EXHIBIT 10.1
EXECUTION COPY
PURCHASE AGREEMENT
BETWEEN
TRIAD FINANCIAL CORPORATION
ORIGINATOR
AND
TRIAD FINANCIAL SPECIAL PURPOSE LLC
DEPOSITOR
DATED AS OF MARCH 1, 2003
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS.................................................................... 1
SECTION 1.1 General ....................................................................... 1
SECTION 1.2 Specific Terms ................................................................ 1
SECTION 1.3 Usage of Terms ................................................................ 2
SECTION 1.4 [Reserved]..................................................................... 2
SECTION 1.5 No Recourse ................................................................... 2
SECTION 1.6 Action by or Consent of Noteholders and Certificateholder ..................... 3
SECTION 1.7 Material Adverse Effect ....................................................... 3
ARTICLE II. CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY... .............. 3
SECTION 2.1 Conveyance of the Receivables and the Other Conveyed Property.................. 3
ARTICLE III. REPRESENTATIONS AND WARRANTIES................................................. 4
SECTION 3.1 Representations and Warranties of Originator .................................. 4
SECTION 3.2 Representations and Warranties of Depositor ................................... 5
ARTICLE IV. COVENANTS OF SELLER............................................................ 7
SECTION 4.1 Protection of Title of Depositor............................................... 7
SECTION 4.2 Reserved....................................................................... 8
SECTION 4.3 Other Liens or Interests ...................................................... 8
SECTION 4.4 Costs and Expenses ............................................................ 9
SECTION 4.5 Indemnification by Originator ................................................. 9
SECTION 4.6 Indemnification by the Depositor .............................................. 9
ARTICLE V. REPURCHASES.................................................................... 10
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty ............................. 10
SECTION 5.2 Reassignment of Purchased Receivables ......................................... 10
SECTION 5.3 Waivers ....................................................................... 11
ARTICLE VI. MISCELLANEOUS.................................................................. 11
SECTION 6.1 Liability of Originator and Depositor ......................................... 11
SECTION 6.2 Merger or Consolidation of Originator or Depositor ............................ 11
SECTION 6.3 Limitation on Liability of Originator, and Depositor and Others ............... 12
SECTION 6.4 Originator May Own Notes or the Certificate ................................... 12
SECTION 6.5 Amendment...................................................................... 12
SECTION 6.6 Notices........................................................................ 13
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SECTION 6.7 Merger and Integration ........................................................ 14
SECTION 6.8 Severability of Provisions .................................................... 14
SECTION 6.9 Intention of the Parties....................................................... 14
SECTION 6.10 Governing Law ................................................................. 15
SECTION 6.11 Counterparts .................................................................. 15
SECTION 6.12 Conveyance of the Receivables and the Other Conveyed
Property to the Issuer ........................................................ 15
SECTION 6.13 Nonpetition Covenant .......................................................... 15
SCHEDULES
Schedule A -- Schedule of Receivables
Schedule B -- Representations and Warranties from Originator as to the Receivables
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of March 1, 2003, is between
Triad Financial Corporation, a California corporation, as Originator
("Originator"), and Triad Financial Special Purpose LLC, a Delaware limited
liability company, as Depositor ("Depositor").
Depositor has agreed to purchase from the Originator, and the
Originator, pursuant to this Agreement, is selling to Depositor the Receivables
and Other Conveyed Property.
In consideration of the premises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
receipt of which is acknowledged, the Originator and the Depositor, intending to
be legally bound, hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1 General. Capitalized terms used herein
without definition will have the respective meanings assigned to such terms in
the Sale and Servicing Agreement dated as of March 1, 2003, by and among the
Depositor, Triad Financial Corporation, in its individual capacity, as Custodian
and as Servicer, Triad Automobile Receivables Trust 2003-A, as Issuer, and
JPMorgan Chase Bank, as Backup Servicer and Indenture Trustee.
SECTION 1.2 Specific Terms. Whenever used in this
Agreement, the following words and phrases, unless the context otherwise
requires, will have the following meanings:
"Agreement" means this Purchase Agreement and all amendments
hereof and supplements hereto.
"Closing Date" means March 26, 2003.
"Issuer" means Triad Automobile Receivables Trust 2003-A.
"Other Conveyed Property" means all property described in
Section 2.1(b), (c), (d), (e), (f) and (h) of the Sale and Servicing Agreement
conveyed by the Originator to the Depositor pursuant to this Agreement other
than the Receivables, including all monies paid on or after the Cut-Off Date.
"Owner Trustee" means Wilmington Trust Company, as Owner
Trustee appointed and acting pursuant to the Trust Agreement.
"Receivables" means the Receivables listed on the Schedule of
Receivables attached hereto.
"Related Documents" means the Notes, the Certificate, the Sale
and Servicing Agreement, the Indenture, the Trust Agreement, the Policy, the
Insurance Agreement, the Swap
Agreements and the Underwriting Agreement. The Related Documents to be executed
by any party are referred to herein as "such party's Related Documents," "its
Related Documents" or by a similar expression.
"Repurchase Event" means the occurrence of a breach of any of
the Originator's representations and warranties hereunder including the
representations and warranties set forth in Schedule B or any other event which
requires the repurchase of a Receivable by the Originator under the Sale and
Servicing Agreement.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement referred to in Section 1.1.
"Schedule of Representations" means the Schedule of
Representations and Warranties attached hereto as Schedule B.
"Schedule of Receivables" means the schedule of Receivables
sold and transferred pursuant to this Agreement which is attached hereto as
Schedule A.
"Taxes" means any sales, gross receipts, personal property,
tangible or intangible personal property, privilege or license taxes (but not
including any (x) federal, state or other taxes, arising out of the ownership of
the Notes or the Certificate, (y) transfer taxes arising in connection with the
transfer of the Notes or the Certificate or (z) federal, state or other taxes
arising out of any fees paid to the indemnified parties pursuant to the
Transaction Documents).
"Trustee" means JPMorgan Chase Bank, as trustee and any
successor trustee appointed and acting pursuant to the Indenture.
SECTION 1.3 Usage of Terms. With respect to all terms
used in this Agreement, the singular includes the plural and the plural the
singular; words importing any gender include the other gender; references to
"writing" include printing, typing, lithography, and other means of reproducing
words in a visible form; references to agreements and other contractual
instruments include all subsequent amendments thereto or changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement or the Sale and Servicing Agreement; references to Persons include
their permitted successors and assigns; and the terms "include" or "including"
mean "include without limitation" or "including without limitation." The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or other
subdivision, and Article, Section, Schedule and Exhibit references, unless
otherwise specified, refer to Articles and Sections of and Schedules and
Exhibits to this Agreement.
SECTION 1.4 [Reserved].
SECTION 1.5 No Recourse. Without limiting the
obligations of the Originator or the Depositor hereunder, no recourse may be
taken, directly or indirectly, under this Agreement or any certificate or other
writing delivered in connection herewith or therewith, against any stockholder,
officer or director, as such, of the Originator or the Depositor, or of any
predecessor or successor of the Originator or the Depositor.
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SECTION 1.6 Action by or Consent of Noteholders and
Certificateholder. Whenever any provision of this Agreement refers to action to
be taken, or consented to, by Noteholders or the Certificateholder, such
provision will be deemed to refer to the Certificateholder or Noteholder, as the
case may be, of record as of the Record Date immediately preceding the date on
which such action is to be taken, or consent given, by Noteholders or the
Certificateholder. Solely for the purposes of any action to be taken, or
consented to, by Noteholders, any Note registered in the name of the Depositor,
the Originator or any Affiliate thereof will be deemed not to be outstanding;
provided, however, that, solely for the purpose of determining whether the Owner
Trustee or the Indenture Trustee is entitled to rely upon any such action or
consent, only Notes or Certificates that the Owner Trustee or the Indenture
Trustee, respectively, knows to be so owned will be so disregarded.
SECTION 1.7 Material Adverse Effect. Whenever a
determination is to be made under this Agreement as to whether a given event,
action, course of conduct or set of facts or circumstances could or would have a
material adverse effect on the Noteholders or the Insurer (or any similar or
analogous determination), such determination will be made without taking into
account the funds available from claims under the Policy.
ARTICLE II.
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 Conveyance of the Receivables and the Other
Conveyed Property.
(a) Subject to the terms and conditions of this
Agreement, Originator hereby sells, transfers, assigns and otherwise
conveys to Depositor without recourse (but without limitation of its
obligations in this Agreement), and Depositor hereby purchases, all
right, title and interest of Originator in and to the Receivables and
the Other Conveyed Property, including collections paid on or after the
Cut-Off Date. It is the intention of Originator and Depositor that the
sale and assignment contemplated by this Agreement constitutes a sale
and contribution of the Receivables and the Other Conveyed Property
from Originator to Depositor, conveying good title thereto free and
clear of any liens, and the beneficial interest in and title to the
Receivables and the Other Conveyed Property will not be part of
Originator's estate in the event of the filing of a bankruptcy petition
by or against Originator under any bankruptcy or similar law.
(b) Simultaneously with the sale of the Receivables and
the Other Conveyed Property to Depositor, Depositor has paid or caused
to be paid to or upon the order of Originator an amount equal to net
proceeds of the Class A Notes (less the initial deposit to the Spread
Account) by wire transfer of immediately available funds and the
remainder as a contribution to the capital of the Depositor (a
wholly-owned subsidiary of Originator).
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of
Originator. Originator makes the following representations and warranties as of
the date hereof, on which Depositor relies in purchasing the Receivables and the
Other Conveyed Property, on which the Issuer will rely in purchasing the
Receivables and the Other Conveyed Property and on which the Insurer will rely
in issuing the Policy. Such representations are made as of the execution and
delivery of this Agreement, but will survive the sale, transfer and assignment
of the Receivables and the Other Conveyed Property hereunder, and the sale,
transfer and assignment thereof by Depositor to the Issuer. Originator and
Depositor agree that Depositor will assign to Issuer all Depositor's rights
under this Agreement and that the Indenture Trustee will thereafter be entitled
to enforce this Agreement against Originator in the Indenture Trustee's own name
on behalf of the Noteholders.
(a) Schedule of Representations. The representations and
warranties set forth on the Schedule of Representations with respect to
the Receivables as of the date hereof, are true and correct.
(b) Organization and Good Standing. Originator has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of California, with power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is currently
conducted, and had at all relevant times, and now has, power, authority
and legal right to acquire, own, transfer and sell the Receivables and
the Other Conveyed Property to be transferred to Depositor.
(c) Due Qualification. Originator is duly qualified to do
business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of its property or the conduct of its business with
respect to the Receivables requires such qualification.
(d) Power and Authority. Originator has the power and
authority to execute and deliver this Agreement and its Related
Documents and to carry out its terms and their terms, respectively;
Originator has full power and authority to sell and assign the
Receivables and the Other Conveyed Property to be sold and assigned to
Depositor hereunder and has duly authorized such sale and assignment to
Depositor by all necessary corporate action; and the execution,
delivery and performance of this Agreement and Originator's Related
Documents have been duly authorized by Originator by all necessary
corporate action.
(e) Valid Sale; Binding Obligations. This Agreement and
Originator's Related Documents have been duly executed and delivered,
will effect a valid sale, transfer and assignment of the Receivables
and the Other Conveyed Property to the Depositor, enforceable against
Originator and creditors of and purchasers from Originator; and this
Agreement and Originator's Related Documents constitute legal, valid
and binding obligations of Originator enforceable in accordance with
their
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respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or
at law.
(f) No Violation. The consummation of the transactions
contemplated by this Agreement and the Related Documents, and the
fulfillment of the terms of this Agreement and the Related Documents,
will not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice, lapse of time or
both) a default under, the articles of incorporation or bylaws of
Originator, or any indenture, agreement, mortgage, deed of trust or
other instrument to which Originator is a party or by which it is
bound, or result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement,
the Sale and Servicing Agreement and the Indenture, or violate any law,
order, rule or regulation applicable to Originator of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over Originator or any
of its properties.
(g) No Proceedings. There are no proceedings or
investigations pending or, to Originator's knowledge, threatened
against Originator, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having
jurisdiction over Originator or its properties (i) asserting the
invalidity of this Agreement or any of the Related Documents, (ii)
seeking to prevent the issuance of the Notes or the consummation of any
of the transactions contemplated by this Agreement or any of the
Related Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Originator of its
obligations under, or the validity or enforceability of, this Agreement
or any of the Related Documents or (iv) seeking to affect adversely the
federal income tax or other federal, state or local tax
characterization of, or seeking to impose any excise, franchise,
transfer or similar tax upon, the transfer and acquisition of the
Receivables and the Other Conveyed Property hereunder or under the Sale
and Servicing Agreement.
(h) True Sale. The Receivables are being transferred with
the intention of removing them from Originator's estate pursuant to
Section 541 of the Bankruptcy Code, as the same may be amended from
time to time.
SECTION 3.2 Representations and Warranties of Depositor.
Depositor makes the following representations and warranties as of the date
hereof, on which Originator relies in transferring the Receivables and the Other
Conveyed Property to the Depositor, on which the Issuer will rely in purchasing
the Receivables and on which the Insurer will rely in issuing the Policy. Such
representations are made as of the execution and delivery of this Agreement, but
will survive the sale, transfer and assignment of the Receivables and the Other
Conveyed Property hereunder, and the sale, transfer and assignment thereof to
the Issuer under the Sale and Servicing Agreement.
(a) Organization and Good Standing. Depositor has been
duly organized and is validly existing as a limited liability company
in good standing under the laws of the
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State of Delaware, with power and authority to own its properties and
to conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and now
has, power, authority and legal right to acquire, own and sell the
Receivables and the Other Conveyed Property to be transferred to the
Issuer.
(b) Due Qualification. Depositor is duly qualified to do
business as a foreign limited liability company in good standing, and
has obtained all necessary licenses and approvals in all jurisdictions
in which the ownership or lease of its property or the conduct of its
business requires such qualification.
(c) Power and Authority. Depositor has the power and
authority to execute and deliver this Agreement and its Related
Documents and to carry out its terms and their terms, respectively; and
the execution, delivery and performance of this Agreement and
Depositor's Related Documents have been duly authorized by Depositor by
all necessary action.
(d) Valid Sale; Binding Obligations. This Agreement and
Depositor's Related Documents have been duly executed and delivered,
and this Agreement and Depositor's Related Documents constitute legal,
valid and binding obligations of Depositor enforceable in accordance
with their respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or
at law.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the Related Documents, and the
fulfillment of the terms of this Agreement and the Related Documents,
will not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice, lapse of time or
both) a default under, the limited liability company agreement of
Depositor, or any indenture, agreement, mortgage, deed of trust or
other instrument to which Depositor is a party or by which it is bound,
or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement,
the Sale and Servicing Agreement and the Indenture, or violate any law,
order, rule or regulation applicable to Depositor of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over Depositor or any
of its properties.
(f) No Proceedings. There are no proceedings or
investigations pending or, to Depositor's knowledge, threatened against
Depositor, before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality having jurisdiction over
Depositor or its properties (i) asserting the invalidity of this
Agreement or any of the Related Documents, (ii) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by Depositor of its obligations under, or the
validity or
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enforceability of, this Agreement or any of the Related Documents or
(iv) seeking to affect adversely the federal income tax or other
federal, state or local tax characterization of, or seeking to impose
any excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Receivables and the Other Conveyed Property
hereunder or under the Sale and Servicing Agreement.
In the event of any breach of a representation and warranty
made by Depositor hereunder, Originator covenants and agrees that it will not
take any action to pursue any remedy that it may have hereunder, in law, in
equity or otherwise, until a year and a day have passed since the date on which
all notes, certificates, pass-through certificates or other similar securities
issued by Depositor, or a trust or similar vehicle formed by Depositor, have
been paid in full. Originator and Depositor agree that damages will not be an
adequate remedy for such breach and that this covenant may be specifically
enforced by Issuer or by the Indenture Trustee on behalf of the Noteholders and
Owner Trustee on behalf of the Certificateholder.
ARTICLE IV.
COVENANTS OF SELLER
SECTION 4.1 Protection of Title of Depositor.
(a) At or prior to the Closing Date, Originator will have
filed or caused to be filed UCC-1 financing statements, (i) naming
Originator as seller or debtor and naming Depositor as purchaser or
secured party, (ii) naming Depositor as seller or debtor and the Issuer
as purchaser or secured party, and (iii) naming Issuer as debtor and
Indenture Trustee as secured party and describing the Receivables and
the Other Conveyed Property being transferred as collateral, in such
locations as are required in order to perfect the transfers and pledges
thereof under the Related Documents. From time to time thereafter,
Originator will execute and file such financing statements and cause to
be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve,
maintain and protect the interest of Depositor under this Agreement, of
the Issuer under the Sale and Servicing Agreement and of the Indenture
Trustee under the Indenture in the Receivables and the Other Conveyed
Property and in the proceeds thereof. Originator will deliver (or cause
to be delivered) to Depositor, the Indenture Trustee and the Insurer
file-stamped copies of, or filing receipts for, any document filed as
provided above, as soon as available following such filing. In the
event that Originator fails to perform its obligations under this
subsection, Depositor, Issuer or the Indenture Trustee may do so, at
the expense of such Originator. In furtherance of the foregoing, the
Originator hereby authorizes the Depositor, the Issuer or the Indenture
Trustee to file a record or records (as defined in the applicable UCC),
including financing statements, in all jurisdictions and with all
filing offices as each may determine, in its sole discretion, are
necessary or advisable to perfect the security interest granted to the
Depositor pursuant to Section 6.9. Such financing statements may
describe the collateral in the same manner as described herein or may
contain an indication or description of collateral that describes such
property in any other manner as such party may determine, in its sole
discretion, is necessary, advisable or prudent to ensure the perfection
of the security interest in the collateral granted to the Depositor
herein.
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(b) Originator will not change its name, identity, state
of incorporation or corporate structure in any manner that would, could
or might make any financing statement or continuation statement filed
by Originator (or by Depositor, Issuer or the Indenture Trustee on
behalf of Originator) in accordance with Section 4.1(a) seriously
misleading within the meaning of Section 9-506 of the applicable UCC,
unless they will have given Depositor, Issuer, Insurer and the
Indenture Trustee at least 60 days' prior written notice thereof, and
will promptly file appropriate amendments to all previously filed
financing statements and continuation statements.
(c) Originator shall at all times maintain each office
from which it services Receivables and its principal executive office
within the United States of America.
(d) Prior to the Closing Date, Originator has maintained
accounts and records as to each Receivable accurately and in sufficient
detail to permit (i) the reader thereof to know at any time as of or
prior to the Closing Date, the status of such Receivable, including
payments and recoveries made and payments owing (and the nature of
each) and (ii) reconciliation between payments or recoveries on (or
with respect to) each Receivable and the Principal Balance as of the
Closing Date. Originator will maintain its computer systems so that,
from and after the time of transfer under this Agreement of the
Receivables to Depositor, the conveyance of the Receivables by
Depositor to the Issuer, Originator's master computer records
(including archives) that will refer to a Receivable indicate clearly
that such Receivable has been transferred to the Depositor and has been
conveyed by Depositor to Issuer. Indication of the Issuer's ownership
of a Receivable will be deleted from or modified on Originator's
computer systems when, and only when, the Receivable will become a
Purchased Receivable or will have been paid in full.
(e) If at any time Originator proposes to sell, grant a
security interest in, or otherwise transfer any interest in any motor
vehicle receivables to any prospective purchaser, lender or other
transferee, Originator will give to such prospective purchaser, lender
or other transferee computer tapes, records or print-outs (including
any restored from archives) that, if they refer in any manner
whatsoever to any Receivable (other than a Purchased Receivable), will
indicate clearly that such Receivable has been sold by the Originator
and is owned by the Issuer.
SECTION 4.2 Reserved.
SECTION 4.3 Other Liens or Interests. Except for the
conveyances hereunder, Originator will not sell, pledge, assign or transfer to
any other Person or grant, create, incur, assume or suffer to exist any Lien on
the Receivables or the Other Conveyed Property or any interest herein and
Depositor will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on the Receivables or
the Other Conveyed Property or any interest therein, and Originator will defend
the right, title, and interest of Depositor and the Issuer in and to the
Receivables and the Other Conveyed Property against all claims of third parties
claiming through or under Originator and Depositor will defend the right, title,
and interest of the Issuer in and to the Receivables and the Other Conveyed
Property against all claims of third parties claiming through or under
Depositor.
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SECTION 4.4 Costs and Expenses. Each of Originator and
Depositor will pay all reasonable costs and disbursements in connection with the
performance of its obligations hereunder and under its Related Documents.
SECTION 4.5 Indemnification by Originator. (a)
Originator will defend, indemnify and hold harmless Depositor, the Issuer, the
Indenture Trustee, the Backup Servicer, the Owner Trustee, the Noteholders and
the Insurer from and against any and all costs, expenses, losses, damages,
claims, and liabilities, arising out of or resulting from: (i) any breach of any
of Originator's representations and warranties contained herein, (ii) the use,
ownership or operation by Originator or any affiliate thereof of a Financed
Vehicle, (iii) any action taken, or failed to be taken, by it in respect of the
Receivables other than in accordance with this Agreement or the Sale and
Servicing Agreement or (iv) the negligence (except for errors in judgment),
willful misfeasance, or bad faith of Originator in the performance of its duties
under this Agreement or by reason of reckless disregard of Originator's
obligations and duties under this Agreement.
(b) Originator will defend, indemnify and hold harmless
the Issuer, the Indenture Trustee, the Backup Servicer, the Owner Trustee, the
Noteholders and the Insurer from and against any and all costs, expenses,
losses, damages, claims, and liabilities, arising out of or resulting from any
Taxes which may at any time be asserted against such Persons with respect to (i)
the conveyance or ownership of the Receivables or the Other Conveyed Property
hereunder, (ii) the conveyance or ownership of the Receivables under the Sale
and Servicing Agreement and (iii) the issuance and original sale of the Notes
and the issuance of the Certificate, and costs and expenses in defending against
the same, arising by reason of the acts to be performed by Originator under this
Agreement or imposed against such Persons.
Indemnification under this Section 4.5 will include reasonable
fees and expenses of counsel and expenses of litigation and will survive payment
of the Notes and the Certificate and termination of this Agreement. The
indemnity obligations hereunder will be in addition to any obligation that
Originator may otherwise have.
SECTION 4.6 Indemnification by the Depositor. (a) The
Depositor will defend, indemnify and hold harmless the Originator, the Issuer,
the Indenture Trustee, the Backup Servicer, the Owner Trustee, the Noteholders
and the Insurer from and against any and all costs, expenses, losses, damages,
claims, and liabilities, arising out of or resulting from: (i) any breach of any
of the Depositor's representations and warranties contained herein, (ii) the
use, ownership or operation by the Depositor or any affiliate thereof of a
Financed Vehicle, (iii) any action taken, or failed to be taken, by it in
respect of the Receivables other than in accordance with this Agreement or the
Sale and Servicing Agreement or (iv) the negligence (except for errors in
judgment), willful misfeasance, or bad faith of the Depositor in the performance
of its duties under this Agreement or by reason of reckless disregard of the
Depositor's obligations and duties under this Agreement.
(b) Depositor will defend, indemnify and hold harmless
the Issuer, the Indenture Trustee, the Backup Servicer, the Owner Trustee, the
Noteholders and the Insurer from and against any and all costs, expenses,
losses, damages, claims, and liabilities, arising out of or resulting from any
Taxes which may at any time be asserted against such Persons with respect to the
transactions contemplated by this Agreement, including (i) the conveyance or
ownership of
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the Receivables or the Other Conveyed Property hereunder, (ii) the conveyance or
ownership of the Receivables under the Sale and Servicing Agreement and (iii)
the issuance and original sale of the Notes and the issuance of the Certificate,
and costs and expenses in defending against the same, arising by reason of the
acts to be performed by Depositor under this Agreement or imposed against such
Persons.
Indemnification under this Section 4.6 will include reasonable fees and
expenses of counsel and expenses of litigation and will survive payment of the
Notes and the Certificate and termination of this Agreement. The indemnity
obligations hereunder will be in addition to any obligation that the Depositor
may otherwise have.
ARTICLE V.
REPURCHASES
SECTION 5.1 Repurchase of Receivables Upon Breach of
Warranty. Upon the occurrence of a Repurchase Event, Originator will, unless the
breach which is the subject of such Repurchase Event will have been cured in all
material respects, repurchase the Receivable relating thereto from the Issuer
and, simultaneously with the repurchase of the Receivable, Originator will
deposit the Purchase Amount in full, without deduction or offset, to the
Collection Account, pursuant to Section 3.2 of the Sale and Servicing Agreement.
It is understood and agreed that, except as set forth in Section 6.1, the
obligation of Originator to repurchase any Receivable, as to which a breach
occurred and is continuing, will, if such obligation is fulfilled, constitute
the sole remedy against Originator for such breach available to Depositor, the
Issuer, the Insurer, the Backup Servicer, the Noteholders, the
Certificateholder, the Indenture Trustee on behalf of the Noteholders or the
Owner Trustee on behalf of the Certificateholder. This Section 5.1 is intended
to grant the Issuer and the Indenture Trustee a direct right against Originator
to demand performance hereunder, and in connection therewith, Originator waives
any requirement of prior demand against Depositor with respect to such
repurchase obligation. Any such repurchase will take place in the manner
specified in Section 3.2 of the Sale and Servicing Agreement. Notwithstanding
any other provision of this Agreement or the Sale and Servicing Agreement to the
contrary, the obligation of Originator under this Section 5.1 will not terminate
upon a termination of Originator as Servicer under the Sale and Servicing
Agreement and will be performed in accordance with the terms hereof
notwithstanding the failure of the Servicer or Depositor to perform any of their
respective obligations with respect to such Receivable under the Sale and
Servicing Agreement.
In addition to the foregoing and notwithstanding whether the
related Receivable will have been purchased by Originator, Originator will
indemnify the Depositor, the Issuer, the Indenture Trustee, the Backup Servicer,
the Owner Trustee, the Insurer, the Noteholders and the Certificateholder from
and against all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel, which may be asserted against
or incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such Repurchase Events.
SECTION 5.2 Reassignment of Purchased Receivables. Upon
deposit in the Collection Account of the Purchase Amount of any Receivable
repurchased by Originator under
10
Section 5.1, the Issuer will take such steps as may be reasonably requested by
Originator in order to assign to Originator all of the Issuer's right, title and
interest in and to such Receivable and all security and documents and all Other
Conveyed Property conveyed to the Issuer directly relating thereto, without
recourse, representation or warranty, except as to the absence of Liens created
by or arising as a result of actions of the Issuer. Such assignment will be a
sale and assignment outright, and not for security. If, following the
reassignment of a Purchased Receivable, in any enforcement suit or legal
proceeding, it is held that Originator may not enforce any such Receivable on
the ground that it will not be a real party in interest or a holder entitled to
enforce the Receivable, the Issuer will, at the expense of Originator, take such
steps as Originator deems reasonably necessary to enforce the Receivable,
including bringing suit in the Issuer's name.
SECTION 5.3 Waivers. No failure or delay on the part of
Depositor, or the Issuer as assignee of Depositor, in exercising any power,
right or remedy under this Agreement will operate as a waiver thereof, nor will
any single or partial exercise of any such power, right or remedy preclude any
other or future exercise thereof or the exercise of any other power, right or
remedy.
ARTICLE VI.
MISCELLANEOUS
SECTION 6.1 Liability of Originator and Depositor. Each
of Originator and Depositor will be liable in accordance herewith only to the
extent of the obligations in this Agreement specifically undertaken by each of
Originator, and Depositor, respectively and the representations and warranties
of each of Originator and Depositor, respectively.
SECTION 6.2 Merger or Consolidation of Originator or
Depositor. Any corporation, limited liability company or other entity (i) into
which Originator or Depositor may be merged or consolidated, (ii) resulting from
any merger or consolidation to which Originator or Depositor is a party or (iii)
succeeding to the business of Originator or Depositor, in the case of Depositor,
which corporation, limited liability company or other entity has a certificate
of incorporation or limited liability company agreement containing provisions
relating to limitations on business and other matters substantively identical to
those contained in Depositor's limited liability company agreement, provided
that in any of the foregoing cases such corporation or other entity will execute
an agreement of assumption to perform every obligation of Originator or
Depositor, as the case may be, under this Agreement and, whether or not such
assumption agreement is executed, will be the successor to Originator or
Depositor, as the case may be, hereunder (without relieving Originator or
Depositor of their responsibilities hereunder, if it survives such merger or
consolidation) without the execution or filing of any document or any further
action by any of the parties to this Agreement. Notwithstanding the foregoing,
so long as no Insurer Default has occurred and is continuing, Depositor will not
merge or consolidate with any other Person or permit any other Person to become
the successor to Depositor's business without the prior written consent of the
Insurer. Originator or Depositor will promptly inform the other parties, the
Issuer, the Indenture Trustee, the Owner Trustee and, so long as no Insurer
Default has occurred and is continuing, the Insurer, of such merger,
consolidation or purchase and assumption. Notwithstanding the foregoing, as a
condition to the consummation of the transactions referred to in clauses (i),
(ii) and (iii) above, (x) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Sections 3.1 (other then
11
subsection (f) thereof in connection with a change in control as provided in the
Insurance Agreement) and 3.2 will have been breached (for purposes hereof, such
representations and warranties will be true and correct as of the date of the
consummation of such transaction) and with respect to a transaction involving
the Depositor, no event that, after notice or lapse of time, or both, would
become an event of default under the Insurance Agreement, has occurred and is
continuing, (y) with respect to a transaction involving the Depositor, Depositor
will have delivered written notice of such consolidation, merger or purchase and
assumption to the Rating Agencies prior to the consummation of such transaction
and will have delivered to the Issuer, the Insurer and the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section 6.2 and that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with, and (z)
Originator or Depositor, as applicable, will have delivered to the Issuer and
the Indenture Trustee an Opinion of Counsel, stating, in the opinion of such
counsel, either (A) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary to preserve
and protect the interest of the Issuer and the Indenture Trustee in the
Receivables and reciting the details of the filings or (B) no such action will
be necessary to preserve and protect such interest.
SECTION 6.3 Limitation on Liability of Originator, and
Depositor and Others. Originator, and Depositor and any director, officer,
employee or agent thereof may rely in good faith on the advice of counsel or on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement. Originator, or
Depositor will not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its obligations under this Agreement or
its Related Documents and that in its opinion may involve it in any expense or
liability.
SECTION 6.4 Originator May Own Notes or the Certificate.
Subject to the provisions of the Sale and Servicing Agreement, Originator and
any Affiliate of Originator may in their individual or any other capacity become
the owner or pledgee of Notes or the Certificate with the same rights as they
would have if they were not Originator or an Affiliate thereof.
SECTION 6.5 Amendment.
(a) This Agreement may be amended by Originator and
Depositor with the prior written consent of the Insurer (so long as no
Insurer Default has occurred and is continuing) but without the consent
of the Indenture Trustee, the Owner Trustee, the Certificateholder or
any of the Noteholders (i) to cure any ambiguity or (ii) to correct any
provisions in this Agreement; provided, however, that such action will
not, as evidenced by an Opinion of Counsel delivered to the Issuer, the
Owner Trustee and the Indenture Trustee, adversely affect in any
material respect the interests of any Certificateholder or Noteholder.
(b) This Agreement may also be amended from time to time
by Originator, and Depositor, with the prior written consent of the
Insurer (so long as no Insurer Default has occurred and is continuing)
and with the consent of the Indenture Trustee and, if required, the
Certificateholder and the Noteholders, in accordance with the Sale and
Servicing Agreement, for the purpose of adding any provisions to or
changing in any
12
manner or eliminating any of the provisions of this Agreement, or of
modifying in any manner the rights of the Certificateholder or
Noteholders; provided, however, the Originator provides the Indenture
Trustee with an Opinion of Counsel, (which may be provided by the
Originator's internal counsel) that no such amendment will increase or
reduce in any manner the amount of, or accelerate or delay the timing
of, collections of payments on Receivables or distributions that will
be required to be made on any Note or Certificate.
(c) Prior to the execution of any such amendment or
consent, Originator will have furnished written notification of the
substance of such amendment or consent to each Rating Agency.
(d) It will not be necessary for the consent of
Certificateholder or Noteholders pursuant to this Section 6.5 to
approve the particular form of any proposed amendment or consent, but
it will be sufficient if such consent will approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholder or
Noteholders will be subject to such reasonable requirements as the
Indenture Trustee may prescribe, including the establishment of record
dates. The consent of a Holder of a Certificate or a Note given
pursuant to this Section or pursuant to any other provision of this
Agreement will be conclusive and binding on such Holder and on all
future Holders of such Certificate or Note and of any Certificate or
Note issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the
Certificate or Note.
SECTION 6.6 Notices.
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 Originator:
Triad Financial Corporation
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
With a separate copy to:
Attention: Vice President, Legal
13
If to the Depositor:
Triad Financial Special Purpose LLC
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
or such other address as will be designated by a party in a written notice
delivered to the other party or to the Issuer, Owner Trustee or the Indenture
Trustee, as applicable. 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 6.7 Merger and Integration. Except as
specifically stated otherwise herein, this Agreement and Related Documents set
forth the entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are superseded by this
Agreement and the Related Documents. This Agreement may not be modified,
amended, waived or supplemented except as provided herein.
SECTION 6.8 Severability of Provisions. If any one or
more of the covenants, provisions or terms of this Agreement will be for any
reason whatsoever held invalid, then such covenants, provisions or terms will be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and will in no way affect the validity or enforceability of the other
provisions of this Agreement.
SECTION 6.9 Intention of the Parties.
(a) The execution and delivery of this Agreement will
constitute an acknowledgment by Originator and Depositor that they
intend that the assignments and transfers herein contemplated
constitute sales and assignments outright, and not for security, of the
Receivables and the Other Conveyed Property, conveying good title
thereto free and clear of any Liens, from Originator to Depositor and
that the Receivables and the Other Conveyed Property will not be a part
of Originator's estate in the event of the bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding, or other proceeding
under any federal or state bankruptcy or similar law, or the occurrence
of another similar event, of, or with respect to Originator. If such
conveyance is determined to be made as security for a loan made by
Depositor, the Issuer, the Noteholders or the Certificateholder to the
Originator the parties intend that Originator will have granted to
Depositor a security interest in all of Originator's right, title and
interest, respectively, in and to:
(1) the Receivables and all moneys received thereon
after the applicable Cutoff Date,
(2) the Other Conveyed Property conveyed to
Depositor by Originator pursuant to this Agreement including (a) an
assignment of the security interests in the
14
Financed Vehicles granted by Obligors pursuant to the Receivables, and
any other interest of the Depositor in such Financed Vehicles, (b) any
proceeds and the right to receive any proceeds with respect to the
Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors
and any proceeds from the liquidation of the Receivables, (c) the right
to cause the related Dealer or a Third-Party Lender to repurchase
Receivables pursuant to a Dealer Agreement or an Auto Loan Purchase and
Sale Agreement, respectively, as a result of the breach of
representation or warranty in the related Dealer Agreement or Auto Loan
Purchase and Sale Agreement, respectively, (d) all rights, if any, to
refunds for the costs of any Service Contracts on the related Financed
Vehicles, (e) the related Receivables Files and (f) the proceeds of any
and all of the foregoing, and
(3) all proceeds and investments with respect to
items (1) and (2) above.
(b) This Agreement will constitute a security agreement
under applicable law.
SECTION 6.10 Governing Law. This Agreement will be
construed in accordance with the laws of the State of New York without regard to
the principles of conflicts of laws thereof and the obligations, rights and
remedies of the parties under this Agreement will be determined in accordance
with such laws.
SECTION 6.11 Counterparts. For the purpose of
facilitating the execution of this Agreement and for other purposes, this
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts will be deemed to be an original, and all of which
counterparts will constitute but one and the same instrument.
SECTION 6.12 Conveyance of the Receivables and the Other
Conveyed Property to the Issuer. Originator acknowledges that Depositor intends,
pursuant to the Sale and Servicing Agreement, to convey the Receivables and the
Other Conveyed Property, together with its rights under this Agreement, to the
Issuer on the date hereof. Originator acknowledges and consents to such
conveyance and pledge and waives any further notice thereof and covenants and
agrees that the representations and warranties of Originator contained in this
Agreement and the rights of Depositor hereunder are intended to benefit the
Insurer, the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders
and the Certificateholder. In furtherance of the foregoing, Originator covenants
and agrees to perform its duties and obligations hereunder, in accordance with
the terms hereof for the benefit of the Insurer, the Issuer, the Owner Trustee,
the Indenture Trustee, the Noteholders and the Certificateholder and that,
notwithstanding anything to the contrary in this Agreement, Originator will be
directly liable to the Issuer, the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholder (notwithstanding any failure by the
Servicer, or the Backup Servicer to perform its respective duties and
obligations hereunder or under Related Documents) and that the Indenture Trustee
may enforce the duties and obligations of Originator under this Agreement
against Originator for the benefit of the Insurer, the Owner Trustee, the
Indenture Trustee, the Noteholders and the Certificateholder.
SECTION 6.13 Nonpetition Covenant. Originator will not
petition or otherwise invoke the process of any court or government authority
for the purpose of
15
commencing or sustaining a case against the Depositor or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Depositor or the Issuer or any substantial part of
their respective property, or ordering the winding up or liquidation of the
affairs of the Depositor or the Issuer.
16
IN WITNESS WHEREOF, the parties have caused this Purchase
Agreement to be duly executed by their respective officers as of the day and
year first above written.
TRIAD FINANCIAL CORPORATION,
as Originator
By /s/ Xxxx X. Xxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
TRIAD FINANCIAL SPECIAL PURPOSE LLC,
as Depositor
By /s/ Xxxx X. Xxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
Accepted:
JPMORGAN CHASE BANK,
as Indenture Trustee
By /s/ Sora Jun
------------------
Name: Sora Jun
Title: Trust Officer
[Signature page to Purchase Agreement]
SCHEDULE A
SCHEDULE OF RECEIVABLES
[On File with Xxxxx Xxxxxxxxxx LLP]
SCHEDULE B
REPRESENTATIONS AND WARRANTIES
OF THE ORIGINATOR
1. Characteristics of Receivables. Each Receivable (A) was
originated (i) by Triad, (ii) by a Dealer and purchased by Triad from such
Dealer under an existing Dealer Agreement or pursuant to a Dealer Assignment
with Triad and was validly assigned by such Dealer to Triad pursuant to a Dealer
Assignment, or (iii) by a Third-Party Lender and purchased by Triad from such
Third-Party Lender under an existing Auto Loan Purchase and Sale Agreement or
pursuant to a Third-Party Lender Assignment with Triad and was validly assigned
by such Third-Party Lender to Triad pursuant to a Third-Party Lender Assignment,
(B) was originated by Triad, such Dealer or such Third-Party Lender for the
retail sale of a Financed Vehicle in the ordinary course of Triad's, the
Dealer's or the Third-Party Lender's business, in each case, in accordance with
Triad's credit policies and was fully and properly executed by the parties
thereto, and Triad, each Dealer and each Third-Party Lender had all necessary
licenses and permits to originate Receivables in the state where Triad, each
such Dealer or each such Third-Party Lender was located, (C) contains customary
and enforceable provisions such that the rights and remedies of the holder
thereof adequate for realization against the collateral security, (D) is a
Receivable which provides for level monthly payments (provided that the period
in the first Collection Period and the payment in the final Collection Period of
the Receivable may be minimally different from the normal period and level
payment) that, if made when due, will fully amortize the Amount Financed over
the original term and (E) has not been amended or collections with respect to
which waived, other than as evidenced in the Receivable File relating thereto.
2. Fraud or Misrepresentation. Each Receivable was originated (i)
by Triad, (ii) by a Dealer and was sold by the Dealer to Triad, or (iii) by a
Third-Party Lender and was sold by the Third-Party Lender to Triad, and was
transferred by Triad to the Depositor and by the Depositor to the Issuer without
any fraud or misrepresentation on the part of Triad, the Depositor, such Dealer
or Third-Party Lender in any case.
3. Compliance with Law. All requirements of applicable federal,
state and local laws, and regulations thereunder (including, without limitation,
usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act,
the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the Xxxx-Xxxxxxxx
Warranty Act, the Federal Reserve Board's Regulations "B" and "Z" (including
amendments to the Federal Reserve's Official Staff Commentary to Regulation Z,
effective October 1, 1998, concerning negative equity loans), the Soldiers' and
Sailors' Civil Relief Act of 1940, each applicable state Motor Vehicle Retail
Installment Sales Act, and state adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code and other consumer credit laws and equal credit
opportunity and disclosure laws) in respect of the Receivables and the Financed
Vehicles, have been complied with in all material respects, and each Receivable
and the sale of the Financed Vehicle evidenced by each Receivable complied at
the time it was originated or made and now complies in all material respects
with all applicable legal requirements.
4. Origination. Each Receivable was originated in the United
States and the related Obligor is a resident of the United States.
5. Binding Obligation. Each Receivable represents the genuine,
legal, valid and binding payment obligation of the Obligor thereon, enforceable
by the holder thereof in accordance with its terms, except (A) as enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law and (B) as such
Receivable may be modified by the application after the applicable Cutoff Date
of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended; and all
parties to each Receivable had full legal capacity to execute and deliver such
Receivable and all other documents related thereto and to grant the security
interest purported to be granted thereby.
6. No Government Obligor. No Obligor is the United States of
America or any State or any agency, department, subdivision or instrumentality
thereof.
7. Obligor Bankruptcy. At the related Cutoff Date no Obligor had
been identified on the records of Triad as being the subject of a current
bankruptcy proceeding.
8. Schedule of Receivables. The information set forth in the
Schedule of Receivables has been produced from the Electronic Ledger and was
true and correct in all material respects as of the close of business on the
related Cutoff Date.
9. Marking Records. By the Closing Date, as applicable, the
Originator will have caused the portions of the Electronic Ledger relating to
the Receivables to be clearly and unambiguously marked to show that the
Receivables have been sold to the Depositor by the Originator and sold by the
Depositor to the Issuer in accordance with the terms of the Sale and Servicing
Agreement.
10. Computer Tape. The Computer Tape made available by the
Originator to the Trust on the Closing Date, as applicable, was complete and
accurate as of the related Cutoff Date and includes a description of the same
Receivables that are described in the Schedule of Receivables.
11. Adverse Selection. No selection procedures adverse to the
Noteholders or the Insurer were utilized in selecting the Receivables from those
receivables owned by the Originator which met the selection criteria contained
in the Sale and Servicing Agreement.
12. Chattel Paper. The Receivables constitute chattel paper within
the meaning of the UCC as in effect in the States of California, New York and
Delaware.
13. One Original. There is only one original executed copy of each
Receivable.
14. Receivable Files Complete. There exists a Receivable File
pertaining to each Receivable and such Receivable File contains (a) a fully
executed original of the Receivable, (b) in the case of retail installment sale
contracts, the original executed credit application, or a paper or electronic
copy thereof and (c) the original Lien Certificate or application therefor. Each
of
SCH B-2
such documents which is required to be signed by the Obligor has been signed by
the Obligor in the appropriate spaces. All blanks on any form have been properly
filled in and each form has otherwise been correctly prepared. The complete
Receivable File for each Receivable currently is in the possession of the
Custodian or in the possession of a third-party vendor.
15. Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, and the Financed Vehicle securing each such
Receivable has not been released from the lien of the related Receivable in
whole or in part. No terms of any Receivable have been waived, altered or
modified in any respect since its origination, except by instruments or
documents identified in the Receivable File. No Receivable has been modified as
a result of application of the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended. All funds payable to or on behalf of the Obligors with respect to
the Receivables have been fully disbursed.
16. Lawful Assignment; No Consent Required. No Receivable was
originated in, or is subject to the laws of, any jurisdiction the laws of which
would make unlawful, void or voidable the sale, transfer and assignment of such
Receivable and the Other Conveyed Property under this Agreement. For the
validity of the sale, transfer and assignment of the Receivables and Other
Conveyed Property to Triad, the Depositor, and the Trust, no consent by any
Dealer, Third-Party Lender or Obligor is required under any agreement or
applicable law.
17. Good Title. No Receivable has been sold, transferred, assigned
or pledged by the Dealer or Third-Party Lender, Triad or the Depositor, as the
case may be, to any Person other than Triad, the Depositor and the Issuer, as
the case may be. Immediately prior to the conveyance of the Receivables to the
Depositor pursuant to this Agreement, as applicable, the Originator was the sole
owner thereof and had good title thereto, free of any Lien and, upon execution
and delivery of this Agreement by the Originator and the Depositor will have
good title to and will be the sole owner of such Receivables, free of any Lien.
No Dealer or Third-Party Lender has an unpaid participation in, or other right
to receive, proceeds of any Receivable. The Originator 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 or the related
Dealer Agreements, Auto Loan Purchase and Sale Agreements, Dealer Assignments or
Third-Party Lender Assignments or to payments due under such Receivables.
18. Security Interest in Financed Vehicle. Each Receivable created
or will create a valid, binding and enforceable first priority security interest
in favor of the Originator in the Financed Vehicle. The Lien Certificate and
original certificate of title for each Financed Vehicle show, or if a new or
replacement Lien Certificate is being applied for with respect to such Financed
Vehicle the Lien Certificate will be received within 180 days of the Closing
Date, as applicable, and will show the Originator as the original secured party
under each Receivable as the holder of a first priority security interest in
such Financed Vehicle. With respect to each Receivable for which the Lien
Certificate has not yet been returned from the Registrar of Titles, the
Originator has applied for or received written evidence from the related Dealer
or Third-Party Lender that such Lien Certificate showing the Originator as first
lienholder has been applied for and the Originator's security interest has been
validly assigned by the Originator to the Depositor pursuant to this Agreement
and by the Depositor to the Trust pursuant to the Sale and Servicing Agreement.
Immediately after the sale, transfer and assignment thereof by the Originator to
the Depositor and by the Depositor to the Trust, each Receivable will be secured
by an enforceable
SCH B-3
and perfected first priority security interest in the Financed Vehicle in favor
of the Indenture Trustee as secured party, which security interest is prior to
all other Liens upon and security interests in such Financed Vehicle which now
exist or may hereafter arise or be created (except, as to priority, for any lien
for taxes, labor or materials affecting a Financed Vehicle). As of the related
Cutoff Date there were no Liens or claims for taxes, work, labor or materials
affecting a Financed Vehicle which are or may be Liens prior or equal to the
Liens of the related Receivable.
19. All Filings Made. All filings (including, without limitation,
UCC filings) required to be made by any Person, and actions required to be taken
or performed by any Person in any jurisdiction to give the Trust a first
priority perfected lien on, or ownership interest in, the Receivables and the
proceeds thereof and the Other Conveyed Property have been made, taken or
performed.
20. No Impairment. The Originator 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 Receivable or otherwise to impair the rights of the
Trust, the Insurer, the Indenture Trustee and the Noteholders in any Receivable
or the proceeds thereof.
21. Receivable Not Assumable. No Receivable is assumable by
another Person in a manner which would release the Obligor thereof from such
Obligor's obligations to Triad with respect to such Receivable.
22. No Defenses. No Receivable is subject to any right of
rescission, setoff, counterclaim or defense and no such right has been asserted
or threatened with respect to any Receivable.
23. No Default. There has been no default, breach, violation or
event permitting acceleration under the terms of any Receivable (other than
payment delinquencies of not more than 30 days and other defaults that will not
have a material adverse effect on the ability of the Obligor to make, nor the
enforceability of Obligor's obligation to make, Scheduled Receivables Payments
and will not have a material adverse effect on the validity or priority of
Originator's lien on the Financed Vehicle), and no condition exists or event has
occurred and is continuing that with notice, the lapse of time or both would
constitute a default, breach, violation or event permitting acceleration under
the terms of any Receivable, and there has been no waiver of any of the
foregoing. As of the related Cutoff Date no Financed Vehicle had been
repossessed by or at the direction of the Originator.
24. Insurance. At the time of an origination of a Receivable by
Triad or a purchase of a Receivable by Triad from a Dealer or Third-Party
Lender, each Financed Vehicle was covered by a comprehensive and collision
insurance policy (i) subject to maximum deductibles of $500 for collision
coverage and $500 for comprehensive coverage, (ii) naming Triad as loss payee
and (iii) insuring against loss and damage due to fire, theft, transportation,
collision and other risks generally covered by comprehensive and collision
coverage. Each Receivable requires the Obligor to maintain physical loss and
damage insurance, naming Triad and its successors and assigns as additional
insured parties, and each Receivable permits the holder thereof to obtain
physical loss and damage insurance at the expense of the Obligor if the Obligor
fails to do so.
SCH B-4
No Financed Vehicle is insured under a policy of force-placed
insurance on the related Cutoff Date.
25. Past Due. At the related Cutoff Date no Scheduled Receivable
Payment was more than 30 days past due.
26. Remaining Principal Balance. At the related Cutoff Date the
Principal Balance of each Receivable set forth in the Schedule of Receivables is
true and accurate in all material respects.
27. Certain Characteristics of Receivables. (A) Each Receivable
had a remaining maturity, as of the Cutoff Date, of not more than 72 months; (B)
each Receivable had an original maturity of not more than 72 months; (C) not
more than 37.6% of Receivables (calculated by Aggregate Principal Balance) will
have an original term to maturity of 72 months; (D) each Receivable had a
remaining Principal Balance as of the Cutoff Date of at least $5,003.58 and not
more than $42,151.35; and (E) each Receivable has an Annual Percentage Rate of
at least 11.00% and not more than 29.90%.
SCH B-5
