Exhibit 10.1
FORM OF RECEIVABLES PURCHASE AGREEMENT
between
TRIAD FINANCIAL CORPORATION
as Seller
and
[ ]
as Purchaser
---------------------------
Dated as of [ ]
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................................................................1
SECTION 1.1 Definitions................................................................................1
SECTION 1.2. Usage of Terms.............................................................................4
SECTION 1.3. Section References.........................................................................4
SECTION 1.4. Action by or Consent of Noteholders........................................................4
SECTION 1.5. No Recourse................................................................................4
SECTION 1.6. Material Adverse Effect....................................................................4
ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY..........................................5
SECTION 2.1. Conveyance of the Initial Receivables and the Initial Other Conveyed Property..............5
SECTION 2.2. Conveyance of the Subsequent Receivables and the Subsequent Other Conveyed Property........5
SECTION 2.3. Conditions of Company's Obligations........................................................6
SECTION 2.4. True Sales.................................................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................................9
SECTION 3.1. Representations and Warranties of Triad as Seller..........................................9
SECTION 3.2. Representations and Warranties of the Company as Purchaser................................11
SECTION 3.3. Indemnification...........................................................................13
ARTICLE IV COVENANTS OF TRIAD....................................................................................17
SECTION 4.1. Protection of Title of the Company and the Trust..........................................17
SECTION 4.2. Other Liens or Interests..................................................................18
SECTION 4.3. Costs and Expenses........................................................................18
ARTICLE V REPURCHASES OR REPLACEMENTS............................................................................19
SECTION 5.1. Repurchase or Replacement of Receivables Upon Breach of Warranty..........................19
SECTION 5.2. Reassignment of Purchased Receivables.....................................................20
SECTION 5.3. Waivers...................................................................................20
ARTICLE VI MISCELLANEOUS.........................................................................................20
SECTION 6.1. Liability of Triad........................................................................20
SECTION 6.2. Merger or Consolidation of Triad..........................................................20
SECTION 6.3. Limitation on Liability of Triad and Others...............................................21
SECTION 6.4. Conveyance of the Receivables and the Other Conveyed Property to the Trust................21
SECTION 6.5. Amendment.................................................................................22
SECTION 6.6. Notices...................................................................................23
SECTION 6.7. Merger and Integration....................................................................23
SECTION 6.8. Severability of Provisions................................................................23
SECTION 6.9. GOVERNING LAW.............................................................................24
SECTION 6.10. Counterparts..............................................................................24
SECTION 6.11. Nonpetition Covenant......................................................................24
SECTION 6.12. Assignment...............................................................................24
SECTION 6.13. Third-Party Beneficiaries................................................................24
SECTION 6.14. Successors and Assigns...................................................................24
SCHEDULE A - SCHEDULE OF RECEIVABLES
SCHEDULE B - REPRESENTATIONS AND WARRANTIES OF THE SELLER
SCHEDULE C - LEGAL PROCEEDINGS
RECEIVABLES PURCHASE AGREEMENT, dated as of [ ] (this "AGREEMENT"),
between Triad Financial Corporation, a California corporation, as seller
("TRIAD"), and [ ], a [ ] corporation, as purchaser (the "COMPANY").
WHEREAS, the Company, as Purchaser, has agreed to purchase from Triad,
as Seller, and Triad has agreed to sell and transfer to the Company, the Initial
Receivables and the Initial Other Conveyed Property on the Closing Date, and
with respect to Subsequent Receivables, will transfer on the related Subsequent
Transfer Date the Subsequent Receivables and the Subsequent Other Conveyed
Property.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the Company and Triad hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS
Capitalized terms used but not defined herein shall have the meanings
set forth in the Sale and Servicing Agreement (as defined below). Whenever
capitalized and used in this Agreement, the following words shall have the
following meanings:
"INITIAL OTHER CONVEYED PROPERTY" means the Other Conveyed Property
conveyed by Triad to the Company on the Closing Date pursuant to this Agreement
other than the Initial Receivables.
"INITIAL RECEIVABLES" means the Receivables listed on the Schedule of
Receivables attached hereto and transferred by the Seller to the Company on the
Closing Date.
"ISSUER" means Triad Auto Receivables Owner Trust 199[ ]-[ ], a
Delaware business trust.
"OTHER CONVEYED PROPERTY" means, with respect to the Receivables: (1)
all of the right, title and interest of Triad in and to all monies due or
received under the Receivables or in respect thereof after the applicable Cutoff
Date including amounts due on or before the applicable Cutoff Date but received
by the Seller after the applicable Cutoff Date (including without limitation all
Liquidation Proceeds and Recoveries received with respect to such Receivables);
and (2) all of the right, title and interest of Triad in and to (i) the security
interests of Triad in the related Financed Vehicles and any other interest of
Triad in the related Financed Vehicles, including the certificates of title with
respect to such Financed Vehicles, (ii) the Insurance Policies and any proceeds
from any Insurance Policies relating to the Receivables, the Obligors or the
related Financed Vehicles, including rebates or refunds of premiums relating to
the Receivables, (iii) the rights of Triad against Dealers with respect to the
Receivables under the Dealer Agreements and the Dealer Assignments, (iv) the
rights of Triad with respect to the Receivables under the Correspondent
Agreements and the Correspondent Assignments, (v) all items contained in the
related 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 related Financed
Vehicles, (vi) property (including the right to receive future Liquidation
Proceeds) that secures any of the Receivables and that has been acquired by or
on behalf of Triad pursuant to liquidation of any such Receivable, (vii) all of
the right, title and interest of the Seller in and to refunds for the costs of
extended service contracts with respect to the Financed Vehicles, and (viii) all
proceeds and investments of any of the foregoing, all present and future claims,
demands, causes and choses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any of the foregoing.
"PROSPECTUS" means the Prospectus dated [ ] relating to the offering by
the Company from time to time of its asset backed notes and asset backed
certificates in the form in which it was or will be filed with the Commission
pursuant to Rule 424(b) under the Securities Act filed with the Commission
pursuant to Rule 424(b) under the Securities Act.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated [ ],
relating to the Notes in the form in which it was or will be filed with the
Commission pursuant to rule 424(b) under the Securities Act.
"PURCHASE PRICE" means, with respect to Receivables to be sold by Triad
to the Purchaser on the Closing Date or any Subsequent Transfer Date, as the
case may be, the total principal amount of such Receivables (as reflected on the
books of Triad as of the Initial Cutoff Date or the related Subsequent Cutoff
Date, as applicable).
"PURCHASER" means [ ].
"RECEIVABLES" means a retail installment contract (including any
related promissory note and the related security agreement), and all rights and
obligations under such contract, for a Financed Vehicle that is included in the
Schedule of Receivables (except for Receivables that shall have become Purchased
Receivables or Receivables that are replaced in accordance with the terms
hereof.)
"REGISTRATION STATEMENT" means that certain registration statement on
Form S-3, as amended (Registration No. [ ]) relating to the offering by the
Company from time to time of its asset backed notes and asset backed
certificates as previously declared effective by the Commission.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement,
dated as of [ ], among Triad Financial Corporation, in its individual capacity
and as Servicer, [ ], as the Company, the Trust and [ ], as Indenture Trustee
and as Backup Servicer, as the same may be amended or supplemented from time to
time in accordance with the terms thereof.
"SCHEDULE OF REPRESENTATIONS" means the Schedule of Representations and
Warranties attached hereto as SCHEDULE B.
"SCHEDULE OF RECEIVABLES" means the Schedule of Initial Receivables
sold and transferred pursuant to this Agreement on the Closing Date which is
attached hereto as Schedule A as it may
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be amended from time to time, including to remove Purchased Receivables or
replaced Receivables or add Replacement Receivables pursuant to Section 5.1 or
add Subsequent Receivables.
"SELLER" means Triad Financial Corporation.
"SUBSEQUENT CUTOFF DATE" means the date specified in the related
Subsequent Transfer Agreement, provided, however that such date shall be on or
before the Subsequent Transfer Date.
"SUBSEQUENT OTHER CONVEYED PROPERTY" means Other Conveyed Property
conveyed by Triad to the Company on the Subsequent Transfer other than the
Subsequent Receivables pursuant to the Subsequent Purchase Agreement on the
Subsequent Transfer Date.
"SUBSEQUENT PURCHASE AGREEMENT" means an agreement by and between Triad
and the Company pursuant to which the Company will acquire Subsequent
Receivables.
"SUBSEQUENT RECEIVABLES" means the Receivables transferred to the
Company pursuant to Section 2.2, which shall be listed on Schedule A to the
related Subsequent Purchase Agreement.
"SUBSEQUENT TRANSFER DATE" means, with respect to Subsequent
Receivables, any date, occurring not more frequently than once a month, during
the Funding Period on which Subsequent Receivables are to be transferred to the
Company pursuant to this Agreement, and a Subsequent Purchase Agreement is
executed and delivered on or before [ ].
"TERMINATION EVENT" means the existence of any one or more of the
following conditions on or prior to the Closing Date:
(a) a stop order suspending the effectiveness of the Registration
Statement shall have been issued or a proceeding for that purpose shall have
been initiated or threatened by the Commission; or
(b) after the execution and delivery of this Agreement but prior to the
Closing Date, a downgrading, or public notification of a possible change without
indication of direction, shall have occurred in the rating afforded any of the
debt securities or claims paying ability of Triad by any Rating Agency; or
(c) after the execution and delivery of this Agreement but prior to the
Closing Date, there shall have occurred an adverse change in the condition,
financial or otherwise, in the earnings, regulatory situation or business
prospects of Triad reasonably determined by the Company to be material; or
(d) after the date of this Agreement but prior to the Closing Date,
there shall have occurred any of the following: (i) any suspension or material
limitation in trading in securities generally on the New York Stock Exchange, or
any suspension of trading of any securities of Triad or its parent or affiliate
if so traded on any exchange or in the over-the-counter market; (ii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iii) the engagement by the United
States in hostilities, or the
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escalation of such hostilities, or any calamity or crisis, if the effect of any
such event specified in this clause (iv) in the reasonable judgment of the
Company makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Notes on the terms and in the manner
contemplated in the Prospectus Supplement.
"TRIAD REPURCHASE EVENT" means the occurrence of a breach of any of
Triad's representations and warranties under SECTION 3.1(a).
SECTION 1.2. USAGE OF TERMS.
With respect to all terms used in this Agreement, the singular includes
the plural and the plural the singular; words importing one gender include the
other gender; references to "writing" include printing, typing, lithography, and
other means of reproducing words in a visible form; references to agreements and
other contractual instruments include all subsequent amendments thereto or
changes therein entered into in accordance with their respective terms and not
prohibited by this Agreement 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."
SECTION 1.3. SECTION REFERENCES.
All references to Articles, Sections, paragraphs, subsections, exhibits
and schedules shall be to such portions of this Agreement unless otherwise
specified.
SECTION 1.4. ACTION BY OR CONSENT OF NOTEHOLDERS.
Whenever any provision of this Agreement refers to action to be taken
or consented to by Noteholders, such provision shall be deemed to refer to
Noteholders of record as of the Record Date immediately preceding the date on
which such action is to be taken or consent given by Noteholders. Solely for the
purposes of any action to be taken, or consented to by Noteholders, any Note
registered in the name of, or beneficially owned by, the Company, Triad or any
Affiliate of either of such entity, shall be deemed not to be outstanding;
PROVIDED, HOWEVER, that, solely for the purpose of determining whether the
Indenture Trustee is entitled to rely upon any such action or consent, only
Notes which the Indenture Trustee knows to be so owned shall be so disregarded.
SECTION 1.5. NO RECOURSE.
Without limiting the obligations of the Seller 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 Triad, the Company or of any
predecessor or successor of Triad or the Company.
SECTION 1.6. 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
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adverse effect on the Trust or the Noteholders (or any similar or analogous
determination), such determination shall be made without taking into account any
amounts on deposit in the Reserve Account or funds available from claims under
the Note Policy.
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1. CONVEYANCE OF THE INITIAL RECEIVABLES AND THE INITIAL
OTHER CONVEYED PROPERTY.
(a) CONVEYANCE. Subject to the terms and conditions of this Agreement,
Triad hereby sells, contributes, transfers, assigns and otherwise conveys to the
Company, without recourse (but without limitation of its obligations in this
Agreement), and the Company hereby purchases and accepts, all right, title and
interest of Triad in and to the Initial Receivables and the Initial Other
Conveyed Property with respect thereto. It is the intention of Triad and the
Company that the transfer and assignment contemplated by this Agreement shall
constitute a sale and/or contribution of the Initial Receivables and the Initial
Other Conveyed Property from Triad to the Company and the beneficial interest in
and title to the Initial Receivables and the Initial Other Conveyed Property
shall not be part of Triad's estate in the event of the filing of a bankruptcy
petition by or against Triad under any bankruptcy or similar law. If,
notwithstanding the intent of Triad and the Company, the transfer and assignment
contemplated hereby is held not to be a sale, Triad hereby grants a first
priority security interest to the Company in the property conveyed pursuant to
this SECTION 2.1(a), and this Agreement shall be construed so as to further such
intent.
(b) INITIAL RECEIVABLES PURCHASE PRICE. Simultaneously with the
conveyance of the Initial Receivables and the Initial Other Conveyed Property
with respect thereto by Triad to the Company, on the Closing Date, the Company
shall pay to Triad the Purchase Price of the Initial Receivables sold by Triad
to the Company.
SECTION 2.2. CONVEYANCE OF THE SUBSEQUENT RECEIVABLES AND THE
SUBSEQUENT OTHER CONVEYED PROPERTY.
(a) CONVEYANCE. On each Subsequent Transfer Date and simultaneously
with the execution and delivery of the related Subsequent Purchase Agreement,
Triad shall sell, contribute, transfer, assign and otherwise convey to the
Company, without recourse (but without limitation of its obligations in this
Agreement), and the Company shall purchase and accept, all right, title and
interest of Triad in and to the Subsequent Receivables and the Subsequent Other
Conveyed Property with respect thereto. It is the intention of Triad and the
Company that the transfer and assignment contemplated by each Subsequent
Transfer Agreement shall constitute a sale and/or contribution of the Subsequent
Receivables and the Subsequent Other Conveyed Property from Triad to the Company
and the beneficial interest in and title to the Subsequent Receivables and the
Subsequent Other Conveyed Property shall not be part of Triad's estate in the
event of the filing of a bankruptcy petition by or against Triad under any
bankruptcy or similar law.
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(b) SUBSEQUENT RECEIVABLES PURCHASE PRICE. Simultaneously with the
conveyance of the Subsequent Receivables and the Subsequent Other Conveyed
Property with respect thereto by Triad to the Company, on each Subsequent
Transfer Date the Company shall pay to Triad the Purchase Price of the
Subsequent Receivables sold by Triad to the Company.
SECTION 2.3. CONDITIONS OF THE COMPANY'S OBLIGATIONS. The obligations
of the Company to purchase the Initial Receivables and the Initial Other
Conveyed Property from Triad, and with respect to Subsequent Receivables, the
obligations of the Company to purchase the Subsequent Receivables and the
Subsequent Other Conveyed Property from Triad, will be subject to the
satisfaction on the Closing Date and on each Subsequent Transfer Date, as the
case may be, of the following conditions. Upon payment of the purchase price for
the Initial Receivables and the Initial Other Conveyed Property or for the
Subsequent Receivables and the Subsequent Other Conveyed Property, as the case
may be, to Triad and the prior written consent of the Insurer, such other
conditions shall be deemed satisfied or waived.
(a) Each of the obligations of Triad required to be performed by it on
or prior to the Closing Date and on each Subsequent Transfer Date, as the case
may be, pursuant to the terms of this Agreement shall have been duly performed
and complied with, and all of the representation and warranties of Triad under
this Agreement shall be true and correct in all material respects as of the
Closing Date and on each Subsequent Transfer Date, as the case may be, and no
event shall have occurred which, with notice or the passage of time, would
constitute a default under this Agreement and the Company and the Insurer shall
have received certificates to the effect of the foregoing signed by an
authorized officer of Triad.
(b) The Company shall have received letters in form and substance
reasonably acceptable to the Company and its counsel, and the Insurer, prepared
by [ ], independent certified public accountants, dated as of the date of the
Prospectus Supplement, as of the Closing Date and on each Subsequent Transfer
Date, as the case may be, (i) regarding the numerical information contained in
the Prospectus Supplement and (ii) relating to certain agreed upon procedures as
specified by the Insurer.
(c) The Company shall have received duly executed and delivered copies
of the following additional closing documents, in form and substance reasonably
satisfactory to the Company and its counsel and the Insurer
(i) the Schedule of Receivables;
(ii) the Related Documents and the Underwriting Agreement,
dated as of [ ], between the Company and the Underwriter, and all
documents required thereunder, in each case duly executed and delivered
by each of the parties thereto other than the Company;
(iii) an officer's certificate of an officer of Triad, dated
as of the Closing Date and as of each Subsequent Transfer Date, as the
case may be, as to the incumbency of officers and the due authorization
of the transactions contemplated by the Related
6
Documents, with resolutions of their boards of directors and a copy of
their charter and by-laws attached thereto;
(iv) opinions of counsel for Triad as to the matters, and in
form and substance, reasonably acceptable to the Company and the
Insurer (it being agreed that such opinions shall expressly provide
that the Owner Trustee, the Indenture Trustee, the Underwriter, the
Insurer and the Rating Agencies shall be entitled to rely on such
opinions), including as to such matters as shall be required for the
assignment of a rating to the Notes of "AAA" by S&P and "Aaa" by
Xxxxx'x;
(v) a letter from each of Xxxxx'x and S&P that it has assigned
a rating of "AAA" and "Aaa", respectively, to the Notes and
satisfactory written notification of such ratings has been received by
the Insurer;
(vi) opinions of counsel for the Owner Trustee and the
Indenture Trustee, in form and substance reasonably acceptable to the
Company and the Insurer (it being agreed that such opinions shall
expressly provide that Triad, the Underwriter, the Insurer and the
Rating Agencies shall be entitled to rely on such opinions);
(vii) opinions of counsel for the Trust, in form and in
substance reasonably acceptable to the Company and the Insurer (it
being agreed that such opinions shall expressly provide that the Owner
Trustee, the Indenture Trustee, the Underwriter, the Insurer and the
Rating Agencies shall be entitled to rely on such opinions);
(viii) the Insurer (so long as no Insurer Default has occurred
or is continuing) shall, in its sole and absolute discretion, have
approved the transfer of the Subsequent Receivables to the Company;
(ix) after giving effect to any transfer of Subsequent
Receivables on a Subsequent Transfer Date, the Receivables transferred
to the Company pursuant hereto shall meet the following criteria (based
on the characteristics of the Initial Receivables on the Initial Cutoff
Date and the Subsequent Receivables on the related Subsequent Cutoff
Dates): (a) the weighted average APR of such Receivables transferred to
the Company shall not be less than one percent less than the weighted
average APR of the Initial Receivables on the Initial Cutoff Date,
unless, with the prior consent of the Rating Agencies, [ ] and the
Insurer, the Spread Account Subsequent Deposit is increased with
respect to such Subsequent Receivables by the amount required by the
Insurer; (b) the weighted average remaining term of the Receivables
transferred to the Trust shall not be greater than [ ] months nor less
than [ ] months; (c) not more than [ ]% of the aggregate Principal
Balance of such Receivables will represent financing of used Financed
Vehicles; (d) the APR is not less than [ ]% nor more than [ ]%; (e) not
more than [ ]% of the aggregate Principal Balance of such Receivables
will represent Receivables designated in Credit Tier 3, not more than
[ ]% of the aggregate Principal Balance of the Receivables will
represent Receivables designated in Credit Tier 4, not more than
[ ]% of the Aggregate Principal Balance of the Receivables will
represent Receivables designated in Credit Tier 5 and not more
than [ ]% of the aggregate Principal Balance of
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the Receivables will represent Receivables designated in Credit Tier 6;
(f) no such Receivable will represent financing of a Financed Vehicle
which is older than a [ ]model year; (g) not more than [ ]% of the
aggregate Principal Balance of such Receivables will be conveyed to
Triad pursuant to Correspondent Assignments, and not more than [ ]% of
the aggregate Principal Balance of such Receivables will be conveyed to
Triad by any one Correspondent, additionally, the Trust, the Indenture
Trustee, the Owner Trustee and the Insurer shall have received a
written confirmation from a firm of certified independent public
accountants as to the satisfaction of the criteria in clauses (a)
through (f); and
(x) no selection procedures believed to be adverse to the
interests of the Noteholders or the Insurer shall have been utilized in
selecting the Receivables.
(d) With respect to the transfer of the Initial Receivables, no
Termination Event shall have occurred as of the Closing Date.
(e) All proceedings in connection with the transactions contemplated by
this Agreement and the other Related Documents and all documents incident hereto
and thereto shall be reasonably satisfactory in form and substance to the
Company and its counsel.
(f) Triad shall have furnished the Company and the Insurer with such
other certificates of its officers or others and such other documents or
opinions as the Company or its counsel or the Insurer may reasonably request.
(g) All other terms and conditions of this Agreement and the Sale and
Servicing Agreement shall have been complied with in all material respects or
waived.
SECTION 2.4. TRUE SALES. (a) Each of Triad and the Company intend the
transfer of the Initial Receivables and the Initial Other Conveyed Property or
the Subsequent Receivables and the Subsequent Other Conveyed Property, as the
case may be, to constitute a true sale by Triad to the Company providing the
Company with the full benefits of ownership thereof, and neither party hereto
intends the transactions contemplated hereunder to be, or for any purpose to be
characterized as, a loan from the Company to Triad.
(b) If (but only to the extent) that the transfer of the Initial
Receivables and the Initial Other Conveyed Property or the Subsequent
Receivables and the Subsequent Other Conveyed Property, as the case may be,
hereunder is characterized by a court or other Governmental Authority as a loan
rather than a sale, Triad shall be deemed hereunder to have granted to the
Company a security interest in all of Triad's right, title and interest in and
to the Initial Receivables and the Initial Other Conveyed Property or the
Subsequent Receivables and the Subsequent Other Conveyed Property, as the case
may be. Such security interest shall secure all of Triad's obligations (monetary
or otherwise) under this Agreement and the other Related Documents to which it
is a party, whether now or hereafter existing or arising, due or to become due,
direct or indirect, absolute or contingent. The Company shall have, with respect
to the property described in this SECTION 2.4, and in addition to all the other
rights and remedies available to the Company under this Agreement and applicable
law, all the rights and remedies of a secured
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party under any applicable UCC, and this Agreement shall constitute a security
agreement under applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF TRIAD AS SELLER.
Triad makes the following representations and warranties as of the date
hereof and as of each Subsequent Transfer Date, as the case may be, on which the
Company relies in purchasing the Receivables and the Other Conveyed Property
with respect thereto and in transferring the Receivables and the Other Conveyed
Property with respect thereto to the Trust under the Sale and Servicing
Agreement and on which the Insurer will rely in issuing the Policy. Unless
otherwise specified, such representations and warranties speak as of the Closing
Date and as of the execution and delivery of any Subsequent Purchase Agreement,
as the case may be, but shall survive the sale, contribution, transfer and
assignment of the Receivables and the Other Conveyed Property hereunder, and the
sale, transfer and assignment thereof by the Company to the Trust under the Sale
and Servicing Agreement. Triad and the Company agree that the Company will
assign to the Trust all of the Company's rights and interests under the
Agreement and the Trust will pledge all of such interests of the Company to the
Indenture Trustee, and that the Indenture Trustee will thereafter be entitled to
enforce this Agreement directly against Triad in the Indenture Trustee's own
name on behalf of the Noteholders and the Insurer.
(a) SCHEDULE OF REPRESENTATIONS. The representations and warranties set
forth on the Schedule of Representations with respect to the Initial Receivables
as of the Closing Date, and with respect to the Subsequent Receivables as of the
related Subsequent Transfer Date are true and correct in all material respects.
(b) ORGANIZATION AND GOOD STANDING. Triad has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of California, with due 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 has, the power,
authority and legal right to acquire, sell and own the Receivables and the Other
Conveyed Property to be transferred to the Company.
(c) DUE QUALIFICATION. Triad is duly qualified to do business as a
foreign corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property or
the conduct of its business shall require such qualification.
(d) POWER AND AUTHORITY. Triad has the power and authority to execute
and deliver this Agreement, the Sale and Servicing Agreement and its Related
Documents and to carry out its terms and their terms, respectively; Triad has
the power and authority to sell and assign the Receivables and Other Conveyed
Property to be sold and assigned to and deposited with the Company hereunder and
has duly authorized such sale and assignment to the Company by all necessary
corporate action; and the execution, delivery and performance of this Agreement,
the
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Sale and Servicing Agreement and its Related Documents have been duly authorized
by Triad by all necessary corporate action.
(e) BINDING, OBLIGATION. This Agreement, the Sale and Servicing
Agreement and Triad's Related Documents, when duly executed and delivered by the
other parties thereto, shall constitute a legal, valid and binding obligation of
Triad enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium 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 execution, delivery and performance by Triad of
its Related Documents, the consummation of the transactions contemplated by this
Agreement, the Sale and Servicing Agreement and the Related Documents and the
fulfillment of the terms hereof and thereof do not (i) conflict with, result in
any breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, the articles of incorporation
or bylaws of Triad, or any indenture, agreement, mortgage, deed of trust,
commitment letter or other instrument to which Triad is a party or by which it
or its properties are bound, (ii) result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust, commitment letter or other instrument or
(iii) violate any law, order, rule or regulation applicable to Triad of any
Governmental Authority having jurisdiction over Triad or any of its properties.
(g) NO PROCEEDINGS. Other than as set forth on SCHEDULE C hereto, there
are no proceedings or investigations pending or, to the best of Triad's
knowledge, threatened against Triad before any Governmental Authority having
jurisdiction over Triad 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 could reasonably be expected to have a material adverse effect on
the performance by Triad of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents, or (iv)
seeking to adversely affect the federal income tax or other federal, state or
local tax attributes of the Notes or seeking to impose any excise, franchise,
transfer or similar tax upon the Notes or the sale and assignment of the
Receivables and the Other Conveyed Property.
(h) NO CONSENTS. No consent, approval, license, authorization or order
of, or declaration, registration or filing with, any Governmental Authority or
other Person, is required to be made by Triad in connection with the execution,
delivery or performance of its Related Documents or the consummation of the
transactions contemplated thereby, except such as have been duly made, effected
or obtained.
(i) CHIEF EXECUTIVE OFFICE. The chief executive office of Triad is
located at 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000.
(j) NO UNTRUE STATEMENT. None of the statements of Triad in the
Prospectus Supplement (excluding any reference to or information contained in
the Prospectus or any
10
information deemed incorporated by reference in the Prospectus Supplement
from the Prospectus) contains any untrue statement or alleged untrue
statement of any material fact or omits to state a material fact necessary to
make the statements contained therein, in light of the circumstances under
which they were made, not misleading.
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AS
PURCHASER.
The Company makes the following representations and warranties as of
the date hereof and as of the Subsequent Transfer Date, as the case may be, on
which Triad relies in selling, assigning, transferring and conveying the
Receivables and the Other Conveyed Property to the Company hereunder and on
which the Insurer will rely in issuing the Policy. Unless otherwise specified,
such representations and warranties speak as of the Closing Date and as of each
Subsequent Transfer Date, as the case may be, but shall survive the sale,
contribution, transfer and assignment of the Receivables and the Other Conveyed
Property hereunder, and the sale, transfer and assignment thereof by the Company
to the Trust under the Sale and Servicing Agreement.
(a) ORGANIZATION AND GOOD STANDING. The Company has been duly organized
and is validly existing as a corporation under the laws of the State of [ ],
with due 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 has, the power, authority and legal right to
acquire, sell and own the Receivables and the Other Conveyed Property and to
transfer the Receivables and the Other Conveyed Property to the Trust pursuant
to the Sale and Servicing Agreement.
(b) DUE QUALIFICATION. The Company is duly qualified to do business as
a foreign corporation in good standing and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business shall require such qualification.
(c) POWER AND AUTHORITY. The Company has the power, authority and legal
right to execute and deliver this Agreement and to carry out its terms and their
terms, respectively; the Company has the power and authority to acquire the
Receivables and the Other Conveyed Property hereunder and to sell, transfer or
otherwise convey such Receivables and Other Conveyed Property to the Trust and
has duly authorized such acquisition and conveyance by all necessary corporate
action; and the execution, delivery and performance of this Agreement has been
duly authorized by the Company by all necessary corporate action.
(d) BINDING OBLIGATION. This Agreement, when duly executed and
delivered by the other parties thereto, shall constitute a legal, valid and
binding obligation of the Company enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium 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 execution, delivery and performance by the
Company of this Agreement, the consummation of the transactions contemplated by
this Agreement, the Sale and
11
Servicing Agreement and the Company's Related Documents, and the fulfillment of
the terms of this Agreement, the Sale and Servicing Agreement and the Company's
Related Documents, do not and will not (i) conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the articles of incorporation or bylaws of the
Company, or any indenture, agreement, mortgage, deed of trust, commitment letter
or other instrument to which the Company is a party or by which it or its
properties are bound, (ii) result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust, commitment letter or other instrument or (iii) violate
any law, order, rule or regulation applicable to the Company of any Governmental
Authority having jurisdiction over the Company or any of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the Company's knowledge, threatened against the Company before any
Governmental Authority having jurisdiction over the Company or its properties
(i) asserting the invalidity of this Agreement, the Sale and Servicing Agreement
or any of the Related Documents, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement, the Sale and Servicing
Agreement or any of the Company's Related Documents, (iii) seeking any
determination or ruling that could reasonably be expected to have a material
adverse effect on the performance by the Company of its obligations under, or
the validity or enforceability of, this Agreement, the Sale and Servicing
Agreement or any of the Company's Related Documents, or (iv) seeking to
adversely affect the federal income tax or other federal, state or local tax
attributes of the Notes or seeking to impose any excise, franchise, transfer or
similar tax upon the Notes or the transfer and acquisition of the Receivables
and the Other Conveyed Property hereunder, or the transfer by the Company of the
Receivables and the Other Conveyed Property to the Trust pursuant to the Sale
and Servicing Agreement.
(g) NO CONSENTS. No consent, approval, license, authorization or order
of, or declaration, registration or filing with, any Governmental Authority or
other Person is required to be made by the Company in connection with the
execution, delivery or performance of its Related Documents or the consummation
of the transactions contemplated thereby, except such as have been duly made,
effected or obtained.
(h) CHIEF EXECUTIVE OFFICE. The chief executive office of the Company
is located at [ ].
(i) INVESTMENT COMPANY ACT COMPLIANCE. The Company is not required to
be registered as an "investment company" under the Investment Company Act of
1940, as amended.
In the event of any breach of a representation and warranty made by the Company
hereunder, Triad covenants and agrees that Triad will not take any action to
pursue any remedy that either may have hereunder, in law, in equity or
otherwise, until a year and a day have passed since the date on which all Notes
or other similar securities issued by the Trust, or another trust or similar
vehicle formed by the Company, or any obligations, notes or other securities
issued by the Company have been paid in full. Triad and the Company agree that
damages will not be an adequate remedy for such breach and that this covenant
may be specifically enforced by the Company, the Trust or by the Indenture
Trustee on behalf of the Noteholders and the Insurer.
12
SECTION 3.3. INDEMNIFICATION.
(a) Triad shall defend, indemnify and hold harmless the Company, the
Issuer, the Indenture Trustee, the Owner Trustee and the Insurer, from and
against any and all costs, expenses, losses, damages, claims, and liabilities,
arising out of or resulting from any breach of any of Triad's representations
and warranties contained herein.
(b) Triad shall defend, indemnify and hold harmless the Company, the
Issuer, the Indenture Trustee, the Owner Trustee and the Insurer from and
against any and all costs, expenses, losses, damages, claims, and liabilities,
arising out of or resulting from the use, ownership or operation by Triad or any
affiliate thereof of a Financed Vehicle.
(c) Triad shall defend, indemnify and hold harmless the Company, the
Issuer, the Indenture Trustee, the Owner Trustee and the Insurer from and
against any and all costs, expenses, losses, damages, claims, and liabilities,
arising out of or resulting from any action taken, or failed to be taken, by it
in respect of any portion of the Receivables other than in accordance with this
Agreement or the Sale and Servicing Agreement.
(d) Triad agrees to pay, and shall defend, indemnify and hold harmless
the Company, the Issuer, the Indenture Trustee, the Owner Trustee and the
Insurer from and against any taxes that may at any time be asserted against the
Company, the Issuer, the Indenture Trustee, the Owner Trustee with respect to
the transactions contemplated in this Agreement, including, without limitation,
any sales, gross receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes (but not including any taxes asserted with
respect to, and as of the date of, the sale, transfer and assignment of the
Receivables and the Other Conveyed Property to the Company and by the Company to
the Issuer or the issuance and original sale of the Notes or the Certificates,
or asserted with respect to ownership of the Receivables and Other Conveyed
Property which shall be indemnified by Triad pursuant to clause (e) below, or
federal, state or other income taxes, arising out of distributions on the Notes
or the Certificates or transfer taxes arising in connection with the transfer of
the Notes or the Certificates) and costs and expenses in defending against the
same, arising by reason of the acts to be performed by Triad under this
Agreement or imposed against such Persons.
(e) Triad agrees to pay, and to indemnify and hold harmless the
Company, the Issuer, the Indenture Trustee, the Owner Trustee and the Insurer
from, any taxes which may at any time be asserted against such Persons with
respect to, and as of the date of, the conveyance or ownership of the
Receivables or the Other Conveyed Property hereunder and the conveyance or
ownership of the Receivables under the Sale and Servicing Agreement or the
issuance and original sale of the Notes or the Certificates, including, without
limitation, any sales, gross receipts, personal property, tangible or intangible
personal property, privilege or license taxes (but not including any federal or
other income taxes, including franchise taxes, arising out of the transactions
contemplated hereby or transfer taxes arising in connection with the transfer of
the Notes or the Certificates) and costs and expenses in defending against the
same, arising by reason of the acts to be performed by Triad under this
Agreement or imposed against such Persons.
13
(f) Triad shall defend, indemnify and hold harmless the Company, the
Issuer, the Indenture Trustee, the Owner Trustee and the Insurer from and
against any and all costs, expenses, losses, claims, damages, and liabilities to
the extent that such cost, expense, loss, claim, damage, or liability arose out
of, or was imposed upon any of such Persons through the negligence, misfeasance,
or bad faith of Triad in the performance of its duties under this agreement or
by reason of reckless disregard of Triad's obligations and duties under this
Agreement.
(g) Triad shall indemnify and hold harmless the Company, the Issuer,
the Indenture Trustee, the Owner Trustee, the Insurer, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred by
reason of the violation by Triad of federal or state securities laws in
connection with the registration or the sale of the Notes or the Certificates.
Indemnification under this SECTION 3.3 shall include reasonable fees
and expenses of counsel and expenses of litigation and shall survive termination
of the Notes and the Certificates. The indemnity obligations hereunder shall be
in addition to any obligation that Triad may otherwise have.
Notwithstanding the indemnity provisions contained in SECTIONS 3.3(a)
through (h), Triad shall not be required to indemnify any Indemnified Party
against any taxes, costs, expenses, losses, damages, claims or liabilities to
the extent the same shall arise out of or be based upon (i) the wilful
misfeasance, bad faith or gross negligence of such party, or (ii) losses
suffered by reason of uncollectible or uncollected Receivables.
(h) (i) Triad agrees to indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the Registration
Statement, each Person who controls the Company within the meaning of Section 15
of the Securities Act, the Underwriter and the Underwriter's respective officers
and directors and each Person, if any, who controls the Underwriter within the
meaning of the Securities Act and the Exchange Act (each, a "Company Indemnified
Party"), against any and all losses, claims, damages or liabilities to which any
Company Indemnified Party may become subject under the Securities Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, and shall reimburse such Company Indemnified Party for any
legal or other expenses incurred by the Company Indemnified Party in connection
with investigating or defending any such loss, claim, damage, liability or
action, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the preliminary prospectus
supplement (except as subsequently updated in the Prospectus Supplement), the
Prospectus Supplement or any amendment or supplement to the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement approved
in writing by Triad, or the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
in the preliminary prospectus supplement (except as subsequently updated in the
Prospectus Supplement), Prospectus Supplement or any amendment or supplement to
the Prospectus Supplement approved in writing by Triad, in light of the
circumstances under which they were made, not misleading, other than any untrue
statement or alleged untrue statement or omission or alleged omission based on
any information (A) in the third and last paragraph on the first page of the
Prospectus
14
Supplement; (B) under the heading "Company" in "Summary of Terms;" (C) in the
second sentence under the heading "Use of Proceeds" in the Prospectus Supplement
only to the extent relating to the Company's use of proceeds; (D) under the
heading "Underwriting" in the Prospectus Supplement (the "Company Information"),
or the Prospectus or the Registration Statement; and (E) under the heading "The
Insurer"; whether or not deemed a part of or included in, by cross-reference or
otherwise, the Prospectus Supplement. This indemnity agreement shall be in
addition to any liability which Triad may otherwise have.
(ii) Triad agrees to indemnify and hold the Company harmless
against any and all losses, claims, damages or liabilities that the
Company may sustain related to the failure of Triad to perform in all
material respects their duties under this Agreement. Triad shall
immediately notify the Company if a claim is made by a third party with
respect to this Agreement, and Triad shall assume the defense of any
such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Company in respect
of such claim.
(i) The Company agrees to indemnify and hold harmless Triad, each of
its directors and officers and each Person who controls Triad or any such
Person, within the meaning of the Securities Act and the Exchange Act, against
any and all losses, claims, damages or liabilities to which Triad or any such
Person may become subject under the Securities Act, the Exchange Act or
otherwise, and shall reimburse Triad and any such director, officer or
controlling Person for any legal or other expenses incurred by such party or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damages, liability or action, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Prospectus, the Registration Statement and the
Company Information in the Prospectus Supplement, and any amendment or
supplement to the Prospectus, or the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. This indemnity agreement shall be in addition to any liability
which the Company may otherwise have.
(j) Promptly after receipt by an indemnified party under this SECTION
3.3 of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
this SECTION 3.3, notify the indemnifying party in writing of the commencement
thereof, but the omission to so notify the indemnifying party shall not relieve
the indemnifying party from any liability which the indemnifying party may have
to any indemnified party hereunder except to the extent such indemnifying party
has been prejudiced thereby. If any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party). After notice from the indemnifying
party to such indemnified party of its election to assume the
15
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this SECTION 3.3 for any legal or otherwise expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability of any claims that are the subject
matter of such action.
(k) If the indemnification provided for in this SECTION 3.3(h) and (i)
is unavailable or insufficient to hold harmless any Company Indemnified Party
under SUBSECTION (h) above or Triad, each of their directors and officers and
each Person who controls Triad or any such Person, within the meaning of the
Securities Act and the Exchange Act, under SUBSECTION (i) above, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in SUBSECTION (h) OR (i) above, as applicable, (a) in such
proportion as is appropriate to reflect the relative benefits received by
Company on the one hand and Triad on the other from the offering of the offered
Notes or (b) if the allocation provided by CLAUSE (a) above is not permitted by
applicable law in such proportion as is appropriate to reflect not only the
relative benefits referred to in CLAUSE (a) above but also the relative fault of
Company on the one hand and Triad on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative benefits
received by Company on the one hand and Triad on the other shall be deemed to be
in the same proportion as the total net proceeds from the sale of the Trust
Property (before deducting expenses) received by Triad bear to the total
underwriting discounts and commissions received by the Underwriter. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
Indemnified Parties or Triad and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
SUBSECTION (k) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject to this SUBSECTION (k). Notwithstanding
the provisions of this SUBSECTION (k), except with respect to liabilities of the
Company resulting directly from material misstatements or material omissions of
information contained in the Registration Statement or the Prospectus, the
Company shall not be required to pay any amount in excess of the amount by which
the total price at which the Notes underwritten by the Underwriter and
distributed to the public were offered to the public exceeds the amount of any
damages which the Company has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
16
ARTICLE IV
COVENANTS OF TRIAD
SECTION 4.1. PROTECTION OF TITLE OF THE COMPANY AND THE TRUST.
(a) Triad shall execute, file, record and register such financing
statements and cause to be executed, filed, recorded and registered such
continuation and other statements or documents, all in such manner and in such
places as may be required by law fully to preserve, maintain and protect the
interests of the Company under this Agreement and any Subsequent Receivables
Purchase Agreement, and of the Trust and the Indenture Trustee under the
Indenture, the Sale and Servicing Agreement and any Subsequent Transfer
Agreement, in the Receivables and the Other Conveyed Property, and in the
proceeds thereof. Triad shall deliver (or cause to be delivered) to the Company,
the Owner Trustee. the Indenture Trustee and the Insurer file-stamped copies of,
or filing receipts for, any document recorded, registered or filed as provided
above, as soon as available following such recordation, registration or filing.
If Triad fails to perform its obligations under this subsection, the Company,
the Owner Trustee, the Insurer or the Indenture Trustee may do so, at the
expense of Triad.
(b) Triad shall not change its name, identity or corporate structure in
any manner that would make any financing statement or continuation statement
filed by Triad (or by the Company, the Trust or the Indenture Trustee on behalf
of Triad) in accordance with SECTION 4.1(a) seriously misleading within the
meaning of the applicable provisions of the UCC or any title statute, unless
Triad shall have given the Company, the Owner Trustee, the Insurer and the
Indenture Trustee at least sixty (60) days prior written notice thereof, and
shall promptly file appropriate amendments to all previously filed financing
statements and continuation statements.
(c) Triad shall give the Company, the Owner Trustee, the Insurer (so
long as an Insurer Default shall not have occurred and be continuing) and the
Indenture Trustee at least sixty (60) days prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement. Triad shall at all times maintain each office from which it
services Receivables and its principal executive office within the United States
of America.
(d) Triad, so long as Triad is the Servicer, shall maintain accounts
and records as to each Receivable accurately and in sufficient detail to permit
(i) the reader thereof to know at any time 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 amounts from time to time deposited in the
Collection Account in respect of such Receivable.
(e) Triad shall maintain its computer systems so that, from and after
the time of sale under this Agreement or any Subsequent Receivables Purchase
Agreement of the Receivables to the Company and the sale of the Receivables by
the Company to the Trust, Triad's master computer records (including any backup
archives) that refer to any Receivable indicate clearly that such Receivable is
owned by the Trust. Indication of the Trust's ownership of a Receivable shall
17
be deleted from or modified on Triad's computer systems when, and only when, the
Receivable has been paid in full or purchased.
(f) If at any time Triad proposes to sell, grant a security interest
in, or otherwise transfer any interest in automotive receivables (other than the
Receivables) to any prospective purchaser, lender or other transferee, Triad
shall give to such prospective purchaser, lender or other transferee computer
tapes, records or print-outs (including any restored from backup archives) that,
if they shall refer in any manner whatsoever to any Receivable, indicate clearly
that such Receivable is owned by the Trust (unless such Receivable has been paid
in full or purchased).
(g) Promptly after taking the foregoing actions described in SECTIONS
4.1(b) or (c), Triad shall deliver to the Indenture Trustee, the Owner Trustee
and the Insurer an Opinion of Counsel either (i) stating that, in the opinion of
such counsel, all financing statements and continuation statements have been
executed and filed that are necessary to preserve and protect the interest of
the Indenture Trustee in the Trust Property, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (ii) stating that, in the opinion of such counsel, no such action is
necessary to preserve and protect such interest.
SECTION 4.2. OTHER LIENS OR INTERESTS.
Triad shall not (i) create, incur or suffer to exist, or agree to
create, incur or suffer to exist, or consent to cause or permit in the future
(upon the happening of a contingency or otherwise) the creation, incurrence or
existence of any Lien on, or restriction on transferability of, the Receivables,
except for the Lien in favor of the Company, the Lien in favor of the Trust, the
Lien in favor of the Indenture Trustee for the benefit of the Noteholders and
the Insurer and the restrictions on transferability imposed by the Related
Documents or (ii) sign or file under the UCC of any jurisdiction any financing
statement that names Triad or the Company as a debtor, or sign any security
agreement authorizing any secured party thereunder to file any such financing
statement, with respect to the Receivables, except in each case any such
instrument solely securing the rights and preserving the Lien of the Company,
the Lien of the Trust and the Lien of the Indenture Trustee, for the benefit of
the Noteholders and the Insurer or as otherwise permitted under this Agreement
or the Related Documents. Triad shall defend the right, title and interest of
Purchaser and the Indenture Trustee on behalf of the Noteholders and the Insurer
in and to the Receivables and Other Conveyed Property against all claims of
third parties obtaining through or under the Seller.
SECTION 4.3. COSTS AND EXPENSES. In connection with the transactions
contemplated under this Agreement and the other Related Documents, Triad shall
promptly pay (or shall reimburse Company or any other Person to the extent that
Company or such other Person shall pay): (a) the cost of the qualification of
the Notes for offer and sale under the securities or Blue Sky laws (including
the reasonable fees and expenses of counsel for the Underwriter relating to the
preparation, reproduction and delivery of any Blue Sky Memorandum prepared in
connection with such qualification); (b) the fees of the Rating Agencies; (c)
any of the initial fees of Owner Trustee and Indenture Trustee and the
reasonable fees and disbursements of their counsel (which, in the case of
Indenture Trustee, are set forth a fee letter dated as of [ ]); (d) expenses
incurred in connection with printing (or otherwise reproducing) and delivering
this Agreement,
18
the other Related Documents, the Prospectus, the Prospectus Supplement, any
amendment or supplement thereto, any preliminary prospectus and prospectus
supplement, the Notes and the Certificates; (e) fees and expenses relating to
the filing of documents with the commission (including all related filings under
Rule 424(b) of the Securities Act, all related filings on Form 8-K and periodic
reports under the Exchange Act) in connection with the transactions contemplated
hereby; (f) the shelf registration amortization fee (which fee shall equal
1/33rd of 1% times the aggregate principal amount of the offered Notes) paid in
connection with the issuance of offered Notes; (g) all accountant's fees
incurred in connection with the accountant's review of the Prospectus Supplement
and delivery of the letters described in SECTION 2.3, and (h) the reasonable
fees and disbursements of counsel to the Company.
ARTICLE V
REPURCHASES OR REPLACEMENTS
SECTION 5.1. REPURCHASE OR REPLACEMENT OF RECEIVABLES UPON BREACH OF
WARRANTY.
Upon the occurrence of a Triad Repurchase Event, Triad shall, unless
such breach shall have been cured in all material respects, repurchase or
replace the related Receivable in accordance with the Sale and Servicing
Agreement from the Company as of the Accounting Date in the first complete
Collection Period following its discovery or its receipt of notice of any such
Triad Repurchase Event and, on or before the Determination Date following such
Accounting Date, Triad shall deposit or cause to be deposited the Purchase
Amount into the Collection Account pursuant to SECTION 4.5 of the Sale and
Servicing Agreement. In no event shall Triad satisfy the obligations specified
in the foregoing sentence with Replacement Receivables, if after giving effect
to such replacement, either (i) as of the date of such replacement, more than 20
Receivables in the aggregate since the Closing Date are Replacement Receivables,
or (ii) the sum of the Principal Balances transferred since the Closing Date of
the Replacement Receivables is greater than 0.30 percent of the Original Pool
Balance. The obligation of Triad to repurchase or replace any Receivable as to
which a breach has occurred and is continuing shall, if such obligation is
fulfilled, constitute the sole remedy against Triad for such breach available to
the Company, the Issuer, the Insurer, the Backup Servicer, the Indenture Trustee
on behalf of the Noteholders or the Noteholders; PROVIDED, HOWEVER, Triad shall
indemnify the Indenture Trustee and the Backup Servicer, and each of their
respective officers, directors, employees and agents, as well as the Trust, the
Insurer and the Noteholders 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 breach. The provisions of
this Section 5.1 are intended to grant the Issuer and the Indenture Trustee a
direct right against Triad to demand performance hereunder. Upon receipt of the
Purchase Amount or a Replacement Receivable and written instructions from the
Servicer, the Indenture Trustee shall release to Triad or any of Triad's
designees, the related Receivable File and shall execute and deliver all
reasonable instruments of transfer or assignment, without recourse, as are
prepared by Triad and delivered to the Custodian and necessary to vest in Triad,
or such designee, title to the Receivable. The Custodian shall be under no duty
or obligation (a) to inspect, review or examine any documents, instruments,
certificates or other papers to determine that they are genuine, enforceable, or
appropriate for the represented purpose
19
or that they are other than what they purport to be on their face or (b) to
determine whether there is a breach of any of the Seller's representations and
warranties. Notwithstanding any other provision of this Agreement or the Sale
and Servicing Agreement to the contrary, the obligation of Triad under this
SECTION 5.1 shall not terminate upon the termination of Triad as Servicer under
the Sale and Servicing Agreement and shall be performed in accordance with the
terms hereof notwithstanding the failure of the Servicer or the Company to
perform any of their respective obligations with respect to such Receivables
under the Sale and Servicing Agreement.
SECTION 5.2. REASSIGNMENT OF PURCHASED RECEIVABLES.
Upon deposit in the Collection Account of the Purchase Amount of any
Receivables repurchased by Triad or deposit with the Indenture Trustee of a
Replacement Receivable under SECTION 5.1, the Company, the Owner Trustee and the
Indenture Trustee shall take any and all actions reasonably requested by Triad,
at the expense of Triad, to assign, without recourse, representation or
warranty, to Triad all of the Company's, the Indenture Trustee's and the Trust's
right, title and interest in and to such Receivables, such assignment being an
assignment outright and not for security; and Triad shall thereupon own such
Receivables and all such Other Conveyed Property, free of any further obligation
to the Company, the Trust, the Indenture Trustee or the Noteholders with respect
thereto. The Company shall take any and all actions reasonably requested by
Triad, at the expense of Triad, to release its security interest in each such
Receivable and in the Other Conveyed Property with respect thereto. If,
following the reassignment of a Purchased Receivable, or a replaced Receivable
in any enforcement suit or legal proceeding, it is held that Triad may not
enforce any such Receivable on the ground that it shall not be a real party in
interest or a holder entitled to enforce the Receivable, the Company shall, at
the expense of Triad, take such steps as Triad deems reasonably necessary to
enforce the Receivable, including bringing suit in the Company's name.
SECTION 5.3. WAIVERS.
No failure or delay on the part of the Company or the Trust, as
purchaser and assignee of the Company, in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall 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 TRIAD.
Triad shall be liable in accordance herewith only to the extent of the
obligations of this Agreement specifically undertaken by Triad and its
representations and warranties.
SECTION 6.2. MERGER OR CONSOLIDATION OF TRIAD.
Triad shall not merge or consolidate with any other Person or permit
any other Person to become the successor to all or substantially all of Triad's
business or assets unless, after such
20
merger, consolidation or succession, the successor or surviving entity shall be
capable of fulfilling Triad's duties hereunder. Triad shall not merge or
consolidate with any other Person or permit any other Person to become its
successor without the prior written consent of the Insurer, which consent shall
not be unreasonably withheld. Any such successor corporation shall execute an
agreement of assumption of every obligation of Triad under its Related Documents
and, whether or not such assumption agreement is executed, shall be the
successor to Triad under this Agreement without the execution or filing of any
document (or any further act on the part of any of the parties to this
Agreement). Triad shall provide prompt notice of any merger, consolidation or
succession pursuant to this SECTION 6.2 to the Owner Trustee, the Indenture
Trustee, each Rating Agency and, so long as an Insurer Default shall not have
occurred and be continuing, the Insurer. Notwithstanding the foregoing, Triad
shall not merge or consolidate with any other Person or permit any other Person
to become a successor to Triad's business, unless: (i) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
SECTION 3.1 shall have been breached in any material respect (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction), and no event, that, after notice or lapse of
time, or both, would become an Insurance Agreement Event of Default shall have
occurred and be continuing; (ii) Triad shall have delivered to the Owner
Trustee, the Indenture Trustee, each Rating Agency and, so long as an Insurer
Default shall not have occurred and be continuing, the Insurer, 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 (iii) Triad shall have
delivered to the Owner Trustee, the Indenture Trustee, the Insurer and each
Rating Agency 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 interests of the Company, the Trust and the Indenture Trustee, in the
Receivables or (B) no such action shall be necessary to preserve and protect
such interest.
SECTION 6.3. LIMITATION ON LIABILITY OF TRIAD AND OTHERS.
Triad and any director or officer or employee or agent of Triad 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. Triad shall not be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its
obligations under this Agreement and that in its opinion may involve it in any
expense or liability.
SECTION 6.4. CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED
PROPERTY TO THE TRUST.
Triad acknowledges that the Company intends, pursuant to the Sale and
Servicing Agreement and any Subsequent Transfer Agreement, to convey the
Receivables and the Other Conveyed Property, together with its respective rights
under this Agreement and any Subsequent Receivables Purchase Agreement, to the
Trust on the date hereof and any Subsequent Transfer Date, as the case may be.
Triad acknowledges and consents to such conveyance and waives any further notice
thereof and covenants and agrees that the representations and warranties of
Triad
21
contained in this Agreement, and the rights of the Company hereunder, are
intended to benefit the Indenture Trustee, the Trust, the Insurer and the
Noteholders. In furtherance of the foregoing, Triad covenants and agrees to
perform its duties and obligations hereunder in accordance with the terms hereof
for the benefit of the Indenture Trustee, the Trust, the Insurer and the
Noteholders and that, notwithstanding anything to the contrary in this
Agreement, Triad shall be directly liable to the Indenture Trustee ,the Insurer
and the Trust (notwithstanding any failure by the Servicer, the Backup Servicer
or the Company to perform its duties and obligations hereunder or under the Sale
and Servicing Agreement), and that the Owner Trustee and the Indenture Trustee,
may enforce the duties and obligations of Triad under this Agreement against
Triad for the benefit of the Trust, the Insurer or the Noteholders,
respectively.
SECTION 6.5. AMENDMENT.
(a) This Agreement may be amended by Triad and the Company with the
prior written consent of the Insurer (so long as an Insurer Default shall not
have occurred and be continuing) but without the consent of the Indenture
Trustee, the Owner Trustee any of the Certificateholder or the Noteholders, (i)
to cure any ambiguity, (ii) to correct or supplement any provisions in this
Agreement or (iii) for the purpose of adding any provision to or changing in any
manner or eliminating any provision of this Agreement or of modifying in any
manner the rights of the Noteholders; PROVIDED, HOWEVER, that such action shall
not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee, the
Indenture Trustee and the Rating Agency, adversely affect in any material
respect the interests of the Noteholders.
(b) This Agreement may also be amended from time to time by Triad and
the Company with the prior written consent of the Insurer (so long as an Insurer
Default shall not have occurred and be continuing) and with the consent of a
Note Majority (which consent of any Holder of a Note given pursuant to this
SECTION 6.5(b) or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holder and on all future Holders of such Note and
of any 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 Note), for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement, or of modifying in any manner the rights of
the Noteholders; PROVIDED, HOWEVER, that the Rating Agency Condition shall have
been satisfied with respect to any such amendment prior to the execution
thereof; and PROVIDED, FURTHER, that no such amendment shall (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables, payments that shall be required to be
made on any Note or the Class A Interest Rate or (ii) reduce the aforesaid
percentage required to consent to any such amendment or any waiver hereunder,
without the consent of the Holders of all Notes then outstanding.
(c) Prior to the execution of any such amendment or consent under
SECTION 6.5(a) or (b), Triad shall furnish five (5) days prior written
notification of the substance of such amendment or consent to the Rating Agency.
(d) Promptly after the execution of any such amendment or consent under
SECTION 6.5(b), the Indenture Trustee shall furnish written notification of the
substance of such amendment or consent to each Noteholder.
22
(e) It shall not be necessary for the consent of Noteholders pursuant
to SECTION 6.5(b) to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Noteholders shall be subject to such
reasonable requirements as the Indenture Trustee may prescribe.
SECTION 6.6. NOTICES.
All demands, notices and communications under this Agreement shall be
in writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Company, at the following address: [ ], (b) in the case of the
Seller, at the following address: Triad Financial Corporation, 0000 Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000, Telecopy No.: (714)
894-8617, (c) in the case of the Indenture Trustee, and for so long as the
Indenture Trustee is the Backup Servicer, the Backup Servicer, at the following
address: [ ], (d) in the case of the Trust or the Owner Trustee, at the
following address: [ ], with a copy to the Servicer and (e) in the case of the
Insurer, to [ ], (in each case in which failure on the part of the Insurer to
respond shall be deemed to constitute consent or acceptance, then a copy of such
notice or other communication should also be sent to the attention of each of
the General Counsel and the Head-Financial Guaranty Group and shall be marked to
indicate "URGENT MATERIAL ENCLOSED"); (f) in the case of Moody's, to Xxxxx'x
Investors Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000; and (g) in the case of S&P, to Standard & Poor's Ratings Group,
00 Xxxxxxxx - 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed
Surveillance Department; or at such other address as shall be designated by any
such party in a written notice to the other parties. Any notice required or
permitted to be mailed to a Noteholder shall be given by first class mail,
postage prepaid, at the address of such Holder as shown in the Note Register,
and any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Noteholder
receives such notice.
SECTION 6.7. MERGER AND INTEGRATION.
Except as specifically stated otherwise herein, this Agreement, the
Sale and Servicing Agreement and the 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, the
Sale and Servicing 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, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
23
SECTION 6.9. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS
OF LAWS THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 6.10. COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute but one and the same instrument.
SECTION 6.11. NONPETITION COVENANT.
Until one year and one day following the payment in full of all amounts
due in respect of the Notes, neither the Company nor Triad shall petition or
otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Company or the Trust
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 Company or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Company or the
Trust.
SECTION 6.12. ASSIGNMENT.
Notwithstanding anything to the contrary contained in this Agreement,
except as provided in SECTION 6.2, this Agreement may not be assigned by Triad
or the Company.
SECTION 6.13. THIRD-PARTY BENEFICIARIES. The Insurer and its successors
and assigns shall be a third-party beneficiary to the provisions of this
Agreement, and shall be entitled to rely upon and directly enforce such
provisions of this Agreement so long as no Insurer Default shall have occurred
and be continuing. Except as expressly stated otherwise herein, any right of the
Insurer to direct, appoint, consent to, approve or, or take any action under
this Agreement, shall be a right exercised by the Insurer in its sole and
absolute discretion. The Insurer may disclaim any of its rights and powers under
this Agreement (but not its duties and obligations under the Note Policy) upon
delivery of a written notice to the Indenture Trustee. Nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Trust Property or
under or in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 6.14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the parties hereof and their respective successors and assigns, and shall
inure to the benefit of and be enforceable by the parties hereof and their
respective successors and assigns permitted hereunder. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of
the Trust, the Indenture Trustee and the Noteholders and their respective
permitted successors
24
and assigns, if any. Any request, notice, direction, consent, waiver or other
instrument or action by any Noteholder shall bind its successors and assigns.
25
IN WITNESS WHEREOF, the parties have caused this Receivables Purchase
Agreement to be duly executed by their respective officers, effective as of the
day and year first above written.
TRIAD FINANCIAL CORPORATION, as Seller
By:
------------------------------------------
Name:
Title:
[ ] as Purchaser
By:
------------------------------------------
Name:
Title:
26
SCHEDULE A
SCHEDULE OF RECEIVABLES
On file with the Indenture Trustee.
A-1
SCHEDULE B
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Triad hereby makes the following representations and warranties as to
the Receivables. Unless otherwise specified, such representations and warranties
are made as of the Closing Date with respect to Initial Receivables and as of
the related Subsequent Transfer Date with respect to Subsequent Receivables.
Such representations and warranties shall survive the sale, transfer, and
assignment of the Receivables by the Purchaser.
1. CHARACTERISTICS OF RECEIVABLES. Each Receivable (A) was
originated by a Dealer for the retail sale of a Financed Vehicle in the ordinary
course of such Dealer's business and such Dealer had all necessary licenses and
permits to originate Receivables in the state where such Dealer was located, was
fully and properly executed by the parties thereto, was purchased, directly or
indirectly, by Triad using and materially conforming to Triad's credit policies,
from such Dealer and a Correspondent under an existing Dealer Agreement or
Correspondent Agreement or pursuant to a Dealer Assignment between the Dealer
and Triad or a Correspondent Assignment between the Correspondent and Triad and
was validly assigned by such Dealer or Correspondent to Triad pursuant to such
Assignment, (B) contains customary and enforceable provisions such as to render
the rights and remedies of the holder thereof adequate for realization against
the collateral security, (C) 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) which, if made when due,
shall fully amortize the Amount Financed over the original term and (D) 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
by a Dealer and was sold by the Dealer to (i) Triad or (ii) a Correspondent,
which sold such Receivable to Triad, and Triad sold such Receivable to the
Company in any such case, without any fraud or misrepresentation on the part of
such Dealer.
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",
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.
B-1
4. ORIGINATION. Each Receivable was originated in 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 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, any State or municipality, 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. MAKING RECORDS. By the Closing Date or Subsequent Transfer
Date, as applicable, the Seller 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 Company by the Seller and resold
by the Company to the Trust in accordance with the terms of the Sale and
Servicing Agreement.
10. COMPUTER TAPE. The Computer Tape made available by the
Seller to the Trust on the Closing Date or Subsequent Transfer 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 believed to be
adverse to the Noteholders or the Insurer were utilized in selecting the
Receivables from those receivables owned by the Seller 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.
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-2
and (b) the original Lien Certificate or application therefor. The complete
Receivable File for each Receivable is in the possession of the Custodian.
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.
16. LAWFUL ASSIGNMENT. 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 under the
Sale and Servicing Agreement (or pursuant to transfers of the Notes, if
applicable).
17. GOOD TITLE. Immediately prior to the conveyance of the
Receivables to the Trust pursuant to the Sale and Servicing Agreement or
Subsequent Transfer Agreement, as applicable, the Seller was the sole owner
thereof and had good marketable title thereto, free of any Lien and, upon
execution and delivery of the Sale and Servicing Agreement by the Seller, the
Trust shall have good and marketable title to and will be the sole owner of such
Receivables, free of any Lien. No Dealer or Correspondent has a participation
in, or other right to receive, proceeds of any Receivable. The Seller 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 or Dealer Assignments or Correspondent
Agreements or Correspondent Assignment, if applicable, or to payments due under
such Receivables.
18. SECURITY INTEREST IN FINANCED VEHICLE. Each Receivable
created or shall create a valid, binding and enforceable first priority security
interest in favor of the Seller in the Financed Vehicle. The Lien Certificate
and original certificate of title for each Financed Vehicle identify Triad, or
if a 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 or
Subsequent Transfer Date, as applicable, and will identify Triad the Seller
named 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, Triad has received written evidence from the related Dealer
that such Lien Certificate showing the Seller as the first lienholder has been
applied for and the Seller's security interest has been validly assigned by the
Seller to the Trust pursuant to the Sale and Servicing Agreement. Immediately
after the sale, transfer and assignment thereof by the Seller to the Trust, each
Receivable will be secured by an enforceable 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.
B-3
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 Seller 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, the Owner 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, to the best of Seller's knowledge, 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 affect on the ability of the Obligor to make, nor the
enforceability of Obligor's obligation to make, Contract Scheduled Payments and
will not have a material adverse effect on the validity or priority of the 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 Triad.
24. INSURANCE. At the time of a purchase of a Receivable by
Triad from a Dealer or a third party, each Financed Vehicle is required to be
covered by a comprehensive and collision insurance policy (i) naming Triad as
loss payee, (ii) insuring against loss and damage due to fire, theft, collision
and other risks generally covered by comprehensive and collision coverage and
(iii) subject to maximum deductibles of $500 for collision coverage and $500 for
comprehensive coverage. Each Receivable requires the Obligor to maintain
physical loss and damage insurance 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. 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 Receivable was a
Receivable for which more than 10% of a Contract Scheduled Payment is 31 or more
days past due.
26. REMAINING PRINCIPAL BALANCE. At the related Cutoff Date,
the Principal Balance of each Receivable set forth in Schedule of Receivables is
true and accurate in all material respects.
B-4
27. CERTAIN CHARACTERISTICS OF INITIAL RECEIVABLES. (A) Each
Initial Receivable had a remaining maturity, as of the Initial Cutoff Date, of
not more than [ ] months; (B) each Receivable had an original maturity of not
more than [ ] months; (C) each Initial Receivable had a remaining Principal
Balance as of the Initial Cutoff Date of at least $[ ] and not more than $[ ];
(D) each Initial Receivable has an Annual Percentage Rate of at least [ ]% and
not more than [ ]%; (E) no Initial Receivable was one for which more than [ ]%
of a Scheduled Payment was [ ] or more days past due as of the Initial Cutoff
Date; (F) no funds have been advanced by Triad, any Dealer, or Correspondent or
anyone acting on behalf of any of them in order to cause any Initial Receivable
to qualify under clause (E) above; and (G) not more than [ ]% of the aggregate
Principal Balance of such Receivables will be conveyed to Triad pursuant to
Correspondent Assignments, and not more than [ ]% of the aggregate Principal
Balance of such Receivables will be conveyed to Triad by any one Correspondent.
28. FULL AMORTIZATION. Each Receivable is a fully amortizing
Simple Interest Receivable, Rule of 78's Receivable or Actuarial Receivable
which provides for level monthly payments which, if made when due, shall fully
amortize the Amount Financed over the original term.
B-5
SCHEDULE C
LEGAL PROCEEDINGS
[ ]
C-1
