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INDENTURE
between
TRIAD AUTO RECEIVABLES OWNER TRUST 1999-1
and
THE CHASE MANHATTAN BANK
as Indenture Trustee
Dated as of March 1, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE..........................3
Section 1.1. Definitions..............................................3
Section 1.2. Incorporation by Reference of Trust Indenture Act........9
Section 1.3. Rules of Construction....................................9
Section 1.4. Material Adverse Effect.................................10
ARTICLE II THE NOTES.........................................................10
Section 2.1. Form....................................................10
Section 2.2. Execution, Authentication and Delivery..................10
Section 2.3. Temporary Notes.........................................11
Section 2.4. Registration, Registration of Transfer and Exchange.....11
Section 2.5. Mutilated, Destroyed, Lost or Stolen Notes..............13
Section 2.6. Persons Deemed Owners...................................14
Section 2.7. Payment of Principal and Interest, Defaulted Interest...14
Section 2.8. Cancellation............................................16
Section 2.9. Release of Collateral...................................16
Section 2.10. Book-Entry Notes........................................16
Section 2.11. Notices to Clearing Agency..............................17
Section 2.12. Definitive Notes........................................17
Section 2.13. Authenticating Agents...................................17
ARTICLE III COVENANTS........................................................21
Section 3.1. Payment of Principal and Interest.......................21
Section 3.2. Maintenance of Office or Agency.........................21
Section 3.3. Money for Payments To Be Held in Trust..................21
Section 3.4. Existence...............................................23
Section 3.5. Protection of the Trust Estate..........................23
Section 3.6. Opinion as to the Trust Estate..........................24
Section 3.7. Performance of Obligations, Servicing; of Receivables...24
Section 3.8. Negative Covenants......................................25
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Section 3.9. Annual Statement as to Compliance.......................26
Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms.....26
Section 3.11. Successor or Transferee.................................29
Section 3.12. No Other Business.......................................29
Section 3.13. No Borrowing............................................29
Section 3.14. Servicer's Obligations..................................29
Section 3.15. Guarantees, Loans, Advances and Other Liabilities.......29
Section 3.16. Capital Expenditures....................................29
Section 3.17. Notice of Events of Default.............................29
Section 3.18 Restricted Payments.....................................30
Section 3.18. Further Instruments and Acts............................30
Section 3.19. Compliance with Laws....................................30
Section 3.20. Tax Treatment...........................................30
Section 3.21. Investment Company Act..................................30
Section 3.22. Liens...................................................30
Section 3.23. Conduct of Business.....................................30
ARTICLE IV SATISFACTION AND DISCHARGE........................................31
Section 4.1. Satisfaction and Discharge of Indenture.................31
Section 4.2 Application of Trust Money..............................33
Section 4.3. Payment of Moneys Held by Paying Agent..................33
ARTICLE V REMEDIES...........................................................33
Section 5.1. Events of Default.......................................33
Section 5.2. Acceleration of Maturity; Rescission and Annulment......35
Section 5.3. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee....................................36
Section 5.4. Remedies; Priorities....................................38
Section 5.5. Reserved................................................41
Section 5.6. Limitation of Suits.....................................41
Section 5.7. Unconditional Rights of Noteholders To Receive
Principal and Interest..................................42
Section 5.8. Restoration of Rights and Remedies......................42
Section 5.9. Rights and Remedies Cumulative..........................43
Section 5.10. Delay or Omission Not a Waiver..........................43
Section 5.11. Control by Noteholders..................................43
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Section 5.12. Waiver of Past Default..................................43
Section 5.13. Undertaking for Costs...................................44
Section 5.14. Waiver of Stay or Extension Laws........................44
Section 5.15. Action on Notes.........................................44
Section 5.16. Performance and Enforcement of Certain Obligations......45
Section 5.17 Subrogation.............................................45
Section 5.18 Preference Claims.......................................45
ARTICLE VI THE INDENTURE TRUSTEE.............................................46
Section 6.1 Duties of the Indenture Trustee.........................46
Section 6.2. Rights of Indenture Trustee.............................49
Section 6.3. Individual Rights of the Indenture Trustee..............50
Section 6.4. Indenture Trustee's Disclaimer..........................50
Section 6.5. Notice of Defaults......................................50
Section 6.6. Reports by Indenture Trustee to the Holders.............50
Section 6.7. Compensation, Reimbursement and Indemnity...............50
Section 6.8. Replacement of the Indenture Trustee....................51
Section 6.9. Successor Indenture Trustee by Merger...................53
Section 6.10. Appointment of Co-Trustee or Separate Trustee...........53
Section 6.11. Eligibility; Disqualification...........................55
Section 6.12. Preferential Collection of Claims Against Issuer........55
Section 6.13. Appointment and Powers..................................55
Section 6.14. Performance of Duties...................................55
Section 6.15. Limitation on Liability.................................56
Section 6.16. Reliance Upon Documents.................................56
Section 6.17. Successor Indenture Trustee.............................56
Section 6.19. Representations and Warranties of the Indenture
Trustee ................................................57
Section 6.20. Waiver of Setoffs.......................................58
Section 6.21. Control by the Controlling Party........................58
Section 6.22. Indenture Trustee Not Liable for Notes or Receivables...58
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS...................................59
Section 7.1. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders................................59
Section 7.2. Preservation of Information, Communications to
Noteholders ............................................59
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Section 7.3 Reports by Issuer.......................................59
Section 7.4. Reports by Indenture Trustee............................60
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES............................60
Section 8.1. Collection of Money.....................................60
Section 8.2. Trust Accounts..........................................61
Section 8.3. General Provisions Regarding Accounts...................61
Section 8.4. Release of Trust Estate.................................61
Section 8.5. Opinion of Counsel......................................62
ARTICLE IX SUPPLEMENTAL INDENTURES...........................................62
Section 9.1. Supplemental Indentures Without Consent of Noteholders..62
Section 9.2. Supplemental Indentures With Consent of Noteholders.....63
Section 9.3. Execution of Supplemental Indentures....................64
Section 9.4. Effect of Supplemental Indenture........................65
Section 9.5. Conformity With Trust Indenture Act.....................65
Section 9.6. Reference in Notes to Supplemental Indentures...........65
ARTICLE X REDEMPTION OF NOTES................................................65
Section 10.1. Redemption..............................................65
Section 10.2. Form of Redemption Notice...............................65
Section 10.3. Notes Payable on Redemption Date........................66
ARTICLE XI MISCELLANEOUS.....................................................66
Section 11.1. Compliance Certificates and Opinions, etc...............66
Section 11.2. Form of Documents Delivered to Indenture Trustee........68
Section 11.3. Acts of Noteholders.....................................69
Section 11.4. Notices, etc., to the Indenture Trustee, Issuer and
Rating Agency...........................................69
Section 11.5. Notices to Noteholders, Waiver..........................70
Section 11.6. Alternate Payment and Notice Provisions.................71
Section 11.7. Effect of Headings and Table of Contents................71
Section 11.8. Conflict with Trust Indenture Act.......................71
Section 11.9. Successors and Assigns..................................71
Section 11.10. Severability...........................................71
Section 11.11. Benefits of Indenture..................................71
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Section 11.12. Legal Holidays.........................................72
Section 11.13. Governing Law..........................................72
Section 11.14. Counterparts...........................................72
Section 11.15. Recording of Indenture.................................72
Section 11.16. Trust Obligation.......................................72
Section 11.17. No Petition............................................72
Section 11.18. Inspection.............................................73
Exhibit A-1 Form of Class A-1 Notes
Exhibit A-2 Form of Class A-2 Notes
Exhibit B Form of Class B Notes
Exhibit C-1 Non-QIB Transferee Certificate
Exhibit C-2 QIB Transfer Certificate
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INDENTURE, dated as of March 1, 1999, between TRIAD AUTO RECEIVABLES OWNER
TRUST 1999-1, a Delaware business trust (the "Issuer"), and THE CHASE MANHATTAN
BANK, a New York banking corporation, as trustee (the "Indenture Trustee") and
not in its individual capacity.
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's 5.626% Asset Backed
Notes, Class A-1 (each, a "Class A-1 Note"), 6.090% Asset Backed Notes, Class
A-2 (each, a "Class A-2 Note", and together with the Class A-1 Notes, the "Class
A Notes") and 11.000% Asset Backed Notes, Class B (each, a "Class B Note" and,
together with the Class A Notes, the "Notes".)
As security for the payment and performance by the Issuer of the Issuer
Secured Obligations (as defined below), the Issuer has agreed to assign the
Indenture Collateral (as defined below) as collateral to the Indenture Trustee
on behalf of the Insurer and the Noteholders.
Financial Security Assurance Inc. (the "Insurer") has issued and delivered
a financial guaranty insurance policy, dated the Closing Date (with
endorsements, the "Note Policy"), pursuant to which the Insurer guarantees
Scheduled Payments, as defined in the Note Policy.
As an inducement to the Insurer to issue and deliver the Note Policy, the
Issuer and the Insurer have executed and delivered the Insurance and Indemnity
Agreement, dated as of March 1, 1999 (as amended from time to time, the
"Insurance Agreement"), among the Insurer, the Issuer, Triad Financial
Corporation, and Triad Financial Special Purpose Corporation II ("TFSPC II").
As an additional inducement to the Insurer to issue the Note Policy, and
as security for the performance by the Issuer of the Insurer Issuer Secured
Obligations and as security for the performance by the Issuer of the Indenture
Trustee Issuer Secured Obligations, the Issuer has agreed to assign the
Indenture Collateral (as defined below) as collateral to the Indenture Trustee
for the benefit of the Issuer Secured Parties, as their respective interests may
appear.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee on behalf of and for the
benefit of the Issuer Secured Parties to secure the performance of the Issuer
Secured Obligations and its compliance with the covenants hereof, all of the
Issuer's right, title and interest in (but none of the Issuer's obligations), to
and under the following, whether now existing or hereafter arising or acquired
(collectively, the "Indenture Collateral"):
(a) the Initial Receivables and any Subsequent Receivables, all
monies due or received thereunder or in respect thereof after the Initial Cutoff
Date or the related Subsequent Cutoff Date (in each case, including amounts due
on or before the related Cutoff Date but received by Triad, the Company, TFSPC
II or the Issuer after the related Cutoff Date), as applicable, and all
Liquidation Proceeds and recoveries received with respect to such Receivables;
(b) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Initial Receivables and any Subsequent Receivables, and
any other interest of the Issuer in the Financed Vehicles, including the
certificates of title with respect to the Financed Vehicles;
(c) the Insurance Policies and any proceeds from any Insurance
Policies relating to the Initial Receivables and any Subsequent Receivables, the
Obligors or the related Financed Vehicles, including rebates or refunds of
premiums;
(d) rights against Dealers with respect to the Initial Receivables
and any Subsequent Receivables under the Dealer Agreements, Dealer Assignments
and rights against Correspondents under the Correspondent Agreements and the
Correspondent Assignments;
(e) property (including the right to receive future Liquidation
Proceeds) that secures the Initial Receivables, any Subsequent Receivables and
any property that has been acquired by or on behalf of the Company or the Issuer
pursuant to liquidation of any such Receivables;
(f) all funds on deposit from time to time in the Trust Accounts,
including all income thereon and proceeds thereof; and
(g) all right, title and interest (but none of the Issuer's
obligations) of the Trust and Company, respectively, in and to the Sale and
Servicing Agreement, any Subsequent Transfer Agreement, the Receivables Purchase
Agreement and any Subsequent Purchase Agreement, including a direct right to
cause the Company and Triad, respectively, to purchase Receivables from the
Trust under certain circumstances;
(h) all right, title and interest in and to refunds for the costs of
extended service contracts financed under each Receivable with respect to the
Financed Vehicles;
(i) all items contained in the Receivable File related to each
Receivable, and all other documents or electronic records that Triad keeps on
file in accordance with its customary procedures relating to the Receivables;
and
(j) all proceeds and investments of any of the foregoing, all
present and future claims, demands, causes and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any of the foregoing.
The foregoing Grant is made in trust to secure the payment of the Issuer
Secured Obligations.
The Indenture Trustee, on behalf of the Noteholders and the Insurer,
hereby acknowledges such Grant, accepts the trusts under this Indenture in
accordance with this Indenture and agrees to perform its duties required in this
Indenture to the end that the interests of the Issuer Secured Parties may be
adequately and effectively protected.
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
(a) Except as otherwise specified herein or as the context may
otherwise require, the following terms have the respective meanings set forth
below for all purposes of this Indenture:
"Accredited Investor" means an entity meeting the requirements of an
institutional "accredited investor" under Rule 5.1(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act.
"Act" has the meaning specified in Section 11.3(a).
"Authorized Officer" means, with respect to the Issuer or the Servicer, as
the case may be, any officer of the Owner Trustee or the Servicer or other
person who is authorized to act for the Owner Trustee or the Servicer, as
applicable, in matters relating to the Issuer and who is identified on the list
of Authorized Officers delivered by each of the Owner Trustee and the Servicer
to the Indenture Trustee and the Insurer on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).
"Book-Entry Notes" means a beneficial interest in the Class A Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.10.
"Class" means any class of Notes.
"Class A Note" is defined in the recitals.
"Class A-1 Interest Rate" means 5.626% per annum, calculated on the basis
of a 360-day year consisting of twelve 30-day months.
"Class A-1 Note" is defined in the recitals. Each Class A-1 Note shall be
substantially in the form of Exhibit A-1.
"Class A-2 Interest Rate" means 6.090% per annum, calculated on the basis
of a 360-day year consisting of twelve 30-day months.
"Class A-2 Note" is defined in the recitals. Each Class A-2 Note shall be
substantially in the form of Exhibit A-2.
"Class B Interest Rate" means 11.000% per annum, calculated on the basis
of a 360-day year consisting of twelve 30-day months.
"Class B Note" is defined in the recitals. Each Class B Note shall be
substantially in the form of Exhibit B.
3
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means March 25, 1999.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Commission" shall mean the Securities and Exchange Commission.
"Controlling Party" means the Insurer, so long as an Insurer Default shall
not have occurred and be continuing, and otherwise, the Indenture Trustee for
the benefit of the Noteholders.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Indenture is
located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or at such other
address as the Indenture Trustee may designate from time to time by notice to
the Noteholders, the Insurer and the Issuer, or the principal corporate trust
office of any successor Indenture Trustee (the address of which the successor
Indenture Trustee shall notify the Noteholders, the Insurer and the Issuer).
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Notes" shall mean definitive, fully registered Notes issued to
Note Owners and Class B Noteholders. The Definitive Notes shall be typewritten,
printed, lithographed or engraved or produced by any combination of these
methods (with or without steel engraved borders), all as determined by the
officers executing such Notes, as evidenced by their execution of such Notes.
"Event of Default" has the meaning specified in Section 5.1.
"Eligible Account" means (i) a segregated trust account that is maintained
with the corporate trust department of the Indenture Trustee, or (ii) a
segregated direct deposit account maintained with a depository institution or
trust company organized under the laws of the United States of America, or any
of the States thereof or the District of Columbia, having a certificate of
deposit, short-term deposit or commercial paper rating of at least "A-1" by
Standard & Poor's or "P-1" by Moody's.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
4
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create and xxxxx x xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture, and other forms of the verb "to Grant" shall have correlative
meanings. A Grant of the Indenture Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations of the granting party) of the granting party thereunder, including
the immediate and continuing right to claim for, collect, receive and give
receipt for principal and interest payments in respect of the Indenture
Collateral and all other moneys payable thereunder, to give and receive notices
and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring Proceedings in the name of the granting party or
otherwise and generally to do and receive anything that the granting party is or
may be entitled to do or receive thereunder or with respect thereto.
"Holder" means the Person in whose name a Note is registered on the Note
Register.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Indenture Collateral" has the meaning specified in the Granting Clause of
this Indenture.
"Indenture Trustee" means The Chase Manhattan Bank, not in its individual
capacity but solely as Indenture Trustee under this Indenture, or any successor
Indenture Trustee under this Indenture.
"Indenture Trustee Fee" with respect to any Payment Date, the fee payable
to the Indenture Trustee for services rendered during the related Collection
Period, which shall be equal to one twelfth of 0.0025% multiplied by the Note
Balance as of the open of business on the first day of the related Collection
Period, provided, however, in no event shall the Indenture Trustee Fee be less
than $1,875.00 in aggregate in any calendar year.
"Indenture Trustee Issuer Secured Obligations" means all amounts and
obligations that the Issuer may at any time owe to or on behalf of the Indenture
Trustee for the benefit of the Noteholders under this Indenture or the Notes
(including all payments under the Notes).
"Independent" means, when used with respect to any specified Person, that
the Person: (a) is in fact independent of the Issuer, any other obligor upon the
Notes, Triad, the Company other than the Underwriter and any Affiliate of any of
the foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor,
Triad, the Company other than the Underwriter or any Affiliate of any of the
foregoing Persons and (c) is not connected with the Issuer, the Company other
than the Underwriter any such other obligor, Triad or any Affiliate of any of
the foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered
to the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1, made by an
Independent appraiser or other expert duly licensed and of recognized standing
appointed by an Issuer Order, and such opinion or certificate shall state
5
that the signer has read the definition of "Independent" in this Indenture and
that the signer is Independent within the meaning thereof.
"Insurance Agreement Indenture Cross Default" has the meaning specified
therefor in the Insurance Agreement.
"Insurer Issuer Secured Obligations" means all amounts and obligations
that the Issuer may at any time owe to or on behalf of the Insurer under this
Indenture, the Insurance Agreement or any other Related Document.
"Issuer" means Triad Auto Receivables Owner Trust 1999-1, until a
permitted successor replaces it and, thereafter, means such successor and for
purposes of any provision contained herein and required by the TIA, each other
obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or request,
respectively, signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Indenture Trustee.
"Issuer Secured Obligations" means the Insurer Issuer Secured Obligations
and the Indenture Trustee Issuer Secured Obligations.
"Issuer Secured Parties" means each of the Indenture Trustee in respect of
the Indenture Trustee Issuer Secured Obligations and the Insurer in respect of
the Insurer Secured Obligations.
"Non-QIB Transferee Certificate" means a certificate substantially in the
form of Exhibit C-1 hereto.
"Noteholder" means a Holder.
"Note Majority" means Holders of Outstanding Class A Notes and Outstanding
Class B Notes representing more than 50% of the Note Balance of Outstanding
Notes.
"Note Owner" means, with respect to a Book-Entry Note, the person who is
the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agent Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"Note Policy" means the financial guaranty insurance policy issued by the
Insurer with respect to the Notes, including any endorsements thereto.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.4.
"Notes" is defined in the introduction hereto.
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"Officers' Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 and TIA ss.314, and
delivered to the Indenture Trustee.
"Opinion of Counsel" means one or more written opinions of counsel,
reasonably acceptable in form and substance and from counsel acceptable to (i)
if addressed to the Insurer, the Insurer, and (ii) a Note Majority and the
Indenture Trustee or the Owner Trustee and not at the expense of the Indenture
Trustee or Owner Trustee and which shall comply with any applicable requirements
of Section 11.1.
"Outstanding" means, as of any date, all Notes theretofore authenticated
and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture); and
(iii) Notes in exchange for or in lieu of other Notes that have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
provided, however, that Notes that have been paid with proceeds of the Note
Policy shall continue to remain Outstanding for purposes of this Indenture until
the Insurer has been paid as subrogee hereunder or reimbursed pursuant to the
Insurance Agreement as evidenced by a written notice from the Insurer delivered
to the Indenture Trustee, and the Insurer shall be deemed to be the holder
thereof to the extent of any payments thereon made by the Insurer, provided,
further, that in determining whether the Holders of the requisite Note Balance
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder or under any Related Document, Notes owned by the Issuer, any
other obligor upon the Notes, Triad, the Company or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Indenture Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes that a Responsible Officer of the Indenture Trustee actually
knows to be so owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Indenture Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Issuer, any other obligor
upon the Notes, Triad, the Company or any Affiliate of any of the foregoing
Persons.
"Owner Trustee" means Wilmington Trust Company, not in its individual
capacity but solely as trustee of the Issuer.
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"Paying Agent" means the Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.11
and is authorized by the Issuer to make the payments to and distributions from
the Collection Account and the Note Distribution Account, including payment of
principal or of interest on the Notes on behalf of the Issuer.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.5 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"QIB Transfer Certificate" means a certificate substantially in the form
of Exhibit C-2 hereto.
"Qualified Institutional Buyer" means an entity meeting the requirements
of a "qualified institutional buyer" under Rule 144A
"Redemption Date" means the Payment Date specified by the Servicer or the
Issuer pursuant to Section 10.1.
"Redemption Price" means (a) in the case of a redemption of Notes pursuant
to Section 10.1 (a), the aggregate unpaid principal amount of the Notes to be
redeemed, plus accrued and unpaid interest thereon at the applicable interest
rate to but excluding the related Redemption Date, and (b) in the case of a
payment to Noteholders pursuant to Section 10.1(b), the amount on deposit in the
Note Distribution Account, but not in excess of the amount specified in clause
(a) above.
"Registered Holder" means the Person in whose name a Note is registered on
the Note Register on the applicable Record Date.
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Secretary or Assistant Secretary,
or any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject, in each case having responsibility with respect to this
Indenture.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of March 1, 1999, among the Issuer, the Company, Triad, in its
individual capacity and as Servicer, and The Chase Manhattan Bank, as Indenture
Trustee and as Backup Servicer, as the same may be amended or supplemented from
time to time.
"Scheduled Payments" has the meaning specified in the Note Policy.
8
"Securities Act" means the Securities Act of 1933, as amended.
"State" means any one of the fifty states of the United States of America
or the District of Columbia.
"Strike Bid" has the meaning specified in Section 5.5.
"Termination Date" means the latest of (i) the expiration of the Note
Policy and the return of the Note Policy to the Insurer for cancellation, (ii)
the date on which the Insurer shall have received payment and performance of all
Insurer Issuer Secured Obligations and (iii) the date on which the Indenture
Trustee shall have received full and indefeasible payment and performance of all
Indenture Trustee Issuer Secured Obligations.
"Trust Estate" means all the money, instruments, rights and other property
that are subject or intended to be subject to the Lien and security interest of
this Indenture for the benefit of the Noteholders (including, without
limitation, all property and interests Granted to the Indenture Trustee) and the
Insurer, including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and as in force on the date hereof, unless otherwise specifically
provided.
(b) Except as otherwise specified herein or as the context may
otherwise require, the capitalized terms used herein but not defined have the
respective meanings set forth in the Sale and Servicing Agreement for all
purposes of this Indenture.
Section 1.2. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
Section 1.3. Rules of Construction. Unless the context otherwise requires:
9
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect on the date hereof,
(iii) "or" is not exclusive;
(iv) "including" means "including, without limitation,"; and
(v) words in the singular include the plural and words in the plural
include the singular.
Section 1.4. 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 could or would have a material adverse effect on the Noteholders
(or any similar or analogous determination), such determination shall be made
without taking into account the funds available from claims under the Note
Policy.
ARTICLE II
THE NOTES
Section 2.1. Form. The Class A-1 Notes, the Class A-2 Notes and the Class
B Notes, together with the Indenture Trustee's certificate of authentication,
shall be in substantially the forms set forth in Exhibits A-1, and A-2 and B,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibits X-0, X-0 and B are part of the terms of this
Indenture.
Section 2.2. Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
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The Indenture Trustee shall upon receipt of the Note Policy and an Issuer
Order authenticate and deliver Class A-1 Notes, Class A-2 Notes and Class B
Notes for original issue in an aggregate principal amount of $71,100,000,
$56,300,000 and $12,600,000, respectively. The Class A-1 Note Balance, the Class
A-2 Note Balance and the Class B Note Balance at any time may not exceed such
amount except as provided in Section 2.5.
Each Note shall be dated the date of its authentication. The Notes shall
be issuable as registered Notes in the minimum denomination of $250,000 and in
integral multiples of $1,000 in excess thereof; provided, however, that one Note
of each Class may be issued in an additional amount equal to any remaining
portion of the original Note Balance for such Class.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate of authentication shall be conclusive evidence, and the
only evidence, that such Note has been duly authenticated and delivered
hereunder.
Section 2.3. Temporary Notes. Pending the preparation of Definitive Notes,
the Issuer may execute, and upon receipt of an Issuer Order, the Indenture
Trustee shall authenticate and deliver, temporary Notes that are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to
be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.2, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
Section 2.4. Registration, Registration of Transfer and Exchange.
(a) The Indenture Trustee shall keep or cause to be kept a register
(the "Note Register") for the registration, transfer and exchange of Notes. The
Indenture Trustee shall be the "Note Registrar" for the purpose of registering
Notes and transfers and exchanges of Notes as herein provided. The names and
addresses of all Noteholders and the names and addresses of the transferees of
any Notes shall be registered in the Note Register. The Person in whose name any
Note is so registered shall be deemed and treated as the sole owner and Holder
thereof for all purposes of this Indenture and the Note Registrar and the
Indenture Trustee and any agent of any of them shall not be affected by any
notice or knowledge to the contrary. A Note is transferable or exchangeable only
upon the surrender of such Note to the Note Registrar at the Corporate Trust
Office together with an assignment and transfer (executed by the Holder or his
duly authorized attorney), subject to the requirements of Sections 2.10, 2.12,
and 2.14, as applicable.
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Upon request of the Indenture Trustee, the Note Registrar shall provide the
Indenture Trustee with the names, addresses and percentage interests of the
Holders.
Upon any resignation of any Note Registrar, the Issuer shall promptly
appoint a successor or, if it elects not to make such an appointment, assume the
duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer shall give the Indenture Trustee and the Insurer
prompt written notice of the appointment of such Note Registrar and of the
location, and any change in the location, of the Note Register, and the
Indenture Trustee shall have the right to inspect the Note Register at all
reasonable times and to obtain copies thereof, and the Indenture Trustee shall
have the right to conclusively rely upon a certificate executed on behalf of the
Note Registrar by a Responsible Officer thereof as to the names and addresses of
the Holders of the Notes and the principal amounts and number of such Notes.
(b) Subject to Sections 2.10, 2.12, and 2.14 hereof, upon surrender for
registration of transfer of any Note together with an instrument of assignment
or transfer (executed by the Holder or its duty authorized attorney) at the
office or agency of the Issuer to be maintained as provided in Section 3.2, if
the requirements of Section 8-401(1) of the UCC are met, the Issuer shall
execute, the Indenture Trustee shall authenticate and the Noteholder shall
obtain from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations of a like
aggregate principal amount. Each new Note issued pursuant to this Section 2.4
shall be registered in the name of any Person as the transferring Holder may
request, subject to the provisions of Sections 2.10, 2.12, and 2.14, as
applicable.
(c) At the option of the Holder, Notes may be exchanged for other new
Notes of the same Class in any authorized denominations of a like aggregate
principal amount, upon surrender of the Notes to be exchanged, together with a
written request at the office or agency designated pursuant to Section 3.2.
Whenever any Notes are so surrendered for exchange, subject to the requirements
of Sections 2.10, 2.12, and 2.14 and if the requirements of Section 8-401(1)(a)
of the UCC are met, the Issuer shall execute, the Indenture Trustee shall
authenticate and the Noteholder shall obtain from the Indenture Trustee, the
Notes that the Noteholder making the exchange is entitled to receive.
(d) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
(e) Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar.
(f) Notwithstanding the foregoing, in the case of any sale or other
transfer of a Definitive Note or a temporary Note, the transferor of such
Definitive Note or such temporary
12
Note shall be required to represent and warrant in writing that the prospective
transferee either (a) is not (i) an employee benefit plan (as defined in section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), which is subject to the provisions of Title I of ERISA, (ii) a plan
(as defined in section 4975(e)(1) of the Code), which is subject to Section 4975
of the Code, or (iii) an entity whose underlying assets are deemed to be assets
of a plan described in (i) or (ii) above by reason of such plan's investment in
the entity (any such entity described in clauses (i) through (iii), a "Benefit
Plan Entity") or (b) is a Benefit Plan Entity and the acquisition and holding of
the Definitive Note or the temporary Note by such prospective transferee is
covered by a Department of Labor Prohibited Transaction Class Exemption. Each
transferee of a Book Entry Note that is a Benefit Plan Entity shall be deemed to
represent that its acquisition and holding of the Book Entry Note is covered by
a Department of Labor Prohibited Transaction Class Exemption.
(g) No fee or service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Issuer or the Indenture
Trustee may require payment of a sum sufficient to cover any tax, expense or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes, other than exchanges pursuant to
Section 2.3 or 9.6 not involving any transfer. In connection with any transfer
to Noteholders requesting Notes, the transferor shall reimburse the Trust for
any costs (including the cost of the Note Registrar's counsel's review of the
documents and any legal opinions, submitted by the transferor or transferee to
the Note Registrar as provided herein) incurred by the Note Registrar in
connection with such transfer.
(h) The preceding provisions of this section notwithstanding, the Issuer
shall not be required to make and the Note Registrar shall not register
transfers or exchanges of any Note for a period of fifteen (15) days preceding
the due date for any payment with respect to the Note.
Section 2.5. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee and the Insurer (if
such Note is a Class A Note and an Insurer Default has not occurred and is
continuing) such security or indemnity as may be required by the Indenture
Trustee, the Insurer and the Issuer to hold the Issuer, the Insurer and the
Indenture Trustee, respectively, harmless, then, in the absence of notice to the
Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a protected purchaser, and provided that the requirements of Section
8-405 of the UCC are met, the Issuer shall execute, and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Note, a replacement Note of the
same Class; provided, however, that if any such destroyed, lost or stolen Note,
but not a mutilated Note, shall have become, or within seven (7) days shall be,
due and payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable or upon the Redemption Date without surrender thereof. If, after
the delivery of such replacement Note (or payment of a destroyed, lost or stolen
Note pursuant to the proviso to the preceding sentence), a protected purchaser
of the original Note in lieu of which such replacement Note was issued presents
for payment such original Note, the Issuer, the Indenture Trustee and the
Insurer shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was
13
delivered or any Person taking such replacement Note from such Person to whom
such replacement Note was delivered (or payment made) or any assignee of such
Person, except a protected purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section 2.5, the
Issuer or the Indenture Trustee may require the payment by the Holder of such
Note of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other reasonable expenses (including the
fees and expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 2.5 in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture, equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 2.5 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.6. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer, the Indenture Trustee and the Insurer may treat the Person
in whose name any Note is registered as of the preceding Record Date as the
owner of such Note for the purpose of receiving payments of principal of and
interest, if any, on such Note and for all other purposes whatsoever, whether or
not such Note be overdue, and none of the Issuer, the Insurer or the Indenture
Trustee nor any agent thereof shall be affected by notice to the contrary.
Section 2.7. Payment of Principal and Interest, Defaulted Interest.
(a) The Class A-1 Notes, the Class A-2 Notes and the Class B Notes
shall accrue interest at the Class A-1 Interest Rate, the Class A-2 Interest
Rate and the Class B Interest Rate, respectively, and such interest shall be
payable on each Payment Date, as and to the extent provided in Sections 4.6 and
4.7 of the Sale and Servicing Agreement and Section 3.1 of this Indenture. Any
installment of interest or principal, if any, payable on any Note that is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the related Record Date, by wire transfer of
immediately available funds if such Noteholder holds the Notes representing at
least $1,000,000 in Class A-1 Note Balance, Class A-2 Note Balance or Class B
Note Balance as of the Closing Date and if such Person has delivered to the
Indenture Trustee in writing instructions with respect to effecting a wire
transfer to such Person no later than the applicable Determination Date by check
mailed first-class, postage prepaid, to such Person's address as it appears on
the Note Register on such Record Date, except that, unless Definitive Notes have
been issued pursuant to Section 2.12, with respect to Notes registered on the
Record
14
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a Payment
Date (and except for the Redemption Price for any Note called for redemption
pursuant to Section 10.1) which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.3.
(b) The principal of each Note shall be payable in installments on each
Payment Date (including the Class A-1 Final Scheduled Payment Date, Class A-2
Final Scheduled Payment Date and the Class B Final Scheduled Payment Date, as
applicable) as and to the extent provided in this Indenture and in Sections 4.6
and 4.7 of the Sale and Servicing Agreement. Notwithstanding the foregoing (and
subject to the provisions of Sections 5.1 and 5.2), the entire Note Balance
shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing if the Insurer (if an Insurer Default shall not have
occurred and be continuing) or the Indenture Trustee or a Note Majority (if an
Insurer Default has occurred and is continuing) has declared the Notes to be
immediately due and payable in the manner provided in Section 5.2.
The Indenture Trustee shall notify the Person in whose name a Note is
registered at the close of business on the Record Date preceding the Payment
Date on which the Issuer expects that the final installment of principal of and
interest on such Note will be paid. Such notice shall be mailed no later than
the fifth (5th) day of the month in which such final Payment Date occurs and
shall specify that such final installment will be payable only upon presentation
and surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such installment unless there are five
or fewer Noteholders of record in which case such presentation and surrender
shall occur within thirty (30) days after the Class A-1 Final Scheduled Payment
Date, the Class A-2 Final Scheduled Payment Date and the Class B Final Scheduled
Payment Date, as applicable. Notices in connection with redemptions of Notes
shall be mailed to Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, and such
default is waived by the Controlling Party, the Issuer shall pay, in any lawful
manner, as and to the extent provided in Section 4.7 of the Sale and Servicing
Agreement, defaulted interest (plus interest on such defaulted interest to the
extent lawful) at the applicable interest rate in any lawful manner. The Issuer
may pay such defaulted interest to the Persons who are Noteholders on the
immediately following Payment Date, and, if such amount is not paid on such
following Payment Date, then on a subsequent special record date, which date
shall be at least five (5) Business Days prior to the payment date. The Issuer
shall fix or cause to be fixed any such special record date and payment date,
and, at least fifteen (15) days before any such special record date, the Issuer
shall mail to each Noteholder and the Indenture Trustee a notice that states the
special record date, the payment date and the amount of defaulted interest to be
paid.
(d) Promptly following the date on which all principal of and interest on
the Notes has been paid in full and the Notes have been surrendered to the
Indenture Trustee, the Indenture Trustee shall, if the Insurer has paid any
amount in respect of the Notes under the Note Policy or otherwise which has not
been reimbursed to it, deliver such surrendered Notes to the Insurer to the
extent not previously cancelled or destroyed.
15
Section 2.8. Cancellation. Subject to Section 2.7(d), all Notes
surrendered for payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other than the Indenture Trustee, be delivered to
the Indenture Trustee and shall be promptly canceled by the Indenture Trustee.
Subject to Section 2.7(d), the Issuer may at any time deliver to the Indenture
Trustee for cancellation any Notes previously authenticated and delivered
hereunder that the Issuer may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly canceled by the Indenture Trustee. No Notes
shall be authenticated in lieu of or in exchange for any Notes canceled as
provided in this Section except as expressly permitted by this Indenture.
Subject to Section 2.7(d), all canceled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time.
Section 2.9. Release of Collateral. The Indenture Trustee shall, on or
after the Termination Date, release any remaining portion of the Trust Property
from the lien created by this Indenture and deposit in the Collection Account
any funds then on deposit in any other Trust Account. The Indenture Trustee
shall release property from the lien created by this Indenture pursuant to this
Section 2.9 only upon receipt of an Issuer Request accompanied by an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA) Independent
Certificates in accordance with TIA xx.xx. 314(c) and 314(d)(1) meeting the
applicable requirements of Section 11.1.
Section 2.10. Book-Entry Notes. The Class A Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. Such Class A Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner shall receive a Definitive Note
representing such Class A Note Owner's interest in such Class A Note, except as
provided in Section 2.12. Unless and until the Definitive Notes have been issued
to Note Owners pursuant to Section 2.12:
(i) the provisions of this Section 2.10 shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Class A Notes
and the giving of instructions or directions hereunder) as the sole Holder
of the Class A Notes, and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section 2.10
conflict with any other provisions of this Indenture, the provisions of
this Section 2.10 shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants. Unless and until Definitive Notes are issued
pursuant to Section 2.10, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
16
transmit payments of principal of and interest on the Class A Notes to
such Clearing Agency Participants;
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Class A Noteholders evidencing a
specified percentage of the Class A Note Balance or the Note Balance, the
Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Note Owners
and/or Clearing Agency Participants owning or representing, respectively,
such required percentage of the beneficial interest in the Class A Notes
and has delivered such instructions to the Indenture Trustee; and
(vi) Note Owners may receive copies of any reports sent to Class A
Noteholders pursuant to this Indenture, upon written request, together
with a certification that they are Note Owners and payment of reproduction
and postage expenses associated with the distribution of such reports,
from the Indenture Trustee at the Corporate Trust Office.
Section 2.11. Notices to Clearing Agency. Whenever a notice or other
communication to the Class A Noteholders is required under this Indenture,
unless and until Definitive Notes shall have been issued to Note Owners pursuant
to Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to the Class A Noteholders to the
Clearing Agency, and shall have no obligation to the Note Owners.
Section 2.12. Definitive Notes. If (i) the Servicer advises the Indenture
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities with respect to the Class A Notes, and
the Servicer is unable to locate a qualified successor, (ii) the Servicer at its
option (with prior written notice to the Insurer) advises the Indenture Trustee
in writing that it elects to terminate the book-entry system through the
Clearing Agency or (iii) after the occurrence of an Event of Default, the
Insurer (if no Insurer Default shall have occurred and is continuing) or Note
Owners representing beneficial interests aggregating at least a majority of the
Class A Note Balance (if an Insurer Default shall have occurred and is
continuing) advise the Indenture Trustee through the Clearing Agency in writing
that the continuation of a book entry system through the Clearing Agency is no
longer in the best interests of the Insurer or the Note Owners, as the case may
be, then the Clearing Agency shall notify all Note Owners and the Indenture
Trustee of the occurrence of any such event and of the availability of
Definitive Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Class A Note or Class A Notes representing
the Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Indenture Trustee shall
recognize the Holders of the Definitive Notes as Class A Noteholders.
Section 2.13. Authenticating Agents. (a) The Indenture Trustee may appoint
one or more Persons (each, an "Authenticating Agent") (with the written consent
of the Servicer if such
17
Person is other than the Indenture Trustee), with power to act on its behalf and
subject to its direction in the authentication of Notes in connection with
issuance, transfers and exchanges under Sections 2.2, 2.3, 2.4, 2.5 and 2.12, as
fully to all intents and purposes as though each such Authenticating Agent had
been expressly authorized by those Sections to authenticate such Notes. For all
purposes of this Indenture, the authentication of Notes by an Authenticating
Agent pursuant to this Section shall be deemed to be the authentication of Notes
"by the Indenture Trustee."
(b) Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of any Authenticating Agent,
shall be the successor of such Authenticating Agent hereunder, without the
execution or filing of any further act on the part of the parties hereto or such
Authenticating Agent or such successor corporation.
(c) Any Authenticating Agent may at any time resign by giving
written notice of resignation to Indenture Trustee and Owner Trustee. Indenture
Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and Owner
Trustee. Upon receiving such notice of resignation or upon such a termination,
Indenture Trustee may appoint a successor Authenticating Agent and shall give
written notice of any such appointment to Owner Trustee.
(d) Servicer agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services. The provisions of Section 6.4
shall be applicable to any Authenticating Agent.
Section 2.14. Transfer Restrictions relating to Class B Notes. (a) The
transfer and registration of Notes shall be subject to the restrictions set
forth as follows (in addition to the provisions of Section 2.4):
(i) The Note Registrar shall register the transfer of a Class
B Note if the requested transfer is being made by a transferor who
has provided the Note Registrar with a QIB Transfer Certificate,
substantially in the form of Exhibit C-2 hereto, to the effect that
the transfer is being made to a Qualified Institutional Buyer in
accordance with Rule 144A;
(ii) The Note Registrar shall register the transfer of a Note
if prior to the transfer such transferee furnishes to the Note
Registrar (A) a Non-QIB Transferee Certificate, substantially in the
form of Exhibit C-1 hereto, to the effect that the transfer is being
made to an Accredited Investor or to an Affiliated Person in
accordance with an applicable exemption under the Securities Act,
and (B) an opinion of counsel acceptable to the Note Registrar that
such transfer is in compliance with the Securities Act;
18
(iii) The Note Register shall not register the transfer of a
Class B Note (a) to an individual who is not a citizen or resident
of the United States, (b) to an entity organized under the laws of
any foreign country, (c) to any other individual or entity
classified as a "foreign person" under the Code or (d) to any other
person who is not a "United States person" within the meaning of
Section 7701 (a)(3) of the Code and any such purported transfer
shall be void ab initio;
and, in each case the Note Registrar shall register the transfer of a Class B
Note only if prior to the transfer, the transferor in the case of clause (i) or
the transferee in the case of clause (ii), furnishes to the Note Registrar a
written undertaking by the transferor to reimburse the Trust for any costs
incurred by it in connection with the proposed transfer. In addition, the Note
Registrar may, as a condition of the registration of any such transfer, require
the transferor to furnish such other certificates, legal opinions or other
information (at the transferor's expense) as the Note Registrar may reasonably
require to confirm that the proposed transfer is being made pursuant to an
exemption or in a transaction not subject to, the registration requirements of
the Securities Act and other applicable laws.
(b) If Class B Notes are issued upon the transfer, exchange or replacement
of Class B Notes not bearing the securities legend set forth in Section 2.15,
the Notes so issued shall not bear such securities legend. If Class B Notes are
issued upon the transfer, exchange or replacement of Class B Notes bearing the
securities legend set forth in Section 2.15, or if a request is made to remove
such securities legend on a Class B Note, the Class B Notes so issued shall bear
such securities legend, or such securities legend shall not be removed, as the
case may be, unless there is delivered to the Note Registrar such satisfactory
evidence, which may include an opinion of counsel (at the expense of the party
requesting the removal of such legend) familiar with United States securities
laws, as may be reasonably required by the Note Registrar, that neither such
securities legend nor the restrictions on transfers set forth therein are
required to ensure that transfers of any Note comply with the provisions of Rule
144A or Rule 144 under the Securities Act or that such Note is not a "restricted
security" within the meaning of Rule 144 under the Securities Act. Upon
provision of such satisfactory evidence, the Note Registrar shall execute and
deliver a Note that does not bear such securities legend.
Section 2.15. Legending of the Class B Notes. (a) (i) The Class B Notes
have not been registered under the Securities Act or any state securities law.
The Class B Notes shall bear a legend as follows:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS.
NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO REGISTRATION.
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THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE THAT IS TWO
YEARS (OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER
RULE 144(K) UNDER THE SECURITIES ACT AS PERMITTING RESALES BY
NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE SELLER OR ANY AFFILIATE OF THE SELLER WAS THE OWNER OF
THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE) ONLY (A) TO THE SELLER,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) THAT PURCHASES FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501 (A) (1), (2), (3) OR (7) OF REGULATION D
PROMULGATED UNDER THE SECURITIES ACT THAT IS PURCHASING THE NOTE FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE SELLER'S AND THE INDENTURE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F)
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS NOTE MAY NOT BE TRANSFERRED (A) TO AN INDIVIDUAL WHO IS NOT A
CITIZEN OR RESIDENT OF THE UNITED STATES, (B) TO ANY ENTITY
ORGANIZED UNDER THE LAWS OF ANY FOREIGN COUNTRY, (C) TO ANY OTHER
INDIVIDUAL OR ENTITY CLASSIFIED AS A FOREIGN PERSON UNDER THE
INTERNAL REVENUE CODE OF 1986 AS AMENDED OR (D) TO ANY OTHER PERSON
WHO IS NOT A "UNITED STATES PERSON" WITHIN THE MEANING OF SECTION
7701 (A)(3) OF THE CODE. ANY SUCH PURPORTED TRANSFER SHALL BE VOID
AB INITIO.
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ARTICLE III
COVENANTS
Section 3.1. Payment of Principal and Interest. The Issuer shall duly and
punctually pay the principal and interest, if any, on the Notes in accordance
with the terms of the Notes and this Indenture. Without limiting the foregoing,
the Issuer shall distribute (or cause to be distributed) the amounts on deposit
in the Note Distribution Account on each Payment Date, as and to the extent
provided in Sections 4.6 and 4.7 of the Sale and Servicing Agreement (i) for the
benefit of the Class A-1 Notes, to the Class A-1 Noteholders, (ii) for the
benefit of the Class A-2 Notes, to the Class A-2 Noteholders, and (ii) for the
benefit of the Class B Notes, to the Class B Noteholders. Amounts properly
withheld under the Code or any applicable State law by any Person from a payment
to any Noteholder of interest and/or principal shall be considered as having
been paid by the Issuer to such Noteholder for all purposes of this Indenture.
Section 3.2. Maintenance of Office or Agency. The Indenture Trustee shall
maintain in the city of New York, New York an office or agency where Notes may
be surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may be
served. The Issuer hereby initially appoints the Indenture Trustee to serve as
its agent for the foregoing purposes. The Indenture Trustee shall give prompt
written notice to the Issuer of the location, and of any change in the location,
of any such office or agency. If at any time the Indenture Trustee shall fail to
maintain any such office or agency or shall fail to furnish the Issuer with the
address thereof, such surrenders, notices and demands may be made or served at
the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee
as its agent to receive all such surrenders, notices and demands.
Section 3.3. Money for Payments To Be Held in Trust. All payments of
amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the Note Distribution Account pursuant to Section 8.2(b)
hereof shall be made on behalf of the Issuer by the Indenture Trustee or by
another Paying Agent, and no amounts so withdrawn from the Note Distribution
Account for payments of Notes shall be paid over to the Issuer, except as
provided in this Section 3.3 and Sections 4.6 and 4.7 of the Sale and Servicing
Agreement.
On or before each Payment Date (including the Class A-1 Final Scheduled
Payment Date, the Class A-2 Final Scheduled Payment Date and the Class B Final
Scheduled Payment Date, as applicable) and Redemption Date, the Issuer shall
deposit or cause to be deposited in the Note Distribution Account an aggregate
sum sufficient to pay the amounts then becoming due under the Notes as and to
the extent provided in Sections 3.2(c), 3.3 and 4.4 of the Sale and Servicing
Agreement, such sum to be held in trust for the benefit of the Persons entitled
thereto.
The Issuer shall cause each Paying Agent (other than the Indenture
Trustee) to execute and deliver to the Indenture Trustee and the Insurer an
instrument in which such Paying Agent shall agree with the Indenture Trustee
(and if the Indenture Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section 3.3, that such Paying Agent shall:
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(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Indenture Trustee written notice of any Default by the
Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with respect to
the Notes;
(iii) at any time during the continuance of any such Default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent; and
(v) comply with all requirements of the Code and any applicable
State law with respect to the withholding from any payments made by it on
any Notes of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order,
direct any Paying Agent to pay to the Indenture Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Indenture Trustee upon the
same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and upon Issuer Request with the prior written consent of the Insurer (unless an
Insurer Default shall have occurred and be continuing) shall be deposited with
the Issuer; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look only to the Issuer for payment thereof (but only to the
extent of the amounts so paid to the Issuer), and all liability of the Indenture
Trustee or such Paying Agent with respect to such trust money shall thereupon
cease; provided, however, that if such money or any portion thereof had been
previously deposited by the Insurer or the Indenture Trustee with the Indenture
Trustee for the payment of principal or interest on the Notes, to the extent any
amounts are owing to the Insurer, such amounts shall be paid promptly to the
Insurer upon the Indenture Trustee's receipt of a written request by the Insurer
to such effect, and provided, further, that the Indenture Trustee or such Paying
Agent, before being required to make any such repayment, shall at the expense
and direction of the Issuer cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in The City of New York, notice that such money remains
unclaimed and that, after a date specified therein,
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which shall not be less than thirty (30) days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Indenture Trustee shall also adopt and employ, at the expense of the Issuer,
any other reasonable means of notification of such repayment (including mailing
notice of such repayment to Holders whose Notes have been called but have not
been surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
Section 3.4. Existence. Except as otherwise permitted by the provisions of
Section 3.10, the Issuer shall keep in full effect its existence, rights and
franchises as a business trust under the laws of the State of Delaware and shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Indenture Collateral and each
other instrument or agreement included in the Trust Estate or to enforce its
rights under the Receivables and with respect to the Financed Vehicles.
Section 3.5. Protection of the Trust Estate. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Issuer
Secured Parties to be prior to all other liens in respect of the Trust Estate,
and the Issuer shall take all actions necessary to obtain and maintain, in favor
of the Indenture Trustee for the benefit of the Issuer Secured Parties, a first
lien on and a first priority, perfected security interest in the Trust Estate.
The Issuer shall from time to time execute and deliver all such supplements and
amendments hereto and all such financing statements, continuation statements,
instruments of further assurance and other instruments, and shall take such
other action necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust Estate;
(ii) maintain the Trust Estate free and clear of all prior liens;
(iii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Indenture Trustee for the benefit of the
Issuer Secured Parties created by this Indenture or carry out more
effectively the purposes hereof;
(iv) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(v) enforce any of the Indenture Collateral;
(vi) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Issuer Secured Parties in such Trust Estate
against the claims of all Persons; and
(vii) pay all taxes or assessments levied or assessed upon the Trust
Estate when due.
The Issuer hereby designates the Indenture Trustee as its agent and
attorney-in-fact to execute any financing statement, continuation statement,
instrument of further assurance or other
23
instrument required to be executed to accomplish the foregoing; provided,
however, that, except with respect to continuation statements, the Indenture
Trustee shall not be obligated to execute such instruments except upon written
instruction from the Servicer or the Issuer, except, that such instruction need
not be in writing if delivered with respect to instruments to be executed by the
Indenture Trustee on the Closing Date.
Section 3.6. Opinion as to the Trust Estate.
(a) On the Closing Date the Issuer shall furnish to the Indenture
Trustee and the Insurer an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken, or will be taken within two
(2) Business Days of the Closing Date, with respect to the execution and filing
of any financing statements and continuation statements as are necessary to
perfect and make effective the first priority lien and security interest in the
Indenture Collateral and the proceeds thereof in favor of the Indenture Trustee
for the benefit of the Issuer Secured Parties created by this Indenture and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and security interest
effective.
(b) Within 90 days after the beginning of each calendar year,
beginning in March 2000, the Issuer shall furnish to the Indenture Trustee and
the Insurer, an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording, filing,
rerecording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and with respect to the execution and filing
of any financing statements and continuation statements as are necessary to
maintain the lien and security interest created by this Indenture and reciting
the details of such action or stating that in the opinion of such counsel no
such action is necessary to maintain such lien and security agreement. Such
Opinion of Counsel shall also describe the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture.
Section 3.7. Performance of Obligations; Servicing of Receivables.
(a) The Issuer shall not take, or fail to take, any action and shall
use its best efforts not to permit any action to be taken by others that would
release any Person from any material covenants or obligations under any
instrument or agreement included in the Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the
Insurer (so long as an Insurer Default shall not have occurred and be
continuing) to assist it in performing its duties under this Indenture, and any
performance of such duties by a Person identified to the Indenture Trustee and
the Insurer in an Officers' Certificate of the Issuer shall be deemed to be
action taken by the Issuer. Pursuant to the Sale and Servicing Agreement, the
Issuer has
24
contracted with the Servicer to assist the Issuer in performing its duties under
the Notes and this Indenture.
(c) The Issuer shall perform and observe all of its obligations and
agreements contained in this Indenture, the other Related Documents and in the
instruments and agreements included in the Trust Estate, including filing or
causing to be filed any UCC financing statements and continuation statements
required to be filed by this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence of a
Servicer Termination Event under the Sale and Servicing Agreement, the Issuer
shall promptly notify the Indenture Trustee, the Insurer and the Rating Agencies
thereof in accordance with Section 11.4 hereof, and shall specify in such notice
the action, if any, the Issuer is taking with respect thereto. If a Servicer
Termination Event shall arise from the failure of the Servicer to perform any of
its duties or obligations under the Sale and Servicing Agreement with respect to
the Receivables, the Issuer shall take all reasonable steps available to it to
remedy such failure.
(e) If notice of termination has been given to the Servicer of the
Servicer's rights and powers pursuant to Section 9.2 of the Sale and Servicing
Agreement, the Backup Servicer or another successor Servicer shall be appointed
as successor Servicer in accordance with Section 9.3 of the Sale and Servicing
Agreement. Except as otherwise expressly provided therein, the Issuer shall not
waive, amend, modify, supplement or terminate any Related Document or any
provision thereof without the consent of the Indenture Trustee and the Insurer
(if an Insurer Default shall not have occurred and be continuing) or the Note
Majority (if an Insurer Default shall have occurred and is continuing).
(f) Upon any termination of the Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify
the Indenture Trustee, the Insurer and the Rating Agencies. As soon as a
successor Servicer is appointed, the Issuer shall notify the Indenture Trustee
of such appointment, specifying in such notice the name and address of such
successor Servicer.
(g) The Issuer agrees that it shall not waive timely performance or
observance by the Servicer, the Backup Servicer or Triad of their respective
duties under Related Documents (x) without the prior consent of the Insurer
(unless an Insurer Default shall have occurred and be continuing) or (y) if the
effect thereof would adversely affect the Holders.
Section 3.8. Negative Covenants. So long as any Notes are Outstanding, the
Issuer shall not:
(i) except as expressly permitted by this Indenture, the Sale and
Servicing Agreement or the Related Documents, sell, transfer, exchange or
otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Trust Estate, unless directed to do so by
the Controlling Party;
25
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code or applicable State law) or
assert any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust Estate;
or
(iii) dissolve or liquidate in whole or in part; or
(iv) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (B)
permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Trust Estate or any
part thereof or any interest therein or the proceeds thereof, other than
(i) any liens on the Financed Vehicles which (w) are junior to or are
otherwise subordinated to the lien in favor of the Indenture Trustee, (x)
have arisen notwithstanding the Servicer's best efforts to avoid the
imposition of such liens, (y) to which neither the Indenture Trustee nor
the Issuer has consented, and (z) have arisen despite the Servicer not
having surrendered title to the Financed Vehicle (unless the Servicer was
legally obligated to do so), and (ii) tax liens, mechanics' liens and
other liens that arise subsequent to the Closing Date or Subsequent
Transfer Date, as applicable by operation of law, in each case on a
Financed Vehicle and arising solely as a result of an action or omission
of the related Obligor), or (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any such tax
lien, mechanics lien or other lien that arises by operation of law)
security interest in the Trust Estate.
Section 3.9. Annual Statement as to Compliance. The Issuer shall deliver
to the Indenture Trustee and the Insurer, within ninety (90) days after the end
of each fiscal year of the Issuer (commencing with the fiscal year ended
December 31, 2000), and otherwise in compliance with the requirements of TIA
Section 314(a)(4) an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture has been made under such Authorized
Officer's supervision;
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a default
in the compliance of any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status
thereof; and
(iii) such certificate is in compliance with the requirements of TIA
Section 314(a)(4).
Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
26
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee and the Insurer (so long as an Insurer Default shall not have
occurred and be continuing), the due and punctual payment of the principal
of and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee and the Insurer (so
long as an Insurer Default shall not have occurred and be continuing)) to
the effect that such transaction will not have any material adverse tax
consequence to the Issuer, the Insurer, any Noteholder or the
Certificateholders;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee and
the Insurer an Officers' Certificate and an Opinion of Counsel each
stating that such merger or consolidation and such supplemental indenture
comply with this Section 3.10 and that all conditions precedent provided
for in this Section 3.10 relating to such transaction have been complied
with (including any filing required by the Exchange Act); and
(vii) so long as an Insurer Default shall not have occurred and be
continuing, the Issuer shall have given the Insurer written notice of such
conveyance or transfer at least twenty (20) Business Days prior to the
consummation of such action and shall have received the prior written
approval of the Insurer of such conveyance or transfer and the Issuer or
the Person (if other than the Issuer) formed by or surviving such
conveyance or transfer has a net worth, immediately after such conveyance
or transfer, that is (a) greater than zero and (b) not less than the net
worth of the Issuer immediately prior to giving effect to such conveyance
or transfer.
(b) Except as otherwise provided herein and in the Related
Documents, the Issuer shall not convey or transfer all or substantially all of
its properties or assets, including those included in the Trust Estate, to any
Person, unless:
27
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall: (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any State, (B) expressly assumes, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee and the Insurer (so long as an Insurer Default shall
not have occurred and be continuing), the due and punctual payment of the
principal of and interest on all Notes and the performance or observance
of every agreement and covenant of this Indenture and each of the Related
Documents on the part of the Issuer to be performed or observed, all as
provided herein, (C) expressly agrees by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of Holders of the Notes,
(D) unless otherwise provided in such supplemental indenture, expressly
agrees to indemnify, defend and hold harmless the Issuer against and from
any loss, liability or expense arising under or related to this Indenture
and the Notes, and (E) expressly agrees by means of such supplemental
indenture that such Person (or if a group of Persons, then one specified
Person) shall make any filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection with the
Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee and the Insurer (so
long as an Insurer Default shall not have occurred and be continuing)) to
the effect that such transaction will not have any material adverse tax
consequence to the Trust, the Insurer, any Noteholder or the
Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee and
the Insurer an Officers' Certificate and an Opinion of Counsel each
stating that such conveyance or transfer and such supplemental indenture
comply with this Section 3.10 and that all conditions precedent provided
for in this Section 3.10 relating to such transaction have been complied
with (including any filing required by the Exchange Act); and
(vii) so long as an Insurer Default shall not have occurred and be
continuing, the Issuer shall have given the Insurer written notice of such
conveyance or transfer at least twenty (20) Business Days prior to the
consummation of such action and shall have received the prior written
approval of the Insurer of such conveyance or transfer and the Issuer or
the Person (if other than the Issuer) acquiring or surviving such
conveyance or transfer has a net worth, immediately after such conveyance
or transfer, that is (a) greater
28
than zero and (b) not less than the net worth of the Issuer immediately
prior to giving effect to such conveyance or transfer.
Section 3.11. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance
with Section 3.10(a), the Person formed by or surviving such consolidation or
merger (if other than the Issuer) shall succeed to, and be substituted for, and
may exercise every right and power of, the Issuer under this Indenture with the
same effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all or substantially all the
assets and properties of the Issuer pursuant to Section 3.10(b), the Issuer
shall be released from every covenant and agreement of this Indenture to be
observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery of written notice to the Indenture Trustee stating
that the Issuer is to be so released.
Section 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing of the
Receivables in the manner contemplated by this Indenture and the other Related
Documents and activities incidental thereto.
Section 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for (i) the Notes, (ii) obligations arising from time to
time to the Insurer under the Insurance Agreement and (iii) any other
indebtedness permitted by the Related Documents. The proceeds of the Notes shall
be used to purchase the Receivables, to fund the Pre-Funding Account and the
Capitalized Interest Account and to pay the Issuer's organizational,
transactional and start up expenses. Net amounts remaining after such payments
shall be distributed by the Issuer to the Certificateholder(s). The Issuer shall
incur no additional borrowed money indebtedness secured by the Trust Estate
other than the Notes.
Section 3.14. Servicer's Obligations. The Issuer shall cause the Servicer
to comply with Article III and Section 4.10 of the Sale and Servicing Agreement.
Section 3.15. Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by the Sale and Servicing Agreement or this Indenture, the Issuer
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person.
Section 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.17. Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Insurer and the Rating Agencies prompt written notice of
each Event of Default
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hereunder and each default on the part of the Servicer or Triad of its
obligations under the Sale and Servicing Agreement, in each case of which it
becomes aware.
Section 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(iii) set aside or otherwise segregate any amount for any such purpose;
provided, however, that the Issuer may make, or cause to be made, distributions
to the Servicer, the Owner Trustee, the Indenture Trustee and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement or Trust Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Indenture and the Related
Documents.
Section 3.19. Further Instruments and Acts. Upon request of the Indenture
Trustee or the Insurer, the Issuer shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
Section 3.20. Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Related Document.
Section 3.21. Tax Treatment. The Issuer has structured this Indenture and
the Notes with the intention that the Notes will qualify under applicable
federal, state and local tax law as indebtedness. The Issuer and each Holder
agree to treat, and take no action inconsistent with the treatment of, the Notes
(or any beneficial interest therein) as indebtedness for purposes of federal,
state and local income or franchise taxes and any other tax imposed on or
measured by income. Each Holder, by acquisition of a beneficial interest in a
Note, agrees to be bound by the provisions of this Section 3.21.
Section 3.22. Investment Company Act. The Issuer shall conduct its
operations in a manner that will not subject it to registration as an
"investment company" under the Investment Company Act of 1940, as amended.
Section 3.23. Liens. The Issuer shall not contract for, create, incur or
suffer to exist any Lien upon any of its property or assets, whether now owned
or hereafter acquired, except for Permitted Liens.
Section 3.24. Conduct of Business. Except as provided herein and in the
Related Documents, the Issuer shall (a) conduct its business solely in its own
name through its duly authorized officers or agents so as not to mislead others
as to the identity of the Issuer with which those others are concerned, and
particularly shall use its best efforts to avoid the appearance of
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conducting business on behalf of Triad, TFSPC II, any Affiliate thereof or any
Certificateholder or that the assets of the Issuer are available to pay the
creditors of Triad, TFSPC II, any Affiliate thereof or any Certificateholder;
(b) maintain records and books of account separate from those of Triad, TFSPC
II, any Affiliate thereof or any Certificateholder; (c) maintain an arm's-length
relationship with Triad, TFSPC II, any Affiliate thereof or any
Certificateholder and shall not hold itself out as being liable for the debts of
Triad, TFSPC II, any Affiliate thereof or any Certificateholder; (d) keep its
assets and its liabilities wholly separate from those of all other entities,
including Triad, TFSPC II, any Affiliate thereof or any Certificateholder,
except as expressly permitted by the Related Documents; (e) not maintain bank
accounts or other depository accounts to which any Affiliate or
Certificateholder (other than TFSPC II in its capacity as sole Certificateholder
of the Issuer) is an account party, into which any Affiliate or
Certificateholder (other than TFSPC II in its capacity as sole Certificateholder
of the Issuer) makes deposits or from which any Affiliate or Certificateholder
(other than TFSPC II in its capacity as sole Certificateholder of the Issuer)
has the power to make withdrawals, except as otherwise permitted by Sections 3.2
and 4.2 of the Sale and Servicing Agreement; (f) shall obtain proper
authorization for all the Issuer's actions requiring such authorization; (g)
shall obtain proper authorization from TFSPC II and its other
Certificateholders, if any, for all action requiring approval of TFSPC II and
its other Certificateholders, if any; (h) shall pay operating expenses and
liabilities from the Issuer's own funds; (i) shall disclose in its annual
financial statements the effects of the Issuer's transactions under the Related
Documents in accordance with generally accepted accounting principles and shall
disclose that the assets of the Issuer are not available to pay creditors of
Triad, TFSPC II, any Affiliate thereof or any Certificateholder; (j) shall
continuously maintain the resolutions, agreements and other instruments
underlying the transactions described in the Related Documents as official
records; and (k) shall insure that any consolidated financial statements of
Triad, TFSPC II, any Affiliate thereof or any Certificateholder have notes to
the effect that the Issuer is a separate entity whose creditors have a claim on
its assets prior to those assets becoming available to its equity holders.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1. Satisfaction and Discharge of Indenture. This Indenture shall
cease to be of further effect with respect to the Notes except, to the extent
applicable, as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon, (iv)
Sections 3.2 and 3.20, (v) the rights, obligations and immunities of the
Indenture Trustee hereunder (including the rights of the Indenture Trustee under
Section 6.7 and the obligations of the Indenture Trustee under Section 4.2) and
(vi) the rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of them,
and the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, when:
(A) either
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(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen and
that have been replaced or paid as provided in Section 2.5 and (ii)
Notes for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided in
Section 3.3) have been delivered to the Indenture Trustee for
cancellation and the Note Policy has expired and been returned to
the Insurer for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at the Class A-1
Final Scheduled Payment Date, the Class A-2 Final
Scheduled Payment Date or the Class B Final Scheduled
Payment Date, as applicable within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Indenture
Trustee for the giving of notice of redemption by the
Indenture Trustee in the name, and at the expense, of
the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature prior
to the date such amounts are payable), in trust for such purpose, in
an amount sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Indenture Trustee for
cancellation when due to the Class A-1 Final Scheduled Payment Date,
the Class A-2 Final Scheduled Payment Date or the Class B Final
Scheduled Payment Date, as applicable or Redemption Date (if Notes
shall have been called for redemption pursuant to Section 10.1), as
the case may be;
(B) the Issuer has paid or caused to be paid all Insurer
Issuer Secured Obligations and all Indenture Trustee Issuer Secured
Obligations and the Note Policy has expired in accordance with its terms
and has been returned to the Insurer for cancellation;
(C) the Issuer has delivered to the Indenture Trustee an
Officers' Certificate, an Opinion of Counsel and (if required by the TIA,
the Indenture Trustee or the Insurer (so long as an Insurer Default shall
not have occurred and be continuing)) an Independent Certificate from a
firm of certified public accountants, each meeting the applicable
requirements of Section 11.1 and, subject to Section 11.2, each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with; and
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(D) the Issuer has delivered to the Indenture Trustee an
Opinion of Counsel to the effect that the satisfaction and discharge of
the Notes pursuant to this Section shall not cause any Noteholder to be
treated as having sold or exchanged any of its Notes for purposes of
Section 1001 of the Code.
Section 4.2. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.1 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for the
payment or redemption of which such monies have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such monies need not be segregated from the other funds except to
the extent required herein or in the Sale and Servicing Agreement or required by
law.
Section 4.3. Payment of Moneys Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
moneys then held by any Paying Agent other than the Indenture Trustee under this
Indenture with respect to such Notes shall, upon demand of the Issuer, be paid
to the Indenture Trustee to be held and applied according to Section 3.3 hereof
and Sections 4.6 and 4.7 of the Sale and Servicing Agreement, and thereupon such
Paying Agent shall be released from all further liability with respect to such
moneys.
ARTICLE V
REMEDIES
Section 5.1. Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any Governmental Authority):
(i) default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of
five (5) days (solely for purposes of this clause, a payment on the Notes
funded by the Insurer or the Collateral Agent pursuant to the Reserve
Account Agreement shall be deemed to be a payment made by the Issuer);
(ii) default in the payment of the principal of or any installment
of the Principal of any Note when the same becomes due and payable (solely
for purposes of this clause, a payment on the Notes funded by the Insurer
or the Collateral Agent pursuant to the Reserve Account Agreement shall be
deemed to be a payment made by the Issuer);
(iii) so long as an Insurer Default shall not have occurred and be
continuing, an Insurance Agreement Indenture Cross Default shall have
occurred; provided, however, that the occurrence of an Insurance Agreement
Indenture Cross Default may not form the basis of an Event of Default
unless the Insurer shall, upon prior written notice to the Rating
Agencies, have delivered in accordance with Section 11.4 to the Issuer and
the
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Indenture Trustee and not rescinded a written notice specifying that such
Insurance Agreement Indenture Cross Default constitutes an Event of
Default under the Indenture;
(iv) so long as an Insurer Default shall have occurred and be
continuing, default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement a default in the observance or performance of which is elsewhere
in this Section 5.1 specifically dealt with), or any representation or
warranty of the Issuer made in this Indenture or in any certificate or
other writing delivered pursuant hereto or in connection herewith proving
to have been incorrect in any material respect as of the time when the
same shall have been made, and such default shall continue or not be
cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated
or otherwise cured, for a period of thirty (30) days (or for such longer
period, not in excess of ninety (90) days, as may be reasonably necessary
to remedy such default; provided, however, that such default is capable of
remedy within ninety (90) days or less and the Servicer on behalf of the
Owner Trustee delivers an Officer's Certificate to the Indenture Trustee
to the effect that such Owner Trustee has commenced, or will promptly
commence and diligently pursue, all reasonable efforts to remedy such
default) after there shall have been given, by registered or certified
mail, to the Issuer by the Indenture Trustee or to the Issuer and the
Indenture Trustee by the Holders of at least 25% of the Note Balance, a
written notice specifying such default or incorrect representation or
warranty and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder;
(v) so long as an Insurer Default shall have occurred and be
continuing, the filing of a petition for relief by a court having
jurisdiction in the premises in respect of the Issuer, the Company or any
substantial part of their property in an involuntary case under any
applicable Federal or State bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer, the Company or for any substantial part of their property, or
ordering the winding-up or liquidation of the affairs of the Issuer or the
Company, and such petition shall remain unstayed and in effect for a
period of sixty (60) consecutive days; or
(vi) so long as an Insurer Default shall have occurred and be
continuing, the commencement by the Issuer or the Company of a voluntary
case under any applicable Federal or State bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer or
the Company to the entry of an order for relief in an involuntary case
under any such law, or the consent by the Issuer or the Company to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or the
Company or for any substantial part of its property, or the making by the
Issuer or the Company of any general assignment for the benefit of
creditors, or the failure by the Issuer or the Company generally to pay
its debts as such debts become due, or the taking of action by the Issuer
or the Company in furtherance of any of the foregoing.
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The Issuer shall deliver to the Indenture Trustee, the Insurer, the
Noteholders and the Rating Agencies, within five (5) days after the occurrence
thereof, written notice in the form of an Officers' Certificate of any event
that, with the giving of notice or the lapse of time or both, would become an
Event of Default, its status and what action the Issuer is taking or proposes to
take with respect thereto.
Section 5.2. Acceleration of Maturity; Rescission and Annulment.
(a) If an Insurer Default shall not have occurred and be continuing
and an Event of Default shall have occurred and be continuing, the Notes shall
become immediately due and payable at par, together with accrued interest
thereon. If an Event of Default shall have occurred and be continuing, the
Controlling Party may exercise any of the remedies specified in Section 5.4(a).
In the event of any acceleration of any Notes by operation of this Section 5.2,
the Indenture Trustee shall continue to be entitled to make claims under the
Note Policy pursuant to the Sale and Servicing Agreement for Scheduled Payments
on the Notes. Payments under the Note Policy following acceleration of any Notes
shall be applied by the Indenture Trustee:
(i) to Noteholders for amounts due and unpaid on the Notes for
interest, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for interest; and
(ii) to Noteholders for amounts due and unpaid on the Notes for
principal, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal.
(b) In the event any Notes are accelerated due to an Event of
Default, the Insurer shall have the right (in addition to its obligation to pay
Scheduled Payments on the Class A Notes in accordance with the Note Policy), but
not the obligation, to make payments under the Note Policy or otherwise of
interest and principal due on such Notes, in whole or in part, on any date or
dates following such acceleration as the Insurer, in its sole discretion, shall
elect.
(c) If an Insurer Default shall have occurred and be continuing and
an Event of Default shall have occurred and be continuing, the Indenture Trustee
in its discretion may, or if so requested in writing by the Note Majority shall
declare by written notice to the Issuer that the Notes become, whereupon they
shall become, immediately due and payable at par, together with accrued interest
thereon.
(d) If an Insurer Default shall have occurred and be continuing,
then at any time after such declaration of acceleration of maturity has been
made by the Indenture Trustee and before a judgment or decree for payment of the
money due has been obtained by the Indenture Trustee as hereinafter in this
Article V provided, the Note Majority, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences
if:
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(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes if
the Event of Default giving rise to such acceleration had not occurred;
and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if the Notes are accelerated following
the occurrence of an Event of Default, the Issuer will, upon demand of the
Indenture Trustee, pay to it as and to the extent provided in Sections 4.6 and
4.7 of the Sale and Servicing Agreement, for the benefit of the Holders of
Notes, the whole amount then due and payable on such Notes for principal and
interest, and, to the extent payment at such rate of interest shall be legally
enforceable, upon overdue installments of interest, at the applicable interest
rate, and in addition thereto such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
its agents and counsel.
(b) Each Issuer Secured Party hereby irrevocably and unconditionally
appoints the Controlling Party as the true and lawful attorney-in-fact of such
Issuer Secured Party for so long as such Issuer Secured Party is not the
Controlling Party, with full power of substitution, to execute, acknowledge and
deliver any notice, document, certificate, paper, pleading or instrument and to
do in the name of the Controlling Party as well as in the name, place and stead
of such Issuer Secured Party such acts, things and deeds for or on behalf of and
in the name of such Issuer Secured Party under this Indenture (including
specifically under Section 5.4) and under the Related Documents which such
Issuer Secured Party could or might do or which may be necessary, desirable or
convenient in such Controlling Party's sole discretion to effect the purposes
contemplated hereunder and under the Related Documents and, without limitation,
following the occurrence of an Event of Default, exercise full right, power and
authority to take, or defer from taking, any and all acts with respect to the
administration, maintenance or disposition of the Trust Estate.
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(c) In the event that an Event of Default occurs and is continuing,
the Indenture Trustee may, in its discretion but with the prior written consent
of the Controlling Party and shall, at the direction of the Controlling Party
(except as provided in Section 5.3(d) below), proceed to protect and enforce its
rights and the rights of the Noteholders, by such appropriate Proceedings as the
Indenture Trustee or the Controlling Party shall deem most effective to protect
and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by law.
(d) Notwithstanding anything to the contrary contained in this
Indenture (including, without limitation, Sections 5.4(a), 5.11, 5.12 and 5.16)
and regardless of whether an Insurer Default shall have occurred and be
continuing, if the Issuer fails to perform its obligations under Section 10.1(b)
hereof when and as due, the Indenture Trustee may in its discretion (and without
the consent of the Controlling Party) proceed to protect and enforce its rights
and the rights of the Noteholders by such appropriate proceedings as the
Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for specific performance of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy or legal or equitable right vested in the Indenture
Trustee by this Indenture or by law; provided that the Indenture Trustee shall
only be entitled to take any such actions without the consent of the Controlling
Party to the extent such actions (x) are taken only to enforce the Issuer's
obligations to redeem the principal amount of Notes and (y) are taken only
against the portion of the Indenture Collateral, if any, consisting of the
Pre-Funding Account, the Capitalized Interest Account, any investments therein
and any proceeds thereof.
(e) In the event that there shall be pending, relative to the Issuer
or any other obligor upon the Notes or any Person having or claiming an
ownership interest in the Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable Federal or State bankruptcy, insolvency or
other similar law, or in case a receiver, assignee, trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor upon the Notes, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor upon the Notes, the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Indenture Trustee shall have made any demand pursuant to this
Section 5.3, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
37
(ii) unless prohibited by applicable law or regulations, to vote on
behalf of the Holders of the Notes in any election of a trustee, a standby
trustee or any Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee or the Holders of Notes allowed in any Proceedings relative to the
Issuer, its creditors and its property;
and any trustee, receiver, liquidator, assignee, custodian, sequestrator or
other similar official in any such Proceeding is hereby authorized by each of
such Noteholders to make payments to the Indenture Trustee, and, if the
Indenture Trustee shall consent to the making of payments directly to such
Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of negligence
or bad faith.
(f) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(g) All rights of action and of asserting claims under this
Indenture, the Class A Reserve Account or under any of the Notes may be enforced
by the Indenture Trustee without the possession of any of the Notes or the
production thereof in any trial or other Proceedings relative thereto, and any
such action or Proceedings instituted by the Indenture Trustee shall be brought
in its own name and as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation
of the Indenture Trustee, each predecessor Indenture Trustee and their
respective agents and attorneys, shall be for the ratable benefit of the Holders
of the Notes.
(h) In any Proceedings brought by the Indenture Trustee or to which
the Indenture Trustee shall be a party (and also any Proceedings involving the
interpretation of any provision of this Indenture or the Reserve Account
Agreement), the Indenture Trustee shall be held to represent all the Holders of
the Notes, and it shall not be necessary to make any Noteholder a party to any
such Proceedings.
Section 5.4. Remedies; Priorities.
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(a) If an Event of Default shall have occurred and be continuing,
the Controlling Party may do one or more of the following (subject to Sections
5.5 and 5.11):
(i) institute Proceedings in its own name and as or on behalf of a
trustee of an express trust for the collection of all amounts then payable
on the Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect from
the Issuer and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Issuer Secured Parties;
(iv) elect to have the Issuer maintain possession of the Receivables
and continue to apply collections on such Receivables as if there had been
no declaration of acceleration; and
(v) direct the Indenture Trustee in writing to sell the Trust
Estate, or any portion thereof or rights or interest therein, at one or
more public or private sales called and conducted in any manner permitted
by law; provided, however, that:
(A) if the Insurer is the Controlling Party, the Insurer
may not sell or otherwise liquidate the Trust Estate following an
Insurance Agreement Indenture Cross Default unless: (x) such
Insurance Agreement Indenture Cross Default arises from a claim
being made on the Note Policy or from the insolvency of the Trust,
Triad or TFSPC II or the Trust becomes taxable as an association (or
publicly traded partnership) taxable as a corporation for federal or
state income tax purposes, or the Class A Notes are not being
treated as indebtedness for federal or applicable state income tax
purposes and such characterization having a material adverse effect
on the Trust, the Noteholders or the Insurer and such sale is in
accordance with Section 5.5 or (y) the proceeds of such sale or
liquidation distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon such Notes
for principal and interest; or
(B) if the Indenture Trustee is the Controlling Party,
the Indenture Trustee may not sell or otherwise liquidate the Trust
Estate following an Event of Default, other than an Event of Default
described in Section 5.1(i) or (ii), unless: (x) all the Noteholders
consent thereto, (y) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to discharge in full
all amounts then due and unpaid upon such Notes for principal and
interest or (z) the Indenture Trustee determines that the Trust
Estate will not continue to provide sufficient funds for the payment
of principal of and interest on the Notes as they would have become
due if the Notes had not been declared due and payable, and
39
the Indenture Trustee provides prior written notice to the Rating
Agency and obtains the consent of Holders of the Note Majority. In
determining such sufficiency or insufficiency with respect to
clauses (y) and (z) above, the Indenture Trustee may, but need not,
obtain and rely upon an opinion of an Independent investment banking
or accounting firm of national reputation as to the feasibility of
such proposed action and as to the sufficiency of the Trust Estate
for such purpose.
(b) Following (i) an acceleration of the Notes pursuant to Section
5.2 or, (ii) in the event that an Insurer Default shall have occurred and be
continuing, the occurrence of an Event of Default pursuant to Section 5.1(i),
5.1(ii), 5.1(iv), 5.1(v) or 5.1(vi) of the Indenture or (iii) the receipt of
Insolvency Proceeds pursuant to Section 10.1(b) of the Sale and Servicing
Agreement, the Payment Amount, including any money or property collected
pursuant to this Section and any such Insolvency Proceeds, shall be applied by
the Indenture Trustee on the related Payment Date in the following order of
priority:
(i) first, amounts due and owing and required to be distributed to
the Servicer (provided there is no Servicer Termination Event), the Owner
Trustee, the Collateral Agent, Back Up Servicer and the Indenture Trustee,
respectively, pursuant to priorities (i) and (ii) of Section 4.6(b) of the
Sale and Servicing Agreement and not previously distributed, in the order
of such priorities and without preference or priority of any kind within
such priorities;
(ii) second, to Class A-1 Noteholders and Class A-2 Noteholders for
amounts due and unpaid on the Class A-1 Notes and the Class A-2 Notes for
interest, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Class A-1 Notes and Class A-2 Notes,
respectively, for interest;
(iii) third, to Class A-1 Noteholders and Class A-2 Noteholders for
amounts due and unpaid on the Class A-1 Notes and Class A-2 Notes for
principal, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Class A-1 Notes and Class A-2 Notes,
respectively, for principal;
(iv) fourth, amounts due and owing and required to be distributed to
the Insurer pursuant to priority (vi) of Section 4.6(b) of the Sale and
Servicing Agreement and not previously distributed); and
(v) fifth, to Class B Noteholders for amounts due and unpaid on the
Class B Notes for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class B Notes for
interest;
(vi) sixth, to Class B Noteholders for amounts due and unpaid on the
Class B Notes for principal, ratably, without preference of any kind,
according to the amounts due and payable on the Class B Notes for
principal; and
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(vii) seventh, to the Collateral Agent to be applied as provided in
the Class A Reserve Account Agreement;
provided that any amounts collected from the Pre-Funding Account or the
Capitalized Interest Account shall be paid, first, for amounts due and unpaid on
the Class A Notes for principal for distribution to Class A Noteholders in
accordance with Section 10.1(b) hereof and, second, in accordance with
priorities (i) through (vii) above.
(c) The Indenture Trustee may fix a special record date and special
payment date for any payment to Noteholders pursuant to this Section. At least
fifteen (15) days before such special record date, the Indenture Trustee shall
mail to each Noteholder and the Issuer a notice that states the special record
date, the special payment date and the amount to be paid.
Section 5.5. Rights of Insurer to Direct Indenture Trustee; Class B
Noteholder's Right of First Refusal.
(a) The Insurer, after giving written notice to the Indenture
Trustee, shall have the right to direct the time, method and place at or by
which the Indenture Trustee conducts any proceeding for any remedy available to
the Indenture Trustee, or exercise any such trust or power conferred upon the
Indenture Trustee.
(b) If in the exercise of its rights, powers and remedies solely
pursuant to Section 5.4(a)(v)(A), the Insurer directs the Indenture Trustee to
liquidate Receivables with an aggregate Principal Balance exceeding 25% of the
Aggregate Principal Balance of all Receivables by selling such Receivables to
one or more third parties in one or more substantially contemporaneous sales,
the Insurer shall direct the Indenture Trustee, prior to contracting to sell any
such Receivables to a third party, to (i) solicit and receive no fewer than
three bids and (ii) notify any Holder of Outstanding Class B Notes evidencing in
the aggregate more than 50% of the Class B Note Balance of its intent to sell
such Receivables and the amount of the highest bid the Indenture Trustee has
received to purchase such Receivables (the "Strike Bid"). Such Class B
Noteholders or their designee shall have ten (10) Business Days from the date of
notification to submit a bid equal to or greater than the Strike Bid. If the
Indenture Trustee has not received a bid from such Class B Noteholders or their
designee within such ten (10) Business Day period, the Insurer shall be entitled
to direct the Indenture Trustee to consummate the purchase at the Strike Bid. If
the Indenture Trustee receives a bid equal to or greater than the Strike Bid
from the Class B Noteholders or their designee with such ten (10) Business Day
period, the Insurer shall direct the Indenture Trustee to accept such bid of the
Class B Noteholders or their designee and the Class B Noteholders shall make
payment for the Receivables within 10 days in immediately available funds.
Section 5.6. Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
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(ii) the Holders of not less than 25% of the Note Balance have made
written request to the Indenture Trustee to institute such Proceeding in
respect of such Event of Default in its own name as Indenture Trustee
hereunder;
(iii) such Holders have offered to the Indenture Trustee indemnity
reasonably satisfactory to the Indenture Trustee against the costs,
expenses and liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for sixty (60) days after its receipt of
such notice, request and offer of indemnity has failed to institute such
Proceeding; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such sixty (60) day period by the
Note Majority; and
(vi) an Insurer Default shall have occurred and be continuing;
it being understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Noteholders or to obtain or to seek to obtain priority or preference over any
other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Note Balance, the Indenture
Trustee shall maintain the funds on deposit in the Trust Accounts and take such
other action, if any, that it shall determine in its sole discretion or with the
advice of counsel (which shall be at Issuer's expense), notwithstanding any
other provisions of this Indenture. In no event shall the Indenture Trustee be
liable for taking any action or refraining from taking any action should it
receive such conflicting or inconsistent instructions from such Holders.
Section 5.7. Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, on or after the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
Section 5.8. Restoration of Rights and Remedies. If the Controlling Party
or any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Controlling Party or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee, the
Insurer and the Noteholders shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former positions
hereunder, and
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thereafter all rights and remedies of the Indenture Trustee, the Insurer and the
Noteholders shall continue as though no such Proceeding had been instituted.
Section 5.9. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Controlling Party or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee, the Controlling Party or any Holder of Notes to exercise any
right or remedy accruing upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
V or by law to the Indenture Trustee, the Insurer or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee, the Insurer or by the Noteholders, as the case may be.
Section 5.11. Control by Noteholders. If the Indenture Trustee is the
Controlling Party, the Holders of the Note Majority shall have the right to
direct the time, method and place of conducting any Proceeding for any remedy
available to the Indenture Trustee with respect to the Notes or exercising any
trust or power conferred on the Indenture Trustee; provided, however, that:
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.4, any direction to
the Indenture Trustee to sell or liquidate the Trust Estate shall be by
Holders of Notes representing not less than 100% of the Note Balance;
(iii) if the conditions set forth in Section 5.5 have been satisfied
and the Indenture Trustee elects to retain the Trust Estate pursuant to
such Section, then any direction to the Indenture Trustee by Holders of
Notes representing less than 100% of the Note Balance to sell or liquidate
the Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction; and
provided, however, that, subject to Section 6.1, the Indenture Trustee need not
take any action that it reasonably determines might involve it in liability or
would reasonably be expected to materially adversely affect the rights of any
Noteholder(s) not consenting to such action.
Section 5.12. Waiver of Past Default. If an Insurer Default shall have
occurred and be continuing prior to the declaration of the acceleration of the
maturity of Notes as provided in Section 5.4, the Holders of the Note Majority
may waive any past Default or Event of Default and
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its consequences except a Default (a) in payment of principal of or interest on
any of the Notes or (b) in respect of a covenant or provision hereof that cannot
be modified or amended without the consent of the Holder of each Note. In the
case of any such waiver, the Issuer, the Indenture Trustee and the Holders of
the Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.
The Indenture Trustee shall promptly provide written notice to each Rating
Agency of any such waiver.
Section 5.13. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such Holder's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder(s) holding in
the aggregate more than 10% of the Note Balance or (c) any suit instituted by
any Noteholder for the enforcement of the payment of principal of or interest on
any Note on or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 5.15. Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to the Notes or this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Issuer or
by the levy of any execution under such judgment upon any portion of the Trust
Estate or upon any of the assets of the Issuer.
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Section 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so
(upon the direction of the Servicer) and at the Issuer's expense, the Issuer
shall take all such lawful action as the Indenture Trustee may request to compel
or secure the performance and observance by Triad and the Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement in accordance, with the terms thereof, and
to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of Triad or the
Servicer thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by Triad or the Servicer of each of
their obligations under the Sale and Servicing Agreement.
(b) If the Indenture Trustee is the Controlling Party and if an
Event of Default has occurred and is continuing, the Indenture Trustee may, and
subject to Section 5.11 hereof at the direction (which direction shall be in
writing) of the Holders of the Note Majority shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against Triad or the
Servicer under or in connection with the Sale and Servicing Agreement, including
the right or power to take any action to compel or secure performance or
observance by Triad or the Servicer of each of their obligations to the Company
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement, and any right of the
Issuer to take such action shall be suspended.
Section 5.17. Subrogation. The Indenture Trustee shall receive as
attorney-in-fact of each Class A Noteholder any Note Policy Claim Amount from
the Insurer. Any and all Note Policy Claim Amounts disbursed by the Indenture
Trustee from claims made under the Note Policy shall not be considered payment
by the Trust or from the Class A Reserve Account with respect to such Notes and
shall not discharge the obligations of the Trust with respect thereto. The
Insurer shall, to the extent it makes any payment with respect to the Class A
Notes, become subrogated to the rights of the recipient of such payments to the
extent of such payments. Subject to and conditioned upon any payment with
respect to the Class A Notes by or on behalf of the Insurer, the Indenture
Trustee shall assign to the Insurer all rights to the payment of interest of
interest or principal with respect to the Class A Notes which are then due for
payment to the extent of all payments made by the Insurer, and the Insurer may
exercise any option, vote, right, power or the like with respect to the Class A
Notes to the extent that it has made payment pursuant to the Note Policy. To
evidence such subrogation, the Note Registrar shall note the Insurer's rights as
subrogee upon the register of Noteholders upon receipt from the Insurer of proof
of payment by the Insurer of any Class A Interest Payment Amount or Class A
Principal Payment Amount. The foregoing subrogation shall in all cases be
subject to the rights of the Class A Noteholders to receive the Scheduled
Payments in respect of the Notes.
Section 5.18. Preference Claims. (a) In the event that the Indenture
Trustee has received a certified copy of an order of the appropriate court that
any Class A Interest Payment Amount or Class A Principal Payment Amount paid on
a Class A Note has been avoided in whole or in part as a preference payment
under applicable bankruptcy law, the Indenture Trustee shall so
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notify the Insurer, shall comply with the provisions of the Note Policy to
obtain payment by the Insurer of such avoided payment, and shall, at the time it
provides notice to the Insurer, notify Holders of the Class A Notes by mail
that, in the event that any Class A Noteholder's payment is so recoverable, such
Class A Noteholder will be entitled to payment pursuant to the terms of the Note
Policy. The Indenture Trustee shall furnish to the Insurer at its written
request, the requested records it holds in its possession evidencing the
payments of principal of and interest on the Class A Notes, if any, which have
been made by the Indenture Trustee and subsequently recovered from the Class A
Noteholders, and the dates on which such payments were made. Pursuant to the
terms of the Note Policy, the Insurer will make such payment on behalf of the
Class A Noteholder to the receiver, conservator, debtor-in-possession or trustee
in bankruptcy named in the Order (as defined in the Note Policy) and not to the
Indenture Trustee or any Class A Noteholder directly (unless a Class A
Noteholder has previously paid such payment to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy, in which case the Insurer will
make such payment to the Indenture Trustee for distribution to such Class A
Noteholder upon proof of such payment reasonably satisfactory to the Insurer).
(b) The Indenture Trustee shall promptly notify the Insurer of any
proceeding or the institution of any action (of which a Responsible Officer of
the Indenture Trustee has actual knowledge), seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law (a "Preference Claim") of any distribution made
with respect to the Notes. Each Holder of Class A Notes, by its purchase of the
Class A Notes, and the Indenture Trustee hereby agree that so long as an Insurer
Default shall not have occurred and be continuing, the Insurer may at any time
during the continuation of any proceeding relating to a Preference Claim direct
all matters relating to such Preference Claim including, without limitation, (i)
the direction of any appeal of any order relating to any Preference Claim and
(ii) the posting of any surety, supersedes or performance bond pending any such
appeal at the expense of the Insurer, but subject to reimbursement as provided
in the Insurance Agreement. In addition, and without limitation of the
foregoing, as set forth in Section 5.17, the Insurer shall be subrogated to, and
each Class A Noteholder and the Indenture Trustee hereby delegate an assign, to
the fullest extent permitted by law, the rights of the Indenture Trustee and
each Class A Noteholder in the conduct of any proceeding with respect to a
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.1. Duties of the Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and the Related Documents and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default actually
known to a Responsible Officer:
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(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and its other
Related Documents and no implied covenants or obligations shall be read
into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Indenture Trustee, the Indenture Trustee
shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture and the Indenture
Trustee's other Related Documents.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this clause (c) does not limit the effect of clause (b) of this
Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction by the Insurer (so long as an Insurer Default shall have not
occurred and be continuing) or a Note Majority (if an Insurer Default has
occurred and is continuing) or otherwise received by it pursuant to this
Indenture;
(iv) the Indenture Trustee shall not be charged with knowledge of an
Event of Default or Servicer Termination Event unless a Responsible
Officer obtains actual knowledge of such event or the Indenture Trustee
receives written notice of such event from Triad, the Insurer, the
Servicer or Holders owning Notes aggregating not less than 10% of the Note
Balance; and
(v) the Indenture Trustee shall have no duty to monitor the
performance of the Issuer, the Company, Triad or the Servicer, nor shall
it have any liability in connection with malfeasance or nonfeasance by the
Issuer, the Company, Triad or the Servicer. The Indenture Trustee shall
have no liability in connection with compliance of the Issuer, the
Company, Triad or the Servicer with statutory or regulatory requirements
related to the Receivables. The Indenture Trustee shall not make or be
deemed to have made any representations or warranties with respect to the
Receivables or the validity or sufficiency of any pledge or assignment of
the Receivables to the Indenture Trustee.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to clauses (a), (b), (c) and (g) and to the
provisions of the TIA.
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(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law, this Indenture
or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur or be subjected to
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds to
believe that repayments of such funds or adequate indemnity reasonably
satisfactory to it against any loss, liability or expense is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to this Section 6.1 and to the provisions of the TIA.
(i) The Indenture Trustee shall, upon one (1) Business Day's prior
notice to the Indenture Trustee, permit any representative of the Insurer,
during the Indenture Trustee's normal business hours, to examine all books of
account, records, reports and other papers of the Indenture Trustee relating to
the Notes, to make copies and extracts therefrom and to discuss the Indenture
Trustee's affairs and actions, as such affairs and actions relate to the
Indenture Trustee's duties with respect to the Notes, with the Indenture
Trustee's officers and employees responsible for carrying out the Indenture
Trustee's duties with respect to the Notes. All expenses incurred by the
Indenture Trustee in connection with such examination shall be borne by the
Issuer.
(j) The Indenture Trustee shall, and hereby agrees that it shall,
perform all of the obligations and duties required of it under the Sale and
Servicing Agreement.
(k) In no event shall the Indenture Trustee be required to perform,
or be responsible for the manner of performance of, any of the obligations of
the Servicer, or any other party, under the Sale and Servicing Agreement except
that The Chase Manhattan Bank solely in its capacity as Backup Servicer, shall
perform and be responsible for such obligations during such time, if any, as the
Backup Servicer shall be the successor to, and be vested with the rights,
powers, duties and privileges of the Servicer in accordance with the terms of
the Sale and Servicing Agreement.
(l) The Indenture Trustee shall, and hereby agrees that it will,
hold the Note Policy in trust, and will hold any proceeds of any claim on the
Note Policy in trust solely for the use and benefit of the Class A Noteholders.
(m) Without limiting the generality of this Section 6.1, the
Indenture Trustee, in its capacity as Indenture Trustee, shall have no duty,
unless specifically set forth in this Indenture or the Related Documents, (i) to
see to any recording, filing or depositing of this Indenture or any agreement
referred to herein or any financing statement evidencing a security
48
interest in the Financed Vehicles, or to see to the maintenance of any such
recording or filing or depositing or to any recording, refiling or redepositing
of any thereof, (ii) to see to the payment or discharge of any tax, assessment
or other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against any part of the Trust Estate, (iii) to
confirm or verify the contents of any reports or certificates delivered to the
Indenture Trustee pursuant to this Indenture or the Sale and Servicing Agreement
believed by the Indenture Trustee to be genuine and to have been signed or
presented by the proper party or parties, or (iv) to inspect the Financed
Vehicles at any time or ascertain or inquire as to the performance or observance
of any of the Issuer's, the Company's or the Servicer's representations,
warranties or covenants or the Servicer's duties and obligations as Servicer.
(n) The Indenture Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture and left to the
Indenture Trustee's discretion, or to institute, conduct or defend any
litigation under this Agreement or in relation to this Indenture, at the
request, order or direction of any of the Noteholders, pursuant to the
provisions of this Indenture, unless such Noteholders shall have offered to the
Indenture Trustee reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby.
Section 6.2. Rights of Indenture Trustee.
(a) The Indenture Trustee may conclusively rely and shall be fully
protected in acting on any document reasonably believed by it to be genuine and
to have been signed or presented by the proper person. The Indenture Trustee
need not investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officers' Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys or a custodian or nominee, and (with respect to actions or
omissions by an attorney that is not an employee of the Indenture Trustee) the
Indenture Trustee shall not be responsible for any misconduct or negligence on
the part of, or for the supervision of, any such attorney.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or within
its rights or powers; provided, however, that the Indenture Trustee's conduct
does not constitute willful misconduct, negligence (other than errors in
judgment) or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture,
the Related Documents and the Notes shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
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(f) The Indenture Trustee, other than in its capacity as Custodian
under the Sale and Servicing Agreement, shall not be required to make any
initial or periodic examination of any files or records related to the
Receivables for the purpose of establishing the presence or absence of defects,
the compliance by the Issuer with its representations and warranties or for any
other purpose.
(g) If the Indenture Trustee is also acting as Paying Agent or Note
Registrar hereunder, the rights and protections afforded to the Indenture
Trustee pursuant to this Article VI shall also be afforded to such Paying Agent
or Note Registrar.
Section 6.3. Individual Rights of the Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not the Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
Section 6.4. Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be responsible for, and makes no representation as to the validity or
adequacy of, this Indenture, the Trust Estate or the Notes; (except the
enforceability of this Indenture and the Indenture Trustee's Related Documents
against the Indenture Trustee) shall not be accountable for the Issuer's use of
the proceeds from the Notes; and shall not be responsible for any statement of
the Issuer in this Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Indenture Trustee's certificate
of authentication.
Section 6.5. Notice of Defaults. If an Event of Default or Servicer
Termination Event occurs and is continuing and is known to, or written notice
thereof has been delivered to, a Responsible Officer, the Indenture Trustee
shall promptly mail to the Rating Agencies and each Noteholder notice of the
Event of Default or Servicer Termination Event after such Responsible Officer
has knowledge or written notice of such Event of Default or Servicer Termination
Event. Except in the case of an Event of Default in payment of principal of or
interest on any Note (including payments pursuant to the mandatory redemption
provisions of such Note), the Indenture Trustee may withhold the notice of such
Event of Default if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Noteholders.
Section 6.6. Reports by Indenture Trustee to the Holders. The Indenture
Trustee shall deliver to each Noteholder such information as set forth in
Section 4.10 of the Sale and Servicing Agreement.
Section 6.7. Compensation, Reimbursement and Indemnity.
(a) The Issuer shall, or shall cause the Servicer to, pay to the
Indenture Trustee the Indenture Trustee Fee, including compensation for
extraordinary services such as default administration in accordance with Section
4.6 of the Sale and Servicing Agreement. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall, or shall cause the Servicer to, reimburse the Indenture
Trustee
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for all reasonable out-of-pocket expenses incurred or made by it, including
costs of collection, in addition to the compensation for its services, to the
extent such expenses do not result from the bad faith or negligence of the
Indenture Trustee. Such expenses shall include securities transaction charges
and the reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts but, with respect
to securities transaction charges, only to the extent such charges have not been
waived due to the Indenture Trustee's receipt of payment from any financial
institution with respect to certain eligible investments specified by the
Servicer pursuant to Section 4.1(c) of the Sale and Servicing Agreement.
(b) The Issuer shall or shall cause the Servicer in accordance with
Section 8.1 of the Sale and Servicing Agreement to indemnify the Indenture
Trustee and its officers, directors, employees and agents against any and all
loss, liability or expense (including attorneys' fees) incurred by them in
connection with the administration of this trust and the performance of its
duties hereunder. The Indenture Trustee shall notify the Issuer and the Servicer
promptly of any claim for which it may seek indemnity. Failure by the Indenture
Trustee to so notify the Issuer and the Servicer shall not relieve the Issuer or
the Servicer of its obligations hereunder. The Issuer shall, or shall cause the
Servicer to, defend the claim and the Indenture Trustee may have separate
counsel and the Issuer shall, or shall cause the Servicer to, pay the fees and
expenses of such counsel. Neither the Issuer nor the Servicer need reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence (other than errors in judgment) or bad faith.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Indenture Trustee be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Indenture Trustee has been advised of the likelihood of such loss or
damage and regardless of the form of action. This indemnity shall survive the
termination of the Agreement.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section 6.7 shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of an Event of Default specified in
Section 5.1(iv) or (v), the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
Federal or State bankruptcy, insolvency or similar law. Notwithstanding anything
else set forth in this Indenture or the Related Documents, the Indenture Trustee
agrees that the obligations of the Issuer to the Indenture Trustee hereunder and
under the Related Documents shall be recourse to the Trust Estate only and
specifically shall not be recourse to the assets of the Issuer, the Company or
Triad, except that Triad, as Servicer, has undertaken the payment and indemnity
obligations as described in this Section 6.7. In addition, the Indenture Trustee
agrees that its recourse to the amounts held pursuant to the Reserve Account
Agreement shall be limited to the right to receive the distributions referenced
to in Section 4.6(b) of the Sale and Servicing Agreement and that its recourse
to TFSPC II shall be solely as explicitly set forth in the Related Documents.
Section 6.8. Replacement of the Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective
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until the acceptance of appointment by the successor Indenture Trustee pursuant
to this Section 6.8. Subject to the preceding sentence, the Indenture Trustee
may resign at any time by providing sixty (60) days prior written notice to the
Issuer, the Insurer and the Noteholders or sooner if so required by law. The
Issuer may and, at the request of the Insurer (unless an Insurer Default shall
have occurred and be continuing) shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect of the
Indenture Trustee in an involuntary case or proceeding under federal or
state banking or bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar
law, shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Indenture Trustee or for any
substantial part of the Indenture Trustee's property, or ordering the
winding-up or liquidation of the Indenture Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws, as now
or hereafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law is commenced with respect to the
Indenture Trustee and such case is not dismissed within 60 days;
(iv) the Indenture Trustee commences a voluntary case under any
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or other similar official) for the Indenture
Trustee or for any substantial part of the Indenture Trustee's property,
or makes any assignment for the benefit of creditors or fails generally to
pay its debts as such debts become due or take any corporate action in
furtherance of any of the foregoing; or
(v) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly provide written notice of such event to the Rating Agencies, the
Insurer and the Noteholders and shall appoint a successor Indenture Trustee
acceptable to the Insurer (so long as an Insurer Default shall not have occurred
and be continuing) or a Note Majority (if an Insurer Default has occurred and is
continuing). If the Issuer shall fail to appoint such a successor Indenture
Trustee, the Insurer (so long as an Insurer Default shall not have occurred and
be continuing) or a Note Majority (if an Insurer Default has occurred and is
continuing) may appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, the Insurer (provided that an
Insurer Default shall not have occurred and be continuing) and to the Issuer.
Thereupon the resignation or removal of the retiring
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Indenture Trustee shall become effective, and the successor Indenture Trustee
shall have all the rights, powers and duties of the retiring Indenture Trustee
under this Indenture. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor Indenture
Trustee and shall be paid all fees and expenses owed through the date of
termination.
If a successor Indenture Trustee does not take office within sixty (60)
days after the retiring Indenture Trustee provides notice of intended
resignation or is removed, the retiring Indenture Trustee, the Issuer or the
Insurer (so long as an Insurer Default shall not have occurred and be
continuing) or a Note Majority (if an Insurer Default has occurred and is
continuing) may petition any court of competent jurisdiction for the appointment
of a successor Indenture Trustee.
If the Indenture Trustee shall fail to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's obligations under Section 6.7 shall continue for the
benefit of the retiring Indenture Trustee. The retiring Indenture Trustee shall
have no liability for any act or omission by any successor Indenture Trustee.
Section 6.9. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee. The Indenture
Trustee shall provide the Rating Agencies, the Insurer and the Issuer written
notice of any such transaction as soon as practicable thereafter; provided,
however, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11.
If at the time of any such succession by merger, conversion or
consolidation to the Indenture Trustee any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee may
adopt the certificate of authentication of any predecessor trustee, and deliver
such Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may authenticate
such Notes either in the name of any predecessor Indenture Trustee hereunder or
in the name of the successor to the Indenture Trustee; and in all such cases
such certificates of authentication shall have the full force and effect to the
same extent given to the certificate of authentication of the Indenture Trustee
anywhere in the Notes or in this Indenture.
Section 6.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee with the consent of the Insurer (so long as an Insurer Default shall not
have occurred and be continuing) or a Note Majority (if an Insurer Default has
occurred and is continuing) shall have the power and may execute and deliver all
53
instruments to appoint one or more Person(s) to act as co-trustee(s), or
separate trustee(s), of all or any part of the Trust Estate, and to vest in such
Person(s), in such capacity and for the benefit of the Noteholders, such title
to the Trust Estate, or any part thereof, and, subject to the other provisions
of this Section, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.8.
(c) Every 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 Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture 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 Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act(s) are to be performed, the
Indenture Trustee shall be incompetent or unqualified to perform such
act(s), in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate 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
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(d) Any notice, request or other writing given to the Indenture
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 Indenture and
the conditions of this Article VI. 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
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(e) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Indenture 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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(f) The Indenture Trustee shall have no obligation to determine
whether a co-trustee or separate trustee is legally required in any jurisdiction
in which any part of the Trust Estate may be located.
Section 6.11. Eligibility; Disqualification. The Indenture Trustee shall
at all times satisfy the requirements of ss.26(a)(1) of the Investment Company
Act of 1940, as amended and the requirements of TIA ss.301(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it shall have
a long-term debt rating of BBB- or better by the Rating Agencies. The Indenture
Trustee shall provide copies of such reports to the Insurer upon request. The
Indenture Trustee shall comply with TIA ss.310(b), including the optional
provision permitted by the second sentence of TIA ss.310(b)(9); provided,
however, that there shall be excluded from the operation of TIA ss.310(b)(1) any
indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss.311(a), excluding any creditor
relationship listed in TIA ss.311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss.311(a) to the extent indicated.
Section 6.13. Appointment and Powers. Subject to the terms and conditions
hereof, each of the Issuer Secured Parties hereby appoints The Chase Manhattan
Bank as Indenture Trustee with respect to the Indenture Collateral, and The
Chase Manhattan Bank hereby accepts such appointment and agrees to act as the
Indenture Trustee with respect to the Indenture Collateral for the Issuer
Secured Parties, to maintain custody and possession of such Indenture Collateral
(except as otherwise provided hereunder and under the Sale and Servicing
Agreement) and to perform the other duties of the Indenture Trustee in
accordance with the provisions of this Indenture and the Related Documents. Each
Issuer Secured Party hereby authorizes the Indenture Trustee to take such action
on its behalf, and to exercise such rights, remedies, powers and privileges
hereunder, as the Controlling Party may direct and as are specifically
authorized to be exercised by the Indenture Trustee by the terms hereof,
together with such actions, rights, remedies, powers and privileges as are
reasonably incidental thereto. The Indenture Trustee shall act upon and in
compliance with the written instructions of the Controlling Party delivered
pursuant to this Indenture promptly following receipt of such written
instructions; provided that the Indenture Trustee shall not act in accordance
with any instructions (i) which are not authorized by, or in violation of the
provisions of, this Indenture, (ii) which are in violation of any applicable
law, rule or regulation or (iii) for which the Indenture Trustee has not
received reasonable indemnity. Receipt of such instructions shall not be a
condition to the exercise by the Indenture Trustee of its express duties
hereunder, except where this Indenture provides that the Indenture Trustee is
permitted to act only following and in accordance with such instructions.
Section 6.14. Performance of Duties. The Indenture Trustee shall have no
duties or responsibilities except those expressly set forth in this Indenture
and the other Related Documents to which the Indenture Trustee is a party or as
directed by the Controlling Party in accordance with this Indenture. The
Indenture Trustee shall not be required to take any discretionary actions
hereunder except at the written direction and with the indemnification of the
Controlling Party.
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The Indenture Trustee shall, and hereby agrees that it will, subject to this
Article VI, perform all of the duties and obligations required of it under the
Sale and Servicing Agreement.
Section 6.15. Limitation on Liability. Neither the Indenture Trustee nor
any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them hereunder or in connection
herewith, except that the Indenture Trustee shall be liable for its negligence
(other than errors in judgment), bad faith or willful misconduct; nor shall the
Indenture Trustee be responsible for the validity, effectiveness, value,
sufficiency or enforceability against the Issuer of this Indenture or any of the
Indenture Collateral (or any part thereof). Notwithstanding any term or
provision of this Indenture, the Indenture Trustee shall incur no liability to
the Issuer or the Issuer Secured Parties for any action taken or omitted by the
Indenture Trustee in connection with the Indenture Collateral, except for the
negligence (other than errors in judgment) or willful misconduct on the part of
the Indenture Trustee and, further, shall incur no liability to the Issuer
Secured Parties except for negligence (other than errors in judgment), bad faith
or willful misconduct in carrying out its duties to the Issuer Secured Parties.
The Indenture Trustee shall be protected and shall incur no liability to any
such party in relying upon the accuracy, acting in reliance upon the contents,
and assuming the genuineness of any notice, demand, certificate, signature,
instrument or other document reasonably believed by the Indenture Trustee to be
genuine and to have been duly executed by the appropriate signatory, and (absent
actual knowledge to the contrary by a Responsible Officer of the Indenture
Trustee) the Indenture Trustee shall not be required to make any independent
investigation with respect thereto. The Indenture Trustee shall at all times be
free independently to establish to its reasonable satisfaction, but shall have
no duty to independently verify, the existence or nonexistence of facts that are
a condition to the exercise or enforcement of any right or remedy hereunder or
under any of the Related Documents. The Indenture Trustee may consult with
counsel, and shall not be liable for any action taken or omitted to be taken by
it hereunder in good faith and in accordance with the advice of such counsel.
The Indenture Trustee shall not be under any obligation to exercise any of the
remedial rights or powers vested in it by this Indenture or to follow any
direction from the Controlling Party or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder unless it
shall have received reasonable security or indemnity satisfactory to the
Indenture Trustee against the costs, expenses and liabilities which might be
incurred by it.
Section 6.16. Reliance Upon Documents. In the absence of negligence, bad
faith or willful misconduct on its part, the Indenture Trustee shall be entitled
to conclusively rely on any communication, instrument, paper or other document
reasonably believed by it to be genuine and correct and to have been signed or
sent by the proper Person or Persons and shall have no liability in acting, or
omitting to act, where such action or omission to act is in reasonable reliance
upon any statement or opinion contained in any such document or instrument.
Section 6.17. Successor Indenture Trustee. Any Person into which the
Indenture Trustee may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its trust business and assets
as a whole or substantially as a whole, or any Person resulting from any such
conversion, merger, consolidation, sale or transfer to which the Indenture
Trustee is a party, shall (provided it is otherwise qualified to serve as the
Indenture Trustee hereunder) be and become a successor Indenture Trustee
hereunder and be vested with all of the
56
title to and interest in the Indenture Collateral and all of the trusts, powers,
discretions, immunities, privileges and other matters as was its predecessor
without the execution or filing of any instrument or any further act, deed or
conveyance on the part of any of the parties hereto, anything herein to the
contrary notwithstanding, except to the extent, if any, that any such action is
necessary to perfect, or continue the perfection of, the security interest of
the Issuer Secured Parties in the Indenture Collateral; provided that any such
successor shall also be the successor Indenture Trustee under Section 6.9.
Section 6.18. Representations and Warranties of the Indenture Trustee. The
Indenture Trustee represents and warrants to the Issuer and to each Issuer
Secured Party as follows:
(a) Due Organization. The Indenture Trustee is a New York banking
corporation and is duly organized, validly existing and in good standing under
the laws of the State of New York, and is duly authorized and licensed under
applicable law to conduct its business as presently conducted.
(b) Corporate Power. The Indenture Trustee has all requisite right,
power and authority to execute and deliver this Indenture and its related
documents and to perform all of its duties as Indenture Trustee hereunder and
thereunder.
(c) Due Authorization. The execution and delivery by the Indenture
Trustee of this Indenture and the other Related Documents to which it is a
party, and the performance by the Indenture Trustee of its duties hereunder and
thereunder, have been duly authorized by all necessary corporate proceedings and
no further approvals or filings, including any governmental approvals, are
required for the valid execution and delivery by the Indenture Trustee, or the
performance by the Indenture Trustee, of this Indenture and such other Related
Documents.
(d) No Violation. The execution, delivery and performance by the
Indenture Trustee of this Agreement and its Related Documents (i) do not violate
any provision of any law or regulation governing it or any order, writ,
judgment, or decree of any court, arbitrator, or governmental authority
applicable to it or any of its assets, (ii) do not violate any provision of its
corporate charter or by-laws, and (iii) do not violate any provision of, or
constitute, with or without notice or lapse of time, a default under, or result
in the creation or imposition of any lien on any of the Trust property pursuant
to the provisions of any mortgage, indenture, contract, agreement or other
undertaking other than this Agreement to which it is a party.
(e) No Consent Required. The execution, delivery and performance by
the Indenture Trustee of this Agreement and its Related Documents do not require
the authorization, consent or approval of, the giving of notice to, the filing
or registration with, or the taking of any action in respect of, any
governmental authority or agency.
(f) Valid and Binding Indenture. The Indenture Trustee has duly
executed and delivered this Indenture and each other Related Document to which
it is a party, and each of this Indenture and each such other Related Document
constitutes the legal, valid and binding obligation of the Indenture Trustee,
enforceable against the Indenture Trustee in accordance with
57
its terms, except as (i) such enforceability may be limited by bankruptcy,
insolvency, reorganization and similar laws relating to or affecting the
enforcement of creditors' rights generally and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability.
Section 6.19. Waiver of Setoffs. The Indenture Trustee hereby expressly
waives any and all rights of setoff that the Indenture Trustee may otherwise at
any time have under applicable law with respect to any Trust Account and agrees
that amounts in the Trust Accounts shall at all times be held and applied solely
in accordance with the provisions hereof and of the Sale and Servicing
Agreement.
Section 6.20. Control by the Controlling Party. The Indenture Trustee
shall comply with notices and instructions given by the Issuer only if
accompanied by the written consent of the Controlling Party, except that if any
Event of Default shall have occurred and be continuing, the Indenture Trustee
shall act upon and comply with notices and instructions given by the Controlling
Party alone in the place and stead of the Issuer.
Section 6.21. Indenture Trustee Not Liable for Notes or Receivables. The
Indenture Trustee makes no representations as to the validity or sufficiency of
the Sale and Servicing Agreement or of the Notes (other than authentication of
the Notes) or of any Receivable or Related Document, except as expressly
provided herein or in the Sale and Servicing Agreement. Except as expressly set
forth in the Related Documents, the Indenture Trustee shall at no time (except
with respect to its duties as Backup Servicer, Collateral Agent and Custodian
under the Related Documents and except during such time, if any, as it is acting
as successor Servicer) have any responsibility or liability for or with respect
to the legality, validity and enforceability of any security interest in any
Financed Vehicle or any Receivable, or the perfection and priority of such a
security interest or the maintenance of any such perfection and priority, or for
or with respect to the sufficiency of the Trust or its ability to generate the
payments to be distributed to Noteholders under this Indenture, including the
existence, condition, location and ownership of any Financed Vehicle; subject to
Section 2.3 of the Sale and Servicing Agreement, the existence and
enforceability of any insurance thereon; the existence of any Receivable or any
computer or other record thereof; subject to Section 2.3 of the Sale and
Servicing Agreement, the completeness of any Receivable; subject to Section 2.3
of the Sale and Servicing Agreement, the receipt by the Servicer of any
Receivable; the performance or enforcement of any Receivable; the compliance by
the Company and the Servicer with any covenant or the breach by the Company and
the Servicer of any warranty or representation made under any Related Document
and the accuracy of any such warranty or representation prior to the Indenture
Trustee's receipt of notice or other discovery of any noncompliance therewith or
any breach thereof; any investment of monies by or at the direction of the
Servicer or any loss resulting therefrom (it being understood, however, that the
Indenture Trustee shall remain responsible for any Trust Property that it may
hold directly); the acts or omissions of the Company, the Servicer or any
Obligor; any action of the Servicer taken in the name of the Indenture Trustee;
the accuracy, content or completeness of any offering documents used in
connection with the sale of the Notes or any action by the Indenture Trustee
taken at the instruction of the Servicer, the Company or the Noteholders holding
the requisite percentage of Notes not inconsistent with the provisions hereof or
of any Related Document; provided, however, that the foregoing shall not relieve
the Indenture Trustee of its respective
58
obligation to perform its duties under this Agreement and the other Related
Documents, whether as Indenture Trustee, as Collateral Agent, as Custodian or as
Backup Servicer. The Indenture Trustee shall not be accountable for the use or
application by the Company of any of the Notes or of the proceeds of such Notes,
or for the use or application of any funds paid to the Servicer in respect of
the Receivables prior to the time such funds are deposited in the Collection
Account.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.1. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee within thirty (30) days after receipt by the Issuer of a written request
by the Indenture Trustee, a list of the names and addresses of the Holders of
Notes as of a date not more than ten (10) days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished. The Indenture Trustee
shall or, if the Indenture Trustee is not the Note Registrar, the Issuer shall,
furnish to the Insurer in writing upon their written request and at such other
times as the Insurer may request a copy of the list.
Section 7.2. Preservation of Information, Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.1 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in Section 7.1 upon receipt of a
new list so furnished.
(b) Three or more Noteholders, or one or more Holder(s) of Notes
evidencing at least 25% of the Note Balance, may obtain a list of the names and
addresses of Holders of Notes of record as of the most recent Record Date in
order to communicate with other Noteholders with respect to their rights under
this Indenture or under the Notes.
(c) Noteholders may communicate pursuant to TIA ss.312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(d) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss. 312(c).
Section 7.3. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within fifteen (15) days after
the Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe)
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which the Issuer may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA ss. 313(c))
such summaries of any information, documents and reports required to be
filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.3(a) as may be required by rules and regulations prescribed from time to
time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.4. Reports by Indenture Trustee. If required by TIA ss.313(a),
within 60 days after each June 30, beginning with June 30, 1999, the Indenture
Trustee shall mail to each Noteholder as required by TIA ss.313(c) a brief
report dated as of such date that complies with TIA ss.313(a). The Indenture
Trustee also shall comply with TIA ss.313(b). A copy of each report at the time
of its mailing to Noteholders shall be given by the Indenture Trustee to the
Servicer to file with the Commission and each stock exchange, if any, on which
the Notes are listed. The Issuer shall notify the Indenture Trustee if and when
the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.1. Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture and the Sale and
Servicing Agreement. The Indenture Trustee shall apply all such money received
by it, as provided in this Indenture and the Sale and Servicing Agreement.
Except as otherwise expressly provided in this Indenture or in the Sale and
Servicing Agreement, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the Trust Estate,
the Indenture Trustee may take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
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Section 8.2. Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause the
Indenture Trustee to establish and maintain, in the name of the Indenture
Trustee, for the benefit of the Noteholders and the Insurer, the Trust Accounts
as provided in Section 4.1 of the Sale and Servicing Agreement.
(b) On each Payment Date, the Indenture Trustee shall distribute all
amounts on deposit in the Note Distribution Account to Noteholders to the extent
of amounts due and unpaid on the Notes for principal and interest in the amounts
and in the order of priority set forth in Sections 4.6 and 4.7 of the Sale and
Servicing Agreement.
Section 8.3. General Provisions Regarding Accounts.
(a) The funds in the Trust Accounts shall be invested and reinvested
by the Indenture Trustee in Eligible Investments in accordance with Section
4.1(c) of the Sale and Servicing Agreement.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in
any way be held liable for the selection of Eligible Investments or by reason of
any insufficiency in the Trust Accounts resulting from any loss on any Eligible
Investment included therein, except for losses attributable to the Indenture
Trustee's failure to make payments on such Eligible Investments issued by the
Indenture Trustee, in its commercial capacity as principal obligor and not as
trustee, in accordance with their terms.
Section 8.4. Release of Trust Estate.
(a) The Indenture Trustee may, and when required by this Indenture
shall, execute instruments to release property from the lien of this Indenture,
or convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with this Indenture and the Sale and
Servicing Agreement. No party relying upon an instrument executed by the
Indenture Trustee as provided in this Article shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due to the Indenture Trustee pursuant to Section 6.7
have been paid, all other Issuer Secured Obligations have been paid in full and
the Note Policy has expired in accordance with its terms and has been returned
to the Insurer for cancellation, release any remaining portion of the Trust
Estate that secured the Notes from the lien of this Indenture and release to the
Issuer or any other Person entitled thereto any funds then on deposit in the
Collection Account. The Indenture Trustee shall release property from the lien
of this Indenture pursuant to this Section 8.2(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA
ss.ss.314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1.
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Section 8.5. Opinion of Counsel. The Indenture Trustee shall receive at
least seven (7) days' notice when requested by the Issuer to take any action
pursuant to Section 8.4(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, as a condition to such action, an
Opinion of Counsel stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
will not materially and adversely impair the security for the Notes or the
rights of the Noteholders in contravention of this Indenture; provided, however,
that no such notice or Opinion of Counsel shall be required after the Notes and
all other Issuer Secured Obligations have been paid in full and the Note Policy
has expired in accordance with its terms and has been returned to the Insurer
for cancellation, or for the release of liens in connection with a Purchased
Receivable or a replaced Receivable; and provided, further, that such Opinion of
Counsel shall not be required to express an opinion as to the fair value of the
Trust Estate. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures Without Consent of Noteholders.
Without the consent of the Holders of Notes but with the prior written consent
of the Insurer (unless an Insurer Default shall have occurred and be continuing)
and with prior written notice to the Rating Agencies, the Issuer and the
Indenture Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto in form satisfactory to the Indenture Trustee,
for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required to
be subjected to the lien of this Indenture, or to subject to the lien of
this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of Notes, or to surrender any right or power herein conferred upon
the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) (A) to cure any ambiguity or to correct any provision herein or
in any supplemental indenture that may be inconsistent with any other
provision herein or in any supplemental indenture or (B) to make any other
provisions with respect to matters or questions arising under this
Indenture which are not inconsistent with the provisions of this Indenture
or in any supplemental indenture so long as, in the Opinion of Counsel,
such
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action in this clause (B) shall not materially adversely affect the
interests of the Holders of Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as
may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
Section 9.2. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee may, with prior written notice to the Rating
Agencies, with the prior written consent of the Insurer (unless Insurer Default
shall have occurred and be continuing) and with the prior written consent of the
Note Majority enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Notes under this Indenture; provided, however, that, no such
supplemental indenture shall, without the consent of the Insurer and the Holder
of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest
rate thereon or the Redemption Price with respect thereto, change the
provisions of this Indenture relating to the application of collections
on, or the proceeds of the sale of, the Trust Estate to the payment of
principal of or interest on the Notes, or change any place of payment
where, or the coin or currency in which, any Note or the interest thereon
is payable, or impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any such
amount due on or after the respective due dates thereof (or, in the case
of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Note Balance, the consent of the
Holders of which is required for any such supplemental indenture, or the
consent of the Holders of which is required for any waiver of compliance
with certain provisions of this Indenture or certain defaults hereunder
and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of "Outstanding";
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(iv) reduce the percentage of the Note Balance required to direct
the Indenture Trustee to sell or liquidate the Trust Estate pursuant to
Section 5.4 or 5.11;
(v) modify any provision of this Section 9.2 except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Related Documents cannot be
modified or waived without the consent of the Holder of each Outstanding
Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation
of any of the individual components of such calculation);
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive any Holder of Notes of the security provided by the lien
of this Indenture; or
(viii) become effective if the Rating Agency Condition in respect
thereof shall have not been satisfied.
The provisions of this Section shall in no event be construed to require
the consent of the Noteholders or the Certificateholders to a reduction in the
Target Overcollateralization Amount or the required level of the Class A Reserve
Account.
The manner of obtaining such consents (and any other consents of
Noteholders provided for in this Indenture or in any other Related Document) and
of evidencing the authorization of the execution thereof by Noteholders shall be
subject to such reasonable requirements as the Indenture Trustee may provide.
Prior to the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section 9.2, the Indenture Trustee shall
mail to the Holders of the Notes to which such amendment or supplemental
indenture relates a true copy of such supplemental indenture. Any failure of the
Indenture Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
Section 9.3. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
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Section 9.4. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.5. Conformity With Trust Indenture Act. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.
Section 9.6. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer shall so determine, new Notes so modified as to conform, in the opinion
of the Issuer, to any such supplemental indenture may be prepared and executed
by the Issuer and authenticated and delivered by the Indenture Trustee in
exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
Section 10.1. Redemption.
(a) On any Payment Date on which the Servicer exercises its option
to purchase the Receivables and other Trust Property pursuant to Section 10.1 of
the Sale and Servicing Agreement, the Notes shall be redeemed in whole, but not
in part, for a purchase price equal to the Redemption Price. Pursuant to said
Section 10.1, the Servicer shall furnish notice of such redemption to the
Indenture Trustee, the Insurer, the Backup Servicer and the Rating Agencies not
later than the Record Date prior to the Redemption Date and the Servicer shall
deposit with the Indenture Trustee in the Collection Account the Redemption
Price of the Notes to be redeemed on or before the Redemption Date.
(b) In the event that the assets of the Trust are sold pursuant to
Section 9.1 of the Trust Agreement, all amounts on deposit in the Collection
Account shall be paid to the Noteholders up to the Note Balance and all accrued
and unpaid interest thereon. If amounts are to be paid to Noteholders pursuant
to this Section 10.1(c), the Servicer or the Issuer shall, to the extent
practicable, furnish notice of such event to the Indenture Trustee not later
than forty-five (45) days prior to the Redemption Date whereupon all such
amounts shall be payable on the Redemption Date.
Section 10.2. Form of Redemption Notice. Notice of redemption under
Section 10.1 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed no later than
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the fifth (5th) day of the month in which the applicable Redemption Date occurs
to each Holder of Notes, as of the close of business on the Record Date
preceding the applicable Redemption Date, at such Holder's address appearing in
the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered in accordance
with Section 2.7(b)(ii) hereof for payment of the Redemption Price (which
shall be the office or agency of the Issuer to be maintained as provided
in Section 3.2).
Notice of redemption of the Notes shall be given by the Indenture Trustee
in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
Section 10.3. Notes Payable on Redemption Date. The Notes or portions
thereof to be redeemed shall, following notice of redemption pursuant to this
Article X, become due and payable on the Redemption Date at the Redemption Price
and (unless the Issuer shall default in the payment of the Redemption Price) no
interest shall accrue on the Redemption Price for any period after the date to
which accrued interest is calculated for purposes of calculating the Redemption
Price.
If there are not sufficient funds in the Collection Account on the Payment
Date on which the Notes are to be redeemed available to pay the Redemption
Price, the notice of redemption shall be deemed to have been revoked and the
Notes shall not be redeemed on the Redemption Date. Payments will be made on
such Payment Date in accordance with Section 4.7 of the Sale and Servicing
Agreement as though no notice of redemption had been given and the Notes shall
continue to bear interest at the Class A Interest Rate.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Compliance Certificates and Opinions, etc. Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under this Indenture, the Indenture Trustee shall be entitled to request that
the Issuer furnish to the Indenture Trustee and to the Insurer (i) an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, and (iii) (if required by
the TIA) an Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section, except that, in the case of
any such application or request as to which the furnishing of such documents is
specifically required by this Indenture, no additional certificate or opinion
need be furnished.
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(a) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made (or has caused to be made) such examination or
investigation as is necessary to enable such signatory to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the Lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.1 or elsewhere
in this Indenture, furnish to the Indenture Trustee and the Insurer an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Indenture Collateral or other property or securities to be so deposited.
Such certificate or opinion of fair value shall satisfy the requirements of
Section 314 of the TIA, as amended.
(c) Whenever the Issuer is required to furnish to the Indenture
Trustee and the Insurer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i) above,
the Issuer shall also deliver to the Indenture Trustee and the Insurer an
Independent Certificate as to the same matters, if the fair value to the issuer
of the securities to be so deposited and of all other such securities made the
basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause (ii), is 10% or more of
the Outstanding Notes; provided, that such a certificate need not be furnished
with respect to any securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is less than $25,000 or
less than 1% percent of the Outstanding Notes.
(d) Other than with respect to the release of any Purchased
Receivables or Liquidated Receivables whenever any property or securities are to
be released from the lien of this Indenture, the Issuer shall also furnish to
the Indenture Trustee and the Insurer an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed to be
released and stating that in the opinion of such person the proposed release
will not impair the security under this Indenture in contravention of the
provisions hereof.
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(e) Whenever the Issuer is required to furnish to the Indenture
Trustee and the Insurer an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii) above,
the Issuer shall also furnish to the Indenture Trustee and the Insurer an
Independent Certificate as to the same matters if the fair value of the property
or securities and of all other property other than Purchased Receivables and
Defaulted Receivables, or securities released from the lien of this Indenture
since the commencement of the then current calendar year, as set forth in the
certificates required by clause (iii) above and this clause (iv), equals 10% or
more of the Outstanding Notes; provided, that such certificate need not be
furnished in the case of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is less than $25,000
or less than 1 percent of the then Outstanding Notes.
(f) Notwithstanding Section 2.9 or any other provision of this
Section, the Issuer may (A) collect, liquidate, sell or otherwise dispose of
Receivables as and to the extent permitted or required by the Related Documents
and (B) make cash payments out of the Trust Accounts as and to the extent
permitted or required by the Related Documents.
Section 11.2. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate, opinion or representations
with respect to the matters upon which his certificate or opinion is based
is/are erroneous. Any such certificate of an Authorized Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Servicer, Triad or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Servicer, Triad or the Issuer, as
applicable, unless such Authorized Officer or counsel knows, or in the exercise
of reasonable care should know, that the certificate, opinion or representations
with respect to such matters are erroneous.
Where any Person is required or permitted to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Whenever in this Indenture, in connection with any application,
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such
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application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained
in any such document as provided in Article VI.
Section 11.3. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instrument(s) of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided,
such action shall become effective when such instrument(s) are delivered to the
Indenture Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument(s) (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Noteholders signing such
instrument(s). Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1) conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or Act by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof, in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
Section 11.4. Notices, etc., to the Indenture Trustee, Issuer and Rating
Agency. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders, or other documents provided or permitted by this
Indenture, shall be in writing and, if such request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders is to be made upon,
given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer, shall
be sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder, shall
be sufficient for every purpose hereunder if in writing and mailed, first-class,
postage prepaid, to the Issuer addressed to: Triad Auto Receivables Owner Trust
1999-1, 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000,
Telecopy No.: (000) 000-0000 or at any other address previously furnished in
writing to the Indenture Trustee by the Issuer, with a copy to the Owner
Trustee, addressed to: Wilmington Trust Company, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx,
00
Xxxxxxxx 00000. The Issuer shall promptly transmit any notice received by it
from the Noteholders to the Indenture Trustee.
(c) The Insurer by the Issuer or the Indenture Trustee shall be
sufficient for any purpose hereunder if in writing and mailed by registered mail
or personally delivered or telexed or telecopied to the recipient as follows:
To the Insurer: Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Surveillance Department
Re: Triad Auto Receivables Owner Trust 1999-1
Class A Asset Backed Notes
Telex No.: (000) 000-0000
Confirmation: (000)000-0000
Telecopy Nos.: (000) 000-0000 or
(000) 000-0000
(In each case in which notice or other communication to the Insurer refers to an
Event of Default, a claim on the Note Policy or with respect to which failure on
the part of the Insurer to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication should also be
sent to the attention of the General Counsel and the Head--Financial Guaranty
Group "URGENT MATERIAL ENCLOSED.")
Notices required to be given to the Rating Agency by the Issuer or the
Indenture Trustee shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, to the address set forth in Section
10.12(e) of the Sale and Servicing Agreement.
Section 11.5. Notices to Noteholders, Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to this
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Indenture, then any manner of giving such notice as shall be satisfactory to the
Indenture Trustee shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event of
Default.
Section 11.6. Alternate Payment and Notice Provisions. Notwithstanding any
provision of this Indenture or any of the Notes to the contrary, the Issuer may
enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such Holder,
that is different from the methods provided for in this Indenture or the Notes
for such payments or notices. The Issuer will furnish to the Indenture Trustee a
copy of each such agreement and the Indenture Trustee will cause payments to be
made and notices to be given in accordance with such agreements to the extent
such alternative arrangements are reasonable. Any additional costs or expenses
associated therewith shall be payable by the Issuer or the applicable
Noteholder.
Section 11.7. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 11.8. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA xx.xx. 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not expressly contained herein.
Section 11.9. Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents of the Indenture
Trustee.
Section 11.10. Severability. Any provision of this Indenture or the Notes
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 or of the
Notes, as applicable, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 11.11. Benefits of Indenture. The Insurer and its successors and
assigns shall be a third-party beneficiary to the provisions of this Indenture,
and shall be entitled to rely upon and to directly enforce such provisions of
this Indenture so long as an Insurer Default shall not have occurred and be
continuing. Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, and the Noteholders, and the Insurer, and any other party secured
hereunder, and any other person with
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an ownership interest in any part of the Trust Estate, any benefit or any legal
or equitable right, remedy or claim under this Indenture. The Insurer may
disclaim any of its rights and powers under this Indenture (in which case the
Trustee may exercise such right or power hereunder), but not its duties and
obligations under the Note Policy, upon delivery of a written notice to the
Indenture Trustee.
Section 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next Business Day with the same force and effect as if
made on the date on which nominally due, and no interest shall accrue for the
period from and after any such nominal date.
Section 11.13. Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.14. Counterparts. This Indenture may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.15. Recording of Indenture. If this Indenture is subject to
recording in any public recording offices, such recording is to be effected by
the Issuer and, at its expense, accompanied by an Opinion of Counsel (which may
be counsel to the Indenture Trustee or any other counsel reasonably acceptable
to the Indenture Trustee and the Insurer) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
Section 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director, employee or
agent of (a) the Owner Trustee in its individual capacity, (b) any holder of a
beneficial interest in the Issuer or the Indenture Trustee or (c) of any
successor or assign of the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed (it being understood that the Owner
Trustee and the Indenture Trustee have no such obligations in their respective
individual capacities) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Section 11.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they shall not at any
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time institute against the Company or the Issuer, or join in any institution
against the Issuer 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 Notes, this Indenture or any other Related Document. The foregoing shall
not limit the rights of the Indenture Trustee to file any claim in or otherwise
take any action with respect to any insolvency proceeding that was instituted
against the Issuer by any Person other than the Indenture Trustee.
Section 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or of the
Insurer, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall cause its representatives to hold in
confidence all such information; provided, however, that the foregoing shall not
be construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known, or information obtained by the Indenture Trustee from
sources other than the Issuer or the Servicer, (ii) disclosure of any and all
information (A) if required to do so by any applicable statute, law, rule or
regulation, (B) to any government agency or regulatory or self-regulatory body
having or claiming authority to regulate or oversee any aspects of the Indenture
Trustee's business or that of its Affiliates, (C) pursuant to any subpoena,
civil investigative demand or similar demand or request of any court, regulatory
authority, arbitrator or arbitration to which the Indenture Trustee or an
Affiliate thereof or any officer, director, employee or shareholder thereof is
subject, (D) in any preliminary or final placement memorandum, registration
statement or contract or other document pertaining to the transactions
contemplated by the Indenture and approved in advance by the Issuer or (E) to
any Affiliate, independent or internal auditor, agent, employee or attorney of
the Indenture Trustee having a need to know the same; provided, that the
Indenture Trustee advises such recipient of the confidential nature of the
information being disclosed and such recipient agrees to keep such information
confidential, (iii) any other disclosure authorized in writing by the Issuer or
the Servicer or (iv) disclosure to the other parties to the transactions
contemplated by the Related Documents and the Noteholders.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers duly authorized as of the day and
year first above written.
TRIAD AUTO RECEIVABLES OWNER TRUST 1999-1
By: Wilmington Trust Company,
not in its individual capacity but
solely as Owner Trustee
By: ________________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as Indenture
Trustee
By: ________________________________________
Name:
Title:
74
B-1
