EXHIBIT 10.1
EXECUTION COPY
PURCHASE AGREEMENT
BETWEEN
TRIAD FINANCIAL CORPORATION
ORIGINATOR
AND
TRIAD FINANCIAL SPECIAL PURPOSE LLC
SELLER
DATED AS OF AUGUST 1, 2002
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS....................................................... 1
SECTION 1.1 General........................................................... 1
SECTION 1.2 Specific Terms.................................................... 1
SECTION 1.3 Usage of Terms.................................................... 2
SECTION 1.4 [Reserved]........................................................ 2
SECTION 1.5 No Recourse....................................................... 2
SECTION 1.6 Action by or Consent of Noteholders and
Certificateholder................................................. 2
SECTION 1.7 Material Adverse Effect........................................... 3
ARTICLE II. CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED
PROPERTY.......................................................... 3
SECTION 2.1 Conveyance of the Receivables and the Other Conveyed
Property.......................................................... 3
ARTICLE III. REPRESENTATIONS AND WARRANTIES.................................... 4
SECTION 3.1 Representations and Warranties of Originator...................... 4
SECTION 3.2 Representations and Warranties of Seller.......................... 5
ARTICLE IV. COVENANTS OF SELLER............................................... 7
SECTION 4.1 Protection of Title of Seller..................................... 7
SECTION 4.2 Reserved.......................................................... 8
SECTION 4.3 Other Liens or Interests.......................................... 8
SECTION 4.4 Costs and Expenses................................................ 9
SECTION 4.5 Indemnification by Originator..................................... 9
SECTION 4.6 Indemnification by the Seller..................................... 9
ARTICLE V. REPURCHASES....................................................... 10
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty................. 10
SECTION 5.2 Reassignment of Purchased Receivables............................. 10
SECTION 5.3 Waivers........................................................... 11
ARTICLE VI. MISCELLANEOUS..................................................... 11
SECTION 6.1 Liability of Originator and Seller................................ 11
SECTION 6.2 Merger or Consolidation of Originator or Seller................... 11
SECTION 6.3 Limitation on Liability of Originator, and Seller and
Others............................................................ 12
SECTION 6.4 Originator May Own Notes or the Certificate....................... 12
SECTION 6.5 Amendment......................................................... 12
SECTION 6.6 Notices........................................................... 13
SECTION 6.7 Merger and Integration............................................ 14
i
SECTION 6.8 Severability of Provisions........................................ 14
SECTION 6.9 Intention of the Parties.......................................... 14
SECTION 6.10 Governing Law..................................................... 15
SECTION 6.11 Counterparts...................................................... 15
SECTION 6.12 Conveyance of the Receivables and the Other Conveyed
Property to the Issuer............................................ 15
SECTION 6.13 Nonpetition Covenant.............................................. 15
SCHEDULES
Schedule A -- Schedule of Receivables
Schedule B -- Representations and Warranties from Originator as to the
Receivables
ii
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of August 1, 2002, is between
Triad Financial Corporation, a California corporation, as Originator
("Originator"), and Triad Financial Special Purpose LLC, a Delaware limited
liability company, as Seller ("Seller").
Seller has agreed to purchase from the Originator, and the
Originator, pursuant to this Agreement, is selling to Seller the Receivables and
Other Conveyed Property.
In consideration of the premises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
receipt of which is acknowledged, the Originator and the Seller, intending to be
legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 General. Capitalized terms used herein without
definition will have the respective meanings assigned to such terms in the Sale
and Servicing Agreement dated as of August 1, 2002, by and among the Seller,
Triad Financial Corporation, in its individual capacity, as Custodian and as
Servicer, Triad Automobile Receivables Trust 2002-A, as Issuer, and JPMorgan
Chase Bank, as Backup Servicer and Indenture Trustee.
SECTION 1.2 Specific Terms. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, will have
the following meanings:
"Agreement" means this Purchase Agreement and all amendments
hereof and supplements hereto.
"Closing Date" means August 21, 2002.
"Issuer" means Triad Automobile Receivables Trust 2002-A.
"Other Conveyed Property" means all property described in Section
2.1(b), (c), (d), (e), (f) and (h) of the Sale and Servicing Agreement conveyed
by the Originator to the Seller pursuant to this Agreement other than the
Receivables, including all monies paid on or after the Cut-Off Date.
"Owner Trustee" means Wilmington Trust Company, as Owner Trustee
appointed and acting pursuant to the Trust Agreement.
"Receivables" means the Receivables listed on the Schedule of
Receivables attached hereto.
"Related Documents" means the Notes, the Certificate, the Sale
and Servicing Agreement, the Indenture, the Trust Agreement, the Policy, the
Insurance Agreement and the Underwriting Agreement. The Related Documents to be
executed by any party are referred to
herein as "such party's Related Documents," "its Related Documents" or by a
similar expression.
"Repurchase Event" means the occurrence of a breach of any of the
Originator's representations and warranties hereunder including the
representations and warranties set forth in Schedule B or any other event which
requires the repurchase of a Receivable by the Originator under the Sale and
Servicing Agreement.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement referred to in Section 1.1.
"Schedule of Representations" means the Schedule of
Representations and Warranties attached hereto as Schedule B.
"Schedule of Receivables" means the schedule of Receivables sold
and transferred pursuant to this Agreement which is attached hereto as Schedule
A.
"Taxes" means any sales, gross receipts, personal property,
tangible or intangible personal property, privilege or license taxes (but not
including any (x) federal, state or other taxes, arising out of the ownership of
the Notes or the Certificate, (y) transfer taxes arising in connection with the
transfer of the Notes or the Certificate or (z) federal, state or other taxes
arising out of any fees paid to the indemnified parties pursuant to the
Transaction Documents).
"Trustee" means JPMorgan Chase Bank, as trustee and any successor
trustee appointed and acting pursuant to the Indenture.
SECTION 1.3 Usage of Terms. With respect to all terms used in
this Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography, and other means of reproducing words in a
visible form; references to agreements and other contractual instruments include
all subsequent amendments thereto or changes therein entered into in accordance
with their respective terms and not prohibited by this Agreement or the Sale and
Servicing Agreement; references to Persons include their permitted successors
and assigns; and the terms "include" or "including" mean "include without
limitation" or "including without limitation." The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer to
Articles and Sections of and Schedules and Exhibits to this Agreement.
SECTION 1.4 [Reserved].
SECTION 1.5 No Recourse. Without limiting the obligations of the
Originator or the 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 the Originator or the Seller, or of any predecessor or
successor of the Originator or the Seller.
SECTION 1.6 Action by or Consent of Noteholders and
Certificateholder. Whenever any provision of this Agreement refers to action to
be taken, or consented to, by
2
Noteholders or the Certificateholder, such provision will be deemed to refer to
the Certificateholder or Noteholder, as the case may be, of record as of the
Record Date immediately preceding the date on which such action is to be taken,
or consent given, by Noteholders or the Certificateholder. Solely for the
purposes of any action to be taken, or consented to, by Noteholders, any Note
registered in the name of the Seller, the Originator or any Affiliate thereof
will be deemed not to be outstanding; provided, however, that, solely for the
purpose of determining whether the Owner Trustee or the Indenture Trustee is
entitled to rely upon any such action or consent, only Notes or Certificates
that the Owner Trustee or the Indenture Trustee, respectively, knows to be so
owned will be so disregarded.
SECTION 1.7 Material Adverse Effect. Whenever a determination is
to be made under this Agreement as to whether a given event, action, course of
conduct or set of facts or circumstances could or would have a material adverse
effect on the Noteholders or the Insurer (or any similar or analogous
determination), such determination will be made without taking into account the
funds available from claims under the Policy.
ARTICLE II.
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 Conveyance of the Receivables and the Other Conveyed
Property.
(a) Subject to the terms and conditions of this Agreement,
Originator hereby sells, transfers, assigns and otherwise conveys to
Seller without recourse (but without limitation of its obligations in
this Agreement), and Seller hereby purchases, all right, title and
interest of Originator in and to the Receivables and the Other Conveyed
Property, including collections paid on or after the Cut-Off Date. It is
the intention of Originator and Seller that the sale and assignment
contemplated by this Agreement constitutes a sale and contribution of
the Receivables and the Other Conveyed Property from Originator to
Seller, conveying good title thereto free and clear of any liens, and
the beneficial interest in and title to the Receivables and the Other
Conveyed Property will not be part of Originator's estate in the event
of the filing of a bankruptcy petition by or against Originator under
any bankruptcy or similar law.
(b) Simultaneously with the sale of the Receivables and the
Other Conveyed Property to Seller, Seller has paid or caused to be paid
to or upon the order of Originator an amount equal to net proceeds of
the Class A Notes (less the initial deposit to the Spread Account) by
wire transfer of immediately available funds and the remainder as a
contribution to the capital of the Seller (a wholly-owned subsidiary of
Originator).
3
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of Originator.
Originator makes the following representations and warranties as of the date
hereof, on which Seller relies in purchasing the Receivables and the Other
Conveyed Property, on which the Issuer will rely in purchasing the Receivables
and the Other Conveyed Property and on which the Insurer will rely in issuing
the Policy. Such representations are made as of the execution and delivery of
this Agreement, but will survive the sale, transfer and assignment of the
Receivables and the Other Conveyed Property hereunder, and the sale, transfer
and assignment thereof by Seller to the Issuer. Originator and Seller agree that
Seller will assign to Issuer all Seller's rights under this Agreement and that
the Indenture Trustee will thereafter be entitled to enforce this Agreement
against Originator in the Indenture Trustee's own name on behalf of the
Noteholders.
(a) Schedule of Representations. The representations and
warranties set forth on the Schedule of Representations with respect to
the Receivables as of the date hereof, are true and correct.
(b) Organization and Good Standing. Originator has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of California, with power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and now has, power, authority and legal right to
acquire, own, transfer and sell the Receivables and the Other Conveyed
Property to be transferred to Seller.
(c) Due Qualification. Originator is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the
ownership or lease of its property or the conduct of its business with
respect to the Receivables requires such qualification.
(d) Power and Authority. Originator has the power and authority
to execute and deliver this Agreement and its Related Documents and to
carry out its terms and their terms, respectively; Originator has full
power and authority to sell and assign the Receivables and the Other
Conveyed Property to be sold and assigned to Seller hereunder and has
duly authorized such sale and assignment to Seller by all necessary
corporate action; and the execution, delivery and performance of this
Agreement and Originator's Related Documents have been duly authorized
by Originator by all necessary corporate action.
(e) Valid Sale; Binding Obligations. This Agreement and
Originator's Related Documents have been duly executed and delivered,
will effect a valid sale, transfer and assignment of the Receivables and
the Other Conveyed Property to the Seller, enforceable against
Originator and creditors of and purchasers from Originator; and this
Agreement and Originator's Related Documents constitute legal, valid and
binding obligations of Originator enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or
4
other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(f) No Violation. The consummation of the transactions
contemplated by this Agreement and the Related Documents, and the
fulfillment of the terms of this Agreement and the Related Documents,
will not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice, lapse of time or
both) a default under, the articles of incorporation or bylaws of
Originator, or any indenture, agreement, mortgage, deed of trust or
other instrument to which Originator is a party or by which it is bound,
or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement,
the Sale and Servicing Agreement and the Indenture, or violate any law,
order, rule or regulation applicable to Originator of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over Originator or any
of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending or, to Originator's knowledge, threatened against Originator,
before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over
Originator or its properties (i) asserting the invalidity of this
Agreement or any of the Related Documents, (ii) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by Originator of its obligations under, or the
validity or enforceability of, this Agreement or any of the Related
Documents or (iv) seeking to affect adversely the federal income tax or
other federal, state or local tax characterization of, or seeking to
impose any excise, franchise, transfer or similar tax upon, the transfer
and acquisition of the Receivables and the Other Conveyed Property
hereunder or under the Sale and Servicing Agreement.
(h) True Sale. The Receivables are being transferred with the
intention of removing them from Originator's estate pursuant to Section
541 of the Bankruptcy Code, as the same may be amended from time to
time.
SECTION 3.2 Representations and Warranties of Seller. Seller
makes the following representations and warranties as of the date hereof, on
which Originator relies in transferring the Receivables and the Other Conveyed
Property to the Seller, on which the Issuer will rely in purchasing the
Receivables and on which the Insurer will rely in issuing the Policy. Such
representations are made as of the execution and delivery of this Agreement, but
will survive the sale, transfer and assignment of the Receivables and the Other
Conveyed Property hereunder, and the sale, transfer and assignment thereof to
the Issuer under the Sale and Servicing Agreement.
(a) Organization and Good Standing. Seller has been duly
organized and is validly existing as a limited liability company in good
standing under the laws of the State of Delaware, with power and
authority to own its properties and to conduct its
5
business as such properties are currently owned and such business is
currently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire, own and sell the Receivables and
the Other Conveyed Property to be transferred to the Issuer.
(b) Due Qualification. Seller is duly qualified to do business
as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of its property or the conduct of its
business requires such qualification.
(c) Power and Authority. Seller has the power and authority to
execute and deliver this Agreement and its Related Documents and to
carry out its terms and their terms, respectively; and the execution,
delivery and performance of this Agreement and Seller's Related
Documents have been duly authorized by Seller by all necessary action.
(d) Valid Sale; Binding Obligations. This Agreement and Seller's
Related Documents have been duly executed and delivered, and this
Agreement and Seller's Related Documents constitute legal, valid and
binding obligations of Seller enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations
on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the Related Documents, and the
fulfillment of the terms of this Agreement and the Related Documents,
will not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice, lapse of time or
both) a default under, the limited liability company agreement of
Seller, or any indenture, agreement, mortgage, deed of trust or other
instrument to which Seller is a party or by which it is bound, or result
in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed
of trust or other instrument, other than this Agreement, the Sale and
Servicing Agreement and the Indenture, or violate any law, order, rule
or regulation applicable to Seller of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over Seller or any of its
properties.
(f) No Proceedings. There are no proceedings or investigations
pending or, to Seller's knowledge, threatened against Seller, before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over Seller or its
properties (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the issuance of the Notes or
the consummation of any of the transactions contemplated by this
Agreement or any of the Related Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by Seller of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents or
(iv) seeking to affect adversely the federal income tax or other
federal, state or local tax characterization
6
of, or seeking to impose any excise, franchise, transfer or similar tax
upon, the transfer and acquisition of the Receivables and the Other
Conveyed Property hereunder or under the Sale and Servicing Agreement.
In the event of any breach of a representation and warranty made
by Seller hereunder, Originator covenants and agrees that it will not take any
action to pursue any remedy that it may have hereunder, in law, in equity or
otherwise, until a year and a day have passed since the date on which all notes,
certificates, pass-through certificates or other similar securities issued by
Seller, or a trust or similar vehicle formed by Seller, have been paid in full.
Originator and Seller agree that damages will not be an adequate remedy for such
breach and that this covenant may be specifically enforced by Issuer or by the
Indenture Trustee on behalf of the Noteholders and Owner Trustee on behalf of
the Certificateholder.
ARTICLE IV.
COVENANTS OF SELLER
SECTION 4.1 Protection of Title of Seller.
(a) At or prior to the Closing Date, Originator will have filed
or caused to be filed UCC-1 financing statements, (i) naming Originator
as seller or debtor and naming Seller as purchaser or secured party,
(ii) naming Seller as seller or debtor and the Issuer as purchaser or
secured party, and (iii) naming Issuer as debtor and Indenture Trustee
as secured party and describing the Receivables and the Other Conveyed
Property being transferred as collateral, in such locations as are
required in order to perfect the transfers and pledges thereof under the
Related Documents. From time to time thereafter, Originator will execute
and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as
may be required by law fully to preserve, maintain and protect the
interest of Seller under this Agreement, of the Issuer under the Sale
and Servicing Agreement and of the Indenture Trustee under the Indenture
in the Receivables and the Other Conveyed Property and in the proceeds
thereof. Originator will deliver (or cause to be delivered) to Seller,
the Indenture Trustee and the Insurer file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing. In the event that Originator fails to perform its
obligations under this subsection, Seller, Issuer or the Indenture
Trustee may do so, at the expense of such Originator. In furtherance of
the foregoing, the Originator hereby authorizes the Seller, the Issuer
or the Indenture Trustee to file a record or records (as defined in the
applicable UCC), including financing statements, in all jurisdictions
and with all filing offices as each may determine, in its sole
discretion, are necessary or advisable to perfect the security interest
granted to the Seller pursuant to Section 6.9. Such financing statements
may describe the collateral in the same manner as described herein or
may contain an indication or description of collateral that describes
such property in any other manner as such party may determine, in its
sole discretion, is necessary, advisable or prudent to ensure the
perfection of the security interest in the collateral granted to the
Seller herein.
7
(b) Originator will not change its name, identity, state of
incorporation or corporate structure in any manner that would, could or
might make any financing statement or continuation statement filed by
Originator (or by Seller, Issuer or the Indenture Trustee on behalf of
Originator) in accordance with Section 4.1(a) seriously misleading
within the meaning of Section 9-506 of the applicable UCC, unless they
will have given Seller, Issuer, Insurer and the Indenture Trustee at
least 60 days' prior written notice thereof, and will promptly file
appropriate amendments to all previously filed financing statements and
continuation statements.
(c) Originator shall at all times maintain each office from
which it services Receivables and its principal executive office within
the United States of America.
(d) Prior to the Closing Date, Originator has maintained
accounts and records as to each Receivable accurately and in sufficient
detail to permit (i) the reader thereof to know at any time as of or
prior to the Closing Date, the status of such Receivable, including
payments and recoveries made and payments owing (and the nature of each)
and (ii) reconciliation between payments or recoveries on (or with
respect to) each Receivable and the Principal Balance as of the Closing
Date. Originator will maintain its computer systems so that, from and
after the time of transfer under this Agreement of the Receivables to
Seller, the conveyance of the Receivables by Seller to the Issuer,
Originator's master computer records (including archives) that will
refer to a Receivable indicate clearly that such Receivable has been
transferred to the Seller and has been conveyed by Seller to Issuer.
Indication of the Issuer's ownership of a Receivable will be deleted
from or modified on Originator's computer systems when, and only when,
the Receivable will become a Purchased Receivable or will have been paid
in full.
(e) If at any time Originator proposes to sell, grant a security
interest in, or otherwise transfer any interest in any motor vehicle
receivables to any prospective purchaser, lender or other transferee,
Originator will give to such prospective purchaser, lender or other
transferee computer tapes, records or print-outs (including any restored
from archives) that, if they refer in any manner whatsoever to any
Receivable (other than a Purchased Receivable), will indicate clearly
that such Receivable has been sold by the Originator and is owned by the
Issuer.
SECTION 4.2 Reserved.
SECTION 4.3 Other Liens or Interests. Except for the conveyances
hereunder, Originator will not sell, pledge, assign or transfer to any other
Person or grant, create, incur, assume or suffer to exist any Lien on the
Receivables or the Other Conveyed Property or any interest herein and Seller
will not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on the Receivables or the Other
Conveyed Property or any interest therein, and Originator will defend the right,
title, and interest of Seller and the Issuer in and to the Receivables and the
Other Conveyed Property against all claims of third parties claiming through or
under Originator and Seller will defend the right, title, and interest of the
Issuer in and to the Receivables and the Other Conveyed Property against all
claims of third parties claiming through or under Seller.
8
SECTION 4.4 Costs and Expenses. Each of Originator and Seller
will pay all reasonable costs and disbursements in connection with the
performance of its obligations hereunder and under its Related Documents.
SECTION 4.5 Indemnification by Originator. (a) Originator will
defend, indemnify and hold harmless Seller, the Issuer, the Indenture Trustee,
the Backup Servicer, the Owner Trustee, the Noteholders and the Insurer from and
against any and all costs, expenses, losses, damages, claims, and liabilities,
arising out of or resulting from: (i) any breach of any of Originator's
representations and warranties contained herein, (ii) the use, ownership or
operation by Originator or any affiliate thereof of a Financed Vehicle, (iii)
any action taken, or failed to be taken, by it in respect of the Receivables
other than in accordance with this Agreement or the Sale and Servicing Agreement
or (iv) the negligence (except for errors in judgment), willful misfeasance, or
bad faith of Originator in the performance of its duties under this Agreement or
by reason of reckless disregard of Originator's obligations and duties under
this Agreement.
(b) Originator will defend, indemnify and hold harmless the
Issuer, the Indenture Trustee, the Backup Servicer, the Owner Trustee, the
Noteholders and the Insurer from and against any and all costs, expenses,
losses, damages, claims, and liabilities, arising out of or resulting from any
Taxes which may at any time be asserted against such Persons with respect to (i)
the conveyance or ownership of the Receivables or the Other Conveyed Property
hereunder, (ii) the conveyance or ownership of the Receivables under the Sale
and Servicing Agreement and (iii) the issuance and original sale of the Notes
and the issuance of the Certificate, and costs and expenses in defending against
the same, arising by reason of the acts to be performed by Originator under this
Agreement or imposed against such Persons.
Indemnification under this Section 4.5 will include reasonable
fees and expenses of counsel and expenses of litigation and will survive payment
of the Notes and the Certificate and termination of this Agreement. The
indemnity obligations hereunder will be in addition to any obligation that
Originator may otherwise have.
SECTION 4.6 Indemnification by the Seller. (a) The Seller will
defend, indemnify and hold harmless the Originator, the Issuer, the Indenture
Trustee, the Backup Servicer, the Owner Trustee, the Noteholders and the Insurer
from and against any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from: (i) any breach of any of the
Seller's representations and warranties contained herein, (ii) the use,
ownership or operation by the Seller or any affiliate thereof of a Financed
Vehicle, (iii) any action taken, or failed to be taken, by it in respect of the
Receivables other than in accordance with this Agreement or the Sale and
Servicing Agreement or (iv) the negligence (except for errors in judgment),
willful misfeasance, or bad faith of the Seller in the performance of its duties
under this Agreement or by reason of reckless disregard of the Seller's
obligations and duties under this Agreement.
(b) Seller will defend, indemnify and hold harmless the Issuer,
the Indenture Trustee, the Backup Servicer, the Owner Trustee, the Noteholders
and the Insurer from and against any and all costs, expenses, losses, damages,
claims, and liabilities, arising out of or resulting from any Taxes which may at
any time be asserted against such Persons with respect to the transactions
contemplated by this Agreement, including (i) the conveyance or ownership of
9
the Receivables or the Other Conveyed Property hereunder, (ii) the conveyance or
ownership of the Receivables under the Sale and Servicing Agreement and (iii)
the issuance and original sale of the Notes and the issuance of the Certificate,
and costs and expenses in defending against the same, arising by reason of the
acts to be performed by Seller under this Agreement or imposed against such
Persons.
Indemnification under this Section 4.6 will include reasonable
fees and expenses of counsel and expenses of litigation and will survive payment
of the Notes and the Certificate and termination of this Agreement. The
indemnity obligations hereunder will be in addition to any obligation that the
Seller may otherwise have.
ARTICLE V.
REPURCHASES
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty.
Upon the occurrence of a Repurchase Event, Originator will, unless the breach
which is the subject of such Repurchase Event will have been cured in all
material respects, repurchase the Receivable relating thereto from the Issuer
and, simultaneously with the repurchase of the Receivable, Originator will
deposit the Purchase Amount in full, without deduction or offset, to the
Collection Account, pursuant to Section 3.2 of the Sale and Servicing Agreement.
It is understood and agreed that, except as set forth in Section 6.1, the
obligation of Originator to repurchase any Receivable, as to which a breach
occurred and is continuing, will, if such obligation is fulfilled, constitute
the sole remedy against Originator for such breach available to Seller, the
Issuer, the Insurer, the Backup Servicer, the Noteholders, the
Certificateholder, the Indenture Trustee on behalf of the Noteholders or the
Owner Trustee on behalf of the Certificateholder. This Section 5.1 is intended
to grant the Issuer and the Indenture Trustee a direct right against Originator
to demand performance hereunder, and in connection therewith, Originator waives
any requirement of prior demand against Seller with respect to such repurchase
obligation. Any such repurchase will take place in the manner specified in
Section 3.2 of the Sale and Servicing Agreement. Notwithstanding any other
provision of this Agreement or the Sale and Servicing Agreement to the contrary,
the obligation of Originator under this Section 5.1 will not terminate upon a
termination of Originator as Servicer under the Sale and Servicing Agreement and
will be performed in accordance with the terms hereof notwithstanding the
failure of the Servicer or Seller to perform any of their respective obligations
with respect to such Receivable under the Sale and Servicing Agreement.
In addition to the foregoing and notwithstanding whether the
related Receivable will have been purchased by Originator, Originator will
indemnify the Seller, the Issuer, the Indenture Trustee, the Backup Servicer,
the Owner Trustee, the Insurer, the Noteholders and the Certificateholder from
and against all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel, which may be asserted against
or incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such Repurchase Events.
SECTION 5.2 Reassignment of Purchased Receivables. Upon deposit
in the Collection Account of the Purchase Amount of any Receivable repurchased
by Originator under
10
Section 5.1, the Issuer will take such steps as may be reasonably requested by
Originator in order to assign to Originator all of the Issuer's right, title and
interest in and to such Receivable and all security and documents and all Other
Conveyed Property conveyed to the Issuer directly relating thereto, without
recourse, representation or warranty, except as to the absence of Liens created
by or arising as a result of actions of the Issuer. Such assignment will be a
sale and assignment outright, and not for security. If, following the
reassignment of a Purchased Receivable, in any enforcement suit or legal
proceeding, it is held that Originator may not enforce any such Receivable on
the ground that it will not be a real party in interest or a holder entitled to
enforce the Receivable, the Issuer will, at the expense of Originator, take such
steps as Originator deems reasonably necessary to enforce the Receivable,
including bringing suit in the Issuer's name.
SECTION 5.3 Waivers. No failure or delay on the part of Seller,
or the Issuer as assignee of Seller, in exercising any power, right or remedy
under this Agreement will operate as a waiver thereof, nor will any single or
partial exercise of any such power, right or remedy preclude any other or future
exercise thereof or the exercise of any other power, right or remedy.
ARTICLE VI.
MISCELLANEOUS
SECTION 6.1 Liability of Originator and Seller. Each of
Originator and Seller will be liable in accordance herewith only to the extent
of the obligations in this Agreement specifically undertaken by each of
Originator, and Seller, respectively and the representations and warranties of
each of Originator and Seller, respectively.
SECTION 6.2 Merger or Consolidation of Originator or Seller. Any
corporation, limited liability company or other entity (i) into which Originator
or Seller may be merged or consolidated, (ii) resulting from any merger or
consolidation to which Originator or Seller is a party or (iii) succeeding to
the business of Originator or Seller, in the case of Seller, which corporation,
limited liability company or other entity has a certificate of incorporation or
limited liability company agreement containing provisions relating to
limitations on business and other matters substantively identical to those
contained in Seller's limited liability company agreement, provided that in any
of the foregoing cases such corporation or other entity will execute an
agreement of assumption to perform every obligation of Originator or Seller, as
the case may be, under this Agreement and, whether or not such assumption
agreement is executed, will be the successor to Originator or Seller, as the
case may be, hereunder (without relieving Originator or Seller of their
responsibilities hereunder, if it survives such merger or consolidation) without
the execution or filing of any document or any further action by any of the
parties to this Agreement. Notwithstanding the foregoing, so long as no Insurer
Default has occurred and is continuing, Seller will not merge or consolidate
with any other Person or permit any other Person to become the successor to
Seller's business without the prior written consent of the Insurer. Originator
or Seller will promptly inform the other parties, the Issuer, the Indenture
Trustee, the Owner Trustee and, so long as no Insurer Default has occurred and
is continuing, the Insurer, of such merger, consolidation or purchase and
assumption. Notwithstanding the foregoing, as a condition to the consummation of
the transactions referred to in clauses (i), (ii) and (iii) above, (x)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Sections 3.1 (other then subsection (f) thereof in
connection with a change in control as provided in the Insurance Agreement) and
3.2 will have
11
been breached (for purposes hereof, such representations and warranties will be
true and correct as of the date of the consummation of such transaction) and
with respect to a transaction involving the Seller, no event that, after notice
or lapse of time, or both, would become an event of default under the Insurance
Agreement, has occurred and is continuing, (y) with respect to a transaction
involving the Seller, Seller will have delivered written notice of such
consolidation, merger or purchase and assumption to the Rating Agencies prior to
the consummation of such transaction and will have delivered to the Issuer, the
Insurer and the Indenture Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 6.2 and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, and (z) Originator or Seller, as applicable, will have
delivered to the Issuer and the Indenture Trustee an Opinion of Counsel,
stating, in the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary to preserve and protect the interest of the Issuer and the
Indenture Trustee in the Receivables and reciting the details of the filings or
(B) no such action will be necessary to preserve and protect such interest.
SECTION 6.3 Limitation on Liability of Originator, and Seller and
Others. Originator, and Seller and any director, officer, employee or agent
thereof may rely in good faith on the advice of counsel or on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising under this Agreement. Originator, or Seller will not be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its obligations under this Agreement or its Related Documents
and that in its opinion may involve it in any expense or liability.
SECTION 6.4 Originator May Own Notes or the Certificate. Subject
to the provisions of the Sale and Servicing Agreement, Originator and any
Affiliate of Originator may in their individual or any other capacity become the
owner or pledgee of Notes or the Certificate with the same rights as they would
have if they were not Originator or an Affiliate thereof.
SECTION 6.5 Amendment.
(a) This Agreement may be amended by Originator and Seller with
the prior written consent of the Insurer (so long as no Insurer Default
has occurred and is continuing) but without the consent of the Indenture
Trustee, the Owner Trustee, the Certificateholder or any of the
Noteholders (i) to cure any ambiguity or (ii) to correct any provisions
in this Agreement; provided, however, that such action will not, as
evidenced by an Opinion of Counsel delivered to the Issuer, the Owner
Trustee and the Indenture Trustee, adversely affect in any material
respect the interests of any Certificateholder or Noteholder.
(b) This Agreement may also be amended from time to time by
Originator, and Seller, with the prior written consent of the Insurer
(so long as no Insurer Default has occurred and is continuing) and with
the consent of the Indenture Trustee and, if required, the
Certificateholder and the Noteholders, in accordance with the Sale and
Servicing Agreement, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this
Agreement, or of modifying in any manner the
12
rights of the Certificateholder or Noteholders; provided, however, the
Originator provides the Indenture Trustee with an Opinion of Counsel,
(which may be provided by the Originator's internal counsel) that no
such amendment will increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on
Receivables or distributions that will be required to be made on any
Note or Certificate.
(c) Prior to the execution of any such amendment or consent,
Originator will have furnished written notification of the substance of
such amendment or consent to each Rating Agency.
(d) It will not be necessary for the consent of Certificateholder
or Noteholders pursuant to this Section 6.5 to approve the particular
form of any proposed amendment or consent, but it will be sufficient if
such consent will approve the substance thereof. The manner of obtaining
such consents and of evidencing the authorization of the execution
thereof by Certificateholder or Noteholders will be subject to such
reasonable requirements as the Indenture Trustee may prescribe,
including the establishment of record dates. The consent of a Holder of
a Certificate or a Note given pursuant to this Section or pursuant to
any other provision of this Agreement will be conclusive and binding on
such Holder and on all future Holders of such Certificate or Note and of
any Certificate or Note issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is
made upon the Certificate or Note.
SECTION 6.6 Notices.
All demands, notices and communications hereunder will be in
writing and will be deemed to have been duly given to the addressee if mailed,
by first-class registered mail, postage prepaid service, confirmed facsimile
transmission, or a nationally recognized express courier, as follows:
If to the Originator:
Triad Financial Corporation
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
With a separate copy to:
Attention: Vice President, Legal
13
If to the Seller:
Triad Financial Special Purpose LLC
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
or such other address as will be designated by a party in a written notice
delivered to the other party or to the Issuer, Owner Trustee or the Indenture
Trustee, as applicable. Any such demand, notice or communication hereunder will
be deemed to have been received on the date delivered to or received at the
premises of the addressee as evidenced by the date noted on the return receipt.
SECTION 6.7 Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and Related Documents set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
SECTION 6.8 Severability of Provisions. If any one or more of the
covenants, provisions or terms of this Agreement will be for any reason
whatsoever held invalid, then such covenants, provisions or terms will be deemed
severable from the remaining covenants, provisions or terms of this Agreement
and will in no way affect the validity or enforceability of the other provisions
of this Agreement.
SECTION 6.9 Intention of the Parties.
(a) The execution and delivery of this Agreement will constitute
an acknowledgment by Originator and Seller that they intend that the
assignments and transfers herein contemplated constitute sales and
assignments outright, and not for security, of the Receivables and the
Other Conveyed Property, conveying good title thereto free and clear of
any Liens, from Originator to Seller and that the Receivables and the
Other Conveyed Property will not be a part of Originator's estate in the
event of the bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, or the occurrence of another similar event,
of, or with respect to Originator. If such conveyance is determined to
be made as security for a loan made by Seller, the Issuer, the
Noteholders or the Certificateholder to the Originator the parties
intend that Originator will have granted to Seller a security interest
in all of Originator's right, title and interest, respectively, in and
to:
(1) the Receivables and all moneys received thereon after
the applicable Cutoff Date,
(2) the Other Conveyed Property conveyed to Seller by
Originator pursuant to this Agreement including (a) an assignment of the
security interests in the Financed Vehicles granted by Obligors pursuant
to the Receivables, and any other
14
interest of the Seller in such Financed Vehicles, (b) any proceeds and
the right to receive any proceeds with respect to the Receivables from
claims on any physical damage, credit life or disability insurance
policies covering Financed Vehicles or Obligors and any proceeds from
the liquidation of the Receivables, (c) the right to cause the related
Dealer or a Third-Party Lender to repurchase Receivables pursuant to a
Dealer Agreement or an Auto Loan Purchase and Sale Agreement,
respectively, as a result of the breach of representation or warranty in
the related Dealer Agreement or Auto Loan Purchase and Sale Agreement,
respectively, (d) all rights, if any, to refunds for the costs of any
Service Contracts on the related Financed Vehicles, (e) the related
Receivables Files and (f) the proceeds of any and all of the foregoing,
and
(3) all proceeds and investments with respect to items (1)
and (2) above.
(b) This Agreement will constitute a security agreement under
applicable law.
SECTION 6.10 Governing Law. This Agreement will be construed in
accordance with the laws of the State of New York without regard to the
principles of conflicts of laws thereof and the obligations, rights and remedies
of the parties under this Agreement will be determined in accordance with such
laws.
SECTION 6.11 Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts will be deemed to be an original, and all of which counterparts
will constitute but one and the same instrument.
SECTION 6.12 Conveyance of the Receivables and the Other Conveyed
Property to the Issuer. Originator acknowledges that Seller intends, pursuant to
the Sale and Servicing Agreement, to convey the Receivables and the Other
Conveyed Property, together with its rights under this Agreement, to the Issuer
on the date hereof. Originator acknowledges and consents to such conveyance and
pledge and waives any further notice thereof and covenants and agrees that the
representations and warranties of Originator contained in this Agreement and the
rights of Seller hereunder are intended to benefit the Insurer, the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders and the Certificateholder.
In furtherance of the foregoing, Originator covenants and agrees to perform its
duties and obligations hereunder, in accordance with the terms hereof for the
benefit of the Insurer, the Issuer, the Owner Trustee, the Indenture Trustee,
the Noteholders and the Certificateholder and that, notwithstanding anything to
the contrary in this Agreement, Originator will be directly liable to the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholder (notwithstanding any failure by the Servicer, or the Backup
Servicer to perform its respective duties and obligations hereunder or under
Related Documents) and that the Indenture Trustee may enforce the duties and
obligations of Originator under this Agreement against Originator for the
benefit of the Insurer, the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholder.
SECTION 6.13 Nonpetition Covenant. Originator will not petition
or otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Seller or the Issuer
under any federal or state
15
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Seller or the Issuer or any substantial part of their respective property, or
ordering the winding up or liquidation of the affairs of the Seller or the
Issuer.
16
IN WITNESS WHEREOF, the parties have caused this Purchase
Agreement to be duly executed by their respective officers as of the day and
year first above written.
TRIAD FINANCIAL CORPORATION,
as Originator
By /s/ XXXX X. XXXXXXXX
---------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
TRIAD FINANCIAL SPECIAL PURPOSE LLC,
as Seller
By /s/ XXXX X. XXXXXXXX
---------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
Accepted:
JPMORGAN CHASE BANK,
as Indenture Trustee
By /s/ XXXXXX XXXXXXX
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Trust Officer
[Purchase Agreement]
SCHEDULE A
SCHEDULE OF RECEIVABLES
[On File with Xxxxx Xxxxxxxxxx LLP]
SCHEDULE B
REPRESENTATIONS AND WARRANTIES
OF THE ORIGINATOR
1. Characteristics of Receivables. Each Receivable (A) was originated
(i) by Triad, (ii) by a Dealer and purchased by Triad from such Dealer under an
existing Dealer Agreement or pursuant to a Dealer Assignment with Triad and was
validly assigned by such Dealer to Triad pursuant to a Dealer Assignment, or
(iii) by a Third-Party Lender and purchased by Triad from such Third-Party
Lender under an existing Auto Loan Purchase and Sale Agreement or pursuant to a
Third-Party Lender Assignment with Triad and was validly assigned by such
Third-Party Lender to Triad pursuant to a Third-Party Lender Assignment, (B) was
originated by Triad, such Dealer or such Third-Party Lender for the retail sale
of a Financed Vehicle in the ordinary course of Triad's, the Dealer's or the
Third-Party Lender's business, in each case, in accordance with Triad's credit
policies and was fully and properly executed by the parties thereto, and Triad,
each Dealer and each Third-Party Lender had all necessary licenses and permits
to originate Receivables in the state where Triad, each such Dealer or each such
Third-Party Lender was located, (C) contains customary and enforceable
provisions such that the rights and remedies of the holder thereof adequate for
realization against the collateral security, (D) is a Receivable which provides
for level monthly payments (provided that the period in the first Collection
Period and the payment in the final Collection Period of the Receivable may be
minimally different from the normal period and level payment) that, if made when
due, will fully amortize the Amount Financed over the original term and (E) has
not been amended or collections with respect to which waived, other than as
evidenced in the Receivable File relating thereto.
2. Fraud or Misrepresentation. Each Receivable was originated (i) by
Triad, (ii) by a Dealer and was sold by the Dealer to Triad, or (iii) by a
Third-Party Lender and was sold by the Third-Party Lender to Triad, and was
transferred by Triad to the Seller and by the Seller to the Issuer without any
fraud or misrepresentation on the part of Triad, the Seller, such Dealer or
Third-Party Lender in any case.
3. Compliance with Law. All requirements of applicable federal, state
and local laws, and regulations thereunder (including, without limitation, usury
laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Xxxx-Xxxxxxxx Warranty Act,
the Federal Reserve Board's Regulations "B" and "Z" (including amendments to the
Federal Reserve's Official Staff Commentary to Regulation Z, effective October
1, 1998, concerning negative equity loans), the Soldiers' and Sailors' Civil
Relief Act of 1940, each applicable state Motor Vehicle Retail Installment Sales
Act, and state adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code and other consumer credit laws and equal credit opportunity
and disclosure laws) in respect of the Receivables and the Financed Vehicles,
have been complied with in all material respects, and each Receivable and the
sale of the Financed Vehicle evidenced by each Receivable complied at the time
it was originated or made and now complies in all material respects with all
applicable legal requirements.
4. Origination. Each Receivable was originated in the United States and
the related Obligor is a resident of the United States.
5. Binding Obligation. Each Receivable represents the genuine, legal,
valid and binding payment obligation of the Obligor thereon, enforceable by the
holder thereof in accordance with its terms, except (A) as enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law and (B) as such Receivable may be
modified by the application after the applicable Cutoff Date of the Soldiers'
and Sailors' Civil Relief Act of 1940, as amended; and all parties to each
Receivable had full legal capacity to execute and deliver such Receivable and
all other documents related thereto and to grant the security interest purported
to be granted thereby.
6. No Government Obligor. No Obligor is the United States of America or
any State or any agency, department, subdivision or instrumentality thereof.
7. Obligor Bankruptcy. At the related Cutoff Date no Obligor had been
identified on the records of Triad as being the subject of a current bankruptcy
proceeding.
8. Schedule of Receivables. The information set forth in the Schedule of
Receivables has been produced from the Electronic Ledger and was true and
correct in all material respects as of the close of business on the related
Cutoff Date.
9. Marking Records. By the Closing Date, as applicable, the Originator
will have caused the portions of the Electronic Ledger relating to the
Receivables to be clearly and unambiguously marked to show that the Receivables
have been sold to the Seller by the Originator and sold by the Seller to the
Issuer in accordance with the terms of the Sale and Servicing Agreement.
10. Computer Tape. The Computer Tape made available by the Originator to
the Trust on the Closing Date, as applicable, was complete and accurate as of
the related Cutoff Date and includes a description of the same Receivables that
are described in the Schedule of Receivables.
11. Adverse Selection. No selection procedures adverse to the
Noteholders or the Insurer were utilized in selecting the Receivables from those
receivables owned by the Originator which met the selection criteria contained
in the Sale and Servicing Agreement.
12. Chattel Paper. The Receivables constitute chattel paper within the
meaning of the UCC as in effect in the States of California, New York and
Delaware.
13. One Original. There is only one original executed copy of each
Receivable.
14. Receivable Files Complete. There exists a Receivable File pertaining
to each Receivable and such Receivable File contains (a) a fully executed
original of the Receivable, (b) in the case of retail installment sale
contracts, the original executed credit application, or a paper or electronic
copy thereof and (c) the original Lien Certificate or application therefor. Each
of
SCH B-2
such documents which is required to be signed by the Obligor has been signed by
the Obligor in the appropriate spaces. All blanks on any form have been properly
filled in and each form has otherwise been correctly prepared. The complete
Receivable File for each Receivable currently is in the possession of the
Custodian or in the possession of a third-party vendor.
15. Receivables in Force. No Receivable has been satisfied, subordinated
or rescinded, and the Financed Vehicle securing each such Receivable has not
been released from the lien of the related Receivable in whole or in part. No
terms of any Receivable have been waived, altered or modified in any respect
since its origination, except by instruments or documents identified in the
Receivable File. No Receivable has been modified as a result of application of
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended. All funds
payable to or on behalf of the Obligors with respect to the Receivables have
been fully disbursed.
16. Lawful Assignment; No Consent Required. No Receivable was originated
in, or is subject to the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the sale, transfer and assignment of such Receivable
and the Other Conveyed Property under this Agreement. For the validity of the
sale, transfer and assignment of the Receivables and Other Conveyed Property to
Triad, the Seller, and the Trust, no consent by any Dealer, Third-Party Lender
or Obligor is required under any agreement or applicable law.
17. Good Title. No Receivable has been sold, transferred, assigned or
pledged by the Dealer or Third-Party Lender, Triad or the Seller, as the case
may be, to any Person other than Triad, the Seller and the Issuer, as the case
may be. Immediately prior to the conveyance of the Receivables to the Seller
pursuant to this Agreement, as applicable, the Originator was the sole owner
thereof and had good title thereto, free of any Lien and, upon execution and
delivery of this Agreement by the Originator and the Seller will have good title
to and will be the sole owner of such Receivables, free of any Lien. No Dealer
or Third-Party Lender has an unpaid participation in, or other right to receive,
proceeds of any Receivable. The Originator has not taken any action to convey
any right to any Person that would result in such Person having a right to
payments received under the related Insurance Policies or the related Dealer
Agreements, Auto Loan Purchase and Sale Agreements, Dealer Assignments or
Third-Party Lender Assignments or to payments due under such Receivables.
18. Security Interest in Financed Vehicle. Each Receivable created or
will create a valid, binding and enforceable first priority security interest in
favor of the Originator in the Financed Vehicle. The Lien Certificate and
original certificate of title for each Financed Vehicle show, or if a new or
replacement Lien Certificate is being applied for with respect to such Financed
Vehicle the Lien Certificate will be received within 180 days of the Closing
Date, as applicable, and will show the Originator as the original secured party
under each Receivable as the holder of a first priority security interest in
such Financed Vehicle. With respect to each Receivable for which the Lien
Certificate has not yet been returned from the Registrar of Titles, the
Originator has applied for or received written evidence from the related Dealer
or Third-Party Lender that such Lien Certificate showing the Originator as first
lienholder has been applied for and the Originator's security interest has been
validly assigned by the Originator to the Seller pursuant to this Agreement and
by the Seller to the Trust pursuant to the Sale and Servicing Agreement.
Immediately after the sale, transfer and assignment thereof by the Originator to
the Seller and by the Seller to the Trust, each Receivable will be secured by an
enforceable and
SCH B-3
perfected first priority security interest in the Financed Vehicle in favor of
the Indenture Trustee as secured party, which security interest is prior to all
other Liens upon and security interests in such Financed Vehicle which now exist
or may hereafter arise or be created (except, as to priority, for any lien for
taxes, labor or materials affecting a Financed Vehicle). As of the related
Cutoff Date there were no Liens or claims for taxes, work, labor or materials
affecting a Financed Vehicle which are or may be Liens prior or equal to the
Liens of the related Receivable.
19. All Filings Made. All filings (including, without limitation, UCC
filings) required to be made by any Person, and actions required to be taken or
performed by any Person in any jurisdiction to give the Trust a first priority
perfected lien on, or ownership interest in, the Receivables and the proceeds
thereof and the Other Conveyed Property have been made, taken or performed.
20. No Impairment. The Originator has not done anything to convey any
right to any Person that would result in such Person having a right to payments
due under the Receivable or otherwise to impair the rights of the Trust, the
Insurer, the Indenture Trustee and the Noteholders in any Receivable or the
proceeds thereof.
21. Receivable Not Assumable. No Receivable is assumable by another
Person in a manner which would release the Obligor thereof from such Obligor's
obligations to Triad with respect to such Receivable.
22. No Defenses. No Receivable is subject to any right of rescission,
setoff, counterclaim or defense and no such right has been asserted or
threatened with respect to any Receivable.
23. No Default. There has been no default, breach, violation or event
permitting acceleration under the terms of any Receivable (other than payment
delinquencies of not more than 30 days and other defaults that will not have a
material adverse effect on the ability of the Obligor to make, nor the
enforceability of Obligor's obligation to make, Scheduled Receivables Payments
and will not have a material adverse effect on the validity or priority of
Originator's lien on the Financed Vehicle), and no condition exists or event has
occurred and is continuing that with notice, the lapse of time or both would
constitute a default, breach, violation or event permitting acceleration under
the terms of any Receivable, and there has been no waiver of any of the
foregoing. As of the related Cutoff Date no Financed Vehicle had been
repossessed by or at the direction of the Originator.
24. Insurance. At the time of an origination of a Receivable by Triad or
a purchase of a Receivable by Triad from a Dealer or Third-Party Lender, each
Financed Vehicle covered by a comprehensive and collision insurance policy (i)
subject to maximum deductibles of $500 for collision coverage and $500 for
comprehensive coverage, (ii) naming Triad as loss payee and (iii) insuring
against loss and damage due to fire, theft, transportation, collision and other
risks generally covered by comprehensive and collision coverage. Each Receivable
requires the Obligor to maintain physical loss and damage insurance, naming
Triad and its successors and assigns as additional insured parties, and each
Receivable permits the holder thereof to obtain physical loss and damage
insurance at the expense of the Obligor if the Obligor fails to do so.
SCH B-4
No Financed Vehicle is insured under a policy of force-placed insurance on the
related Cutoff Date.
25. Past Due. At the related Cutoff Date no Scheduled Receivable Payment
was more than 30 days past due.
26. Remaining Principal Balance. At the related Cutoff Date the
Principal Balance of each Receivable set forth in the Schedule of Receivables is
true and accurate in all material respects.
27. Certain Characteristics of Receivables. (A) Each Receivable had a
remaining maturity, as of the Cutoff Date, of not more than 72 months; (B) each
Receivable had an original maturity of not more than 72 months; (C) not more
than 41% of Receivables (calculated by Aggregate Principal Balance) will have an
original term to maturity of 72 months; (D) each Receivable had a remaining
Principal Balance as of the Cutoff Date of at least $5,000 and not more than
$50,000; and (E) each Receivable has an Annual Percentage Rate of at least 11%
and not more than 30%.
SCH B-5
