--------------------------------------------------------------------------------
TRUST AGREEMENT
dated as of November 3, 1997
between
CAX DTR Securitization Corp.,
as Depositor and Holder of the Trust Certificates,
and
Wilmington Trust Company,
as Owner Trustee
-------------------------
STRUCTURED MORTGAGE TRUST 1997-2
--------------------------------------------------------------------------------
TRUST AGREEMENT
TRUST AGREEMENT, dated as of November 3, 1997, between CAX DTR
Securitization Corp., a Delaware corporation, as Depositor and initial holder of
the Trust Certificates, and Wilmington Trust Company, a Delaware bank and trust
company, as Owner Trustee.
PRELIMINARY STATEMENT
WHEREAS, the Depositor (as defined herein) desires to form the
trust to be created hereby (the "Trust") for the purpose of (i) accepting from
the Depositor, and holding for the benefit of the Holders (as defined herein) of
the Notes (as defined herein), the Trust Estate (as defined herein); (ii)
issuing one or more classes of Collateralized Notes (the "Notes") pursuant to
the Indenture, which Notes are secured by, among other things, a lien on the
Daiwa FLOWS Certificates (as defined herein), and distributing the Notes or the
proceeds therefrom to the Depositor; (iii) issuing a single Class of Trust
Certificates (the "Trust Certificates"), which evidence the entire equity
interest in the Trust, which in turn represents the overcollateralization of the
Notes; (iv) consummating certain transactions contemplated by, and performing
certain obligations under, the Related Agreements (as defined herein); and (v)
engaging in certain activities incidental to the foregoing;
WHEREAS, Wilmington Trust Company, a Delaware bank and trust
company, is willing to act as owner trustee hereunder (in its individual
capacity, the "Bank", and solely in its capacity as owner trustee hereunder,
with its successors in interest in such capacity and its permitted assigns, the
"Owner Trustee") and to accept the Trust created hereby.
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein contained and of other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1
ARTICLE I
DEFINITIONS
All capitalized terms used herein and not otherwise defined,
unless the context otherwise requires, shall have the meanings set forth below
or, if not defined in this Article I, in the Indenture. In the event that a
capitalized term used herein is defined both in this Trust Agreement and in the
Indenture, the definition appearing herein shall control.
"Administrative Expenses": The Indenture Trustee Fee, the
Owner Trustee Fee and fees of the Rating Agency payable under the Indenture.
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control," when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the meaning of "control".
"Agent": Any agent or attorney of the Owner Trustee appointed
by the Owner Trustee to execute one or more of the trusts or powers hereunder
the execution of which is properly delegable to an agent under the Business
Trust Statute and other Delaware laws applicable to trustees.
"Applicant": The meaning assigned to such term in Section
12.4.
"Available Funds": The meaning assigned to such term in the
Indenture.
"Bank": The meaning assigned to that term in the preliminary
statement above.
"Bankruptcy Code": The Bankruptcy Code of 1978, Title 11 of
the United States Code, as amended from time to time.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, Wilmington, Delaware,
or any other city specified in the definition of Business Day in the Indenture,
are authorized or obligated by law or executive order to be closed.
"Business Trust Statute": The meaning assigned to that term in
Section 2.1.
"Certificate Account": The segregated trust account
established in the name of the Owner Trustee pursuant to Section 3.1.
"Certificate Distribution Date": The meaning set forth in the
Indenture.
"Certificate of Trust": The meaning assigned to that term in
Section 2.1.
2
"Certificate Register" and "Certificate Registrar": The
register of Trust Certificates maintained, and the registrar appointed, pursuant
to Section 12.1.
"Certificateholder" or "Holder": With respect to any Trust
Certificate, the Person in whose name such Trust Certificate is registered on
the Certificate Register. Initially, the Depositor shall be the sole holder of
all the Trust Certificates received with respect to the Trust Estate.
"Class": With respect to the Notes or the Trust Certificates,
all of the Trust Certificates or Notes, as the case may be, having the same
alphabetical and/or numerical class designation.
"Closing Date": November 3, 1997.
"Code": The Internal Revenue Code of 1986, as amended from
time to time.
"Company": Commercial Assets, Inc., a Maryland corporation.
"Contribution Agreement": The contribution agreement, dated as
of November 3, 1997, between the Company and the Depositor, pursuant to which
the Company contributed the Daiwa FLOWS Certificates, together with certain
other assets, to the Depositor.
"Corporate Trust Office": The principal corporate trust office
of the Owner Trustee at which, at any particular time, its corporate trust
business is administered, which office at the date hereof is located at the
address of the Owner Trustee set forth in Section 13.4.
"Daiwa FLOWS Certificates": The $50,974,526 aggregate
principal amount of Daiwa Securities America Inc. Multifamily First Loss
Ownership Securities ("Multifamily FlowsSM) Series 1994 Multifamily FlowsSM
trust receipt pass-through certificates, issued pursuant to the Daiwa Pooling
Agreement, together with all related securities entitlements, contract rights,
general intangibles and accounts, conveyed to the Owner Trustee by the Depositor
pursuant to the Section 2.2(b), as from time to time are held as a part of the
Trust Estate.
"Daiwa Pooling Agreement": The meaning assigned to that term
in the Indenture.
"Depositor": CAX DTR Securitization Corp., a Delaware
corporation, and its successors in interest.
"Direction Letter": The meaning assigned to that term in
Section 4.1.
"Eligible Trustee": A corporation or association organized and
doing business under the laws of any state or the United States of America,
authorized under such laws to exercise corporate trust powers and to accept the
trust conferred under this Trust Agreement, having a combined capital and
surplus of at least $100,000,000 and subject to supervision or examination by
federal or state authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this definition 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.
3
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated thereunder.
"Final Payment Date": The meaning assigned to that term in
Section 8.1 (b).
"Governmental Authority": Any government, or any commission,
authority, board, agency, division, subdivision or any court or tribunal of the
government, of the United States of America or of any state, territory, city,
municipality, county or town thereof or of the District of Columbia, of the
Commonwealth of Puerto Rico, or of any foreign jurisdiction, including the
employees or agents thereof.
"Indenture": That certain Trust Indenture, dated as of
November 3, 1997, by and among the Trust, the Company, and the Indenture
Trustee, pursuant to which the Notes are being issued, as the same may be from
time to time supplemented or amended.
"Indenture Trustee": La Salle National Bank, a national
banking corporation, in its capacity as trustee under the Indenture, or its
successor in interest, or any successor trustee appointed as provided in the
Indenture.
"Initial Purchaser": PaineWebber Incorporated, an initial
purchaser of the Notes.
"Initial Trust Estate": The corpus of the Trust created as of
the date hereof and to be administered hereunder, consisting of $10.
"IRS": The Internal Revenue Service or its successor.
"Liabilities": The meaning set forth in Section 7.2(b).
"Lien": Any lien, encumbrance or security interest on or in
any particular asset.
"1933 Act": The Securities Act of 1933, as amended.
"1934 Act": The Securities Exchange Act of 1934, as amended.
"1940 Act": The Investment Company Act of 1940, as amended.
"Noteholder": Those persons or entities holding the Notes from
time to time as shown on the Note Register maintained under the Indenture.
"Note Purchase Agreement": The purchase agreement, dated
November 3, 1997, among the Initial Purchaser, the Depositor and the Owner
Trustee.
"Notes": The meaning assigned to that term in the preliminary
statement above.
"Officers' Certificate": A certificate signed on behalf of the
applicable entity by two officers, one of whom shall be the Chairman of the
Board, the Vice Chairman of the Board, the President, any Vice President or
Managing Director, an Assistant Vice President or any other authorized officer
4
(however denominated) and the other of which shall be by the Treasurer, the
Secretary, one of the Assistant Treasurers or Assistant Secretaries, or, in
either case, another officer customarily performing functions similar to those
performed by any of the above designated officers or, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"Opinion of Counsel": A written opinion of counsel which is
reasonably acceptable to the Owner Trustee.
"Owner Trustee": The meaning assigned to that term in the
preliminary statement above.
"Owner Trustee Fee": An amount equal to $4,000 per annum.
"Payment Account": The segregated trust account established in
the name of the Indenture Trustee pursuant to Section 12.01 of the Indenture.
"Payment Date": December 31, 1997, and thereafter the fourth
Business Day following the 25th day of the month, or, if such 25th day is not a
Business Day, then following the next succeeding Business Day; provided,
however, that with respect to the payment of amounts that are described in
Section 3.1(1), the Payment Date shall be the Closing Date.
"Percentage Interest": With respect to any Trust Certificate,
the percentage interest in the related Class evidenced by such Trust Certificate
as specified on the face thereof.
"Person": Any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Rating Agency": Duff & ▇▇▇▇▇▇ Credit Rating Co.
"Record Date": With respect to any Class of Trust Certificates
for any Payment Date, the last Business Day of the month preceding such Payment
Date.
"Related Agreements": This Trust Agreement, the Trust
Certificates, the Indenture, the Notes, the Contribution Agreement, the
Underlying Agreements and the Note Purchase Agreement, as each of them may, from
time to time, be amended or supplemented.
"Responsible Officer": Any officer of the Owner Trustee
assigned to the Corporate Trust Office with direct responsibility for the
administration of this Trust Agreement and also, with respect to a particular
matter, any officer of the Owner Trustee employed within the Corporate Trust
Office, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject, and, in the
case of any certification required to be signed by a Responsible Officer, such
an officer whose name appears on a list of corporate trust officers furnished to
the Depositor and the Indenture Trustee by the Owner Trustee, as such list may
be amended from time to time.
"Tax Return": The meaning set forth in Section 6.6.
5
"Transfer": Any direct or indirect transfer or other form of
assignment of any Trust Certificate.
"Trust": The trust established under this Trust Agreement.
"Trust Agreement": This Trust Agreement, as the same may be
amended or supplemented from time to time.
"Trust Certificates": The meaning assigned to such term in the
preliminary statement above.
"Trust Estate": The corpus of the trust created as of the
Closing Date and to be administered hereunder, consisting of: all the estate,
right, title and interest of the Depositor in, to and under (a) the Daiwa FLOWS
Certificates, and (b) the Related Agreements (i) to which the Depositor is a
party; or (ii) of which the Depositor is a third party beneficiary, including
the right to receive all income on the Daiwa FLOWS Certificates from and
including the date in December 1997 on which distributions are made on the Daiwa
FLOWS Certificates pursuant to the Daiwa Pooling Agreement; and (c) all present
and future claims, demands, causes and chooses in action in respect of any or
all of the foregoing and all payments on or under and all proceeds of every kind
and nature whatsoever in respect thereof, including all proceeds of the
conversion, voluntary or involuntary, into cash or other liquid property, all
cash proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of obligations
and receivables, instruments and other property which at any time constitute all
or part of or are included in the proceeds of the foregoing.
"Underlying Agreement": With respect to the Daiwa FLOWS
Certificates, the pooling and servicing agreement, trust agreement or other
governing agreement, together with all exhibits thereto, pursuant to which such
Daiwa FLOWS Certificates were issued.
"Uniform Commercial Code": The Uniform Code as in effect in
any applicable jurisdiction.
"Voting Rights": The voting rights of all the Trust
Certificates, which shall be allocated to any particular Trust Certificate in
pro rata proportion to their respective Percentage Interests.
[End of Article I]
6
ARTICLE II
AUTHORITY TO EXECUTE AND PERFORM VARIOUS DOCUMENTS;
DECLARATION OF BUSINESS TRUST BY THE BANK
SECTION 2.1 Declaration of Business Trust by the Bank. The
Bank is hereby appointed to hold and agrees to hold the Trust Estate as Owner
Trustee of Structured Mortgage Trust 1997-2 in trust upon the terms and
conditions and for the use and benefit of the Certificateholders as herein set
forth.
It is the intention of the parties hereto that the trust
created by this Agreement constitute a business trust under the Business Trust
Statute and that this Agreement constitute the governing instrument of such
business trust. This declaration of business trust is not intended to create a
partnership or a joint-stock association. As soon as practicable after the date
hereof, the Owner Trustee shall file the Certificate of Trust required by
Section 3910(a) of the Business Trust Statute (the "Certificate of Trust"), in
the office of the Secretary of State of the State of Delaware. Effective as of
the date hereof, the Owner Trustee shall have all the rights, powers and duties
set forth herein and in the Business Trust Statute with respect to accomplishing
the purposes of the Trust. For purposes of this Declaration of Business Trust,
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. C. ss. 3801 et seq., as the same may be amended from time to time.
SECTION 2.2 Transfer of Trust Estate to Owner Trustee.
(a) As of the date hereof, the Depositor has sold, granted,
assigned, transferred and otherwise conveyed to and deposited with the Owner
Trustee and its successors, forever, all right, title and interest of the
Depositor in and to the sum of Ten Dollars ($10.00), constituting the Initial
Trust Estate.
(b) Effective as of the Closing Date, the Depositor hereby
sells, grants, assigns, transfers, and otherwise conveys to, and deposits with,
the Owner Trustee, and its successors, until this Trust Agreement terminates
pursuant to Section 8.1, the entire remaining portion of the Trust Estate in
addition to the Initial Trust Estate, such conveyance to be made in exchange for
the net proceeds from the sale of the Notes on the Closing Date, together with
any Notes not sold on such date. Such assignment includes, without limitation,
all amounts payable to the Depositor in respect of the Daiwa FLOWS Certificates
from and including the date in December 1997 on which distributions are made on
the Daiwa FLOWS Certificates pursuant to the Daiwa Pooling Agreement, and all
rights of the Depositor in and to the Daiwa FLOWS Certificates pursuant to the
related Underlying Agreements. In connection with such transfer, the Depositor
assigned to the Trust all of its rights against the Company with respect to the
Trust Estate created pursuant to the Contribution Agreement.
In connection with such transfer and assignment, the Depositor
does hereby deliver or cause to be delivered to, and deposit or cause to be
deposited with, the Owner Trustee (or, at the direction of the Owner Trustee, to
and with the Indenture Trustee on behalf of the Trust pursuant to the Indenture)
each of the following documents or instruments relating to the Daiwa FLOWS
Certificates:
(i) a duly issued and authenticated physical certificate
7
evidencing such Daiwa FLOWS Certificates endorsed in blank, together
with such Opinions of Counsel and other documents as shall be necessary
to cause registration of transfer of such Daiwa FLOWS Certificates to
the Indenture Trustee to be made and to obtain a duly issued and
authenticated physical certificate evidencing such Daiwa FLOWS
Certificates registered in the name of the Indenture Trustee;
(ii) copies of any Uniform Commercial Code Financing
Statements, the filing of which is requested by the Indenture Trustee;
(iii) a copy (which may be on electronic media) of each
related Underlying Agreement; and
(iv) all other items relating to the foregoing as may be
reasonably requested by the Owner Trustee or the Indenture Trustee.
(c) The Owner Trustee hereby acknowledges the receipt by it of
the Initial Trust Estate and, upon delivery by or on behalf of the Depositor of
the documents and instruments referenced in Section 2.1(b), will acknowledge
receipt of the entire remaining portion of the Trust Estate in addition to the
Initial Trust Estate and such other documents and instruments referenced above,
and declares that it holds and will hold the entire Trust Estate and such
documents and instruments and that it holds and will hold all other assets and
documents included in the Trust Estate in trust for the exclusive use and
benefit of all present and future Certificateholders.
Except as expressly provided in Section 8.1, neither the
Depositor nor any Certificateholder may revoke the Trust established hereunder.
Except as provided in Sections 4.2 and 8.1 hereof, the Owner Trustee shall not
assign, sell, dispose of or transfer any interest in, nor may the Depositor or
any Certificateholder withdraw from the Trust, any Daiwa FLOWS Certificates or
other asset constituting the Trust Estate. Except as contemplated by the
Indenture, the Owner Trustee shall not permit the Daiwa FLOWS Certificates or
any other asset constituting the Trust Estate to be subjected to any lien, claim
or encumbrance arising by, through or under the Owner Trustee or any person
claiming by, through or under the Owner Trustee.
SECTION 2.3 Authorization to Engage in Certain Activities. The
Depositor hereby authorizes and directs the Owner Trustee (i) to execute and
deliver, as trustee for and on behalf of the Certificateholders, the Related
Agreements to which the Trust is a party and all other agreements, documents,
instruments and certificates contemplated to be executed and delivered by the
Trust pursuant to the Related Agreements and, pursuant to the terms of the
Indenture, to execute, issue and deliver to the Indenture Trustee the Notes
(each such Related Agreement and the Notes to be in the form approved by the
Depositor); (ii) to execute and deliver the Trust Certificates to the Depositor;
(iii) as and to the extent provided in the Indenture, to pledge the Trust Estate
to the Indenture Trustee on behalf of the Noteholders as security for repayment
of the Notes and, in connection therewith, to deliver (or cause to be delivered)
to the Indenture Trustee each of the documents and instruments contemplated by
the Granting Clause of the Indenture; (iv) to take whatever action shall be
required to be taken by the Owner Trustee by the terms of, and exercise its
rights and perform its duties under, each of the documents, agreements,
instruments and certificates referred to in clauses (i) through (iii) above as
set forth in such documents, agreements, instruments and certificates; and (v)
subject to the terms of this Trust Agreement, to take such other action in
connection with the foregoing as the Certificateholders may from time to time
direct.
8
SECTION 2.4 Execution and Delivery of Trust Certificates.
(a) The Owner Trustee shall, on the date hereof, execute and
cause to be authenticated and delivered to and upon the order of the Depositor,
the Trust Certificates evidencing the entire beneficial ownership of the Trust.
The Trust Certificates will consist of a single class designated as the "Class A
Trust Certificates". The rights of the Certificateholders to receive
distributions from the proceeds of the Trust in respect of their Trust
Certificates, and all ownership interests of the Certificateholders in such
distributions, shall be as set forth in this Trust Agreement:
(b) The Trust Certificates will be substantially in the form
attached hereto as Exhibit A; provided that any of the Trust Certificates may be
issued with appropriate insertions, omissions, substitutions and variations, and
may have imprinted or otherwise reproduced thereon such legend or legends, not
inconsistent with the provisions of this Trust Agreement, as may be required to
comply with any law or with rules or regulations pursuant thereto, or with the
rules of any securities market in which the Trust Certificates are admitted to
trading, or to conform to general usage. The Trust Certificates will be issuable
in registered form only, with each certificate representing not less than a 25%
Percentage Interest of the Class.
(c) Each Trust Certificate may be printed or in typewritten or
similar form, and each Trust Certificate shall, upon original issue, be executed
by the Owner Trustee and authenticated by the Certificate Registrar and
delivered to or upon the order of the Depositor. All Trust Certificates shall be
executed by manual or facsimile signature on behalf of the Trust by an
authorized officer of the Owner Trustee, not individually, but solely as Owner
Trustee hereunder. Trust Certificates bearing the signatures of individuals who
were at any time the proper officers of the Owner Trustee shall bind the Owner
Trustee, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the delivery of such Trust Certificates or did not
hold such offices at the date of execution of such Trust Certificates. No Trust
Certificate shall be entitled to any benefit under this Trust Agreement, or be
valid for any purpose, unless there appears on such Trust Certificate a
certificate of authentication in the form set forth on the signature page of the
form of the Trust Certificate attached as Exhibit A, executed by the Certificate
Registrar by manual signature, and such certificate of authentication upon any
Trust Certificate shall be conclusive evidence, and the only evidence, that such
Trust Certificate has been duly authenticated and delivered hereunder. All Trust
Certificates shall be dated the date of their authentication.
SECTION 2.5 Activities of the Trust. It is the intention of
the parties hereto that the Trust shall not engage in any business or activities
other than as specified in Section 2.3. The operations of the Trust will be
conducted in accordance with the following standards (and the Owner Trustee and
the Depositor hereby agree to use their best efforts to cause the operations of
the Trust to be conducted in accordance herewith):
(i) The Trust will observe all procedures required by this
Trust Agreement.
(ii) The business and affairs of the Trust will be managed by
or under the direction of the Owner Trustee. Except as otherwise
expressly provided in this Trust Agreement, the Depositor will have no
authority to act for, or to assume any obligation or responsibility on
behalf of, the Trust.
9
(iii) The Trust will keep correct and complete books and
records of accounts and minutes of the meetings and other proceedings
of the Owner Trustee and any Agents, separate from those of the
Depositor or any subsidiary, affiliate or separate account of the
Depositor. Any such resolutions, agreements and other instruments will
be continuously maintained as official records by the Trust.
(iv) Each of the Depositor and the Trust will provide for its
own operating expenses and liabilities from its own funds. General
overhead and administrative expenses of the Trust will not be charged
or otherwise allocated to the Depositor (except indirectly, insofar as
the Depositor owns the Trust Certificates) and such expenses of the
Depositor will not be charged or otherwise allocated to the Trust.
(v) The Trust will conduct its business under names or
tradenames so as not to mislead others as to the identity of the Trust.
Without limiting the generality of the foregoing, all oral and written
communications, including letters, invoices, contracts, statements, and
applications will be made solely in the name of the Trust (or addressed
to the Trust, as applicable) if related to the Trust. The Depositor and
the Trust each will have separate stationery and other business forms.
(vi) There will be no guarantees made by the Trust with
respect to obligations of the Depositor. There will not be any
indebtedness between the Trust and the Depositor.
10
(vii) The Trust will act solely in its name and through its or
the Owner Trustee's duly authorized officers or Agents in the conduct
of its business. The Trust will not: (a) operate or purport to operate
as an integrated, single economic unit with respect to the Depositor or
any other affiliated or unaffiliated entity; (b) seek or obtain credit
or incur any obligation to any third party based upon the assets of the
Depositor; or (c) induce any such third party to reasonably rely on the
creditworthiness of the Depositor or any other affiliated or
unaffiliated entity.
[End of Article II]
11
ARTICLE I
ESTABLISHMENT OF CERTIFICATE ACCOUNT
SECTION 3.1 Establishment of Certificate Account: Deposits
in Certificate Account.
The Owner Trustee, for the benefit of the Certificateholders,
shall establish and maintain one or more interest bearing trust accounts
(collectively, the "Certificate Account"), entitled "Wilmington Trust Company,
in trust for the registered holders of Structured Mortgage Trust 1997-2 Trust
Certificates" and shall hold in trust for the benefit of the Certificateholders.
The Owner Trustee shall cause the following payments and collections to be
deposited directly into the Certificate Account: (1) all proceeds of the
issuance of the Notes received from the Initial Purchaser; (2) all payments
allocable to the Trust Certificates that are received from time to time pursuant
to Section 12.01 of the Indenture; (3) any payments received on the Daiwa FLOWS
Certificates from time to time pursuant to the respective Underlying Agreements
but subject to Section 4.1(a) and (b); and (4) any other amounts specifically
required to be deposited in the Certificate Account hereunder.
The foregoing requirements for deposit in the Certificate
Account shall be exclusive.
SECTION 3.2 Permitted Withdrawals From the Certificate
Account.
The Owner Trustee may from time to time withdraw funds from
the Certificate Account for the following purposes:
(i) to make payments on the Trust Certificates on the Closing
Date in an amount equal to the proceeds of issuance of the Notes
received from the Initial Purchaser;
(ii) to make payments on the Trust Certificates in the amounts
and in the manner provided for in Section 4.2 hereunder;
(iii) to pay itself any unpaid Owner Trustee Fees, but only to
the extent of amounts in the Certificate Account representing amounts
received in respect of the Daiwa FLOWS Certificates;
(iv) to reimburse or indemnify the Owner Trustee for expenses
and other liabilities incurred by and reimbursable to the Owner
Trustee, pursuant to Section 7.2 hereunder, except as otherwise
provided in such Section; and
(v) to clear and terminate the Certificate Account upon the
termination of this Agreement.
On the Closing Date the Owner Trustee shall withdraw from the
Certificate Account all proceeds of issuance of the Notes and shall use such
funds withdrawn from the Certificate Account only for the purposes described in
this Section 3.2 and in Section 4.2 hereunder.
[End of Article III]
12
ARTICLE I
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE TRUST ESTATE
SECTION 4.1 Distribution of Payments.
(a) Simultaneously with the execution of this Trust Agreement,
the Trust shall notify and direct the parties responsible under the respective
Underlying Agreements for making distributions on the Daiwa FLOWS Certificates
(which notice shall be substantially in the form of Exhibit B hereto (the
"Direction Letter")) (i) to remit all future payments on account of the Daiwa
FLOWS Certificates directly to the Indenture Trustee for payment as specified in
the Indenture until such time as the Indenture Trustee notifies the Trust that
the Lien on the Trust Estate under the Indenture shall have been discharged and
released, and (ii) that following the receipt of such notice, such parties shall
remit all future payments on account of the Daiwa FLOWS Certificates, from and
after the date in December 1997 on which distributions are made on the Daiwa
FLOWS Certificates pursuant to the Daiwa Pooling Agreement, to the Owner Trustee
for the benefit of the Certificateholders.
(b) In the event that, following receipt by the Trust of the
Direction Letter and prior to receipt by the Trust of notice from the Indenture
Trustee that the Lien on the Trust Estate under the Indenture has been
discharged and released, any payments on account of the Daiwa FLOWS Certificates
are received directly (rather than through the Indenture Trustee) by the Owner
Trustee, the Depositor or a Certificateholder, the Person so receiving such
payment shall, promptly upon receipt, deliver such payment over to the Indenture
Trustee without deduction, set-off or adjustment of any kind.
(c) Pursuant to the terms of the Indenture, after payment by
the Indenture Trustee of all required payments on the Notes on each Indenture
Payment Date, the remaining Available Funds in the Payment Account will be
remitted by the Indenture Trustee to the Owner Trustee for application as
provided in Section 3.2 (including, without limitation, payment to the
Certificateholders in accordance with Section 4.2 hereunder). The Owner Trustee
may direct the Indenture Trustee to distribute such remaining Available Funds on
any such Payment Date in a manner consistent with Sections 3.2 and 4.2 (as if
such remaining Available Funds were on deposit in the Certificate Account); and,
in connection therewith, such remaining Available Funds shall be deemed to have
been deposited in the Certificate Account and subsequently withdrawn to make
such distributions.
SECTION 4.2 Payments.
(a) On each Payment Date (or, if the payments from the
Indenture Trustee on such Payment Date contemplated by Section 4.1(c) shall have
been received after [1:00] p.m., New York City time, on such Payment Date, as
soon as practicable, but in no event more than one Business Day following
receipt), the Owner Trustee (or its Agent) shall withdraw from the Certificate
Account all funds that were previously deposited therein or deemed deposited
therein in accordance with Section 4.1(c), and the Owner Trustee (or its Agent)
shall pay such funds to the Certificateholders pro rata based upon their
respective Percentage Interests. Payments to the Certificateholders on each
Payment Date will be made to the Certificateholders of record on the related
Record Date. Payments to any Certificateholder on any Payment Date shall be made
13
by wire transfer of immediately available funds to the account of such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have so notified the Owner Trustee in
writing at least five Business Days prior to the related Record Date and if such
Certificateholder is the registered owner of Trust Certificates representing at
least a 50% Percentage Interest, or otherwise by check mailed by first class
mail to the address of such Certificateholder appearing in the Certificate
Register. Final payment on each Trust Certificate will be made in like manner,
but only upon presentment and surrender of such Trust Certificate at the
Corporate Trust Office or such other location specified in the notice to
Certificateholders of such final payment.
(b) Whenever the Owner Trustee expects that the final
distribution with respect to the Certificates will be made on the next Payment
Date (such Payment Date, the "Final Payment Date"), or upon a termination of the
Trust at the direction of the Certificateholders in accordance with Section 8.1,
the Owner Trustee shall mail to each Certificateholder on such date of
Certificates a notice to the effect that:
(i) the Owner Trustee expects that the final distribution
with respect to the Trust Certificates will be made
on such Payment Date but only upon presentation and
surrender of the Trust Certificates at the office of
the Owner Trustee therein specified, and
(ii) no interest shall accrue on the Trust Certificates from
and after such Payment Date.
Upon presentation and surrender of the Trust Certificates by the
Certificateholders on the Final Payment Date in respect of the Trust
Certificates, the Owner Trustee shall distribute to the Certificateholders the
amounts otherwise distributable on such Payment Date pursuant to Section 4.2(a).
Any funds not distributed on such Payment Date because of the failure of any
Certificateholders to tender their Certificates shall be set aside and held in
trust for the account of the appropriate non-tendering Certificateholders. If
any Trust Certificate, as to which notice has been given pursuant to this
Section 4.2(c) shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Owner Trustee shall mail a
second notice to the remaining Certificateholders, at their last addresses shown
in the Certificate Register, to surrender their Trust Certificates for
cancellation in order to receive, from such funds held, the final payment with
respect thereto. If within one year after the second notice any Trust
Certificate shall not have been surrendered for cancellation, the Owner Trustee
shall directly, or through an Agent, take reasonable steps to contact the
remaining Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining such funds and of contacting
Certificateholders shall be paid out of the Trust assets which remain held by
the Owner Trustee. If within two years after the second notice any Trust
Certificates shall not have been surrendered for cancellation, the Owner Trustee
shall segregate all amounts distributable to the Holders thereof and shall
thereafter hold such amounts uninvested for the benefit of such Holders. No
interest shall accrue or be payable to any Certificateholder on any amount held
as a result of such Certificateholder's failure to surrender its Trust
Certificates for final payment thereof in accordance with this Section 4.2(c).
SECTION 4.3 Statements to Certificateholders. On each Payment
Date, the Owner Trustee (or its Agent) shall prepare, and shall forward by mail,
a statement to each Certificateholder and to the Depositor stating:
14
(i) the aggregate amounts of interest and principal paid
to the Certificateholders on such Payment Date;
(ii) all amounts received by the Owner Trustee, together
with their application; and
(iii) the amount of the Owner Trustee Fees received by the
Owner Trustee since the preceding Payment Date and
any unpaid Owner Trustee Fees then due and owing to
the Owner Trustee.
In addition, the Owner Trustee promptly (and, in any event,
within five Business Days of receipt) will furnish to Certificateholders and the
Depositor copies of any notices, statements reports or other communications
received by the Owner Trustee on behalf of the Trust as issuer of the Notes or
as owner of the Daiwa FLOWS Certificates, including, without limitation, any
such notices, statements, reports or other communications relating to the Notes,
the Indenture, the Daiwa FLOWS Certificates, the Underlying Agreements or the
other assets of the Trust Estate.
On or before January 31st of each calendar year, beginning
with calendar year 1998, the Owner Trustee (or its agent) shall prepare, or
cause to be prepared, and deliver, or cause to be delivered, by first class mail
to each Person who at any time during the previous calendar year was a
Certificateholder of record a statement containing the information required to
be contained in the regular monthly report to Certificateholders, as set forth
above in this Section 4.3, aggregated for such previous calendar year or the
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Owner Trustee shall be deemed to have been satisfied to
the extent that substantially comparable information shall have been provided by
the Owner Trustee to any Person who was a Certificateholder, as described above,
pursuant to any requirements of the Code and regulations thereunder as from time
to time are in force.
SECTION 4.4 Access to Certain Documentation and Information.
The Owner Trustee shall provide to the Certificateholders access to the all
reports, documents and records maintained by the Owner Trustee in respect of its
duties hereunder, such access being afforded without charge but only upon
reasonable written request and during normal business hours at offices
designated by the Owner Trustee.
15
SECTION 4.5 Compliance with Withholding Requirements. In the
event that the Owner Trustee is required (whether on liquidation of the Trust or
otherwise) to make payments to the Depositor or the Certificateholders,
notwithstanding any other provisions of this Trust Agreement, the Owner Trustee
(or its Agent) shall comply with all federal withholding requirements with
respect to payments to the Depositor or the Certificateholders that the Owner
Trustee reasonably believes are applicable under or required by the Code. The
consent of the Depositor or the Certificateholders, as the case may be, shall
not be required for any such withholding. The parties hereto understand and
agree that the Owner Trustee shall not be required to gross up any such payments
for the amount of such withholding (or any other amounts).
SECTION 4.6 Holding of Trust Estate. Subject to the terms of
the Indenture, the Owner Trustee shall hold that portion of the Trust Estate
delivered to the Owner Trustee that consists of "instruments" (as such term is
defined in Section 9-105(i) of the Uniform Commercial Code as in effect in
Delaware on the date hereof) in the State of Delaware and, except as otherwise
specifically provided in this Agreement, shall not remove such instruments from
the State of Delaware unless it receives an Opinion of Counsel (obtained and
delivered at the expense of the Person requesting the removal of such
instruments from the State of Delaware) that in the event the transfer of the
Daiwa FLOWS Certificates to the Owner Trustee, on behalf of the Trust, is deemed
not to be a sale, after such removal, the Owner Trustee, on behalf of the Trust,
will possess a first priority perfected security interest in such instruments.
[End of Article IV]
16
ARTICLE I
DUTIES OF THE OWNER TRUSTEE
SECTION 5.1 Notice of Certain Events; Action by the Owner
Trustee.
(a) Whenever the Owner Trustee, on behalf of the Trust as issuer of the
Notes or as owner of the Daiwa FLOWS Certificates, is requested or, as to any
particular matter, notified by any Person, of its authority, to take any action
or to give any consent, approval or waiver that it is entitled to take or give
on behalf of the Trust in such capacity, the Owner Trustee shall promptly notify
all the Certificateholders of such request or notice in such detail as is
available to it.
(b) Subject to the Owner Trustee's rights in this Trust
Agreement to be indemnified for its acts and omissions with respect to matters
concerning this Trust Agreement, the Related Agreements, the Trust Estate or the
Daiwa FLOWS Certificates, the Owner Trustee shall take or refrain from taking
such action as Certificateholders entitled to a majority of the Voting Rights
shall so direct; provided, however, that so long as the Trust Estate is subject
to the lien of the Indenture such action of the Certificateholders must be
affirmatively approved by 60% of the Holders of the Outstanding Notes. The Owner
Trustee may, from time to time, request in writing instructions from the
Certificateholders and shall request in writing instructions from the
Certificateholders if the Owner Trustee receives notice that a default has
occurred and is continuing under the Indenture.
(c) Notwithstanding any direction of the Certificateholders to
the contrary or any provision hereof to the contrary, the Owner Trustee shall
not, without the written consent of the Indenture Trustee, execute any direction
of the Certificateholders that might result in the Trust being terminated prior
to the satisfaction and discharge of the Lien of the Indenture on the Trust
Estate or prior to the payment in full of the principal of and accrued interest
on the Notes.
SECTION 5.2 Distribution of Reports. The Owner Trustee shall
promptly (but no later than five Business Days following receipt thereof)
distribute to the Depositor and the Certificateholders such reports, notices,
statements and written materials which it actually receives as Owner Trustee or
otherwise on behalf of the Trust hereunder or under any of the other Related
Agreements.
SECTION 5.3 Action Required Only if Owner Trustee is
Indemnified. The Owner Trustee shall not be required to take any action under
Section 5.1(b) if the Owner Trustee shall reasonably determine that such action
is likely to result in personal liability for which the Owner Trustee has not
been and will not be adequately indemnified or is contrary to the terms hereof
or of any Related Agreement or Underlying Agreement, or is otherwise contrary to
law.
17
SECTION 5.4 No Duties Except as Specified in Trust
Agreement or Instructions
(a) The Owner Trustee shall not have any duty or obligation to
manage, control, use, make any payment in respect of, register, record, insure,
inspect, sell, dispose of or otherwise deal with the Daiwa FLOWS Certificates or
any other part of the Trust Estate, or otherwise to take or refrain from taking
any action under or in connection with any Related Agreement to which the Owner
Trustee is a party, except as expressly provided by the terms of this Trust
Agreement or any such other Related Agreement or in written instructions from
the Certificateholders received pursuant to Section 5.1(b); and no implied
duties or obligations shall be read into this Trust Agreement against the Owner
Trustee, other than the obligation of the Owner Trustee to exercise such of the
rights and powers vested in it by this Trust Agreement in good faith and in a
manner which is not grossly negligent and which does not constitute willful
misconduct. The Bank (and any successor trustee or co-trustee) in its individual
capacity nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any Liens on the Trust Estate
arising by, through or under the Owner Trustee (or any successor trustee or
co-trustee appointed in accordance with Article IX) either (i) when acting in
its individual capacity or (ii) when acting improperly in its capacity, as Owner
Trustee.
(b) Without limiting the generality of the foregoing
subsection (a), except as otherwise explicitly provided in this Trust Agreement
or in any other Related Agreement to which it is a party, neither the Owner
Trustee nor the Bank shall have any duty to (i) file or record any Related
Agreement or any other document, or to maintain any such filing or recording or
to refile or rerecord any such document, (ii) pay or discharge any tax or any
Lien owing with respect to or assessed or levied against any part of the Trust
Estate, other than to forward notice of such tax or Lien received by the Owner
Trustee to the Certificateholders and the Indenture Trustee, (iii) confirm,
verify, investigate or inquire into the failure of any party to receive any
reports or financial statements in connection with the Daiwa FLOWS Certificates,
(iv) ascertain or inquire as to the performance or observance of any person or
entity under or of any of the Related Agreements, or (v) manage, control, sell,
dispose of or otherwise deal with the Daiwa FLOWS Certificates or any part
hereof or any other part of the Trust Estate.
[End of Article V]
18
ARTICLE I
THE OWNER TRUSTEE
SECTION 6.1 Acceptance of Trust and Duties. The Bank accepts
the trust hereby created and agrees to perform the same, but only upon the terms
of this Trust Agreement in accordance with the standard of care set forth in
Section 5.4(a). The Bank, as Owner Trustee, agrees to receive, manage and
disburse all moneys constituting part of the Trust Estate actually received by
it as Owner Trustee in accordance with the terms of this Trust Agreement.
Neither the Bank nor the Owner Trustee shall be answerable or accountable under
any circumstances, except for (i) its own willful misconduct, bad faith or gross
negligence; (ii) the inaccuracy of any of its representations or warranties
contained in Section 6.2 of this Trust Agreement; (iii) its failure to perform
obligations expressly undertaken by it in this Trust Agreement in accordance
with the standard of care set forth in Section 5.4(a); (iv) taxes based on or
measured by any fees, commissions or compensation received by it for acting as
Owner Trustee in connection with any of the transactions contemplated by this
Trust Agreement or any other Related Agreements; (v) its failure to use due care
to receive, manage and disburse moneys actually received by it in accordance
with the terms hereof; and (vi) any other claims, amounts or taxes otherwise
excluded from the Depositor's indemnity obligations pursuant to Article VII.
SECTION 6.2 Limited Representations or Warranties of the Owner
Trustee. Neither the Bank nor the Owner Trustee makes (i) any representation or
warranty, either express or implied, as to the title to or value of the Daiwa
FLOWS Certificates, or (ii) any representation or warranty as to the validity or
enforceability of any Related Agreement, except as set forth below or as to the
correctness of any statement made by a person or entity other than the Bank or
the Owner Trustee contained in any Related Agreement. The Bank represents,
warrants and covenants to and for the benefit of the Depositor, the Indenture
Trustee for the benefit of the Noteholders and the Certificateholders that:
(a) The Bank is a bank and trust company, duly organized,
validly existing and in good standing under the laws of the state of Delaware;
(b) The execution and delivery by the Bank, and the
performance and compliance by the Bank with the terms of, this Trust Agreement
and any and all documents to be executed or delivered by the Bank in its
individual capacity in connection with this Trust Agreement and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
Trust Agreement and such other documents executed in connection herewith to
which the Bank is a party, will not violate any provisions of the Bank's charter
or bylaws, and no consent, approval, authorization or order of or filing with or
notice to any court or governmental agency or body is required for the
execution, delivery or performance by the Bank of this Trust Agreement;
(c) The Bank, in its individual capacity, has full power and
authority and has taken all action necessary to execute and deliver this Trust
Agreement and any and all documents to be executed or delivered by it in its
individual capacity in connection with this Trust Agreement and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
Trust Agreement and such other documents executed in connection herewith to
which it is a party, and this Trust Agreement and such other documents executed
in connection herewith to which it is a party are the legal, valid and binding
obligations of the Bank, in its individual capacity, enforceable against the
19
Bank in accordance with their respective terms, except as such terms may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors generally and by general principles of
equity;
(d) The consummation of the transactions contemplated by this
Trust Agreement do not conflict with, violate or contravene any law, rule,
regulation or judicial, governmental or administrative order applicable to the
Bank or the Owner Trustee or conflict with, result in a breach of or constitute
a default under any of the terms, conditions or provisions of any agreement or
instrument to which the Bank is a party or by which it is bound, or any order or
decree applicable to the Bank, or result in the creation or imposition of any
Lien on any of the Bank's assets or property, which would materially and
adversely affect the ability of the Bank or the Owner Trustee to carry out the
transactions contemplated by this Trust Agreement; and
(e) There is no action, suit or proceeding pending against the
Bank, in its individual capacity or as Owner Trustee, in any court or by or
before any other governmental agency or instrumentality which would materially
and adversely affect the ability of the Bank, in its individual capacity or as
Owner Trustee, to carry out the transactions contemplated by this Trust
Agreement.
SECTION 6.3 Trust Accounts. Moneys received by the Owner
Trustee hereunder shall be segregated in a trust account maintained with a
federal or state chartered depository institution or trust company having
corporate trust powers and acting in its fiduciary capacity.
SECTION 6.4 Reliance: Advice of Counsel. Neither the Bank nor
the Owner Trustee shall incur any liability to any person or entity 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 in good faith to be signed by the proper party or
parties. The Owner Trustee may accept and rely upon 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 an Officers' Certificate of
the relevant party, as to such fact or matter, and such Officers' Certificate
shall constitute full protection to the Owner Trustee for any action reasonably
taken or omitted to be taken by it in good faith in reliance thereon. In the
administration of the Trust hereunder, the Owner Trustee may execute any of the
trusts or powers hereof and perform its powers and duties hereunder directly or
through Agents and may consult with counsel, accountants and other skilled
persons or entities to be selected and employed by it reasonably.
SECTION 6.5 Not Acting in Individual Capacity. All persons or
entities having any claim against the Bank or the Owner Trustee by reason of the
transactions contemplated by the Related Agreements shall look only to the Trust
Estate (or a part thereof, as the case may be) for payment or satisfaction
thereof, except as specifically provided in this Trust Agreement and except to
the extent that the Bank or the Owner Trustee shall otherwise expressly agree in
any Related Agreement to which it is a party.
SECTION 6.6 Books and Records; Tax Election. (a) The Owner
Trustee shall be responsible for the keeping of all appropriate books and
records relating to the receipt and disbursement of all moneys that it may
receive or be entitled to hereunder or under any other Related Agreement. The
Owner Trustee shall file an application with the IRS for a taxpayer
20
identification number with respect to the Trust (and, upon receipt of such
number, shall notify the Indenture Trustee thereof) and prepare or cause to be
prepared and sign and/or file a tax return in connection with the transactions
contemplated hereby or by any other Related Agreement (the "Tax Return");
provided, however, that the Owner Trustee shall send or cause to be sent a copy
of the completed Tax Return to the Depositor, the Certificateholders and the
Indenture Trustee not more than 60 nor less than 30 days prior to the due date
of the Tax Return. The Depositor and the Certificateholders shall each, upon
request by the Owner Trustee (or the Agent of the Owner Trustee), furnish the
Owner Trustee (or the Agent of the Owner Trustee) with all such information as
may be reasonably required from the Depositor or the Certificateholders in
connection with the preparation of such Tax Return. The Owner Trustee shall keep
copies of the Tax Returns delivered to or filed by it (or by the Agent of the
Owner Trustee).
(b) The Owner Trustee agrees that, for federal income tax
purposes, the Trust shall be treated as a grantor trust under Part I, Subpart E,
of Subchapter J of the Code, and that the Owner Trustee on behalf of the Trust
shall file (or cause to be filed) tax returns consistent with the
characterization of the Trust as a grantor trust. The Owner Trustee shall be
deemed to be in compliance with its obligations pursuant to this Section 6.6 if
(i) the Trust enters into an agreement with LaSalle National Bank with respect
to the preparation of tax returns relating to the Trust and (ii) it executes and
delivers the reports and documents required hereunder; provided, however, that
LaSalle National Bank shall be entitled to delegate its duties under such
agreement to a subcontractor; provided, further, that the LaSalle National Bank
will be primarily liable for the performance of duties thereunder.
[End of Article VI]
21
ARTICLE I
COMPENSATION, REIMBURSEMENT AND INDEMNIFICATION
OF THE OWNER TRUSTEE
SECTION 7.1 Compensation of the Owner Trustee. The Owner
Trustee shall be entitled to receive as compensation for its services the Owner
Trustee Fee, such amount to be payable: first, as provided in the Indenture;
second, out of amounts on deposit in the Certificate Account that represent
payments received in respect of the Daiwa FLOWS Certificates; and, third, to the
extent not paid pursuant to either clause "first" or "second" of this Section,
within 60 days of first becoming due, by the Certificateholders, on a joint and
several basis.
SECTION 7.2 Reimbursement and Indemnification of the
Owner Trustee
(a) The Owner Trustee shall be entitled to be reimbursed for
its reasonable expenses (including reasonable attorneys' fees) incurred in the
performance of its duties as Owner Trustee hereunder, and to be compensated
reasonably for any extraordinary services rendered under Section 5.1(b) except
to the extent that such expenses arise out of or result from (i) the Owner
Trustee's own willful misconduct, bad faith or gross negligence; (ii) the
inaccuracy of any of the Bank's or the Owner Trustee's representations or
warranties contained in Section 6.2; (iii) the Owner Trustee's failure to
perform obligations expressly undertaken by it in this Trust Agreement in
accordance with the standard of care set forth in Section 5.4(a); (iv) taxes
based on or measured by any fees, commissions or compensation received by the
Owner Trustee for acting as such in connection with any of the transactions
contemplated by this Trust Agreement or any other Related Agreements; and (v)
the Owner Trustee's failure to use due care to receive, manage and disburse
moneys actually received by it in accordance with the terms hereof.
(b) The Owner Trustee shall be entitled to be indemnified and
held harmless from and against any and all liabilities, obligations, indemnity
obligations, losses (excluding loss of anticipated profits), damages (including
reasonable expenses reasonably incurred), claims, actions, suits or judgments of
any kind and nature whatsoever (collectively, the "Liabilities") which may be
imposed on, incurred by or asserted at any time against the Owner Trustee in any
way relating to or arising out of the Trust Estate, any of the properties
included therein, the administration of the Trust Estate or any action or
inaction of the Owner Trustee hereunder or under the Related Agreements, except
to the extent that such Liabilities arise out of or result from (i) the Owner
Trustee's own willful misconduct, bad faith or negligence; (ii) the inaccuracy
of any of the Owner Trustee's representations or warranties contained in Section
6.2; (iii) the Owner Trustee's failure to perform obligations expressly
undertaken by it in this Trust Agreement in accordance with the standard of care
set forth in Section 5.4(a); (iv) taxes based on or measured by any fees,
commissions or compensation received by the Owner Trustee for acting as such in
connection with any of the transactions contemplated by this Trust Agreement or
any other Related Agreements; and (v) the Owner Trustee's failure to use due
care to receive, manage and disburse moneys actually received by it in
accordance with the terms hereof. The indemnities contained in this Section
7.2(b) shall survive the termination of this Trust Agreement and the removal or
resignation of the Owner Trustee hereunder.
(c) Any reimbursements and indemnities to the Owner Trustee
pursuant to this Section 7.2 shall be payable: first, out of amounts on deposit
in the Certificate Account; and, second, to the extent not paid pursuant to
clause first within 60 days of first being incurred, by the Certificateholders,
22
on a joint and several basis.
SECTION 7.3 Not Obligations of the Trust. None of the fees,
expenses and other liabilities referred to in Sections 7.1 and 7.2 shall be
obligations of the Trust or otherwise chargeable to the Trust Estate. The Owner
Trustee hereby agrees not to cause or participate in the filing of a petition in
bankruptcy against the Trust for the non-payment to the Owner Trustee of any
amounts provided by this Trust Agreement until the expiration of one year and
one day after the payment in full of all the Notes issued under the Indenture.
[End of Article VII]
23
ARTICLE I
TERMINATION OF TRUST AGREEMENT
SECTION 8.1 Termination. The Trust shall not be terminated
under this Section 8.1 until the Notes have been paid in full and the Lien on
the Trust Estate created by the Indenture has been released; provided, however,
that in no event shall the trust created hereby continue beyond the expiration
of 21 years from the death of the survivor of the descendants of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, the late ambassador of the United States to the Court of St. James's
living on the date hereof.
This Trust Agreement may be terminated by all of the
Certificateholders at any time prior to the issuance of the Notes and the pledge
of the Trust Estate pursuant to the Indenture, and at any time after the
Indenture is discharged in accordance with Article V thereof, and this Trust
Agreement shall terminate in connection with the final distribution on the Daiwa
FLOWS Certificates. With respect to any such event, this Trust Agreement and the
estate and rights thereby granted by the Depositor to the Owner Trustee in the
Trust Estate shall cease, terminate and be void as of the date of the final
distribution by the Owner Trustee of all the assets in the Trust Estate pursuant
to this Section 8.1 and Section 4.2. After payment of all amounts then due and
payable to the Owner Trustee pursuant to Sections 7.1 and 7.2 hereof, all right,
title and interest in the Trust Estate still held by the Owner Trustee at the
time of such termination shall be transferred, assigned and paid over to the
Certificateholders or their respective designees.
The Certificateholders hereby irrevocably appoint the Owner
Trustee as its attorney-in-fact for the purposes of the terminating the Trust.
SECTION 8.2 Further Assurances by the Owner Trustee upon
Termination
Upon termination of this Trust, the Owner Trustee shall take
such action as may be requested by the Certificateholders to transfer the
remaining assets of the Trust to the Certificateholders or the
Certificateholders' respective designees, including the execution of instruments
of transfer or assignment with respect to the Daiwa FLOWS Certificates and any
of the Related Agreements to which the Owner Trustee is a party.
SECTION 8.3 Insolvency of a Certificateholder. The insolvency
or other similar incapacity of a Certificateholder shall not (i) operate to
terminate this Trust Agreement; (ii) entitle any Certificateholder's legal
representatives to claim an accounting or to take any action in any court for a
partition or winding up of the Trust Estate; or (iii) otherwise affect the
rights, obligations and liabilities of the parties hereto.
[End of Article VIII]
24
ARTICLE I
SUCCESSOR OWNER TRUSTEES, CO-OWNER TRUSTEES
AND SEPARATE OWNER TRUSTEES
SECTION 9.1 Resignation of the Owner Trustee: Appointment
of Successor
(a) The Owner Trustee may resign at any time (and shall
immediately resign if it ceases to be an Eligible Trustee) by giving at least 60
days written notice to the Certificateholders, the Depositor, the Indenture
Trustee, such resignation to be effective on the acceptance of appointment by a
successor Owner Trustee under Section 9.1(b) hereof. The Depositor shall remove
the Owner Trustee by written notice, a copy of which shall be concurrently
delivered by the Depositor to the Certificateholders and the Indenture Trustee,
if the Owner Trustee ceases to be an Eligible Trustee and fails to resign
immediately such resignation to be effective on the acceptance of appointment by
a successor Owner Trustee under Section 9.1(b) hereof. The Owner Trustee
otherwise may be removed with or without cause at any time by the
Certificateholders with 60 days' prior written notice, a copy of which shall be
concurrently delivered by the Certificateholders to the Depositor and the
Indenture Trustee. Any such removal shall be effective upon the acceptance of
appointment by a successor Owner Trustee under Section 9.1(b) hereof. In case of
the resignation or removal of the Owner Trustee, the Certificateholders may
appoint a successor Owner Trustee by an instrument signed by the
Certificateholders. If a successor Owner Trustee shall not have been appointed
within 60 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, the Depositor, the Indenture Trustee or any Certificateholder may apply
to any court of competent jurisdiction to appoint a successor Owner Trustee to
act until such time, if any, as a successor shall have been appointed and shall
have accepted its appointment as above provided. Any successor Owner Trustee so
appointed by such court shall immediately and without further act be superseded
by any successor Owner Trustee appointed as above provided within one year from
the date of the appointment by such court.
(b) Any successor Owner Trustee, however appointed, shall
execute and deliver to the predecessor Owner Trustee and the Indenture Trustee
an instrument accepting such appointment and shall furnish a photocopy of such
instrument to the Certificateholders, 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
herein; provided, however, that 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 moneys or
other property then held by such predecessor Owner Trustee upon the trusts
herein expressed.
(c) Any successor Owner Trustee shall be an Eligible Trustee,
willing, able and legally qualified to perform the duties of the Owner Trustee
hereunder.
(d) Any corporation into which the Owner Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Owner Trustee shall be
a party, or any corporation to which substantially all the corporate trust
business of the Owner Trustee may be transferred, shall, subject to the terms of
25
Section 9.1(c) hereof, be the Owner Trustee under this Trust Agreement without
any further act.
SECTION 9.2 Co-Trustees and Separate Trustees. Whenever the
Owner Trustee or the Indenture Trustee shall deem it necessary or prudent in
order to conform to any law of any jurisdiction in which all or any part of the
Trust Estate shall be situated or to make any claim or be a party to any suit
with respect to the Trust Estate, the Trust Certificates, the Notes or any
Related Agreement, or the Owner Trustee or the Indenture Trustee shall be
advised in writing by counsel reasonably satisfactory to each of them that it is
so necessary or prudent, the Owner Trustee and the Certificateholders shall
execute and deliver an agreement supplemental hereto and all other instruments
and agreements, and shall take all other action, necessary or proper to
constitute one or more persons or entities, who need not meet the requirements
of Section 9.1(c) hereof (and the Owner Trustee may appoint one or more of its
officers), either as co-trustees or co-trustees jointly with the Owner Trustee
of all or any part of the Trust Estate, or as separate trustee or separate
trustees of all or any part of the Trust Estate, and to vest in such persons or
entities, in such capacity, such title to the Trust Estate or any part thereof
and such rights or duties as may be necessary or desirable, all for such period
and under such terms and conditions as are reasonably satisfactory to the Owner
Trustee and the Certificateholders. In case any co-trustee or separate trustee
shall die, become incapable of acting, resign or be removed, the title to the
Trust Estate and all rights and duties of such co-trustee or separate trustee
shall, so far as permitted by law, vest in and be exercised by the Owner
Trustee, without the appointment of a successor to such co-trustee or separate
trustee.
SECTION 9.3 Notice. Whenever a successor Owner Trustee is
appointed under Section 9.1 hereof, the Owner Trustee resigns pursuant to such
Section 9.1 or a co-trustee or separate trustee is appointed pursuant to Section
9.2 hereof, the Certificateholders promptly shall give notice of such fact to
the Rating Agencies, if the Indenture has not been discharged.
[End of Article IX]
26
ARTICLE I
SUPPLEMENTS AND AMENDMENTS
SECTION 10.1 Supplements and Amendments. Subject to Sections
10.2 and 10.3, this Trust Agreement shall be amended by a written instrument
signed by the Owner Trustee and the Certificateholders (and, if its rights
hereunder are adversely affected, the Depositor), but if in the opinion of the
Owner Trustee any instrument required to be so executed materially and adversely
affects any right, duty or liability of, or immunity or indemnity in favor of
the Bank or the Owner Trustee under this Trust Agreement or any of the other
Related Agreements to which the Owner Trustee is a party, or would cause or
result in any conflict with or breach of any terms, conditions or provisions of,
or default under, the Bank's charter documents or by-laws 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, unless it shall have
been provided an indemnity satisfactory to it by the Certificateholders.
In the event that there is more than one Holder of Trust
Certificates (as shown on the Certificate Register), the consent to an amendment
by Certificateholders entitled to a majority of the Voting Rights shall be
sufficient to bind all of such Holders; provided, however, that no such
amendment shall: (i) reduce in any manner the amount of, or delay the timing of,
payments received on any Trust Certificate without the consent of the affected
Holder; or (ii) amend this Section 10.1, without the consent of the Holders of
all Trust Certificates then outstanding.
SECTION 10.2 Limitation on Amendments. Notwithstanding Section
10.1 or Section 10.3 hereof, the Owner Trustee shall not, without the consent of
the Indenture Trustee, amend Section 8.1 of this Trust Agreement, or execute any
amendment that might result in the Trust being terminated prior to the
satisfaction and discharge of the Lien of the Indenture on the Trust Estate or
otherwise have a material adverse effect on the Noteholders prior to the payment
in full of the principal of and interest on the Notes. Furthermore,
notwithstanding Section 10.1 or Section 10.3 hereof, the Owner Trustee shall not
execute any amendment without obtaining written confirmation from the Rating
Agency that such amendment will not result in the qualification, downgrade or
withdrawal of any then-current rating on the Notes.
SECTION 10.3 Additional Amendment Provisions. (a) It shall not
be necessary for the consent of the Certificateholders under this Article X to
approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof shall be subject to such reasonable regulations as the Owner Trustee may
prescribe.
(b) The Owner Trustee may amend this Trust Agreement at any
time without the consent of the Certificateholders at any time prior to the
liquidation of the Trust in order to modify, eliminate or add to any of its
provisions, to such extent as shall be necessary to prevent or reduce the
imposition on the Trust of any material federal, state or local taxes; provided,
however, that such action, as evidenced by an Opinion of Counsel acceptable to
the Owner Trustee is necessary or advisable to prevent the imposition of any
such taxes on the Trust.
(c) Prior to the execution of any amendment to this Trust
Agreement, the Owner Trustee shall be entitled to receive and rely upon an
Opinion of Counsel, at the expense of the party requesting such amendment (or,
27
if such amendment is requested by the Owner Trustee, then at the expense of the
Trust) stating that the execution of such amendment is authorized or permitted
by this Trust Agreement.
[End of Article X]
28
ARTICLE I
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE DEPOSITOR
SECTION 11.1 Representations and Warranties of the Depositor
(a) The Depositor represents and warrants as follows for the
benefit of the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders:
(i) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
has full power and authority, and has taken all action necessary, to
execute and deliver this Trust Agreement, and any and all other
documents to be executed or delivered by it in connection with this
Trust Agreement, and to fulfill its obligations under, and to
consummate the transactions contemplated by, this Trust Agreement, and
this Trust Agreement and such other documents executed in connection
herewith are the legal, valid and binding obligations of the Depositor,
enforceable against it in accordance with their respective terms,
except as such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights
of creditors generally and by general principles of equity;
(ii) the execution and delivery of this Trust Agreement and
each other document to be executed or delivered by it in connection
with this Trust Agreement, and the performance of its obligations
hereunder and thereunder by the Depositor will not violate the
provisions of its certificate of incorporation or bylaws, conflict with
any provision of any law or regulation to which it is subject, or
conflict with, result in a breach of, or constitute a default under any
of the terms, conditions or provisions of, any agreement or instrument
to which the Depositor is a party or by which it or its property is
bound, or any order or decree applicable to the Depositor, or result in
the creation or imposition of any Lien on any of the Depositor's assets
or property, which would materially and adversely affect the ability of
the Depositor to carry out the transactions contemplated by this Trust
Agreement or such other documents executed in connection herewith; no
consent, approval, authorization or order of or filing with or notice
to any court or governmental agency or body is required for the
execution, delivery and performance by the Depositor of this Trust
Agreement or such other documents;
(iii) there is no action, suit or proceeding pending against
the Depositor in any court or by or before any other governmental
agency or instrumentality which would materially and adversely affect
the validity of the Daiwa FLOWS Certificates or the ability of the
Depositor or the Certificateholder to carry out the transactions
contemplated by this Trust Agreement; and
(iv) immediately prior to the conveyance of the Daiwa FLOWS
Certificates to the Owner Trustee, the Depositor had good title to, and
was the sole owner of, the Daiwa FLOWS Certificates, free and clear of
any pledge, lien, encumbrance or security interest and such assignment
validly transfers all right, title and interest in and to the Daiwa
FLOWS Certificates to the Owner Trustee, free and clear of any pledge,
lien, encumbrance or security interest.
29
(b) It is understood and agreed that each of the foregoing
representations and warranties of the Depositor shall survive delivery of the
Daiwa FLOWS Certificates to the Owner Trustee. Upon discovery or receipt of
notice by the Depositor or a Responsible Officer of the Owner Trustee of a
breach of any of the foregoing representations and warranties that materially
and adversely affects the interests of the Indenture Trustee for the benefit of
the Noteholders or the Owner Trustee for the benefit of the Certificateholders
in the Daiwa FLOWS Certificates, the party discovering such breach shall give
prompt written notice to the other party hereto and to the Indenture Trustee.
SECTION 11.2 Accrued Interest, Etc. The Depositor agrees that
any income, interest, fees and other payments that it may receive in respect of
the Daiwa FLOWS Certificates applicable to a period from and including the date
in December 1997 on which distributions are made on the Daiwa FLOWS Certificates
pursuant to the Daiwa Pooling Agreement shall inure to the benefit of the Trust,
and the Depositor shall pay such amounts to the Owner Trustee to be remitted in
accordance with Section 4.1 promptly upon receipt.
SECTION 11.3 Additional Covenants of the Depositor. The
Depositor hereby covenants and agrees that:
(a) The business and affairs of the Depositor will be managed
by or under the direction of its board of directors in accordance with
its certificate of incorporation and by-laws. The Depositor will keep
correct and complete books and records of accounts and minutes of the
meetings and other proceedings of its board of directors. Any such
resolutions, agreements and other instruments will be continuously
maintained as official records by the Depositor.
(b) The Depositor will at all times ensure that its
capitalization is adequate in light of its business and purposes. The
Depositor will pay from its own funds and assets (and not the Trust's)
all obligations and indebtedness incurred by it.
(c) The Depositor will not conduct its business in the name of
the Trust or the Company.
(d) The Depositor will not guarantee any obligations of the
Trust (including the Notes or the Trust Certificates). The Depositor
will not operate or purport to operate as an integrated, single
economic unit with respect to the Trust or the Company or seek or
obtain credit or incur any obligation to any third party based on the
assets of the Trust or the Company or induce any such third party to
reasonably rely on the creditworthiness of the Trust or the Company in
connection therewith.
(e) The accounting records of the Depositor will disclose the
effect of the transactions in accordance with statutory accounting
practices and relevant pronouncements.
(f) The Depositor hereby acknowledges, and agrees for the
benefit of Owner Trustee, the Indenture Trustee, the Noteholders and
the Certificateholders to perform, each obligation imposed upon it
under the Indenture.
(g) The Depositor hereby acknowledges, and agrees for the
benefit of Owner Trustee, the Indenture Trustee, the Noteholders and
the Certificateholders that it will treat the Notes as debt instruments
30
for purposes of federal and state income tax, franchise tax, and other
tax measured in whole or in part by income.
[End of Article XI]
31
ARTICLE I
TRANSFER OF INTEREST OF THE DEPOSITOR
SECTION 12.1 Registration of Transfer and Exchange of Trust Certificates
(a) At all times during the term of this Trust Agreement,
there shall be maintained at the office of a registrar appointed by the
Depositor (the "Certificate Registrar") a register (the "Certificate Register")
in which, subject to such reasonable regulations as the Certificate Registrar
may prescribe, the Certificate Registrar shall provide for the registration of
Trust Certificates and the registration of transfers and exchanges of Trust
Certificates as herein provided. The Owner Trustee is hereby initially appointed
(and hereby agrees to act in accordance with the terms hereof) as Certificate
Registrar for the purpose of registering Trust Certificates and transfers and
exchanges of Trust Certificates as herein provided. The Owner Trustee may
appoint, by a written instrument delivered to the Depositor, any other bank or
trust company to act as Certificate Registrar under such conditions as the Owner
Trustee may prescribe, provided that the Owner Trustee shall not be relieved of
any of its duties or responsibilities hereunder as Certificate Registrar by
reason of such appointment. If the Owner Trustee resigns or is removed in
accordance with the terms hereof, the successor trustee shall immediately
succeed to its predecessor's duties as Certificate Registrar. The Depositor and
the Owner Trustee shall have the right to inspect the Certificate Register or to
obtain a copy thereof at all reasonable times, and to rely conclusively upon a
certificate of the Certificate Registrar as to the information set forth in the
Certificate Register.
(b) No sale, transfer, or other disposition of any Trust
Certificate may be made, and the Certificate Registrar shall refuse to register
any such transfer, unless the Depositor (or, if the Depositor no longer exists,
100% of the Certificateholders) shall consent in writing to such sale, transfer,
or other disposition. The Depositor (or any such other Certificateholder) shall
be entitled to request from the parties interested in effecting such sale,
transfer, or other disposition, and to rely upon, a certification of facts
and/or an opinion of counsel which establishes to the satisfaction of the
Depositor (or such other Certificateholder) that such sale, transfer, or other
disposition is permissible under applicable law and the Related Agreements.
(c) Transfer of any Trust Certificate is limited to "qualified
institutional buyers" as defined in Rule 144A promulgated under the 1933 Act
("QIBs") purchasing for their own accounts or for the account of a QIB, whom the
Certificateholder has informed, in each case, that the transfer is being made in
reliance on Rule 144A, in a transaction meeting the requirements of Rule 144A,
and to institutional "accredited investors" as defined in Rule 501(a)(1), (2),
(3), or (7) (or any entity in which all of the equity owners come within such
paragraphs) of Regulation D under the 1933 Act, in each case to a transferee
which constitutes one "beneficial owner" and a qualified purchaser, as defined
in the 1940 Act, and which is not purchasing with a view to distribution in
violation of the 1933 Act. If a Certificateholder desires to transfer all or a
portion of the interest represented by a Trust Certificate, the
Certificateholder, as assignor, will be required to surrender the Trust
Certificate to the Certificate Registrar and to execute and deliver to the
Certificate Registrar an assignment request in the form attached thereto, and
the proposed transferee will be required to execute and deliver to the Owner
Trustee the Transfer Affidavit in the form attached thereto. No transfer shall
be effective or shall be registered in the Certificate Register without the
express prior written consent of the Owner Trustee.
(d) No transfer of any ownership interest in a Trust
Certificate shall be made to any Plan. Each prospective transferee of a Trust
32
Certificate shall deliver to the Trust, the Certificate Registrar and the
Indenture Trustee (a) an investment representation letter stating, that the
prospective transferee is not a Plan, or (b) an Opinion of Counsel, at the
expense of the transferring Certificateholder, which establishes to the
satisfaction of the Trust, the Certificate Registrar and the Indenture Trustee
that the purchase or holding of the Trust Certificate will not result in the
Trust Estate being deemed to be "plan assets"' and subject to the fiduciary
responsibility or prohibited transaction provisions of ERISA, the Code, or
Similar Law and will not constitute or result in a prohibited transaction within
the meaning of Section 406 or Section 407 of ERISA or Section 4975 of the Code,
and will not subject the Trust, the Indenture Trustee or the Certificate
Registrar to any obligation or liability (including obligations or liabilities
under ERISA or Section 4975 of the Code), which Opinion of Counsel shall not be
an expense of the Indenture Trustee, the Trust Estate, Certificate Registrar or
the Trust. Any transfer of a Trust Certificate that would violate, or result in
a prohibited transaction under, ERISA or Section 4975 of the Code or any Similar
Law shall be deemed absolutely null and void ab initio.
(e) For so long as the Notes are outstanding and the Lien of
the Indenture has not been satisfied and discharged, no sale, transfer, or other
disposition of any Trust Certificate may be made, and the Certificate Registrar
shall refuse to register any such transfer, unless the Owner Trustee shall have
received written confirmation from the Rating Agency to the effect that such
sale, transfer, or other disposition will not result in the qualification,
downgrade or withdrawal of any then current rating on the Notes.
(f) Each Trust Certificate shall bear a legend describing or
referencing the restrictions on transferability set forth in Sections 12.1(b),
(c) and (d).
(g) Subject to compliance with Sections 12.1(b), (c) and (d),
upon surrender for registration of transfer of any Trust Certificate at the
office of the Certificate Registrar or at the office of its Agent in the City of
New York, the Owner Trustee shall execute, and the Certificate Registrar shall
deliver and authenticate, in the name of the designated transferee or
transferees, one or more new Trust Certificates of the same Class, in authorized
denominations, evidencing in the aggregate a like aggregate Percentage Interest
and dated the date of authentication by the Certificate Registrar.
(h) At the option of any Certificateholder, Trust Certificates
may be exchanged for other Trust Certificates of the same Class, in authorized
denominations, evidencing in the aggregate a like aggregate Percentage Interest
upon surrender of the Trust Certificates to be exchanged at the office of the
Certificate Registrar, or the office of its Agent in the City of New York.
Whenever any Trust Certificates are so surrendered for exchange, the Owner
Trustee shall execute and the Certificate Registrar shall authenticate and
deliver, the Trust Certificates which the Certificateholder is entitled to
receive.
(i) If the Owner Trustee or the Certificate Registrar so
requires, every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by, the Certificateholder thereof or such
person's attorney duly authorized in writing.
(j) No service charge shall be made to the requesting
Certificateholder for any registration of transfer or exchange of Trust
Certificates, but the Certificate Registrar may require payment of a sum
33
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Trust Certificates.
(k) The Certificate Registrar shall cancel and retain or
destroy, in accordance with the Owner Trustee's retention policy then in effect,
all Trust Certificates surrendered for registration of transfer or exchange.
. SECTION 12.2 Mutilated, Destroyed, Lost or Stolen Trust Certificates
If (i) any mutilated Trust Certificate is surrendered to the
Owner Trustee or the Certificate Registrar, or the Owner Trustee and the
Certificate Registrar receive evidence to their satisfaction of the destruction,
loss or theft of any Trust Certificate, and (ii) there is delivered to the Owner
Trustee and the Certificate Registrar such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of actual
knowledge by a Responsible Officer of the Owner Trustee or the Certificate
Registrar that such Trust Certificate has not been acquired by a bona fide
purchaser, the Owner Trustee shall execute and the Certificate Registrar shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like
Class and tenor. Upon the issuance of any new Trust Certificate under this
Section 12.2, the Owner Trustee may require the payment 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
Certificate Registrar) connected therewith. Any replacement Trust Certificate
issued pursuant to this Section shall constitute complete and indefeasible
evidence of ownership of the corresponding interest in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust
Certificate shall be found at any time, and such original Trust Certificate
shall be deemed cancelled upon the issuance of such replacement Trust
Certificate.
SECTION 12.3 Persons Deemed Owners. Prior to due presentation
of a Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar, the Indenture Trustee and any agent of any of them may
treat the person or entity in whose name any Trust Certificate is registered as
the owner of such Trust Certificate for the purpose of receiving distributions
pursuant to Section 4.2 hereof and for all other purposes whatsoever, and
neither the Owner Trustee, the Certificate Registrar, the Indenture Trustee nor
any agent of any of them shall be affected by notice to the contrary.
SECTION 12.4 Access to Names and Addresses.
(a) If any Certificateholder (an "Applicant") applies in writing to the
Owner Trustee, and such application states that the Applicant desires to
communicate with other Certificateholders with respect to their rights under
this Trust Agreement or the Trust Certificates and is accompanied by a copy of
the communication which such Applicant proposes to transmit, then the Owner
Trustee shall, at the expense of such Applicant, within ten Business Days after
the receipt of such application, furnish or cause to be furnished to such
Applicant a list of the names and addresses of the Certificateholders as set
forth in the Certificate Register.
(b) Every Certificateholder consents to the disclosure to any Applicant
of its identity and status as a Certificateholder and agrees with the Owner
Trustee that the Owner Trustee and the Certificate Registrar shall not be held
accountable in any way by reason of the disclosure of any information as to the
names and addresses of the Certificateholders hereunder, regardless of the
34
source from which such information was derived.
SECTION 12.5 Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Trust Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
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 Owner Trustee. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Trust Agreement and conclusive in favor of the Owner Trustee, if made in
the manner provided in this Section 12.5.
(b) The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Owner Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by a Certificateholder shall bind every transferee of
every Trust Certificate issued upon the registration of transfer of such
Certificateholder's Trust Certificate or in exchange therefor or in lieu
thereof, in respect of anything done, or omitted to be done, by the Owner
Trustee, in reliance thereon, whether or not notation of such action is made
upon such Trust Certificate.
(d) The Owner Trustee may require such additional proof of any matter
referred to in this Section 12.5 as it shall deem necessary.
35
SECTION 12.6 Transferee's Agreement. No assignment, conveyance
or other transfer pursuant to this Article XII shall be effective unless the
transferee shall have executed and delivered to the Owner Trustee an instrument
containing the transferee's agreement to be bound by the terms of this Trust
Agreement.
[End of Article XII]
36
ARTICLE I
MISCELLANEOUS
SECTION 13.1 No Legal Title to Trust Estate in the
Certificateholder. The Certificateholders shall not have legal title to any part
of the Trust Estate; provided, however, that the Certificateholder has a
beneficial interest in the Trust Estate (and initially shall have all right,
title and interest in and to the Trust Certificates). No transfer by operation
of law or otherwise of any right, title or interest of the Certificateholders in
and to the Trust Estate or hereunder shall operate to terminate this Trust
Agreement or the Trust or the trusts hereunder or entitle any successor or
transferee to an accounting or to the transfer to it of legal title to any part
of the Trust Estate.
SECTION 13.2 Action by the Owner Trustee is Binding. Any
actions, directions, approvals or consents by the Owner Trustee so long as such
actions, directions, consents or approvals are made pursuant to the terms of
this Trust Agreement shall bind the Certificateholders and shall be effective to
consent to action taken by the parties. No such party shall be required to
inquire as to the authorization, necessity, expediency or regularity of such
consent by the Owner Trustee.
SECTION 13.3 Limitation on Rights of Others. Nothing in this
Trust Agreement, whether express or implied, shall be construed to give to any
person or entity, other than the Bank, the Owner Trustee, the Depositor, the
Certificateholder and the Indenture Trustee on behalf of the Noteholders, and
the Certificateholders, any legal or equitable right, remedy or claim under or
in respect of this Trust Agreement.
SECTION 13.4 Notices. All demands, notices and communications
hereunder shall be in writing, may be given by telecopy transmission, shall be
deemed to have been given upon receipt (except that notices being sent by first
class mail, postage prepaid, shall be deemed to be received five business days
following the mailing thereof) as follows:
If to the Owner Trustee, to:
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
37
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Finger
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
If to the Depositor, to:
CAX DTR Securitization Corp.
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (303) 614-[9401]
Telephone Number: (303) 614-[9400]
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
with copies to:
Bartlit ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
If to the Indenture Trustee, as set forth in the Indenture,
If to a Certificateholder, to that person or entity's name and
address as set forth from time to time in the Certificate
Register,
or to such other address as any of them shall specify by written notice to the
other parties.
SECTION 13.5 Severability. To the extent permitted by law, any
provision of this Trust Agreement that may be determined by competent authority
to be 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.
SECTION 13.6 Limitation on the Depositor's and the
Certificateholder's Respective Liability
38
Neither the Depositor nor any Certificateholder shall have any
liability for the performance of this Trust Agreement except as expressly set
forth herein.
SECTION 13.7 Separate Counterparts. This Trust 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.
SECTION 13.8 Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the Bank, the Owner Trustee and its successors and assigns, the
Certificateholders and the Depositor and its or their respective successors and
assigns, all as herein provided. Any request, notice, direction, consent, waiver
or other instrument or action by the Depositor shall bind the successors and
assigns of the Depositor and any request, notice, direction, consent, waiver or
other instrument or action by a Certificateholder shall bind the successors and
assigns of such Certificateholder. It is the intention of the parties hereto
that the Trust constitute a trust formed pursuant to the laws of the State of
Delaware with the purpose of facilitating the transactions contemplated by the
Related Agreements.
SECTION 13.9 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 provision hereof.
SECTION 13.10 Governing Law. THIS TRUST AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE.
SECTION 13.11 Administration of Trust. The principal place
of administration of the Trust shall be in Delaware.
SECTION 13.12 Performance by the Depositor. Any obligation of
the Owner Trustee hereunder or under any Related Agreement or other document
contemplated herein may be performed by the Depositor and any such performance
shall not be construed as a revocation of the trusts created hereby.
SECTION 13.13 Conflict with Indenture and Underlying
Agreement. If this Trust Agreement (or any instructions given by the Depositor
or the Certificateholders pursuant hereto) shall require that any action be
taken with respect to any matter and the Indenture or any Underlying Agreement
(or any instructions duly given in accordance with the terms thereof) shall
require that a different action be taken with respect to such matter, and such
actions shall be mutually exclusive, the provisions of the Indenture or such
Underlying Agreement, in respect thereof, shall control.
SECTION 13.14 No Implied Waiver. No term or provision of this
Trust Agreement may be changed, waived, discharged or terminated orally, but
only by an instrument in writing entered into as provided in Section 10.1
hereof; and any such waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
SECTION 13.15 Third Party Beneficiary. The Indenture Trustee
for the benefit of the Noteholders is an intended third-party creditor
beneficiary of this Trust Agreement from and including the date hereof to the
39
date on which the Lien on the Trust Estate created pursuant to the Indenture is
satisfied, discharged and released pursuant to Article III of the Indenture.
SECTION 13.16 References. The definitions in Article I shall
apply equally to both the singular and plural forms of the terms defined.
"Include", "included", "includes" and "including" shall be deemed to be followed
by "without limitation". "Writing", "written" and comparable terms refer to
printing, typing, lithography or other means of reproducing words in a visible
form. Any agreement or instrument or any law, rule or regulation of any
Governmental Authority defined or referred to in Article I means such agreement
or instrument or such law, rule or regulation as from time to time amended,
modified or supplemented in accordance with the terms thereof, including (in the
case of agreements or instruments) by waiver or consent and (in the case of such
law, rule or regulation) by succession of any comparable successor law, rule or
regulation and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its successors and permitted assigns. Any term defined above
by reference to any agreement or instrument or any law, rule or regulation of
any Governmental Authority has such meaning whether or not such agreement,
instrument or law, rule or regulation is in effect. "Trust Agreement", "hereof",
"herein", "hereto", "hereunder" and comparable terms refer to this Trust
Agreement (including all exhibits and schedules hereto) and not to any
particular article, section, clause or other subdivision hereof or attachment
hereto. References to any gender include, unless the context otherwise requires,
references to all genders, and references to the singular include, unless the
context other requires, references to the plural and vice versa. References in
this Trust Agreement to "Article", "Section", "Clause" or another subdivision or
to an attachment are, unless the context otherwise requires, to an article,
clause or subdivision of or attachment to this Trust Agreement.
[Signatures appear on next page]
40
EXECUTION COPY IN WITNESS WHEREOF, the parties hereto have
caused this Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the date hereof.
CAX DTR SECURITIZATION CORP.,
Delaware corporation,
as Depositor,
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President & Secretary
-i-
STRUCTURED MORTGAGE TRUST
1997-2, a Delaware business trust,
By: Wilmington Trust Company,
not individually, but solely
in its capacity as Owner Trustee,
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ii