EXHIBIT 10.2
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is made as of April 29,
2005, by and among Triad Holdings, LLC, a Delaware limited liability company
(the "LLC"), Triad Holdings Inc., a Delaware corporation and wholly owned
subsidiary of the LLC ("Triad Holdings"), Triad Financial Corporation, a
California corporation and successor by merger to Triad Acquisition Corp., a
Delaware corporation and wholly owned subsidiary of Triad Holdings ("Triad," and
together with Triad Holdings, the "Companies"), Xxxxxx'x Xxxx/Ford Ltd., a Texas
limited partnership ("HGF"), and the other persons and entities listed on the
Schedule of Purchasers attached hereto (the "Purchasers"). Certain definitions
are set forth in Section 11 of this Agreement.
WHEREAS, the LLC and the Companies desire to receive financial and
management consulting services from HGF, and obtain the benefit of the
experience of HGF in business and financial management generally and its
knowledge of the Companies and the Companies' financial affairs in particular,
and HGF desires to provide such services to the Companies on the terms set forth
herein.
WHEREAS, the LLC wishes to sell, and the Purchasers desire to
purchase, 65,408 Common Units of the LLC (the "Common Units") hereunder.
WHEREAS, the execution and delivery of this Agreement by the LLC,
the Companies and the Purchasers is a condition to the purchase of Preferred
Units and Common Units by the Investors pursuant to the Unit Purchase Agreement
of even date herewith among the LLC, HGF and certain affiliates of each of GTCR
Xxxxxx Xxxxxx, L.L.C. and Xxxxxxx, Xxxxx & Co.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements hereinafter set forth and the mutual benefits to be
derived herefrom, the Purchasers, the LLC and the Companies hereby agree as
follows:
1. Engagement. The LLC and the Companies hereby engage HGF as a
financial and management consultant, and HGF hereby agrees to provide financial
and management consulting services to the LLC and the Companies, all on the
terms and subject to the conditions set forth below.
2. Services of HGF. HGF shall provide Xxxxxx X. Xxxx to serve as the
Chief Executive Officer of the LLC and Executive Chairman of the Companies, as
long as Xx. Xxxx is in sufficiently good physical and mental health to serve in
such capacity. Xx. Xxxx'x responsibilities will include setting corporate
strategy, overseeing the performance of the Companies' Chief Executive Officer,
naming senior executives of the Companies (other than the Chief Executive
Officer, who will be named and approved by the boards of directors of the
Companies (collectively, the "Board")), and recommending compensation of such
executives to the Board. In addition, HGF will meet with the Companies
regularly, monitor their performance, and work with and advise Companies
management on strategy and operational issues.
3. Personnel. HGF shall provide and devote to the performance of
this Agreement such partners, employees and agents of HGF as HGF shall deem
appropriate for the
furnishing of the services required hereby; provided that in any event (i) HGF
shall provide Xxxxxx X. Xxxx to serve as the Chief Executive Officer of the LLC
and Executive Chairman of the Companies as long as Xx. Xxxx is in sufficiently
good physical and mental health to serve in such capacity, and (ii) HGF shall
provide Xxxx Xxxx and Xxxxx Staff to furnish a portion of the services required
hereby, and/or provide such other individuals who, in Xx. Xxxx'x reasonable
opinion, possess qualifications and capabilities that are comparable to those of
Messrs. Xxxx and Staff. In the event that none of Messrs. Ford, Xxxx and Staff
are available to serve as provided herein, HGF shall, within 90 days of the last
date any of Messrs. Ford, Xxxx and Staff are available to serve as provided
herein, promptly provide other individuals to serve in such roles for the
furnishing of the services required hereby. If holders of the Required Interest
(as defined in the LLC Agreement) determine reasonably and in good faith, and by
written resolution, that such individuals do not possess qualifications and
capabilities that are comparable to those of Messrs. Xxxx and Staff, then the
holders of the Required Interest shall have the right to terminate this
Agreement by providing written notice of such termination to HGF.
4. Management Fee and Expense Reimbursement.
(a) Commencing as of the date of the closing of the transactions
contemplated by the Acquisition Agreement (the "Closing Date"), the Companies
shall, jointly and severally, pay to HGF a management fee equal to $1,500,000
per annum, payable monthly in arrears on the last day of each month, commencing
with the month during which the Closing Date occurs, with the monthly payment
for the month in which such closing occurs being pro rated for the number of
days between the Closing Date and the end of such month.
(b) The Companies shall, jointly and severally, promptly reimburse
HGF for all reasonable travel expenses and other travel related out-of-pocket
fees and expenses as have been or may be incurred by HGF, its partners,
officers, employees and related persons, in connection with the rendering of any
services hereunder (including, but not limited to, fees and expenses incurred in
attending Company-related meetings).
5. Term.
(a) Sections 1 through 4 of this Agreement will continue from the
date hereof until terminated by HGF or the LLC upon not less than 90 days' prior
NOTICE to the other party (the "Service Period"); provided however that the
Service Period shall end immediately upon a closing of the buy/sell right set
forth in Section 10.5 of the LLC Agreement in which HGF sells all of its Units
(an "HGF Sale Closing"). No termination of this Agreement, whether pursuant to
this paragraph or otherwise, shall affect the LLC's or the Companies'
obligations with respect to the fees, costs and expenses incurred by HGF in
rendering services hereunder and not reimbursed by the LLC or the Companies as
of the effective date of such termination.
(b) In the event of (x) a termination of the Service Period by HGF
following the occurrence of any event described in clauses (ii), (iii) or (iv)
of the definition of "Triggering Event" in the LLC Agreement that is not cured
within 30 days after the LLC's receipt of notice thereof by HGF, (y) a
termination of the Service Period by the LLC (other than for Cause (as defined
below) or pursuant to the last sentence of Section 3 above) or (z) a termination
of the
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Service Period upon an HGF Sale Closing, then the LLC will continue to pay to
HGF the fees referred to in Section 4(a) above through the fifth anniversary of
the date of this Agreement, or through the first anniversary of the termination
of the Service Period, if later.
(c) In the event of a termination of the Service Period by the LLC
for Cause or pursuant to the last sentence of Section 3 above, the LLC will
continue to pay to HGF the fees referred to in Section 4(a) above through the
first anniversary of the termination of the Service Period. "Cause" shall deemed
to exist if, without the prior written consent of the LLC, (i) HGF fails to
perform in all material respects its obligations pursuant to Section 2 of this
Agreement, or (ii) Xxxxxx X. Xxxx is employed by, actively consults with, is a
director of, or controls or owns a direct or indirect majority interest in, any
business or enterprise (other than the Companies and their affiliates) whose
primary business is non-prime lending for new and late model used automobiles;
provided that Cause shall not be deemed to exist unless and until HGF has
received written notice from the LLC specifying the acts or omissions that
constitute Cause and HGF has failed to cure such acts or omissions within 30
days after receipt of such notice.
(d) Notwithstanding the foregoing, but subject to the second
sentence in Section 5(a) above, the LLC will not be obligated to continue to pay
to HGF the fees referred to in Section 4(a) above from and after the occurrence
of (i) a Sale of the Company (as defined in the LLC Agreement), or (ii) a
Qualified IPO (as defined in the LLC Agreement).
6. Indemnification. As part of the consideration for the agreement
of HGF to furnish its services under this Agreement, the LLC and the Companies
hereby jointly and severally agree to indemnify and hold harmless HGF and its
affiliates and the respective managing directors, officers, directors,
investors, shareholders, members, partners, employees and agents of, and persons
controlling, HGF or any of its affiliates within the meaning of either Section
15 of the Securities Act of 1933, as amended, or Section 20 of the Securities
Exchange Act of 1934, as amended, and each of their respective successors and
assigns (collectively, the "indemnified persons") from and against all claims,
liabilities, expenses, losses or damages (or actions in respect thereof) related
to or arising out of actions taken (or omitted to be taken) by HGF pursuant to
the terms of this Agreement, or HGF's role in connection therewith; provided,
however, that the LLC and the Companies shall not be responsible for any claims,
liabilities, expenses, losses and damages to the extent that it is finally
judicially determined that they result primarily from actions taken or omitted
to be taken by HGF or an indemnified person in bad faith or due to HGF's or an
indemnified person's gross negligence or willful misconduct. If for any reason
(other than the bad faith, gross negligence or willful misconduct of HGF or an
indemnified person as provided above) the foregoing indemnity is unavailable to
the indemnified persons or insufficient to hold the indemnified persons
harmless, then the LLC and the Companies shall contribute to the amount paid or
payable by the indemnified persons as a result of such claim, liability,
expense, loss or damage in such proportion as is appropriate to reflect not only
the relative benefits received by the LLC and the Companies on the one hand and
HGF on the other, but also the relative fault of the LLC and the Companies and
HGF and the indemnified persons, as well as any relevant equitable
considerations, subject to the limitation that in any event (other than the bad
faith, gross negligence or willful misconduct of HGF or an indemnified person as
provided above) HGF's aggregate contribution to all claims, expenses, losses,
liabilities and damages shall not exceed the amount of fees actually received by
HGF pursuant to this Agreement. Promptly after receipt by HGF or an indemnified
person of notice of any
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complaint or the commencement of any action or proceeding with respect to which
indemnification may be sought against the LLC or the Companies, HGF will notify
the LLC and the Companies in writing of the receipt or commencement thereof, but
failure to notify the LLC and the Companies will relieve the LLC or the
Companies from any liability which it may have hereunder only if, and to the
extent that, such failure results in the forfeiture of substantial rights and
defenses, and will not in any event relieve the LLC or the Companies from any
other obligation to any indemnified person. The LLC and the Companies shall
promptly assume the defense of such action with counsel approved by HGF
(including payment of fees and disbursements of such counsel) insofar as such
action shall relate to any alleged liability in respect of which indemnity may
be sought against the LLC and the Companies. HGF shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and disbursements of such counsel shall be at the expense of HGF
unless employment of such counsel has been specifically authorized by the Board
of Managers of the LLC in writing. The LLC and the Companies shall pay the fees
and expenses of one separate counsel (plus local counsel if appropriate) for HGF
and any other indemnified persons if the named parties to any such action
(including any impleaded parties) include the LLC and the Companies (or any of
the directors of the LLC and the Companies) and HGF and (i) in the good faith
judgment of HGF the use of joint counsel would present such counsel with an
actual or potential conflict of interest, (ii) HGF shall have been advised by
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the LLC or the Companies (or
their managers or directors), or (iii) the LLC or the Companies failed to assume
the defense thereof. The LLC and the Companies shall not be liable to indemnify
any person for any settlement of any claim or action effected without written
consent of the LLC or the Companies, which consent shall not be unreasonably
withheld. The Companies and the LLC agree not to enter into any or settlement of
any claim (whether or not HGF or any other indemnified party is a formal party
to such claim) in respect of which indemnification may be sought hereunder
without the prior written consent of HGF (which consent will not be unreasonably
withheld), unless such settlement includes an unconditional release of HGF and
each indemnified party from all liability arising out of such claim. In
addition, the LLC and the Companies hereby agree to reimburse HGF and each other
indemnified person for all expenses (including reasonable fees and disbursements
of counsel if the LLC and the Companies do not assume the defense of such
action) as they are incurred by HGF, or any indemnified person in connection
with investigating, preparing or defending any such action or claim. HGF shall
have no liability to the LLC or the Companies, any of their respective
subsidiaries or affiliates or any of their directors, officers or employees in
connection with the services which HGF renders pursuant to this Agreement,
except for HGF's bad faith, gross negligence or willful misconduct judicially
determined as aforesaid. The indemnification, contribution and expense
reimbursement obligation the LLC and the Companies has under this Section 6
shall be in addition to any liability the LLC and the Companies may otherwise
have. The provisions of this Section 6 shall survive any termination or
completion of the engagement provided by this Agreement.
7. HGF an Independent Contractor. HGF, the LLC and the Companies
agree that HGF shall perform services hereunder as an independent contractor,
retaining control over and responsibility for its own operations and personnel.
Neither HGF nor its directors, officers, or employees shall be considered
employees or agents of the LLC or the Companies as a result of this Agreement
nor shall any of them have authority pursuant to this Agreement to contract in
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the name of or bind the LLC or the Companies, except as expressly agreed to in
writing by the LLC or the Companies, respectively. The foregoing shall not be
construed to limit or affect the authority that Xxxxxx X. Xxxx or any other
person may have in his or her capacity as a manager, officer or director or the
LLC, the Companies or any of their affiliates.
8. Purchase and Sale of Common Units.
(a) Upon execution of this Agreement, each Purchaser will purchase,
and the LLC will sell, the number of Common Units set forth next to such
Purchaser's name on the Schedule of Purchasers attached hereto at a price of
$1.00 per unit. The LLC will deliver to each Purchaser the certificate(s)
representing such Common Units (if the Common Units are in certificated form),
and each Purchaser will deliver to the LLC a check or wire transfer of
immediately available funds in the aggregate amount set forth next to such
Purchaser's name on the Schedule of Purchasers attached hereto as payment for
such Common Units, and in any event the LLC will clearly reflect on its books
and records that each Purchaser is the holder of such Common Units.
(b) The Common Units acquired pursuant to Section 8(a) hereof are
referred to herein as the "Carried Common Units."
(c) Within 30 days after the date hereof, each Purchaser will make
an effective election with the Internal Revenue Service under Section 83(b) of
the Internal Revenue Code and the regulations promulgated thereunder in the form
of Exhibit A attached hereto.
(d) In connection with the purchase and sale of the Carried Common
Units, each Purchaser hereby makes the representations set forth in Section
3.1(b) of the LLC Agreement.
9. Vesting of Carried Common Units.
(a) The Carried Common Units shall be subject to vesting in the
manner specified in this Section 9.
(b) Except as otherwise provided in this Section 9, the Carried
Common Units shall become vested in equal amounts on the last day of each fiscal
quarter over a five year period beginning on the last day of the calendar
quarter during which the Closing Date occurs (the "Initial Vesting Date") and
ending on the fifth anniversary of the Initial Vesting Date, such that 1/20 of
the Carried Common Units shall become vested on the Initial Vesting Date and on
the last day of each calendar quarter thereafter, if as of each such date the
Service Period is still in effect.
(c) Upon the occurrence of (i) a Sale of the Company, (ii) a
Qualified IPO, or (iii) the termination of the Service Period for any reason
(other than a voluntary termination by HGF or a termination by the LLC for Cause
or pursuant to the last sentence of Section 3 above), all Carried Common Units
which have not yet become vested shall become vested as of the date of
consummation of the Sale of the Company or the Qualified IPO or the effective
date of such termination, as applicable, if the Service Period has been in
effect as of immediately before such date. Upon the occurrence of a voluntary
termination of the Service Period by HGF, all further
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vesting of the remaining unvested portion of the Carried Common Units, if any,
shall cease. Upon the occurrence of a termination of the Service Period by the
LLC for Cause or pursuant to the last sentence of Section 3 above, vesting shall
be accelerated by one year such that an additional 1/5 of the Carried Common
Units shall immediately vest upon such termination and further vesting with
respect to the then remaining unvested portion of the Carried Common Units, if
any, shall cease.
(d) All Carried Common Units that have not vested in accordance with
this Section 9 are referred to herein as "Unvested Common Units."
10. Repurchase Option.
(a) In the event the Service Period is voluntarily terminated by HGF
(the "Voluntary Separation") or terminated by the LLC for Cause or pursuant to
the last sentence of Section 3 above, the Unvested Common Units (whether held by
any Purchaser or one or more of any Purchaser's transferees, other than the LLC)
will be subject to repurchase, in each case by the LLC pursuant to the terms and
conditions set forth in this Section 10 (the "Repurchase Option"). There shall
be no Repurchase Option with respect to any Carried Common Units which are no
longer Unvested Common Units. For the avoidance of doubt, a termination of the
Service Period by HGF following the occurrence of any of the events described in
clauses (ii), (iii) or (iv) of the definition of "Triggering Event" in the LLC
Agreement shall be deemed to not be a "Voluntary Separation."
(b) In the event of a Voluntary Separation or a termination by the
LLC for Cause or pursuant to the last sentence of Section 3 above, the purchase
price for each Unvested Common Unit will be the Original Cost for such unit.
(c) The LLC (with the approval of the Board) may elect to purchase
all or any portion of the Unvested Common Units by delivering written notice
(the "Repurchase Notice") to the holder or holders of such securities within 90
days after the Voluntary Separation or termination by the LLC for Cause or
pursuant to the last sentence of Section 3 above. The Repurchase Notice will set
forth the number of Unvested Common Units to be acquired from each holder, the
aggregate consideration to be paid for such units and the time and place for the
closing of the transaction.
(d) The closing of the purchase of the Unvested Common Units
pursuant to the Repurchase Option shall take place on the date designated by the
LLC in the Repurchase Notice, which date shall not be more than one month nor
less than five days after the delivery of such notice. The LLC will pay for the
Unvested Common Units by a check or wire transfer of funds. The LLC will be
entitled to receive customary representations and warranties from the sellers
regarding such sale.
11. Definitions.
"Acquisition Agreement" means the Stock Purchase Agreement, dated as
of December 23, 2004, by and among Fairlane Credit LLC, a Delaware limited
liability company, Ford Motor Credit Company, a Delaware corporation, Triad
Holdings and Triad Acquisition Corp., a Delaware corporation and wholly owned
subsidiary of Triad Holdings, pursuant to
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which Triad Acquisition Corp. will acquire all of the outstanding stock of Triad
Financial Corporation, as amended or modified from time to time in accordance
with the terms thereof.
"Carried Common Units" will continue to be Carried Common Units in
the hands of any holder other than the Purchasers (except for the LLC), and
except as otherwise provided herein, each such other holder of Carried Common
Units will succeed to all rights and obligations attributable to a Purchaser as
a holder of Carried Common Units hereunder. Carried Common Units will also
include equity of the LLC (or a corporate successor to the LLC or a subsidiary
of the LLC) issued with respect to Carried Common Units (i) by way of a unit
split, unit dividend, conversion, or other recapitalization, (ii) by way of
reorganization or recapitalization of the LLC in connection with the
incorporation of a corporate successor prior to a Public Offering (as defined in
the LLC Agreement) or (iii) by way of a distribution of securities of a
subsidiary of the LLC to the members of the LLC. Notwithstanding the foregoing,
after any transfer of Unvested Common Units, such Unvested Common Units shall
remain Unvested Common Units subject to further vesting in accordance with the
terms hereof.
"LLC Agreement" means the Limited Liability Company Agreement of the
LLC, as amended from time to time pursuant to its terms.
"Original Cost" means, with respect to each Carried Common Unit
purchased hereunder, $1.00 (as proportionately adjusted for all subsequent unit
splits, unit dividends and other recapitalizations).
12. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when (i) delivered
personally to the recipient, (ii) sent to the recipient by reputable express
courier service (charges prepaid), (iii) mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid, or (iv)
telecopied to the recipient (with hard copy sent to the recipient by reputable
overnight courier service (charges prepaid) that same day) if telecopied before
5:00 p.m. Chicago, Illinois time on a business day, and otherwise on the next
business day. Such notices, demands and other communications shall be sent to
the parties hereto at the addresses indicated below (or at such other address as
shall be given in writing by one party to the others):
If to the LLC:
Triad Holdings, LLC
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to a Company:
c/o Triad Financial Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: ______________
If to a Purchaser:
To the address set forth on the Schedule of Purchasers
attached hereto.
If to HGF:
Xxxxxx'x Xxxx/Ford Ltd.
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other address or to the attention of such other person or entity as the
recipient party shall have specified by prior written notice to the sending
party. Any notice under this Agreement will be deemed to have been given when so
delivered or sent or, if mailed, five days after deposit in the U.S. mail.
13. General Provisions.
(a) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(c) No Strict Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
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(d) Counterparts. This Agreement may be executed in separate
counterparts (including by means of facsimile), each of which is deemed to be an
original and all of which taken together constitute one and the same agreement.
(e) Successors and Assigns. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable by
parties hereto and their respective successors and assigns (including subsequent
holders of Carried Common Units); provided, however, that except as expressly
provided herein HGF's obligations of performance may not be assigned or
delegated by HGF without the written consent of the Board of the LLC, and any
such attempted assignment or delegation by HGF without such written consent
shall be null and void ab initio.
(f) Choice of Law. The law of the State of Delaware will govern all
questions concerning the relative rights of the LLC, the Companies and their
respective securityholders. All other questions concerning the construction,
validity and interpretation of this Agreement and the exhibits hereto will be
governed by and construed in accordance with the internal laws of the State of
New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of New York.
(g) MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN
OR AMONG ANY OF THE PARTIES HERETO, WHETHER ARISING IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY AND/OR THE RELATIONSHIP
ESTABLISHED AMONG THE PARTIES HEREUNDER.
(h) Remedies. Each of the parties to this Agreement will be entitled
to enforce its rights under this Agreement specifically, to recover damages and
costs (including attorney's fees) caused by any breach of any provision of this
Agreement and to exercise all other rights existing in its favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any party may in its
sole discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement. Nothing contained in this Agreement shall be
construed to confer upon any Person who is not a signatory hereto any rights or
benefits, whether as a third-party beneficiary or otherwise (other than the
indemnified persons in respect of Section 6 hereof).
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(i) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of each of the parties
hereto.
(j) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or holiday in the
state in which the LLC's chief executive office is located, the time period
shall be automatically extended to the business day immediately following such
Saturday, Sunday or holiday.
(k) Reasonable Expenses. The LLC agrees to pay the reasonable fees
and expenses of each Purchaser's counsel arising in connection with the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated by this Agreement.
(l) Adjustments of Numbers. All numbers set forth herein that refer
to unit prices or amounts will be appropriately adjusted to reflect unit splits,
unit dividends, combinations of units and other recapitalizations affecting the
subject class of equity.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Management
Agreement on the date first written above.
TRIAD HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxx X. Xxxx
Its: CEO
TRIAD HOLDINGS INC.
By: /s/ J. Xxxxx Staff
-----------------------------------
Name: J. Xxxxx Staff
Its: CEO
TRIAD FINANCIAL CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Its: SVP - CFO
XXXXXX'X XXXX/FORD LTD.
By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxx X. Xxxx
Its: General Partner
/s/ Xxxxxx X. Xxxx
---------------------------------------
Xxxxxx X. Xxxx
/s/ J. Xxxxx Staff
---------------------------------------
J. Xxxxx Staff
/s/ Xxxx X. Xxxx
---------------------------------------
Xxxx X. Xxxx
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx
EXHIBIT A
____________, 2005
PROTECTIVE ELECTION TO INCLUDE MEMBERSHIP
INTEREST IN GROSS INCOME PURSUANT TO
SECTION 83(b) OF THE INTERNAL REVENUE CODE
On April 29, 2005, the undersigned acquired limited liability
company membership interests (the "Membership Interests") in Triad Holdings,
LLC, a Delaware limited liability company (the "LLC"), for an aggregate amount
of $16,352.00. Pursuant to the Limited Liability Company Agreement of the LLC,
the undersigned is entitled to an interest in LLC capital equal to an interest
in LLC profits.
Based on current Treasury Regulation Section 1.721-1(b), Proposed
Treasury Regulation Section 1.721-1(b)(1), and Revenue Procedures 93-27 and
2001-43, the undersigned does not believe that issuance of the Membership
Interest to the undersigned is subject to the provisions of Section 83 of the
Internal Revenue Code (the "Code"). In the event that the sale is so treated,
however, the undersigned desires to make an election to have the receipt of the
Membership Interest taxed under the provisions of Code Section 83(b) at the time
the undersigned acquired the Membership Interest.
Therefore, pursuant to Code Section 83(b) and Treasury Regulation
Section 1.83-2 promulgated thereunder, the undersigned hereby makes an election,
with respect to the Membership Interest, to report as taxable income for the
calendar year 2005 the excess (if any) of the value of the Membership Interest
on April 29, 2005 over the purchase price thereof.
The following information is supplied in accordance with Treasury
Regulation Section 1.83-2(e):
1. The name, address and social security number of the undersigned:
____________________
____________________
____________________
____________________
2. A description of the property with respect to which the election is being
made: Membership Interests in the LLC entitling the undersigned to an
interest in the LLC's capital equal to approximately 1.64% of the LLC's
profits after return of capital and preferred yield to the holders of
preferred equity interests of the LLC.
3. The date on which the Membership Interest was transferred: April 29, 2005.
The taxable year for which such election is made: 2005.
4. The restrictions to which the property is subject: If the undersigned
ceases to be retained by the LLC or any of its subsidiaries due to
voluntary separation by the undersigned or
termination by the LLC for cause, the unvested portion of the units will
be subject to repurchase by the LLC at cost.
5. The fair market value on April 29, 2005 of the property with respect to
which the election is being made, determined without regard to any lapse
restrictions and in accordance with Revenue Procedure 93-27: $16,352.00.
6. The amount paid or to be paid for such property: $16,352.00.
* * * * *
A copy of this election is being furnished to the LLC pursuant to
Treasury Regulation Section 1.83-2(e)(7). A copy of this election will be
submitted with the 2005 federal income tax return of the undersigned pursuant to
Treasury Regulation Section 1.83-2(c).
Dated: __________, 2005
___________________________________
Name: _____________________________
