AMENDED AND RESTATED TRUST AGREEMENT among First Tennessee Bank National Association, as Seller, First Horizon Asset Securities Inc., as Depositor, and Wilmington Trust Company, as Owner Trustee Dated as of November 21, 2006 FIRST HORIZON ABS TRUST...
AMENDED
AND RESTATED
among
First
Tennessee Bank National Association,
as
Seller,
First
Horizon Asset Securities Inc.,
as
Depositor,
and
Wilmington
Trust Company,
as
Owner
Trustee
Dated
as
of November 21, 2006
FIRST
HORIZON ABS TRUST 2006-HE2
First
Horizon
HELOC
Notes, Series 2006-HE2
AMENDED
AND RESTATED TRUST AGREEMENT, dated as of November 21, 2006, among First
Tennessee Bank National Association, as seller (the “Seller”), First Horizon
Asset Securities Inc., as depositor (the “Depositor”) and Wilmington Trust
Company, a Delaware banking corporation, acting hereunder not in its individual
capacity but solely as owner trustee (the “Owner Trustee”).
WHEREAS,
the Seller, the Depositor and the Owner Trustee entered into a Trust Agreement
(the “Original Trust Agreement”), dated as of November 14, 2006, and filed with
the Secretary of State of the State of Delaware a Certificate of Trust on
November 14, 2006, creating First Horizon ABS Trust 2006-HE2 (the “Trust”);
and
WHEREAS,
the Seller, the Depositor and the Owner Trustee desire to enter into this
Amended and Restated Trust Agreement in order to amend and restate in its
entirety the Original Trust Agreement and to provide for the operation of the
Trust upon the terms and conditions more particularly set forth
herein.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
contained, the parties hereto hereby amend and restate in its entirety the
Original Trust Agreement and agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Capitalized
Terms.
For all
purposes of this Agreement, the following terms shall
have the meanings set forth below:
Agreement:
This
Amended and Restated Trust Agreement, as
the
same may be amended
and
supplemented from time to time.
Bankruptcy
Action:
As
defined in Section 4.1.
Certificate:
If the
Transferor elects to evidence its interest in the Transferor Interest in
certificated form pursuant to Section 3.5, a certificate executed by the Trust
and authenticated by or on behalf of the Owner Trustee, substantially in the
form of Exhibit C.
Certificate
of Trust:
The
Certificate of Trust in the form of Exhibit A to the Original Trust Agreement,
which was filed for the Trust pursuant to Section 3810(a) of the Statutory
Trust
Act.
Code:
The
Internal Revenue Code of 1986, as amended from time to time, and Treasury
Regulations promulgated thereunder.
Corporate
Trust Office:
With
respect to (i) the Owner Trustee, the principal office of the Owner Trustee
at
which at any particular time its corporate business shall be administered,
which
office on the Closing Date is located at ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Department;
or (ii) the Indenture
Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate business shall be administered, which office
on
the Closing Date is located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Mortgage-Backed Securities Group, First Horizon ABS Trust ▇▇▇▇-▇▇▇
-▇-
▇▇▇▇▇▇▇▇▇:
First
Horizon Asset Securities Inc., a Delaware corporation. Distribution Account:
As
defined in the Sale and Servicing Agreement.
ERISA:
As
defined in Section 3.13.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended. Expenses: As defined in Section
8.2.
Indemnification
Agreement:
The
Indemnification Agreement dated as of November 15, 2006 by and among the
Insurer, the Seller, the Depositor and the Trust.
Indenture:
The
Indenture, dated as of November 1, 2006, between the Trust and the Indenture
Trustee.
Indenture
Trustee:
The
Bank of New York, a New York banking corporation, as Indenture Trustee under
the
Indenture or any successor indenture trustee under the Indenture appointed
in
accordance with such agreement.
Initial
Note Principal Balance:
With
respect to the Notes, $355,000,000.
Insurance
and Indemnity Agreement:
The
Insurance and Indemnity Agreement dated as of November 21, 2006 among the Trust,
the Depositor, the Seller, the Master Servicer and the Insurer, including any
amendments and supplements thereto in accordance with the terms
thereof.
Master
Servicer:
First
Tennessee Bank National Association, in its capacity as Master Servicer under
the Sale and Servicing Agreement, or any successor master servicer appointed
pursuant to the Sale and Servicing Agreement.
Non-U.S.
Person:
Any
Person other than (i) a citizen or resident of the United States, (ii) an entity
treated for United States federal income tax purposes as a corporation or
partnership created or organized in or under the laws of the United States
or
any state thereof, including the District of Columbia (unless, in the case
of an
entity treated as a partnership, Treasury regulations provide otherwise), (iii)
an estate that is subject to U.S. federal income tax regardless of the source
of
its income, (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States persons have authority to control all substantial decisions of the trust,
or (v) certain trusts in existence on August 20, 1996 and treated as United
States persons on such date that elect to continue to be so
treated.
Original
Trust Agreement:
As
defined in the recitals hereof.
-3-
Owner
Trust Estate:
The
contribution of $1 referred to in Section 2.5, the Trust Estate, and any other
assets of the Trust that are not part of the Trust Estate.
Owner
Trustee:
Wilmington Trust Company, a Delaware banking corporation, not in its individual
capacity but solely as owner trustee under this Agreement, and any successor
owner trustee hereunder.
Plan:
As
defined in Section 3.13.
Premium
Letter:
The
letter agreement dated as of November 15, 2006 by and among the Insurer, the
Seller, the Depositor and the Trust with respect to the premium and other
amounts payable in respect of the Insurance Policy.
Prospective
Transferor:
Any
prospective purchaser or prospective transferee of the Transferor
Interest.
Rating
Agency Condition:
With
respect to certain actions requiring Rating Agency consent, that each Rating
Agency shall have been given 10 days (or such shorter period as is acceptable
to
each Rating Agency) prior notice thereof and that each of the Rating Agencies
shall have notified the Depositor, the Seller, the Owner Trustee, the Indenture
Trustee, the Insurer and the Trust in writing that such action will not result
in a reduction or withdrawal of the then current rating of the Notes, without
regard to the Insurance Policy.
Record
Date:
The
Business Day immediately preceding the related Payment Date; provided, however,
that if any Note becomes a Definitive Note, the Record Date for such Note shall
be the last Business Day of the month immediately preceding the month in which
the related Payment Date occurs.
Registrar:
The
Bank of New York, a New York banking corporation, in its capacity as Registrar
hereunder, and any successor or permitted assignee thereof.
Sale
and Servicing Agreement:
The
Sale and Servicing Agreement dated as of November 1, 2006, among the Seller,
the
Depositor, the Trust, the Master Servicer and the Indenture
Trustee.
Secretary
of State:
The
Secretary of State of the State of Delaware.
Seller:
First
Tennessee Bank National Association, a national banking association as Seller
under the Mortgage Loan Purchase Agreement.
Statutory
Trust Act:
Chapter
38 of Title 12 of the Delaware Code, 12 Del. Code § 3801 et seq., as the same
may be amended from time to time.
Transaction
Documents:
Each of
this Agreement, the Insurance and Indemnification Agreement, the Indemnification
Agreement, the Premium Letter, the Administration Agreement, the Indenture
and
the Sale and Servicing Agreement, as each may be amended or supplemented from
time to time.
Transferor:
The
owner of the Transferor Interest as shown on the Transferor Interest Register.
The initial owner of the Transferor Interest as shown on the Transferor Interest
Register is First Tennessee Bank National Association.
-4-
Transferor
Interest:
As
defined in Section 3.2.
Transferor
Interest Register:
A
register kept by the Registrar in which, subject to such reasonable regulations
as it may prescribe, the Registrar shall provide for the registration of the
ownership of the Transferor Interest and the registration of transfers of the
Transferor interest. The location of the Registrar shall be the same as that
of
the Corporate Trust Office of the Indenture Trustee.
Treasury
Regulations:
Regulations, including proposed or temporary regulations, promulgated under
the
Code. References herein to specific provisions of proposed or temporary
regulations shall include analogous provisions of final Treasury Regulations
or
other successor Treasury Regulations.
Trust:
First
Horizon ABS
Trust
2006-HE2, the Delaware statutory trust created pursuant to this
Agreement.
Trust
Estate:
The
assets subject to the Sale and Servicing Agreement, the Mortgage Loan Purchase
Agreement, this Trust Agreement and the Indenture, assigned to the Indenture
Trustee pursuant to the Indenture, which assets consist of (i) each Mortgage
Loan and the related Mortgage File, including its Principal Balance (including
all Additional Balances resulting from Draws made pursuant to the related
Mortgage Note prior to the termination of the Trust) and all collections in
respect of interest and principal received after the Cut-Off Date; (ii) property
that secured a Mortgage Loan that has become REO Property; (iii) the Seller's
rights under any insurance policies maintained by the Mortgagors or the Master
Servicer in respect of the Mortgage Loans (including any Insurance Proceeds);
(iv) such other assets as shall from time to time be identified as on deposit
in
the Collection Account and Distribution Account in accordance with the Sale
and
Servicing Agreement; (v) the Depositor's rights under the Mortgage Loan Purchase
Agreement; (vi) the Insurance Policy and the proceeds of any draw thereunder;
(vii) any proceeds of any of the foregoing (i) through (vi); and (viii) all
other assets included or to be included in the Trust for the benefit of
Noteholders and the Insurer.
Underwriter: FTN
Financial
Capital
Markets, a division of First Tennessee Bank National Association.
Section
1.2 Other
Definitional Provisions.
(a) Capitalized
terms used herein and not otherwise defined herein have the meanings assigned
to
them in the Sale and Servicing Agreement or, if not defined therein, in the
Indenture.
(b) All
terms
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.
(c) As
used
in this Agreement and in any certificate or other document made or delivered
pursuant hereto or thereto, accounting terms not defined in this Agreement
or in
any such certificate or other document, and accounting terms partly defined
in
this Agreement or in any such certificate or other document to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of accounting
terms in this Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
-5-
(d) The
words
“hereof,” “herein,” “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement; Section and Exhibit references contained in this
Agreement are references to Sections and Exhibits in or to this Agreement unless
otherwise specified; and the term “including” shall mean “including without
limitation.”
(e) The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.
(f) Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
ARTICLE
II
ORGANIZATION
Section
2.1 Name.
The Trust continued hereby shall be known as “First Horizon ABS Trust 2006-HE2,”
in which name the Owner Trustee may conduct the business of the Trust and
make
and
execute contracts and other instruments on behalf of the Trust
and
the Trust may ▇▇▇
and be
sued.
Section
2.2 Office.
The
office of the Trust shall be in care of the Owner Trustee at the Corporate
Trust
Office or at such other address in the State of Delaware as the Owner Trustee
may designate by written notice to the Transferor and Insurer.
Section
2.3 Purposes
and Powers.
(a) The
purpose of the Trust is to engage in the following activities:
(i) to
issue
the Notes pursuant to the Indenture and the Transferor Interest
pursuant to this Agreement and to sell such Notes and Transferor
Interest;
(ii) with
the
proceeds of the sale of the Notes and the Transferor Interest, to fund start-up
and transactional expenses of the Trust and to pay the balance to the Depositor,
or at the direction of the Depositor, to pay the Seller, as its interests may
appear pursuant to the Sale and Servicing Agreement;
-6-
(iii) to
assign, grant, transfer, pledge, mortgage and convey the Trust Estate pursuant
to the Indenture and to hold, manage and distribute to the Transferor pursuant
to the terms of the Sale and Servicing Agreement any portion of the Trust Estate
released from the lien of, and remitted to the Trust pursuant to, the
Indenture;
(iv) to
enter
into and perform its obligations under the Transaction Documents to which it
is
to be a party;
(v) to
engage
in those activities, including executing agreements, instruments and
certificates, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vi) subject
to compliance with the Transaction Documents, to engage in such other activities
as may be required in connection with conservation of the Owner Trust Estate
and
the making of distributions to the Noteholders and the Transferor.
The
Trust
is hereby authorized to engage in the foregoing activities. The Trust shall
not
engage in
any
activity other than in connection with the foregoing
or other than as required or authorized
by the
terms of this Agreement or the Transaction Documents.
Section
2.4 Appointment
of Owner Trustee.
The
Depositor has appointed the Owner Trustee as trustee of the Trust, to have
all
the rights, powers and duties set forth herein.
Section
2.5 Initial
Capital Contribution of Owner Trust Estate. Pursuant to the Original Trust
Agreement, the Depositor sold, assigned, transferred, conveyed and set over
to
the Trust the sum of $1. The Owner Trustee hereby acknowledges receipt in trust
from the Depositor, as of the date of the Original Trust Agreement, of the
foregoing contribution, which shall constitute the
initial Owner Trust Estate and shall be deposited in the Distribution
Account. The Depositor shall
pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the
owner
Trustee, promptly reimburse the Owner Trustee for any such expenses paid by
the
Owner Trustee.
Section
2.6 Declaration
of Trust; Fiscal Year.
(a) The
Owner
Trustee hereby declares that it will hold the Owner Trust Estate in trust upon
and subject to the conditions set forth herein for the use and benefit of the
Transferor, subject to the obligations of the Trust under the Transaction
Documents. It is the intention of the parties hereto that the Trust constitute
a
statutory trust under the Statutory Trust Act and that this Agreement constitute
the governing instrument of such statutory trust. It is the intention of the
parties hereto that, solely for income and franchise tax purposes, the Trust
shall be treated as a security arrangement, with the assets of the Trust being
the Owner Trust Estate and the Transferor being the owner of the Transferor
Interest. None of the Owner Trustee, the Transferor, the Seller or the Depositor
will make an affirmative election on Internal Revenue Service Form 8832 to
have
the Trust taxed as a corporation for federal income tax purposes. The parties
agree that, unless otherwise required by appropriate tax authorities, the Trust
will file or cause to be filed annual or other necessary returns, reports and
other forms, if any, consistent with the characterization of the Trust as
provided in the second preceding sentence for such tax purposes. Effective
as of
the date hereof, the Owner Trustee shall have all rights, powers and duties
set
forth herein and in the Statutory Trust Act with respect to accomplishing the
purposes of the Trust. The Owner Trustee has filed the Certificate of Trust
with
the Secretary of State.
-7-
(b) The
Trust's fiscal year will be January 1st
to
December 31st.
Section
2.7 Title
to Trust Property.
(a) Subject
to the Indenture, legal title to all the Owner Trust Estate 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 Owner Trust Estate to be
vested in a trustee or trustees,
in which case title shall be deemed to be vested in the Owner Trustee, a
co-owner trustee and/or a separate trustee, as the case may be.
(b) The
Transferor shall not have legal title to any part of the Owner Trust Estate.
No
transfer by operation of law or otherwise of any interest of the Transferor
shall operate to terminate this Agreement or the trusts hereunder or entitle
any
transferee to an accounting or to the transfer to it of any part of the Owner
Trust Estate.
Section
2.8 Situs
of Trust. The Trust will be located in the State of Delaware. All bank
accounts maintained by the Owner Trustee on behalf of the Trust shall be located
in the State of Delaware or the State of New York. The Trust shall not have
any
employees; provided, however, that nothing herein shall restrict or prohibit
the
Owner Trustee from having employees within or without the State of Delaware.
Payments will be received by the Trust only in Delaware or New York, and
payments will be made by the Trust only from Delaware or New York. The only
office of the Trust will be at the Corporate Trust Office in
Delaware.
Section
2.9 Representations
and Warranties of the Depositor. The Depositor hereby represents and
warrants to the Owner Trustee and the Insurer that:
(a) The
Depositor is a validly existing Delaware corporation in good standing. The
Depositor has the power and authority to execute and deliver this Agreement
and
to perform in accordance herewith; the execution, delivery and performance
of
this Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Depositor and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action of the Depositor; this Agreement evidences the valid, binding and
enforceable obligation of the Depositor; and all requisite action has been
taken
by the Depositor to make this Agreement valid, binding and enforceable upon
the
Depositor in accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally or the application of equitable principles
in any proceeding, whether at law or in equity.
-8-
(b) The
consummation of the transactions contemplated by this Agreement will not result
in (i) the breach of any terms or provisions of the Depositor's charter and
bylaws, (ii) the breach of any term or provision of, or conflict with or
constitute a default under or result in the acceleration of any obligation
under, any material agreement, indenture or loan or credit agreement or other
material instrument to which the Depositor, or its property is subject, or
(iii)
the violation of any law, rule, regulation, order, judgment or decree to which
the Depositor or its respective property is subject.
(c) To
the
Depositor's best knowledge, 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
otherwise) or operations of the Depositor or its properties or might have
consequences that would materially and adversely affect its performance
hereunder.
(d) To
the
Depositor's best knowledge, there are no proceedings or investigations pending
or threatened before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its
properties: (A) asserting the invalidity of this Agreement, (B) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or (C) seeking any determination or ruling that might materially
and
adversely affect the performance by the Depositor of its obligations under,
or
the validity or enforceability of, this Agreement.
Section
2.10 Federal
Income Tax Allocations Net income of the Trust for any month, as determined
for
Federal income tax purposes (and each item of income, gain, loss and deduction
entering into the computation thereof), shall be allocated to the
Transferor.
ARTICLE
III
TRANSFEROR
INTEREST AND TRANSFERS OF
THE
TRANSFEROR INTEREST
Section
3.1 Initial
Ownership. Upon the execution of this Agreement, the Transferor shall be the
sole beneficial owner of the Trust, and the Depositor agrees that it shall
have
no beneficial interest in the Trust and shall not be a beneficial owner of
the
Trust.
Section
3.2 The
Transferor Interest. The Transferor Interest (as defined below) shall
initially be uncertificated and shall represent the entire beneficial ownership
interest in the assets of the Owner Trust Estate, subject to the debt
represented by the Notes (the “Transferor Interest”). The Transferor Interest
may be certificated and represented by the Certificate as provided in Section
3.5. The Transferor Interest may be assigned by the Transferor as provided
in
Section 3.13.
Upon
the
completion of a transfer in accordance with the terms and conditions of this
Article III, a transferee of the Transferor Interest shall become the
Transferor, and shall be entitled to the rights and subject to the obligations
of the Transferor hereunder, upon such transferee's
acceptance of the Transferor Interest and upon such transfer being duly
registered
in
such
transferee's name pursuant to Section 3.4.
-9-
Section
3.3 Purchase
of Additional Balances. Pursuant to the Sale and Servicing Agreement,
Principal Collections may be applied by the Master Servicer to purchase
Additional Balances for the Trust during a Due Period. If on any Payment Date,
Principal Collections are insufficient to purchase all Additional Balances
required to be purchased on such Payment Date, the Transferor will advance
funds
to the Trust to purchase the Additional Balances that were not funded by
Principal Collections. The Transferor will be entitled to reimbursement for
any
such advanced funds from Principal Collections remaining on any Payment Date,
but only from the amounts released from the Trust pursuant to Section
5.01(a)II.(iii) of the Sale and Servicing Agreement. The Transferor will also
be
entitled to remove certain randomly selected Mortgage Loans from the Trust
as
reimbursement for any such advanced funds in accordance with Section 2.09 of
the
Sale and Servicing Agreement.
If
the
Transferor fails to advance to the Trust the amounts specified in the preceding
paragraph, the Seller will be required to purchase, and the Transferor will
be
required to sell, the Transferor Interest and the Seller will assume all of
the
obligations of the Transferor, including the obligation to make advances as
provided in the preceding paragraph.
Section
3.4 Registration
of Transfer and Exchange of Transferor Interest. The Owner Trustee hereby
appoints The Bank of New York as Registrar under this Agreement. The Registrar
shall keep or cause to be kept, at the office or agency maintained pursuant
to
Section 3.8, a Transferor Interest Register. Subject to such reasonable
regulations as the Registrar may prescribe, the Transferor Interest Register
shall provide for the registration of the Transferor Interest and of transfer
and exchange of the Transferor Interest as herein provided. The Registrar,
subject to Section 3.13, on behalf of the Trust shall note on the Transferor
Interest Register any transfer of the Transferor Interest.
Section
3.5 Certification
of Transferor Interest.
(a) The
Transferor shall initially hold the Transferor Interest in the form of an
uncertificated interest. The Transferor may elect at any time, by written notice
to the Owner Trustee, to have the Transferor Interest be evidenced by a
Certificate. If the Transferor elects to have the Transferor Interest be in
certificated form, the Certificate will be issued in registered form,
substantially in the form of Exhibit C, and shall be executed and delivered
by
the Owner Trustee to the Transferor. Upon issuance, the Certificate shall be
a
single certificate and shall represent the entire Transferor Interest. If,
after
electing to have the Transferor Interest evidenced by the Certificate, the
Transferor elects to have the Transferor Interest be an uncertificated interest,
the Transferor shall deliver to the Owner Trustee for cancellation the
Certificate previously issued to the Transferor.
(b) Each
Certificate shall be executed by manual or facsimile signature on behalf of
the
Owner Trustee by any responsible officer thereof. Any Certificate bearing the
manual or facsimile signature of an individual who was, at the time when such
signature was affixed, authorized to sign on behalf of the Owner Trustee shall
not be rendered invalid, notwithstanding that such individual ceased to be
so
authorized prior to the authentication and delivery of such Certificate or
does
not hold such office at the date of such Certificate. No Certificate shall
be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by or on behalf of the
Registrar by the manual signature of a Responsible Officer, and such certificate
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered
hereunder.
-10-
Section
3.6 Persons
Deemed Transferors. Prior to due assignment of the Transferor Interest
for registration of transfer, the Depositor, the Seller, the Owner Trustee,
the
Indenture Trustee,
the Insurer and the Registrar may treat the Person in whose name the Transferor
Interest
shall be
registered in the Transferor Interest Register as the owner thereof for the
purpose of receiving distributions pursuant to Section 5.2 and for all other
purposes whatsoever, and none of the Depositor, the Seller, the Owner Trustee,
the Indenture Trustee, the Insurer or the Registrar shall be bound by any notice
to the contrary.
Section
3.7 [Reserved].
Section
3.8 Maintenance
of Office or Agency. The Registrar shall maintain an office or offices or
agency or agencies (initially, the Corporate Trust Office of the Indenture
Trustee) where instructions for the transfer of the Transferor Interest may
be
delivered for registration of transfer or exchange pursuant to Section 3.4
and
where notices and demands to or upon the Registrar in respect of the Transferor
Interest and the Transaction Documents may be served. The Registrar shall give
prompt written notice to the Seller, the Insurer, the Owner Trustee and the
Transferor of any change in the location of the Transferor Interest Register
or
any such office or agency.
Section
3.9 Appointment
of Paving Agent. The Trust hereby appoints the Indenture Trustee as Paying
Agent under this Agreement. The Paying Agent shall make distributions to the
Transferor from the Distribution Account pursuant to Section 5.2 of this
Agreement and Section 5.01 of the Sale and Servicing Agreement and shall report
the amounts of such distributions to the Owner Trustee. The Paying Agent shall
have the revocable power to withdraw funds from the Distribution Account for
the
purpose of making the distributions referred to above. In the event that the
Indenture Trustee shall no longer be the Paying Agent hereunder, the Trust
shall
appoint a successor to act as Paying Agent (which shall at all times be a
corporation duly incorporated and validly existing under the laws of the United
States of America or any state thereof, authorized under such laws to exercise
corporate trust powers and subject to supervision or examination by federal
or
state authorities). The Trust shall cause such successor Paying Agent or any
additional Paying Agent appointed by it to execute and deliver to the Trust
an
instrument in which such successor Paying Agent or additional Paying Agent
shall
agree with the Trust that as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums, if any, held by it for payment
to
the Transferor in trust for the benefit of the Transferor until such sums shall
be paid to the Transferor. The Paying Agent shall return all unclaimed funds
to
the Owner Trustee, and upon removal of a Paying Agent, such Paying Agent shall
also return all funds in its possession to the Owner Trustee. Any reference
in
this Agreement to the Paying Agent shall include any co-paying agent unless
the
context requires otherwise.
Section
3.10 [Reserved].
Section
3.11 [Reserved].
-11-
Section
3.12 [Reserved].
Section
3.13 Restrictions
on Transfers of Transferor Interest. To the fullest extent permitted by
applicable law, the Transferor Interest shall not be sold, pledged, transferred
or assigned, except as provided below.
(a) The
Transferor Interest may not be acquired by or for the, account of (i) an
employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”)) that is subject to the
provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1)
of
the Code that is subject to Section 4975 of the Code, or (iii) any entity,
including an insurance company separate account or general account, whose
underlying assets include plan assets by reason of a plan's investment in the
entity or otherwise (each, a “Plan”). Each Prospective owner of the Transferor
Interest, other than the Seller or an affiliate of the Seller, shall represent
and warrant, in writing, to the Owner Trustee and the Registrar and any of
their
respective successors that:
(i) Such
Person is (A) a “qualified institutional buyer” as defined in Rule
144A
under the Securities
Act of 1933, as amended (the “Securities
Act”),
and is
aware that the seller of such Transferor Interest may be relying on the
exemption
from
the
registration requirements
of the Securities
Act provided by Rule
144A
and is acquiring
such
Transferor Interest for its own account or for the account
of one or more
qualified
institutional buyers for whom it is authorized
to act,
(B)
an institutional “accredited investor” as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act,
or
(C) a Person involved in the organization or operation of the Trust or
an
affiliate of such Person within the meaning of Rule 3a-7 of the 1940 Act, as
amended (including, but not limited to, the Seller or the
Depositor).
(ii)
Such
Person understands that such Transferor Interest has not been and will not
be
registered under the Securities Act and may be offered, sold, pledged or
otherwise transferred only to a person whom the seller reasonably believes
is
(A) a “qualified institutional buyer,” (B) “an accredited investor” or (C) a
Person involved in the organization or operation of the Trust or an affiliate
of
such Person, in each case in a transaction meeting the requirements of Rule
1.44A under the Securities Act or that is otherwise exempt from registration
under the Securities Act and in accordance with any applicable securities laws
of any state of the United States.
(iii) Such
Person shall comply with the provisions of Section 3.13(b), as applicable,
relating to the ERISA restrictions with respect to the acceptance or acquisition
of such Transferor Interest.
(iv) Such
Person is not a Non-U.S. Person, unless this restriction is waived in writing
as
to such Person by the Seller.
(b) Each
Prospective Transferor, other than the Depositor or an Affiliate of the
Depositor, shall represent and warrant, in writing, to the Owner Trustee and
the
Registrar and any of their respective successors, in accordance with Exhibit
B
hereto, that the Prospective Transferor is not (A) an “employee benefit plan”
within the meaning of Section 3(3) of ERISA, that is subject to the provisions
of Title I of ERISA, or (B) a “plan within the meaning of Section 4975(e)(1) of
the Code that is subject to Section 4975 of the Code or (C) any entity,
including an insurance company separate account or general account, whose
underlying assets include plan assets by reason of a plan's investment in the
entity or otherwise (each, a “Plan”) and is not directly or indirectly
purchasing such Transferor Interest on behalf of, as investment manager of,
as
named fiduciary of, as trustee of, or with assets of a Plan.
-12-
(c) The
Registrar shall not permit the transfer of the Transferor Interest unless
provided with IRS Form W-8ECI or W-9 in form satisfactory to the Paying Agent,
duly executed by the Transferee or his attorney duly authorized in
writing.
(d) [Reserved].
(e) No
pledge
or transfer of the Transferor Interest shall be effective unless such purchase
or transfer is (i) to a single beneficial owner and (ii) accompanied by an
Opinion of Counsel satisfactory to the Owner Trustee, which Opinion of Counsel
shall not be an expense of the Trust, the Registrar, the Master Servicer or
the
Seller, to the effect that (a) such pledge or transfer will not cause the Trust
to be treated for federal income tax purposes as an association taxable as
a
corporation, a taxable mortgage pool, or a publicly traded partnership taxable
as a corporation and (b) such pledge or transfer will not jeopardize the status
of the Notes as debt for all purposes.
ARTICLE
IV
ACTIONS
BY OWNER TRUSTEE
Section
4.1 Prior
Notice to the Transferor and the Insurer with Respect to Certain Matters.
With respect to the following matters, the Owner Trustee shall not take action,
and neither the Transferor nor the Insurer shall direct the Owner Trustee to
take any action, unless (i) the Insurer has provided its written consent and
(ii) at least 30 days before the taking of such action, the owner Trustee shall
have notified the Transferor in writing of the proposed action and neither
the
Transferor nor the Insurer shall have notified the Owner Trustee in writing
prior to the 30th day after such notice is given that the Transferor has
withheld consent or the Transferor or the Insurer has provided alternative
direction:
(a) the
initiation of any claim or lawsuit by the Trust (except claims or lawsuits
brought in connection with the collection
of the
Mortgage Loans) and the compromise of any action, claim or lawsuit brought
by or
against the Trust (except with respect to the aforementioned claims or lawsuits
for collection of the Mortgage Loans);
(b) the
election by the Trust to file an amendment to the Certificate of Trust (unless
such amendment is required to be filed under the Statutory Trust
Act);
-13-
(c) the
amendment
or other
change to this Agreement or any Transaction Document in circumstances where
the
consent of any Noteholder or the Insurer, is required;
(d) the
amendment
or other
change to this Agreement or any Transaction Document in circumstances where
the
consent of any Noteholder or the Insurer is not required and such amendment
materially adversely affects the interest of the Transferor;
(e) the
appointment pursuant to the Indenture of a successor Note Registrar, Paying
Agent or Indenture Trustee, or the consent to the assignment by the Note
Registrar, paying Agent or Indenture Trustee of its obligations under the
Indenture;
(f) the
consent to the calling or waiver of any default of any Transaction
(g) the
consent to the assignment by the Indenture Trustee or the Seller of their
respective obligations under any Transaction Document;
(h) except
as
provided in Article D{ hereof, dissolve, terminate or liquidate the Trust in
whole or in part;
(i) merge
or
consolidate the Trust with or into any other entity, or, except as contemplated
by the Section
3.16 of
the Indenture, convey or transfer all or substantially all of the Trust's assets
to any other entity;
(j) cause
the
Trust to incur, assume or guaranty any indebtedness other than the Notes, as
set
forth in this Agreement;
(k) do
any
act that conflicts with any other Transaction Document;
(l) do
any
act which would make it impossible to carry on the ordinary business of the
Trust;
(m) confess
a
judgment against the Trust;
(n) possess
Trust assets, or assign the Trust’s right to property, for other than a Trust
purpose; or
(o) change
the Trust’s purpose and powers from those set forth in this
Agreement.
-14-
In
addition, except as specifically contemplated by the Transaction Documents,
the
Trust shall not commingle its assets with those of any other entity. The Trust
shall (i) maintain its financial and accounting books and records separate
from
those of any other entity; (ii) maintain its office and bank accounts separate
from any other person or entity and to hold itself out as a separate entity;
(iii) not commingle its assets with those of any other person or entity; (iv)
conduct its own business in its own name and use stationery, invoices, checks
or
other business forms under its own name and not that of any Person, Noteholder
or Affiliate; (v) other than as expressly set forth herein, pay its indebtedness
and operating expenses from its own funds, and the Trust shall not pay the
indebtedness, operating expenses and liabilities of any other Person, Noteholder
or Affiliate; (vi) observe all formalities required under the Statutory Trust
Act and other formalities required by the Transaction Documents; (vii) not
guarantee or become obligated for the debts of any other person or entity;
(viii) not hold out its credit as being available to satisfy the obligation
of
any other person or entity; (ix) not acquire the obligations or securities
of
its Noteholders or its Affiliates; (x) other than as expressly set forth herein,
not make loans to any other person or entity or buy or hold evidence of
indebtedness issued by any other person or entity; (xi) other than as expressly
set forth herein, not pledge its assets for the benefit of any other person
or
entity; (xii) hold itself out as a separate entity from each Noteholder and
not
conduct any business in the name of any Noteholder; (xiii) correct any known
misunderstanding regarding its separate identity; (xiv) not identify itself
as a
division of any other person or entity; (xv) other than as expressly set forth
herein, the Trust will conduct business with the Noteholders or any Affiliate
thereof on an arm's-length basis; (xvi) maintain adequate capital in light
of
its contemplated business operations; (xvii) correct any known misunderstanding
regarding its separate identity; and (xviii) maintain appropriate records of
all
appropriate actions and shall maintain its office separate from the offices
of
the Depositor or the Seller, and any of their respective affiliates. For
accounting purposes, the Trust shall be treated as an entity separate and
distinct from the Transferor. The pricing and other material terms of all
transactions and agreements (other than the issuance of the Notes and the
Transaction Documents) to which the Trust is a party shall be intrinsically
fair
to all parties thereto; provided that the Owner Trustee shall be entitled to
rely on the determination of such fact by any party entitled to direct the
Owner
Trustee to enter into such agreement or transaction on behalf of the
Trust.
The
Owner
Trustee shall not have the power, except upon the direction of the Transferor
and with the consent of the Insurer (which consent shall not be unreasonably
withheld), and to the extent otherwise consistent with the Transaction
Documents, to (i) remove or replace the Seller or the Indenture Trustee, (ii)
institute proceedings to have the Trust declared or adjudicated a bankrupt
or
insolvent, (iii) consent to the institution of bankruptcy or insolvency
proceedings against the Trust, (iv) file a petition or consent to a petition
seeking reorganization or relief on behalf of the Trust under any applicable
federal or state law relating to bankruptcy, (v) consent to the appointment
of a
receiver, liquidator, assignee, trustee, sequestrator (or any similar official)
of the Trust or a substantial portion of the property of the Trust, (vi) make
any assignment for the benefit of the Trust's creditors, (vii) cause the Trust
to admit in writing its inability to pay its debts generally as they become
due,
or (viii) take any action, or cause the Trust to take any action, in furtherance
of any of the foregoing (any of the above, a “Bankruptcy Action”). So long as
the Indenture remains in effect, the Transferor shall not have the power to
take, and shall not take, any Bankruptcy Action with respect to the Trust or
direct the Owner Trustee to take any Bankruptcy Action with respect to the
Trust.
Section
4.2 [Reserved].
Section
4.3 Action
by Transferor with Respect to Bankruptcy.
To the
fullest extent permitted by applicable law, the Owner Trustee shall not have
the
power to commence a voluntary proceeding in bankruptcy relating to the Trust
without the prior consent and approval of (i) the Insurer; (ii) the Transferor;
and (iii) the
Indenture Trustee, and the delivery to the Owner Trustee by the Transferor
of a
certificate certifying that such Transferor reasonably believes that the Trust
is insolvent. The terns of this Section 4.3 shall survive for one year and
one
day following the termination of this Agreement
-15-
Section
4.4 Restrictions
on Transferor's Power.
The
Transferor shall not direct the Owner Trustee to take or refrain from taking
any
action if such action or inaction would be contrary to any obligation of the
Trust or the Owner Trustee under this Agreement or any of the Transaction
Documents or would be contrary to Section 2.3 hereof, nor shall the Owner
Trustee be obligated to follow any such direction, if given.
Section
4.5 Rights
of Insurer. Notwithstanding anything to the contrary in the Transaction
Documents, (a) the Owner Trustee shall provide prompt written notice to the
Insurer of any action, proceeding or investigation that to the actual knowledge
of the Owner Trustee could adversely affect the Trust or the Trust Estate or
the
rights or obligations of the Insurer under any of the Transaction Documents
or
under the Policy, (b) if no Insurer Default shall have occurred and be
continuing, and the Seller shall be actively defending any action, proceeding
or
investigation brought against the Trust or the Trust Estate that could
materially adversely affect the Trust or the Trust Estate or the rights or
obligations of the Insurer under any of the Transaction Documents or under
the
Policy, then the Owner Trustee shall, upon written notice from the insurer,
allow the Insurer to institute, assume or control the defense of such action,
proceeding or investigation and (c) without the prior written consent of the
Insurer (so long as no insurer Default shall have occurred and be continuing),
the Owner Trustee shall not (i) initiate any investigation, claim, suit or
proceeding by the Trust or compromise any claim, suit or proceeding brought
by
or against the Trust, other than with respect to the enforcement of any
receivable or any rights of the Trust thereunder, (ii) authorize the merger
or
consolidation of the Trust with or into any other statutory trust or other
entity (other than in accordance with Section 3.16 of the Indenture) or (iii)
amend the Certificate of Trust.
ARTICLE
V
APPLICATION
OF TRUST FUNDS; CERTAIN DUTIES
Section
5.1 Establishment
of Trust Account. The Trust hereby appoints the Indenture Trustee
for the purpose of establishing and maintaining the Distribution
Account and making the
distributions therefrom to the Persons entitled thereto pursuant to Section
5.01
of the Sale and Servicing
Agreement. The Trust shall cause the Indenture Trustee to establish and maintain
with
the
Indenture Trustee for the benefit of the Trust one or more Eligible Accounts
in
accordance with the Indenture.
Section
5.2 Application
Of Trust Funds.
(a) On
each
Payment Date, the Paying Agent shall make the distributions and payments
set forth in Section 5.01 of the Sale and Servicing Agreement from amounts
on
deposit in
the
Distribution Account.
(b) On
or
before the third Business Day following each Payment Date, the Paying Agent
shall send to DTC the statement provided to the Paying Agent by the Indenture
Trustee pursuant to Section 5.03 of the Sale and Servicing Agreement with
respect to such Payment Date.
-16-
(c) In
the
event that any withholding tax is imposed on the Trust's payment (or allocations
of income) to the Transferor, such tax shall reduce the amount otherwise
distributable to the Transferor in accordance with this Section 5.2. The Paying
Agent is hereby authorized and directed to retain from amounts otherwise
distributable to the Transferor sufficient funds for the payment of any tax
that
is legally owed by the Trust (but such authorization shall not prevent the
Paying Agent from contesting any such tax in appropriate proceedings, and
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings). The amount of any withholding tax imposed with respect to
the
Transferor shall be treated as cash distributed to the Transferor at the time
it
is withheld by the Trust and remitted to the appropriate taxing authority.
If
there is a possibility that withholding tax is payable with respect to a
distribution (such as a distribution to a Non-U.S. Person), the Paying Agent
may
in its sole discretion withhold such amounts in accordance with this paragraph
(c). In the event that the Transferor wishes to apply for a refund of any such
withholding tax, the Owner Trustee and the Paying Agent shall reasonably
cooperate with the Transferor in making such claim so long as the Transferor
agrees to reimburse the Owner Trustee and the Paying Agent for any out-of-pocket
expenses incurred.
Section
5.3 Method
of Payment. Distributions required to be made to the Transferor on
any
Payment Date shall be made to the Transferor of record
on
the preceding Record Date in the
manner
set forth in Section 5.01 of the Sale and Servicing Agreement.
Section
5.4 [Reserved].
Section
5.5 Accounting
and Reports to the Transferor, the Internal Revenue Service and
Others.
Upon
written request of the Transferor, the Owner Trustee shall deliver to the
Transferor such information, reports or statements in its possession as may
be
required by the Code and applicable Treasury Regulations and as may be required
to enable the Transferor to prepare its respective federal and state income
tax
returns. Consistent with the Trust's characterization for tax purposes as a
security arrangement for the issuance of non-recourse debt, no federal income
tax return shall be filed on behalf of the Trust unless either (a) the Trust
or
the Transferor shall receive an Opinion of Counsel based on a change in
applicable law occurring after the date hereof that the Code requires such
a
filing or (b) the Internal Revenue Service shall determine that the Trust is
required to file such a return. In the event that the Trust is required to
file
tax returns, the Administrator, on behalf of the Trust, shall elect under
Section 1278 of the Code to include in income currently any market discount
that
accrues with respect to the Mortgage Loans. The Administrator, on behalf of
the
Trust, shall prepare or shall cause to be prepared any tax returns required
to
be filed by the Trust and shall remit such returns to the Transferor at least
five days before such returns are due to be filed. The Transferor, or any other
such party required by law, shall promptly sign such returns and deliver such
returns after signature to the Administrator and such returns shall be filed
by,
or at the direction of, the Administrator with the appropriate tax
authorities.
-17-
ARTICLE
VI
AUTHORITY
AND DUTIES OF OWNER TRUSTEE
Section
6.1 General
Authority.
The
Owner Trustee is authorized and directed to execute and deliver or cause to
be
executed and delivered the Notes, and the Transaction Documents to which the
Trust is to be a party and each certificate or other document attached as an
exhibit to or contemplated by the Transaction Documents to which the Trust
is to
be a party and any amendment or other agreement or instrument described in
Article III, in each case, in such form as the Owner Trustee shall approve,
as
evidenced conclusively by the Owner Trustee's execution thereof, and, on behalf
of the Trust, to direct the Indenture Trustee to authenticate and deliver the
Notes in an aggregate principal amount equal to $355,000,000 and to execute
on
behalf of the Trust any filing authorizations relating to financing statements
to be filed pursuant to the Indenture and any cross receipts related to the
Transaction Documents. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Transaction Documents.
Section
6.2 General
Duties. It shall be the duty of the Owner Trustee to discharge (or cause to
be discharged) all of its responsibilities pursuant to the terms of this
Agreement and the Transaction Documents to which it is a party and to administer
the Trust in the interest of the Transferor, subject to the Transaction
Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Transaction
Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Transaction Document, and the Owner Trustee shall not
be
held liable for the default or failure of the Administrator to carry out their
respective obligations under the Administration Agreement.
Section
6.3 Action
upon Instruction.
(a) Subject
to Article IV herein and in accordance with the terms of the Transaction
Documents, the Transferor or the Insurer (so long as no Insurer Default exists)
may by written instruction direct the Owner Trustee in the management of the
Trust but only to the extent consistent with the limited purpose of the
Trust.
(b) Notwithstanding
the foregoing, the Owner Trustee shall not be required to take any action
hereunder or under any Transaction Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is contrary
to the terms hereof or of any Transaction Document or is otherwise contrary
to
law.
(c) Whenever
the Owner Trustee is unable to decide between alternative courses of action
permitted or required by the terms of this Agreement or under any Transaction
Document,
the Owner Trustee shall promptly give notice (in such form as shall be
appropriate under the circumstances) to the Transferor and the Insurer (so
long
as no Insurer Default exists) requesting instruction from the Transferor and
the
Insurer (so long as no Insurer Default exists) as to the course of action to
be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Insurer, or if there is an Insurer Default,
the Transferor, received, the Owner Trustee shall not be liable on account
of
such action to any Person. In the event that the written instructions received
from the Transferor and the Insurer are in conflict, preference shall be given
to the Insurer. If the Owner Trustee shall not have received appropriate
instruction within 10 days of such notice (or within such shorter period of
time
as reasonably
may be specified in such notice or may be necessary under the circumstances)
it
may,
but
shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Transaction Documents, as it shall
deem
to be in the best interest of the Transferor, and shall have no liability to
any
Person for such action or inaction.
-18-
(d) In
the
event that the Owner Trustee is unsure as to the application of any provision
of
this Agreement or any Transaction Document or any such provision is ambiguous
as
to its application, or is, or appears to be, in conflict with any other
applicable provision, or in the event that this Agreement provides no direction
to the Owner Trustee or is silent or is incomplete as to the course of action
that the Owner Trustee is required to take with respect to a particular set
of
facts, the Owner Trustee may give notice (in such form as shall be appropriate
under the circumstances) to the Transferor and the Insurer requesting
instruction and, to the extent that the Owner Trustee acts or refrains from
acting in good faith in accordance with any such instruction received from
the
Insurer, or if there is an Insurer Default, the Transferor, the Owner Trustee
shall not be liable, on account of such action or inaction, to any Person.
If
the Owner Trustee shall not have received appropriate instruction within 10
days
of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Transaction Documents, as it shall
deem
to be in the best interest of the Transferor, and shall have no liability to
any
Person for such action or inaction.
Section
6.4 No
Duties. Except as Specified in this Agreement the Transaction Documents or
in Instructions The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain
from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee or the Trust is a party, except as expressly provided
by the terms of this Agreement, any Transaction Document to which the Owner
Trustee is a Party or in any written instruction received by the Owner Trustee
pursuant to Section 6.3; and no implied duties or obligations shall be read
into
this Agreement or any Transaction Document against the Owner Trustee. The Owner
Trustee shall have no responsibility for filing any financing or continuation
statement in any public office at anytime or to otherwise perfect or maintain
the perfection of any security interest or lien granted to it hereunder or
to
prepare, execute or file any tax or Securities and Exchange Commission filing
for the Trust or to record this Agreement or any Transaction Document. The
Owner
Trustee 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
Owner Trust Estate that result from actions by, or claims against, the Owner
Trustee in its individual capacity that are not related to the ownership or
the
administration of the Owner Trust Estate.
Section
6.5 No
Action Except Under Specified Documents or Instructions. The Owner Trustee
shall not manage, control, use, sell, dispose of or otherwise deal with any
part
of the Owner Trust Estate except (i) in accordance with the powers granted
to
and the authority conferred upon the Owner Trustee pursuant to this Agreement,
(ii) in accordance with the Transaction Documents or (iii) in accordance with
any document or instruction delivered to the Owner Trustee pursuant to Section
6.3 above.
-19-
Section
6.6 Restrictions.
The Owner Trustee shall not take any action (a) that is inconsistent with the
purposes of the Trust set forth in Section 2.3 hereof or (b) that, to the actual
knowledge of the Owner Trustee, would result in the Trust's becoming taxable
as
a corporation for Federal income tax purposes. The Transferor shall not direct
the Owner Trustee to take action that would violate the provisions of this
Section 6.6.
ARTICLE
VII
CONCERNING
THE OWNER TRUSTEE
Section
7.1 Acceptance
of Trusts and Duties. The Owner Trustee accepts the trusts hereby created
and agrees to perform its duties hereunder with respect to such trusts but
only
upon the terms of this Agreement and subject to the terms and conditions of
the
Transaction Documents. The Owner Trustee also agrees to disburse all moneys
actually received by it constituting part of the Owner Trust Estate upon the
terms of the Transaction Documents and this Agreement. The Owner Trustee shall
not be answerable or accountable hereunder or under any Transaction Document
under any circumstances, except (i) for its own willful misconduct, bad faith
or
gross negligence or (ii) in the case of the inaccuracy of any representation
or
warranty contained in Section 7.3 below expressly made by Wilmington Trust
Company. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the
Owner
Trustee shall not be liable for any error of judgment made by a responsible
officer of the Owner Trustee;
(b) no
provision of this Agreement or any Transaction Document shall require the Owner
Trustee to expend or risk funds or otherwise incur any financial liability
in
the performance of any of its rights or powers hereunder or under any
Transaction Document if the owner Trustee shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured or provided to it;
(c) under
no
circumstances shall the Owner Trustee be liable for indebtedness evidenced
by or
arising under any of the Transaction Documents, including the principal of
and
interest on the Notes;
(d) the
Owner
Trustee shall not be responsible for or in respect of the validity or
sufficiency of this Agreement or for the due execution hereof by the Depositor
or the Seller or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate
or
for or in respect of the validity or sufficiency of the Transaction Documents,
other than the execution and delivery of the Certificate (if the Transferor
Interest is certificated and represented by the Certificate as provided in
Section 3.5 above), and the Owner Trustee shall in no event assume or incur
any
liability, duty, or obligation to any Noteholder, to the Transferor or other
than as expressly provided for herein and in the Transaction
Documents;
-20-
(e) the
Owner
Trustee shall not be liable for the default or misconduct of the Seller, the
Indenture Trustee, or the Master Servicer under any of the Transaction Documents
or otherwise and the Owner Trustee shall have no obligation or liability to
perform the obligations of the Trust under this Agreement or the Transaction
Documents that are required to be performed by the Indenture Trustee under
the
Indenture, the Master Servicer under the Sale and Servicing Agreement, the
Administrator or the Seller under the Administration Agreement or the Registrar
or any Paying Agent hereunder;
(f) the
Owner
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Agreement, or to institute, conduct or defend any
litigation under this Agreement or otherwise or in relation to this Agreement
or
any Transaction Document, at the request, order or direction of the Transferor,
unless such Transferor has offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right.of the Owner Trustee
to perform any discretionary act enumerated in this Agreement or in any
Transaction Document shall not be construed as a duty, and the Owner Trustee
shall not be answerable for other than its gross negligence or willful
misconduct in the performance of any such act; and.
(g) The
Owner
Trustee shall not be liable with respect to any action taken or omitted to
be
taken by it in accordance with the instructions of the Insurer or the Transferor
to the extent such action or direction is permitted by the Transaction
Documents.
Section
7.2 Furnishing
of Documents. The Owner Trustee shall furnish (a) to the Transferor promptly
upon receipt of a written request therefor, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to the Owner Trustee under the Transaction Documents
and
(b) to the Insurer promptly upon written request therefor, copies of this
Agreement.
Section
7.3 Representations
and Warranties. Wilmington Trust Company hereby
represents and warrants to the Depositor, for the benefit of the Transferor
and
the Insurer, that:
(a) It
is a
banking corporation duly organized and validly existing in good standing under
the laws of the State of Delaware. It has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement;
(b) It
has
taken all corporate action necessary to authorize the execution and delivery
by
it of this Agreement, and this Agreement has been executed and delivered by
one
of its officers who is duly authorized to execute and deliver this Agreement
on
its behalf;
-21-
(c) Neither
the execution nor the delivery by it of this Agreement nor the consummation
by
it of the transactions contemplated hereby nor compliance by it with any of
the
terms or provisions hereof will contravene any Federal or Delaware law,
governmental rule or regulation governing the banking or trust powers of the
Owner Trustee or any judgment or order binding on it, or constitute any default
under its charter documents or by-laws or any indenture, mortgage, contract,
agreement or instrument to which it is a party or by which any of its properties
may be bound;
(d) This
Agreement has been duly authorized, executed and delivered by Wilmington Trust
Company and constitutes a valid, legal and binding obligation of Wilmington
Trust Company, enforceable against it in accordance with the terms hereof,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights generally and to
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(e) Wilmington
Trust Company 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 governmental agency,
which default might have consequences that would materially and adversely affect
the condition (financial or other) or operations of the Owner Trustee or its
properties or might have consequences that would materially adversely affect
its
performance hereunder; and
(f) No
litigation is pending or, to the best of Wilmington Trust Company’s knowledge,
threatened against Wilmington Trust Company which would prohibit its entering
into this Agreement or performing its obligations under this
Agreement,
Section
7.4 Reliance;
Advice of Counsel.
(a) The
Owner
Trustee shall incur no liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond, or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. The Owner Trustee
may accept a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full
force
and effect. As to any fact or matter the method of the determination 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
or
by the treasurer or other authorized officer of the relevant party, as to such
fact or matter and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith
in
reliance thereon.
(b) In
the
exercise or administration of the Trust hereunder and in the performance of
its
duties and obligations under this Agreement or the Transaction Documents, the
Owner Trustee (i) may act directly or through its agents or attorneys pursuant
to agreements entered into with any of them, and the Owner Trustee shall not
be
liable for the conduct or misconduct of such agents or attorneys if such agents
or attorneys shall have been selected by the Owner Trustee with reasonable
care,
and (ii) may consult with counsel, accountants and other skilled persons to
be
selected with reasonable care and employed by it. The Owner Trustee shall not
be
liable for anything done, suffered or omitted in good faith by it in accordance
with the opinion or advice of any such counsel, accountants or other such
persons and not contrary to this Agreement or any Transaction
Document.
-22-
Section
7.5 Not
Acting in Individual. Capacity Except as provided in this Article VII, in
accepting the trusts hereby created, Wilmington Trust Company acts solely as
Owner 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 this Agreement or any Transaction Document shall look only
to
the Owner Trust Estate for payment or satisfaction thereof.
Section
7.6 Owner
Trustee Not Liable for the Transferor Interest or the Mortgage Loans. The
recitals contained herein and in the Certificate (other than the signature
of
the Owner Trustee on the Certificate, if the Transferor Interest is certificated
and represented by the Certificate as provided in Section 3.5) shall be taken
as
the statements of the Depositor, and the Owner Trustee assumes no responsibility
for the correctness thereof. The Owner Trustee makes no representations as
to
the validity or sufficiency of this Agreement, of any Transaction Document
or of
the Transferor Interest (other than the signature of the Owner Trustee on the
Certificate, if the Transferor Interest is certificated and represented by
the
Certificate as provided in Section 3.5 above, and as specified in Section 7.3
hereof) or the Notes, or of any Mortgage Loans or related documents. The Owner
Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Mortgage Loan,
or
the perfection and priority of any security interest created by any Mortgage
Loan or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Owner Trust Estate or its ability to generate
the payments to be distributed to the Transferor under this Agreement or to
the
Noteholders under the Indenture, including, without limitation: the existence,
condition and ownership of any Mortgaged Property; the existence and
enforceability of any insurance thereon; the existence and contents of any
Mortgage Loan on any computer or other record thereof; the validity of the
assignment of any Mortgage Loan to the Trust or of any intervening assignment;
the completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan; the compliance by the Depositor, the Seller or the Master
Servicer with any warranty or representation made under any Transaction Document
or in any related document or the accuracy of any such warranty or
representation or any action of the Depositor, the Seller, the Indenture
Trustee, the Administrator or the Master Servicer or any subservicer taken
in
the name of the Owner Trustee.
Section
7.7 Owner
Trustee. May Own the Transferor Interest and the Notes The Owner Trustee in
its individual or any other capacity may become the owner or pledgee of the
Transferor Interest or the Notes and may deal with the Depositor, the Seller,
the Indenture Trustee, the Administrator and the Master Servicer in banking
transactions with the same rights as it would have if it were not Owner
Trustee.
Section
7.8 Licenses.
Upon written request, the Owner Trustee shall cooperate with the Administrator
in connection with the Administrator's causing the Trust to use its best efforts
to obtain and maintain the effectiveness of any licenses required in connection
with this Agreement and the Transaction Documents and the transactions
contemplated hereby and thereby until such time as the Trust shall terminate
in
accordance with the terms hereof; provided, however, that the Owner Trustee
shall have no duty to obtain and maintain any such licenses.
-23-
ARTICLE
VIII
COMPENSATION
OF OWNER TRUSTEE
Section
8.1 Owner
Trustee's Fees and Expenses.
Wilmington Trust Company shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between the Seller and the Owner Trustee, and the Owner Trustee shall be
entitled to be reimbursed by the Trust for its other reasonable expenses
hereunder, including 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 its
duties hereunder.
Section
8.2 Indemnification.
The Trust shall be liable as primary obligor for, and shall indemnify the Owner
Trustee (including in its individual capacity) and its successors, assigns,
agents, employees, officers, directors and servants (collectively, the
“Indemnified Parties”) from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, “Expenses”) which may at any
time be imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement,
the
Transaction Documents, the Owner Trust Estate, the administration of the Owner
Trust Estate or the action or inaction of the Owner Trustee hereunder, except
only that the Seller shall not be liable for or required to indemnify an
Indemnified Party from and against Expenses arising or resulting from any of
the
matters described in the third sentence of Section 7.1 hereof. The indemnities
contained in this Section 8.2 shall survive the resignation or termination
of
the Owner Trustee or the termination of this Agreement. In the event of any
claim, action or proceeding for which indemnity will be sought pursuant to
this
Section 8.2, the Owner Trustee's choice of legal counsel shall be subject to
the
approval of the Seller, which approval shall not be unreasonably
withheld.
Section
8.3 Payments
to the Owner. Trustee Any amounts paid to the Owner Trustee pursuant to this
Article VIII shall be deemed not to be a part of the Owner Trust Estate
immediately after such payment.
Section
8.4 Amounts
Unpaid. To the extent any amounts owed to the Owner Trustee (including in
its individual capacity) pursuant to Sections 8.1 and 8.2 hereof are not paid
to
the Owner Trustee within 15 days of a request for payment thereof, the Seller
agrees to pay such amounts to the Owner Trustee. The obligations of the Seller
contained in this Section 8.4 shall survive the resignation of the Owner Trustee
or the termination of the Trust or this Agreement.
-24-
ARTICLE
IX
TERMINATION
OF TRUST AGREEMENT
Section
9.1 Termination
of Trust Agreement.
(a) The
Trust
shall dissolve and commence winding up pursuant to the Statutory Trust Act
upon
the satisfaction and discharge of the Indenture pursuant to Section 4.1 of
the
Indenture and the termination of the Sale and Servicing Agreement. The
bankruptcy, liquidation, dissolution, death or incapacity of the Transferor
shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle
such Transferor'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
all
or any part of the Trust or Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.
(b) The
Transferor Interest shall be subject to an early redemption or termination
at
the option of the Master Servicer in the manner and subject to the provisions
of
the Sale and Servicing Agreement.
(c) Except
as
provided in Sections 9.1(a) and (b) above, none of the Depositor, the Seller,
the Administrator, or the Transferor shall be entitled to revoke or terminate
the Trust.
(d) Notice
of
any termination of the Trust, specifying the Payment Date upon which the Paying
Agent shall make payment of the final distribution in respect of the Transferor
Interest, or, if the Transferor Interest is certificated and represented by
the
Certificate, specifying the Payment Date upon which the Transferor shall
surrender the Certificate to the Paying Agent for payment of the final
distributions and cancellation, shall be given by the Registrar to the
Transferor, the Insurer and the Rating Agencies mailed within five Business
Days
of receipt by the Registrar of notice of such termination pursuant to (a) or
(b)
above, which notice given by the Registrar shall state (i) the Payment Date
upon
or with respect to which final payment of the Registrar shall be made upon
presentation and surrender of the Transferor Interest (if the Transferor
Interest is certificated and represented by the Certificate as provided in
Section 3.5) at the office of the Paying Agent therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Payment Date is not applicable, payments being made only
upon
submission of a claim for and acknowledgment of final distribution under the
Transferor Interest at the office of the Paying Agent therein specified. The
Registrar shall give such notice to the Owner Trustee and the Paying Agent
at
the time such notice is given to the Transferor. Upon presentation of such
submission of a claim for and acknowledgment of final distribution under the
Transferor Interest, the Paying Agent shall cause to be distributed to the
Transferor amounts distributable on such Payment Date pursuant to Section 5.01
of the Sale and Servicing Agreement.
In
the
event that the Transferor shall not have submitted claim for and acknowledgment
of
final
distribution under the Transferor Interest for cancellation within six months
after the date
specified in the above mentioned written notice, the Registrar shall give a
second written notice to the Transferor and the Insurer with respect thereto.
If
within one year after such second notice, the Registrar may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
Transferor concerning the final distribution, and the cost thereof shall be
paid
out of the funds and other assets that shall remain subject to this
Agreement.
-25-
Upon
the
termination of the Trust pursuant to this Article IX and, if any part of the
Transferor Interest is then evidenced by the Certificate, upon the surrender
of
such Certificate, the Owner Trustee shall sell, assign and convey to the holder
of the Transferor Interest or its designee, without recourse, representation
or
warranty, all right, title and interest of the Trust in the Trust Estate,
whether then existing or thereafter created, all moneys due or to become due
and
all amounts received with respect thereto and all proceeds thereof, except
for
amounts held by the Indenture Trustee pursuant to Section 8.01(b) of the Sale
and Servicing Agreement. The Owner Trustee shall execute and deliver such
instruments of transfer and assignment, in each case without recourse, as shall
be reasonably requested by the holder of the Transferor Interest to vest in
the
holder of the Transferor Interest or its designee all right, title and interest
which the Trust had in the Trust Estate.
(e) Upon
the
winding up of the Trust and the final payment on the Certificates in accordance
with Section 9.01(c), the Owner Trustee shall cause the Certificate of ▇▇▇▇▇
to
be canceled by filing a certificate of cancellation with the Secretary of State
in accordance with the Statutory Trust Act. Upon the filing of such certificate
of cancellation, this Agreement (except as otherwise provided herein) and the
Trust shall terminate and be of no further force or effect. Upon the filing
of
such certificate of cancellation, this Agreement (except as otherwise provided
herein) and the Trust shall terminate and he of no further force or
effect.
ARTICLE
X
SUCCESSOR
OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section
10.1 Eligibility
Requirements for Owner Trustee. The Owner Trustee shall at all times be a
corporation satisfying the provisions of the Statutory Trust Act, organized
pursuant to the laws of the United States or a state of the United States,
authorized to exercise corporate powers; having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by Federal
or
state authorities; having (or having a parent which has) a long-term rating
of
at least “A” (or its equivalent) by each of Standard & Poor's, and Fitch (or
as is otherwise acceptable to the Rating Agencies); and being acceptable to
the
Insurer. If such corporation shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or
examining authority, then for the purpose of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital
and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance
with
the provisions of this Section 10. 1, the Owner Trustee shall resign immediately
in the manner and with the effect specified in Section 10.2.
-26-
Section
10.2 Resignation
or Removal of Owner Trustee. The Owner Trustee may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof
to
the Trust, the Indenture Trustee, the Rating Agencies, the Insurer, the
Transferor and the Seller. As a condition to the effectiveness of any such
resignation, at least 15 calendar days prior to the effective date of such
resignation, the Owner Trustee shall provide (x) written notice to the Depositor
of any successor pursuant to this Section and (y) in writing and in form and
substance reasonably satisfactory to the Depositor, all information reasonably
requested by the Depositor in order to comply with its reporting obligation
under Item 6.02 of Form 8-K with respect to the resignation of the Owner
Trustee. Upon receiving such notice of resignation, the Indenture Trustee shall
promptly appoint a successor Owner Trustee with the consent of the Insurer,
which consent shall not be unreasonably withheld, by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Owner Trustee and one copy to the successor Owner Trustee. If no successor
Owner
Trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Owner Trustee
or the Insurer may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.
If
at any
time the Owner Trustee shall cease to be eligible in accordance with the
provisions of Section 10.1 above and shall fail to resign after written request
therefor by the Indenture Trustee, or if at any time the Owner Trustee shall
be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver
of the Owner Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Owner Trustee or of its property
or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the
Indenture Trustee may, with the written consent of the Insurer, and, at the
direction of the Insurer, shall, remove the Owner Trustee. If the Indenture
Trustee shall remove the Owner Trustee under the authority of the immediately
preceding sentence, (i) the Indenture Trustee shall promptly appoint a successor
Owner Trustee acceptable to the Insurer by written instrument in duplicate,
one
copy of which instrument shall be delivered to the outgoing Owner Trustee so
removed and one copy to the successor Owner Trustee and (ii) upon notice of
such
removal, the Seller shall pay all fees and expenses owed to the outgoing Owner
Trustee.
Any
resignation or removal of the Owner Trustee and appointment of a successor
Owner
Trustee pursuant to any of the provisions of this Section 10.2 shall not become
effective until acceptance of appointment by the successor Owner Trustee
pursuant to Section 10.3, written approval by the Insurer and payment by the
Seller of all fees and expenses owed to the outgoing Owner Trustee. The
Indenture Trustee shall provide notice of such resignation or removal of the
Owner Trustee to each of the Rating Agencies.
Section
10.3 Successor
Owner Trustee. Any successor Owner Trustee appointed pursuant to Section
10.2 shall execute, acknowledge and deliver to the Indenture Trustee, the
Insurer and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal
of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee (if acceptable to the Insurer), without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties,
and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Indenture Trustee and the predecessor Owner Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor Owner Trustee all
such rights, powers, duties, and obligations.
-27-
No
successor Owner Trustee shall accept appointment as provided in this Section
10.3 unless at the time of such acceptance such successor Owner Trustee shall
be
eligible pursuant to Section 10.1 above.
Upon
acceptance of appointment by a successor Owner Trustee pursuant to this Section
10.3, the Indenture Trustee shall mail notice of the successor of such Owner
Trustee to the Transferor, the Noteholders, the Insurer and the Rating Agencies.
If the Indenture Trustee fails to mail such notice within 10 days after
acceptance of appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of the Indenture
Trustee.
Section
10.4 Merger
or Consolidation of Owner Trustee. Any corporation into which the Owner
Trustee may be merged or converted or with which either 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 succeeding to all or
substantially all of the corporate trust business of the Owner Trustee, shall
be
the successor of the Owner Trustee, as the case may be, hereunder, provided
such
corporation shall be eligible pursuant to Section 10.01 above, without the
execution or filing of any instrument or any further act on the part of any
of
the parties hereto, anything herein to the contrary notwithstanding; provided
further that the Owner Trustee, shall mail notice of such merger or
consolidation to the Depositor, the Seller, the Indenture Trustee, the
Transferor, the Rating Agencies and the Insurer.
As
a
condition to the effectiveness of any merger or consolidation, at least 15
calendar days prior to the effective date of any merger or consolidation of
the
Owner Trustee, the Owner Trustee shall provide (x) written notice to the
Depositor and the Master Servicer of any successor pursuant to this Section
and
(y) in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to
a successor Owner Trustee.
Section
10.5 Appointment
of Co-Owner Trustee or Separate Owner Trustee. Notwithstanding any other
provisions of this Agreement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Owner Trust Estate
or
any Mortgaged Property may at the time be located, the Owner Trustee (with
the
consent of the Insurer, which consent shall not be unreasonably withheld) shall
have the power and shall execute and deliver all instruments to appoint one
or
more Persons to act as co-owner trustee, jointly with the Owner Trustee, or
separate owner trustee or separate owner trustees, of all or any part of the
Owner Trust Estate, and to vest in such Person, in such capacity, such title
to
the Owner Trust Estate, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Owner Trustee may consider necessary or desirable. No co-owner trustee
or
separate trustee under this Section 10.5 shall be required to meet the terms
of
eligibility as a successor Owner Trustee pursuant to Section 10.1 above and
no
notice of the appointment of any co-owner trustee or separate trustee shall
be
required pursuant to Section 10.3 above.
Each
separate trustee and co-owner trustee shall, to the extent permitted by law,
be
appointed and act subject to the following provision and
conditions:
-28-
(a) all
rights, powers, duties and obligations conferred or imposed
upon
the
Owner Trustee shall be conferred upon and exercised or performed by the Owner
Trustee and such separate owner trustee or co-owner trustee jointly (it being
understood that such separate owner trustee or co-owner trustee is not
authorized to act separately without the Owner Trustee joining in such act),
except to the extent that under any 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, in which event such
rights, powers, duties, and obligations (including the holding of title to
the
Owner Trust Estate or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-owner trustee
but
solely at the direction of the Owner Trustee;
(b) no
owner
trustee under this Agreement shall be personally liable by reason of any act
or
omission of any other owner trustee under this Agreement; and
(c) the
Owner
Trustee may at any time accept the resignation of or remove any separate trustee
or co-owner trustee.
Any
notice, request or other writing given to the Owner Trustee shall be deemed
to
have been given to the separate trustees and co-owner trustees, as if given
to
each of them. Every instrument appointing any separate owner trustee or co-owner
trustee, other than this Agreement, shall refer to this Agreement and to the
conditions of this Article X. Each separate trustee and co-owner trustee, upon
its acceptance of appointment, shall be vested with the estates specified in
its
instrument
of appointment, either jointly with the Owner Trustee or separately, as may
be
provided therein, subject to all the provisions of this Agreement, specifically
including every provision of this Agreement relating to the conduct of,
affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee.
Any
separate trustee or co-owner trustee may at any time appoint the Owner Trustee
as its agent or attorney-in-fact with full power and authority, to the extent
not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any owner trustee or co-owner
trustee shall die, become incapable of acting, resign or be removed, all of
its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment
of
a new or successor trustee.
ARTICLE
XI
MISCELLANEOUS
Section
11.1 Supplements
and Amendments. This Agreement may be amended by the Depositor, the Seller
and the Owner Trustee with prior written notice to the Rating Agencies and
the
Indenture Trustee and with the consent of the Insurer (which consent shall
not
heunreasonably withheld), but without the consent of any of the Noteholders,
the
Transferor or the Indenture Trustee, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
in
this Agreement or of modifying in any manner the rights of the Noteholders
or
the Transferor; provided, however, that such action shall not adversely affect
in any material respect the interests of any Noteholder, the Transferor or
the
Insurer. An amendment described above shall be deemed not to adversely affect
in
any material respect the interests of any Noteholder, the Transferor or the
Insurer if either (i) an Opinion of Counsel is obtained to such effect, or
(ii)
the party requesting the amendment satisfies the Rating Agency Condition with
respect to such amendment.
-29-
This
Agreement may also be amended from time to time by the Seller, the Depositor
and
the Owner Trustee, with the prior written consent of the Rating Agencies, the
Insurer and the Indenture
Trustee, the Noteholders evidencing more than 50% of the Percentage Interests
in
the Notes
and
the Transferor, for the purpose of adding any provisions to or changing in
any
manner
or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Transferor; provided, however,
that
no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections
of
payments on the Mortgage Loans or distributions that shall be required to be
made for the benefit of the Noteholders or the Transferor or (b) reduce the
aforesaid Percentage Interests required to consent to any such amendment,
without the consent of the holders of all the outstanding Notes and the
Transferor. The Depositor shall join in any such amendment approved
as provided in the preceding sentence so long as such amendment is not adverse
to the
interests of the Depositor.
Promptly
after the execution of any such amendment, the Owner Trustee shall furnish
written notification of the substance of such amendment to the Indenture
Trustee, the Insurer and each of the Rating Agencies.
It
shall
not be necessary for the consent of the Transferor, the Noteholders or the
Indenture Trustee pursuant to this Section 11.1 to approve the particular form
of any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of the Transferor provided for in this Agreement or in any other
Transaction Document) and of evidencing the authorization of the execution
thereof by the Transferor and the Noteholders shall be subject to such
reasonable requirements as the Owner Trustee may prescribe.
Promptly
after the execution of any amendment to the Certificate of Trust, the Owner
Trustee shall cause the filing of such amendment with the Secretary of
State.
Prior
to
the execution of any amendment to this Agreement or the Certificate of Trust,
the Owner Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent to such execution and
delivery have been satisfied. The Owner Trustee may, but shall not be obligated
to, enter into any such amendment which affects the Owner Trustee's own rights,
duties or immunities under this Agreement or otherwise.
Section
11.2 No
Legal Title to Owner Trust Estate in Transferor. The Transferor shall not
have legal title to any part of the Owner Trust Estate. The Transferor shall
be
entitled to receive distributions with respect to their undivided ownership
interest therein only in accordance with Articles V and IX herein. No transfer,
by operation of law or otherwise, of any right,
title, or interest of the Transferor to and in its Transferor Interest shall
operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting
or
to the transfer
to it of
legal title to any pan of the Owner Trust Estate.
-30-
Section
11.3 Limitations
on Rights of Others. The provisions of this Agreement are solely for the
benefit of the Owner Trustee, the Seller, the Trust, the Insurer, the
Transferor, the Depositor and, to the extent expressly provided herein, the
Indenture Trustee and the Noteholders, and nothing in this Agreement, whether
express or implied, shall be construed to give to any other Person any legal
or
equitable right, remedy or claim in the Owner Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
Section
11.4 Notices.
All demands, notices and communications hereunder shall be in writing and shall
be deemed to have been duly given if personally delivered at or mailed by
overnight mail, certified mail or registered mail, postage prepaid, to: (i)
in
the case of the Seller, First Tennessee Bank National Association, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, (ii) in the case of
the
Depositor, First Horizon Asset Securities Inc. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇, (iii) in the case of the Owner Trustee, ▇▇▇▇▇▇
Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Corporate Trust Administration, or by facsimile at (▇▇▇) ▇▇▇-▇▇▇▇
and
(iv) in the case of the Transferor, as set forth in the Transferor Interest
Register. Any such notices shall be deemed to be effective with respect to
any
party hereto upon the receipt of such notice by such party, except that notices
to the Transferor shall be effective upon mailing or personal
delivery.
Section
11.5 Severability.
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
Section
11.6 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.
Section
11.7 Successors
and Assigns. All covenants and agreements contained herein shall be binding
upon, and inure to the benefit of the Seller, the Owner Trustee, the Insurer
and
its successors and the Transferor and its successors and permitted assigns,
all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by the Transferor shall bind the successors and assigns
of
the Transferor.
Section
11.8 No
Petition. To the fullest extent permitted by applicable law, the Owner
Trustee and the Seller, by entering into this Agreement, the Transferor, by
accepting the Transferor Interest, and the Indenture Trustee and each Noteholder
by accepting the benefits of this Agreement, hereby covenant and agree that
they
will not at any time institute against the Transferor or the Trust, or join
in
any institution against the Transferor, the Depositor or the Trust of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States Federal or state bankruptcy
law.
Section
11.9 [Reserved].
-31-
Section
11.10 No
Recourse. The Transferor by accepting the Transferor Interest acknowledges
that the Transferor's Transferor Interest represents a beneficial interest
in
the assets of the Trust only and does not represent an interest in or an
obligation of the Master Servicer, the Seller, the Depositor, the Owner Trustee
or any Affiliate thereof and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated in this
Agreement, the Transferor Interest or the Transaction Documents.
Section
11.11 Headings.
The headings of the various Articles and Sections herein are for convenience
of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section
11.12 GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section
11.13 [Reserved].
Section
11.14 Third
Party Beneficiary. The parties hereto acknowledge that the Insurer is an
express third party beneficiary hereof entitled to enforce the provisions hereof
as if it were actually a party hereto. Nothing in this Section 11.14 however
shall be construed to mitigate in any way, the fiduciary responsibilities of
the
Owner Trustee to the beneficiaries of the Trust.
-32-
IN
WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be
duly
executed by their respective officers hereunto duly authorized, as of the day
and year first above written.
|
WILMINGTON
TRUST COMPANY,
|
|||
|
as
Owner Trustee
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
FIRST
HORIZON ASSET SECURITIES, INC.,
|
|||
|
as
Depositor
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
FIRST
TENNESSEE BANK NATIONAL
|
|||
|
ASSOCIATION,
as Depositor
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
EXHIBIT
A
CERTIFICATE
OF TRUST
OF
FIRST
HORIZON ABS TRUST 2006-HE2
This
Certificate of Trust of First Horizon ABS Trust 2006-HE2 (the “Trust”) is being
duly executed and filed on behalf of the Trust by Wilmington Trust Company,
a
Delaware banking corporation, as trustee, to form a statutory trust under the
Delaware Statutory Trust Act (12 Del. C. § 3801 et seq.) (the
“Act”).
1. Name.
The
name of the trust formed hereby is First Horizon ABS Trust
2006-HE2.
2. Delaware
Trustee. The
name
and
the
business address of the trustee of the Trust in the State of Delaware is
Wilmington Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust
Administration.
3. Effective
Date.
Certificate of Trust shall be effective upon filing.
|
WILMINGTON
TRUST COMPANY,
|
|||
|
as
Owner Trustee
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
A-1
EXHIBIT
B
TRANSFER
CERTIFICATE
Wilmington
Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Corporate Trust Administration
The
Bank
of New York
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate
Trust Administration,
First
Horizon ABS Trust 2006-HE2
|
Re:
|
Amended
and Restated Trust Agreement, dated as of November 21, 2006, among
First
Tennessee Bank National Association, as Seller, First Horizon Asset
Securities Inc. and Wilmington Trust Company, as Owner Trustee; First
Horizon ABS Trust 2006-HE2, First Horizon HELOC Notes Series
2006-HE2
|
Ladies
and Gentlemen:
The
undersigned (the “Transferee”) has agreed to purchase from ___________________
(the “Transferor”) the Transferor Interest:
A. Rule
144A
“Qualified Institutional Buyers” should complete this section
I. The
Transferee is (check one):
|
____
|
(i)
An insurance company, as defined in Section 2(13) of the Securities
Act of
1933, as amended (the “Securities Act'), (ii) an investment company
registered under the Investment Company Act of 1940, as amended (the
“Investment Company Act'), (iii) a business development company as
defined
in Section 2(a)(48) of the Securities Act, (iv) a Small Business
Investment Company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment
Act of 1958, (v) a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state
or
its
political subdivisions, for the benefit of its employees, (vi) an
employee
benefit plan within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), (vii) a business
development company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940, (viii) an organization described in Section
501(c)(3) of the Internal Revenue Code, corporation (other than a
bank as
defined in Section 3(a)(2) of the Securities Act or a savings and
loan
association or other institution referenced in Section 3(a)(2) of
the
Securities Act or a foreign bank or savings and loan association
or
equivalent institution), partnership, or similar business trust;
or (ix)
an investment advisor registered under the Investment Advisors Act
of
1940, which, for each of (i) through (ix), owns and invests on a
discretionary basis at least $100 million in securities other than
securities of issuers affiliated with the Transferee, securities
issued or
guaranteed by the United States or a person controlled or supervised
by
and acting as an instrumentality of the government of the United
States
pursuant to authority granted by the Congress of the United States,
bank
deposit notes and certificates of deposit, loan participations, repurchase
agreements, securities owned but subject to a repurchase agreement,
and
currency, interest rate and commodity swaps (collectively, “Excluded
Securities”);
|
B-1
|
____
|
a
dealer registered pursuant to Section 15 of the Securities Exchange
Act of
1934, as amended (the “Exchange Act”) that in the aggregate owns and
invests on a discretionary basis at least $10 million of securities
other
than Excluded Securities and securities constituting the whole or
part of
an unsold allotment to, or subscription by, Transferee as a participant
in
a public offering;
|
|
____
|
an
investment company registered under the Investment Company Act that
is
part of a family of investment companies (as defined in Rule 144A
of the
Securities and Exchange Commission) which own in the aggregate at
least
$100 million in securities other than Excluded Securities and securities
of issuers that are part of such family of investment
companies;
|
|
____
|
an
entity, all of the equity owners of which are entities described
in this
Paragraph A(I);
|
|
____
|
a
bank as defined in Section 3(a)(2) of the Securities Act, any savings
and
loan association or other institution as referenced in Section 3(a)(5)(A)
of the Securities Act, or any foreign bank or savings and loan association
or equivalent institution that in the aggregate owns and invests
on a
discretionary basis at least $100 million in securities other than
Excluded Securities and has an audited net worth of at least $25
million
as demonstrated in its latest annual financial statements, as of
a date
not more than (i) 16 months preceding the date of transfer of the
Transferor Interest to the Transferee in the case of ______________________,
and (ii) not more than 18 months preceding such date in the case
of a
foreign bank or savings association or equivalent
institution.
|
II. The
Transferee is acquiring such Transferor Interest solely for its own account,
for
the account of one or more others, all of which are “Qualified Institutional
Buyers” within the meaning of Rule 144A, or in its capacity as a dealer
registered pursuant to Section 15 of the Exchange Act acting in a riskless
principal transaction on behalf of a “Qualified Institutional Buyer”. The
Transferee is not acquiring such Transferor Interest with a view to or for
the
resale, distribution, subdivision or fractionalization thereof which would
require registration of the Transferor Interest under the Securities
Act.
B-2
B. “Accredited
Investors” should complete this Section
I. The
Transferee is (check one):
|
____
|
a
bank within the meaning of Section 3(a)(2) of the Securities
Act;
|
|
____
|
a
savings and loan association or other institution defined in Section
3(a)(5) of the Securities Act;
|
|
____
|
a
broker or dealer registered pursuant to the Exchange
Act;
|
|
____
|
an
insurance company within the meaning of Section 2(13} of the Securities
Act;
|
|
____
|
an
investment company registered under the Investment Company
Act;
|
|
____
|
an
employee benefit plan within the meaning of Title I of ERISA, which
has
total assets in excess of
$5,000,000;
|
|
____
|
another
entity which is an “accredited investor” within the meaning of paragraph
(fill in) of subsection (a) of Rule 501 of the Securities and Exchange
Commission.
|
II. The
Transferee is acquiring such Transferor Interest solely for its own account,
for
investment, and not with a view to or for the resale, distribution, subdivision
or fractionalization thereof which would require registration of the Transferor
Interest under the Securities Act.
C. If
the
Transferee is unable to complete one of paragraph A(I) or paragraph B(I) above,
the Transferee must furnish an opinion in form and substance satisfactory to
the
Trustee of counsel satisfactory to the Trustee to the effect that such purchase
will not violate any applicable federal or state securities laws.
D. The
Transferee represents that it is not (A) an “employee benefit plan” within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), that is subject to the provisions of Title I of ERISA, or
(B) a “plan” within the meaning of Section 4975(6)(1) of the Code that is
subject to Section 4975 of the Code (any such plan or employee benefit plan,
a
“Plan”) or (C) any entity, including an insurance company separate account or
general account, whose underlying assets include plan assets by reason of a
plan's investment in the entity and is not directly or indirectly purchasing
such Transferor interest on behalf of, as investment manager of, as named
fiduciary of, as trustee of, or with assets of a Plan.
B-3
III. the
Transferee is an “accredited investor” as defined in Rule 501(a) of Regulation D
pursuant to the Securities Act.
|
Very
truly yours,
|
|||
|
[NAME
OF PURCHASER]
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
Dated:
THE
FOREGOING IS ACKNOWLEDGED THIS ____ DAY OF_______________, 20___.
[NAME
OF
SELLER]
|
By:
|
|||
|
Title:
|
|||
B-4
EXHIBIT
C
FORM
OF TRANSFEROR CERTIFICATE
This
certificate has not been and will not be registered under the Securities Act
of
1933, as amended,
or the securities laws of any state and may not be resold or transferred unless
it is
registered pursuant to the Securities Act of 1933 and the securities laws of
any
state or is
sold or transferred in transactions that are exempt from registration under
the
Securities Act of 1933 and
under applicable state law and is transferred in accordance with Section
3.13
of the Agreement (as defined herein).
Neither this certificate nor any interest in it may be transferred unless the
transferee delivers to the Owner Trustee a representation letter to the effect
that the transferee is not an employee benefit plan (as defined in Section
3(3)
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”))
that is subject to Title I of
ERISA, a
plan subject
to Section 4975(e)(1) of the Code that is subject to Section 4975
of
the Code. Notwithstanding anything else to the contrary herein, any purported
transfer of this
certificate to or on behalf of an employee benefit or other plan subject to
ERISA or to
the Code without the representation letter satisfactory to the Owner Trustee
as
described above shall be void.
C-1
|
Cut-off
Date
|
: |
________
__, 200_
|
|
Percentage
of Transferor Interest
|
: |
100%
|
|
Certificate
No.
|
: |
[
]
|
|
First
Payment Date
|
December
26, 2006
|
FIRST
HORIZON ABS TRUST 2006-HE2
Transferor
Certificate
evidencing
a percentage interest in the Transferor Interest
evidencing
an undivided beneficial interest in the assets of a trust
consisting
primarily of a pool of home equity revolving credit
line
mortgage loans sold by
First
Horizon Asset Securities Inc.
This
Certificate does not represent an obligation of or interest in First Horizon
Asset
Securities Inc. (the “Depositor”), First Tennessee Bank National Association or
the Owner Trustee or any of their affiliates. Neither this Certificate nor
the
underlying Trust Estate is guaranteed or insured by any governmental agency
or
instrumentality.
This
certifies that [_____________________________________] is the registered owner
of the Transferor Interest evidenced by this Certificate, which has been issued
by First Horizon ABS Trust 2006-HE2, a Delaware statutory trust (the “Trust”),
the assets of which consist primarily of a pool of revolving home equity lines
of credit secured by first and second liens on residential real property (the
“Mortgage Loans”) transferred by the Depositor and serviced by First Tennessee
Bank National Association (in that capacity, the “Master Servicer”). The First
Horizon ABS Trust 2006-HE2 was created pursuant to a Trust Agreement, dated
as
of November 14, 2006 among First Tennessee Bank National Association, as seller,
the Depositor and Wilmington Trust Company, as owner trustee (the “Owner
Trustee”), as amended and restated by an Amended and Restated
Trust Agreement, dated as of November 21, 2006, among First Tennessee Bank
National Association, as seller, the Depositor and the Owner Trustee (the
“Agreement”) a summary of some of the pertinent provisions of which follows.
Capitalized terms used in this Certificate without
definition have the meanings assigned in the Agreement. This Certificate is
issued under
and is
subject to the Agreement. The holder of this Certificate by virtue of the
acceptance of it agrees to be bound by the Agreement.
This
Certificate evidences the Transferor Interest in the Trust, representing, to
the
extent specified in the Agreement, an undivided beneficial interest
in:
(i) each
Mortgage Loan and the related Mortgage File, including its Principal Balance
(including all Additional Balances resulting from Draws made pursuant to the
related Mortgage Note prior to the termination of the Trust) and all collections
in respect of interest and principal received after the Cut-off
Date;
(ii) property
that secured a Mortgage Loan that has become REO Property;
(iii) the
Seller's rights under any insurance policies maintained by the Mortgagors or
the
Master Servicer in respect of the Mortgage Loans (including any Insurance
Proceeds);
C-2
(iv) such
other assets as shall from time to time be identified as on deposit in the
Collection Account and the Distribution Account in accordance with the Sale
and
Servicing Agreement; and
(v) the
Depositor's rights under the Purchase Agreement;
(vi) the
Insurance Policy and the proceeds of any draw thereunder;
(vii) any
proceeds of any of the foregoing (i) through (vi); and
(viii) all
other
assets included or to be included in the Trust (collectively, the “Trust
Estate”).
A
first
priority
security
interest
in
all the Trust Estate has been granted to the Indenture Trustee
under
the Indenture.
The
Transferor, by its acceptance of this Certificate, agrees that it will look
solely to the funds available under the Agreement for payment of this
Certificate and that the Owner Trustee in its individual capacity is not
personally liable to the Transferor for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This
Certificate does not purport to summarize the Agreement and reference is made
to
the Agreement for the interests, rights, and limitations of rights and
obligations evidenced by this Certificate, and the rights and obligations of
the
Owner Trustee.
The
Agreement may be amended by the Depositor, the Seller and the Owner Trustee
with
prior written notice to the Rating Agencies and the Indenture Trustee and with
the consent of the Insurer (which consent shall not be unreasonably withheld),
but without the consent of any of the Noteholders, the Transferor or the
Indenture Trustee, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to
or
changing in any manner or eliminating any of the provisions in this Agreement
or
of modifying in any manner the rights of the Noteholders or the Transferor;
provided, however, that such action shall not adversely affect in any material
respect the interests of any Noteholder, the Transferor or the Insurer. The
Agreement may also be amended from time to time by the Seller, the Depositor
and
the Owner Trustee, with the prior written consent of the Rating Agencies, the
Insurer and the Indenture Trustee, the Noteholders evidencing more than 50%
of
the Percentage Interests in the Notes and the Transferor, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders or the Transferor, subject to the limitations set forth in the
Agreement.
No
transfer of this Certificate shall be made unless the transfer is exempt from
the registration requirements of the Securities Act of 1933 (the “Act”) and any
applicable state securities laws or is made in accordance with the Act and
those
laws. In connection with any transfer of this Certificate, the Registrar will
require that each Prospective Transferor, other than a Prospective Transferor
of
an affiliate of the Depositor, either:
C-3
(i) the
transferee to execute an investment letter acceptable to and in form and
substance satisfactory to the Registrar certifying to the Owner Trustee the
facts surrounding the transfer, which investment letter shall not be an expense
of the Owner Trustee; or
(ii) an
Opinion of Counsel acceptable to and in form and substance satisfactory to
the
Registrar that the transfer may be made pursuant to an exemption from the Act,
describing the applicable exemption and its basis, or is being made pursuant
to
the Act, which Opinion of Counsel shall not be an expense of the Registrar
or
the Depositor.
In
connection with any transfer of this Certificate, the holder transferring his
Certificate shall indemnify the Trust against any liability that may result
if
the transfer is not so exempt or is not made in accordance with any federal
and
state laws.
Neither
this Certificate nor any legal or beneficial interest in it may be, directly
or
indirectly, purchased, transferred, sold, pledged, assigned, or otherwise
disposed of, and any proposed transferee of this Certificate shall not become
its registered Holder, unless the conditions in Section 3.13 of the Agreement
are satisfied.
No
service charge shall be made for the registration of transfer or exchange of
this Certificate, but the Owner Trustee or the Registrar may require payment
of
a sum sufficient to cover any tax or governmental charge that may be imposed
in
connection with any transfer or exchange of this Certificate.
The
Owner
Trustee, the Registrar, and any Paying Agent will treat the person in whose
name
this Certificate is registered in the Transferor Interest Register as its owner
for the purpose of receiving distributions pursuant to Section 5.2 of the
Agreement and for all other purposes whatsoever, and none of the Owner Trustee,
the Registrar, and any Paying Agent shall be bound by any notice to the
contrary.
The
obligations created by the Agreement will terminate and this Certificate will
be
retired and the Trust will be dissolved when the final distribution from the
Trust Estate is made resulting in the Trust having no further assets. Pursuant
to Section 8.01 of the Sale and Servicing Agreement, the Master Servicer may
effect the transfer of all the Mortgage Loans at their termination purchase
price on any Payment Date from the Payment Date immediately before which the
Note Principal Balance is less than or equal to 10% of the Original Note
Principal Balance. This transfer will result in the termination of the Agreement
and the dissolution of the Trust.
C-4
Unless
the certificate of authentication on this Certificate has been executed by
the
Registrar by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement, or be valid for any purpose.
Dated:
[________], 20[__]
|
FIRST
HORIZON ABS TRUST
2006-HE2
|
|||
|
|
By: Wilmington
Trust Company,
Not
in its individual capacity but solely as
Owner
Trustee
|
||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
Certificate
of Authentication:
This
is
the Transferor Certificate referenced in the
within-mentioned
Agreement.
THE
BANK
OF NEW YORK,
not
in
its individual capacity but solely as Registrar
By:_______________________________
Authorized
Officer
C-5