EXECUTION COPY
EXHIBIT 4.1
================================================================================
TRIAD AUTOMOBILE RECEIVABLES TRUST 2005-A
Class A-1 3.30% Asset Backed Notes
Class A-2 3.79% Asset Backed Notes
Class A-3 4.05% Asset Backed Notes
Class A-4 4.22% Asset Backed Notes
---------------------------------
INDENTURE
Dated as of May 26, 2005
-----------------------------------
JPMORGAN CHASE BANK, N.A.
Indenture Trustee
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE............................................................. 2
SECTION 1.1 Definitions................................................................................. 2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act........................................... 10
SECTION 1.3 Rules of Construction....................................................................... 11
ARTICLE II THE NOTES............................................................................................. 11
SECTION 2.1 Form........................................................................................ 11
SECTION 2.2 Execution, Authentication and Delivery...................................................... 11
SECTION 2.3 Temporary Notes............................................................................. 12
SECTION 2.4 Registration; Registration of Transfer and Exchange......................................... 12
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes.................................................. 14
SECTION 2.6 Persons Deemed Owner........................................................................ 15
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest....................................... 15
SECTION 2.8 Cancellation................................................................................ 16
SECTION 2.9 Release of Collateral....................................................................... 16
SECTION 2.10 Book-Entry Notes............................................................................ 16
SECTION 2.11 Notices to Clearing Agency.................................................................. 17
SECTION 2.12 Definitive Notes............................................................................ 17
ARTICLE III COVENANTS, REPRESENTATIONS AND WARRANTIES............................................................ 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 Trust Estate.................................................................. 20
SECTION 3.6 Opinions as to Trust Estate................................................................. 21
SECTION 3.7 Performance of Obligations; Servicing of Receivables........................................ 21
SECTION 3.8 Negative Covenants.......................................................................... 22
SECTION 3.9 Annual Statement as to Compliance........................................................... 23
SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms.......................................... 23
SECTION 3.11 Successor or Transferee..................................................................... 25
SECTION 3.12 No Other Business........................................................................... 26
SECTION 3.13 No Borrowing................................................................................ 26
SECTION 3.14 Servicer's Obligations...................................................................... 26
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities........................................... 26
SECTION 3.16 Capital Expenditures........................................................................ 26
SECTION 3.17 Compliance with Laws........................................................................ 26
SECTION 3.18 Restricted Payments......................................................................... 26
SECTION 3.19 Notice of Events of Default................................................................. 27
SECTION 3.20 Further Instruments and Acts................................................................ 27
SECTION 3.21 Amendments of Sale and Servicing Agreement and Trust Agreement.............................. 27
SECTION 3.22 Income Tax Characterization................................................................. 27
SECTION 3.23 Representations and Warranties.............................................................. 27
ARTICLE IV SATISFACTION AND DISCHARGE............................................................................ 28
SECTION 4.1 Satisfaction and Discharge of Indenture..................................................... 28
SECTION 4.2 Application of Trust Money.................................................................. 29
SECTION 4.3 Repayment of Moneys Held by Note Paying Agent............................................... 30
i
ARTICLE V REMEDIES............................................................................................... 30
SECTION 5.1 Events of Default........................................................................... 30
SECTION 5.2 Rights Upon Event of Default................................................................ 31
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee................... 32
SECTION 5.4 Remedies.................................................................................... 35
SECTION 5.5 Optional Preservation of the Receivables.................................................... 36
SECTION 5.6 Priorities.................................................................................. 36
SECTION 5.7 Limitation of Suits......................................................................... 37
SECTION 5.8 Unconditional Rights of Noteholders To Receive Principal and Interest....................... 38
SECTION 5.9 Restoration of Rights and Remedies.......................................................... 38
SECTION 5.10 Rights and Remedies Cumulative.............................................................. 38
SECTION 5.11 Delay or Omission Not a Waiver.............................................................. 38
SECTION 5.12 Control by Noteholders...................................................................... 38
SECTION 5.13 Waiver of Past Defaults..................................................................... 39
SECTION 5.14 Undertaking for Costs....................................................................... 39
SECTION 5.15 Waiver of Stay or Extension Laws............................................................ 40
SECTION 5.16 Action on Notes............................................................................. 40
SECTION 5.17 Performance and Enforcement of Certain Obligations.......................................... 40
ARTICLE VI THE INDENTURE TRUSTEE................................................................................. 40
SECTION 6.1 Duties of Indenture Trustee................................................................. 40
SECTION 6.2 Rights of Indenture Trustee................................................................. 42
SECTION 6.3 Individual Rights of Indenture Trustee...................................................... 44
SECTION 6.4 Indenture Trustee's Disclaimer.............................................................. 44
SECTION 6.5 Notice of Defaults.......................................................................... 44
SECTION 6.6 Reports by Indenture Trustee to Holders..................................................... 44
SECTION 6.7 Compensation and Indemnity.................................................................. 44
SECTION 6.8 Replacement of Indenture Trustee............................................................ 45
SECTION 6.9 Successor Indenture Trustee by Merger....................................................... 47
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee........................... 47
SECTION 6.11 Eligibility: Disqualification............................................................... 48
SECTION 6.12 Preferential Collection of Claims Against Issuer............................................ 48
SECTION 6.13 Representations and Warranties of the Indenture Trustee..................................... 49
SECTION 6.14 Waiver of Setoffs........................................................................... 49
SECTION 6.15 Control by the Controlling Party............................................................ 49
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS....................................................................... 49
SECTION 7.1 Issuer To Furnish To Indenture Trustee Names and Addresses of Noteholders................... 49
SECTION 7.2 Preservation of Information; Communications to Noteholders.................................. 50
SECTION 7.3 Reports by Issuer........................................................................... 50
SECTION 7.4 Reports by Indenture Trustee................................................................ 51
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES................................................................ 51
SECTION 8.1 Collection of Money......................................................................... 51
SECTION 8.2 Release of Trust Estate..................................................................... 51
SECTION 8.3 Opinion of Counsel.......................................................................... 52
ARTICLE IX SUPPLEMENTAL INDENTURES............................................................................... 52
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders...................................... 52
SECTION 9.2 Supplemental Indentures with Consent of Noteholders......................................... 53
SECTION 9.3 Execution of Supplemental Indentures........................................................ 55
SECTION 9.4 Effect of Supplemental Indenture............................................................ 55
SECTION 9.5 Conformity With Trust Indenture Act......................................................... 55
SECTION 9.6 Reference in Notes to Supplemental Indentures............................................... 55
ii
ARTICLE X REDEMPTION OF NOTES.................................................................................... 55
SECTION 10.1 Redemption.................................................................................. 55
SECTION 10.2 Form of Redemption Notice................................................................... 56
SECTION 10.3 Notes Payable on Redemption Date............................................................ 57
ARTICLE XI MISCELLANEOUS......................................................................................... 57
SECTION 11.1 Compliance Certificates and Opinions, etc................................................... 57
SECTION 11.2 Form of Documents Delivered to Indenture Trustee............................................ 58
SECTION 11.3 Acts of Noteholders......................................................................... 59
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies............................. 60
SECTION 11.5 Notices to Noteholders; Waiver.............................................................. 61
SECTION 11.6 [Reserved].................................................................................. 61
SECTION 11.7 Conflict with Trust Indenture Act........................................................... 61
SECTION 11.8 Effect of Headings and Table of Contents.................................................... 62
SECTION 11.9 Successors and Assigns...................................................................... 62
SECTION 11.10 Separability............................................................................... 62
SECTION 11.11 Benefits of Indenture...................................................................... 62
SECTION 11.12 Legal Holidays............................................................................. 63
SECTION 11.13 Governing Law.............................................................................. 63
SECTION 11.14 Counterparts............................................................................... 63
SECTION 11.15 Recording of Indenture..................................................................... 63
SECTION 11.16 Trust Obligation........................................................................... 63
SECTION 11.17 Limitation of Liability of Owner Trustee................................................... 64
SECTION 11.18 No Petition................................................................................ 64
SECTION 11.19 Inspection................................................................................. 64
SECTION 11.20 Nonpublic Personal Information............................................................. 64
EXHIBITS
EXHIBIT A-1 Form of Class A-1 Note
EXHIBIT A-2 Form of Class A-2 Note
EXHIBIT A-3 Form of Class A-3 Note
EXHIBIT A-4 Form of Class A-4 Note
iii
CROSS-REFERENCE TABLE
Cross-reference sheet showing the location in the Indenture of the
provisions inserted pursuant to Sections 310 through 318(a) inclusive of the
Trust Indenture Act of 1939.1
Trust Indenture Act of 1939 Indenture Section
- -------------------------------------------------------------------------------- -----------------
Section 310
(a) (1)................................................................ 6.11
(a) (2)................................................................ 6.11
(a) (3)................................................................ 6.10, 6.11
(a) (4)................................................................ Not Applicable
(a) (5)................................................................ 6.11
(b).................................................................... 6.11
(c).................................................................... Not Applicable
Section 311
(a).................................................................... 6.12
(b).................................................................... 6.12
(c).................................................................... Not Applicable
Section 312
(a).................................................................... 7.1, 7.2(a)
(b).................................................................... 7.2(b)
(c).................................................................... 7.2(c)
Section 313
(a).................................................................... 7.4
(b).................................................................... 7.4
(c).................................................................... 7.4
(d).................................................................... 7.4
Section 314
(a)(1)................................................................. 7.3(a)
(a)(2)................................................................. 7.3(a)
(a)(3)................................................................. 7.3(a)
(a)(4)................................................................. 3.9
(b)(1)................................................................. 3.6(a)
(b)(2)................................................................. 3.6(b)
(c)(1)................................................................. 4.1, 8.2, 11.1
(c)(2)................................................................. 4.1, 8.2, 11.1
(c)(3)................................................................. 8.2
(d)(1)................................................................. 11.1(b)
(d)(2)................................................................. 11.1(b)
(d)(3)................................................................. 11.1(b)
(e).................................................................... 11.1(a)
- -----------------
(1) This Cross-Reference Table is not part of the Indenture.
iv
Section 315
(a).................................................................... 6.1(b), 6.1(c)(i)
(b).................................................................... 6.5, 11.5
(c).................................................................... 6.1(a)
(d)(1)................................................................. 6.1(b), 6.1(c)
(d)(2)................................................................. 6.1(c)(ii)
(d)(3)................................................................. 6.1(c)(iii)
(e).................................................................... 5.14
Section 316
(a).................................................................... 5.12, 5.13
(b).................................................................... 5.8
(c).................................................................... 2.6
Section 317
(a)(1)................................................................. 5.3(a)
(a)(2)................................................................. 5.3(e)
(b).................................................................... 3.3
Section 318
(a).................................................................... 11.7
v
INDENTURE dated as of May 26, 2005, between TRIAD AUTOMOBILE
RECEIVABLES TRUST 2005-A, a Delaware statutory trust (the "Issuer"), and
JPMORGAN CHASE BANK, N.A., a national banking association organized under the
laws of the United States, as Indenture Trustee (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the benefit of the Holders of the Issuer's Class A-1 3.30% Asset Backed
Notes (the "Class A-1 Notes"), the Class A-2 3.79% Asset Backed Notes (the
"Class A-2 Notes"), the Class A-3 4.05% Asset Backed Notes (the "Class A-3
Notes), the Class A-4 4.22% Asset Backed Notes (the "Class A-4 Notes", and
collectively with the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the "Class A Notes" or the "Notes").
As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer has agreed to assign
the Collateral (as defined below) as collateral to the Indenture Trustee on
behalf of the Noteholders and the Insurer.
Ambac Assurance Corporation (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
Policy Claim Amounts, 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 May 26, 2005 (as amended from time to time, the
"Insurance Agreement"), among the Insurer, the Issuer, the Indenture Trustee,
Triad Financial Corporation and Triad Financial Special Purpose LLC.
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
Collateral (as defined below) as collateral to the Indenture Trustee for the
benefit of the Issuer Secured Parties, as their respective interests may appear.
1
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, for the benefit of the Issuer Secured Parties, all of the Issuer's right,
title and interest in and to (a) the Receivables; (b) an assignment of the
security interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Issuer in the Financed Vehicles; (c)
with respect to the Receivables, the right to cause the related Dealer or
Third-Party Lender to repurchase such Receivables, as a result of a breach of
representation or warranty in the related Dealer Agreement or the related Auto
Loan Purchase and Sale Agreement, respectively; (d) all rights under any Service
Contracts on the related Financed Vehicles; (e) any proceeds with respect to the
Receivables from claims on any physical damage, credit life or disability
insurance policies covering Financed Vehicles or Obligors; (f) the Trust
Accounts and all funds on deposit from time to time in the Trust Accounts, and
in all investments and proceeds thereof and all rights of the Issuer therein
(including all income thereon); (g) the Issuer's rights and benefits, but none
of its obligations or burdens, under the Purchase Agreement, including the
delivery requirements, representations and warranties and the cure and
repurchase obligations of Triad under the Purchase Agreement; (h) all items
contained in the Receivable Files and any and all other documents that Triad
keeps on file in accordance with its customary procedures relating to the
Receivables, the Obligors or the Financed Vehicles; (i) the Issuer's rights and
benefits, but none of its obligations or burdens, under the Sale and Servicing
Agreement (including all rights of the Depositor under the Purchase Agreement);
and (j) all present and future claims, demands, causes and choses of 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 or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every kind
and other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to the Indenture Trustee on
behalf of the Noteholders and for the benefit of the Insurer. The Indenture
Trustee hereby acknowledges such Grant, accepts the trusts under this Indenture
in accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the end that the interests of such parties,
recognizing the priorities of their respective interests, may be adequately and
effectively protected.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1 Definitions. Except as otherwise specified herein, 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).
2
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. A Person will not be
deemed to be an Affiliate of any person solely because such other Person has the
contractual right or obligation to manage such Person unless such other Person
controls such Person through equity ownership or otherwise.
"Authorized Officer" means, with respect to the Issuer and the
Servicer, any officer or agent acting pursuant to a power of attorney of the
Owner Trustee or the Servicer, as applicable, who is authorized to act for the
Owner Trustee or the Servicer, as applicable, in matters relating to the Issuer
or the Servicer, as applicable, and who is identified on the list of Authorized
Officers delivered by each of the Owner Trustee and the Servicer to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"Basic Documents" means this Indenture, the Certificate of Trust,
the Trust Agreement, the Sale and Servicing Agreement, the Insurance Agreement,
the Purchase Agreement and other documents and certificates delivered in
connection therewith.
"Benefit Plan Entity" has the meaning specified in Section 2.4.
"Book-Entry Notes" means a beneficial interest in the Notes,
ownership and transfers of which will be made through book entries by a Clearing
Agency as described in Section 2.10. The Class A Notes will initially be
Book-Entry Notes.
"Business Day" means a day other than a Saturday, a Sunday or other
day on which commercial banks located in the states of Delaware, California or
New York are authorized or obligated to be closed.
"Certificate" means a trust certificate evidencing the beneficial
interest of a Certificateholder in the Trust.
"Certificateholder" means the Person in whose name a Certificate is
registered on the Certificate Register.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Class A Notes" means, collectively, the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.
"Class A-1 Interest Rate" means 3.30% per annum (computed on the
basis of a 360-day year and the actual number of days in the related Interest
Period).
3
"Class A-1 Notes" means the Class A-1 3.30% Asset Backed Notes,
substantially in the form of Exhibit A-1.
"Class A-2 Interest Rate" means 3.79% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-2 Notes" means the Class A-2 3.79% Asset Backed Notes,
substantially in the form of Exhibit A-2.
"Class A-3 Interest Rate" means 4.05% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-3 Notes" means the Class A-3 4.05% Asset Backed Notes,
substantially in the form of Exhibit A-3.
"Class A-4 Interest Rate" means 4.22% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-4 Notes" means the Class A-4 4.22% Asset Backed Notes,
substantially in the form of Exhibit A-4.
"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 May 26, 2005.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of
this Indenture.
"Controlling Party" means the Insurer, provided that if (i) an
Insurer Default has occurred and is continuing or (ii) all amounts payable to
the Class A Noteholders under this Indenture and the Insurer under the Insurance
Agreement have been paid in full, then the Controlling Party means the Indenture
Trustee acting at the direction of the Majority Noteholders.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business will be
administered which office at the date of the execution of this Agreement is
located at 4 New York Plaza, 6th Floor, New York, New York 10004-2477 (facsimile
number (212) 623-5930), Attention: Institutional Trust Services-Triad 2005-A, or
at such other address as the Indenture Trustee may designate from time to time
by notice to the Noteholders, the Insurer, the Servicer and the Issuer, or the
principal
4
corporate trust office of any successor Indenture Trustee (the address of which
the successor Indenture Trustee will notify the Noteholders, the Insurer, the
Servicer 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" has the meaning specified in Section 2.10.
"Distribution Date" means, with respect to each Collection Period,
the 12th day of the following Collection Period, or, if such day is not a
Business Day, the immediately following Business Day, commencing June 13, 2005.
"ERISA" has the meaning specified in Section 2.4.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Executive Officer" means, with respect to any corporation, the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, any Executive Vice President, any Vice President, the Secretary or
the Treasurer of such corporation; and with respect to any partnership, any
general partner thereof.
"Grant" means mortgage, pledge, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create, grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to this Indenture. A Grant of the Collateral or of any other agreement or
instrument will include all rights, powers and options (but none of the
obligations) 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 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" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to
5
provide funds for payment, to supply funds to invest in any Person or otherwise
to assure a creditor against loss; (g) obligations secured by any lien on
property or assets of such Person, whether or not the obligations have been
assumed by such Person; or (h) obligations of such Person under any interest
rate or currency exchange agreement.
"Indenture" means this Indenture as amended and supplemented from
time to time.
"Indenture Trustee" means JPMorgan Chase Bank, N.A., a national
banking association organized under the laws of the United States, not in its
individual capacity but as Indenture Trustee under this Indenture, or any
successor Indenture Trustee under this Indenture.
"Indenture Trustee Issuer Secured Obligations" means all amounts and
obligations which the Issuer may at any time owe to or on behalf of the
Indenture Trustee for the benefit of the Noteholders under this Indenture, the
Notes or any Basic Document.
"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, the Depositor 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, the Depositor or any Affiliate
of any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, the Depositor 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, prepared
by an Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate will state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Insurer Default" means the occurrence and continuance of any of the
following events:
(a) the Insurer failing to make a payment required under the Note Policy
in accordance with its terms;
(b) the Insurer (i) filing a petition or commencing any case or
proceeding under any provision or chapter of the United States
Bankruptcy Code or any other similar federal or state law relating
to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) making a general assignment for the benefit of
its creditors, or (iii) having an order for relief entered against
it under the United States Bankruptcy Code or any other similar
federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization which is final and
nonappealable; or
6
(c) a court of competent jurisdiction, the Wisconsin Department of
Insurance or other competent regulatory authority has entered a
final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent or receiver for the Insurer or for all or
any material portion of its property or (ii) authorizing the taking
of possession of all or any material portion of the property of the
Insurer by a custodian, trustee, agent or receiver.
"Insurer Issuer Secured Obligations" means all amounts and
obligations which the Issuer may at any time owe to or on behalf of the Insurer
under this Indenture, the Insurance Agreement or any other Basic Document.
"Interest Rate" means, with respect to the (i) Class A-1 Notes, the
Class A-1 Interest Rate, (ii) Class A-2 Notes, the Class A-2 Interest Rate,
(iii) Class A-3 Notes, the Class A-3 Interest Rate and (iv) Class A-4 Notes, the
Class A-4 Interest Rate.
"Issuer" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the 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
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Issuer Secured Obligations" means the Insurer Issuer Secured
Obligations and the Indenture Trustee Issuer Secured Obligations.
"Issuer Secured Parties" means each of the Indenture Trustee in
respect of the Indenture Trustee Issuer Secured Obligations and the Insurer in
respect of the Insurer Issuer Secured Obligations.
"Majority Noteholders" means the holders of a majority of the Class
A Notes, measured by Outstanding Amount.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note or
a Class A-4 Note.
"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 Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Note 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 of or interest on the Notes on behalf of the
Issuer.
7
"Note Policy" means the insurance policy issued by the Insurer with
respect to the Class A Notes, including any endorsements thereto.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.4.
"Officer's 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 Section 314
(unless signed by the Owner Trustee on behalf of the Issuer), and delivered to
the Indenture Trustee. Unless otherwise specified, any reference in this
Indenture to an Officer's Certificate will be to an Officer's Certificate of any
Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel
who may, except as otherwise expressly provided in this Indenture, be employees
of or counsel to the Issuer and who is satisfactory to the Indenture Trustee
and, if addressed to the Insurer, satisfactory to the Insurer, and which will
comply with any applicable requirements of Section 11.1, and will be in form and
substance satisfactory to the Indenture Trustee, and if addressed to the
Insurer, satisfactory to the Insurer.
"Outstanding" means, as of the date of determination, 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 Note Paying Agent in trust for the Noteholders (provided, however,
that if such Notes are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor, satisfactory
to the Indenture Trustee); and
(iii) Notes in exchange for or in lieu of other Notes which 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 Class A Notes which have been paid with proceeds of the
Note Policy will 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 will 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
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Depositor, the
Servicer or any Affiliate of any of the foregoing Persons will be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Indenture Trustee will 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 either
8
actually knows to be so owned or has received written notice thereof will 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, the Depositor or
any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all
Notes, or class of Notes, as applicable, Outstanding at the date of
determination.
"Person" means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"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 will 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.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency has been given ten (10) days (or such shorter period as will
be acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies has notified the Depositor, the Servicer, the Insurer, the
Indenture Trustee, the Owner Trustee and the Issuer in writing that such action
will not result in a reduction or withdrawal of the then current rating of the
Notes.
"Record Date" means, with respect to a Distribution Date, Redemption
Date or other date of determination, the close of business on the Business Day
immediately preceding such Distribution Date, Redemption Date or other date of
determination.
"Redemption Date" means in the case of a redemption of the Notes
pursuant to Section 10.1(a), the Distribution Date specified by the Servicer or
the Issuer pursuant to Section 10.1(a).
"Redemption Price" means in the case of a redemption of the Notes
pursuant to Section 10.1(a), an amount equal to the then outstanding principal
amount of each class of Notes being redeemed plus accrued and unpaid interest
thereon to but excluding the Redemption 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, Assistant Treasurer,
Assistant Secretary, Trust Officer or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the above
designated officers and in each case, having direct responsibility for the
administration of this agreement, 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.
9
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of May 26, 2005, among the Issuer, the Depositor, the
Custodian, the Servicer, the Indenture Trustee and the Backup Servicer, as the
same may be amended or supplemented from time to time.
"Scheduled Payments" has the meaning specified in the Note Policy.
"State" means any one of the 50 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 has received payment and performance of all
Insurer Issuer Secured Obligations and (iii) the date on which the Indenture
Trustee has received payment and performance of all Indenture Trustee Issuer
Secured Obligations.
"Trust Estate" means all 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 all
property and interests Granted to the Indenture Trustee), 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.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
Capitalized terms used herein and not otherwise defined herein have
the meanings assigned to them in the Sale and Servicing Agreement or the Trust
Agreement.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"trustee" or "institutional trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer.
10
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 U.S. generally accepted accounting
principles as in effect on the date of this Agreement;
(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.
ARTICLE II
The Notes
SECTION 2.1 Form. The Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes, in each case together with the
Indenture Trustee's certificate of authentication, will be in substantially the
form set forth in Exhibits A-1, A-2, A-3 and A-4, respectively, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may, consistently herewith, be determined by the officers executing such Notes,
as evidenced by their execution of the Notes. Any portion of the text of any
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
The Definitive Notes will 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.
Each Note will be dated the date of its authentication. The terms of
the Notes set forth in Exhibits A-1, A-2, A-3 and A-4 are part of the terms of
this Indenture.
SECTION 2.2 Execution, Authentication and Delivery. The Notes will
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 will bind the Issuer,
notwithstanding that such individuals
11
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 will, upon receipt of the Note Policy and
Issuer Order, authenticate and deliver Class A-1 Notes for original issue in an
aggregate principal amount of $245,000,000, Class A-2 Notes for original issue
in an aggregate principal amount of $335,000,000, Class A-3 Notes for original
issue in an aggregate principal amount of $290,000,000 and Class A-4 Notes for
original issue in an aggregate principal amount of $234,000,000. The Class A-1
Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes outstanding at any
time may not exceed such amounts except as provided in Section 2.5.
The Notes will be issuable as registered Notes in the minimum
denomination of $1,000 and in integral multiples thereof (except for one Note of
each class which may be issued in a denomination other than an integral multiple
of $1,000).
No Note will 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 upon any Note will 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 will authenticate and deliver, temporary Notes which 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 the terms of 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 will 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 Noteholder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer will
execute and the Indenture Trustee will authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes will in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.4 Registration; Registration of Transfer and Exchange. The
Issuer will cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer will provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee will be "Note Registrar" for the purpose of registering Notes
and transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer will promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
12
If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee 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
will have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee will have the right to
conclusively rely upon a certificate executed on behalf of the Note Registrar by
an Executive Officer thereof as to the names and addresses of the Noteholders of
the Notes and the principal amounts and number of such Notes.
Subject to Sections 2.10 and 2.12, upon surrender for registration
of transfer of any Note at the office or agency of the Issuer to be maintained
as provided in Section 3.2, if the requirements of Section 8-401(a)(1) of the
UCC are met the Issuer will execute and upon its request the Indenture Trustee
will authenticate and the Noteholder will obtain from the Indenture Trustee, in
the name of the designated transferee or transferees, one or more new Notes, in
any authorized denominations, of the same class and a like aggregate principal
amount.
At the option of the Noteholder, Notes may be exchanged for other
Notes in any authorized denominations, of the same class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, subject to Sections
2.10 and 2.12, if the requirements of Section 8-401(a)(1) of the UCC are met the
Issuer will execute and upon its request the Indenture Trustee will authenticate
and the Noteholder will obtain from the Indenture Trustee, the Notes which the
Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes will 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.
Every Note presented or surrendered for registration of transfer or
exchange will be (i) duly endorsed by, or be accompanied by a written instrument
of transfer in the form attached to Exhibits A-1, A-2, A-3 and A-4 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 which requirements include membership or
participation in Securities Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Exchange Act, and (ii) accompanied by such other documents as the Indenture
Trustee may require.
Notwithstanding the foregoing, in the case of any sale or other
transfer of a Definitive Note, the transferor of such Definitive Note will 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 (including, without limitation, an insurance company general account)
(any such entity described in clauses (i) through (iii), a "Benefit Plan
Entity") or
13
(b) is a Benefit Plan Entity, which is purchasing a Class A Note and the
acquisition and holding of such Definitive Note by such prospective transferee
will be eligible for, and satisfy all requirements of, a Department of Labor
prohibited transaction class exemption. Each transferee of a Book-Entry Note
will be deemed to have made one of the foregoing representations.
No service charge will be made to a Noteholder for any registration
of transfer or exchange of Notes, but the Note Registrar may require payment of
a sum sufficient to cover any tax 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.
The preceding provisions of this Sections 2.4 notwithstanding, the
Issuer will not be required to make and the Note Registrar will not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee and the Insurer
(unless an Insurer Default has occurred and is continuing) such security or
indemnity as may be required by it to hold the Issuer, the Indenture Trustee and
the Insurer 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 bona
fide purchaser, and provided that the requirements of Section 8-405 of the UCC
are met, the Issuer will execute and upon its request the Indenture Trustee will
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, has become or
within seven days will be due and payable, or has been called for redemption,
instead of issuing a replacement Note, the Issuer may direct the Indenture
Trustee, in writing, to 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 bona fide 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
will 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 any assignee of such
Person, except a bona fide purchaser, and will 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 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 will constitute an
original additional contractual
14
obligation of the Issuer, whether or not the mutilated, destroyed, lost or
stolen Note will be at any time enforceable by anyone, and will 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 will 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 Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee, any
agent of the Issuer or the Indenture Trustee, and the Insurer may treat the
Person in whose name any Note is registered (as of the 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, the Indenture Trustee nor
any agent of the Issuer or the Indenture Trustee will be affected by notice to
the contrary.
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest.
(a) The Notes will accrue interest as provided in the forms of the
Class A-1 Note, the Class A-2 Note, the Class A-3 Note and the Class A-4 Note
set forth in Exhibits A-1, A-2, A-3 and A-4, respectively, and such interest
will be due and payable on each Distribution Date, as specified therein. Any
installment of interest or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable
Distribution Date will be paid to the Person in whose name such Note (or one or
more Predecessor Notes) is registered on the Record Date, by wire transfer or
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 Distribution Date or on the applicable Final Scheduled
Distribution Date (and except for the Redemption Price for any Note called for
redemption pursuant to Section 10.1(a)) which will be payable as provided below.
The funds represented by any such checks returned undelivered will be held in
accordance with Section 3.3.
(b) The principal of each Note will be payable in installments on
each Distribution Date, as applicable, as provided in the forms of the Class A-1
Note, the Class A-2 Note, the Class A-3 Note and the Class A-4 Note set forth in
Exhibits A-1, A-2, A-3 and A-4, respectively. Notwithstanding the foregoing, the
entire unpaid principal amount of the Notes will be due and payable, if not
previously paid, on the date on which an Event of Default has occurred and is
continuing, and the Notes have been declared immediately due and payable in the
manner provided in Section 5.2. All principal payments on each class of Notes
will be made pro rata to the Noteholders of such class entitled thereto. Upon
written notice from the Issuer, the Indenture Trustee will notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Distribution Date on which the Issuer expects that the final
installment of principal of and interest on such Note will be paid. Such notice
will be mailed or transmitted by facsimile prior to such final Distribution Date
and will specify that such
15
final installment will be payable only upon presentation and surrender of such
Note and will specify the place where such Note may be presented and surrendered
for payment of such installment. Notices in connection with redemptions of Notes
will be mailed to Noteholders as provided in Section 10.2.
(c) 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 will, 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.
SECTION 2.8 Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption will, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and will be promptly canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered will be promptly canceled by the
Indenture Trustee. No Notes will be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section, except as expressly permitted by
this Indenture. 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 unless the Issuer will timely direct by an Issuer Order that
they be destroyed or returned to it; provided that such Issuer Order is timely
and the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.9 Release of Collateral. The Indenture Trustee will, on or
after the Termination Date, release any remaining portion of the Trust Estate
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 will
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 Sections 314(c) and 314(d)(1) meeting the
applicable requirements of Section 11.1.
SECTION 2.10 Book-Entry Notes. The Class A Notes, upon original
issuance, will be issued in the form of typewritten Notes representing the
Book-Entry Notes, to be delivered to the Indenture Trustee on behalf of The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
Issuer. Such Notes will initially be registered on the Note Register in the name
of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner
will receive a Definitive Note representing such Note Owner's interest in such
Note, except as provided in Section 2.12. With respect to the Book-Entry Notes,
unless and until definitive, fully registered Notes (the "Definitive Notes")
have been issued to Note Owners pursuant to Section 2.12:
(i) the provisions of this Section 2.10 will be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee will be entitled
to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of
16
principal of and interest on the Notes and the giving of instructions or
directions hereunder) as the sole Holder of the Notes, and has no
obligation to the Note Owners;
(iii) to the extent that the provisions of this Section 2.10
conflict with any other provisions of this Indenture, the provisions of
this Section will control;
(iv) the rights of Note Owners will be exercised only through the
Clearing Agency and will 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 2.12, 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 Outstanding Amount of the Notes, the Clearing
Agency will 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. With respect to the
Book-Entry Notes, whenever a notice or other communication to the Noteholders is
required under this Indenture, unless and until Definitive Notes have been
issued to Note Owners pursuant to Section 2.12, the Indenture Trustee will give
all such notices and communications specified herein to be given to the
Noteholders to the Clearing Agency, and has 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 Book-Entry
Notes, and the Servicer is unable to locate a qualified successor, (ii) the
Servicer at its option 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, Note Owners representing beneficial
interests aggregating at least a majority of the Outstanding Amount of the
Book-Entry Notes 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 Owners of the Book-Entry Notes, then
the Clearing Agency will notify all Owners of Book-Entry Notes and the Indenture
Trustee of the occurrence of any such event and of the availability of
Definitive Notes to such 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
17
instructions, the Issuer will execute and the Indenture Trustee will
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
will be liable for any delay in delivery of such instructions and may
conclusively rely on, and will be fully protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Indenture Trustee will
recognize the Holders of the Definitive Notes as Noteholders.
ARTICLE III
Covenants, Representations and Warranties
SECTION 3.1 Payment of Principal and Interest. The Issuer will duly
and punctually pay the principal of and interest on the Notes in accordance with
the terms of the Notes and this Indenture. Without limiting the foregoing, the
Issuer will cause to be distributed all amounts on deposit in the Note
Distribution Account on a Distribution Date deposited therein pursuant to the
Sale and Servicing Agreement (i) for the benefit of the Class A-l Notes, to
Class A-1 Noteholders, (ii) for the benefit of the Class A-2 Notes, to Class A-2
Noteholders, (iii) for the benefit of the Class A-3 Notes, to Class A-3
Noteholders and (iv) for the benefit of the Class A-4 Notes, to Class A-4
Noteholders. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal will be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.2 Maintenance of Office or Agency. The Issuer will
maintain in 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 Issuer will give prompt written notice
to the Indenture Trustee of the location, and of any change in the location, of
any such office or agency. If at any time the Issuer will fail to maintain any
such office or agency or will fail to furnish the Indenture Trustee 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. Issuer hereby
appoints the Indenture Trustee as paying agent for the Certificates.
SECTION 3.3 Money for Payments to be Held in Trust. On or before
each Distribution Date and Redemption Date, the Issuer will deposit or cause to
be deposited in the Note Distribution Account from the Collection Account (and
cause all other transfers to and from the accounts provided for herein to be
made) an aggregate sum sufficient to pay the amounts then becoming due under the
Notes, such sum to be held in trust for the benefit of the Persons entitled
thereto and (unless the Note Paying Agent is the Indenture Trustee) will
promptly notify the Indenture Trustee of its action or failure so to act.
The Issuer will cause each Note Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee and the
Insurer an instrument in which such Note Paying Agent will agree with the
Indenture Trustee (and if the Indenture Trustee acts as Note Paying Agent, it
hereby so agrees), subject to the provisions of this Section, that such Note
Paying Agent will:
18
(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 will 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 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 Note 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 Note Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code 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 Note Paying Agent to pay to the Indenture Trustee all sums held
in trust by such Note 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 Note
Paying Agent; and upon such a payment by any Note Paying Agent to the Indenture
Trustee, such Note Paying Agent will be released from all further liability with
respect to such money.
Subject to applicable laws with respect to the escheat of funds, any
money held by the Indenture Trustee or any Note 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 will be discharged from
such trust and be paid to the Issuer on Issuer Request with the consent of the
Insurer (unless an Insurer Default has occurred and is continuing) and will be
deposited by the Indenture Trustee in the Collection Account; and the Holder of
such Note will 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 Note Paying Agent
with respect to such trust money will thereupon cease; provided, however, that
if such money or any portion thereof had been previously deposited by the
Insurer or 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 will 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 Note Paying Agent, before being required to make any such
repayment, will at the expense 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
19
circulation in New York, New York, notice that such money remains unclaimed and
that, after a date specified therein, which will not be less than 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 will also adopt and employ,
at the expense of the Issuer, any other reasonable means of notification of such
repayment (including, but not limited to, 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 Note
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 will keep in full effect its existence,
rights and franchises as a statutory trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or will be necessary to protect the validity and enforceability
of this Indenture, the Notes, the Collateral and each other instrument or
agreement included in the Trust Estate.
SECTION 3.5 Protection of 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 will 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,
which security interest will be enforceable against third-party creditors. The
Issuer will from time to time prepare (or will cause to be prepared), execute
and deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust Estate;
(ii) 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;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee in such Trust Estate against the claims of all
Persons and parties;
(vi) pay all taxes or assessments levied or assessed upon the Trust
Estate when due; and
20
(vii) maintain or preserve all of the Issuer's right, title and
interest in its rights and benefits, but none of its obligations or
burdens, under the Purchase Agreement and the Sale and Servicing
Agreement, including the Issuer's rights under the Purchase Agreement and
the Sale and Servicing Agreement, to enforce the delivery requirements,
representations and warranties and the cure and repurchase obligations of
Triad under the Purchase Agreement and the Sale and Servicing Agreement.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by and delivered to the Indenture Trustee pursuant to
this Section.
SECTION 3.6 Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer will 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 and filing 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
perfect and make effective the first priority lien and security interest in
favor of the Indenture Trustee, for the benefit of the Issuer Secured Parties,
created by this Indenture and reciting the details of such action, or stating
that, in the opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) Within 120 days after the beginning of each calendar year,
beginning with the first calendar year beginning more than six months after the
Closing Date, the Issuer will 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, re-recording 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 interest. Such Opinion of
Counsel will 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 until April 30 in
the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Receivables.
(a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's 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
ordered by any bankruptcy or other court or as expressly provided in the Basic
Documents or such other instrument or agreement.
21
(b) The Issuer may contract with other Persons acceptable to the
Insurer (so long as no Insurer Default has occurred and is 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
Officer's Certificate of the Issuer will be deemed to be action taken by the
Issuer; provided that the Issuer will remain liable for performing these duties
hereunder. Initially, the Issuer has contracted with the Servicer to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in the Basic Documents and in the
instruments and agreements included in the Trust Estate, including, preparing
(or causing to prepared) and filing (or causing to be filed) all UCC financing
statements and continuation statements required to be filed by the terms of this
Indenture and the Sale and Servicing Agreement in accordance with and within the
time periods provided for herein and therein. Except as otherwise expressly
provided therein, the Issuer will not waive, amend, modify, supplement or
terminate any Basic Document or any provision thereof without the consent of the
Indenture Trustee, the Insurer or the Majority Noteholders.
(d) If a responsible officer of the Issuer has actual knowledge of
the occurrence of a Servicer Termination Event under the Sale and Servicing
Agreement, the Issuer will promptly notify the Indenture Trustee, the Insurer
and the Rating Agencies thereof in accordance with Section 11.4, and will
specify in such notice the action, if any, the Issuer is taking in respect of
such default. If a Servicer Termination Event arises from the failure of the
Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Receivables, the Issuer will take all
reasonable steps available to it to remedy such failure.
(e) The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Depositor of their respective duties under the
Basic Documents (x) without the prior consent of the Insurer (unless an Insurer
Default has occurred and is continuing) or (y) if the effect thereof would
adversely affect the Holders of the Notes.
SECTION 3.8 Negative Covenants. So long as any Notes are
Outstanding, the Issuer will not:
(i) except as expressly permitted by the Basic 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 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) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien in favor of the Indenture Trustee created
by this Indenture to be amended,
22
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (B)
permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Trust Estate or any
part thereof or any interest therein or the proceeds thereof (other than
tax liens, mechanics' liens and other liens that arise 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), (C) permit the lien of this
Indenture not to constitute a valid first priority (other than with
respect to any such tax, mechanics' or other lien) security interest in
the Trust Estate, or (D) amend, modify or fail to comply with the
provisions of the Basic Documents without the prior written consent of the
Controlling Party.
SECTION 3.9 Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee and the Insurer, within 120 days after the end
of each fiscal year of the Issuer (commencing with the fiscal year ended
December 31, 2005), 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; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under the Basic Documents 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.
SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms.
(a) The Issuer will 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 will be a Person organized and existing under
the laws of the United States of America or any state and will 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 no Insurer Default has occurred and is 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 has occurred and is continuing;
(iii) the Rating Agency Condition has been satisfied with respect to
such transaction;
23
(iv) the Issuer has received an Opinion of Counsel (and has
delivered copies thereof to the Indenture Trustee and the Insurer (so long
as no Insurer Default has occurred and is continuing)) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer, the Insurer, any Noteholder or the Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture has been taken;
(vi) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation
or merger and such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act); and
(vii) so long as no Insurer Default has occurred and is continuing,
the Issuer will have given the Insurer written notice of such
consolidation or merger at least 20 Business Days prior to the
consummation of such action and will have received the prior written
approval of the Insurer of such consolidation or merger and the Issuer or
the Person (if other than the Issuer) formed by or surviving such
consolidation or merger has a net worth, immediately after such
consolidation or merger, that is (a) greater than zero and (b) not less
than the net worth of the Issuer immediately prior to giving effect to
such consolidation or merger.
(b) The Issuer will 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 will (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 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 no Insurer Default has
occurred and is 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 each of the Basic Documents on the part of the
Issuer to be performed or observed, all as provided herein, (C) expressly
agree by means of such supplemental indenture that all right, title and
interest so conveyed or transferred will be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agree 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
agree by means of such supplemental indenture that such Person (or if a
group of persons, then one specified Person) will prepare (or cause to be
prepared) and make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection with the
Notes;
24
(ii) immediately after giving effect to such transaction, no Default
or Event of Default has occurred and is continuing;
(iii) the Rating Agency Condition has been satisfied with respect to
such transaction;
(iv) the Issuer has received an Opinion of Counsel (and will have
delivered copies thereof to the Indenture Trustee and the Insurer (so long
as no Insurer Default has occurred and is continuing)) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer, the Insurer, any Noteholder or the Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture has been taken;
(vi) the Issuer will have delivered to the Indenture Trustee and the
Insurer an Officer's Certificate and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any
filing required by the Exchange Act); and
(vii) so long as no Insurer Default has occurred and is continuing,
the Issuer will have given the Insurer written notice of such conveyance
or transfer at least 20 Business Days prior to the consummation of such
action and will have received the prior written approval of the Insurer of
such conveyance or transfer and the transferee 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.
(c) The Issuer will not change its jurisdiction of organization
without notifying the Indenture Trustee and the Insurer and taking any actions
necessary to maintain a first priority perfected security interest in the
Collateral under this Indenture.
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) will 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 the assets and properties
of the Issuer pursuant to Section 3.10 (b), Triad Automobile Receivables Trust
2005-A will 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 Triad Automobile Receivables Trust 2005-A is to be so released.
25
SECTION 3.12 No Other Business. The Issuer will not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by the Basic Documents and activities
incidental thereto.
SECTION 3.13 No Borrowing. The Issuer will not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes, (ii) obligations owing from time to time
to the Insurer under the Insurance Agreement and (iii) any other Indebtedness
permitted by or arising under the Basic Documents. The proceeds of the Notes
will be used exclusively to fund the Issuer's purchase of the Receivables and
the other assets specified in the Sale and Servicing Agreement, to fund the
Spread Account and to pay the Issuer's organizational, transactional and
start-up expenses.
SECTION 3.14 Servicer's Obligations. The Issuer will cause the
Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.10 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 will 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 will not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17 Compliance with Laws. The Issuer will 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
Basic Document.
SECTION 3.18 Restricted Payments. The Issuer will 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 amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, distributions
to the Servicer, the Owner Trustee, the Backup Servicer, the Insurer, 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 the Basic
Documents.
26
SECTION 3.19 Notice of Events of Default. Upon a responsible officer
of the Issuer having actual knowledge thereof, the Issuer agrees to give the
Indenture Trustee, the Insurer and the Rating Agencies prompt written notice of
each Default or Event of Default hereunder and each default on the part of the
Servicer or the Depositor of its obligations under the Sale and Servicing
Agreement.
SECTION 3.20 Further Instruments and Acts. Upon request of the
Indenture Trustee or the Insurer, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 3.21 Amendments of Sale and Servicing Agreement and Trust
Agreement. The Issuer will not agree to any amendment to Section 12.1 of the
Sale and Servicing Agreement or Section 10.1 of the Trust Agreement to eliminate
the requirements thereunder that the Indenture Trustee or the Holders of the
Notes consent to amendments thereto as provided therein.
SECTION 3.22 Income Tax Characterization. For purposes of federal
income, state and local income and franchise and any other income taxes, the
Issuer will treat the Notes as indebtedness and each Noteholder (or beneficial
Note Owner) will be deemed, by virtue of acquisition of its interest in such
Note, to have agreed, to treat the Notes as indebtedness for all applicable tax
reporting purposes.
SECTION 3.23 Representations and Warranties. The Issuer represents
and warrants that:
(a) Security Interest. This Indenture creates a valid and continuing
security interest (as defined in the applicable UCC) in the Receivables in favor
of the Indenture Trustee, which security interest is prior to all other Liens,
and is enforceable as such as against creditors of and purchasers from the
Seller. The Issuer owns and has good and marketable title to the Receivables
free and clear of any Lien (other than the Lien in favor of the Indenture
Trustee), claim or encumbrance of any Person. The Issuer is not aware of any
judgments or tax liens filed against the Issuer.
(b) All Filings Made. The Issuer has taken all steps necessary to
perfect the Indenture Trustee's security interest in the property securing the
Receivables, provided that, if not done as of the Closing Date, the Issuer will
cause, within ten days of the Closing Date, the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the security interest in
the Receivables granted to the Indenture Trustee hereunder. All financing
statements filed or to be filed by the Issuer in favor of the Indenture Trustee
in connection herewith that describes the Collateral contain a statement to the
following effect:
(A purchase or taking of a security interest in any collateral
described in this financing statement except as permitted by the
Indenture will violate the rights of the Indenture Trustee).
27
(c) No Impairment. The Issuer has not done anything to convey any
right to any Person that would result in such Person having a right to payments
due under the Receivables or otherwise to impair the rights of the Insurer, the
Indenture Trustee and the Noteholders in any Receivable or the proceeds thereof.
Other than the security interest granted to the Indenture Trustee pursuant to
this Indenture, the Issuer has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Receivables. The Issuer has not
authorized the filing of and is not aware of any financing statements against
the Issuer that include a description of collateral covering the Receivables
other than any financing statement relating to the security interest granted to
the Indenture Trustee hereunder or that has been terminated. The Issuer is not
aware of any judgment or tax lien filings against it.
(d) The Receivables. The Receivables constitute "tangible chattel
paper" within the meaning of the applicable UCC. Triad Financial Corporation, as
the Custodian under the Sale and Servicing Agreement, has in its possession all
original copies of the receivable files that constitute or evidence the
Receivables. The receivable files that constitute or evidence the Receivables do
not have any marks or notations indicating that they have been pledged, assigned
or conveyed by the Issuer to any person.
(e) Good Title. Immediately prior to the pledge of the Receivables
to the Indenture Trustee pursuant to this Indenture, the Issuer was the sole
owner thereof and had good and indefeasible title thereto, free of any Lien and,
upon execution and delivery of the Basic Documents, the Trust shall have good
and indefeasible title to and will be the sole owner of such Receivables, free
of any Lien. No dealer or third-party lender has a participation in, or other
right to receive, proceeds of any Receivable. The Issuer has not taken any
action to convey any right to any Person that would result in such Person having
a right to payments received under the related Insurance Policies, Auto Loan
Purchase and Sale Agreements, Dealer Assignments or Third-Party Lender
Assignments or to payments due under such Receivables.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1 Satisfaction and Discharge of Indenture. This Indenture
will cease to be of further effect with respect to the Notes except 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 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13, 3.20, 3.21 and 3.22, (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, will execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when
(A) either
28
(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 Indenture Trustee 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 Distribution Dates within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving of
notice of redemption by the Indenture Trustee in the name, and at
the expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature prior
to the date such amounts are payable), in trust for such purpose, in
an amount sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Indenture Trustee for
cancellation when due to their respective Final Scheduled
Distribution Dates or Redemption Date (if Notes have been called for
redemption pursuant to Section 10.1(a)), 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
(C) the Issuer has delivered to the Indenture Trustee and the
Insurer an Officer's Certificate, an Opinion of Counsel and if
required by the TIA, the Indenture Trustee or the Insurer (so long
as no Insurer Default has occurred and is continuing) an Independent
Certificate from a firm of certified public accountants, each
meeting the applicable requirements of Section 11.1(a) and each
stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been
complied with.
SECTION 4.2 Application of Trust Money. All moneys deposited with
the Indenture Trustee pursuant to Section 4.1 will be held in trust and applied
by it, in accordance with the provisions of the Notes and the Basic Documents,
to the payment, either directly or through any Note Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for the
payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal
29
and interest; but such moneys need not be segregated from other funds except to
the extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.3 Repayment of Moneys Held by Note Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Note Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to such
Notes will, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to Section 3.3 and thereupon such Note Paying Agent
will be released from all further liability with respect to such moneys.
ARTICLE V
Remedies
SECTION 5.1 Events of Default. "Event of Default" means any one of
the following events (whatever the reason for such Event of Default and whether
it is voluntary or involuntary or effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(i) default by the Issuer in the payment of any interest on any Note
when the same becomes due and payable, and such default continues for a
period of five days; or
(ii) default by the Issuer in the payment of the principal of any
Note on its Final Scheduled Distribution Date; or
(iii) if the Insurer is the Controlling Party, a Trigger Event (as
defined under the Insurance Agreement) has occurred and is continuing; or
(iv) a draw has been made on the Note Policy; or
(v) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate 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 or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order remains
unstayed and in effect for a period of 60 consecutive days; or
(vi) the commencement by the Issuer 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 to the entry of
an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust
Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of action by the Issuer in
furtherance of any of the foregoing; or
30
(vii) the Issuer becoming taxable as an association or a publicly
traded partnership taxable as a corporation for federal or state income
tax purposes; or
(viii) on any Distribution Date, after taking into account the
application of the sum of Available Funds for the related calendar month
plus any available amounts from the Spread Account for the related
Distribution Date, any amounts listed in clauses (i) through (v) of
Section 5.7(a) of the Sale and Servicing Agreement have not been paid in
full; or
(ix) default in the observance or performance in any material
respect 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 specifically dealt
with), or any representation or warranty of the Issuer made in this
Indenture, in any Basic Document or in any certificate or any 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
has been made, and such default will continue or not be cured, or the
circumstance or condition in respect of which such representation or
warranty was incorrect will not have been eliminated or otherwise cured,
for a period of 30 days (or for such longer period, not in excess of 90
days, as may be reasonably necessary to remedy such default) after there
has 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 Outstanding Amount of the Notes, a written
notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder.
The Issuer will deliver to the Indenture Trustee and the Insurer,
within five days after knowledge of the occurrence thereof, written notice in
the form of an Officer's Certificate of any event which with the giving of
notice and the lapse of time 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 Rights Upon Event of Default.
(a) In the event of any acceleration of any Notes by operation of
this Section 5.2, the Indenture Trustee will 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 will be applied by the Indenture Trustee:
FIRST: to Class A Noteholders for amounts due and unpaid on the
Class A Notes for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class A Notes for
interest; and
SECOND: first, to the Class A-1 Noteholders for amounts due and
unpaid for principal, then to Holders of the other Classes of Class A
Notes for amounts due and unpaid on such Class A Notes for principal,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Class A Notes for principal.
31
(b) In the event any Notes are accelerated due to an Event of
Default, the Insurer has 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, will elect.
(c) If an Event of Default occurs and is continuing (other than
Events of Default specified in Section 5.1(v) and (vi)), the Indenture Trustee
may, with consent of the Insurer (if the Insurer is the Controlling Party), and
will, at the direction of the Controlling Party, declare by written notice to
the Issuer that the Notes become, whereupon they will become, immediately due
and payable at par, together with accrued interest thereon. If an Event of
Default specified in Section 5.1(v) or (vi) occurs, the Notes will automatically
become due and payable at par, together with interest thereon, without any
declaration or other act on the part of its Indenture Trustee, any Noteholder or
the Controlling Party.
(d) If at any time after such declaration of acceleration of
maturity has been made 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 Controlling Party, 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 5.13.
No such rescission will 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, notwithstanding any rights of any
other party herein to exercise any of its remedies as provided herein, if (i)
default is made in the payment of any interest on any Note when the same becomes
due and payable, and such default continues for a period of five days, or (ii)
default is made in the payment of the principal of or any installment of the
principal of any Note when the same becomes due and payable, the Issuer will pay
to the Indenture Trustee, for the benefit of the Holders of the Notes, the whole
amount then
32
due and payable on such Notes for principal and interest, with interest upon the
overdue principal, and, to the extent payment at such rate of interest will be
legally enforceable, upon overdue installments of interest, at the applicable
Interest Rate and in addition thereto such further amount as will 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, 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 other Basic 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 Basic 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) If an Event of Default occurs and is continuing, the Indenture
Trustee may with the consent of the Controlling Party and will, at the direction
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 or the Controlling Party will 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) [Reserved].
(e) In case there will 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 or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official has been appointed
for or taken possession of the Issuer or its property or such other obligor or
Person, 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, the Indenture Trustee, irrespective of whether the
principal of any Notes will then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee has
made any demand pursuant to the provisions of this Section, will be entitled and
empowered, by intervention in such proceedings or otherwise to, and may with the
Insurer's consent (so long as the Insurer is the Controlling Party), and will,
at the direction of the Controlling Party:
(i) file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and file
such other papers or documents
33
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, bad faith or willful misconduct) and of the Noteholders
allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, vote on
behalf of the Noteholders in any election of a trustee, a standby trustee
or Person performing similar functions in any such proceedings;
(iii) 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) 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 Noteholders allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
will consent to the making of payments directly, to such Noteholders, to pay to
the Indenture Trustee such amounts as will 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 will be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such Proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar person.
(g) All rights of action and of asserting claims under this
Indenture 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 will be brought in its own name as Indenture
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 trustee and their respective agents and attorneys,
will be for the ratable benefit of the Holders of the Notes.
34
(h) In any Proceedings brought by the Indenture Trustee (and also
any Proceedings involving the interpretation of any provision of this
Indenture), the Indenture Trustee will be held to represent all the Holders of
the Notes, and it will not be necessary to make any Noteholder a party to any
such proceedings.
SECTION 5.4 Remedies.
(a) If an Event of Default has occurred and is continuing and the
Notes have been declared due and payable and such declaration and its
consequences have not been rescinded, the Indenture Trustee may, with the
consent of the Insurer (so long as the Insurer is the Controlling Party) and
will, at the direction of the Controlling Party, do one or more of the following
(subject to Section 5.5):
(i) institute Proceedings in its own name and as 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 Indenture Trustee and the Holders of the Notes; and
(iv) 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 direct the sale or other liquidation of the Trust Estate unless
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 unless either
(x) Noteholders representing not less than 100% of
the Outstanding Amount of the Notes consent thereto, 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
(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
35
become due if the Notes had not been declared due and
payable, and the Indenture Trustee provides prior
written notice to the Rating Agencies and obtains the
consent of Holders of 66-2/3% of the Outstanding Amount
of the Notes.
In determining such sufficiency or insufficiency with respect to
clause (y) and (z), the Indenture Trustee may, but need not, obtain and
conclusively 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.
SECTION 5.5 Optional Preservation of the Receivables. If the
Indenture Trustee is the Controlling Party and if the Notes have been declared
to be due and payable under Section 5.2 following an Event of Default and such
declaration and its consequences have not been rescinded and annulled, the
Indenture Trustee may but need not maintain possession of the Trust Estate. It
is the desire of the parties hereto and the Noteholders that there be at all
times sufficient funds for the payment of principal of and interest on the
Notes, and the Indenture Trustee will take such desire into account when
determining whether or not to maintain possession of the Trust Estate. In
determining whether to maintain possession of the Trust Estate, the Indenture
Trustee may, but need not, obtain and conclusively 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.
SECTION 5.6 Priorities.
(a) Following (1) the acceleration of the Notes pursuant to Section
5.2 or (2) the receipt of Insolvency Proceeds pursuant to Section 10.1(b) of the
Sale and Servicing Agreement, the Indenture Trustee will apply the following
amounts from (i) Available Funds on deposit in the Collection Account, including
any money or property collected pursuant to Section 5.4 of this Indenture and
any such Insolvency Proceeds, after the payment of all amounts owing to the
Indenture Trustee pursuant to Section 6.7 of this Indenture, and (ii) amounts on
deposit in the Spread Account on the related Distribution Date in the following
order of priority:
FIRST: amounts due and owing and required to be distributed to the
Servicer (provided there is no Servicer Termination Event), the Owner
Trustee, the Indenture Trustee, and Backup Servicer, respectively,
pursuant to priorities (i) and (ii) of Section 5.7(a) of the Sale and
Servicing Agreement and not previously distributed, in the order of such
priorities as set forth therein and without limitation, preference or
priority of any kind within such priorities;
SECOND: to the Holders of the Class A Notes, for amounts due and
unpaid on such Class A Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A Notes for interest;
THIRD: to the Class A-1 Noteholders, for amounts due and unpaid on
the Class A-1 Notes for principal, then, to the Holders of the other
classes of Class A Notes, for amounts due and unpaid on such Class A Notes
for principal, ratably, without
36
preference or priority of any kind, according to the amounts due and
payable on such Class A Notes for principal;
FOURTH: amounts due and owing and required to be distributed to the
Insurer pursuant to priority (vi), (vii) and (x) of Section 5.7(a) of the
Sale and Servicing Agreement and not previously distributed; and
FIFTH: any remainder to the Holders of the Certificates.
(b) The Indenture Trustee may fix a record date and payment date for
any payment to Noteholders pursuant to this Section 5.6. At least 15 days before
such record date the Issuer will mail to each Noteholder and the Indenture
Trustee a notice that states the record date, the payment date and the amount to
be paid.
SECTION 5.7 Limitation of Suits. No Holder of any Note has 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 Outstanding Amount of
the Notes 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 Holder or Holders have offered to the Indenture Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings;
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of
a majority of the Outstanding Amount of the Notes; and
(vi) the Insurer is not the Controlling Party;
it being understood and intended that no one or more Noteholders has 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 Holders or
to enforce any right under this Indenture, except in the manner herein provided.
In the event the Indenture Trustee receives conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing less than a majority of the Outstanding Amount of the Notes, the
Indenture Trustee will act at the direction of the group of Noteholders with the
greater Outstanding Amount of Notes, provided, however, that in the event
37
the Indenture Trustee receives conflicting or inconsistent requests and
indemnity from two or more groups of Noteholders representing an equal
Outstanding Amount of Notes, the Indenture Trustee in its sole discretion may
determine what action, if any, will be taken, notwithstanding any other
provisions of this Indenture.
SECTION 5.8 Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Note has 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 will not be impaired
without the consent of such Holder.
SECTION 5.9 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 Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders will, 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 and
the Noteholders will continue as though no such Proceeding had been instituted.
SECTION 5.10 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 will, 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, will not prevent the concurrent assertion or employment
of any other appropriate right or remedy.
SECTION 5.11 Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee, the Controlling Party or any Holder of any Note to
exercise any right or remedy accruing upon any Default or Event of Default will
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 or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.12 Control by Noteholders. If the Indenture Trustee is the
Controlling Party, the Majority Noteholders will 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 that:
(i) such direction will not be in conflict with any rule of law or
with this Indenture;
38
(ii) any direction to the Indenture Trustee to sell or liquidate the
Trust Estate is subject to the express terms of Section 5.4;
(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 Noteholders
representing less than 100% of the Outstanding Amount of the Notes to sell
or liquidate the Trust Estate will 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;
provided, however, that, subject to Article VI, the Indenture Trustee need not
take any action that it determines might involve it in liability, financial or
otherwise, without receiving indemnity satisfactory to it, or might materially
adversely affect the rights of any Noteholders not consenting to such action.
SECTION 5.13 Waiver of Past Defaults. The Insurer may, or if an
Insurer Default has occurred and is continuing, the Majority Noteholders may,
prior to the declaration of the acceleration of the maturity of the Notes as
provided in Section 5.4, 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 which 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 will be restored to their former positions and rights hereunder,
respectively; but no such waiver will extend to any subsequent or other Default
or impair any right consequent thereto.
Upon any such waiver, such Default will cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom will be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver will extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.14 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof will be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' 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 will not apply to (a) any suit instituted by the
Indenture Trustee or the Controlling Party, (b) any suit instituted by any
Noteholder, or group of Noteholders, in each case holding in the aggregate more
than 10% of the Outstanding Amount of the Notes 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).
39
SECTION 5.15 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 5.16 Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture will not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders will 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 5.17 Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so
and at the Servicer's expense, the Issuer agrees to take all such lawful action
as the Indenture Trustee may request to compel or secure the performance and
observance by the Servicer of its 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 institution of legal or administrative actions or
Proceedings to compel or secure performance by the Servicer of its obligations
under the Sale and Servicing Agreement.
(b) If the Indenture Trustee is a Controlling Party and if an Event
of Default has occurred and is continuing, the Indenture Trustee may, and, at
the written direction of the Majority Noteholders will, subject to Article VI,
exercise all rights, remedies, powers, privileges and claims of the Issuer
against the Servicer under or in connection with the Sale and Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Servicer of its obligations to the Issuer
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 will be suspended.
ARTICLE VI
The Indenture Trustee
SECTION 6.1 Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee will exercise, subject to the provisions of Article V, the
rights and powers vested in it by the Basic Documents to which it is a Party and
use the same degree of care and skill in its
40
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:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations will 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; however, the Indenture Trustee will
examine the certificates and opinions to determine whether or not they
conform on their face to the requirements of this Indenture.
(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 paragraph does not limit the effect of Section 6.1 (b);
(ii) the Indenture Trustee will 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; and
(iii) the Indenture Trustee will not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.12.
(d) The Indenture Trustee will not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing Agreement.
(f) No provision of this Indenture will require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it has reasonable grounds to believe that repayment of
such funds or indemnity reasonably satisfactory to it against such risk or
liability is not assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee will
be subject to the provisions of this Section 6.1 and to the provisions of the
TIA.
(h) The Indenture Trustee will, upon two Business Days' prior notice
to the Indenture Trustee, permit any representative of the Insurer at the
expense of the Trust, during the
41
Indenture Trustee's normal business hours, to examine all books of account,
records, reports and other papers of the Indenture Trustee relating to the
Notes, to make copies and extracts therefrom and to discuss the Indenture
Trustee's affairs and actions, as such affairs and actions relate to the
Indenture Trustee's duties with respect to the Notes, with the Indenture
Trustee's officers and employees responsible for carrying out the Indenture
Trustee's duties with respect to the Notes.
(i) The Indenture Trustee will, and hereby agrees that it will,
perform all of the obligations and duties required of it under the Sale and
Servicing Agreement.
(j) The Indenture Trustee will, 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.
(k) Without limiting the generality of this Section 6.1, the
Indenture Trustee will have no duty (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 any
insurance of the Financed Vehicles or Obligors or to effect or maintain any such
insurance, (iii) 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, (iv) 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 (v) to inspect the Financed
Vehicles at any time or ascertain or inquire as to the performance of observance
of any of the Issuer's, the Depositor's or the Servicer's representations,
warranties or covenants or the Servicer's duties and obligations as Servicer and
as custodian of the Receivable Files under the Sale and Servicing Agreement.
(l) In no event will JPMorgan Chase Bank, N.A., in any of its
capacities hereunder, be deemed to have assumed any duties of the Owner Trustee
under the Delaware Statutory Trust Statute, common law, or the Trust Agreement.
SECTION 6.2 Rights of Indenture Trustee.
(a) The Indenture Trustee may conclusively rely on any report,
certificate, opinion, statement or other document 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 the document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee will not be liable for any action it takes or omits to take in good
faith in reliance on the Officer's 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 or attorneys or a custodian or nominee, and the Indenture Trustee will
not be responsible for any misconduct or
42
negligence on the part of, or for the supervision of, Triad Financial
Corporation, or any other such agent, attorney, custodian or nominee appointed
with due care by it hereunder.
(d) The Indenture Trustee will not be liable for any action it takes
or omits to take in good faith which 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 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
and the Notes will 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 will be under no obligation to institute,
conduct or defend any litigation under this Indenture or in relation to this
Indenture, at the request, order or direction of any of the Noteholders or the
Controlling Party, pursuant to the provisions of this Indenture, unless such
Noteholders or the Controlling Party has offered to the Indenture Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; provided, however, that the Indenture
Trustee will, upon the occurrence of an Event of Default (that has not been
cured), exercise the rights and powers vested in it by this Indenture, subject
to Article V, with reasonable care and skill.
(g) The Indenture Trustee will not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by the Insurer (so long as no Insurer Default has occurred and is continuing) or
(if an Insurer Default has occurred and is continuing) by the Noteholders
evidencing not less than 25% of the Outstanding Amount thereof; provided,
however, that if the payment within a reasonable time to the Indenture Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Indenture Trustee, not
reasonably assured to the Indenture Trustee by the security afforded to it by
the terms of this Indenture or the Sale and Servicing Agreement, the Indenture
Trustee may require reasonable indemnity against such cost, expense or liability
as a condition to so proceeding; the reasonable expense of every such
examination will be paid by the Person making such request, or, if paid by the
Indenture Trustee, will be reimbursed by the Person making such request upon
demand.
(h) The Indenture Trustee will not be liable for any losses on
investments except for losses resulting from the failure of the Indenture
Trustee to make an investment in accordance with instructions given in
accordance hereunder. If the Indenture Trustee acts as the Note Paying Agent or
Note Registrar, the rights and protections afforded to the Indenture Trustee
will be afforded to the Note Paying Agent and Note Registrar.
(i) The Indenture Trustee will not be required to take notice or be
deemed to have notice or knowledge of any Default or Event of Default or
Servicer Termination Event unless a Responsible Officer of the Indenture Trustee
has received written notice or obtained actual knowledge thereof. In the absence
of receipt of such notice or actual knowledge, the
43
Indenture Trustee may conclusively assume that there is no Default or Event of
Default or Servicer Termination Event.
(j) Anything in this Agreement to the contrary notwithstanding, in
no event will 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.
SECTION 6.3 Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Note Paying Agent,
Note Registrar, co-registrar or co-Note 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
will not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the Trust Estate or the Notes, it will not be
accountable for the Issuer's use of the proceeds from the Notes, and it will not
be responsible for any statement of the Issuer in the 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 occurs and is
continuing and if it is either known by, or written notice of the existence
thereof has been delivered to, a Responsible Officer of the Indenture Trustee,
the Indenture Trustee will mail to each Noteholder and the Insurer (unless an
Insurer Default has occurred and is continuing) notice of the Default within 90
days after such knowledge or notice occurs. Except in the case of a 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 if and so long as it in good faith determines that
withholding the notice is in the interests of Noteholders.
SECTION 6.6 Reports by Indenture Trustee to Holders. The Indenture
Trustee will deliver to each Noteholder such information as may be reasonably
required to enable such Holder to prepare its federal and State income tax
returns.
SECTION 6.7 Compensation and Indemnity.
(a) Pursuant to Section 5.7(a) of the Sale and Servicing Agreement,
the Issuer will, or will cause the Servicer to, pay to the Indenture Trustee and
the Backup Servicer from time to time compensation for its services as per a
separate fee schedule. The Indenture Trustee's compensation will not be limited
by any law on compensation of a trustee of an express trust. The Issuer will, or
will cause the Servicer to, reimburse the Indenture Trustee and the Backup
Servicer for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses will include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's and the Backup Servicer's
agents, counsel, accountants and experts. The Issuer will, or will
44
cause the Servicer to, indemnify the Indenture Trustee and the Backup Servicer
and their respective officers, directors, employees and agents against any and
all loss, liability or expense (including attorneys' fees and expenses) incurred
by each of them in connection with the acceptance or the administration of this
Trust and the performance of its duties hereunder. The Indenture Trustee or the
Backup Servicer will notify the Issuer and the Servicer promptly of any claim
for which it may seek indemnity. Failure by the Indenture Trustee or the Backup
Servicer to so notify the Issuer and the Servicer will not relieve the Issuer of
its obligations hereunder or the Servicer of its obligations under Section 8.2
and Article XI of the Sale and Servicing Agreement. The Issuer will, or will
cause the Servicer to, defend the claim, and if failure to provide separate
counsel will result in a conflict of interest, the Indenture Trustee or the
Backup Servicer may have separate counsel and the Issuer will 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 or the Backup Servicer through the
Indenture Trustee's or the Backup Servicer's own willful misconduct, negligence
or bad faith.
(b) The Issuer's payment obligations to the Indenture Trustee and
the Backup Servicer pursuant to this Section 6.7 will survive the discharge of
this Indenture or the respective earlier resignation or removal of the Indenture
Trustee or the Backup Servicer. When the Indenture Trustee or the Backup
Servicer incurs expenses after the occurrence of a Default specified in Section
5.1(v) or (vi) with respect to the Issuer, 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 the Basic Documents, the Indenture
Trustee agrees that the obligations of the Issuer (but not the Servicer) to the
Indenture Trustee under the Basic Documents will be recourse to the Trust Estate
only and specifically will not be recourse to the assets of the
Certificateholder or any Noteholder. In addition, the Indenture Trustee agrees
that its recourse to the Issuer, the Trust Estate, the Depositor and amounts
held in the Spread Account will be limited to the right to receive the
distributions referred to in Section 5.7(a) of the Sale and Servicing Agreement
and Section 5.6 hereof.
SECTION 6.8 Replacement of Indenture Trustee. The Indenture Trustee
may resign at any time by so notifying the Issuer and the Insurer. The Issuer
may, with the consent of the Controlling Party, and will at the request of the
Controlling Party, 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, has 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;
45
(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 takes 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 will promptly appoint a successor Indenture Trustee acceptable to the
Insurer (so long as no Insurer Default has occurred and is continuing). If the
Issuer fails to appoint such a successor Indenture Trustee, the Insurer may
appoint a successor Indenture Trustee.
A successor Indenture Trustee will deliver a written acceptance of
its appointment to the retiring Indenture Trustee, the Insurer (provided that no
Insurer Default has occurred and is continuing) and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee will become effective,
subject to satisfaction of the Rating Agency Condition and the successor
Indenture Trustee will have all the rights, powers and duties of the retiring
Indenture Trustee under this Indenture. The successor Indenture Trustee will
mail a notice of its succession to Noteholders. The retiring Indenture Trustee,
at the expense of the Trust, will promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed (notwithstanding that
such resignation or removal is not effective), the retiring Indenture Trustee,
the Issuer or the Holders of a majority in Outstanding Amount of the Notes may
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder with the Insurer's consent (unless an Insurer Default exists) may
petition any court of competent jurisdiction for the removal of the Indenture
Trustee and the appointment of a successor Indenture Trustee.
Any resignation or removal of the Indenture Trustee and appointment
of a successor Indenture Trustee pursuant to any of the provisions of this
Section will not become effective until acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.8 and payment of all fees
and expenses owed to the outgoing Indenture Trustee.
46
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Servicer's obligations under Section 6.7 will
continue for the benefit of the retiring 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 will be the successor Indenture Trustee; provided, that
the surviving corporation must satisfy the eligibility criteria set forth in
Section 6.11. The Indenture Trustee will provide the Rating Agencies prior
written notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee will succeed to the trusts
created by this Indenture any of the Notes will 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 will not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates will
have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee will have.
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture 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 no Insurer Default has
occurred and is continuing) will have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Trust Estate, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, such title to the Trust Estate, or any part
hereof, 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 will 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 will be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee will, 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 will be conferred or imposed upon and exercised
or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee
47
will be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the holding
of title to the Trust Estate or any portion thereof in any such
jurisdiction) will be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Indenture
Trustee;
(ii) no trustee hereunder will be personally liable by reason of any
act or omission of any other trustee hereunder, including acts or
omissions of predecessor or successor trustees; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee will be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee will refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, will be vested with the estates or
property specified in its instrument of appointment, either jointly with the
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 will be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee will die, dissolve, become insolvent, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts will invest in and be exercised by the Indenture Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
(e) Any and all amounts relating to the fees and expenses of the
co-Indenture Trustee or separate Indenture Trustee will be borne by the Trust
Estate.
SECTION 6.11 Eligibility: Disqualification. The Indenture Trustee
will at all times satisfy the requirements of TIA Section 310(a). The Indenture
Trustee will 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 will have a
long term debt rating of BBB-, or an equivalent rating, or better by the Rating
Agencies. The Indenture Trustee will provide copies of such reports to the
Insurer upon request. The Indenture Trustee will comply with TIA Section 310(b);
provided, however, that there will be excluded from the operation of TIA Section
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 Section
310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Issuer. The
Indenture Trustee will comply with TIA Section 311(a), excluding any creditor
relationship listed in
48
TIA Section 311(b). An Indenture Trustee who has resigned or been removed will
be subject to TIA Section 311(a) to the extent indicated.
SECTION 6.13 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 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 to perform all of
its duties as Indenture Trustee hereunder.
(c) Due Authorization. The execution and delivery by the Indenture
Trustee of the Basic 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 the Basic Documents.
(d) Valid and Binding Indenture. The Indenture Trustee has duly
executed and delivered this Indenture and each other Basic Document to which it
is a party, and each of this Indenture and each such other Basic 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 6.14 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 will at all times be held
and applied solely in accordance with the provisions hereof.
SECTION 6.15 Control by the Controlling Party. The Indenture Trustee
will 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 has occurred and is continuing, the Indenture Trustee will act
upon and comply with notices and instructions given by the Controlling Party
alone in the place and stead of the Issuer.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1 Issuer To Furnish To Indenture Trustee Names and
Addresses of Noteholders. The Issuer will furnish or cause to be furnished to
the Indenture
49
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders as of such Record Date, (b) at such other times as the Indenture
Trustee may request in writing, within 30 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
10 days prior to the time such list is furnished; provided, however, that so
long as the Indenture Trustee is the Note Registrar, no such list will be
required to be furnished. The Indenture Trustee or, if the Indenture Trustee is
not the Note Registrar, the Issuer will furnish to the Insurer in writing at
such times as the Insurer may request a copy of the list.
SECTION 7.2 Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee will preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.1
and the names and addresses of Holders received by the Indenture Trustee in its
capacity as Note Registrar. The Indenture Trustee may destroy any list furnished
to it as provided in such Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar will
have the protection of TIA Section 312(c).
SECTION 7.3 Reports by Issuer.
(a) The Issuer will:
(i) file with the Indenture Trustee, within 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
will transmit by mail to all Noteholders described in TIA Section 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.
50
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer will end on December 31 of each year.
SECTION 7.4 Reports by Indenture Trustee. If required by TIA Section
313(a), within 60 days after each May 31, beginning with May 31, 2005, the
Indenture Trustee will mail to each Noteholder as required by TIA Section 313(c)
a brief report dated as of such date that complies with TIA Section 313(a). The
Indenture Trustee also will comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders will
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer will 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
will 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 will 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 will 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 Release of Trust Estate.
(a) Subject to the payment of its fees and expenses and other
amounts pursuant to Section 6.7, the Indenture Trustee may (with the Insurer's
consent, so long as the Insurer is the Controlling Party), and will at the
Controlling Party's direction, execute instruments to release property from the
lien of this Indenture, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article VIII
will 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 will, at such time as there are no Notes
outstanding, all sums due the Indenture Trustee pursuant to Section 6.7 and all
sums due the Insurer under the Insurance Agreement have been paid, 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 Trust Accounts. The Indenture
51
Trustee will 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 Sections 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.1.
SECTION 8.3 Opinion of Counsel. The Indenture Trustee will receive
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.2(a), accompanied by copies of any instruments involved,
and the Indenture Trustee may also require, as a condition to such action, an
Opinion of Counsel in form and substance satisfactory to the Indenture Trustee,
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 the provisions of this Indenture; provided, however, that such
Opinion of Counsel will not be required to express an opinion as to the fair
value of the Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
Supplemental Indentures
SECTION 9.1 Supplemental Indentures Without Consent of
Noteholders.(a) Without the consent of the Holders of any Notes but with the
consent of the Insurer (unless an Insurer Default has occurred and is
continuing) and with prior notice to the Rating Agencies by the Issuer, as
evidenced to the Indenture Trustee, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter into
one or more indentures supplemental hereto (which will conform to the provisions
of the Trust Indenture Act as in force at the date of the execution thereof), in
form satisfactory to the Indenture Trustee, for any of the following purposes;
provided that such action will not adversely affect in any material respect the
interests of the Holders of the Notes or of the Insurer:
(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
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the 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;
52
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided, that such action
shall not adversely affect the interests of the Holders of the 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 will 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 will 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.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the Notes
but with the consent of the Insurer (unless an Insurer Default has occurred and
is continuing) and with prior notice to the Rating Agencies by the Issuer, 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 the Notes under this Indenture; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder or the Insurer.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies, with the consent of the Insurer
(unless an Insurer Default has occurred and is continuing) and with the consent
of the Majority Noteholders, by Act of such Holders delivered to the Issuer and
the Indenture Trustee, 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 the Notes under this Indenture; provided,
however, that, if an Insurer Default has occurred and is continuing, such
supplemental indenture will not materially and adversely affect the interests of
the Insurer; provided further, that subject to the express rights of the Insurer
under the Basic Documents, no such supplemental indenture will, without the
consent of 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
provision of this Indenture relating to the application of collections on,
or the proceeds of the sale of, the Trust Estate to
53
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;
(ii) 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 the Notes on or after the respective due dates thereof (or, in the case
of redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding Amount of the Notes,
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;
(iv) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to sell or liquidate the Trust
Estate pursuant to Section 5.4;
(vi) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of the Basic Documents cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby;
(vii) 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 Distribution Date (including the
calculation of any of the individual components of such calculation) or to
affect the rights of the Noteholders to the benefit of any provisions for
the mandatory redemption of the Notes contained herein; or
(viii) 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 in any of
the Basic Documents, terminate the lien of this Indenture on any property
at any time subject hereto or deprive the Holder of any Note of the
security provided by the lien of this Indenture.
The Indenture Trustee may determine whether or not any Notes would
be affected by any supplemental indenture and any such determination will be
conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee will not be liable
for any such determination made in good faith.
It will not be necessary for any Act of Noteholders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it will be sufficient if such Act will approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section 9.2, the Indenture
Trustee will mail to the
54
Holders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Indenture Trustee to mail such notice, or any
defect therein, will 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 amendments or modifications thereby of the
trusts created by this Indenture, the Indenture Trustee will be entitled to
receive, and will 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 will 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
will 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 will 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 will 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 will conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture will then be qualified under the Trust
Indenture Act.
SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee will,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee will so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and 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) The Notes are subject to redemption in whole, but not in part,
at the direction of the Servicer pursuant to Section 10.1(a) of the Sale and
Servicing Agreement, on any Distribution Date on which the Servicer exercises
its option to purchase the Owner Trust Estate,
55
other than the Trust Accounts (with the consent of the Insurer if such purchase
would result in a claim on the Note Policy or would result in any amount owing
to the Insurer under the Insurance Agreement remaining unpaid), which
Distribution Date shall be after the last day of any Collection Period as of
which the Pool Balance will be less than or equal to 10% of the Original Pool
Balance, for a purchase price equal to the Redemption Price. The Servicer or the
Issuer will furnish the Insurer and the Rating Agencies notice of such
redemption. If the Notes are to be redeemed pursuant to this Section 10.1(a),
the Servicer or the Issuer will furnish notice of such election to the Indenture
Trustee not later than 35 days prior to the Redemption Date and the Issuer will
deposit with the Indenture Trustee in the Collection Account the Redemption
Price of the Notes to be redeemed at least two Business Days prior to the
Redemption Date whereupon all such Notes will be due and payable on the
Redemption Date upon the furnishing of a notice complying with Section 10.2 to
each Holder of Notes.
(b) In the event that the assets of the Trust are distributed
pursuant to Section 8.1 of the Trust Agreement, all amounts on deposit in the
Note Distribution Account will be paid to the Noteholders up to the Outstanding
Amount of the Notes and all accrued and unpaid interest thereon. If amounts are
to be paid to Noteholders pursuant to this Section 10.1(b), the Servicer or the
Issuer will, to the extent practicable, furnish notice of such event to the
Indenture Trustee not later than 45 days prior to the Redemption Date whereupon
all such amounts will be payable on the Redemption Date.
SECTION 10.2 Form of Redemption Notice.
Notice of redemption under Section 10.1 will be given by the
Indenture Trustee by facsimile or by first-class mail, postage prepaid,
transmitted or mailed prior to the applicable Redemption Date 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 will state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such Redemption
Date is not applicable and that payments will be made only upon
presentation and surrender of such Notes and the place where such Notes
are to be surrendered for payment of the Redemption Price (which will be
the office or agency of the Issuer to be maintained as provided in Section
3.2); and
(iv) that interest on the Notes will cease to accrue on the
Redemption Date.
Notice of redemption of the Notes will 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 will not impair or
affect the validity of the redemption of any other Note.
56
SECTION 10.3 Notes Payable on Redemption Date. The Notes to be
redeemed will, following notice of redemption as required by Section 10.2 (in
the case of redemption pursuant to Section 10.1(a)), on the Redemption Date
become due and payable at the Redemption Price and (unless the Issuer will
default in the payment of the Redemption Price) no interest will accrue on the
Redemption Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Redemption Price.
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 any provision of this Indenture, the Issuer will furnish to the Indenture
Trustee and to the Insurer (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) if requested by the Indenture
Trustee 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 any provision of this Indenture, no
additional certificate or opinion need be furnished.
(a) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture will 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 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) (i)(i) 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,
other than in connection with a release of any Purchased Receivable or
Liquidated Receivable, the Issuer will, in addition to any obligation imposed in
Section 11.1(a) 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
57
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(ii) 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 will 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 Amount of the Notes, but 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% of the
Outstanding Amount of the Notes.
(iii) 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 will also
furnish to the Indenture Trustee and the Insurer an Officer's Certificate
certifying or stating the opinion of each Person signing such certificate
as to the fair value (within 90 days of such release) of the property or
securities proposed to be released and stating that in the opinion of such
Person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
(iv) 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 will 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 Liquidated 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 Amount
of the Notes, but 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% of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of this
Section 11.1(b), the Issuer may (A) collect, liquidate, sell or otherwise
dispose of Receivables as and to the extent permitted or required by the
Basic Documents and (B) make cash payments out of the Trust Accounts as
and to the extent permitted or required by the Basic 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
58
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 or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based 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, the Depositor or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Depositor or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required 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 or
certificate or report to the Indenture Trustee, it is provided that the Issuer
will deliver any document as a condition of the granting of such application, or
as evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document will 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 will 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 instruments 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 will become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent will 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 11.3.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any customary manner of the Indenture
Trustee.
59
(c) The ownership of Notes will be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes will bind the Holder of every
Note issued upon the registration thereof or 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 Indenture Trustee, Issuer and Rating
Agencies. All demands, notices and communications hereunder will be in writing
and will be deemed to have been duly given to the addressee if mailed, by
first-class registered mail, postage prepaid service, confirmed facsimile
transmission, or a nationally recognized express courier, as follows:
If to the Indenture Trustee: JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004-2477
Attention: Worldwide Securities
Services - Global Debt
- Triad 2005-A
If to the Issuer: Triad Automobile Receivables Trust
2005-A in care of Wilmington Trust
Company
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890
with a copy to: Triad Financial Corporation
7711 Center Avenue, Suite 100
Huntington Beach, CA 92647
Attention: Chief Financial Officer
with a separate copy mailed to the
attention of: General Counsel
The Issuer will promptly transmit any notice received by it from the Noteholders
to the Indenture Trustee.
If to the Insurer: Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
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 will be deemed to constitute consent or
acceptance, then a copy of such notice or other communication should also be
sent to the attention of the General Counsel "URGENT MATERIAL ENCLOSED."
60
If to Moody's: Moody's Investors Service, Inc.
99 Church Street, 4th Floor
New York, New York 10007
Attention: ABS Monitoring Department
If to Standard & Poor's: Standard & Poor's
A Division of The McGraw-Hill Companies,
Inc.
55 Water Street, 40th Floor
New York, New York 10041
Attention of Asset Backed Surveillance
Department
or, as to each of the foregoing, at such other address as will be designated by
written notice to the other parties. Any such demand, notice or communication
hereunder will be deemed to have been received on the date delivered to or
received at the premises of the addressee as evidenced by the date noted on the
return receipt.
SECTION 11.5 Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice will 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 will affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner here
in provided will 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 will be the equivalent of such
notice. Waivers of notice by Noteholders will be filed with the Indenture
Trustee but such filing will not be a condition precedent to the validity of any
action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it will be impractical to
mail notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as will be satisfactory to the Indenture Trustee will 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 will not affect any other rights or obligations
created hereunder, and will not under any circumstance constitute a Default or
Event of Default.
SECTION 11.6 [Reserved].
SECTION 11.7 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
61
Indenture by any of the provisions of the Trust Indenture Act, such required
provision will control.
The provisions of TIA Sections 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 physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and will not affect the construction hereof.
SECTION 11.9 Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer will bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture will bind its successors.
SECTION 11.10 Separability. In case any provision in this Indenture
or in the Notes will be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions will not in any way be
affected or impaired thereby.
SECTION 11.11 Benefits of Indenture. The Insurer and its successors
and assigns will be a third-party beneficiary to the provisions of this
Indenture, and will be entitled to rely upon and directly to enforce such
provisions of this Indenture so long as no Insurer Default has occurred and is
continuing. Nothing in this Indenture or in the Notes, express or implied, will
give to any Person, other than the parties hereto and their successors
hereunder, the Insurer, and the Noteholders, 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 Indenture 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.
In exercising any of its voting rights, rights to direct or consent
or any other rights as the Insurer under this Indenture or any other Basic
Document, subject to the terms and conditions of this Indenture, the Insurer
will not have any obligation or duty to any Person to consider or take into
account the interests of any Person and will not be liable to any Person for any
action taken by it or at its discretion or any failure by it to act or to direct
that any action be taken, without regard to whether such inaction or action
benefits or adversely affects any Noteholder, the Issuer or any other Person.
Without limiting the generality of this Section 11.11, the Insurer,
so long as it is the Controlling Party, will be entitled to instruct the
Indenture Trustee, by delivery of a written direction in the form of a Removal
Direction (as defined in Section 1.3 of the Intercreditor Agreement, dated as of
October 1, 2003, among Triad Financial Corporation, JPMorgan Chase Bank, N.A.,
as Agent, and the other parties thereto), to remove the Servicer in accordance
with such direction if the Insurer has terminated the Servicer pursuant to the
terms of the Sale and
62
Servicing Agreement, and the Indenture Trustee will, upon receipt of such
Removal Direction from the Insurer, act in accordance with the instructions of
the Insurer and in accordance with the procedures as set forth in Section 1.3 of
the Intercreditor Agreement.
SECTION 11.12 Legal Holidays. In any case where the date on which
any payment is due will 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 succeeding Business Day with the same force and
effect as if made on the date an which nominally due, and no interest will
accrue for the period from and after any such nominal date.
SECTION 11.13 Governing Law. THIS INDENTURE WILL 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 WILL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed will be deemed to be an
original, but all such counterparts will together constitute but one and the
same instrument.
SECTION 11.15 Recording of Indenture. If this Indenture is subject
to recording in any appropriate 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, the Depositor, the
Servicer, the Owner Trustee, the Backup Servicer or the Indenture Trustee on the
Notes or under this Indenture, any other Basic Document or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Depositor, the Servicer, the Indenture Trustee, the Backup Servicer or the Owner
Trustee (including 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 the Depositor, the Servicer, the Indenture
Trustee, the Backup Servicer or the Owner Trustee (including in its individual
capacity), any holder of a beneficial interest in the Issuer, the Depositor, the
Servicer, the Owner Trustee, the Backup Servicer or the Indenture Trustee or of
any successor or assign of the Depositor, the Servicer, the Indenture Trustee,
the Backup Servicer or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed (it being understood that the
Indenture Trustee, the Backup Servicer and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary will 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. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee will be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
63
SECTION 11.17 Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary, this
Agreement has been executed by Wilmington Trust Company not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event will Wilmington Trust Company in its individual capacity or, except as
expressly provided in the Trust Agreement, as Owner Trustee have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Issuer hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse will be had solely to the
assets of the Issuer. For all purposes of this Agreement, in the performance of
its duties or obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee will be subject to, and
entitled to the benefits of, the terms and provisions of Articles V, VI and VII
of the Trust Agreement.
SECTION 11.18 No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Depositor or the
Issuer, or join in any institution against the Depositor or 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, any of the
Basic Documents.
SECTION 11.19 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.
SECTION 11.20 Nonpublic Personal Information
In the course of carrying out their duties under this Indenture, the
Indenture Trustee and the Issuer shall develop or receive certain information
regarding the "consumers" and "customers" of the Servicer, including but not
limited to "nonpublic personal information," (as those terms are defined in
Title V of the Gramm-Leach-Bliley Act and the privacy regulations adopted
thereunder). Notwithstanding any other provision of this Indenture, with respect
to nonpublic personal information about the customers and consumers of the
Servicer, each of the Indenture Trustee and the Issuer agrees as follows: (i)
except as may be reasonably necessary in the ordinary course of business to
carry out the activities to be performed by the Indenture Trustee or the Issuer
under this Indenture or as may be required by law or legal process, it will not
disclose any such nonpublic personal information to any third party; (ii) it
will not use any such nonpublic personal information other than to carry out the
purposes for which it was disclosed to the Indenture Trustee or the Issuer, as
applicable, unless such other use is expressly permitted by a written agreement
executed by the Servicer or required by law or legal process; (iii) it shall
restrict disclosure of the information solely to those of its employees with a
need to know and will advise employees who receive the information of the
obligation of
64
confidentiality hereunder; and (iv) it will take all reasonable measures,
including without limitation such measures as it takes to safeguard its own
confidential information, to ensure the security and confidentiality of all such
nonpublic personal information, to protect against anticipated threats or
hazards to the security or integrity of such nonpublic personal information and
to protect against unauthorized access to or use of such nonpublic personal
information. The Servicer shall have access (during normal business hours, upon
reasonable prior notice) to review such books and records of the Indenture
Trustee and the Issuer as may be necessary to assess compliance with the
requirements of this Section 11.20. All costs and expenses of such a review
shall be borne solely by the Servicer, unless the results of such review
indicate a breach of this Section 11.20 by the Indenture Trustee or the Issuer.
The Indenture Trustee or the Issuer, as applicable, shall promptly notify the
Servicer if it receives any complaint or notice concerning a violation of
privacy rights or becomes aware of a breach of customer data security. Upon
termination of this Indenture, the Indenture Trustee and the Issuer shall return
or destroy all nonpublic personal information, without retaining any copies of
such documents and records
65
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, hereunto duly
authorized, all as of the day and year first above written.
TRIAD AUTOMOBILE RECEIVABLES TRUST 2005-A,
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee of the Trust
By: /s/ Rachel L. Simpson
---------------------------------------
Name: Rachel L. Simpson
Title: Financial Services Officer
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but solely as
Indenture Trustee
By: /s/ Michael A. Smith
----------------------------------------
Name: Michael A. Smith
Title: Vice President
[Indenture]
EXHIBIT A-1
REGISTERED $245,000,000
No. RB-A-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 89578S AK 9
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.
NO TRANSFER OF THIS NOTE WILL BE PERMITTED TO BE MADE TO ANY PERSON
UNLESS [THE INDENTURE TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEROR TO
THE EFFECT THAT] [FOR DEFINITIVE NOTES] EITHER (I) THE TRANSFEREE IS NOT AND IS
NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF (A) AN "EMPLOYEE BENEFIT
PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (B) A "PLAN" (AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE
CODE OR (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE DEEMED TO BE ASSETS OF A PLAN
DESCRIBED IN (A) OR (B) ABOVE BY REASON OF SUCH PLAN'S INVESTMENT IN THE ENTITY
(INCLUDING, WITHOUT LIMITATION, AN INSURANCE COMPANY GENERAL ACCOUNT) OR (II)
THE TRANSFEREE'S ACQUISITION AND CONTINUED HOLDING OF THIS NOTE WILL BE ELIGIBLE
FOR, AND SATISFY ALL REQUIREMENTS OF, A DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION. [EACH TRANSFEREE OF A BENEFICIAL INTEREST IN THIS
NOTE WILL BE DEEMED TO HAVE MADE ONE OF THE FOREGOING REPRESENTATIONS.] [FOR
GLOBAL NOTES]
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 AUTOMOBILE RECEIVABLES TRUST 2005-A
CLASS A-1 3.30% ASSET BACKED NOTE
A-1-1
Triad Automobile Receivables Trust 2005-A, a statutory trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of TWO HUNDRED FORTY-FIVE MILLION
DOLLARS payable on each Distribution Date in an amount equal to the result
obtained by multiplying (i) a fraction, the numerator of which is the initial
principal amount hereof and the denominator of which is the aggregate initial
principal amount of such Class A-1 Notes, by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the Class
A-1 Notes pursuant to the Indenture; provided, however, that the entire unpaid
principal amount of this Note will be due and payable on June 12, 2006 (the
"Final Scheduled Distribution Date"). The Issuer will pay interest on this Note
at the rate per annum shown above on each Distribution Date until the principal
of this Note is paid or made available for payment. Interest on this Note will
accrue for each Distribution Date from the most recent Distribution Date on
which interest has been paid to but excluding such Distribution Date or, if no
interest has yet been paid, from May 26, 2005. Interest will be computed on the
basis of a 360-day year and the actual number of days in the related Interest
Period. Such principal of and interest on this Note will be paid in the manner
specified on the reverse hereof.
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 will be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Note Policy") issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of Scheduled Payments with respect to each Distribution Date, all as
more fully set forth in the Note Policy, the Indenture and the Sale and
Servicing Agreement.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which will 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 whose name appears below by manual signature, this Note
will not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-1-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
TRIAD AUTOMOBILE RECEIVABLES TRUST 2005-A
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee of the Trust
By: _________________________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: May ___, 2005 JPMORGAN CHASE BANK, N.A., not in its
individual capacity but solely as Indenture
Trustee
By: _________________________________________
Authorized Officer
A-1-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 3.30% Asset Backed Notes (herein called the "Class
A-1 Notes"), all issued under an Indenture dated as of May 26, 2005 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and JPMorgan Chase Bank, N.A., as Indenture Trustee (the
"Indenture Trustee," which term includes any successor Indenture Trustee under
the Indenture) to which the 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 defined in the Indenture, as supplemented or amended, will
have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes (together, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 12th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing June 13, 2005. The term
"Distribution Date," will be deemed to include the Final Scheduled Distribution
Date.
As described above, the entire unpaid principal amount of this Note
will be due and payable on the earlier of the Final Scheduled Distribution Date
and the Redemption Date, if any, pursuant to the Indenture. As described above,
a portion of the unpaid principal balance of this Note will be due and payable
on each Distribution Date. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes will be due and payable on the date on which an
Event of Default has occurred and is continuing and the Indenture Trustee has
declared the Notes to be immediately due and payable or the Notes have
automatically become due and payable, in each case, in the manner provided in
the Indenture. All principal payments on the Class A-1 Notes will be made pro
rata to the Class A-1 Noteholders entitled thereto.
Payments of interest and principal on this Note on each Distribution
Date will be made by check mailed to the Person whose name appears as the Holder
of this Note (or one or more Predecessor Notes) on the Note Register as of the
close of business on each Record Date or by wire transfer in immediately
available funds pursuant to the terms of the Indenture. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) effected by
any payments made on any Distribution Date will be binding upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If
funds are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Holder hereof as of the Record
Date preceding such Distribution Date by notice mailed prior to such
Distribution Date and the amount then due and payable will be payable only upon
presentation and surrender of this Note at the Indenture Trustee's principal
A-1-4
Corporate Trust Office or at the office of the Indenture Trustee's agent
appointed for such purposes located in New York, New York.
The Issuer will pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees (i)
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (a) the Depositor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, (b) any owner of a
beneficial interest in the Issuer or (c) any partner, owner, beneficiary, agent,
officer, director or employee of the Depositor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Depositor, the Servicer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the Depositor,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary will 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, and (ii) to treat
the Notes as indebtedness for purposes of federal income, state and local income
and franchise and any other income taxes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and the Insurer and any agent of the
Issuer, the Indenture Trustee or the Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Indenture
Trustee, the Insurer nor any such agent will be affected by notice to the
contrary.
A-1-5
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Majority
Noteholders. The Indenture also contains provisions permitting the Noteholders
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) will be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture will 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 will be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture will 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 Basic Documents, neither Wilmington Trust Company in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns will be personally liable for, nor will
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
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
for the sole purposes of binding the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Holder will have no claim against any of the foregoing for any deficiency, loss
or claim therefrom; provided, however, that nothing contained herein will be
taken to prevent recourse to, and enforcement
A-1-6
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
[statement of insurance]
A-1-7
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)
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 _____________________________(1) ______________________________
Signature Guaranteed:
____________________________________ ______________________________
- ----------
(1) 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.
A-1-8
EXHIBIT A-2
REGISTERED $335,000,000
No. RB-A-2-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 89578S AL 7
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.
NO TRANSFER OF THIS NOTE WILL BE PERMITTED TO BE MADE TO ANY PERSON
UNLESS [THE INDENTURE TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEROR TO
THE EFFECT THAT] [FOR DEFINITIVE NOTES] EITHER (I) THE TRANSFEREE IS NOT AND IS
NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF (A) AN "EMPLOYEE BENEFIT
PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (B) A "PLAN" (AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE
CODE OR (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE DEEMED TO BE ASSETS OF A PLAN
DESCRIBED IN (A) OR (B) ABOVE BY REASON OF SUCH PLAN'S INVESTMENT IN THE ENTITY
(INCLUDING, WITHOUT LIMITATION, AN INSURANCE COMPANY GENERAL ACCOUNT) OR (II)
THE TRANSFEREE'S ACQUISITION AND CONTINUED HOLDING OF THIS NOTE WILL BE ELIGIBLE
FOR, AND SATISFY ALL REQUIREMENTS OF, A DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION. [EACH TRANSFEREE OF A BENEFICIAL INTEREST IN THIS
NOTE WILL BE DEEMED TO HAVE MADE ONE OF THE FOREGOING REPRESENTATIONS.] [FOR
GLOBAL NOTES]
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 AUTOMOBILE RECEIVABLES TRUST 2005-A
CLASS A-2 3.79% ASSET BACKED NOTE
A-2-1
Triad Automobile Receivables Trust 2005-A, a statutory trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of THREE HUNDRED THIRTY-FIVE MILLION
DOLLARS payable on each Distribution Date in an amount equal to the result
obtained by multiplying (i) a fraction, the numerator of which is the initial
principal amount hereof and the denominator of which is the aggregate initial
principal amount of such Class A-2 Notes, by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the Class
A-2 Notes pursuant to the Indenture; provided, however, that the entire unpaid
principal amount of this Note will be due and payable on January 12, 2009 (the
"Final Scheduled Distribution Date"). The Issuer will pay interest on this Note
at the rate per annum shown above on each Distribution Date until the principal
of this Note is paid or made available for payment. Interest on this Note will
accrue for each Distribution Date from and including the twelfth day of the
prior calendar month (or in the case of the first Distribution Date, from and
including the Closing Date) to, but excluding, the twelfth day of the calendar
month in which such Distribution Date occurs. Interest will be computed on the
basis of a 360-day year consisting of twelve 30-day months. Such principal of
and interest on this Note will be paid in the manner specified on the reverse
hereof.
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 will be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Note Policy") issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Scheduled Payments with respect to each Distribution Date, all
as more fully set forth in the Note Policy, the Indenture and the Sale and
Servicing Agreement.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which will 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 whose name appears below by manual signature, this Note
will not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-2-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
TRIAD AUTOMOBILE RECEIVABLES TRUST 2005-A
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee of the Trust
By: ________________________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: May ___, 2005 JPMORGAN CHASE BANK, N.A., not in its
individual capacity but solely as Indenture
Trustee
By: _______________________________________
Authorized Officer
A-2-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 3.79% Asset Backed Notes (herein called the "Class
A-2 Notes"), all issued under an Indenture dated as of May 26, 2005 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and JPMorgan Chase Bank, N.A., as Indenture Trustee (the
"Indenture Trustee," which term includes any successor Indenture Trustee under
the Indenture) to which the 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 defined in the Indenture, as supplemented or amended, will
have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes (together, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 12th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing June 13, 2005. The term
"Distribution Date," will be deemed to include the Final Scheduled Distribution
Date.
As described above, the entire unpaid principal amount of this Note
will be due and payable on the earlier of the Final Scheduled Distribution Date
and the Redemption Date, if any, pursuant to the Indenture. As described above,
a portion of the unpaid principal balance of this Note will be due and payable
on each Distribution Date. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes will be due and payable on the date on which an
Event of Default has occurred and is continuing and the Indenture Trustee has
declared the Notes to be immediately due and payable or the Notes have
automatically become due and payable, in each case, in the manner provided in
the Indenture. All principal payments on the Class A-2 Notes will be made pro
rata to the Class A-2 Noteholders entitled thereto.
Payments of interest and principal on this Note on each Distribution
Date will be made by check mailed to the Person whose name appears as the Holder
of this Note (or one or more Predecessor Notes) on the Note Register as of the
close of business on each Record Date or by wire transfer in immediately
available funds pursuant to the terms of the Indenture. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) effected by
any payments made on any Distribution Date will be binding upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If
funds are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Holder hereof as of the Record
Date preceding such Distribution Date by notice mailed prior to such
Distribution Date and the amount then due and payable will be payable only upon
presentation and surrender of this Note at the Indenture Trustee's principal
A-2-4
Corporate Trust Office or at the office of the Indenture Trustee's agent
appointed for such purposes located in New York, New York.
The Issuer will pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees (i)
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (a) the Depositor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, (b) any owner of a
beneficial interest in the Issuer or (c) any partner, owner, beneficiary, agent,
officer, director or employee of the Depositor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Depositor, the Servicer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the Depositor,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary will 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, and (ii) to treat
the Notes as indebtedness for purposes of federal income, state and local income
and franchise and any other income taxes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and the Insurer and any agent of the
Issuer, the Indenture Trustee or the Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Indenture
Trustee, the Insurer nor any such agent will be affected by notice to the
contrary.
A-2-5
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Majority
Noteholders. The Indenture also contains provisions permitting the Noteholders
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) will be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture will 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 will be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture will 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 Basic Documents, neither Wilmington Trust Company in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns will be personally liable for, nor will
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
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
for the sole purposes of binding the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Holder will have no claim against any of the foregoing for any deficiency, loss
or claim therefrom; provided, however, that nothing contained herein will be
taken to prevent recourse to, and enforcement
A-2-6
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
[statement of insurance]
A-2-7
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)
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 _________________________________(1) _________________________________
Signature Guaranteed:
_______________________________________ _________________________________
- ----------
(1) 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.
A-2-8
EXHIBIT A-3
REGISTERED $290,000,000
No. RB-A-3
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 89578S AM 5
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.
NO TRANSFER OF THIS NOTE WILL BE PERMITTED TO BE MADE TO ANY PERSON
UNLESS [THE INDENTURE TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEROR TO
THE EFFECT THAT] [FOR DEFINITIVE NOTES] EITHER (I) THE TRANSFEREE IS NOT AND IS
NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF (A) AN "EMPLOYEE BENEFIT
PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (B) A "PLAN" (AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE
CODE OR (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE DEEMED TO BE ASSETS OF A PLAN
DESCRIBED IN (A) OR (B) ABOVE BY REASON OF SUCH PLAN'S INVESTMENT IN THE ENTITY
(INCLUDING, WITHOUT LIMITATION, AN INSURANCE COMPANY GENERAL ACCOUNT) OR (II)
THE TRANSFEREE'S ACQUISITION AND CONTINUED HOLDING OF THIS NOTE WILL BE ELIGIBLE
FOR, AND SATISFY ALL REQUIREMENTS OF, A DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION. [EACH TRANSFEREE OF A BENEFICIAL INTEREST IN THIS
NOTE WILL BE DEEMED TO HAVE MADE ONE OF THE FOREGOING REPRESENTATIONS.] [FOR
GLOBAL NOTES]
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 AUTOMOBILE RECEIVABLES TRUST 2005-A
CLASS A-3 4.05% ASSET BACKED NOTE
A-3-1
Triad Automobile Receivables Trust 2005-A, a Delaware statutory
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to CEDE
& CO., or registered assigns, the principal sum of TWO HUNDRED NINETY MILLION
DOLLARS payable on each Distribution Date in an amount equal to the result
obtained by multiplying (i) a fraction, the numerator of which is the initial
principal amount hereof and the denominator of which is the aggregate initial
principal amount of such Class A-3 Notes, by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the Class
A-3 Notes pursuant to the Indenture; provided, however, that the entire unpaid
principal amount of this Note will be due and payable on March 12, 2010 (the
"Final Scheduled Distribution Date"). The Issuer will pay interest on this Note
at the rate per annum shown above on each Distribution Date until the principal
of this Note is paid or made available for payment. Interest on this Note will
accrue for each Distribution Date from and including the twelfth day of the
prior calendar month (or in the case of the first Distribution Date, from and
including the Closing Date) to, but excluding, the twelfth day of the calendar
month in which such Distribution Date occurs. Interest will be computed on the
basis of a 360-day year consisting of twelve 30-day months. Such principal of
and interest on this Note will be paid in the manner specified on the reverse
hereof.
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 will be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Class A Notes are entitled to the benefits of a financial
guaranty insurance policy (the "Note Policy") issued by Ambac Assurance
Corporation (the "Insurer"), pursuant to which the Insurer has unconditionally
guaranteed payments of Scheduled Payments with respect to each Distribution
Date, all as more fully set forth in the Note Policy, the Indenture and the Sale
and Servicing Agreement.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which will 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 whose name appears below by manual signature, this Note
will not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-3-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
TRIAD AUTOMOBILE RECEIVABLES TRUST 2005-A
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee of the Trust
By: _____________________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: May ___, 2005 JPMORGAN CHASE BANK, N.A., not in its
individual capacity but solely as Indenture
Trustee
By: _______________________________________
Authorized Officer
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 4.05% Asset Backed Notes (herein called the "Class
A-3 Notes"), all issued under an Indenture dated as of May 26, 2005 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and JPMorgan Chase Bank, N.A., as Indenture Trustee (the
"Indenture Trustee," which term includes any successor Indenture Trustee under
the Indenture) to which the 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 defined in the Indenture, as supplemented or amended, will
have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes (together, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-3 Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 12th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing June 13, 2005. The term
"Distribution Date," will be deemed to include the Final Scheduled Distribution
Date.
As described above, the entire unpaid principal amount of this Note
will be due and payable on the earlier of the Final Scheduled Distribution Date
and the Redemption Date, if any, pursuant to the Indenture. As described above,
a portion of the unpaid principal balance of this Note will be due and payable
on each Distribution Date. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes will be due and payable on the date on which an
Event of Default has occurred and is continuing and the Indenture Trustee has
declared the Notes to be immediately due and payable or the Notes have
automatically become due and payable, in each case, in the manner provided in
the Indenture. All principal payments on the Class A-3 Notes will be made pro
rata to the Class A-3 Noteholders entitled thereto.
Payments of interest and principal on this Note on each Distribution
Date will be made by check mailed to the Person whose name appears as the Holder
of this Note (or one or more Predecessor Notes) on the Note Register as of the
close of business on each Record Date or by wire transfer in immediately
available funds pursuant to the terms of the Indenture. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) effected by
any payments made on any Distribution Date will be binding upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If
funds are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Holder hereof as of the Record
Date preceding such Distribution Date by notice mailed prior to such
Distribution Date and the amount then due and payable will be payable only upon
presentation and surrender of this Note at the Indenture Trustee's principal
Corporate Trust Office or at the office of the Indenture Trustee's agent
appointed for such purposes located in New York, New York.
The Issuer will pay interest on overdue installments of interest at
the Class A-3 Interest Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note will be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees (i)
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (a) the Depositor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, (b) any owner of a
beneficial interest in the Issuer or (c) any partner, owner, beneficiary, agent,
officer, director or employee of the Depositor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Depositor, the Servicer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the Depositor,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary will 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, and (ii) to treat
the Notes as indebtedness for purposes of federal income, state and local income
and franchise and any other income taxes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and the Insurer and any agent of the
Issuer, the Indenture Trustee or the Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Indenture
Trustee, the Insurer nor any such agent will be affected by notice to the
contrary.
A-3-5
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Majority
Noteholders. The Indenture also contains provisions permitting the Noteholders
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) will be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture will 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 will be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture will 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 Basic Documents, neither Wilmington Trust Company in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns will be personally liable for, nor will
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
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
for the sole purposes of binding the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Holder will have no claim against any of the foregoing for any deficiency, loss
or claim therefrom; provided, however, that nothing contained herein will be
taken to prevent recourse to, and enforcement
A-3-6
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
[statement of insurance]
A-3-7
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)
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 _____________________________(1) ______________________________
Signature Guaranteed:
___________________________________ ______________________________
- ----------
(1) 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.
A-3-8
EXHIBIT A-4
REGISTERED $234,000,000
No. RB-A-4
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 89578S AN 3
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.
NO TRANSFER OF THIS NOTE WILL BE PERMITTED TO BE MADE TO ANY PERSON
UNLESS [THE INDENTURE TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEROR TO
THE EFFECT THAT] [FOR DEFINITIVE NOTES] EITHER (I) THE TRANSFEREE IS NOT AND IS
NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF (A) AN "EMPLOYEE BENEFIT
PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (B) A "PLAN" (AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE
CODE OR (C) AN ENTITY WHOSE UNDERLYING ASSETS ARE DEEMED TO BE ASSETS OF A PLAN
DESCRIBED IN (A) OR (B) ABOVE BY REASON OF SUCH PLAN'S INVESTMENT IN THE ENTITY
(INCLUDING, WITHOUT LIMITATION, AN INSURANCE COMPANY GENERAL ACCOUNT) OR (II)
THE TRANSFEREE'S ACQUISITION AND CONTINUED HOLDING OF THIS NOTE WILL BE ELIGIBLE
FOR, AND SATISFY ALL REQUIREMENTS OF, A DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION. [EACH TRANSFEREE OF A BENEFICIAL INTEREST IN THIS
NOTE WILL BE DEEMED TO HAVE MADE ONE OF THE FOREGOING REPRESENTATIONS.] [FOR
GLOBAL NOTES]
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 AUTOMOBILE RECEIVABLES TRUST 2005-A
CLASS A-4 4.22% ASSET BACKED NOTE
A-4-1
Triad Automobile Receivables Trust 2005-A, a Delaware statutory
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to CEDE
& CO., or registered assigns, the principal sum of TWO HUNDRED THIRTY-FOUR
MILLION DOLLARS payable on each Distribution Date in an amount equal to the
result obtained by multiplying (i) a fraction, the numerator of which is the
initial principal amount hereof and the denominator of which is the aggregate
initial principal amount of such Class A-4 Notes, by (ii) the aggregate amount,
if any, payable from the Note Distribution Account in respect of principal on
the Class A-4 Notes pursuant to the Indenture; provided, however, that the
entire unpaid principal amount of this Note will be due and payable on June 12,
2012 (the "Final Scheduled Distribution Date"). The Issuer will pay interest on
this Note at the rate per annum shown above on each Distribution Date until the
principal of this Note is paid or made available for payment. Interest on this
Note will accrue for each Distribution Date from and including the twelfth day
of the prior calendar month (or in the case of the first Distribution Date, from
and including the Closing Date) to, but excluding, the twelfth day of the
calendar month in which such Distribution Date occurs. Interest will be computed
on the basis of a 360-day year consisting of twelve 30-day months. Such
principal of and interest on this Note will be paid in the manner specified on
the reverse hereof.
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 will be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
The Class A Notes are entitled to the benefits of a financial
guaranty insurance policy (the "Note Policy") issued by Ambac Assurance
Corporation (the "Insurer"), pursuant to which the Insurer has unconditionally
guaranteed payments of Scheduled Payments with respect to each Distribution
Date, all as more fully set forth in the Note Policy, the Indenture and the Sale
and Servicing Agreement.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which will 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 whose name appears below by manual signature, this Note
will not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-4-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
TRIAD AUTOMOBILE RECEIVABLES TRUST 2005-A
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee of the Trust
By: _____________________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: May ___, 2005 JPMORGAN CHASE BANK, N.A., not in its
individual capacity but solely as Indenture
Trustee
By: _______________________________________
Authorized Officer
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-4 4.22% Asset Backed Notes (herein called the "Class
A-4 Notes"), all issued under an Indenture dated as of May 26, 2005 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and JPMorgan Chase Bank, N.A., as Indenture Trustee (the
"Indenture Trustee," which term includes any successor Indenture Trustee under
the Indenture) to which the 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 defined in the Indenture, as supplemented or amended, will
have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes (together, the "Notes") are and will be secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Class A-4 Notes will be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 12th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing June 13, 2005. The term
"Distribution Date," will be deemed to include the Final Scheduled Distribution
Date.
As described above, the entire unpaid principal amount of this Note
will be due and payable on the earlier of the Final Scheduled Distribution Date
and the Redemption Date, if any, pursuant to the Indenture. As described above,
a portion of the unpaid principal balance of this Note will be due and payable
on each Distribution Date. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes will be due and payable on the date on which an
Event of Default has occurred and is continuing and the Indenture Trustee has
declared the Notes to be immediately due and payable or the Notes have
automatically become due and payable, in each case, in the manner provided in
the Indenture. All principal payments on the Class A-4 Notes will be made pro
rata to the Class A-4 Noteholders entitled thereto.
Payments of interest and principal on this Note on each Distribution
Date will be made by check mailed to the Person whose name appears as the Holder
of this Note (or one or more Predecessor Notes) on the Note Register as of the
close of business on each Record Date or by wire transfer in immediately
available funds pursuant to the terms of the Indenture. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) effected by
any payments made on any Distribution Date will be binding upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If
funds are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Holder hereof as of the Record
Date preceding such Distribution Date by notice mailed prior to such
Distribution Date and the amount then due and payable will be payable only upon
presentation and surrender of this Note at the Indenture Trustee's principal
Corporate Trust Office or at the office of the Indenture Trustee's agent
appointed for such purposes located in New York, New York.
The Issuer will pay interest on overdue installments of interest at
the Class A-4 Interest Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which requirements
include membership or participation in Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Exchange Act, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees (i)
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (a) the Depositor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, (b) any owner of a
beneficial interest in the Issuer or (c) any partner, owner, beneficiary, agent,
officer, director or employee of the Depositor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Depositor, the Servicer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the Depositor,
the Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary will 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, and (ii) to treat
the Notes as indebtedness for purposes of federal income, state and local income
and franchise and any other income taxes.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and the Insurer and any agent of the
Issuer, the Indenture Trustee or the Insurer may treat the Person in whose name
this Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Indenture
Trustee, the Insurer nor any such agent will be affected by notice to the
contrary.
A-4-5
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Insurer and of the Majority
Noteholders. The Indenture also contains provisions permitting the Noteholders
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) will be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture will 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 will be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note
or of the Indenture will 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 Basic Documents, neither Wilmington Trust Company in its
individual capacity, any owner of a beneficial interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns will be personally liable for, nor will
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
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
for the sole purposes of binding the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, the
Holder will have no claim against any of the foregoing for any deficiency, loss
or claim therefrom; provided, however, that nothing contained herein will be
taken to prevent recourse to, and enforcement
A-4-6
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
[statement of insurance]
A-4-7
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)
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 _____________________________(1) __________________________________
Signature Guaranteed:
___________________________________ __________________________________
- ----------
(1) 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.
A-4-8