AMENDED AND RESTATED TRUST AGREEMENT
among
FIELDSTONE MORTGAGE INVESTMENT CORPORATION,
as Depositor,
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Owner Trustee
and
▇▇▇▇▇ FARGO BANK, N.A.,
as Trust Administrator
Dated as of November 23, 2005
Fieldstone Mortgage Investment Trust, Series 2005-3
Mortgage-Backed Notes
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions............................................. 1
Section 1.02. Other Definitional Provisions........................... 5
ARTICLE II
ORGANIZATION
Section 2.01. Name.................................................... 6
Section 2.02. Office.................................................. 6
Section 2.03. Purpose and Powers...................................... 6
Section 2.04. Appointment of the Owner Trustee........................ 6
Section 2.05. Initial Capital Contribution; Declaration of Trust...... 7
Section 2.06. Issuance of Initial Certificates........................ 7
Section 2.07. Liability of the Ownership Certificate Holder........... 7
Section 2.08. Situs of Trust.......................................... 7
Section 2.09. Title to Trust Property................................. 8
Section 2.10. Representations and Warranties of the Depositor......... 8
Section 2.11. Tax Treatment........................................... 9
Section 2.12. Investment Company...................................... 9
ARTICLE III
THE CERTIFICATES AND TRANSFERS OF INTERESTS
Section 3.01. The Certificates........................................ 9
Section 3.02. Execution, Authentication and Delivery of the
Certificates......................................... 10
Section 3.03. Registration of and Limitations on Transfers and
Exchanges of the Certificates........................ 10
Section 3.04. Lost, Stolen, Mutilated or Destroyed Certificate........ 13
Section 3.05. Persons Deemed Certificateholders....................... 13
Section 3.06. Access to List of Certificateholders' Names and
Addresses............................................ 13
Section 3.07. [Reserved].............................................. 13
Section 3.08. Maintenance of Office or Agency......................... 13
Section 3.09. Certificate Paying Agent................................ 14
Section 3.10. Initial Beneficiary..................................... 15
ARTICLE IV
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 4.01. Collection Account...................................... 15
Section 4.02. Application of Trust Funds.............................. 15
Section 4.03. Method of Payment....................................... 16
Section 4.04. [Reserved].............................................. 16
Section 4.05. Segregation of Moneys; No Interest...................... 16
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ARTICLE V
AUTHORITY AND DUTIES OF THE OWNER TRUSTEE; ACTION BY
CERTIFICATEHOLDERS
Section 5.01. General Authority....................................... 16
Section 5.02. General Duties.......................................... 16
Section 5.03. Action Upon Instruction................................. 17
Section 5.04. No Duties Except as Specified under Specified Documents
or in Instructions................................... 17
Section 5.05. Restrictions............................................ 18
Section 5.06. Prior Notice to the Certificateholders with Respect to
Certain Matters...................................... 18
Section 5.07. Action by the Holder with Respect to Bankruptcy......... 20
Section 5.08. Restrictions on the Ownership Certificate Holder's
Power................................................ 21
ARTICLE VI
CONCERNING THE OWNER TRUSTEE
Section 6.01. Acceptance of Trusts and Duties......................... 21
Section 6.02. Furnishing of Documents................................. 22
Section 6.03. Books and Records....................................... 22
Section 6.04. Representations and Warranties.......................... 22
Section 6.05. Reliance; Advice of Counsel............................. 24
Section 6.06. Not Acting in Individual Capacity....................... 24
Section 6.07. Owner Trustee Not Liable for Certificates or
Collateral........................................... 25
Section 6.08. Owner Trustee May Own Notes............................. 25
Section 6.09. Licenses................................................ 25
Section 6.10. Doing Business in Other Jurisdictions................... 25
Section 6.11. ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act Certification........................ 26
ARTICLE VII
INDEMNIFICATION AND COMPENSATION
Section 7.01. Trust Expenses.......................................... 26
Section 7.02. Indemnification......................................... 26
Section 7.03. Compensation............................................ 26
Section 7.04. Lien on Trust Estate.................................... 26
ARTICLE VIII
TERMINATION OF AGREEMENT
Section 8.01. Termination of Agreement................................ 27
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 9.01. Eligibility Requirements for Owner Trustee.............. 28
Section 9.02. Resignation or Removal of Owner Trustee................. 28
Section 9.03. Successor Owner Trustee................................. 28
Section 9.04. Merger or Consolidation of Owner Trustee................ 29
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Section 9.05. Appointment of Co-Trustee or Separate Trustee........... 29
ARTICLE X
MISCELLANEOUS
Section 10.01. Supplements and Amendments.............................. 30
Section 10.02. No Legal Title to Trust Estate in Certificateholders.... 32
Section 10.03. Pledge of Collateral by Owner Trustee is Binding........ 32
Section 10.04. Limitations on Rights of Others......................... 32
Section 10.05. Notices................................................. 32
Section 10.06. Severability............................................ 33
Section 10.07. Separate Counterparts................................... 33
Section 10.08. Successors and Assigns.................................. 33
Section 10.09. Headings................................................ 33
Section 10.10. Governing Law........................................... 33
Section 10.11. No Petition............................................. 33
Section 10.12. No Recourse............................................. 34
Section 10.13. Customer Identification................................. 34
ARTICLE XI
OFFICERS
Section 11.01. Appointment of Officers................................. 34
Section 11.02. Officers to Provide Information to the Owner Trustee.... 34
Exhibit A Forms of Certificates
Exhibit B [Reserved]
Exhibit C Form of Certificate of Trust
Exhibit D-1 Form of Rule 144A Investment Letter
Exhibit D-2 Form of Non-Rule 144A Investment Letter
Exhibit E Form of Certificate of Beneficial Owner
Exhibit F Form of Representation and Warranty Regarding
Transferee's Status as a REIT or Qualified REIT
Subsidiary
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This TRUST AGREEMENT, dated as of November 23, 2005, is by and among
FIELDSTONE MORTGAGE INVESTMENT CORPORATION, a Maryland corporation (the
"Depositor"), U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking
association, as Owner Trustee (the "Owner Trustee"), and ▇▇▇▇▇ FARGO BANK, N.A.,
a national banking association, as Trust Administrator (the "Trust
Administrator").
WHEREAS, pursuant to the Transfer and Servicing Agreement, the Depositor
intends to sell, transfer and assign to a Delaware statutory trust created
hereunder certain Mortgage Loans and related assets (collectively, the
"Collateral"), which statutory trust would then pledge such Collateral under an
indenture in order to secure the issuance of its Mortgage-Backed Notes, Series
2005-3 (the "Securities") and its obligations under the Swap Agreement, the net
proceeds of which would be applied toward the purchase of the Collateral.
WHEREAS, the Depositor and the Owner Trustee entered into a Trust Agreement
dated October 25, 2005 (the "Original Trust Agreement"), and filed with the
Secretary of State of the State of Delaware a Certificate of Trust on October
25, 2005, creating Fieldstone Mortgage Investment Trust, Series 2005-3 (the
"Trust").
WHEREAS, the Depositor, the Owner Trustee and the Trust Administrator
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 mutual agreements
herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Agreement, the
following terms shall have the meanings set forth below.
Actual Knowledge: With respect to (i) the Owner Trustee, any officer within
the Corporate Trust Office of the Owner Trustee responsible for administering
the Trust hereunder, or under the Operative Agreements, who has actual knowledge
of an action taken or an action not taken with regard to the Trust. Actions
taken or actions not taken of which the Owner Trustee should have had knowledge,
or has constructive knowledge, do not meet the definition of Actual Knowledge
hereunder. With respect to the Trust Administrator, any Responsible Officer of
the Trust Administrator who has actual knowledge of an action taken or an action
not taken with regard to the Trust. Actions taken or actions not taken of which
the Trust Administrator should have had knowledge, or has constructive
knowledge, do not meet the definition of Actual Knowledge hereunder.
Agreement or Trust Agreement: This Amended and Restated Trust Agreement and
any amendments or modifications hereof.
Authorized Officer: With respect to the Trust, any officer of the Owner
Trustee who is authorized to act for the Owner Trustee in matters relating to
the Trust and who is identified on
the list of Authorized Officers delivered by the Owner Trustee to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter) and, so long as the Transfer and Servicing Agreement is
in effect, any Vice President, Assistant Vice President, Trust Officer, or more
senior officer of the Trust Administrator who is authorized to act for the Trust
Administrator in matters relating to the Trust and to be acted upon by the Trust
Administrator pursuant to the Transfer and Servicing Agreement and who is
identified on the list of Authorized Officers delivered by the Trust
Administrator to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
Bank: U.S. Bank Trust National Association, in its individual capacity and
not as Owner Trustee under this Agreement.
Certificate: Any Ownership Certificate issued pursuant to this Agreement.
Certificate of Trust: The Certificate of Trust to be filed by the Owner
Trustee for the Trust pursuant to Section 3810(a) of the Delaware Trust Statute
in the form of Exhibit C hereto.
Certificate Paying Agent: Initially, the Trust Administrator, in its
capacity as Certificate Paying Agent, or any successor to the Trust
Administrator in such capacity.
Certificate Register: The register maintained by the Certificate Registrar
in which the Certificate Registrar shall provide for the registration of the
Certificates and of transfers and exchanges of such Certificates.
Certificate Registrar: Initially, the Trust Administrator, in its capacity
as Certificate Registrar, or any successor to the Trust Administrator in such
capacity.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register.
Code: The Internal Revenue Code of 1986, as amended.
Collateral: As defined in the Indenture.
Corporate Trust Office: With respect to (i) the Owner Trustee, the
corporate trust administration office of the Owner Trustee located at U.S. Bank
Corporate Trust Services, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
such other address as the Owner Trustee may designate by notice to the Trust
Administrator, or the principal office of any successor Owner Trustee (the
address (which shall be in the State of Delaware) of which the successor owner
trustee will notify the Certificateholders); (ii) the Trust Administrator, the
principal corporate trust office of the Trust Administrator at which, at any
particular time, its corporate trust business shall be administered, which
office at the date hereof for purposes of transfers and exchanges and for
presentment and surrender of the Certificates and for payment thereof is located
at ▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Group (Fieldstone 2005-3), and for
all other purposes is located at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Group (Fieldstone 2005-3) (or for
overnight deliveries, at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Group (Fieldstone 2005-3)); and
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(iii) the Certificate Registrar, the principal office of the Certificate
Registrar at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Agreement is located
at the Corporate Trust Office of the Trust Administrator, or at such other
address as the Certificate Registrar may designate from time to time by notice
to the Securityholders and the Trust, or the principal corporate trust office of
any successor Certificate Registrar at the address designated by such successor
Certificate Registrar by notice to the Securityholders and the Trust.
Delaware Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12
Del.C. Section 3801 et seq., as the same may be amended from time to time.
Depositor: Fieldstone Mortgage Investment Corporation, a Maryland
corporation.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Expenses: The meaning specified in Section 7.02.
Indenture: The indenture dated as of November 1, 2005, between the Issuer
and the Indenture Trustee, as such may be amended or supplemented from time to
time.
Indenture Trustee: HSBC Bank USA, National Association, not in its
individual capacity but solely as Indenture Trustee, or any successor in
interest.
Initial Holder: Fieldstone Mortgage Ownership Corp., or any successor in
interest, in the case of the Ownership Certificate.
Master Servicer: ▇▇▇▇▇ Fargo Bank, N.A., or any successor in interest.
Net Proceeds from the Notes: The proceeds received by the Trust from time
to time from the issuance and sale of its Notes, less the costs and expenses
incurred in connection with the issuance and sale of such Notes.
Non-U.S. Person: Any person other than a "United States person" as defined
in Section 7701(a)(30) of the Code.
Note: Any of the Class 1-A, Class 2-A1, Class 2-A2, Class 2-A3, Class M1,
Class M2, Class M3, Class M4, Class M5, Class M6, Class M7, Class M8, Class M9,
Class M10, Class M11, Class M12 or Class M13 Notes issued pursuant to the
Indenture.
Noteholder: A Person in whose name a Note is registered on the Note
Register.
Officer: Those officers of the Trust referred to in Article XI.
Opinion of Counsel: One or more written opinions of counsel who may, except
as otherwise expressly provided in this Agreement, be employees of or counsel to
the Depositor and who shall be satisfactory to the Owner Trustee and the Trust
Administrator, which opinion shall be addressed to the Owner Trustee, the Trust
Administrator and each Swap Counterparty.
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Original Trust Agreement: As defined in the recitals hereof.
Ownership Certificate: An equity certificate representing a 100% undivided
beneficial interest in the Trust in substantially the form annexed hereto as
part of Exhibit A.
Owner Trustee: U.S. Bank Trust National Association, a national banking
association, and any successor in interest, not in its individual capacity, but
solely as owner trustee under the Trust Agreement.
Percentage Interest: With respect to any Ownership Certificate, the
percentage set forth on the face thereof.
Permitted Transferee: Means (i) an entity for federal income tax purposes
that qualifies as (a) a single REIT, (b) a Qualified REIT Subsidiary of such
REIT, or (c) an entity that is disregarded for federal income tax purposes that
is wholly owned by such related REIT or related Qualified REIT Subsidiary or
(ii) a lender or repurchase agreement counterparty in a repurchase agreement or
secured lending transaction that qualifies as a borrowing for federal income tax
purposes.
Proposer: The Certificateholder making a written request pursuant to
Section 5.07.
Prospective Holder: Each prospective purchaser and any subsequent
transferee of the Ownership Certificate.
Qualified REIT Subsidiary: A direct or indirect 100% owned subsidiary of a
REIT that satisfies the requirements of Section 856(i) of the Code.
REIT: A real estate investment trust within the meaning of Sections 856 and
857 of the Code.
Responsible Officer: With respect to (i) the Owner Trustee, any officer
within the Corporate Trust Office of the Owner Trustee with direct
responsibility for the administration of the Trust and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of, and familiarity with, the particular subject; and
(ii) the Trust Administrator, any officer within the Corporate Trust Office of
the Trust Administrator with direct responsibility for the administration of the
Trust and also, with respect to a particular matter, any other officer to whom
such matter is referred because of such officer's knowledge of, and familiarity
with, the particular subject.
Retained Notes: Those certain classes, or portions of certain classes, of
Notes, which at the time of their issuance, FIC, as the owner of the Ownership
Certificate, either directly or indirectly through one or more of its Qualified
REIT Subsidiaries or entities that are disregarded for United States federal
income tax purposes that are wholly owned by the related REIT or a related
Qualified REIT Subsidiary, acquires beneficial ownership thereof.
Secretary of State: The Secretary of State of the State of Delaware.
Security: Any of the Certificates or Notes.
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Securityholder: Any Certificateholder or Noteholder.
Seller: Fieldstone Investment Corporation, a Maryland corporation.
Transfer and Servicing Agreement: The Transfer and Servicing Agreement
dated as of November 1, 2005, by and among the Trust, the Depositor, the Trust
Administrator, the Master Servicer, Fieldstone Servicing Corp., as servicer,
JPMorgan Chase Bank, National Association, as subservicer, the Seller and the
Indenture Trustee, as such may be amended or supplemented from time to time.
Trust: The trust established pursuant to this Agreement which shall carry
on its business operations under the name of "Fieldstone Mortgage Investment
Trust, Series 2005-3."
Trust Administrator: ▇▇▇▇▇ Fargo Bank, N.A., or any successor in interest.
Section 1.02. Other Definitional Provisions.
Capitalized terms used herein and not defined herein shall have the same
meanings assigned to them in the Transfer and Servicing Agreement or in the
Indenture, as applicable.
(a) 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.
(b) 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.
(c) 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."
(d) 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 the feminine and neuter genders of such terms.
(e) 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
5
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 2.01. Name. The trust established under this Agreement shall be
referred to as "Fieldstone Mortgage Investment Trust, Series 2005-3," in which
name the Owner Trustee and the Officers may conduct the activities contemplated
hereby, including the making and executing of contracts and other instruments on
behalf of the Trust and ▇▇▇ and be sued.
Section 2.02. Office. The principal office of the Trust shall be in care of
the Owner Trustee, at its Corporate Trust Office. The Trust shall also have an
office in care of the Trust Administrator at its Corporate Trust Office.
Section 2.03. Purpose and Powers. The Trust shall have the power and
authority to engage in any of the following activities:
(a) to issue the Notes pursuant to the Indenture and the Certificates
pursuant to this Agreement and to sell, transfer and exchange such Notes and
Certificates;
(b) with the proceeds of the sale of the Notes and the Certificates, to pay
the organizational, start-up and transactional expenses of the Trust and to pay
the balance of the Net Proceeds from the Notes to the Depositor in consideration
of the transfer to the Trust of the Collateral;
(c) to assign, grant, transfer, pledge, mortgage and convey the Trust
Estate pursuant to the Indenture and to hold, manage and distribute to the
Certificateholders pursuant to the terms of the Transfer and Servicing Agreement
any portion of the Collateral released from the lien of, and remitted to the
Trust pursuant to, the Indenture;
(d) to enter into and perform its obligations under the Operative
Agreements and the Swap Agreement to which it is to be a party;
(e) to engage in those activities, including entering into agreements, that
are necessary, suitable or convenient to accomplish the foregoing or are
incidental thereto or connected therewith; and
(f) subject to compliance with the Operative Agreements, to engage in such
other activities as may be required in connection with conservation of the Trust
Estate and the making of distributions and payments to the Certificateholders
and the Noteholders.
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 Operative Agreements.
Section 2.04. Appointment of the Owner Trustee. The Depositor hereby
appoints the Bank to act as owner trustee (the "Owner Trustee") of the Trust
effective as of the date hereof to
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have all the rights, powers and duties set forth herein with respect to
accomplishing the purposes of the Trust.
The Owner Trustee is hereby authorized to execute this Agreement, the
Indenture, the Transfer and Servicing Agreement and any other Operative
Agreement on behalf of the Trust. The Owner Trustee is hereby authorized to take
all actions required or permitted to be taken by it in accordance with the terms
of this Agreement.
Section 2.05. Initial Capital Contribution; Declaration of Trust.
(a) The Depositor hereby sells, assigns, transfers, conveys and sets over
to the Trust, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the Closing Date, of the
foregoing contribution, which shall constitute the initial corpus of the Trust
Estate. 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.
(b) The Owner Trustee hereby declares that it will hold the Trust Estate in
trust upon and subject to the conditions set forth herein for the use and
benefit of the Certificateholders, subject to the obligations of the Trust under
the Operative Agreements. It is the intention of the parties hereto that the
Trust constitute a statutory trust under the Delaware Trust Statute and that
this Agreement constitute the governing instrument of such statutory trust. No
later than the Closing Date, the Owner Trustee shall cause the filing of the
Certificate of Trust with the Secretary of State. Except as otherwise provided
in this Agreement, the rights of the Certificateholders will be those of
beneficial owners of the Trust.
Section 2.06. Issuance of Initial Certificates. Upon the formation of the
Trust by the initial contribution by the Depositor pursuant to Section 2.05, the
Owner Trustee will issue the Certificates to the Initial Holders.
Section 2.07. Liability of the Ownership Certificate Holder. The Ownership
Certificate Holder shall be liable directly to and shall indemnify any injured
party for all losses, claims, damages, liabilities and expenses of the Trust
(including Expenses, to the extent not paid out of the Trust Estate); provided,
however, that the Ownership Certificate Holder shall not be liable for payments
required to be made to or for any losses incurred by a Noteholder in the
capacity of an investor in the Notes. In addition, any third party creditors of
the Trust (other than in connection with the obligations described in the
following sentence for which the Ownership Certificate Holder shall be liable)
shall be deemed third party beneficiaries of this paragraph. The Ownership
Certificate Holder shall be liable for any entity level taxes imposed on the
Trust. The obligations of the Ownership Certificate Holder under this paragraph
shall be evidenced by the Ownership Certificate.
Section 2.08. 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 States of Delaware, New York or the jurisdiction
where the Trust Administrator maintains bank accounts with respect to
collections on the Collateral. The only office of the Trust will be as described
in Section 2.02 hereof. The Trust shall not have any employees; provided,
however,
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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, New York, the jurisdiction in which the Trust
Administrator maintains the Collection Account or such other jurisdiction
designated by the Depositor, and payments will be made by the Trust only from
the Collection Account or from Delaware, New York or such other jurisdiction
designated by the Depositor.
Section 2.09. Title to Trust Property.
(a) Subject to the Indenture, title to all of the Trust Estate shall be
vested at all times in the Trust as a separate legal entity until this Agreement
terminates pursuant to Article VIII hereof; provided, however, that if the laws
of any jurisdiction require that title to any part of the Trust Estate be vested
in the trustee of the Trust, then title to that part of the Trust Estate shall
be deemed to be vested in the Owner Trustee or any co-trustee or separate
trustee, as the case may be, appointed pursuant to Article IX of this Agreement.
(b) The Certificateholders shall have beneficial but not legal title to any
part of the Trust Estate. No transfer by operation of law or otherwise of any
interest of the Certificateholders shall operate to terminate this Agreement or
the trusts created hereunder or entitle any transferee to an accounting or to
the transfer to it of any part of the Trust Estate.
Section 2.10. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee, the Swap
Counterparty and the Trust Administrator as of the Closing Date, as follows:
(a) The Depositor is duly organized and validly existing as a corporation
in good standing under the laws of the State of Delaware, with power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted and had at all
relevant times, and now has, power, authority and the legal right to acquire and
own the Mortgage Loans.
(b) The Depositor is duly qualified to do business as a foreign corporation
in good standing and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business shall require such qualifications.
(c) The Depositor has the power and authority to execute and deliver any
Operative Agreement to which it is a party and to carry out its terms; the
Depositor has full power and authority to sell and assign the Collateral to be
sold and assigned to and deposited with the Trust and the Depositor has duly
authorized such assignment and deposit to the Trust by all necessary corporate
action; and the execution, delivery and performance of this Agreement or any
other Operative Agreement to which it is a party has been duly authorized by the
Depositor by all necessary corporate action and, assuming the due authorization,
execution and delivery of each such agreement by the other parties thereto, each
such agreement constitutes a valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with its terms, except as
enforcement thereof may be subject to or limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws relating to or affecting
creditors' rights generally and by general equitable principles.
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(d) The consummation of the transactions contemplated by this Agreement and
the fulfillment of the terms hereof and thereof do not conflict with, result in
any breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the certificate of incorporation or
by-laws of the Depositor, or any indenture, agreement or other instrument to
which the Depositor is a party or by which it is bound; nor result in the
creation or imposition of any lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument (other than pursuant
to the Operative Agreements); nor violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation applicable to the Depositor
of any court or of any Federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Depositor or
its properties.
(e) There are no proceedings or investigations, pending or, to the best
knowledge of the Depositor, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties: (i) asserting the invalidity of this
Agreement or any other Operative Agreement to which the Depositor is a party,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by this Agreement or any other Operative Agreement to which the Depositor is a
party or (iii) 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 or any other Operative
Agreement to which the Depositor is a party.
(f) The representations and warranties of the Depositor made pursuant to
the Transfer and Servicing Agreement are true and correct.
(g) This Agreement is not required to be qualified under the Trust
Indenture Act of 1939, as amended, and the Trust is not required to be
registered as an "investment company" under the Investment Company Act of 1940,
as amended.
Section 2.11. Tax Treatment. The Depositor, the Owner Trustee and the
Initial Holder intend that the Trust be treated for federal income tax purposes
as a Qualified REIT Subsidiary and agree to take no action inconsistent with
such treatment. The Trust Administrator will perform the calculation of accrual
of original issue discount and the amortization of premium on the Securities.
The Seller will prepare and file the Trust's income tax returns, if applicable,
and will make any other necessary tax filings under the Code.
Section 2.12. Investment Company. Neither the Depositor nor any holder of a
Certificate shall take any action which would cause the Trust to become an
"investment company" which would be required to register under the Investment
Company Act of 1940, as amended.
ARTICLE III
THE CERTIFICATES AND TRANSFERS OF INTERESTS
Section 3.01. The Certificates. The Ownership Certificate shall initially
be issued as a single certificate in definitive, fully registered form and shall
initially be registered in the name of the applicable Initial Holder. No
Ownership Certificate shall be issued in authorized denominations of less than a
100% Percentage Interest in such Certificate. The Certificates shall
9
be executed on behalf of the Trust by manual or facsimile signature of an
Authorized Officer of the Owner Trustee and authenticated in the manner provided
in Section 3.02. Each Certificate bearing the manual signatures of individuals
who were, at the time when such signatures shall have been affixed, authorized
to sign on behalf of the Trust, shall be validly issued and entitled to the
benefit of this Agreement, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the authentication and delivery
of each such Certificate or did not hold such offices at the date of
authentication and delivery of each such Certificate. A Person shall become a
Certificateholder and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder upon such Person's acceptance of a
Certificate duly registered in such Person's name pursuant to Section 3.03.
Section 3.02. Execution, Authentication and Delivery of the Certificates.
Concurrently with the sale of the Collateral to the Trust pursuant to the
Transfer and Servicing Agreement, the Owner Trustee shall cause the Certificates
issued hereunder to be executed and authenticated on behalf of the Trust and
authenticated and delivered to or upon the written order of the Depositor,
signed by its chairman of the board, its president or any vice president,
without further corporate action by the Depositor. No Certificate shall entitle
its Holder to any benefit under this Agreement or be valid for any purpose
unless there shall appear on such Certificate a certificate of authentication
substantially in the form set forth as part of Exhibit A hereto, executed by the
Owner Trustee or the Certificate Registrar, as the Owner Trustee's
authenticating agent, by manual signature; such authentication shall constitute
conclusive evidence that such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
Section 3.03. Registration of and Limitations on Transfers and Exchanges of
the Certificates. The Certificate Registrar shall keep or cause to be kept, at
the office or agency maintained pursuant to Section 3.08, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of the Certificates and
of transfers and exchanges of the Certificates as set forth herein; provided,
however, that no Ownership Certificate shall be issued in any such transfer and
exchange representing less than a 100% Percentage Interest in such Certificate,
and provided, further, that no Ownership Certificate shall be issued in any such
transfer and exchange except in accordance with the provisions and conditions
set forth below in this Section 3.03. The Trust Administrator shall be the
initial Certificate Registrar. If the Certificate Registrar resigns or is
removed, the Owner Trustee, with the consent of the Depositor, shall appoint a
successor Certificate Registrar.
Subject to satisfaction of the conditions set forth below, upon surrender
for registration of transfer of a Certificate at the office or agency maintained
pursuant to Section 3.08, the Owner Trustee shall execute, authenticate and
deliver (or cause the Trust Administrator as its authenticating agent to
authenticate and deliver), in the name of the designated transferee, a new
Certificate evidencing the Percentage Interest of the Certificate so surrendered
and dated the date of authentication by the Owner Trustee or the Certificate
Registrar.
Every Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
each Certificateholder or such Certificateholder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer or
10
exchange shall be cancelled and subsequently disposed of by the Certificate
Registrar in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Owner Trustee or the Certificate 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 a Certificate
or any other expense arising as a result of any registration of transfer or
exchange.
The preceding provisions of this Section notwithstanding, the Owner Trustee
shall not make and the Certificate Registrar shall not register transfer or
exchanges of a Certificate for a period of 15 days preceding the due date for
any payment with respect to such Certificate.
No transfer of a Certificate shall be made unless such transfer is exempt
from the registration requirements of the Securities Act and any applicable
state securities laws or is made in accordance with said Act and laws. Except in
the case of an initial transfer to an Initial Holder, in the event of any such
transfer, the Certificate Registrar or the Depositor shall prior to such
transfer require the transferee to execute (i) an investment letter (in the form
attached hereto as Exhibit D-1) certifying to the Trust, the Owner Trustee, the
Trust Administrator, the Certificate Registrar and the Depositor that such
transferee is a "qualified institutional buyer" under Rule 144A under the
Securities Act, or (ii) an investment letter (in the form attached hereto as
Exhibit D-2) certifying to the Trust, the Owner Trustee, the Trust
Administrator, the Certificate Registrar and the Depositor that such transferee
is an "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
the Securities Act), and any expense associated with the preparation and
execution of any such investment letter shall not be an expense of the Trust,
the Owner Trustee, the Trust Administrator, the Certificate Registrar or the
Depositor. A Certificateholder desiring to effect the transfer of a Certificate
shall, and does hereby agree to, indemnify the Trust, the Owner Trustee, the
Trust Administrator, the Certificate Registrar and the Depositor against any and
all liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
Except in the case of an initial transfer to an Initial Holder, no transfer
of a Certificate shall be made unless the Certificate Registrar shall have
received a representation letter (substantially in the form attached hereto as
Exhibit D-1 or D-2) from the proposed transferee of such Certificate to the
effect that such proposed transferee is not an employee benefit plan or other
retirement arrangement subject to Section 406 of ERISA, or Section 4975 of the
Code or any substantially similar applicable law, or a Person acting on behalf
of or using the assets of any such plan, which representation letter shall not
be an expense of the Trust, the Owner Trustee, the Trust Administrator, the
Certificate Registrar or the Depositor. In addition, any Retained Notes will be
subject to the same ERISA restrictions and consequences discussed above
applicable to the Ownership Certificate unless either (a) the Retained Notes are
sold or transferred to a party that is a taxable REIT subsidiary or is not
affiliated with the owner of the Ownership Certificate and at the time of such
sale or transfer: (i) the owner of the Ownership Certificate is a Permitted
Transferee; (ii) no modifications have been made to the transaction documents;
(iii) the respective ratings of the Retained Notes as of the date of such sale
or transfer are not lower than the rating of such Retained Note as of the
closing date; and (iv) no adverse changes have been made to (or that would
adversely affect the application of) the legal
11
authorities applicable to the closing date tax opinion or (b) the holder of the
Retained Notes otherwise receives a tax opinion from a law firm generally
recognized to be qualified to opine concerning the tax aspects of asset
securitization that (i) the Retained Notes "will be debt" and (ii) after the
sale or transfer, the Trust will continue to qualify as a Qualified REIT
Subsidiary for federal income tax purposes.
Prior to and as a condition of the registration of any transfer, sale or
other disposition of the Ownership Certificate (except for any transfer, sale or
other disposition which does not result in a change in the beneficial owner of
the Ownership Certificate for federal income tax purposes), each Initial Holder
of an Ownership Certificate and each Prospective Holder of an Ownership
Certificate shall represent and warrant in writing, in the case of each Initial
Holder, in substantially the form set forth in Exhibit E hereto, and in the case
of each Prospective Holder, in substantially the form set forth in Exhibit F
hereto, to the Owner Trustee, the Trust Administrator and the Certificate
Registrar and any of their respective successors that:
(i) Such Person is duly authorized to purchase the Ownership
Certificate and its purchase of investments having the characteristics of
the Ownership Certificate is authorized under, and not directly or
indirectly in contravention of, any law, charter, trust instrument or other
operative document, investment guidelines or list of permissible or
impermissible investments that is applicable to the investor;
(ii) Such Person understands that each holder of an Ownership
Certificate, by virtue of its acceptance thereof, assents to the terms,
provisions and conditions of the Agreement;
(iii) (a) Such Person is a REIT, a Qualified REIT Subsidiary, or an
entity that is disregarded for federal income tax purposes that is wholly
owned by a REIT or a Qualified REIT Subsidiary or (b) in the case of a
Prospective Holder other than the Initial Holder, such Person is a
Permitted Transferee; and
(iv) Such Person will only transfer the Ownership Certificate to a
person that is a Permitted Transferee.
In addition, any Retained Notes will be subject to the same requirements,
restrictions and consequences discussed in the preceding sentence applicable to
the Ownership Certificate unless either (a) the Retained Notes are sold or
transferred to a party that is a taxable REIT subsidiary or is not affiliated
with the owner of the Ownership Certificate and at the time of such sale or
transfer: (i) the owner of the Ownership Certificate is a Permitted Transferee;
(ii) no modifications have been made to the transaction documents; (iii) the
respective ratings of the Retained Notes as of the date of such sale or transfer
are not lower than the rating of such Retained Note as of the closing date; and
(iv) no adverse changes have been made to (or that would adversely affect the
application of) the legal authorities applicable to the closing date tax opinion
or (b) the holder of the Retained Notes otherwise receives a tax opinion from a
law firm generally recognized to be qualified to opine concerning the tax
aspects of asset securitization that (i) the Retained Notes "will be debt" and
(ii) after the sale or transfer, the Trust will continue to qualify as a
Qualified REIT Subsidiary for federal income tax purposes.
12
The Owner Trustee shall cause each Certificate to contain a legend,
substantially similar to the applicable legends provided in Exhibit A hereto,
stating that transfer of such Certificate is subject to certain restrictions and
referring prospective purchasers of the Certificates to this Section 3.03 with
respect to such restrictions.
Section 3.04. Lost, Stolen, Mutilated or Destroyed Certificate. If (a) a
mutilated Certificate is surrendered to the Certificate Registrar, or (b) the
Certificate Registrar receives evidence to its satisfaction that a Certificate
has been destroyed, lost or stolen, and there is delivered to the Certificate
Registrar proof of ownership satisfactory to the Certificate Registrar, together
with such security or indemnity as required by the Certificate Registrar and the
Owner Trustee to save each of them harmless, then in the absence of notice to
the Certificate Registrar or the Owner Trustee that such Certificate has been
acquired by a protected purchaser, the Owner Trustee shall execute on behalf of
the Trust, and the Owner Trustee or the Certificate Registrar shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like tenor and Percentage Interest.
In connection with the issuance of any new Certificate under this Section 3.04,
the Owner Trustee or the Certificate Registrar may require the payment of a sum
sufficient to cover any expenses of the Owner Trustee or the Certificate
Registrar (including any fees and expenses of counsel) and any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section 3.04 shall constitute conclusive
evidence of ownership in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 3.05. Persons Deemed Certificateholders. Prior to due presentation
of a Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar or any Certificate Paying Agent may treat any
Certificateholder as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.02 and for all other purposes whatsoever,
and none of the Trust, the Owner Trustee, the Certificate Registrar or any
Certificate Paying Agent shall be bound by any notice to the contrary.
Section 3.06. Access to List of Certificateholders' Names and Addresses.
The Certificate Registrar shall furnish or cause to be furnished to the
Depositor or the Owner Trustee, within 15 days after receipt by the Certificate
Registrar of a written request therefor from the Depositor or the Owner Trustee,
in such form as the Depositor or the Owner Trustee, as the case may be, may
reasonably require, the name and address of each Certificateholder as of the
most recent Record Date. A Certificateholder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Trust, the
Depositor, the Certificate Registrar and the Owner Trustee accountable or liable
for damages by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
Section 3.07. [Reserved]
Section 3.08. Maintenance of Office or Agency. The Certificate Registrar on
behalf of the Trust, shall maintain an office or offices or agency or agencies
where the Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Owner Trustee in respect
of the Certificates and the Operative Agreements may be served. The Certificate
Registrar shall give the Owner Trustee prompt notice, in writing, of any such
13
notice or demand. The Certificate Registrar initially designates the Corporate
Trust Office of the Trust Administrator as its office for such purposes. The
Certificate Registrar shall give prompt written notice to the Depositor, the
Owner Trustee and the Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
Section 3.09. Certificate Paying Agent.
(a) The Owner Trustee may appoint, and hereby appoints, the Trust
Administrator as Certificate Paying Agent under this Agreement. The Certificate
Paying Agent shall make distributions to each Certificateholder from the
Collection Account pursuant to Section 4.02 hereof and Sections 5.08 and 6.02 of
the Transfer and Servicing Agreement and, upon request, shall report the amounts
of such distributions to the Owner Trustee. The Certificate Paying Agent shall
have the revocable power to withdraw funds from the Collection Account for the
purpose of making the distributions referred to above. The Trust Administrator
hereby accepts such appointment and further agrees that it will be bound by the
provisions of this Agreement and the Transfer and Servicing Agreement relating
to the Certificate Paying Agent and shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Certificates in trust for the benefit of the Person entitled
thereto until such sums shall be paid to such Person or otherwise disposed
of as herein provided;
(ii) give the Owner Trustee notice of any default by the Trust of
which a Responsible Officer of the Trust Administrator has actual knowledge
in the making of any payment required to be made with respect to the
Certificates;
(iii) at any time during the continuance of any such default, upon the
written request of the Owner Trustee forthwith pay to the Owner Trustee on
behalf of the Trust all sums so held in Trust by such Certificate Paying
Agent;
(iv) immediately resign as Certificate Paying Agent and forthwith pay
to the Owner Trustee on behalf of the Trust all sums held by it in trust
for the payment of the Certificates if at any time it ceases to meet the
standards under this Section 3.09 required to be met by the Certificate
Paying Agent at the time of its appointment; and
(v) not institute bankruptcy proceedings against the Trust in
connection with this Agreement.
(b) In the event that the Trust Administrator shall no longer be the
Certificate Paying Agent hereunder, the Owner Trustee, with the consent of the
Depositor, shall appoint a successor to act as Certificate Paying Agent (which
shall be a bank or trust company). The Owner Trustee shall cause such successor
Certificate Paying Agent or any additional Certificate Paying Agent appointed by
the Owner Trustee to execute and deliver to the Owner Trustee an instrument in
which such successor Certificate Paying Agent or additional Certificate Paying
Agent shall agree with the Owner Trustee that as Certificate Paying Agent, such
successor Certificate Paying Agent or additional Certificate Paying Agent will
hold all sums, if any, held by it for payment in trust for the benefit of each
Certificateholder entitled thereto until such sums shall be paid to such
Certificateholder. The Certificate Paying Agent shall return all unclaimed funds
to the Owner Trustee, and upon removal of a Certificate Paying Agent, such
Certificate Paying Agent
14
shall also return all funds in its possession to the Owner Trustee. The
provisions of Sections 5.03, 5.04, 6.01, 6.05, 6.07, 6.08, 7.01 and 7.02 shall
apply to the Trust Administrator also in its role as Certificate Paying Agent
for so long as the Trust Administrator shall act as Certificate Paying Agent
and, to the extent applicable, to any other Certificate Paying Agent appointed
hereunder. Any reference in this Agreement to the Certificate Paying Agent shall
include any co-paying agent unless the context requires otherwise.
Section 3.10. Initial Beneficiary. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.05 and until the issuance of
the Certificates, the Depositor shall be the sole beneficiary of the Trust.
ARTICLE IV
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 4.01. Collection Account. All of the right, title and interest of
the Trust in all funds on deposit from time to time in the Collection Account
and in all proceeds thereof shall be held for the benefit of each
Certificateholder and such other persons entitled to payments therefrom. Except
as otherwise expressly provided herein or in the Transfer and Servicing
Agreement, the Collection Account shall be under the sole dominion and control
of the Owner Trustee for the benefit of the Certificateholders.
The Collection Account shall be subject to and established and maintained
in accordance with the applicable provisions of the Transfer and Servicing
Agreement and the Indenture, including, without limitation, the provisions of
Sections 5.08 and 6.02 of the Transfer and Servicing Agreement regarding
distributions from the Collection Account.
Section 4.02. Application of Trust Funds.
(a) On each Payment Date, the Owner Trustee shall direct the Certificate
Paying Agent to distribute to each Certificateholder, from amounts on deposit in
the Collection Account, the distributions as provided in Sections 5.08 and 6.02
of the Transfer and Servicing Agreement with respect to such Payment Date. The
Owner Trustee hereby directs the Certificate Paying Agent to distribute on each
Payment Date to each Certificateholder amounts on deposit in the Collection
Account in accordance with Sections 5.08 and 6.02 of the Transfer and Servicing
Agreement and the Certificate Paying Agent hereby acknowledges such direction.
(b) All payments to be made under this Agreement by the Certificate Paying
Agent shall be made only from the income and proceeds, including Net Proceeds
from the Notes, of the Trust Estate and only to the extent that the Certificate
Paying Agent has received such income or proceeds. The Bank shall not be liable
to any Certificateholder, the Indenture Trustee or the Trust Administrator for
any amounts payable pursuant to this Section 4.02 except to the extent that
non-payment is due to the Owner Trustee's acts or omissions amounting to willful
misconduct or gross negligence.
(c) Distributions to any Certificateholder shall be subordinated to the
creditors of the Trust, including, without limitation, the Noteholders.
15
Section 4.03. Method of Payment. Subject to Section 8.01(c), distributions
required to be made to any Certificateholder on any Payment Date as provided in
Section 4.02 shall be made to the each Person who was a Certificateholder on the
preceding Record Date either by wire transfer, in immediately available funds,
to the account of each such Certificateholder at a bank or other entity having
appropriate facilities therefor, if such respective Certificateholder shall have
provided to the Certificate Registrar appropriate written instructions at least
five Business Days prior to such Payment Date or, if not, by check mailed to
each such Certificateholder at the respective address of such Certificateholder
appearing in the Certificate Register.
Section 4.04. [Reserved]
Section 4.05. Segregation of Moneys; No Interest. Moneys received by or on
behalf of the Owner Trustee hereunder and deposited into the Collection Account
will be segregated except to the extent required otherwise by law or the
provisions of the Transfer and Servicing Agreement. The Owner Trustee shall not
be liable for payment of any interest in respect of such moneys.
ARTICLE V
AUTHORITY AND DUTIES OF THE OWNER TRUSTEE; ACTION BY CERTIFICATEHOLDERS
Section 5.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Notes, the Certificates, the other Operative
Agreements to which the Trust is to be a party, each certificate or other
document attached as an exhibit to or contemplated by the Operative Agreements
to which the Trust is to be a party and any amendment or other agreement or
instrument described herein, all as approved by the Depositor, as evidenced
conclusively by the Owner Trustee's execution thereof, and, on behalf of the
Trust, to direct the Trust Administrator to authenticate the Notes. 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 Operative Agreements.
Section 5.02. General Duties.
(a) 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 other Operative Agreements to which the Trust is a party and to
administer the Trust in the interest of the Certificateholders, subject to the
Operative Agreements 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 Operative
Agreements to the extent the Trust Administrator has agreed in the Transfer and
Servicing Agreement or this Agreement, respectively, to perform any act or to
discharge any duty of the Owner Trustee or the Trust hereunder or under any
Operative Agreement, and the Owner Trustee shall not be held liable for the
default or failure of the Trust Administrator to carry out its obligations under
the this Agreement or the Transfer and Servicing Agreement or any other
Operative Agreement, respectively; and
16
(b) It shall be the duty of the Depositor under the Transfer and Servicing
Agreement to obtain and preserve the Trust's qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Indenture, the Notes, the
Collateral and each other instrument and agreement included in the Trust Estate.
It shall be the duty of the Owner Trustee to cooperate with the Depositor with
respect to such matters.
Section 5.03. Action Upon Instruction.
(a) Subject to Article V and in accordance with the terms of the Operative
Agreements, the Ownership Certificate Holder 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. Such direction may be
exercised at any time by written instruction of the Ownership Certificate Holder
pursuant to this Article V.
(b) Notwithstanding the foregoing, the Owner Trustee shall not be required
to take any action hereunder or under any Operative Agreement 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 Operative Agreement 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 other Operative Agreement, or in the event that the Owner Trustee is unsure
as to the application of any provision of this Agreement or any other Operative
Agreement 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 permits any determination by 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
promptly give notice (in such form as shall be appropriate under the
circumstances) to the Ownership Certificate Holder requesting instruction 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 Ownership
Certificate Holder, the Owner Trustee shall not be liable on account of such
action 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 any other Operative
Agreement, as it shall deem to be in the best interests of each
Certificateholder, and the Owner Trustee shall have no liability to any Person
for such action or inaction.
Section 5.04. No Duties Except as Specified under Specified 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 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
(i) in accordance with the powers granted to and the authority conferred upon
the Owner Trustee pursuant to this Agreement, and (ii) in accordance with any
document or
17
instruction delivered to the Owner Trustee pursuant to Section 5.03; and no
implied duties or obligations shall be read into this Agreement or any Operative
Agreement against the Owner Trustee. Without limiting the foregoing, unless
specifically enumerated in any Operative Agreement to which the Owner Trustee is
party, the Owner Trustee (i) shall have no duty or obligation to execute, file
or deliver, or cause the preparation, filing or delivery by other persons of,
any such documents, reports, filings, instruments, certificates or opinions as
it shall be the duty of the Trust to prepare, file or deliver pursuant to the
Operative Agreements, (ii) shall have no duty or obligation to take, or refrain
from taking, any action that is the duty or the obligation of the Trust pursuant
to the Operative Agreements and (iii) shall have no duty or obligation to
monitor the Trust's duties and obligations pursuant to the Operative Agreements
nor ensure that such duties and obligations are fulfilled by the Trust. The
Owner Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to the Trust
or to prepare or file any Securities and Exchange Commission filing for the
Trust or to record this Agreement or any Operative Agreement or to prepare or
file any tax return for the Trust. 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 Trust Estate that result from actions
by, or claims against the Bank that are not related to the ownership or the
administration of the Trust Estate.
Section 5.05. Restrictions.
(a) The Owner Trustee shall not take any action that is inconsistent with
the purposes of the Trust set forth in Section 2.03. The Ownership Certificate
Holder shall not direct the Owner Trustee to take action that would violate the
provisions of this Section 5.05.
(b) The Owner Trustee shall not, except as provided herein, convey or
transfer any of the Trust's properties or assets, including those included in
the Trust Estate, to any person unless such conveyance or transfer shall not
violate the provisions of the Indenture.
Section 5.06. Prior Notice to the Certificateholders with Respect to
Certain Matters. With respect to the following matters, the Owner Trustee shall
not take action unless at least 30 days before the taking of such action, the
Owner Trustee shall have notified each Certificateholder in writing of the
proposed action and each Certificateholder shall have notified the Owner Trustee
in writing prior to the 30th day after such notice is given that each
Certificateholder has consented to such action or 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 cash distributions due and
owing under the Collateral) 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 cash distributions due and owing under the
Collateral);
(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 Delaware Trust
Statute);
18
(c) the amendment of the Indenture by a supplemental indenture or of this
Agreement, the Swap Agreement or any other Operative Agreement in circumstances
where the consent of any Noteholder is required;
(d) the amendment or other change of the Indenture by a supplemental
indenture or of this Agreement or any other Operative Agreement in circumstances
where the consent of any Noteholder is not required and such amendment
materially adversely affects the interests of any Certificateholder;
(e) the amendment of the Transfer and Servicing Agreement in circumstances
where the consent of any Securityholder is required;
(f) the amendment, change or modification of the Transfer and Servicing
Agreement, except to cure any ambiguity or to amend or supplement any provision
in a manner or add any provision that would not materially and adversely affect
the interests of any Certificateholder;
(g) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of a
successor Certificate Registrar or Certificate Paying Agent or the consent to
the assignment by the Note Registrar, Paying Agent, Indenture Trustee,
Certificate Registrar or Certificate Paying Agent of its obligations under the
Indenture or this Agreement, as applicable;
(h) the consent to the calling or waiver of any default of any Operative
Agreement;
(i) the consent to the assignment by the Indenture Trustee of its
obligations under any Operative Agreement;
(j) except as provided in Article VIII hereof, dissolve, terminate or
liquidate the Trust in whole or in part;
(k) the merger, conversion or consolidation of the Trust with or into any
other entity, or conveyance or transfer of all or substantially all of the
Trust's assets to any other entity;
(l) the incurrence, assumption or guaranty by the Trust of any indebtedness
other than as set forth in this Agreement;
(m) the taking of any action which conflicts with any Operative Agreement
or would make it impossible to carry on the ordinary business of the Trust or
change the Trust's purpose and powers set forth in this Agreement;
(n) the confession of a judgment against the Trust;
(o) the possession of the Trust assets, or assignment of the Trust's right
to property, for other than a Trust purpose; or
(p) the lending of funds by the Trust to any entity.
19
In addition, the Trust shall not commingle its assets with those of any
other entity. The Trust shall maintain its financial and accounting books and
records separate from those of any other entity. Except as expressly set forth
herein, the Trust shall pay its indebtedness, operating expenses and liabilities
from its own funds, and the Trust shall neither incur any indebtedness nor pay
the indebtedness, operating expenses and liabilities of any other entity. Except
as expressly set forth herein, the Trust shall not engage in any dissolution,
liquidation, consolidation, merger or sale of assets. The Trust shall maintain
appropriate minutes or other records of all appropriate actions and shall
maintain its office separate from the offices of the Depositor or any of its
Affiliates. The Trust shall not engage in any business activity in which it is
not currently engaged other than as contemplated by the Operative Agreements and
related documentation. The Trust shall not form, or cause to be formed, any
subsidiaries and shall not own or acquire any asset other than as contemplated
by the Operative Agreements and related documentation. Other than as
contemplated by the Operative Agreements and related documentation, the Trust
shall not follow the directions or instructions of the Depositor. The Trust
shall conduct its own business in its own name. The Trust shall observe all
formalities required under the Delaware Trust Statute. The Trust shall not hold
out its credit as being available to satisfy the obligations of any other person
or entity. The Trust shall not acquire the obligations or securities of its
Affiliates or the Seller. Other than as contemplated by the Operative Agreements
and related documentation, the Trust shall not pledge its assets for the benefit
of any other person or entity. The Trust shall correct any known
misunderstanding regarding its separate identity. The Trust shall not identify
itself as a division of any other person or entity.
For accounting purposes, the Trust shall be treated as an entity separate
and distinct from each Certificateholder. The pricing and other material terms
of all transactions and agreements to which the Trust is a party shall be
intrinsically fair to all parties thereto. This Agreement is and shall be the
only agreement among the parties thereto with respect to the creation, operation
and termination of the Trust.
The Owner Trustee shall not have the power, except upon the written
direction of the Ownership Certificate Holder, and to the extent otherwise
consistent with the Operative Agreements, to (i) remove or replace the Indenture
Trustee, or (ii) institute a bankruptcy against the Trust. So long as the
Indenture remains in effect, to the extent permitted by applicable law, the
Ownership Certificate Holder shall have no power to commence, and shall not
commence, any bankruptcy with respect to the Trust or direct the Owner Trustee
to commence any bankruptcy with respect to the Trust.
(q) The Owner Trustee shall not have the power, except upon the written
direction of the Ownership Certificate Holder, to (i) remove the Trust
Administrator under the Transfer and Servicing Agreement pursuant to Section
7.10 thereof, (ii) appoint a successor Trust Administrator pursuant to Section
7.10 of the Transfer and Servicing Agreement, or (iii) except as expressly
provided in the Indenture, to sell the Collateral after the termination of the
Indenture. The Owner Trustee shall take the actions referred to in the preceding
sentence only upon written instructions signed and authorized by the Ownership
Certificate Holder.
Section 5.07. Action by the Holder with Respect to Bankruptcy. The Owner
Trustee shall not have the power to commence or consent to a bankruptcy relating
to the Trust without
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the prior approval of the Ownership Certificate Holder and the delivery to the
Owner Trustee by the Ownership Certificate Holder of a certificate certifying
that the Ownership Certificate Holder reasonably believes that the Trust is
insolvent. This paragraph shall survive for one year and one day following
termination of this Agreement. So long as the Indenture remains in effect, the
Ownership Certificate Holder shall not have the power to institute, and shall
not institute, any bankruptcy with respect to the Trust or direct the Owner
Trustee to take such action.
Section 5.08. Restrictions on the Ownership Certificate Holder's Power. The
Ownership Certificate Holder shall not direct the Owner Trustee to take or to
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 Operative Agreements or would be contrary to Section 2.03 nor shall the
Owner Trustee be obligated to follow any such direction, if given.
ARTICLE VI
CONCERNING THE OWNER TRUSTEE
Section 6.01. Acceptance of Trusts and Duties. The Owner Trustee accepts
the trusts hereby created and agrees to perform the same but only upon the terms
of this Agreement and the terms of the Transfer and Servicing Agreement. The
Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the Trust Estate upon the terms of this Agreement. The Bank
shall not be answerable or accountable hereunder or under any other Operative
Agreements under any circumstances, except (i) for its own willful misconduct,
gross negligence or bad faith, (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 6.04, (iii) for liabilities
arising from the failure by the Bank to perform obligations expressly undertaken
by it in the last sentence of Section 5.04, or (iv) for taxes, fees or other
charges based on or measured by any fees, commissions or compensation received
by the Bank in connection with any of the transactions contemplated by this
Agreement, any other Operative Agreements or the Notes. In particular, but not
by way of limitation:
(a) The Bank shall not be liable for any error of judgment made in good
faith by a Responsible Officer of the Owner Trustee;
(b) The Bank shall not be liable with respect to any action taken or
omitted to be taken by the Owner Trustee in accordance with the instructions of
any Certificateholder;
(c) No provision of this Agreement shall require the Bank to expend or risk
funds or otherwise incur any financial liability in the performance of any of
the Owner Trustee's rights or powers hereunder or under any other Operative
Agreements if the Bank 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;
(d) Under no circumstance shall the Bank be liable for indebtedness
evidenced by or arising under any of the Operative Agreements, including the
principal of and interest on the Notes;
(e) The Bank shall not be liable with respect to any action taken or
omitted to be taken by the Depositor, the Trust Administrator, the Master
Servicer, the Indenture Trustee, any Officer or the Certificate Paying Agent
under this Agreement or any other Operative Agreement
21
or otherwise and the Bank shall not be obligated to perform or monitor the
performance of any obligations or duties under this Agreement or the other
Operative Agreements which are to be performed by the Certificate Paying Agent
under this Agreement, the Trust Administrator under the Transfer and Servicing,
the Indenture Trustee under the Indenture or by any other Person under any of
the Operative Agreements; and
(f) The Bank shall not be responsible for or in respect of the recitals
herein, the validity or sufficiency of this Agreement or for the due execution
hereof by the Depositor or for the form, character, genuineness, sufficiency,
value or validity of any of the Trust Estate or for or in respect of the
validity or sufficiency of the Operative Agreements, other than the certificate
of authentication on the Certificates, and the Bank shall in no event assume or
incur any liability, duty or obligation to any Noteholder, the Depositor or to
any Certificateholder, other than as expressly provided for herein.
Section 6.02. Furnishing of Documents. The Owner Trustee will furnish to
the Trust Administrator (for distribution to each Certificateholder), 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 hereunder or under the Operative
Agreements unless the Trust Administrator shall have already received the same.
Section 6.03. Books and Records. The Owner Trustee shall keep or cause to
be kept proper books of record and account of all the transactions under this
Agreement, including a record of the name and address of each Certificateholder.
The Owner Trustee shall be deemed to have complied with this Section 6.03 by the
appointment of the Trust Administrator and the Certificate Paying Agent to
perform the duties hereunder.
Section 6.04. Representations and Warranties.
(a) The Bank represents and warrants to the Depositor, for the benefit of
each Certificateholder and the Swap Counterparty, as follows:
(i) the Bank is a national banking association, duly organized and
validly existing under the laws of the United States and has the power and
authority to execute, deliver and perform its obligations under this
Agreement and (assuming due authorization, execution and delivery of this
Agreement by the Depositor and Trust Administrator), has the power and
authority as Owner Trustee to execute and deliver the Operative Agreements
and to perform its obligations thereunder and, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
this Agreement constitutes a legal, valid and binding obligation of the
Bank or the Owner Trustee, as the case may be, enforceable against the Bank
or the Owner Trustee, as the case may be, in accordance with its terms,
except that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
22
(ii) the Bank has no reason to believe that anyone authorized to act
on its behalf has offered any interest in and to the Trust for sale to, or
solicited any offer to acquire any of the same from, anyone;
(iii) the execution, delivery and performance by the Bank, either in
its individual capacity or as Owner Trustee, as the case may be, of the
Operative Agreements will not result in any violation of, or be in any
conflict with, or constitute a default under any of the provisions of any
indenture, mortgage, chattel mortgage, deed of trust, conditional sales
contract, lease, note or bond purchase agreement, license, judgment, order
or other agreement to which the Bank is a party or by which it or any of
its properties is bound;
(iv) the execution and delivery by the Bank of this Agreement, and the
performance of its duties as Owner Trustee hereunder, do not require the
consent or approval of, the giving of notice to, or the registration with,
or the taking of any other action with respect to, any governmental
authority or agency of the State of Delaware (except as may be required by
the Delaware Trust Statute); and
(v) there are no pending or, to the best of its knowledge, threatened
actions or proceedings against the Bank before any court, administrative
agency or tribunal which, if determined adversely to it, would materially
and adversely affect its ability, either in its individual capacity or as
Owner Trustee, as the case may be, to perform its obligations under this
Agreement or the Operative Agreements.
(b) ▇▇▇▇▇ Fargo Bank, N.A., as Trust Administrator, hereby represents and
warrants to the Depositor, for the benefit of each Certificateholder and the
Swap Counterparty, that:
(i) it is a national banking association, duly organized and validly
existing in good standing under the laws of the United States, and has the
power and authority to execute, deliver and perform its obligations under
this Agreement and, assuming the due authorization, execution and delivery
hereof by the other parties hereto, this Agreement constitutes a legal,
valid and binding obligation of the Trust Administrator, enforceable
against the Trust Administrator in accordance with its terms, except that
(a) the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefor may
be brought;
(ii) it has taken all action necessary to authorize the execution and
delivery by it of this Agreement, and this Agreement will be executed and
delivered by one of its officers who is duly authorized to execute and
deliver this Agreement on its behalf; and
(iii) 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, governmental rule or regulation governing the banking or trust
powers of the Trust Administrator or any
23
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.
Section 6.05. Reliance; Advice of Counsel.
(a) Except as provided in Section 6.01, 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
or partnership entity as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the manner of ascertainment of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president (or the general
partner, in the case of a partnership) and by the treasurer or any assistant
treasurer or the secretary or any assistant secretary of the relevant party, as
to such fact or matter, and such certificate shall constitute full protection to
the Owner Trustee for any action taken or omitted to be taken by it in good
faith in reliance thereon.
(b) In its exercise or administration of the trusts and powers hereunder,
including its obligations under Section 5.02(b), and in the performance of its
duties and obligations under this Agreement or the other Operative Agreements,
the Owner Trustee may employ agents and attorneys and enter into agreements
(including the Transfer and Servicing Agreement) with any of them, and the Owner
Trustee shall not be answerable for the default or misconduct of any such agents
or attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care. If, and to the extent, the Seller shall have
failed to reimburse the Owner Trustee for all reasonable expenses and
indemnities incurred pursuant to this Section 6.05(b), as provided in Section
7.01 and Section 7.02, the Owner Trustee may seek reimbursement therefor from
the Trust Estate.
(c) In the administration of the trusts and performance of its duties
hereunder, the Owner Trustee may consult with counsel, accountants and other
skilled Persons to be selected and employed by it, and the Owner Trustee shall
not be liable for anything done, suffered or omitted in good faith by it in
accordance with the reasonable advice or opinion of any such counsel,
accountants or other skilled Persons. If, and to the extent, the Seller shall
have failed to reimburse the Owner Trustee for all reasonable expenses and
indemnities incurred pursuant to this Section 6.05(c), as provided in Section
7.01 and Section 7.02, the Owner Trustee may seek reimbursement therefor from
the Trust Estate.
Section 6.06. Not Acting in Individual Capacity. Except as provided in this
Article VI, in accepting the trusts hereby created the Owner Trustee acts solely
as trustee hereunder and not in its individual capacity, and all persons having
any claim against the Owner Trustee by reason of the transactions contemplated
by the Operative Agreements shall look only to the Trust Estate for payment or
satisfaction thereof.
24
Section 6.07. Owner Trustee Not Liable for Certificates or Collateral. The
recitals contained herein and in the Certificates (other than the signatures and
countersignatures of the Owner Trustee on the Certificates) 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 Operative Agreement or of
the Certificates (other than the signatures and countersignatures of the Owner
Trustee on the Certificates) or the Notes, or of any Collateral 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 Collateral, or the perfection and priority of any security interest created
by any Collateral or the maintenance of any such perfection and priority, or for
or with respect to the sufficiency of the Trust Estate or its ability to
generate the payments to be distributed to Certificateholders under this
Agreement or the Noteholders under the Indenture, including, without limitation:
the existence, condition and ownership of any Collateral; the existence and
enforceability of any insurance thereon; the existence and contents of any
Collateral on any computer or other record thereof; the validity of the
assignment of any Collateral to the Trust or of any intervening assignment; the
completeness of any Collateral; the performance or enforcement of any
Collateral; the compliance by the Depositor with any warranty or representation
made under any Operative Agreements or in any related document or the accuracy
of any such warranty or representation or any action of the Trust Administrator
or the Indenture Trustee taken in the name of the Owner Trustee.
Section 6.08. Owner Trustee May Own Notes. The Owner Trustee in its
individual capacity may become an owner or pledgee of Notes and may deal with
the Depositor, the Trust Administrator and the Indenture Trustee in banking
transactions with the same rights as it would have if it were not Owner Trustee.
Section 6.09. Licenses. The Depositor shall cause the Trust to use its best
efforts to obtain and maintain the effectiveness of any licenses required in
connection with this Agreement and the other Operative Agreements and the
transactions contemplated hereby and thereby until such time as the Trust shall
terminate in accordance with the terms hereof. It shall be the duty of the Owner
Trustee to cooperate with the Depositor with respect to such matters.
Section 6.10. Doing Business in Other Jurisdictions. Notwithstanding
anything contained herein to the contrary, neither the Bank nor the Owner
Trustee shall be required to take any action in any jurisdiction other than in
the State of Delaware if the taking of such action will (i) require the consent
or approval or authorization or order of or the giving of notice to, or the
registration with or the taking of any other action in respect of, any state or
other governmental authority or agency of any jurisdiction other than the State
of Delaware; (ii) result in any fee, tax or other governmental charge under the
laws of any jurisdiction or any political subdivisions thereof in existence on
the date hereof other than the State of Delaware becoming payable by the Bank or
the Owner Trustee; or (iii) subject the Bank or the Owner Trustee to personal
jurisdiction in any jurisdiction other than the State of Delaware for causes of
action arising from acts unrelated to the consummation of the transactions by
the Bank or the Owner Trustee, as the case may be, contemplated hereby. The
Owner Trustee shall be entitled to obtain advice of counsel (which advice shall
be an expense of the Trust) to determine whether any action required to be taken
pursuant to this Agreement results in the consequences described in clauses (i),
(ii) and (iii) of the preceding sentence. In the event that such counsel advises
the Owner Trustee that
25
such action will result in such consequences, the Owner Trustee will appoint a
co-trustee pursuant to Section 9.05 hereof to proceed with such action.
Section 6.11. ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act Certification. Notwithstanding anything to
the contrary herein or in any Operative Agreement, the Owner Trustee shall not
be required to execute, deliver or certify on behalf of the Trust or any other
Person any filings, certificates, affidavits or other instruments in connection
with certifications required under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
ARTICLE VII
INDEMNIFICATION AND COMPENSATION
Section 7.01. Trust Expenses. The Seller shall pay the 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 in connection therewith. The Seller shall also pay (or reimburse
the Bank for) all reasonable expenses of the Owner Trustee hereunder, including,
without limitation, the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Owner Trustee may
employ in connection with the exercise and performance of its rights and duties
under the Operative Agreements.
Section 7.02. Indemnification. The Seller agrees to assume liability for,
and indemnify the Bank and its successors, assigns, officers, directors, agents
and servants, against and from, any and all liabilities, obligations, losses,
damages, taxes, claims, actions, suits, costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may be imposed on, incurred by or asserted at
any time against the Bank (whether or not indemnified against by other parties)
in any way relating to or arising out of this Agreement, any Operative
Agreement, the Collateral, the administration of the Trust Estate or the action
or inaction of the Owner Trustee hereunder, except only that the Seller shall
not be required to indemnify the Bank for Expenses arising or resulting from any
of the matters described in the third sentence of Section 6.01. The indemnities
contained in this Section 7.02 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, 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 7.03. Compensation. The Bank shall receive as compensation for its
services hereunder such fees as are set forth in the Fee Letter Agreement
between the Bank and the Seller.
Section 7.04. Lien on Trust Estate. The Bank shall have a lien on the Trust
Estate for any compensation or indemnity due hereunder, such lien to be subject
only to prior liens of the Indenture. The Bank shall not bring any proceedings
to foreclose on such lien if and to the extent the Trust Estate is subject to
the lien of the Indenture. Any amount paid to the Owner Trustee pursuant to this
Article VII shall be deemed not to be part of the Trust Estate immediately after
such payment.
26
ARTICLE VIII
TERMINATION OF AGREEMENT
Section 8.01. Termination of Agreement.
(a) This Agreement (other than Article VII) shall terminate and the trusts
created hereby shall dissolve and terminate and the Trust Estate shall, subject
to the Indenture and Sections 4.01 and 7.04 and Section 3808 of the Delaware
Trust Statute, be distributed to the Certificateholders, and this Agreement
shall be of no further force or effect, upon the earlier of (i) the full payment
of principal and interest due on all Classes of the Notes and all obligations
under the Swap Agreement; and (ii) the sale or other final disposition by the
Indenture Trustee or the Owner Trustee, as the case may be, of all the Trust
Estate and the final distribution by the Indenture Trustee or the Owner Trustee,
as the case may be, of all moneys or other property or proceeds of the Trust
Estate in accordance with the terms of the Indenture, the Transfer and Servicing
Agreement and Section 4.02. The bankruptcy, liquidation or dissolution of any
Certificateholder shall not operate to terminate this Agreement, nor entitle
such Certificateholder's legal representatives to claim an accounting or to take
any action or proceeding in any court for a partition or winding up of the Trust
Estate, nor otherwise affect the rights, obligations and liabilities of the
parties hereto.
(b) Except as provided in Section 8.01(a), none of the Depositor or any
Certificateholder shall be entitled to revoke or terminate the Trust established
hereunder.
(c) Notice of any termination of the Trust, specifying the Payment Date
upon which Certificateholders shall surrender their Certificates to the
Certificate Paying Agent for payment of the final distribution and cancellation,
shall be given by the Certificate Paying Agent by letter to the
Certificateholders, the Swap Counterparty and the Rating Agencies mailed within
five Business Days of receipt of notice of the final payment on the Notes
pursuant to the Transfer and Servicing Agreement, stating (i) the Payment Date
upon or with respect to which final payment of the Certificates shall be made
upon presentation and surrender of the Certificates at the office of the
Certificate 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 presentation and surrender of
the Certificates at the office of the Certificate Paying Agent therein
specified. The Certificate Paying Agent shall give such notice to the Owner
Trustee and the Certificate Registrar at the time such notice is given to the
Certificateholders. Upon presentation and surrender of the Certificates, the
Certificate Paying Agent shall cause to be distributed to the applicable
Certificateholder amounts distributable on such Payment Date pursuant to Section
5.08 and Section 6.02 of the Transfer and Servicing Agreement.
(d) Upon the winding up of the Trust and its termination, the Owner Trustee
shall upon the written request of the Depositor cause the Certificate of Trust
to be cancelled by filing a certificate of cancellation with the Secretary of
State in accordance with the provisions of Section 3810 of the Delaware Trust
Statute.
27
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 9.01. Eligibility Requirements for Owner Trustee. The Owner Trustee
shall at all times be a corporation satisfying the provisions of Section 3807(a)
of the Delaware Trust Statute; 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; and having (or having a parent
which has) a short-term debt rating of at least "A-1" or the equivalent by, or
which is otherwise acceptable to, the Rating Agencies. 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,
the Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 9.02.
Section 9.02. Resignation or Removal of Owner Trustee. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving 30 days' prior written notice thereof to the Depositor, the Swap
Counterparty and the Indenture Trustee. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor Owner Trustee 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 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 9.01 and shall fail to resign after written
request therefor by the Depositor, 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
Depositor may remove the Owner Trustee. If the Depositor shall remove the Owner
Trustee under the authority of the immediately preceding sentence, the Depositor
shall promptly appoint a successor Owner Trustee 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 payment of
all fees 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 shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 9.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Trust Administrator shall provide notice of such
resignation or removal of the Owner Trustee to the Rating Agencies.
Section 9.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 9.02 shall execute, acknowledge and deliver to the
Trust Administrator and to its predecessor Owner Trustee an instrument accepting
such appointment under this
28
Agreement, and thereupon the resignation or removal of the predecessor Owner
Trustee shall become effective and such successor Owner Trustee without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties, and obligations of its predecessor under this 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 Trust Administrator 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.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 9.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Trust Administrator shall mail notice of the successor of such
Owner Trustee to all Certificateholders, the Indenture Trustee, the Noteholders,
the Swap Counterparty and the Rating Agencies. If the Trust Administrator 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 Trust Administrator.
Section 9.04. Merger or Consolidation of Owner Trustee. Any Person into
which the Owner Trustee may be merged or converted or with which it may be
consolidated or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such Person shall be eligible pursuant to Section 9.01, 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.
Section 9.05. Appointment of Co-Trustee or Separate 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 Trust Estate or any Collateral may at the time be located, and for the
purpose of performing certain duties and obligations of the Owner Trustee with
respect to the Trust and the Certificates under the Transfer and Servicing
Agreement, the Owner Trustee shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by the Owner Trustee to
act as co-trustee, jointly with the Owner Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Estate, and to vest in such
Person, in such capacity, such title to the Trust, 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-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee pursuant to
Section 9.01 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 9.03.
29
The Owner Trustee hereby appoints the Trust Administrator for the purpose
of establishing and maintaining the Collection Account and making the
distributions therefrom to the Persons entitled thereto pursuant to Section 5.08
and Section 6.02 of the Transfer and Servicing Agreement.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provision and conditions:
(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 trustee or co-trustee jointly (it being
understood that such separate trustee or co-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 Trust or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Owner
Trustee;
(b) no trustee under this Agreement shall be personally liable by reason of
any act or omission of any other trustee under this Agreement; and
(c) the Trust Administrator and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or co-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-trustees, as if given
to each of them. Every instrument appointing any separate trustee or co-trustee,
other than this Agreement, shall refer to this Agreement and to the conditions
of this Article. Each separate trustee and co-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 and a copy thereof given
to the Trust Administrator.
Any separate trustee or co-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 separate trustee or co-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 X
MISCELLANEOUS
Section 10.01. Supplements and Amendments. This Agreement may be amended by
the Depositor, the Trust Administrator and the Owner Trustee, with the consent
of each Certificateholder and with the prior written consent of the Swap
Counterparty (but only to the
30
extent such amendment materially adversely affects the amounts, priority or
timing of payments under the Swap Agreement and the Swap Agreement is in effect)
and with prior written notice to the Rating Agencies, but without the consent of
any of the Noteholders 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 each Certificateholder; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Noteholder or Certificateholder or adversely affect
the tax status of the Trust. An amendment shall not be deemed to adversely
affect in any material respect the interests of any Noteholder or
Certificateholder and no opinion referred to in the preceding proviso shall be
required to be delivered if the Person requesting the amendment obtains a letter
from each Rating Agencies stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to each
applicable Class of Notes and Certificates. Notwithstanding the preceding
sentence, an opinion shall be required with respect to tax matters as set forth
in this paragraph.
This Agreement may also be amended from time to time by the Depositor, the
Trust Administrator and the Owner Trustee, with the prior written consent of the
Rating Agencies and with the prior written consent of the Indenture Trustee, the
holders of Notes evidencing more than 66 2/3 % of the Outstanding Balance of the
Notes, the consent of each Certificateholder and with the prior written consent
of the Swap Counterparty (but only to the extent such amendment materially
adversely affects the amounts, priority or timing of payments under the Swap
Agreement and the Swap Agreement is in effect), 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 any
Certificateholder; provided, however, that no such amendment shall, as evidenced
by an Opinion of Counsel, adversely affect the tax status of the Trust; and
provided, further, 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 Collateral or payments that shall be required to be made for the
benefit of the Noteholders or any Certificateholder or (b) reduce the aforesaid
percentage of the Outstanding Balance of the Notes required to consent to or to
waive the requirement for any Certificateholder to consent to any such
amendment, in either case of clause (a) or (b) without the consent of the
holders of all the outstanding Notes and each Certificateholder.
Notwithstanding the foregoing, no provision of Sections 2.03 or 5.06 hereof
may be amended in any manner unless (i) 100% of the Outstanding Balance of the
Noteholders have consented in writing thereto, (ii) the Rating Agencies have
consent in writing thereto or (iii) the Notes have been paid in full and the
Indenture has been discharged.
Promptly after the execution of any such amendment or consent, the Trust
Administrator shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and the
Rating Agencies.
It shall not be necessary for the consent of the Certificateholders, the
Noteholders or the Indenture Trustee pursuant to this Section 10.01 to approve
the particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance
31
thereof. The manner of obtaining such consents (and any other consents of the
Certificateholders provided for in this Agreement or in any other Operative
Agreement) and of evidencing the authorization of the execution thereof by the
Certificateholders 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 and the Trust Administrator shall be
entitled to receive and rely upon an Opinion of Counsel, at the expense of the
Trust, stating that the execution of such amendment is authorized or permitted
by this Agreement. Neither the Owner Trustee nor the Trust Administrator shall
be obligated to enter into any such amendment which affects the Owner Trustee's
or Trust Administrator's own rights, duties or immunities under this Agreement
or otherwise.
Section 10.02. No Legal Title to Trust Estate in Certificateholders. The
Certificateholders shall not have legal title to any part of the Trust Estate
and shall only be entitled to receive distributions with respect to their
respective undivided beneficial interest therein pursuant to Section 4.02 once
all amounts then owing with respect to the Notes have been paid in accordance
with the Indenture. No transfer, by operation of law of any right, title and
interest of any Certificateholder in and to its undivided beneficial interest in
the Trust Estate or hereunder shall operate to terminate this Agreement or the
trusts hereunder or entitle any successor transferee to an accounting or to the
transfer to it of legal title to any part of the Trust Estate.
Section 10.03. Pledge of Collateral by Owner Trustee is Binding. The pledge
of the Collateral to the Indenture Trustee by the Trust made under the Indenture
and pursuant to the terms of this Agreement shall bind each Certificateholder
and shall be effective to transfer or convey the rights of the Trust and each
Certificateholder in and to such Collateral to the extent set forth in the
Indenture. No purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such pledge or as to the
application of any proceeds with respect thereto by the Owner Trustee.
Section 10.04. Limitations on Rights of Others. Nothing in this Agreement,
whether express or implied (except for Section 7.04), shall be construed to give
to any Person other than the Owner Trustee and the Certificateholders any legal
or equitable right in the Trust Estate or under or in respect of this Agreement
or any covenants, conditions or provisions contained herein.
Section 10.05. Notices. Unless otherwise expressly specified or permitted
by the terms hereof, all notices shall be in writing and delivered by hand, by
courier or mailed by certified mail, postage prepaid, (a) if to the Owner
Trustee or the Trust, addressed to it at the Corporate Trust Office of the Owner
Trustee or to such other address as the Owner Trustee may have set forth in a
written notice to the Certificateholders and the Depositor addressed to it at
the address set forth for such Certificateholders in the Certificate Register;
(b) if to the Trust Administrator, addressed to it at the Corporate Trust Office
of the Trust Administrator; and (c) if to the
32
Depositor, Fieldstone Mortgage Investment Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Whenever any notice in writing is
required to be given by the Owner Trustee or the Trust Administrator, such
notice shall be deemed given and such requirement satisfied if such notice is
mailed by certified mail, postage prepaid, addressed as provided above.
Section 10.06. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.07. 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 10.08. Successors and Assigns. All representations, warranties,
covenants and agreements contained herein shall be binding upon, and inure to
the benefit of, the Owner Trustee and its successors and assigns and the Swap
Counterparty, the Depositor and each Certificateholder and its respective
successors, all as herein provided. Any request, notice, direction, consent,
waiver or other instrument or action by any Certificateholder shall bind the
successors of each such Certificateholder. Notwithstanding anything to the
contrary herein, the Swap Counterparty is an express third party beneficiary of
this Agreement.
Section 10.09. 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 10.10. Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE
WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 10.11. No Petition.
(a) The Owner Trustee and the Trust Administrator, by entering into this
Agreement, each Certificateholder, by accepting the Certificates, 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 Depositor or the Trust, or join in any institution against the
Depositor or the Trust of, any bankruptcy under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Certificates, the Notes, this Agreement or any of the other Operative
Agreements.
(b) The Depositor shall not be liable for the default or misconduct of the
Trust Administrator, the Owner Trustee, the Indenture Trustee or the Certificate
Paying Agent under
33
any of the Operative Agreements or otherwise and the Depositor shall have no
obligation or liability to perform the obligations of the Trust under this
Agreement or the Operative Agreements that are required to be performed by the
Trust Administrator under the Transfer and Servicing Agreement or the Indenture
Trustee under the Indenture.
Section 10.12. No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificate represents a
beneficial interest in the Trust only and does not represent an interest in or
an obligation of the Depositor, the Trust Administrator, the Owner Trustee, any
co-trustee, the Bank or any Affiliate thereof (other than the Trust) 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 Certificates or the
other Operative Agreements.
Section 10.13. Customer Identification. The Depositor's legal name,
principal place of business, local office or other physical location street
address is Fieldstone Mortgage Investment Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and its government issued
identification number is ▇▇-▇▇▇▇▇▇▇. The Seller's legal name, principal place of
business, local office or other physical location street address is Fieldstone
Investment Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, and its government issued identification number is ▇▇-▇▇▇▇▇▇▇. In
connection with any federal, state or local laws requiring financial
institutions to obtain, verify and record information that identifies each
person or entity who opens an account, the Owner Trustee may request, and the
Seller and the Depositor agree to promptly provide to the Owner Trustee, copies
of documentation which substantiates the identity of the Depositor or the
Seller, as applicable. Such documentation may include, but is not limited to,
financial statements, government licenses, certified copies of formation
documents or identification documentation of principals claiming to represent
such party.
ARTICLE XI
OFFICERS
Section 11.01. Appointment of Officers. The Trust may have one or more
Officers who are hereby empowered to take and are responsible for performing all
ministerial duties on behalf of the Trust pursuant to this Agreement and the
other Operative Agreements, including, without limitation, the execution of the
Officers' Certificate (as defined in the Indenture), the Trust Order (as defined
in the Indenture), the Trust Request (as defined in the Indenture), the annual
compliance report required under Section 3.09 of the Indenture, and any annual
reports, documents and other reports which the Trust is required to file with
the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended. Each of the Chairman of the Board,
the Chief Executive Officer, the President, each Senior Vice President and each
Vice President of the Depositor is hereby appointed as an Officer of the Trust.
The Depositor shall promptly deliver to the Owner Trustee and the Indenture
Trustee a list of its officers who shall become the Officers of the Trust
pursuant to this Section 11.01.
Section 11.02. Officers to Provide Information to the Owner Trustee. It
shall be the duty of each Officer to keep the Owner Trustee reasonably and
promptly informed as to material
34
events relating to the Trust, including, without limitation, all claims pending
or threatened against the Trust, the purchase and sale of any material portion
of the Trust Estate and the execution by such Officer on behalf of the Trust of
any material agreements or instruments.
35
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.
FIELDSTONE MORTGAGE INVESTMENT CORPORATION,
as Depositor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity but solely as
Trust Administrator
By: /s/ ▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Vice President
Acknowledged and Agreed, solely
for purposes of Sections 2.11, 7.01, 7.02 and 10.13:
FIELDSTONE INVESTMENT CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
EXHIBIT A
FORM OF CERTIFICATES
THIS OWNERSHIP CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY
STATE. THIS OWNERSHIP CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD
OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF ONLY TO (A) A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE ACT, IN A
TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT PURSUANT TO
RULE 144A OR (B) AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE ACT THAT IS ACQUIRING THE
OWNERSHIP CERTIFICATE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE ACT. NO PERSON IS OBLIGATED TO REGISTER THIS OWNERSHIP CERTIFICATE UNDER THE
ACT OR ANY STATE SECURITIES LAWS.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY A TRANSFEREE FOR, OR ON BEHALF OF, AN
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT THAT IS SUBJECT TO SECTION
406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") OR ANY SUBSTANTIALLY SIMILAR LAW, OR ANY ENTITY DEEMED TO HOLD THE PLAN
ASSETS OF THE FOREGOING. EACH INVESTOR IN THIS CERTIFICATE WILL BE DEEMED TO
MAKE THE FOREGOING REPRESENTATIONS AND WILL FURTHER BE DEEMED TO REPRESENT,
WARRANT AND COVENANT THAT IT WILL NOT SELL, PLEDGE OR OTHERWISE TRANSFER THIS
CERTIFICATE IN VIOLATION OF THE FOREGOING.
THIS OWNERSHIP CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE,
THE TRUST ADMINISTRATOR OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS
EXPRESSLY PROVIDED IN THE TRUST AGREEMENT OR THE OTHER OPERATIVE AGREEMENTS.
THIS OWNERSHIP CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN
THE TRANSFER AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS OWNERSHIP CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED AN AFFIDAVIT FROM THE PROPOSED TRANSFEREE IN WHICH
THE PROPOSED TRANSFEREE DECLARES THAT IT IS EITHER (A)(i) A REAL ESTATE
INVESTMENT TRUST (A "REIT") WITHIN
THE MEANING OF SECTIONS 856 AND 857 OF THE CODE, (ii) A QUALIFIED REIT
SUBSIDIARY WITHIN THE MEANING OF SECTION 856(i) OF THE CODE OR (iii) AN ENTITY
THAT IS DISREGARDED FOR UNITED STATES FEDERAL INCOME TAX PURPOSES THAT IS WHOLLY
OWNED BY A REIT OR QUALIFIED REIT SUBSIDIARY OR (B) A LENDER OR REPURCHASE
AGREEMENT COUNTERPARTY IN A REPURCHASE AGREEMENT OR SECURED LENDING TRANSACTION
THAT QUALIFIES AS A BORROWING FOR FEDERAL INCOME TAX PURPOSES. MOREOVER, ANY
ATTEMPTED TRANSFER OF THIS OWNERSHIP CERTIFICATE TO A PERSON OTHER THAN A
PERMITTED TRANSFEREE SHALL BE VOID AB INITIO AND THE PURPORTED TRANSFEREE SHALL
ACQUIRE NO RIGHTS IN THIS OWNERSHIP CERTIFICATE.
A-2
FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2005-3
Certificate No. 1 Percentage Interest: 100%
First Payment Date: December 25, 2005
Evidencing a fractional undivided equity interest in the Trust Estate, the
property of which consists primarily of the Collateral in Fieldstone Mortgage
Investment Trust, Series 2005-3 (the "Trust"), a Delaware statutory trust formed
by Fieldstone Mortgage Investment Corporation, a Maryland corporation, as
depositor (the "Depositor"), pursuant to the Agreement referred to below.
This certifies that FIELDSTONE MORTGAGE OWNERSHIP CORP. is the registered
owner of the Percentage Interest referred to above.
The Trust was created pursuant to a Trust Agreement (the "Agreement") dated
as of October 25, 2005, between the Depositor and U.S. Bank Trust National
Association, as owner trustee (the "Owner Trustee," which term includes any
successor entity under the Agreement), as amended and restated as of November
23, 2005, among the Depositor, the Owner Trustee and ▇▇▇▇▇ Fargo Bank, N.A., as
trust administrator (the "Trust Administrator"), a summary of certain of the
pertinent provisions of which is set forth hereinafter. This Ownership
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Ownership
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound, and the Transfer and Servicing Agreement dated as of November 1, 2005
(as amended or supplemented from time to time, the "Transfer and Servicing
Agreement"), by and among the Trust, the Depositor, ▇▇▇▇▇ Fargo Bank, N.A., as
trust administrator (in such capacity, the "Trust Administrator") and master
servicer (in such capacity, the "Master Servicer"), Fieldstone Servicing
Corporation, as servicer, JPMorgan Chase Bank, National Association, as
subservicer, Fieldstone Investment Corporation, as seller, and HSBC Bank USA,
National Association, as indenture trustee (the "Indenture Trustee").
Distributions on this Ownership Certificate shall be made by the Trust
Administrator, in its capacity as Certificate Paying Agent under the Agreement
and the Transfer and Servicing Agreement.
This Ownership Certificate is issued under the Agreement to which reference
is hereby made for a statement of the respective rights thereunder of the
Depositor, the Owner Trustee and the Holder of the Ownership Certificate and the
terms upon which the Ownership Certificate is executed and delivered. All terms
used in this Ownership Certificate which are defined in the Agreement shall have
the meanings assigned to them in the Agreement. The Trust Estate consists of the
Collateral in the Fieldstone Mortgage Investment Trust, Series 2005-3. To the
extent not otherwise defined herein, capitalized terms used herein have the
meanings assigned to such terms in the Agreement or the Transfer and Servicing
Agreement. The rights of the Holder are subordinated to the rights of the
Noteholders, as set forth in the Indenture dated as of November 1, 2005, among
the Trust, Trust Administrator and the Indenture Trustee.
There will be distributed on the 25th day of each month or, if such 25th
day is not a Business Day, the next Business Day (each, a "Payment Date"),
commencing in December 2005,
A-3
to the Holder at the close of business on the last Business Day of the month
preceding the month of such Payment Date (the "Record Date"), the amount to be
distributed to Holder on such Payment Date, all as described in the Transfer and
Servicing Agreement.
The Holder, by its acceptance of this Ownership Certificate, agrees that it
will look solely to the funds on deposit in the Collection Account that have
been released from the lien of the Indenture for payment hereunder and that
neither the Owner Trustee, the Trust Administrator or the Certificate Paying
Agent in their individual capacities nor the Depositor is personally liable to
the Holder for any amount payable under this Ownership Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
The Holder acknowledges and agrees that its rights to receive distributions
in respect of this Ownership Certificate are subordinated to the rights of the
Noteholders as described in the Indenture.
The Depositor and the Holder, by acceptance of an Ownership Certificate,
agree to treat, and to take no action inconsistent with the treatment of, the
Trust as a Qualified REIT Subsidiary for federal, and any applicable state and
local income tax purposes.
The Holder, by its acceptance of an Ownership Certificate, covenants and
agrees that it will not at any time institute against the Depositor or the
Trust, or join in any institution against 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 or
similar law in connection with any obligations relating to the Ownership
Certificate, the Notes, the Agreement or any other of the Operative Agreements.
Distributions on this Ownership Certificate will be made as provided in the
Agreement by the Certificate Paying Agent by wire transfer or check mailed to
the Holder without the presentation or surrender of this Ownership Certificate
or the making of any notation hereon. Except as otherwise provided in the
Agreement and notwithstanding the above, the final distribution on this
Ownership Certificate will be made after due notice by the Certificate Paying
Agent of the pendency of such distribution and only upon presentation and
surrender of this Ownership Certificate at the office or agency maintained by
the Certificate Registrar for that purpose.
Reference is hereby made to the further provisions of this Ownership
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Owner Trustee, or an authenticating agent by manual
signature, this Ownership Certificate shall not entitle the Holder hereof to any
benefit under the Agreement or be valid for any purpose.
THIS OWNERSHIP CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND
A-4
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
A-5
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Ownership Certificate to be duly
executed.
FIELDSTONE MORTGAGE INVESTMENT TRUST,
SERIES 2005-3
By: U.S. BANK TRUST NATIONAL
ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By:
------------------------------------
Authorized Signatory
Dated:
----------------------
CERTIFICATE OF AUTHENTICATION
This is the Ownership Certificate referred to in the within-mentioned Trust
Agreement.
▇▇▇▇▇ FARGO BANK, N.A.,
not in its individual capacity but
solely as Trust Administrator
By:
------------------------------------
Authorized Signatory
Dated:
-----------------------
A-6
FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2005-3
OWNERSHIP CERTIFICATE
The Ownership Certificate does not represent an obligation of, or an interest
in, the Depositor, the Master Servicer, the Indenture Trustee, the Owner
Trustee, the Trust Administrator or any Affiliates of any of them and no
recourse may be had against any such parties or their assets, except as
expressly set forth or contemplated herein or in the Agreement or the other
Operative Agreements. In addition, this Ownership Certificate is not guaranteed
by any governmental agency or instrumentality and is limited in right of payment
to certain collections and recoveries with respect to the Collateral, all as
more specifically set forth herein. A copy of the Agreement may be examined by
any Certificateholder upon written request during normal business hours at the
principal office of the Depositor and at such other places, if any, designated
by the Depositor.
The Agreement permits the amendment thereof as specified below, provided that
any amendment be accompanied by an Opinion of Counsel to the effect that such
amendment complies with the provisions of the Agreement and would not cause the
Trust to be subject to an entity level tax. If the purpose of the amendment is
to correct any mistake, eliminate any inconsistency, cure any ambiguity or deal
with any matter not covered, it shall not be necessary to obtain the consent of
any Noteholder or the Indenture Trustee. If the purpose of the amendment is to
add or eliminate or change any provision of the Agreement, other than as
specified in the preceding sentence, the amendment shall require the consent of
the Holder, the consent of Noteholders evidencing more than 66 2/3% of the
Outstanding Balance of the Notes and the Indenture Trustee; provided, however,
that no such amendment shall, as evidenced by an Opinion of Counsel, adversely
affect the tax status of the Trust; and provided, further, 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 Collateral or
distributions that shall be required to be made for the benefit of the
Noteholders or the Holder or (b) reduce the aforesaid percentage of the
Outstanding Balance of the Notes required to consent to or to waive the
requirement for the Holder to consent to any such amendment, in either case of
clause (a) or (b) without the consent of the holders of all the outstanding
Notes and the Holder.
As provided in the Agreement and subject to certain limitations therein set
forth, including the limitations set forth in Section 3.03 thereof, the transfer
of this Ownership Certificate is registerable in the Certificate Register upon
surrender of this Ownership Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar, accompanied by a written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon a new Ownership Certificate will be issued to the
designated transferee. The initial Certificate Registrar appointed under the
Agreement is the Trust Administrator.
Except as provided in the Agreement, the Ownership Certificate is issuable only
in a minimum Percentage Interest of 100%. No service charge will be made for any
such registration of transfer or exchange, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith or any expense incurred
thereby.
A-7
The Owner Trustee, the Certificate Paying Agent, the Trust Administrator, the
Certificate Registrar and any agent of the Owner Trustee, the Certificate Paying
Agent, the Trust Administrator or the Certificate Registrar may treat the Holder
as the owner hereof for all purposes, and none of the Owner Trustee, the
Certificate Paying Agent, the Trust Administrator, the Certificate Registrar or
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the Trust
created thereby shall terminate upon the payment to Certificateholders of all
amounts required to be paid to them pursuant to the Trust Agreement and the
Transfer and Servicing Agreement and the disposition of all property held as
part of the Trust Estate.
A-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
___________________________________________________________________________
________
___________________________________________________________________________
________
(Please print or type name and address, including postal zip code, of
assignee and social security number or employer identification number)
___________________________________________________________________________
________
the within Certificate stating in the names of the undersigned in the
Securities Register and does hereby irrevocably constitute and appoint
___________________________________________________________________________
________
to transfer such Certificate in such Securities Register of the Trust.
I [we] further direct the Securities Registrar to issue a new Certificate
of the same Class of like principal to the above-named assignee and deliver such
Certificate to the following address:
___________________________________________________________________________
________
___________________________________________________________________________
________
Dated:
------------------------- ----------------------------------------
Signature by or on behalf of Assignor
------------------------------------- ----------------------------------------
Authorized Officer Signature Guaranteed
------------------------------------- ----------------------------------------
Name of Institution NOTICE: The signature(s) of this
assignment must correspond with the
name(s) on the face of this Certificate
without alteration or any change
whatsoever. The signature must be
guaranteed by a participant in the
Securities Transfer Agents Medallion
Program, the New York Stock Exchange
Medallion Signature Program or the Stock
A-9
Exchanges Medallion Program. Notarized
or witnessed signatures are not
acceptable as guaranteed signatures.
A-10
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Securities Registrar.
Distributions shall be made by wire transfer in immediately available funds to
___________________________________________________________________________
________
for the account of
____________________________________________________________________
account number __________________ or, if mailed by check, to
___________________________
___________________________________________________________________________
________.
Applicable reports and statements should be mailed to
________________________________
___________________________________________________________________________
________.
This information is provided by __________________________________________
the assignee named above, or ________________________________ as its agent.
A-11
EXHIBIT B
[RESERVED]
EXHIBIT C
FORM OF CERTIFICATE OF TRUST OF
FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2005-3
THIS Certificate of Trust of Fieldstone Mortgage Investment Trust, Series
2005-3 (the "Trust"), is being duly executed and filed by the undersigned, as
trustee, to form a statutory trust under the Delaware Statutory Trust Act (12
DEL. CODE, Sections 3801 et seq.) (the "Act").
1. NAME. The name of the statutory trust formed hereby is "FIELDSTONE
MORTGAGE INVESTMENT TRUST, SERIES 2005-3."
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust in the State of Delaware are U.S. Bank Trust National Association, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Fieldstone
Mortgage Investment Trust, Series 2005-3.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the owner trustee of the Trust,
has executed this Certificate of Trust in accordance with Section 3811(a) of the
Act.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Owner Trustee
By:
------------------------------------
Name:
Title:
EXHIBIT D-1
FORM OF RULE 144A INVESTMENT LETTER
________________________
Date
▇▇▇▇▇ Fargo Bank, N.A.,
as Certificate Registrar
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Re: Fieldstone Mortgage Investment Trust, Series 2005-3
[Ownership Certificate]
Ladies and Gentlemen:
In connection with our acquisition of the Fieldstone Mortgage Investment
Trust, Series 2005-3 Ownership Certificate (the "Certificate"), we certify that
(a) we understand that the Certificate has not been registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
is being transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we have such knowledge and
experience in financial and business matters that we are capable of evaluating
the merits and risks of investment in the Certificate, (c) we have had the
opportunity to ask questions of and receive answers from Fieldstone Mortgage
Investment Corporation (the "Depositor") concerning the purchase of the
Certificate and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Certificate, (d) we have not,
nor has anyone acting on our behalf, offered, transferred, pledged, sold or
otherwise disposed of the Certificate or any interest in the Certificate, or
solicited any offer to buy, transfer, pledge or otherwise dispose of the
Certificate or any interest in the Certificate from any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action that would constitute a distribution of the
Certificate under the Act or that would render the disposition of the
Certificate a violation of Section 5 of the Act or any state securities laws or
require registration pursuant thereto, and we will not act, or authorize any
person to act, in such manner with respect to the Certificate and (e) we are a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Act ("Rule 144A"). We are aware that the sale to us is being made in reliance on
Rule 144A.
We are acquiring the Certificate for our own account or for resale pursuant
to Rule 144A and understand that such Certificate may be resold, pledged or
transferred only (1) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A or (2) pursuant to another
exemption from registration under the Act.
In addition, we hereby certify that we are not an employee benefit plan or
other retirement arrangement that is subject to Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or to Section 4975
of the Internal Revenue Code of 1986, as amended (or to any other substantially
similar law) or any entity deemed to hold the plan assets of the foregoing.
We hereby acknowledge that under the terms of the Amended and Restated
Trust Agreement among Fieldstone Mortgage Investment Corporation, as Depositor,
U.S. Bank Trust National Association, as Owner Trustee, and ▇▇▇▇▇ Fargo Bank,
N.A., as Trust Administrator, dated as of November 23, 2005, no transfer of the
Certificate shall be permitted to be made to any person unless the Certificate
Registrar has received a certificate from such transferee in the form hereof.
We hereby indemnify the Depositor, Certificate Registrar and the Owner
Trustee against any liability that may result to either of them if our transfer
or other disposition of the Certificate (or any interest therein) is not exempt
from the registration requirements of the Act and any applicable state
securities laws or is not made in accordance with such federal and state laws.
Very truly yours,
[Name of Transferee]
By:
------------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF NON-RULE 144A INVESTMENT LETTER
_________________________
Date
▇▇▇▇▇ Fargo Bank, N.A.,
as Certificate Registrar
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Re: Fieldstone Mortgage Investment Trust, Series 2005-3
[Ownership Certificate]
Ladies and Gentlemen:
In connection with our acquisition of the Fieldstone Mortgage Investment
Trust, Series 2005-3 Ownership Certificate (the "Certificate") we certify that
(a) we understand that the Certificate has not been registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
is being transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we are an "accredited investor,"
as defined in Rule 501(a)(1), (2), (3) or (7) under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investment in the Certificate, (c) we have
had the opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Certificate and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificate, (d) we are acquiring the Certificate for investment for our own
account and not with a view to any distribution of such Certificate (but without
prejudice to our right at all times to sell or otherwise dispose of the
Certificate in accordance with clause (f) below), (e) we have not offered or
sold any Certificate to, or solicited offers to buy any Certificate from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action that would result in a violation of Section 5
of the Act or any state securities laws and (f) we will not sell, transfer or
otherwise dispose of any Certificate unless (1) such sale, transfer or other
disposition is made pursuant to an effective registration statement under the
Act and in compliance with any relevant state securities laws or is exempt from
such registration requirements and, if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Amended and Restated Trust Agreement
dated as of November 23, 2005, among Fieldstone Mortgage Investment Corporation,
as Depositor, U.S. Bank Trust National
Association, as Owner Trustee and ▇▇▇▇▇ Fargo Bank, N.A., as Trust Administrator
(the "Trust Agreement").
In addition, we hereby certify that we are not an employee benefit plan or
other retirement arrangement subject to section 406 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or to Section 4975 of the
Internal Revenue Code of 1986, as amended (or to any other substantially similar
law) or any entity deemed to hold the plan assets of the foregoing.
We hereby acknowledge that under the terms of the Trust Agreement, no
transfer of the Certificate shall be permitted to be made to any person unless
the Certificate Registrar has received a certificate from such transferee in the
form hereof.
We hereby indemnify the Owner Trustee, the Depositor and the Certificate
Registrar against any liability that may result to either of them if our
transfer or other disposition of the Certificate (or any interest therein) is
not exempt from the registration requirements of the Act and any applicable
state securities laws or is not made in accordance with such federal and state
laws.
Very truly yours,
[Name of Transferee]
By:
------------------------------------
Name:
Title:
D-2-2
EXHIBIT E
U.S. Bank Trust National Association
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇-▇
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Fieldstone 2005-3
Re: Fieldstone Mortgage Investment Trust, Series 2005-3
Ladies and Gentlemen:
This representation and warranty is delivered pursuant to Section 3.03 of
the Amended and Restated Trust Agreement dated as of November 23, 2005 (the
"Agreement"), among Fieldstone Mortgage Investment Corporation, as depositor
(the "Depositor"), U.S. Bank Trust National Association, as owner trustee (the
"Owner Trustee"), and ▇▇▇▇▇ Fargo Bank, N.A., as trust administrator (the "Trust
Administrator"), in connection with the transfer by Fieldstone Mortgage
Investment Trust, Series 2005-3 (the "Trust") to the undersigned as beneficial
owner (the "Beneficial Owner") of a 100% Percentage Interest in the Ownership
Certificate. Capitalized terms used but not defined in this document have the
meanings ascribed to them in the Agreement.
The Beneficial Owner hereby certifies that it has received a copy of the
Agreement and that it understands the restrictions on transferability of the
Ownership Certificate and the indemnity provisions set forth in Section 3.03 of
the Agreement. In connection with the transfer of the Ownership Certificate to
the Beneficial Owner, the Beneficial Owner represents and warrants that:
(1) The Beneficial Owner either (i) qualifies for taxation as a real
estate investment trust (a "REIT") within the meaning of Sections 856
and 857 of the Internal Revenue Code of 1986, as amended (the "Code"),
(ii) is a qualified REIT subsidiary within the meaning of Section
856(i) of the Code (a "Qualified REIT Subsidiary"), or (iii) is an
entity that is disregarded for federal income tax purposes that is
wholly owned by a REIT or a Qualified REIT Subsidiary.
(2) The Beneficial Owner hereby agrees to be subject to the
indemnification provisions set out in Section 3.03 of the Agreement.
(3) The Beneficial Owner hereby agrees to be subject to the provisions
governing events of default set out in the Indenture among the Trust,
as issuer, ▇▇▇▇▇ Fargo Bank, N.A., as Trust Administrator, and HSBC
Bank USA, National Association, as Indenture Trustee, dated as of
November 1, 2005.
(4) The Beneficial Owner hereby agrees to notify the Trust within sixty
(60) days of the date on which the Beneficial Owner discovers that it
has failed to qualify as a REIT, a Qualified REIT Subsidiary or an
entity that is disregarded for federal income tax purposes that is
wholly owned by a REIT or a Qualified REIT Subsidiary at any time at
which the Beneficial Owner owns the Ownership Certificate.
(5) The Beneficial Owner is not, and on November 23, 2005, will not be, an
employee benefit plan or other retirement arrangement subject to
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or Section 4975 of the Code or any substantially
similar applicable law (collectively, a "Plan") or a person acting on
behalf of any such Plan or investing the assets of any such Plan to
acquire the Ownership Certificate.
(6) The Beneficial Owner will not transfer the Ownership Certificate to
any person or entity (i) as to which the Purchaser has reason to
believe does not satisfy the requirements set forth in the Agreement,
and (ii) without obtaining from the prospective Purchaser and
providing to the Certificate Registrar a written representation
substantially in the form of Exhibit F to the Agreement.
(7) The Holder of the Ownership Certificate will not take any action or
inaction that would cause the Trust to be subject to any United States
federal income taxation.
[SIGNATURE PAGE FOLLOWS]
E-2
Very truly yours,
FIELDSTONE MORTGAGE OWNERSHIP CORP.
By:
------------------------------------
Name:
Title:
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ REGARDING TRANSFEREE'S
STATUS AS A REIT OR QUALIFIED REIT SUBSIDIARY
This representation and warranty is delivered pursuant to Section 3.03 of
the Trust Agreement dated as of November 23, 2005 (the "Agreement"), among
Fieldstone Mortgage Investment Corporation, as depositor (the "Depositor"), U.S.
Bank Trust National Association, as owner trustee (the "Owner Trustee"), and
▇▇▇▇▇ Fargo Bank, N.A., as trust administrator (the "Trust Administrator"), in
connection with the transfer by [the [transferor] to the undersigned] as
beneficial owner (the "Beneficial Owner") of a 100% Percentage Interest in the
Ownership Certificate. Capitalized terms used but not defined in this document
have the meanings ascribed to them in the Agreement.
The Beneficial Owner hereby certifies that it has received a copy of the
Agreement and that it understands the restrictions on transferability of the
Ownership Certificate set forth in Section 3.03 of the Agreement and the
indemnity provisions set forth in Section 7.02 of the Agreement. In connection
with the transfer of the Ownership Certificate to the Beneficial Owner, the
Beneficial Owner represents and warrants that:
(1) The Beneficial Owner either (i) qualifies for taxation as a real
estate investment trust (a "REIT") within the meaning of Sections 856
and 857 of the Internal Revenue Code of 1986, as amended (the "Code"),
(ii) is a qualified REIT subsidiary within the meaning of Section
856(i) of the Code (a "Qualified REIT Subsidiary"), or (iii) an entity
that is disregarded for federal income tax purposes that is wholly
owned by a REIT or a Qualified REIT Subsidiary. Notwithstanding the
foregoing, the Beneficial Owner may pledge or transfer the Ownership
Certificate to a lender or repurchase agreement counterparty in a
repurchase agreement or secured lending transaction that qualifies as
a borrowing for federal income tax purposes.
(2) The Beneficial Owner hereby agrees to be subject to the
indemnification provisions set out in Section 7.02 of the Agreement,
and hereby warrants that the Beneficial Owner shall indemnify the
Trust for any income tax imposed upon the Trust due to the Beneficial
Owner's failure to qualify as a REIT, a Qualified REIT Subsidiary, or
an entity that is disregarded for federal income tax purposes that is
wholly owned by a REIT or a Qualified REIT Subsidiary at any time at
which such Beneficial Owner owns the Ownership Certificate.
(3) The Beneficial Owner hereby agrees to be subject to the provisions
governing events of default set out in the Indenture among Fieldstone
Mortgage Investment Trust, Series 2005-3 (the "Trust"), as issuer,
▇▇▇▇▇ Fargo Bank, N.A., as trust administrator and HSBC Bank USA,
National Association, as indenture trustee, dated as of November 1,
2005.
(4) The Beneficial Owner hereby agrees to notify the Trust within sixty
(60) days of the date on which the Beneficial Owner discovers that it
has failed to qualify as a
REIT, a Qualified REIT Subsidiary, or an entity that is disregarded
for federal income tax purposes that is wholly owned by a REIT or a
Qualified REIT Subsidiary at any time at which the Beneficial Owner
owns the Ownership Certificate.
(5) The Beneficial Owner is not, and on _________ [date of transfer] will
not be, an employee benefit plan or other retirement arrangement
subject to Section 406 of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") or Section 4975 of the Code or any
substantially similar applicable law (collectively, a "Plan") or a
person acting on behalf of any such Plan or investing the assets of
any such Plan to acquire the Ownership Certificate.
(6) The Beneficial Owner will not transfer the Ownership Certificate to
any person or entity (i) as to which the Purchaser has reason to
believe does not satisfy the requirements set forth in the Agreement,
and (ii) without obtaining from the prospective Purchaser and
providing to the Certificate Registrar a written representation
substantially in the form of this Exhibit F to the Agreement.
(7) The Holder of the Ownership Certificate will not take any action or
inaction that would cause the Trust to be subject to any United States
federal income taxation.
F-2
