STRUCTURED MORTGAGE TRUST 1997-1
TRUST AGREEMENT
Among
ASSET INVESTORS CORPORATION
as Depositor,
ASSET INVESTORS SECURED FINANCING CORPORATION
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
dated as of March 26, 1997
ARTICLE I - DEFINITIONS
1.01 Definitions........................................1
1.02 Indenture Definitions..............................4
ARTICLE II - ORGANIZATION
2.01 Name of the Trust; Statement of
Intent.............................................4
2.02 Office.............................................5
2.03 Declaration of Trust...............................5
2.04 Purpose and Powers.................................5
2.05 Transfer of Additional Trust
Property to the Trust..............................5
2.06 Acknowledgment of Receipt of
Trust Property by Owner Trustee....................6
2.07 Representations, Warranties and
Covenants of the Depositor.........................6
2.08 Representations and Warranties of
WTC ...............................................8
2.09 Execution of the Purchase
Agreement..........................................9
2.10 Liability of Holders of Trust
Certificates.......................................10
ARTICLE III - CONCERNING THE OWNERS
3.01 Ownership Prior to Closing Date....................10
3.02 Issuance of Trust Certificates.....................10
3.03 Transfer of Trust Certificates.....................10
3.04 Mutilated, Destroyed, Lost or
Stolen Trust Certificates..........................13
ARTICLE IV - CONCERNING THE AGENT
4.01 Appointment as Agent...............................14
4.02 Instructions to Owner Trustee......................14
4.03 Direction of Agent.................................15
4.04 Replacement of Agent...............................15
4.05 No Agent...........................................15
ARTICLE V - PAYMENTS AND DISTRIBUTIONS
5.01 Payments...........................................15
5.02 Method of Payment..................................16
5.03 Reports............................................16
i
ARTICLE VI - DUTIES OF THE OWNER TRUSTEE
6.01 Issuance of the Notes..............................17
6.02 In General.........................................17
6.03 Right of Owner Trustee to Request
Instructions.......................................17
6.04 Activities of the Trust............................18
6.05 No Duties Except As Specified in
Agreement or Instructions..........................18
6.06 No Action Except Under Specified
Documents or Instructions..........................19
6.07 Further Assurances.................................19
6.08 Restrictions.......................................19
6.09 Books and Records..................................19
6.10 Communication with Owners..........................19
ARTICLE VII - CONCERNING THE OWNER TRUSTEE
7.01 Acceptance of Trusts and Duties....................20
7.02 Furnishing of Documents............................22
7.03 [Reserved].........................................22
7.04 No Segregation of Moneys;
No Interest........................................22
7.05 Reliance; Employment of Agents
and Advice of Counsel..............................22
7.06 Not Acting in Individual Capacity..................23
7.07 Special Servicing and
Collateral Fund Agreements.........................23
ARTICLE VIII - INDEMNIFICATION BY OWNERS
8.01 Trust Expenses.....................................24
8.02 Indemnification....................................24
8.03 Compensation.......................................25
8.04 Lien on Trust Property.............................25
ARTICLE IX - TERMINATION OF TRUST AGREEMENT
9.01 Termination of Trust
Agreement..........................................24
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ARTICLE X - SUCCESSOR OWNER TRUSTEES AND ADDITIONAL TRUSTEES
10.01 Resignation of Owner Trustee;
Appointment of Successor...........................26
10.02 Appointment of Additional
Trustees...........................................28
10.03 Amendments to Certificate
of Trust...........................................30
ARTICLE XI - MISCELLANEOUS
11.01 Supplements, Amendments
and Waivers........................................30
11.02 No Legal Title to Trust
Property in Owners.................................30
11.03 Pledge of Collateral by Owner
Trustee is Binding.................................31
11.04 Limitations on Rights of Others...............................31
11.05 Non-Petition..................................................31
11.06 Notices 31
11.07 Authorization for Action Deemed to
be Given...........................................32
11.08 Severability..................................................32
11.09 Separate Counterparts.........................................32
11.10 Successors and Assigns........................................32
11.11 Headings 32
11.12 Governing Law.................................................32
EXHIBITS
EXHIBIT A: Form of Trust Certificate
EXHIBIT B: Form of Letter of Representations
SCHEDULES
SCHEDULE A: Description of the Securities
SCHEDULE B: Description of the Assigned Indemnities
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TRUST AGREEMENT relating to STRUCTURED MORTGAGE TRUST
1997-1, dated as of March 26, 1997, by and among ASSET INVESTORS CORPORATION, a
Maryland corporation, as Depositor, ASSET INVESTORS SECURED FINANCING
CORPORATION, a Delaware corporation and wholly-owned subsidiary of the Depositor
(the "SPE") and WILMINGTON TRUST COMPANY, a banking corporation organized under
the laws of the State of Delaware (in its individual capacity, "WTC").
ARTICLE I
DEFINITIONS
1.01. Definitions. For all purposes of this Agreement, the
following terms shall have the meanings set forth below.
"Act" shall have the meaning set forth in Section 2.01.
"Affiliate" of any Person means any other Person controlling,
controlled by or under common control with such Person.
"Agreement" means this Trust Agreement and any amendments or
modifications hereof.
"Authorized Officer" means, with respect to the Owner Trustee,
any officer or representative of the Owner Trustee who is authorized to act for
the Owner Trustee in matters relating to, and binding upon, the Trust and whose
name appears on a list of such authorized officers and representatives furnished
by the Owner Trustee to the Depositor and the Indenture Trustee, as such list
may be amended or supplemented from time to time.
"Business Day" means any day except a Saturday, Sunday or other
day on which banking institutions in the State of Delaware are authorized by law
or regulation to close.
"Certificate Register" means the register maintained pursuant to
Section 3.03(a) hereof.
"Closing Date" means March 27, 1997, or such other date as
specified by the Depositor.
"Collateral" means that portion of the Trust Property that will
be granted to the Indenture Trustee from time to time pursuant to the terms of
the Indenture and therefore will be subject to the Lien of the Indenture, as
identified by the defined term "Trust Estate" in the Indenture.
"Company/SPE Transfer Agreement" means the Agreement between
Asset Investors Corporation and the SPE pursuant to which the Securities and
certain other assets are transferred to the SPE.
"Corporate Trust Office" means the office of the Owner Trustee
located at ▇▇▇▇▇▇ Square North ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
"Debtor Relief Laws" means any applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws relating to or
affecting creditors' rights generally any court decisions with respect thereto
and general principles of equity.
"Depositor" means Asset Investors Corporation, a Maryland
corporation, and its successors and assigns.
"Depository Agreement" means the Letter of Representa- tions to
the Depository Trust Company in connection with the Notes.
"Distribution Date" means the Business Day following each
Payment Date as defined in the Indenture.
"Fiscal Year" shall mean from each January l to the following
December 31.
"Grant" and variants thereof has the meaning specified in the
Indenture.
"Indemnified Expenses" shall have the meaning set forth in
Section 8.02.
"Indenture" means the Indenture dated March 27, 1997, between
the Trust and the Indenture Trustee which provides for the issuance of the
Notes, and the Indenture as it may be amended or supplemented from time to time.
"Indenture Trustee" means the trustee under the Indenture, and
any successor Person that shall have become the trustee under the Indenture.
"Initial Purchaser" means Bear, ▇▇▇▇▇▇▇ & Co. Inc. as initial
purchaser of the Notes pursuant to the Purchase Agreement".
"Letter of Representations" means the letter to be furnished by
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each purchaser of Trust Certificates in connection with its purchase of Trust
Certificates substantially in the form of Exhibit C hereto.
"Lien" means any lien, mortgage, security interest, pledge,
charge, equity or claim of others or encumbrance of any kind.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its
successors.
"Note Rate" means with respect to any Distribution Date the
weighted average pass-through rate paid on the Notes pursuant to the terms of
the Indenture and the Notes on the immediately preceding Payment Date (as
defined in the Indenture).
"Note Agreements" means the Indenture, the Notes, the Depository
Agreement and the Purchase Agreement.
"Noteholder" means the Person in whose name a Note is registered
in the Note Register pursuant to Section 3.05 of the Indenture.
"Notes" means the Collateralized Notes, Class A, Class B, Class
C and Class D, issued by the Trust acting through the Owner Trustee under the
Indenture.
"Owners" means the Depositor and its successors in interest as
beneficiaries of the Trust pursuant to Article III.
"Ownership Percentage" with respect to any Owner means the
proportion (expressed as a percentage) of the ownership interest in the Trust
held by such Owner.
"Owner Trustee" means Wilmington Trust Company, not in its
individual capacity but solely in its fiduciary capacity as owner trustee under
this Agreement, and any successor owner trustee hereunder.
"Payment Account" has the meaning specified in the Indenture.
"Periodic Reports" means any reports or submissions that the
Trust is required pursuant to the Indenture to make with respect to the Notes.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
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"Purchase Agreement" means the Purchase Agreement relating to
the Notes among the Initial Purchaser, the Depositor and the Trust.
"Secretary of State" means the office of the Secretary of State
of the State of Delaware.
"Securities" means the mortgaged-backed securities which are to
be conveyed to the Trust under this Agreement as part of the Trust Property and
which are set forth in Schedule A hereto.
"SPE" means Asset Investors Secured Financing Corporation, a
Delaware corporation which has been organized and is wholly owned by the
Depositor.
"Trust" means the trust established by this Agreement,
designated as Structured Mortgage Trust 1997-1."
"Trust Certificate" means a certificate evidencing the Ownership
Percentage of an Owner substantially in the form annexed hereto as Exhibit A.
"Trust Property" means all money, instruments and other property
deposited in the Trust pursuant hereto, including all proceeds thereof.
Notwithstanding the foregoing, "Trust Property" shall not include any amounts
paid or payable to WTC pursuant to Article VIII.
"WTC" means Wilmington Trust Company and any successor owner
trustee hereunder, in its individual capacity and not as Owner Trustee.
1.02. Indenture Definitions. Capitalized terms used herein and
not otherwise defined herein shall have the meaning assigned to them in the
Indenture.
ARTICLE II
ORGANIZATION
2.01. Name of Trust; Statement of Intent. The name of the Trust
formed hereby shall be Structured Mortgage Trust 1997-1, in which name the Owner
Trustee may conduct the business and affairs of the Trust, make and execute
contracts and agreements on behalf of the Trust and ▇▇▇ and be sued on behalf of
the Trust. It is the intention of the parties hereto that the Trust constitute a
business trust under the Delaware Business Trust Act (12 Del.C. ' 3801 et
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seq.)(the "Act") and that this Agreement constitute the governing instrument of
the Trust under the Act. The Owner Trustee hereby is authorized to file a
Certificate of Trust under said Act with the Secretary of State.
2.02. Office. The office of the Trust shall be in care of the
Owner Trustee, at the address set forth in Section 11.06 or at such other
address as the Owner Trustee may designate by notice to the Owners.
2.03. Declaration of Trust. WTC is hereby appointed to hold and
agrees to hold the Trust Property as Owner Trustee in trust upon the terms and
conditions and for the use and benefit of the holders of the Trust Certificates
as herein set forth. The Owner Trustee hereby acknowledges that it has received
the sum of $1.00 from the Depositor, such sum initially constitutes the Trust
Property. Upon receipt of the additional Trust Property as provided in Section
2.05 and of proceeds from the sale of the Notes, the Trust shall repay such
amount to the Depositor, shall issue the Trust Certificates as provided in
Section 3.02 and, thereafter the Depositor shall have no direct interest in the
Trust.
2.04. Purpose and Powers. (a) The purposes of the Trust are to
issue and administer the Notes, to acquire and own the Collateral and to pledge
the Collateral to support the Notes pursuant to the Indenture, all for the
benefit of the Owners. The Trust shall not have power to perform any act or
engage in any business or activity whatsoever except for the foregoing and as
provided in clause (b) and any activity that is necessary, convenient or
incidental to the foregoing and within the contemplation of the Indenture.
(b) The Trust may acquire additional mortgaged-backed
securities, pledge them to the Trustee and issue additional classes of notes;
provided that prior to taking any such action, the Owner Trustee and the Trustee
are provided with (i) an opinion of counsel to the effect that the Trust will
not be treated as a taxable mortgage pool for federal income tax purposes, (ii)
a written acknowledgement from Moody's that such action will not adversely
affect its then rating of each Class of Notes, and (iii) a written
acknowledgement from an investment banking firm that such action will not
adversely affect the Class D Notes (if such Class of Notes is outstanding and is
not then rated by Moody's).
2.05. Transfer of Additional Trust Property to the Trust. As of
the Closing Date, the SPE shall transfer to the Trust without recourse all its
right, title and interest in and to (i) the Securities identified on Schedule A
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attached hereto and all distributions payable thereon on and after the Pooled
Certificate Information Date, (ii) its rights under the Company/SPE Transfer
Agreement and (iii) the indemnities described in Schedule B attached hereto.
Legal title to all of the Trust Property shall be vested at all times in the
Trust as a separate legal entity except where applicable law in any jurisdiction
requires title to any part of the Trust Property to be vested in a trustee or
trustees, in which case title shall be deemed to be vested in the Owner Trustee,
a co-trustee and/or a separate trustee, as the case may be. The Trust Property
shall be held for the common, equal and ratable use, benefit and security of all
Persons who shall from time to time be Owners and without preference of any of
the Owners over any of the others by reason of priority in the time of issue,
sale or negotiation of the Trust Certificates held by such Owners.
2.06. Acknowledgement of Receipt of Trust Property by Owner
Trustee. The Owner Trustee agrees to acknowledge on behalf of the Trust, by
executing a certificate to that effect, based on receipt of a certification by
the Indenture Trustee, which may be in the form of a signed copy of the
Indenture, the deposit of the Securities, with the Indenture Trustee referred to
in Section 2.05 on the Closing Date.
2.07. Representations, Warranties and Covenants of the Depositor
and the SPE. (a) The Depositor and the SPE each hereby represents and warrants
to the Owner Trustee that as of the date hereof and as of the Closing Date:
(i) It is, and throughout the term of this Agreement will
remain, a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and has the
corporate power and authority to perform its obligations under this
Agreement;
(ii) The execution, delivery and performance of this Agreement
have been duly authorized by all requisite corporate action on its part;
(iii) This Agreement has been duly executed and delivered and,
assuming due authorization, execution, and delivery by WTC, will
constitute its legal, valid and binding obligation, enforceable in
accordance with its terms, except only as such enforcement may be
limited by applicable Debtor Relief Laws;
(iv) Its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not (A)
violate its articles of incorporation or by-laws, and, to the best of
its knowledge, after reasonable investigation, (B) violate any law or
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regulation, or any administrative or judicial decree or order to which
it is subject or (C) constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material contract, agreement or other
instrument to which it is a party or which may be applicable to it or
any of its assets;
(v) To the best of its knowledge, after reasonable
investigation, it is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state,
municipal or other governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Depositor or its properties or
might have consequences that would affect its performance hereunder;
(vi) It is not a party to or bound by any agreement or
instrument or subject to any articles of incorporation, by-laws or any
other corporate restriction or any judgment, order, writ, injunction,
decree, law or regulation which now or in the future may materially and
adversely affect its ability to perform its obligations under this
Agreement or which requires the consent of any third Person to the
execution of this Agreement or the performance by it of its obligations
under this Agreement;
(vii) No litigation is pending or, to the best of its knowledge,
threatened against it which might materially and adversely affect its
entering into this Agreement or performing its obligations under this
Agreement; and
(viii) Upon the contribution, assignment or other transfer of
any of the Trust Property to the Trust under this Agreement the Trust
will have received good title thereto free and clear of any Lien, and
the Trust will have the right to pledge and deliver the Collateral to
the Indenture Trustee in accordance with the Indenture and Section 6.01
of this Agreement. Upon the pledge and delivery of the Collateral by the
Trust to the Indenture Trustee in the manner contemplated by this
Agreement and the Indenture, and assuming the validity and binding
effect of the Indenture and relying as aforesaid and assuming no action
by the Trust to grant any other Liens, the Indenture Trustee will have
obtained a valid first security interest in the Collateral, prior to all
other Liens;
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(b) The Depositor and the SPE hereby covenant that, so long as
any of the Notes remain outstanding and any principal or interest thereon
remains unpaid:
(i) They will use their best efforts to cause the Trust to have
good and marketable title to the Trust Property, free of all Liens
(other than the Lien of the Indenture) and to have lawful authority to
assign, transfer and pledge the Collateral to the Indenture Trustee;
(ii) Immediately upon the transfer of the Trust Property to the
Trust pursuant to this Agreement, they will make any appropriate
notations on their respective records to indicate that the Trust
Property has been transferred to the Trust pursuant to this Agreement,
and, to the extent it constitutes Collateral, has been pledged by the
Trust to the Indenture Trustee to secure payment of the Notes;
(iii) If the Depositor or the SPE shall take any action which
would cause the Trust to become an investment company which would be
required to register under the Investment Company Act of 1940, they will
use their best efforts to cause the Trust to be registered under such
Act; and
(iv) Without the prior consent of holders of 60% of the Voting
Rights of each Class of outstanding Notes and the written confirmation
from Moody's that such action will not adversely affect its then ratings
of the Notes of any Class, the Depositor will not dispose of its
ownership interest in the SPE and the SPE will not transfer its Trust
Certificates.
(c) The Depositor and the SPE hereby represent and warrant that,
as of the date hereof and as of the Closing Date, the Trust is not and will not
be required to register as an investment company under the Investment Company
Act of 1940.
2.08. Representations and Warranties of WTC. WTC hereby
represents and warrants to the Depositor, as of the Closing Date, that:
(i) WTC is a banking corporation organized under the laws of the
State of Delaware, validly existing and in good standing under the laws
of the State of Delaware;
(ii) WTC has full power, authority and legal right to execute
and deliver this Agreement and to perform its obligations under this
Agreement, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement;
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(iii) The execution, delivery and performance by WTC, in its
individual capacity and in its capacity as Owner Trustee on behalf of
the Trust, as the case may be, of this Agreement and the Indenture, and
the issuance of the Notes and the Trust Certificates by the Trust acting
through the Owner Trustee are within the corporate power of WTC, have
been duly authorized by all necessary corporate action on the part of
WTC (no action by its shareholders being required) and do not and will
not (i) violate or contravene any judgment, injunction, order or decree
binding on WTC, (ii) violate, contravene or constitute a default under
any provision of the certificate of incorporation or by-laws of WTC or
of any material agreement, contract, mortgage or other instrument
binding on WTC or (iii) result in the creation or imposition of any Lien
attributable to WTC on the Trust Property, other than as contemplated
hereunder;
(iv) No consent, approval, authorization or order of, or filing
with, any court or regulatory, supervisory or governmental agency or
body is required under Delaware law by or with respect to WTC in
connection with the execution, delivery and performance by WTC, in its
individual capacity and in its capacity as Owner Trustee on behalf of
the Trust, as the case may be, of this Agreement or the Indenture or the
issuance of the Notes and the Trust Certificates by the Trust acting
through the Owner Trustee or the consummation by the Owner Trustee of
the transactions contemplated hereby or thereby (except for the filing
of the Certificate of Trust with the Secretary of State); and
(v) This Agreement has been duly executed and delivered by the
Owner Trustee and constitutes the legal, valid and binding obligation of
the Owner Trustee, enforceable against the Owner Trustee in accordance
with its terms, except as the enforcement hereof may be limited by
applicable Debtor Relief Laws.
2.09. Execution of the Purchase Agreement; Proceeds. The Owner
Trustee is hereby authorized to execute the Purchase Agreement on behalf of the
Trust. The Notes shall be issued on the Closing Date in accordance with the
terms of the Indenture and the Purchase Agreement and shall be sold pursuant to
the Purchase Agreement. The net proceeds of the sale of the Notes paid on the
Closing Date shall be distributed by the Owner Trustee to the SPE or in
accordance with its direction on the Closing Date by wire transfer.
2.10. Liability of Holders of Trust Certificates. Each holder of
Trust Certificates agrees to be severally liable with any other holders of Trust
Certificates in proportion to their beneficial interests in the Trust for all
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fees, expenses, taxes, indemnity payments and other liabilities of the Trust
(other than the principal and interest on the Notes, for which holders of the
Trust Certificates shall have no liability) to the extent not satisfied out of
the Trust Property, in accordance with their terms, including those incurred by
WTC in its individual capacity or as Owner Trustee, in the administration of the
Trust hereunder, except that no holder of Trust Certificates shall be liable for
any such liabilities arising prior to the date on which such holder acquired, or
after the date on which such holder transferred in accordance with the terms
hereof, its Trust Certificate, to the extent such fees, expenses, taxes,
indemnity payments and other liabilities of the Indenture Trustee or the Owner
Trustee or WTC, as the case may be, with respect to the Trust, are not paid out
of the Trust Property.
ARTICLE III
CONCERNING THE OWNERS
3.01. Ownership Prior to Closing Date. The Depositor shall be
the sole Owner of the Trust prior to the Closing Date. The Depositor shall pay
organizational expenses of the Trust as they may arise. No Trust Certificate
shall be issued to the Depositor to evidence its interest in the Trust.
3.02. Issuance of Trust Certificates. (a) On the Closing Date,
and in connection with the transfer of the Securities, the Owner Trustee,
concurrently with the issuance of the Notes, shall issue a Trust Certificate or
Trust Certificates in substantially the form attached hereto as Exhibit A,
evidencing ownership of the entire beneficial interest in the Trust, to the SPE.
(b) Each Trust Certificate shall be executed by manual signature
on behalf of the Trust by an Authorized Officer of the Owner Trustee. Trust
Certificates bearing the manual signature of an individual who was, at the time
such signature was affixed, an Authorized Officer shall bind the Trust,
notwithstanding that such individual has ceased to be an Authorized Officer
prior to the delivery of such Trust Certificate or is not an Authorized Officer
at the date of such Trust Certificates. Each Trust Certificate shall be dated
the date of its issuance.
3.03. Transfer of Trust Certificates. (a) The Depositor hereby
appoints the Owner Trustee as registrar and transfer agent with respect to the
Trust Certificates and the Owner Trustee hereby accepts such appointment. The
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Owner Trustee shall keep at its Corporate Trust Office a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, the Owner Trustee shall provide for the registration of the Trust
Certificates and for transfers and exchanges of the Trust Certificates as herein
provided. At the option of the Owners, Trust Certificates may be exchanged for
other Trust Certificates of like percentage of beneficial interest in the Trust
upon surrender to the Owner Trustee of the Trust Certificates to be exchanged.
Whenever any Trust Certificates are so surrendered for exchange, the Owner
Trustee shall execute and deliver the Trust Certificates which the Owner making
the exchange is entitled to receive. Every Trust Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee, and duly executed by the Owner or his attorney duly authorized in
writing. No transfer of a Trust Certificate shall be made if such transfer would
violate any terms of this Agreement or the Letter of Representations nor shall
any transfer be effective unless an appropriate entry has been made on the
Certificate Register. A transfer of a Trust Certificate or part thereof shall
not be effective unless the transferee shall have signed and delivered to the
Owner Trustee an instrument containing the transferee's agreement to be bound by
all the terms of this Agreement, together with evidence satisfactory to the
Owner Trustee demonstrating the transferee's compliance with the requirements of
subsection (c) of this Section 3.03. Further, before any Trust Certificates may
be transferred to any Person, the Owner Trustee shall have received (i) the
prior consent of holders of at least 60% of the Voting Rights of each Class of
outstanding Notes and (ii) a written acknowledgement from Moody's that such
action will not adversely affect its then rating of each Class of Notes. The
Owners shall be entitled to all rights provided to them under this Agreement and
shall be subject to the provisions and conditions contained in this Agreement
and in the Trust Certificates.
(b) No offer, sale, transfer or other disposition (including
pledge) of any Trust Certificate shall be made by any Owner thereof unless
registered under the Securities Act of 1933, as amended (the "1933 Act"), or an
exemption from the registration requirements of the 1933 Act and any applicable
state securities or "Blue Sky" laws is available and the holder (except the
Depositor) and prospective transferee of the Trust Certificate each certify to
the Owner Trustee, in writing, as to the facts surrounding the transfer.
(c) Unless waived by the Owner Trustee (which waiver may be
given without the consent of any holder of Trust Certificates), no offer, sale,
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transfer or other disposition (including pledge) of any Trust Certificate shall
be made to any transferee unless (i) the net worth of the transferee is not less
than the greater of (A) the product of $15,000,000 and the percentage ownership
of the Trust by the transferee after the proposed transfer and (B) $5,000,000;
(ii) the transferee understands that the Trust Certificates will be offered in a
transaction not involving any public offering within the meaning of the
Securities Act, and that, if in the future it decides to resell, pledge or
otherwise transfer any Trust Certificates, such Trust Certificates may be
resold, pledged or transferred only (a) to an institutional Accredited Investor
as defined in Rule 5.01(a)(1)-(3) and (7) as promulgated under Regulation D
under the Securities Act or pursuant to another exemption from the registration
requirements of the Securities Act and any applicable state laws or (b) pursuant
to an effective registration statement under the Securities Act; (iii) if the
transferee is a corporation purchasing the Trust Certificates in the State of
California, it has a net worth of at least $14,000,000 according to its most
recent audited financial statement; and (v) the proposed transfer is not to the
Indenture Trustee or its affiliates (as defined under the ▇▇▇▇ ▇▇▇) or to a
Rating Agency. The Owner Trustee may require appropriate evidence as to
compliance with the foregoing conditions of transfer and the Owner Trustee shall
be fully protected in relying on such evidence in making any transfer. The Owner
Trustee shall not bear any of the costs associated with the transfer of the
Trust Certificates.
(d) If any legislation is enacted or regulation adopted which would
result in the imposition of any tax on the Trust or the holders of the Notes,
and, as a result, the Rating Agency advises that it intends to reduce the rating
on any Class of the Notes below the rating for such Class specified in the
Indenture, the then Owners shall be deemed to have agreed to an amendment, and,
if requested, to sign such other documents as may be necessary, to the agreement
by which they purchased the Trust Certificate, this Agreement and the Indenture,
such amendment or other documents to be in such form as such Rating Agency may
require so as to permit the Bonds to retain said rating.
(e) Each Trust Certificate shall bear a legend setting forth
restrictions on transferability substantially as follows: "THIS CERTIFICATE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)
TO AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 5.01(a)(1)-(3) AND
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(7) UNDER REGULATION D UNDER THE SECURITIES ACT OR PURSUANT TO ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE
STATE LAW OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT. THE TRANSFER OF THIS INTEREST WILL NOT BE EFFECTIVE UNLESS THE
TRANSFEREE HAS SIGNED AND DELIVERED TO THE ISSUER A LETTER OF REPRESENTATIONS
SUBSTANTIALLY IN THE FORM SET FORTH AS EXHIBIT C TO THE TRUST AGREEMENT DATED AS
OF MARCH 26, 1997, BY AND AMONG ASSET INVESTORS CORPORATION (THE "DEPOSITOR"),
ASSET INVESTORS SECURED FINANCING CORPORATION AND WILMINGTON TRUST COMPANY, AS
OWNER TRUSTEE. THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED WITHOUT THE CONSENT
OF HOLDERS OF AT LEAST 60% of the VOTING RIGHTS OF EACH CLASS OF THE TRUSTS'
COLLATERALIZED NOTES ISSUED PURSUANT TO THE INDENTURE DATED AS OF MARCH 27, 1997
BETWEEN THE TRUST AND STATE STREET BANK AND TRUST COMPANY, AS INDENTURE TRUSTEE,
VOTING SEPARATELY, AND RECEIPT OF WRITTEN CONFIRMATION FROM ▇▇▇▇▇'▇ INVESTORS
SERVICE, INC. (OR ITS SUCCESSOR) THAT SUCH TRANSFER WILL NOT CAUSE IT TO
DOWNGRADE OR WITHDRAW ITS THEN RATING OF ANY CLASS OF SUCH NOTES.
(f) There shall be no fee charged with respect to the transfer or
exchange of any Trust Certificate hereunder; provided, however, that the Owner
Trustee may require the payment by the Owner of a sum sufficient to cover any
tax or other governmental charge or other expenses (including the fees and
expenses of the Owner Trustee) that may be imposed in relation to such transfer
or exchange.
(g) The Owner Trustee shall not be required to transfer, and the
Certificate Registrar shall not be required to register, any transfer for a
period of ten (10) days prior to any Distribution Date.
(h) Notwithstanding anything contained herein to the contrary, the Owner
Trustee shall not be responsible for ascertaining whether any transfer complies
with the registration provisions or exemptions from the Securities act of 1933,
as amended, the Securities Act of 1934, as amended, applicable state securities
law or the Investment Company Act; provided, however, that if a certificate is
specifically required to be delivered to the Owner Trustee by a purchaser or
transferee of a Trust Certificate, the Owner Trustee shall be under a duty to
examine the same to determine whether it conforms to the requirements of this
Trust Agreement and shall promptly notify the party delivering the same if such
certificate does not so conform.
3.04. Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If (i) any mutilated Trust Certificate is surrendered to the Owner Trustee, or
the Owner Trustee receives evidence to its satisfaction of the destruction, loss
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or theft of any Trust Certificate, and (ii) there is delivered to the Owner
Trustee such security or indemnity as may be required by it to save it harmless,
then, in the absence of actual knowledge of a responsible officer in the
Corporate Trust Administration Division of the Owner Trustee that such Trust
Certificate has been acquired by a bona fide purchaser, the Owner Trustee shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like
tenor bearing the same issue number, with notations, if any, as the Owner
Trustee shall determine upon surrender and cancellation of, and in exchange and
substitution for, such mutilated Trust Certificate or in lieu of and in
substitution for the Trust Certificate so lost, stolen or destroyed, and
aggregate Ownership Percentage. In connection with the issuance of any new Trust
Certificate under this Section 3.04, the Owner Trustee may require the payment
by the Owner of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Owner Trustee) connected therewith. Any duplicate Trust
Certificate issued pursuant to this Section 3.04 shall constitute complete and
indefeasible evidence of ownership of a beneficial interest in the Trust, to the
extent of the Ownership Percentage represented by the Trust Certificate, as if
originally issued, whether or not the lost, stolen or destroyed Trust
Certificate shall be found at any time.
ARTICLE IV
CONCERNING THE AGENT
4.01. Appointment as Agent. The Depositor shall act as agent for
the Owners (in such capacity, the "Agent") until its resignation or removal
pursuant to Section 4.04. The Agent shall have no responsibility under this
Agreement other than to render the services called for hereunder in good faith.
The Agent shall not be liable to the Owners, the Owner Trustee or any other
Person except by reason of its acts or omissions to act which constitute bad
faith, willful misconduct, gross negligence or reckless disregard of its duties
under this Agreement.
4.02. Instructions to Owner Trustee. The right to
(a) instruct the Owner Trustee pursuant to Section 6.03, (b) to agree to
compensation for the Owner Trustee pursuant to Section 8.03, (c) to appoint a
successor Owner Trustee or to remove the Owner Trustee pursuant to Section
10.01(a), and (d) to consent to amendments and waivers pursuant to Section
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11.01, in each case as reserved to the Owners of Trust Certificates pursuant to
this Agreement, shall be exercised by the Agent on behalf of the Owners of Trust
Certificates. The Agent shall promptly respond to every request for instructions
addressed to it by the Owner Trustee.
4.03. Direction of Agent. In performing its duties hereunder,
the Agent shall act in accordance with any written instruction signed on behalf
of Owners holding, in the aggregate, a majority of the beneficial interest in
the Trust and in so acting, to the extent the Agent acts in good faith in
accordance with any such instruction received from such Owners, the Agent shall
not be liable to any person.
4.04. Replacement of Agent. The Agent may resign its duties at
any time on notice to the Owners and the Owner Trustee. The Agent may be
removed, and in the event of the removal or resignation of the Agent, a
successor Agent will be appointed by Owners holding, in the aggregate, a
majority of the ownership interest in the Trust. No such removal or resignation
shall be effective until a successor Agent has been appointed and accepted such
appointment, unless it is determined by the Owners that there shall be no Agent,
and until a notice of such removal meeting the requirements of this section is
delivered to the Owner Trustee.
4.05. No Agent. If at any time there is no Agent appointed under
this Article, Owners holding a majority of the ownership interests in the Trust
shall give such directions or consents or take such other actions as are
reserved herein to the Agent or to the Owners.
ARTICLE V
PAYMENTS AND DISTRIBUTIONS
5.01. Payments. Any amounts paid to the Owner Trustee by the
Indenture Trustee pursuant to Section 12.01 of the Indenture, free and clear of
the Lien of the Indenture, and any amounts received by the Owner Trustee in
respect of the Trust Property, shall be applied in the following order:
(a) to pay any amounts then due to the Owner Trustee or WTC as
the case may be, under this Agreement; and
(b) to pay any current operating expenses of the Trust.
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Any sums remaining after such application shall be distributed to the Owners, in
proportion to their Ownership Percentages, promptly and no later than two
Business Days after the date on which the Owner Trustee has knowledge of its
receipt of such funds. If for any reason funds are not so distributed, the Agent
shall have the right to direct their investment. All payments to be made under
this Agreement by the Owner Trustee shall be made only from the income and
proceeds of the Trust Property and only to the extent that the Owner Trustee has
received such income or proceeds. WTC shall not be liable to the Owners or the
Indenture Trustee or any other person for any amounts payable pursuant to this
Section 5.01 and, except as specifically provided herein, is not subject to any
liability under this Agreement.
5.02. Method of Payment. All amounts payable to an Owner
pursuant to this Agreement will be paid by the Owner Trustee to the Owner or a
nominee thereof by crediting the amount to be distributed to the Owner to an
account maintained by the Owner with the Owner Trustee in immediately available
funds or by transferring such amount in immediately available funds to a banking
institution with bank wire transfer facilities for the account of the Owner, as
instructed in writing from time to time by the Owner.
5.03. Reports. (a) Each payment to an Owner pursuant to Section
5.01 shall be accompanied by a report setting forth, for the related month and
for each preceding month of the same Fiscal Year, the amounts, if any, received
by the Owner Trustee together with their application.
(b) The Owner Trustee will (i) cause to be prepared such annual
or other reports, (ii) make such elections and file such tax returns relating to
the Trust as may from time to time be required under any applicable state or
Federal statute or rule or regulation thereunder and (iii) cause to be mailed to
any Owner any or all of such tax returns when requested to do so by any such
Owner or the Agent. It is the intention of the parties hereto that, for federal
income tax purposes, the Trust shall be treated as a grantor trust under Part I,
Subpart E of Subchapter J of the Code, and that the Owner Trustee shall file (or
cause to be filed) tax returns consistent with characterization of the Trust as
a grantor trust. The Owner Trustee shall be deemed to be in compliance with its
obligations pursuant to this Section 5.03(b) if (i) the Trust enters into an
agreement with Financial Asset Management LLC with respect to the preparation of
tax returns relating to the Trust and (ii) it executes and delivers the reports
and documents required hereunder.
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ARTICLE VI
DUTIES OF THE OWNER TRUSTEE
6.01. Issuance of the Notes. In connection with the issuance of
the Notes, the Owner Trustee is hereby authorized and directed:
(a) to execute and deliver on behalf of the Trust the Depository
Agreement, the Indenture, the Trust Certificates and the Notes;
(b) to pledge on behalf of the Trust the Collateral to the
Trustee as security for the Notes; and
(c) to take whatever action shall be required to be taken by the
Owner Trustee by the terms of, and subject to the terms of, this Agreement.
6.02. In General. It shall be the duty of the Owner Trustee:
(a) to discharge (or cause to be discharged) all
responsibilities assigned to it pursuant to the terms of this Agreement,
(b) to cause the preparation of any Periodic Reports, and
(c) to administer the Trust in the interest of the Owners, in
accordance with the express purpose and powers of the Trust and the provisions
of this Agreement.
6.03. Right of Owner Trustee to Request Instructions.
(a) The Owner Trustee shall take such action or shall refrain
from taking such action under this Agreement as it shall be directed pursuant to
a specific provision of this Agreement or, absent such a specific provision, as
it shall be directed in a notice delivered by the Agent or the Owners holding in
the aggregate a majority of the ownership interest in the Trust in accordance
with Section 11.06 hereof. In connection with the following non-ministerial
matters, the Owner Trustee shall not act unless it shall be directed in a notice
delivered by the Agent or the Owners holding in the aggregate a majority of the
ownership interest in the Trust in accordance with Section 11.06 hereof:
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(i) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of the
Noteholders is required;
(ii) the initiation of any claim or lawsuit by the
Trust and the compromise of any claim or lawsuit
brought by or against the Trust;
(iii) the appointment of successor Note Registrars,
successor Paying Agents, successor Indenture Trustees,
and any Indenture accountants pursuant to the
Indenture;
(iv) the decision to remove the Indenture Trustee; and
(v) the decision to elect to redeem the Notes pursuant
to Section 10.01 of the Indenture.
(b) If in performing its duties under this Agreement the Owner
Trustee (i) is unable to decide between alternative courses of action, or (ii)
is unsure of the application of any provision of this Agreement, the Indenture
or the Note Agreements, the Owner Trustee may deliver a notice to the Owners and
the Agent in accordance with Section 11.06 requesting written instructions as to
the course of action desired by them and the Owners shall make any determination
required pursuant to this Section 6.03, as reflected in instructions to the
Owner Trustee delivered in accordance with Section 11.06; provided, however,
that if the Owner Trustee does not receive such instructions within 10 days
after it has delivered such notice, or such shorter period of time set forth in
such notice, it may, but shall be under no duty to, take or refrain from taking
such action not inconsistent with this Agreement as it shall deem advisable and
in the best interests of the Owners and the Owner Trustee shall not be liable
for such action or inaction.
6.04. Activities of Trust. The Trust shall not engage in any
activities other than those required or authorized by the terms of this
Agreement or the Indenture.
6.05. No Duties Except as Specified in Agreement or
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment in respect of, register, record, sell, dispose of or otherwise
deal with the Trust Property, or to otherwise take or refrain from taking any
action under, or in connection with, any document contemplated hereby to which
the Trust or the Owner Trustee is a party, except as expressly provided by the
terms of this Agreement or in written instructions pursuant to Section 6.03; and
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no implied duties or obligations shall be read into this Agreement against the
Owner Trustee. WTC nevertheless agrees that it will, at its own cost and
expense, promptly take all action as may be necessary to discharge any Liens on
any part of the Trust Property which are attributable to actions by or claims
against WTC that are not related to the ownership of the Trust Property or the
administration of the Trust Property or the transactions contemplated by this
Agreement or the Note Agreements.
6.06. No Action Except Under Specified Documents or
Instructions. The Owner Trustee agrees that it will not manage, control, use,
sell, dispose of or otherwise deal with the Trust Property except (i) as
required by the terms of this Agreement, (ii) in accordance with the powers
granted to, or the authority conferred upon, the Owner Trustee pursuant to this
Agreement, or (iii) in accordance with the express terms hereof or in accordance
with written instructions received by the Owner Trustee pursuant to Section
6.03.
6.07. Further Assurances. Upon written request, the Owner
Trustee shall execute and deliver all such other instruments, documents or
certificates and take all such other actions as may be necessary or advisable in
connection with the performance of its duties hereunder and the consummation of
the transactions contemplated hereby.
6.08. Restrictions. The Owner Trustee shall take no action (a)
that is inconsistent with the purposes and powers of the Trust as set forth in
Section 2.04 or (b) if the Owner Trustee has been notified by the Agent or the
Indenture Trustee that such action would cause or threaten to cause any
nationally recognized statistical rating organization that has rated the Notes
to downgrade the ratings of the Notes. Neither the Owners nor the Agent on
behalf of the Owners shall direct the Owner Trustee to take action that would
violate the provisions of this Section 6.08.
6.09. Books and Records. The Owner Trustee shall keep proper
books of record and account of all the transactions under this Agreement,
including the Certificate Register, at its Corporate Trust Office, and such
books and records shall be open to inspection by any Owner at all reasonable
times during the usual business hours of the Owner Trustee.
6.10. Communication with Owners. If an Owner (for purposes of
this Section, an "Applicant") applies in writing to the Owner Trustee, and such
application states that the Applicant desires to communicate with other Owners
and is accompanied by a copy of the form of proxy or other communication which
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such Applicant proposes to transmit, then the Owner Trustee shall, within five
Business Days after the receipt of such application, at its election, either:
(1) afford such Applicant access to the Certificate Register
maintained by the Owner Trustee in accordance with Section 3.03(a)
hereof; or
(2) inform such Applicant as to the approximate number of Owners
whose names and addresses appear in the Certificate Register, and as to
the approximate cost of mailing to such Owners the form of proxy or
other communication, if any, specified in such application.
If the Owner Trustee shall elect not to afford such Applicant
access to the Certificate Register, the Owner Trustee shall, upon the written
request of such Applicant, mail to each Owner whose name and address appears in
the Certificate Register a copy of the form of proxy or other communications
that is specified in such request with reasonable promptness after a tender to
the Owner Trustee of the material to be mailed and of payment, or provision for
the payment, of the reasonable expenses of mailing. Each Owner acknowledges and
agrees that the Owner Trustee shall incur no liability in connection with any
information provided pursuant to this Section 6.10.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
7.01. Acceptance of Trusts and Duties. The Owner Trustee accepts
the trusts hereby created and agrees to perform the same but only upon the terms
of this Agreement. The Owner Trustee also agrees to disburse all moneys actually
received by it constituting part of the Trust Property upon the terms of this
Agreement. WTC shall not be answerable or accountable under any circumstances,
except (i) for its own willful misconduct or gross negligence, (ii) in the case
of the inaccuracy of any representation or warranty contained in Section 2.08,
(iii) for liabilities arising from the failure by WTC to perform obligations
expressly undertaken by it in the last sentence of Section 6.05, or (iv) for
taxes, fees or other charges on, based on or measured by any fees, commissions
or compensation received by WTC in connection with any of the transactions
contemplated by this Agreement or the Note Agreements. In particular, but not by
way of limitation:
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(a) WTC shall not be liable for any error of judgment made in
good faith by a responsible officer of the Owner Trustee;
(b) No provision of this Agreement shall require WTC to expend
or risk funds or otherwise incur any financial liability in the performance of
any of the Owner Trustee's rights or powers hereunder, if WTC shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or provided
to it;
(c) Under no circumstance shall WTC be liable for indebtedness
evidenced by any Notes;
(d) [Reserved]
(e) WTC shall not be responsible for or in respect of the
recitals herein, the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor, the SPE or the Agent or for the form,
character, genuineness, sufficiency, value or validity of any Collateral or for
or in respect of the validity or sufficiency of the Indenture, and WTC shall in
no event assume or incur any liability, duty or obligation to any Noteholder,
the Depositor or to any Owner, other than as expressly provided for herein;
(f) WTC shall not be under any obligation to appear in,
prosecute or defend any action which in its opinion may require it to incur any
out-of-pocket expense or any liability, unless it shall be furnished with such
reasonable security and indemnity against such expense or liability as it may
require, and any out-of-pocket cost of the Owner Trustee as a result of such
actions shall be deductible from and a charge against the Trust Property to the
extent that such Trust Property is not subject to the Lien of the Indenture. The
Owner Trustee may, but shall be under no duty to, undertake such action as it
may deem necessary at any and all times, without any further action by any
Owner, to protect the Trust Property and the rights and interests of the Owners
pursuant to the terms of this Agreement and the Indenture; provided, however,
that WTC may obtain reimbursement for the out-of-pocket expenses and costs of
such actions, undertakings or proceedings from the Trust Property to the extent
that such portion of the Trust Property is not subject to the Lien of the
Indenture;
(g) Notwithstanding anything contained herein to the contrary,
neither WTC nor the Owner Trustee shall be required to take any action in any
jurisdiction other than in the State of Delaware if the taking of such action
will (i) require the consent or approval or authorization or order of or the
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giving of notice to, or the registration with or taking of any action in respect
of, any state or other governmental authority or agency of any jurisdiction
other than the State of Delaware; (ii) result in any fee, tax or other
governmental charge under the laws of any jurisdiction or any political
subdivisions thereof in existence on the date hereof other than the State of
Delaware becoming payable by WTC; or (iii) subject WTC to personal jurisdiction
in any jurisdiction other than the State of Delaware for causes of action
arising from acts unrelated to the consummation of the transactions by WTC or
the Owner Trustee, as the case may be, contemplated hereby.
7.02. Furnishing of Documents. The Owner Trustee will furnish to
the Agent, promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to the Owner Trustee hereunder or under the Note
Agreements, unless the Owner Trustee reasonably believes a copy already has been
furnished to the Agent.
7.03. [Reserved]
7.04. No Segregation of Moneys; No Interest. Except as otherwise
provided herein or in the Indenture, moneys received by the Owner Trustee
hereunder need not be segregated in any manner except to the extent required by
law and may be deposited under such general conditions as may be prescribed by
law, and neither the Owner Trustee nor WTC shall be liable for any interest
thereon.
7.05. Reliance; Employment of Agents and Advice of Counsel. (a)
The Owner Trustee shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. The Owner Trustee
may accept a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the manner of ascertainment of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate signed by the president or any vice president and by the
treasurer or an assistant treasurer or the secretary or an assistant secretary
of the relevant party, as to such fact or matter, and such certificate shall
constitute full protection to the Owner Trustee for any action taken or omitted
to be taken by it in good faith in reliance thereon.
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(b) In its exercise or administration of the trusts and powers
hereunder, including its obligations under Section 6.02(b) and any duties or
obligations under the Indenture, the Owner Trustee may, at the expense of the
Trust Property, employ agents, attorneys, accountants and auditors and enter
into agreements with any of them, and WTC, in its individual capacity and in its
capacity as Owner Trustee, shall not be answerable or accountable for the
default or misconduct of any such agents, attorneys, accountants or auditors or
for any action taken by the Owner Trustee in accordance with advice given as a
result of such employment or consultation, if such agents, attorneys,
accountants or auditors shall have been selected by the Owner Trustee with
reasonable care.
(c) In the administration of the trusts hereunder or in the
performance of its duties and obligations under any of the Note Agreements, the
Owner Trustee may act directly or, at the expense of the Trust Property, through
agents or attorneys and may, at the expense of the Trust Property, consult with
counsel, accountants, auditors and other skilled persons to be selected and
employed by it, and the Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the advice or opinion
of any such counsel, accountants or other skilled persons and not contrary to
this Agreement.
7.06. Not Acting in Individual Capacity. Except as provided in
this Article VII, in accepting the trusts hereby created WTC acts solely as
trustee hereunder and not in its individual capacity, and all persons having any
claim against the Owner Trustee by reason of the transactions contemplated by
the Note Agreements shall look only to the Trust Property for payment or
satisfaction thereof; provided, however, that nothing contained herein shall
protect WTC or the Owner Trustee against any liability to which either would
otherwise be subject by reason of or with respect to the matters contained in
clauses (i) to (iv) of Section 7.01.
7.07 Special Servicing and Collateral Fund Agreements. The Owner
Trustee acknowledges for the benefit of each Servicer or Master Servicer under a
Special Servicing Agreement to which AIC is a party and which relates to any of
the Securities that it is not entitled to exercise any contractual rights under
those various Special Servicing Agreements either prior to, or, if applicable,
after any foreclosure upon the Collateral due to a default under the Notes,
without the express prior written consent of such Servicer or Master Servicer.
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ARTICLE VIII
INDEMNIFICATION
8.01. Trust Expenses. The Owners, on a pro rata basis based upon
their respective Ownership Percentages, shall pay (or reimburse WTC for) all
reasonable out-of-pocket expenses, disbursements and advances incurred or made
by the Owner Trustee (including without limitation the amounts set forth in
clauses (a) through (d) of Section 5.01), to the extent not paid out of the
Trust Property, in accordance with any of the provisions of this Agreement and
the Note Agreements, including, without limitation, the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee may employ in connection with the exercise and performance
of its rights and duties under this Agreement and the Note Agreements.
8.02. Indemnification. (a) On a pro rata basis based upon their
respective Ownership Percentages, the Owners covenant to indemnify WTC for, and
to hold it harmless against, any loss, liability, obligations, damages,
penalties, taxes (excluding any taxes payable by WTC on or measured by any
compensation for services rendered by the Owner Trustee under this Agreement),
actions, claims, suits or out-of-pocket expenses or costs including the
reasonable fees and expenses of counsel) of any kind and nature whatsoever
incurred or arising out of or in connection with the acceptance or
administration of this trust (the "Indemnified Expenses"), to the extent not
paid out of the Trust Property, including the reasonable costs and out-of-pocket
expenses of defending itself against any claim of liability in the premises,
except for expenses resulting from the matters referred to in the proviso clause
to Section 7.06 or for the Owner Trustee's failure to use ordinary care to
dispense funds pursuant to Section 5.01. The indemnities under this Section 8.02
shall survive the termination of this Agreement.
(b) The Owner Trustee shall not be required to take or refrain
from taking any action under this Agreement or the Note Agreements (other than
the giving of notices) unless WTC shall have been indemnified, in manner and
form satisfactory to WTC, against any Indemnified Expenses which may be incurred
or charged in connection therewith. The Owner Trustee shall not be required to
take any action if WTC shall reasonably determine, or shall have been advised by
counsel, that such action is likely to result in personal liability, or is
contrary to the terms hereof or of any document contemplated hereby to which the
Owner Trustee is a party or otherwise contrary to law.
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8.03. Compensation. WTC shall receive as compensation for the
Owner Trustee's services hereunder a fee which shall be set forth in a separate
agreement with the Depositor.
8.04. Lien on Trust Property. WTC shall have a Lien on the Trust
Property for any compensation or indemnity due hereunder, such Lien to be
subject only to prior Liens of the Indenture, including the lien of the
Indenture Trustee.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
9.01. Termination of Trust Agreement. (a) This Agreement and the
trusts created hereby may be terminated by the Depositor at any time prior to
the issuance of the Notes and the pledge of the Collateral pursuant to Section
6.01(b). This Agreement and the trusts created hereby shall terminate and the
Trust Property shall, subject to the Indenture and Section 5.01 hereof, be
distributed to the Owners in accordance with their respective Ownership
Percentages, and this Agreement shall be of no further force or effect, upon the
sale or other final disposition by the Indenture Trustee of all moneys or other
property or proceeds of the Collateral and other assets otherwise held under and
in accordance with the terms of the Indenture and by the Owner Trustee of all
the Trust Property and the final distribution by the Owner Trustee in accordance
with Section 5.01 hereof. The bankruptcy, death or incapacity of any Owner shall
not operate to terminate this Agreement, nor entitle such Owner's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Property, nor
otherwise affect the rights, obligations and liabilities of the parties hereto.
(b) On any Payment Date on or after the date on which after
taking into account payments of principal on such Payment Date the aggregate
outstanding Note Principal Balance of the Notes is less than 25% of their
original Note Principal Balance, Owners may direct the Owner Trustee to redeem,
on behalf of the Trust, the Notes in whole but not in part. In addition, the
Owners may direct the Owner Trustee to redeem, on behalf of the Trust, the Notes
in whole, but not in part, at any time upon a determination, based upon an
opinion of counsel, that the Notes of any Class will not be treated for federal
income tax purposes as evidences of indebtedness. Any such redemption will be at
a redemption price equal to the aggregate Note Principal Balance of the
outstanding Notes and the amount of any expenses payable by the Trust. The
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Owners may exercise their right to cause the redemption upon (i) the election of
the Owners holding a majority of the ownership interests in the Trust and (ii)
the payment by or on behalf of each Owner of such Owner's pro rata share of the
purchase price. If the majority in interest of the Owners do not otherwise agree
on the disposition of the Securities, the Securities will be assigned to the
Owners, the Owner holding the largest Ownership Percentage will sell the
Securities at market value, and any proceeds remaining after payment of the
expenses of the Trust will first be applied to repay amounts provided to redeem
the Notes and then will be paid to each Owner pro rata based on their respective
interests in the Trust.
(c) Except as provided in Section 9.01(a), neither the Depositor
nor any Owner shall be entitled to revoke the Trust established hereunder.
(d) Upon the winding up of the Trust and its termination the
Owner Trustee shall cause the Certificate of Trust filed under the Act to be
canceled by filing a Certificate of Cancellation with the Secretary of State.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL TRUSTEES
10.01. Resignation of Owner Trustee; Appointment of Successor.
(a) The Owner Trustee may resign at any time without cause by giving at least 60
days' prior written notice to the Owners, such resignation to be effective on
the acceptance of appointment by a successor Owner Trustee under Section
10.01(b). Upon receipt of such notice of resignation, the Owners shall use their
best efforts promptly to appoint a successor Owner Trustee in the manner and
meeting the qualifications hereinafter provided by written instrument or
instruments delivered to such resigning Owner Trustee and the successor Owner
Trustee. In addition, the Owners may at any time remove the Owner Trustee for
its commission of a material breach of this Agreement by an instrument in
writing delivered to the Owner Trustee, such removal to be effective upon the
acceptance of appointment by a successor Owner Trustee under Section 10.01(b).
In case of the resignation or removal of the Owner Trustee, the Owners may
appoint a successor Owner Trustee by an instrument signed by the Owners. If a
successor Owner Trustee shall not have been appointed within 30 days after the
giving of written notice of such resignation or the delivery of the written
instrument with respect to such removal, the Owner Trustee or the Owners may
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apply to any court of competent jurisdiction to appoint a successor Owner
Trustee to act until such time, if any, as a successor shall have been appointed
as above provided. Thereupon, such court may appoint a successor Owner Trustee
as it may deem proper. Any successor Owner Trustee so appointed by such court
shall immediately and without further act be superseded by any successor Owner
Trustee appointed as above provided within one year from the date of the
appointment by such court.
(b) Any successor Owner Trustee, however appointed, shall
promptly execute and deliver to the predecessor Owner Trustee an instrument
accepting such appointment, and thereupon such successor Owner Trustee, without
further act, shall become vested with all the estates, properties, rights,
powers, duties and trusts of the predecessor Owner Trustee in the trusts
hereunder with like effect as if originally named the Owner Trustee herein and
shall be bound by all the terms and conditions of this Agreement. Nevertheless,
upon the written request of such successor Owner Trustee, and following the
receipt of any compensation or indemnity due hereunder, such predecessor Owner
Trustee shall execute and deliver an instrument transferring to such successor
Owner Trustee, upon the trusts herein expressed, all the estates, properties,
rights, powers, duties and trusts of such predecessor Owner Trustee, and such
predecessor Owner Trustee shall duly assign, transfer, deliver and pay over to
such successor Owner Trustee all of the Trust Property then held or subsequently
received by such predecessor Owner Trustee together with all necessary
instruments of transfer and assignments or other documents properly executed
necessary to effect such transfer and such of the records or copies thereof
maintained by the predecessor Owner Trustee who shall thereupon be discharged
from all duties and responsibilities under this Agreement. Any resignation or
removal of an Owner Trustee and appointment of a successor Owner Trustee shall
become effective upon acceptance of appointment by the successor Owner Trustee.
(c) Any successor Owner Trustee, however appointed, shall be a
bank or trust company incorporated and doing business within the United States
of America, having its principal place of business in the State of Delaware and
having a combined capital and surplus of at least $50,000,000, if there be such
an institution willing, able and legally qualified to perform the duties of the
Owner Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Owner Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Owner Trustee shall be
a party, or any corporation to which substantially all the corporate trust
business of the Owner Trustee may be transferred, shall, subject to the terms of
Section 10.01(c), be the Owner Trustee under this Agreement without further act.
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10.02. Appointment of Additional Trustees. (a) At any time or
times, for the purpose of meeting any legal requirements of any jurisdiction in
which any of the Trust Property may at the time be located, or in the event that
the Owner Trustee is unwilling to perform any act in any jurisdiction other than
the State of Delaware, the Owner Trustee shall have the power to appoint one or
more individuals or corporations either to act as co-trustee or co-trustees
jointly with the Owner Trustee or to act as separate trustee or separate
trustees and to vest in such person or persons, in such capacity, such title to
the Trust Property or any part thereof, and such rights, powers, duties, trusts
or obligations as may be necessary for the Trust to carry out the purposes
hereunder, subject to the remaining provisions of this Section 10.02.
(b) Unless otherwise provided in the instrument appointing such
co-trustee or separate trustee, every co-trustee or separate trustee shall, to
the extent permitted by law, be appointed subject to the following terms,
namely:
(i) All rights, powers, trusts, duties and obligations
conferred by this Agreement upon the Owner Trustee in respect of
the custody, control or management of moneys, papers, securities
and other personal property shall be exercised solely by the
Owner Trustee;
(ii) All rights, powers, trusts, duties and obligations
conferred or imposed by this Agreement upon the trustees shall
be conferred or imposed upon and exercised or performed by the
Owner Trustee, or by the Owner Trustee and such co-trustee or
co-trustees, or separate trustee and separate trustees jointly,
except to the extent that, under the law of any jurisdiction in
which any particular act or acts are to be performed, the Owner
Trustee shall be incompetent or unqualified to perform such act
or acts, or in the event that the Owner Trustee is unwilling to
perform any act in any jurisdiction other than the State of
Delaware, in which event such act or acts shall be performed by
such co-trustee or co-trustees or separate trustee or separate
trustees alone;
(iii) Any request in writing by the Owner Trustee to
any co-trustee or separate trustee to take or refrain from
taking any action hereunder shall be sufficient warrant for the
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taking, or the refraining from taking, of such action by such
co-trustee or separate trustee;
(iv) Any co-trustee or separate trustee to the extent
permitted by law may delegate to the Owner Trustee the exercise
of any right, power, trust, duty or obligation, discretionary or
otherwise;
(v) The Owner Trustee at any time, by an instrument in
writing may accept the resignation of or remove any co-trustee
or separate trustee appointed under this Section 10.02. A
successor to any co-trustee or separate trustee so resigned or
removed may be appointed in the manner provided in this Section
10.02;
(vi) Neither the Owner Trustee nor any co-trustee or
separate trustee appointed hereunder shall be personally liable
by reason of any act or omission of any other trustee hereunder
selected by it with reasonable care;
(vii) Any demand, request, direction, appointment,
removal, notice, consent, waiver or other action in writing
executed by the Owners and delivered to the Owner Trustee shall
be deemed to have been delivered to each such co-trustee or
separate trustee; and
(viii) Any moneys, papers, securities or other items of
personal property received by any such co-trustee or separate
trustee hereunder shall forthwith, so far as may be permitted by
law, be turned over to the Owner Trustee to be held pursuant to
the terms hereof.
(c) Upon the acceptance in writing of such appointment by any
such co-trustee or separate trustee, it or he shall be vested with the estate,
right, title and interest in the Trust Property, or portion thereof, and with
such rights, powers, duties, trusts or obligations, jointly or separately with
the Owner Trustee, as set forth herein or otherwise, all as shall be specified
in the instrument of appointment, subject to all the terms hereof. Every such
acceptance shall be filed with the Owner Trustee.
(d) In case any co-trustee or separate trustee shall die, become
incapable of acting, resign or be removed, the estate, right, title and interest
in the Trust Property and all rights, powers, trusts, duties and obligations of
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said co-trustee or separate trustee shall, so far as permitted by law, vest in
and be exercised by the Owner Trustee unless and until a successor co-trustee or
separate trustee shall be appointed pursuant to this Section 10.02.
10.03 Amendments to Certificate of Trust. Upon the change in
identity of any of the Trustees as provided for in this Article X, the Trustees
shall cause an amendment to the Certificate of Trust filed under the Act to be
filed with the Secretary of State of the State of Delaware indicating the change
with respect to such Trustee's identity.
ARTICLE XI
MISCELLANEOUS
11.01. Supplements, Amendments and Waivers. (a) At the written
request of Owners holding, in the aggregate, not less than 66-2/3% of the
ownership interest in the Trust, amendments of, or waivers of compliance with,
any provisions of this Agreement (other than Sections 2.04, 2.10, 3.03, 9.01 and
11.02, which, after the sale and issuance of the Notes, shall also require the
consent of holders of not less than 66-2/3% of the Note Principal Balance of the
Notes then Outstanding) shall be effected by a written instrument signed by the
Owner Trustee and all of such Owners, but if in the opinion of the Owner Trustee
any instrument required to be so executed adversely affects any right, duty or
liability of, or immunity or indemnity in favor of, the Owner Trustee under this
Agreement or any of the documents contemplated hereby to which the Owner Trustee
is a party, or would cause or result in any conflict with or breach of any
terms, conditions or provisions of, or default under, the charter documents or
by-laws of the Owner Trustee or any document contemplated hereby to which the
Owner Trustee is a party, or would violate the fundamental purpose of the Trust,
the Owner Trustee may in its sole discretion decline to execute such instrument.
(b) Prior to the execution of any amendment, supplement or
waiver to this Agreement, the Owner Trustee shall be entitled to obtain (at the
expense of the Trust Property) an opinion of counsel as to whether such proposed
amendment, supplement or waiver is permitted by the terms hereof.
11.02. No Legal Title to Trust Property in Owners. The Owners
shall not have legal title to any part of the Trust Property and shall only be
entitled to receive distributions with respect to their undivided beneficial
interest therein pursuant to Section 5.01. No transfer, by operation of law or
otherwise, of any right, title and interest of the Owners in and to their
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undivided beneficial interests in the Trust Property or hereunder shall operate
to terminate this Agreement or the trusts hereunder or entitle any successor or
transferee to an accounting or to the transfer to it of legal title to any part
of the Trust Property.
11.03. Pledge of Collateral by Owner Trustee is Binding. The
pledge of the Collateral to the Indenture Trustee by the Trust made under the
Indenture and pursuant to the terms of this Agreement shall bind the Owners and
shall be effective to transfer or convey the rights of the Trust and the Owners
in and to such Collateral to the extent set forth in the Indenture. No purchaser
or other grantee shall be required to inquire as to the authorization,
necessity, expediency or regularity of such pledge or as to the application of
any proceeds with respect thereto by the Owner Trustee.
11.04. Limitations on Rights of Others. Nothing in this
Agreement, whether express or implied, shall be construed to give to any person
other than WTC or the Owner Trustee, as the case may be, and the Owners any
legal or equitable right in the Trust Property or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein; provided;
however, that the Trustee and the Noteholders are third party beneficiaries
hereof.
11.05. Non-Petition. Each of the Depositor, the SPE and WTC
agrees that it will not seek to commence a case under the Bankruptcy Code or
similar law against the Trust prior to one year and one day after the Notes have
been paid in full. The provisions of this paragraph shall survive any
termination of this Agreement.
11.06. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and delivered by
hand or mailed by certified mail, postage prepaid, if to the Owner Trustee,
addressed to ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Administration, or to such other address
as the Owner Trustee may have set forth in a written notice to the Owners and to
the Agent; if to the Agent, addressed to it at Asset Investors Corporation, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: President or such other
address as the Agent may have furnished to the Owner Trustee and the Owners; and
if to an Owner, addressed to it at the address set forth for such Owner in the
register maintained by the Owner Trustee. Whenever any notice in writing is
required to be given by the Owner Trustee, such notice shall be deemed given and
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such requirement satisfied if such notice is mailed by certified mail, postage
prepaid, addressed as provided above.
11.07. Authorization for Action Deemed to be Given. Any action
taken by the Owner Trustee pursuant to this Agreement in the presence of the
Depositor, the Agent or their respective counsel, whether with or without
written instructions directing the Owner Trustee to take such action, shall be
conclusively deemed to be authorized and taken under the direction of the
Depositor or the Agent, as the case may be.
11.08. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.09. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
11.10. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, WTC, the
Owner Trustee, each Owner and their respective successors and assigns, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by an Owner shall bind the successors and assigns of such
Owner.
11.11. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
11.12. Governing Law. This Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the State of
Delaware, including all matters of construction, validity and performance.
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IN WITNESS WHEREOF, the parties hereto have caused this Deposit
Trust Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
WILMINGTON TRUST COMPANY
By: /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: W. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Senior Financial Services Officer
ASSET INVESTORS CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and Chief
Financial Officer
ASSET INVESTORS SECURED FINANCING CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President, Secretary and
Treasurer
