1
EXHIBIT 4.1.5
================================================================================
INDENTURE
between
TRIAD AUTO RECEIVABLES OWNER TRUST 1998-4
and
THE CHASE MANHATTAN BANK
as Indenture Trustee
Dated as of November 1, 1998
================================================================================
2
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.................................................... 3
Section 1.1. Definitions...................................................................... 3
ARTICLE II THE NOTES...................................... 9
Section 2.1. Form............................................................................. 9
Section 2.2. Execution, Authentication and Delivery........................................... 10
Section 2.3. Temporary Notes.................................................................. 10
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..................................................................... 15
Section 2.9. Release of Collateral............................................................ 15
Section 2.10. Book-Entry Notes................................................................ 16
Section 2.11. Notices to Clearing Agency...................................................... 16
Section 2.12. Definitive Notes................................................................ 17
Section 2.13. Authenticating Agents........................................................... 17
ARTICLE III COVENANTS..................................... 18
Section 3.1. Payment of Principal and Interest................................................ 18
Section 3.2. Maintenance of Office or Agency.................................................. 18
Section 3.3. Money for Payments To Be Held in Trust........................................... 18
Section 3.4. Existence........................................................................ 20
Section 3.5. Protection of the Trust Estate................................................... 20
Section 3.6. Opinion as to the Trust Estate................................................... 21
Section 3.7. Performance of Obligations, Servicing; of Receivables............................ 22
Section 3.8. Negative Covenants............................................................... 23
Section 3.9. Annual Statement as to Compliance................................................ 23
Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms............................. 24
Section 3.11. Successor or Transferee......................................................... 26
i
3
Section 3.12. No Other Business............................................................... 26
Section 3.13. No Borrowing.................................................................... 26
Section 3.14. Servicer's Obligations.......................................................... 27
Section 3.15. Guarantees, Loans, Advances and Other Liabilities............................... 27
Section 3.16. Capital Expenditures............................................................ 27
Section 3.17. Notice of Events of Default..................................................... 27
RESTRICTED PAYMENTS....................................... 27
Section 3.18. Further Instruments and Acts.................................................... 27
Section 3.19. Compliance with Laws............................................................ 28
Section 3.20. Tax Treatment................................................................... 28
Section 3.21. Investment Company Act.......................................................... 28
Section 3.22. Liens........................................................................... 28
Section 3.23. Conduct of Business............................................................. 28
ARTICLE IV SATISFACTION AND DISCHARGE................................................................... 29
Section 4.1. Satisfaction and Discharge of Indenture.......................................... 29
APPLICATION OF TRUST MONEY................................... 30
Section 4.2. Payment of Moneys Held by Paying Agent........................................... 30
ARTICLE V REMEDIES....................................... 31
Section 5.1. Events of Default................................................................ 31
Section 5.2. Acceleration of Maturity; Rescission and Annulment............................... 32
Section 5.3. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee........ 34
Section 5.4. Remedies; Priorities............................................................. 36
Section 5.5. Optional Preservation of the Receivables......................................... 38
Section 5.6. Limitation of Suits.............................................................. 38
Section 5.7. Unconditional Rights of Noteholders To Receive Principal and Interest............ 39
Section 5.8. Restoration of Rights and Remedies............................................... 39
Section 5.9. Rights and Remedies Cumulative................................................... 39
Section 5.10. Delay or Omission Not a Waiver.................................................. 40
Section 5.11. Control by Noteholders.......................................................... 40
Section 5.12. Waiver of Past Default.......................................................... 40
Section 5.13. Undertaking for Costs........................................................... 41
ii
4
Section 5.14. Waiver of Stay or Extension Laws................................................ 41
Section 5.15. Action on Notes................................................................. 41
Section 5.16. Performance and Enforcement of Certain Obligations.............................. 42
SUBROGATION........................................... 42
ARTICLE VI THE INDENTURE TRUSTEE................................ 43
DUTIES OF THE INDENTURE TRUSTEE................................. 43
Section 6.2. Rights of Indenture Trustee...................................................... 46
Section 6.3. Individual Rights of the Indenture Trustee....................................... 47
Section 6.4. Indenture Trustee's Disclaimer................................................... 47
Section 6.5. Notice of Defaults............................................................... 47
Section 6.6. Reports by Indenture Trustee to the Holders...................................... 47
Section 6.7. Compensation, Reimbursement and Indemnity........................................ 48
Section 6.8. Replacement of the Indenture Trustee............................................. 49
Section 6.9. Successor Indenture Trustee by Merger............................................ 50
Section 6.10. Appointment of Co-Trustee or Separate Trustee................................... 51
Section 6.11. Eligibility; Disqualification................................................... 52
Section 6.12. Preferential Collection of Claims Against Issuer................................ 52
Section 6.13. Appointment and Powers.......................................................... 52
Section 6.14. Performance of Duties........................................................... 53
Section 6.15. Limitation on Liability......................................................... 53
Section 6.16. Reliance Upon Documents......................................................... 54
Section 6.17. Successor Indenture Trustee..................................................... 54
Section 6.19. Representations and Warranties of the Indenture Trustee......................... 54
Section 6.20. Waiver of Setoffs............................................................... 55
Section 6.21. Control by the Controlling Party................................................ 55
Section 6.22. Indenture Trustee Not Liable for Notes or Receivables........................... 55
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.............................................................. 56
Section 7.1. Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders........... 56
Section 7.2. Preservation of Information, Communications to Noteholders....................... 57
Section 7.3. Reports by Issuer................................................................ 57
Section 7.4. Reports by Indenture Trustee..................................................... 58
iii
5
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES....................................................... 58
Section 8.1. Collection of Money.............................................................. 58
Section 8.2. Trust Accounts................................................................... 58
Section 8.3. General Provisions Regarding Accounts............................................ 58
Section 8.4. Release of Trust Estate.......................................................... 59
Section 8.5. Opinion of Counsel............................................................... 59
ARTICLE IX SUPPLEMENTAL INDENTURES............................... 60
Section 9.1. Supplemental Indentures Without Consent of Noteholders........................... 60
Section 9.2. Supplemental Indentures With Consent of Noteholders.............................. 61
Section 9.3. Execution of Supplemental Indentures............................................. 62
Section 9.4. Effect of Supplemental Indenture................................................. 62
Section 9.5. Conformity With Trust Indenture Act.............................................. 63
Section 9.6. Reference in Notes to Supplemental Indentures.................................... 63
ARTICLE X REDEMPTION OF NOTES................................. 63
Section 10.1. Redemption...................................................................... 63
Section 10.2. Form of Redemption Notice....................................................... 63
Section 10.3. Notes Payable on Redemption Date................................................ 64
ARTICLE XI MISCELLANEOUS.................................... 64
Section 11.1. Compliance Certificates and Opinions, etc....................................... 64
Section 11.2. Form of Documents Delivered to Indenture Trustee................................ 66
Section 11.3. Acts of Noteholders............................................................. 67
Section 11.4. Notices, etc., to the Indenture Trustee, Issuer and Rating Agency............... 67
Section 11.5. Notices to Noteholders, Waiver.................................................. 68
Section 11.6. Alternate Payment and Notice Provisions......................................... 69
Section 11.7. Effect of Headings and Table of Contents........................................ 69
Section 11.8. Conflict with Trust Indenture Act............................................... 69
Section 11.9. Successors and Assigns.......................................................... 69
Section 11.10. Severability................................................................... 69
Section 11.11. Benefits of Indenture.......................................................... 70
Section 11.12. Legal Holidays................................................................. 70
Section 11.13. Governing Law.................................................................. 70
Section 11.14. Counterparts................................................................... 70
iv
6
Section 11.15. Recording of Indenture......................................................... 70
Section 11.16. Trust Obligation............................................................... 71
Section 11.17. No Petition.................................................................... 71
Section 11.17. Inspection..................................................................... 71
v
7
EXHIBITS
Exhibit A Form of Class A Note
vi
8
INDENTURE, dated as of November 1, 1998, between TRIAD AUTO RECEIVABLES
OWNER TRUST 1998-4, 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 5.98% Asset Backed
Notes, Class A (each, a "Class A Note" or, a "Note").
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 November 1, 1998 (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;
9
(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.
2
10
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:
"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 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. Each Class A Note shall be
substantially in the form of Exhibit A.
"Class A Prepayment Amount" means, as of the Payment Date on or
immediately following the last day of the Funding Period, after giving effect to
any transfer of Subsequent Receivables on such date, an amount equal to the
Pre-Funded Amount as of such Payment Date.
"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 December 15, 1998.
"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.
3
11
"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. 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.
"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.
4
12
"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 .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 $1875.00 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 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.
"Interest Rate" means 5.98% per annum, calculated on the basis of a
360-day year consisting of twelve 30-day months.
"Issuer" means Triad Auto Receivables Owner Trust 1998-4, 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.
5
13
"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.
"Noteholder" means a Holder.
"Note Majority" means Holders of Outstanding 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.
"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
6
14
(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.
"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.
"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
7
15
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 November 1, 1998, 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.
"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.
"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
8
16
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:
(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 Notes, together with the Indenture
Trustee's certificate of authentication, shall be in substantially the form set
forth in Exhibit A, 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
9
17
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 A 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.
The Indenture Trustee shall upon receipt of the Note Policy and an
Issuer Order authenticate and deliver Class A Notes for original issue in an
aggregate principal amount of $100,000,000. The 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 may be issued in an additional amount equal to any remaining portion of
the original Note Balance.
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
10
18
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 Section
2.10 and 2.12. 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 and 2.12 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 and 2.12.
(c) At the option of the Holder, Notes may be exchanged for other
new Notes 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
11
19
Sections 2.10 and 2.12 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 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
12
20
and the Insurer (unless an Insurer Default shall have occurred and be
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;
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 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.
13
21
(a) The Class A Notes shall accrue interest at the Class
A Interest Rate, 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 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 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 Final Scheduled Payment Date) 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 Final Scheduled Payment Date.
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
14
22
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.
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 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 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 Note Owner's interest in such 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
Notes and the giving of instructions or directions hereunder) as the
sole Holder of the Notes, and shall have no obligation to the Note
Owners;
15
23
(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 transmit payments of principal of and interest on the
Notes to such Clearing Agency Participants;
(v) whenever this Indenture requires or permits actions
to be taken based upon instructions or directions of Noteholders
evidencing a specified percentage of 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 Notes and has delivered such instructions to the Indenture Trustee;
and
(vi) Note Owners may receive copies of any reports sent to
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 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 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 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
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 Note or 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.
16
24
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 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 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.
ARTICLE III
COVENANTS
Section 3.1. 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 for the benefit of the Notes, as and
to the extent provided in Sections 4.6 and 4.7 of the Sale and Servicing
Agreement to Holders of the Notes. 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.
17
25
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 Final Scheduled Payment
Date) 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:
(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
18
26
(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, 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.
19
27
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 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
20
28
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 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
21
29
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;
(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
22
30
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.
(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;
23
31
(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:
(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;
24
32
(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; and
(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).
(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 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.
25
33
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 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
26
34
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
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
27
35
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
(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 their respective Final Scheduled
Payment Dates within one year, or
(iii) are to be called for
redemption within one year under
arrangements satisfactory to the Indenture
Trustee for the
28
36
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 Final Scheduled Payment Date 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
(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.
29
37
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 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
30
38
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.
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
31
39
(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 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:
(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
32
40
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.
(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.
33
41
(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;
(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
34
42
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 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.
(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
35
43
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 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 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 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 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;
36
44
(iii) third, 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;
(iv) fourth, amounts due and owing and required to be
distributed to the Insurer pursuant to priority (v) of Section 4.6(b)
of the Sale and Servicing Agreement and not previously distributed);
and
(v) fifth, to the Collateral Agent to be applied as provided
in the 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 Notes for principal for distribution to Noteholders in accordance with
Section 10.1(b) hereof and, second, in accordance with priorities (i) through
(v) 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. [Reserved].
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;
(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;
37
45
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 in its sole discretion or with advice of counsel (which shall be at
Issuer's expense) may determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture.
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 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.
38
46
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 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
39
47
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.
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
40
48
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 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 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 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 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 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 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 Interest Payment Amount or Principal Payment Amount. The foregoing
subrogation shall in all cases be subject to the rights of the 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 Interest Payment Amount or Principal Payment Amount paid on a Note has been
avoided in whole or in part as a preference payment under applicable bankruptcy
law, the Indenture Trustee shall so 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 Notes by mail that, in the event that any Noteholder's payment is
so recoverable, such 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 Notes, if any, which have been made
by the Indenture Trustee and subsequently recovered from 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 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 Noteholder directly (unless 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 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, by its purchase of Notes, and the
Indenture
41
49
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 Noteholder and the
Indenture Trustee hereby delegate an assign, to the fullest extent permitted by
law, the rights of the Indenture Trustee and each 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:
(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;
42
50
(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.
(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
43
51
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 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 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.
44
52
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.
(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
45
53
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 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 7.1 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
46
54
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 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;
47
55
(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 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.
48
56
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
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
49
57
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.
(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.
50
58
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. 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.
51
59
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 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
52
60
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 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
53
61
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 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
54
62
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) 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.
55
63
(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.
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.
56
64
(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
xx.xx. 314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1.
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.
57
65
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 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.
58
66
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";
(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
59
67
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 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.
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.
60
68
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 6.2. 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 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).
61
69
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.
62
70
(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
63
71
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.
(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
64
72
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 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 1998-4, 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx,
Xxxxxxxxxx 00000, Telecopy No.: (000) 000-0000 or at any other address
65
73
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, 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 1998-4
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.
66
74
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 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,
67
75
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 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.
68
76
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 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.
69
77
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 1998-4
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:
70
78
EXHIBIT A
to Indenture
FORM OF CLASS A NOTES
REGISTERED $100,000,000
No. R- CUSIP NO. [____________]
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any Note
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE, IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF
THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
TRIAD AUTO RECEIVABLES OWNER TRUST 1998-4
5.98% ASSET BACKED NOTES, CLASS A
Triad Auto Receivables Owner Trust 1998-4, a Delaware business trust
(including any successor, the "Issuer"), for value received, hereby promises to
pay to CEDE & CO., or registered assigns, the principal sum of ONE HUNDRED
MILLION DOLLARS ($100,000,000) partially payable on each Payment Date in an
amount equal to the aggregate amount, if any, payable from the Collection
Account and the Note Distribution Account in respect of principal on the Class A
Notes pursuant to Section 3.1 of the Indenture and Sections 4.6 and 4.7 of the
Sale and Servicing Agreement; provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the earlier of the
Final Scheduled Payment Date and the Redemption Date, if any, pursuant to
Section 10.1 of the Indenture. The Issuer will pay interest on this Note at the
rate per annum shown above, on each Payment Date until the principal of this
Note is paid or made available for payment, on the principal amount of this Note
outstanding on the close of business on the last day of the calendar month
preceding such Payment Date (the "Collection Period End Date"), subject to
certain limitations contained in Section 3.1 of the Indenture and Sections 4.6
and 4.7 of the Sale and Servicing Agreement to the holders of record as of the
Record Date in the month in which the Payment Date occurs. Interest on this Note
will accrue for each Payment Date from the last day of the most recent
Collection Period on which interest has been paid to but excluding the last day
of the next Collection Period or, if no interest has yet been paid, from
December 15, 1998. Interest will be computed on the basis of a 360-day year of
C-2-1
79
twelve 30-day months. Such principal of and interest on this Note shall be paid
in the manner specified in the Indenture.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Dated: December 15, 1998
TRIAD AUTO RECEIVABLES OWNER
TRUST 1998-4
By: Wilmington Trust Company,
not in its individual capacity but
solely as Owner Trustee
By:
--------------------------------------
Name:
Title:
C-2-2
80
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: December 15, 1998
THE CHASE MANHATTAN BANK
not in its individual capacity but solely as
Indenture Trustee
By:
----------------------------------------
Authorized Signatory
C-2-3
81
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 5.98% Asset Backed Notes, Class A (herein called the "Class A
Notes" or the "Notes"), all issued under an Indenture, dated as of November 1,
1998 (such Indenture, as supplemented or amended, is herein called the
"Indenture"), between the Issuer and The Chase Manhattan Bank, not in its
individual capacity but solely as indenture trustee (the "Indenture Trustee",
which term includes any successor Indenture Trustee under the Indenture), for
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Notes. The Notes are
subject to all terms of the Indenture. All terms used in this Note that are not
otherwise defined herein and that are defined in the Indenture shall have the
meanings assigned to them in or pursuant to the Indenture.
The Class A Notes will each be secured by the collateral pledged as
security therefor as provided in the Indenture.
The Issuer shall pay interest on overdue installments of interest at
the Class A Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.1 of the Sale and Servicing Agreement, in whole, but not in part, if
the Servicer exercises its option to purchase the Receivables and the other
Trust Property on any Payment Date if, as of the last day of the related
Collection Period,, the Aggregate Principal Balance of Receivables has declined
to less than or equal to 10% of the Original Pool Balance.
Each Noteholder, by acceptance of a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Owner Trustee in its
individual capacity, the Indenture Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of (a) the Owner Trustee in
its individual capacity, the Indenture Trustee in its individual capacity, (b)
any holder of a beneficial interest in the Issuer or the Owner Trustee or the
Indenture Trustee or of (c) any successor or assign of the Owner Trustee in its
individual capacity, the Indenture Trustee in its individual capacity, except as
any such Person may have expressly agreed 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.
It is the intent of the Issuer, the Servicer and the Noteholders that,
for purposes of Federal and State income tax and any other tax measured in whole
or in part by income, the Notes will qualify as indebtedness of the Issuer. The
Noteholders, by acceptance of a Note, agree to treat, and to take no action
inconsistent with the treatment of, the Notes for such tax purposes as
indebtedness of the Issuer.
C-2-4
82
Each Noteholder, by acceptance of a Note, covenants and agrees that by
accepting the benefits of the Indenture that such Noteholder will not at any
time institute against the Issuer, or join in any institution against the Issuer
of, any bankruptcy, reorganization or arrangement, insolvency or liquidation
proceedings under any United States Federal or State bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Related Documents.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Related Documents, neither Wilmington Trust Company, in its
individual capacity, The Chase Manhattan Bank, in its individual capacity, any
owner of a beneficial interest in the Issuer, nor any of their respective
partners, beneficiaries, agents, officers, directors, employees, successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on, or performance of, or omission
to perform, any of the covenants, obligations or indemnification's contained in
this Note or the Indenture, it being expressly understood that said covenants,
obligations and indemnification's have been made by (i) the Owner Trustee for
the sole purpose of binding the assets of the Issuer, and (ii) the Indenture
Trustee for the sole purpose of binding the interests of the Indenture Trustee
in the assets of the Issuer. The Holder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Related Documents, in the case
of an Event of Default under the Indenture, the Holder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
C-2-5
83
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
--------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
-------------------------------------------------
--------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________ attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated:
---------------- ------------------------------------
Signature Guaranteed:
*/
-----------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the Note
Registrar.
--------------------------
*/ NOTE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular without alteration, enlargement or any change
whatsoever.
C-2-6
