Exhibit 4.3
================================================================================
TRUST AGREEMENT
among
COMPASS BANK,
COMPASS ASSET ACCEPTANCE COMPANY, L.L.C.
as Seller,
and
[__________],
as Owner Trustee
Dated as of [__________]
COMPASS RECEIVABLES ASSET FUNDING TRUST 200[_]-[__]
Closed-End Mortgage Loan Asset Backed Notes, Series 200[_]-[__]
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.......................................................................1
Section 1.1 Capitalized Terms............................................................1
Section 1.2 Other Definitional Provisions................................................4
ARTICLE II ORGANIZATION......................................................................5
Section 2.1 Name.........................................................................5
Section 2.2 Office.......................................................................5
Section 2.3 Purposes and Powers..........................................................5
Section 2.4 Appointment of Owner Trustee.................................................6
Section 2.5 Capital Contribution of Owner Trust Estate...................................6
Section 2.6 Declaration of Trust.........................................................7
Section 2.7 Title to Trust Property......................................................7
Section 2.8 Situs of Trust...............................................................7
Section 2.9 Representations and Warranties of the Seller.................................7
ARTICLE III OWNERSHIP INTEREST AND TRANSFERS OF THE
OWNERSHIP INTEREST................................................................9
Section 3.1 Initial Ownership............................................................9
Section 3.2 The Ownership Interest.......................................................9
Section 3.3 [Reserved]...................................................................9
Section 3.4 Registration of Transfer and Exchange of Ownership Interest..................9
Section 3.5 [Reserved]...................................................................9
Section 3.6 Persons Deemed Transferors...................................................9
Section 3.7 [Reserved]...................................................................9
Section 3.8 Maintenance of Office or Agency..............................................9
Section 3.9 Appointment of Paying Agent.................................................10
Section 3.10 [Reserved]..................................................................10
Section 3.11 [Reserved]..................................................................10
Section 3.12 [Reserved]..................................................................10
Section 3.13 Restrictions on Transfers of Ownership Interest.............................10
ARTICLE IV ACTIONS BY OWNER TRUSTEE.........................................................13
Section 4.1 Prior Notice to the Transferor with Respect to Certain Matters..............13
Section 4.2 [Reserved]..................................................................15
Section 4.3 Action by Transferor with Respect to Bankruptcy.............................15
i
Section 4.4 Restrictions on Transferor's Power..........................................15
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES.......................................16
Section 5.1 Establishment of Trust Account..............................................16
Section 5.2 Application Of Trust Funds..................................................16
Section 5.3 Method of Payment...........................................................17
Section 5.4 [Reserved]..................................................................17
Section 5.5 Accounting and Reports to the Transferor, the Internal
Revenue Service and Others..................................................17
Section 5.6 Signature on Returns........................................................17
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE............................................17
Section 6.1 General Authority...........................................................17
Section 6.2 General Duties..............................................................18
Section 6.3 Action upon Instruction.....................................................18
Section 6.4 No Duties Except as Specified in this Agreement, the
Transaction Documents or in Instructions....................................19
Section 6.5 No Action Except Under Specified Documents or Instructions..................19
Section 6.6 Restrictions................................................................20
ARTICLE VII CONCERNING THE OWNER TRUSTEE.....................................................20
Section 7.1 Acceptance of Trusts and Duties.............................................20
Section 7.2 Furnishing of Documents.....................................................22
Section 7.3 Representations and Warranties..............................................22
Section 7.4 Reliance; Advice of Counsel.................................................23
Section 7.5 Not Acting in Individual Capacity...........................................23
Section 7.6 Owner Trustee Not Liable for the Ownership Interest or the
Mortgage Loans..............................................................24
Section 7.7 Owner Trustee May Own the Ownership Interest and the Notes..................24
Section 7.8 Licenses....................................................................24
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE....................................................24
Section 8.1 Owner Trustee's Fees and Expenses...........................................24
Section 8.2 Indemnification.............................................................25
Section 8.3 Payments to the Owner Trustee...............................................25
ARTICLE IX TERMINATION OF AGREEMENT.........................................................26
Section 9.1 Termination of Agreement....................................................26
ii
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER
TRUSTEES.........................................................................27
Section 10.1 Eligibility Requirements for Owner Trustee..................................27
Section 10.2 Resignation or Removal of Owner Trustee.....................................27
Section 10.3 Successor Owner Trustee.....................................................28
Section 10.4 Merger or Consolidation of Owner Trustee....................................29
Section 10.5 Appointment of Co-Owner Trustee or Separate Owner Trustee...................29
ARTICLE XI MISCELLANEOUS....................................................................30
Section 11.1 Supplements and Amendments..................................................30
Section 11.2 No Legal Title to Owner Trust Estate in Transferor..........................32
Section 11.3 Limitations on Rights of Others.............................................32
Section 11.4 Notices.....................................................................32
Section 11.5 Severability................................................................32
Section 11.6 Separate Counterparts.......................................................33
Section 11.7 Successors and Assigns......................................................33
Section 11.8 No Petition.................................................................33
Section 11.9 [Reserved]..................................................................33
Section 11.10 No Recourse.................................................................33
Section 11.11 Headings....................................................................33
Section 11.12 GOVERNING LAW...............................................................33
Section 11.13 Inconsistencies with Sale and Servicing Agreement...........................34
Section 11.14 Third Party Beneficiary.....................................................34
Section 11.15 Servicer....................................................................34
Section 11.16 Rights Under Indenture......................................................34
EXHIBIT A [Reserved].................................................................A-1
EXHIBIT B Form of Transfer Certificate...............................................B-1
iii
THIS TRUST AGREEMENT is dated as of [__________] among Compass Bank
("COMPASS BANK"), Compass Asset Acceptance Company, L.L.C., as seller (the
"SELLER") and [__________], a [__________], as owner trustee (the "OWNER
TRUSTEE").
PRELIMINARY STATEMENT
NOW, in consideration of the mutual agreements herein contained, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 CAPITALIZED TERMS. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
"AGREEMENT" shall mean this Trust Agreement, as the same may be amended and
supplemented from time to time.
"BANKRUPTCY ACTION" shall have the meaning assigned to such term in Section
4.1.
"BENEFIT PLAN" shall have the meaning assigned to such term in Section
3.13.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COLLECTION ACCOUNT" shall have the meaning assigned to such term in the
Sale and Servicing Agreement.
"COMPASS BANK" shall mean Compass Bank or its successors.
"CORPORATE TRUST OFFICE" shall mean, (i) with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee, which office at date
of execution of this Agreement, is located at [__________], Attention:
[__________]; or at such other address as the Owner Trustee may designate by
notice to the Transferor, or the principal corporate trust office of any
successor Owner Trustee (the address (which shall be in the State of
[__________]) of which the successor owner trustee will notify the Transferor);
or (ii) with respect to the Indenture Trustee, the principal corporate trust
office of the Indenture Trustee, which office at date of execution of this
Agreement, is located at [__________], Attention: [__________], or at such other
address as the Indenture Trustee may designate by notice to the Transferor and
the Owner Trustee, or the principal corporate trust office of any successor
Indenture Trustee (the address (which shall be in
the State of New York) of which the successor indenture trustee will notify the
Transferor and the Owner Trustee.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"EXPENSES" shall have the meaning assigned to such term in Section 8.2.
"INDENTURE" shall mean the Indenture, dated as of [__________], by and
between the Owner Trustee and the Indenture Trustee.
"INDENTURE TRUSTEE" shall mean [__________], a [__________], as Indenture
Trustee under the Indenture.
"INITIAL NOTE PRINCIPAL AMOUNT" shall mean with respect to the Class A
Notes and Class M Notes, an aggregate of $[__________].
"NON-PERMITTED FOREIGN OWNER" shall have the meaning set forth in Exhibit B
hereto.
"NON-U.S. PERSON" shall mean any Person other than (i) a citizen or
resident of the United States, (ii) an entity treated for United States federal
income tax purposes as a corporation or partnership created or organized in or
under the laws of the United States or any state thereof, including the District
of Columbia, (iii) an estate that is subject to U.S. federal income tax
regardless of the source of its income, (iv) a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States trustees have authority to control all
substantial decisions of the trust, or (v) certain trusts in existence on August
20, 1996 and treated as United States persons on such date that elect to
continue to be so treated.
"ORIGINATOR" shall mean Compass Bank or its successors.
"OWNER TRUST ESTATE" shall mean the contribution of $[_____] referred to in
Section 2.5 and the Trust Estate.
"OWNER TRUSTEE" shall mean [__________], a [__________], not in its
individual capacity but solely as owner trustee under this Agreement, and any
successor owner trustee hereunder.
"OWNERSHIP INTEREST" shall have the meaning specified in Section 3.2.
2
"PROSPECTIVE TRANSFEROR" shall mean any prospective purchaser or
prospective transferee of the Ownership Interest.
"RATING AGENCY CONDITION" shall mean, with respect to certain actions
requiring Rating Agency consent, that each Rating Agency shall have been given
10 days (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each of the Rating Agencies shall have notified the
Seller and the Owner Trustee in writing that such action will not result in a
reduction or withdrawal of the then current rating of the Notes.
"RECORD DATE" shall mean the last Business Day preceding the related
Payment Date; provided, however, that following the date on which Definitive
Notes are available pursuant to Section 2.2 of the Indenture, the Record Date
shall be the last day of the calendar month preceding the month in which the
related Payment Date occurs.
"REGISTER" shall mean a register kept by the Registrar in which, subject to
such reasonable regulations as it may prescribe, the Registrar shall provide for
the registration of the Ownership Interest and the registration of transfers of
the Ownership Interest. The location of the Registrar shall be the same as that
of the Corporate Trust Office of the Indenture Trustee.
"REGISTRAR" shall mean the Indenture Trustee as Registrar hereunder.
"SALE AND SERVICING AGREEMENT" shall mean the Sale and Servicing Agreement
dated as of the date hereof, among the Owner Trustee, the Seller, the Indenture
Trustee and the Servicer.
"SELLER" shall mean Compass Asset Acceptance Company, L.L.C. or its
successors.
"SERVICER" shall mean Compass Bank, or any successor servicer appointed
pursuant to the Sale and Servicing Agreement.
"TRANSFER AGREEMENT" shall mean the Transfer Agreement dated as the date
hereof, among the Owner Trustee and the Originator.
"TRANSACTION DOCUMENTS" shall mean each of the Indenture, the Sale and
Servicing Agreement, the Transfer Agreement and this Agreement.
"TRANSFEROR" shall mean the owner of the Ownership Interest.
"TREASURY REGULATIONS" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed
3
or temporary regulations shall include analogous provisions of final Treasury
Regulations or other successor Treasury Regulations.
"TRUST" shall mean Compass Receivables Asset Funding Trust 200[_]-[__], the
New York common law trust governed pursuant to this Agreement.
"TRUST ESTATE" shall mean the assets transferred and assigned to the Owner
Trustee pursuant to the Sale and Servicing Agreement, the Mortgage Loan Purchase
Agreement, the Transfer Agreement, this Agreement and pledged to the Indenture
Trustee pursuant to the Indenture consisting of: (i) each Mortgage Loan and each
Eligible Substitute Mortgage Loan and its related Mortgage Note and other
Mortgage File documents for each Mortgage Loan and each Eligible Substitute
Mortgage Loan, including such Mortgage Loan's and each such Eligible Substitute
Mortgage Loan's Principal Balance and all collections in respect thereof
received after the Cut-Off Date or Subsequent Cut-Off Date, as applicable; (ii)
property that secured a Mortgage Loan and each Eligible Substitute Mortgage Loan
that has become REO; (iii) the interest in certain hazard insurance policies
maintained by the Mortgagors or the Servicer in respect of the Mortgage Loans
and each Eligible Substitute Mortgage Loan transferred by the Seller; (iv) the
Collection Account and all amounts on deposit in the Collection Account
(exclusive of net earnings thereon); (v) the Owner Trustee's rights under the
Sale and Servicing Agreement; (vi) any proceeds of any of the foregoing; and
(vii) all other assets included or to be included in the Trust Estate for the
benefit of Noteholders.
Section 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Sale and Servicing Agreement or, if
not defined therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles,
4
the definitions contained in this Agreement or in any such certificate or other
document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
ORGANIZATION
Section 2.1 NAME. The Trust created hereby shall be known as "Compass
Receivables Asset Funding Trust 200[_]-[__]".
Section 2.2 OFFICE. The office of the Trust shall be in care of the Owner
Trustee at the Corporate Trust Office or at such other address as the Owner
Trustee may designate by written notice to the Noteholders and the Seller.
Section 2.3 PURPOSES AND POWERS.
(a) The purpose of the Trust is, and the Owner Trustee shall have
the power and authority, to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Ownership Interest pursuant to this Agreement and to sell such
Notes and Ownership Interest;
(ii) with the proceeds of the sale of the Notes and the
Ownership Interest, to fund start-up and transactional expenses
of the Trust and to pay the
5
balance to the Seller, as its interests may appear pursuant to
the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and
convey the Trust Estate pursuant to the Indenture and to hold,
manage and distribute to the Transferor pursuant to the terms of
the Sale and Servicing Agreement any portion of the Trust Estate
released from the lien of, and remitted to the Owner Trustee
pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the
Transaction Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected
therewith; and
(vi) subject to compliance with the Transaction Documents,
to engage in such other activities as may be required in
connection with conservation of the Owner Trust Estate and the
making of distributions to the Noteholders and the Transferor.
The Owner Trustee is hereby authorized to engage in the foregoing activities;
provided, however, that neither the Owner Trustee nor officers of the Owner
Trustee on behalf of the Trust shall have or exercise any powers not permitted
of "Qualifying SPEs" (within the meaning of the Statement of financial
Accounting Standard No. 140 ("FAS 140") under FAS 140 or any successor
accounting standard thereto. The Owner Trustee 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 other Transaction Documents.
Section 2.4 APPOINTMENT OF OWNER TRUSTEE. The Seller hereby appoints the
Owner Trustee as trustee of the Trust effective as of the date hereof, to have
all the rights, powers and duties set forth herein.
Section 2.5 CAPITAL CONTRIBUTION OF OWNER TRUST ESTATE. The Seller hereby
conveys to the Trust the sum of $1,000. The Owner Trustee hereby acknowledges
receipt in trust from the Seller, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate and such
cash contribution shall be deposited in the Collection Account.
6
Section 2.6 DECLARATION OF TRUST. The Owner Trustee hereby declares that it
will hold the Owner Trust Estate in trust upon and subject to the conditions set
forth herein for the use and benefit of the Transferor, subject to the
obligations of the Owner Trustee under the Transaction Documents. It is the
intention of the parties hereto that the Trust constitute a common law trust
under the common laws of the state of New York and that this Agreement
constitute the governing instrument of such New York common law trust. It is the
intention of the parties hereto that, solely for income and franchise tax
purposes, the Trust shall be treated as a disregarded entity, with the assets of
the Trust being treated as owned by the Transferor as the owner of the Ownership
Interest. The parties agree that, unless otherwise required by appropriate tax
authorities, the Owner Trustee will file or cause to be filed annual or other
necessary returns, reports and other forms, if any, consistent with the
characterization of the Trust as provided in the preceding sentence for such tax
purposes. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers and duties set forth herein with respect to accomplishing the
purposes of the Trust.
Section 2.7 TITLE TO TRUST PROPERTY.
(a) Subject to the Indenture, legal title to all the Owner Trust
Estate shall be vested at all times in the Owner Trustee, a co-owner trustee
and/or a separate trustee, as the case may be.
(b) The Transferor shall not have legal title to any part of the
Owner Trust Estate. No transfer by operation of law or otherwise of any interest
of the Transferor shall operate to terminate this Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it of
any part of the Owner Trust Estate.
Section 2.8 SITUS OF TRUST. The Trust will be located and administered in
the State of [__________]. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of [__________]. The Trust
shall not have any employees. Payments will be received by the Trust only in the
State of [__________], and payments will be made by the Owner Trustee only from
the State of [__________].
Section 2.9 REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller hereby represents and warrants to the Owner Trustee, the
Noteholders and the Indenture Trustee that:
(a) The Seller is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the power to own its assets
7
and to transact the business in which it is currently engaged. The Seller is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the business transacted by it or properties owned by it
require such qualification and in which the failure to so qualify would have a
material adverse effect on the business, properties, assets or condition
(financial or other) of the Seller;
(b) The Seller has the power and authority to make, execute,
deliver and perform its obligations under this Agreement and to perform its
obligations with respect to all of the transactions contemplated under this
Agreement, and has taken all necessary action to authorize the execution,
delivery and performance of its obligations under this Agreement. When executed
and delivered, this Agreement will constitute the legal, valid and binding
obligation of the Seller enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies (whether in a proceeding at law or in
equity);
(c) The Seller is not required to obtain the consent of any other
Person or any consent, license, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or authorizations, or
registrations or declarations, as shall have been obtained or filed, as the case
may be;
(d) The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby by the Seller will not
violate any provision of any existing law or regulation or any order or decree
of any court applicable to the Seller or any provision of the organizational
documents of the Seller, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Seller is a party or by
which the Seller may be bound; and
(e) No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the knowledge
of the Seller threatened, against the Seller or any of its properties or with
respect to this Agreement which in the opinion of the Seller has a reasonable
likelihood of resulting in a material adverse effect on the transactions
contemplated by this Agreement.
8
ARTICLE III
OWNERSHIP INTEREST AND TRANSFERS OF THE OWNERSHIP INTEREST
Section 3.1 INITIAL OWNERSHIP. The Transferor is the sole owner of the
Trust.
Section 3.2 THE OWNERSHIP INTEREST. The Ownership Interest (as defined
below) shall be uncertificated and shall represent the entire undivided
beneficial ownership interest in the Owner Trust Estate, subject to the debt
represented by the Notes (the "OWNERSHIP INTEREST"). The Ownership Interest may
be assigned by the Transferor as provided in Section 3.13.
Upon completion of a transfer in accordance with the terms and conditions
of this Article III, a transferee of the Ownership Interest shall become the
Transferor, and shall be entitled to the rights and subject to the obligations
of the Transferor hereunder, upon such transferee's acceptance of the Ownership
Interest duly registered in such transferee's name pursuant to Section 3.4
below.
Section 3.3 [Reserved].
Section 3.4 REGISTRATION OF TRANSFER AND EXCHANGE OF OWNERSHIP INTEREST.
The Owner Trustee hereby appoints [__________] as Registrar under this
Agreement. The Registrar shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 3.8, a Register in which, subject to such
reasonable regulations as it may prescribe, the Register shall provide for the
registration of the Ownership Interest and of transfer and exchange of the
Ownership Interest as herein provided. The Registrar, subject to Section 3.13
hereof, on behalf of the Trust shall note on the Register the transfer of the
Ownership Interest.
Section 3.5 [Reserved].
Section 3.6 PERSONS DEEMED TRANSFERORS. Prior to due assignment of the
Ownership Interest for registration of transfer, the Seller, the Owner Trustee,
the Indenture Trustee and the Registrar may treat the Person in whose name the
Ownership Interest shall be registered in the Register as the owner thereof for
the purpose of receiving distributions pursuant to Section 5.2 hereof and for
all other purposes whatsoever, and none of the Seller, the Owner Trustee, the
Indenture Trustee or the Registrar shall be bound by any notice to the contrary.
Section 3.7 [Reserved].
Section 3.8 MAINTENANCE OF OFFICE OR AGENCY. The Indenture Trustee shall
maintain an office or offices or agency or agencies (initially, the Corporate
Trust Office of the Indenture
9
Trustee) where instructions for the transfer of the Ownership Interest may be
delivered for registration of transfer or exchange pursuant to Section 3.4 and
where notices and demands to or upon the Registrar in respect of the Ownership
Interest and the Transaction Documents may be served. The Indenture Trustee
shall give prompt written notice to the Owner Trustee and the Transferor of any
change in the location of the Register or any such office or agency.
Section 3.9 APPOINTMENT OF PAYING AGENT. The Owner Trustee hereby appoints
the Indenture Trustee as Paying Agent under this Agreement. The Paying Agent
shall make distributions to the Transferor from the Collection Account pursuant
to Section 5.2 hereof and Section 5.01 of the Sale and Servicing Agreement and
shall report the amounts of such distributions to the Owner Trustee. The Paying
Agent shall have the revocable power to withdraw funds from the Collection
Account for the purpose of making the distributions referred to above. In the
event that the Indenture Trustee shall no longer be the Paying Agent hereunder,
the Owner Trustee shall, pursuant to the direction of the Seller, appoint a
successor to act as Paying Agent (which shall at all times be a corporation duly
incorporated and validly existing under the laws of the United States of America
or any state thereof, authorized under such laws to exercise corporate trust
powers and subject to supervision or examination by federal or state
authorities). The Owner Trustee shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Owner Trustee to execute and deliver to
the Owner Trustee an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Owner Trustee that as Paying Agent,
such successor Paying Agent or additional Paying Agent will hold all sums, if
any, held by it for payment to the Transferor in trust for the benefit of the
Transferor until such sums shall be paid to the Transferor. The Paying Agent
shall return all unclaimed funds to the Owner Trustee, and upon removal of a
Paying Agent, such Paying Agent shall also return all funds in its possession to
the Owner Trustee. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
Section 3.10 [Reserved].
Section 3.11 [Reserved].
Section 3.12 [Reserved].
Section 3.13 RESTRICTIONS ON TRANSFERS OF OWNERSHIP INTEREST. To the
fullest extent permitted by applicable law, the Ownership Interest shall not be
sold, pledged, transferred or assigned, except as provided below.
10
(a) The Ownership Interest may not be acquired by or for the
account of (i) an employee benefit plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) that is
subject to the provisions of Title I of ERISA, (ii) a plan described in Section
4975(e)(1) of the Code, or (iii) any entity, including an insurance company
separate account or general account, whose underlying assets include plan assets
by reason of a plan's investment in the entity (each, a "BENEFIT PLAN"). Each
prospective owner of the Ownership Interest, other than Compass Bank or an
affiliate of Compass Bank, shall represent and warrant, in writing, to the Owner
Trustee and the Registrar and any of their respective successors that:
(i) Such Person is (A) a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and is aware that the seller of such
Ownership Interest may be relying on the exemption from the
registration requirements of the Securities Act provided by Rule
144A and is acquiring such Ownership Interest for its own account
or for the account of one or more qualified institutional buyers
for whom it is authorized to act, (B) an "accredited investor" as
defined in Rule 501(a) under the Securities Act , or (C) a Person
involved in the organization or operation of the Trust or an
affiliate of such Person within the meaning of Rule 3a-7 of the
1940 Act, as amended (including, but not limited to, Compass Bank
or the Transferor).
(ii) Such Person understands that such Ownership Interest
has not been and will not be registered under the Securities Act
and may be offered, sold, pledged or otherwise transferred only
to a person whom the seller reasonably believes is (A) a
"qualified institutional buyer," (B) "an accredited investor" or
(C) a Person involved in the organization or operation of the
Trust or an affiliate of such Person, in each case in a
transaction meeting the requirements of Rule 144A under the
Securities Act or that is otherwise exempt from registration
under the Securities Act and in accordance with any applicable
securities laws of any state of the United States.
(iii) Such Person shall comply with the provisions of
SECTION 3.13(b), as applicable, relating to the ERISA
restrictions with respect to the acceptance or acquisition of
such Ownership Interest .
(b) Each Prospective Transferor, other than the Transferor or an
affiliate of the Transferor, shall either:
11
(i) represent and warrant, in writing, to the Owner Trustee
and the Registrar and any of their respective successors, in
accordance with Exhibit B hereto, that the Prospective Transferor
is not (A) an "employee benefit plan" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or (B) a "plan" within the meaning of
Section 4975(e)(1) of the Code (any such plan or employee benefit
plan, a "PLAN") or (C) any entity, including an insurance company
separate account or general account, whose underlying assets
include plan assets by reason of a plan's investment in the
entity and is not directly or indirectly purchasing such
Ownership Interest on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) furnish to the Owner Trustee and the Registrar and any
of their respective successors an opinion of counsel acceptable
to such persons that (A) the proposed issuance or transfer of
such Ownership Interest to such Prospective Transferor will not
cause any assets of the Trust to be deemed assets of a Plan, and
(B) the proposed holding or transfer of such Ownership Interest
will not cause the Owner Trustee or the Registrar or any of their
respective successors to be a fiduciary of a Plan within the
meaning of Section 3(21) of ERISA and will not give rise to a
transaction described in Section 406 of ERISA or Section
4975(c)(1) of the Code for which a statutory or administrative
exemption is unavailable.
(c) Neither the Ownership Interest nor any beneficial ownership
interest therein may be transferred to the Originator, or to any non-United
States Person as defined in Code Sections 7701(a)(30), and any purported
transfer in violation of this Section 3.13(c) shall be null and void ab initio.
(d) The Prospective Transferor, other than the initial Transferor
or an affiliate of the initial Transferor, shall obtain an Opinion of Counsel
(which shall be addressed to the Owner Trustee and the Registrar) to the effect
that, as a matter of federal income tax law, such Prospective Transferor is
permitted to accept the transfer of the Ownership Interest.
(e) The Ownership Interest may not be pledged or transferred
without delivery to the Registrar of an Opinion of Counsel to the effect that
such transfer would not jeopardize the tax treatment of the Trust, would not
subject the Trust to an entity-level tax, and would not jeopardize the status of
the Notes as debt for all purposes.
(f) No pledge or transfer of the Ownership Interest shall be
effective unless such purchase or transfer is (i) to a single beneficial owner
and (ii) accompanied by an opinion of
12
counsel satisfactory to the Owner Trustee, which Opinion of Counsel shall not be
an expense of the Owner Trustee, the Registrar or the Servicer, to the effect
such pledge or transfer will not cause the Trust to be treated for federal
income tax purposes as a taxable mortgage pool, association or a publicly traded
partnership taxable as a corporation.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.1 PRIOR NOTICE TO THE TRANSFEROR WITH RESPECT TO CERTAIN MATTERS.
With respect to the following matters, the Owner Trustee shall not take action,
and neither the Transferor nor the Indenture Trustee shall direct the Owner
Trustee to take any action, unless (i) at least 30 days before the taking of
such action, the Owner Trustee shall have notified the Transferor and the
Indenture Trustee in writing of the proposed action and neither the Transferor
nor the Indenture Trustee shall have notified the Owner Trustee in writing prior
to the 30th day after such notice is given that the Transferor has withheld
consent or the Transferor has provided alternative direction, and (ii) in the
case of clauses (b), (c), (d), (g), (i), (j), and (o), the Rating Agencies have
confirmed in writing that the taking of the proposed action would not result in
a withdrawal or reduction of the then-current ratings of the Notes:
(a) the initiation of any claim or lawsuit by the Owner Trustee
(except claims or lawsuits brought in connection with the collection of the
Mortgage Loans) and the compromise of any action, claim or lawsuit brought by or
against the Owner Trustee (except with respect to the aforementioned claims or
lawsuits for collection of the Mortgage Loans);
(b) [Reserved];
(c) the amendment or other change to this Agreement or any
Transaction Document in circumstances where the consent of any Noteholder is
required;
(d) the amendment or other change to this Agreement or any
Transaction Document in circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the interest of the
Transferor;
(e) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee, or the consent to the assignment
by the Note Registrar, Paying Agent or Indenture Trustee of its obligations
under the Indenture;
13
(f) the consent to the calling or waiver of any default of any
Transaction Document;
(g) the consent to the assignment by the Indenture Trustee of its
respective obligations under any Transaction Document;
(h) except as provided in Article IX hereof, dissolve, terminate or
liquidate the Trust in whole or in part;
(i) merge or consolidate the Trust with or into any other entity,
or, except as contemplated by the Sale and Servicing Agreement or the Indenture,
convey or transfer all or substantially all of the Trust's assets to any other
entity;
(j) cause the Owner Trustee on behalf of the Trust to incur, assume
or guaranty any indebtedness other than as permitted by the Transaction
Documents;
(k) do any act that conflicts with any other Transaction Document;
(l) do any act which would make it impossible to carry on the
ordinary business of the Owner Trustee on behalf of the Trust;
(m) confess a judgment against the Trust;
(n) possess Trust assets, or assign the Owner Trustee's right to
property, for other than a Trust purpose; or
(o) change the Trust's purpose and powers from those set forth in
this Agreement.
In addition, except as specifically contemplated by the Transaction
Documents, the Owner Trustee 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 Owner Trustee shall pay its indebtedness, operating expenses and
liabilities from its own funds, and the Owner Trustee shall not pay the
indebtedness, operating expenses and liabilities of any other Person. The Owner
Trustee shall maintain appropriate minutes or other records of all appropriate
actions and shall maintain its office separate from the offices of the Seller or
Compass Bank, and any of their respective affiliates. This Agreement and the
Transaction Documents shall be the only agreements among the parties hereto with
respect to the creation, operation and termination of the Trust. The
14
pricing and other material terms of all transactions and agreements to which the
Owner Trustee is a party shall be intrinsically fair to all parties thereto.
The Owner Trustee shall not have the power, except upon the written
direction of the Transferor and to the extent otherwise consistent with the
Transaction Documents, to (i) remove or replace the Servicer or the Indenture
Trustee, (ii) [institute proceedings to have the Trust declared or adjudicated a
bankrupt or insolvent], (iii) [consent to the institution of bankruptcy or
insolvency proceedings against the Trust], (iv) [file a petition or consent to a
petition seeking reorganization or relief on behalf of the Trust under any
applicable federal or state law relating to bankruptcy], (v) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or any
similar official) of the Trust or a substantial portion of the property of the
Trust, (vi) make any assignment for the benefit of the Trust's creditors, (vii)
[cause the Trust to admit in writing its inability to pay its debts generally as
they become due], or (viii) take any action, or cause the Trust to take any
action, in furtherance of any of the foregoing (any of the above, a "BANKRUPTCY
ACTION"). So long as the Indenture remains in effect, the Transferor shall not
have the power to take, and shall not take, any Bankruptcy Action with respect
to the Trust or direct the Owner Trustee to take any Bankruptcy Action with
respect to the Trust.
Section 4.2 [Reserved].
Section 4.3 ACTION BY TRANSFEROR WITH RESPECT TO BANKRUPTCY. [To the
fullest extent permitted by applicable law, the Owner Trustee shall not have the
power to commence a voluntary proceeding in bankruptcy relating to the Trust
without the prior consent and approval of (i) the Transferor, and (ii) the
Indenture Trustee, and the delivery to the Owner Trustee by the Transferor of a
certificate certifying that such Transferor reasonably believes that the Trust
is insolvent.] The terms of this Section 4.3 shall survive for one year and one
day following the termination of this Agreement.
Section 4.4 RESTRICTIONS ON TRANSFEROR'S POWER. The Transferor shall not
direct the Owner Trustee to take or refrain from taking any action if such
action or inaction would be contrary to any obligation of the Owner Trustee
under this Agreement or any of the Transaction Documents or would be contrary to
Section 2.3 hereof, nor shall the Owner Trustee be obligated to follow any such
direction, if given.
15
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.1 ESTABLISHMENT OF TRUST ACCOUNT. The Owner Trustee shall cause
the Indenture Trustee to establish and maintain with the Indenture Trustee for
the benefit of the Trust one or more Eligible Accounts in accordance with the
Indenture.
Section 5.2 APPLICATION OF TRUST FUNDS.
(a) On each Payment Date, the Paying Agent shall make the
distributions and payments set forth in Section 5.01 of the Sale and Servicing
Agreement from amounts on deposit in the Collection Account.
(b) On or before the third Business Day following each Payment
Date, the Paying Agent shall send to DTC the statement provided to the Paying
Agent by the Indenture Trustee pursuant to Section 5.03 of the Sale and
Servicing Agreement with respect to such Payment Date.
(c) In the event that any withholding tax is imposed on the Owner
Trustee's payment (or allocations of income) to the Transferor, such tax shall
reduce the amount otherwise distributable to the Transferor in accordance with
this Section 5.2. The Paying Agent is hereby authorized and directed in
accordance with the instructions of the Servicer to retain from amounts
otherwise distributable to the Transferor sufficient funds for the payment of
any tax that is legally owed by the Owner Trustee (but such authorization shall
not prevent the Paying Agent from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to the Transferor shall be treated as cash distributed to the Transferor
at the time it is withheld by the Owner Trustee and remitted to the appropriate
taxing authority. If there is a possibility that withholding tax is payable with
respect to a distribution (such as a distribution to a non-U.S. Transferor), the
Paying Agent in accordance with the instructions of the Servicer shall withhold
such amounts in accordance with this paragraph (c). In the event that the
Transferor wishes to apply for a refund of any such withholding tax, the Owner
Trustee and the Paying Agent shall reasonably cooperate with the Transferor in
making such claim so long as the Transferor agrees to reimburse the Owner
Trustee and the Paying Agent for any out-of-pocket expenses incurred.
16
Section 5.3 METHOD OF PAYMENT. Distributions required to be made to the
Transferor on any Payment Date shall be made to the Transferor of record on the
preceding Record Date in the manner set forth in Section 5.01 of the Sale and
Servicing Agreement.
Section 5.4 [Reserved].
Section 5.5 ACCOUNTING AND REPORTS TO THE TRANSFEROR, THE INTERNAL REVENUE
SERVICE AND OTHERS. The Servicer shall deliver (or cause to be delivered) to the
Transferor such information, reports or statements as may be required by the
Code and applicable Treasury Regulations and as may be required to enable the
Transferor to prepare its respective federal and state income tax returns.
Consistent with the Trust's characterization as a disregarded entity within the
meaning of Treasury regulations Section 301.7701-2(a), no federal income tax
return shall be filed on behalf of the Trust unless either (a) the Owner Trustee
or the Transferor shall receive an Opinion of Counsel that based on a change in
applicable law occurring after the date hereof the Code requires such a filing
or (b) the Internal Revenue Service shall determine that the Trust is required
to file such a return. The Servicer shall prepare or shall cause to be prepared
any tax returns required to be filed by the Owner Trustee relating to the Trust
and shall remit such returns to the Transferor at least five days before such
returns are due to be filed. Such returns shall be filed by, or at the direction
of, the Servicer with the appropriate tax authorities. In no event shall the
Transferor be liable for any liabilities, costs or expenses of the Trust arising
out of the application of any tax law, including federal, state, foreign or
local income or excise taxes or any other tax imposed on or measured by income
(or any interest, penalty or addition with respect thereto or arising from a
failure to comply therewith), except for any such liability, cost or expense
attributable to the Transferor's breach of its obligations under this Agreement.
Section 5.6 SIGNATURE ON RETURNS.
The Owner Trustee shall sign on behalf of the Trust the tax returns of the
Trust, if any, unless applicable law requires the Transferor to sign such
documents, in which case such documents shall be signed by the Transferor.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.1 GENERAL AUTHORITY. The Owner Trustee is authorized and directed
to execute and deliver the Notes, and the Transaction Documents to which the
Owner Trustee is to be a party and each certificate or other document attached
as an exhibit to or contemplated by the Transaction Documents to which the Owner
Trustee is to be a party and any other agreement or
17
instrument described in Article III, in each case, in such form as the
Transferor shall approve, as evidenced conclusively by the Owner Trustee's
execution thereof, and, to direct the Indenture Trustee to authenticate and
deliver the Class A Notes and Class M Notes in an aggregate principal amount
equal to the Initial Note Principal Amount.
Section 6.2 GENERAL DUTIES. It shall be the duty of the Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and to administer the assets of the Trust in the
interest of the Transferor, subject to the Transaction Documents and in
accordance with the provisions of this Agreement. Notwithstanding the foregoing,
the Owner Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the Transaction Documents to the extent the
Servicer has agreed in the Sale and Servicing Agreement to perform any act or to
discharge any duty of the Owner Trustee hereunder or under any Transaction
Document, and the Owner Trustee shall not be held liable for the default or
failure of the Servicer to carry out its obligations under the Sale and
Servicing Agreement.
Section 6.3 ACTION UPON INSTRUCTION.
(a) Subject to Article IV herein and in accordance with the terms
of the Transaction Documents, the Transferor may by written instruction direct
the Owner Trustee in the management of the assets 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 Transferor.
(b) Notwithstanding the foregoing, the Owner Trustee shall not be
required to take any action hereunder or under any Transaction Document if the
Owner Trustee shall have reasonably determined, or shall have been advised by
counsel, that such action is likely to result in liability on the part of the
Owner Trustee or is contrary to the terms hereof or of any Transaction Document
or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or under any Transaction Document, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances) to
the Transferor requesting instruction from the Transferor 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 Transferor received, 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,
18
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Transaction Documents, as it shall deem
to be in the best interest of the Transferor, and shall have no liability to any
Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Transaction Document or
any such provision is ambiguous as to its application, or is, or appears to be,
in conflict with any other applicable provision, or in the event that this
Agreement provides no direction to the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Transferor
requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received from the Transferor, the Owner Trustee shall not be liable, on account
of such action or inaction, to any Person. If the Owner Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action, not inconsistent with this Agreement or the
Transaction Documents, as it shall deem to be in the best interest of the
Transferor, and shall have no liability to any Person for such action or
inaction.
Section 6.4 NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT, THE
TRANSACTION DOCUMENTS OR IN INSTRUCTIONS. The Owner Trustee shall not have any
duty or obligation to manage, make any payment with respect to, register,
record, sell, dispose of, or otherwise deal with the Owner Trust Estate, or to
otherwise take or refrain from taking any action under, or in connection with,
any document contemplated hereby to which the Owner Trustee is a party, except
as expressly provided by the terms of this Agreement, or in any document or
written instruction received by the Owner Trustee pursuant to Section 6.3; and
no implied duties or obligations shall be read into this Agreement or any
Transaction Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at anytime or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to prepare or file any
Securities and Exchange Commission filing or to record this Agreement or any
Transaction Document. The Owner Trustee nevertheless agrees that it will, at its
own cost and expense, promptly take all action as may be necessary to discharge
any liens on any part of the Owner Trust Estate that result from actions by, or
claims against, the Owner Trustee in its individual capacity that are not
related to the ownership or the administration of the Owner Trust Estate.
Section 6.5 NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR INSTRUCTIONS. The
Owner Trustee shall not manage, control, use, sell, dispose of or otherwise deal
with any part of
19
the Owner Trust Estate except (i) in accordance with the powers granted to and
the authority conferred upon the Owner Trustee pursuant to this Agreement, (ii)
in accordance with the Transaction Documents and (iii) in accordance with any
document or instruction delivered to the Owner Trustee pursuant to Section 6.3
above. The Owner Trustee shall not be required to take any action under this
Agreement if the Owner Trustee shall reasonably determine or shall have been
advised by counsel that such action is contrary to the terms of this Agreement
or is otherwise contrary to law.
Section 6.6 RESTRICTIONS. The Owner Trustee shall not take any action (a)
that is inconsistent with the purposes of the Trust set forth in Section 2.3
hereof or (b) that, to the actual knowledge of the Owner Trustee, would result
in the Trust's becoming taxable as a corporation for Federal income tax
purposes. The Transferor shall not direct the Owner Trustee to take action that
would violate the provisions of this Section 6.6.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.1 ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee accepts the
trusts hereby created and agrees to perform its duties hereunder with respect to
such trusts but only upon the terms of this Agreement. The Owner Trustee also
agrees to disburse all moneys actually received by it constituting part of the
Owner Trust Estate upon the terms of the Transaction Documents and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder or
under any Transaction Document under any circumstances, except (i) for its own
willful misconduct, bad faith or negligence or (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 7.3 below
expressly made by the Owner Trustee. In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment
made by a responsible officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the instructions of
the Transferor or the Servicer.
(c) no provision of this Agreement or any Transaction Document
shall require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Transaction Document if the
20
Owner Trustee shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Transaction Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution hereof by
the Seller or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate or for or in respect of the validity
or sufficiency of the Transaction Documents, and the Owner Trustee shall in no
event assume or incur any liability, duty, or obligation to any Noteholder, or
the Transferor other than as expressly provided for herein and in the
Transaction Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Indenture Trustee or the Servicer under any of the Transaction
Documents or otherwise and the Owner Trustee shall have no obligation or
liability to perform the obligations of the Trust under this Agreement or the
Transaction Documents that are required to be performed by the Indenture Trustee
under the Indenture, the Servicer under the Sale and Servicing Agreement or the
Registrar or any Paying Agent hereunder;
(g) the Owner Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation under this Agreement or otherwise or in relation to
this Agreement or any Transaction Document, at the request, order or direction
of the Transferor, unless such Transferor has offered to the Owner Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Transaction Document shall not be construed as a duty, and
the Owner Trustee shall not be answerable for other than its gross negligence or
willful misconduct in the performance of any such act; and
(h) With respect to the Noteholders, the Owner Trustee undertakes
to perform or observe only such of the covenants and obligations of the Owner
Trustee as are expressly set forth in this Agreement, and no implied covenants
or obligations with respect to the Noteholders shall be read into this Agreement
or the other Transaction Documents against the Owner Trustee. The Owner Trustee
shall not be deemed to owe any fiduciary duty to the Noteholders other than as a
result of the gross negligence or willful misconduct of the Owner Trustee in the
performance of its express obligations under this Agreement.
21
Section 7.2 FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish to the
Transferor promptly upon receipt of a written request therefor, duplicates or
copies of all reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Owner Trustee under the
Transaction Documents.
Section 7.3 REPRESENTATIONS AND WARRANTIES.
The Owner Trustee hereby represents and warrants to the Seller, for the
benefit of the Transferor, the Noteholders and the Indenture Trustee, that:
(a) It is a [__________] duly formed and validly existing under the
laws of [__________]. It has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement;
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf. The execution, delivery and
performance by the Owner Trustee of this Agreement will not require the
authorization, consent or approval of, the giving of notice to, the filing or
registration with, or the taking of any other action with respect to, any
governmental authority or agency of the State of Delaware or the United States
of America governing its trust powers;
(c) Neither the execution nor the delivery by it of this Agreement
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene any
Federal, governmental rule or regulation governing the banking or trust powers
of the Owner Trustee or any judgment or order binding on it, or constitute any
default under its charter documents or by-laws or any indenture, mortgage,
contract, agreement or instrument to which it is a party or by which any of its
properties may be bound;
(d) This Agreement has been duly authorized, executed and delivered
by the Owner Trustee and constitutes a valid, legal and binding obligation of
the Owner Trustee, enforceable against it in accordance with the terms hereof,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights generally and to
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(e) The Owner Trustee is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental
22
agency, which default might have consequences that would materially and
adversely affect the condition (financial or other) or operations of the Owner
Trustee or its properties or might have consequences that would materially
adversely affect its performance hereunder; and
(f) No litigation is pending or, to the best of the Owner Trustee's
knowledge, threatened against the Owner Trustee which would prohibit its
entering into this Agreement or performing its obligations under this Agreement.
Section 7.4 RELIANCE; ADVICE OF COUNSEL.
(a) The Owner Trustee shall incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond, or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the determination
of which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer or any assistant treasurer or other authorized
officer of the relevant party, as to such fact or matter and such certificate
shall constitute full protection to the Owner Trustee for any action taken or
omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and
in the performance of its duties and obligations under this Agreement or the
Transaction Documents, the Owner Trustee (i) may, at the expense of Compass
Bank, act directly or through its agents or attorneys pursuant to agreements
entered into with any of them, and the Owner Trustee shall not be liable for the
conduct or misconduct of such agents or attorneys if such agents or attorneys
shall have been selected by the Owner Trustee with reasonable care, and (ii) may
consult with counsel, accountants and other skilled persons to be selected with
reasonable care. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the opinion or advice
of any such counsel, accountants or other such persons and not contrary to this
Agreement or any Transaction Document.
Section 7.5 NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in this
Article VII, in accepting the trusts hereby created, [__________] acts solely as
Owner Trustee hereunder and not in its individual capacity and all Persons
having any claim against the Owner Trustee by reason of the transactions
contemplated by this Agreement or any Transaction Document shall look only to
the Owner Trust Estate for payment or satisfaction thereof.
23
Section 7.6 OWNER TRUSTEE NOT LIABLE FOR THE OWNERSHIP INTEREST OR THE
MORTGAGE LOANS. The recitals contained herein and in the Ownership Interest
shall be taken as the statements of the Seller, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Transaction Document or of the Ownership Interest (other than as specified in
Section 7.3 hereof) or the Notes, or of any Mortgage Loans or related documents.
The Owner Trustee shall at no time have any responsibility or liability for or
with respect to the legality, validity and enforceability of any Mortgage Loan,
or the perfection and priority of any security interest created by any Mortgage
Loan or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Owner Trust Estate or its ability to generate
the payments to be distributed to the Transferor under this Agreement or to the
Noteholders under the Indenture, including, without limitation: the existence,
condition and ownership of any Mortgaged Property; the existence and
enforceability of any insurance thereon; the existence and contents of any
Mortgage Loan on any computer or other record thereof; the validity of the
assignment of any Mortgage Loan to the Trust or of any intervening assignment;
the completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan; the compliance by the Seller or the Servicer with any warranty or
representation made under any Transaction Document or in any related document or
the accuracy of any such warranty or representation or any action of the Seller,
the Indenture Trustee, or the Servicer or any subservicer taken in the name of
the Owner Trustee.
Section 7.7 OWNER TRUSTEE MAY OWN THE OWNERSHIP INTEREST AND THE NOTES. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of the Ownership Interest or the Notes and may deal with the Seller, the
Indenture Trustee, and the Servicer in banking transactions with the same rights
as it would have if it were not Owner Trustee.
Section 7.8 LICENSES. The Owner Trustee shall use its best efforts to
obtain and maintain the effectiveness of any licenses required in connection
with this Agreement and the Transaction Documents and the transactions
contemplated hereby and thereby until such time as the Trust shall terminate in
accordance with the terms hereof.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
Section 8.1 OWNER TRUSTEE'S FEES AND EXPENSES. Compass Bank is a party to
this Agreement solely for purposes of this Article VIII. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the
24
date hereof between Compass Bank and the Owner Trustee, and the Owner Trustee
shall be entitled to be reimbursed by Compass Bank for its other reasonable
expenses hereunder, including the reasonable compensation, expenses and
disbursements of such agents, representatives, experts and counsel as the Owner
Trustee may employ in connection with the exercise and performance of its rights
and its duties hereunder or under the Transaction Documents.
Section 8.2 INDEMNIFICATION. Compass Bank shall be liable as primary
obligor for, and shall indemnify the Owner Trustee (in its individual and trust
capacities) and its officers, directors, successors, assigns, agents and
servants (collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"EXPENSES") which may at any time be imposed on, incurred by, or asserted
against the Owner Trustee (in its individual and trust capacities) or any
Indemnified Party in any way relating to or arising out of this Agreement, the
Transaction Documents, the Owner Trust Estate, the administration of the Owner
Trust Estate or the action or inaction of the Owner Trustee hereunder, except
only that Compass Bank shall not be liable for or required to indemnify an
Indemnified Party from and against Expenses arising or resulting from any of the
matters described in the third sentence of Section 7.1 hereof. The indemnities
contained in this Section 8.2 and the rights under Section 8.1 shall survive the
resignation or termination of the Owner Trustee or the termination of this
Agreement. In the event of any claim, action or proceeding for which indemnity
will be sought pursuant to this Section 8.2, the Owner Trustee's choice of legal
counsel shall be subject to the approval of Compass Bank, which approval shall
not be unreasonably withheld.
Section 8.3 PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the Owner
Trustee pursuant to this Article VIII shall be deemed not to be a part of the
Owner Trust Estate immediately after such payment.
25
ARTICLE IX
TERMINATION OF AGREEMENT
Section 9.1 TERMINATION OF AGREEMENT.
(a) This Agreement (other than Article VIII) shall terminate and
the Trust shall dissolve and terminate and be of no further force or effect on
the earliest of (i) the final payment or other liquidation of the last Mortgage
Loan remaining in the Trust; (ii) the optional purchase by the Servicer of the
Mortgage Loans as described in Section 8.01 of the Sale and Servicing Agreement,
and (iii) the sale of the Mortgage Loans as described in Section 10.2 of the
Indenture and the corresponding redemption of the Notes; (iv) the Payment Date
in [__________] and (v) the expiration of 21 years from the death of the last
survivor of the descendents of Xxxxxx X. Xxxxxxx (the late ambassador of the
United States to the Court of St. James's) alive on the date hereof. The
bankruptcy, liquidation, dissolution, death or incapacity of the Transferor
shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle
such Transferor's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding-up of all
or any part of the Owner Trust Estate nor (z) otherwise affect the rights,
obligations and liabilities of the parties hereto.
(b) The Ownership Interest shall be subject to an early redemption
or termination at the option of the Servicer in the manner and subject to the
provisions of Section 8.01 of the Sale and Servicing Agreement.
(c) Except as provided in Sections 9.1(a) and (b) above, neither
the Seller, or the Transferor shall be entitled to revoke or terminate the
Trust.
(d) If any Ownership Interest is in certificated form notice of any
termination of the Trust, specifying the Payment Date upon which the Transferor
shall surrender its Ownership Interest to the Paying Agent for payment of the
final distributions and cancellation, shall be given by the Registrar to the
Transferor and the Rating Agencies mailed within five Business Days of receipt
by the Registrar of notice of such termination pursuant to (a) or (b) above,
which notice given by the Registar shall state (i) the Payment Date upon or with
respect to which final payment of the Registrar shall be made upon presentation
and surrender of the Ownership Interest at the office of the Paying Agent
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Payment Date is not applicable,
payments being made only upon submission of a claim for and acknowledgment of
final distribution under the Ownership Interest at the office of the Paying
Agent therein specified. The Registrar shall give such notice to the Owner
Trustee and the Paying Agent at the
26
time such notice is given to the Transferor. Upon presentation of such
submission of a claim for and acknowledgment of final distribution under the
Ownership Interest, the Paying Agent shall cause to be distributed to the
Transferor amounts distributable on such Payment Date pursuant to Section 5.01
of the Sale and Servicing Agreement.
In the event that the Transferor shall not have submitted claim for and
acknowledgment of final distribution under the Ownership Interest for
cancellation within six months after the date specified in the above mentioned
written notice, the Registrar shall give a second written notice to the
Transferor with respect thereto. Within one year after such second notice, the
Registrar may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the Transferor concerning the final distribution,
and the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.1 ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner Trustee
shall at all times be a corporation or [__________] 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 long-term rating of at least "Baa3" (or
its equivalent) by Moody's and "A" (or its equivalent) by Standard & Poor's. If
such corporation shall publish reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance with
the provisions of this Section 10.1, the Owner Trustee shall resign immediately
in the manner and with the effect specified in Section 10.2.
Section 10.2 RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Indenture Trustee, the Transferor and the Rating
Agencies. Upon receiving such notice of resignation, the Transferor 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.
27
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 10.1 above and shall fail to resign after written
request therefor by the Transferor, 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
Transferor may remove the Owner Trustee. If the Transferor shall remove the
Owner Trustee under the authority of the immediately preceding sentence, the
Transferor 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 10.2
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.3 and payment of all fees and expenses owed
to the outgoing Owner Trustee. The Indenture Trustee shall provide notice of
such resignation or removal of the Owner Trustee to each of the Rating Agencies.
Section 10.3 SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee appointed
pursuant to Section 10.2 shall execute, acknowledge and deliver to the Indenture
Trustee and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, 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; 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 10.3 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1 above.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 10.3, the Indenture Trustee shall mail notice of the successor of
such Owner Trustee to the Transferor, the Noteholders and the Rating Agencies.
If the Indenture Trustee fails to mail such
28
notice within 10 days after acceptance of appointment by the successor Owner
Trustee, the successor Owner Trustee shall cause such notice to be mailed at the
expense of the Indenture Trustee.
Section 10.4 MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any corporation into
which the Owner Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee, as the case may be,
hereunder, provided such corporation shall be eligible pursuant to Section 10.1
above, without the execution or filing of any instrument or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided further that the Owner Trustee, shall mail notice of
such merger or consolidation to the Seller, Compass Bank and the Rating
Agencies.
Section 10.5 APPOINTMENT OF CO-OWNER TRUSTEE OR SEPARATE OWNER TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Mortgaged Property may at the time be located,
the Owner Trustee shall have the power and shall execute and deliver all
instruments to appoint one or more Persons to act as co-owner trustee, jointly
with the Owner Trustee, or separate owner trustee or separate owner trustees, of
all or any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the 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-owner
trustee or separate trustee under this Section 10.5 shall be required to meet
the terms of eligibility as a successor Owner Trustee pursuant to Section 10.1
above and no notice of the appointment of any co-owner trustee or separate
trustee shall be required pursuant to Section 10.3 above.
The Owner Trustee hereby appoints the Indenture Trustee for the purpose of
establishing and maintaining the Collection Account and making the distributions
therefrom to the Persons entitled thereto pursuant to Section 5.01 of the Sale
and Servicing Agreement.
Each separate trustee and co-owner trustee shall, to the extent permitted
by law, be appointed and act subject to the following provision and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised
or performed by the Owner Trustee and such separate owner trustee or
co-owner trustee jointly (it
29
being understood that such separate owner trustee or co-owner trustee
is not authorized to act separately without the Owner Trustee joining
in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed,
the Owner Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties, and
obligations shall be exercised and performed singly by such separate
trustee or co-owner trustee but solely at the direction of the Owner
Trustee;
(ii) no owner trustee under this Agreement shall be personally
liable by reason of any act or omission of any other owner trustee
under this Agreement; and
(iii) the Owner Trustee may at any time accept the resignation of
or remove any separate trustee or co-owner trustee.
Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to the separate trustees and co-owner trustees, as if
given to each of them. Every instrument appointing any separate owner trustee or
co-owner trustee, other than this Agreement, shall refer to this Agreement and
to the conditions of this Article X. Each separate trustee and co-owner trustee,
upon its acceptance of appointment, shall be vested with the estates specified
in its instrument of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument shall be filed with the Owner Trustee.
Any separate trustee or co-owner trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any owner trustee or co-owner
trustee shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment of
a new or successor trustee.
ARTICLE XI
MISCELLANEOUS
Section 11.1 SUPPLEMENTS AND AMENDMENTS. This Agreement may be amended by
the Seller, Compass Bank and the Owner Trustee with prior written notice to the
Rating Agencies and the Indenture Trustee, but without the consent of any of the
Noteholders, the Transferor or
30
the Indenture Trustee, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the Transferor;
PROVIDED, HOWEVER, that such action shall not adversely affect in any material
respect the interests of the Indenture Trustee, any Noteholder or the
Transferor. An amendment described above shall be deemed not to adversely affect
in any material respect the interests of any Noteholder or the Transferor if the
party requesting the amendment satisfies the Rating Agency Condition with
respect to such amendment.
This Agreement may also be amended from time to time by the Seller, Compass
Bank and the Owner Trustee, with the prior written consent of the Rating
Agencies and the Indenture Trustee, the Majority Noteholder and the Transferor,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Transferor; PROVIDED, HOWEVER, that
no such amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on the Mortgage Loans
or distributions that shall be required to be made for the benefit of the
Noteholders or the Transferor or (b) reduce the aforesaid Percentage Interests
required to consent to any such amendment, without the consent of the holders of
all the outstanding Notes. The Seller shall join in any such amendment approved
as provided in the preceding sentence so long as such amendment is not adverse
to the interests of the Seller.
Promptly after the execution of any such amendment, the Owner Trustee shall
furnish written notification of the substance of such amendment to the Indenture
Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of the Transferor, the
Noteholders or the Indenture Trustee pursuant to this Section 11.1 to approve
the particular form of any proposed amendment, but it shall be sufficient if
such consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of the Transferor provided for in this
Agreement or in any other Transaction Document) and of evidencing the
authorization of the execution thereof by the Transferor and the Noteholders
shall be subject to such reasonable requirements as the Owner Trustee may
prescribe.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent to such execution and delivery have
been satisfied. The Owner Trustee may, but shall not be
31
obligated to, enter into any such amendment which affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
Section 11.2 NO LEGAL TITLE TO OWNER TRUST ESTATE IN TRANSFEROR. The
Transferor shall not have legal title to any part of the Owner Trust Estate. The
Transferor shall be entitled to receive distributions with respect to their
undivided ownership interest therein only in accordance with Articles V and IX
herein. No transfer, by operation of law or otherwise, of any right, title, or
interest of the Transferor to and in its Ownership Interest shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
Section 11.3 LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Transferor and,
to the extent expressly provided herein, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
Section 11.4 NOTICES.
(a) Unless otherwise expressly specified or permitted by the terms
hereof, all notices shall be in writing and shall be deemed given upon receipt
by the intended recipient or three Business Days after mailing if mailed by
certified mail, postage prepaid (except that notice to the Owner Trustee shall
be deemed given only upon actual receipt by the Owner Trustee), at the following
addresses: (i) if to the Owner Trustee, its Corporate Trust Office with a copy
to: [__________]; (ii) if to Compass Bank or the Seller, 00 Xxxxx 00xx Xxxxxx,
Xxxxxxxxxx, Xxxxxxx 00000, Attention: Senior Vice President and (iii) if to the
Indenture Trustee, its Corporate Trust Office; or, as to each such party, at
such other address as shall be designated by such party in a written notice to
each other party.
(b) Any notice required or permitted to be given to the Transferor
shall be given by first-class mail, postage prepaid, at the address of such
Transferor as shown in the Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Transferor receives such notice.
Section 11.5 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any
32
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 11.6 SEPARATE COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 11.7 SUCCESSORS AND ASSIGNS. All covenants and agreements contained
herein shall be binding upon, and inure to the benefit of the Owner Trustee and
its successors and the Transferor and its successors and permitted assigns, all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by the Transferor shall bind the successors and assigns of
the Transferor.
Section 11.8 NO PETITION. The Owner Trustee, by entering into this
Agreement, the Transferor, by accepting the Ownership Interest, and the
Indenture Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Transferor, or join in any institution against the Transferor, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States Federal or state bankruptcy or law
in connection with any obligations relating to the Ownership Interest and the
Notes, this Agreement or any of the Transaction Documents.
Section 11.9 [Reserved].
Section 11.10 NO RECOURSE. The Transferor by accepting the Ownership
Interest acknowledges that the Transferor's Ownership Interest represents a
beneficial interest in the Trust only and does not represent an interest in or
an obligation of the Servicer, the Owner Trustee or any Affiliate thereof and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated in this Agreement, the Ownership Interest or
the Transaction Documents.
Section 11.11 HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 11.12 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
33
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section 11.13 INCONSISTENCIES WITH SALE AND SERVICING AGREEMENT. In the
event certain provisions of this Agreement conflict with the provisions of the
Sale and Servicing Agreement, the parties hereto agree that the provisions of
the Sale and Servicing Agreement shall be controlling.
Section 11.14 THIRD PARTY BENEFICIARY. The parties hereto acknowledge that
the Indenture Trustee is an express third party beneficiary hereof entitled to
enforce the provisions hereof as if it was actually a party hereto. Nothing in
this Section 11.14 however shall be construed to mitigate in any way, the
fiduciary responsibilities of the Owner Trustee to the beneficiaries of the
Trust.
Section 11.15 SERVICER. The Servicer is authorized to prepare, or to cause
to be prepared, execute and deliver on behalf of the Owner Trustee all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Trust, or the Owner Trustee to prepare, file or deliver
pursuant to the Transaction Documents. Upon written request, the Owner Trustee
shall execute and deliver to the Servicer a limited power of attorney appointing
the Servicer the attorney-in-fact to prepare, or to cause to be prepared,
execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.
Section 11.16 RIGHTS UNDER INDENTURE. [__________] shall be afforded each
of the rights, protections, immunities and indemnities in acting as Registrar
and Paying Agent hereunder, as it is entitled to in its capacity as Indenture
Trustee under Article VI of the Indenture.
34
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.
[__________], as Owner Trustee
By:
-----------------------------------
Name:
Title:
COMPASS ASSET ACCEPTANCE
COMPANY L.L.C., as Seller
By:
-----------------------------------
Name:
Title:
COMPASS BANK
By:
-----------------------------------
Name:
Title:
EXHIBIT A
[RESERVED]
A-1
EXHIBIT B
TRANSFER CERTIFICATE
[----------]
--------------------------------
--------------------------------
Attention: [____________________]
Re: Trust Agreement, dated as of [__________], among Compass Bank and
[__________], as Owner Trustee; Compass Receivables Asset Funding
Trust 200[_]-[__], Closed-End Mortgage Loan Asset Backed Notes, Series
200[_]-[__]
Ladies and Gentlemen:
The undersigned (the "Transferee") has agreed to purchase from
_______________________________________ (the "Transferor") the Ownership
Interest:
A. Rule 144A "Qualified Institutional Buyers" should complete this
section
I. The Transferee is (check one):
___ (i) An insurance company, as defined in Section 2(13) of
the Securities Act of 1933, as amended (the "Securities
Act"), (ii) an investment company registered under the
Investment Company Act of 1940, as amended (the "Investment
Company Act"), (iii) a business development company as
defined in Section 2(a)(48) of the Securities Act, (iv) a
Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958, (v) a plan
established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or
its political subdivisions, for the benefit of its
employees, (vi) an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), (vii) a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940, (viii)
B-1
an organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation (other than a bank as
defined in Section 3(a)(2) of the Securities Act or a
savings and loan association or other institution referenced
in Section 3(a)(2) of the Securities Act or a foreign bank
or savings and loan association or equivalent institution),
partnership, or Massachusetts or similar business trust; or
(ix) an investment advisor registered under the Investment
Advisors Act of 1940, which, for each of (i) through (ix),
owns and invests on a discretionary basis at least $100
million in securities other than securities of issuers
affiliated with the Transferee, securities issued or
guaranteed by the United States or a person controlled or
supervised by and acting as an instrumentality of the
government of the United States pursuant to authority
granted by the Congress of the United States, bank deposit
notes and certificates of deposit, loan participations,
repurchase agreements, securities owned but subject to a
repurchase agreement, and currency, interest rate and
commodity swaps (collectively, "Excluded Securities");
___ a dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") that in the aggregate owns and invests on a
discretionary basis at least $10 million of securities other
than Excluded Securities and securities constituting the
whole or part of an unsold allotment to, or subscription by,
Transferee as a participant in a public offering;
___ an investment company registered under the Investment
Company Act that is part of a family of investment companies
(as defined in Rule 144A of the Securities and Exchange
Commission) which own in the aggregate at least $100 million
in securities other than Excluded Securities and securities
of issuers that are part of such family of investment
companies;
___ an entity, all of the equity owners of which are entities
described in this Paragraph A(I);
B-2
___ a bank as defined in Section 3(a)(2) of the Securities Act,
any savings and loan association or other institution as
referenced in Section 3(a)(5)(A) of the Securities Act, or
any foreign bank or savings and loan association or
equivalent institution that in the aggregate owns and
invests on a discretionary basis at least $100 million in
securities other than Excluded Securities and has an audited
net worth of at least $25 million as demonstrated in its
latest annual financial statements, as of a date not more
than 16 months preceding the date of transfer of the
Ownership Interest to the Transferee in the case of a U.S.
Bank or savings and loan association, and not more than 18
months preceding such date in the case of a foreign bank or
savings association or equivalent institution.
II. The Transferee is acquiring such Ownership Interest solely for
its own account, for the account of one or more others, all of which are
"Qualified Institutional Buyers" within the meaning of Rule 144A, or in its
capacity as a dealer registered pursuant to Section 15 of the Exchange Act
acting in a riskless principal transaction on behalf of a "Qualified
Institutional Buyer". The Transferee is not acquiring such Ownership Interest
with a view to or for the resale, distribution, subdivision or fractionalization
thereof which would require registration of the Ownership Interest under the
Securities Act.
B. "Accredited Investors" should complete this Section
I. The Transferee is (check one):
___ a bank within the meaning of Section 3(a)(2) of the
Securities Act;
___ a savings and loan association or other institution defined
in Section 3(a)(5) of the Securities Act;
___ a broker or dealer registered pursuant to the Exchange Act;
___ an insurance company within the meaning of Section 2(13) of
the Securities Act;
___ an investment company registered under the Investment
Company Act;
B-3
___ an employee benefit plan within the meaning of Title I of
ERISA, which has total assets in excess of $5,000,000;
___ another entity which is an "accredited investor" within the
meaning of paragraph (fill in) of subsection (a) of Rule 501
of the Securities and Exchange Commission.
II. The Transferee is acquiring such Ownership Interest solely for
its own account, for investment, and not with a view to or for the resale,
distribution, subdivision or fractionalization thereof which would require
registration of the Ownership Interest under the Securities Act.
C. If the Transferee is unable to complete one of paragraph A(I) or
paragraph B(I) above, the Transferee must furnish an opinion in form and
substance satisfactory to the Owner Trustee of counsel satisfactory to the Owner
Trustee to the effect that such purchase will not violate any applicable federal
or state securities laws.
D. The Transferee represents that it is not (A) an "employee benefit plan"
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or (B) a "plan" within the meaning of Section
4975(e)(1) of the Code (any such plan or employee benefit plan, a "Plan") or (C)
any entity, including an insurance company separate account or general account,
whose underlying assets include plan assets by reason of a plan's investment in
the entity and is not directly or indirectly purchasing such Trust Security on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with assets of a Plan or (D) a non-United States Person as defined in Section
7701(a)(30) of the Code.
Very truly yours,
[NAME OF PURCHASER]
By:
---------------------------------
Title:
-------------------------------
Dated:
THE FOREGOING IS ACKNOWLEDGED THIS ____ DAY OF _________________, 200_.
[NAME OF SELLER]
B-4
By:
-------------------------------------
Title:
----------------------------------
B-5
