EXHIBIT 4.2
EXECUTION COPY
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AMENDED AND RESTATED
TRUST AGREEMENT
among
TRIAD FINANCIAL SPECIAL PURPOSE LLC
Depositor,
TRIAD FINANCIAL CORPORATION
Administrator
and
WILMINGTON TRUST COMPANY
Owner Trustee
Dated as of March 18, 2004
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS ................................................................ 1
SECTION 1.1. Capitalized Terms ................................................ 1
SECTION 1.2. Other Definitional Provisions .................................... 3
ARTICLE II. ORGANIZATION .............................................................. 3
SECTION 2.1. Name ............................................................. 3
SECTION 2.2. Office ........................................................... 3
SECTION 2.3. Purposes and Powers .............................................. 3
SECTION 2.4. Appointment of Owner Trustee ..................................... 4
SECTION 2.5. Initial Capital Contribution of Trust Estate ..................... 4
SECTION 2.6. Declaration of Trust ............................................. 4
SECTION 2.7. Title to Trust Property .......................................... 5
SECTION 2.8. Situs of Trust ................................................... 5
SECTION 2.9. Representations and Warranties of the Depositor .................. 5
SECTION 2.10. Representations and Warranties of the Administrator .............. 6
SECTION 2.11. Covenants of the Certificateholder ............................... 7
SECTION 2.12. Federal Income Tax Treatment of the Trust ........................ 8
ARTICLE III. CERTIFICATE AND TRANSFER OF INTEREST ..................................... 8
SECTION 3.1. Ownership ........................................................ 8
SECTION 3.2. The Certificate .................................................. 8
SECTION 3.3. Authentication of Certificate .................................... 9
SECTION 3.4. Registration of Transfer and Exchange of Certificate ............. 9
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates ................ 10
SECTION 3.6. Persons Deemed Certificateholders ................................ 10
SECTION 3.7. Maintenance of Office or Agency .................................. 11
SECTION 3.8. Disposition in Whole But Not in Part ............................. 11
SECTION 3.9. ERISA Restrictions ............................................... 11
ARTICLE IV. VOTING RIGHTS AND OTHER ACTIONS ........................................... 11
SECTION 4.1. Prior Notice to Holder with Respect to Certain Matters ........... 11
SECTION 4.2. Action by Certificateholder with Respect to Certain Matters ...... 12
SECTION 4.3. Restrictions on Certificateholder's Power ........................ 12
SECTION 4.4. Rights of Security Insurer ....................................... 13
ARTICLE V. AUTHORITY AND DUTIES OF OWNER TRUSTEE ...................................... 13
SECTION 5.1. General Authority ................................................ 13
SECTION 5.2. General Duties ................................................... 13
SECTION 5.3. Action upon Instruction .......................................... 13
SECTION 5.4. No Duties Except as Specified in this Agreement or in Instructions 14
SECTION 5.5. No Action Except under Specified Documents or Instructions ....... 15
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SECTION 5.6. Restrictions ...................................................... 15
ARTICLE VI. CONCERNING THE OWNER TRUSTEE .............................................. 15
SECTION 6.1. Acceptance of Trusts and Duties ................................. 15
SECTION 6.2. Furnishing of Documents ......................................... 16
SECTION 6.3. Representations and Warranties .................................. 17
SECTION 6.4. Reliance; Advice of Counsel ..................................... 17
SECTION 6.5. Not Acting in Individual Capacity ............................... 17
SECTION 6.6. Owner Trustee Not Liable for Certificate or Receivables ......... 18
SECTION 6.7. Owner Trustee May Own Notes ..................................... 18
SECTION 6.8. Payments from Owner Trust Estate ................................ 18
SECTION 6.9. Doing Business in Other Jurisdictions ........................... 18
ARTICLE VII. COMPENSATION OF OWNER TRUSTEE ............................................ 19
SECTION 7.1. Owner Trustee's Fees and Expenses ............................... 19
SECTION 7.2. Indemnification ................................................. 19
SECTION 7.3. Payments to the Owner Trustee ................................... 19
SECTION 7.4. Non-recourse Obligations ........................................ 19
ARTICLE VIII. TERMINATION OF TRUST AGREEMENT .......................................... 20
SECTION 8.1. Termination of Trust Agreement .................................. 20
ARTICLE IX. SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES .................... 21
SECTION 9.1. Eligibility Requirements for Owner Trustee ...................... 21
SECTION 9.2. Resignation or Removal of Owner Trustee ......................... 21
SECTION 9.3. Successor Owner Trustee ......................................... 22
SECTION 9.4. Merger or Consolidation of Owner Trustee ........................ 22
SECTION 9.5. Appointment of Co-Trustee or Separate Trustee ................... 23
ARTICLE X. MISCELLANEOUS .............................................................. 24
SECTION 10.1. Supplements and Amendments ...................................... 24
SECTION 10.2. No Legal Title to Owner Trust Estate in Certificateholder ....... 25
SECTION 10.3. Limitations on Rights of Others ................................. 25
SECTION 10.4. Notices ......................................................... 25
SECTION 10.5. Severability .................................................... 26
SECTION 10.6. Separate Counterparts ........................................... 26
SECTION 10.7. Assignments ..................................................... 27
SECTION 10.8. No Recourse ..................................................... 27
SECTION 10.9. No Petition ..................................................... 27
SECTION 10.10. Headings ........................................................ 27
SECTION 10.11. GOVERNING LAW ................................................... 27
SECTION 10.12. Administrator ................................................... 27
EXHIBITS
EXHIBIT A FORM OF CERTIFICATE
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EXHIBIT B FORM OF CERTIFICATE OF TRUST
EXHIBIT C FORM OF CERTIFICATE AS TO INITIAL PURCHASE
EXHIBIT D FORM OF QUALIFIED INSTITUTIONAL BUYER TRANSFEREE'S CERTIFICATE
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This AMENDED AND RESTATED TRUST AGREEMENT dated as of March 18, 2004
among TRIAD FINANCIAL SPECIAL PURPOSE LLC, a Delaware limited liability company
(the "Depositor"), TRIAD FINANCIAL CORPORATION, as sponsor of the Trust and
Administrator (the "Administrator") and WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as Owner Trustee, (the "Owner Trustee") amends and restates
in its entirety that certain Trust Agreement dated as of February 24, 2004
between the Depositor and the Owner Trustee.
ARTICLE I.
Definitions
SECTION 1.1. Capitalized Terms. For all purposes of this Agreement,
the following terms will have the meanings set forth below:
"Administrator" means Triad, as the Administrator of the Trust.
"Agreement" means this Trust Agreement, as the same may be amended
and supplemented from time to time.
"Benefit Plan" has the meaning assigned to such term in Section 3.9.
"Certificate" means a trust certificate evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit A attached hereto.
"Certificateholder" or "Holder" means the person in whose name a
Certificate is registered on the Certificate Register, initially Triad Financial
Special Purpose LLC.
"Certificate of Trust" means the Certificate of Trust in the form of
Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the Statutory
Trust Statute.
"Certificate Register" and "Certificate Registrar" mean the register
mentioned and the registrar appointed pursuant to Section 3.4.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" means, with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee located at Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or at such
other address as the Owner Trustee may designate by notice to the
Certificateholder, or the principal corporate trust office of any successor
Owner Trustee (the address of which the successor owner trustee will notify the
Certificateholder).
"Depositor" means Triad Financial Special Purpose LLC, a Delaware
limited liability company.
"ERISA" has the meaning assigned to such term in Section 3.9.
"Expenses" has the meaning assigned to such term in Section 7.2.
"Indemnified Parties" has the meaning assigned to such term in
Section 7.2.
"Indenture" means the Indenture, dated as of March 1, 2004, between
the Trust and JPMorgan Chase Bank, as Indenture Trustee.
"Owner Trust Estate" means all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Section 2.1 of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts (including all Eligible Investments therein and
all proceeds therefrom) and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust under the Sale and
Servicing Agreement.
"Owner Trustee" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee hereunder.
"Record Date" means with respect to any Distribution Date, the close
of business on the last Business Day immediately preceding such Distribution
Date.
"Responsible Officer" means, with respect to the Owner Trustee, any
officer within the Corporate Trust Office of the Owner Trustee with direct
responsibility for the administration of the Trust and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of March 1, 2004, among the Trust, the Depositor, Triad and
the Indenture Trustee, as the same may be amended and supplemented from time to
time.
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Security Insurer" means Ambac Assurance Corporation, or its
successor in interest.
"Statutory Trust Statute" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq. as the same may be amended from
time to time.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations will include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Triad" means Triad Financial Corporation, a California corporation,
or its successor in interest.
"Trust" means the trust established by this Agreement.
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SECTION 1.2. Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined 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 will 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, will have the respective meanings
given to them under generally accepted accounting principles as in effect on the
date of this Agreement or any such certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document will
control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement will 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"
will 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.
ARTICLE II.
Organization
SECTION 2.1. Name. There is hereby formed a trust to be known as
"Triad Automobile Receivables Trust 2004-A," in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and xxx and be sued.
SECTION 2.2. Office. The office of the Trust will 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 Certificateholder.
SECTION 2.3. Purposes and Powers.
(a) The purpose of the Trust is, and the Trust will have the power
and authority, to engage in the following activities:
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(i) to issue the Notes pursuant to the Indenture and the
Certificate pursuant to this Agreement, and to sell the
Notes to the Depositor;
(ii) to assign, grant, transfer, pledge, mortgage and convey
the Trust Estate to the Indenture Trustee pursuant to
the Indenture for the benefit of the Security Insurer
and on behalf of the Noteholders and to hold, manage and
distribute to the Certificateholder pursuant to the
terms of the Sale and Servicing Agreement any portion of
the Trust Estate released from the Lien of, and remitted
to the Trust pursuant to, the Indenture;
(iii) to enter into and perform its obligations under the
Basic Documents to which it is a party;
(iv) 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
(v) subject to compliance with the Basic 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 Certificateholder
and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
will not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of the Basic Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor 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. Initial Capital Contribution of Trust Estate. The Owner
Trustee hereby acknowledges prior receipt in trust from the Depositor of the sum
of $1,000 which contribution will constitute the initial Owner Trust Estate. The
Administrator will pay organizational expenses of the Trust as they may arise.
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 Holder, subject to
the obligations of the Trust under the Basic Documents. It is the intention of
the parties hereto that the Trust constitute a statutory trust under the
Statutory Trust Statute and that this Agreement constitute the governing
instrument of such statutory trust. Effective as of the date hereof, the Owner
Trustee will have all rights, powers and duties set forth herein and to the
extent not inconsistent herewith, in the Statutory Trust Statute with respect to
accomplishing the purposes of the Trust. The Owner Trustee has filed the
Certificate of Trust with the Secretary of State.
The Holder will not have any personal liability for any liability or
obligation of the Trust.
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SECTION 2.7. Title to Trust Property.
(a) Legal title to all the Owner Trust Estate will be vested at all
times in the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Owner Trust Estate to be vested
in a trustee or trustees, in which case title will be deemed to be vested in the
Owner Trustee, a co-trustee and/or a separate trustee, as the case may be. If
any portion of the Owner Trust Estate is deemed vested in the Owner Trustee, a
co-trustee and/or separate trustee, the Owner Trustee, upon having actual
knowledge thereof, will immediately notify the Indenture Trustee, the Servicer
and the Administrator, and the Administrator will cause to be filed such UCC
financing statements and related filing documents or writings as are necessary
to maintain the Indenture Trustee's security interest in the Owner Trust Estate.
(b) The Holder will not have legal title to any part of the Trust
Property. The Holder is entitled to receive distributions with respect to its
undivided ownership interest therein only in accordance with Article VIII. No
transfer, by operation of law or otherwise, of any right, title or interest by
the Certificateholder of its ownership interest in the Owner Trust Estate will
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 Trust Property.
SECTION 2.8. Situs of Trust. The Trust will be located in the State
of Delaware. All bank accounts maintained by the Owner Trustee on behalf of the
Trust will be located in the State of Delaware or the State of New York.
Payments will be received by the Trust only in Delaware or New York and payments
will be made by the Trust only from Delaware or New York. The Trust will not
have any employees in any state other than Delaware; provided, however, that
nothing herein will restrict or prohibit the Owner Trustee, the Servicer or any
agent of the Trust from having employees within or without the State of
Delaware. The only office of the Trust will be at the Corporate Trust Office
located in Delaware.
SECTION 2.9. Representations and Warranties of the Depositor. The
Depositor makes the following representations and warranties on which the Owner
Trustee relies in accepting the Owner Trust Estate in trust and executing the
Certificate and upon which the Security Insurer relies in issuing the Note
Policy.
(a) Organization and Good Standing. The Depositor is duly organized
and validly existing as a Delaware limited liability company with power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted and is proposed to
be conducted pursuant to the Basic Documents.
(b) Due Qualification. The Depositor is duly qualified to do
business as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of its property, the conduct of its business and the
performance of its obligations under the Basic Documents requires such
qualification.
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(c) Power and Authority. The Depositor has the power and authority
to execute and deliver this Agreement and to carry out its terms; the Depositor
has full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Trust and the Depositor has duly authorized
such sale and assignment and deposit to the Trust by all necessary action; and
the execution, delivery and performance of this Agreement has been duly
authorized by the Depositor by all necessary action.
(d) No Consent Required. No consent, license, approval or
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of the Basic Documents, except for such as
have been obtained, effected or made.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the limited liability
agreement of the Depositor, or any material indenture, agreement or other
instrument to which the Depositor is a party or by which it is bound; nor result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); nor violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation applicable to the Depositor
of any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Depositor or
its properties.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the Depositor's knowledge, threatened against it before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties (A) asserting the
invalidity of any of the Basic Documents, (B) seeking to prevent the issuance of
the Certificate or the Notes or the consummation of any of the transactions
contemplated by any of the Basic Documents, (C) seeking any determination or
ruling that might materially and adversely affect its performance of its
obligations under, or the validity or enforceability of, any of the Basic
Documents, or (D) seeking to adversely affect the federal income tax or other
federal, state or local tax characteristics of the Certificate.
SECTION 2.10. Representations and Warranties of the Administrator.
The Administrator, as sponsor of the Trust, assumes all rights and obligations
under Section 2(a)-4 of the Securities Act of 1933, as amended. The
Administrator makes the following representations and warranties on which the
Owner Trustee relies in accepting the Owner Trust Estate in trust and executing
the Certificate and upon which the Security Insurer relies in issuing the Note
Policy.
(a) Organization and Good Standing. The Administrator is duly
organized and validly existing as a California corporation with power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted and is proposed to
be conducted pursuant to the Basic Documents.
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(b) Due Qualification. The Administrator is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of its property, the conduct of its business and the performance of its
obligations under the Basic Documents requires such qualification.
(c) Power and Authority. The Administrator has the corporate power
and authority to execute and deliver this Agreement and to carry out its terms;
the Administrator has full power and authority to sell and assign the property
to be sold and assigned to and deposited with the Trust and the Administrator
has duly authorized such sale and assignment and deposit to the Trust by all
necessary corporate action; and the execution, delivery and performance of this
Agreement has been duly authorized by the Administrator by all necessary
corporate action.
(d) No Consent Required. No consent, license, approval or
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of the Basic Documents, except for such as
have been obtained, effected or made.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of the Administrator, or any material indenture,
agreement or other instrument to which the Administrator is a party or by which
it is bound; nor result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any law or,
to the best of the Administrator's knowledge, any order, rule or regulation
applicable to the Administrator of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Administrator or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the Administrator's knowledge, threatened against it before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties (A) asserting the
invalidity of any of the Basic Documents, (B) seeking to prevent the issuance of
the Certificate or the Notes or the consummation of any of the transactions
contemplated by any of the Basic Documents, (C) seeking any determination or
ruling that might materially and adversely affect its performance of its
obligations under, or the validity or enforceability of, any of the Basic
Documents, or (D) seeking to adversely affect the federal income tax or other
federal, state or local tax attributes of the Certificate.
SECTION 2.11. Covenants of the Certificateholder. The
Certificateholder agrees:
(a) to be bound by the terms and conditions of the Certificate of
which the Holder is the owner and of this Agreement, including any supplements
or amendments hereto and to perform the obligations of a Holder as set forth
therein or herein, in all respects as if it were a signatory hereto. This
undertaking is made for the benefit of the Trust, the Owner Trustee and the
Security Insurer; and
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(b) until the completion of the events specified in Section 8.1(d),
not to, for any reason, institute proceedings for the Trust to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against the Trust, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trust or a substantial
part of its property, or cause or permit the Trust to make any assignment for
the benefit of its creditors, or admit in writing its inability to pay its debts
generally as they become due, or declare or effect a moratorium on its debt or
take any action in furtherance of any such action.
SECTION 2.12. Federal Income Tax Treatment of the Trust.
(a) For so long as the Trust has a single owner for federal income
tax purposes, it will, pursuant to Treasury Regulations promulgated under
section 7701 of the Code, be disregarded as an entity distinct from the
Certificateholder for all federal income tax purposes. Accordingly, for federal
income tax purposes, the Certificateholder will be treated as (i) owning all
assets owned by the Trust, (ii) having incurred all liabilities incurred by the
Trust, and (iii) all transactions between the Trust and the Certificateholder
will be disregarded.
(b) Neither the Owner Trustee nor any Certificateholder will, under
any circumstances, and at any time, make an election on IRS Form 8832 or
otherwise, to classify the Trust as an association taxable as a corporation for
federal, state or any other applicable tax purpose.
(c) Notwithstanding Section 3.8, in the event that the Trust has two
or more equity owners for federal income tax purposes, the Trust will be treated
as a partnership. At any such time that the Trust has two or more equity owners,
this Agreement will be amended, in accordance with Section 10.1 herein, and
appropriate provisions will be added so as to provide for treatment of the Trust
as a partnership.
ARTICLE III.
Certificate and Transfer of Interest
SECTION 3.1. Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5 and until the issuance of
the Certificate to the initial Certificateholder, the Depositor will be the sole
beneficiary of the Trust.
SECTION 3.2. The Certificate. The Certificate will be executed on
behalf of the Trust by manual or facsimile signature of an authorized officer of
the Owner Trustee. A Certificate bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures will have been affixed,
authorized to sign on behalf of the Trust, will be validly issued and entitled
to the benefit of this Agreement, notwithstanding that such individuals or any
of them will have ceased to be so authorized prior to the authentication and
delivery of such Certificate or did not hold such offices at the date of
authentication and delivery of such Certificate. A transferee of a Certificate
will become a Certificateholder, and will be entitled to the rights and subject
to the obligations of a Certificateholder hereunder, upon due registration of
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such Certificate in such transferee's name pursuant to Section 3.4. The
Certificate will be issuable in minimum denominations no less than 5% of the
beneficial interest in the Trust.
SECTION 3.3. Authentication of Certificate. Concurrently with the
initial sale of the Receivables to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee will cause the Certificate to be executed on behalf
of the Trust, authenticated and delivered to or upon the written order of the
Depositor, signed by its chairman of the board, its president or any vice
president, its treasurer or any assistant treasurer without further action by
the Depositor, in authorized denominations. No Certificate will entitle its
holder to any benefit under this Agreement, or will be valid for any purpose,
unless there will appear on such Certificate a certificate of authentication
substantially in the form set forth in Exhibit A, executed by the Owner Trustee,
by manual signature; such authentication will constitute conclusive evidence
that such Certificate is duly authenticated and delivered hereunder. The
Certificate will be dated the date of its authentication.
SECTION 3.4. Registration of Transfer and Exchange of Certificate.
The Certificate Registrar will keep or cause to be kept, at the office or agency
maintained pursuant to Section 3.7, a Certificate Register in which, subject to
such reasonable regulations as it may prescribe, the Owner Trustee will provide
for the registration of the Certificate and of transfers and exchanges of the
Certificate as herein provided. The Owner Trustee will be the initial
Certificate Registrar.
The Certificateholder will provide the Certificate Registrar and the
Indenture Trustee with the name and address of the Certificateholder on the
Closing Date. Upon any transfers of the Certificate, the Certificate Registrar
will notify the Indenture Trustee of the name and address of the transferee in
writing, by facsimile, on the day of such transfer.
Upon surrender for registration of transfer of the Certificate at
the office or agency maintained pursuant to Section 3.7, the Owner Trustee will
execute, authenticate and deliver, in the name of the designated transferee, a
new Certificate dated the date of authentication by the Owner Trustee or any
authenticating agent.
A Certificate presented or surrendered for registration of transfer
or exchange will be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Certificateholder or his attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer or exchange will be
canceled and subsequently disposed of by the Owner Trustee in accordance with
its customary practice.
No service charge will be made for any registration of transfer or
exchange of the Certificate, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any expense, tax or
governmental charge that may be imposed in connection with any transfer or
exchange of the Certificate.
To the fullest extent permitted by applicable law, no sale, pledge
or other transfer of a Certificate will be made unless (I) such sale, pledge or
other transfer (i) is made pursuant to an effective registration statement under
the Securities Act and any applicable state securities laws or (ii) is exempt
from the registration requirements under the Securities Act and such state
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securities laws and (II) such sale, pledge or other transfer is made to a Person
that satisfies the requirements of paragraph (a)(2)(ii) of Rule 3a-7 as then in
effect or any successor rule ("Rule 3a-7") under the Investment Company Act.
Each prospective purchaser of the Certificate in the initial sale by the Issuer
on the Closing Date will deliver completed and duly executed transferee's
certificate (in the form of Exhibit C) to the Owner Trustee. Each prospective
purchaser of a Certificate after the Closing Date will deliver a completed and
duly executed transferee's certificate (in the form of Exhibit D for "qualified
institutional buyers"), to the Owner Trustee and to the Transferor for
inspection prior to effecting any requested transfer. The Issuer and the Owner
Trustee may rely conclusively upon the information contained in any such
transferee's certificate in the absence of knowledge to the contrary. In
connection with any transfer (other than (i) the initial purchase of any
Certificate by the initial purchasers who deliver a transferee's certificate in
the form of Exhibit C and (ii) the purchase of any Certificate by a purchaser
who delivers a Transferee's Certificate in the form of Exhibit D), the Owner
Trustee will require an Opinion of Counsel to the effect that such transfer may
be effected without registration under the Securities Act, which Opinion of
Counsel, if so required, will be addressed to the Issuer and the Owner Trustee
and will be secured at the expense of the Holder. The Owner Trustee may rely
upon the representation of any transferee made to the Owner Trustee, and upon
such Opinion of Counsel, and will be fully protected in so doing. Any
Certificate Owners will be deemed to have agreed to these restrictions on
transfer.
In order to preserve the exemption for resales and transfers
provided by Rule 144A under the Securities Act, the Issuer will provide to any
Certificateholder and any prospective purchaser designated by such
Certificateholder, upon request of such Certificateholder or such prospective
purchaser, such information required by Rule 144A as will enable the resale of
such Certificate to be made pursuant to Rule 144A. The Owner Trustee will
cooperate with the Issuer in providing the Issuer such information in its
possession regarding the Certificate, the Receivables and other matters
regarding the Certificate as the Issuer will reasonably request to meet its
obligations under the preceding sentence.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate will be surrendered to the Certificate Registrar,
or if the Certificate Registrar will receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there will be delivered to
the Certificate Registrar and the Owner Trustee such security or indemnity as
may be required by them to save each of them harmless, then in the absence of
notice that such Certificate has been acquired by a bona fide purchaser, the
Owner Trustee on behalf of the Trust will execute, and the Owner Trustee will
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like class, tenor
and denomination. In connection with the issuance of any new Certificate under
this Section, the Owner Trustee or the Certificate Registrar may require the
payment of a sum sufficient to cover any expense, tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section will constitute conclusive evidence of an
ownership interest in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate will be found at any time.
SECTION 3.6. Persons Deemed Certificateholders. Every Person by
virtue of becoming a Certificateholder in accordance with this Agreement is
deemed to be bound by the terms of this Agreement. Prior to due presentation of
the Certificate for registration of transfer,
10
the Owner Trustee, the Certificate Registrar and the Security Insurer, and any
agent of the Owner Trustee, the Certificate Registrar and the Security Insurer,
may treat the person in whose name any Certificate will be registered in the
Certificate Register as the owner of such Certificate for the purpose of
receiving distributions pursuant to the Sale and Servicing Agreement and for all
other purposes whatsoever, and none of the Owner Trustee, the Certificate
Registrar or the Security Insurer nor any agent of the Owner Trustee, the
Certificate Registrar or the Security Insurer will be bound by any notice to the
contrary.
SECTION 3.7. Maintenance of Office or Agency. The Owner Trustee will
maintain an office or offices or agency or agencies where the Certificate may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Owner Trustee in respect of the Certificate and the Basic
Documents may be served. The Owner Trustee initially designates its principal
Corporate Trust Office for such purposes. The Owner Trustee will give prompt
written notice to the Depositor, the Certificateholder and (unless an Insurer
Default has occurred and is continuing) the Security Insurer of any change in
the location of the Certificate Register or any such office or agency.
SECTION 3.8. Disposition in Whole But Not in Part. The Certificate
may be transferred in whole but not in part. To the fullest extent permitted by
applicable law, any attempted transfer of the Certificate that would divide the
ownership of the Trust Estate is void.
SECTION 3.9. ERISA Restrictions. The Certificate 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
(as defined in Section 4975(e)(1) of the Code) that is subject to Section 4975
of the Code, or (iii) any entity whose underlying assets include assets of a
plan described in (i) or (ii) above by reason of such plan's investment in the
entity (including, without limitation, an insurance company general account)
(each, a "Benefit Plan"). By accepting and holding its beneficial ownership
interest in its Certificate, the Holder thereof is deemed to have represented
and warranted that it is not a Benefit Plan.
ARTICLE IV.
Voting Rights and Other Actions
SECTION 4.1. Prior Notice to Holder with Respect to Certain Matters.
With respect to the following matters, the Owner Trustee will not take action
unless at least 30 days before the taking of such action, the Owner Trustee will
have notified the Certificateholder in writing of the proposed action and the
Certificateholder will not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that the Certificateholder has withheld
consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Statutory Trust Statute or unless such amendment would not materially and
adversely affect the interests of the Holder);
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(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholder; or
(d) except pursuant to Section 12.1(b) of the Sale and Servicing
Agreement, the amendment, change or modification of the Sale and Servicing
Agreement, except to cure any ambiguity or defect or to amend or supplement any
provision in a manner that would not materially adversely affect the interests
of the Certificateholder.
The Owner Trustee will notify the Certificateholder in writing of any
appointment of a successor Note Registrar or Indenture Trustee within five
Business Days after receipt of notice thereof.
SECTION 4.2. Action by Certificateholder with Respect to Certain
Matters. The Owner Trustee will not have the power, except upon the direction of
the Certificateholder or the Security Insurer in accordance with the Basic
Documents, to (a) remove the Servicer under the Sale and Servicing Agreement
pursuant to Section 9.2 thereof or (b) except as expressly provided in the Basic
Documents, sell the Receivables after the termination of the Indenture. The
Owner Trustee will take the actions referred to in the preceding sentence only
upon written instructions signed by the Certificateholder and the furnishing of
indemnification satisfactory to the Owner Trustee by the Certificateholder.
SECTION 4.3. Restrictions on Certificateholder's Power.
(a) The Certificateholder will not direct the Owner Trustee to take
or refrain from taking any action if such action or inaction would be contrary
to any obligation of the Trust or the Owner Trustee under any of the Basic
Documents or would be contrary to Section 2.3 nor will the Owner Trustee be
obligated to follow any such direction, if given.
(b) The Certificateholder will not have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to this
Agreement or any Basic Document, unless the Certificateholder is the Instructing
Party pursuant to Section 5.3 and unless the Certificateholder previously will
have given to the Owner Trustee a written notice of default and of the
continuance thereof, as provided in this Agreement, and also unless
Certificateholder will have made written request upon the Owner Trustee to
institute such action, suit or proceeding in its own name as Owner Trustee under
this Agreement and will have offered to the Owner Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Owner Trustee, for 30 days after its
receipt of such notice, request, and offer of indemnity, has neglected or
refused to institute any such action, suit, or proceeding, and during such
30-day period no request or waiver inconsistent with such written request has
been given to the Owner Trustee pursuant to and in compliance with this Section
or Section 5.3. For the protection and enforcement of the provisions of this
Section, the Certificateholder and the Owner Trustee are entitled to such relief
as can be given either at law or in equity.
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SECTION 4.4. Rights of Security Insurer. Notwithstanding anything to
the contrary in the Basic Documents, without the prior written consent of the
Security Insurer (so long as no Insurer Default has occurred and is continuing),
the Owner Trustee will not (i) remove the Servicer, (ii) initiate any claim,
suit or proceeding by the Trust or compromise any claim, suit or proceeding
brought by or against the Trust, other than with respect to the enforcement of
any Receivable or any rights of the Trust thereunder, (iii) authorize the merger
or consolidation of the Trust with or into any other statutory trust or other
entity (other than in accordance with Section 3.10 of the Indenture) or (iv)
amend the Certificate of Trust (other than as may be required by the Statutory
Trust Statute).
ARTICLE V.
Authority and Duties of Owner Trustee
SECTION 5.1. General Authority.
The Owner Trustee is authorized and directed to execute and deliver
the Basic Documents to which the Trust is named as a party and each certificate
or other document attached as an exhibit to or contemplated by the Basic
Documents to which the Trust is named as a party and any amendment thereto, in
each case, in such form as the Certificateholder will approve as evidenced
conclusively by the Owner Trustee's execution thereof, and on behalf of the
Trust, to direct the Indenture Trustee to authenticate and deliver Class A-1
Notes in the aggregate principal amount of $124,000,000, Class A-2 Notes in the
aggregate principal amount of $228,000,000, Class A-3 Notes in the aggregate
principal amount of $110,000,000, Class A-4 Notes in the aggregate principal
amount of $208,250,000 and Class B Notes in the aggregate principal amount of
$66,295,272. In addition to the foregoing, the Owner Trustee is authorized, but
will not be obligated, to take all actions required of the Trust pursuant to the
Basic Documents. The Owner Trustee is further authorized from time to time to
take such action as the Instructing Party recommends with respect to the Basic
Documents.
SECTION 5.2. General Duties. It will 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 Trust in the
interest of the Holder, subject to the Basic Documents and in accordance with
the provisions of this Agreement. Notwithstanding the foregoing, the Owner
Trustee is deemed to have discharged its duties and responsibilities under the
Basic Documents to the extent the Servicer or Administrator has agreed to
perform any act or to discharge any duty of the Trust or the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee will not be liable
for the default or failure of the Servicer or Administrator to carry out its
obligations.
SECTION 5.3. Action upon Instruction.
(a) Subject to Article IV, the Security Insurer (so long as any
Class A Notes are outstanding and an Insurer Default will not have occurred and
be continuing) or the Certificateholder (if an Insurer Default has occurred and
is continuing or if no Class A Notes are outstanding) (the "Instructing Party")
has the exclusive right to direct the actions of the Owner Trustee in the
management of the Trust. The Instructing Party will ensure that such
instructions
13
are not inconsistent with the express terms set forth herein or in any Basic
Document. The Instructing Party will not instruct the Owner Trustee in a manner
inconsistent with the Basic Documents.
(b) The Owner Trustee will not be required to take any action
hereunder or under any Basic Document if the Owner Trustee has reasonably
determined, or has 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 Basic 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 any Basic Document, the Owner Trustee will promptly give notice (in
such form as will be appropriate under the circumstances) to the Instructing
Party requesting instruction as to the course of action to be adopted, and to
the extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Instructing Party received, the Owner Trustee will not be
liable on account of such action to any Person. If the Owner Trustee will not
have received appropriate instruction within ten 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 will be under no duty to, take
or refrain from taking such action, not inconsistent with the Basic Documents,
as it will deem to be in the best interests of the Certificateholder, and will
have no liability to any Person for such action or inaction.
(d) If the Owner Trustee is unsure as to the application of any
provision of this Agreement or any Basic 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 if this Agreement permits any determination by
the Owner Trustee or is silent or is incomplete as to the course of action that
the Owner Trustee is required to take with respect to a particular set of facts,
the Owner Trustee may give notice (in such form as will be appropriate under the
circumstances) to the Instructing Party 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, the Owner Trustee will not be
liable, on account of such action or inaction, to any Person. If the Owner
Trustee will 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 will be
under no duty to, take or refrain from taking such action, not inconsistent with
the Basic Documents, as it will deem to be in the best interests of the
Certificateholder, and will have no liability to any Person for such action or
inaction.
SECTION 5.4. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee will 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 5.3; and no implied duties or obligations will
be read into this Agreement or any Basic Document against the Owner Trustee. The
Owner Trustee will have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted
14
to it hereunder or to prepare or file any filing for the Trust with the
Securities and Exchange Commission or to record this Agreement or any Basic
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 (solely in its individual capacity) and that are not
related to the ownership or the administration of the Owner Trust Estate.
SECTION 5.5. No Action Except under Specified Documents or
Instructions. The Owner Trustee will not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
or (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 5.3.
SECTION 5.6. Restrictions. The Owner Trustee will not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 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 Certificateholder will not direct the Owner Trustee to take action
that would violate the provisions of this Section.
ARTICLE VI.
Concerning the Owner Trustee
SECTION 6.1. 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 Basic Documents. The Owner
Trustee will not be answerable or accountable hereunder or under any Basic
Document under any circumstances, except (i) for its own willful misconduct, bad
faith or gross negligence, (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 6.3 expressly made by the Owner
Trustee, (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations expressly undertaken by it in the last sentence of Section
5.4 hereof, (iv) for taxes, fees or other charges on, based on or measured by,
any fees, commissions or compensation received 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 will not be liable for any error of judgment
made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee will not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Instructing Party, the Servicer or the Certificateholder;
(c) no provision of this Agreement or any Basic Document will
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 Basic Document if the Owner
15
Trustee has 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 will the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;
(e) the Owner Trustee will not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution hereof by
the Depositor or 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 Basic Documents, other than the certificate of
authentication on the Certificate, and the Owner Trustee will in no event assume
or incur any liability, duty or obligation to the Security Insurer, Indenture
Trustee, any Noteholder or to any Certificateholder, other than as expressly
provided for herein;
(f) the Owner Trustee will not be liable for the default or
misconduct of the Security Insurer, the Administrator, the Indenture Trustee, or
the Servicer under any of the Basic Documents or otherwise and the Owner Trustee
has no obligation or liability to perform the obligations under the Basic
Documents that are required to be performed by the Administrator, the Indenture
Trustee or the Servicer under the Sale and Servicing Agreement; and
(g) the Owner Trustee will 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 Basic Document, at the request, order or direction of the
Instructing Party or the Certificateholder, unless such Instructing Party or
Certificateholder 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 Basic
Document will not be construed as a duty, and the Owner Trustee will not be
answerable for other than its gross negligence, bad faith or willful misconduct
in the performance of any such act.
With respect to the Security Insurer or Instructing Party, 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 Security Insurer or
Instructing Party shall be read into the Basic Documents against the Owner
Trustee. The Owner Trustee shall not be deemed to owe any fiduciary duty to the
Security Insurer or Instructing Party, and shall not be liable to any such
person for the failure of the Trust to perform its obligations to such persons
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.
SECTION 6.2. Furnishing of Documents. The Owner Trustee will furnish
to the Certificateholder promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
16
SECTION 6.3. Representations and Warranties . The Owner Trustee
hereby represents and warrants to the Depositor, the Holder and the Security
Insurer (which will have relied on such representations and warranties in
issuing the Note Policy), that:
(a) It is a Delaware banking corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene any
federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
SECTION 6.4. Reliance; Advice of Counsel.
(a) The Owner Trustee will 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, secretary or other authorized officers of the
relevant party, as to such fact or matter, and such certificate will 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 the Basic Documents, the
Owner Trustee (i) may act directly or through its agents or attorneys pursuant
to agreements entered into with any of them, and the Owner Trustee will not be
liable for the conduct or misconduct of such agents or attorneys if such agents
or attorneys will have been selected by the Owner Trustee with reasonable care,
and (ii) may consult with counsel, accountants and other skilled persons to be
selected in good faith. The Owner Trustee will 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 according to such
opinion not contrary to this Agreement or any Basic Document.
SECTION 6.5. Not Acting in Individual Capacity. Except as provided
in this Article VI, in accepting the trust hereby created Wilmington Trust
Company acts solely as
17
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 Basic Document will look only to the Owner
Trust Estate for payment or satisfaction thereof.
SECTION 6.6. Owner Trustee Not Liable for Certificate or
Receivables. The recitals contained herein and in the Certificate (other than
the signature and countersignature of the Owner Trustee on the Certificate) will
be taken as the statements of the Certificateholder 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
Basic Document or of the Certificate (other than the signature and
countersignature of the Owner Trustee on the Certificate) or the Notes, or of
any Receivable or related documents. The Owner Trustee will at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Receivable, or the perfection and priority of any security
interest created by any Receivable in any Financed Vehicle 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 Certificateholder under this Agreement or the Noteholders under the
Indenture, including, without limitation: the existence, condition and ownership
of any Financed Vehicle; the existence and enforceability of any insurance
thereon; the existence and contents of any Receivable on any computer or other
record thereof; the validity of the assignment of any Receivable to the Trust or
of any intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Depositor,
the Servicer or any other Person with any warranty or representation made under
any Basic Document or in any related document or the accuracy of any such
warranty or representation or any action of the Indenture Trustee or the
Servicer or any subservicer taken in the name of the Owner Trustee.
SECTION 6.7. Owner Trustee May Own Notes. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of the Notes
and may deal with the Depositor, the Indenture Trustee and the Servicer in
banking transactions with the same rights as it would have if it were not Owner
Trustee.
SECTION 6.8. Payments from Owner Trust Estate. All payments to be
made by the Owner Trustee under any of the Basic Documents to which the Trust or
the Owner Trustee is a party will be made only from the income and proceeds of
the Owner Trust Estate and only to the extent that the Owner Trust will have
received income or proceeds from the Owner Trust Estate to make such payments in
accordance with the terms hereof. Wilmington Trust Company, or any successor
thereto, in its individual capacity, will not be liable for any amounts payable
under any of the Basic Documents to which the Trust or the Owner Trustee is a
party.
SECTION 6.9. Doing Business in Other Jurisdictions. Notwithstanding
anything contained herein to the contrary, neither Wilmington Trust Company or
any successor thereto, nor the Owner Trustee will be required to take any action
in any jurisdiction other than in the State of Delaware if the taking of such
action will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 9.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental
18
charge under the laws of the State of Delaware becoming payable by Wilmington
Trust Company (or any successor thereto); or (iii) subject Wilmington Trust
Company (or any successor thereto) to personal jurisdiction in any jurisdiction
other than the State of Delaware for causes of action arising from acts
unrelated to the consummation of the transactions by Wilmington Trust Company
(or any successor thereto) or the Owner Trustee, as the case may be,
contemplated hereby.
ARTICLE VII.
Compensation of Owner Trustee
SECTION 7.1. Owner Trustee's Fees and Expenses. The Owner Trustee
will receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between Triad and the Owner
Trustee, and the Owner Trustee will be entitled to be reimbursed by Triad 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 and under the Basic Documents.
SECTION 7.2. Indemnification. Triad will indemnify the Owner Trustee
and its officers, directors, employees, successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all costs,
expenses, losses, damages, claims and liabilities (collectively, "Expenses"),
arising out of or resulting from the Basic Documents, the Owner Trust Estate,
the administration of the Owner Trust Estate or the action or inaction of the
Owner Trustee hereunder, except that Triad will not be liable for or required to
indemnify the Owner Trustee from and against Expenses (i) arising or resulting
from any of the matters described in the third sentence of Section 6.1 and (ii)
constituting federal, state or other taxes arising out of any fees paid to the
Owner Trustee pursuant to the Basic Documents.
Indemnification under this Section 7.2 will include reasonable fees
and expenses of counsel and expenses of litigation and the indemnities contained
in this Section and the rights under Section 7.1 will survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. In any
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's choice of legal counsel will be
subject to the approval of Triad which approval will not be unreasonably
withheld.
SECTION 7.3. Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VII will be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
SECTION 7.4. Non-recourse Obligations. Notwithstanding anything in
this Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
will be with recourse to the Owner Trust Estate only and specifically will be
without recourse to the assets of the Holder.
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ARTICLE VIII.
Termination of Trust Agreement
SECTION 8.1. Termination of Trust Agreement.
(a) This Agreement and the Trust will terminate in accordance with
Section 3808 of the Statutory Trust Statute and be of no further force or effect
upon the latest of (i) the maturity or other liquidation of the last Receivable
(including the purchase by the Servicer at its option of the corpus of the Trust
as described in Section 10.1 of the Sale and Servicing Agreement) and the
subsequent distribution of amounts in respect of such Receivables as provided in
the Basic Documents, or (ii) the payment to the Certificateholder of all amounts
required to be paid to it pursuant to this Agreement and the payment to the
Security Insurer of all amounts payable or reimbursable to it pursuant to the
Sale and Servicing Agreement; provided, however, that the rights to
indemnification under Section 7.2 and the rights under Section 7.1 will survive
the termination of the Trust. Triad or the Servicer will promptly notify the
Owner Trustee and the Security Insurer of any prospective termination pursuant
to this Section. The bankruptcy, liquidation, dissolution, death or incapacity
of the Certificateholder will not (x) operate to terminate this Agreement or the
Trust, nor (y) entitle the Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Owner Trust Estate
nor (z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Neither the Depositor nor the Certificateholder will be entitled
to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the Certificateholder will surrender the
Certificate to the Indenture Trustee for payment of the final distribution and
cancellation, will be given by the Owner Trustee by letter to the
Certificateholder mailed within five Business Days of receipt of notice of such
termination from the Servicer given pursuant to Section 10.1(c) of the Sale and
Servicing Agreement, stating (i) the Distribution Date upon or with respect to
which final payment of the Certificate will be made upon presentation and
surrender of the Certificate at the office of the Indenture Trustee therein
designated, (ii) the amount of any such final payment and (iii) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificate at the office
of the Indenture Trustee therein specified. The Owner Trustee will give such
notice to the Indenture Trustee at the time such notice is given to the
Certificateholder. Upon presentation and surrender of the Certificate, the
Indenture Trustee will cause to be distributed to the Certificateholder amounts
distributable on such Distribution Date pursuant to Section 5.7 of the Sale and
Servicing Agreement.
If the Certificateholder does not surrender the Certificate for
cancellation within six months after the date specified in the above mentioned
written notice, the Owner Trustee will give a second written notice to the
Certificateholder to surrender the Certificate for cancellation and receive the
final distribution with respect thereto. If within one year after the second
notice the Certificate will not have been surrendered for cancellation, the
Owner Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the
20
Certificateholder concerning surrender of its Certificate, and the cost thereof
will be paid out of the funds and other assets that will remain subject to this
Agreement. Any funds remaining in the Trust after exhaustion of such remedies
will be distributed, subject to applicable escheat laws, by the Owner Trustee to
the Holder.
(d) Upon the completion of the winding up of the Trust in accordance
with Section 3808 of the Statutory Trust Statute and its termination, the Owner
Trustee will cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Statutory Trust Statute.
ARTICLE IX.
Successor Owner Trustees and Additional Owner Trustees
SECTION 9.1. Eligibility Requirements for Owner Trustee. The Owner
Trustee will at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Statutory Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; and (iv) acceptable to the Security Insurer in its sole discretion,
so long as an Insurer Default will not have occurred and be continuing. If such
corporation will 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 will 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 will cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee will resign immediately in the manner and with
the effect specified in Section 9.2.
SECTION 9.2. 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 Depositor, the Security Insurer, the
Administrator and the Servicer. Upon receiving such notice of resignation, the
Administrator will promptly appoint a successor Owner Trustee by written
instrument, in duplicate, one copy of which instrument will be delivered to the
resigning Owner Trustee and one copy to the successor Owner Trustee, provided
that the Administrator has received written confirmation from each of the Rating
Agencies that the proposed appointment will not result in an increased capital
charge to the Security Insurer by either of the Rating Agencies. If no successor
Owner Trustee has been so appointed and have accepted appointment within 30 days
after the giving of such notice of resignation, the resigning Owner Trustee or
the Security Insurer may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.
If at any time the Owner Trustee will cease to be eligible in
accordance with the provisions of Section 9.1 and will fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee will be legally unable to act, or will be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property will be
appointed, or any public officer will take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator with the consent of the
Security Insurer (so long as an Insurer Default will not
21
have occurred and be continuing) may remove the Owner Trustee. If the
Administrator removes the Owner Trustee under the authority of the immediately
preceding sentence, the Administrator will promptly appoint a successor Owner
Trustee by written instrument, in duplicate, one copy of which instrument will
be delivered to the outgoing Owner Trustee so removed, one copy to the Security
Insurer 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 will
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 9.3 and payment of all fees and expenses owed to the
outgoing Owner Trustee. The Administrator will provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 9.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 9.2 will execute, acknowledge and deliver to the
Depositor, the Servicer, the Administrator, the Security Insurer and to its
predecessor Owner Trustee an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Owner
Trustee will become effective and such successor Owner Trustee, without any
further act, deed or conveyance, will 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 will upon payment of its fees and expenses deliver to the successor
Owner Trustee all documents and statements and monies held by it under this
Agreement; and the Depositor, the Administrator and the predecessor Owner
Trustee will 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 will accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
will be eligible pursuant to Section 9.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Administrator will mail notice of the successor of such
Owner Trustee to the Certificateholder, the Indenture Trustee, the Noteholders
and the Rating Agencies. If the Administrator will fail to mail such notice
within 10 days after acceptance of appointment by the successor Owner Trustee,
the successor Owner Trustee will cause such notice to be mailed at the expense
of the Administrator.
SECTION 9.4. 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 will be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, will be the successor of the Owner Trustee
hereunder, provided such corporation will be eligible pursuant to Section 9.1,
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 will mail notice of such merger or
consolidation to the Rating Agencies.
22
SECTION 9.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly have the power and will
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee and the Security Insurer to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate 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
Servicer and the Owner Trustee may consider necessary or desirable. If the
Servicer will not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee subject, unless an
Insurer Default has occurred and is continuing, to the approval of the Security
Insurer (which approval will not be unreasonably withheld) has the power to make
such appointment. No co-trustee or separate trustee under this Agreement will be
required to meet the terms of eligibility as a successor trustee pursuant to
Section 9.1 and no notice of the appointment of any co-trustee or separate
trustee will be required pursuant to Section 9.3.
Each separate trustee and co-trustee will, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee will be conferred upon
and exercised or performed by the Owner Trustee and such
separate trustee or co- trustee jointly (it being
understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that
under any law of any jurisdiction in which any
particular act or acts are to be performed, the Owner
Trustee will be incompetent or unqualified to perform
such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title
to the Trust or any portion thereof in any such
jurisdiction) will be exercised and performed singly by
such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
(ii) no trustee under this Agreement will be personally
liable by reason of any act or omission of any other
trustee under this Agreement; and
(iii) the Administrator and the Owner Trustee acting jointly
may at any time accept the resignation of or remove any
separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee will
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee will refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
23
acceptance of the trusts conferred, will be vested with the estates or property
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 will be filed with the Owner Trustee
and a copy thereof given to the Servicer and the Security Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
will die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts will vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE X.
Miscellaneous
SECTION 10.1. Supplements and Amendments.
(a) This Agreement may be amended by the Depositor, the
Administrator and the Owner Trustee, with the prior written consent of the
Security Insurer (so long as an Insurer Default will not have occurred and be
continuing) and with prior written notice to the Rating Agencies, without the
consent of any of the Noteholders or the Certificateholder, (i) to cure any
ambiguity or defect or (ii) to correct, supplement or modify any provisions in
this Agreement; provided, however, that such action will not, as evidenced by an
Opinion of Counsel which may be based upon a certificate of the Servicer,
adversely affect in any material respect the interests of any Noteholder or
Certificateholder.
(b) This Agreement may also be amended from time to time, with the
prior written consent of the Security Insurer (so long as an Insurer Default
will not have occurred and be continuing), by the Depositor, the Administrator
and the Owner Trustee, with prior written notice to the Rating Agencies, to the
extent such amendment materially and adversely affects the interests of the
Noteholders, with the consent of the Noteholders evidencing not less than a
majority of the Outstanding Amount of the Notes, and the consent of the
Certificateholder (which consent of any Certificateholder or Noteholder given
pursuant to this Section or pursuant to any other provision of this Agreement
will be conclusive and binding on such Certificateholder or Noteholder) 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 Certificateholder; provided, however, that, subject to
the express rights of the Security Insurer under the Basic Documents, no such
amendment will (a) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, collections of payments on Receivables or distributions
that will be required to be made for the benefit of the Noteholders or the
Certificateholder or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes and
the Certificateholder.
24
Promptly after the execution of any such amendment or consent, the
Owner Trustee will furnish written notification of the substance of such
amendment or consent to the Certificateholder, the Indenture Trustee and each of
the Rating Agencies.
It will not be necessary for the consent of Certificateholder, the
Noteholders or the Indenture Trustee pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it will be sufficient
if such consent will approve the substance thereof. The manner of obtaining such
consents (and any other consents of the Certificateholder provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholder will be subject to such reasonable
requirements as the Owner Trustee may prescribe. Promptly after the execution of
any amendment to the Certificate of Trust, the Owner Trustee will cause the
filing of such amendment with the Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee will 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
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but will not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 10.2. No Legal Title to Owner Trust Estate in
Certificateholder. The Certificateholder will not have legal title to any part
of the Owner Trust Estate. The Certificateholder will be entitled to receive
distributions in accordance with Article VIII. No transfer, by operation of law
or otherwise, of any right, title or interest of the Certificateholder to and in
its ownership interest in the Owner Trust Estate will operate to terminate this
Agreement or the trust 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 10.3. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Owner Trustee, the Depositor,
the Certificateholder, the Servicer and, to the extent expressly provided
herein, the Security Insurer, the Indenture Trustee and the Noteholders, and
nothing in this Agreement, whether express or implied, will 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 10.4. Notices.
(a) All demands, notices and communications hereunder will be in
writing and will be deemed to have been duly given to the addressee if mailed,
by first-class registered mail, postage prepaid service, confirmed facsimile
transmission, or a nationally recognized express courier, as follows:
If to the Administrator:
Triad Financial Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
25
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
If to the Owner Trustee:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
If to the Depositor:
Triad Financial Special Purpose LLC
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
If to the Security Insurer:
Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(in each case in which notice or other communication to the Security Insurer
refers to an Event of Default, a claim on the Note Policy or with respect to
which failure on the part of the Security Insurer to respond will be deemed to
constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the General Counsel and
the Head-Financial Guaranty Group "URGENT MATERIAL ENCLOSED"); or, as to each
party, at such other address as will be designated by such party in a written
notice to each other party. Any such demand, notice or communication hereunder
will be deemed to have been received on the date delivered to or received at the
premises of the addressee as evidenced by the date noted on the return receipt.
(b) Any notice required or permitted to be given to a
Certificateholder will be given by first-class mail, postage prepaid, at the
address of the Holder. Any notice so mailed within the time prescribed in this
Agreement will be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice.
SECTION 10.5. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction will, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction will not invalidate or render unenforceable
such provision in any other jurisdiction.
SECTION 10.6. Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered will be an original, but all such counterparts will together
constitute but one and the same instrument.
26
SECTION 10.7. Assignments. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns.
SECTION 10.8. No Recourse. The Certificateholder by accepting a
Certificate acknowledges that the Certificate represents a beneficial interest
in the Trust only and does not represent interests in or obligations of the
Depositor, the Servicer, the Owner Trustee, the Indenture Trustee, the Security
Insurer 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 the
Certificate or the Basic Documents.
SECTION 10.9. No Petition. To the fullest extent permitted by
applicable law, the Owner Trustee and the Administrator, by entering into this
Agreement, each Certificateholder, by accepting a Certificate, and the Indenture
Trustee and each Noteholder, by accepting the benefits of this Agreement, each
hereby covenants and agrees that it will not at any time institute against the
Depositor or the Issuer, or join in any institution against the Depositor or the
Issuer, of bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Certificate, the Notes or any of the Basic Documents.
SECTION 10.10. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and will not define or
limit any of the terms or provisions hereof.
SECTION 10.11. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER WILL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 10.12. Administrator. The Administrator is authorized to
prepare, or cause to be prepared, execute and deliver on behalf of the Trust all
such documents, reports, filings, instruments, certificates and opinions as it
will be the duty of the Trust or Owner Trustee to prepare, file or deliver
pursuant to the Basic Documents. Upon written request, the Owner Trustee will
execute and deliver to the Administrator a limited power of attorney appointing
the Administrator the Trust's agent and attorney-in-fact to prepare, or cause to
be prepared, execute and deliver all such documents, reports, filings,
instruments, certificates and opinions.
[Remainder of page intentionally left blank.]
27
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
WILMINGTON TRUST COMPANY
Owner Trustee
By: /s/ XXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Financial Services Officer
TRIAD FINANCIAL SPECIAL PURPOSE LLC
Depositor
By: /s/ XXXX X. XXXXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
TRIAD FINANCIAL CORPORATION
Administrator
By: /s/ XXXX X. XXXXXXXX
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
[Amended and Restated Trust Agreement]
EXHIBIT A
NUMBER
R-1
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE IS NOT TRANSFERABLE,
EXCEPT UNDER THE LIMITED CONDITIONS
SPECIFIED IN THE TRUST AGREEMENT
---------------------------------
ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of retail
installment sale contracts secured by new and used automobiles and light duty
trucks.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE APPLICABLE
SECURITIES LAWS OF ANY STATE. ACCORDINGLY, TRANSFER OF THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN SECTION 3.4 OF THE TRUST AGREEMENT.
BY ITS ACCEPTANCE OF THIS CERTIFICATE THE HOLDER OF THIS CERTIFICATE HAS
REPRESENTED TO THE ISSUER AND THE OWNER TRUSTEE THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS
ACQUIRING THIS CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF
OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED
INSTITUTIONAL BUYERS).
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE BY
ANY PERSON UNLESS (I) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR IS EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT AND SUCH STATE SECURITIES LAWS, (II) SO LONG AS THIS CERTIFICATE
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, SUCH
SALE, PLEDGE OR OTHER TRANSFER IS MADE TO A PERSON WHO THE TRANSFEROR REASONABLY
BELIEVES AFTER DUE INQUIRY IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A), ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS
A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL
BUYERS) TO WHOM NOTICE IS GIVEN THAT THE SALE, PLEDGE OR TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, OR (III) SUCH SALE, PLEDGE OR OTHER TRANSFER IS
OTHERWISE MADE IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, IN WHICH CASE (A) THE OWNER
TRUSTEE WILL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE PROSPECTIVE
TRANSFEREE CERTIFY TO THE OWNER TRUSTEE AND THE ISSUER IN WRITING THE FACTS
SURROUNDING SUCH TRANSFER, WHICH CERTIFICATION WILL BE IN FORM AND SUBSTANCE
SATISFACTORY TO THE OWNER TRUSTEE AND THE ISSUER, AND (B) THE OWNER TRUSTEE MAY
REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH WILL NOT BE AT THE EXPENSE OF THE
ISSUER OR THE OWNER TRUSTEE) SATISFACTORY TO THE ISSUER AND THE OWNER TRUSTEE TO
THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT. NO SALE,
PLEDGE OR OTHER TRANSFER MAY BE MADE TO ANY ONE PERSON FOR CERTIFICATES WITH A
PERCENTAGE INTEREST OF LESS THAN 5% .
NO TRANSFER OF THIS CERTIFICATE WILL BE PERMITTED TO BE MADE TO ANY PERSON
UNLESS THE OWNER TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEREE TO THE
EFFECT THAT THE TRANSFEREE IS NOT AND IS NOT ACTING ON BEHALF OF OR INVESTING
THE ASSETS OF (A) 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, (B) A "PLAN" (AS DEFINED IN
SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (C) ANY ENTITY WHOSE
UNDERLYING ASSETS INCLUDE ASSETS OF A PLAN DESCRIBED IN (A) OR (B) ABOVE BY
REASON OF SUCH PLAN'S INVESTMENT IN THE ENTITY (INCLUDING, WITHOUT LIMITATION,
AN INSURANCE COMPANY GENERAL ACCOUNT). EACH TRANSFEREE OF A BENEFICIAL INTEREST
IN THIS CERTIFICATE WILL BE DEEMED TO HAVE MADE THE FOREGOING REPRESENTATION.
(THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF TRIAD
FINANCIAL SPECIAL PURPOSE LLC OR ANY OF ITS AFFILIATES.)
THIS CERTIFIES THAT [_____] is the registered owner of a nonassessable,
fully-paid, beneficial ownership interest in certain distributions of Triad
Automobile Receivables Trust 2004-A (the "Trust") formed by Triad Financial
Special Purpose LLC, a Delaware limited liability company (the "Depositor").
The Trust was created pursuant to a Trust Agreement dated February 24,
2004, as amended and restated as of March 18, 2004 (the "Trust Agreement"),
among the Depositor, Triad Financial Corporation (the "Administrator") and
Wilmington Trust Company, as owner trustee (the "Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement.
This is the duly authorized Certificate designated as "Asset Backed
Certificate" (herein called the "Certificate"). Also issued under the Indenture,
dated as of March 1, 2004, between the Trust, and JPMorgan Chase Bank, as
trustee, are five classes of Notes designated as "Class A-1 1.07% Asset Backed
Notes" (the "Class A-1 Notes"), "Class A-2 1.40% Asset Backed
A-2
Notes" (the "Class A-2 Notes"), "Class A-3 1.90% Asset Backed Notes" (the "Class
A-3 Notes"),"Class A-4 2.50% Asset Backed Notes" (the "Class A-4 Notes") and the
Class B 8.00% Asset Backed Notes" (the "Class B Notes"). This Certificate is
issued under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the holder of this Certificate by virtue of
the acceptance hereof assents and by which such holder is bound. The property of
the Trust includes a pool of retail installment sale contracts secured by new
and used automobiles and light duty trucks (the "Receivables"), all monies due
thereunder after the Cutoff Date, security interests in the vehicles financed
thereby, certain bank accounts and the proceeds thereof, proceeds from claims on
certain insurance policies and certain other rights under the Trust Agreement
and the Sale and Servicing Agreement, and all right, to and interest of the
Depositor in and to the Purchase Agreement dated as of March 1, 2004 between
Triad Financial Corporation and the Depositor and all proceeds of the foregoing.
The holder of this Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Sale and Servicing Agreement, the
Indenture and the Trust Agreement, as applicable.
Distributions on this Certificate will be made as provided in the Trust
Agreement and the Sale and Servicing Agreement by the Indenture Trustee by wire
transfer or check mailed to the Certificateholder without the presentation or
surrender of this Certificate or the making of any notation hereon. Except as
otherwise provided in the Trust Agreement or the Sale and Servicing Agreement
and notwithstanding the above, the final distribution on this Certificate will
be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency maintained for the purpose by the Indenture Trustee.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions will for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by an
authorized officer of the Owner Trustee, by manual signature, this Certificate
will not entitle the holder hereof to any benefit under the Trust Agreement or
the Sale and Servicing Agreement or be valid for any purpose.
THIS CERTIFICATE WILL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
WILL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-3
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Certificate to be duly executed.
TRIAD AUTOMOBILE RECEIVABLES TRUST 2004-A
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee of the Trust
Dated: March __, 2004 By: ___________________________
Authorized Signatory
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the within-mentioned Trust
Agreement.
WILMINGTON TRUST COMPANY, OR WILMINGTON TRUST COMPANY,
not in its individual capacity but solely not in its individual capacity but solely as
as Owner Trustee of the Trust Owner Trustee of the Trust
By: _________________________ By: __________________________
Authenticating Agent Authorized Signatory
By: _________________________
Authorized Signatory
A-4
(Reverse of Certificate)
The Certificate does not represent an obligation of, or an interest in,
the Depositor, the Administrator, the Servicer, the Owner Trustee or any
Affiliates of any of them and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated herein or in
the Basic Documents. In addition, this Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Receivables, all as more specifically
set forth herein and in the Sale and Servicing Agreement. A copy of each of the
Sale and Servicing Agreement and the Trust Agreement may be examined during
normal business hours at the principal office of the Depositor, and at such
other places, if any, designated by the Administrator, by any Certificateholder
upon written request.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor under the Trust Agreement at any time by the Depositor, the
Administrator and the Owner Trustee with the consent of the Security Insurer,
the Majority Noteholders and the Certificateholder. Any such consent by the
Holder of this Certificate will be conclusive and binding on such Holder and on
all future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Trust Agreement also permits
the amendment thereof, in certain limited circumstances, without the consent of
the Certificateholder.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the holder hereof or such holder's attorney duly authorized in writing, and
thereupon a new Certificate evidencing the same aggregate interest in the Trust
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is Wilmington Trust Company. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any expense, tax or governmental charge payable in
connection therewith.
The Owner Trustee, the Security Insurer and any agent of the Owner Trustee
or the Security Insurer may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Owner Trustee,
the Security Insurer nor any such agent will be affected by any notice to the
contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby will terminate upon: the latest of (i) the maturity or
other liquidation of the last Receivable (including the purchase by the Servicer
at its option of the corpus of the Trust as described in Section 10.1 of the
Sale and Servicing Agreement) and the subsequent distribution of amounts in
respect of such Receivables as provided in the Basic Documents, or (ii) the
payment to the Certificateholder of all amounts required to be paid to it
pursuant to the Trust Agreement and the payment to the Security Insurer of all
amounts payable or reimbursable to it
A-5
pursuant to the Sale and Servicing Agreement. The Servicer may at its option
purchase the corpus of the Trust at a price specified in the Sale and Servicing
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Certificate; however, such right of purchase
is exercisable, subject to certain restrictions, only as of the last day of any
Collection Period as of which the Pool Balance is 10% or less of the Original
Pool Balance.
The recitals contained herein will be taken as the statements of the Trust
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
Certificate or of any Receivable or related document.
Unless the certificate of authentication hereon will have been executed by
an authorized officer of the Owner Trustee, by manual or facsimile signature,
this Certificate will not entitle the Holder hereof to any benefit under the
Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.
A-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
______________________________ Attorney to transfer said Certificate on
the books of the Certificate Registrar, with full power of substitution in the
premises.
Dated: __________________________________*
Signature
Guaranteed: __________________________________*
-------------------------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-7
EXHIBIT B
FORM OF
CERTIFICATE OF TRUST
OF
TRIAD AUTOMOBILE RECEIVABLES TRUST 2004-A
THIS Certificate of Trust of TRIAD AUTOMOBILE RECEIVABLES TRUST
2004-A (the "Trust") is being duly executed and filed on behalf of the Trust by
the undersigned, as trustee, to form a statutory trust under the Delaware
Statutory Trust Act (12 Del. C. Section 3801 et seq.) (the "Act").
1. Name. The name of the statutory trust formed by this Certificate
of Trust is "Triad Automobile Receivables Trust 2004-A."
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is Wilmington Trust Company.
3. Effective Date. This Certificate of Trust will be effective upon
filing.
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate of Trust in accordance with Section 3811(a)(1) of the Act.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as trustee
of the Trust
By:
----------------------------------------
Name:
Title:
B-1
EXHIBIT C
[FORM OF CERTIFICATE AS TO INITIAL PURCHASE]
[date]
Triad Automobile Receivables Trust 2004-A
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Re: Triad Automobile Receivables Trust 2004-A,
Trust Certificate
Dear Sirs:
In connection with the proposed purchase by the buyer listed below
(the "Buyer") of the above-referenced Trust Certificate (the "Certificate")
issued pursuant to the Amended and Restated Trust Agreement, dated as of March
18, 2004 (the "Trust Agreement") among Triad Financial Special Purpose LLC, as
depositor (the "Depositor"), Triad Financial Corporation, as administrator (the
"Administrator") and Wilmington Trust Company, as Owner Trustee (the "Owner
Trustee"), relating to the Triad Automobile Receivables Trust 2004-A
Certificate, the Buyer advises you as follows:
(i) it (a) has such knowledge and experience in financial
and business matters that it is capable of evaluating
the merits and risks of its investment in the
Certificate and is able to bear the economic risks of
such investment; (b) is a "qualified institutional
buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended, and is acquiring
beneficial ownership of the Certificate for its own
account or for the account of another "qualified
institutional buyer"; (c) satisfies the requirements of
paragraph (a)(2)(ii) of Rule 3a-7 under the Investment
Company Act of 1940, as amended, and (d) understands
that the Administrator, the Depositor and the Owner
Trustee are relying on such representations in
connection with the issuance of the Certificate;
(ii) it has reviewed the Prospectus Supplement dated March 9,
2004 (the "Prospectus Supplement") (including the
section captioned "Risk Factors" therein) and such other
materials and information with respect to the
Certificate, the Depositor and the Administrator as it
deems necessary and has been afforded the opportunity to
make inquiry of the Depositor and the Administrator and
to receive answers, and has received all information
requested;
(iii) it understands that the Certificate have not been
registered or qualified under the 1933 Act or the
securities laws of any state;
(iv) it has not distributed the Prospectus Supplement or any
other materials relating to the Certificate to anyone
other than its counsel or other advisor, and no one
other than such counsel or advisor has used its copies
of such documents; and
(v) it is not, and is not acting on behalf of or investing
the assets of, (x) 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, (y) a
plan (as defined in Section 4975(e)(1) of the Internal
Revenue Code of 1986, as amended (the "Code") that is
subject to Section 4975 of the Code or (z) any entity
whose underlying assets include assets of a plan
described in (x) or (y) above by reason of such plan's
investment in the entity (including, without limitation,
an insurance company general account).
Very truly yours,
[BUYER]
By:
-----------------------------------------------
Name:
Title:
C-2
EXHIBIT D
[FORM OF "QUALIFIED INSTITUTIONAL BUYER" TRANSFEREE'S CERTIFICATE]
[date]
Triad Automobile Receivables Trust 2004-A...
c/o Wilmington Trust Company, as Owner Trustee
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Re: Triad Automobile Receivables Trust 2004-A,
Trust Certificate
Dear Sirs:
In connection with the proposed purchase by the buyer listed below (the
"Buyer") of the above-referenced Trust Certificate (the "Certificate") issued
pursuant to the Amended and Restated Trust Agreement, dated as of March 18, 2004
(the "Trust Agreement") among Triad Financial Special Purpose LLC, as depositor
(the "Depositor"), Triad Financial Corporation, as administrator (the
"Administrator") and Wilmington Trust Company, as Trustee (the "Owner Trustee"),
relating to the Triad Automobile Receivables Trust 2004-A Certificate, the Buyer
advises you as follows: (i) the Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act of 1933, as amended
(the "1933 Act") and is acquiring beneficial ownership of the Certificate for
its own account or for the account of another "qualified institutional buyer";
and (ii) the Buyer satisfies the requirements of paragraph (a)(2)(ii) of Rule
3a-7 under the Investment Company Act of 1940, as amended (the "1940 Act"). In
addition to the foregoing, you may rely on the information provided in Annex 1
or 2, as applicable, attached hereto and incorporated herein.
The Buyer understands that the Certificate has not been registered under
the 1933 Act or the securities laws of any state. The Buyer acknowledges that it
has independently conducted such investigation and evaluation of the merits and
the risks involved in an investment in the Certificate and has received such
information (whether from the Depositor, the transferor from which it proposes
to purchase Certificate, or from any other source) as the Buyer has deemed
necessary and advisable in order to make its investment decision. The Buyer has
had any questions arising from such investigation and evaluation answered by the
Issuer to the satisfaction of the Buyer. The Buyer is a sophisticated
institutional investor, having such knowledge and experience in financial and
business matters generally, and with respect to asset-backed notes and
investments in "non-prime" and "sub-prime" automobile loans specifically, that
it is capable of independently evaluating the merits and risks of investment in
the Certificate. In the normal course of its business, the Buyer invests in or
purchases certificates similar to the
D-1
Certificate. The Buyer is aware that it may be required to bear the economic
risk of an investment in the Certificate for an indefinite period of time, and
it is able to bear such risk for an indefinite period.
Very truly yours,
[BUYER]
By:
-------------------------------------
Name:
Title:
Taxpayer ID:
------
Name in which
Note is
to be Registered:
------------------
Address for Notices
------------------
------------------
------------------
Payment Instructions
----
X-0
XXXXX 0 XX XXXXXXX X
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to the parties listed in the
"Qualified Institutional Buyer" Transferee's Certificate to which this
certification relates with respect to the Rule 144A Securities described
therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $_____________(1) in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A) and (ii) the
Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined
by a State or Federal authority having supervision over any such
institutions or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
-----------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
D-3
____ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of
Columbia.
____ State or Local Plan. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisers Act of 1940.
____ Small Business Investment Company. Buyer is 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.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisors
Act of 1940.
____ Trust Fund. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively State or Local
Plans or ERISA Plans as defined above, and no participant of the
Buyer is an individual retirement account or an H.R. 10 (Xxxxx)
plan.
3. The Buyer is not, and is not acting on behalf of or investing the
assets of, (a) 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, (b) a plan (as defined in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code") that is
subject to Section 4975 of the Code or (c) any entity whose underlying assets
include assets of a plan described in (a) or (b) above by reason of such plan's
investment in the entity (including, without limitation, an insurance company
general account).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
5. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at
D-4
market. Further, in determining such aggregate amount, the Buyer may have
included securities owned by subsidiaries of the Buyer, but only if such
subsidiaries are consolidated with the Buyer in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934.
6. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the securities
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
7. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of Rule 144A Securities will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
Bank or Savings and Loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
Print Name of Buyer
By:
---------------------------
Name:
Title:
Date:
---------------------------
X-0
XXXXX 0 XX XXXXXXX X
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers that are Registered Investment Companies]
The undersigned hereby certifies as follows to the parties listed in the
"Qualified Institutional Buyer" Transferee's Certificate to which this
certification relates with respect to the Rule 144A Securities described
therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A"), because Buyer is part of a Family of Investment
Companies (as defined below), is such an officer of the Buyer.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used,
except (i) where the Buyer or the Buyer's Family of Investment Companies reports
its securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market.
____ The Buyer owned $________________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $__________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
3. The Buyer is not, and is not acting on behalf of or investing the
assets of, (a) 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, (b) a plan (as defined in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code") that is
subject to Section 4975 of the Code or (c) any entity whose underlying assets
include assets of a plan described in (a) or (b) above by reason of such plan's
investment in the entity (including, without limitation, an insurance company
general account).
4. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or
D-6
investment advisers that are affiliated (by virtue of being majority owned
subsidiaries of the same parent or because one investment adviser is a majority
owned subsidiary of the other).
5. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) bank deposit notes and certificates of deposit, (iii)
loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
6. The Buyer is familiar with Rule 144A and understands that the parties
listed in the "Qualified Institutional Buyer" Transferee's Certificate to which
this certification relates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be in
reliance on Rule 144A. In addition, the Buyer will only purchase for the Buyer's
own account.
7. Until the date of purchase of the Rule 144A Securities, the undersigned
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of Rule 144A Securities will constitute a reaffirmation of
this certification by the undersigned as of the date of such purchase.
----------------------------------------
Print Name of Buyer or Adviser
By:
-----------------------------------
Name:
Title:
IF AN ADVISER:
----------------------------------------
Print Name of Buyer
Date:
-----------------------------------
D-7
