EXHIBIT 4.3
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TRUST AGREEMENT
Among
TRIAD FINANCIAL SPECIAL PURPOSE LLC
Depositor,
TRIAD FINANCIAL CORPORATION
Administrator
and
[OWNER TRUSTEE]
Owner Trustee
Dated as of _______, 200_
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TABLE OF CONTENTS
PAGE
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ARTICLE I.
DEFINITIONS.................................................................................... 1
Section 1.1. Capitalized Terms.................................................... 1
Section 1.2. Other Definitional Provisions........................................ 3
ARTICLE II.
ORGANIZATION................................................................................... 4
Section 2.1. Name................................................................. 4
Section 2.2. Office............................................................... 4
Section 2.3. Purposes and Powers.................................................. 4
Section 2.4. Appointment of Owner Trustee......................................... 5
Section 2.5. Initial Capital Contribution of Trust Estate......................... 5
Section 2.6. Declaration of Trust................................................. 5
Section 2.7. Liability of the Certificateholders.................................. 5
Section 2.8. Title to Trust Property.............................................. 5
Section 2.9. Situs of Trust....................................................... 5
Section 2.10. Representations and Warranties of the Depositor...................... 6
Section 2.11. Representations and Warranties of the Administrator.................. 7
Section 2.12. Covenants of the Certificateholders.................................. 8
Section 2.13. Federal Income Tax Treatment of the Trust............................ 8
ARTICLE III.
CERTIFICATES AND TRANSFERS OF INTERESTS........................................................ 9
Section 3.1. Ownership............................................................ 9
Section 3.2. The Certificates..................................................... 9
Section 3.3. Authentication of Certificates....................................... 9
Section 3.4. Registration of Transfer and Exchange of Certificates................ 10
Section 3.5. Mutilated, Destroyed, Lost or Stolen Certificates.................... 11
Section 3.6. Persons Deemed Certificateholders.................................... 12
Section 3.7. Maintenance of Office or Agency...................................... 12
Section 3.8. ERISA Restrictions................................................... 12
Section 3.9. Access to List of Certificateholders' Names and Addresses............ 12
ARTICLE IV.
VOTING RIGHTS AND OTHER ACTIONS................................................................ 13
Section 4.1. Majority Certificateholders.......................................... 13
Section 4.2. Prior Notice to Certificateholders with Respect to Certain Matters... 13
Section 4.3. Action by Certificateholders with Respect to Certain Matters......... 13
Section 4.4. Restrictions on Certificateholders' Power............................ 14
[Section 4.5. Rights of Security Insurer........................................... 14]
ARTICLE V.
AUTHORITY AND DUTIES OF OWNER TRUSTEE.......................................................... 14
Section 5.1. General Authority.................................................... 14
Section 5.2. General Duties....................................................... 15
Section 5.3. Action upon Instruction.............................................. 15
Section 5.4. No Duties Except as Specified in this Agreement or in Instructions... 16
Section 5.5. No Action Except under Specified Documents or Instructions........... 16
Section 5.6. Restrictions......................................................... 16
ARTICLE VI.
CONCERNING THE OWNER TRUSTEE................................................................... 16
Section 6.1. Acceptance of Trusts and Duties...................................... 16
Section 6.2. Furnishing of Documents.............................................. 18
Section 6.3. Representations and Warranties....................................... 18
Section 6.4. Reliance; Advice of Counsel.......................................... 19
Section 6.5. Not Acting in Individual Capacity.................................... 19
Section 6.6. Owner Trustee Not Liable for Certificates or Receivables............. 19
Section 6.7. Owner Trustee May Own Notes.......................................... 20
Section 6.8. Payments from Owner Trust Estate..................................... 20
Section 6.9. Doing Business in Other Jurisdictions................................ 20
ARTICLE VII.
COMPENSATION OF OWNER TRUSTEE.................................................................. 20
Section 7.1. Owner Trustee's Fees and Expenses.................................... 20
Section 7.2. Indemnification...................................................... 20
Section 7.3. Payments to the Owner Trustee........................................ 21
Section 7.4. Non-recourse Obligations............................................. 21
ARTICLE VIII.
TERMINATION OF TRUST AGREEMENT................................................................. 21
Section 8.1. Termination of Trust Agreement....................................... 21
ARTICLE IX.
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES......................................... 22
Section 9.1. Eligibility Requirements for Owner Trustee........................... 22
Section 9.2. Resignation or Removal of Owner Trustee.............................. 23
Section 9.3. Successor Owner Trustee.............................................. 23
Section 9.4. Merger or Consolidation of Owner Trustee............................. 24
Section 9.5. Appointment of Co-Trustee or Separate Trustee........................ 24
ARTICLE X.
MISCELLANEOUS.................................................................................. 25
Section 10.1. Supplements and Amendments........................................... 25
Section 10.2. No Legal Title to Owner Trust Estate in Certificateholders........... 26
Section 10.3. Limitations on Rights of Others...................................... 27
Section 10.4. Notices.............................................................. 27
Section 10.5. Severability......................................................... 28
Section 10.6. Separate Counterparts................................................ 28
Section 10.7. Assignments.......................................................... 28
Section 10.8. No Recourse.......................................................... 28
Section 10.9. No Petition.......................................................... 28
Section 10.10. Headings............................................................. 28
Section 10.11. GOVERNING LAW........................................................ 28
Section 10.12. Administrator........................................................ 29
EXHIBITS
EXHIBIT A - FORM OF CERTIFICATE
EXHIBIT B - FORM OF CERTIFICATE OF TRUST
EXHIBIT C - FORM OF QUALIFIED INSTITUTIONAL BUYER TRANSFEREE'S CERTIFICATE
This TRUST AGREEMENT dated as of ______, 200_ 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 [OWNER TRUSTEE], a ________________, as trustee and not in
its individual capacity (the "Owner Trustee"), amends and restates in its
entirety that certain Trust Agreement dated as of _________, 200_ 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.
"Beneficial Interest" means an undivided fractional beneficial ownership
interest in the Trust. The amount of each Beneficial Interest shall be expressed
as a percentage, and the total of the Beneficial Interests shall be 100.0%.
"Benefit Plan" has the meaning assigned to such term in Section 3.8.
"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
Residual Special Purpose LLC.
"Certificate of Trust" means the Certificate of Trust in the form of
Exhibit B that has been 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
________________________________, or at such other address as the Owner Trustee
may designate by notice to the Certificateholders, or the principal corporate
trust office of any successor Owner Trustee (the address of which such successor
Owner Trustee will notify the Certificateholders).
"Depositor" means Triad Financial Special Purpose LLC, a Delaware limited
liability company.
"ERISA" has the meaning assigned to such term in Section 3.8.
"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 _______, 200_, between the
Trust and [Indenture Trustee], as Indenture Trustee, as the same may be amended
and supplemented from time to time.
"Instructing Party" has the meaning assigned to such term in Section 5.3
"Majority Certificateholders" means Certificateholders holding at least a
majority of the Beneficial Interests.
"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 [Owner Trustee], a ________________, not in its
individual capacity but solely as owner trustee under this Agreement, and any
successor Owner Trustee hereunder.
"Person" means any individual, corporation, estate, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Record Date" means with respect to any Distribution Date, the close of
business on the last Business Day immediately preceding such Distribution Date.
"Residual Holder" means Triad Financial Residual Special Purpose LLC, a
Delaware limited liability company.
"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 ________, 200_, 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 ________________, or its successor in interest.]
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"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.
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.
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ARTICLE II.
ORGANIZATION
Section 2.1. Name. There is hereby formed a trust to be known as "Triad
Automobile Receivables Trust 200_-_," 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 Certificateholders.
Section 2.3. Purposes and Powers. The purpose of the Trust is, and the
Trust will have the power and authority, to engage in the following activities:
(a) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Agreement, and to sell the Notes to the Depositor
and sell, transfer or exchange the Certificates;
(b) 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 Certificateholders 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;
(c) to enter into and perform its obligations under the Basic
Documents to which it is a party;
(d) to enter into interest rate swaps and caps and other derivative
instruments in connection with the Notes;
(e) to enter into interest rate swaps and caps and other derivative
instruments in connection with the Certificates;
(f) 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
(g) 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 Certificateholders 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.
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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 Holders, 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.
Section 2.7. Liability of the Certificateholders. Certificateholders and
holders of beneficial interests therein shall be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware.
Section 2.8. 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) No Certificateholder will have legal title to any part of the
Trust Property. No transfer, by operation of law or otherwise, of any right,
title or interest by any 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 2.9. 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
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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 2.10. 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
Certificates [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.
(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 best knowledge, threatened against it before any
court, regulatory body,
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administrative agency or other tribunal or governmental instrumentality having
jurisdiction over it or its properties (i) asserting the invalidity of any of
the Basic Documents, (ii) seeking to prevent the issuance of the Certificates or
the Notes or the consummation of any of the transactions contemplated by any of
the Basic Documents, (iii) 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 (iv) seeking to
adversely affect the federal income tax or other federal, state or local tax
characteristics of the Certificates.
Section 2.11. 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 "Securities
Act"). 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 Certificates [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 corporate 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 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 the Depositor and deposited by the Depositor with the
Trust and the Administrator has duly authorized such sale and assignment to the
Depositor 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
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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 best knowledge, threatened against it before
any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over it or its properties (i)
asserting the invalidity of any of the Basic Documents, (ii) seeking to prevent
the issuance of the Certificates or the Notes or the consummation of any of the
transactions contemplated by any of the Basic Documents, (iii) 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 (iv) seeking to adversely affect the federal income
tax or other federal, state or local tax attributes of the Certificates.
Section 2.12. Covenants of the Certificateholders. Each 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
(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
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 2.13. 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) If there is more than one owner of the Certificates, due to the
sale of the Certificates, issuance by the Trust of additional Certificates to a
Person other than the Residual Holder or otherwise, the Depositor and the Owner
Trustee, by entering into this Agreement, and
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the Residual Holder and the Certificateholders, by acquiring any Certificates or
interest therein, (i) express their intention that the Certificates will qualify
as equity interests in a partnership for federal income tax purposes and (ii)
unless otherwise required by the appropriate taxing authorities, agree to treat
the Certificates as equity interests in a partnership for the purposes of
federal income taxes, state and local income and franchise taxes, and any other
taxes imposed upon, measured by, or based upon gross or net income. The parties
agree that, unless otherwise required by appropriate tax authorities, the Trust
shall file or cause to be filed annual or other necessary returns, reports and
other forms consistent with such characterization of the Trust for tax purposes.
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 the treatment of the Trust as a
partnership for federal income tax purposes.
ARTICLE III.
CERTIFICATES AND TRANSFERS OF INTERESTS
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 Certificates. Each 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. Subject to the satisfaction of
the conditions herein and those conditions stated on the 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 such Certificate in such transferee's name
pursuant to Section 3.4. Each Certificate will be issuable in minimum
denominations of no less than 5% of the beneficial interest in the Trust. Each
Certificate will represent a Beneficial Interest in the Trust.
Section 3.3. Authentication of Certificates. Concurrently with the initial
sale of the Receivables to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee will cause the Certificates 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 or facsimile signature; such authentication will constitute conclusive
evidence that such Certificate is duly authenticated and delivered hereunder.
Each Certificate will be dated the date of its authentication.
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Section 3.4. Registration of Transfer and Exchange of Certificates. 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 Certificates and of transfers and exchanges of the
Certificates as herein provided. The Owner Trustee will be the initial
Certificate Registrar.
The initial Certificateholder will provide the Certificate Registrar and
the Indenture Trustee with its name and address on the Closing Date. Upon any
transfers of a Certificate, the Certificate Registrar will notify the Indenture
Trustee of the name and address of each transferee in writing, by facsimile, on
the day of such transfer.
Upon surrender for registration of transfer of a 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 a 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 a Certificate.
To the fullest extent permitted by applicable law, no sale, pledge or
other transfer of a Certificate will be made unless (a) 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) such sale,
pledge or other transfer is made to a Person that is a "qualified institutional
buyer" as defined in Rule 144A under the Securities Act, (b) such sale, pledge
or other transfer will not cause the Trust to be treated as a publicly traded
partnership taxable as a corporation for federal income tax purposes, and (c)
such sale, pledge or other transfer is made to a Person who is a United States
Person (within the meaning of Section 7701(a)(30) of the Code) and who has
delivered to the Owner Trustee satisfactory evidence thereof. 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 C 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 the purchase of any Certificate by a
purchaser who delivers a transferee's certificate in the form of Exhibit C), 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
10
any transferee made to the Owner Trustee, and upon such Opinion of Counsel, and
will be fully protected in so doing. Any Certificateholders 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 Certificates, the Receivables and other matters
regarding the Certificates as the Issuer will reasonably request to meet its
obligations under the preceding sentence.
At the option of a Holder, a Certificate may be exchanged for one or more
other Certificates of authorized denominations of a like aggregate beneficial
interest in the Trust upon surrender of the Certificate to be exchanged at the
Corporate Trust Office maintained pursuant to Section 3.7. Whenever any
Certificates are so surrendered for exchange, the Owner Trustee shall execute on
behalf of the Trust, authenticate and deliver one or more Certificates dated the
date of authentication by the Owner Trustee or any authenticating agent. Such
Certificates shall be delivered to the Holder making the exchange.
Section 3.5. Mutilated, Destroyed, Lost or Stolen Certificates.
(a) If (i) 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 (ii)
there will be delivered to the Certificate Registrar and the Owner Trustee such
security or indemnity as may be required by them to hold each of them harmless,
then in the absence of notice that such Certificate has been acquired by a
protected 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 3.5, 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 3.5 will constitute
conclusive evidence of an ownership interest in the Trust, as if originally
issued, whether or not the mutilated, destroyed, lost or stolen Certificate will
be found at any time.
(b) If, after the delivery of a replacement Certificate or payment
in respect of a mutilated, destroyed, lost or stolen Certificate pursuant to
Section 3.5(a), a protected purchaser of the original Certificate in lieu of
which such replacement Certificate was issued presents for payment such original
Certificate, the Owner Trustee shall be entitled to recover such payment from
the Person to whom such replacement Certificate was delivered or any Person
taking such replacement Certificate from such Person to whom such replacement
Certificate was delivered or any assignee of such Person, except a protected
purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Owner Trustee in connection therewith.
11
(c) The provisions of this Section 3.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.
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 a Certificate
for registration of transfer, 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 Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Owner Trustee in respect of the Certificates and the
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 Certificateholders [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. ERISA Restrictions. The Certificates may not be acquired by
or for the account 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 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, 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.
Section 3.9. Access to List of Certificateholders' Names and Addresses.
The Owner Trustee shall furnish or cause to be furnished to the Servicer and the
Depositor, within 15 days after receipt by the Owner Trustee of a request
therefor from the Servicer or the Depositor in writing, a list of the names and
addresses of the Certificateholders as of the most recent Record Date. Each
Holder, by receiving and holding a Certificate, shall be deemed to have agreed
not to hold any of the Servicer, the Depositor or the Owner Trustee accountable
by reason of the disclosure of its name and address, regardless of the source
from which such information was derived.
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ARTICLE IV.
VOTING RIGHTS AND OTHER ACTIONS
Section 4.1. Majority Certificateholders. Except as expressly provided
herein, any action that may be taken or consent that may be given or withheld by
the Certificateholders under this Agreement shall be effective if such action is
taken or consent is given or withheld by the Majority Certificateholders as of
such action or consent. Except as expressly provided herein, any written notice,
instruction, direction or other document of the Certificateholders delivered
pursuant to this Agreement shall be effective if signed by the Majority
Certificateholders.
Section 4.2. Prior Notice to Certificateholders 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 Certificateholders in writing of the proposed
action and the Majority Certificateholders will not have notified the Owner
Trustee in writing prior to the 30th day after such notice is given that the
Majority Certificateholders have 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);
(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 Certificateholders;
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 Certificateholders.
The Owner Trustee will notify the Certificateholders in writing of any
appointment of a successor Note Registrar or Indenture Trustee within five
Business Days after receipt of notice thereof.
Section 4.3. Action by Certificateholders with Respect to Certain Matters.
The Owner Trustee will not have the power, except upon the direction of all
Certificateholders [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 all Certificateholders and the furnishing of
indemnification satisfactory to the Owner Trustee by all Certificateholders.
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Section 4.4. Restrictions on Certificateholders' Power.
(a) No Certificateholder will 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 Certificateholders will not have any right by virtue or by
availing themselves 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 Certificateholders constitute the
Majority Certificateholders who are the Instructing Party pursuant to Section
5.3 and unless the Certificateholders 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 the Certificateholders 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 10 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 10-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 4.4 or Section 5.3. For the protection and
enforcement of the provisions of this Section 4.4, the Certificateholders and
the Owner Trustee are entitled to such relief as can be given either at law or
in equity.
[Section 4.5. 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 (a) remove the Servicer, (b) 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, (c) 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 (d)
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 Majority
Certificateholders 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 $______________, [Class A-2 Notes] in the aggregate principal amount of
$______________, [Class A-3 Notes] in the aggregate principal amount of
$_________, [Class A-4 Notes] in the aggregate principal amount of
$_______________ and Class B Notes in the aggregate principal amount of
$_____________.
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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
Holders, 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 Majority Certificateholders (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 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 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 Certificateholders, 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
15
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 Certificateholders, 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 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 (a) in accordance with the
powers granted to and the authority conferred upon the Owner Trustee pursuant to
this Agreement, (b) in accordance with the Basic Documents or (c) 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. No
Certificateholder will direct the Owner Trustee to take action that would
violate the provisions of this Section 5.6.
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
16
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, and (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 Majority Certificateholders;
(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 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 Certificates, 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 Majority Certificateholders, unless such Instructing
Party or Majority Certificateholders has offered to the Owner Trustee security
or
17
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 a
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.
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 _________________, duly organized and validly existing
in good standing under the laws of the State of ____________. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(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.
(d) This Agreement constitutes a legal, valid and binding obligation
of the Owner Trustee, enforceable against the Owner Trustee in accordance with
its terms, subject as to enforceability to applicable bankruptcy, insolvency,
reorganization, convservatorship, receivership, liquidation and other similar
laws affecting enforcement of the rights of creditors of banks generally and to
equitable limitations on the availability of specific remedies.
18
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 [Owner Trustee] acts solely as
Owner Trustee hereunder and not in its individual capacity and all Persons
having any claim against the Owner Trustee by reason of the transactions
contemplated by this Agreement or any Basic Document will look only to the Owner
Trust Estate for payment or satisfaction thereof.
Section 6.6. Owner Trustee Not Liable for Certificates or Receivables. The
recitals contained herein and in the Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates) will be taken as the
statements of the Certificateholders 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 any Certificate (other than the signature and
countersignature of the Owner Trustee on any 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 Certificateholders under this Agreement or the Noteholders under the
Indenture, including: 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
19
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 Trust will have received
income or proceeds from the Owner Trust Estate to make such payments in
accordance with the terms hereof. [Owner Trustee], 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 [Owner Trustee] 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, (a) 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; (b)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by [Owner Trustee] (or any successor thereto); or
(c) subject [Owner Trustee] (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 [Owner
Trustee] (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
20
(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 7.2 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 7.2, 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 Holders.
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 later 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 Certificateholders of all
amounts required to be paid to them pursuant to this Agreement [and the payment
to the Security Insurer of all amounts payable or reimbursable to them 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 8.1. The bankruptcy, liquidation, dissolution, death or
incapacity of any Certificateholder will not (x) operate to terminate this
Agreement or the Trust, nor (y) entitle such 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.
21
(b) Neither the Depositor nor the Certificateholders will be
entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which each Certificateholder will surrender its
Certificate to the Owner Trustee for payment of the final distribution, if any,
and cancellation, will be given by the Owner Trustee by letter to the
Certificateholders 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 each Certificate will be made upon presentation and
surrender of such Certificate at the office of the Owner 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 such Certificate at the
office of the Owner Trustee therein specified. The Owner Trustee will give such
notice to the Indenture Trustee at the time such notice is given to the
Certificateholders. Upon presentation and surrender of a Certificate, the Owner
Trustee will instruct the Indenture Trustee to cause to be distributed to the
Certificateholders thereof amounts distributable on such Distribution Date
pursuant to Section 5.7 of the Sale and Servicing Agreement.
If a Certificateholder does not surrender its 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 such
Certificateholder to surrender its 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 such 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 Certificateholders.
(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
$__________ 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 9.1, the combined capital and
surplus of such corporation will be deemed to be its combined capital and
surplus as set forth in its most
22
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 9.1,
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 has 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 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 9.2
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
23
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 9.3 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 9.3, the Administrator will mail notice of the successor of such
Owner Trustee to the Certificateholders, the Indenture Trustee, the Noteholders
and the Rating Agencies. If the Administrator fails 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.
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 9.5, such powers, duties, obligations, rights and trusts as the
Servicer and the Owner Trustee may consider necessary or desirable. If the
Servicer has not 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:
(a) 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
24
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;
(b) no trustee under this Agreement will be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(c) 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 IX. Each separate trustee and co-trustee, upon its 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
should 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 Certificateholders, (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
25
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 Majority
Certificateholders (which consent of any Certificateholder or Noteholder given
pursuant to this Section 10.1(b) 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 Certificateholders; provided,
however, that, [subject to the express rights of the Security Insurer under the
Basic Documents,] no such amendment will (i) 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 Certificateholders or (ii) reduce the aforesaid
percentage of the Outstanding Amount of the Notes and aforesaid percentage of
the Certificateholders required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes and Certificates.
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 Certificateholders, the Indenture Trustee and each
of the Rating Agencies.
It will not be necessary for the consent of the Certificateholders,
the Noteholders or the Indenture Trustee pursuant to this Section 10.1(b) 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 Certificateholders
provided for in this Agreement or in any other Basic Document) and of evidencing
the authorization of the execution thereof by the Certificateholders 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 Certificateholders.
No Certificateholder will have legal title to any part of the Owner Trust
Estate. The Certificateholders 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 a 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.
26
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
Certificateholders, 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
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Chief Financial Officer
If to the Owner Trustee:
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
If to the Depositor:
Triad Financial Special Purpose LLC
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Chief Financial Officer
[If to the Security Insurer:
[_________________]
[_________________]
[_________________]
(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
27
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
such 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.
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. Each Certificateholder by accepting a
Certificate acknowledges that a 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 Certificates 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
Certificates, 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
28
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.]
29
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.
[OWNER TRUSTEE]
Owner Trustee
By: ___________________________________
Name:
Title:
TRIAD FINANCIAL SPECIAL PURPOSE LLC
Depositor
By: ___________________________________
Name:
Title:
TRIAD FINANCIAL CORPORATION
Administrator
By: ___________________________________
Name:
Title:
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 ("RULE
144A") 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, 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
A-1
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
BENEFICIAL 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 200_-_ (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 ___________,
200_, as amended and restated as of ________, 200_ (the "Trust Agreement"),
among the Depositor, Triad Financial Corporation (the "Administrator") and
[Owner Trustee], 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 one of the duly authorized Certificates designated as "Asset
Backed Certificates" (herein called the "Certificate"). Also issued under the
Indenture, dated as of _______, 200_, between the Trust and [Indenture Trustee],
as indenture trustee, are [five] classes of Notes designated as "[Class A-1
____% Asset Backed Notes]", "[Class A-2 ____% Asset Backed Notes]", "[Class A-3
____% Asset Backed Notes]", "[Class A-4 ____% Asset Backed Notes]" and the
"Class B ____% Asset Backend 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
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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, title and interest of the Depositor
in and to the Purchase Agreement dated as of ______, 200_ 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 Owner 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 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.
THIS CERTIFICATE 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.
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
200_-A
By: [OWNER TRUSTEE],
not in its individual capacity but
soley as Owner Trustee of the Trust
By: _____________________________________
Authorized Signatory
Dated: _______, 200_
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the within-mentioned Trust Agreement.
[OWNER TRUSTEE], OR [OWNER TRUSTEE],
not in its individual capacity but not in its individual capacity but
solely as Owner Trustee of the Trust solely as Owner Trustee of the Trust
By: ________________________________ By: ________________________________
Authenticating Agent Authorized Signatory
By: ________________________________
Authorized Signatory
A-1
(Reverse of Certificate)
This 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 Majority Certificateholders. 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 any 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 [Owner Trustee]. 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 may decline to register this Certificate if (1) the registration
of this Certificate in the name of the purchaser or other transferee, in the
reasonable belief of the Owner Trustee, will cause the Trust to be treated as a
publicly traded partnership taxable as a corporation for federal income tax
purposes, or (2) the purchaser or the transferee seeking registration of this
Certificate is not a United States Person (within the meaning of Section
7701(a)(30) of the Code) or fails to deliver to the Owner Trustee satisfactory
evidence of its status as such a United States Person.
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.
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The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby will terminate upon: the later 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 Certificateholders of all amounts required to be paid pursuant to
the Trust Agreement [and the payment to the Security Insurer of all amounts
payable or reimbursable to it 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 this 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-3
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-4
EXHIBIT B
CERTIFICATE OF TRUST
OF
TRIAD AUTOMOBILE RECEIVABLES TRUST 200_-_
THIS Certificate of Trust of Triad Automobile Receivables Trust 200_-_
(the "Trust") is being duly executed and filed by the undersigned, as trustee,
to form a statutory trust under the Delaware Statutory Trust Act (12 Del. C.
Section 3801 et seq.) (the "Act").
1. Name. The name of the statutory trust formed hereby is "Triad
Automobile Receivables Trust 200_-_."
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware are [Owner Trustee],
______________________________________.
3. Effective Date. This Certificate of Trust shall 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.
[OWNER TRUSTEE]
as trustee
By: ____________________________________
Name:
Title:
EXHIBIT C
[FORM OF "QUALIFIED INSTITUTIONAL BUYER"
TRANSFEREE'S CERTIFICATE]
[DATE]
Triad Automobile Receivables Trust 200__-_
c/o [Owner Trustee], as Owner Trustee
[_____________________]
[_____________________]
[_____________________]
[_____________________]
[Owner Trustee]
[_____________________]
[_____________________]
[_____________________]
[_____________________]
Re: Triad Automobile Receivables Trust 200_-_, Trust Certificate No.______
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 Trust Agreement, dated as of ________, 200_ (the "Trust
Agreement") among Triad Financial Special Purpose LLC, as depositor (the
"Depositor"), Triad Financial Corporation, as administrator (the
"Administrator") and [Owner Trustee], as trustee and not in its individual
capacity (the "Owner Trustee"), relating to the Triad Automobile Receivables
Trust 200_ - _ Certificate, the Buyer advises you that 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." 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 the 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
C-1
similar to the 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
________________________________________
________________________________________
C-2
ANNEX 1 TO EXHIBIT C
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 Certificate 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.
----------------
(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.
C-3
_____ Broker-dealer. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
_____ 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 (a) securities
of issuers that are affiliated with the Buyer, (b) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(c) bank deposit notes and certificates of deposit, (d) loan participations, (e)
repurchase agreements, (f) securities owned but subject to a repurchase
agreement and (g) 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
C-4
Buyer and did not include any of the securities referred to in the preceding
paragraph, except (a) where the Buyer reports its securities holdings in its
financial statements on the basis of their market value, and (b) no current
information with respect to the cost of those securities has been published. If
clause (b) in the preceding sentence applies, the securities may be valued at
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 Certificate, 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: ____________________________________
C-5
ANNEX 2 TO EXHIBIT C
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, as amended ("Rule 144A"), because the 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 the Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (a) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended, and (b) 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 (x) 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 (y) no current information with respect to the
cost of those securities has been published. If clause (y) 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
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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 (a) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (b) bank deposit notes and certificates of deposit, (c)
loan participations, (d) repurchase agreements, (e) securities owned but subject
to a repurchase agreement and (f) 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 Certificate, 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 the Certificate 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: ___________________________________
C-7
