EXHIBIT 10.2
EXECUTION VERSION
TRUST AGREEMENT
dated as of
September 6, 2001
among
CAPITALSOURCE FINANCE LLC
and
EQUIVEST CAPITAL, INC.
as Initial Certificateholders
and
CS RESORTS, INC.
as Owner Trustee
and
THE CAPITAL TRUST COMPANY OF DELAWARE
as Delaware Trustee
CS RESORTS - 2001 TRUST
EXHIBIT 10.2
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...........................................................................1
Section 1.1 Definitions.........................................................................1
Section 1.2 Interpretation......................................................................1
ARTICLE II ORGANIZATION........................................................................2
Section 2.1 Name................................................................................2
Section 2.2 Office..............................................................................2
Section 2.3 Declaration of Trust and Statement of Intent........................................2
Section 2.4 Purposes of Trust...................................................................3
ARTICLE III CERTIFICATES AND CERTIFICATEHOLDERS.................................................3
Section 3.1 Form of Definitive Certificates, Authorized Denominations of Certificates...........3
Section 3.2 Issuance of Certificates; Execution and Delivery of Definitive Certificates.........4
Section 3.3 Registration; Registration of Transfer and Exchange of Definitive Certificates......5
Section 3.4 Mutilated, Destroyed, Lost or Stolen Definitive Certificates........................6
Section 3.5 Persons Deemed Certificateholders...................................................7
Section 3.6 Transfer of Certificates............................................................7
Section 3.7 Approvals of Certificateholders....................................................10
Section 3.8 No Recourse........................................................................10
Section 3.9 Majority Control...................................................................10
Section 3.10 Liability of Certificateholders.................................................10
Section 3.11 Book-Entry and Definitive Certificates..........................................10
ARTICLE IV ALLOCATIONS........................................................................12
Section 4.1 Capital Accounts...................................................................12
Section 4.2 Allocations to Capital Accounts....................................................12
Section 4.3 Allocation of Net Expense..........................................................13
Section 4.4 Tax Allocations....................................................................13
ARTICLE V DISTRIBUTIONS......................................................................13
Section 5.1 Distributions......................................................................13
Section 5.2 Withholding........................................................................14
ARTICLE VI TRUSTEES...........................................................................15
Section 6.1 Powers of the Owner Trustee........................................................15
Section 6.2 Delegation of Responsibilities.....................................................16
Section 6.3 Right to Request and Receive Instructions..........................................17
Section 6.4 Trustee Fees.......................................................................17
Section 6.5 Trustee Expenses...................................................................18
Section 6.6 Liability of Owner Trustee.........................................................18
Section 6.7 Indemnification of Owner Trustee...................................................19
EXHIBIT 10.2
Section 6.8 Resignation........................................................................20
Section 6.9 Removal of Owner Trustee...........................................................21
Section 6.10 Successor Owner Trustee............................................................21
Section 6.11 Merger or Consolidation of Trustee.................................................21
Section 6.12 Representations and Warranties of Owner Trustee....................................22
Section 6.13 Prior Notice to Certificateholders with Respect to Certain Matters.................22
Section 6.14 Insolvency Proceedings.............................................................22
Section 6.15 Restrictions on Certificateholders' Power..........................................23
Section 6.16 Eligibility Requirements for Owner Trustee.........................................23
Section 6.17 Evidence on which Owner Trustee May Act; Advice of Counsel.........................23
Section 6.18 Responsibilities of Delaware Trustee...............................................23
Section 6.18 Indemnification of Delaware Trustee................................................25
Section 6.20 Resignation or Removal of Delaware Trustee; Successor Delaware Trustee.............27
Section 6.21 Representations and Warranties of Delaware Trustee.................................27
ARTICLE VII TRUST OPERATIONS...................................................................28
Section 7.1 Recordkeeping; Tax Matters Partner; Tax Returns....................................28
Section 7.2 Reports............................................................................29
Section 7.3 Certificate of Trust...............................................................30
Section 7.4 Expenses...........................................................................30
Section 7.5 Engagement of the Servicing Agent..................................................30
ARTICLE VIII REDEMPTIONS........................................................................30
Section 8.1 Redemptions........................................................................30
ARTICLE IX REPAYMENT OF CERTIFICATES..........................................................31
Section 9.1 Repayment of Certificates..........................................................31
ARTICLE X TERMINATION........................................................................31
Section 10.1 Termination........................................................................31
ARTICLE XI MISCELLANEOUS......................................................................31
Section 11.1 Beneficiaries......................................................................31
Section 11.2 Certain Rights.....................................................................31
Section 11.3 Amendments and Waivers.............................................................32
Section 11.4 No Legal Title of Certificateholders to Trust Property.............................32
Section 11.5 Survival of Agreement Provisions...................................................33
Section 11.6 Notices............................................................................33
Section 11.7 Entire Agreement...................................................................33
Section 11.8 Severability.......................................................................33
Section 11.9 Separate Counterparts..............................................................34
Section 11.10 Successors and Assigns.............................................................34
Section 11.11 Headings...........................................................................34
Section 11.12 Governing Law......................................................................34
Section 11.13 No Petition Covenant...............................................................34
EXHIBIT 10.2
EXHIBITS
SCHEDULE 1 INITIAL CERTIFICATEHOLDERS
SCHEDULE 2 PORTFOLIO ASSETS
SCHEDULE OF DEFINITIONS
EXHIBIT A-1 FORM OF DEFINITIVE PASS THROUGH-A CERTIFICATE
EXHIBIT A-2 FORM OF DEFINITIVE PASS THROUGH-B CERTIFICATE
EXHIBIT A-3 FORM OF DEFINITIVE EQUITY-1 CERTIFICATE
EXHIBIT B FORM OF SUBSCRIPTION AGREEMENT
EXHIBIT C FORM OF SERVICING AGREEMENT
EXHIBIT D CONDITIONS PRECEDENT TO DELIVERY OF CERTIFICATES
EXHIBIT E FORM OF TRANSFER CERTIFICATE
EXHIBIT F FORM OF CONFIRMATION OF REGISTRATION OF INTEREST IN CERTIFICATES
EXHIBIT 10.2
TRUST AGREEMENT
This TRUST AGREEMENT, dated as of September 6, 2001 (as amended,
supplemented and/or modified from time to time, this "Trust Agreement"), is
entered into by and among CAPITALSOURCE FINANCE LLC, a Delaware limited
liability company ("CapitalSource"), EQUIVEST CAPITAL, INC., a Delaware
corporation ("ECI" and in its capacity as a certificateholder hereunder,
together with CapitalSource, the "Initial Certificateholders"), CS Resorts,
Inc., a Delaware corporation, as Owner Trustee (as defined herein), and The
Capital Trust Company of Delaware, or Delaware Trustee (as defined herein).
W I T N E S S E T H:
WHEREAS, the Initial Certificateholders and the Trustees desire to
enter into this Trust Agreement for the purpose of establishing the Trust (as
defined herein); and
WHEREAS, the Initial Certificateholders and the Owner Trustee desire
that the Trust issue the Certificates to the Initial Certificateholders, enter
into the Exchange Agreement, acquire the Portfolio Assets, engage the Servicing
Agent, enter into the Servicing Agreement (all as defined herein) and conduct
the other business as set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, receipt of which is hereby
acknowledged, the Initial Certificateholders and the Trustees hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms not otherwise defined herein
have the respective meanings set forth in the Schedule of Definitions attached
hereto.
Section 1.2 INTERPRETATION. Unless otherwise indicated in this Trust
Agreement:
(a) Reference to and the definition of any document (including this
Trust Agreement) shall be deemed a reference to such document as it may be
amended or modified from time to time;
(b) All references to an "Article", "Section", "Schedule" or "Exhibit"
are to an Article or Section hereof or to a Schedule or an Exhibit attached
hereto;
(c) Defined terms in the singular shall include the plural and vice
versa, and the masculine, feminine or neuter gender shall include all genders;
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EXHIBIT 10.2
(d) Accounting terms used herein, but not defined in the Schedule of
Definitions attached hereto shall have the respective meanings given to them
under GAAP; and
(e) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Trust Agreement shall refer to this Trust Agreement as
a whole and not to any particular provision of this Trust Agreement; the
headings in this Trust Agreement are for the purpose of reference only and do
not limit or affect its meaning.
ARTICLE II
ORGANIZATION
Section 2.1 NAME. The Trust created by this Trust Agreement shall be
called "CS Resorts - 2001 Trust", in which name the Owner Trustee may conduct
the business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and ▇▇▇ and be sued on behalf of the Trust.
Section 2.2 OFFICE. The office of the Trust shall be in care of the
Owner Trustee at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Loan Management, (the "Corporate Trust Office"), or at such other
address as the Owner Trustee may designate by written notice to the
Certificateholders.
Section 2.3 DECLARATION OF TRUST AND STATEMENT OF INTENT. (a)The Owner
Trustee hereby declares that it shall hold all the estate, right, title and
interest in any property received by it under this Trust Agreement (except
property to be applied under the terms of this Trust Agreement to the payment of
or reimbursement for the Trustee's fees, indemnities or expenses) in trust for
the benefit of the Certificateholders, all as subject to the terms and
provisions of this Trust Agreement.
(b) It is the intention of the parties hereto that the Trust constitute
a single purpose business trust within the meaning of Chapter 38 of Title 12 of
the Delaware Code (as amended from time to time, the "Delaware Business Trust
Act") and that this Trust Agreement constitute the governing instrument of this
Trust. Effective as of the date hereof, the Trustees and the Tax Matters Partner
shall each have all rights, powers, authority and authorization set forth herein
and in the Delaware Business Trust Act with respect to accomplishing the
purposes of the Trust.
(c) It is the intention of the parties hereto that, for purposes of
federal income taxes, state and local income and franchise taxes and any other
taxes imposed upon, measured by, or based upon gross or net income, the Trust
shall be treated as a partnership and that the Certificates shall be treated as
evidencing partnership interests of the Trust. The terms of this Trust Agreement
shall be interpreted to further this intention of the parties. The parties
hereto agree that, unless otherwise required by appropriate tax authorities, the
Trust, through the Tax Matters Partner, shall file or cause to be filed annual
or other necessary returns, reports and other forms consistent with the
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EXHIBIT 10.2
characterization of the Trust as a partnership for such purposes. Each
Certificateholder by acceptance of its Certificate respectively agrees, unless
otherwise required by any appropriate tax authority, to file its own tax returns
and reports in a manner consistent with such characterization.
(d) It is the intention of the parties hereto that, for purposes of
Delaware state tax laws, the Trust will derive no income from a trade, business
or commerce in or connected with the State of Delaware and will have no assets,
activities (other than having a Delaware trustee as required by the Delaware
Business Trust Act and the filing of documents with the Secretary of State of
the State of Delaware) or employees in the State of Delaware.
Section 2.4 PURPOSES OF TRUST. The Trust shall not engage in any
activity other than issuing the Certificates, acquiring the Portfolio Assets
pursuant to the Loan Sale Agreement and the Exchange Agreement, entering into
and performing its obligations under the Basic Documents and such other
purchase, subscription or placement agreements as may be necessary to comply
with the requirements of this Trust Agreement and the other Basic Documents, and
receiving payments in respect of the Portfolio Assets and distributing such
payments pursuant to Section 5.1; PROVIDED, that the Trust shall also engage in
any other activities, including entering into agreements, which are necessary,
suitable or convenient to accomplish the foregoing or are incidental thereto or
connected therewith. The Trust shall not issue or sell any certificates, notes
or other obligations other than the Certificates or otherwise incur, assume or
guarantee any indebtedness for borrowed money.
ARTICLE III
CERTIFICATES AND CERTIFICATEHOLDERS
Section 3.1 FORM OF DEFINITIVE CERTIFICATES, AUTHORIZED DENOMINATIONS
OF CERTIFICATES. (a) Subject to the provisions of Section 3.11, the Definitive
Certificates shall be issued in definitive, fully registered form without
interest coupons and shall be issued in Authorized Denominations as set forth in
subsection (c) below. The Pass Through-A Certificates shall be issued in
substantially the form set forth in EXHIBIT A-1 hereto, the Pass Through-B
Certificates shall be issued in substantially the form set forth in EXHIBIT A-2
hereto and the Equity-1 Certificates shall be issued in substantially the form
set forth in EXHIBIT A-3 hereto. The Definitive Certificates shall be executed
on behalf of the Trust by manual or facsimile signature of an authorized officer
of the Owner Trustee. Definitive Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, shall be validly issued
and entitled to the benefits of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
issuance and delivery of such Certificates or did not hold such offices at the
date of issuance and delivery of such Certificates.
(b) The Definitive Certificates shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods (with
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EXHIBIT 10.2
or without steel engraved borders) all as determined by the Owner Trustee, as
evidenced by the Owner Trustee's execution of such Definitive Certificates.
(c) Each Certificate shall be issuable in the denominations as are
determined by the Owner Trustee to be necessary to accomplish the purposes of
this Trust Agreement ("Authorized Denominations").
(d) The Pass Through-A Certificates shall have 95% of the total voting
power of the Certificates, the Pass Through-B Certificates shall have 5% of the
total voting power of the Certificates and the Equity-1 Certificates shall have
0% of the total voting power of the Certificates.
(e) The Pass Through-A Dividends and the Pass Through-B Dividends shall
accrue with respect to the Pass Through-A Certificates and the Pass Through-B
Certificates, respectively, and the Pass Through-A Certificateholders and the
Pass Through-B Certificateholders shall be entitled to receive distributions
from the Trust in the amount of the Pass Through-A Dividends and the Pass
Through-B Dividends, respectively, in the priority and manner set forth in
Section 5.1. If the Trust receives any interest payments in respect of the
Portfolio Assets that are made at a default rate of interest (as determined
pursuant to the documentation related to the loans that comprise the Portfolio
Assets) then the Pass Through-A Rate shall automatically increase so that such
default rate interest payments are added to the Pass Through-A Dividends
otherwise payable pursuant to Section 5.1. The Equity-1 Certificates shall not
be entitled to receive dividends or distributions of any kind until the Pass
Through-A Certificates and the Pass Through-B Certificates have been fully and
finally redeemed together with all dividends or other amounts payable with
respect thereto.
Section 3.2 ISSUANCE OF CERTIFICATES; EXECUTION AND DELIVERY OF
DEFINITIVE CERTIFICATES. (a) On the Closing Date, upon satisfaction of the
conditions set forth in EXHIBIT D hereto, the Trust shall issue, and the Initial
Certificateholders shall receive, in accordance with the terms of the
Subscription Agreement, at par, Certificates in the amounts and of the class set
forth with respect to such Initial Certificateholder on SCHEDULE 1 hereto. The
Outstanding Certificate Balance, after giving effect to the Certificates issued
on the Closing Date, shall equal $4,670,885.49. The Owner Trustee shall cause
Definitive Certificates to be issued, delivered and registered on the
Certificate Register in accordance with the provisions of Section 3.11(b) or
cause Book-Entry Certificates to be issued and registered on the Certificate
Register, as applicable, in such names as the Initial Certificateholders so
direct upon the request of the Initial Certificateholders, in exchange for the
consummation of the transactions contemplated by the Basic Documents.
Concurrently with the issuance of the certificates pursuant to this Section 3.2,
the Trust shall acquire the Portfolio Assets pursuant to the terms of the
Exchange Agreement and the Loan Sale Agreement.
(b) Every Person, by virtue of having become a Certificateholder in
accordance with the terms of this Trust Agreement, shall be deemed to have
expressly assented to and agreed to, and shall be bound by, the terms of this
Trust Agreement.
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EXHIBIT 10.2
Section 3.3 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE OF
DEFINITIVE CERTIFICATES. (a) The Owner Trustee shall keep or cause to be kept a
certificate register in which, subject to such reasonable regulations as it may
prescribe, the Owner Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as provided herein (the
"Certificate Register").
(b) Transfers of ownership interests in the Definitive Certificates
shall be recorded by the Owner Trustee in the Certificate Register; PROVIDED,
HOWEVER, that no Definitive Certificate may be subdivided upon transfer or
exchange such that the denomination of any resulting Definitive Certificate is
less than the Authorized Denominations.
(c) Upon surrender for registration of transfer of any Definitive
Certificate at the Corporate Trust Office, the Owner Trustee shall execute on
behalf of the Trust and deliver in the name of the designated transferee or
transferees, one or more new Definitive Certificates in the Authorized
Denominations of a like aggregate certificate balance.
(d) At the option of a Certificateholder, Definitive Certificates may
be exchanged for other Definitive Certificates of Authorized Denominations of a
like aggregate certificate balance upon surrender at the Corporate Trust Office
of the Definitive Certificates to be exchanged. Whenever any Definitive
Certificates are so surrendered for exchange, the Owner Trustee shall execute on
behalf of the Trust and deliver one or more new Definitive Certificates. Such
new Definitive Certificates shall be delivered to the Certificateholder making
the exchange.
(e) Every Definitive Certificate presented or surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in the form of EXHIBIT E hereto duly executed by the Certificateholder
or his attorney duly authorized in writing. Each Definitive Certificate
surrendered for registration of transfer or exchange shall be canceled and
subsequently disposed of by the Owner Trustee in accordance with its customary
practice.
(f) All transfers of Certificates shall be subject to the requirements
of Section 3.6.
(g) No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection with
such transfer or exchange and any other amounts required to be paid under the
Definitive Certificates.
(h) Registrations and transfers of Book-entry Certificates shall be
done as set forth in Section 3.11.
Section 3.4 MUTILATED, DESTROYED, LOST OR STOLEN DEFINITIVE
CERTIFICATES. (a) If (i) any mutilated Definitive Certificate is surrendered to
the Owner Trustee, or the Owner Trustee receives evidence to its satisfaction of
the destruction, loss or theft of any Definitive Certificate, and (ii) there is
delivered to the Owner Trustee and the Trust such security or indemnity as may
be required by them to hold each of them harmless, then, in the absence of
notice to the Trustee that such Definitive Certificate has been acquired by a
5
EXHIBIT 10.2
bona fide purchaser, the Owner Trustee shall execute on behalf of the Trust and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Definitive Certificate, a replacement Definitive Certificate of a like
aggregate certificate balance; PROVIDED, HOWEVER, that if any such destroyed,
lost or stolen Definitive Certificate, but not a mutilated Definitive
Certificate, shall have become or within seven days shall be due and payable,
then instead of issuing a replacement Definitive Certificate the Trust may pay
to the Certificateholder of such destroyed, lost or stolen Definitive
Certificate the amount payable thereunder when so due or payable.
(b) If, after the delivery of a replacement Definitive Certificate or
payment in respect of a destroyed, lost or stolen Definitive Certificate
pursuant to Section 3.4(a), a bona fide purchaser of the original Definitive
Certificate in lieu of which such replacement Definitive Certificate was issued
presents for payment such original Definitive Certificate, the Trust shall be
entitled to recover such replacement Definitive Certificate (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Definitive Certificate from such Person to whom such replacement Definitive
Certificate was delivered or any assignee of such Person, except a bona fide
purchaser, and the Trust and the Owner Trustee shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expense incurred by the Trust or the Owner Trustee in connection
therewith.
(c) In connection with the issuance of any replacement Definitive
Certificate under this Section 3.4, the Owner Trustee may require the payment by
the Certificateholder of such Definitive Certificate of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the reasonable fees and
expenses of the Owner Trustee and its counsel) connected therewith.
(d) Any duplicate Definitive Certificate issued pursuant to this
Section 3.4 in replacement of any mutilated, destroyed, lost or stolen
Definitive Certificate shall constitute an original additional contractual
obligation of the Trust, whether or not the mutilated, destroyed, lost or stolen
Definitive Certificate shall be found at any time or be enforced by anyone, and
shall be entitled to all the benefits of this Trust Agreement equally and
ratably with any and all other Certificates duly issued hereunder.
(e) The provisions of this Section 3.4 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Definitive
Certificates.
Section 3.5 PERSONS DEEMED CERTIFICATEHOLDERS. Prior to (i) transfer on
the Certificate Register in the case of Book-Entry Certificates or (ii) due
presentation of a Definitive Certificate for registration of transfer, the Owner
Trustee may treat the Certificateholder shown on the Certificate Register or the
Person in whose name any Definitive Certificate shall be registered in the
Certificate Register (as of the date of determination), as the case may be, as
the absolute owner of such Certificate for all purposes, including, for the
purpose of receiving distributions pursuant to Article VI, regardless of any
notice of ownership, trust, theft or loss or of any writing thereon.
Section 3.6 TRANSFER OF CERTIFICATES. (a) GENERAL. No Certificateholder
may, in any transaction or series of transactions, directly or indirectly (each
of the following, a "transfer"), (i) sell, assign or otherwise in any manner
dispose of all or any part of its interest in any Certificate issued to it,
whether by act, deed, merger or otherwise, or (ii) mortgage or create a lien or
security interest in such Certificate unless such transfer satisfies the
conditions set forth in this Section 3.6. No purported transfer of any interest
in any Certificate or any portion thereof which is not made in accordance with
this Section 3.6 shall be given effect by or be binding upon the Trust or the
Owner Trustee and any such purported transfer shall be null and void AB INITIO
and vest in the transferee no rights against the Trust or the Owner Trustee. In
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EXHIBIT 10.2
addition, without limiting any other provision hereof, in no event shall the
Owner Trustee register any transfer if such transfer would result in there being
more than 12 registered owners of Certificates. In addition, each Initial
Certificateholder, severally and not jointly, represents and covenants and each
prospective Certificateholder shall be required to represent and covenant that
(a) it is purchasing one or more Certificates for its own account and that it is
the sole beneficial owner and (b) either (1) it is not, for federal income tax
purposes, a partnership, grantor trust, or S corporation (as defined in the
Code) or (2) it is, for federal income tax purposes, a partnership, grantor
trust, or S corporation but, after giving effect to its acquisition of such
Certificates, less than 60% of the aggregate value of its assets would consist
of Certificates, and (c) such Certificates have not been and shall not be
transferred through an "established securities market" within the meaning of
section 7704(b) of the Code.
(b) CONDITIONS TO TRANSFER. A Certificateholder may transfer a
Certificate or its beneficial interest in a Certificate only in accordance with
the following provisions:
(i) TRANSFER OF CERTIFICATES. No transfer of any Certificate or
any beneficial interest therein may be made unless such transfer is
made to an "accredited investor" within the meaning of Regulation D
under the Securities Act or in accordance with another exemption from
the registration requirements of the Securities Act and such laws of
any State of the United States and, unless waived in writing by the
Owner Trustee, an opinion of counsel in form satisfactory to the Owner
Trustee is delivered to the Owner Trustee and the Trust to the effect
that such transfer is in compliance with the Securities Act and this
Trust Agreement.
(ii) ERISA. No Certificates or any beneficial interest therein
may be purchased by or transferred to or held by an entity which is
(A) a Benefit Plan or a Person acting on behalf of a Benefit Plan, or
(B) an insurance company general account unless, for such insurance
company general account, documentation has been provided to the Owner
Trustee in substantially the form of the Transfer Certificate attached
hereto as EXHIBIT E. In determining the sufficiency or insufficiency
of the documentation and representations contained therein for
purposes of the preceding sentence, the Owner Trustee may, but need
not, obtain and rely upon an opinion of counsel as to the sufficiency
of the documentation provided.
(iii) CERTIFICATE TRANSFER REQUIREMENT. All purchasers or
transferees of Certificates other than the Initial Certificateholders
(including pledgees of Certificates other than pledgee contemplated by
Section 3.6(b)(v)(2) below) or any beneficial interest therein must
execute and deliver to the Owner Trustee a certificate substantially
in the form attached hereto as EXHIBIT E.
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EXHIBIT 10.2
(iv) INVESTMENT COMPANY ACT RESTRICTIONS. No transfer of any
Certificate or any beneficial interest in any Certificate shall be
made, and the Owner Trustee shall not register such transfer, if such
transfer would require registration of the Trust as an "investment
company" under the Investment Company Act. The Trustee shall not
register any transfer unless such transferee is a "qualified
purchaser" (within the meaning of Section 3(c)(7) of the Investment
Company Act) of the Certificates or if such transfer would otherwise
require registration of the Trust under the Investment Company Act.
(v) TRANSFER WITH CONSENT; PERMITTED TRANSFERS.
(1) Notwithstanding anything to the contrary in this Trust
Agreement, no transfer of any Equity-1 Certificate or any
beneficial interest in any Equity-1 Certificate shall be made
without the prior written approval of each other
Certificateholder. Nothing in this Section 3.6(b)(v) shall be
deemed to imply any duty of the Owner Trustee to solicit any of
the consents described herein, but it shall not register any
transfer unless the requisite consents have been received by it.
(2) Notwithstanding anything to the contrary in this Trust
Agreement, CapitalSource or its Affiliates shall be permitted to
pledge the Certificates held by it and the pledgee, pursuant to
any such pledge, shall be entitled to transfer pledged
Certificates held by it upon foreclosure. Each Certificateholder
shall be permitted to transfer Certificates held by it or any
beneficial interest therein to its Affiliates without the consent
of the other Certificateholders provided it and such Affiliate,
as applicable, comply with the other provisions of this Section
3.6(b), make the representations and warranties required by
Section 3.6(a) and provide written notice of such transfer to the
Owner Trustee promptly upon the consummation thereof.
(vi) TRANSFER TO NON-U.S. PERSONS. The Certificates shall not be
acquired by or for the account of any individual or entity that is not
a "U.S. person" as defined in section 7701(a)(30) of the Code and any
transfer of a Certificate to a Person that is not a "U.S. person"
shall be absolutely null and void AB INITIO and shall vest no rights
in the purported transferee. Each purchaser or transferee of a
Certificate will be required to certify under penalties of perjury
that it is a "U.S. person" and to make the appropriate certification
to such effect in its applicable Transfer Certificate. The foregoing
shall not apply to a pledge by CapitalSource or its Affiliates to a
U.S. branch of a non-U.S. person that is a banking institution.
(vii) AT LEAST TWO CERTIFICATEHOLDERS. No transfer of a
Certificate shall be valid if such transfer were to result in there
being less than two Certificateholders.
(viii) RELIANCE BY OWNER TRUSTEE ON CERTIFICATIONS. In
determining whether the conditions set forth in clauses (i) through
(vii), above, have been satisfied, the Owner Trustee may conclusively
rely on the certifications contained in the Transfer Certificates and
on the information in the Certificate Register submitted to it and
shall have no obligation to investigate the truth and correctness
thereof (subject to the last paragraph of Section 3.6(c), below).
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EXHIBIT 10.2
(c) INVALID TRANSFERS. If the conditions to transfer set forth in
subsection (b) above are not fully satisfied or if the Owner Trustee receives
written notice or if an officer of the Owner Trustee otherwise obtains actual
knowledge that (i) a transfer or attempted or purported transfer of any interest
in any Certificate was consummated in compliance with the provisions of this
Section 3.6 on the basis of an incorrect form or certification from the
transferee or purported transferee or (ii) the owner of any interest in a
Certificate is in breach of any representation or agreement set forth in any
certificate or any deemed representation or agreement of such owner, the Owner
Trustee will not register such attempted or purported transfer and if a transfer
has been registered, such transfer shall be absolutely null and void AB INITIO
and shall vest no rights in the purported transferee (such purported transferee,
a "Disqualified Transferee") and the last preceding Certificateholder that was
not a Disqualified Transferee shall be restored to all rights as a
Certificateholder thereof retroactively to the date of transfer of such
Certificate by such Certificateholder. Nothing herein shall be deemed to imply
for the Owner Trustee any duty of investigation or monitoring subsequent to the
date of any transfer.
Notwithstanding anything contained herein to the contrary, the Owner
Trustee shall not be responsible for ascertaining whether any transfer complies
with the registration provisions or exemptions from the Securities Act,
applicable state securities law or the Investment Company Act; PROVIDED, that,
if under this Section 3.6 a certificate is specifically required to be delivered
to the Owner Trustee by a purchaser or transferee of a Certificate or any
beneficial interest therein, the Owner Trustee shall be under a duty to examine
the same to determine whether it conforms on its face to the requirements of
this Section 3.6 and shall promptly notify the party delivering the same if such
certificate does not so conform.
(d) SECURITIES LEGEND. Each Definitive Certificate issued hereunder
will bear the legend set forth on the form of Certificates included as EXHIBIT
▇-▇, ▇▇▇▇▇▇▇ ▇-▇ and EXHIBIT A-3 hereto.
Section 3.7 APPROVALS OF CERTIFICATEHOLDERS. Each Certificateholder by
accepting its Certificate or any beneficial interest therein is deemed to have
approved: (i) the terms of this Trust Agreement to the extent applicable to the
Certificateholders, (ii) the composition of the Portfolio Assets, (iii) the
provisions of the Certificates, and (iv) the execution and delivery of the
Servicing Agreement and the other Basic Documents.
Section 3.8 NO RECOURSE. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Trust in respect of the
Certificates or under this Trust Agreement or any other Basic Document or any
certificate or other writing delivered in connection herewith or therewith,
against: (i) any Trustee in its individual capacity; (ii) any Certificateholder
or other owner of a beneficial interest in the Trust, as an owner of a
beneficial interest in the Trust; (iii) any successor or assignee of any of the
foregoing; (iv) any Affiliate, partner, owner, beneficiary, agent, officer,
director, employee or agent of any of the foregoing, except as any such person
may have expressly agreed in writing. For all purposes of this Trust Agreement,
in the performance of any duties or obligations of the Trust under the Basic
Documents, the Trustees shall be subject to, and entitled to the benefits of,
the terms and provisions of this Trust Agreement. Without limiting the
foregoing, each Certificateholder expressly agrees that it shall have no
recourse for payment in respect of its Certificate or its rights pursuant to
this Trust Agreement, or for any claim based thereon or otherwise in respect
thereof, except against the assets of the Trust.
9
EXHIBIT 10.2
Section 3.9 MAJORITY CONTROL. Except as otherwise expressly provided
herein, any action that may be taken or consent that may be given or withheld by
Certificateholders under this Trust Agreement may be taken, given or withheld by
the Majority Certificateholders. Except as otherwise expressly provided herein,
any written notice or consent of Certificateholders delivered pursuant to this
Trust Agreement shall be effective if signed by the Majority Certificateholders
at the time of the delivery of such notice or consent.
Section 3.10 LIABILITY OF CERTIFICATEHOLDERS. No Certificateholder
shall have any personal liability for any liability or obligation of the Trust
to full extent contemplated by Section 3803(a) of the Delaware Business Trust
Act.
Section 3.11 BOOK-ENTRY AND DEFINITIVE CERTIFICATES. (a) Unless
Definitive Certificates have been issued in accordance with Subsection (b)
below, on each date of issuance pursuant to Section 3.2, Book-Entry Certificates
shall be issued, and the Owner Trustee shall cause the Certificate Register to
reflect such issuance of Certificates in such amounts as have been issued, and
such Book-Entry Certificates shall be registered on the Certificate Register in
the name of the Certificateholder thereof and such Certificateholder shall
receive a confirmation in the form attached hereto as EXHIBIT F confirming such
registration. No Certificateholder will receive a definitive certificate
representing such Certificateholder's interest in the Book-Entry Certificate,
except as provided above and in subsection (b) below. Unless and until
Definitive Certificates have been issued pursuant to subsection (b) below:
(i) the provisions of this Section 3.11 shall be in full force
and effect;
(ii) to the extent that the provisions of this Section 3.11
conflict with any other provisions of this Trust Agreement, the
provisions of this Section 3.11 shall control;
(iii) unless and until Definitive Certificates are issued
pursuant to subsection (b) below, the Owner Trustee will register
transfers among the Certificateholders on the Certificate Register,
which shall be open for inspection during regular business hours and
shall contain a record of the name, address and taxpayer
identification number of each Certificateholder;
(iv) the Owner Trustee shall not register such transfers in the
Certificate Register except upon satisfaction of the conditions set
forth in Section 3.6;
(v) each Certificateholder shall bear all of the expenses it
incurs in connection with any sale, transfer or exchange of its
Book-Entry Certificates;
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EXHIBIT 10.2
(vi) no service charge shall be made for any registration of
transfer or exchange of Book-Entry Certificates, but the Owner Trustee
may require payment of a reasonable sum equal to the sum that the
Owner Trustee may require to effect a transfer or exchange of
Certificates under Section 3.3(g);
(vii) on the Business Day following any registration in the
Certificate Register of a transfer of a Book-Entry Certificate, the
Owner Trustee shall send to each transferee and transferor a
confirmation of the transfer (the confirmation to be substantially in
the form of EXHIBIT F hereto); and
(viii) notwithstanding anything herein to the contrary, unless
and until Definitive Certificates are issued pursuant to Subsection
(b) below, the Owner Trustee is hereby authorized to direct the Trust
to transmit payments in accordance with Section 5.1 in respect of the
Certificates to the Certificateholders of record on the date of such
distribution that are entitled thereto by wire transfer of immediately
available funds in accordance with such instructions as have been
previously provided in writing to the Owner Trustee.
(b) If with respect to the Certificates, the Majority
Certificateholders advise the Owner Trustee in writing that the continuation of
a book-entry system through the Owner Trustee is no longer in the best interests
of the Certificateholders, then the Owner Trustee shall notify all
Certificateholders of the occurrence of any such event and of the availability
of Definitive Certificates. Upon delivery of instructions from the
Certificateholders regarding the exchange of all Book-Entry Certificates
registered on the Certificate Register for Definitive Certificates to be
registered on the Certificate Register in connection with the registration of
Definitive Certificates in the names of Certificateholders, the Owner Trustee
shall execute and deliver the Definitive Certificates in accordance with the
instructions of the Certificateholders. The Owner Trustee shall not be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such registration instructions. Upon the
issuance of Definitive Certificates, the Owner Trustee and the Servicing Agent
shall recognize the Certificateholders in whose names such Definitive
Certificates are registered on the Certificate Register as Certificateholders
hereunder.
(c) As to any Book-Entry Certificate, the Certificateholder shown on
the Certificate Register from time to time shall be deemed the absolute owner
thereof for all purposes.
ARTICLE IV
ALLOCATIONS
Section 4.1 CAPITAL ACCOUNTS. There shall be established for each
Certificateholder a separate capital account, which shall be designated as a
"Capital Account" and collectively shall be designated as the "Capital
Accounts". The Capital Account of a Certificateholder shall be established as of
the date that such Certificateholder is issued its Certificate with initial
balances equal to the amount of the Certificates so acquired as set forth on
Schedule 1 hereto. Thereafter, the balances of the Capital Accounts shall be
adjusted on each Capital Account Adjustment Date as set forth below.
11
EXHIBIT 10.2
Section 4.2 ALLOCATIONS TO CAPITAL ACCOUNTS. The balance of each
Capital Account (the "Account Balance") shall be determined on any Capital
Account Adjustment Date other than the Closing Date and shall equal:
(i) the balance of such account as of the last Capital Account
Adjustment Date, minus
(ii) the Net Expense for the preceding Capital Account Adjustment
Period allocable to such Certificateholder in accordance with Section
4.3, plus
(iii) the amount of any Certificates, as set forth on Schedule 1
as amended from time to time, issued by the Trust to such
Certificateholder since the last Capital Account Adjustment Date,
minus
(iv) the distributions made during such Capital Account
Adjustment Period with respect to the Certificates owned by such
Certificateholder.
In connection with any transfer of a Certificate, the Capital Account
established with respect to the transferee of such Certificate shall have an
initial balance bearing the same proportion to the balance in the transferor's
Capital Account immediately prior to the transfer as the outstanding balance of
the Certificates acquired by the transferee bears to the aggregate certificate
balance of the Certificates owned by the transferor immediately prior to such
transfer. For the avoidance of doubt, no Certificateholder shall have any
obligation to restore any deficit balance to such owner's Capital Account.
Section 4.3 ALLOCATION OF NET EXPENSE. To the extent not paid by ECI
pursuant to Section 7.4, Net Expense for any Capital Account Adjustment Period
shall be allocated to the Equity-1 Certificateholders (for allocation to their
individual Capital Accounts as described in Section 4.2) PRO RATA, based on the
number of Equity-1 Certificates outstanding.
Section 4.4 TAX ALLOCATIONS. Except as required by section 704(c) of
the Code, the Treasury regulations thereunder and section
1.704-1(b)(2)(iv)(f)(4) of the Treasury regulations with respect to the
allocation of tax gain or loss on the assets of the Trust, each item of income,
gain, loss and deduction shall be allocated for federal income tax purposes in
the same manner that the item was allocated to the Certificateholders' Capital
Accounts. No election shall be made under section 754 of the Code unless the Tax
Matters Partner determines, in its sole discretion, that such an election should
be made.
12
EXHIBIT 10.2
ARTICLE V
DISTRIBUTIONS
Section 5.1 DISTRIBUTIONS. All payments received by the Trust from any
source in respect of the Portfolio Assets shall be distributed no later than the
next Distribution Date in the following order of priority:
(i) first, to the extent not paid by ECI pursuant to Section 7.4,
to the Delaware Trustee in payment of any amounts then due and payable
to the Delaware Trustee pursuant to Section 6.4, 6.5 or 6.19 of this
Trust Agreement, until such amounts are paid in full;
(ii) second, to the extent not paid by ECI pursuant to Section
7.4, to the Owner Trustee in payment of any amounts then due and
payable to the Owner Trustee pursuant to Section 6.4, 6.5 or 6.7 of
this Trust Agreement, until such amounts are paid in full;
(iii) third, to the Pass Through-A Certificateholders in payment
of the Pass Through-A Dividends, if any, accrued to such date until
such amounts are paid in full;
(iv) fourth, to the Pass Through-B Certificateholders in payment
of the Pass Through-B Dividends, if any, accrued to such date until
such amounts are paid in full;
(v) fifth, to the Equity-1 Certificateholders, the Excess
Interest, if any, associated with such payment;
(vi) sixth, to the Pass Through-A Certificateholders in full or
partial redemption, as the case may be, of Pass Through-A
Certificates, if any, then outstanding;
(vii) seventh, to the Pass Through-B Certificateholders in full
or partial redemption, as the case may be, of Pass Through-B
Certificates, if any, then outstanding;
(viii) the remainder to the Equity-1 Certificateholders.
In the event there is more than one Certificateholder in any particular class or
type, each of the amounts payable pursuant to clauses (iv), (v), (vi), (vii),
and (viii) of this Section 5.1, as the case may be, shall be made PRO RATA among
the Certificateholders of the class or type entitled thereto, based upon the
relative outstanding principal amount of the Certificates of such class or type
held by a Certificateholder to the total outstanding principal amount of all
such Certificates of such class or type.
13
EXHIBIT 10.2
Section 5.2 WITHHOLDING. If any withholding tax is imposed on the
Trust's payment (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to the Certificateholder in
accordance with this Article V. The Owner Trustee is hereby authorized to retain
from amounts otherwise distributable to the Certificateholders sufficient funds
for the payment of any tax that is legally owed by the Trust (but such
authorization shall not prevent the Tax Matters Partner from contesting any such
tax in appropriate proceedings or prevent the Trust from withholding payment of
such tax, if permitted by law, pending the outcome of such proceedings). The
amount of any withholding tax imposed with respect to a Certificateholder shall
be treated as cash distributed to such Certificateholder at the time it is
withheld by the Trust and remitted to the appropriate taxing authority. If there
is a possibility that withholding tax is payable with respect to a payment, the
Owner Trustee may, in its sole discretion, withhold such amounts in accordance
with this Section 5.2. If a Certificateholder wishes to apply for a refund of
any such withholding tax, the Owner Trustee shall reasonably cooperate with such
Certificateholder in making such claim so long as such Certificateholder agrees
to reimburse the Owner Trustee for any out-of-pocket expenses incurred in
connection with such refund. Nothing herein shall be deemed to require the Owner
Trustee to contest any withholding tax referred to in this Section 5.2.
ARTICLE VI
TRUSTEES
Section 6.1 POWERS OF THE OWNER TRUSTEE. Notwithstanding anything in
this Trust Agreement to the contrary, in order to further the objectives of the
Trust, the Owner Trustee is hereby authorized to perform all activities,
including the execution of all documents and delegation of responsibilities
related thereto, in order to do the following on behalf of the Trust:
(a) to perform its duties and obligations under this Trust Agreement;
and
(b) to administer the affairs of the Trust as follows:
(i) at the direction of the Initial Certificateholders, to
acquire the Portfolio Assets pursuant to the terms of the Exchange
Agreement and the Loan Sale Agreement;
(ii) to pay dividends to the Certificateholders and make
redemptions of the Certificates as contemplated by Section 5.1 and
Article VIII and IX of this Trust Agreement;
(iii) to execute and deliver the Certificates to the
Certificateholders from time to time;
(iv) upon receipt, to deliver reports regarding the assets of the
Trust to the Certificateholders;
14
EXHIBIT 10.2
(v) to appoint CapitalSource as the Tax Matters Partner pursuant
to Section 7.1 hereof to perform the duties and accept the obligations
with respect to the tax matters of the Trust;
(vi) to appoint the Servicing Agent and execute and deliver the
Servicing Agreement pursuant to Section 7.5 hereof and delegate to the
Servicing Agent the powers and duties contained therein and accept
directions and advice of the Servicing Agent with respect to the
management of the Portfolio Assets to the extent provided therein; and
(vii) to execute and deliver, from time to time, agreements
regarding the purchase, subscription or placement of the Certificates
and the other business of the Trust.
The Majority Certificateholders may by written instruction direct the
Owner Trustee in the management of the Trust and the Owner Trustee may request
and receive written instruction from the Majority Certificateholders prior to
and/or during the undertaking of such management activities; PROVIDED, that the
Majority Certificateholders shall be responsible for assuring that such
instructions are not contrary to the Basic Documents.
Notwithstanding anything in this Trust Agreement to the contrary, the
Trust has the power and authority and is hereby authorized, without the consent,
approval or other action by the Initial Certificateholders or any other Person,
to (i) execute, deliver and perform its obligations under the Basic Documents
and each Purchase Agreement and Transfer Certificate to which it is or becomes a
party or signatory and (ii) execute, deliver and issue the Certificates from
time to time.
The Owner Trustee undertakes to perform only such duties as are
specifically set forth in this Trust Agreement, and no implied covenants or
obligations shall be read into this Trust Agreement against the Owner Trustee.
It is expressly acknowledged and agreed that CapitalSource shall be the
solely authorized "tax matters partner" for tax purposes and as such shall
perform all duties set forth in Section 7.1 hereof and shall, as necessary to
accomplish such duties and obligations, give express directions to the Owner
Trustee. The Owner Trustee agrees to follow such instruction unless and until
the Initial Certificateholder shall no longer be the Tax Matters Partner, in
which case the Owner Trustee shall follow the instruction of the successor Tax
Matters Partner in accordance with the provisions of Section 7.1 hereof.
It is expressly acknowledged and agreed that, upon the effectiveness of
the Servicing Agreement, the Servicing Agent, pursuant to the provisions of
Section 7.5 hereof and the terms and provisions of the Servicing Agreement,
shall be the solely authorized manager of the Portfolio Assets and shall direct
the investment of Trust property in the Portfolio Assets, to the extent provided
in the Servicing Agreement, and as such shall give written direction or advice
to the Owner Trustee in accordance with the terms and conditions of the
Servicing Agreement and the Owner Trustee agrees to follow such written
direction or advice and shall be entitled to rely on the Servicing Agent with
respect to all matters relating to the Portfolio Assets.
15
EXHIBIT 10.2
Section 6.2 DELEGATION OF RESPONSIBILITIES. The Owner Trustee may
exercise any of the trusts or powers under this Trust Agreement or perform any
duties under this Trust Agreement or any Basic Document (other than certain
specified duties of the Tax Matters Partner set forth in Section 7.1 hereof or
the Servicing Agent set forth pursuant to Section 7.5 hereof and the Servicing
Agreement) either directly or by or through its Affiliates or through agents or
attorneys and, at the reasonable expense of the Trust, may consult with
independent counsel, accountants and other skilled persons to be selected and
employed by it. The Owner Trustee shall not be responsible for the acts or
omissions of such agents, attorneys, accountants or other consultants appointed
by it with due care.
Pursuant to the provisions of Section 7.1 hereof, the Owner Trustee
shall exercise its trusts, powers and duties with regard to the tax matters of
the Trust, solely at the express direction of the Tax Matters Partner and the
Owner Trustee shall not be responsible for the acts or omissions of such Person,
including those acts or omissions made by the Tax Matters Partner with willful
malfeasance, gross negligence or reckless disregard of obligations in the
performance of its duties. Pursuant to the provisions of Section 7.5 hereof and
the terms and provisions of the Servicing Agreement, the Owner Trustee shall
exercise its trusts, powers and duties with regard to the management of the
Portfolio Assets solely at the express direction of the Servicing Agent, and the
Owner Trustee shall not be responsible for the acts or omissions of the
Servicing Agent, including those made with willful malfeasance, gross negligence
or reckless disregard in the performance of its respective duties.
Section 6.3 RIGHT TO REQUEST AND RECEIVE INSTRUCTIONS. In the event
that the Owner Trustee is unsure as to the application of any provision of any
Basic Document, or such provision is ambiguous as to its application, or is, or
appears to be, in conflict with any other applicable provision, or in the event
that any Basic Document permits any determination by the Owner Trustee or is
silent or is incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall be entitled to give notice (in such form as shall be appropriate under the
circumstances) to the registered Certificateholders, with a copy to the
Servicing Agent, requesting written instructions of the Majority
Certificateholders in accordance with Section 6.1 hereof and, to the extent that
the Owner Trustee shall have acted, or refrained from acting, in good faith in
accordance with any such written instructions received from Majority
Certificateholders, the Owner Trustee shall not be liable on account of such
action or inaction to any Person. If the Owner Trustee shall not have received
appropriate instructions within ten days of such notice (or within such shorter
period of time as may be specified in such notice) the Owner Trustee may, but
shall be under no duty to, take or refrain from taking such action as the Owner
Trustee shall deem to be in the best interests of the Certificateholders, and
the Owner Trustee shall have no liability to any Person for such action or
inaction except to the extent described in Section 6.6 hereof.
Section 6.4 TRUSTEE FEES. (a) OWNER TRUSTEE FEES. To the extent not
paid by ECI pursuant to Section 7.4, the Trust shall pay to the Owner Trustee an
initial fee of $100 and on the Closing Date and on each September 1st
thereafter, an annual fee of $100 (the "Owner Trustee Fee") in each case
pursuant to Section 5.1. The Owner Trustee Fee will be payable with respect to
the period commencing on the Closing Date through the day preceding the
termination and final dissolution of the Trust. In the event that the Owner
Trustee is requested to render services beyond those specifically required of it
in this Trust Agreement, the Trust shall pay pursuant to Section 5.1 (to the
extent not paid by ECI pursuant to Section 7.4) to the Owner Trustee additional
compensation for such services, which compensation shall be based on the fair
value of such services. The compensation payable to the Owner Trustee shall not
be limited by any provision of law regarding the compensation of a trustee of an
express trust.
16
EXHIBIT 10.2
(b) DELAWARE TRUSTEE FEES. To the extent not paid by ECI pursuant to
Section 7.4, the Trust shall pay to the Delaware Trustee an initial fee of $2500
on the Closing Date and an annual fee of $2500 (the "Delaware Trust Fee") in
each case pursuant to Section 5.1.
Section 6.5 TRUSTEE EXPENSES. To the extent not paid by ECI pursuant to
Section 7.4, the Trust shall reimburse each Trustee pursuant to Section 5.1 for
all of its reasonable charges and out-of-pocket expenses incurred in connection
with its services as Owner Trustee or Delaware Trustee, as applicable,
hereunder, including the reasonable fees and expenses of its counsel and all
fees and expenses related to appointing an agent to accept service of process in
the State of Delaware.
Section 6.6 LIABILITY OF OWNER TRUSTEE. Notwithstanding any other
provision of this Trust Agreement or any Basic Document to the contrary, the
Owner Trustee, in its individual capacity and as trustee, shall not be liable or
accountable to any Person for any act, omission, obligation, covenant,
representation, warranty, or liability of the Trust or any trustee thereof under
any Basic Document or in connection with the administration of the Trust or the
transactions contemplated by this Trust Agreement, except that such limitation
of liability shall not affect the liability, if any, that the Owner Trustee may
have to the Trust and the Certificateholders for the Owner Trustee's (i) own
willful misconduct, bad faith or gross negligence or (ii) breach of any of its
representations and warranties under Section 6.12. Without limiting the
generality of the foregoing:
(a) the Owner Trustee shall not be personally liable for an error of
judgment made in good faith by an officer of the Owner Trustee, unless the Owner
Trustee was grossly negligent;
(b) the Owner Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith, unless
the Owner Trustee was grossly negligent or such action or omission constituted
willful misconduct;
(c) the Owner Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
rights or powers under this Trust Agreement or under any documents relating
hereto, if the Owner Trustee shall have reasonable grounds for believing after
due inquiry that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured or provided to it;
(d) the Owner Trustee shall not be personally liable for any loss
incurred by the Trust with respect to any investment of the Trust;
17
EXHIBIT 10.2
(e) the Owner Trustee may conclusively rely upon certificates or
opinions furnished to the Owner Trustee and on their face conforming to the
requirements, if any, of this Trust Agreement in determining the truth of the
statements and the correctness of the opinions contained therein and need not
investigate any fact or matter stated in such certificates and opinions and in
the absence of (i) willful misconduct, gross negligence or bad faith with
respect to the Owner Trustee or (ii) the failure of the Owner Trustee to examine
such certificates or opinions so as to determine compliance of the same on their
face with the requirements, if any, of this Trust Agreement, the Owner Trustee
shall have no personal liability with respect to any such reliance;
(f) without in any way intending to limit the scope of application of
clause (c) of this Section 6.6, the Owner Trustee shall not be under any
obligation to exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the Certificateholders or
Servicing Agent pursuant to the Basic Documents, or to institute, conduct or
defend any litigation hereunder or in relation hereto, pursuant to the
provisions of this Trust Agreement, unless the Owner Trustee shall have been
offered security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby; and
(g) the Owner Trustee shall not be personally liable with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Majority Certificateholders, the Servicing Agent, the Tax
Matters Partner, or any other Person given pursuant to any express provision of
the Basic Documents.
Anything in this Trust Agreement to the contrary notwithstanding, in no event
shall the Owner Trustee be liable under this Trust Agreement for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Owner Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.
Section 6.7 INDEMNIFICATION OF OWNER TRUSTEE. (a) The Owner Trustee, in
its individual capacity and as trustee, and its Affiliates, and each officer,
director, employee, stockholder, agent or partner of any of them, and any person
who is or was serving at the request of the Owner Trustee (each, an "Indemnified
Person"), shall be indemnified by the Trust to the fullest extent permitted by
law, whether or not any of the transactions contemplated hereby are consummated,
against all claims, costs and expenses (including reasonable legal counsel's
fees and expenses, judgments, fines and amounts paid in settlement), losses,
taxes (other than taxes on the Owner Trustee Fee), damages and/or liability
(collectively, "Losses") to which such Indemnified Person may become subject or
with which such Indemnified Person shall be threatened by reason of or in
connection with such Indemnified Person serving or having served in such
capacity for or in connection with the Trust, or by reason of any action or
alleged action or omission or alleged omission by an Indemnified Person in any
capacity described above, except to the extent such Losses result from or are
attributable to such Indemnified Person's willful misconduct, gross negligence
or bad faith in the performance of its duties or the criminal conduct of such
Indemnified Person; PROVIDED, that no recourse may be taken, directly or
18
EXHIBIT 10.2
indirectly, with respect to the obligations of the Trust described hereunder,
against any Certificateholder, or any owner of a beneficial interest in a
Certificateholder or against any officer, director or member thereof.
(b) In determining whether an Indemnified Person acted with willful
misconduct, gross negligence or bad faith, the good faith reliance of such
Indemnified Person (i) as to financial matters upon the report, opinion or
financial information prepared or reviewed by an internationally recognized
investment banking firm or other internationally recognized financial, business
or economic consultant, or by independent public accountants, shall be presumed,
in the absence of an express showing to the contrary, to constitute good faith
reliance by, and without gross negligence, willful misconduct or bad faith on
the part of, such Indemnified Person as to the matters covered thereby or
information included therein, and (ii) as to any matter of fact set forth in the
books and records of the Trust shall be presumed unless it can be shown by
competent evidence that such Indemnified Person knew that the matter or fact was
incorrect as presented so as not to constitute good faith reliance by, and
without gross negligence, willful misconduct or bad faith on the part of, such
Indemnified Person.
(c) The right of indemnification granted by this Section 6.7 shall be
in addition to any rights to which the Person seeking indemnification may
otherwise be entitled, whether by law, agreement or otherwise. By acquiring a
Certificate each Certificateholder acknowledges that the Owner Trustee has
entered into this Section 6.7 and takes the benefit of this Section 6.7 on its
own behalf and on behalf of its Affiliates, and each officer, director,
employee, stockholder, agent or partner thereof and agrees that the benefit of
this Section 6.7 shall accrue to the Owner Trustee, its Affiliates, and each
officer, director, employee, stockholder, agent or partner thereof as if each of
them had been named as a party hereto. The Trust shall pay the reasonable
expenses incurred by any Indemnified Person in investigating, preparing or
defending a claim that relates to the performance of duties or services by the
Indemnified Person as provided in this Trust Agreement in advance of the final
disposition of such claim, upon receipt of an undertaking by or on behalf of
such Indemnified Person to repay such payment if there shall be an adjudication
or determination that such Indemnified Person is not entitled to indemnification
as provided herein; PROVIDED, that the Trust shall be entitled to reimbursement
of such expenses paid to any Indemnified Person in connection with any action,
suit or proceeding commenced by the Trust against such Indemnified Person
wherein it is adjudicated or determined that such Indemnified Person is not
entitled to indemnification as provided herein.
(d) The indemnity provided by this Section 6.7 shall survive the
removal or resignation of the Owner Trustee and shall survive the dissolution of
the Trust and the termination of this Trust Agreement.
Section 6.8 RESIGNATION. (a) The Owner Trustee may resign at any time
by giving ninety days' prior written notice to the Certificateholders.
19
EXHIBIT 10.2
(b) Promptly after receipt of such notice of resignation, the Majority
Certificateholders shall appoint a successor Owner Trustee in accordance with
Section 6.10.
(c) Any resignation of the Owner Trustee pursuant to the provisions of
this Section 6.8 shall not become effective until the acceptance of appointment
by the successor Owner Trustee as provided in Section 6.10.
Section 6.9 REMOVAL OF OWNER TRUSTEE. (a) If at any time: (i) the Owner
Trustee shall be legally unable to act; (ii) the Owner Trustee shall fail to
meet the requirements of Section 6.17; (iii) the Owner Trustee shall be adjudged
bankrupt or insolvent; (iv) a receiver of the Owner Trustee or of its property
shall be appointed; or (v) any public officer shall take charge or control of
the Owner Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Majority
Certificateholders may petition any court of competent jurisdiction for the
removal of the Owner Trustee and the appointment of a successor owner trustee.
(b) Any resignation or removal of the Owner Trustee and appointment of
a successor owner trustee pursuant to the provisions of this Section 6.9 shall
not become effective until acceptance of appointment by the successor owner
trustee as provided in Section 6.10; PROVIDED, that if no successor Owner
Trustee has been appointed within 90 days after the Owner Trustee has given
written notice of its election to resign, or after the Owner Trustee has
received written notice of its removal, as applicable, the Owner Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Owner Trustee.
Section 6.10 SUCCESSOR OWNER TRUSTEE. (a) A successor Owner Trustee
appointed as provided in Section 6.8 or Section 6.9 shall execute, acknowledge
and deliver to the Trust, the Certificateholders and its predecessor Owner
Trustee a written instrument accepting such appointment under this Trust
Agreement and thereupon the resignation or removal of the predecessor Owner
Trustee shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor under this Trust Agreement and with
like effect as if originally named as owner trustee. The predecessor Owner
Trustee shall deliver or cause to be delivered to the successor owner trustee or
its designee any Trust property and any related agreements, documents and
statements held by it under this Trust Agreement, and the Trust and the
predecessor Owner Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting and
confirming in the successor owner trustee all such rights, powers, duties and
obligations.
(b) Upon acceptance of appointment by a successor owner trustee, the
successor owner trustee shall cause notice of the succession of such successor
owner trustee to be delivered to each Certificateholder.
(c) In no event shall the retiring Owner Trustee be liable for the acts
or omissions of any successor owner trustee hereunder.
20
EXHIBIT 10.2
(d) No appointment of a successor owner trustee shall become effective
until all fees, charges, indemnities and expenses of the retiring Owner Trustee
shall have been paid.
Section 6.11 MERGER OR CONSOLIDATION OF TRUSTEE. Without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, any Person into which the Owner Trustee may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
Person succeeding to substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder.
Section 6.12 REPRESENTATIONS AND WARRANTIES OF OWNER TRUSTEE. The Owner
Trustee by execution of this Trust Agreement represents and warrants to the
Certificateholders that:
(a) it has the corporate trust power and authority to enter into this
Trust Agreement and each other document required to be executed and delivered by
the Owner Trustee in connection with this Trust Agreement and to perform its
obligations hereunder and consummate the transactions contemplated hereby and
the person signing this Trust Agreement on behalf of the Owner Trustee has been
duly authorized to execute and deliver this Trust Agreement and each other
document required to be executed and delivered by the Owner Trustee in
connection with this Trust Agreement;
(b) such execution, delivery and compliance by the Owner Trustee do not
conflict with, or constitute a default under the Owner Trustee's charter or
by-laws, any applicable Delaware law relating to its trust powers, or any
regulation or order of any Delaware governmental authority having jurisdiction
over its trust powers; and
(c) this Trust Agreement has been duly executed by the Owner Trustee
and constitutes a valid and legally binding agreement of the Owner Trustee.
Section 6.13 PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
MATTERS. The Owner Trustee shall not take action with respect to the following
matters, unless (i) the Owner Trustee shall have notified the Certificateholders
in writing of the proposed action at least 10 days before the taking of such
action, and (ii) prior to the 10th day after such notice is given, the Majority
Certificateholders shall have delivered to the Owner Trustee consent to such
action:
(a) the compromise of any action, claim or lawsuit brought by or
against the Trust; and
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under applicable law).
Section 6.14 INSOLVENCY PROCEEDINGS. The Owner Trustee shall not have
the power to commence a voluntary proceeding in bankruptcy relating to the Trust
unless the restrictions set forth in Section 11.13 are satisfied and each
remaining Certificateholder has delivered to the Owner Trustee a certificate
certifying that such Certificateholder reasonably believes that the Trust is
insolvent.
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EXHIBIT 10.2
Section 6.15 RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. The
Certificateholders may direct the Owner Trustee to take or refrain from taking
any action but only if such action or inaction would not be contrary to any
obligation of the Trust or the Owner Trustee under the Basic Documents. The
Certificateholders shall not instruct the Owner Trustee to take or refrain from
taking any action at the direction of the Certificateholders if such action or
inaction would have an adverse effect in any respect upon the interests of the
Servicing Agent unless the consent of the Servicing Agent is obtained.
Section 6.16 ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall: (a) at all times be a corporation or other entity; (b) at all
times be authorized to exercise corporate trust powers; and (c) at the time of
the appointment be otherwise satisfactory to the Majority Certificateholders. If
at any time the Owner Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.17, the Owner Trustee shall resign immediately in
the manner and with the effect specified in Section 6.8.
Section 6.17 EVIDENCE ON WHICH OWNER TRUSTEE MAY ACT; ADVICE OF
COUNSEL. (a) In addition to any other express provision contained in this Trust
Agreement, including, but not limited to those set forth in Article VII hereof,
the Owner Trustee shall be protected in acting upon any signature, notice,
Transfer Certificate, resolution, request, consent, order certificate, report,
opinion, bond or other paper or document believed by it to be genuine, and to
have been signed, countersigned or presented by the proper person or persons.
The Owner Trustee need not investigate any fact or matter stated in such
documents. The Owner Trustee may accept a certified copy of a resolution of the
board of directors or other governing body of any corporate person 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 method of the
determination of which is not specifically prescribed in this Trust Agreement,
the Owner Trustee may for all purposes hereof rely on a certificate, signed by
the president or any vice president or by the treasurer or other authorized
officers of the relevant person, as to such fact or matter, and such certificate
shall constitute full protection of the Owner Trustee for any action taken or
omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under the Basic Documents pursuant
to Section 6.2 hereof, the Owner Trustee may consult with legal counsel,
accountants and other skilled persons and the Owner Trustee shall not be liable
for anything done, suffered or omitted in good faith by it in accordance with
the advice or written opinion of any such legal counsel, accountants or other
such persons and not contrary to this Trust Agreement.
Section 6.18 RESPONSIBILITIES OF DELAWARE TRUSTEE
(a) The Delaware Trustee shall not have any duty or liability with
respect to the administration of the Trust, the investment of the Trust's
property or the payment of dividends or other distributions of income or
principal to the Trust's beneficiary, and no implied obligations shall be
inferred from this Trust Agreement on the part of the Delaware Trustee. The
Delaware Trustee shall not be liable for the acts or omissions of the Owner
Trustee nor shall the Delaware Trustee be liable for any act or omission by it
in good faith in accordance with the directions of the Owner Trustee.
22
EXHIBIT 10.2
(b) The Delaware Trustee accepts the trusts hereby created and agrees
to perform its duties hereunder with respect to the same but only upon the terms
of this Trust Agreement. The Delaware Trustee understands and agrees that it
does not have the power to sign on behalf of, or bind the Trust. The Delaware
Trustee shall not be liable under any circumstances, except for breach of this
Agreement its willful misconduct or gross negligence. In particular, but not by
way of limitation:
(i) The Delaware Trustee shall not be liable for any error of
judgment made in good faith;
(ii) No provision of this Trust Agreement shall require the
Delaware Trustee to expend or risk its funds or otherwise incur any
financial liability in the performance of its rights or duties
hereunder, if the Delaware Trustee shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;
(iii) Under no circumstance shall the Delaware Trustee be liable
for any representation, warranty, covenant or indebtedness of the
Trust;
(iv) The Delaware Trustee shall not be responsible for or in
respect of the genuineness, form or value of the Trust property, the
validity or sufficiency of this Trust Agreement or for the due
execution hereof by the Owner Trustee;
(v) In the event that the Delaware Trustee is unsure of the
course of action to be taken hereunder, the Delaware Trustee may
request instructions from the Owner Trustee and to the extent the
Delaware Trustee follows such instructions in good faith it shall not
be liable to any person. In the event that no instructions are
provided within the time requested by the Delaware Trustee, it shall
have no duty or liability for its failure to take any action or for
any action it takes in good faith;
(vi) All funds deposited with the Delaware Trustee hereunder may
be held in a non-interest bearing trust account and the Delaware
Trustee shall not be liable for any interest thereon or for any loss
as a result of the investment thereof at the direction of the Owner
Trustee; and
(vii) To the extent that, at law or in equity, the Delaware
Trustee has duties and liabilities relating thereto to the Owner
Trustee or the Trust, the Owner Trustee agrees that such duties and
liabilities are replaced by the terms of this Trust Agreement.
(c) The Delaware Trustee shall incur no liability to anyone in acting
upon any document believed by it to be genuine and believed by it to be signed
by the proper party or parties. As to any fact or matter the manner of
ascertainment of which is not specifically prescribed herein, the Delaware
Trustee may for all purposes hereof rely on a certificate, signed by the Owner
Trustee, as to such fact or matter, and such certificate shall constitute full
protection to the Delaware Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.
23
EXHIBIT 10.2
(d) In the exercise of administration of the trust hereunder, the
Delaware Trustee (i) may act directly or, at the expense of the Trust, through
agents or attorneys, and the Delaware Trustee shall not be liable for the
default or misconduct of such agents or attorneys if such agents or attorneys
shall have been selected by the Delaware Trustee in good faith, and (ii) may, at
the expense of the Trust, consult with counsel, accountants and other experts,
and it shall not be liable for anything done, suffered or omitted in good faith
by it in accordance with the advice or opinion of any such counsel, accountants
or other experts.
(e) Except as expressly provided in this Section 6.18, in accepting and
performing the trusts hereby created, the Delaware Trustee acts solely as
trustee hereunder and not in any other capacity, and all persons having any
claim against the Delaware Trustee by reason of the transactions contemplated by
this Trust Agreement shall look only to the Trust's property for payment or
satisfaction thereof.
Section 6.19 INDEMNIFICATION OF DELAWARE TRUSTEE
(a) The Trust shall (i) compensate the Delaware Trustee in accordance
with Section 6.4(b), (ii) reimburse the Delaware Trustee for all reasonable
expenses (including reasonable fees and expenses of counsel and other experts)
and (iii) indemnify, defend and hold harmless, to the fullest extent authorized
under Delaware law, the Delaware Trustee and any of the officers, directors,
employees and agents of the Delaware Trustee (the "Indemnified Persons") from
and against any and all losses, damages, liabilities, claims, actions, suits,
costs, expenses, disbursements (including the reasonable fees and expenses of
counsel), taxes and penalties of any kind and nature whatsoever (collectively,
"Expenses"), to the extent that such Expenses arise out of or are imposed upon
or asserted at any time against such Indemnified Persons with respect to the
performance of this Trust Agreement, the creation, operation or termination of
the Trust or the transactions contemplated hereby; such indemnification shall
continue for such Indemnified Persons who have ceased to be a Delaware Trustee
or who have ceased to be an officer, director, employee or agent of a Delaware
Trustee; PROVIDED, HOWEVER, that the Trust shall not be required to indemnify
any Indemnified Person for any Expenses which are a result of breach of this
Agreement, or the willful misconduct, bad faith or gross negligence of such
Indemnified person.
(b) The right to indemnification conferred in this section shall be a
contract right and shall include the right to be paid by the Trust, and in the
event of a shortfall, by the Owner Trustee. Expenses incurred by the Delaware
Trustee or an officer, director, employee or agent of the Delaware Trustee in
defending a civil or criminal action, suit or proceeding shall be paid by the
Trust in advance of the final disposition of such action, suit or proceeding
upon the receipt of an undertaking by or on behalf of the Delaware Trustee or
such director, officer, employee or agent to repay such amount if it shall
ultimately be determined that they are not entitled to be indemnified by the
Trust or Owner Trustee as authorized in Title 12 Section 3817 of the Delaware
Code. Such advances shall be paid by the Trust within 30 days after the receipt
of a statement(s) from the claimant requesting such advance(s) from time to
time.
24
EXHIBIT 10.2
(c) To obtain indemnification under this section, a claimant shall
submit to the Owner Trustee a written request, including therein or therewith
such documentation and information as is reasonably available to the claimant
and is reasonably necessary to determine whether and to what extent the claimant
is entitled to indemnification. If it is so determined that the claimant is
entitled to indemnification, payment to the claimant shall be made within 10
days after such determination.
(d) If a claim under this section is not paid in full by the Trust
within 30 days after a written claim pursuant to this section has been received
by the Owner Trustee, the claimant may at any time thereafter bring suit against
the Trust (and, in the event of a shortfall, against the Owner Trustee), to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled to be paid also the reasonable expense of
prosecuting such claim. Neither the failure of the Trust (acting through the
Owner Trustee) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth under Delaware
law, nor an actual determination by the Trust (acting through the Owner Trustee)
that the claimant has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the claimant has not met the
applicable standard of conduct.
(e) If a determination shall have been made pursuant to this section by
the Owner Trustee that the claimant is entitled to indemnification, the Trust
shall be bound by such determination in any judicial proceeding commenced
pursuant to this section.
(f) The Trust shall be precluded from asserting in any judicial
proceeding commenced pursuant to this section that the procedures and
presumptions of this section are not valid, binding and enforceable and shall
stipulate in such proceeding that the Trust is bound by all the provisions of
this section.
(g) The right to indemnification and the payment of reasonable expenses
incurred in defending a proceeding in advance of its final disposition conferred
in this section shall not be exclusive of any other right which any Indemnified
Person may have or hereafter acquire under any statute, charter, bylaws,
agreement, contract, vote of stockholders or directors, or pursuant to the
direction (howsoever embodied) of any court of competent jurisdiction or
otherwise. No repeal or modification of this section shall in any way diminish
or adversely affect the rights of any Indemnified Person hereunder in respect of
any occurrence or matter arising prior to any such repeal or modification.
Section 6.20 RESIGNATION OR REMOVAL OF DELAWARE TRUSTEE; SUCCESSOR
DELAWARE TRUSTEE.
(a) RESIGNATION OR REMOVAL OF DELAWARE TRUSTEE. The Majority
Certificateholders may at any time and with or without cause remove the Delaware
Trustee by giving notice thereof to the Delaware Trustee and the Delaware
Trustee may resign at any time by giving 90 days written notice thereof to the
Owner Trustee; provided that no such resignation or removal shall be effective
until a successor Delaware trustee has been appointed pursuant to Section
6.20(b).
25
EXHIBIT 10.2
(b) Upon the notice of resignation or removal of the Delaware Trust
pursuant to Section 6.20(a), the Majority Certificateholders shall appoint a new
Delaware trustee. A successor Delaware Trustee appointed as provided in Section
6.20(a) shall execute, acknowledge and deliver to the Trust, the
Certificateholders and its predecessor Delaware Trustee a written instrument
accepting such appointment under this Trust Agreement and thereupon the
resignation or removal of the predecessor Delaware Trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under this Trust Agreement and with like effect
as if originally named as Delaware trustee. The predecessor Delaware Trustee
shall deliver or cause to be delivered to the successor Delaware trustee or its
designee any Trust property and any related agreements, documents and statements
held by it under this Trust Agreement, and the Trust and the predecessor
Delaware Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Delaware trustee all such rights, powers, duties and
obligations. In no event shall the retiring Delaware Trustee be liable for the
acts or omissions of any successor Delaware trustee hereunder. No appointment of
a successor Delaware trustee shall become effective until all fees, charges,
indemnities and expenses of the retiring Delaware Trustee shall have been paid.
(c) the Delaware Trustee shall: (a) at all times be a corporation or
other entity satisfying the provisions of Section 3807(a) of the Delaware
Business Trust Act; (b) at all times be authorized to exercise corporate trust
powers; and (c) at the time of the appointment be otherwise satisfactory to the
Majority Certificateholders. If at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.20(c), the Delaware
Trustee shall resign immediately in the manner and with the effect specified in
Section 6.20(a).
Section 6.21 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE. The
Delaware Trustee by execution of this Trust Agreement represents and warrants to
the Certificateholders that:
(a) it has the corporate trust power and authority to enter into this
Trust Agreement and to perform its obligations hereunder and consummate the
transactions contemplated hereby and the person signing this Trust Agreement on
behalf of the Delaware Trustee has been duly authorized to execute and deliver
this Trust Agreement;
(b) such execution, delivery and compliance by the Delaware Trustee do
not conflict with, or constitute a default under the Delaware Trustee's charter
or by-laws, any applicable Delaware law relating to its trust powers, or any
regulation or order of any Delaware governmental authority having jurisdiction
over its trust powers;
(c) this Trust Agreement have each been duly executed by the Delaware
Trustee and constitutes a valid and legally binding agreement of the Delaware
Trustee; and
26
EXHIBIT 10.2
(d) the Delaware Trustee is an entity that satisfies the provisions of
Section 3807(a) of the Delaware Business Trust Act.
ARTICLE VII
TRUST OPERATIONS
Section 7.1 RECORDKEEPING; TAX MATTERS PARTNER; TAX RETURNS. The Owner
Trustee shall be responsible for the keeping of all appropriate books and
records relating to the receipt and disbursement by it of all moneys under this
Trust Agreement. CapitalSource is hereby engaged and agrees to act as the "tax
matters partner" for purposes of the Code (the "Tax Matters Partner") and shall
have the additional duties specified in this Section 7.1. In the event
CapitalSource ceases to own Certificates or resigns as Tax Matters Partner
(which it may do at any time upon sixty (60) days' prior written notice to the
Owner Trustee) it shall no longer be the Tax Matters Partner with respect to
taxable periods ending on or after the date of such cessation. The Majority
Certificateholders shall have the right to remove the Person then acting as Tax
Matters Partner (including CapitalSource) if such Person acts in a manner that
constitutes willful malfeasance, gross negligence or reckless disregard of its
obligations as Tax Matters Partner. In the event that CapitalSource ceases to be
the Tax Matters Partner due to the transfer of its Certificates duly approved by
the Majority Certificateholders, the transferee shall become the Tax Matters
Partner with respect to taxable years ending on and after the date of such
transfer. If there is more than one transferee, the transferee with the highest
certificate balance shall be the Tax Matters Partner. An appropriate statement
revoking the designation of CapitalSource as "tax matters partner" under the
Code shall be filed with the Internal Revenue Service by the successor Tax
Matters Partner. It is expressly acknowledged that the Owner Trustee is
responsible solely for ministerial functions, as directed by the Tax Matters
Partner, relating to the tax matters of the Trust. The Tax Matters Partner shall
at the reasonable expense of the Trust file an application with the Internal
Revenue Service for a taxpayer identification number with respect to the
partnership created for federal income tax purposes by this Trust Agreement. The
Tax Matters Partner shall at the reasonable expense of the Trust cause to be
prepared all tax returns required to be filed with respect to the Trust and
shall execute and cause to have filed such returns and to make such elections as
may from time to time be required or appropriate so as to maintain the Trust's
characterization as a partnership for federal income tax, state and local income
and franchise tax and any other tax purposes. The Tax Matters Partner shall
cause the delivery to each Certificateholder of such information as may be
reasonably required to enable each Certificateholder to prepare its tax returns.
In performing its duties under this Section 7.1, the Tax Matters Partner may
retain a firm of independent public accountants (as agreed from time to time by
the Trust and the Majority Certificateholders), tax counsel or both, at the
reasonable expense of the Trust. In preparing tax returns and other tax
information, the Tax Matters Partner may rely, without independent confirmation
or investigation, on information prepared or provided by such independent public
accountants or tax counsel. The Tax Matters Partner shall cause a completed copy
of such return and such other information to be mailed to each
Certificateholder. The Tax Matters Partner shall be deemed to have discharged
its obligations pursuant to this Section 7.1 with respect to the preparation of
tax returns and other tax information upon retention of such independent public
accountants and the Tax Matters Partner shall have no liability with respect to
the negligence or misconduct of such independent public accountants and tax
counsel. To the extent permitted by law, such tax returns shall be prepared on a
basis consistent with the characterization agreed upon by the parties in Section
2.3(c) hereof.
27
EXHIBIT 10.2
The Trust shall indemnify and hold harmless the Tax Matters Partner,
its members, indirect owners thereof, directors, officers, stockholders, agents
and employees of any of the foregoing (such parties collectively in such case,
the "Tax Matters Partner Indemnified Parties") from and against any and all
liabilities, and will reimburse each Tax Matters Partner Indemnified Party for
all reasonable fees and expenses (including reasonable fees and expenses of
legal counsel) as such fees and expenses are incurred in investigating,
preparing, pursuing or defending any claim, action, litigation, arbitration,
administration or other proceeding or with respect to any pending or threatened
claim, action, litigation, arbitration, administration or other proceeding
(collectively, the "Actions"), caused by, or arising out of or in connection
with the performance by a Tax Matters Partner Indemnified Party of services
under this Trust Agreement or any failure to act by such Tax Matters Partner
Indemnified Party and for liabilities otherwise with respect to the appointment
and acting as Tax Matters Partner in connection herewith; PROVIDED, HOWEVER,
that a Tax Matters Partner Indemnified Party shall not be indemnified for any
liabilities it incurs as a result of any acts by such Tax Matters Partner
Indemnified Party constituting willful malfeasance, gross negligence or reckless
disregard of obligations in each case by such Tax Matters Partner Indemnified
Party in performing its services hereunder.
Section 7.2 REPORTS
(a) Upon receipt from the Servicing Agent, the Owner Trustee shall be
responsible for delivering to the Certificateholders, other than Affiliates of
the Servicing Agent, the reports and other documents to be delivered to the
Trust or the Owner Trustee pursuant to Servicing Agreement.
(b) Notwithstanding anything set forth in this Section 7.2, the Owner
Trustee shall have no obligation to deliver any report or other document if such
report or other document has not been delivered to the Owner Trustee.
Section 7.3 CERTIFICATE OF TRUST. The Owner Trustee shall file a
certificate of trust in the office of the Secretary of State of Delaware as
required by Section 3810(a)(1) of the Delaware Business Trust Act and shall file
from time to time amendments to such certificate of trust in the office of the
Secretary of State of Delaware as required by Section 3810(b)(2) of the Delaware
Business Trust Act.
Section 7.4 EXPENSES. ECI shall promptly pay on behalf of the Trust all
of the Trust's operating expenses, including the fees and expenses payable in
accordance with Sections 6.4, 6.5 and 7.1 and the Trust's and each Trustee's
expenses for legal, accounting and reporting expenses, filing fees, wire
transfer fees, taxes and extraordinary expenses such as indemnity and litigation
expenses (such expenses being the "Operating Expenses"); PROVIDED that ECI's
obligation with respect to Operating Expenses pursuant to this Section 7.4 shall
not exceed $3,000 during any calendar year. Without limiting the foregoing, at
the time of the issuance of the Certificates, ECI shall pay on behalf of the
28
EXHIBIT 10.2
Trust all legal and other out-of-pocket fees and expenses incurred in connection
with the organization of the Trust, the issuance of the Certificates and the
preparation and execution of the Basic Documents and the preparation and filing
of the trust certificate (the "Organizational Expenses"). Nothing contained in
Sections 4.1, 4.3 or 5.1 shall diminish or otherwise alter ECI's obligations to
make the payments required by this Section 7.4.
Section 7.5 ENGAGEMENT OF THE SERVICING AGENT. Concurrent with and upon
the effectiveness of this Trust Agreement, the Owner Trustee shall execute the
Servicing Agreement on behalf of the Trust and thereby the Trust shall engage
the Servicing Agent to provide the services with respect to the Portfolio Assets
pursuant to the terms and conditions set forth in such Servicing Agreement. Such
terms and condition shall include, without limitation, a provision that all
payments in respect of the Portfolio Assets are to be made directly to the Trust
and that any such payments not so made to the Trust shall be, if received by the
Servicing Agent, segregated and held in trust and immediately paid to the Trust
by the Servicing Agent. Upon such engagement, the Owner Trustee, pursuant to the
provisions of Section 6.1 hereof, agrees to accept the express direction of the
Servicing Agent in accordance with the terms and provisions of the Servicing
Agreement.
ARTICLE VIII
REDEMPTIONS
Section 8.1 REDEMPTIONS. (a) No Certificateholder shall have the right
to require the Trust to redeem its Certificate except as set forth in this
Section 8.1.
(b) Except with the written consent of the Majority Certificateholders,
the Pass Through-A Certificates and the Pass Through-B Certificates shall not be
subject to redemption except pursuant to payments made in accordance with
Section 5.1. The Equity-1 Certificates shall not be subject to redemption until
the termination of the Trust pursuant to Article X.
ARTICLE IX
REPAYMENT OF CERTIFICATES
Section 9.1 REPAYMENT OF CERTIFICATES. Subject to the provisions of
Section 3.8 and Section 4.2, upon any redemption pursuant to Article VIII, an
amount will be payable in respect of each Certificate of the class or type so
redeemed equal to the positive balance of the related Certificateholder's
Capital Account, if any.
29
EXHIBIT 10.2
ARTICLE X
TERMINATION
Section 10.1 TERMINATION. The Trust shall be dissolved upon (i) the
redemption in whole of all of the outstanding Pass Through-A Certificates (and
distribution of the related redemption payments) together with the payment to
the Pass Through-A Certificateholders of all other amounts, including costs and
expenses, due them and (ii) the valid exercise of ECI's option to acquire all of
the Pass Through-B Certificates pursuant to the terms of the Option Agreement.
Upon completion of winding up following dissolution of the Trust, including the
distribution and payment of all final amounts due from or to the Trust, the
Owner Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State of the State of Delaware
in accordance with Section 3810 of the Delaware Business Trust Act. Upon such
certificate of cancellation becoming effective, the Trust and this Trust
Agreement shall be terminated and all remaining assets of the Trust shall be
delivered to the Equity-1 Certificateholders. The indemnity provided by Section
6.7 hereof and the rights of the Owner Trustee to the Owner Trustee Fee and
expenses shall survive such termination.
ARTICLE XI
MISCELLANEOUS
Section 11.1 BENEFICIARIES. Nothing in this Trust Agreement, whether
express or implied, shall be construed to give to any Person other than the
Owner Trustee, the Indemnified Persons and the Certificateholders any legal or
equitable right, remedy or claim under or in respect of this Trust Agreement.
Section 11.2 CERTAIN RIGHTS. Nothing contained in this Trust Agreement
shall be construed to limit the right of business entities with which the Owner
Trustee is associated to enter into business ventures or to offer advice to any
other business entity which has a similar investment objective as the Trust.
Section 11.3 AMENDMENTS AND WAIVERS. (a) AMENDMENTS WITHOUT CONSENT.
This Trust Agreement may be amended by the Owner Trustee without the consent of
the Certificateholders to make any change which is required by applicable law,
or any rule or regulation issued thereunder; PROVIDED, that no such amendment
shall cause the Trust to be taxable as a corporation for federal income tax,
state and local income and franchise tax and any other tax purposes.
(b) AMENDMENTS WITH CONSENT. Notwithstanding any provision in Section
11.3(a), this Trust Agreement may also be amended by the Owner Trustee upon
receipt of the written consent of the Majority Certificateholders; PROVIDED,
HOWEVER, that no amendment which would have an adverse effect on the time or
manner or rates of distributions to any Certificateholder, or which would result
in adverse income or franchise tax consequences to the Certificateholder as a
result of its owning Certificates, including in the case of the Initial
Certificateholders, its members or the direct and indirect owners thereof, its
directors, officers, stockholders, agents and employees of any of the foregoing,
shall be made without the consent of the Certificateholder of each outstanding
Certificate affected thereby. Promptly after the execution of any amendment or
consent, the Trust shall cause a written notice which sets forth the substantive
provisions of the amendment to be delivered to the Certificateholders; PROVIDED
that the failure of the Owner Trustee to deliver any such notice shall not
impair or affect the validity of such amendment.
30
EXHIBIT 10.2
(c) WAIVERS. No term or provision hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing; and any
waiver of the terms hereof shall be effective only in the specific instance and
for the specific purpose given.
(d) CONDITIONS PRECEDENT TO EXECUTION OF AMENDMENTS. In connection with
the execution of any amendment to this Trust Agreement or any amendment of any
other agreement to which the Trust is a party, the Owner Trustee shall be
entitled to receive and, subject to Section 6.6, conclusively rely upon an
opinion of legal counsel to the effect that such amendment is authorized or
permitted by the Basic Documents and that all conditions precedent in the Basic
Documents for the execution and delivery thereof by the Trust or the Owner
Trustee, as the case may be, have been satisfied.
Section 11.4 NO LEGAL TITLE OF CERTIFICATEHOLDERS TO TRUST PROPERTY.
The Certificateholders shall not have legal title to any property of the Trust.
The Certificateholders shall be entitled to receive distribution payments with
respect to their beneficial interests in the Trust in accordance with the
provisions of Article V hereof. No transfer, by operation of law or otherwise,
of any right, title and interest in the Trust shall operate to terminate this
Trust Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any property of the Trust.
Section 11.5 SURVIVAL OF AGREEMENT PROVISIONS. Sections 6.6 and 6.7
shall survive the termination of this Trust Agreement and the resignation or
removal of the Owner Trustee.
Section 11.6 NOTICES. Any notice required hereunder shall be in writing
and shall be sent to the appropriate address indicated below or such other
mailing address notice of which has been given by the party whose address has
changed to the Owner Trustee. Any notice shall be deemed to have been duly given
if (i) mailed, first-class, postage pre-paid, on the third Business Day after
deposit in the U.S. mail, (ii) personally delivered or delivered by telecopy
(and confirmed by telephone), when received, (iii) sent by overnight courier, on
the second following Business Day, or (iv) by telegram, on the following
Business Day.
31
EXHIBIT 10.2
(a) to the Owner Trustee:
CS Resorts, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: Loan Management
(b) to the Delaware Trustee:
The Capital Trust Company of Delaware
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Trust Administration
(c) to the Initial Certificateholders:
At the address for such Certificateholder
provided in SCHEDULE 1 hereto
(d) to any other Certificateholder:
At the address for such Certificateholder
provided to the Owner Trustee
Section 11.7 ENTIRE AGREEMENT. The Owner Trustee's duties and
responsibilities to any Certificateholder or any Person interested therein shall
be limited to those specifically set forth in this Trust Agreement and there are
no promises, undertakings, representations or warranties by the Owner Trustee
relative to the Trust not expressly set forth or referred to herein.
Section 11.8 SEVERABILITY. Any provision of this Trust Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 11.9 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. It shall not be necessary,
when making proof of this Trust Agreement, to produce or account for more than
one counterpart.
Section 11.10 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the Owner
Trustee, and its successors and assigns.
32
EXHIBIT 10.2
Section 11.11 HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 11.12 GOVERNING LAW. THIS TRUST AGREEMENT SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
DELAWARE, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 11.13 NO PETITION COVENANT. The Owner Trustee and each
Certificateholder shall not, prior to the date which is one year and one day
after the redemption in whole of all of the outstanding Pass Through-A
Certificates and all of the outstanding Pass Through-B Certificates, acquiesce,
petition or otherwise invoke or cause the Trust to invoke the process of any
court or governmental authority for the purpose of commencing or sustaining a
case against the Trust under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust or any substantial part of
its property, or making a general assignment for the benefit of creditors, or
ordering the winding up or liquidation of the affairs of the Trust.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
33
EXHIBIT 10.2
TRUST AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers thereunto duly authorized as of
the date first set forth above.
CAPITALSOURCE FINANCE LLC,
as an Initial Certificateholder
By:
----------------------------------------
Name:
Title:
EQUIVEST CAPITAL, INC.,
as an Initial Certificateholder
By:
----------------------------------------
Name:
Title:
CS RESORTS, INC., not in its
individual capacity but solely
as Owner Trustee of the Trust
By:
----------------------------------------
Name:
Title:
THE CAPITAL TRUST COMPANY OF DELAWARE, not in
its individual capacity but solely as
Delaware Trustee of the Trust
By:
----------------------------------------
Name:
Title:
EXHIBIT 10.2
SCHEDULE 1
INITIAL CERTIFICATEHOLDERS
PASS THROUGH-A CERTIFICATES
Amount: $4,437,246.22
Initial Certificateholder: CapitalSource Finance LLC
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: Loan Management
PASS THROUGH-B CERTIFICATES
Amount: $233,539.27
Initial Certificateholder: CapitalSource Finance LLC
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: Loan Management
EQUITY-1 CERTIFICATES
Amount: $100
Initial Certificateholder: Equivest Capital, Inc.
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT 10.2
SCHEDULE 2
PORTFOLIO ASSETS
1). Coconut Palms IV Loan - Loan from the Trust to Ocean Development Group,
Inc., a Florida corporation, in the maximum principal amount of $9,000,000,
dated as of April 19, 1998. It has been represented to the Trust that, as
of August 23, 2001, the outstanding balance of this loan is $4,107,428.00.
2). Loan from the Trust to Carmel Development, Inc., a South Carolina
corporation, in the maximum principal amount of $2,400,000, dated as of
July 17, 1998. It has been represented to the Trust that, as of August 23,
2001, the outstanding balance of this loan is $563,357.
EXHIBIT 10.2
CS Resorts - 2001 Trust
SCHEDULE OF DEFINITIONS
"Account Balance" has the meaning set forth in Section 4.2 of
the Trust Agreement.
"Affiliate" means as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" of a
Person means the power, directly or indirectly, either to (a) vote 51% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"Agency Office" means the office required to be maintained by
the Issuer where notices and demands to and upon the Issuer may be served.
"Agreement" means the Trust Agreement, as amended,
supplemented or modified from time to time.
"Authorized Denomination" has the meaning set forth in Section
3.1 of the Trust Agreement.
"Authorized Officer" means, with respect to the Issuer, any
officer of the Owner Trustee who is authorized to act for the Owner Trustee in
matters relating to the Issuer.
"Basic Documents" means the Trust Agreement, the Certificates,
the Subscription Agreement, the Loan Sale Agreement, the Exchange Agreement and
the Servicing Agreement.
"Benefit Plan" means (i) an employee benefit plan (as defined
in section 3(3) of ERISA), which is subject to ERISA, (ii) a plan (as defined in
section 4975(e)(1) of the Code) which is subject to section 4975 of the Code or
(iii) any other "benefit plan investor" (within the meaning of 29 C.F.R.
2510.3-101(f)(2)).
"Book-Entry Certificate" means each uncertificated Certificate
issued by the Trust in fully registered form pursuant to the provisions of
Section 3.11 of the Trust Agreement.
"Business Day" means any day other than Saturday, Sunday or
any other day on which commercial banks in Washington, D.C., or the city where
the Corporate Trust Office of the Owner Trustee is located and are authorized or
required by law to be closed.
"Capital Accounts" has the meaning set forth in Section 4.1
of the Trust Agreement.
EXHIBIT 10.2
"Capital Account Adjustment Date" means any of the following
dates: (a) the Closing Date, (b) the date of redemption of any Certificates; (c)
the last day of any taxable year of the Trust; or (d) any other date on which it
is necessary to determine adjusted Account Balances.
"Capital Account Adjustment Period" means the period
commencing on the preceding Capital Account Adjustment Date and ending on the
day preceding the Capital Account Adjustment Date with respect to which the
determination of the Capital Account balances is being made.
"Certificates" means, collectively, the Pass Through-A
Certificates, the Pass Through-B Certificates and the Equity-1 Certificates.
"Certificate Register" has the meaning set forth in Section
3.3 of the Trust Agreement.
"Certificateholder" means any record owner of a Certificate as
reflected on the Certificate Register.
"Closing Date" means September 7, 2001.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor act thereto.
"Corporate Trust Office" with respect to the Owner Trustee has
the meaning set forth in Section 2.2 of the Trust Agreement.
"Definitive Certificates" means each certificated Certificate
issued by the Trust in definitive, fully registered form without interest
coupons as set forth in Section 3.2 of the Trust Agreement and pursuant to the
provisions of Section 3.11 of the Trust Agreement.
"Delaware Business Trust Act" has the meaning set forth in
Section 2.3 of the Trust Agreement.
"Delaware Trustee" means The Capital Trust Company of
Delaware, not in its individual capacity but solely as the Delaware trustee
under the Trust Agreement, and any successor qualifying under Section 6.20 of
the Trust Agreement.
"Distribution Date" means the Business Day immediately
following the Business Day upon which any payment in respect of the Portfolio
Assets is received by the Trust.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations promulgated thereunder or any successor
act thereto.
"Equity-1 Certificate" means a beneficial interest in the
Trust that is designated as an Equity-1 Certificate and which is issued by the
Trust pursuant to the Trust Agreement.
EXHIBIT 10.2
"Excess Interest" means the remainder of any Interest Payment
after application of such payment pursuant to clause (i), (ii), (iii) and (iv)
of Section 5.1.
"Exchange Agreement" means that certain Exchange Agreement,
dated as of September 7, 2001, by and among CapitalSource, the Trust, Equivest
Finance, Inc. and ECI.
"GAAP" means generally accepted accounting principles in the
United States, consistently applied.
"Initial Certificateholders" has the meaning set forth in the
introductory paragraph of the Trust Agreement.
"Investment Company Act" means the Investment Company Act of
1940, as amended, and the regulations promulgated thereunder or any successor
thereto.
"Interest Payment" means any payment or portion of any payment
received by the Trust that is characterized by the Owner Trustee in its sole
discretion as an interest payment in respect of the Portfolio Assets.
"Issuer" means the CS Resorts - 2001 Trust, a Delaware
business trust, created pursuant to the Trust Agreement.
"Loan Sale Agreement" mean that certain Loan Sale Agreement,
dated as of September 7, 2001, by and among CapitalSource and the Trust.
"Losses" has the meaning set forth in Section 6.7 of the Trust
Agreement.
"Majority Certificateholders" means, at any time of
determination, the following: (i) if any Pass Through-A Certificates are
outstanding then the Certificateholders owning more than 50% of the outstanding
principal balance of Pass Through-A Certificates; (ii) if no Pass Through-A
Certificates are outstanding but Pass Through-B Certificates are outstanding,
then the Certificateholders owning more than 50% of the outstanding principal
balance of Pass Through-B Certificates and (iii) if no Pass Through-A
Certificates and no Pass Through-B Certificates are outstanding then the
Certificateholders owning more than 50% of the outstanding principal balance of
the Equity-1 Certificates.
"Net Expense" means for any Capital Account Adjustment Period
the Operating Expenses (paid or accrued) attributable to such period.
"Operating Expenses" has the meaning set forth in Section 7.4
of the Trust Agreement.
"Option Agreement" means that certain Option Agreement, dated
as of September 7, 2001, executed by CapitalSource in favor of ECI.
EXHIBIT 10.2
"Organizational Expenses" has the meaning set forth in Section
7.4 of the Trust Agreement.
"Outstanding Certificate Balance" means, at any time, the
aggregate unpaid principal balance of all Certificates then outstanding.
"Owner Trustee" means CS Resorts, Inc., a Delaware
corporation, not in its individual capacity but solely as owner trustee under
the Trust Agreement, and any successor qualifying under Section 6.17 of the
Trust Agreement.
"Owner Trustee Fee" has the meaning set forth in Section 6.4
of the Trust Agreement.
"Pass Through-A Certificate" means a beneficial interest in
the Trust that is designated as a Pass Through-A Certificate and which is issued
by the Trust pursuant to the Trust Agreement.
"Pass Through-A Dividends" means a dividend payable in respect
of the Pass Through-A Certificates that accrues on all outstanding Pass
Through-A Certificates at an annual rate equal to the Pass Through-A Rate and is
calculated based on the actual number of days elapsed during the period to which
such dividend relates divided by 360 days.
"Pass Through-A Rate" means the Prime Rate plus 2.00% as such
rate may be increased pursuant to Section 3.1(e) of the Trust Agreement;
provided that at no time shall the Pass Through-A Rate be less that 10% per
annum.
"Pass Through-B Certificate" means a beneficial interest in
the Trust that is designated as a Pass Through-B Certificate and which is issued
by the Trust pursuant to the Trust Agreement.
"Pass Through-B Dividends" means a dividend payable in respect
of the Pass Through-B Certificates that accrues on all outstanding Pass
Through-B Certificates at an annual rate equal to the Pass Through-B Rate and is
calculated based on the actual number of days elapsed during the period to which
such dividend relates divided by 360 days.
"Pass Through-B Rate" means 0%.
"Person" means any legal person, including, without
limitation, any individual, corporation, estate, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
limited liability company, unincorporated organization or government or any
agency or political subdivision thereof or other entity of similar nature.
"Portfolio Assets" means those certain loans set forth on
Schedule 2 to the Trust Agreement.
EXHIBIT 10.2
"Prime Rate" means the prime commercial lending rate as
announced from time to time by Citibank, N.A. or its successor at its principal
office in New York, New York or such other office as shall be reasonably
acceptable to Owner Trustee (it being understood that said prime commercial
lending rate is a reference rate and does not necessarily represent the lowest
or best rate being charged to any customer), each change in said rates to be
effective as of the date of such change.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Purchase Agreement" means any subscription agreement entered
into by a Certificateholder pursuant to Section 3.1 of the Trust Agreement,
substantially in the form of Exhibit B to the Trust Agreement.
"Securities Act" means the Securities Act of 1933, as amended,
or any successor act thereto.
"Servicing Agent" means ECI, engaged as servicing agent under
the Servicing Agreement, or any successor thereto pursuant to the terms of such
Servicing Agreement.
"Servicing Agreement" means the Servicing Agreement, dated as
of September 7, 2001, between the Trust and the Servicing Agent in the form of
Exhibit C hereto, to be entered into according to the provisions of Section 7.6
of the Trust Agreement, as amended, supplemented, modified or replaced from time
to time.
"Sharing Percentage" means, with respect to any
Certificateholder, the aggregate unpaid principal balance of Certificates held
by such Certificateholder expressed as a percentage of the then Outstanding
Certificate Balance.
"Tax Matters Partner" has the meaning set forth in Section 7.1
of the Trust Agreement.
"transfer" has the meaning set forth in Section 3.6 of the
Trust Agreement.
"Transfer Certificate" means, with respect to the
Certificates, Exhibit E to the Trust Agreement.
"Trust" means CS Resorts - 2001 Trust, created pursuant to the
Trust Agreement.
"Trust Agreement" has the meaning set forth in the initial
paragraph of the Trust Agreement and includes all schedules and exhibits
thereto, as the same may be amended, supplemented and/or modified from time to
time.
"Trustees" means, collectively, the Delaware Trustee and the
Owner Trustee.
EXHIBIT 10.2
"U.S. Dollars" or "$" or "Dollars" means the lawful currency
of the United States of America.
EXHIBIT 10.2
Exhibit A-1
FORM OF DEFINITIVE PASS THROUGH-A CERTIFICATE
THIS PASS THROUGH-A CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND NEITHER THIS PASS THROUGH-A CERTIFICATE NOR ANY
INTEREST HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE CONDITIONS SET FORTH IN THE TRUST AGREEMENT (AS DESCRIBED ON
THE REVERSE HEREOF, THE "TRUST AGREEMENT"), APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR TO SUCH OTHER PERSONS IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; PROVIDED,
THAT AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER IS DELIVERED STATING THAT
SUCH TRANSFER WOULD BE IN COMPLIANCE WITH THE SECURITIES ACT. IN ADDITION, THE
ISSUER HEREOF HAS NOT BEEN AND WILL NOT BE REGISTERED AS AN "INVESTMENT COMPANY"
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY
ACT") AND NO TRANSFER OF THIS PASS THROUGH-A CERTIFICATE OR ANY INTEREST HEREIN
MAY BE MADE UNLESS THE TRANSFEREE IS A "QUALIFIED PURCHASER" (WITHIN THE MEANING
OF SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT) OR IF SUCH TRANSFER WOULD
REQUIRE REGISTRATION OF THE ISSUER HEREOF AS AN "INVESTMENT COMPANY" UNDER THE
INVESTMENT COMPANY ACT. THIS PASS THROUGH-A CERTIFICATE IS TRANSFERABLE ONLY
UPON COMPLIANCE WITH THE PROVISIONS OF THE TRUST AGREEMENT PURSUANT TO WHICH
THIS PASS THROUGH-A CERTIFICATE WAS ISSUED.
THE TRUST AGREEMENT PROVIDES THAT THIS PASS THROUGH-A
CERTIFICATE MAY NOT BE TRANSFERRED UNLESS (1) THE PURCHASER REPRESENTS AND
COVENANTS THAT (a) IT IS PURCHASING THIS PASS THROUGH-A CERTIFICATE FOR ITS OWN
ACCOUNT; (b) EITHER (i) IT IS NOT, FOR FEDERAL INCOME TAX PURPOSES, A
PARTNERSHIP, GRANTOR TRUST OR S CORPORATION (AS DEFINED IN THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE")) OR (ii) IT IS FOR FEDERAL INCOME TAX
PURPOSES, A PARTNERSHIP, GRANTOR TRUST OR S CORPORATION BUT, AFTER GIVING EFFECT
TO THIS PURCHASE OF THIS PASS THROUGH-A CERTIFICATE, LESS THAN 60% OF THE
AGGREGATE VALUE OF ITS ASSETS WOULD CONSIST OF CERTIFICATES (AS DEFINED IN THE
TRUST AGREEMENT); AND (c) THIS PASS THROUGH-A CERTIFICATE HAS NOT BEEN AND SHALL
NOT BE TRANSFERRED THROUGH AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING
OF SECTION 7704(b) OF THE CODE; AND (2) THE PURCHASER CERTIFIES UNDER PENALTIES
OF PERJURY THAT IT IS A "U.S. PERSON," AS DEFINED IN SECTION 7701(a)(30) OF THE
CODE.
EXHIBIT 10.2
THE INITIAL CERTIFICATEHOLDER HAS REPRESENTED AND COVENANTED
THAT IT IS HOLDING THE PASS THROUGH-A CERTIFICATES FOR ITS OWN ACCOUNT AND (b)
INTERESTS IN THE INITIAL CERTIFICATEHOLDER HAVE NOT BEEN AND SHALL NOT BE
TRANSFERRED THROUGH AN ESTABLISHED SECURITIES MARKET.
NO EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) WHICH IS
SUBJECT TO THE PROVISIONS OF ERISA, NO PLAN (AS DEFINED IN SECTION 4975(e)(1) OF
THE CODE), WHICH IS SUBJECT TO SECTION 4975 OF THE CODE, NO OTHER "BENEFIT PLAN
INVESTOR" (WITHIN THE MEANING OF 29 C.F.R. ss. 2510.3-101(f)(2)), NO PERSON
ACTING ON BEHALF OF THE AFOREMENTIONED AND NO INSURANCE COMPANY GENERAL ACCOUNT
(UNLESS CERTAIN SPECIFIED CONDITIONS ARE MET) MAY PURCHASE OR HOLD THIS PASS
THROUGH-A CERTIFICATE OR ANY INTEREST HEREIN
CS RESORTS - 2001 TRUST
PASS THROUGH-A CERTIFICATE
$---------
THIS CERTIFIES THAT ____________________________________ is
the registered owner of a non-assessable, fully-paid, fractional undivided "Pass
Through-A" beneficial interest in CS RESORTS - 2001 TRUST (the "Trust").
The Trust was created pursuant to a trust agreement dated as
of September 6, 2001 (as amended, supplemented or modified from time to time,
the "Trust Agreement"), between CAPITALSOURCE FINANCE LLC and EQUIVEST CAPITAL,
INC. as the initial certificateholders (together with its successors and
permitted assigns, the "Certificateholder"), and CS Resorts, Inc., as owner
trustee (the "Owner Trustee"). To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the Trust
Agreement.
This Pass Through-A Certificate is one of the duly authorized
Pass Through-A Certificates referred to in the Trust Agreement. This Pass
Through-A Certificate is issued under and is subject to the terms, provisions
and conditions of the Trust Agreement, the terms of which are incorporated
herein by reference and made a part hereof, to which Trust Agreement the
Certificateholder by virtue of the acceptance hereof assents and by which such
Certificateholder is bound.
On each Distribution Date, the Trust, solely out of the assets
of the Trust actually received and held by the Owner Trustee, will make
distributions to the Certificateholder in an amount equal to such
Certificateholder's pro rata portion for such Distribution Date, to the extent
of funds available therefor. Distributions shall be payable by wire transfer in
immediately available funds to the account designated by the Certificateholder
hereof pursuant to the Trust Agreement.
EXHIBIT 10.2
Each Certificateholder by acceptance of a Pass Through-A
Certificate covenants and agrees that it will treat the Pass Through-A
Certificates as representing equity interests in a partnership for United States
federal income tax purposes.
On any redemption provided for in Section 8.1 of the Trust
Agreement, the Trust, solely out of the assets of the Trust available therefor,
promises to pay to the Certificateholder an amount equal to the positive balance
of such Certificateholder's Capital Account, if any, by wire transfer in
immediately available funds to the account designated by such Certificateholder.
This Pass Through-A Certificate is subject to redemption in
accordance with the provisions of Article VIII of the Trust Agreement.
THIS PASS THROUGH-A CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO THE
CONFLICT OF LAW PROVISIONS THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Trust has caused this Pass Through-A
Certificate to be duly executed.
CS RESORTS - 2001 TRUST
By: CS RESORTS, INC., not in its individual capacity,
but solely as Owner Trustee
Dated: By:
------------ ----------------------------------------------------------
Name:
Title:
EXHIBIT 10.2
EXHIBIT 10.2
Exhibit A-2
FORM OF DEFINITIVE PASS THROUGH-B CERTIFICATE
THIS PASS THROUGH-B CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND NEITHER THIS PASS THROUGH-B CERTIFICATE NOR ANY
INTEREST HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE CONDITIONS SET FORTH IN THE TRUST AGREEMENT (AS DESCRIBED ON
THE REVERSE HEREOF; THE "TRUST AGREEMENT"), APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR TO SUCH OTHER PERSONS IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; PROVIDED,
THAT AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER IS DELIVERED STATING THAT
SUCH TRANSFER WOULD BE IN COMPLIANCE WITH THE SECURITIES ACT. IN ADDITION, THE
ISSUER HEREOF HAS NOT BEEN AND WILL NOT BE REGISTERED AS AN "INVESTMENT COMPANY"
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY
ACT") AND NO TRANSFER OF THIS PASS THROUGH-B CERTIFICATE OR ANY INTEREST HEREIN
MAY BE MADE UNLESS THE TRANSFEREE IS A "QUALIFIED PURCHASER" (WITHIN THE MEANING
OF SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT) OR IF SUCH TRANSFER WOULD
REQUIRE REGISTRATION OF THE ISSUER HEREOF AS AN "INVESTMENT COMPANY" UNDER THE
INVESTMENT COMPANY ACT. THIS PASS THROUGH-B CERTIFICATE IS TRANSFERABLE ONLY
UPON COMPLIANCE WITH THE PROVISIONS OF THE TRUST AGREEMENT PURSUANT TO WHICH
THIS PASS THROUGH-B CERTIFICATE WAS ISSUED.
THE TRUST AGREEMENT PROVIDES THIS PASS THROUGH-B CERTIFICATE
MAY NOT BE TRANSFERRED UNLESS (1) THE PURCHASER REPRESENTS AND COVENANTS THAT
(a) IT IS PURCHASING THIS PASS THROUGH-B CERTIFICATE FOR ITS OWN ACCOUNT; (b)
EITHER (i) IT IS NOT, FOR FEDERAL INCOME TAX PURPOSES, A PARTNERSHIP, GRANTOR
TRUST OR S CORPORATION (AS DEFINED IN THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE")) OR (ii) IT IS FOR FEDERAL INCOME TAX PURPOSES, A
PARTNERSHIP, GRANTOR TRUST OR S CORPORATION BUT, AFTER GIVING EFFECT TO THIS
PURCHASE OF THIS PASS THROUGH-B CERTIFICATE, LESS THAN 60% OF THE AGGREGATE
VALUE OF ITS ASSETS WOULD CONSIST OF CERTIFICATES (AS DEFINED IN THE TRUST
AGREEMENT); AND (c) THIS PASS THROUGH-B CERTIFICATE HAS NOT BEEN AND SHALL NOT
BE TRANSFERRED THROUGH AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF
SECTION 7704(b) OF THE CODE; AND (2) THE PURCHASER CERTIFIES UNDER PENALTIES OF
PERJURY THAT IT IS A "U.S. PERSON," AS DEFINED IN SECTION 7701(a)(30) OF THE
CODE.
EXHIBIT 10.2
THE INITIAL CERTIFICATEHOLDER HAS REPRESENTED AND COVENANTED
THAT (a) IT IS HOLDING THE PASS THROUGH-B CERTIFICATES FOR ITS OWN ACCOUNT AND
(b) INTERESTS IN THE INITIAL CERTIFICATEHOLDER HAVE NOT BEEN AND SHALL NOT BE
TRANSFERRED THROUGH AN ESTABLISHED SECURITIES MARKET.
NO EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) WHICH IS
SUBJECT TO THE PROVISIONS OF ERISA, NO PLAN (AS DEFINED IN SECTION 4975(e)(1) OF
THE CODE) WHICH IS SUBJECT TO SECTION 4975 OF THE CODE, NO OTHER "BENEFIT PLAN
INVESTOR" (WITHIN THE MEANING OF 29 C.F.R. ss. 2510.3-101(f)(2)), NO PERSON
ACTING ON BEHALF OF THE AFOREMENTIONED AND NO INSURANCE COMPANY GENERAL ACCOUNT
(UNLESS CERTAIN SPECIFIED CONDITIONS ARE MET) MAY PURCHASE OR HOLD THIS PASS
THROUGH-B CERTIFICATE OR ANY INTEREST HEREIN.
CS RESORTS - 2001 TRUST
PASS THROUGH-B CERTIFICATE
$-------------
THIS CERTIFIES THAT ____________________________________ is
the registered owner of a non-assessable, fully-paid, fractional undivided "Pass
Through-B" beneficial interest in CS RESORTS - 2001 TRUST (the "Trust").
The Trust was created pursuant to a trust agreement dated as
of September 6, 2001 (as amended, supplemented or modified from time to time,
the "Trust Agreement"), between CAPITALSOURCE FINANCE LLC and EQUIVEST CAPITAL,
INC. as the initial certificateholders (together with its successors and
permitted assigns, the "Certificateholder"), and CS Resorts, Inc., as owner
trustee (the "Owner Trustee"). To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the Trust
Agreement.
This Pass Through-B Certificate is one of the duly authorized
Pass Through-B Certificates referred to in the Trust Agreement. This Pass
Through-B Certificate is issued under and is subject to the terms, provisions
and conditions of the Trust Agreement, the terms of which are incorporated
herein by reference and made a part hereof, to which Trust Agreement the
Certificateholder by virtue of the acceptance hereof assents and by which such
Certificateholder is bound.
On each Distribution Date, the Trust, solely out of the assets
of the Trust actually received and held by the Owner Trustee, will make
distributions to the Certificateholder in an amount equal to such
Certificateholder's pro rata portion for such Distribution Date, to the extent
of funds available therefor. Distributions shall be payable by wire transfer in
immediately available funds to the account designated by the Certificateholder
hereof pursuant to the Trust Agreement.
EXHIBIT 10.2
Each Certificateholder by acceptance of a Pass Through-B
Certificate covenants and agrees that it will treat the Pass Through-B
Certificates as representing equity interests in a partnership for United States
federal income tax purposes.
On any redemption provided for in Section 8.1 of the Trust
Agreement, the Trust, solely out of the assets of the Trust available therefor,
promises to pay to the Certificateholder an amount equal to the positive balance
of such Certificateholder's Capital Account, if any, by wire transfer in
immediately available funds to the account designated by such Certificateholder.
This Pass Through-B Certificate is subject to redemption in
accordance with the provisions of Article VIII of the Trust Agreement.
THIS PASS THROUGH-B CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO THE
CONFLICT OF LAW PROVISIONS THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Trust has caused this Pass Through-B
Certificate to be duly executed.
CS RESORTS - 2001 TRUST
By: CS RESORTS, INC., not in its individual capacity,
but solely as Owner Trustee
Dated: By:
------------ ----------------------------------------------------------
Name:
Title:
EXHIBIT 10.2
Exhibit A-3
EXHIBIT 10.2
FORM OF DEFINITIVE EQUITY-1 CERTIFICATE
THIS EQUITY-1 CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND NEITHER THIS EQUITY-1 CERTIFICATE NOR ANY
INTEREST HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT WITH THE
CONSENT OF EACH OF THE OTHER CERTIFICATEHOLDERS AND IN ACCORDANCE WITH THE OTHER
CONDITIONS SET FORTH IN THE TRUST AGREEMENT (AS DESCRIBED ON THE REVERSE HEREOF;
THE "TRUST AGREEMENT"), APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR TO SUCH OTHER PERSONS IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; PROVIDED, THAT AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER IS DELIVERED STATING THAT SUCH TRANSFER WOULD
BE IN COMPLIANCE WITH THE SECURITIES ACT. IN ADDITION, THE ISSUER HEREOF HAS NOT
BEEN AND WILL NOT BE REGISTERED AS AN "INVESTMENT COMPANY" UNDER THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT") AND NO TRANSFER
OF THIS EQUITY-1 CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE UNLESS THE
TRANSFEREE IS A "QUALIFIED PURCHASER" (WITHIN THE MEANING OF SECTION 3(c)(7) OF
THE INVESTMENT COMPANY ACT) OR IF SUCH TRANSFER WOULD REQUIRE REGISTRATION OF
THE ISSUER HEREOF AS AN "INVESTMENT COMPANY" UNDER THE INVESTMENT COMPANY ACT.
THIS EQUITY-1 CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH THE
PROVISIONS OF THE TRUST AGREEMENT PURSUANT TO WHICH THIS EQUITY-1 CERTIFICATE
WAS ISSUED.
THE TRUST AGREEMENT PROVIDES THIS EQUITY-1 CERTIFICATE MAY NOT
BE TRANSFERRED UNLESS (1) THE PURCHASER REPRESENTS AND COVENANTS THAT (a) IT IS
PURCHASING THIS EQUITY-1 CERTIFICATE FOR ITS OWN ACCOUNT; (b) EITHER (i) IT IS
NOT, FOR FEDERAL INCOME TAX PURPOSES, A PARTNERSHIP, GRANTOR TRUST OR S
CORPORATION (AS DEFINED IN THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE")) OR (ii) IT IS FOR FEDERAL INCOME TAX PURPOSES, A PARTNERSHIP, GRANTOR
TRUST OR S CORPORATION BUT, AFTER GIVING EFFECT TO THIS PURCHASE OF THIS
EQUITY-1 CERTIFICATE, LESS THAN 60% OF THE AGGREGATE VALUE OF ITS ASSETS WOULD
CONSIST OF CERTIFICATES (AS DEFINED IN THE TRUST AGREEMENT); AND (c) THIS
EQUITY-1 CERTIFICATE HAS NOT BEEN AND SHALL NOT BE TRANSFERRED THROUGH AN
"ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(b) OF THE
CODE; AND (2) THE PURCHASER CERTIFIES UNDER PENALTIES OF PERJURY THAT IT IS A
"U.S. PERSON," AS DEFINED IN SECTION 7701(a)(30) OF THE CODE.
EXHIBIT 10.2
THE INITIAL CERTIFICATEHOLDER HAS REPRESENTED AND COVENANTED
THAT (a) IT IS HOLDING THE EQUITY-1 CERTIFICATES FOR ITS OWN ACCOUNT AND (b)
INTERESTS IN THE INITIAL CERTIFICATEHOLDER HAVE NOT BEEN AND SHALL NOT BE
TRANSFERRED THROUGH AN ESTABLISHED SECURITIES MARKET.
NO EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) WHICH IS
SUBJECT TO THE PROVISIONS OF ERISA, NO PLAN (AS DEFINED IN SECTION 4975(e)(1) OF
THE CODE) WHICH IS SUBJECT TO SECTION 4975 OF THE CODE, NO OTHER "BENEFIT PLAN
INVESTOR" (WITHIN THE MEANING OF 29 C.F.R. ss. 2510.3-101(f)(2)), NO PERSON
ACTING ON BEHALF OF THE AFOREMENTIONED AND NO INSURANCE COMPANY GENERAL ACCOUNT
(UNLESS CERTAIN SPECIFIED CONDITIONS ARE MET) MAY PURCHASE OR HOLD THIS EQUITY-1
CERTIFICATE OR ANY INTEREST HEREIN.
CS RESORTS - 2001 TRUST
EQUITY-1 CERTIFICATE
$ ---------
THIS CERTIFIES THAT ____________________________________ is
the registered owner of a non-assessable, fully-paid, fractional undivided
"Equity-1" beneficial interest in CS RESORTS - 2001 TRUST (the "Trust").
The Trust was created pursuant to a trust agreement dated as
of September 6, 2001 (as amended, supplemented or modified from time to time,
the "Trust Agreement"), between CAPITALSOURCE FINANCE LLC and EQUIVEST CAPITAL,
INC. as the initial certificateholders (together with its successors and
permitted assigns, the "Certificateholder"), and CS Resorts, Inc., as owner
trustee (the "Owner Trustee"). To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the Trust
Agreement.
This Equity-1 Certificate is one of the duly authorized
Equity-1 Certificates referred to in the Trust Agreement. This Equity-1
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, the terms of which are incorporated herein by
reference and made a part hereof, to which Trust Agreement the Certificateholder
by virtue of the acceptance hereof assents and by which such Certificateholder
is bound.
On each Distribution Date, the Trust, solely out of the assets
of the Trust actually received and held by the Owner Trustee, will make
distributions to the Certificateholder in an amount equal to such
Certificateholder's pro rata portion for such Distribution Date, to the extent
of funds available therefor. Distributions shall be payable by wire transfer in
immediately available funds to the account designated by the Certificateholder
hereof pursuant to the Trust Agreement.
EXHIBIT 10.2
Each Certificateholder by acceptance of a Equity-1 Certificate
covenants and agrees that it will treat the Equity-1 Certificates as
representing equity interests in a partnership for United States federal income
tax purposes.
Upon termination of the Trust pursuant to Article X of the
Trust Agreement, the Trust, solely out of the assets of the Trust available
therefor, promises to pay to the Certificateholder an amount equal to the
positive balance of such Certificateholder's Capital Account, if any, by wire
transfer in immediately available funds to the account designated by such
Certificateholder.
THIS EQUITY-1 CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO THE CONFLICT OF LAW
PROVISIONS THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Trust has caused this Equity-1
Certificate to be duly executed.
CS RESORTS - 2001 TRUST
By: CS RESORTS, INC., not in its individual capacity,
but solely as Owner Trustee
Dated: By:
------------ ----------------------------------------------------------
Name:
Title:
EXHIBIT 10.2
Exhibit B
FORM OF SUBSCRIPTION AGREEMENT
See attached.
EXHIBIT 10.2
Exhibit C
FORM OF SERVICING AGREEMENT
See attached.
EXHIBIT 10.2
Exhibit D
CONDITIONS PRECEDENT TO DELIVERY OF CERTIFICATES
PURSUANT TO SECTIONS 3.2(a) AND 3.2(b)
OF THE TRUST AGREEMENT
See attached.
EXHIBIT 10.2
Exhibit E
FORM OF TRANSFER CERTIFICATE
See attached.
EXHIBIT 10.2
Exhibit F
FORM OF CONFIRMATION OF REGISTRATION
OF INTEREST IN CERTIFICATES
See attached.