Exhibit 4.4
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FORM OF AMENDED AND RESTATED TRUST AGREEMENT
among
[__________________________________]
TRIAD FINANCIAL CORPORATION
[__________________________________]
OWNER TRUSTEE
and
[__________________________________]
Dated as of [___________]
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TABLE OF CONTENTS
Page
RECITALS..........................................................................................................1
ARTICLE I. DEFINITIONS...........................................................................................1
Section 1.1. Capitalized Terms..........................................................................1
Section 1.2. Usage of Terms.............................................................................3
Section 1.3. Material Adverse Effect....................................................................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 Property.............................................5
Section 2.6. Declaration of Trust.......................................................................5
Section 2.7. No Liability of Certificateholder..........................................................5
Section 2.8. Title to Trust Property....................................................................6
Section 2.9. Situs of Trust.............................................................................6
Section 2.10. Representations and Warranties of [_____].................................................6
Section 2.11. Representations and Warranties of [_______]...............................................7
Section 2.12. Federal Income Tax Allocations............................................................9
Section 2.13. Covenants of [_____].....................................................................10
ARTICLE III. CERTIFICATES AND TRANSFER OF INTERESTS.............................................................11
Section 3.1. Initial Ownership.........................................................................11
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Section 3.2. The Certificates..........................................................................11
Section 3.3. Authentication of Certificates............................................................11
Section 3.4. Registration of Transfer and Exchange of Certificates.....................................12
Section 3.5. Legending of Certificates.................................................................13
Section 3.6. Mutilated, Destroyed, Lost or Stolen Certificates.........................................13
Section 3.7. Persons Deemed Certificateholder(s).......................................................14
Section 3.8. Access to List of Certificateholder(s)' Names and Addresses...............................14
Section 3.9. Maintenance of Office or Agency...........................................................14
Section 3.10. Disposition Only With Consent of Insurer..................................................14
Section 3.11. ERISA Restrictions........................................................................15
ARTICLE IV. VOTING RIGHTS AND OTHER ACTIONS.....................................................................15
Section 4.1. Prior Notice to Holders with Respect to Certain Matters...................................15
Section 4.2. Action by Certificateholder(s) with Respect to Certain Matters............................15
Section 4.3. Action by Certificateholder(s) with Respect to Bankruptcy.................................16
Section 4.4. Restrictions on Certificateholder(s)' Power...............................................16
Section 4.5. Majority Control..........................................................................16
Section 4.6. Rights of Insurer.........................................................................17
ARTICLE V. CERTAIN DUTIES.......................................................................................17
Section 5.1. Accounting and Records to the Noteholders, Certificateholder(s),
the Internal Revenue Service and Others...................................................17
Section 5.2. Signature on Returns; Tax Matters Partner.................................................17
Section 5.3. Payments to Certificateholders............................................................18
ARTICLE VI. AUTHORITY AND DUTIES OF OWNER TRUSTEE...............................................................18
Section 6.1. General Authority.........................................................................18
Section 6.2. General Duties............................................................................18
Section 6.3. Action upon Instruction...................................................................18
Section 6.4. No Duties Except as Specified in this Agreement or in Instructions........................19
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Section 6.5. No Action Except under Specified Documents or Instructions................................19
Section 6.6. Restrictions..............................................................................20
ARTICLE VII. CONCERNING THE OWNER TRUSTEE.......................................................................20
Section 7.1. Acceptance of Trusts and Duties...........................................................20
Section 7.2 Furnishing of Documents....................................................................21
Section 7.3. Representations and Warranties............................................................21
Section 7.4. Reliance; Advice of Counsel...............................................................22
Section 7.5 Not Acting in Individual Capacity.........................................................22
Section 7.6. Owner Trustee Not Liable for Certificates or Receivables..................................23
Section 7.7. Payments from Trust Property..............................................................23
Section 7.8. Doing Business in Other Jurisdictions.....................................................23
ARTICLE VIII. COMPENSATION AND INDEMNIFICATION OF OWNER TRUSTEE.................................................24
Section 8.1. Owner Trustee's Fees and Expenses.........................................................24
Section 8.2. Indemnification...........................................................................24
Section 8.3. Payments to the Owner Trustee.............................................................24
Section 8.4. Non-recourse Obligations..................................................................24
ARTICLE IX. TERMINATION OF TRUST AGREEMENT......................................................................24
Section 9.1. Termination of Trust Agreement............................................................24
ARTICLE X. SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES...............................................26
Section 10.1 Eligibility Requirements for Owner Trustee................................................26
Section 10.2 Resignation or Removal of Owner Trustee...................................................26
Section 10.3 Successor Owner Trustee...................................................................27
Section 10.4 Merger or Consolidation of Owner Trustee..................................................27
Section 10.5. Appointment of Co-Trustee or Separate Trustee.............................................27
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ARTICLE XI. MISCELLANEOUS.......................................................................................29
Section 11.1 Supplements and Amendments................................................................29
Section 11.2. No Legal Title to Trust Property in Certificateholder(s).................................30
Section 11.3. Limitations on Rights of Others..........................................................30
Section 11.4. Notices..................................................................................30
Section 11.5. Severability.............................................................................31
Section 11.6. Separate Counterparts....................................................................31
Section 11.7. Assignments..............................................................................31
Section 11.8. No Petition..............................................................................31
Section 11.9. Bankruptcy Matters.......................................................................31
Section 11.10. No Recourse..............................................................................32
Section 11.11. Headings.................................................................................32
Section 11.12. Governing Law............................................................................32
Section 11.13. Servicer.................................................................................32
Exhibit A Form of Certificate..........................................................................A-1
Exhibit B Form of Certificate of Trust.................................................................B-1
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AMENDED AND RESTATED TRUST AGREEMENT, dated as of [__________], among
TRIAD FINANCIAL CORPORATION, a California corporation ("Triad"),
[_____________________________], a Delaware corporation, as Holder of the
Certificate ("[_______]"), [__________________________________], a [________]
corporation, as depositor, ("[_____]"), and [___________________________], a
[________] banking corporation, as Owner Trustee. This Trust Agreement amends
and restates in its entirety the trust agreement (the "Original Trust
Agreement") entered into among Triad, [_______], [_____] and
[______________________], dated as of [____________].
RECITALS
WHEREAS, pursuant to the Original Trust Agreement, a business trust
was created under Chapter 38 of Title 12 of the Delaware Code, 12 Del.C ss.
3801, et seq. (the "Business Trust Statute") named Triad Auto Receivables Owner
Trust 199[ ]-[ ] (the "Trust");
WHEREAS, Triad, [_______], [_____] and [______________________] desire
to amend and restate the Original Agreement as provided in this Amended and
Restated Trust Agreement and to continue the Trust as a business trust under the
Business Trust Statute and that this Trust Agreement constitute the governing
instrument of such business trust; and
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
Section 1.1. CAPITALIZED TERMS. Capitalized terms used but not defined
herein shall have the meanings set forth in the Sale and Servicing Agreement (as
defined below). For all purposes of this Agreement, the following terms shall
have the meanings set forth below:
"[_____]" shall mean [_____________________], a
[____________] corporation, as depositor.
"AGREEMENT" shall mean this Trust Agreement, as the same may be
amended and supplemented from time to time in accordance with the terms hereof.
"BENEFIT PLAN" shall have the meaning assigned to such term in Section
3.10.
"BUSINESS TRUST STATUTE" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et. seq., as the same may be amended from
time to time.
"CERTIFICATE" shall mean a certificate evidencing the beneficial
interest of a Certificateholder in the Issuer, substantially in the form of
Exhibit A.
"CERTIFICATE OF TRUST" shall mean the Certificate of Trust in the form
of Exhibit B to be filed for the Issuer pursuant to Section 3810(a) of the
Business Trust Statute.
"CERTIFICATE PERCENTAGE INTEREST" shall mean with respect to any
Certificate, the percentage interest of ownership in the Issuer represented
thereby as set forth on the face thereof.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" shall mean the
register mentioned in and the registrar appointed pursuant to Section 3.4.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"CORPORATE TRUST OFFICE" shall mean, 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 Certificateholder(s), the Insurer and Triad, or the
principal corporate trust office of any successor Owner Trustee (the address of
which the successor owner trustee will notify the Certificateholder(s), the
Insurer and Triad).
"EQUITY INTERESTS" shall have the meaning assigned to such term in
Section 2.11.
"ERISA" shall have the meaning assigned to such term in Section 3.10.
"EXPENSES" shall have the meaning assigned to such term in Section
8.1. "GOVERNMENTAL AUTHORITY" shall mean any court or federal or state
regulatory body, administrative agency or other tribunal or other governmental
instrumentality.
"HOLDER" or "CERTIFICATEHOLDER" shall mean the Person in whose name a
Certificate is registered on the Certificate Register.
"INITIAL CERTIFICATE BALANCE" shall have the meaning assigned to such
term in Section 2.5.
"INSTRUCTING PARTY" shall mean the Insurer (so long as an Insurer
Default shall not have occurred and be continuing) or the Holders of
Certificates evidencing not less than a majority of the Certificate Percentage
Interest (if an Insurer Default shall have occurred and be continuing).
"INSURER" shall mean [______________________________], or its
successor in interest.
"ISSUER" shall mean the Trust established by this Agreement.
"ORIGINAL TRUST AGREEMENT" shall mean the Trust Agreement among Triad,
[_____], [_______] and the Owner Trustee, dated as of [______________].
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"OWNER TRUSTEE" shall mean [______________________], a [__________]
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"RELATED DOCUMENTS" shall mean this Agreement, the Indenture, the Sale
and Servicing Agreement, the Certificate of Trust, the Notes, the Receivables
Purchase Agreement, the Insurance Agreement, the Reserve Account Agreement, the
Indemnification Agreement, the Premium Letter, the Underwriting Agreement, and
the other agreements executed in connection with the Closing. The Related
Documents executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
"SALE AND SERVICING AGREEMENT" shall mean the Sale and Servicing
Agreement, dated as of [_____________], among the Issuer, [_____], Triad, in its
individual capacity and as Servicer, and [__________________], as Indenture
Trustee and Backup Servicer, as the same may be amended or supplemented from
time to time.
"SECRETARY OF STATE" shall mean the Secretary of State of the State of
Delaware.
"[_______]" shall mean [_____________________], a Delaware
corporation, as Certificateholder.
"TREASURY REGULATIONS" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"TRUST" shall mean Triad Auto Receivables Owner Trust 199[ ]-[ ], a
Delaware business trust.
Section 1.2. USAGE OF TERMS. With respect to all terms used in this
Agreement, the singular includes the plural and the plural includes the
singular, words importing one gender include the other gender, references to
"writing" include printing, typing, lithography and other means of reproducing
words in a visible form, references to agreements and other contractual
instruments include all subsequent amendments thereto or changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement, references to Persons include their permitted successors and assigns,
and the terms "include" or "including" mean "include without limitation" or
"including without limitation."
Section 1.3. MATERIAL ADVERSE EFFECT. Whenever a determination is to
be made under this Agreement as to whether a given event, action, course of
conduct or set of facts or circumstances could or would have a material adverse
effect on the Noteholders or Certificateholders (or any similar or analogous
determination), such determination shall be made without taking into account the
funds available from claims under the Note Policy.
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ARTICLE II.
ORGANIZATION
Section 2.1. NAME. There is hereby formed a trust to be known as
"Triad Auto Receivables Owner Trust 199[ ]-[ ]", in which name the Owner Trustee
may conduct the business of the Issuer, make and execute contracts and other
instruments on behalf of the Issuer and ▇▇▇ and be sued on behalf of the Issuer.
Section 2.2. OFFICE. The office of the Issuer shall be (a) in care of
the Owner Trustee at the Corporate Trust Office or at such other address in
Delaware as the Owner Trustee may designate by written notice to the
Certificateholder(s), the Insurer and Triad or (b) at the principal corporate
trust office of any successor Owner Trustee (the address of which the successor
Owner Trustee will notify the Certificateholder(s), the Insurer and Triad).
Section 2.3. PURPOSES AND POWERS. (a) The purpose of the Issuer is,
and the Issuer shall have the power and authority, to engage in the following
activities:
(i) to acquire from time to time the Trust Property;
(ii) to issue the Notes pursuant to the Indenture and the Certificates
pursuant to this Agreement, and to sell, transfer and exchange the Notes
and the Certificates and to pay interest on and principal of the Notes and
distributions on the Certificates;
(iii) with the proceeds of the sale of the Notes, to fund the
Pre-Funding Account and the Capitalized Interest Account, to pay the
organizational, start-up and transactional expenses of the Issuer and to
pay the balance to [_____] pursuant to the Sale and Servicing Agreement;
(iv) to assign, grant, transfer, pledge, mortgage and convey the Trust
Property to the Indenture Trustee pursuant to the Indenture for the benefit
of the Insurer and 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 Property released from the Lien of, and
remitted to the Issuer pursuant to, the Indenture and the Sale and
Servicing Agreement;
(v) to enter into and perform its obligations under the Related
Documents to which it is a party;
(vi) 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
(vii) subject to compliance with the Related Documents, to engage in
such other activities as may be required in connection with conservation of
the Trust Property and the making of distributions to the
Certificateholder(s) and the Noteholders.
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(b) The Issuer is hereby authorized to engage in the foregoing
activities. The Issuer shall not engage in any activity other than in connection
with the foregoing or other than as required or authorized by the terms of this
Agreement or the Related Documents.
Section 2.4. APPOINTMENT OF OWNER TRUSTEE. [_____] hereby appoints the
Owner Trustee as trustee of the Issuer effective as of the date hereof, to have
all the rights, powers and duties set forth herein, and the Owner Trustee by
execution hereof accepts such appointment.
Section 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST PROPERTY. [_____]
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the sum of $10 (the "Initial Certificate Balance"). The
Owner Trustee hereby acknowledges receipt in trust from [_____], as of the date
hereof, of the foregoing contribution, which shall constitute the initial Trust
Property and shall be deposited into the Collection Account.
Section 2.6. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Trust Property 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 Issuer under the Related Documents. The Issuer shall
constitute a business trust under the Business Trust Statute, and this Agreement
shall constitute the governing instrument of such business trust. It is the
intention of the parties hereto that, solely for income and franchise tax
purposes, until the Certificates are held by more than one person or the Trust
is recharacterized as a separate entity, the Trust will be disregarded as an
entity separate from its beneficial owner and the Notes will be treated as debt
of the Certificateholder. If the Certificates are held by more than one person
or the Trust is recharacterized as a separate entity, it is the intention of the
parties hereto that, solely for income and franchise tax purposes, the Issuer
shall be treated as a partnership with the assets of the partnership being the
Trust Property, the partners of the partnership being the Certificateholders and
the Notes being debt of the partnership. The parties agree that, unless
otherwise required by appropriate tax authorities, until the Certificates are
held by more than one person or the Trust is recharacterized as a separate
entity, the Trust will not file or cause to be filed annual or other necessary
returns, reports and other forms characterizing the Issuer as a partnership for
income and franchise tax purposes. Consistent with the foregoing, neither the
Trust, the Owner Trustee nor any officers, manager, agent , Certificateholder,
holder of other Equity Interests or members of the Trust shall have the power to
elect for purposes of federal, state or local laws to treat the Trust as an
association taxable as a corporation (including the election under Treasury
Regulations section 301.7701-3(c)). Effective as of the date hereof, the Owner
Trustee shall have all rights, powers and duties set forth herein and, to the
extent not inconsistent herewith, in the Business Trust Statute with respect to
accomplishing the purposes of the Issuer. The Owner Trustee shall file the
Certificate of Trust with the Secretary of State.
Section 2.7. NO LIABILITY OF CERTIFICATEHOLDER. To the fullest extent
permitted by law, no Certificateholder shall have any personal liability for any
liability or obligation of the Issuer.
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Section 2.8. TITLE TO TRUST PROPERTY.
(a) Legal title to all the Trust Property shall be vested at all times
in the Issuer as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Trust Property to be vested in a
trustee or trustees, in which case title shall be deemed to be vested in the
Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.
(b) The Holders shall not have legal title to any part of the Trust
Property. The Holders shall be entitled to receive distributions with respect to
their undivided ownership interest therein only in accordance with Articles V
and IX. No transfer, by operation of law or otherwise, of any right, title or
interest by any Certificateholder of its beneficial or other ownership interest
in the Trust Property shall operate to terminate this Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it of
legal title to any part of the Trust Property.
Section 2.9. SITUS OF TRUST. The Issuer shall be located and
administered in the State of Delaware. The Issuer's assets shall be segregated.
All bank accounts maintained by the Owner Trustee on behalf of the Issuer shall
be located in the State of Delaware. Payments shall be received by the Issuer
only in Delaware and payments will be made by the Issuer only from Delaware. The
Issuer shall not have any employees in any state other than Delaware; provided,
however, that nothing herein shall restrict or prohibit the Owner Trustee, the
Servicer or any agent of the Issuer from having employees within or without the
State of Delaware. The only office of the Issuer shall be at the Corporate Trust
Office in Delaware.
Section 2.10. REPRESENTATIONS AND WARRANTIES OF [_____]. [_____] makes
the following representations and warranties upon which the Owner Trustee relies
in accepting the Trust Property in trust and issuing the Certificates and upon
which the Insurer relies in issuing the Note Policy:
(a) ORGANIZATION AND GOOD STANDING. It is duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power, authority and legal right to own its
properties and to conduct its business as such properties are currently owned
and such business is currently conducted, and had at all relevant times and now
has power, authority and legal right to acquire and own the Receivables and to
enter into and perform its obligations under this Agreement and its Related
Documents.
(b) DUE QUALIFICATION. It is duly qualified to do business as a
foreign corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property or
the conduct of its business and the performance of its obligations under this
Agreement and the Related Documents requires or shall require such
qualifications, licenses or approvals, except where the failure to have such
qualifications, licenses or approvals will not have a material adverse effect on
the interest of the Trust or the Insurer in the Receivables or on it's ability
to perform its obligations under this Agreement and the Related Documents, or
its ability to enforce the Receivables and the other property in the Trust
Property.
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(c) POWER AND AUTHORITY. It has the power and authority to execute and
deliver this Agreement and its Related Documents and to carry out its and their
terms. It has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Issuer and it has duly authorized
such sale and assignment and deposit to the Issuer by all necessary corporate
action and the execution, delivery and performance of this Agreement and its
Related Documents have been duly authorized by all necessary corporate action.
(d) NO CONSENT REQUIRED. No consent, license, approval, authorization
or order of, or registration, declaration or filing with, any Governmental
Authority or other Person is required to be made in connection with the
execution, delivery or performance of this Agreement or its Related Documents or
the consummation of the transactions contemplated hereby or thereby, except such
as have been duly made, effected or obtained.
(e) NO VIOLATION. The execution, delivery and performance by it of
this Agreement and its Related Documents, the consummation of the transactions
contemplated hereby and thereby, and the fulfillment of the terms hereof and
thereof, do not (i) 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, its certificate of incorporation or bylaws, or any indenture, agreement,
mortgage, deed of trust, license or other instrument to which it is a party or
by which it or its properties are bound, (ii) result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or other instrument, or (iii)
violate any law, order, rule or regulation applicable to it of any Governmental
Authority having jurisdiction over it or any of its properties.
(f) BINDING OBLIGATIONS. Its Related Documents, when duly executed and
delivered by the other parties thereto, shall constitute legal, valid and
binding obligations of it enforceable in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(g) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the best of its knowledge, threatened against it before any Governmental
Authority having jurisdiction over it or its properties (i) asserting the
invalidity of any of the Related Documents, (ii) seeking to prevent the issuance
of the Certificates or the Notes or the consummation of any of the transactions
contemplated by the Related Documents, (iii) seeking any determination or ruling
that could reasonably be expected to have a material adverse effect on the
performance by it of its obligations under, or the validity or enforceability
of, any of the Related Documents or (iv) seeking to adversely affect the federal
income tax or other federal, state or local tax attributes of the Certificates
or the Notes or seeking to impose any excise, franchise, transfer or similar tax
upon the Certificates or the Notes or the sale and assignment of the Receivables
under the Related Documents.
Section 2.11. REPRESENTATIONS AND WARRANTIES OF [_______].
(a) ORGANIZATION AND GOOD STANDING. It is duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with
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power, authority and legal right to own its properties and to conduct its
business as such properties are currently owned and such business is currently
conducted, and had at all relevant times and now has power, authority and legal
right to acquire and own the Certificates and to enter into and perform its
obligations under this Agreement and its Related Documents.
(b) DUE QUALIFICATION. It is duly qualified to do business as a
foreign corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property or
the conduct of its business and the performance of its obligations under this
Agreement and the Related Documents requires or shall require such
qualifications, licenses or approvals, except where the failure to have such
qualifications, licenses or approvals will not have a material adverse effect on
the interest of the Trust or the Insurer in the Receivables or on the it's
ability to perform its obligations under this Agreement and the Related
Documents.
(c) POWER AND AUTHORITY. It has the power and authority to execute and
deliver this Agreement and its Related Documents and to carry out its and their
terms. It has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Issuer and it has duly authorized
such sale and assignment and deposit to the Issuer by all necessary corporate
action and the execution, delivery and performance of this Agreement and its
Related Documents have been duly authorized by all necessary corporate action.
(d) NO CONSENT REQUIRED. No consent, license, approval, authorization
or order of, or registration, declaration or filing with, any Governmental
Authority or other Person is required to be made in connection with the
execution, delivery or performance of this Agreement or its Related Documents or
the consummation of the transactions contemplated hereby or thereby, except such
as have been duly made, effected or obtained.
(e) NO VIOLATION. The execution, delivery and performance by it of
this Agreement and its Related Documents, the consummation of the transactions
contemplated hereby and thereby, and the fulfillment of the terms hereof and
thereof, do not (i) 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, its certificate of incorporation or bylaws, or any indenture, agreement,
mortgage, deed of trust, license or other instrument to which it is a party or
by which it or its properties are bound, (ii) result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or other instrument, or (iii)
violate any law, order, rule or regulation applicable to it of any Governmental
Authority having jurisdiction over it or any of its properties.
(f) BINDING OBLIGATIONS. Its Related Documents, when duly executed and
delivered by the other parties thereto, shall constitute legal, valid and
binding obligations of it enforceable in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(g) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the best of its knowledge, threatened against it before any Governmental
Authority having
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jurisdiction over it or its properties (i) asserting the invalidity of any of
the Related Documents, (ii) seeking to prevent the issuance of the Certificates
or the Notes or the consummation of any of the transactions contemplated by the
Related Documents, (iii) seeking any determination or ruling that could
reasonably be expected to have a material adverse effect on the performance by
it of its obligations under, or the validity or enforceability of, any of the
Related Documents or (iv) seeking to adversely affect the federal income tax or
other federal, state or local tax attributes of the Certificates or the Notes or
seeking to impose any excise, franchise, transfer or similar tax upon the
Certificates or the Notes or the sale and assignment of the Receivables under
the Related Documents.
Section 2.12. FEDERAL INCOME TAX ALLOCATIONS. If Certificates are held
by more than one person or the Trust is recharacterized as a separate entity,
interest payments on the Certificates (or other interests in the Trust treated
as equity in the Trust for applicable tax purposes ("Equity Interests"),
including interest on amounts previously due on the Certificates or Equity
Interests but not yet distributed) shall be treated as "guaranteed payments"
under Section 707(c) of the Code. Net income of the Issuer for any month as
determined for Federal income tax purposes (and each item of income, gain, loss
and deduction entering into the computation thereof) shall be allocated:
(a) among the Certificateholders and Equity Interest holders as of the
close of business on the last day of such month, in proportion to their
ownership of principal amount of Certificates and Equity Interests on such date,
an amount of net income up to the sum of: (i) the portion of the market discount
on the Receivables accrued during such month that is allocable to the excess, if
any, of the initial Certificate Balance over their initial aggregate issue
price, (ii) Certificateholders' and Equity Interest holders' prepayment premium,
if any, payable for such month, (iii) any other amounts of income payable to the
Certificateholders or Equity Interest holders for such month; and such sum of
amounts specified in clauses (i) through (iii) of this sentence shall be reduced
by any amortization by the Trust of premium on Receivables that corresponds to
any excess of the issue price of Certificates or Equity Interests over their
principal amount, and
(b) to the Certificateholders and Equity Interest holders as of the
close of business on the last day of such month, in proportion to their
ownership of principal amount of Certificates and Equity Interests on such date,
and other holders of interests in the Reserve Account, to the extent of any
remaining net income, in accordance with their respective interests therein.
If the net income of the Trust for any month is insufficient for the allocations
described in clause (a), subsequent net income shall first be allocated to make
up such shortfall before being allocated as provided in the preceding sentence.
Net losses of the Trust, if any, for any month as determined for Federal income
tax purposes (and each item of income, gain, loss and deduction entering into
the computation thereof) shall be allocated to [_______] (or other holders of
interests in the Reserve Account) to the extent [_______] (or such holders) are
reasonably expected to bear the economic burden of such net losses, and any
remaining net losses shall be allocated among the remaining Certificateholders
and Equity Interest holders as of the close of business on the last day of such
month in proportion to their ownership of principal amount of Certificates and
Equity Interests on such day. [_______] is authorized to modify the allocations
in this paragraph if
9
necessary or appropriate, in its sole discretion, for the allocations to fairly
reflect the economic income, gain or loss to [_______] or to the
Certificateholders or Equity Interest holders, or as otherwise required by the
Code. Notwithstanding anything provided in this Section 2.11, if the
Certificates are held solely by one person or the Trust has not been
recharacterized as a separate entity, the application of this Section 2.11 shall
be disregarded.
Section 2.13. COVENANTS OF [_____]. [_____] agrees and covenants for
the benefit of each Holder, the Insurer and the Owner Trustee, during the term
of this Agreement, and to the fullest extent permitted by applicable law, that:
(a) it shall not, for any reason, institute proceedings for the Issuer
to be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Issuer, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Issuer, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Issuer or a substantial part of the property of the
Issuer or cause or permit the Issuer to make any assignment for the benefit of
creditors, or admit in writing the inability of the Issuer to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Issuer or take any action in furtherance of any such action; and
(b) it shall not, for any reason, prior to the end of the Funding
Period withdraw or attempt to withdraw from this Agreement, dissolve, institute
proceedings for it to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against it, 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 it or a substantial part of its property, or make any assignment
for the benefit of 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.
(c) COVENANTS OF THE HOLDERS. This undertaking is made for the benefit
of the Issuer, the Owner Trustee, the Insurer and all other Holders present and
future. Each Holder agrees:
(d) to be bound by the terms and conditions of the Certificates of
which such 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;
(e) to hereby appoint [_______] as such Holder's agent and
attorney-in-fact to sign any federal income tax information return filed on
behalf of the Issuer and agree that, if requested by the Issuer, it will sign
such federal income tax information return in its capacity as holder of an
interest in the Issuer. Each Holder also hereby agrees that in its tax returns
it will not take any position inconsistent with those taken in any tax returns
filed by the Issuer;
(f) if such Holder is other than an individual or other entity holding
its Certificate through a broker who reports securities sales on Form 1099-B, to
notify the Owner
10
Trustee of any transfer by it of a Certificate in a taxable sale or exchange,
within thirty (30) days of the date of the transfer;
(g) until the completion of the events specified in Section 9.1(e),
not to, for any reason, institute proceedings for the Issuer or [_______] to be
adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against the Issuer or [_______] 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 Issuer or [_______] or a substantial part of its property, or
cause or permit the Issuer or [_______] 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; and
(h) it shall obtain from each counterparty to each Related Document to
which it or the Issuer is a party and each other agreement entered into on or
after the date hereof to which it or the Issuer is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
9.1(e) such counterparty shall not institute against , or join any other Person
in instituting against, it or the Issuer, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or similar proceedings under
the laws of the United States.
ARTICLE III.
CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.1. INITIAL OWNERSHIP. Upon the formation of the Issuer by
the contribution by [_____] pursuant to Section 2.5 and prior to the issuance of
the Certificates pursuant to Section 3.2, [_____] shall be the sole initial
beneficiary of the Issuer.
Section 3.2. THE CERTIFICATES. In consideration of payment of the sum
of $[_________] to the Trust and upon the written order of [_____], the
Certificates shall be initially issued to [_______] in a Certificate Percentage
Interest of 100%. The Certificates shall be executed on behalf of the Issuer by
manual or facsimile signature of an authorized officer of the Owner Trustee.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Issuer shall be validly issued and entitled to the benefit of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of authentication and
delivery of such Certificates. A transferee of a Certificate shall become a
Certificateholder, and shall 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.
Section 3.3. AUTHENTICATION OF CERTIFICATES. Concurrently with the
initial sale of the Receivables to the Issuer pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Certificates in an aggregate
Certificate Percentage Interest equal to 100% to be executed on behalf of the
Issuer, authenticated and delivered to or upon the written order of
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[_____], signed by its chairman of the board, its president or any vice
president, its treasurer or any assistant treasurer without further corporate
action by [_____], in authorized denominations. No Certificate shall entitle its
holder to any benefit under this Agreement, or shall be valid for any purpose,
unless there shall appear on such Certificate a certificate of authentication
substantially in the form set forth in Exhibit A, executed by the Owner Trustee
by manual signature. Such authentication shall constitute conclusive evidence
that such Certificate shall have been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Section 3.4. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
The Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 3.8, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Owner Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. [______________________] shall be
the initial Certificate Registrar.
The Certificate Registrar shall provide the Indenture Trustee with a
list of the names and addresses of the Certificateholder(s) on the Closing Date.
Upon any transfers of Certificates, the Certificate Registrar shall notify the
Servicer, the Insurer and the Indenture Trustee of the name and address of the
transferee in writing, by facsimile, on the day of such transfer.
Upon surrender for registration of transfer of any Certificate at the
office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute, authenticate and deliver (or shall cause its authenticating agent to
authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of a like
class and aggregate Certificate Percentage Interest dated the date of
authentication by the Owner Trustee or any authenticating agent. At the option
of a Holder, Certificates may be exchanged for other Certificates of the same
class in authorized denominations of a like aggregate amount upon surrender of
the Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.8.
Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Certificateholder or his attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Certificate Registrar, which requirements include
membership or participation in the Securities Transfer Agent's Medallion Program
("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 Exchange Act. Each Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by the
Owner Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
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Notwithstanding the preceding provisions of this Section 3.4, the
Owner Trustee shall not be required to make, and the Certificate Registrar shall
not be required to register, transfers or exchanges of Certificates for a period
of fifteen (15) days preceding the due date for any payment with respect to the
Certificates.
In furtherance of and not in limitation of the foregoing, each
Certificateholder, by acceptance of its Certificate, specifically acknowledges
that it has no right to or interest in any monies at any time held pursuant to
the Reserve Account Agreement or prior to the release of such monies pursuant to
Section 4.6(b) of the Sale and Servicing Agreement, such monies being held in
trust for the benefit of the Noteholders and the Insurer. Notwithstanding the
foregoing, in the event that it is ever determined that the monies held in the
Reserve Account constitute a pledge of collateral, then the provisions of the
Sale and Servicing Agreement and the Reserve Account Agreement shall be
considered to constitute a security agreement and [_______] and the
Certificateholders hereby grant to the Collateral Agent for the benefit of the
Noteholders and the Insurer a first priority perfected security interest in such
amounts, to be applied as set forth in Section 3.03 of the Reserve Account
Agreement. In addition, each Certificateholder, by acceptance of its
Certificate, hereby appoints [_______] as its agent to pledge a first priority
perfected security interest in the Reserve Account, and any amounts held therein
from time to time to the Collateral Agent for the benefit of the Indenture
Trustee and the Insurer pursuant to the Reserve Account Agreement and agrees to
execute and deliver such instruments of conveyance, assignment, grant and
confirmation, as well as any financing statements, in each case the Insurer
shall consider reasonably necessary in order to perfect the Collateral Agent's
Security Interest in the Collateral (as such terms are defined in the Reserve
Account Agreement).
Section 3.5. LEGENDING OF CERTIFICATES. Each Certificate shall bear a
legend in substantially the following form:
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE. ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION.
Section 3.6. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar, the Owner Trustee and (unless an Insurer Default
shall have occurred and be continuing) the Insurer, such security or indemnity
as may be reasonably required by them to save each of them harmless, then in the
absence of notice that such Certificate shall have been acquired by a bona fide
purchaser, the Owner Trustee on behalf of the Issuer shall execute and the Owner
Trustee, or the Owner Trustee's authenticating agent, shall 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 Certificate
Percentage Interest. 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 tax or other governmental
charge that may be imposed in connection
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therewith. Any replacement Certificate issued pursuant to this Section 3.6 shall
constitute conclusive evidence of an ownership interest in the Issuer, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 3.7. PERSONS DEEMED CERTIFICATEHOLDER(S). Every Person by
virtue of becoming a Certificateholder in accordance with this Agreement shall
be 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 Insurer and any agent of the Owner Trustee, the
Certificate Registrar and the Insurer, may treat the Person in whose name any
Certificate shall 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, the Insurer or any agent of the Owner
Trustee, the Certificate Registrar or the Insurer shall be bound by any notice
to the contrary.
Section 3.8. ACCESS TO LIST OF CERTIFICATEHOLDER(S)' NAMES AND
ADDRESSES. The Owner Trustee shall furnish or cause to be furnished to the
Servicer, [_____], [_______] or (unless an Insurer Default shall have occurred
and be continuing), the Insurer, within fifteen (15) days after receipt by the
Owner Trustee of a request therefor from such Person in writing, a list of the
names and addresses of the Certificateholder(s) as of the most recent Record
Date. If three or more Holders of Certificates or one or more Holders of
Certificates evidencing not less than a Certificate Percentage Interest equal to
25% apply in writing to the Owner Trustee, and such application states that the
applicants desire to communicate with other Certificateholder(s) with respect to
their rights under this Agreement or under the Certificates and such application
is accompanied by a copy of the communication that such applicants propose to
transmit, then the Owner Trustee shall, within five (5) Business Days after the
receipt of such application, afford such applicants access during normal
business hours to the current list of Certificateholder(s). Each Holder or
Owner, by receiving and holding a Certificate, shall be deemed to have agreed
not to hold any of Triad, [_______], the Servicer, the Owner Trustee, the
Insurer or any agent thereof accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
Section 3.9. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee
shall maintain in [__________], 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 Related Documents may be served. The
Owner Trustee initially designates its Corporate Trust Office for such
purposes. The Owner Trustee shall give prompt written notice to Triad, the
Certificateholder(s) and (unless an Insurer Default shall have occurred and
be continuing) the Insurer of any change in the location of the Certificate
Register or any such office or agency.
Section 3.10. DISPOSITION ONLY WITH CONSENT OF INSURER. The
Certificate is only transferable (i) to an Affiliate of Triad Financial
Corporation whose stock has been pledged to the Insurer or (ii) to another
entity with the prior written consent of the Insurer in its sole discretion and,
in each case in accordance with the restrictions set forth in Section 2.6(m) of
the Insurance Agreement. The Owner Trustee shall cause any Certificate issued to
contain a legend
14
stating "THI CERTIFICATE IS NOT TRANSFERABLE, EXCEPT UNDER THE LIMITED
CONDITIONS SPECIFIED IN THE TRUST AGREEMENT".
Section 3.11. ERISA RESTRICTIONS. No Certificateholder may transfer
its interest in or to any Certificate to or for the account of (i) an employee
benefit plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended "ERISA")) that is subject to the provisions of
Title 1 of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code, or
(iii) any entity whose underlying assets include plan assets by reason of a
plan's investment in the entity (each, a "Benefit Plan"). By accepting and
holding its beneficial ownership interest in its Certificate, the Holder thereof
shall be deemed to have represented and warranted that it is not a Benefit Plan.
ARTICLE IV.
VOTING RIGHTS AND OTHER ACTIONS
Section 4.1. PRIOR NOTICE TO HOLDERS WITH RESPECT TO CERTAIN MATTERS.
With respect to the following matters, the Owner Trustee shall not take any of
the actions set forth below unless at least thirty (30) days before the taking
of such action, the Owner Trustee shall have notified the Certificateholder(s)
and the Insurer in writing of the proposed action and the Instructing Party
(pursuant to Section 4.5, if applicable) shall have notified the Owner Trustee
in writing that such Certificateholder(s) have consented thereto:
(a) the election by the Issuer to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business Trust
Statute or unless such amendment would not materially and adversely affect the
interests of the Certificateholders);
(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 would not materially and adversely affect the interests of the
Certificateholder(s); or
(d) 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 and adversely affect the
interests of the Certificateholder(s).
The Owner Trustee shall notify the Certificateholder(s) in writing of any
appointment of a successor Note Registrar, Indenture Trustee or Certificate
Registrar within five Business Days thereof.
Section 4.2. ACTION BY CERTIFICATEHOLDER(S) WITH RESPECT TO CERTAIN
MATTERS. The Owner Trustee shall not have the power, except upon the direction
of the Insurer or, in the event that an Insurer Default shall have occurred and
be continuing, the Certificateholder(s) in accordance with the Related
Documents, to (a) remove the Servicer under the Sale and Servicing Agreement or
(b) except as expressly provided in the Related Documents, sell the Receivables
after the termination of the Indenture. The Owner Trustee shall take the actions
referred to in the
15
preceding sentence only upon written instructions signed by the Insurer or the
Certificateholder(s) pursuant to Section 4.5, as the case may be, and the
furnishing of indemnification satisfactory to the Owner Trustee by the
Certificateholder(s).
Section 4.3. ACTION BY CERTIFICATEHOLDER(S) WITH RESPECT TO
BANKRUPTCY. To the fullest extent permitted by applicable law, the Owner Trustee
shall not have the power to, and shall not, commence any proceeding or other
actions contemplated by Section 2.13(a) relating to the Issuer.
Section 4.4. RESTRICTIONS ON CERTIFICATEHOLDER(S)' POWER.
(a) No Certificateholder(s) shall 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 Issuer or the Owner Trustee under this Agreement or any of
the Related Documents or would be contrary to Section 2.3 or otherwise contrary
to law nor shall the Owner Trustee be obligated to follow any such direction, if
given.
(b) No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Related Document, unless: (i) the Certificateholder(s) are the
Instructing Party pursuant to Section 6.3 and shall previously have given to the
Owner Trustee a written notice of default and of the continuance thereof, as
provided in this Agreement; (ii) Certificateholder(s) evidencing not less than a
Certificate Percentage Interest equal to 25% shall have made written request to
the Owner Trustee to institute such action, suit or proceeding in its own name
as Owner Trustee under this Agreement and shall 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; (iii) the Owner Trustee, for
thirty (30) days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding; and (iv) during such thirty (30) day period no request or waiver
inconsistent with such written request has been given to the Owner Trustee
pursuant to and in compliance with this Section 4.4(b) or Section 6.3; provided,
however, that each Certificateholder hereby agrees with every other
Certificateholder and the Owner Trustee that no one or more Holders shall have
any right in any manner whatever by virtue or by availing itself or themselves
of any provisions of this Agreement to affect, disturb or prejudice the rights
of any other Holders, or to obtain or seek to obtain priority over or preference
to any other such Holder, or to enforce any right under this Agreement, except
in the manner provided in this Agreement and for the equal, ratable and common
benefit of all Certificateholder(s). For the protection and enforcement of the
provisions of this Section 4.4, each and every Certificateholder and the Owner
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 4.5. MAJORITY CONTROL. No Certificateholder shall have any
right to vote or in any manner otherwise control the operation and management of
the Issuer except as expressly provided in this Agreement. Except as expressly
provided herein, any action that may be taken by the Certificateholder(s) under
this Agreement may be taken by the Holders of Certificates evidencing not less
than a majority of the Certificate Percentage Interest. Except as expressly
provided herein, any written notice of the Certificateholder(s) delivered
pursuant to this
16
Agreement shall be effective if signed by Certificateholder(s) evidencing not
less than a majority of the Certificate Percentage Interest at the time of the
delivery of such notice.
Section 4.6. RIGHTS OF INSURER. Notwithstanding anything to the
contrary in the Related Documents, without the prior written consent of the
Insurer (so long as no Insurer Default shall have occurred and be continuing),
the Owner Trustee shall not (i) remove the Servicer, (ii) initiate any claim,
suit or proceeding by the Issuer or compromise any claim, suit or proceeding
brought by or against the Issuer, other than with respect to the enforcement of
any Receivable or any rights of the Issuer thereunder, (iii) authorize the
merger or consolidation of the Issuer with or into any other business trust or
other entity (other than in accordance with Section 3.10 of the Indenture), (iv)
amend the Certificate of Trust.
ARTICLE V.
CERTAIN DUTIES
Section 5.1. ACCOUNTING AND RECORDS TO THE NOTEHOLDERS,
CERTIFICATEHOLDER(S), THE INTERNAL REVENUE SERVICE AND OTHERS. Subject to
Section 2.6 of this Agreement, Triad shall: (a) maintain (or cause to be
maintained) the books of the Issuer on a calendar year basis on the accrual
method of accounting (including the allocations, net income and net loss under
Section 2.11); (b) prepare and deliver (or cause to be delivered) to each
Certificateholder, as may be required by the Code and applicable Treasury
Regulations, such information as may be required (including Schedule K-1) to
enable each Certificateholder to prepare its federal and state income tax
returns; (c) prepare and file or cause to be filed such tax returns relating to
the Issuer (including a partnership information return, Form 1065), and direct
the Owner Trustee or the Servicer, as the case may be, to make such elections as
may from time to time be required or appropriate under any applicable state or
federal statute or rule or regulation thereunder so as to maintain the Issuer's
characterization as a partnership for federal income tax purposes; and (d)
collect or cause to be collected any withholding tax as required under the Code
with respect to income or distributions to Certificateholder(s) and the
appropriate forms relating thereto. Subject to Section 2.6, the Owner Trustee
shall make all elections pursuant to this Section 5.1 as directed by Triad. The
Owner Trustee shall sign all tax information returns filed pursuant to this
Section 5.1 and any other returns as may be required by law, and in doing so
shall rely entirely upon, and shall have no liability for information provided
by, or calculations provided by, Triad or the Servicer, as the case may be. The
Owner Trustee shall elect under Section 1278 of the Code to include in income
currently any market discount that accrues with respect to the Receivables. The
Owner Trustee shall not make the election provided under Section 754 of the
Code.
Section 5.2. SIGNATURE ON RETURNS; TAX MATTERS PARTNER.
(a) Notwithstanding the provisions of Section 5.1 and subject to
Section 2.6, the Owner Trustee shall sign on behalf of the Issuer the tax
returns of the Issuer, if any, unless applicable law requires a
Certificateholder to sign such documents, in which case such documents shall be
signed by [_______].
17
(b) Subject to Section 2.6, [_______] shall be the "tax matters
partner" of the Issuer pursuant to the Code.
Section 5.3. PAYMENTS TO CERTIFICATEHOLDERS. On each Payment Date, the
Indenture Trustee will distribute to the Certificateholder(s) as of the related
Determination Date each such Certificateholder's Certificate Percentage Interest
in the amount to be distributed on such Payment Date pursuant to Section
4.6(b)(x) of the Sale and Servicing Agreement by wire transfer or check mailed
to such Certificateholder.
ARTICLE VI.
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.1. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Related Documents to which the Issuer is
named as a party and each certificate or other document attached as an exhibit
to or contemplated by the Related Documents to which the Issuer is named as a
party and any amendment thereto, in each case in such form as [_____] shall
approve as evidenced conclusively by the Owner Trustee's execution thereof, and
on behalf of the Issuer, to direct the Indenture Trustee to authenticate and
deliver the Notes in the aggregate principal amount of $[________]. In addition
to the foregoing, the Owner Trustee is authorized, but shall not be obligated,
to take all actions required of the Issuer pursuant to the Related Documents.
The Owner Trustee is further authorized from time to time to take such action as
the Instructing Party recommends with respect to the Related Documents so long
as such activities are consistent with the terms of the Related Documents.
Section 6.2. GENERAL DUTIES. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the term of this Agreement and to administer the Issuer in the interest of the
Holders, subject to the Related Documents to which the Issuer is a party and in
accordance with the provisions of this Agreement. Notwithstanding the foregoing,
the Owner Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the Related Documents to the extent the
Servicer has agreed in the Sale and Servicing Agreement or [_______] has agreed
in this Agreement to perform any act or to discharge any duty of the Owner
Trustee hereunder or under any Related Document, and the Owner Trustee shall not
be liable for the default or failure of the Servicer, [_______] to carry out any
of their obligations under the Sale and Servicing Agreement or this Agreement,
respectively, except with respect to obligations redelegated back to the Owner
Trustee.
Section 6.3. ACTION UPON INSTRUCTION. (a) Subject to Article IV, the
Instructing Party shall have the exclusive right to direct the actions of the
Owner Trustee in the management of the Issuer, so long as such instructions are
not inconsistent with the express terms set forth herein or in any Related
Document. The Instructing Party shall not instruct the Owner Trustee in a manner
inconsistent with this Agreement or the Related Documents.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Related Document, other than its express duties, if the
Owner Trustee shall have reasonably determined, or shall have been advised by
counsel, that such action is likely to result in
18
liability on the part of the Owner Trustee or is contrary to the terms hereof or
of any Related 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
Related Document, the Owner Trustee shall promptly give notice (in such form as
shall 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 shall not be
liable on account of such action to any Person. If the Owner Trustee shall not
have received appropriate instruction within ten (10) days of delivery of such
notice (or within such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action, as it shall deem to
be in the best interests of the Certificateholder(s), and shall 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 Related Document or any such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or if this Agreement permits any determination by
the Owner Trustee or is silent or is incomplete as to the course of action that
the Owner Trustee is required to take with respect to a particular set of facts,
the Owner Trustee may give notice (in such form as shall 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 (so long as the same is not
manifestly inconsistent with this Agreement or a Related Document), the Owner
Trustee shall not be liable, on account of such action or inaction, to any
Person. If the Owner Trustee shall not have received appropriate instruction
within ten (10) days of delivery of such notice (or within such shorter period
of time as reasonably may be specified in such notice or may be necessary under
the circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, as it shall deem to be in the best interests of the
Certificateholder(s), and shall have no liability to any Person for such action
or inaction.
Section 6.4. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of or
otherwise deal with the Trust Property, 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 Related Document, document or written instruction
received by the Owner Trustee pursuant to Section 6.3; and no implied duties or
obligations shall be read into this Agreement or any Related Document against
the Owner Trustee. The Owner Trustee nevertheless agrees that it will, at its
own cost and expense, promptly take all action as may be necessary to discharge
any Liens on any part of the Trust Property 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 Trust Property.
Section 6.5. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part
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of the Trust Property or take any action on the part of the Issuer 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 Related Documents
and (c) in accordance with any document or instruction conforming with and
delivered to the Owner Trustee pursuant to Section 6.3.
Section 6.6. RESTRICTIONS. The Owner Trustee shall not take any action
that, to the actual knowledge of a Responsible Officer the Owner Trustee, would
result in the Issuer's becoming taxable as a corporation for federal income tax
purposes or for the purposes of any applicable state tax on corporations. The
Certificateholder(s) shall not direct the Owner Trustee to take action that
would violate the provisions of this Section 6.6.
ARTICLE VII.
CONCERNING THE OWNER TRUSTEE
Section 7.1. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Trust Property upon the terms of the Related Documents and this
Agreement. The Owner Trustee (in its individual or trust capacities) shall not
be answerable or accountable hereunder or under any Related Document under any
circumstances, except (i) for its own willful misconduct, bad faith or
negligence (other than errors in judgment), (ii) in the case of the inaccuracy
of any representation or warranty contained in Section 7.3 expressly made by the
Owner Trustee in its individual capacity, (iii) for liabilities arising from the
failure of the Owner Trustee to perform obligations expressly undertaken by it
in the last sentence of Section 6.4, (iv) for taxes, fees or other charges on,
based on or measured by, any fees, commissions or compensation received by the
Owner Trustee or (v) for any investments issued by the Owner Trustee or any
branch or affiliate thereof in its commercial capacity. In particular, but not
by way of limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Owner Trustee (in its individual or trust capacities) shall
not be liable for any error of judgment made by a Responsible Officer of the
Owner Trustee;
(b) the Owner Trustee (in its individual or trust capacities) shall
not be liable with respect to any action taken or omitted to be taken by it in
accordance with the instructions (not inconsistent with this Agreement or any
Related Document) of the Instructing Party, the Servicer or any
Certificateholder;
(c) no provision of this Agreement or any Related Document shall
require the Owner Trustee (in its individual or trust capacities) 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 Related Document if the Owner
Trustee shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
or provided to it;
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(d) the Owner Trustee (in its individual or trust capacities) shall
not be responsible for or in respect of the validity or sufficiency of this
Agreement or for the due execution hereof by [_______], Triad or [_____] or for
the form, character, genuineness, sufficiency, value or validity of any of the
Trust Property or for or in respect of the validity or sufficiency of the
Related Documents, other than the certificate of authentication on the
Certificates, and the Owner Trustee shall in no event assume or incur any
liability, duty or obligation to Triad or [_____], the Insurer, the Indenture
Trustee, any Noteholder or to any Certificateholder, other than as expressly
provided for herein and in the Related Documents;
(e) the Owner Trustee (in its individual or trust capacities) shall
not be liable for the default or misconduct of Triad, [_______], [_____], the
Insurer, the Indenture Trustee, or the Servicer under any of the Related
Documents or otherwise, and the Owner Trustee shall have no obligation or
liability to perform the obligations under this Agreement or the Related
Documents that are required to be performed by Triad, [_______], or [_____]
under this Agreement, the Indenture Trustee under the Indenture or the Servicer
under the Sale and Servicing Agreement; and
(f) the Owner Trustee (in its individual or trust capacities) shall be
under no obligation to exercise any of the rights or powers vested in it by this
Agreement, other than its express duties, or to institute, conduct or defend any
litigation under this Agreement or otherwise or in relation to this Agreement or
any Related Document, at the request, order or direction of the Instructing
Party or any of the Certificateholder(s), unless such Instructing Party or
Certificateholder(s) have offered to the Owner Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities that
may reasonably 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 Related Document shall not be construed as a duty, and the Owner
Trustee (in its individual or trust capacities) shall not be answerable for
other than its negligence (other than errors in judgment), bad faith or willful
misconduct in the performance of any such act.
Section 7.2. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
to the Certificateholder(s), 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 Related Documents.
Section 7.3. REPRESENTATIONS AND WARRANTIES. The Owner Trustee hereby
represents and warrants in its individual capacity to Triad, the Holders and the
Insurer (which shall have relied on such representations and warranties in
issuing the Note Policy), that:
(a) It is a Delaware banking corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
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(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 or any judgment
or order binding on it, or constitute any default under its charter documents or
by-laws or any indenture, mortgage, contract, agreement or instrument to which
it is a party or by which any of its properties may be bound.
(d) This Agreement has been duly authorized, executed and delivered by
it and constitutes a legal, valid and binding obligation of it, enforceable
against it, in accordance with its terms.
(e) No consent, approval or other authorization of, or registration,
declaration or filing with, any court or governmental agency or commission of
the State of Delaware is required by or with respect to it for the valid
execution and delivery of this Agreement, or for the validity or enforceability
thereof, other than the filing of the Certificate of Trust.
Section 7.4. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate signed by the
president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Related 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 (with respect to acts or omissions of attorneys that are not employees
of the Owner Trustee) shall not be liable for the conduct or misconduct of such
attorneys if such attorneys shall have been selected by the Owner Trustee with
reasonable care, and (ii) may consult with counsel, accountants and other
skilled persons to be selected with reasonable care and employed by it. The
Owner Trustee shall not be liable for anything done, suffered or omitted in good
faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and according to such opinion not
contrary to this Agreement or any Related Document.
Section 7.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article VII, in accepting the trusts hereby created, the 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 Related Document shall look only to the
Trust Property for payment or satisfaction thereof.
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Section 7.6. 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) shall be taken as
the statements of [_______] 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, any Related Document, the
Certificates (other than the signature and countersignature of the Owner Trustee
on the Certificates), the Notes (other than the signature of the Owner Trustee
on the Notes) or any Receivable or related documents (other than enforceability
against the Owner Trustee). The Owner Trustee shall 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 (except as
required by the Indenture) the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Property or its ability
to generate the payments to be distributed to Certificateholder(s) 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 Issuer or of any intervening assignment; the
completeness of any Receivable; the performance or enforcement of any
Receivable; the compliance by [_____], [_______], the Servicer or any other
Person with any warranty or representation made under any Related 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 7.7. PAYMENTS FROM TRUST PROPERTY. All payments to be made by
the Owner Trustee under this Agreement or any of the Related Documents to which
the Issuer or the Owner Trustee is a party shall be made only from the income
and proceeds of the Trust Property, only to the extent not otherwise directed to
be made by the Indenture Trustee and only to the extent that the Owner Trustee
shall have received income or proceeds from the Trust Property to make such
payments in accordance with the terms hereof.
[______________________] or any successor thereto, in its individual capacity,
shall not be liable for any amounts payable under this Agreement or any of the
Related Documents to which the Issuer or the Owner Trustee is a party, except
any expenses arising from or resulting from any of the matters described in the
third sentence of Section 7.1.
Section 7.8. DOING BUSINESS IN OTHER JURISDICTIONS. Notwithstanding
anything contained herein to the contrary, neither [______________________] or
any successor thereto, nor the Owner Trustee shall be required to take any
action in any jurisdiction other than in the State of Delaware if the taking of
such action will, even after the appointment of a co-trustee or separate trustee
in accordance with Section 10.5, (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; or (b)
subject [______________________] (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
[______________________] (or any successor thereto) or the Owner Trustee, as the
case may be, contemplated hereby.
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ARTICLE VIII.
COMPENSATION AND INDEMNIFICATION OF OWNER TRUSTEE
Section 8.1. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon between the Servicer and the Owner Trustee, and the Owner
Trustee shall be entitled to be reimbursed by the Issuer or [_______] 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 Related Documents
("Expenses"). The Owner Trustee shall also be entitled to be reimbursed by
[_______] for any organizational expenses of the Issuer.
Section 8.2. INDEMNIFICATION. Triad shall defend, indemnify and hold
harmless the Owner Trustee to the extent provided in Section 8.1 of the Sale and
Servicing Agreement, as dated the date hereof and incorporated herein by
reference.
Section 8.3. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Trust Property immediately after such payment.
Section 8.4. NON-RECOURSE OBLIGATIONS. Notwithstanding anything in
this Agreement or any Related Document, the Owner Trustee agrees in its
individual capacity and in its capacity as Owner Trustee for the Issuer that all
obligations of the Issuer to the Owner Trustee individually or as Owner Trustee
for the Issuer shall be recourse to the Trust Property only and specifically
shall not be recourse to the assets of any Holder.
ARTICLE IX.
TERMINATION OF TRUST AGREEMENT
Section 9.1. TERMINATION OF TRUST AGREEMENT. (a) The Issuer shall
dissolve and this Agreement shall terminate and be of no further force or effect
upon the latest of (i) the maturity or other liquidation of the last Receivable
(including the purchase by the Servicer at its option of the Receivables and
other Trust Property of the Issuer 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 Related Documents, (ii) the payment to
Certificateholders and Noteholders of all amounts required to be paid to them
pursuant to this Agreement, the Indenture and the Sale and Servicing Agreement
and the payment to the Insurer of all amounts payable or reimburseable to it
pursuant to the Sale and Servicing Agreement, (iii) the expiration of the Note
Policy in accordance with its terms, or (iv) payment to the Insurer of all
amounts due to the Insurer under the Insurance Agreement; provided, however,
that the rights to indemnification under Section 8.1 and the rights under
Section 10.1 shall survive the dissolution of the Issuer. The Servicer shall
promptly notify the Owner Trustee and the Insurer of any prospective termination
or dissolution pursuant to this Section 9.1. The bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder, shall not (x) operate
to terminate this Agreement or dissolve
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the Issuer, 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 affairs of the Issuer or
Trust Property nor (z) otherwise affect the rights, obligations and liabilities
of the parties hereto.
(b) Except as provided in Section 9.1(a), neither Triad, [_____] nor
any Certificateholder shall be entitled to revoke the trust created hereby or
otherwise dissolve the Issuer.
(c) Notice of any dissolution of the Issuer, specifying the Payment
Date upon which the Certificateholder(s) shall surrender their Certificates to
the Indenture Trustee for payment of the final distribution and cancellation,
shall be given by the Owner Trustee by letter to Certificateholder(s) mailed
within five (5) 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 Payment Date upon or with respect to which final payment of the
Certificates shall be made upon presentation and surrender of the Certificates
at the office of the Indenture Trustee therein designated, (ii) the amount of
any such final payment, (iii) that the Record Date otherwise applicable to such
Payment Date is not applicable, payments being made only upon presentation and
surrender of the Certificates at the office of the Indenture Trustee therein
specified and (iv) that no amount will thereafter be payable under the
Certificates. The Owner Trustee shall give such notice to the Certificate
Registrar (if other than the Owner Trustee) and the Indenture Trustee at the
time such notice is given to Certificateholder(s). Upon presentation and
surrender of the Certificates, the Indenture Trustee shall cause to be
distributed to Certificateholder(s) amounts distributable on such Payment Date
pursuant to Section 4.6(b)(x) of the Sale and Servicing Agreement.
In the event that all of the Certificateholder(s) shall not surrender
their Certificates for cancellation within two months after the date specified
in the above mentioned written notice, the Owner Trustee shall give a second
written notice to the remaining Certificateholder(s) to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholder(s) concerning surrender of their Certificates,
and the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Any funds held by the Issuer after exhaustion
of such remedies shall be distributed, subject to applicable escheat laws, by
the Owner Trustee to [_______] and Holders shall look solely to [_______] for
payment.
(d) Any funds held by the Issuer after funds for final payment have
been distributed or set aside for payment shall be distributed by the Owner
Trustee to [_______].
(e) Upon the winding up of the Issuer and its termination, the Owner
Trustee shall 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 Business Trust Statute.
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ARTICLE X.
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation: (a) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (b) authorized to exercise
corporate trust powers; (c) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authorities; and (iv) acceptable to the Insurer in its reasonable discretion, so
long as an Insurer Default shall not have occurred be continuing. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section 10.1, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section 10.1, the Owner Trustee shall resign immediately in the manner and
with the effect specified in Section 10.2.
Section 10.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to [_______], the Insurer and the Servicer.
Upon receiving such notice of resignation, [_______] shall, with the prior
written consent of the Insurer, promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee, provided that [_______] shall have received written confirmation from
each of the Rating Agencies that the proposed appointment will not result in an
increased capital charge to the Insurer by either of the Rating Agencies. If no
successor Owner Trustee shall have been so appointed and have accepted
appointment within thirty (30) days after the giving of such notice of
resignation, the resigning Owner Trustee or the Insurer may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by [_______] or any other entity authorized to make
such request, or if at any time the Owner Trustee shall be legally unable to
act, or shall be adjudged bankrupt or insolvent, or a receiver of the Owner
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Owner Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then such requesting
party may remove the Owner Trustee. If [_______] shall remove the Owner Trustee
under the authority of the immediately preceding sentence, [_______], with the
prior written consent of the Insurer, shall promptly appoint a successor Owner
Trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the outgoing Owner Trustee so removed, one copy to the Insurer
and one copy to the successor Owner Trustee and all fees owed to the outgoing
Owner Trustee shall be paid.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section 10.2
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.3 and payment of all fees and expenses owed
to the outgoing Owner Trustee. The successor Owner
26
Trustee shall provide notice of such resignation or removal of the Owner Trustee
each of the Rating Agencies.
Section 10.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to
[_______], the Servicer, the 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 shall become effective
and such successor Owner Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall deliver to the successor
Owner Trustee all documents and statements and monies held by it under this
Agreement. [_______] and the predecessor Owner Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor Owner Trustee all
such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the successor Owner Trustee shall mail notice of the successor
of such Owner Trustee to all Certificateholder(s), the Indenture Trustee, and
the Rating Agencies. If the Servicer shall fail to mail such notice within ten
(10) days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Servicer.
Section 10.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing (other than the filing of an amendment to the
Certificate of Trust with the Secretary of State) of any instrument or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
Section 10.5. 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 Trust Property or any Financed Vehicle may at the time be located, the
Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee and the Instructing Party to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Property, and to vest in such Person, in such capacity, such title
to the Issuer, or any part thereof, and, subject to the other provisions of this
Section 10.5, such powers, duties, obligations, rights and trusts as the
27
Servicer and the Owner Trustee may consider necessary or desirable. If the
Servicer shall not have joined in such appointment within fifteen (15) days
after the receipt by it of a request so to do, the Owner Trustee, subject,
unless an Insurer Default shall have occurred and be continuing, to the approval
of the Insurer (which approval shall not be unreasonably withheld), shall have
the power to make such appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 10.1 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Owner Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
Issuer or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but solely at
the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Servicer and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to 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 shall refer to this Agreement and
the conditions of this Section 10.5. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall 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 shall be filed with the
Owner Trustee and a copy thereof given to the Servicer and the 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
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
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ARTICLE XI.
MISCELLANEOUS
Section 11.1. SUPPLEMENTS AND AMENDMENTS. (a) This Agreement may be
amended by Triad, [_______], [_____] and the Owner Trustee, with the prior
written consent of the Insurer (so long as an Insurer Default shall not have
occurred and be continuing) and with prior written notice to the Rating
Agencies, without the consent of any of the Noteholders or any other
Certificateholder(s): (i) to cure any ambiguity or defect; or (ii) to correct or
supplement any provisions in this Agreement; provided, however, that such action
under this clause (ii) shall not, as evidenced by an Opinion of Counsel (which
may be based upon a certificate of the Servicer) delivered to the Owner Trustee
and the Rating Agency 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 Insurer (so long as an Insurer Default shall not
have occurred and be continuing) by Triad, [_______], [_____] and the Owner
Trustee, with prior written notice to the Rating Agencies and with the consent
of the Holders of Notes evidencing not less than the Note Majority and the
consent of the Certificateholder(s) evidencing not less than a majority
Certificate Percentage Interest (which consent of any Holder of a Certificate or
Note given pursuant to this Section 11.1(b) or pursuant to any other provision
of this Agreement shall be conclusive and binding on such Holder and on all
future Holders of such Certificate or Note and of any Certificate or Note issued
upon the transfer thereof or in exchange thereof or in lieu thereof whether or
not notation of such consent is made upon the Certificate or Note) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Noteholders or the Certificateholder(s); provided, however, that, the Rating
Agency Condition shall have been satisfied with respect to any such amendment
prior to the execution thereof; and provided, further, that, subject to the
express rights of the Insurer under the Related Documents, no such amendment
shall (i) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on Receivables, payments that shall be
required to be made on any Certificate or Note, or yield on the Certificates or
the Class A Interest Rate, or (ii) reduce the aforesaid percentage required to
consent to any such amendment or any waiver hereunder, without the consent of
the Holders of all Certificates and Notes then outstanding.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Noteholders, the Indenture
Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholder(s), the
Noteholders or the Indenture Trustee pursuant to this Section 11.1(b) to approve
the particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Certificateholder(s) or
Noteholders provided for in this Agreement or in any other Related Document) and
of evidencing the authorization of the execution thereof by Certificateholder(s)
or Noteholders shall be subject to such reasonable requirements as the Owner
Trustee may prescribe.
29
Promptly after the execution of any amendment to the Certificate of Trust, the
Owner Trustee shall cause the filing of such amendment with the Secretary of
State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Section 11.1 and that all conditions precedent
to the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall 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 11.2. NO LEGAL TITLE TO TRUST PROPERTY IN
CERTIFICATEHOLDER(S). The Certificateholder(s) shall not have legal title to any
part of the Trust Property. The Certificateholder(s) shall be entitled to
receive distributions with respect to their undivided ownership interest therein
only in accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title or interest of the Certificateholder(s) to and in
their ownership interest in the Trust Property shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Trust Property.
Section 11.3. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Owner Trustee (in its individual and
trust capacities), Triad, [_______], [_____], the Certificateholder(s), the
Servicer, the Indenture Trustee and, to the extent expressly provided herein,
the Insurer, the Noteholders, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Trust Property or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
Section 11.4. NOTICES. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed first class mail or certified mail, in each case return receipt
requested, and shall be deemed to have been duly given upon receipt: (i) if to
the Trust or the Owner Trustee, addressed to the Corporate Trust Office with a
copy to Triad; (ii) if to [_____], addressed to
[___________________________________]; (iii) if to Triad, addressed to Triad
Financial Corporation, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; (iv) if to [_______], addressed to
[________________________________________________________________________], and
(v) if to the Insurer, addressed to Insurer,
[_____________________________________], (in each case in which notice or other
communication to [______________] refers to an Event of Default, a claim on the
Note Policy or with respect to which failure on the part of [___________] to
respond shall be deemed to constitute consent or acceptance, then a copy of such
notice or other communication shall also be sent to the attention of the General
Counsel and the Head-Financial Guaranty Group "URGENT MATERIAL ENCLOSED"); or,
as to each party, at such other address as shall be designated by such party in
a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be
30
conclusively presumed to have been duly given, whether or not the Certificate
holder receives such notice.
Section 11.5. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 11.6. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 11.7. ASSIGNMENTS. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns. This Agreement shall also inure to the benefit of the Insurer
for so long as an Insurer Default shall not have occurred and be continuing.
Without limiting the generality of the foregoing, all covenants and agreements
in this Agreement which confer rights upon the Insurer shall be for the benefit
of and run directly to the Insurer, and the Insurer shall be entitled to rely on
and enforce such covenants and agreements, subject, however, to the limitations
on such rights provided in this Agreement and the Related Documents. The Insurer
may disclaim any of its rights and powers under this Agreement (but not its
duties and obligations under the Note Policy) upon delivery of a written notice
to the Owner Trustee.
Section 11.8. NO PETITION. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), 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, hereby covenants
and agrees that they will not at any time institute against [_____] or
[_______], or join in any institution against [_____] or [_______] of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates, the
Notes, this Agreement or any of the Related Documents.
Section 11.9. BANKRUPTCY MATTERS. To the fullest extent permitted by
law, no Certificateholder or any party to this Agreement shall take any action
to cause the Issuer to dissolve in whole or in part or file a voluntary petition
or otherwise initiate proceedings to have the Issuer adjudicated bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against the Issuer, or file a petition seeking or consenting to reorganization
or relief of the Issuer as debtor under any applicable federal or state law
relating to bankruptcy, insolvency or other relief for debtors with respect to
the Issuer; or seek or consent to the appointment of any trustee, receiver,
conservator, assignee, sequestrator, custodian, liquidator (or other similar
official) of the Issuer or of all or any substantial part of the properties and
assets of the Issuer, or cause the Issuer to make any general assignment for the
benefit of creditors of the Issuer or take any action in furtherance of any of
the above actions unless each Certificateholder and the Indenture Trustee shall
have provided its written consent.
31
Section 11.10. NO RECOURSE. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Issuer only and do not represent interests in or
obligations of Triad, the Servicer, [_______], [_____], the Owner Trustee, the
Insurer, the Indenture Trustee or any Affiliate thereof and no recourse may be
had against such parties or their assets, except as may be expressly set forth
or contemplated in this Agreement, the Certificates or the Related Documents.
Section 11.11. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.13. SERVICER. The Servicer is authorized to prepare, or
cause to be prepared, execute and deliver on behalf of the Issuer all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Issuer or Owner Trustee to prepare, file or deliver pursuant
to the Related Documents. Upon written request, the Owner Trustee shall execute
and deliver to the Servicer a limited power of attorney appointing the Servicer
the Issuer'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.
32
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
[___________________________],
as Owner Trustee
By:___________________________
Name: ________________________
Title: _______________________
[______________________________],
as Holder of the Certificate
By: ___________________________
Name:
_________________________
Title:
_________________________
TRIAD FINANCIAL CORPORATION, as
Servicer
By:
____________________________
Name:
___________________________
Title:
__________________________
[________________________________],
as Company
By:
_____________________________
Name:
____________________________
Title:
___________________________
33
EXHIBIT A
___% Certificate Percentage Interest
NUMBER
R-
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT UNDER THE LIMITED CIRCUMSTANCES
SPECIFIED IN THE TRUST AGREEMENT.*
ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Issuer, as defined below, the property of which includes a pool of motor vehicle
retail installment contracts secured by new or used automobiles or light-duty
trucks and sold by Triad Financial Corporation, a California corporation
("Triad" or in its capacity as Servicer under the Sale and Servicing Agreement
(as defined below), the "Servicer") to [_________________________________], a
[__________] corporation ("[_____]"), and by [_____] to the Issuer.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE. ANY RESALE, TRANSFER OR
OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION
MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION.
THIS CERTIFICATE MAY NOT BE PURCHASED BY EMPLOYEE BENEFIT PLANS THAT ARE SUBJECT
TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
PERSONS USING ASSETS OF SUCH PLANS.
(THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF TRIAD, THE
SERVICER, [_____] OR ANY AFFILIATE THEREOF, EXCEPT TO THE LIMITED EXTENT
DESCRIBED BELOW.)
________________
* [To be inserted on the Certificate to be held by Triad SPE].
A-1
THIS CERTIFIES THAT ____________________ is the registered owner of a
___% Certificate Percentage Interest that is a nonassessable, fully-paid,
beneficial ownership interest in certain distributions of Triad Auto Receivables
Owner Trust 199[___]-[_____] (the "Issuer") formed by [_____].
The Issuer was created pursuant to a Trust Agreement, dated as of
[__________] (the "Trust Agreement"), between Triad, [_______], [_____] and
[______________________], 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 Certificate is one of the duly authorized Certificates designated
as "Asset Backed Certificates" (herein called the "Certificates"). Also issued
under the Indenture, dated as of [__________], between the Issuer,
[________________________], as Indenture Trustee (the "Indenture Trustee"), is
one class of Notes designated as "Class A Asset Backed Notes" (the "Class A
Notes" or the "Notes"). This Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the holder of this Certificate by virtue of the acceptance hereof
assents and by which such holder is bound. The property subject to the Trust
Agreement includes a pool of motor vehicle retail installment contracts secured
by new and used automobiles and light-duty trucks (the "Receivables"), all
monies received thereunder or in respect thereof on or 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, dated as of [__________] (the "Sale and Servicing Agreement"),
between Triad, [_____] and the Indenture Trustee, all right to and interest of
[_____] in and to the Receivables Purchase Agreement, dated as of [__________],
between Triad and [_____], and all proceeds of the foregoing.
Under the Trust Agreement, there will be distributed on the [_____]
day of each month (or, if such [_____] day is not a Business Day, the next
Business Day) (the "Payment Date"), commencing on [___________], to the Person
in whose name this Certificate is registered at the close of business on the
Business Day preceding such Payment Date (the "Record Date"), such
Certificateholder's Certificate Percentage Interest in the amount to be
distributed to Certificateholders on such Payment Date
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.
The holder of this Certificate, by acceptance of this Certificate,
specifically acknowledges that it has no right to or interest in any monies at
any time held pursuant to the Reserve Account Agreement or prior to the release
of such monies pursuant to Section 4.6(b)(x) of the Sale and Servicing
Agreement, such monies being held in trust for the benefit of the Noteholders
and the Insurer. Notwithstanding the foregoing, in the event that it is ever
determined that the monies held in the Reserve Account constitute a pledge of
collateral, then the
A-2
provisions of the Sale and Servicing Agreement and the Reserve Account Agreement
shall be considered to constitute a security agreement and the holder this
Certificate hereby grants to the Collateral Agent for the benefit of the
Noteholders and the Insurer a first priority perfected security interest in such
amounts, to be applied as set forth in Section 3.03 of the Reserve Account
Agreement. In addition, each Certificateholder, by acceptance of its
Certificate, hereby appoints [_______] as its agent to pledge a first priority
perfected security interest in the Reserve Account, and any amounts held therein
from time to time to the Collateral Agent for the benefit of the Indenture
Trustee and the Insurer pursuant to the Reserve Account Agreement and agrees to
execute and deliver such instruments of conveyance, assignment, grant, and
confirmation, as well as any financing statements, in each case as the Insurer
shall consider reasonably necessary in order to perfect the Collateral Agent's
Security Interest in the Collateral (as such terms are defined in the Reserve
Account Agreement).
It is the intent of Triad, the Servicer, [_____] and the
Certificateholders that, for purposes of all applicable federal and state income
taxes, until the Certificates are held by more than one person or the Trust is
recharacterized as a separate entity, the Trust will be disregarded as an entity
separate from its owner. If the Certificates are held by more than one person or
the Trust is recharacterized as a separate entity, it is the intent of
[_______], the Servicer and the Certificateholder that, for purposes of all
applicable federal and state income taxes, the Issuer will be treated as a
partnership and the Certificateholders (including [_______]) will be treated as
partners in that partnership. [_______] and any other Certificateholders by
acceptance of a Certificate, agree to treat, and to take no action inconsistent
with such treatment of, the Certificates for such tax purposes.
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Issuer or [_______], or join in any institution against the Issuer or
[_______] of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Certificates, the Notes, the Trust Agreement or any of the Related
Documents.
Distributions on this Certificate will be made on behalf of the Owner
Trustee by the Indenture Trustee as provided in the Sale and Servicing Agreement
by wire transfer or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon. Except as otherwise provided in the Trust
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 in the [______________________________________].
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Certificate shall not entitle the
A-3
holder hereof to any benefit under the Trust Agreement or the Sale and Servicing
Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE 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 SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
A-4
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not
in its individual capacity, has caused this Certificate to be duly executed.
TRIAD AUTO RECEIVABLES OWNER
TRUST 199[____]-[_____]
By: [______________________], not in its
individual capacity, but solely
as Owner Trustee
Dated: [______________] By:
________________________________
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Trust Agreement.
[________________________], [_______________________],
as Owner Trustee or as Owner Trustee
By: By:
_______________________ _____________________
Authenticating Agent
By: ________________________
A-5
(Reverse of Certificate)
The Certificates do not represent an obligation of, or an interest in,
Triad, 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 Trust Agreement, the
Sale and Servicing Agreement or the Related 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 Trust
Agreement and 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 Seller, and at such other places,
if any, designated by the Seller, 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
Triad and the rights of the Certificateholder(s) under the Trust Agreement at
any time by Triad, [_____] and the Owner Trustee with the consent of Holders of
Certificates evidencing not less than a majority of the outstanding Certificate
Percentage Interest of the Certificates. Any such consent by the holder of this
Certificate shall be conclusive and binding on such holder and on all future
holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Trust Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
holders of any of the Certificates.
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 in the [______________________], 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 one or more new Certificates
in authorized denominations evidencing the same aggregate interest in the Issuer
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is [______________________].
As provided in the Trust Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates in
authorized denominations evidencing the same aggregate denomination, as
requested by the holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar, the Insurer and any
agent of the Owner Trust, the Certificate Registrar or the 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
A-6
Certificate Registrar, the Insurer, nor any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Sale and Servicing Agreement and the Trust created by the Trust
Agreement shall terminate upon the payment to Certificateholder(s) and
Noteholders of all amounts required to be paid to them pursuant to the Trust
Agreement and the Sale and Servicing Agreement. The Servicer of the Receivables
may at its option purchase Receivables and other property of the Issuer at a
price specified in the Sale and Servicing Agreement, and such purchase of the
Receivables and other property of the Issuer will effect early retirement of the
Certificates; provided, 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 Aggregate Principal Balance has declined to less than 10% of the
Original Pool Balance.
The Certificates may not be purchased by (a) an employee benefit plan
(as defined in Section 3(3) of ERISA) that is subject to the provisions of Title
I of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding this
Certificate, the Holder hereof shall be deemed to have represented and warranted
that it is not a Benefit Plan.
The recitals contained herein shall be taken as the statements of
Triad, [_______] or the Servicer, as the case may be, 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.
A-7
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-8
EXHIBIT B
FORM OF
CERTIFICATE OF TRUST OF
TRIAD AUTO RECEIVABLES OWNER TRUST 199[ ]-[ ]
This Certificate of Trust of Triad Auto Receivables Owner Trust 199
[____]-[_____] (the "Trust"), dated as of [____________________], is being
duly executed and filed by [______________________], a Delaware banking
corp., to form a business trust under the Delaware Business Trust Act (12
Del, Code, ss. 3801 et seq.).
1. Owner Name. The name of the business trust formed hereby is "Triad
Auto Receivables Owner Trust 199[____]-[_____]."
2. Trustee. The name and principal place of business of the trustee of
the Trust in the State of Delaware is [_____________________________].
3. Effective Date. This Certificate of Trust will be effective
[____________].
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
[____________________________],
as Owner Trustee
By:
______________________________
Name:
________________________
Title:
_________________________
B-1
