Exhibit 99.1
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CHARTERMAC
SECOND AMENDED AND RESTATED TRUST AGREEMENT
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This SECOND AMENDED AND RESTATED TRUST AGREEMENT is entered into as of
November 17, 2003 by and among the undersigned Trustees and those persons who
are or become Shareholders pursuant to the terms of this Trust Agreement.
Capitalized terms used but not defined shall have the meanings assigned to such
terms in Article 2.
W I T N E S S E T H :
WHEREAS, certain of the Trustees have created a statutory trust in
accordance with applicable provisions of the Trust Act by entering into a Trust
Agreement, dated as of August 12, 1996, as amended by an Amendment No. 1 to
Trust Agreement dated as of April 30, 1997, and as amended and restated by the
Amended and Restated Trust Agreement dated as of September 30, 1997, and as
further amended by Amendment Nos. 1, 2, 3 and 4 to the Amended and Restated
Trust Agreement dated as of May 8, 2000, December 11, 2000, June 13, 2002 and
November 17, 2003, respectively (as so amended and amended and restated, the
"Original Trust Agreement"), and by the filing with the Secretary of State of
the State of Delaware of a Certificate of Trust on August 12, 1996, as
heretofore amended; and
WHEREAS, the parties hereto desire to amend and restate the Original
Trust Agreement in its entirety as provided herein;
WHEREAS, the Shareholders have approved the amendment and restatement of
the Original Trust Agreement;
"WHEREAS, the Shareholders have approved the amendment and restatement
of the Original Trust Agreement as provided herein and pursuant to Sections 1.1
and 10.4(f) of the Original Trust Agreement, the Board of Trustees, without the
consent of the Shareholders, has approved the amendments to the Original Trust
Agreement to change the Trust's name from "Charter Municipal Mortgage Acceptance
Company" to "CharterMac"; and
WHEREAS, the Trustees desire that the Trust qualify as a partnership for
federal income tax purposes under the Code.
NOW, THEREFORE, the parties hereto hereby declare that all money and
property contributed to or otherwise owned or held by or on behalf of the Trust,
together with the proceeds thereof, shall be held and managed in trust for the
benefit of the Shareholders, subject to the provisions hereof.
1. ORGANIZATION
1.1 Name. The trust hereby continued shall be known as CharterMac in
which name the Board of Trustees may conduct business or any subsequent name as
shall be selected by the Board of Trustees.
1.2 Business Offices. The principal office of the Trust, and such
additional offices as the Board of Trustees may determine to establish, shall be
located at such place or places inside or outside the State of Delaware as the
Board of Trustees may designate from time to time.
1.3 Declaration of Trust. The Board of Trustees hereby declares that
they will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the use and benefit of the Shareholders. It is the
intention of the parties hereto that this Trust Agreement and the Bylaws shall
constitute the governing instruments of the Trust.
2. DEFINITIONS AND GLOSSARY OF TERMS
The following terms used in this Trust Agreement shall (unless otherwise
expressly provided herein or unless the context otherwise requires) have the
following respective meanings:
"Adjusted Capital Account Deficit" shall have the meaning ascribed
thereto in Section 9.5.
"Affiliate" of an Entity shall mean (i) any officer, director, partner,
employee or controlling shareholder of such Entity; (ii) any Person controlling,
controlled by or under common control with any Entity or any individual
described in (i) above; (iii) any officer, director, trustee, general partner or
employee of any Person described in (ii) above; and (iv) any Person who is a
member, other than as limited partner, with any individual described in (i) and
(ii) above in a relationship of joint venture, general partnership, or similar
form of unincorporated business association.
"Amended and Restated Operating Agreement" shall mean that certain
Amended and Restated Operating Agreement of CharterMac Capital Company, LLC
dated the date hereof.
"Available Cash" shall mean, with respect to the applicable period of
measurement (i.e., any period beginning on the first day of the fiscal year,
quarter or other period commencing immediately after the last day of the fiscal
year, quarter or other applicable period for purposes of the prior calculation
of Available Cash for, or with respect to which, a Distribution has been made,
and ending on the last day of the
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fiscal year, quarter or other applicable period immediately preceding the date
of the calculation), the excess, if any, as of such date, of
(a) the gross cash receipts of the Trust for such period from
all sources whatsoever, including, without limitation, the following:
(i) all interest and other revenues, income and proceeds
derived by the Trust from its operations, including, without
limitation, distributions received by the Trust from any Entity
in which the Trust has an interest;
(ii) all proceeds and revenues received by the Trust on
account of any sales of assets of the Trust or as a refinancing
of or payment of principal, interest, costs, fees, penalties or
otherwise on account of any borrowings made by, or other
leverage of, the Trust or financings or refinancings of any
asset of the Trust;
(iii) the amount of any insurance proceeds and
condemnation awards received by the Trust;
(iv) all capital contributions or loans received by the
Trust from its Shareholders;
(v) all Reserves previously set aside by the Trust, to
the extent such amounts are no longer needed for the specific
purposes for which such amounts were reserved; and
(vi) the proceeds of liquidation of the Trust's assets
in accordance with this Agreement;
over
(b) the sum of:
(i) all operating costs and expenses, including taxes
and other expenses of the assets directly and indirectly held by
the Trust and capital expenditures made during such period
(without deduction, however, for any capital expenditures,
charges for depreciation or other expenses not paid in cash or
expenditures from Reserves described in (vii) below);
(ii) all costs and expenses expended or paid during such
period in connection with the sale or other disposition, or
financing or refinancing, of the assets directly or indirectly
held by the Trust or the recovery of insurance or condemnation
proceeds;
(iii) all fees and reimbursements provided for under
this Agreement;
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(iv) all debt service, including principal and interest,
paid during such period on all indebtedness (including under any
line of credit) of the Trust;
(v) all capital contributions, advances, reimbursements
or similar payments made to any Person in which the Trust has an
interest;
(vi) all loans made by the Trust in accordance with the
terms of this Agreement; and
(vii) any new Reserves or increases in Reserves
reasonably determined by the Managing Trustees to be necessary
for working capital, capital improvements, payments of periodic
expenditures, debt service or other purposes for the Trust or
any Person in which the Trust has an interest.
"Board of Trustees" shall mean, collectively, the Managing Trustees
named in Section 3.1(b) so long as they continue in office, and all other
individuals who have been duly elected and qualify as Managing Trustees.
"Book Amortization" shall have the meaning ascribed thereto in Section
9.7.
"Book Depreciation" shall have the meaning ascribed thereto in Section
9.7.
"Book Disparity" shall have the meaning ascribed thereto in Section 9.7.
"Book Gain" shall have the meaning ascribed thereto in Section 9.7.
"Book Loss" shall have the meaning ascribed thereto in Section 9.7.
"Bylaws" shall mean the Second Amended and Restated Bylaws of the Trust
as adopted as of the date hereof, and as amended or restated from time to time,
by the Board of Trustees pursuant to Section 10.2(b), which Bylaws are
incorporated herein by reference and shall form a part of the governing
instrument of the Trust.
"Capital Account" shall have the meaning ascribed thereto in Section
9.4.
"Capital Event" shall mean any Trust transaction not in the ordinary
course of its business including, without limitation, principal payments,
prepayments, the incurrence of prepayment penalties, sales, exchanges,
foreclosures or other dispositions of assets directly or indirectly owned by the
Trust, recoveries of damage awards and insurance proceeds not used to rebuild
(other than the receipt of contributions to the capital of the Trust and
business or rental interruption insurance proceeds not used to rebuild).
"Cause" shall mean gross negligence or willful misconduct.
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"Code" shall mean the Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent revenue laws.
"Common Shares" shall mean any Shares classified or reclassified as such
by the Board of Trustees.
"Common Shareholder" shall mean any Person who holds Common Shares in
its capacity as a beneficial owner of the Trust, including the Manager to the
extent it holds Common Shares.
"Contribution Agreement" shall mean that certain Contribution Agreement,
dated as of December 17, 2002, by and among CharterMac Capital Company, LLC and
other parties named therein.
"control" (and its correlative forms) shall have the meaning ascribed to
such term under the Investment Company Act of 1940, as amended and in effect on
the date of this Agreement.
"Covered Person" shall have the meaning ascribed thereto in Section
10.9.
"CRA Preferred Shares" means, collectively, the Convertible Community
Reinvestment Act Preferred Shares and the Series A Convertible Community
Reinvestment Act Preferred Shares described in Section 6.7.
"Distributions" shall mean any cash or Trust Property distributed to
Shareholders in accordance with the terms of this Trust Agreement arising from
their beneficial ownership interests in the Trust.
"Entity" shall mean any general partnership, limited partnership,
corporation, joint venture, trust, business or statutory trust, real estate
investment trust, limited liability company, cooperative or association.
"Final Ratio" shall have the meaning ascribed thereto in Section 9.6(c).
"Incentive Share Option Plan" shall mean any Share option plan which may
be adopted from time to time by the Board of Trustees.
"Indemnified Party(ies)" shall have the meaning ascribed thereto in
Section 14.1.
"Independent Trustee" shall mean each Managing Trustee who is not an
officer or employee of the Trust; who is neither related to the Trust's officers
nor represents concentrated or family holdings of the Trust's voting interests;
and who, in the view of the other Independent Trustees, is free of any
relationship that would interfere with the exercise of independent judgment with
respect to matters relating or pertaining to the affairs of the Trust; provided,
however, that if Nasdaq, or the national securities exchange on which any Shares
are listed, adopts rules which mandate a different definition of "independence",
such definition shall apply in place of the foregoing.
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"Leverage Limitation" shall have the meaning ascribed thereto in Section
10.3.
"Majority Vote" shall mean, as to any matter on which the Shareholders
have the right to vote, the affirmative vote of the holders of the outstanding
Common Shares together with the holders of any other class or series of Shares
entitled to vote with the holders of Common Shares (voting as a single class),
having more than 50% of the outstanding Shares entitled to vote on the matter.
For the avoidance of doubt, except as to matters on which the holders of Special
Preferred Voting Shares are entitled to a separate class vote under the
Certificate of Designation of Special Preferred Voting Shares, the holders of
the Common Shares and the holders of the Special Preferred Voting Shares shall
vote together as a single class.
"Management Agreement" shall mean the agreement between the Trust and
the Manager, as amended from time to time, pursuant to which the Manager will be
engaged by the Trust to conduct the business and affairs of the Trust upon the
terms and conditions therein.
"Manager" shall mean such Person to which the Board of Trustees
delegates the authority to conduct the business and affairs of the Trust in all
matters as set forth in the Management Agreement with the Manager.
"Managing Trustees" shall mean the individuals named in Section 3.1(b)
so long as they continue in office, and all other individuals who have been duly
elected and qualify as trustees of the Trust hereunder, including the
Independent Trustees but not including the Registered Trustee.
"Net Income" or "Net Loss" shall mean for each fiscal year or other
applicable period, an amount equal to the Trust's taxable income or loss for
such year or period as determined for federal income tax purposes determined in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a) of the Code shall be included in taxable income or loss), and (a)
by including as an item of gross income any tax-exempt income received by the
Trust and not otherwise taken into account in computing Net Income or Net Loss;
(b) by treating as a deductible expense any expenditure of the Trust described
in Section 705(a)(2)(B) of the Code (or which is treated as a Section
705(a)(2)(B) expenditure pursuant to Section 1.704-1(b)(2)(iv)(i) of the
Regulations) and not otherwise taken into account in computing Net Income or Net
Loss; (c) by making any adjustments needed to take into account any differences
between book basis and tax basis; and (d) by not taking into account in
computing Net Income or Net Loss items separately allocated to the Shareholders
pursuant to the provisions of Article 9 hereof.
"Original Trust Agreement" shall have the meaning ascribed thereto in
the Preamble.
"Outstanding Preferred Securities" shall have the meaning ascribed
thereto in Section 10.3.
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"Percentage Interest" shall mean, as to a Shareholder, the fractional
part of the Shares owned by such Shareholder and expressed as a percentage
computed by dividing the Shares owned by such Shareholder by the total number of
issued and outstanding Shares owned by all Shareholders. As used in this
definition, the term "Shareholder" includes the Common Shareholders and any
other Shareholders who receive the same Distributions as the Common
Shareholders, including holders of CRA Preferred Shares; provided that the Board
of Trustees, without requirement for any consent of the Shareholders, may modify
this definition from time to time as necessary to reflect the terms of any
Shares issued by the Trustees pursuant to Section 6.7.
"Person" shall mean an individual or Entity.
"Preferred Shares" shall mean any Shares classified or reclassified as
such by the Board of Trustees.
"RCC Acquisition Documents" shall have the meaning ascribed thereto in
Section 10.11.
"Registered Trustee" shall mean Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity but solely as a trustee
hereunder, or any other Person which succeeds it in such capacity pursuant to
Section 15.2 and in compliance with Section 3807 of the Trust Act.
"Registered Trustee Person" shall have the meaning ascribed thereto in
Section 14.2.
"Reserves" shall mean the amount set aside by the Board of Trustees or
the Manager as reserves of the Trust for working capital and for repairs,
replacements, contingencies or other purposes.
"Shareholder" shall mean any Person who holds Shares in its capacity as
a beneficial owner of the Trust, including the Manager to the extent it holds
Shares.
"Shareholder Minimum Gain" shall mean an amount, with respect to each
Shareholder Nonrecourse Debt, equal to the Trust Minimum Gain (assuming, for
this purpose, that the Trust's only liability was the Shareholder Nonrecourse
Debt), that would result if such Shareholder Nonrecourse Debt were treated as a
nonrecourse liability, determined in accordance with Treas. Reg. Section
1.704-2(i)(3) and then aggregating the separately computed gains.
"Shareholder Nonrecourse Debt" shall have the meaning ascribed to
"partner nonrecourse debt" set forth in Treas. Reg. Section 1.704-2(b)(4).
"Shareholder Nonrecourse Deductions" shall have the meaning ascribed to
"partner nonrecourse deductions" set forth in Treas. Reg. Section 1.704-2(i)(2).
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"Shares" shall mean the beneficial interests of a Shareholder in the
Trust representing undivided beneficial interests in the assets of the Trust,
which may be evidenced by Trust Certificates, including, without limitation,
Common Shares and Preferred Shares.
"Special Common Units" shall have the meaning ascribed thereto in the
Amended and Restated Operating Agreement.
"Special Preferred Voting Shares" shall have the meaning ascribed
thereto in Section 6.7(c).
"Substantially All of the Assets" shall mean assets representing 66-2/3%
or more of the net book value of all of the Trust's assets as of the end of the
most recently completed calendar quarter.
"Terminating Capital Transaction" shall mean any sale or other
disposition of assets of the Trust in connection with a liquidation of the
Trust.
"Total Market Value" shall mean the greater of (i) the sum of (a) the
aggregate market value of the Trust's outstanding Shares, and (b) the total
leverage of the Trust and (ii) the aggregate value of the Trust's assets as
determined by the Manager based upon third-party or management appraisals and
other criteria as the Board of Trustees shall determine in its sole discretion.
"Transfer" shall mean sale, assignment, conveyance, transfer, gift,
pledge, hypothecation, mortgage, exchange or other disposition whether
voluntary, involuntary, by operation of law or otherwise.
"Trust" shall mean CharterMac.
"Trust Act" shall mean the Delaware Statutory Trust Act, 12 Del.C.
Sections 3801 et. seq., as amended from time to time, or the corresponding
provisions of any succeeding law.
"Trust Agreement" shall mean this Second Amended and Restated Trust
Agreement, dated as of November 17, 2003 among the undersigned Trustees and
those Persons who are or become Shareholders pursuant to the terms of this Trust
Agreement, as amended or restated from time to time, and shall include the
By-laws, as amended or restated from time to time by the Board of Trustees.
"Trust Certificate" shall mean a certificate signed on behalf of the
Trust by a Trustee or the Manager, evidencing the Shares of a Shareholder in the
Trust.
"Trust Minimum Gain" shall mean the sum of the amounts determined by
computing with respect to each nonrecourse liability of the Trust, the amount of
gain (of whatever character), if any, that would be realized by the Trust if it
disposed (in a taxable
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transaction) of the Trust Property subject to such liability for no
consideration other than full satisfaction of such liability and then
aggregating the separately computed gains.
"Trust Property" shall mean all right, title and interest of the Trust
in and to any property contributed to the Trust by the Shareholders or otherwise
acquired by the Trust, including, without limitation, all distributions or
payments thereon or proceeds therefrom.
"Trustees" shall mean, collectively, the Managing Trustees and the
Registered Trustee.
3. TRUSTEES; LEGAL TITLE
3.1 Managing Trustees.
(a) Number. The Board of Trustees shall consist of not less than
three nor more than sixteen Managing Trustees. Initially, the Trust shall have
fifteen Managing Trustees, of which eight shall be Independent Trustees. As long
as Xxxxxx X. Xxxxx is on the Board of Trustees, a majority of the Board of
Trustees by at least one Managing Trustee must be Independent Trustees. Upon
Xxxxxx X. Xxxxx'x ceasing to serve as a Managing Trustee for any reason,
including by reason of his resignation or removal or otherwise, and at all times
thereafter, a majority of the Board of Trustees by at least two Managing
Trustees must be Independent Trustees (e.g. if the total number of Managing
Trustees is nine, Independent Trustees must comprise at least six members of the
Board of Trustees). The total number of Managing Trustees may be increased or
decreased pursuant to the Bylaws, but shall never be less than the minimum
number, if any, required by the Trust Act nor more than sixteen.
(b) Initial Board of Trustees. The names of the initial Managing
Trustees are:
Xxxxxx X. Xxxxxx (Class 3)
Xxxxxx Xxxxxxxx (Class 3)
Xxxxxx X. Xxxxxxx (Class 3)
Xxxxxx X. Xxxxxx (Class 3)
Xxxxxxx X. Xxxx (Class 3)
Xxxxxxx X. Xxxxx (Class 2)
Xxxx X. Xxxxxx (Class 2)
Xxxxxx Xxxx Xxxxxxx (Class 2)
Xxxx X. Xxxxxxxxx (Class 2)
Xxxxxx X. Xxxxx (Class 2)
Xxxxx X. Xxxxx (Class 1)
Xxxx X. Xxxx (Class 1)
Xxxxxx X. Xxxxx (Class 1)
Xxxxxx X. Xxxxx (Class 1)
Xxxxxx X. Xxxxxxx (Class 1)
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(c) Classes; Terms. The Board of Trustees shall be elected by
the Common Shareholders. The Managing Trustees (other than any Managing Trustee
elected solely by holders of one or more classes or series of Shares) shall be
classified, with respect to the terms for which they severally hold office, into
three classes, as nearly equal in number as possible, Class I to hold office
initially for a term expiring at the next succeeding annual meeting of
Shareholders, Class II to hold office initially for a term expiring at the
second succeeding annual meeting of Shareholders and Class III to hold office
initially for a term expiring at the third succeeding annual meeting of
Shareholders, with the members of each class to hold office until their
successors are duly elected and qualify. At each annual meeting of the
Shareholders, the successors to the class of Managing Trustees whose term
expires at such meeting shall be elected to hold office for a term expiring at
the annual meeting of Shareholders held in the third year following the year of
their election. Pursuant to and in accordance with the provisions of this Trust
Agreement, the Managing Trustees may increase the number of Managing Trustees
and may fill any vacancy, whether resulting from an increase in the number of
Managing Trustees or otherwise, on the Board of Trustees occurring before the
next annual meeting of Shareholders in the manner provided in the Bylaws.
(d) Removal of Managing Trustees. Subject to the rights of
holders of one or more classes or series of Shares to elect one or more Managing
Trustees, any Managing Trustee, or the entire Board of Trustees, may be removed
from office at any time, but only by Majority Vote.
(e) Resignation of Managing Trustees. Any Managing Trustee may
resign at any time by delivering his resignation in writing to the Board of
Trustees, to take effect at the time specified in the resignation; the
acceptance of a resignation, unless required by its terms, shall not be
necessary to make it effective.
3.2 Registered Trustee.
(a) Initial Registered Trustee; Powers. The Registered Trustee
has been appointed as trustee and joined as a party hereunder for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Trust Act.
In the event of the resignation or removal of the Registered Trustee, the Board
of Trustees shall appoint a successor Registered Trustee in accordance with
Section 15.2.
The Registered Trustee shall be responsible for performing only
the following duties with respect to the Trust: (i) to execute, deliver,
acknowledge and file any certificates of trust and any amendments thereto
required to be filed pursuant to applicable law, (ii) to execute any duly
adopted amendments to this Trust Agreement and (iii) to execute, deliver,
acknowledge and file any certificates of cancellation required to be filed
pursuant to applicable law. The Board of Trustees or the Manager shall keep the
Registered Trustee reasonably informed of any actions of the Board of Trustees
or the Manager or other circumstances that could affect the rights, duties or
liabilities of the Registered Trustee. The Registered Trustee shall have no
other authority, duties or liabilities. The Registered Trustee has no
responsibility for monitoring the conduct of the
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Board of Trustees or the Manager or causing the Board of Trustees or the
Manager, or any other Person to discharge their respective duties under this
Trust Agreement, the Bylaws or the Management Agreement, and the Registered
Trustee shall have no liability for the acts and omissions of the Trust, the
Board of Trustees or the Manager.
(b) Compensation and Expenses of Registered Trustee. The
Registered Trustee shall be entitled to receive from the Trust reasonable
compensation for its services hereunder, as shall be agreed to from time to time
by the Board of Trustees and the Registered Trustee, and the Registered Trustee
shall be entitled to be reimbursed by the Trust for reasonable out-of-pocket
expenses incurred by the Registered Trustee in the performance of its duties
hereunder.
(c) The Registered Trustee shall have a lien on the assets of
the Trust for any compensation or expenses and indemnity due to the Registered
Trustee by the Trust, which lien shall be prior to all other liens.
3.3 Legal Title. Legal title to all Trust Property shall be vested in
the Trust, except that the Board of Trustees may cause legal title to any Trust
Property to be held by or in the name of any Managing Trustee or any other
Person as nominee. Written evidence of the qualification and acceptance of
election or appointment of successor and additional Managing Trustees may be
filed with the records of the Trust and in such other offices, agencies or
places as the Board of Trustees may deem necessary or desirable. To the fullest
extent permitted by law, no Shareholder shall be deemed to have a severable
ownership interest in any individual asset of the Trust or any right of
partition or possession thereof.
4. PURPOSES
The purposes of the Trust shall be, as determined from time to time by
the Board of Trustees, to engage in any lawful business or activity for which a
statutory trust may be created under the Trust Act.
5. TERM
The Trust commenced on August 12, 1996, and shall have perpetual
existence, unless earlier dissolved and terminated in accordance with the
provisions of this Trust Agreement or the Bylaws.
6. SHAREHOLDERS; SHARES
6.1 Authorization of Shares. The Trust is authorized to issue
100,000,000 Shares. Notwithstanding anything to the contrary set forth in this
Trust Agreement (except for the immediately preceding sentence) and without
regard to any express or implied limitation on the authority of the Trust, and
the Board of Trustees on behalf of the Trust, the Trust, and the Board of
Trustees on behalf of the Trust, is authorized, without limitation, (a) to issue
additional Shares from time to time to Persons who are, or who by the purchase
thereof become, Shareholders of the Trust for such consideration, if
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any, and otherwise on such terms and conditions as the Board of Trustees
determines in its sole discretion, (b) to issue Shares as necessary or desirable
in connection with the transactions contemplated by the RCC Acquisition
Documents, including, without limitation, to issue the Special Preferred Voting
Shares and to issue Common Shares in connection with an exchange for Special
Common Units, (c) to issue Shares upon exercise of options granted by the Board
of Trustees or to be granted pursuant to an Incentive Share Option Plan upon
payment in accordance with the terms of the applicable Incentive Share Option
Plan and (d) to issue Shares for distribution to Shareholders or to issue
rights, options or warrants to acquire Shares. The Board of Trustees may from
time to time reserve Shares for issuance for any purpose deemed appropriate by
the Board of Trustees, including, without limitation, pursuant to conversion
rights, exchange rights or option rights with respect to Shares. Shareholders
have no preemptive or other similar rights with respect to the issuance of
Shares. Notwithstanding any other provision contained in this Trust Agreement,
the following Shares have been authorized and issued by the Trust: (i)
42,656,999 Common Shares (whether through the consummation of the transactions
contemplated by the RCC Acquisition Documents or consummation of the
Consolidation, a conversion of CRA Preferred Shares, an exercise of options
pursuant to an Incentive Share Option Plan or otherwise (as each such
capitalized term is defined in the Original Trust Agreement)); (ii) 1,351,636
Convertible Community Reinvestment Act Preferred Shares; and (iii) 6,073,219
Series A Convertible Community Reinvestment Act Preferred Shares; and the
issuance of such Shares is hereby ratified and confirmed in all respects.
6.2 Common Shares. Each Common Share shall entitle the holder thereof to
one vote. The Board of Trustees may reclassify any unissued Common Shares from
time to time in one or more classes or series of beneficial interests.
6.3 Preferred Shares. Preferred Shares shall not entitle the holder
thereof to vote unless the Board of Trustees, in its sole discretion, determines
to grant voting rights to holders of Preferred Shares. The Board of Trustees may
classify any unissued Preferred Shares and reclassify any previously classified
but unissued Preferred Shares of any series from time to time, in one or more
series of beneficial interests in the Trust.
6.4 Classified or Reclassified Shares. Prior to issuance of classified
or reclassified Shares of any class or series, the Board of Trustees by
resolution shall: (a) designate that class or series to distinguish it from all
other classes and series of Shares of the Trust; (b) specify the number of
Shares to be included in the class or series; and (c) set or change, subject to
the express terms of any class or series of Shares of the Trust outstanding at
the time, the preferences, conversion or other rights, voting powers,
privileges, restrictions, limitations as to dividends or other distributions,
qualifications and terms and conditions of redemption for each class or series.
6.5 Trust Agreement and Bylaws. All Persons who own, or shall acquire,
Shares in the Trust shall own, or shall acquire, the same subject to the
provisions of this Trust Agreement and the Bylaws and shall be bound by the
terms and provisions of this Trust Agreement and Bylaws. The Board of Trustees
may from time to time, without
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requirement for any consent of the Shareholders, amend the Bylaws in any manner
that does not violate the provisions of this Trust Agreement.
6.6 Effective Date of Transfer of Shares. The effective date for the
recognition of transfers of Shares, and the identification of the Person
entitled to be treated as the Shareholder at any given time, shall be determined
as follows:
(a) for purposes of Article 9 and any other provision of this
Trust Agreement which relates to the allocation or apportionment of Net Income,
Net Loss or Distributions, the Person entitled to be recognized as the
Shareholder shall be determined in accordance with the provisions of Section
9.2; and
(b) for all purposes other than those set forth in Section
6.6(a), the Person entitled to be recognized as the Shareholder shall be the
Person who is then listed as the record owner of the Shares on the books and
records of the Trust.
6.7 Certificates of Designation. (a) The "Convertible Community
Reinvestment Act Preferred Shares of the Trust" shall have (i) the designation,
powers, preferences, (ii) the relative, participating, optional or other special
rights, and (iii) the qualifications, limitations or restrictions, set forth in
the Amended and Restated Certificate of Designation attached hereto as Appendix
A, which terms are incorporated by reference in, and made a part of, this Trust
Agreement as if specifically set forth herein.
(b) The "Series A Convertible Community Reinvestment Act
Preferred Shares of the Trust" shall have (i) the designation, powers,
preferences, (ii) the relative, participating, optional or other special rights,
and (iii) the qualifications, limitations or restrictions, set forth in the
Certificate of Designation attached hereto as Appendix B, which terms are
incorporated by reference in, and made a part of, this Trust Agreement as if
specifically set forth herein.
(c) The "Special Preferred Voting Shares of the Trust" shall
have (i) the designation, powers, preferences, (ii) the relative, participating,
optional or other special rights, and (iii) the qualifications, limitations or
restrictions, set forth in the Certificate of Designation attached hereto as
Appendix C, which terms are incorporated by reference in, and made a part of,
this Trust Agreement as if specifically set forth herein.
(d) The Board of Trustees shall have full power and authority,
in its sole discretion and without requirement for any consent of the
Shareholders, to establish and designate, and to change in any manner, any class
or series of Shares not outstanding on the date of this Trust Agreement,
including, the Shares described in Section 6.7(c) and including any other Shares
authorized to be issued from time to time by the Trust pursuant to the Trust
Agreement, and to fix the preferences, covenants or other rights, voting powers,
privileges, restrictions, limitations as to dividends or other distributions
qualifications and terms and conditions of redemption for each class or series
thereof as the Board of Trustees may from time to time determine. The
establishment and
13
designation of any class or series of Shares (other than those existing as of
the date of this Trust Agreement) shall be effective upon the adoption of a
resolution by a majority of the Trustees setting forth such establishment and
designation and the relative preferences, covenants or other rights, voting
powers, privileges, restrictions, limitations as to dividends or other
distributions qualifications and terms and conditions of redemption of the
Shares of such class or series, whether directly in such resolution or by
reference to, or approval of, another document that sets forth such relative
preferences, covenants or other rights, voting powers, privileges, restrictions,
limitations as to dividends or other distributions qualifications and terms and
conditions of redemption of such class or series including, without limitation,
any registration statement of the Trust, or as otherwise provided in such
resolution. Upon the establishment of any such class or series, an appendix
shall be attached to this Trust Agreement (identified as a certificate of
designation) to reflect the establishment and designation of such class or
series and the preferences, covenants or other rights, voting powers,
privileges, restrictions, limitations as to dividends or other distributions
qualifications and terms and conditions of redemption thereof, which terms shall
be deemed incorporated by reference in, and made a part of, this Trust Agreement
as if specifically set forth herein; provided that attachment of an appendix
hereto shall not be a condition precedent to the establishment of any class or
series in accordance with this Trust Agreement. Notwithstanding anything
contained in this Section 6.7(d), the power and authority of the Board of
Trustees to change the rights, performances and privileges of any class or
series of Shares as set forth in a certificate of designation attached hereto
shall be subject to such limitations on such changes, including any required
class or series vote, as may be set forth in, or otherwise required by the terms
of, the applicable certificate of designation.
7. LIABILITY OF THE SHAREHOLDERS; REGISTERED TRUSTEE; MANAGING TRUSTEES;
EMPLOYEES; MANAGER
7.1 Shareholders. The Shareholders shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. If and to the extent required by Delaware law, a Shareholder may,
under certain circumstances, be required to return to the Trust for the benefit
of Trust creditors, amounts previously distributed to him.
7.2 Registered Trustee. The Registered Trustee shall not be liable to
the Trust, the Shareholders, the Trustees or any other Person or third parties
for any act, omission or obligation of the Trust, the Board of Trustees, any
Shareholder, the Registered Trustee or the Manager, under any circumstance,
except for any loss directly attributable to its own gross negligence or willful
misconduct. In particular, but not by way of limitation:
(a) The Registered Trustee shall not be liable for any error of
judgment made which did not constitute gross negligence or willful misconduct by
it;
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(b) No provision of this Trust Agreement shall require the
Registered Trustee to take any action, to expend or risk its personal funds or
otherwise incur any financial liability in the performance of its rights, powers
or obligations hereunder, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such action, risk or
liability is not reasonably assured or provided to it;
(c) Under no circumstance shall the Registered Trustee be
personally liable for any representation, warranty, covenant or other obligation
or indebtedness of the Trust;
(d) The Registered Trustee shall not be personally responsible
for or in respect of the validity or sufficiency of this Trust Agreement, or the
form, validity, value or sufficiency of the Trust Property;
(e) The Registered Trustee shall not be personally liable for
its good faith reliance on the provisions of this Trust Agreement;
(f) Under no circumstances shall the Registered Trustee be
personally liable for (i) any action it takes or omits to take in good faith in
accordance with the instruction of the Board of Trustees or the Manager, (ii)
the acts or omissions of the Board of Trustees or the Manager or (iii) the
supervision of or the failure of the Board of Trustees or the Manager to
discharge their respective duties hereunder or pursuant to the Management
Agreement; and
(g) The Registered Trustee shall not incur any liability to
anyone in acting upon any document believed in good faith by it to be genuine
and believed in good faith by it to be signed by the proper party or parties and
need not investigate any fact or matter pertaining to or in any such document.
The Registered Trustee may accept a certified copy of a resolution of the board
of directors or other governing body of any Person as conclusive evidence that
such resolution has been duly adopted by such Person 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 herein, the Registered Trustee may for
all purposes hereof rely on a certificate, signed by any officer of the relevant
Person, as to such fact or matter, and such certificate shall constitute full
protection to the Registered Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.
7.3 Managing Trustees; Employees. To the maximum extent that Delaware
law in effect from time to time permits limitation of the liability of trustees
of a statutory trust, Managing Trustee or employee of the Trust, when acting in
such respective capacities, shall not be personally liable to any Person other
than the Trust or a Shareholder for any act, omission or obligation of the
Trust, the Registered Trustee, the Manager or any Managing Trustee. To the
maximum extent that Delaware law in effect from time to time permits limitation
of the liability of trustees of a statutory trust, no Managing Trustee shall be
liable to the Trust or to any Shareholder for monetary damages for breach of any
duty (including, without limitation, fiduciary duty) as a
15
Managing Trustee, except (i) for acts or omissions of such Managing Trustee that
involve actual fraud or willful misconduct, or (ii) for any transaction from
which such Managing Trustee derived improper personal benefit. Neither the
amendment nor repeal of this Section 7.3 nor the adoption or amendment of any
other provision of this Trust Agreement inconsistent with this Section 7.3 shall
apply to or affect in any respect the applicability of the immediately preceding
sentence with respect to any act or failure to act that occurred prior to such
amendment, repeal or adoption.
7.4 Reliance on Agents, Attorneys, Etc. In the exercise of their rights
and obligations hereunder, the Registered Trustee and the Managing Trustees (i)
may act directly, or at the expense of the Trust, through agents (including,
without limitation, a Manager) or attorneys pursuant to agreements entered into
with any of them, and they shall not be liable for the default or misconduct of
such agents or attorneys if such agent or attorney shall have been selected in
good faith and (ii) may, at the expense of the Trust, consult with counsel to be
selected in good faith, and employed by them, and shall not be liable for
anything done, suffered or omitted in good faith in accordance with the advice
or opinion of any such counsel.
8. INTENTIONALLY DELETED
9. ALLOCATION OF INCOME, LOSS AND DISTRIBUTIONS
9.1 Allocations. Net Income, Net Loss and Available Cash shall be
allocated in the manner hereinafter provided.
9.2 Apportionment Among Shareholders of Net Income, Net Loss and
Distributions Generally.
(a) Non-Capital Events. Net Income, Net Loss and Distributions,
other than Net Income, Net Loss and Distributions attributable to a Capital
Event, allocated to the Shareholders shall be apportioned each calendar quarter
among the Persons who were Shareholders of record on the last day of each
calendar quarter in accordance with their Percentage Interests based upon the
number of Shares owned by each such Shareholder on the last day of such calendar
quarter without regard to Capital Accounts or the number of days during such
calendar quarter in which a Person was a Shareholder.
(b) Capital Events. That portion of Distributions attributable
to a Capital Event and allocations of Net Income and Net Loss from a Capital
Event which is allocated to the Shareholders shall be apportioned among the
Persons who were Shareholders of record on the last day of the month during
which the Trust received the proceeds of such Capital Event in accordance with
their Percentage Interests based upon the number of Shares owned by each such
Shareholder on the last day of such month without regard to Capital Accounts or
the number of days during such month in which a Person was a Shareholder.
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9.3 Consent to Methods. The methods set forth in this Article 9 by which
Distributions and allocations of Net Income and Net Loss are made and
apportioned are hereby expressly consented to by each Shareholder as an express
condition to becoming a Shareholder.
9.4 Capital Accounts.
(a) General. A separate capital account ("Capital Account")
shall be maintained for each Shareholder in accordance with this Section 9.4.
Each Shareholder's Capital Account shall be increased by (1) the amount of money
contributed, or deemed contributed, by such Shareholder to the capital of the
Trust; and (2) such Shareholder's share of Net Income. Each Shareholder's
Capital Account shall be decreased by (i) the amount of Distributions to such
Shareholder and (ii) such Shareholder's share of Net Loss.
(b) Multiple Class or Series of Interests. A Shareholder who has
Shares which represent more than one class or series of interests in the Trust
shall have a single Capital Account that reflects all such interests, regardless
of the class of interests owned by such Shareholder and regardless of the time
or manner in which such interests were acquired.
(c) Contributions of Property. In the event that property (other
than cash) is contributed by a Shareholder to the Trust, the computation of
Capital Accounts, as set forth in this Section 9.4, shall be adjusted as
follows:
(i) the contributing Shareholder's Capital Account shall
be increased by the fair market value of the property
contributed to the Trust by such Shareholder (net of liabilities
securing such contributed property that the Trust is considered
to assume or take subject to under Code Section 752); and
(ii) as required by Treas. Reg. Sections
1.704-1(b)(2)(iv)(g) and 1.704-1(b)(4)(i), if any Shareholder's
Capital Account reflects a fair market value for property which
differs from such property's adjusted basis, each Shareholder's
Capital Account shall be adjusted to take account of the amount
of Book Gain and Book Loss, as defined below, allocated to such
Shareholder pursuant to Section 9.7 hereof and shall not take
into account the Net Income and Net Loss for tax purposes
allocated to such Shareholder pursuant to this Article 9.
(d) Distributions of Property. In the event that property is
distributed by the Trust to a Shareholder, the following special rules shall
apply:
(i) the Capital Account of the Shareholder receiving the
distribution first shall be adjusted (as provided in Treas. Reg.
Section 1.704-1(b)(2)(iv)(e)) to reflect the manner in which the
unrealized income, gain, loss and deduction inherent in such
property (that has not already
17
been reflected in such Shareholder's Capital Account) would be
allocated to such Shareholder if there were a taxable
disposition of such Shareholder for its fair market value on the
date of distribution; and
(ii) the Capital Account of the Shareholder who is
receiving the distribution of property from the Trust shall be
charged with the fair market value of the property at the time
of distribution (net of liabilities secured by such property
that such Shareholder is considered to assume or take subject to
under Code Section 752).
(e) Intention. The foregoing provisions are intended to satisfy
the capital account maintenance requirements of Treas. Reg. Sections 1.704-1(b)
and 1.704-2 and such provisions shall be modified to the extent required by such
section or any successor provision thereto.
9.5 Allocations Causing Negative Capital Accounts. Notwithstanding
Section 9.2, to the extent that any allocation of Net Loss to a Shareholder
would reduce such Shareholder's Capital Account balance (determined after taking
into account all prior distributions and all prior allocations of Net Income and
Net Loss) below zero or would increase the negative balance in such
Shareholder's Capital Account at a time when another Shareholder has a positive
Capital Account balance, such Net Loss shall instead be allocated pro rata to
Shareholders having positive Capital Account balances in proportion to their
respective positive Capital Account balances until such Capital Account balances
are reduced to zero, provided, however, that in no event shall there be a
reallocation of any item of income, gain, loss or deduction allocated among the
Shareholders pursuant to this Trust Agreement for prior years.
If the provisions of this Section 9.5 prohibit the allocation of any
portion of Net Loss to every Shareholder, such portion of the Net Loss shall
instead be allocated to the Manager.
For purposes of determining a Shareholder's Capital Account balance
under this Section 9.5, Distributions made prior to or contemporaneous with any
allocation to a Shareholder shall be reflected in such Shareholder's Capital
Account prior to making such allocation to such Shareholder. For purposes of
this Section 9.5, a Shareholder's Capital Account shall be reduced for:
(x) allocations of Net Loss (or items thereof) which, as of the
end of each Trust year, are reasonably expected to be allocated to such
Shareholder pursuant to Code Section 704(e)(2), Code Section 706(d) and
Treas. Reg. Section 1.751-1(b)(2)(ii); and
(y) Distributions that, as of the end of such year, reasonably
are expected to be made to such Shareholder to the extent they exceed
offsetting increases to such Shareholder's Capital Account that
reasonably are expected to occur during (or prior to) the Trust taxable
years in which such Distributions reasonably are expected to be made.
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For purposes of determining the amount of expected Distributions and
expected Capital Account increases described in (y) above: (A) the rule set
forth in Treas. Reg. Section 1.704-1(b)(2)(iii)(c) concerning the presumed value
of property shall apply, and (B) gross income or Net Income allocated to a
Shareholder pursuant to Section 9.9 shall be taken into account. For purposes of
this Section 9.5 and Section 9.9, a Shareholder's Capital Account shall be
increased (i) to the extent that such Shareholder is obligated to fund deficits
in such Shareholder's Capital Account upon liquidation of the Trust (or is
treated as obligated to so restore such deficits pursuant to Treas. Reg. Section
1.704-1(b)(2)(ii)(c)), and (ii) to the extent of such Shareholder's share of any
Trust Minimum Gain and Shareholder Minimum Gain remaining at the close of the
fiscal period in respect of which such allocations are being made. A Capital
Account which has a negative balance after adjustment in accordance with clauses
(i) and (ii) shall be referred to as an "Adjusted Capital Account Deficit."
9.6 Allocation of Net Income and Net Loss.
(a) General. Except as otherwise provided in Sections 9.5, 9.8,
and 9.9 in each year Net Income and Net Loss, other than Net Income and Net Loss
arising in connection with a Terminating Capital Transaction, shall be allocated
to the Shareholders in accordance with their Percentage Interests.
(b) Terminating Capital Transaction. Allocations of Net Income
or Net Loss (or items thereof) in connection with a Terminating Capital
Transaction or liquidation of the Trust shall first be made so that, to the
extent possible, each Shareholder's Capital Account balance is equal, and the
remainder of such Net Income or Net Loss (or items thereof) shall, subject to
the provisions of Section 9.5, be allocated to the Shareholders in accordance
with their Percentage Interests.
(c) Final Ratio. It is intended that the allocation provisions
of this Article 9 shall result in final positive Capital Account balances of the
Shareholders under Section 12.3 which are equal to each Shareholder's Percentage
Interests (the "Final Ratio"). To the extent that such final positive Capital
Account balances are not in the Final Ratio, Net Income, Net Loss and items
thereof, as computed for book purposes, shall be allocated among the
Shareholders so as to result in final positive Capital Account balances which
are in the Final Ratio. This Section 9.6.(c) shall control notwithstanding any
reallocation of income, loss, or items thereof, as computed for book purposes,
by the Internal Revenue Service or any other taxing authority.
9.7 Allocation of Book Items. In cases where property of the Trust is,
under Treas. Reg. Section 1.704-1(b)(2)(iv)(g), properly reflected in the
Capital Accounts of the Shareholders at a fair market value that differs from
the adjusted tax basis of such property (such difference is hereinafter referred
to as the "Book Disparity"), then depreciation, amortization and gain or loss as
computed for book purposes with respect to such property ("Book Depreciation,"
"Book Amortization," and "Book Gain," and "Book Loss," respectively) will be
greater or less than the depreciation, amortization or gain or loss as computed
for tax purposes. The Manager shall adopt, pursuant to Treas.
19
Reg. Section 1.704-1(b)(2)(iv)(g), a reasonable method of computing Book
Depreciation and Book Amortization. Such Book Depreciation and Book Amortization
shall be allocated among the Shareholders and reflected in the Shareholders'
Capital Accounts under Section 9.4 hereof, in a manner so as to eliminate to the
extent possible, the Book Disparity.
9.8 Mandatory Allocations. Any allocation of Net Income or Net Loss for
tax purposes which is required to be allocated among the Shareholders to take
into account the disparity between the fair market value of a Trust asset and
its adjusted basis (e.g., allocations under Code Section 704(c) for contributed
property) shall be allocated among the Shareholders in accordance with the
requirements of the Code and the regulations promulgated thereunder.
9.9 Minimum Gain Chargeback and Qualified Income Offset.
(a) Minimum Gain Chargeback. Notwithstanding any other provision
of this Agreement to the contrary, in the event there is a net decrease in a
Shareholder's share of Trust Minimum Gain and/or Shareholder Minimum Gain during
a Trust taxable year, such Shareholder shall be allocated items of income and
gain for that year (and if necessary, other years) as required by and in
accordance with Regulations Sections 1.704-2(f)(1) and 1.704-2(i)(4) before any
other allocation is made. This subsection 9.9(a) is intended to constitute a
"minimum gain chargeback" under Treas. Reg. Section 1.704-2(f)(1) and
1.704-2(i)(4).
(b) Qualified Income Offset. In the event a Shareholder
unexpectedly receives any adjustments, allocations or distributions described in
Treas. Reg. Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), and such Shareholder
has an Adjusted Capital Account Deficit, items of Trust income (including gross
income) and gain shall be specially allocated to such Shareholder in an amount
and manner sufficient to eliminate the Adjusted Capital Account Deficit as
quickly as possible. This subsection 9.9.(b) is intended to constitute a
"qualified income offset" under Treas. Reg. Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith.
(c) Other Chargeback of Impermissible Negative Capital Account.
To the extent any Shareholder has an Adjusted Capital Account Deficit at the end
of any Trust fiscal year, each such Shareholder shall be specially allocated
items of Trust income (including gross income) and gain in the amount of such
excess as quickly as possible, provided that an allocation pursuant to this
subsection 9.9.(c) shall be made if and only to the extent that such Shareholder
would have an Adjusted Capital Account Deficit in excess of such sum after all
other allocations provided for in this Article 9 have been tentatively made as
if this subsection 9.9.(c) were not in the Agreement.
9.10 Distributions. Distributions shall be made to the Shareholders in
accordance with their Percentage Interests.
9.11 Restrictions.
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(a) General. The Trust may be restricted under Delaware law from
making Distributions under certain circumstances, as well as under the terms of
notes, mortgages or other types of financing obligations which it may issue or
assume in conjunction with borrowed funds, if any. In addition, Distributions
are subject to the payment of Trust expenses and to the maintenance of
sufficient Reserves. Distributions may also be restricted or suspended in
circumstances when the Board of Trustees determines, in its absolute discretion,
that such action is in the best interest of the Trust.
(b) Withholding Tax. As security for any withholding tax or
other liability or obligation (or reduced deduction for federal income tax
purposes) to which the Trust may be subject as a result of any act or status of
any Shareholder or to which the Trust becomes subject with respect to any
Shares, the Trust shall have, and there is hereby granted to the Trust, a
security interest in all Available Cash distributable to such Shareholder or
with respect to such Shares, to the extent of the amount of such withholding tax
or other liability or obligation or the cost to the other Shareholders of any
reduced deduction of the Trust (as reasonably determined by the Manager). The
Trust shall have a right of set-off against any such Distributions of Available
Cash in the amount of such withholding tax or other liability or obligation or
the cost of such reduced deduction. For purposes of this Trust Agreement, any
amount of federal, state or local tax required to be withheld by the Trust with
respect to any amount distributable by the Trust to any Shareholder shall be
deemed to be a Distribution to such Shareholder and shall reduce the amount
otherwise distributable to such Shareholder under this Agreement.
10. BOARD OF TRUSTEES
10.1 General. Subject to the express limitations herein or in the
Bylaws, (a) the business and affairs of the Trust shall be managed by or under
the direction of the Board of Trustees, and (b) the Board of Trustees shall have
full, exclusive and absolute power, control and authority over the Trust
Property and over the business of the Trust. The Board of Trustees may take any
actions as in its sole judgment and discretion are necessary or desirable to
conduct the business of the Trust. This Trust Agreement shall be construed with
a presumption in favor of the grant of power and authority to the Board of
Trustees. To the fullest extent permitted by law, any construction of this Trust
Agreement or determination made in good faith by the Board of Trustees
concerning its powers and authority hereunder shall be conclusive. The
enumeration and definition of particular powers of the Board of Trustees
included in this Article 10 shall in no way be limited or restricted by
reference to or inference from the terms of this or any other provision of this
Trust Agreement or construed or deemed by inference or otherwise in any manner
to exclude or limit the powers conferred upon the Board of Trustees under the
general laws of the State of Delaware as now or hereafter in force.
10.2 Powers of the Board of Trustees. The conduct of the Trust's
business shall be controlled solely by the Board of Trustees in accordance with
this Trust Agreement and the Bylaws. The Board of Trustees shall have all
authority, rights and powers conferred by law and those required or appropriate
to the management of the
21
Trust's business without the vote or consent of the Shareholders, the Registered
Trustee or any other Person (except as set forth in Sections 10.3 and 11.2 or in
a certificate of designation as set forth in, or contemplated by, Section 6.7).
The Board of Trustees may delegate its authority to the Manager pursuant to a
Management Agreement, whereby, subject to the supervision and control of the
Board of Trustees, the Manager shall render or make available to the Trust
managerial, investment, advisory and/or related services, office space and other
services and facilities (including, if deemed advisable by the Board of
Trustees, the management or supervision of the investments of the Trust) upon
such terms and conditions as may be provided in such Management Agreement.
10.3 Limitations. The Board of Trustees shall not have the authority
without a Majority Vote (in which case the Board of Trustees shall have such
authority) to incur aggregate financing or leverage (whether secured or
unsecured) in excess of 50% of Total Market Value (calculated at the time any
additional financing or leverage is incurred) (the "Leverage Limitation"). For
purposes of this Section 10.3, preferred equity securities issued by the Company
or its subsidiaries and outstanding as of November 17, 2003 (collectively the
"Outstanding Preferred Securities") shall not be deemed to be "financing or
leverage" notwithstanding the fact that SFAS 150 or any other existing or future
accounting or other governmental rule and regulations would classify Outstanding
Preferred Securities as liabilities. In addition, any assets or liabilities
required to be consolidated into the Company's financial statements pursuant to
FIN 46 or any other existing or future accounting or other governmental rules
and regulations shall be factored into the calculation of the Leverage
Limitation.
10.4 Amendments Without Consent. In addition to any amendments otherwise
authorized herein, including, without limitation, pursuant to the definition of
"Percentage Interest" and Sections 6.1 and 6.7, this Trust Agreement may be
amended from time to time by the Board of Trustees without the consent of the
Shareholders or the Registered Trustee (subject to the provisions in this
Section 10.4):
(a) to add to the representations, duties or obligations of the
Board of Trustees or the Registered Trustee or their respective Affiliates or
surrender any right or power granted to the Board of Trustees or its Affiliates
or the Registered Trustee herein, for the benefit of the Shareholders; provided,
that no representations, duties or obligations of the Registered Trustee shall
be added or right or power granted to the Registered Trustee or its Affiliates
surrendered without the Registered Trustee's consent;
(b) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with law applicable to the Trust as
in effect at the time the amendment is adopted, or judicial or administrative
interpretations thereof, or with any other provision herein, as long as any such
change will not adversely affect the rights of the Shareholders or the
Registered Trustee;
(c) to delete or add any provision of this Trust Agreement
required to be so deleted or added by the staff of the Securities and Exchange
Commission or by a State "Blue Sky" Commissioner or similar such official, which
addition or deletion is
22
deemed by such Commission or state official to be for the benefit or protection
of the Shareholders;
(d) to reflect the addition or substitution of Shareholders or
the reduction of Capital Accounts upon the return of capital to Shareholders;
(e) upon notice to all Shareholders, to amend the provisions of
Article 9 of this Trust Agreement (i) so as to revise the date upon which each
Shareholder's distributive share of Net Income, Net Loss and Distributions is
determined and the period of time over which such distributive share relates,
provided that in the opinion of the accountants or counsel to the Trust, such
amended provisions are not impermissible under applicable federal and/or state
income tax legislation, rules or regulations enacted or promulgated thereunder,
or administrative pronouncements or interpretations thereof; and (ii) to the
minimum extent necessary to take account of any amendments to Section 704 of the
Code or the regulations thereunder or any judicial or administrative
interpretations thereof; (f) to change the name of the Trust to any lawful name
which it may select (in which case the Trust shall notify the Registered Trustee
of such change in name);
(g) to take such steps as the Board of Trustees or the Manager
determines are advisable or necessary in order to preserve the tax status of the
Trust as an Entity which is not taxable as a corporation for federal income tax
purposes. The Board of Trustees are each empowered to amend such provisions to
the minimum extent necessary or desirable in accordance with the advice of the
accountants and/or counsel to comply with any applicable federal or state
legislation, rules or regulations enacted or promulgated, administrative
pronouncements or interpretations and/or judicial interpretations thereof after
the date of this Trust Agreement. Subject to Article 14, the Board of Trustees
shall be entitled to rely upon the advice of the accountants or counsel as
described above in making such amendment or amendments; and
(h) to reflect any preferences, covenants or other rights,
voting powers, privileges, restrictions, limitations as to dividends or other
distributions qualifications and terms and conditions of redemption granted in
connection with the issuance of a class or series of Shares not outstanding as
of the date of this Trust Agreement.
Written notice of any amendments to the Trust Agreement shall be
provided to the Registered Trustee within ten days of their adoption.
10.5 Notice of Limitation of Liability. The Board of Trustees or the
Manager shall use its best efforts, in the conduct of the Trust's business, to
put all suppliers and other Persons with whom the Trust does business on notice
that the Shareholders, the Trustees, and the Manager are not liable for the
Trust's obligations and that such suppliers and other Persons shall look solely
to the assets of the Trust for payment, and all agreements to which the Trust is
a party shall include a statement to the effect that the Trust is a statutory
trust organized under the Trust Act; but the Board of Trustees or the
23
Manager shall not be liable for any failure to give such notice to such
suppliers or other Persons and any failure in giving such notice shall not imply
that the Shareholders, the Managing Trustees, the Manager and the Registered
Trustee are liable for the Trust's obligations.
10.6 Accounting Matters. The Board of Trustees or the Manager shall make
all decisions as to accounting matters in accordance with the accounting methods
adopted by the Trust in accordance with generally accepted accounting principles
and procedures applied on a consistent basis. Such party may rely on the Trust's
independent certified public accountants to determine whether such decisions are
in accordance with generally accepted accounting principles.
10.7 Tax-Matters Partner. The Manager is hereby designated as the "Tax
Matters Partner" in accordance with Section 6231(a)(7) of the Code and, in
connection therewith and in addition to all other powers given thereunder, shall
have all other powers needed to fully perform hereunder including, without
limitation, the power to retain all attorneys and accountants of its choice and
the right to settle any audits without the consent of the Shareholders. The
designation made in this Section 10.7 is hereby expressly consented to by each
Shareholder as an express condition to becoming a Shareholder.
10.8 Funds and Assets. The Board of Trustees and the Manager shall have
a fiduciary responsibility for the safekeeping and use of all funds and assets
of the Trust, whether or not in its immediate possession or control, and shall
not employ, or permit another to employ, such funds or assets in any manner
except for the exclusive benefit of the Trust.
10.9 Duties of Board of Trustees and Manager and Registered Trustee. To
the extent that, at law or in equity, the Board of Trustees or the Manager or
the Registered Trustee, or any Affiliate thereof (each, a "Covered Person") has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to the Shareholders, the Covered Person acting in connection with the
Trust's business or affairs shall not be liable to the Trust or to any
Shareholder for its good faith reliance on the provisions of this Trust
Agreement. The provisions of this Trust Agreement, to the extent that they
restrict the duties and liabilities of a Covered Person otherwise existing at
law or in equity, are agreed by the Trust and the Shareholders to replace such
other duties and liabilities of such Covered Person.
10.10 Discretion. Whenever in this Trust Agreement the Board of Trustees
or the Manager is permitted or required to make a decision (i) in its
"discretion" or under a grant of similar authority, the Board of Trustees and
the Manager shall be entitled to consider such interests and factors as it
desires, including its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting the Trust or any
other person; or (ii) in its "good faith" or under another express standard, the
Board of Trustees and the Manager shall act under such express standard and
shall not be
24
subject to any other or different standard imposed by this Trust Agreement or by
applicable law.
10.11 RCC Acquisition.
(a) Notwithstanding any other provision to the contrary in this
Trust Agreement or the Bylaws, each Managing Trustee, acting singly or jointly,
is hereby authorized and directed, for and in the name of the Trust and without
the need for the vote or consent of any Person, to execute, acknowledge, verify,
file, record and deliver, and to cause the Trust to perform its obligations
under each of the RCC Acquisition Documents (as defined below) to which the
Trust is a party and to execute, acknowledge, verify, file, record and deliver,
and to cause the Trust or its subsidiaries to perform its obligations under, any
and all further documents and instruments, and to do or cause to be done such
other and further acts and things for and in the name of the Trust or any of its
subsidiaries that the Managing Trustees or any one of them deem necessary or
appropriate to effectuate the transactions contemplated by the RCC Acquisition
Documents (including, without limitation, the issuance of Shares contemplated
therein).
(b) Notwithstanding any other provision to the contrary in this
Trust Agreement or the Bylaws, in connection with the taking or refraining from
taking of action by the Trust with respect to any consents, waivers, amendments,
approvals, elections or similar actions under or pertaining to any of the RCC
Acquisition Documents, that may affect the rights or obligations of any of APH
Associates L.P., DLK Associates L.P., Marc Associates, L.P., Related General II
L.P. and SJB Associates L.P. or their Affiliates (as defined in the Contribution
Agreement) such action may only be taken or omitted pursuant to a majority vote
of the Independent Trustees.
(c) For purposes of this Section 10.11, the "RCC Acquisition
Documents" shall mean collectively the Contribution Agreement and all Collateral
Documents (as defined in the Contribution Agreement).
(d) Notwithstanding any other provisions to the contrary in this
Trust Agreement or the Bylaws, the provisions of this Section 10.11 shall be
amended only by a majority vote of the Independent Trustees.
11. RIGHTS AND POWERS OF SHAREHOLDERS
11.1 Control. Other than as expressly set forth in this Trust Agreement,
Shareholders shall have no voting rights and Shareholders shall take no part in
any manner in the control, conduct or operation of the Trust and shall have no
right or authority to act for or bind the Trust.
25
11.2 Voting Rights. The Shareholders (except Shareholders who by the
terms of their Shares have no voting rights) considered together as a single
class, have the right by Majority Vote (voting in the manner set forth in the
Bylaws), to vote upon:
(a) without the consent and recommendation of the Board of
Trustees:
(i) subject to the provisions of Section 3.1(d), the
removal of Managing Trustees; and
(ii) the election of Managing Trustees; and
(b) with the prior consent and recommendation of the Board of
Trustees:
(i) the merger, consolidation or conversion of the Trust
with or into another Entity;
(ii) the determination to dissolve the Trust, subject to
the provisions of Article 12;
(iii) amendment of the Trust Agreement, provided such
amendment is not otherwise permissible without Shareholder vote
under Section 10.4 or other provisions of this Trust Agreement;
(iv) subject to the provisions of Article 12, the
disposition of Substantially All of the Assets of the Trust in a
single disposition, or in multiple dispositions in the same
12-month period (other than in connection with leveraging or
other financing permitted pursuant to Section 10.3) and
(v) the determination to incur financing or leverage in
excess of that permitted in Section 10.3.
12. TERMINATION AND DISSOLUTION OF THE TRUST
12.1 Duration. The Trust shall continue perpetually unless dissolved
pursuant to Section 12.2 or pursuant to any applicable provision of the Trust
Act.
12.2 Dissolution. The Trust may be dissolved as follows:
(a) The Trust may be dissolved upon the recommendation of the
Board of Trustees and the approval of Shareholders by Majority Vote; or
(b) The Trust may be dissolved by order of a court of competent
jurisdiction to judicially dissolve the Trust if it is no longer reasonably
practicable to continue the business and affairs of the Trust as contemplated by
this Trust Agreement.
26
12.3 Liquidation and Distribution of Assets. Upon a dissolution and
termination of the Trust for any reason, the Board of Trustees or the Manager
shall take full account of the Trust's assets and liabilities, shall liquidate
the assets as promptly as is consistent with obtaining the fair value thereof,
and shall apply and distribute the proceeds therefrom in the following order:
(a) first, to the satisfaction to the extent permitted by law
(whether by payment or reasonable provision for payment thereof) of obligations
of the Trust to creditors of the Trust (other than as set forth in paragraphs
(b), (c) and (d) below);
(b) second, to the repayment of any outstanding loans made by
the Manager or its Affiliates to the Trust;
(c) third, to the payment of expenses of liquidation and the
establishment of any Reserves for contingencies; and
(d) fourth, to the Common Shareholders, in accordance with, and
to the extent of, the positive balances in their Capital Accounts after the Net
Income or Net Loss (or items thereof) from any Terminating Capital Transaction
has been allocated pursuant to the provisions of Section 9.6(b) hereof.
12.4 Termination of the Trust. Upon dissolution and the completion of
the winding up of the affairs of the Trust, the Trust shall be terminated by the
executing and filing with the Secretary of State of the State of Delaware by one
or more Managing Trustees of a certificate of cancellation of the certificate of
trust of the Trust.
13. SPECIAL POWER OF ATTORNEY
13.1 Grant of Power of Attorney. By acquiring Shares, each Shareholder
is hereby granting to the Board of Trustees and the Manager a special power of
attorney irrevocably making, constituting and appointing the Board of Trustees
and the Manager, acting singly or collectively, as the attorney-in-fact for such
Shareholder, with power and authority to act in his name and on his behalf to
execute, acknowledge and swear to the execution, acknowledgment and filing of
documents, which shall include, by way of illustration but not of limitation,
the following:
(a) this Trust Agreement, any separate certificates of trust of
the Trust, as well as any amendments to or restatements of the foregoing which,
under the laws of the State of Delaware or the laws of any other state, are
required to be filed or which the Board of Trustees or the Manager deems to be
advisable to file;
(b) any duly adopted amendments or restatements of this Trust
Agreement;
(c) any other instrument or document which may be required to be
filed by the Trust under the laws of any state or by any governmental agency, or
which the Board of Trustees or Manager deems advisable to file; and
27
(d) any instrument or document which may be required to effect
the continuation of the Trust, the admission of an additional or substituted
Shareholder, or the dissolution and termination of the Trust (provided such
continuation, admission or dissolution and termination are in accordance with
the terms of this Trust Agreement), or to reflect any reductions in amount of
contributions of Shareholders.
13.2 Character of Power of Attorney. The special power of attorney being
hereby granted by each Shareholder:
(a) is a special power of attorney coupled with an interest, is
irrevocable, shall survive the death, legal incapacity, disability, dissolution,
bankruptcy or termination of the granting Shareholder, and is limited to those
matters herein set forth;
(b) may be exercised by the Board of Trustees or the Manager
acting for each Shareholder by a facsimile signature of the Managing Trustee,
Manager or by one of its officers, or by listing all of the Shareholders
executing any instrument with a signature of a Managing Trustee, the Manager or
one of its officers acting as its attorney-in-fact; and
(c) shall survive a Transfer by a Shareholder of all or any
portion of his Shares for the sole purpose of enabling the Board of Trustees or
the Manager to execute, acknowledge and file any instrument or document
necessary to effect such Transfer.
13.3 Reliance. Each Shareholder has executed this special power of
attorney, and each Shareholder will rely on the effectiveness of such powers
with a view to the orderly administration of the Trust's affairs.
14. INDEMNIFICATION
14.1 Managing Trustees; Employees. To the fullest extent permitted by
law, the Trust shall indemnify its present and former Managing Trustees, the
Manager and its officers, directors, members, partners and employees and agents
(the "Indemnified Part(y)(ies)") against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with
any proceeding to which they may be made a party by reason of their service in
those or other capacities unless it is established that (a) the act or omission
of the Indemnified Party was material to the matter giving rise to the
proceeding and (i) was committed in bad faith or (ii) was the result of active
and deliberate dishonesty, (b) the Indemnified Party actually received an
improper personal benefit in money, property or services, or (c) in the case of
any criminal proceeding, the Indemnified Party had reasonable cause to believe
that the act or omission was unlawful. In addition, the Trust shall pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
any present or former Indemnified Party, provided that the Trust first obtains
(i) a written affirmation by the Indemnified Party of his or its good-faith
belief that he or it has met the standard of conduct necessary for
indemnification by the Trust as authorized by the Trust Agreement and (ii) a
written statement by him or it or on his or its behalf to repay the amount paid
or reimbursed by the Trust if it shall
28
ultimately be determined that the standard of conduct was not met. The Trust
shall also provide indemnification and advance expenses to any present or former
Indemnified Party who served a predecessor of the Trust in such capacity.
14.2 The Registered Trustee. To the fullest extent permitted by law, the
Trust shall indemnify and hold harmless the Registered Trustee and its
Affiliates, and their respective officers, directors, employees, agents and
representatives, (collectively, the "Registered Trustee Persons") from and
against any and all claims or liabilities (including any environmental
liabilities) for which any such Person may become liable by reason of the
Registered Trustee's acting in such capacity under the Trust Agreement or
arising out of or connected with (i) the Trust, (ii) this Trust Agreement, (iii)
any breach of duty owed to the Trust or the Shareholders by a third party or
(iv) any violation or alleged violation of federal or state securities laws. The
Trust shall not indemnify such Persons for liabilities resulting from such
Persons' own fraud, gross negligence or willful misconduct. In addition, the
Trust shall pay or reimburse reasonable expenses in advance of final disposition
of a proceeding to any present or former Registered Trustee Person, provided
that the Trust first obtains (i) a written affirmation by the Registered Trustee
Person of his or its good-faith belief that he or it has met the standard of
conduct necessary for indemnification by the Trust as authorized by this Trust
Agreement and (ii) a written statement by him or it or on his or its behalf to
repay the amount paid or reimbursed by the Trust if it shall ultimately be
determined that the standard of conduct was not met. The Trust shall also
provide indemnification and advance expenses to any present or former Registered
Trustee Person who served a predecessor of the Trust in such capacity.
15. CONCERNING THE REGISTERED TRUSTEE
15.1 Authority and Duties of the Registered Trustee.
(a) General. The Registered Trustee shall have only those
rights, authority, powers, responsibilities and duties as set forth in Section
3.2(a).
(b) Limitations. Without limiting the generality of Section
15.1(a), the Registered Trustee shall have no duty or liability (i) as to any
document contemplated by this Trust Agreement, (ii) to see to any recording or
filing of this Trust Agreement, the Bylaws or any document contemplated hereby
or any security interest or lien or to see to the maintenance of any such
documentation, recording or filing, (iii) to see to any maintenance of or
insurance on the Trust Property, (iv) to see to the payment or discharge of any
tax, assessment or other governmental charge or any lien assessed or levied
against the Trust or any part of the Trust Property or to make or prepare any
reports or returns related thereto, (v) to confirm, verify or inquire into the
failure of the Board of Trustees or the Manager to exercise or perform any of
their respective rights or duties under this Trust Agreement, or (vi) to approve
as satisfactory to it or consent to any matter contemplated by this Trust
Agreement or any document contemplated hereby.
29
15.2 Resignation and Removal of the Registered Trustee.
(a) General. The Registered Trustee may resign as of the last
business day of any month by giving 60 days' prior notice to the Board of
Trustees or the Manager, and the Board of Trustees or the Manager may remove the
Registered Trustee as of the last business day of any month on 60 days' prior
notice to the Registered Trustee. In the case of the resignation or removal of
the Registered Trustee, the Board of Trustees or the Manager shall, without the
consent of any Shareholder, appoint a successor Registered Trustee, provided
that such successor Registered Trustee shall in all respects satisfy the
requirements of Section 3807 of the Trust Act, or any successor provision. The
appointment of the successor Registered Trustee shall take effect concurrently
with the resignation or removal of the former Registered Trustee, and,
thereupon, the Registered Trustee so resigned or removed shall be fully
discharged of its duties and liabilities hereunder, if any. The Registered
Trustee shall not be liable for the acts or omissions to act of any successor
Registered Trustee.
(b) Failure to Appoint Successor. If a successor Registered
Trustee shall not have been appointed within 60 days after such notice of
resignation or removal, the Registered Trustee, the Board of Trustees, the
Manager or any Shareholder may apply to any court of competent jurisdiction to
appoint a successor Registered Trustee to act until such time, if any, as a
successor shall have been appointed as above provided. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
successor Registered Trustee.
(c) Successor by Merger. Any Person into which the Registered
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
Registered Trustee shall be a party, or any corporation to which substantially
all the corporate trust business of the Registered Trustee may be Transferred,
shall, subject to such Person satisfying in all respects the requirements of
Section 3807 of the Trust Act, be the Registered Trustee hereunder without
further act.
(d) Amendment of Certificate of Trust. Upon the substitution of
the successor Registered Trustee, the Board of Trustees or the Manager shall
cause to be filed an amendment along with the successor Registered Trustee to
the certificate of trust with the Secretary of State of the State of Delaware in
accordance with the provisions of Section 3810 of the Trust Act, indicating the
change in the Registered Trustee.
Except as expressly provided above, all Persons having any claim against
the Registered Trustee by reason of the transactions contemplated by this Trust
Agreement shall look only to the property and assets of the Trust for payment or
satisfaction thereof.
16. CERTAIN TRANSACTIONS
Except as may be agreed to in a separate agreement with the Trust, the
Trustees, any Shareholder, the Manager and any Affiliate thereof, and any
shareholder, officer, director, partner or employee thereof, or any Person
owning a legal or beneficial interest
30
therein, may engage in or possess an interest in any other business or venture
of every nature and description, independently or with or for the account of
others including, but not limited to, investments in revenue bonds or mortgages
of any type or instruments backed by or representing a participation interest in
revenue bonds or mortgages, and the ownership, financing, leasing, operation,
management, brokerage and development of real property. Except for the foregoing
proviso, neither the Trustees, any Shareholder, the Manager nor their Affiliates
shall be obligated to present to the Trust any particular investment
opportunity, regardless of whether such opportunity might be suitable for
investment by the Trust, and each Trustee, the Shareholders, the Manager and
each Affiliate shall have the right to take for its own account (individually or
otherwise) or to recommend to others any such investment opportunity.
17. MISCELLANEOUS
17.1 Counterparts. This Trust Agreement may be executed in several
counterparts and all so executed shall constitute one Trust Agreement, binding
on all of the parties hereto, notwithstanding that all of the parties are not
signatory to the original or the same counterpart.
17.2 Binding Provisions. (a) The terms and provisions of this Trust
Agreement shall be binding upon and shall inure to the benefit of the successors
and assigns of the respective parties.
(b) This Trust Agreement shall become effective only upon the
occurrence of Closing (as defined in the Contribution Agreement) under the
Contribution Agreement. If Closing does not occur, then the Original Trust
Agreement shall remain in effect until and unless the same is further amended or
amended and restated in accordance with the terms thereof.
17.3 Severability. In the event any sentence or section of this Trust
Agreement is declared by a court of competent jurisdiction to be void, such
sentence or section shall be deemed severed from the remainder of the Trust
Agreement and the balance of the Trust Agreement shall remain in effect.
17.4 Notices. All notices under this Trust Agreement shall be in writing
and shall be given to the party entitled thereto, by personal service or by
mail, posted to the address maintained by the Trust for such Person or at such
other address as he may specify in writing.
17.5 Headings. Paragraph titles or captions contained in this Trust
Agreement are inserted only as a matter of convenience and for reference. Such
titles and captions in no way define, limit, extend or describe the scope of
this Trust Agreement or the intent of any provision hereof.
17.6 Meanings. Whenever required by the context hereof, the singular
shall include the plural, and vice-versa; and the masculine gender shall include
the feminine and neuter genders, and vice-versa.
31
17.7 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware (including the
Trust Act) applicable to agreements to be made and performed entirely in said
State, and the Shares shall be construed in accordance with the laws of the
State of Delaware, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws; provided, however,
that nothing herein shall affect the obligations of the Trust to comply with
federal or state securities laws; and provided further, however, that there
shall not be applicable to the Trust, the Board of Trustees, the Registered
Trustee or this Trust Agreement any provisions of the laws (statutory or common)
of the State of Delaware pertaining to trusts (other than the Trust Act) that
relate to or regulate, in a manner inconsistent with the terms hereof (i) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (ii) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents or employees of a trust, (v)
the allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding or investing trust assets, or (vii) the establishment of
fiduciary or other standards or responsibilities or limitations on the acts or
powers of trustees, which are inconsistent with the limitations or liabilities
or authorities and powers of trustees as set forth or referenced in this Trust
Agreement. Section 3540 of Title 12 of the Delaware Code shall not apply to the
Trust.
17.8 Other Jurisdictions. In the event the business of the Trust is
carried on or conducted in states in addition to the State of Delaware, then the
Board of Trustees and the Shareholders agree that this Trust shall be qualified
under the laws of each state in which business is actually conducted by the
Trust, and they severally agree to execute such other and further documents as
may be required or requested in order that the Board of Trustees or the Manager
legally may qualify this Trust to do business in such states. The power of
attorney granted to the Board of Trustees and the Manager by each Shareholder in
Article 15 shall constitute the authority of the Board of Trustees and the
Manager to perform the ministerial duty of qualifying this Trust under the laws
of any state in which it is necessary to file documents or instruments of
qualification. A Trust office or principal place of business in any jurisdiction
(within or without the State of Delaware) may be designated from time to time by
the Board of Trustees.
17.9 Power to Reconstitute. In the event that the State of Delaware
amends the Trust Act in any manner which precludes the Trust, at any time, from
obtaining an opinion of tax counsel to the effect that the Trust will be treated
as a partnership for federal income tax purposes and not as an association
taxable as a corporation, then the Board of Trustees or the Manager may, in its
sole discretion, reconstitute the Trust under the laws of another state.
17.10 Agreement to be Bound. EVERY PERSON, BY VIRTUE OF HAVING BECOME A
SHAREHOLDER IN ACCORDANCE WITH THE TERMS OF THIS
32
TRUST AGREEMENT, SHALL BE DEEMED TO HAVE EXPRESSLY ASSENTED AND AGREED TO THE
TERMS OF, AND SHALL BE BOUND BY, THIS TRUST AGREEMENT.
[SIGNATURE PAGES FOLLOW]
33
IN WITNESS WHEREOF, the undersigned have caused these presents to
be executed as of the day and year first above written.
MANAGING TRUSTEES:
------------------------------------ ---------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxx X. Xxxxxxxxx
------------------------------------ ---------------------------------
Name: Xxxxxx Xxxxxxxx Name: Xxxxxx X. Xxxxx
------------------------------------ ---------------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxx
------------------------------------ ---------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxx X. Xxxx
------------------------------------ ---------------------------------
Name: Xxxxxxx X. Xxxx Name: Xxxxxx X. Xxxxx
------------------------------------ ---------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
------------------------------------ ---------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxx Xxxxxxx
REGISTERED TRUSTEE:
WILMINGTON TRUST COMPANY
By:_________________________________
Name:
Title:
APPENDIX A
----------
APPENDIX B
----------
APPENDIX C
----------
CHARTERMAC
Second Amended and Restated Trust Agreement
Dated: November 17, 2003
TABLE OF CONTENTS
-----------------
Page
----
1. ORGANIZATION...........................................................1
2. DEFINITIONS AND GLOSSARY OF TERMS......................................2
3. TRUSTEES; LEGAL TITLE..................................................9
4. PURPOSES..............................................................11
5. TERM..................................................................11
6. SHAREHOLDERS; SHARES..................................................12
7. LIABILITY OF THE SHAREHOLDERS; REGISTERED TRUSTEE; MANAGING
TRUSTEES; EMPLOYEES; MANAGER..........................................14
8. INTENTIONALLY DELETED.................................................16
9. ALLOCATION OF INCOME, LOSS AND DISTRIBUTIONS..........................16
10. BOARD OF TRUSTEES.....................................................22
11. RIGHTS AND POWERS OF SHAREHOLDERS.....................................26
12. TERMINATION AND DISSOLUTION OF THE TRUST..............................27
13. SPECIAL POWER OF ATTORNEY.............................................28
14. INDEMNIFICATION.......................................................29
15. CONCERNING THE REGISTERED TRUSTEE.....................................30
16. CERTAIN TRANSACTIONS..................................................31
17. MISCELLANEOUS.........................................................31
-i-
AMENDMENT NO. 1
TO THE
SECOND AMENDED AND RESTATED TRUST AGREEMENT
OF
CHARTERMAC
This AMENDMENT NO. 1 dated as of September 20, 2005 ("Amendment No. 1")
to the Trust Agreement (as defined below) of CharterMac, a Delaware statutory
trust (the "Trust"), is entered into, by and among the undersigned Trustees.
Capitalized terms used but not defined shall have the meaning assigned to such
terms in Article 2 of the Trust Agreement.
W I T N E S S E T H :
WHEREAS, certain of the Trustees have created a statutory trust in
accordance with applicable provisions of the Trust Act by entering into a Trust
Agreement, dated as of August 12, 1996, as amended by an Amendment No. 1 to
Trust Agreement dated as of April 30, 1997, and as amended and restated by the
Amended and Restated Trust Agreement dated as of September 30, 1997, and as
further amended by Amendment Nos. 1, 2, 3 and 4 to the Amended and Restated
Trust Agreement dated as of May 8, 2000, December 11, 2000, June 13, 2002 and
November 17, 2003, respectively and as further amended and restated by the
Second Amended and Restated Trust Agreement dated as of November 17, 2003 (as so
amended and amended and restated, the "Trust Agreement"), and by the filing with
the Secretary of State of the State of Delaware of a Certificate of Trust on
August 12, 1996, as heretofore amended; and
WHEREAS, article 6.7(d) of the Trust Agreement grants the Board of
Trustees full power and authority, in its sole discretion and without
requirement for any consent of the Shareholders, to establish and designate any
class or series of Shares not outstanding on the date of this Trust Agreement,
and to fix the preferences, covenants or other rights, voting powers,
privileges, restrictions, limitations as to dividends or other distributions
qualifications and terms and conditions of redemption for each class or series
thereof as the Board of Trustees may from time to time determine; and
WHEREAS, Article 6.7(d) of the Trust Agreement provides that the
establishment and designation of any class or series of Shares (other than those
existing as of the date of the Trust Agreement) shall be effective upon the
adoption of a resolution by a majority of the Trustees; and
WHEREAS, the Board of Trustees, by unanimous consent dated July 26,
2005, created a class of preferred shares designated 4.40% Cumulative Perpetual
Convertible Community Reinvestment Act Preferred Shares, Series A-1 ("Cumulative
Preferred Shares"); and
WHEREAS, the Board of Trustees desires to amend the Trust Agreement to
reflect the adoption of the Certificate of Designation of the Cumulative
Preferred Shares.
WHEREAS, the Board of Trustees have resolved to amend Section 6.7(d) of
the Trust Agreement to correct a portion of such Section that is inconsistent
with the remainder of the Trust Agreement; and.
WHEREAS, the Board of Trustees has determined that this Amendment No. 1
is permitted pursuant to Section 10.4(b) of the Trust Agreement and will not
adversely affect the rights of the Shareholders or the Registered Trustee.
NOW, THEREFORE, the Trust Agreement is hereby amended as follows:
1. Effective as of September 20, 2005, Section 6.7 of the Trust
Agreement is hereby amended to add a new Section 6.7(e) as follows:
6.7(e) The "4.40% Cumulative Perpetual Convertible Community
Reinvestment Act Preferred Shares, Series A-1 of the Trust" shall
have (i) the designation, powers, preferences, (ii) the relative,
participating, optional or other special rights, and (iii) the
qualifications, limitations or restrictions, set forth in the
Certificate of Designation attached hereto as Appendix D, which
terms are incorporated by reference in, and made a part of, this
Trust Agreement as if specifically set forth herein.
2. Section 6.7(d) of the Trust Agreement is hereby amended by deleting
the words "a majority of the Trustees" from the second sentence thereof and
replacing such words with the words "the Board of Trustees".
3. Except as otherwise amended herein, the Trust Agreement remains
unchanged and in full force and effect.
4. This Amendment No. 1 shall be interpreted in accordance with the laws
of the State of Delaware (without regard to conflict of laws principles), all
rights and remedies being governed by such laws.
5. This Amendment No. 1 may be executed in counterparts, each of which
shall be an original and all of which shall constitute one and the same
instrument.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 1 to be
executed as of the day and year first above written.
MANAGING TRUSTEES:
----------------------
Xxxxxx X. Xxxxxx
----------------------
Xxxxxxx X. Xxxx
----------------------
Xxxx X. Xxxxxxxxx
----------------------
Xxxx X. Xxxxxx
----------------------
Xxxxx X. Xxxxx
----------------------
Xxxx X. Xxxx
----------------------
Xxxxxx X. Xxxxxx
----------------------
Xxxxxx Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxx
----------------------
Xxxxxx X. Xxxxxxx
----------------------
Xxxxxx Xxxx Xxxxxxx
----------------------
Xxxxxx X. Xxxxx
REGISTERED TRUSTEE:
WILMINGTON TRUST COMPANY, (executing
solely pursuant to Section 3.2(iii)
of the Trust Agreement and not in
its individual capacity but solely
as Registered Trustee)
By: _____________________________
Name:
Title:
