuer, to the
Trustee to transfer

 

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funds from the
Collection Accounts to the Payment Account pursuant to Section 10.2(e)
and to withdraw on the related Payment Date from the Payment Account and pay or
transfer the amounts set forth in the Notes Valuation Report, as applicable, in
the manner specified, and in accordance with the priorities established, in Section
11.1 hereof.

(i)       Not more than five
Business Days after receiving an Issuer Request requesting information
regarding a redemption of the Notes of a Class as of a proposed Redemption Date
set forth in such Issuer Request, the Trustee shall compute the following
information and provide such information in a statement (the “Redemption Date Statement”)
delivered to the Collateral Manager (which shall review such statement in the
manner provided for in Section 10.9(f)), the Preferred Shares Paying
Agent and each Hedge Counterparty:

(i)       the Aggregate Outstanding Amount of the
Notes of the Class or Classes to be redeemed as of such Redemption Date;

(ii)      the amount of accrued interest due on such
Notes as of the last day of the Interest Accrual Period immediately preceding
such Redemption Date;

(iii)     the Redemption Price;

(iv)    the sum of all amounts due and unpaid under Section
11.1(a) (other than amounts payable on the Notes being redeemed or to the
Noteholders thereof);

(v)     the amount due and payable to each Hedge
Counterparty pursuant to the applicable Hedge Agreement; and

(vi)    the amount in the Accounts available for
application to the redemption of such Notes.

(j)       In the event of a sale
by the Issuer of any Collateral Debt Security that is subject to a Liability
Hedge, the Issuer (at the direction Collateral Manager) shall provide written
notice to each Hedge Counterparty under such Liability Hedge at least 5
Business Days prior to such sale.

Section 10.10         Release
of Pledged Collateral Debt Securities; Release of Assets.

(a)      If no Event of Default
has occurred and is continuing and subject to Article 12 hereof, the
Issuer may, by Issuer Order delivered to the Trustee at least two (2) Business
Days prior to the settlement date for any sale of a Pledged Collateral Debt
Security certifying that (i) it has sold such Pledged Collateral Debt Security
pursuant to and in compliance with Article 12 or (ii) in the case of a
redemption pursuant to Sections 9.1 or 9.2 the proceeds from any
such sale of Pledged Collateral Debt Securities are sufficient to redeem the
Notes pursuant to Sections 9.1 or 9.2, direct the Trustee to
release such Pledged Collateral Debt Security and, upon receipt of such Issuer
Order, the Trustee shall deliver any such Pledged Collateral Debt Security, if
in physical form, duly endorsed to the broker or purchaser designated in such
Issuer Order or, if such Pledged Collateral Debt Security is represented by a
Security Entitlement, cause an appropriate transfer thereof to be made, in each
case against

 

215

 

receipt of the
sales price therefor as set forth in such Issuer Order; provided, however,
that the Trustee may deliver any such Pledged Collateral Debt Security in
physical form for examination (prior to receipt of the sales proceeds) in
accordance with street delivery custom. 
The Trustee shall (i) deliver any agreements and other documents in its
possession relating to such Pledged Collateral Debt Security and (ii) if
applicable, duly assign each such agreement and other document, in each case,
to the broker or purchaser designated in such Issuer Order.

(b)      The Issuer may, by Issuer
Order delivered to the Trustee at least three (3) Business Days prior to the
date set for redemption or payment in full of a Pledged Collateral Debt
Security, certifying that such Pledged Collateral Debt Security is being
redeemed or paid in full, direct the Trustee, or at the Trustee’s instructions,
the Custodial Securities Intermediary, to deliver such Pledged Collateral Debt
Security, if in physical form, duly endorsed, or, if such Pledged Collateral
Debt Security is a Clearing Corporation Security, to cause it to be presented,
to the appropriate paying agent therefor on or before the date set for
redemption or payment, in each case against receipt of the applicable
redemption price or payment in full thereof.

(c)      If no Event of Default
has occurred and is continuing and subject to Article 12, the Issuer
may, by Issuer Order delivered to the Trustee at least two (2) Business Days
prior to the date set for an exchange, tender or sale, certifying that a
Collateral Debt Security is subject to an Offer and setting forth in reasonable
detail the procedure for response to such Offer, direct the Trustee or at the
Trustee’s instructions, the Custodial Securities Intermediary, to deliver such
security, if in physical form, duly endorsed, or, if such security is a
Clearing Corporation Security, to cause it to be delivered, in accordance with
such Issuer Order, in each case against receipt of payment therefor.

(d)      The Trustee shall deposit
any proceeds received by it from the disposition of a Pledged Collateral Debt
Security in the Principal Collection Account unless simultaneously applied to
the purchase of Substitute Collateral Debt Securities, subject to the
Replenishment Criteria, or Eligible Investments under and in accordance with
the requirements of Article 12 and this Article 10.  Neither the Trustee nor the Custodial
Securities Intermediary shall be responsible for any loss resulting from
delivery or transfer of any security prior to receipt of payment in accordance
herewith.

(e)      The Trustee shall, upon
receipt of an Issuer Order at such time as there are no Notes Outstanding and
all obligations of the Issuer hereunder have been satisfied, release the Assets
from the lien of this Indenture.

Section 10.11         Reports
by Independent Accountants.

(a)      On or about the Closing
Date, the Issuer shall appoint a firm of Independent certified public
accountants of recognized national reputation for purposes of preparing and
delivering the reports or certificates of such accountants required by this
Indenture.  The Collateral Manager, on
behalf of the Issuer, shall have the right to remove such firm or any successor
firm.  Upon any resignation by or removal
of such firm, the Collateral Manager, on behalf of the Issuer, shall promptly
appoint, by Issuer Order delivered to the Trustee, each Hedge Counterparty and
each Rating Agency, a successor thereto that

 

216

 

shall also be a
firm of Independent certified public accountants of recognized national
reputation and shall provide notice to a designated representative of the
Controlling Class.  If the Collateral
Manager, on behalf of the Issuer, shall fail to appoint a successor to a firm
of Independent certified public accountants which has resigned or been removed,
within thirty (30) days after such resignation or removal, the Issuer
shall promptly notify the Trustee of such failure in writing.  If the Collateral Manager, on behalf of the
Issuer, shall not have appointed a successor within ten (10) days thereafter,
the Trustee shall promptly appoint a successor firm of Independent certified
public accountants of recognized national reputation.  The fees of such Independent certified public
accountants and its successor shall be payable as a Company Administrative
Expense in the Priority of Payments.

(b)      Within sixty (60) days
after December 31 of each year (commencing with December 31, 2007), the Issuer
shall cause to be delivered to the Trustee, the Collateral Manager and each
Rating Agency an Accountant’s Report specifying the procedures applied and the
associated findings with respect to the Monthly Reports, the Notes Valuation
Reports and any Redemption Date Statements prepared in the year ending on such
date.  At least sixty (60) days prior to
the Payment Date in May 2008 (and, if at any time a successor firm of
Independent certified public accountants is appointed, to the Payment Date
following the date of such appointment), the Issuer shall deliver to the
Trustee an Accountant’s Report specifying in advance the procedures that such
firm will apply in making the aforementioned findings throughout the term of
its service as accountants to the Issuer. 
The Trustee shall promptly forward a copy of such Accountant’s Report to
the Collateral Manager and each Holder of Notes of the Controlling Class, at
the address shown on the Note Register. 
The Issuer shall not approve the institution of such procedures if a
Majority of the Aggregate Outstanding Amount of Notes of the Controlling Class,
by written notice to the Issuer and the Trustee within thirty (30) days after
the date of the related notice to the Trustee, object thereto.

(c)      If any Hedge Counterparty
is required to post collateral pursuant to the related Hedge Agreement during
any Due Period, then on or prior to the Payment Date following such Due Period
and on or prior to each anniversary of such Payment Date the Issuer shall cause
a firm of Independent certified public accountants to review and verify that
the value of collateral posted is in accordance with the applicable provisions
of the related Hedge Agreement.

Section 10.12         Reports
to Rating Agencies.

(a)      In addition to the
information and reports specifically required to be provided to each Rating
Agency pursuant to the terms of this Indenture, the Trustee shall provide each
Rating Agency and each Hedge Counterparty with all information or reports
delivered by the Trustee hereunder, and such additional information as each
Rating Agency may from time to time reasonably request and the Trustee
determines in its sole discretion may be obtained and provided without
unreasonable burden or expense.  The Issuer
shall promptly notify the Trustee and the Preferred Shares Paying Agent if a
Rating Agency’s rating of any Class of Notes has been, or it is known by the
Issuer that such rating will be, reduced, or qualified or withdrawn.  The Issuer, or the Collateral Manager on
behalf of the Issuer, also shall deliver to the Rating Agencies, within 10
Business Days after each Quarterly

 

217

 

Measurement Date,
(x) a completed certificate substantially in the form of Exhibit F
hereto, and (y) a completed report substantially in the form of Exhibit G
hereto.

(b)      The Issuer, or the
Collateral Manager on behalf of the Issuer, shall provide the Rating Agencies
with all information and reports delivered to the Trustee hereunder.

(c)      All additional reports to
be sent to the Rating Agencies pursuant to clause (a) above shall be reviewed
prior to such transmission by the Collateral Manager.

(d)      The Collateral Manager
will use commercially reasonable efforts to provide Fitch with annual operating
statement analysis reports in a form generally consistent with the standards of
the Commercial Mortgage Securities Association (with respect to Loans) and a
quarterly data tape in the form customarily prepared by the Collateral Manager
with respect to transactions of this type.

Section 10.13         [Reserved].

Section 10.14         Certain
Procedures.

(a)      For so long as the Notes
may be transferred only in accordance with Rule 144A or another exemption from
registration under the Securities Act, the Issuer (or the Collateral Manager on
behalf of the Issuer) will ensure that any Bloomberg screen containing
information about the Rule 144A Global Notes includes the following (or
similar) language:

(i)       the “Note Box” on the bottom of the “Security
Display” page describing the Rule 144A Global Notes will state: “Iss’d Under
144A/3c7”;

(ii)      the “Security Display” page will have the
flashing red indicator “See Other Available Information”; and

(iii)     the indicator will link to the “Additional
Security Information” page, which will state that the Notes “are being offered
in reliance on the exemption from registration under Rule 144A of the
Securities Act to persons who are both (i) qualified institutional buyers (as
defined in Rule 144A under the Securities Act) and (ii) qualified purchasers
(as defined under Section 3(c)(7) under the Investment Company Act of
1940).

(b)      For so long as the Rule
144A Global Notes are registered in the name of DTC or its nominee, the Issuer
(or the Collateral Manager on behalf of the Issuer) will instruct DTC to take
these or similar steps with respect to the Rule 144A Global Notes:

(i)       the DTC 20-character security descriptor
and 48-character additional descriptor will indicate with marker “3c7” that
sales are limited to (i) QIBs and (ii) Qualified Purchasers;

(ii)      where the DTC deliver order ticket sent to
purchasers by DTC after settlement is physical, it will have the 20-character
security descriptor printed on it.  Where
the DTC deliver order ticket is electronic, it will have a “3c7” indicator and
a

 

218

 

related user
manual for participants, which will contain a description of the relevant
restriction; and

(iii)     DTC will send an “Important Notice”
outlining the 3(c)(7) restrictions applicable to the Rule 144A Global Notes to
all DTC participants in connection with the initial offering of Notes by the
issuers.

 

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ARTICLE 11

APPLICATION OF MONIES

Section 11.1           Disbursements
of Monies from Payment Account.

(a)      Notwithstanding any other
provision in this Indenture, but subject to the other Subsections of this Section
11.1 and Section 13.1 hereof, on each Payment Date, or Redemption
Date the Trustee shall disburse amounts transferred to the Payment Account from
the Interest Collection Account and the Principal Collection Account pursuant
to Section 10.2 hereof in accordance with the following priorities (the “Priority of Payments”):

(i)       Interest Proceeds.  On each Payment Date or Redemption Date
(except as otherwise provided in Section 11.1(c)), Interest Proceeds
with respect to the related Due Period shall be distributed in the following
order of priority:

(1)           to the payment of taxes and filing
fees (including any registered office and government fees) owed by the Issuer,
if any;

(2)           (a) first, to the extent not
previously reimbursed, to the Advancing Agent or the Trustee, in its capacity
as Backup Advancing Agent, the aggregate amount of any Nonrecoverable Advances
due and payable to such party, (b) second, to the extent not previously reimbursed,
to the Collateral Manager, the aggregate amount of any Nonrecoverable Cure
Advance due and payable to the Collateral Manager, (c) third, to the Advancing
Agent, the Advancing Agent Fee and any previously due but unpaid Advancing
Agent Fee (provided that the Advancing Agent has not failed to make any
Interest Advance required to be made in respect of such Payment Date pursuant
to the terms of this Indenture), (d) fourth, to the Advancing Agent and the
Trustee, in its capacity as Backup Advancing Agent, (i) to the extent due and
payable to such party, Reimbursement Interest and (ii) reimbursement of any
outstanding Interest Advances not (in the case of this clause (ii)) to exceed
the amount that would result in an Interest Shortfall with respect to such
Payment Date and (e) fifth, to the extent due and payable to the Collateral
Manager, reimbursement of any outstanding Cure Advance (but only to the extent
of the applicable proceeds in respect of the Collateral Debt Security with
respect to which such Cure Advance was made and not to exceed the amount that
would result in an Interest Shortfall with respect to such Payment Date);

(3)           (a) first, to the payment to the
Trustee, in its capacity as Backup Advancing Agent, the Backup Advancing Agent
Fee (or if the Advancing Agent has failed to make any Interest Advance required
to be made by the Advancing Agent in respect of such Payment Date pursuant to
the terms of this Indenture, the Advancing Agent Fee otherwise payable to the
Advancing Agent on such Payment Date) and any previously due but unpaid Backup
Advancing Agent Fee,

 

220

 

(b) second, to the
payment to the Trustee and the Preferred Shares Paying Agent of the accrued and
unpaid fees in respect of their services equal to U.S.$87,500 per annum, (c) third, to the payment of other accrued and
unpaid Company Administrative Expenses of the Trustee, the Paying Agent, the
Preferred Shares Paying Agent and the Calculation Agent, (d) fourth, to the
payment of any other accrued and unpaid Company Administrative Expenses, (e)
fifth, prior to the date on which amounts on deposit in the Expense Account are
transferred to the Payment Account (in connection with the sale or disposition
of substantially all of the Issuer’s assets) for application as Interest
Proceeds, for deposit in the Expense Account an amount equal to an amount
sufficient to cause the balance of all Eligible Investments and cash in the
Expense Account, immediately after such deposit, to equal U.S.$150,000 and (f) sixth, to the Class
A-2 Note Insurer, the Class A-2 Note Premium and other amounts payable to the
Class A-2 Note Insurer pursuant to the Insurance Agreement; provided  the aggregate of all such amounts in
clauses (c), (d) and (e) above (including such amounts paid since the previous
Payment Date from the Expense Account) will not exceed U.S.$330,000  per annum;

(4)           to the payment of the Senior
Collateral Management Fee and any previously due but unpaid Senior Collateral
Management Fees;

(5)           pro rata on the
basis of amounts payable under each Hedge Agreement (if any), to the payment of
any amounts (including, without limitation, any Hedge Payment Amounts)
scheduled to be paid to each Hedge Counterparty, if any, pursuant to any Hedge
Agreement, along with any payments (however described) due and payable by the
Issuer under any Hedge Agreement in connection with a termination (in whole or
in part) of any Hedge Agreement (including any interest that may accrue
thereon), other than by reason of an Event of Default (as defined in the
related Hedge Agreement) or Termination Event (other than Illegality or Tax
Event) (each as defined in the related Hedge Agreement) in each case, with
respect to which the Hedge Counterparty is the Defaulting Party or the sole
Affected Party (as defined in the related Hedge Agreement);

(6)           to the payment of the Class A-1
Interest Distribution Amount, plus any Class A-1 Defaulted Interest Amount;

(7)           to the payment of the Class A-2
Interest Distribution Amount, plus any Class A-2 Defaulted Interest Amount,
less the Class A-2 Note Premium and other amounts payable to the Class A-2 Note
Insurer;

(8)           to the payment of the Class A-3
Interest Distribution Amount, plus any Class A-3 Defaulted Interest Amount;

(9)           pro rata to the
payment of the Class B-FL Interest Distribution Amount and the Class B-FX
Interest Distribution Amount, plus any Class B Defaulted Interest Amounts;

 

221

 

(10)         as long as any of the Class A Notes or
the Class B Notes are Outstanding, to the payment of the following amounts:

(a)           in
the event that the Class A-1 Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon the Stated Maturity of the Class A-1 Notes, to the payment in full of
principal of the Class A-1 Notes;

(b)           in
the event that the Class A-2 Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class A-2 Notes, to the payment in full of
principal of, first, the Class A-1 Notes and second, the Class A-2 Notes;

(c)           in
the event that the Class A-3 Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class A-2 Notes, to the payment in full of
principal of, first, the Class A-1 Notes, second, the Class A-2 Notes and
third, the Class A-3 Notes;

(d)           in
the event that the Class B Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class B Notes, to the payment in full of principal
of, first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-3 Notes and fourth, pro rata the
Class B Notes; or

(e)           in
the event of a Mandatory Redemption of the Class A Notes and the Class B Notes,
first, to the payment of principal of the Class A-1 Notes, second, to the
payment of principal of the Class A-2 Notes, third, to the payment of principal
of the Class A-3 Notes and fourth, pro rata to
the payment of principal of the Class B Notes, to the extent necessary to cause
the Class A/B Par Value Coverage Test to be satisfied (after giving effect to
the payment of all amounts previously paid on such Payment Date pursuant to
this Section 11.1(a)(i);

(11)         pro rata to the
payment of the Class C-FL Interest Distribution Amount and the Class C-FX
Interest Distribution Amount, plus any Class C Defaulted Interest Amounts;

(12)         pro rata to the
payment of the Class C Capitalized Interest (if any);

(13)         to the payment of the Class D Interest
Distribution Amount, plus any Class D Defaulted Interest Amount;

 

222

 

(14)         to the payment of the Class D
Capitalized Interest (if any);

(15)         to the payment of the Class E Interest
Distribution Amount, plus any Class E Defaulted Interest Amount;

(16)         to the payment of the Class E
Capitalized Interest (if any);

(17)         as long as any of the Class C Notes,
the Class D Notes or the Class E Notes are Outstanding, to the payment of the
following amounts:

(a)           in
the event that the Class C Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class C Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-3 Notes, fourth, pro rata the
Class B Notes and fifth, pro rata the
Class C Notes;

(b)           in
the event that the Class D Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class D Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-3 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes and sixth, the Class D Notes;

(c)           in
the event that the Class E Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class E Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-3 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes, sixth, the Class D Notes and seventh, the Class E Notes; or

(d)           in
the event of a Mandatory Redemption of the Class C Notes, the Class D Notes and
the Class E Notes, first, to the payment of principal of the Class A-1 Notes,
second, to the payment of principal of the Class A-2 Notes, third, to the
payment of principal of the Class A-3 Notes, fourth, pro rata
to the payment of principal of the Class B Notes, fifth, pro rata
to the payment of principal of the Class C Notes, sixth, to the payment of
principal of the Class D Notes and seventh, to the payment of principal of the
Class E Notes, to the extent necessary to cause the Class C/D/E Par Value Coverage
Test to be satisfied (after giving effect to the payment of all amounts
previously paid on such Payment Date pursuant to this Section 11.1(a)(i));

(18)         to the payment of the Class F Interest
Distribution Amount, plus any Class F Defaulted Interest Amount;

 

223

 

(19)         to the payment of the Class F
Capitalized Interest (if any);

(20)         pro rata to the
payment of the Class G-FL Interest Distribution Amount and the Class G-FX
Interest Distribution Amount, plus any Class G Defaulted Interest Amounts;

(21)         pro rata to the
payment of the Class G Capitalized Interest (if any);

(22)         pro rata to the
payment of the Class H-FL Interest Distribution Amount and the Class H-FX
Interest Distribution Amount, plus any Class H Defaulted Interest Amounts;

(23)         pro rata to the
payment of the Class H Capitalized Interest (if any);

(24)         as long as any of the Class F Notes,
Class G Notes or Class H Notes are Outstanding, to the payment of the following
amounts:

(a)           in
the event that the Class F Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class F Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-2 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes, sixth, the Class D Notes, seventh, the Class E Notes and eighth,
the Class F Notes;

(b)           in
the event that the Class G Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class G Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-3 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes, sixth, the Class D Notes, seventh, the Class E Notes, eighth,
the Class F Notes and ninth, pro rata the
Class G Notes;

(c)           in
the event that the Class H Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class H Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-3 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes, sixth, the Class D Notes, seventh, the Class E Notes, eighth,
the Class F Notes, ninth, pro rata the
Class G Notes and tenth, pro rata the
Class H Notes; or

(d)           in
the event of a Mandatory Redemption of the Class F Notes, the Class G Notes and
the Class H Notes, first, to the payment of principal of the Class A-1 Notes,
second, to the payment of principal of the Class A-2 Notes, third, to the
payment of principal of the Class A-3 Notes, fourth, pro rata

 

224

 

to the payment of principal of the Class B Notes, fifth, pro rata to the payment of principal of the Class C Notes,
sixth, to the payment of principal of the Class D Notes, seventh, to the
payment of principal of the Class E Notes, eighth, to the payment of principal
of the Class F Notes, ninth, pro rata to the
payment of principal of the Class G Notes and tenth, pro rata
to the payment of principal of the Class H Notes, to the extent necessary to
cause the Class F/G/H Par Value Coverage Test to be satisfied (after giving
effect to the payment of all amounts previously paid on such Payment Date
pursuant to this Section 11.1(a)(i));

(25)         to the payment of any Company
Administrative Expenses not paid pursuant to paragraph (3) above in the order
specified therein;

(26)         to the payment of the Subordinate
Collateral Management Fee and any accrued and unpaid Subordinate Collateral
Management Fee;

(27)         pro rata on the
basis of amounts payable under each Hedge Agreement (if any), to the payment of
any amounts (including, without limitation, any Hedge Payment Amounts)
(including any interest accrued thereon), if any, payable by the Issuer to the
Hedge Counterparty under the related Hedge Agreement following an Event of
Default or Termination Event (other than Illegality or Tax Event) (each as
defined in the related Hedge Agreement) with respect to which the Hedge
Counterparty is the Defaulting Party or the sole Affected Party (as defined in
the related Hedge Agreement);

(28)         to the payment of the Class J Interest
Distribution Amount, plus, any Class J Defaulted Interest Amount;

(29)         to the payment of the Class J
Capitalized Interest (if any);

(30)         as long as any of the Class J Notes are
Outstanding, in the event that the Class J Notes become due and payable (x) as
a result of an acceleration following an Event of Default, (y) pursuant to an
Auction Call Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon Stated Maturity of the Class J Notes, to the payment in
full of principal of first, the Class A-1 Notes, second, the Class A-2 Notes,
third, the Class A-3 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes, sixth, the Class D Notes, seventh, the Class E Notes, eighth,
the Class F Notes, ninth, pro rata the
Class G Notes, tenth, pro rata the
Class H Notes and eleventh, the Class J Notes;

(31)         to the payment of the Class K Interest
Distribution Amount, plus, any Class K Defaulted Interest Amount;

(32)         to the payment of the Class K
Capitalized Interest (if any);

(33)         as long as any of the Class K Notes are
Outstanding, in the event that the Class K Notes become due and payable (x) as
a result of an acceleration following an Event of Default, (y) pursuant to an
Auction Call Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon Stated

 

225

 

Maturity of the
Class J Notes, to the payment in full of principal of first, the Class A-1
Notes, second, the Class A-2 Notes, third, the Class A-3 Notes, fourth, pro rata the Class B Notes, fifth, pro rata
the Class C Notes, sixth, the Class D Notes, seventh, the Class E Notes,
eighth, the Class F Notes, ninth, pro rata the
Class G Notes, tenth, pro rata the
Class H Notes, eleventh, the Class J Notes and twelfth, the Class K Notes; and

(34)         any remaining Interest Proceeds to be
released from the lien of this Indenture and paid (upon standing order of the
Issuer) to the Preferred Shares Paying Agent for deposit into the Preferred
Shares Distribution Account for distribution to the holders of the Preferred
Shares as payments of the Preferred Shares Distribution Amount subject to and
in accordance with the provisions of the Preferred Shares Paying Agency
Agreement.

(ii)      Principal Proceeds.  On each Payment Date or Redemption Date,
Principal Proceeds with respect to the related Due Period shall be distributed
in the following order of priority:

(1)           to the payment of the amounts
referred to in paragraphs (1) through (9) of Section 11.1(a)(i) in the
same order of priority specified therein, but only to the extent not paid in
full thereunder;

(2)           to the extent that the amounts paid
pursuant to paragraph (10) of Section 11.1(a)(i) are insufficient to pay
such amounts in full thereunder and any Class A Notes or Class B Notes are
Outstanding, to the payment of the following amounts:

(a)           in
the event that the Class A-1 Notes are Outstanding and become due and payable
(x) as a result of an acceleration following an Event of Default, (y) pursuant
to an Auction Call Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon the Stated Maturity of the Class A-1 Notes, to the
payment in full of principal of the Class A-1 Notes;

(b)           in
the event that the Class A-2 Notes are Outstanding and become due and payable
(x) as a result of an acceleration following an Event of Default, (y) pursuant
to an Auction Call Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon the Stated Maturity of the Class A-2 Notes, to the
payment in full of principal of, first, the Class A-1 Notes and second, the
Class A-2 Notes;

(c)           in
the event that the Class A-3 Notes are outstanding and become due and payable
(x) as a result of an acceleration following an Event of Default, (y) pursuant
to an Auction Call Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption or (z) upon the Stated Maturity of the Class A-3 Notes, to the
payment in full of principal of, first, the Class A-1 Notes, second, the Class
A-2 Notes and third, the Class A-3 Notes;

 

226

 

(d)           in
the event that the Class B Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class B Notes, to the payment in full of principal
of, first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-3 Notes and fourth, pro rata the
Class B Notes; or

(e)           in
the event of a Mandatory Redemption of the Class A Notes and the Class B Notes,
first, to the payment of principal of the Class A-1 Notes, second, to the
payment of principal of the Class A-2 Notes, third, to the payment of principal
of the Class A-3 Notes and fourth, pro rata to the
payment of principal of the Class B Notes, to the extent necessary to cause the
Class A/B Par Value Coverage Test to be satisfied (after giving effect to the
payment of all amounts previously paid on such Payment Date pursuant to Section
11.1(a)(i) and this Section 11.1(a)(ii));

(3)           (a)           if
the Class A Notes and the Class B Notes are no longer Outstanding, to the
payment of first, the amounts referred to in paragraph (11) of Section
11.1(a)(i) and second, the amounts referred to in paragraph (12) of Section
11.1(a)(i), but only to the extent not paid in full thereunder;

(b)           if
the Class A Notes, the Class B Notes and the Class C Notes are no longer Outstanding,
to the payment of first, the amounts referred to in paragraph (13) of Section
11.1(a)(i) and second, the amounts referred to in paragraph (14) of Section
11.1(a)(i), but only to the extent not paid in full thereunder;

(c)           if
the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes
are no longer outstanding, to the payment of first, the amounts referred to in
paragraph (15) of Section 11.1(a)(i) and second, the amounts referred to
in paragraph (16) of Section 11.1(a)(i), but only to the extent not paid
in full thereunder;

(4)           to the extent that the amounts paid
pursuant to paragraph (17) of Section 11.1(a)(i) are insufficient to pay
such amounts in full thereunder and any Class C Notes, Class D Notes or Class E
Notes are Outstanding, to the payment of the following amounts:

(a)           in
the event that the Class C Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class C Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-3 Notes, fourth, pro rata the
Class B Notes and fifth, pro rata the
Class C Notes;

 

227

(b)           in
the event that the Class D Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class D Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-3 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes and sixth, the Class D Notes;

(c)           in
the event that the Class E Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class E Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-3 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes, sixth, the Class D Notes and seventh, the Class E Notes; or

(d)           in
the event of a Mandatory Redemption of the Class C Notes, the Class D Notes and
the Class E Notes, first, to the payment of principal of the Class A-1 Notes,
second, to the payment of principal of the Class A-2 Notes, third, to the
payment of principal of the Class A-3 Notes, fourth, pro rata
to the payment of principal of the Class B Notes, fifth, pro rata
to the payment of principal of the Class C Notes, sixth, to the payment of
principal of the Class D Notes and seventh, to the payment of principal of the
Class E Notes, to the extent necessary to cause the Class C/D/E Par Value
Coverage Test to be satisfied (after giving effect to the payment of all
amounts previously paid on such Payment Date pursuant to Section 11.1(a)(i)
and this Section 11.1(a)(ii));

(5)           (a)           if
the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes are no longer Outstanding, to the payment of first, the
amounts referred to in paragraph (18) of Section 11.1(a)(i) and second,
the amounts referred to in paragraph (19) of Section 11.1(a)(i), but
only to the extent not paid in full thereunder;

(b)           if
the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes and the Class F Notes are no longer Outstanding, to the payment
of first, the amounts referred to in paragraph (20) of Section 11.1(a)(i)
and second, the amounts referred to in paragraph (21) of Section 11.1(a)(i),
but only to the extent not paid in full thereunder;

(c)           if
the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes, the Class F Notes and the Class G Notes are no longer
Outstanding, to the payment of first, the amounts referred to in paragraph (22)
of Section 11.1(a)(i) and second, the amounts referred to in paragraph
(23) of Section 11.1(a)(i), but only to the extent not paid in full
thereunder;

 

228

 

(6)           to the extent that the amounts paid
pursuant to paragraph (24) of Section 11.1(a)(i) are insufficient to pay
such amounts in full thereunder and any Class F Notes, Class G Notes or Class H
Notes are Outstanding, to the payment of the following amounts:

(a)           in
the event that the Class F Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class F Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class
A-3 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes, sixth, the Class D Notes, seventh, the Class E Notes and eighth,
the Class F Notes;

(b)           in
the event that the Class G Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption
or (z) upon Stated Maturity of the Class G Notes, to the payment in full of
principal of first, the Class A-1 Notes, second, the Class A-2 Notes, third,
the Class A-3 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes, sixth, the Class D Notes, seventh, the Class E Notes, eighth,
the Class F Notes and ninth, pro rata the
Class G Notes;

(c)           in
the event that the Class H Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption
or (z) upon Stated Maturity of the Class H Notes, to the payment in full of
principal of first, the Class A-1 Notes, second, the Class A-2 Notes, third,
the Class A-3 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes, sixth, the Class D Notes, seventh, the Class E Notes, eighth,
the Class F Notes, ninth, pro rata the
Class G Notes and tenth, pro rata the
Class H Notes; or

(d)           in
the event of a Mandatory Redemption of the Class F Notes, the Class G Notes and
the Class H Notes, first, to the payment of principal of the Class A-1 Notes,
second, to the payment of principal of the Class A-2 Notes, third, to the
payment of principal of the Class A-3 Notes, fourth, pro rata
to the payment of principal of the Class B Notes, fifth, pro rata
to the payment of principal of the Class C Notes, sixth, to the payment of
principal of the Class D Notes, seventh, to the payment of principal of the
Class E Notes, eighth, to the payment of principal of the Class F Notes, ninth,
pro rata to the payment of principal of
the Class G Notes and tenth, pro rata to the
payment of principal of the Class H Notes, to the extent necessary to cause the
Class F/G/H Par Value Coverage Test to be satisfied (after giving effect to the
payment of all amounts previously paid on such Payment Date pursuant to Section
11.1(a)(i) and this Section 11.1(a)(ii);

 

229

 

(7)           if the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes and Class H Notes are no longer outstanding, to the
payment of amounts referred to in paragraph (25) of Section 11.1(a)(i)
to the extent not paid thereunder;

(8)           if the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes and Class H Notes are no longer outstanding, to the
payment of amounts referred to in paragraph (26) of Section 11.1(a)(i)
to the extent not paid thereunder;

(9)           if the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes and Class H Notes are no longer outstanding, to the
payment of amounts referred to in paragraph (27) of Section 11.1(a)(i) to
the extent not paid thereunder;

(10)         if the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes and Class H Notes are no longer Outstanding, to the
payment of first, the amounts referred to in paragraph (28) of Section
11.1(a)(i) and second, the amounts referred to in paragraph (29) of Section
11.1(a)(i), but only to the extent not paid in full thereunder;

(11)         to the extent that the amounts paid
pursuant to paragraph (30) of Section 11.1(a)(i) above are insufficient
to pay such amounts in full thereunder and any Class J Notes are Outstanding,
in the event that the Class J Notes become due and payable (x) as a result of
an acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption
or (z) upon Stated Maturity of the Class J Notes, to the payment in full of
principal of first, the Class A-1 Notes, second, the Class A-2 Notes, third,
the Class A-3 Notes, fourth, pro rata the
Class B Notes, fifth, pro rata the
Class C Notes, sixth, the Class D Notes, seventh, the Class E Notes, eighth,
the Class F Notes, ninth, pro rata the
Class G Notes, tenth, pro rata the
Class H Notes and eleventh, the Class J Notes;

(12)         if the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes and the Class J Notes are no longer
Outstanding, to the payment of first, the amounts referred to in paragraph (31)
of Section 11.1(a)(i) and second, the amounts referred to in paragraph
(32) of Section 11.1(a)(i), but only to the extent not paid in full
thereunder;

(13)         to the extent that the amounts paid
pursuant to paragraph (33) of Section 11.1(a)(i) above are insufficient
to pay such amounts in full thereunder and any Class K Notes are Outstanding,
in the event that the Class K Notes become due and payable (x) as a result of
an acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption
or (z) upon Stated Maturity of the Class K

 

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Notes, to the
payment in full of principal of first, the Class A-1 Notes, second, the Class
A-2 Notes, third, the Class A-3 Notes, fourth, pro rata
the Class B Notes, fifth, pro rata the
Class C Notes, sixth, the Class D Notes, seventh, the Class E Notes, eighth,
the Class F Notes, ninth, pro rata the
Class G Notes, tenth, pro rata the
Class H Notes, eleventh, the Class J Notes and twelfth, the Class K Notes;

(14)         prior to or on the last day of the
Replenishment Period:  (i) with respect
to Replenishment Proceeds only, to the investment of such Replenishment
Proceeds in Eligible Investments and reinvestment in Substitute Collateral Debt
Securities subject to the Replenishment Criteria or, if determined by the
Collateral Manager, to pay any Special Amortization Amount from such
Replenishment Proceeds, to amortize the Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes, the Class B Notes, the Class C Notes, the Class D Notes,
the Class E Notes, the Class F Notes, the Class G Notes, the Class H Notes, the
Class J Notes and the Class K Notes as follows: 
(x) if each of the S&P Special Amortization Pro Rata Condition and
the Moody’s Special Amortization Pro Rata Condition is satisfied with respect
to such Payment Date and the Par Value Coverage Tests were satisfied as of the
related Determination Date, on a pro rata
basis without regard to any Capitalized Interest (based on the Aggregate
Outstanding Amount of each Class) among all Classes of Notes or (y) if either
the S&P Special Amortization Pro Rata Condition or the Moody’s Special
Amortization Pro Rata Condition is not satisfied with respect to such Payment
Date or the Par Value Coverage Tests were not satisfied as of the related
Determination Date, sequentially among all Classes of Notes; provided, however,
that amounts representing recoveries in respect of Defaulted Securities will be
distributed sequentially in any event; and (ii) with respect to Principal
Proceeds (other than Replenishment Proceeds), (x) on each Payment Date that is
not also a Redemption Date or the Stated Maturity of the Notes and (y) in the
absence of an acceleration following an Event of Default, to the payment of
principal of first, the Class A-1 Notes, until the Class A-1 Notes have been
paid in full, second, the Class A-2 Notes, until the Class A-2 Notes have been
paid in full, third, the Class A-3 Notes, until the Class A-3 Notes have been
paid in full, fourth, pro rata the
Class B Notes, until the Class B Notes have been paid in full, fifth, pro rata the Class C Notes, until the Class C Notes have
been paid in full, sixth, the Class D Notes, until the Class D Notes have been
paid in full, seventh, the Class E Notes, until the Class E Notes have been
paid in full, eighth, the Class F Notes, until the Class F Notes have been paid
in full, ninth, pro rata the Class G Notes, until
the Class G Notes have been paid in full, tenth, pro rata
the Class H Notes, until the Class H Notes have been paid in full, eleventh,
the Class J Notes, until the Class J Notes have been paid in full and twelfth,
the Class K Notes, until the Class K Notes have been paid in full;

(15)         after the Replenishment Period (x) on
each Payment Date that is not also a Redemption Date or the Stated Maturity of
the Notes and (y) in the absence of an acceleration following an Event of
Default, to the payment of principal of first, the Class A-1 Notes, until the
Class A-1 Notes have been paid in full, second, the Class A-2 Notes, until the
Class A-2 Notes have been paid in full,

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third, the Class
A-3 Notes, until the Class A-3 Notes have been paid in full, fourth, pro rata the Class B Notes, until the Class B Notes have
been paid in full, fifth, pro rata the
Class C Notes, until the Class C Notes have been paid in full, sixth, the Class
D Notes, until the Class D Notes have been paid in full, seventh, the Class E
Notes, until the Class E Notes have been paid in full, eighth, the Class F
Notes, until the Class F Notes have been paid in full, ninth, pro rata the Class G Notes, until the Class G Notes have
been paid in full, tenth, pro rata the
Class H Notes, until the Class H Notes have been paid in full, eleventh, the
Class J Notes, until the Class J Notes have been paid in full and twelfth, the
Class K Notes, until the Class K Notes have been paid in full;

(16)         any remaining Principal Proceeds to be
released from the lien of this Indenture and paid (upon standing order of the
Issuer) to the Preferred Shares Paying Agent for deposit into the Preferred
Shares Distribution Account for distribution to the holders of the Preferred
Shares as payments of the Preferred Shares Distribution Amount subject to and
in accordance with the provisions of the Preferred Shares Paying Agency
Agreement.

(b)      On or before the Business
Day prior to each Payment Date, the Issuer shall, pursuant to Section
10.2(e), remit or cause to be remitted to the Trustee for deposit in the
Payment Account an amount of Cash sufficient to pay the amounts described in Section
11.1(a) required to be paid on such Payment Date.

(c)      If on any Payment Date
the amount available in the Payment Account from amounts received in the
related Due Period is insufficient to make the full amount of the disbursements
required by the statements furnished by the Trustee pursuant to Section
10.9(e) hereof, the Trustee shall make the disbursements called for in the order
and according to the priority set forth under Section 11.1(a) above,
subject to Section 13.1 hereof, to the extent funds are available
therefor.

(d)      Except as otherwise
expressly provided in this Section 11.1, if on any Payment Date the
amount available in the Payment Account from amounts received in the related
Due Period are insufficient to make the full amount of the disbursements
required by any lettered subclause of Sections 11.1(a)(i) or 11.1(a)(ii),
the Trustee shall make the disbursements called for by such subclause ratably
in accordance with the respective amounts of such disbursements then due and
payable to the extent funds are available therefor, unless such subclause
provides otherwise.

(e)      In connection with the
application of funds to pay Company Administrative Expenses of the Issuer, in
accordance with Section 11.1(a)(i)(3) and Section 11.1(a)(ii)(1),
the Trustee shall remit such funds, to the extent available, to the Issuer (or
as the Issuer may otherwise direct), as directed by the Issuer to the Trustee
or otherwise set forth in the written instructions delivered to the Trustee by
the Issuer (net of amounts payable to the Trustee) no later than the Business
Day prior to the applicable Payment Date. 
All such payments shall be made pursuant to the Priority of Payments.

 

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(f)       In connection with the
payment to each Hedge Counterparty pursuant to each Hedge Agreement of any
amount scheduled to be paid from time to time between Payment Dates from
amounts received with respect to the Collateral Debt Securities, such amounts
shall be distributed to each Hedge Counterparty pursuant to the related Hedge
Agreement.

(g)      In connection with any
required payment by the Issuer to the Special Servicer pursuant to the Asset
Servicing Agreement of any amount scheduled to be paid from time to time
between Payment Dates from amounts received with respect to the Collateral Debt
Securities, such amounts shall be distributed to the Special Servicer pursuant to
the Asset Servicing Agreement.

Section 11.2           Trust
Accounts.

All Monies held by, or
deposited with the Trustee in the Collection Accounts, the Payment Account, the
Expense Account or the Delayed Funding Obligations Account pursuant to the
provisions of this Indenture, and not invested in Eligible Investments as
herein provided, shall be deposited in one or more trust accounts, maintained
at the Corporate Trust Office or at a financial institution whose long-term
rating is at least equal to “A3” by Moody’s and “A-” by S&P to be held in
trust for the benefit of the Noteholders. 
To the extent Monies deposited in such trust account exceed amounts
insured by the Deposit Insurance Fund administered by the Federal Deposit Insurance
Corporation, or any agencies succeeding to the insurance functions thereof, and
are not fully collateralized by direct obligations of the United States of
America, such excess shall be invested in Eligible Investments as directed by
Issuer Order.

 

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ARTICLE
12

SALE
OF COLLATERAL DEBT SECURITIES

Section 12.1           Sales
of Collateral Debt Securities.

(a)      Except as otherwise
expressly permitted or required by this Indenture (including, without
limitation, Section 12.2), the Issuer shall not sell or otherwise
dispose of any Collateral Debt Security; provided that subject to
satisfaction of any applicable conditions in Section 10.10, so long as
(A) no Event of Default has occurred and is continuing and (B) on or prior to
the trade date for such sale the Collateral Manager has certified to the
Trustee that each of the conditions applicable to such sale set forth below has
been satisfied, the Collateral Manager on behalf of the Issuer acting pursuant
to the Collateral Management Agreement may direct the Trustee in writing to
sell, and the Trustee shall sell in the manner directed by the Collateral
Manager in writing (which writing shall specify whether such security is a
Defaulted Security, a Credit Risk Security or a Spread Appreciated Security, if
applicable, or whether such security is otherwise permitted to be sold pursuant
to this Section 12.1(a)):

(i)       any Defaulted Security, at any time; provided
that, during the Replenishment Period with respect to the reinvestment of Sale
Proceeds received in respect of Defaulted Securities which are Replenishable
Assets, the Collateral Manager shall use commercially reasonable efforts to
reinvest such Sale Proceeds in one or more Substitute Collateral Debt
Securities having an aggregate Principal Balance of not less than 100% of the
Sale Proceeds of each Defaulted Security being sold;

(ii)      a Credit Risk Security or Spread
Appreciated Security that is a Replenishable Asset, (A) during the
Replenishment Period, if the Collateral Manager has certified to the Trustee that
it shall use commercially reasonable efforts to purchase one or more Substitute
Collateral Debt Securities having an Aggregate Principal Balance no less than
100% of the Sale Proceeds (excluding accrued interest) from such sale and the
Collateral Manager, in its reasonable business judgment, believes that (i) in
the case of the sale of a Credit Risk Security or a Spread Appreciated Security
(that is not a CMBS Security), the Sale Proceeds may be reinvested in
Substitute Collateral Debt Securities within 45 calendar days or (ii) in the
case of the sale of a Credit Risk Security or a Spread Appreciated Security
(that is a CMBS Security that is not a Closing Date CMBS Security), the Sale
Proceeds may be reinvested in Substitute Collateral Debt Securities within 15
calendar days, and after giving effect to such sale and to the purchase of
Substitute Collateral Debt Securities with the Sale Proceeds thereof, in the
reasonable business judgment of the Collateral Manager (which shall not be
called into question solely as a result of subsequent events), the
Replenishment Criteria shall be met; provided that,
with respect to the reinvestment of Sale Proceeds received in respect of Spread
Appreciated Securities which are Replenishable Assets, the Collateral Manager
will use commercially reasonable efforts to reinvest such Sale Proceeds in one
or more Substitute Collateral Debt Securities having an aggregate Principal Balance
of not less than 100% of

 

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the Principal
Balance of each Collateral Debt Security being sold and (B) after the
Replenishment Period, at any time;

(iii)     a Credit Risk Security that is a Closing
Date CMBS Security, at any time; and

(iv)    if a Collateral Debt Security that is a
Defaulted Security is not sold by the Issuer (at the direction of the
Collateral Manager) within three (3) years of such Collateral Debt Security
becoming a Defaulted Security, the Collateral Manager, on behalf of the Issuer,
shall use its commercially reasonable efforts to sell such Collateral Debt
Security as soon as commercially practicable thereafter.

(b)      Notwithstanding the
foregoing, the Collateral Manager (at its option and at any time) shall be
permitted to effect a sale under this Indenture of a Credit Risk Security or a
Defaulted Security pursuant to the related Underlying Instrument by purchasing
(or causing its affiliate to purchase) such Defaulted Security or Credit Risk
Security from the Issuer for a cash purchase price that shall be equal to the
sum of (i) the Aggregate Principal Balance thereof plus (ii) all accrued and
unpaid interest (or, in the case of a Preferred Equity Security, all accrued
and unpaid dividends or other distributions not attributable to the return of
capital by its governing documents) thereon and all other amounts due
thereunder.  Notwithstanding anything to
the contrary set forth herein, no Advisory Committee consent shall be required
in connection with such cash purchase (the “Permitted Cash Purchase”).

(c)      Notwithstanding anything
contained herein to the contrary, the Collateral Manager, on behalf of the
Issuer, shall (at any time) be permitted to effect a sale of any Origination
Agreement Security hereunder by selling (or causing the Trustee to sell) such
Origination Agreement Security to SLG (an “Origination Agreement Security
Sale”) for a purchase price and upon such terms as determined in accordance
with the Origination Agreement. 
Notwithstanding anything to the contrary set forth herein, no Advisory
Committee consent shall be required in connection with any such sales.

(d)      After the Issuer has
notified the Trustee of an Optional Redemption, a Clean-Up Call or a Tax
Redemption in accordance with Section 9.1 or an Auction Call Redemption
in accordance with Section 9.2, the Collateral Manager on behalf of the
Issuer acting pursuant to the Collateral Management Agreement may at any time
direct the Trustee in writing to sell, and the Trustee shall sell in the manner
directed by the Collateral Manager in writing, any Collateral Debt Security or
any applicable Eligible Investment without regard to the foregoing limitations
in Section 12.1(a); provided that:

(i)       the Sale Proceeds therefrom must be used
to pay certain expenses and redeem all of the Notes in whole but not in part
pursuant to Sections 9.1 and 9.2, and upon any such sale the
Trustee shall release such Collateral Debt Security pursuant to Section
10.10;

(ii)      the Issuer may not direct the Trustee to
sell (and the Trustee shall not be required to release) a Collateral Debt
Security or any applicable Eligible Investment pursuant to this Section
12.1(d) unless:

 

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(1)           the Collateral Manager certifies to
the Trustee that (x) in the Collateral Manager’s commercially reasonable
judgment based on calculations included in the certification (which shall
include the sales prices of each of the Collateral Debt Securities), the Sale
Proceeds from the sale of one or more of the Collateral Debt Securities and any
applicable Eligible Investments will be at least equal to the Total Auction
Call Redemption Price and (y) an Independent bond pricing service (which shall
be one or more broker-dealers selected by the Collateral Manager which are
rated at least “P-1” by Moody’s and at least “A-1+” by S&P and which make a
market in the applicable Collateral Debt Securities and Eligible Investments)
has confirmed (which confirmation may be in the form of a firm bid) the sales
prices contained in the certification in clause (x) above (and attaching a copy
of such confirmation); and

(2)           the Independent accountants appointed
by the Issuer pursuant to Section 10.11 shall confirm in writing the
calculations made in clause (1)(x) above.

(iii)     in connection with an Optional Redemption,
an Auction Call Redemption, a Clean-up Call or a Tax Redemption, all the
Collateral Debt Securities and any applicable Eligible Investments to be sold
pursuant to this Section 12.1(d) must be sold in accordance with the
requirements set forth in Section 9.1(e) and Section 9.2, as
applicable.

(e)      In the event that any
Collateral Debt Security becomes the subject of a conversion, exchange,
redemption or offer, whether voluntary or involuntary, the Issuer (or the
Collateral Manager acting on behalf of the Issuer) shall take no action to
acquire the asset or instrument into which such Collateral Debt Security is
convertible or exchangeable unless such asset or instrument would qualify as a
Substitute Collateral Debt Security.  In
the event of an involuntary exchange or conversion of a Collateral Debt
Security, if the resulting asset or instrument would not qualify as a
Substitute Collateral Debt Security, the Issuer (or the Collateral Manager
acting on behalf of the Issuer) shall use commercially reasonable efforts to
sell such Collateral Debt Security prior to conversion or exchange and, in any
event, shall refuse to accept, and shall not acquire or hold, the asset or
instrument offered in exchange.

(f)       In the event that any
Notes remain Outstanding as of the Payment Date occurring six months prior to
the Stated Maturity of the Notes, the Collateral Manager will be required to
determine whether proceeds expected to be received on the Assets prior to the
Stated Maturity of the Notes will be sufficient to pay in full the principal
amount of (and accrued interest on) the Notes on the Stated Maturity.  If the Collateral Manager determines, in its
sole discretion, that such proceeds will not be sufficient to pay the
outstanding principal amount of and accrued interest on the Notes (a “Note Liquidation Event”)
on the Stated Maturity of the Notes, the Issuer will, at the direction of the
Collateral Manager, be obligated to liquidate the portion of Collateral Debt
Securities sufficient to pay the remaining principal amount of and interest on
the Notes on or before the Stated Maturity. 
The Collateral Debt Securities to be liquidated by the Issuer will be
selected by the Collateral Manager.

 

236

 

Section 12.2           Replenishment
Criteria and Trading Restrictions.

(a)      Except as provided in Section
12.3(c), during the Replenishment Period, Replenishment Proceeds will be
reinvested in Substitute Collateral Debt Securities (which shall be, and hereby
are, Granted to the Trustee pursuant to the Granting Clause of this Agreement)
only if the Collateral Manager has not been removed, or voted to be removed as
a result of the occurrence of an act by the Collateral Manager or its
affiliates that constitutes fraud or criminal activity in the performance of
its obligations under the Collateral Management Agreement and, after giving
effect to such reinvestment, the following criteria (the “Replenishment Criteria”)
are satisfied, as evidenced by an Officer’s Certificate of the Issuer or the
Collateral Manager delivered to the Trustee, as of (i) the date of the
irrevocable and binding commitment to purchase such Substitute Collateral Debt
Securities in the case of the purchase of any CMBS Securities and (ii) the date
of purchase of such Substitute Collateral Debt Securities in the case of the
purchase of any other Specified Type of Collateral Debt Securities:

(i)       the Collateral Quality Tests are
satisfied, or, if any Collateral Quality Test was not satisfied immediately
prior to such reinvestment, the extent of compliance with such Collateral
Quality Test will be maintained or improved following such reinvestment, except
as otherwise specified in the Replenishment Criteria below;

(ii)      the Par Value Coverage Tests are
satisfied, or, except with respect to Sale Proceeds in respect of Defaulted
Securities, if not satisfied, are maintained or improved;

(iii)     if immediately prior to such investment the
S&P CDO Monitor Test or the S&P Recovery Test was not satisfied, such
test result is maintained or improved after giving effect to such reinvestment;
and

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

For the avoidance
of doubt, no investment shall be made in Collateral Debt Securities after the
termination of the Replenishment Period. 
After the Replenishment Period, Unscheduled Principal Proceeds and Sale
Proceeds of Credit Risk Securities and Spread Appreciated Securities, along
with all other Principal Proceeds, must be applied to pay the principal of the
Notes in accordance with the Priority of Payments.

(b)      Within ten (10) Business
Days of purchasing each Substitute Collateral Debt Security, the Collateral
Manager shall deliver to each Rating Agency a comprehensive set of asset and
underwriting materials in form and substance acceptable to the Rating Agencies
(the “Reinvestment Asset Information”) describing such Substitute
Collateral Debt Security.  After
receiving the Reinvestment Asset Information, a Rating Agency may, in the case
of S&P and Moody’s, provide an estimated rating to the Collateral Manager
necessary to confirm whether a Moody’s Post-Acquisition Compliance Test or an
S&P Post-Acquisition Compliance Test failure has occurred.

(c)      Notwithstanding anything
to the contrary set forth herein, within 60 days of finding a Moody’s
Post-Acquisition Compliance Test failure (a “Moody’s Post-Acquisition
Failure”), the Collateral Manager shall use commercially reasonable efforts
to come into

 

237

 

compliance with
the Moody’s Post-Acquisition Compliance Test to the extent that the Collateral
Manager believes it is in the best interest of the Noteholders by (i) directing
and assisting the Trustee to sell the Substitute Collateral Debt Security that
caused the Moody’s Post-Acquisition Failure, at a price at least equal to the
price paid by the Issuer for the Substitute Collateral Debt Security, plus any
fees and expenses attributable to such sale, (ii) instructing and assisting the
Trustee to sell any other Collateral Debt Securities (provided that the sale
price must be at a price at least equal to the price paid by the Issuer for the
Collateral Debt Security, plus any fees and expenses attributable to such sale)
and/or (iii) instructing and assisting the Trustee to purchase additional
Substitute Collateral Debt Securities (subject to the Replenishment Criteria)
that ultimately would result in satisfaction of the Moody’s Post-Acquisition
Compliance Test.  Following a Moody’s
Post-Acquisition Failure, until such time as the Moody’s Post-Acquisition
Compliance Test is satisfied, the Collateral Manager may purchase a Substitute
Collateral Debt Security only if it has a Moody’s Rating; provided, however,
if the Moody’s Post-Acquisition Compliance Test is not satisfied within sixty
(60) days of a finding of a Moody’s Post-Acquisition Failure, each Collateral
Debt Security acquired must have a Moody’s Rating until such time as the Rating
Agency Condition with respect to Moody’s has been satisfied.  Notwithstanding the foregoing, if the Moody’s
Post-Acquisition Compliance Test is not satisfied within 120 days of a finding
of a Moody’s Post-Acquisition Failure, each Collateral Debt Security thereafter
acquired must have a Moody’s Rating regardless of whether the Moody’s
Post-Acquisition Compliance Test is satisfied. 
In no circumstances following the failure to meet a Moody’s
Post-Acquisition Compliance Test within 120 days of a finding of a Moody’s
Post-Acquisition Failure may a Collateral Debt Security be acquired without a
Moody’s Rating.

(d)      Notwithstanding anything
to the contrary set forth herein, within 60 days of finding an S&P
Post-Acquisition Compliance Test failure (an “S&P Post-Acquisition
Failure”), the Collateral Manager may (i) direct and assist the Trustee in
selling the Substitute Collateral Debt Security that caused the S&P
Post-Acquisition Failure, (ii) instruct and assist the Trustee to sell any
other Collateral Debt Securities and/or (iii) instruct and assist the Trustee
to purchase additional Substitute Collateral Debt Securities (subject to the
Replenishment Criteria) that ultimately would result in satisfaction of the
S&P Post-Acquisition Compliance Test. 
Until such time as the S&P Post-Acquisition Compliance Test is
satisfied, the Collateral Manager may purchase a Substitute Collateral Debt
Security only if it has an S&P Rating.

(e)      Notwithstanding anything
to the contrary set forth herein, within 60 days of finding a Fitch
Post-Acquisition Compliance Test failure (a “Fitch Post-Acquisition Failure”),
the Collateral Manager may (i) direct and assist the Trustee in selling the
Substitute Collateral Debt Security that caused the Fitch Post-Acquisition
Failure, (ii) instruct and assist the Trustee to sell any other Collateral Debt
Securities and/or (iii) instruct and assist the Trustee to purchase additional
Substitute Collateral Debt Securities (subject to the Replenishment Criteria)
that ultimately would result in satisfaction of the Fitch Post-Acquisition
Compliance Test.

(f)       Notwithstanding the
foregoing provisions, (i) Cash on deposit in the Collection Accounts may be
invested in Eligible Investments, pending investment in Substitute Collateral
Debt Securities and (ii) if an Event of Default shall have occurred and be

 

238

 

continuing, no
Substitute Collateral Debt Security may be acquired unless it was the subject
of a commitment entered into by the Issuer prior to the occurrence of such
Event of Default.

(g)      Subject to the
limitations set forth in this Section 12.2, no more than 20% of the
Aggregate Collateral Balance as of the Closing Date shall be purchased by the
Issuer pending satisfaction of any of the Moody’s Post-Acquisition Compliance
Test, the S&P Post-Acquisition Compliance Test and the Fitch
Post-Acquisition Compliance Test.

Section 12.3           Conditions
Applicable to all Transactions Involving Sale or Grant.

(a)      Any transaction effected
after the Closing Date under this Article 12 or Section 10.10
shall be conducted in accordance with the requirements of (i) the Collateral
Management Agreement or (ii) such other agreement as the Collateral Manager may
reasonably deem appropriate in accordance with advice of nationally recognized
U.S. bankruptcy counsel; provided that (1) the Collateral Manager shall
not direct the Trustee to acquire any Substitute Collateral Debt Security for
inclusion in the Assets from the Collateral Manager or any of its Affiliates as
principal or to sell any Collateral Debt Security from the Assets to the
Collateral Manager or any of its Affiliates as principal unless the transaction
is effected in accordance with the Collateral Management Agreement or such
other agreement as the Collateral Manager may reasonably deem appropriate in
accordance with advice of nationally recognized U.S. bankruptcy counsel and (2)
the Collateral Manager shall not direct the Trustee to acquire any Substitute
Collateral Debt Security for inclusion in the Assets from any account or
portfolio for which the Collateral Manager serves as investment adviser or
direct the Trustee to sell any Collateral Debt Security to any account or
portfolio for which the Collateral Manager serves as investment adviser unless
such transactions comply with the requirements of any applicable laws.  The Trustee shall have no responsibility to
oversee compliance with this clause by the other parties.

(b)      Upon any Grant pursuant
to this Article 12, all of the Issuer’s right, title and interest to the
Pledged Obligation or Securities shall be Granted to the Trustee pursuant to
this Indenture, such Pledged Obligation or Securities shall be registered in
the name of the Trustee, and, if applicable, the Trustee shall receive such
Pledged Collateral Debt Security or Securities. 
The Trustee shall also receive, not later than the date of delivery of
any Collateral Debt Security delivered after the Closing Date, an Officer’s Certificate
of the Collateral Manager certifying that, as of the date of such Grant, such
Grant complies with the applicable conditions of and is permitted by this Article
12 (and setting forth, to the extent appropriate, calculations in
reasonable detail necessary to determine such compliance).

(c)      Notwithstanding anything
contained in this Article 12 to the contrary, the Issuer shall, subject
to this Section 12.3(c), have the right to effect any transaction which
has been consented to (i) by the Holders of Notes evidencing 100% of the
Aggregate Outstanding Amount of each and every Class of Notes (or if there are
no Notes Outstanding, 100% of the Preferred Shares) and (ii) each Hedge
Counterparty, and of which each Rating Agency has been notified.

 

239

 

Section 12.4           Sale
of Collateral Debt Securities with respect to an Auction Call Redemption.

(a)      Pre-Auction Process.

(i)       Each Auction will occur on the Business
Day that is at least 13 Business Days prior to the proposed Auction Call
Redemption Date (such date, the “Auction
Date”).

(ii)      The Collateral Manager shall initiate the
Auction Procedures at least 24 Business Days before the proposed Auction Call
Redemption Date by:  (a) preparing a list
of Collateral Debt Securities and any applicable Eligible Investments
(including CUSIP Number, if any, par amount and issuer name for each Collateral
Debt Security and any applicable Eligible Investment); (b) deriving a list of
not less than three qualified bidders (the “Listed Bidders”) and requesting from each Listed
Bidder bids by the applicable Auction Date; and (c) notifying the Trustee of
the list of Listed Bidders (the “List”).

(iii)     The Collateral Manager shall deliver a
general solicitation package to the Listed Bidders consisting of:  (a) a form of a purchase agreement (“Auction Purchase Agreement”)
provided to the Trustee by the Collateral Manager (which shall provide that (I)
upon satisfaction of all conditions precedent therein, the purchaser is
irrevocably obligated to purchase, and the Issuer is irrevocably obligated to
sell, the Collateral Debt Securities and any applicable Eligible Investments on
the date and on the terms stated therein, (II) each bidder may tender a
separate bid for one or more Collateral Debt Securities or any applicable
Eligible Investments in an Auction, (III) if the Collateral Debt Securities and
any applicable Eligible Investments are to be sold to different bidders, that
the consummation of the purchase of all Collateral Debt Securities and any
applicable Eligible Investments must occur simultaneously and that the closing
of each purchase is conditional on the closing of the other purchases, (IV) if
for any reason whatsoever the Trustee has not received, by a specified Business
Day (which shall be more than ten Business Days before the proposed Auction
Call Redemption Date), payment in full in immediately available funds of the
purchase price for all Collateral Debt Securities and any applicable Eligible
Investments, the obligations of the parties shall terminate and the Issuer
shall have no obligation or liability whatsoever and (V) any prospective
purchasers will be subject to the “limited recourse” and “non-petition”
provisions set forth in this Indenture); (b) the minimum aggregate Cash
purchase price (which shall be determined by the Collateral Manager as the
Total Auction Call Redemption Price); (c) the list of Collateral Debt
Securities and any applicable Eligible Investments; (d) a formal bid sheet
(which will permit a bidder to bid for all of the Collateral Debt Securities
and any applicable Eligible Investments or separately for any one or more (but
not all) Collateral Debt Securities and any applicable Eligible Investments and
will include a representation from the bidder that it is eligible to purchase
all of the Collateral Debt Securities and any applicable Eligible Investments
or any one or more (but not all) Collateral Debt Securities and any applicable
Eligible Investments) to be provided to the Trustee by the Collateral Manager;
(e) a detailed timetable; and (f) copies of all transfer documents provided to
the Trustee by the

 

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Collateral Manager
(including transfer certificates and subscription agreements which a bidder
must execute pursuant to the underlying instruments and a list of the
requirements which the bidder must satisfy under the underlying instruments
(i.e., QIB status, Qualified Purchaser status, etc.)).

(iv)    The Collateral Manager shall send
solicitation packages to all Listed Bidders on the List at least twenty (20)
Business Days before the proposed Auction Call Redemption Date.  The Listed Bidders shall be required to
submit any due diligence questions (or comments on the draft purchase
agreement) in writing to the Collateral Manager by a date specified in the
solicitation package.  The Collateral
Manager shall be required to answer all reasonable and relevant questions by
the date specified in the solicitation package and the Collateral Manager shall
distribute the questions and answers and the revised final Auction Purchase
Agreement to all Listed Bidders (with a copy to the Issuer and the Trustee).

(b)      Auction Process.

(i)       Wells Fargo Bank, National Association or
its Affiliates may, but shall not be required to, bid at the Auction.  The Collateral Manager and its Affiliates may
bid in the Auction if the Collateral Manager deems such bidding to be
appropriate but is not required to do so.

(ii)      On the second Business Day prior to the
Auction Date (the “Auction Bid
Date”), all bids will be due by facsimile at the offices of
the Trustee by 11:00 a.m. New York City time, with the winning bidder or
bidders to be notified by 2:00 p.m. New York City time.  All bids from Listed Bidders on the List will
be due on the bid sheet contained in the solicitation package.  Each bid shall be for the purchase and
delivery to one purchaser (i) of all (but not less than all) of the Collateral
Debt Securities and any applicable Eligible Investments or (ii) of one or more
(but not all) of the Collateral Debt Securities and any applicable Eligible
Investments.

(iii)     Unless the Trustee receives (A) at least
one bid from a Listed Bidder to purchase all of the Collateral Debt Securities
and any applicable Eligible Investments or (B) receives bids from one or more
Listed Bidders (to purchase one or more (but not all) Collateral Debt
Securities and any applicable Eligible Investments) for all Collateral Debt
Securities and any applicable Eligible Investments in the aggregate, the
Trustee will decline to consummate the sale.

(iv)    Subject to clause (iii) above, with the
advice of the Collateral Manager, the Trustee shall select the bid or bids
which result in the Highest Auction Price from one or more Listed Bidders (in
excess of the specified minimum purchase price).  “Highest Auction Price” means the
higher of (i) the highest price bid by any Listed Bidder for all of the
Collateral Debt Securities and any applicable Eligible Investments or (ii) the
sum of the highest prices bid by one or more Listed Bidders (for one or more
(but not all) Collateral Debt Securities or any applicable Eligible
Investments) for all Collateral Debt Securities and any applicable Eligible
Investments in the aggregate.  In each
case, the price bid by a Listed Bidder will be the dollar amount which the
Collateral Manager

 

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certifies to the
Trustee based on the Collateral Manager’s review of the bids, which
certification shall be binding and conclusive.

(v)     Upon notification to the winning bidder or
bidders, the winning bidder (or, if the Highest Auction Price requires the sale
of the Collateral Debt Securities and any applicable Eligible Investments to
more than one bidder, each winning bidder) will be required to deliver to the
Trustee a signed counterpart of the Auction Purchase Agreement no later than
4:00 p.m. New York City time on the Auction Date.  The winning bidder (or, if the Highest
Auction Price requires the sale of the Collateral Debt Securities and any
applicable Eligible Investments to more than one bidder, each winning bidder)
will make payment in full of the purchase price on the Business Day (the “Auction Purchase Closing Date”)
specified in the general solicitation package (which will be no later than ten
Business Days prior to the proposed Auction Call Redemption Date).  If a winning bidder so requests, the Trustee
and the Issuer will enter into a bailee letter in the form agreed upon by the
Trustee and the Collateral Manager to this Indenture (a “Bailee Letter”) with
each winning bidder and its designated bank (which bank will be subject to
approval by the Issuer or the Collateral Manager on behalf of the Issuer); provided
that such bank enters into an account control agreement with the Trustee and
the Issuer and has a long term debt rating of at least “BBB+” by S&P and
(if rated by Fitch) at least “BBB+” by Fitch and (if rated by Moody’s) at least
“A2” by Moody’s.  If the above
requirements are satisfied, the Trustee will deliver the Collateral Debt
Securities and any applicable Eligible Investments (to be sold to such bidder)
pursuant thereto to the bailee bank at least one Business Day prior to the
closing on the sale of the Collateral Debt Securities and any applicable
Eligible Investments and accept payment of the purchase price pursuant
thereto.  If payment in full of the
purchase price is not made by the Auction Purchase Closing Date for any reason
whatsoever (or, if the Collateral Debt Securities and any applicable Eligible
Investments are to be sold to more than one bidder, if any bidder fails to make
payment in full of the purchase price by the Auction Purchase Closing Date for
any reason whatsoever), the Issuer will decline to consummate the sale of all
Collateral Debt Securities and any applicable Eligible Investments, the Trustee
and the Issuer will direct the bailee bank to return the Collateral Debt
Securities and any applicable Eligible Investments to the Trustee, and (if
notice of redemption has been given by the Trustee) the Trustee will give notice
(in accordance with the terms of this Indenture) that the Auction Call
Redemption will not occur.

(vi)    Notwithstanding the foregoing, but subject
to the satisfaction of the conditions set forth in Section 9.2(b), the
Collateral Manager and/or any of its Affiliates, although it may not have been
the highest bidder, will have the option to purchase any one or more Collateral
Debt Securities and any applicable Eligible Investments for a purchase price
equal to the highest bid therefor.

(c)      Notwithstanding anything
to the contrary set forth in this Section 12.4, but subject to the
satisfaction of the conditions set forth in Sections 7.18 and 9.2(b)
and the consummation of the Auction Call Redemption, at the election of the
Collateral Manager, in lieu of initiating or conducting any Auction, the
Collateral Manager and/or any of its Affiliates will have the option to
purchase all of the Collateral Debt Securities and any applicable Eligible
Investments that would otherwise be subject to such Auction for a price equal
to the

 

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Total Auction Call
Redemption Price.  Such purchase of
Collateral Debt Securities and any applicable Eligible Investments by the
Collateral Manager or its Affiliates pursuant to this Section 12.4(c)
shall be deemed to be a Successful Auction pursuant to this Indenture.

Section 12.5           Modifications
to Collateral Quality Tests, Par Value Coverage Tests or Special Amortization.

In the event any of the
Rating Agencies modifies the definitions or calculations relating to (i) the
method of calculating any of its respective Collateral Quality Tests (a “Collateral
Quality Test Modification”), (ii) any of the Par Value Coverage Tests (a “Par
Value Coverage Test Modification”) or (iii) its requirements for pro rata “special amortizations” (a “Pro Rata Special
Amortization Modification”), in either case in order to correspond with
published changes in the guidelines, methodology or standards established by
such Rating Agency, the Issuer may, but is under no obligation solely as a
result of this Section 12.5 to, incorporate corresponding changes into
this Indenture by an amendment hereto without the consent of the Holders of the
Notes (except as provided below) (but with written notice to the Noteholders)
or the Preferred Shares if (x)(1) in the case of a Collateral Quality Test
Modification, the Rating Agency Condition is satisfied with respect to the
Rating Agency that made such modification or (2) in the case of a Par Value
Coverage Test Modification or a Pro Rata Special Amortization Modification, the
Rating Agency Condition is satisfied with respect to each Rating Agency then
rating the Notes and (y) written notice of such modification is delivered by
the Collateral Manager to the Trustee and by the Trustee to the Holders of the
Notes and Preferred Shares (which notice may be included in the next regularly
scheduled report to Noteholders).  Any
such Collateral Quality Test Modification, Par Value Coverage Test Modification
or Pro Rata Special Amortization Modification, as the case may be, shall be
effected without execution of a supplemental indenture; provided, however,
that such amendment shall be (i) evidenced by a written instrument executed and
delivered by each of the Co-Issuers and the Collateral Manager and delivered to
the Trustee, (ii) accompanied by delivery by the Issuer to the Trustee of (A)
an Officer’s Certificate of the Issuer certifying that such amendment has been
made pursuant to and in compliance with this Section 12.5 and (B) if
requested by the Trustee, an Opinion of Counsel stating that such amendment is
authorized or permitted by this Section 12.5 and that all applicable
conditions precedent under this Section 12.5 have been satisfied, on
which such Officer’s Certificate or such Officer’s Certificate and Opinion of
Counsel, as the case may be, the Trustee shall be entitled to rely.  Notwithstanding the foregoing, so long as the
Class A-1 Notes and/or the Class A-2 Notes are the Controlling Class, the
Issuer shall not make any such change without obtaining the consent of a
Majority of the Controlling Class (such consent not to be unreasonably
withheld); provided that, if the Holders of the Controlling Class do not
object to such change within seven (7) days after notice thereof if given, such
Holders shall be deemed to have consented to such change.  Notwithstanding the foregoing, any such
amendment reasonably determined by the Trustee to be unduly burdensome to the
Trustee shall not take effect without the Trustee’s express written consent.

 

243

 

ARTICLE
13

NOTEHOLDERS’
RELATIONS

Section 13.1           Subordination.

(a)      Anything in this
Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class A-2 Notes, the Class A-3 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes, the Class J Notes and the Class K Notes agree
for the benefit of the Holders of the Class A-1 Notes and each Hedge
Counterparty that the Class A-2 Notes, the Class A-3 Notes, the Class B Notes,
the Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes, the Class J Notes, the Class K Notes and the
Issuer’s rights in and to the Assets (the “Class A-2 Subordinate Interests”)
shall be subordinate and junior to the Class A-1 Notes to the extent and in the
manner set forth in this Indenture including as set forth in Section 11.1(a)
and hereinafter provided.  If any Event
of Default has not been cured or waived and acceleration occurs in accordance
with Article 5, including as a result of an Event of Default specified
in Section 5.1(f) or 5.1(g), the Class A-1 Notes shall be paid in
full before any further payment or distribution is made on account of the Class
A-2 Subordinate Interests.  The Holders
of the Class A-2 Notes, the Class A-3 Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes, the Class H Notes, the Class J Notes and the Class K Notes agree, for
the benefit of the Holders of the Class A-1 Notes, each Hedge Counterparty, not
to cause the filing of a petition in bankruptcy against the Issuer for failure
to pay to them amounts due under the Class A-2 Notes, the Class A-3 Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes, the Class G Notes, the Class H Notes, the Class J Notes and the
Class K Notes hereunder until the payment in full of the Class A-1 Notes and
not before one year and one day, or, if longer, the applicable preference
period then in effect, has elapsed since such payment.

(b)      Anything in this
Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class A-3 Notes, the Class B Notes, the Class C Notes, the Class
D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the Class H
Notes, the Class J Notes and the Class K Notes agree for the benefit of the
Holders of the Class A-1 Notes and the Class A-2 Notes and each Hedge
Counterparty that the Class A-3 Notes, the Class B Notes, the Class C Notes,
the Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the
Class H Notes, the Class J Notes, the Class K Notes and the Issuer’s rights in
and to the Assets (the “Class A-3 Subordinate Interests”) shall be
subordinate and junior to the Class A-1 Notes and the Class A-2 Notes to the
extent and in the manner set forth in this Indenture including as set forth in Section
11.1(a) and hereinafter provided.  If
any Event of Default has not been cured or waived and acceleration occurs in
accordance with Article 5, including as a result of an Event of Default
specified in Section 5.1(f) or 5.1(g), the Class A-1 Notes and
the Class A-2 Notes shall be paid in full before any further payment or
distribution is made on account of the Class A-3 Subordinate Interests.  The Holders of the Class A-3 Notes, the Class
B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F

 

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Notes, the Class G
Notes, the Class H Notes, the Class J Notes and the Class K Notes agree, for
the benefit of the Holders of the Class A-1 Notes and the Class A-2 Notes, each
Hedge Counterparty, not to cause the filing of a petition in bankruptcy against
the Issuer for failure to pay to them amounts due under the Class A-3 Notes,
the Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes, the Class G Notes, the Class H Notes, the Class J Notes and the
Class K Notes hereunder until the payment in full of the Class A-1 Notes and
the Class A-2 Notes and not before one year and one day, or, if longer, the
applicable preference period then in effect, has elapsed since such payment.

(c)      Anything in this
Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes, the Class J Notes
and the Class K Notes agree for the benefit of the Holders of the Class A Notes
and each Hedge Counterparty that the Class B Notes, the Class C Notes, the
Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the
Class H Notes, the Class J Notes, the Class K Notes and the Issuer’s rights in
and to the Assets (the “Class B
Subordinate Interests”) shall be subordinate and junior to
the Class A Notes to the extent and in the manner set forth in this Indenture
including as set forth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured or
waived and acceleration occurs in accordance with Article 5, including
as a result of an Event of Default specified in Section 5.1(f) or 5.1(g),
the Class A Notes shall be paid in full before any further payment or
distribution is made on account of the Class B Subordinate Interests.  The Holders of the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes, the Class H Notes, the Class J Notes and the Class K Notes agree, for
the benefit of the Holders of the Class A Notes and each Hedge Counterparty,
not to cause the filing of a petition in bankruptcy against the Issuer for
failure to pay to them amounts due under the Class B Notes, the Class C Notes,
the Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the
Class H Notes, the Class J Notes and the Class K Notes hereunder until the
payment in full of the Class A Notes and not before one year and one day, or,
if longer, the applicable preference period then in effect, has elapsed since
such payment.

(d)      Anything in this
Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes, the Class J Notes and the Class K
Notes agree for the benefit of the Holders of the Class A Notes, the Class B
Notes and each Hedge Counterparty that the Class C Notes, the Class D Notes,
the Class E Notes, the Class F Notes, the Class G Notes, the Class H Notes, the
Class J Notes, the Class K Notes and the Issuer’s rights in and to the Assets
(the “Class C Subordinate
Interests”) shall be subordinate and junior to the Class A
Notes and the Class B Notes to the extent and in the manner set forth in this
Indenture including as set forth in Section 11.1(a) and hereinafter
provided.  If any Event of Default has
not been cured or waived and acceleration occurs in accordance with Article
5, including as a result of an Event of Default specified in Section
5.1(f) or 5.1(g), the Class A Notes and the Class B Notes shall be
paid in full before any further payment or distribution is made on account of
the Class C Subordinate Interests.  The
Holders of the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes, the Class J Notes and the Class K
Notes agree, for the benefit of the Holders of the Class A Notes and the Class
B Notes and each Hedge Counterparty, not to cause the filing of a petition in

 

245

 

bankruptcy against
the Issuer for failure to pay to them amounts due under the Class C Notes, the
Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the
Class H Notes, the Class J Notes and the Class K Notes hereunder until the
payment in full of the Class A Notes and the Class B Notes and not before one
year and one day, or, if longer, the applicable preference period then in effect,
has elapsed since such payment.

(e)      Anything in this
Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes, the Class H Notes, the Class J Notes and the Class K Notes agree for the
benefit of the Holders of the Class A Notes, the Class B Notes, the Class C
Notes and each Hedge Counterparty that the Class D Notes, the Class E Notes,
the Class F Notes, the Class G Notes, the Class H Notes, the Class J Notes, the
Class K Notes and the Issuer’s rights in and to the Assets (the “Class D Subordinate Interests”)
shall be subordinate and junior to the Class A Notes, the Class B Notes and the
Class C Notes to the extent and in the manner set forth in this Indenture
including as set forth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured or
waived and acceleration occurs in accordance with Article 5, including
as a result of an Event of Default specified in Section 5.1(f) or 5.1(g),
the Class A Notes, the Class B Notes and the Class C Notes shall be paid in
full before any further payment or distribution is made on account of the Class
D Subordinate Interests.  The Holders of
the Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the
Class H Notes, the Class J Notes and the Class K Notes agree, for the benefit
of the Holders of the Class A Notes, the Class B Notes, and the Class C Notes
and each Hedge Counterparty, not to cause the filing of a petition in
bankruptcy against the Issuer for failure to pay to them amounts due under the
Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the
Class H Notes, the Class J Notes and the Class K Notes hereunder until the
payment in full of the Class A Notes, the Class B Notes and the Class C Notes
and not before one year and one day, or, if longer, the applicable preference
period then in effect, has elapsed since such payment.

(f)       Anything in this
Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class E Notes, the Class F Notes, the Class G Notes, the Class H
Notes, the Class J Notes and the Class K Notes agree for the benefit of the
Holders of the Class A Notes, the Class B Notes, the Class C Notes and the
Class D Notes and each Hedge Counterparty that the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes, the Class J Notes, the Class K
Notes and the Issuer’s rights in and to the Assets (the “Class E Subordinate
Interests”) shall be subordinate and junior to the Class A Notes, the Class
B Notes, the Class C Notes and the Class D Notes to the extent and in the
manner set forth in this Indenture including as set forth in Section 11.1(a)
and hereinafter provided.  If any Event
of Default has not been cured or waived and acceleration occurs in accordance
with Article 5, including as a result of an Event of Default specified
in Section 5.1(f) or 5.1(g), the Class A Notes, the Class B
Notes, the Class C Notes, and the Class D Notes shall be paid in full before
any further payment or distribution is made on account of the Class E
Subordinate Interests.  The Holders of
the Class E Notes, the Class F Notes, the Class G Notes, the Class H Notes, the
Class J Notes and the Class K Notes agree, for the benefit of the Holders of
the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes
and each Hedge Counterparty, not to cause the filing of a petition in
bankruptcy against the Issuer for failure to pay to them amounts due under the
Class E Notes, the Class F Notes, the Class G Notes, the

 

246

 

Class H Notes, the
Class J Notes and the Class K Notes hereunder until the payment in full of the
Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes and
not before one year and one day, or, if longer, the applicable preference
period in effect, has elapsed since such payment.

(g)      Anything in this
Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class F Notes, the Class G Notes, the Class H Notes, the Class J
Notes and the Class K Notes agree for the benefit of the Holders of the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes and each Hedge Counterparty that the Class F Notes, the Class G Notes,
the Class H Notes, the Class J Notes, the Class K Notes and the Issuer’s rights
in and to the Assets (the “Class F Subordinate Interests”) shall be
subordinate and junior to the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes and the Class E Notes to the extent and in the manner
set forth in this Indenture including as set forth in Section 11.1(a)
and hereinafter provided.  If any Event
of Default has not been cured or waived and acceleration occurs in accordance
with Article 5, including as a result of an Event of Default specified
in Section 5.1(f) or 5.1(g), the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes and the Class E Notes shall be paid
in full before any further payment or distribution is made on account of the
Class F Subordinate Interests.  The
Holders of the Class F Notes, the Class G Notes, the Class H Notes, the Class J
Notes and the Class K Notes agree, for the benefit of the Holders of the Class
A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes and each Hedge Counterparty, not to cause the filing of a petition in
bankruptcy against the Issuer for failure to pay to them amounts due under the
Class F Notes, the Class G Notes, the Class H Notes, the Class J Notes and the
Class K Notes hereunder until the payment in full of the Class A Notes, the
Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes and
not before one year and one day, or, if longer, the applicable preference
period then in effect, has elapsed since such payment.

(h)      Anything in this
Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class G Notes, the Class H Notes, the Class J Notes and the Class
K Notes agree for the benefit of the Holders of the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes and each Hedge Counterparty that the Class G Notes, the Class H Notes,
the Class J Notes, the Class K Notes and the Issuer’s rights in and to the
Assets (the “Class G Subordinate Interests”) shall be subordinate and
junior to the Class A Notes, the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes and the Class F Notes to the extent and in the manner
set forth in this Indenture including as set forth in Section 11.1(a)
and hereinafter provided.  If any Event
of Default has not been cured or waived and acceleration occurs in accordance
with Article 5, including as a result of an Event of Default specified
in Section 5.1(f) or 5.1(g), the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes and the Class F
Notes shall be paid in full before any further payment or distribution is made
on account of the Class G Subordinate Interests.  The Holders of the Class G Notes, the Class H
Notes, the Class J Notes and the Class K Notes agree, for the benefit of the
Holders of the Class A Notes, the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes and the Class F Notes and each Hedge Counterparty, not
to cause the filing of a petition in bankruptcy against the Issuer for failure
to pay to them amounts due under the Class G Notes, the Class H Notes, the
Class J Notes and the Class K Notes hereunder until the payment in full

 

247

 

of the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes and the Class F Notes and not before one year and one day, or, if longer,
the applicable preference period then in effect, has elapsed since such
payment.

(i)       Anything in this
Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class H Notes, the Class J Notes and the Class K Notes agree for
the benefit of the Holders of the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes and each Hedge Counterparty that the Class H Notes, the Class J Notes,
the Class K Notes and the Issuer’s rights in and to the Assets (the “Class H
Subordinate Interests”) shall be subordinate and junior to the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes and the Class G Notes to the extent and in the manner
set forth in this Indenture including as set forth in Section 11.1(a)
and hereinafter provided.  If any Event
of Default has not been cured or waived and acceleration occurs in accordance
with Article 5, including as a result of an Event of Default specified
in Section 5.1(f) or 5.1(g), the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes and the Class G Notes shall be paid in full before any further payment or
distribution is made on account of the Class H Subordinate Interests.  The Holders of the Class H Notes, the Class J
Notes and the Class K Notes agree, for the benefit of the Holders of the Class
A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes and the Class G Notes and each Hedge Counterparty, not
to cause the filing of a petition in bankruptcy against the Issuer for failure
to pay to them amounts due under the Class H Notes, the Class J Notes and the
Class K Notes hereunder until the payment in full of the Class A Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes and the Class G Notes and not before one year and one day, or if
longer, the applicable preference period then in effect, has elapsed since such
payment.

(j)       Anything in this
Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class J Notes and the Class K Notes agree for the benefit of the
Holders of the Class A Notes, the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes, the Class F Notes, the Class G Notes, the Class H
Notes and each Hedge Counterparty that the Class J Notes, the Class K Notes and
the Issuer’s rights in and to the Assets (the “Class J Subordinate Interests”)
shall be subordinate and junior to the Class A Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes and the Class H Notes to the extent and in the manner set forth
in this Indenture including as set forth in Section 11.1(a) and
hereinafter provided.  If any Event of
Default has not been cured or waived and acceleration occurs in accordance with
Article 5, including as a result of an Event of Default specified in Section
5.1(f) or 5.1(g), the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes and the Class H Notes shall be paid in full before any further payment or
distribution is made on account of the Class J Subordinate Interests.  The Holders of the Class J Notes and the
Class K Notes agree, for the benefit of the Holders of the Class A Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes, the Class G Notes and the Class H Notes and each Hedge
Counterparty, not to cause the filing of a petition in bankruptcy against the
Issuer for failure to pay to them amounts due under the Class J Notes and the
Class K Notes hereunder until the payment in full of the Class A Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class

 

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F Notes, the Class
G Notes and the Class H Notes and not before one year and one day, or if
longer, the applicable preference period then in effect, has elapsed since such
payment.

(k)      Anything in this
Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class K Notes agree for the benefit of the Holders of the Class
A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes, the Class J
Notes and each Hedge Counterparty that the Class K Notes and the Issuer’s
rights in and to the Assets (the “Class K Subordinate Interests”) shall
be subordinate and junior to the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes, the Class H Notes and the Class J Notes to the extent and in the manner
set forth in this Indenture including as set forth in Section 11.1(a)
and hereinafter provided.  If any Event
of Default has not been cured or waived and acceleration occurs in accordance
with Article 5, including as a result of an Event of Default specified
in Section 5.1(f) or 5.1(g), the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes and the Class J Notes shall be paid
in full before any further payment or distribution is made on account of the
Class K Subordinate Interests.  The
Holders of the Class K Notes agree, for the benefit of the Holders of the Class
A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes, the Class J
Notes and each Hedge Counterparty, not to cause the filing of a petition in
bankruptcy against the Issuer for failure to pay to them amounts due under the
Class K Notes hereunder until the payment in full of the Class A Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes, the Class G Notes, the Class H Notes and the Class J Notes and
not before one year and one day, or if longer, the applicable preference period
then in effect, has elapsed since such payment.

(l)       In the event that
notwithstanding the provisions of this Indenture, any holder of any Subordinate
Interests shall have received any payment or distribution in respect of such
Subordinate Interests contrary to the provisions of this Indenture, then,
unless and until the Class A Notes, the Class B Notes, the Class C Notes, the
Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the
Class H Notes, the Class J Notes and the Class K Notes, as the case may be,
shall have been paid in full in accordance with this Indenture, such payment or
distribution shall be received and held in trust for the benefit of, and shall
forthwith be paid over and delivered to, the Trustee, which shall pay and
deliver the same to the Holders of the Class A Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes, the Class J Notes and the Class K Notes, as
the case may be, in accordance with this Indenture.

(m)     Each Holder of Subordinate
Interests agrees with all Holders of the Class A Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes, the Class J Notes and the Class K Notes, as
the case may be, that such Holder of Subordinate Interests shall not demand,
accept or receive any payment or distribution in respect of such Subordinate
Interests in violation of the provisions of this Indenture including this Section
13.1; provided, however,
that after the Class A Notes, the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes, the Class F Notes, the Class G Notes, the Class H
Notes, the Class J Notes and the Class K Notes, as the case

 

249

 

may be, have been
paid in full, the Holders of Subordinate Interests shall be fully subrogated to
the rights of the Holders of the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes, the Class J Notes and the Class K
Notes, as the case may be.  Nothing in this
Section 13.1 shall affect the obligation of the Issuer to pay Holders of
Subordinate Interests.

Section 13.2           Standard
of Conduct.

In exercising any of its
or their voting rights, rights to direct and consent or any other rights as a
Securityholder under this Indenture, subject to the terms and conditions of
this Indenture, including, without limitation, Section 5.9, a
Securityholder or Securityholders shall not have any obligation or duty to any
Person or to consider or take into account the interests of any Person and
shall not be liable to any Person for any action taken by it or them or at its
or their direction or any failure by it or them to act or to direct that an
action be taken, without regard to whether such action or inaction benefits or
adversely affects any Securityholder, the Issuer, or any other Person, except
for any liability to which such Securityholder may be subject to the extent the
same results from such Securityholder’s taking or directing an action, or
failing to take or direct an action, in bad faith or in violation of the
express terms of this Indenture.

 

250

 

ARTICLE
14

MISCELLANEOUS

Section 14.1           Form
of Documents Delivered to the Trustee.

In any case where several
matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.

Any certificate or
opinion of an Authorized Officer of the Issuer or the Co-Issuer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Authorized Officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous.  Any such
certificate of an Authorized Officer of the Issuer or the Co-Issuer or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, the Issuer, the Co-Issuer,
the Collateral Manager or any other Person, stating that the information with
respect to such factual matters is in the possession of the Issuer, the
Co-Issuer, the Collateral Manager or such other Person, unless such Authorized
Officer of the Issuer or the Co-Issuer or such counsel knows that the
certificate or opinion or representations with respect to such matters are
erroneous.  Any Opinion of Counsel may
also be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Authorized Officer of the Issuer or the
Co-Issuer, stating that the information with respect to such matters is in the
possession of the Issuer or the Co-Issuer, unless such counsel knows that the
certificate or opinion or representations with respect to such matters are
erroneous.

Where any Person is
required to make, give or execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.

Whenever in this
Indenture it is provided that the absence of the occurrence and continuation of
a Default or Event of Default is a condition precedent to the taking of any
action by the Trustee at the request or direction of the Issuer or the
Co-Issuer, then notwithstanding that the satisfaction of such condition is a
condition precedent to the Issuer’s or the Co-Issuer’s rights to make such
request or direction, the Trustee shall be protected in acting in accordance
with such request or direction if it does not have knowledge of the occurrence
and continuation of such Default or Event of Default as provided in Section
6.1(e).

 

251

 

Section 14.2           Acts
of Securityholders.

(a)      Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Securityholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Securityholders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee,
and, where it is hereby expressly required, to the Issuer and/or the
Co-Issuer.  Such instrument or
instruments (and the action or actions embodied therein and evidenced thereby)
are herein sometimes referred to as the “Act” of the Securityholders signing
such instrument or instruments.  Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and conclusive in favor
of the Trustee, the Issuer and the Co-Issuer, if made in the manner provided in
this Section 14.2.

(b)      The fact and date of the
execution by any Person of any such instrument or writing may be proved in any
manner which the Trustee deems sufficient.

(c)      The principal amount and
registered numbers of Notes held by any Person, and the date of his holding the
same, shall be proved by the Notes Register. 
The Notional Amount and registered numbers of the Preferred Shares held
by any Person, and the date of his holding the same, shall be proved by the
register maintained with respect to the Preferred Shares.

(d)      Any request, demand,
authorization, direction, notice, consent, waiver or other action by the
Securityholder shall bind such Securityholder (and any transferee thereof) of
such Security and of every Security issued upon the registration thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Trustee, the Preferred Shares Paying Agent, the
Share Registrar, the Issuer or the Co-Issuer in reliance thereon, whether or
not notation of such action is made upon such Security.

Section 14.3           Notices,
etc., to the Trustee, the Issuer, the Co-Issuer, the Collateral Manager, the
Initial Purchasers, each Hedge Counterparty and each Rating Agency.

Any request, demand,
authorization, direction, notice, consent, waiver or Act of Securityholders or
other documents provided or permitted by this Indenture to be made upon, given
or furnished to, or filed with:

(a)      the Trustee by any
Securityholder or by the Issuer or the Co-Issuer shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to and mailed,
by certified mail, return receipt requested, hand delivered, sent by overnight
courier service guaranteeing next day delivery, by electronic mail or by
facsimile in legible form, to the Trustee addressed to it at P.O. Box 98,
Columbia, Maryland 21046, Attention:  CDO
Trust Services Group — Gramercy Real Estate CDO 2007-1, facsimile number:  (410) 715-3748, with a copy to its Corporate
Trust Office, or at any other address previously furnished in writing to the
Issuer, the Co-Issuer or Securityholders by the Trustee;

 

252

 

(b)      the Issuer by the Trustee
or by any Securityholder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing and mailed, first
class postage prepaid, hand delivered, sent by overnight courier service, by
electronic mail or by facsimile in legible form, to the Issuer addressed to it
c/o Gramercy Real Estate CDO 2007-1, Ltd. at c/o Maples Finance Limited, P.O.
Box 1093GT, Boundary Hall, Cricket Square, George Town, Grand Cayman, Cayman
Islands, facsimile number:  345-945-7100,
Attention:  The Directors, or at any
other address previously furnished in writing to the Trustee by the Issuer,
with a copy to the Collateral Manager at its address set forth below;

(c)      the Co-Issuer by the
Trustee or by any Securityholder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first class postage prepaid, hand delivered, sent by overnight courier
service, by electronic mail or by facsimile in legible form, to the Co-Issuer addressed
to it in c/o National Registered Agents, Inc., 160 Greentree Drive, Suite 101,
Dover, Delaware 19904, facsimile number: 
(609) 716-0820, or at any other address previously furnished in writing
to the Trustee by the Co-Issuer, with a copy to the Collateral Manager at its
address set forth below;

(d)      the Preferred Shares
Paying Agent shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to and mailed, by certified mail, return receipt
requested, hand delivered, sent by overnight courier service guaranteeing next
day delivery, by electronic mail or by facsimile in legible form, to the
Preferred Shares Paying Agent addressed to it at P.O. Box 98, Columbia,
Maryland 21046, Attention:  CDO Trust
Services Group — Gramercy Real Estate CDO 2007-1, facsimile number:  (410) 715-3748, or at any other address
previously furnished in writing by the Trustee;

(e)      the Collateral Manager by
the Issuer, the Co-Issuer or the Trustee shall be sufficient for every purpose
hereunder if in writing and mailed, first class postage prepaid, hand
delivered, sent by overnight courier service, by electronic mail or by
facsimile in legible form, to the Collateral Manager addressed to it at GKK
Manager LLC, 420 Lexington Avenue, 19th Floor, New York, New York 10170,
Attention:  Shawn Townsend, facsimile
number:  (212) 216-1785, or at any other
address previously furnished in writing to the Issuer, the Co-Issuer or the Trustee;

(f)       each
Rating Agency, as applicable, by the Issuer, the Co-Issuer, the Collateral
Manager or the Trustee shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and mailed, first class
postage prepaid, hand delivered, sent by overnight courier service, by electronic mail or by
facsimile in legible form, to each Rating Agency addressed to it:  (i) in the case of S&P, at Standard &
Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., 55
Water Street, 41st Floor, New York, New York 10041-0003, facsimile number:
(212) 438-2664, Attention:  Structured
Finance Ratings, Asset-Backed Securities CBO/CLO Surveillance (and by
electronic mail at cdosurveillance@standardandpoors.com; provided  that all reports required to be submitted to S&P
pursuant to this Indenture only shall be provided in electronic form to such
e-mail address); (ii) in the case of Moody’s, at Moody’s Investor Services,
Inc., 99 Church Street, New York, New York 10007, facsimile number: (212)
553-4170, Attention:  CMBS Surveillance
(or by electronic mail at moodys_cre_cdo_monitoring@moodys.com) or such other
address that a Rating Agency shall designate in the future; and (iii) in the
case of Fitch,

 

253

 

at Derivative Fitch, One State Street Plaza, 28th Floor, New
York, New York  10004, facsimile number:
(212) 558-2618, Attention:  Commercial
Real Estate CDO Surveillance — Additional Reporting (or by electronic mail at
cdo.surveillance@derivativefitch.com) or such other address that a Rating
Agency shall designate in the future.

(g)      each Hedge Counterparty
by the Issuer, the Co-Issuer, the Collateral Manager or the Trustee shall be
sufficient for every purpose hereunder if in writing and mailed, first class
postage prepaid, hand delivered, sent by overnight courier service, by
electronic mail or by facsimile in legible form, to each Hedge Counterparty
addressed to it at the address specified in the related Hedge Agreement or at
any other address previously furnished in writing to the Issuer, the Co-Issuer,
the Collateral Manager and the Trustee by each Hedge Counterparty;

(h)      the Initial Purchasers by
the Issuer, the Co-Issuer, the Trustee or the Collateral Manager shall be
sufficient for every purpose hereunder if in writing and mailed, first class
postage prepaid, hand delivered, sent by overnight courier service, by
electronic mail or by facsimile in legible form to the Initial Purchasers at
(i) with respect to Wachovia Capital Markets, LLC, c/o Wachovia Capital
Markets, LLC, 12 East 49th Street, 45th Floor, New York, New York  10017, Attention:  Structured Products Group, facsimile
no.:  (212) 451-2565 and (ii) with
respect to Goldman, Sachs & Co., c/o Goldman, Sachs & Co., 85 Broad
Street, New York, New York  10004; and

(i)       the Class A-2 Note
Insurer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to and mailed, by certified mail, return receipt
requested, hand delivered, sent by overnight courier service guaranteeing next
day delivery, by electronic mail or by facsimile in legible form, to the Class
A-2 Note Insurer addressed to it at MBIA Insurance Corporation, 113 King
Street, Armonk, New York  10504.

Section 14.4           Notices
to Noteholders; Waiver.

Except as otherwise
expressly provided herein, where this Indenture provides for notice to Holders
of Notes of any event,

(a)      such notice shall be
sufficiently given to Holders of Notes if in writing and mailed, first class
postage prepaid or electronically, to each Holder of a Note affected by such
event, at the address of such Holder as it appears in the Notes Register, not
earlier than the earliest date and not later than the latest date, prescribed
for the giving of such notice;

(b)      such notice shall be in
the English language;

(c)      such notice shall also be
provided to the Irish Paying Agent (for so long as any Notes are listed on the
Irish Stock Exchange); and

(d)      all reports or notices to
Preferred Shareholders shall be sufficiently given if provided in writing and
mailed, first class postage prepaid or electronically, to the Preferred Shares
Paying Agent.

 

254

 

Notwithstanding clause
(a) above, a Holder of Notes may give the Trustee written notice that it is
requesting that notices to it be given by facsimile transmissions and stating
the facsimile number for such transmission. 
Thereafter, the Trustee shall give notices to such Holder by facsimile
transmission; provided  that if such
notice also requests that notices be given by mail, then such notice shall also
be given by mail in accordance with clause (a) above.

The Trustee shall deliver
to the Holders of the Notes any information or notice requested to be so
delivered by at least 25% of the Holders of any Class of Notes.

Neither the failure to
mail any notice, nor any defect in any notice so mailed, to any particular
Holder of a Note shall affect the sufficiency of such notice with respect to
other Holders of Notes.  In case by
reason of the suspension of regular mail service or by reason of any other
cause, it shall be impracticable to give such notice by mail, then such
notification to Holders of Notes shall be made with the approval of the Trustee
and shall constitute sufficient notification to such Holders of Notes for every
purpose hereunder.

Where this Indenture
provides for notice in any manner, such notice may be waived in writing by any
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall be filed
with the Trustee but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.

In the event that, by
reason of the suspension of the regular mail service as a result of a strike,
work stoppage or similar activity, it shall be impractical to mail notice of
any event to Noteholders when such notice is required to be given pursuant to
any provision of this Indenture, then any manner of giving such notice as shall
be satisfactory to the Trustee shall be deemed to be a sufficient giving of
such notice.

For so long as any Notes
are listed on the Irish Stock Exchange and the rules of such exchange so
require, all notices to Noteholders of such Notes will be published in the
Daily Official List of the Irish Stock Exchange.

Section 14.5           Effect
of Headings and Table of Contents.

The Article and Section
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.

Section 14.6           Successors
and Assigns.

All covenants and
agreements in this Indenture by the Issuer and the Co-Issuer shall bind their
respective successors and assigns, whether so expressed or not.

Section 14.7           Severability.

In case any provision in
this Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

 

255

 

Section 14.8           Benefits
of Indenture.

Nothing in this Indenture
or in the Securities, expressed or implied, shall give to any Person, other
than (i) the parties hereto and their successors hereunder and (ii) the
Collateral Manager, each Hedge Counterparty, the Class A-2 Note Insurer, the
Preferred Shareholders, the Preferred Shares Paying Agent, the Share Registrar
and the Noteholders (each of whom, in the case of this subclause (ii), shall be
an express third party beneficiary hereunder), any benefit or any legal or
equitable right, remedy or claim under this Indenture.  Notwithstanding the foregoing, any rights of
the Collateral Manager, each Hedge Counterparty, the Class A-2 Note Insurer,
the Preferred Shares Paying Agent, the Share Registrar and the Preferred
Shareholders to receive any payment under this Indenture shall be as determined
in the Collateral Management Agreement, the Hedge Agreements, the Insurance
Agreement, the Insurance Policy, the Preferred Shares Paying Agency Agreement
and any other agreement to which the Collateral Manager, the Hedge Counterparty,
the Class A-2 Note Insurer, the Preferred Shareholders, the Preferred Shares
Paying Agent and/or the Share Registrar are parties to (as opposed to third
party beneficiaries), in each case, as applicable (it being understood that the
Collateral Management Agreement, the Hedge Agreements, the Insurance Agreement,
the Insurance Policy, the Preferred Shares Paying Agency Agreement and any
other such agreement may provide that such party’s right to receive payment
thereunder may be specified in this Indenture).

Section 14.9           Governing
Law.

THIS INDENTURE AND EACH
NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.

Section 14.10         Submission
to Jurisdiction.

Each of the Issuer and
the Co-Issuer hereby irrevocably submits to the non-exclusive jurisdiction of
any New York State or federal court sitting in the Borough of Manhattan in The
City of New York in any action or proceeding arising out of or relating to the
Notes or this Indenture, and each of the Issuer and the Co-Issuer hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such New York State or federal court.  Each of the Issuer and the Co-Issuer hereby
irrevocably waives, to the fullest extent that they may legally do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding.  Each of the Issuer and the
Co-Issuer irrevocably consents to the service of any and all process in any
action or proceeding by the mailing or delivery of copies of such process to it
at the office of the Issuer’s and the Co-Issuer’s agent set forth in Section
7.2.  Each of the Issuer and the
Co-Issuer agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.

 

256

 

Section 14.11         Counterparts.

This instrument may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.

Section 14.12         Liability
of Co-Issuers.

Notwithstanding any other
terms of this Indenture, the Notes or any other agreement entered into between,
inter alios, the Issuer and the
Co-Issuer or otherwise, neither the Issuer nor the Co-Issuer shall have any
liability whatsoever to the Co-Issuer or the Issuer, respectively, under this
Indenture, the Notes, any such agreement or otherwise and, without prejudice to
the generality of the foregoing, neither the Issuer nor the Co-Issuer shall be
entitled to take any steps to enforce, or bring any action or proceeding, in
respect of this Indenture, the Notes, any such agreement or otherwise against
the other Co-Issuer or the Issuer, respectively.  In particular, neither the Issuer nor the
Co-Issuer shall be entitled to petition or take any other steps for the winding
up or bankruptcy of the Co-Issuer or the Issuer, respectively or shall have any
claim in respect of any assets of the Co-Issuer or the Issuer, respectively.

 

257

ARTICLE
15

ASSIGNMENT
OF COLLATERAL DEBT SECURITIES PURCHASE AGREEMENTS, COLLATERAL MANAGEMENT
AGREEMENT, ASSET SERVICING AGREEMENT AND THE CDO SERVICING AGREEMENT

Section 15.1           Assignment
of Collateral Debt Securities Purchase Agreement, the Collateral Management
Agreements, the Asset Servicing Agreement and the CDO Servicing Agreement.

(a)      The Issuer, in
furtherance of the covenants of this Indenture and as security for the Notes
and amounts payable to the Noteholders hereunder and the performance and observance
of the provisions hereof, hereby collaterally assigns, transfers, conveys and
sets over to the Trustee, for the benefit of the Noteholders and each Hedge
Counterparty, all of the Issuer’s estate, right, title and interest in, to and
under each Collateral Debt Securities Purchase Agreement (now or hereafter
entered into), the Collateral Management Agreement, the Asset Servicing
Agreement and the CDO Servicing Agreement (each, an “Article 15 Agreement”), including, without
limitation, (i) the right to give all notices, consents and releases
thereunder, (ii) the right to give all notices of termination and to take any
legal action upon the breach of an obligation of a Seller or the Collateral
Manager thereunder, including the commencement, conduct and consummation of
proceedings at law or in equity, (iii) the right to receive all notices,
accountings, consents, releases and statements thereunder and (iv) the right to
do any and all other things whatsoever that the Issuer is or may be entitled to
do thereunder; provided,  however,
the Trustee hereby grants the Issuer a license to exercise all of the Issuer’s
rights pursuant to the Article 15 Agreements without notice to or the consent
of the Trustee (except as otherwise expressly required by this Indenture, including,
without limitation, as set forth in subsection (f) of this Section 15.1)
which license shall be and is hereby deemed to be automatically revoked upon
the occurrence of an Event of Default hereunder until such time, if any, as
such Event of Default is cured or waived.

(b)      The assignment made
hereby is executed as collateral security, and the execution and delivery
hereby shall not in any way impair or diminish the obligations of the Issuer
under the provisions of each of the Article 15 Agreements, nor shall any of the
obligations contained in each of the Article 15 Agreements be imposed on the
Trustee.

(c)      Upon the retirement of
the Notes, the payment by the Issuer of all amounts payable under each Hedge
Agreement and the release of the Assets from the lien of this Indenture, this
assignment and all rights herein assigned to the Trustee for the benefit of the
Noteholders and each Hedge Counterparty shall cease and terminate and all the
estate, right, title and interest of the Trustee in, to and under each of the
Article 15 Agreements shall revert to the Issuer and no further instrument or
act shall be necessary to evidence such termination and reversion.

(d)      The Issuer represents
that it has not executed any assignment of any of the Article 15 Agreements
other than this collateral assignment.

 

258

 

(e)      The Issuer agrees that
this assignment is irrevocable, and that it shall not take any action which is
inconsistent with this assignment or make any other assignment inconsistent
herewith.  The Issuer shall, from time to
time upon the request of the Trustee, execute all instruments of further
assurance and all such supplemental instruments with respect to this assignment
as the Trustee may specify.

(f)       The Issuer hereby
agrees, and hereby undertakes to obtain the agreement and consent of the Seller
and the Collateral Manager, as applicable, in the Collateral Debt Securities
Purchase Agreements, the Collateral Management Agreement, the Asset Servicing Agreement
and the CDO Servicing Agreement, as applicable, to the following:

(i)       each of the Seller and the Collateral
Manager consents to the provisions of this collateral assignment and agrees to
perform any provisions of this Indenture made expressly applicable to each of
the Seller and the Collateral Manager pursuant to the applicable Article 15
Agreement;

(ii)      each of the Seller and the Collateral
Manager, as applicable, acknowledges that the Issuer is collaterally assigning
all of its right, title and interest in, to and under the Collateral Debt
Securities Purchase Agreements, the Collateral Management Agreement, the Asset
Servicing Agreement and the CDO Servicing Agreement, as applicable, to the
Trustee for the benefit of the Noteholders, each Hedge Counterparty and each of
the Seller and the Collateral Manager, as applicable, agrees that all of the
representations, covenants and agreements made by each of the Seller and the
Collateral Manager, as applicable, in the applicable Article 15 Agreement are also
for the benefit of, and enforceable by, the Trustee, the Noteholders and each
Hedge Counterparty;

(iii)     each of the Seller and the Collateral
Manager, as applicable, shall deliver to the Trustee duplicate original copies
of all notices, statements, communications and instruments delivered or
required to be delivered to the Issuer pursuant to the applicable Article 15
Agreement;

(iv)    none of the Issuer, the Seller or the
Collateral Manager shall enter into any agreement amending, modifying or
terminating the applicable Article 15 Agreement, (other than in respect of an
amendment or modification to cure any inconsistency, ambiguity or manifest
error) or selecting or consenting to a successor collateral manager, without
notifying each Rating Agency and without the prior written consent and written
confirmation of each Rating Agency that such amendment, modification or
termination will not cause its then-current ratings of the Notes to be reduced;

(v)     except as otherwise set forth herein and
therein (including, without limitation, pursuant to Sections 12 and 13
of the Collateral Management Agreement), the Collateral Manager shall continue
to serve as Collateral Manager under the Collateral Management Agreement,
notwithstanding that the Collateral Manager shall not have received amounts due
it under the Collateral Management Agreement because sufficient funds were not
then available hereunder to pay such amounts pursuant to the Priority of
Payments.  The Collateral Manager agrees
not to cause the filing of a petition in bankruptcy against the Issuer for the
nonpayment of the fees or other amounts payable to

 

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the Collateral
Manager under the Collateral Management Agreement until the payment in full of
all Notes issued under this Indenture and the expiration of a period equal to
one year and one day (or, if longer, the applicable preference period then in
effect) following such payment; and

(vi)    the Collateral Manager irrevocably submits
to the non-exclusive jurisdiction of any New York State or federal court
sitting in the Borough of Manhattan in the City of New York in any action or
proceeding arising out of or relating to the Notes or this Indenture, and the
Collateral Manager irrevocably agrees that all claims in respect of such action
or proceeding may be heard and determined in such New York State or federal
court.  The Collateral Manager
irrevocably waives, to the fullest extent it may legally do so, the defense of
an inconvenient forum to the maintenance of such action or proceeding.  The Collateral Manager irrevocably consents
to the service of any and all process in any action or Proceeding by the
mailing by certified mail, return receipt requested, or delivery requiring
signature and proof of delivery of copies of such initial process to it at GKK
Manager LLC, 420 Lexington Avenue, 19th Floor, New York, New York 10170,
Attention:  Shawn Townsend.  The Collateral Manager agrees that a final
and non-appealable judgment by a court of competent jurisdiction in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.

 

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ARTICLE
16

HEDGE
AGREEMENT AND OTHER PROVISIONS

Section 16.1           Issuer’s
Obligations under Hedge Agreement.

(a)      On the Closing Date and
thereafter, and on and after any date on which the Issuer enters into an
additional or replacement Hedge Agreement (including any related Hedge
Counterparty Credit Support), the Issuer as directed by the Collateral Manager
shall (i) require that each Hedge Counterparty thereto, or any third party
(including an Affiliate of such Hedge Counterparty) that (A) has absolutely and
unconditionally guaranteed the obligations of the Hedge Counterparty under the
related Hedge Agreement (with such form of guaranty as shall be satisfactory to
each Rating Agency then rating any Notes hereunder), (B) has entered into
credit intermediation arrangements in respect of the obligations of the Hedge
Counterparty under the related Hedge Agreement satisfactory to each Rating
Agency then rating any Notes hereunder, (C) is the issuing bank on one or more
letters of credit supporting the obligations of the Hedge Counterparty under
the related Hedge Agreement and that shall be reasonably acceptable to each
Rating Agency then rating any Notes hereunder or (D) has provided any other
additional credit support and such inclusion of additional credit support shall
have satisfied the Rating Agency Condition (any such third party, including an
Affiliate of such Hedge Counterparty, a “Hedge Counterparty Credit Support Provider”))
has, at the time the Hedge Agreement is executed, with respect to itself as an
issuer or with respect to its indebtedness, credit ratings at least equal to
the Hedge Counterparty Collateral Threshold Rating, and will maintain (at the
Hedge Counterparty’s or the Hedge Counterparty’s Credit Support Provider’s
expense), subject to Section 16.1(d) hereof, with respect to itself as
an issuer or with respect to its indebtedness, credit ratings at least equal to
the Hedge Counterparty Required Rating, by each Rating Agency then rating any
Notes hereunder, (ii) except with respect to a Form-Approved Liability Hedge,
satisfy the Rating Agency Condition with respect to any additional or
replacement Hedge Agreement and the related Hedge Counterparty and (iii) assign
and grant a security interest in such Hedge Agreement to the Trustee pursuant
to this Indenture.  Each Hedge Agreement
will provide that no amendment, modification or waiver in respect of such Hedge
Agreement, including any additional or replacement Hedge Agreement, will be
effective unless (A) evidenced by a writing executed by each party thereto, (B)
the Trustee has acknowledged its consent thereto in writing and (C) each Rating
Agency confirms that such amendment, modification or waiver will not cause the
reduction or withdrawal of its then-current rating on any Class of Notes.  Each Hedge Agreement entered into after the
Closing Date shall be on prevailing market terms and conditions.

(b)      The Trustee shall, on
behalf of the Issuer, pay amounts due to each Hedge Counterparty under the
related Hedge Agreements in accordance with Section 10.2(f), the
Priority of Payments and Section 16.1(g) hereof.

(c)      The notional amount of
certain Hedge Agreements providing for floating rate payments to the Issuer
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Notes originally
anticipated to be Outstanding on each Payment Date based on certain
assumptions.  In accordance with the
terms of each Hedge Agreement, such notional amount will be reduced by the
Issuer (or the Collateral Manager on behalf of the Issuer) or each Hedge
Counterparty on each Payment Date to the extent that (i) the outstanding
principal amount of the Notes is less than the scheduled aggregate notional
amount of the related Hedge Agreements for such Payment Date and/or (ii) the
Net Outstanding Portfolio Balance is less than the scheduled aggregate notional
amount of the related Hedge Agreements for such Payment Date and/or (iii) in
the case of a Liability Hedge or other single asset-specific Hedge Agreement,
the outstanding Principal Balance of the related underlying Collateral Debt
Security is less than a percentage (as set forth in the related Hedge
Agreement) of the Scheduled material amount of the related Hedge Agreement; provided
that if any Notes are then Outstanding, the Trustee shall first have received
written evidence that the Rating Agency Condition with respect to Moody’s and
S&P has been satisfied with respect to such reduction other than as
scheduled.  Additionally, subject to
satisfaction of the Rating Agency Condition with respect to Moody’s and
S&P, a termination in part of a Hedge Agreement and a corresponding
reduction in the notional amount of the Hedge Agreement may occur in the event
of a Mandatory Redemption or Special Amortization of the Notes.  The Issuer’s remaining obligations in
accordance with the Priority of Payments will not be affected by any such
reduction.  Notwithstanding any right of
the Issuer to terminate each Hedge Agreement or related Hedge Counterparty
Credit Support upon the occurrence of a Termination Event or an Event of Default
(each as defined in each Hedge Agreement) or otherwise pursuant to a Hedge
Agreement, the Issuer shall not (x) terminate any Hedge Agreement or Hedge
Counterparty Credit Support or (y) cause the non-replacement of any terminated
Hedge Agreement, unless in each case the Issuer obtains a written confirmation
from Moody’s and S&P that such termination or non-replacement, as
applicable, would not cause such Rating Agency’s then-current rating on any
Class of Notes, as applicable, to be adversely qualified, reduced, suspended or
withdrawn.

(d)      Each Hedge Agreement
shall provide for termination or partial termination, and shall be capable of
being terminated or partially terminated, (i) by or on behalf of the Issuer
upon the failure of the related Hedge Counterparty to (a) post collateral under
a Hedge Counterparty Credit Support or provide alternate credit enhancement in
accordance with the related Hedge Agreement within the time period specified in
the related Hedge Agreement or (b) upon the failure of the related Hedge
Counterparty to make a Permitted Transfer (at the Hedge Counterparty’s sole
cost and expense) of all of its rights and obligations under the related Hedge
Agreement within the time period specified in the related Hedge Agreement,
after the failure of the related Hedge Counterparty (or any Hedge Counterparty
Credit Support Provider) to have the Hedge Counterparty Collateral Threshold
Ratings, (ii) by or on behalf of the Issuer upon the failure of the related
Hedge Counterparty to (a) post collateral under a Hedge Counterparty Credit
Support and (b) make a Permitted Transfer (at the related Hedge Counterparty’s
sole cost and expense) of all of its rights and obligations under the related
Hedge Agreement or provide alternative credit enhancement within the time
period specified in the related Hedge Agreement after the failure of the
related Hedge Counterparty (or any Hedge Counterparty Credit Support Provider)
to have the Hedge Counterparty Required Ratings, (iii) by the related Hedge
Counterparty, upon the failure of the Issuer to make, when due, any scheduled
periodic payments under the related Hedge Agreement, (iv) in whole or in part
as provided in the related Hedge Agreement, upon the final

 

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sale of the
Assets, an Auction Call Redemption, an Optional Redemption, a Clean-up Call or
a Tax Redemption, (v) in part as provided in the related Hedge Agreement,
subject to satisfaction of the Rating Agency Condition, upon a Mandatory
Redemption or a Special Amortization, (vi) by the related Hedge Counterparty
upon any nonrescindable declaration by the Trustee that the Notes have become
due and payable and (vii) as otherwise expressly provided for in the related
Hedge Agreement.  The Issuer shall
satisfy the Rating Agency Condition with respect to any transfer of all of the
rights and obligations of any Hedge Counterparty under any Hedge Agreement.

(e)      The Trustee shall, prior
to the Closing Date, establish a single, segregated trust account with respect
to each Hedge Counterparty in the name of the Trustee, each designated as the “Hedge
Collateral Account,” which shall be held in trust for the benefit of the
Noteholders and the applicable Hedge Counterparty, over which the Trustee shall
have exclusive control and the sole right of withdrawal, and in which no Person
other than the Trustee, the related Hedge Counterparty and the Noteholders and
the applicable Hedge Counterparty shall have any legal or beneficial
interest.  The Trustee shall deposit all
collateral received from the related Hedge Counterparty under the related Hedge
Agreement in the related Hedge Collateral Account.  Any and all funds at any time on deposit in,
or otherwise to the credit of, each Hedge Collateral Account shall be held in
trust by the Trustee for the benefit of the Noteholders and the related Hedge
Counterparty.  The only permitted
withdrawal from or application of funds on deposit in, or otherwise to the
credit of, each Hedge Collateral Account shall be (i) for application to obligations
of the applicable Hedge Counterparty to the Issuer under the related Hedge
Agreement in accordance with the terms of such Hedge Agreement or (ii) to
return collateral to the applicable Hedge Counterparty when and as required by
the related Hedge Agreement, which the Trustee shall return to the applicable
Hedge Counterparty in accordance with the related Hedge Agreement.  Each Hedge Collateral Account shall remain at
all times with the Corporate Trust Office or a financial institution having a
long-term debt rating at least equal to “A-” or “A3,” as applicable, or a
short-term debt rating at least equal to “A-1,” “P-1” or “F1,” as applicable.

(f)       Upon the default by a
Hedge Counterparty in the payment when due of its obligations to the Issuer
under the related Hedge Agreement (following the expiration of any applicable
grace period), the Trustee shall forthwith provide facsimile notice thereof to
the Issuer, the Collateral Manager, each of the Rating Agencies and, if
applicable, any Hedge Counterparty Credit Support Provider.  When the Trustee becomes aware of such
default, the Trustee shall make a demand on the applicable Hedge Counterparty,
or any Hedge Counterparty Credit Support Provider, if applicable, for payment
forthwith.  The Trustee shall give notice
to the Noteholders and further notice to the Collateral Manager upon the
continuing failure by such Hedge Counterparty or any Hedge Counterparty Credit
Support Provider to perform its obligations during the two (2) Business Days
following a demand made by the Trustee on such Hedge Counterparty or any such
Hedge Counterparty Credit Support Provider.

(g)      Upon the termination or
partial termination of each Hedge Agreement, the Issuer at the direction of the
Collateral Manager and the Trustee shall take such commercially reasonable
actions (following the expiration of any applicable grace period and after the
expiration of the applicable time period set forth in the related Hedge
Agreement) to enforce

 

263

 

the rights of the
Issuer and the Trustee thereunder as may be permitted by the terms of the Hedge
Agreement and consistent with the terms hereof, and shall apply the proceeds of
any such actions (including, without limitation, the proceeds of the liquidation
of any collateral pledged by or on behalf of each Hedge Counterparty) to enable
the Issuer to enter into additional or replacement Hedge Agreements within thirty (30) days of the expiration of
any such grace period and such applicable time period as set forth in the
related Hedge Agreement on substantially identical terms or on such other terms
subject to the Rating Agency Condition. 
The Trustee shall, promptly after the Closing Date, in respect of each
Hedge Counterparty, establish a single segregated trust account in the name of
the Trustee, each designated the “Hedge Termination Account,” which
shall be held in trust for the benefit of the Noteholders and each Hedge
Counterparty and over which the Trustee will have exclusive control and the
sole right of withdrawal, and in each of which no person other than the
Trustee, the Noteholders and the Hedge Counterparty will have any legal or
beneficial interest.  Each Hedge
Termination Account shall remain at all times with the Corporate Trust Office
or a financial institution having a long-term debt rating at least equal to “A-”
or “A3,” as applicable, or a short-term debt rating at least equal to “A-1,” “P-1”
or “F1,” as applicable.  Notwithstanding
anything contained in this Indenture to the contrary, any payments (other than
payments relating to past-due scheduled payments on a Hedge Agreement) received
by the Issuer or Trustee in connection with either (x) the termination (in
whole or in part) of a related Hedge Agreement or (y) the execution of an
additional or replacement Hedge Agreements shall be immediately transferred to
the Trustee for deposit into the related Hedge Termination Account.  Any costs attributable to entering into an
additional or replacement Hedge Agreements (other than in connection with a
Permitted Transfer) with respect to the related Hedge Counterparty shall be
paid from the related Hedge Termination Account, and any such amounts which are
payable but exceed the balance in the related Hedge Termination Account shall
be borne solely by the Issuer and shall constitute expenses payable under
clause (5) of Section 11.1(a)(i) hereof. 
Additionally, any amounts that are due and payable to a Hedge
Counterparty upon a termination of a Hedge Agreement shall be paid from any
amounts on deposit in the related Hedge Termination Account, and, to the extent
the amounts on deposit in such Hedge Termination Account are insufficient to
pay all such amounts, then such amounts will be payable in accordance with Sections
11.1(a)(i) and (ii) hereof. 
Any amounts remaining on deposit in a Hedge Termination Account related
to a Hedge Agreement following payment to the Hedge Counterparty shall be
transferred to the Principal Collection Account and shall constitute Principal
Proceeds.  If determining the amount payable
under the terminated Hedge Agreement, the Issuer or the Collateral Manager on
behalf of the Issuer shall seek quotations in accordance with the terms of the
related Hedge Agreement from reference market-makers whose ratings are at least
equal to the Hedge Counterparty Collateral Threshold Ratings.  In certain circumstances, a Hedge Agreement
may provide that the applicable Hedge Counterparty is responsible for
determining the amounts payable.  In
addition, the Issuer or the Collateral Manager on behalf of the Issuer shall
use commercially reasonable efforts to cause the termination of the related
Hedge Agreement to become effective simultaneously with the effectiveness of a
replacement thereto, described as aforesaid.

(h)      Notwithstanding anything to the contrary
set forth herein, for so long as any Class of Notes is Outstanding under this
Indenture and is rated by S&P, if any Hedge Counterparty falls below (A) a
short-term debt rating by S&P of at least “A-1” or (B) if such

 

264

 

Hedge Counterparty
does not have a short-term debt rating by S&P, a rating of at least “A+” by
S&P, then such Hedge Counterparty shall, within ten (10)
days (or such other time period as may be specified in the related Hedge Agreement),
post collateral in respect of its obligations under the
related Hedge Agreement.

Section 16.2           Collateral
Debt Securities Purchase Agreements.

Following the Closing
Date, unless a Collateral Debt Securities Purchase Agreement is necessary to
comply with the provisions of this Indenture, the Issuer may acquire Collateral
Debt Securities in accordance with customary settlement procedures in the
relevant markets.  In any event, the
Issuer shall obtain from any seller of a Loan, all Underlying Instruments with
respect to each Collateral Debt Security and all Underlying Instruments related
to any related Senior Tranche that govern, directly or indirectly, the rights
and obligations of the owner of the Collateral Debt Security with respect to
the Underlying Term Loan, the Underlying Mortgaged Property and the Collateral
Debt Security and any certificate evidencing the Collateral Debt Security.

Section 16.3           Cure
Rights.

(a)      If the Issuer, as holder
of a Loan, has the right pursuant to the related Underlying Instruments to cure
an event of default on the Underlying Term Loan, the Collateral Manager may, in
accordance with the Collateral Manager Servicing Standard advance from its own
funds with respect to the Loan as a reimbursable Cure Advance, all such amounts
as are necessary to effect the timely cure of such event of default pursuant to
the terms of the related Underlying Instruments; provided  that (i) such advances may only be made (A) to the extent
that the Collateral Manager reasonably believes that such cash advances can be
repaid from future payments on the related underlying commercial mortgage loan
and in accordance with the Collateral Manager’s Servicing Standard and (B) if
the Collateral Manager receives written instruction from holders of at least a Majority
of the aggregate outstanding Notional Amount of the Preferred Shares with
respect thereto, and (ii) the particular advance would not, if made, constitute
a Nonrecoverable Cure Advance.  The
determination by the Collateral Manager that it has made a Nonrecoverable Cure
Advance or that any proposed Cure Advance, if made, would constitute a
Nonrecoverable Cure Advance shall be made by the Collateral Manager in its
reasonable good faith judgment in accordance with the Collateral Manager
Servicing Standard and shall be evidenced by an Officer’s Certificate delivered
promptly to the Trustee, setting forth the basis for such determination,
accompanied by an appraisal, if available, or an Independent broker’s opinion
of the value of the Underlying Mortgaged Property and any information that the
Collateral Manager may have obtained and that supports such determination.  The Collateral Manager will be entitled to
reimbursement from any subsequent payments or recoveries on each Collateral
Debt Security in respect of which it makes a Cure Advance in accordance with
the Priority of Payments if such reimbursement would not cause an Interest
Shortfall; provided that, if at any time the Collateral Manager shall
determine in its sole discretion, exercised in good faith and in accordance
with the Collateral Manager Servicing Standard, that a Cure Advance previously
made is a Nonrecoverable Cure Advance, the Collateral Manager shall be entitled
to reimbursements for such Nonrecoverable Cure Advance from subsequent payments
or collections with respect to the Assets on any Business Day during any
Interest Accrual Period

 

265

 

prior to the
related Determination Date (or on a Payment Date prior to any payment of
interest on or principal of the Notes in accordance with the Priority of
Payments).  Notwithstanding the
foregoing, the Collateral Manager will be permitted (but not obligated) to
defer or otherwise structure the timing of recovery of any Nonrecoverable Cure
Advance in such manner as the Collateral Manager determines (subject to the
applicable provisions of the Asset Servicing Agreement) is in the best interest
of the Noteholders as a collective whole, which may include being reimbursed
for such Nonrecoverable Cure Advance in installments; provided that the
Collateral Manager will not be permitted to defer recovery of any
Nonrecoverable Cure Advance (or any portion thereof) on any Payment Date to the
extent that there are amounts available to be distributed to the Preferred
Shares Paying Agent for deposit into the Preferred Shares Distribution Account
on such Payment Date for distribution to the holders of the Preferred Shares in
accordance with the Priority of Payments without regard to such deferral.  For the avoidance of doubt, the Collateral
Manager may terminate any such deferment at any time.

(b)      On the Business Day
preceding each Determination Date, the Collateral Manager may request by
Officer’s Certificate delivered to the Trustee, reimbursement for any (x) Cure
Advance or (y) Nonrecoverable Cure Advance, from any amounts received with
respect to the related Collateral Debt Security or the Assets,
respectively.  No later than the Payment
Date related to the Determination Date for which the Collateral Manager has
delivered an Officer’s Certificate requesting reimbursement of a Cure Advance
or a Nonrecoverable Cure Advance, the Trustee shall transfer to the Collateral
Manager, by wire transfer to an account identified to the Trustee in writing,
the amount of such Cure Advance or Nonrecoverable Cure Advance, as applicable.

(c)      Notwithstanding anything
to the contrary set forth herein, the Collateral Manager shall not be required
to make any Cure Advance that it determines in its reasonable, good faith
judgment would constitute a Nonrecoverable Cure Advance as determined pursuant
to Section 16.3(a).

Section 16.4           Purchase
Right; Majority Preferred Shares Holder.

If the Issuer, as holder
of a Participation or B Note, has the right pursuant to the related Underlying
Instruments to purchase any related Senior Tranche(s), the Issuer may, and
shall if directed by the Majority Preferred Shares Holder, exercise such right,
if the Collateral Manager determines based on the Collateral Manager Servicing
Standard that the exercise of the option would be in the best interest of the
Noteholders, but may not exercise such right if the Collateral Manager
determines otherwise.  The Collateral
Manager shall deliver to the Trustee an Officer’s Certificate certifying such
determination, accompanied by an Act of the Majority Preferred Shares Holder
directing the Issuer to exercise such right. 
In connection with the purchase of any such Senior Tranche(s), the
Issuer shall assign to the Majority Preferred Shares Holder or its designee all
of its right, title and interest in such Senior Tranche(s) in exchange for a
purchase price (such price and any other associated expense of such exercise to
be paid by the Majority Preferred Shares Holder) of the Senior Tranche(s) (or,
if the Underlying Instruments permit, the Issuer may assign the purchase right
to the Majority Preferred Shares Holder or its designee; otherwise the Majority
Preferred Shares Holder or its designee shall fund the purchase by the Issuer,
which shall then assign the Senior Tranche(s) to the Majority Preferred Shares

 

266

 

Holder or its
designee) (the “Purchase Option Purchase Price”), which amount shall be
delivered by the Majority Preferred Shares Holder or its designee from its own
funds to or upon the instruction of the Collateral Manager in accordance with
terms of the Underlying Instruments related to the acquisition of such Senior
Tranche(s).  The Trustee or the Issuer
shall execute and deliver at the Majority Preferred Shares Holder’s direction
such instruments of transfer or assignment prepared by the Majority Preferred
Shares Holder, in each case without recourse, as shall be necessary to transfer
title to the Majority Preferred Shares Holder or its designee of the Senior
Tranche(s) and the Trustee shall have no responsibility with regard to such
Senior Tranche(s).  As long as the Issuer
owns the related Collateral Debt Security, the Issuer shall not exercise any
purchase rights with respect to a Participation or B Note that is a pari passu interest relative to another
Participation or B Note related to the same mortgage loan; provided, however, that the
Collateral Manager may (in accordance with the Collateral Manager Servicing
Standard) assign such right to third parties to the extent that it is able to
do so pursuant to the terms of the related Underlying Instruments.

Section 16.5           Representations
and Warranties Related to Subsequent Collateral Debt Securities.

(a)      If the Collateral Debt
Security is a Subsequent Collateral Debt Security, upon the acquisition of such
Subsequent Collateral Debt Security by the Issuer, the related seller has made
or assigned to the Issuer the following:

(i)       (A) representations and
warranties in form and substance substantially similar to the representations
and warranties set forth as Schedule I with respect to the Underlying
Term Loan and the Underlying Mortgaged Property (except with respect to
Mezzanine Loans) and (B) representations and warranties regarding good title,
no liens, no modifications, no defaults and valid assignment with respect to
the Loan itself; and

(ii)      in the case of a B Note, the
representations and warranties in form and substance substantially similar to
the representations and warranties set forth as Schedule J with respect
to such B Note;

(iii)     in the case of a Participation, the
representations and warranties in form and substance substantially similar to
the representations and warranties set forth as Schedule K with respect
to such Participation;

(iv)    in the case of a Mezzanine Loan, the
representations and warranties in form and substance substantially similar to
the representations and warranties set forth as Schedule L with respect
to such Mezzanine Loan;

(v)     in the case of a Preferred Equity Security,
the representations and warranties in form and substance substantially similar
to the representations and warranties set forth as Schedule N with
respect to such Preferred Equity Security;

(vi)    in the case of a CMBS Security the
representations and warranties in form and substance substantially similar to
the representations and warranties set forth as Schedule M with respect
to such CMBS Security; and

 

267

 

(vii)   in the case of a Rake Bond, the
representations and warranties in form and substance substantially similar to
the representations and warranties set forth as Schedule M with respect
to such Rake Bond;

(b)      The representations and
warranties in Section 16.5(a) with respect to the acquisition of a
Subsequent Collateral Debt Security may be subject to any modification,
limitation or qualification that the Collateral Manager determines to be
acceptable in accordance with the Collateral Manager Servicing Standard; provided
that the Collateral Manager will provide each Rating Agency with a report
attached to each Monthly Report identifying each such modification, exception,
limitation or qualification received with respect to the acquisition of any
Subsequent Collateral Debt Security during the period covered by the Monthly
Report, which report may contain explanations by the Collateral Manager as to
its determinations.

(c)      The Issuer shall obtain a
covenant from the Person making any representation or warranty to the Issuer
pursuant to Section 16.5(a) that such Person shall repurchase the
related Collateral Debt Security if any such representation or warranty is
breached (but only after the expiration of any permitted cure periods and
failure to cure such breach).  The
purchase price for any Collateral Debt Security repurchased (the “Repurchase
Price”) shall be a price equal to the sum of the following (in each case,
without duplication) as of the date of such repurchase: (i) the outstanding
principal amount thereof, plus (ii)
accrued and unpaid interest on such Collateral Debt Security, plus (iii) any unreimbursed advances, plus
(iv) accrued and unpaid interest on advances on the Collateral Debt Security, plus (v) any reasonable costs and expenses (including, but
not limited to, the cost of any enforcement action, incurred by the Issuer or
the Trustee in connection with any such purchase by a seller).

Section 16.6           Operating
Advisor; Additional Debt.

If the Issuer, as holder
of a B Note, a Participation, a Preferred Equity Security or a Mezzanine Loan,
has the right pursuant to the related Underlying Instruments to appoint the
operating advisor, directing holder or Person serving a similar function under
the Underlying Instruments, each of the Issuer, the Trustee and the Collateral
Manager shall take such actions as are reasonably necessary to appoint the
Collateral Manager to such position.  If
the Issuer, as holder of a B Note, a Participation or a Mezzanine Loan, has the
right pursuant to the related Underlying Instruments to consent to the related
borrower incurring any additional debt, such consent will be subject to
satisfaction of the Rating Agency Condition.

 

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ARTICLE
17

ADVANCING
AGENT

Section 17.1           Liability
of the Advancing Agent.

The Advancing Agent shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Advancing Agent.  The Advancing Agent shall promptly provide
notice to the Issuer, the Co-Issuer, the Collateral Manager, each Hedge
Counterparty and the Trustee of (i) any voluntary or involuntary proceeding or
petition seeking winding up, liquidation, reorganization or other relief under
any bankruptcy, insolvency, receivership or similar law now or hereinafter in
effect, (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Advancing Agent or for a substantial
part of its assets and (iii) any general assignment made by the Advancing Agent
for the benefit of its creditors.

Section 17.2           Merger
or Consolidation of the Advancing Agent.

(a)      The Advancing Agent will
keep in full effect its existence, rights and franchises as a corporation under
the laws of the jurisdiction in which it was formed, and will obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect
the validity and enforceability of this Indenture to perform its duties under
this Indenture.

(b)      Any Person into which the
Advancing Agent may be merged or consolidated, or any corporation resulting
from any merger or consolidation to which the Advancing Agent shall be a party,
or any Person succeeding to the business of the Advancing Agent shall be the
successor of the Advancing Agent, hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding (it being understood and agreed by the
parties hereto that the consummation of any such transaction by the Advancing
Agent shall have no effect on the Trustee’s obligations under Section 10.7,
which obligations shall continue pursuant to the terms of Section 10.7).

Section 17.3           Limitation
on Liability of the Advancing Agent and Others.

None of the Advancing Agent
or any of its affiliates, directors, officers, employees or agents shall be
under any liability for any action taken or for refraining from the taking of
any action in good faith pursuant to this Indenture, or for errors in judgment;
provided, however, that this
provision shall not protect the Advancing Agent against liability to the Issuer
or Noteholders for any breach of warranties or representations made herein or
any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of negligent disregard of obligations and duties hereunder.  The Advancing Agent and any director,
officer, employee or agent of the Advancing Agent may rely in good faith on any
document of any kind prima facie properly executed and

 

269

 

submitted by any
Person respecting any matters arising hereunder.  The Advancing Agent and any director,
officer, employee or agent of the Advancing Agent shall be indemnified by the
Issuer pursuant to the priorities set forth in Section 11.1(a) and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Indenture or the Notes, other than any loss,
liability or expense (i) specifically required to be borne by the Advancing
Agent pursuant to the terms hereof or otherwise incidental to the performance
of obligations and duties hereunder (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Indenture) or (ii)
incurred by reason of any breach of a representation, warranty or covenant made
herein, any misfeasance, bad faith or negligence by the Advancing Agent in the
performance of or negligent disregard of, obligations or duties hereunder or
any violation of any state or federal securities law.

Section 17.4           Representations
and Warranties of the Advancing Agent.

The Advancing Agent
represents and warrants that:

(a)      the Advancing Agent (i)
has been duly organized, is validly existing and is in good standing under the
laws of the State of Delaware, (ii) has full power and authority to own the
Advancing Agent’s assets and to transact the business in which it is currently
engaged and (iii) is duly qualified and in good standing under the laws of each
jurisdiction where the Advancing Agent’s ownership or lease of property or the
conduct of the Advancing Agent’s business requires, or the performance of this
Indenture would require, such qualification, except for failures to be so
qualified that would not in the aggregate have a material adverse effect on the
business, operations, assets or financial condition of the Advancing Agent or
the ability of the Advancing Agent to perform its obligations under, or on the
validity or enforceability of, the provisions of this Indenture applicable to
the Advancing Agent;

(b)      the Advancing Agent has
full power and authority to execute, deliver and perform this Indenture; this
Indenture has been duly authorized, executed and delivered by the Advancing
Agent and constitutes a legal, valid and binding agreement of the Advancing
Agent, enforceable against it in accordance with the terms hereof, except that
the enforceability hereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights and (ii) general principles of equity (regardless
of whether such enforcement is considered in a proceeding in equity or at law);

(c)      neither the execution and
delivery of this Indenture nor the performance by the Advancing Agent of its
duties hereunder conflicts with or will violate or result in a breach or
violation of any of the terms or provisions of, or constitutes a default under:
(i) the Certificate of Formation and limited liability company agreement of the
Advancing Agent, (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement or other evidence of indebtedness or other
agreement, obligation, condition, covenant or instrument to which the Advancing
Agent is a party or is bound, (iii) any law, decree, order, rule or regulation
applicable to the Advancing Agent of any court or regulatory, administrative or
governmental agency, body or authority or arbitrator having jurisdiction over the
Advancing Agent or its properties, and which would have, in the case of any of
(i), (ii) or (iii) of this subsection (c), either individually or in the
aggregate, a material adverse effect on the

 

270

 

business,
operations, assets or financial condition of the Advancing Agent or the ability
of the Advancing Agent to perform its obligations under this Indenture;

(d)      no litigation is pending
or, to the best of the Advancing Agent’s knowledge, threatened, against the
Advancing Agent that would materially and adversely affect the execution,
delivery or enforceability of this Indenture or the ability of the Advancing
Agent to perform any of its obligations under this Indenture in accordance with
the terms hereof; and

(e)      no consent, approval,
authorization or order of or declaration or filing with any government,
governmental instrumentality or court or other person is required for the
performance by the Advancing Agent of its duties hereunder, except such as have
been duly made or obtained.

Section 17.5           Resignation
and Removal; Appointment of Successor.

(a)      No resignation or removal
of the Advancing Agent and no appointment of a successor Advancing Agent
pursuant to this Article 17 shall become effective until the acceptance
of appointment by the successor Advancing Agent under Section 17.6.

(b)      The Advancing Agent may
resign at any time by giving written notice thereof to the Issuer, the
Co-Issuer, the Trustee, the Collateral Manager, each Hedge Counterparty, the Noteholders
and each Rating Agency.

(c)      The Advancing Agent may
be removed at any time by Act of 66 2/3% of the Preferred Shares upon written
notice delivered to the Trustee and to the Issuer and the Co-Issuer.

(d)      If the Advancing Agent
fails to make an Interest Advance required by this Indenture with respect to a
Payment Date, the Trustee, in its capacity as Backup Advancing Agent, shall be
required to make such Interest Advance and shall be entitled to receive, in
consideration thereof, the Advancing Agent Fee (in lieu of the Backup Advancing
Agent Fee) in accordance with the Priority of Payments.

(e)      In addition, if the
Advancing Agent shall have failed, on more than two occasions prior to date on
which no Class A Notes or Class B Notes remain Outstanding, to make an Interest
Advance required by this Indenture, which failure, in each case, is not cured
by the remittance of the amount of such Interest Advance by the Advancing Agent
to the Trustee within thirty (30) days of such failure, such Advancing Agent
shall be deemed to have automatically (and without the need for any act on the
part of any Person) resigned as an advancing agent hereunder and the Trustee
shall automatically (and without the need for any act on the part of any
Person) assume the capacity of the successor Advancing Agent hereunder.  Thereafter, the Trustee shall be entitled to
receive, in consideration of becoming the successor Advancing Agent, the
Advancing Agent Fee (for so long as the Trustee acts as successor Advancing
Agent) in lieu of the Backup Advancing Agent Fee in accordance with the
Priority of Payments.

 

271

 

(f)       If the Advancing Agent
shall resign or be removed, upon receiving such notice of resignation or
removal, the Issuer and the Co-Issuer shall promptly appoint a successor
advancing agent by written instrument, in duplicate, executed by an Authorized
Officer of the Issuer and an Authorized Officer of the Co-Issuer, one copy of
which shall be delivered to the Advancing Agent so resigning and one copy to
the successor Advancing Agent, together with a copy to each Noteholder, the
Trustee, each Hedge Counterparty and the Collateral Manager; provided  that such successor Advancing Agent shall be appointed only
subject to satisfaction of the Rating Agency Condition and upon the written
consent of a Majority of the Preferred Shares. 
If no successor Advancing Agent shall have been appointed and an
instrument of acceptance by a successor Advancing Agent shall not have been
delivered to the Advancing Agent within thirty (30) days after the giving of
such notice of resignation, the resigning Advancing Agent, the Trustee or any
Preferred Shareholder, on behalf of himself and all others similarly situated,
may petition any court of competent jurisdiction for the appointment of a
successor Advancing Agent.

(g)      The Issuer and the
Co-Issuer shall give prompt notice of each resignation and each removal of the
Advancing Agent and each appointment of a successor Advancing Agent by mailing
written notice of such event by first class mail, postage prepaid, to each
Rating Agency, each Hedge Counterparty and to the Holders of the Notes as their
names and addresses appear in the Notes Register.

(h)      No resignation or removal
of the Advancing Agent and no appointment of a successor Advancing Agent shall
become effective until the acceptance of appointment by the successor Advancing
Agent.

Section 17.6           Acceptance
of Appointment by Successor Advancing Agent.

(a)      Every successor Advancing
Agent appointed hereunder shall execute, acknowledge and deliver to the Issuer,
the Co-Issuer, each Hedge Counterparty, the Collateral Manager, the Trustee and
the retiring Advancing Agent an instrument accepting such appointment.  Upon delivery of the required instruments, the
resignation or removal of the retiring Advancing Agent shall become effective
and such successor Advancing Agent, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts, duties and
obligations of the retiring Advancing Agent.

(b)      No appointment of a
successor Advancing Agent shall become effective unless each Rating Agency has
confirmed in writing that the employment of such successor would not adversely
affect the rating on the Notes.

 

272

 

IN WITNESS WHEREOF, the
parties hereto have executed and delivered this Indenture as of the day and
year first above written.

 

	
   

  	
  Executed as a Deed

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GRAMERCY REAL ESTATE CDO 2007-1, LTD., as Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robert R. Foley

  
	
   

  	
   

  	
  Name: Robert R. Foley

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Witness:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GRAMERCY REAL ESTATE CDO 2007-1 LLC, as Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert R. Foley

  
	
   

  	
   

  	
  Name: Robert R. Foley

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION, solely as Trustee, Paying
  Agent, Calculation Agent, Transfer Agent, Custodial Securities Intermediary,
  Backup Advancing Agent and Notes Registrar and not in its individual capacity

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen J. Ridgeway

  
	
   

  	
   

  	
  Name: Karen J. Ridgeway

  
	
   

  	
   

  	
  Title:  Vice President

  
				

 

 

	
   

  	
  GKK LIQUIDITY LLC, as Advancing Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert R. Foley

  
	
   

  	
   

  	
  Name: Robert R. Foley

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

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