EXHIBIT 3.1
JV CAPITAL TRUST
TRUST AGREEMENT
Among
JV MORTGAGE CAPITAL, L.P.,
Depositor,
WILMINGTON TRUST COMPANY,
Owner Trustee
and
the CO-TRUSTEES
Dated September 3, 1999
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
1.01. Capitalized Terms................................................1
ARTICLE II
ORGANIZATION
2.01. Name.............................................................3
2.02. Office...........................................................3
2.03. Purposes and Powers; Statement of Intent.........................3
2.04. Appointment of the Owner Trustee.................................5
2.05. Declaration of Trust.............................................5
2.06. Situs of Trust...................................................5
2.07. Certificate of Trust.............................................5
2.08. Separateness.....................................................5
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF OWNERSHIP INTERESTS
3.01. Initial Issuance of Trust Certificates...........................7
3.02. Registration and Transfer of Trust Certificates..................7
3.03. Limitations on Transfer of Trust Certificates....................8
3.04. Lost, Stolen, Mutilated or Destroyed Trust Certificates..........8
ARTICLE IV
ACTIONS OF THE OWNER TRUSTEE SUBJECT TO POWER OF THE OWNERS
4.01. Prior Notice to Owners with Respect to Certain Matters...........9
4.02. Action Upon Instructions........................................10
4.03. Majority Control................................................10
4.04. Further Assurances..............................................10
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR
5.01. Title to Trust Property...............................................11
5.02. Trust Property........................................................11
5.03. Binding Effect........................................................11
5.04. Consents and Approvals................................................11
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BANK
6.01. Good Standing.........................................................12
6.02. Binding Effect........................................................12
6.03. Consents and Approvals................................................12
ARTICLE VII
AUTHORITY AND DUTIES OF OWNER TRUSTEE
7.01. General Authority.....................................................12
7.02. Specific Authority....................................................13
7.03. General Duties........................................................13
7.04. No Duties Except as Specified in this Agreement or in Instructions....13
7.05. No Action Except Under Specified Documents or Instructions............14
7.06. Reports to Internal Revenue Service and Others........................14
7.07. No Filing in Bankruptcy Proceeding Affecting the Trust................14
ARTICLE VIII
CONCERNING THE OWNER TRUSTEE
8.01. Acceptance of Trusts and Duties.......................................14
8.02. Reliance; Advice of Counsel..........................................16
8.03. Not Acting in Individual Capacity.....................................16
ARTICLE IX
COMPENSATION OF OWNER TRUSTEE
9.01. Owner Trustee's Fees and Expenses.....................................17
9.02. Indemnification.......................................................17
9.03. Lien on Trust Property................................................17
9.04. Payments to the Owner Trustee or the Bank.............................17
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ARTICLE X
CO-TRUSTEES
10.01. Appointment of Co-Trustees.....................................17
10.02. Qualification; Number; Term....................................18
10.03. Manner of Voting...............................................18
10.04. Indemnification; Remuneration..................................19
10.05. Not Acting in Individual Capacity..............................19
10.06. Separate Class.................................................19
10.07. Securities Law Filings.........................................19
ARTICLE XI
TERMINATION OF TRUST AGREEMENT
11.01. Termination of Trust Agreement.................................20
11.02. No Termination by Depositor or Owners..........................20
11.03. Distributions Upon Termination of Trust........................20
ARTICLE XII
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL TRUSTEES
12.01. Resignation of Owner Trustee; Appointment of Successor.........21
12.02. Appointment of Additional Trustees.............................22
ARTICLE XIII
MISCELLANEOUS
13.01. Supplements and Amendments.....................................22
13.02. Limitations on Rights of Others................................22
13.03. Notices........................................................22
13.04. Severability...................................................23
13.05. Separate Counterparts..........................................23
13.06. Successors and Assigns.........................................23
13.07. Headings.......................................................23
13.08. Governing Law..................................................23
13.09. Integration....................................................23
Annex I Form of Trust Certificate
Annex II Form of Investment Representation Letter
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TRUST AGREEMENT, dated as of September 3, 1999, among JV Mortgage Capital,
L.P., a Delaware limited partnership, Wilmington Trust Company, a Delaware
banking corporation, and the Co-Trustees identified herein. ARTICLE I
DEFINITIONS
1.01. Capitalized Terms. For all purposes of this Agreement, the following
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terms shall have the meanings set forth below:
"Affiliate" of any Person means any other Person controlling, controlled by
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or under common control with such Person, provided, that no trustee hereunder
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shall be deemed an Affiliate of the Trust, the Depositor, any beneficial owner
of the Trust or any other trustee of the Trust.
"Agreement" means this Trust Agreement, as it may be further amended from
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time to time.
"Asset-Backed Securities" as defined in Section 2.03(a) hereof.
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"Bank" means Wilmington Trust Company, a Delaware banking corporation, in
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its individual capacity, and its successors and assigns in such capacity
hereunder.
"Certificate of Trust" means the certificate of trust of the Trust filed
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with the Secretary of State as described in Section 2.07 hereof, as amended
pursuant to the Delaware Act.
"Closing Date" means the date on which a Series of Securities is issued.
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"Code" means the Internal Revenue Code of 1986, as it may be amended from
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time to time, any successor statute thereto, and any applicable final or
temporary Department of the Treasury regulations issued thereunder.
"Collateral" as defined in Section 2.03(a) hereof.
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"Co-Trustee" means each co-trustee identified in Section 10.01 hereof and
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any successor thereto.
"Delaware Act" means the Delaware statute designated as "Chapter 38,
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Treatment of Delaware Business Trusts," 12 Del. C.(S).3801 et. seq.
"Depositor" means JV Mortgage Capital, L.P., a Delaware limited
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partnership.
"FASIT" means a "financial asset securitization investment trust" as
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defined in Code Section 860L(a).
"Issuing Entity" as defined in Section 2.03(a) hereof.
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"Majority Co-Trustees" means at least a majority in number of the
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Co-Trustees then duly appointed and acting pursuant to this Agreement.
"Majority Owners" means Owners holding, in the aggregate, in excess of 50%
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of the Ownership Interest.
"Opinion of Counsel" means, with respect to any matter, an opinion of
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counsel acceptable in form and substance to the Owner Trustee.
"Owner Trustee" means Wilmington Trust Company, a Delaware banking
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corporation, acting on behalf of the Trust, not in its individual capacity but
solely as Owner Trustee under this Agreement, and any successor Owner Trustee
hereunder.
"Owners" means the Depositor and each of its successors in interest as
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beneficiaries of the Trust pursuant to Article III hereof.
"Ownership Interest" means the undivided beneficial interest in the Trust
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held by an Owner.
"Ownership Percentage" means, with respect to an Owner, the proportion
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(expressed as a percentage) of the Ownership Interest held by such Owner of the
total Ownership Interests held by all Owners.
"Person" means any individual, corporation, partnership, joint venture,
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association, joint-stock company, trust, unincorporated organization, or
government or agency or political subdivision thereof.
"Participation Certificates" as defined in Section 2.03(a) hereof.
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"Receivables" as defined in Section 2.03(a) hereof.
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"Related Assets" as defined in Section 2.03(a) hereof.
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"REMIC" means a "real estate mortgage investment conduit" as defined in
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Code Section 860D.
"Secretary of State" means the Office of the Secretary of State of the
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State of Delaware.
"Securities" as defined in Section 2.03(a) hereof.
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"Securities Act" means the Securities Act of 1933, as amended.
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"Series" as defined in Section 2.03(a) hereof.
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"Transfer" means the sale, transfer or assignment (including transfers by
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operation of law) of an Owner's right, title and interest in all or any portion
of its Ownership Interest in the Trust; "Transferee," "Transferor," and
"Transferred" have meanings correlative thereto.
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"Trust" means JV Capital Trust, the Delaware business trust created by and
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governed pursuant to this Agreement.
"Trust Certificate" means a certificate evidencing the Ownership Percentage
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of an Owner, substantially in the form attached hereto as Annex I.
"Trust Property" means all right, title and interest of the Trust, or any
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trustee of the Trust, as the case may be, in and to any property contributed to
the Trust by the Owners, or otherwise acquired by and held by the Trust, or any
trustee of the Trust, as the case may be, including, without limitation, all
distributions, payments or proceeds thereon or therefrom. "Trust Property" shall
not include (i) any property transferred to an Issuing Entity or (ii) any
amounts paid to the Bank pursuant to Article IX hereof.
"Trust Related Agreements" means any pooling and servicing agreement,
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underwriting agreement, securities purchase agreement, indenture, certificate or
other agreement related to any Series and to which the Trust is a party or by
the terms of which the Trust is bound.
ARTICLE II
ORGANIZATION
2.01. Name. The Trust created hereby shall be known as JV CAPITAL TRUST, in
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which name the Trust may conduct its business, make and execute contracts and
other instruments, acquire, convey and transfer property, sue and be sued, and
take any other action authorized by this Agreement, subject, in each case, to
the provisions of this Agreement.
2.02. Office. The office of the Trust shall be in care of the Owner
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Trustee, addressed to Wilmington Trust Company, 1100 North Market Street, Rodney
Square North, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration, or at such other address within the State of Delaware as the
Owner Trustee may designate by written notice to the Owners.
2.03. Purposes and Powers; Statement of Intent. The Trust shall have the
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power and authority:
(a) (i) to authorize, issue, sell, deliver, purchase beneficial interests
in and invest in (and enter into agreements in connection with), and/or to be
the settlor or depositor of, or otherwise engage in the establishment of, one or
more trusts (each, an "Issuing Entity") which will issue and sell, bonds, notes,
debt or equity securities, obligations, and other securities and instruments (in
one or more series (each, a "Series"), each of which Series may consist of one
or more classes) ("Securities"), which Securities will be collateralized or
otherwise secured or backed by, or otherwise represent interests in, among other
things (A) one or more Receivables or pools of Receivables (as defined in (ii)
below); (B) pass-through certificates or debt securities ("Asset-Backed
Securities") evidencing undivided beneficial ownership interests in, or debt
obligations of, one or more trusts or other entities that own or hold, among
other things, one or more Receivables or pools of Receivables; (C)
participations or certificates of participation or
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beneficial ownership in one or more Receivables or pools of Receivables
("Participation Certificates"); or (D) other related assets ("Related Assets")
(Receivables, Asset-Backed Securities, Participation Certificates and Related
Assets pledged as security for or otherwise supporting the Securities and the
proceeds thereof are collectively referred to herein as the "Collateral");
(ii) in connection with the issuance and sale of the Securities or
otherwise, to purchase or otherwise acquire, own, hold, transfer, convey,
pledge, assign, sell (or otherwise dispose of), service, finance, refinance or
otherwise deal in or with Collateral and to enter into contractual arrangements,
transactions and agreements with respect to the Receivables and with the
providers or obligors respecting such Collateral, including agreements with
originators of Receivables, sellers or servicers of Receivables or dealers in
any assets to which the Receivables relate; for purposes of this Agreement, the
term "Receivables" means the right to payment under, and other rights of a
holder with respect to, various promissory notes, leases, loan agreements,
installment sales contracts, drafts (including bank and commercial drafts),
trade documents, certificates of participation, accounts receivable, accounts,
account balances, certificates of beneficial ownership, bankers' acceptances,
bonds, notes or debentures of corporations or other business entities and other
agreements and instruments evidencing indebtedness or payment obligations, any
or all of which may be secured or unsecured, that arise in connection with one
or more of the following: (A) loans secured by first or junior mortgages on real
estate or interests in real estate, (B) deeds of trust, mortgage loans, mortgage
participations, mortgage pass-through certificates or collateralized mortgage
obligations issued by any person or entity or other types of mortgage-related
securities, (C) general debt obligations, and (D) any and all other consumer
loans and indebtedness;
(iii) to arrange or otherwise provide for support for any Series of
Securities to be issued by any Issuing Entity by various forms of credit
enhancement including collections and/or distributions on the Receivables which
are to be remitted to certain accounts to be established under the indenture or
participation, pooling or other similar agreement relating to such series, cash
deposits, letter of credit agreements, guarantees, loan or credit agreements,
insurance policies, surety bonds, guaranteed rate agreements, liquidity
facilities, tax protection agreements, interest rate cap agreements, interest
rate swap agreements, currency exchange agreements, other derivative agreements
or other forms of agreements or arrangements for the benefit of the holders of
Securities and/or the enhancement of the credit of such Securities, including
arrangements whereby, for a given Series, payments on one or more classes of
Securities are subordinated to, and constitute additional security for, payments
due on one or more other classes of Securities in such Series;
(iv) to invest certain proceeds from Receivables and other Collateral; and
(v) to execute, deliver and perform its obligations under the Trust
Related Agreements providing for the foregoing.
The Trust shall not have the power or authority to perform any act or
engage in any business whatsoever except for the foregoing purposes and any
activity that is both (i) necessary, advisable or incidental to the foregoing
purposes and (ii) within the contemplation of this Agreement.
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(b) The Trust is intended to qualify as a fixed investment trust within the
meaning of Treasury Regulation (S). 301.7701-4(c), and it is neither the purpose
nor the intent of the parties hereto to create a partnership, joint venture, or
association taxable as a corporation between or among any or all of the Owners
and the Owner Trustee or the Co-Trustees. In particular, neither the Owner
Trustee, any Co-Trustee nor any other Person shall have the power to "vary the
investment" of the Owners within the meaning of the foregoing Treasury
Regulation. In furtherance of the foregoing, a purpose of the Trust shall be to
protect and conserve the assets of the Trust, and the Trust shall not at any
time engage in or carry on any kind of business or any kind of investment
activity, except as otherwise contemplated by this Agreement.
2.04. Appointment of the Owner Trustee. The Depositor hereby appoints the
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Bank as Owner Trustee of the Trust effective as of the date hereof, to have all
the rights, powers and duties of the Owner Trustee set forth herein and to have
all the rights of a trustee of a Delaware business trust under the Delaware Act.
The Owner Trustee hereby confirms the receipt in trust from the Depositor, of
the sum of $1, constituting the initial Trust Property.
2.05. Declaration of Trust. The Owner Trustee hereby declares that it will
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hold the initial Trust Property, and any further Trust Property received by it
hereunder, in trust upon and subject to the conditions set forth herein for the
use and benefit of the Owners, subject to the obligations of the Trust under the
Trust Related Agreements. It is the intention of the parties hereto that the
Trust qualify, and be treated for federal income tax purposes, as a grantor
trust.
2.06. Situs of Trust. It is the intention of the parties hereto that the
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Trust constitute a business trust under the Delaware Act. The Trust has been
created in the State of Delaware and shall be administered in, and all bank
accounts maintained by the Owner Trustee on behalf of the Trust shall be located
in, the State of Delaware. The Trust shall not have any employees and any
receipts of the Trust received by the Owner Trustee on behalf of the Trust shall
be received by the Owner Trustee only in the State of Delaware, and any payments
by the Owner Trustee to the Owners shall be made only from the State of
Delaware. The Trust's only office shall be at the office of the Owner Trustee as
set forth in Section 2.02 hereof.
2.07. Certificate of Trust. Concurrently with the execution and delivery
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hereof, the Owner Trustee shall file a Certificate of Trust on behalf of the
Trust with the Secretary of State pursuant to Section 3810(a)(1) of the Delaware
Act, for the purpose of subjecting the Trust to the provisions of the Delaware
Act.
2.08. Separateness.
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(a) The Trust shall observe all the legal formalities as may be specified
in this Agreement or the Delaware Act with respect to maintaining a legal
existence separate and independent of any Affiliate, the Owner Trustee or any
Affiliate of the Owner Trustee, the Owners or any Affiliate of any Owner.
Specifically, except as otherwise contemplated by the Trust Related Agreements,
the Trust shall:
(i) maintain books and records separate from any other Person;
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(ii) maintain its bank accounts, if any, separate from any other Person;
(iii) not commingle its assets with those of any other Person and to hold
all of its assets in its own name;
(iv) conduct its own business in its own name;
(v) maintain separate financial statements, showing its assets and
liabilities separate and apart from those of any other Person;
(vi) pay its own liabilities and expenses only out of its own funds or,
to the extent that any such expenses are paid by an Owner, reimburse the Owner
for such expenses paid by it;
(vii) observe all organizational formalities required by this Agreement
or the Delaware Act;
(viii) maintain an arm's length relationship with its Affiliates and enter
into transactions with Affiliates only on a commercially reasonable basis;
(ix) pay the salaries of its own employees, if any, from its own funds;
(x) not guarantee or become obligated for the debts of any other entity
or Person;
(xi) not hold out its credit as being available to satisfy the
obligations of any other Person;
(xii) not acquire the obligations or securities of its Affiliates, the
Owners, or Affiliates of an Owner;
(xiii) not make loans to any other Person or, except with respect to any
Collateral held by the Trust, buy or hold evidence of indebtedness issued by any
other Person (other than cash and investment-grade securities);
(xiv) allocate fairly and reasonably any overhead expenses, if any, that
are shared with an Affiliate, including paying for office space and services
performed by any employee of an Affiliate;
(xv) use separate stationery and invoices and not use checks in its
Affiliate's name;
(xvi) hold itself out as a separate entity;
(xvii) correct any known misunderstanding regarding its separate identity;
(xviii) not identify itself as a division of any other Person; and
(xix) maintain adequate capital in light of its contemplated business
operations.
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(b) The Trust shall not incur any obligations other than with respect to
the Trust Related Agreements for a Series of Securities or obligations which are
without recourse, other than to Securities held by the Trust.
(c) The Trust shall remain solvent and will pay its debts and liabilities
from its assets as the same shall become due.
(d) The Trust shall not engage in any dissolution, liquidation,
consolidation, merger or sale of assets.
(e) All sales made by the Trust of any Trust Property shall be made at the
fair market value of such Trust Property.
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF OWNERSHIP INTERESTS
3.01. Initial Issuance of Trust Certificates. As of the date hereof, the
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Owner Trustee shall issue and deliver to the Depositor a Trust Certificate in
the name of the Depositor evidencing 100% of the beneficial interest in the
Trust, substantially in the form attached hereto as Annex I.
3.02. Registration and Transfer of Trust Certificates.
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(a) The Owner Trustee shall maintain at its office referred to in Section
2.02 hereof, or at the office of any agent appointed by it and approved in
writing by the Majority Owners at the time of such appointment, a register
showing a record of the initial issuance of Trust Certificates, a record of each
Transfer of Trust Certificates including the date thereof, the names of the
Owners of the Trust Certificates and their respective Ownership Percentages.
Prior to satisfaction of all conditions precedent to registration of Transfer of
any Trust Certificate pursuant to Section 3.02 (b), the Owner Trustee may treat
the person in whose name any Trust Certificate is registered as the owner of
such Trust Certificate for all purposes whatsoever, whether or not the Owner
Trustee shall have notice to the contrary.
No service charge shall be made to an Owner for any registration of
Transfer of a Trust Certificate, but the Owner Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of Transfer of a Trust Certificate and any
out-of-pocket expenses, including fees and expenses of counsel, if any.
(b) No transfer of a Trust Certificate shall be effective unless made in
accordance with this Section 3.02. No Transfer of a Trust Certificate shall be
made unless such Transfer is made pursuant to an effective registration
statement under the Securities Act, or is exempt from the registration
requirements of the Securities Act. Neither the Depositor nor the Owner Trustee
is obligated to register the Trust Certificates under the Securities Act or any
other securities law. In the event of a Transfer to a party other than an
Affiliate of the Depositor, the Owner Trustee may request a written opinion of
counsel in form and substance satisfactory to the
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Owner Trustee stating that such Transfer is exempt from the Securities Act and
any applicable state securities law, which opinion of counsel shall not be at
the expense of the Owner Trustee.
(c) Subject to the provisions of Section 3.02(b) and Section 3.03 hereof,
the Owner of any Trust Certificate may Transfer all or any portion of the
Ownership Interest evidenced by such Trust Certificate upon the surrender of
such Trust Certificate to the Owner Trustee or its agent and upon receipt by the
Owner Trustee of a transferee letter in the form of Annex II hereto. Promptly
upon the receipt by the Owner Trustee of a transferee letter in the form of
Annex II hereto, (i) the Owner Trustee shall cancel such Trust Certificate; (ii)
if applicable, the Owner Trustee shall issue to the Transferor a new Trust
Certificate representing an Ownership Interest equal to the Ownership Percentage
retained by the Transferor and dated the date of such Transfer; (iii) the Owner
Trustee shall issue to the Transferee a new Trust Certificate representing an
Ownership Interest equal to the Ownership Percentage that was Transferred and
dated the date of such Transfer; and (iv) the Owner Trustee shall register the
new Trust Certificates in the name of the Transferor (if applicable) and
Transferee and record their respective Ownership Interests existing after the
Transfer in accordance with Section 3.02(a). Upon any Transfer of all of an
Owner's Ownership Interest, the Transferor shall be released from all of the
duties, liabilities and obligations of an owner under this Agreement arising
from and after the time of such Transfer; provided, however, the Transferor
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shall remain obligated with respect to all duties and obligations under this
Agreement arising during the period commencing on the date such Owner became
registered as an Owner in accordance with this Section 3.02 and Section 3.03
hereof and terminating on the date such Transfer becomes effective in accordance
with this Section 3.02 and Section 3.03 hereof, and the Transferee shall assume
all duties, liabilities and obligations of an Owner under this Agreement arising
from and after the time of such Transfer in proportion to the Ownership Interest
acquired by such Transferee.
3.03. Limitations on Transfer of Trust Certificates. No transfer of a Trust
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Certificate shall be effective unless the Owner Trustee shall have received a
representation letter from the transferee in the form of Annex II hereto, to the
effect that (a) it is not an employee benefit plan subject to the fiduciary
responsibility provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), or a governmental plan subject to any federal,
state or local law ("Similar Law"), which is, to a material extent, similar to
the foregoing provisions of ERISA or the Code (collectively, a "Plan") or any
entity whose underlying assets include plan assets by reason of a Plan's
investment in the entity (within the meaning of Department of Labor Regulations
Section 2510.3-101); and (b) it is either a qualified institutional buyer within
the meaning of Rule 144A under the Securities Act or an accredited investor
within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act.
3.04. Lost, Stolen, Mutilated or Destroyed Trust Certificates. If (i) any
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mutilated Trust Certificate is surrendered to the Owner Trustee, or (ii) the
Owner Trustee receives evidence to its satisfaction that any Trust Certificate
has been destroyed, lost or stolen, and upon proof of ownership satisfactory to
the Owner Trustee together with such security or indemnity as may be requested
by the Owner Trustee to save it harmless, the Owner Trustee shall execute and
deliver a new Trust Certificate representing the same Ownership Percentage as
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the Trust Certificate so mutilated, destroyed, lost or stolen, bearing a
different certificate number, with such notations, if any, as the Owner Trustee
shall determine.
Any duplicate Trust Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership of the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust
Certificate shall be found at any time.
ARTICLE IV
ACTIONS OF THE OWNER TRUSTEE SUBJECT TO POWER OF THE OWNERS
4.01. Prior Notice to Owners with Respect to Certain Matters.
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(a) In carrying out its obligations hereunder and under the Trust Related
Agreements, with respect to the matters set forth in this Section 4.01(a), the
Owner Trustee shall not take action or consent to the taking of such action
(including any action or consent at the direction of the Co-Trustees) unless
within a reasonable time prior to the taking of such action, the Owner Trustee
shall have, in accordance with Section 4.01(b), notified the Owners in writing
of the proposed action and the Majority Owners shall not have withheld consent
or provided alternative direction:
(i) the amendment of any Trust Related Agreement where the result of such
amendment could reasonably be expected to materially and adversely affect the
Trust or the Owners; or
(ii) the initiation of any claim or lawsuit by the Trust and the compromise
of any claim or lawsuit brought by or against the Trust.
(b) With respect to any such action which the Owner Trustee intends to take
or which it is instructed by the Majority Co-Trustees to take and which, in
accordance with Section 4.01(a), requires notification to the Majority Owners,
the Owner Trustee shall, by written notice to each Owner, with a copy to each
Co-Trustee, describe the circumstances and seek instructions as to the course of
action to be followed. The Owner Trustee shall, subject to Sections 4.03 and
8.01 hereof, act in accordance with the instructions agreed to by the Majority
Owners, and to the extent the Owner Trustee acts in good faith in accordance
with such instructions, the Owner Trustee shall not be liable on account of such
action to any Person. If the Owner Trustee shall not have received from the
Majority Owners an appropriate written instruction or consent within fifteen
(15) days of such notice (or within such shorter period of time as reasonably
may be specified in such notice) the Owner Trustee may, but shall not be under
any duty to, take or refrain from taking such action, not inconsistent with this
Agreement, as the Owner Trustee shall deem to be in the best interests of the
Owners, and the Owner Trustee shall have no liability to any Person for such
action or inaction; provided, however, that the Owner Trustee may not take any
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action with respect to the sale or transfer of the Trust Property unless the
Majority Owners shall have consented thereto in writing.
(c) In the event that any action or consent contemplated by this Section
4.01 is to be taken by the Owner Trustee at the direction or request of the
Majority Co-
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Trustees, the Co-Trustees shall advise the Owner Trustee, in writing, as to the
applicability of this Section 4.01 and specify therein the form and substance of
any notifications to the Owners required under this Section 4.01.
4.02. Action Upon Instructions.
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(a) Subject to Sections 4.01, 4.02(b) and 4.02(c), the Majority Owners or
the Majority Co-Trustees may direct the Owner Trustee in the administration of
the Trust provided that any such instruction shall be (and shall be deemed to
constitute a representation and warranty to the Owner Trustee by the instructor
that it is) consistent in all respect with this Agreement including the limited
purposes and powers of the Trust as set forth in Section 2.03 and Section 2.08
hereof. Such direction may be exercised at any time by written instruction of
the Majority Owners or the Majority Co-Trustees pursuant to this Article IV.
(b) The Owner Trustee shall take such action or actions as may be specified
in any instructions delivered in accordance with Section 4.02(a); provided,
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however, that the Owner Trustee shall not be required to take any such action if
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the Owner Trustee shall have determined in good faith, or shall have been
advised by counsel, that such action (i) is contrary to the terms hereof or of
any document contemplated hereby to which the Owner Trustee is a party or is
otherwise contrary to law, or (ii) is likely to result in liability on the part
of the Bank, unless the Owners shall have provided such indemnification or
security as shall be reasonably satisfactory to the Bank against all costs,
expenses and liabilities arising from its taking such action as Owner Trustee.
(c) No Owner or Co-Trustee shall direct the Owner Trustee to take or
refrain from taking any action (i) contrary to this Agreement or any Trust
Related Agreement, or which (ii) could reasonably be expected to result in a
downgrading or withdrawal of the initial rating of one or more classes of the
Securities of a Series by any rating agency, or (iii) would adversely affect the
status of the Trust as a grantor trust or of the trust relating to one or more
classes of a Series as a grantor trust, a REMIC or a FASIT, as applicable, nor
shall the Owner Trustee be obligated to follow any such direction, if given.
4.03. Majority Control. Unless otherwise specified herein, any action to be
----------------
taken by the Owners under this Agreement shall be taken by the Majority Owners
and any action to be taken by the Co-Trustees under this Agreement shall be
taken by the Majority Co-Trustees. Any written notice of the Owners or the
Co-Trustees delivered pursuant to this Agreement shall be effective if it
appears to the Owner Trustee that one or more counterparts of such notice has
been signed by the Majority Owners or the Majority Co-Trustees, as the case may
be, at the time of delivery of such notice.
4.04. Further Assurances. Subject to the rights and remedies of the Bank
------------------
and Owner Trustee hereunder, the Owner Trustee shall execute and deliver all
such other instruments, documents and certificates and take all such other
actions in accordance with the direction of the Depositor (for so long as it
owns 100% of the Ownership Interest), the Majority Owners (thereafter) or the
Majority Co-Trustees as any such person may deem necessary or advisable in
connection with the transactions contemplated hereby or the performance by the
Owner Trustee of its obligations under any Trust Related Agreement, the taking
of any such
-10-
action by the Owner Trustee on the Closing Date for a Series in the presence of
the Depositor or its counsel to evidence, conclusively, any such direction of
the Depositor.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR
5.01. Title to Trust Property. The Depositor hereby represents and warrants
-----------------------
to the Owner Trustee that upon the transfer of the initial Trust Property by the
Depositor to the Owner Trustee, the Depositor will have transferred the initial
Trust Property to the Owner Trustee free and clear of any lien, encumbrance or
defect in title.
5.02. Trust Property. The Depositor hereby represents and warrants to the
--------------
Owner Trustee that upon delivery of the initial Trust Property, the Trust will
not become an investment company required to be registered under the Investment
Company Act of 1940.
5.03. Binding Effect. The Depositor hereby represents and warrants to the
--------------
Owner Trustee, the Bank and the Co-Trustees that this Agreement has been duly
and validly authorized, executed and delivered by, and constitutes a valid and
legally binding agreement of, the Depositor enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles; and the actions by the Depositor contemplated
by this Agreement do not and will not (i) violate or contravene any judgment,
injunction, order or decree binding on the Depositor, (ii) violate, contravene
or constitute a default under any provision of the certificate of limited
partnership of the Depositor or any material agreement or instrument binding on
the Depositor or (iii) result in the creation or imposition of any lien
attributable to the Depositor on the Trust Property and not permitted by this
Agreement.
5.04. Consents and Approvals.
----------------------
(a) The Depositor represents and warrants to the Owner Trustee and the Bank
that the Depositor is not required to seek or obtain any consent, approval,
authorization, or order of, or filing with, any court or regulatory, supervisory
or governmental agency or body under any Delaware or federal law in connection
with (i) the execution, delivery and performance by the Depositor of this
Agreement or (ii) the issuance of the Trust Certificates by the Trust pursuant
to this Agreement.
(b) The Depositor represents and warrants to the Owner Trustee that the
Depositor is not required to seek or obtain any consent, approval,
authorization, or order of, or filing with, any court or regulatory, supervisory
or governmental agency or body under any Delaware or federal law in connection
with (i) the Trust's activities as depositor in connection with the issuance of
the Securities related to one or more classes of a Series pursuant to the
related Trust Related Agreements or (ii) the consummation by the Trust of the
transactions contemplated hereby or by the Trust Related Agreements (except as
may be required by the Delaware Act).
-11-
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BANK
6.01. Good Standing. The Bank represents and warrants to the Depositor, for
-------------
the benefit of the Owners, that the Bank is a bank and trust company organized
under the laws of the State of Delaware, validly existing and in good standing
under the laws of the State of Delaware and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
under the laws of the State of Delaware to carry on its trust business as now
conducted.
6.02. Binding Effect. The Bank represents and warrants to the Depositor,
--------------
for the benefit of the Owners, that the execution, delivery and performance by
the Bank of this Agreement, and its participation, as Owner Trustee, in
transactions as contemplated hereby and in any Trust Related Agreement, are
within the corporate power of the Bank and have been duly authorized by all
necessary corporate action on the part of the Bank (no action by its
shareholders being required), and this Agreement constitutes the valid and
legally binding agreement of the Bank, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles; and such actions do not and will not (i) violate or
contravene any judgment, injunction, order or decree binding on the Bank, (ii)
violate, contravene or constitute a default under any provision of the
certificate of incorporation or by-laws of the Bank or of any material agreement
or instrument binding on the Bank or (iii) result in the creation or imposition
of any lien attributable to the Bank on the Trust Property and not permitted by
this Agreement.
6.03. Consents and Approvals. The Bank represents and warrants to the
----------------------
Depositor, for the benefit of the Owners, that the Bank is not required to seek
or obtain any consent, approval, authorization, or order of, or filing with, any
court or regulatory, supervisory or governmental agency or body under any
Delaware or federal law governing the banking or trust powers of the Bank in
connection with (i) the execution, delivery and performance by the Bank of this
Agreement or the execution, delivery and performance by the Owner Trustee, on
behalf of the Trust, of the Trust Related Agreements, (ii) the Trust's
activities as depositor in connection with the issuance of the securities
related to one or more classes of a Series pursuant to the related Trust Related
Agreements, (iii) the issuance of the Trust Certificates by the Trust pursuant
to this Agreement or (iv) the consummation by the Trust of the transactions
contemplated hereby or by the Trust Related Agreements (except as may be
required by the Delaware Act).
ARTICLE VII
AUTHORITY AND DUTIES OF OWNER TRUSTEE
7.01. General Authority. The Owner Trustee is authorized and hereby
-----------------
directed to take all actions required to be taken by it pursuant to the terms of
this Agreement. The Owner Trustee is further authorized to take such further
actions as are permitted but not required under this Agreement as the Majority
Owners or Majority Co-Trustees may direct pursuant to Article
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IV hereof. The Owner Trustee is authorized to cause the Trust to comply with its
obligations under the Trust Related Agreements.
7.02. Specific Authority. The Owner Trustee is authorized and hereby
------------------
directed, without limitation, to take the following actions with respect to each
of the Series:
(a) Prior to the Closing Date. To execute and deliver all documents,
-------------------------
instruments, agreements and certificates on behalf of the Trust contemplated by
the Trust Related Agreements or as may be requested by the Depositor or its
counsel, with respect to such Series, prior to the Closing Date.
(b) On the Closing Date. If and when directed by the Depositor or its
-------------------
counsel, to execute and deliver on behalf of the Trust a pooling agreement or
indenture, an underwriting agreement or a securities purchase agreement and any
other Trust Related Agreement and any amendment or supplement to any of the
foregoing, to cause the Trust to: acquire the Collateral to be included in the
trust estate related to such Series as directed by the Depositor and, pursuant
to a pooling agreement, indenture or other Trust Related Agreement, to assign as
depositor such Collateral to the trustee of the Issuing Entity for such Series,
to direct the trustee of such Issuing Entity for such Series to issue and
deliver the Securities related to such Series, to sell the Securities related to
such Series pursuant to a securities purchase agreement or an underwriting
agreement, and to transfer the proceeds of sale of such Securities as directed
by the Depositor (subject to the requirement that such proceeds be applied, if
necessary, to purchase the Collateral to be included in the trust estate related
to such Series, prior to any other application). The Owner Trustee's execution
of any documents for any closing attended by the Depositor or its counsel shall
be deemed to have been an execution at the direction of the Depositor.
7.03. General Duties. It shall be the duty of the Owner Trustee to
--------------
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and to administer the Trust in the interest of the
Owners, subject to the Trust Related Agreements and in accordance with the
provisions of this Agreement. Consistent with the foregoing and the Trust
Related Agreements, the Owner Trustee shall take such measures as may be
recommended by the trustee of an Issuing Entity related to a Series in
connection with the preservation, or in the case of inadvertent termination, the
restoration, of the status of the trust related to such Series as a grantor
trust, REMIC or FASIT, as applicable; provided, however, that in addition to its
-------- -------
other rights and protections hereunder, the Bank shall have no liability
whatsoever for any action taken by the Owner Trustee in accordance with such
recommendation.
7.04. No Duties Except as Specified in this Agreement or in Instructions.
------------------------------------------------------------------
The Owner Trustee shall not have any duty or obligation to manage, make any
payment with respect to, register, record, sell, dispose of or otherwise deal
with any Collateral related to a Series or any part of the Trust Property, to
prepare or file any document under federal or state laws (except for filings to
be made by the Owner Trustee under the Delaware Act and any filings that the
Bank is required to make under any Delaware or federal laws governing its
banking and trust powers) or to otherwise take or refrain from taking any action
under, or in connection with, any document contemplated hereby to which the
Owner Trustee is a party, except as expressly provided by the terms of this
Agreement, including, without limitation, Sections 4.02 and 11.01 hereof, or in
any written instruction received by the Owner Trustee pursuant to Article IV
hereof;
-13-
and no implied duties or obligations shall be read into this Agreement against
the Owner Trustee. The Bank nevertheless agrees that it will, at its own cost
and expense, promptly take all such action as may be necessary to discharge any
liens on any part of the Trust Property which result from actions by, or claims
against, the Bank that are not related to the ownership of the Trust Property or
the transactions contemplated by this Agreement or the Trust Related Agreements.
7.05. No Action Except Under Specified Documents or Instructions. The Owner
----------------------------------------------------------
Trustee shall not manage, control, use, sell, dispose of or otherwise deal with
any part of the Trust Property except (i) subject to the terms of the Trust
Related Agreements, (ii) in accordance with the powers granted to and the
authority conferred upon the Owner Trustee pursuant to this Agreement, and (iii)
in accordance with the express terms hereof or with any instruction delivered to
the Owner Trustee pursuant to Article IV hereof.
7.06. Reports to Internal Revenue Service and Others. The Owner Trustee
----------------------------------------------
shall (i) cause to be prepared and delivered to each Owner such financial
statements of the Trust, and other reports or information, as are necessary to
enable each Owner to prepare such Owner's federal, state or local income tax
returns, (ii) to the extent directed in writing by the Majority Owners or the
Majority Co-Trustees, make or cause to be made such elections, file or cause to
be filed such tax or information returns, and prepare and maintain or cause to
be prepared and maintained such books and records, relating to the Trust as the
Person(s) giving such direction shall have determined (with such determination
being communicated in writing to the Owner Trustee) may be necessary to maintain
the status of the Trust as a grantor trust for federal and state income tax
purposes, or as may from time to time be required under any applicable federal,
state or local statute, rule or regulation, and (iii) cause to be mailed to any
Owner copies of any or all of such reports and tax or information returns of the
Trust when requested to do so by any such Owner.
7.07. No Filing in Bankruptcy Proceeding Affecting the Trust. The Owner
------------------------------------------------------
Trustee and the Bank shall not file or cause the filing of a petition in any
bankruptcy or insolvency proceeding against the Trust until not less than a year
and a day after the payment in full of all principal and interest and any other
amounts due with respect to the securities related to each of the Series.
ARTICLE VIII
CONCERNING THE OWNER TRUSTEE
8.01. Acceptance of Trusts and Duties. The Owner Trustee accepts the trusts
-------------------------------
hereby created and agrees to perform its duties hereunder with respect to the
same but only upon the terms of this Agreement. The Owner Trustee also agrees to
disburse all moneys or property actually received by it constituting part of the
Trust Property upon the terms of this Agreement. The Bank shall not be
answerable or accountable under any circumstances, except (i) for its own
willful misconduct or gross negligence, (ii) in the case of the inaccuracy of
any representation or warranty contained in Article VI hereof expressly made by
the Bank, (iii) for liabilities arising from the failure by the Bank to perform
obligations expressly undertaken by it in the last sentence of Section 7.04
hereof, or (iv) for taxes, fees or other charges on, based on or measured by any
fees, commissions or compensation received by the Owner Trustee in connection
with
-14-
any of the transactions contemplated by this Agreement or the Trust Related
Agreements. In particular, but not by way of limitation:
(a) The Bank shall not be liable for any error of judgment made in good
faith by any officer or employee of the Owner Trustee;
(b) The Bank shall not be liable with respect to any action taken or
omitted to be taken by the Depositor, any Owner or Co-Trustee, or by the Owner
Trustee in good faith in accordance with the instructions of the Majority Owners
or the Majority Co-Trustees, as the case may be;
(c) No provision of this Agreement shall require the Bank to expend or risk
funds or otherwise incur any financial liability in the performance of any of
its or the Owner Trustee's rights or powers hereunder, if the Bank shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or provided
to it;
(d) The Bank shall not be responsible for or in respect of the
sufficiency of this Agreement or for the due execution hereof by the Depositor
or for or in respect of the validity or sufficiency of any Trust Related
Agreement, or for or in respect of the value, genuineness or sufficiency of the
Trust Property or any Collateral; and the Bank shall in no event assume or incur
any liability, duty or obligation to any holder of a security of any of the
Series or to the Depositor or to any Owner, other than as expressly provided for
herein;
(e) The Bank shall not be liable with respect to any action taken or
omitted to be taken by any other party to a Trust Related Agreement, and the
Bank shall not be liable for not having performed any obligations or duties
under this Agreement or the Trust Related Agreements which are to be performed
by any other party thereto unless such other party's action or failure to act is
a direct result of the willful misconduct or gross negligence of the Bank;
(f) The provisions of this Agreement, to the extent that they restrict the
duties and liabilities of the Owner Trustee otherwise existing at law or in
equity, are agreed by the Depositor, the Owners, the Co-Trustees and all other
Persons to replace such other duties and liabilities of the Owner Trustee; and
notwithstanding anything contained herein to the contrary, the Owner Trustee
shall have no duty or liability with respect to compliance by the Trust, the
Owners or any other Person in connection with any Series of Securities with any
federal, state or local securities or tax related laws, including, without
limitation, (i) the Securities Act of 1933, as amended, the Investment Company
Act of 1940, as amended, or any other applicable federal or state securities
laws, rules or regulations, (ii) ERISA or (iii) the Code;
(g) Notwithstanding anything herein or in any Trust Related Agreement to
the contrary, to the maximum extent provided in Section 3803(b) of the Delaware
Act, the Bank, when acting in its capacity as Owner Trustee, shall not be
personally liable to any Person other than the Trust and the beneficial owners
thereof for any act, omission or obligation of the Trust or any other trustee or
other agent or representative of the Trust; and
(h) The Owner Trustee shall not be required to take any action in any
jurisdiction if the taking of such action will (i) require the consent or
approval or authorization or
-15-
order of or the giving of notice to, or the registration with or taking of any
action in respect of, any governmental body other than as have already been
obtained by the Owner Trustee prior to the date hereof; (ii) result in any fee,
tax or other governmental charge under any applicable law in existence on the
date hereof other than those that would otherwise be payable by the Owner
Trustee notwithstanding such action; or (iii) subject the Owner Trustee to
personal jurisdiction in any such jurisdiction other than the state or states
where it maintains offices or branches for causes of action arising from acts
unrelated to consummation of the transaction contemplated by this Agreement.
8.02. Reliance; Advice of Counsel.
---------------------------
(a) The Owner Trustee shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. The Owner
Trustee may accept a certified copy of a resolution of the board of directors or
other governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the manner of ascertainment of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president and by the
treasurer or an assistant treasurer or the secretary or assistant secretary of
the relevant party, as to such fact or matter, and such certificate shall
constitute full protection to the Owner Trustee for any action taken or omitted
to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under any of the Trust Related
Agreements, the Owner Trustee (i) may act directly or, at the expense of the
Trust, through agents or attorneys pursuant to agreements entered into with any
of them, and the Owner Trustee shall not be liable for the default or misconduct
of such agents or attorneys if such agents or attorneys shall have been selected
by the Owner Trustee with due care hereunder; and (ii) may, at the expense of
the Trust, consult with counsel, accountants and other skilled persons to be
selected with due care hereunder and employed by it, and the Owner Trustee shall
not be liable for anything done, suffered or omitted in good faith by it in
accordance with the advice or opinion of any such counsel, accountants or other
skilled persons and based upon such advise or opinion not contrary to this
Agreement.
8.03. Not Acting in Individual Capacity. Except to the extent expressly
---------------------------------
otherwise provided in this Article VIII, in accepting the trusts hereby created,
the Bank acts solely as Owner Trustee hereunder and not in its individual
capacity. Under no circumstances shall the Bank be liable for any
representation, warranty, covenant, agreement, obligation or indebtedness of the
Owner Trustee or the Trust. All persons having any claim against the Trust or
the Owner Trustee by reason of the transactions contemplated by the Trust
Related Agreements shall look only to the Trust for payment or satisfaction
thereof.
-16-
ARTICLE IX
COMPENSATION OF OWNER TRUSTEE
9.01. Owner Trustee's Fees and Expenses. The Owner Trustee shall receive as
---------------------------------
compensation for its services hereunder from the Owners such fees as have been
separately agreed upon prior to the date hereof between the Depositor and the
Bank, and the Owner Trustee shall be entitled to be reimbursed from the Owners
for its reasonable expenses hereunder, including, without limitation, the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and duties hereunder.
9.02. Indemnification. The Bank and its successors, assigns, agents and
---------------
servants shall be indemnified, first from the Trust Property held from time to
time and, after the exhaustion of all Trust Property reasonably available to pay
such amounts and not subject to the lien of any Trust Related Agreement, by the
Owners, from and against any and all liabilities, obligations, losses, damages,
taxes, claims, actions, suits, costs, expenses and disbursements (including
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may be imposed on, incurred by or asserted at any time against
the Bank (whether or not indemnified against by other parties) in any way
relating to or arising out of this Agreement, any Trust Related Agreement, the
administration of the Trust Property or the action or inaction of the Owner
Trustee hereunder, except only that (1) the Owners shall not be required to
indemnify the Bank for expenses arising or resulting from any of the excepted
matters described in the third sentence of Section 8.01 hereof and (2) the
indemnity by any particular Owner shall relate only to liabilities arising
during the period of time in which such Owner was registered as an owner in
accordance with Sections 3.02 and 3.03 hereof. The indemnities and rights of
contribution contained in this Section 9.02 shall survive the termination of
this Agreement. The obligations of the Owners pursuant to this Section 9.02
shall be joint and several; provided, however, that the Owners, as among
-------- -------
themselves, shall have rights of contribution from each other in proportion to
their respective Ownership Percentages at the time the Expenses with respect to
which contribution is sought arose.
9.03. Lien on Trust Property. The Bank shall have a lien on the Trust
----------------------
Property for any compensation or indemnity due hereunder.
9.04. Payments to the Owner Trustee or the Bank. Any amounts paid to the
-----------------------------------------
Owner Trustee or the Bank pursuant to this Article IX shall be deemed not to be
a part of the Trust Property immediately after such payment.
ARTICLE X
CO-TRUSTEES
10.01. Appointment of Co-Trustees. Pursuant to Section 3806 of the Delaware
--------------------------
Act, the following persons are hereby appointed to manage the business and
affairs of the Trust as trustees (the "Co-Trustees") for the benefit of the
Owners as herein set forth:
-17-
Christopher Oddleifson One First Union Center
Charlotte, NC 28288-0166
Steve Hires One First Union Center
Charlotte, NC 28288-0166
Richard Boruta One First Union Center
Charlotte, NC 28288-0166
Douglas A. Friedrich 2700 Sanders Road
Prospect Heights, IL 60070
Christine M. Korte 2700 Sanders Road
Prospect Heights, IL 60070
Michael M. Forester 2700 Sanders Road
Prospect Heights, IL 60070
The Co-Trustees shall have all such rights, duties and obligations with
respect to the management of the business and affairs of the Trust and the Trust
Property as are permitted under applicable law and not otherwise expressly
vested solely in the Owner Trustee in this Agreement, including, without
limitation, the right to direct the Owner Trustee as provided in Section 4.02
hereof, subject to the limitations on the activities of the Trust imposed by
Section 2.03 hereof. In addition, except as otherwise set forth in Section 10.07
hereof, any Co-Trustee shall have the power and authority to execute, on behalf
of the Trust, any documents that the Majority Co-Trustees instruct such
Co-Trustee to execute.
10.02. Qualification; Number; Term.
---------------------------
(a) Each Co-Trustee shall be at least 18 years of age. A Co-Trustee need
not be an Owner, a citizen of the United States or a resident of the State of
Delaware. The number of Co-Trustees shall at all times be not less than six, or
such larger number as may be fixed from time to time by the Majority Owners.
(b) Co-Trustees may be appointed or removed at the direction of the
Majority Owners evidenced by written notice to the Co-Trustees and the Owner
Trustee specifying the effective date of any such appointment or removal and the
term of service of such Co-Trustee, if finite. Co-Trustees shall serve in such
capacity until the end of the term specified in such notice or until their
earlier resignation, death or removal.
10.03. Manner of Voting. Any action of the Co-Trustees may be taken at a
----------------
meeting of the Co-Trustees which meeting may be held at any place within or
without the State of Delaware, as may from time to time be fixed by the
Co-Trustees. Any meeting may be convened by telephonic or other means as the
Co-Trustees may deem appropriate. Any action of the Co-Trustees may be taken
without a meeting if consented thereto in writing by the Majority Co-Trustees.
-18-
10.04. Indemnification; Remuneration.
-----------------------------
(a) A Co-Trustee shall not be personally liable either to the Trust or any
Owner for monetary damages for breach of fiduciary duty as a Co-Trustee, except
(i) for any breach of the Co-Trustee's duty of loyalty to the Trust or the
Owners, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of the law or (iii) for any
transaction from which the Co-Trustee shall have derived an improper personal
benefit.
(b) Each Co-Trustee shall be indemnified, first from the Trust Property
held from time to time and, after the exhaustion of all Trust Property
reasonably available to pay such amounts and not subject to the lien of any
Trust Related Agreement, by the Owners, from and against any and all Expenses
which may be imposed on, incurred by or asserted at any time against such
Co-Trustee (whether or not indemnified against by other parties) in any way
relating to or arising out of this Agreement, any Trust Related Agreement, the
administration of the Trust Property or the action or inaction of the Co-Trustee
hereunder, except only that (1) the Owners shall not be required to indemnify a
Co-Trustee for expenses arising or resulting from any of the matters described
in Section 10.04(a)(i), (ii) or (iii) hereof and (2) the indemnity by any
particular Owner shall relate only to liabilities arising during the period of
time in which such Owner was registered as an owner in accordance with Sections
3.02 and 3.03 hereof. The indemnities and rights of contribution contained in
this Section 10.04(b) shall survive the termination of this Agreement. The
obligations of the Owners pursuant to this Section 10.04(b) shall be joint and
several; provided, however, that the Owners, as among themselves, shall have
-------- -------
rights of contribution from each other in proportion to their respective
Ownership Percentages at the time the Expenses with respect to which
contribution is sought arose.
(c) Co-Trustees may be paid their expenses, if any, of attendance at each
meeting of the Co-Trustees and may be paid a fixed sum for attendance at each
meeting of the Co-Trustees or a stated salary as Co-Trustee.
10.05. Not Acting in Individual Capacity. Except as otherwise expressly
---------------------------------
provided herein, in acting hereunder, each Co-Trustee acts solely as Co-Trustee
and not in its individual capacity; and, except as so provided, all persons
having any claim against any Co-Trustee by reason of the transactions
contemplated hereby shall look only to the Trust Property for payment or
satisfaction thereof; provided, however, that this provision shall not protect
any Co-Trustee (in either capacity) against any liability to which it would
otherwise be subject by reason of (i) willful misconduct or gross negligence in
the performance of its duties, (ii) taxes, fees or other charges on, based on or
measured by any fees, commission or compensation received by any Co-Trustee in
connection with any of the transactions contemplated by this Agreement or the
Trust Related Agreements.
10.06. Separate Class. The Co-Trustees shall constitute a class of trustees
--------------
separate from the Owner Trustee pursuant to Section 3806(b) of the Delaware Act,
and shall be entitled to vote and otherwise exercise the rights and powers
granted herein without the consent of or consultation with the Owner Trustee.
10.07. Securities Law Filings. The Co-Trustees, and each of them, are
----------------------
authorized and hereby directed (i) to prepare, execute and file with the
Securities and Exchange
-19-
Commission (the "SEC"), one or more registration statements, including a
prospectus and forms of prospectus supplements and exhibits thereto relating to
any Securities, (ii) to prepare, execute and file with the SEC such amendments
to such registration statements, including prospectuses, forms of supplements
and exhibits thereto as may be necessary, desirable or appropriate from time to
time in connection therewith and (iii) to prepare, execute and file with any
state one or more documents needed to qualify any of the Securities under any
state securities laws or "blue sky" laws.
ARTICLE XI
TERMINATION OF TRUST AGREEMENT
11.01. Termination of Trust Agreement. This Agreement and the Trust created
------------------------------
hereby shall terminate, and this Agreement shall be of no further force or
effect, and the Trust Property shall be distributed to the Owners in accordance
with Section 11.03 hereof upon the sale or other final disposition by the Owner
Trustee of the Trust Property pursuant to the instruction of the Owners and the
final distribution by the Owner Trustee of all moneys or other property or
proceeds of the Trust. Upon the termination of the Trust and the completion of
the winding up of the Trust's affairs, the Owner Trustee shall file a
certificate of cancellation pursuant to 12 Delaware Code (S). 3810.
The bankruptcy, death or incapacity of any Owner shall not operate to
terminate this Agreement, nor entitle such Owner's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of the Trust Property, nor otherwise affect the
rights, obligations and liabilities of the parties hereto.
11.02. No Termination by Depositor or Owners. Except as provided in Section
-------------------------------------
11.01 hereof, neither the Depositor nor the Owners shall be entitled to
terminate or revoke the Trust established hereunder.
11.03. Distributions Upon Termination of Trust. Upon the termination of the
---------------------------------------
Trust (or such other date as agreed to by the Majority Owners, the Majority
Co-Trustees and the Owner Trustee), the Trust Property or the cash proceeds
therefrom shall be distributed in the following order of priority:
(a) First, to the Owner Trustee for any unpaid amounts owed pursuant to
this Agreement;
(b) Second, to creditors, including the Owner Trustee, except as provided
in subsection (a), the Co-Trustees and any Owners who are creditors, to the
extent otherwise permitted by law, in satisfaction of liabilities of the Trust
(whether by payment or by making of reasonable provision for payment) other than
liabilities for distribution to Owners on account of their respective interests
in the Trust, and in the setting up of such reserves as the Majority Owners may
reasonably deem necessary or appropriate for any contingent, conditional or
unmatured liabilities or obligations of the Trust, and when all such liabilities
are satisfied, the balance of such reserves, if any, shall be distributed as
hereinafter provided; and
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(c) Third, to the Owners pro rata in accordance with and to the extent of
their respective Ownership Interests; provided, however, that if at the time of
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termination there shall be one Owner, then any amount remaining after Section
11.03(a) and (b) shall be distributed to such Owner.
ARTICLE XII
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL TRUSTEES
12.01. Resignation of Owner Trustee; Appointment of Successor.
(a) The Owner Trustee may resign at any time without cause by giving at
least 90 days' prior written notice to the Owners, such resignation to be
effective on the acceptance of appointment by a successor Owner Trustee under
Section 12.01(b) below approved by the Majority Owners. In addition, the
Majority Owners may at any time remove the Owner Trustee without cause by an
instrument in writing delivered to the Owner Trustee, such removal to be
effective upon the acceptance of appointment by a successor Owner Trustee under
Section 12.01(b) below approved by the Majority Owners. In case of the
resignation or removal of the Owner Trustee, the Majority Owners shall use their
best efforts promptly to appoint a Successor Owner Trustee by an instrument
signed by the Majority Owners. If a successor Owner Trustee shall not have been
appointed within 30 days after the giving of written notice of such resignation
or the delivery of the written instrument with respect to such removal, the
Owner Trustee or the Majority Owners may apply to any court of competent
jurisdiction to appoint a successor Owner Trustee to act until such time, if
any, as a successor Owner Trustee shall have been appointed as provided in the
preceding sentence.
(b) Any successor Owner Trustee, however appointed, shall execute and
deliver to the predecessor Owner Trustee and all of the Owners an instrument
accepting such appointment, and thereupon such successor Owner Trustee, without
further act, shall become vested with all the estates, properties, rights,
powers, duties and trusts of the predecessor Owner Trustee in the trusts
hereunder with like effect as if originally named the Owner Trustee herein, and
the predecessor Owner Trustee shall thereupon be released and discharged of its
duties and trusts hereunder except for any liabilities that arose prior to the
appointment of the successor Owner Trustee; but nevertheless, upon the written
request of such successor Owner Trustee, such predecessor Owner Trustee shall
execute and deliver an instrument transferring to such successor Owner Trustee,
upon the trusts herein expressed, all the estates, properties, rights, powers,
duties and trusts of such predecessor Owner Trustee, and such predecessor Owner
Trustee shall duly assign, transfer, deliver and pay over to such successor
Owner Trustee all monies or other property then held or subsequently received by
such predecessor Owner Trustee upon the trusts herein expressed.
(c) Any successor Owner Trustee, however appointed, shall be a bank or
trust company incorporated and doing business within the United States of
America and having a combined capital and surplus of at least $50,000,000, if
there be such an institution willing, able and legally qualified to perform the
duties of the Owner Trustee hereunder upon reasonable and customary terms.
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(d) Any entity into which the Owner Trustee may be merged or converted or
with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
entity to which substantially all of the corporate trust business of the Owner
Trustee may be transferred shall, subject to the terms of Section 12.01(c)
above, be the Owner Trustee under this Agreement without further act.
12.02. Appointment of Additional Trustees. At any time or times for the
----------------------------------
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Property may at the time be located, the Owner Trustee, by an
instrument in writing, may appoint one or more individuals or corporations to
act as separate trustee or separate trustees of all or any part of the Trust
Property but only to the extent that a local law makes it necessary for such
separate trustee or separate trustees to act alone.
ARTICLE XIII
MISCELLANEOUS
13.01. Supplements and Amendments. This Agreement may be amended, and
--------------------------
compliance with any provisions of this Agreement may be waived, only by a
written instrument signed by the Owner Trustee, the Majority Co-Trustees and the
Owners of 100% of the Ownership Interest of the Trust at the time of such
amendment; provided, however, that any amendment or waiver of Section 2.03 shall
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also require the written confirmation of any rating agency rating any securities
related to a Series that such amendment would not result in a downgrading or
withdrawal of the rating then assigned to such securities. Furthermore, if in
the opinion of the Owner Trustee any instrument required to be so executed
adversely affects any right, duty or liability of, or immunity or indemnity in
favor of, the Owner Trustee under this Agreement or any of the documents
contemplated hereby to which the Owner Trustee is a party, or would cause or
result in any conflict with or breach of any term, conditions or provisions of,
or default under, the charter documents or by-laws of the Owner Trustee or any
document contemplated hereby to which the Owner Trustee is a party, the Owner
Trustee may in its sole discretion decline to execute such instrument.
13.02. Limitations on Rights of Others. Nothing in this Agreement, whether
-------------------------------
express or implied, shall be construed to give to any Person other than the
Bank, the Owner Trustee, the Co-Trustees, the Depositor and the Owners any legal
or equitable right, remedy or claim in the Trust Property or under or in respect
of this Agreement or any covenants, conditions or provisions contained herein.
13.03. Notices. Unless otherwise expressly specified or permitted by the
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terms hereof, all notices shall be in writing and delivered by hand, mailed by
certified mail, postage prepaid, or delivered by overnight courier, charges
prepaid, if to the Owner Trustee, addressed to: Wilmington Trust Company, 1100
North Market Street, Rodney Square North, Wilmington, Delaware 19890 Attention:
Corporate Trust Administration, or to such other address as the Owner Trustee
may have set forth in a written notice to the Co-Trustees, the Depositor and the
Owners; if to the Depositor, addressed to: JV Mortgage Capital, L.P., 2700
Sanders Road, Prospect Heights, Illinois, 60070, Attention: Michael M. Forester;
with copies to Patrick Tadie at First Union Mortgage Finance, One First Union
Center, Charlotte, North Carolina 28288-
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0166 and Jordan M. Schwartz, Esq. at Cadwalader, Wickersham & Taft, 100 Maiden
Lane, New York, New York 10038, or to such other address as the Depositor may
have set forth in a written notice to the Owner Trustee, the Co-Trustees and the
Owners; if to an Owner, addressed to it at the address set forth for such Owner
in the register maintained by the Owner Trustee; and if to a Co-Trustee at the
address set forth in Section 10.01, or such other address as the Co-Trustee may
have set forth in written notice to the Owner Trustee, the other Co-Trustees,
the Depositor and the Owners. Whenever any notice in writing is required to be
given hereunder, such notice shall be deemed given and such requirement
satisfied when such notice is hand delivered, mailed by certified mail, postage
prepaid, or delivered to an overnight courier service, charges prepaid, in each
case addressed as provided above.
13.04. Severability. Any provision of this Agreement which is prohibited or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
13.05. Separate Counterparts. This Agreement may be executed by the parties
---------------------
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
13.06. Successors and Assigns. All covenants and agreements contained
----------------------
herein shall be binding upon, and inure to the benefit of, the Owner Trustee,
the Depositor and each Owner and their respective successors and permitted
assigns, all as herein provided. Any request, notice, direction, consent, waiver
or other instrument or action by an Owner shall bind the successors and assigns
of such Owner.
13.07. Headings. The headings of the various Articles and Sections herein
--------
are for convenience of reference only and shall not define or limit any of the
terms or provisions hereof.
13.08. Governing Law. This Agreement shall in all respects be governed by,
-------------
and construed in accordance with, the laws of the State of Delaware (excluding
conflict of law rules), including all matters of construction, validity and
performance.
13.09. Integration. This Agreement constitutes the entire agreement among
-----------
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements or understandings. This Agreement shall be the sole "governing
instrument" of the Trust within the meaning of Section 3801 of the Delaware Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed by themselves or their respective officers hereunto duly
authorized, as of the day and year first above written.
OWNER TRUSTEE:
WILMINGTON TRUST COMPANY
By: /s/ Donald G. MacKelcan
--------------------------------------------
Name: Donald G. MacKelcan
Title: Vice President
DEPOSITOR:
JV MORTGAGE CAPITAL, L.P.
By: JV MORTGAGE CAPITAL, INC.,
general partner
By: /s/ Michael M. Forester
--------------------------------------------
Name: Michael M. Forester
Title: Vice President
CO-TRUSTEES:
RICHARD BORUTA
/s/ Richard Boruta
--------------------------------------------
MICHAEL M. FORESTER
/s/ Michael M. Forester
--------------------------------------------
DOUGLAS A. FRIEDRICH
/s/ Douglas A. Friedrich
--------------------------------------------
STEVE HIRES
/s/ Steve Hires
--------------------------------------------
CHRISTINE M. KORTE
/s/ Christine M. Korte
--------------------------------------------
CHRISTOPHER ODDLEIFSON
/s/ Christopher Oddleifson
--------------------------------------------
Annex I to Trust Agreement
[FORM OF TRUST CERTIFICATE]
JV CAPITAL TRUST
TRUST CERTIFICATE
UNDER THE TRUST AGREEMENT DATED
September 3, 1999
Trust Certificate No. 1
Wilmington Trust Company, a Delaware banking corporation, acting not in its
individual capacity but solely as trustee (the "Owner Trustee") under the Trust
-------------
Agreement (the "Agreement") dated September 3, 1999 with JV Mortgage Capital,
L.P. (the "Depositor") and the Co-Trustees named therein, hereby certifies on
---------
behalf of JV Capital Trust that the Depositor (the "Owner") is the owner of a
-----
100% Ownership Interest in the Trust provided for and created by the Agreement.
This Trust Certificate is issued pursuant to and is entitled to the benefits of
the Agreement, and the Owner by acceptance hereof shall be bound by the terms of
the Agreement. Reference is hereby made to the Agreement and all amendments
thereto for a statement of the respective rights and obligations of the Owner
hereof, the owners from time to time of the remaining Ownership Interest in the
Trust (together with the Owner hereof, the "Owners"), the Owner Trustee and the
------
Co-Trustees. Prior to the due presentment for registration of Transfer hereof,
the Owner Trustee may treat the person in whose name this Trust Certificate is
registered as the Owner of the Ownership Interest in the Trust represented
hereby for all purposes
Capitalized terms used herein without definition have the meanings ascribed
to them in or by reference in the Agreement.
Transfer of this Trust Certificate is subject to certain restrictions and
limitations. In the manner more fully set forth in, and as limited by, the
Agreement, this Trust Certificate may be Transferred upon the books of the Owner
Trustee by the registered Owner in person or by his attorney duly authorized in
writing, upon surrender of this Trust Certificate to the Owner Trustee,
whereupon the Owner Trustee shall issue in the name of the Transferee a Trust
Certificate evidencing the Ownership Percentage transferred to the Transferee.
The Owner hereof, by its acceptance of this Trust Certificate, agrees with
the Owner Trustee and the Owners of the other Trust Certificates issued under
the Agreement that the Owner (i) will be jointly and severally liable with the
other Owners for certain indemnity payments to the Owner Trustee, all as more
fully provided in the Agreement, and (ii) will not Transfer its Ownership
Interest evidenced by this Trust Certificate except in accordance with the
Agreement. The foregoing agreements are in addition to the other obligations of
the Owners under the Agreement.
This Trust Certificate and the Agreement shall in all respects be governed
by, and construed in accordance with, the laws of the State of Delaware
(excluding conflict of law rules), including all matters of construction,
validity and performance.
IN WITNESS WHEREOF, the Owner Trustee, pursuant to the Agreement, has
caused this Trust Certificate to be issued as of the date set forth below.
Dated:
JV CAPITAL TRUST
By: WILMINGTON TRUST COMPANY, not
in its individual capacity but solely as
Owner Trustee
By:
-------------------------------------------
Name:
Title:
Annex II to Trust Agreement
[FORM OF INVESTMENT REPRESENTATION LETTER]
Wilmington Trust Company
1100 North Market Street, Rodney Square North
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Re: Transfer of JV Capital Trust, Trust Certificate
-----------------------------------------------
Ladies and Gentlemen:
This letter is delivered pursuant to Sections 3.02 and 3.03 of the Trust
Agreement dated September 3, 1999 (the "Trust Agreement"), by and among JV
---------------
Mortgage Capital, L.P., as depositor (the "Depositor"), the Co-Trustees named
---------
therein and Wilmington Trust Company, as owner trustee (the "Owner Trustee") on
-------------
behalf of the holders JV Capital Trust, Trust Certificates (the "Trust
-----
Certificates") in connection with the transfer by _________________ (the
- ------------
"Seller") to the undersigned (the "Purchaser") of _____________% Ownership
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Percentage of the Trust Certificates. Terms used but not defined herein shall
have the meanings ascribed thereto in Trust Agreement.
In connection with such transfer, the undersigned hereby represents and
warrants to you as follows:
[[For Qualified Institutional Buyers only] 1. The Purchaser is a "qualified
institutional buyer" within the meaning of Rule 144A ("Rule 144A") promulgated
---------
under the Securities Act of 1933, as amended (the "Securities Act"). The
--------------
Purchaser is aware that the transfer is being made in reliance on Rule 144A, and
the Purchaser has had the opportunity to obtain the information required to be
provided pursuant to paragraph (d)(4)(i) of Rule 144A.]
[[For Institutional Accredited Investors only] 1. We are an "institutional
accredited investor" (an entity meeting the requirements of Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Securities Act and have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Trust Certificates, and we are able to
bear the economic risk of our or its investment. We are acquiring the Trust
Certificates purchased by us for our own account.]
2. The Purchaser represents that it is not an employee benefit plan subject
to the fiduciary responsibility provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
-----
Revenue Code of 1986, as amended (the "Code"), or a governmental plan subject to
----
any federal, state or local law ("Similar Law"), which is, to a material extent,
-----------
similar to the foregoing provisions of ERISA or the Code (collectively, a
"Plan") or any entity whose underlying assets include plan assets by reason of a
Plan's investment in the entity (within the meaning of Department of Labor
Regulations Section 2510.3-101).
3. The Purchaser acknowledges that the Trust Certificates have not been
registered or qualified under the Securities Act or the securities laws of any
State or any other jurisdiction, and that the Trust Certificates cannot be
resold unless it is registered or qualified thereunder or unless an exemption
from such registration or qualification is available.
4. The Purchaser has acquired the Trust Certificates in compliance with,
and will not sell or otherwise transfer any portion of the Trust Certificates,
except in compliance with, Sections 3.02 and 3.03 of the Trust Agreement.
5. The Purchaser agrees to be bound by all the terms and provisions of the
Trust Agreement, including Article IX.
Very truly yours,
[The Purchaser]
By:
--------------------------------------------
Name:
Title
Dated: __________, ____