EXHIBIT 10.1
PURCHASE AGREEMENT
BETWEEN
TRIAD FINANCIAL CORPORATION
ORIGINATOR
AND
TRIAD FINANCIAL SPECIAL PURPOSE LLC
DEPOSITOR
DATED AS OF ____, 20__
TABLE OF CONTENTS
Page
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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 [Reserved].................................................................... 3
Section 1.7 Material Adverse Effect....................................................... 3
ARTICLE II. CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY....................... 3
Section 2.1 Conveyance of the Receivables and the Other Conveyed Property................. 3
ARTICLE III. REPRESENTATIONS AND WARRANTIES..................................................... 3
Section 3.1 Representations and Warranties of the Originator.............................. 3
Section 3.2 Representations and Warranties of the Depositor............................... 5
ARTICLE IV. COVENANTS OF SELLER................................................................. 7
Section 4.1 Protection of Title of the Depositor.......................................... 7
Section 4.2 [Reserved].................................................................... 8
Section 4.3 Other Liens or Interests...................................................... 8
Section 4.4 Costs and Expenses............................................................ 8
Section 4.5 Indemnification by the Originator............................................. 9
Section 4.6 Indemnification by the Depositor.............................................. 9
ARTICLE V. REPURCHASES.......................................................................... 10
Section 5.1 Repurchase of Receivables Upon Breach of Warranty............................. 10
Section 5.2 Reassignment of Purchased Receivables......................................... 10
Section 5.3 Waivers....................................................................... 11
ARTICLE VI. MISCELLANEOUS....................................................................... 11
Section 6.1 Liability of the Originator and the Depositor................................. 11
Section 6.2 Merger or Consolidation of the Originator or the Depositor.................... 11
Section 6.3 Limitation on Liability of the Originator, and the Depositor and Others....... 12
Section 6.4 The Originator May Own Notes or the Certificate............................... 12
Section 6.5 Amendment..................................................................... 12
Section 6.6 Notices....................................................................... 13
Section 6.7 Merger and Integration........................................................ 13
Section 6.8 Severability of Provisions.................................................... 14
Section 6.9 Intention of the Parties...................................................... 14
Section 6.10 Governing Law................................................................. 14
Section 6.11 Counterparts.................................................................. 15
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Section 6.12 Conveyance of the Receivables and the Other Conveyed Property to the
Issuer........................................................................ 15
Section 6.13 Nonpetition Covenant.......................................................... 15
Section 6.14 Payment Obligations of the Depositor Limited.................................. 15
SCHEDULES
Schedule A -- Schedule of Receivables
Schedule B -- Representations and Warranties from the Originator as to the
Receivables
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of ________, 20__, is between
Triad Financial Corporation, a California corporation, as the Originator (the
"Originator"), and Triad Financial Special Purpose LLC, a Delaware limited
liability company, as the Depositor (the "Depositor").
The Depositor has agreed to purchase from the Originator, and the
Originator, pursuant to this Agreement, is selling to the Depositor the
Receivables and Other Conveyed Property.
In consideration of the premises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
receipt of which is acknowledged, the Originator and the Depositor, intending to
be legally bound, hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 General. Capitalized terms used herein without
definition will have the respective meanings assigned to such terms in the Sale
and Servicing Agreement dated as of ______, 20__, by and among the Depositor,
Triad Financial Corporation, in its individual capacity, as Custodian and as
Servicer, Triad Automobile Receivables Trust 200_-_, as Issuer, and [Indenture
Trustee], 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 ______, 200_.
"Indenture Trustee" means [Indenture Trustee], as Indenture Trustee
and any successor Indenture Trustee appointed and acting pursuant to the
Indenture.
"Issuer" means Triad Automobile Receivables Trust 20__-_.
"Other Conveyed Property" means all property described in Section
2.1(a), (b), (c), (d), (e), (f) and (h) of the Sale and Servicing Agreement
conveyed by the Originator to the Depositor pursuant to this Agreement other
than the Receivables, including all monies paid on or after the Cut-Off Date.
"Owner Trustee" means [Owner Trustee], 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 Note 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.
"Residual Holder" means Triad Financial Residual Special Purpose
LLC.
"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 Basic Documents).
Section 1.3 Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement or the Sale and
Servicing Agreement; references to Persons include their permitted successors
and assigns; and the terms "include" or "including" mean "include without
limitation" or "including without limitation." The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer to
Articles and Sections of and Schedules and Exhibits to this Agreement.
Section 1.4 [Reserved].
Section 1.5 No Recourse. Without limiting the obligations of the
Originator or the Depositor hereunder, no recourse may be taken, directly or
indirectly, under this Agreement or any certificate or other writing delivered
in connection herewith or therewith, against any stockholder, officer or
director, as such, of the Originator or the Depositor, or of any predecessor or
successor of the Originator or the Depositor.
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Section 1.6 [Reserved].
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 Note 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, the
Originator hereby sells, transfers, assigns and otherwise conveys to the
Depositor without recourse (but without limitation of its obligations in
this Agreement), and the Depositor hereby purchases, all right, title and
interest of the Originator in and to the Receivables and the Other
Conveyed Property, including all moneys received after the Cutoff Date. It
is the intention of the Originator and the Depositor that the sale and
assignment contemplated by this Agreement constitutes a sale and
contribution of the Receivables and the Other Conveyed Property from the
Originator to the Depositor, conveying good title thereto free and clear
of any liens, and the beneficial interest in and title to the Receivables
and the Other Conveyed Property will not be part of the Originator's
estate in the event of the filing of a bankruptcy petition by or against
the Originator under any bankruptcy or similar law.
(b) Simultaneously with the sale of the Receivables and the Other
Conveyed Property to the Depositor, the Depositor has paid or caused to be
paid to or upon the order of the Originator a purchase price equal to the
aggregate Principal Balance of the Receivables. An amount equal to the net
proceeds of the Class A Notes (less the initial deposit to the Spread
Account) shall be paid by wire transfer of immediately available funds and
the remaining balance of the purchase price will be paid with a portion of
the proceeds from the sale of the Certificate by the Depositor to the
Residual Holder.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Originator. The
Originator makes the following representations and warranties as of the date
hereof, on which the Depositor relies in purchasing the Receivables and the
Other Conveyed Property, on which the Issuer will rely in purchasing the
Receivables and the Other Conveyed Property [and on which the Insurer will rely
in issuing the Note 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 the
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Depositor to the Issuer. The Originator and the Depositor agree that the
Depositor will assign to Issuer all the Depositor's rights under this Agreement
and that the Indenture Trustee will thereafter be entitled to enforce this
Agreement against the 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. The 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, corporate power, authority and legal right to acquire,
own, transfer and sell the Receivables and the Other Conveyed Property to
the Depositor.
(c) Due Qualification. The 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. The Originator has the corporate power and
authority to execute and deliver this Agreement and its Related Documents
and to carry out its terms and their terms, respectively; the Originator
has full power and authority to sell and assign the Receivables and the
Other Conveyed Property to be sold and assigned to the Depositor hereunder
and has duly authorized such sale and assignment to the Depositor by all
necessary corporate action; and the execution, delivery and performance of
this Agreement and the Originator's Related Documents have been duly
authorized by the Originator by all necessary corporate action.
(e) Valid Sale; Binding Obligations. This Agreement and the
Originator's Related Documents have been duly executed and delivered, will
effect a valid sale, transfer and assignment of the Receivables and the
Other Conveyed Property to the Depositor, enforceable against the
Originator and creditors of and purchasers from the Originator; and this
Agreement and the Originator's Related Documents constitute legal, valid
and binding obligations of the Originator 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.
(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 the Originator, or any indenture,
agreement, mortgage, deed of trust or other instrument to which the
Originator
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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 the Originator of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Originator or any of
its properties.
(g) No Proceedings. There are no proceedings or investigations
pending or, to the Originator's best knowledge, threatened against the
Originator, before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality having jurisdiction over
the 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 the 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 the 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 the Depositor. The
Depositor makes the following representations and warranties as of the date
hereof, on which the Originator relies in transferring the Receivables and the
Other Conveyed Property to the Depositor, on which the Issuer will rely in
purchasing the Receivables [and on which the Insurer will rely in issuing the
Note 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. The Depositor 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 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. The Depositor is duly qualified to do
business as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of its property or the conduct of its
business requires such qualification.
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(c) Power and Authority. The Depositor has the power and authority
to execute and deliver this Agreement and its Related Documents and to
carry out its terms and their terms, respectively; and the execution,
delivery and performance of this Agreement and the Depositor's Related
Documents have been duly authorized by the Depositor by all necessary
action.
(d) Valid Sale; Binding Obligations. This Agreement and the
Depositor's Related Documents have been duly executed and delivered, and
this Agreement and the Depositor's Related Documents constitute legal,
valid and binding obligations of the Depositor enforceable in accordance
with their respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on
the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the Related Documents, and the fulfillment of the
terms of this Agreement and the Related Documents, will not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice, lapse of time or both) a default under, the
limited liability company agreement of the Depositor, or any indenture,
agreement, mortgage, deed of trust or other instrument to which the
Depositor is a party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement, the Sale and Servicing Agreement
and the Indenture, or violate any law, order, rule or regulation
applicable to the Depositor of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or any of its
properties.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the Depositor's knowledge, threatened against the
Depositor, before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality having jurisdiction over
the Depositor or its properties (i) asserting the invalidity of this
Agreement or any of the Related Documents, (ii) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by the Depositor 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.
In the event of any breach of a representation and warranty made by
the Depositor hereunder, the 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
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securities issued by the Depositor, or a trust or similar vehicle formed by the
Depositor, have been paid in full. The Originator and the Depositor agree that
damages will not be an adequate remedy for such breach and that this covenant
may be specifically enforced by Issuer or by the Indenture Trustee on behalf of
the Noteholders and Owner Trustee on behalf of the Certificateholder.
ARTICLE IV.
COVENANTS OF SELLER
Section 4.1 Protection of Title of the Depositor.
(a) At or prior to the Closing Date, the Originator will have filed
or caused to be filed UCC-1 financing statements, (i) naming the
Originator as seller or debtor and naming the Depositor as purchaser or
secured party, (ii) naming the Depositor as seller or debtor and the
Issuer as purchaser or secured party and (iii) naming Issuer as debtor and
Indenture Trustee as secured party and describing the Receivables and the
Other Conveyed Property being transferred as collateral, in such locations
as are required in order to perfect the transfers and pledges thereof
under the Basic Documents. From time to time thereafter, the 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 the Depositor under this Agreement, of the Issuer under
the Sale and Servicing Agreement and of the Indenture Trustee under the
Indenture in the Receivables and the Other Conveyed Property and in the
proceeds thereof. The Originator will deliver (or cause to be delivered)
to the Depositor, the Indenture Trustee [and the Insurer] file-stamped
copies of, or filing receipts for, any document filed as provided above,
as soon as available following such filing. In the event that the
Originator fails to perform its obligations under this subsection, the
Depositor, Issuer or the Indenture Trustee may do so, at the expense of
the Originator. In furtherance of the foregoing, the Originator hereby
authorizes the Depositor, the Issuer or the Indenture Trustee to file a
record or records (as defined in the applicable UCC), including financing
statements, in all jurisdictions and with all filing offices as each may
determine, in its sole discretion, are necessary or advisable to perfect
the security interest granted to the Depositor pursuant to Section 6.9.
Such financing statements may describe the collateral in the same manner
as described herein or may contain an indication or description of
collateral that describes such property in any other manner as such party
may determine, in its sole discretion, is necessary, advisable or prudent
to ensure the perfection of the security interest in the collateral
granted to the Depositor herein.
(b) The 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 the
Originator (or by the Depositor, Issuer or the Indenture Trustee on behalf
of the 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 the Depositor, Issuer[, Insurer] and the Indenture Trustee
at least 60 days'
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prior written notice thereof, and will promptly file appropriate
amendments to all previously filed financing statements and continuation
statements.
(c) The 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, the 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 Cutoff Date. The Originator
will maintain its computer systems so that, from and after the time of
transfer under this Agreement of the Receivables to the Depositor and the
conveyance of the Receivables by the Depositor to the Issuer, the
Originator's master computer records (including archives) that will refer
to a Receivable indicate clearly that such Receivable has been transferred
to the Depositor and has been conveyed by the Depositor to Issuer.
Indication of the Issuer's ownership of a Receivable will be deleted from
or modified on the 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 the 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, the
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 and under the other Basic Documents, the 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 the Depositor will not sell, pledge, assign or transfer
to any other Person, or grant, create, incur, assume or suffer to exist any Lien
on the Receivables or the Other Conveyed Property or any interest therein, and
the Originator will defend the right, title, and interest of the Depositor and
the Issuer in and to the Receivables and the Other Conveyed Property against all
claims of third parties claiming through or under the Originator and the
Depositor will defend the right, title, and interest of the Issuer in and to the
Receivables and the Other Conveyed Property against all claims of third parties
claiming through or under the Depositor.
Section 4.4 Costs and Expenses. Each of the Originator and the
Depositor will pay all reasonable costs and disbursements in connection with the
performance of its obligations hereunder and under its Related Documents.
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Section 4.5 Indemnification by the Originator. (a) The Originator
will defend, indemnify and hold harmless the Depositor, the Issuer, the
Indenture Trustee, the Backup Servicer, the Owner Trustee, the Noteholders [and
the Insurer] from and against any and all costs, expenses, losses, damages,
claims, and liabilities, arising out of or resulting from: (i) any breach of any
of the Originator's representations and warranties contained herein, (ii) the
use, ownership or operation by the 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 the Originator in the
performance of its duties under this Agreement or by reason of reckless
disregard of the Originator's obligations and duties under this Agreement.
(b) The Originator will defend, indemnify and hold harmless the
Issuer, the Indenture Trustee, the Backup Servicer, the Owner Trustee, the
Depositor, 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 the
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 the Originator
may otherwise have.
Section 4.6 Indemnification by the Depositor. (a) The Depositor will
defend, indemnify and hold harmless the Originator, the Issuer, the Indenture
Trustee, the Backup Servicer, the Owner Trustee, the Noteholders [and the
Insurer] from and against any and all costs, expenses, losses, damages, claims,
and liabilities, arising out of or resulting from: (i) any breach of any of the
Depositor's representations and warranties contained herein, (ii) the use,
ownership or operation by the Depositor or any affiliate thereof of a Financed
Vehicle, (iii) any action taken, or failed to be taken, by it in respect of the
Receivables other than in accordance with this Agreement or the Sale and
Servicing Agreement or (iv) the negligence (except for errors in judgment),
willful misfeasance, or bad faith of the Depositor in the performance of its
duties under this Agreement or by reason of reckless disregard of the
Depositor's obligations and duties under this Agreement.
(b) The Depositor will defend, indemnify and hold harmless the
Issuer, the Indenture Trustee, the Backup Servicer, the Owner Trustee, the
Noteholders [and the Insurer] from and against any and all costs, expenses,
losses, damages, claims, and liabilities, arising out of or resulting from any
Taxes which may at any time be asserted against such Persons with respect to the
transactions contemplated by this Agreement, including (i) the conveyance or
ownership of 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
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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 the
Depositor under this Agreement or imposed against such Persons.
Indemnification under this Section 4.6 will include reasonable fees
and expenses of counsel and expenses of litigation and will survive payment of
the Notes and the Certificate and termination of this Agreement. The indemnity
obligations hereunder will be in addition to any obligation that the Depositor
may otherwise have.
ARTICLE V.
REPURCHASES
Section 5.1 Repurchase of Receivables Upon Breach of Warranty. Upon
the occurrence of a Repurchase Event, the 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, the 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 4.5(a)(i) and
Section 6.1, the obligation of the 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 the Originator for such breach
available to the Depositor, the Issuer, [the Insurer,] the Backup Servicer, the
Noteholders, the Certificateholder, the Indenture Trustee on behalf of the
Noteholders or the Owner Trustee on behalf of the Certificateholder. This
Section 5.1 is intended to grant the Issuer and the Indenture Trustee a direct
right against the Originator to demand performance hereunder, and in connection
therewith, the Originator waives any requirement of prior demand against the
Depositor with respect to such repurchase obligation. Any such repurchase will
take place in the manner specified in Section 3.2 of the Sale and Servicing
Agreement. Notwithstanding any other provision of this Agreement or the Sale and
Servicing Agreement to the contrary, the obligation of the Originator under this
Section 5.1 will not terminate upon a termination of the 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 the Depositor to
perform any of their respective obligations with respect to such Receivable
under the Sale and Servicing Agreement.
Without limitation of the foregoing and notwithstanding whether the
related Receivable will have been purchased by the Originator, the Originator
will indemnify the Depositor, [the Issuer,] the Indenture Trustee, the Backup
Servicer, the Owner Trustee, [the Insurer,] the Noteholders and the
Certificateholder from and against all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such Repurchase Events.
Section 5.2 Reassignment of Purchased Receivables. Upon deposit in
the Collection Account of the Purchase Amount of any Receivable repurchased by
the Originator under Section 5.1, the Issuer and the Indenture Trustee will take
such steps as may be reasonably
10
requested by the Originator in order to assign to the 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 the 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 and the Indenture Trustee
will, at the expense of the Originator, take such steps as the 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 the
Depositor, or the Issuer as assignee of the Depositor, in exercising any power,
right or remedy under this Agreement will operate as a waiver thereof, nor will
any single or partial exercise of any such power, right or remedy preclude any
other or future exercise thereof or the exercise of any other power, right or
remedy.
ARTICLE VI.
MISCELLANEOUS
Section 6.1 Liability of the Originator and the Depositor. Each of
the Originator and the Depositor will be liable in accordance herewith only to
the extent of the obligations in this Agreement specifically undertaken by each
of the Originator, and the Depositor, respectively and the representations and
warranties of each of the Originator and the Depositor, respectively.
Section 6.2 Merger or Consolidation of the Originator or the
Depositor. Any corporation, limited liability company or other entity (i) into
which the Originator or the Depositor may be merged or consolidated, (ii)
resulting from any merger or consolidation to which the Originator or the
Depositor is a party or (iii) succeeding to the business of the Originator or
the Depositor, in the case of the Depositor, which corporation, limited
liability company or other entity has a certificate of incorporation or limited
liability company agreement containing provisions relating to limitations on
business and other matters substantively identical to those contained in the
Depositor's limited liability company agreement, provided that in any of the
foregoing cases such corporation or other entity will execute an agreement of
assumption to perform every obligation of the Originator or the Depositor, as
the case may be, under this Agreement and, whether or not such assumption
agreement is executed, will be the successor to the Originator or the Depositor,
as the case may be, hereunder (without relieving the Originator or the Depositor
of their responsibilities hereunder, if it survives such merger or
consolidation) without the execution or filing of any document or any further
action by any of the parties to this Agreement. [Notwithstanding the foregoing,
so long as no Insurer Default has occurred and is continuing, the Depositor will
not merge or consolidate with any other Person or permit any other Person to
become the successor to the Depositor's business without the prior written
consent of the Insurer.] The Originator or the Depositor will promptly inform
the other party hereto, the Issuer, the Indenture Trustee, the Owner Trustee
[and, so long as no Insurer Default
11
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 than subsection
(e) thereof in connection with a change in control as provided in the Insurance
Agreement)] and 3.2 will have been breached (for purposes hereof, such
representations and warranties must be true and correct as of the date of the
consummation of such transaction) [and with respect to a transaction involving
the Depositor, no event that, after notice or lapse of time, or both, would
become an event of default under the Insurance Agreement, has occurred and is
continuing,] (y) with respect to a transaction involving the Depositor, the
Depositor will have delivered written notice of such consolidation, merger or
purchase and assumption to the Rating Agencies prior to the consummation of such
transaction and will have delivered to the Issuer[, the Insurer] and the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section 6.2 and that all conditions precedent, if
any, provided for in this Agreement relating to such transaction have been
complied with, and (z) the Originator or the Depositor, as applicable, will have
delivered to the Issuer and the Indenture Trustee an Opinion of Counsel,
stating, in the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary to preserve and protect the interest of the Issuer and the
Indenture Trustee in the Receivables and reciting the details of the filings or
(B) no such action will be necessary to preserve and protect such interest.
Section 6.3 Limitation on Liability of the Originator, and the
Depositor and Others. The Originator, the Depositor and any director, officer,
employee or agent thereof may rely in good faith on the advice of counsel or on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement. Neither the
Originator nor the Depositor will 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 The Originator May Own Notes or the Certificate. Subject
to the provisions of the Basic Documents, the Originator and any Affiliate of
the 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 the Originator or an Affiliate thereof.
Section 6.5 Amendment.
(a) This Agreement may be amended by the Originator and the
Depositor [with the prior written consent of the Insurer (so long as no
Insurer Default has occurred and is continuing) but] without the consent
of the Indenture Trustee, the Owner Trustee, the Certificateholder or any
of the Noteholders (i) to cure any ambiguity or (ii) to correct any
provisions in this Agreement; provided, however, that such action will
not, as evidenced by an Opinion of Counsel delivered to the Issuer, the
Owner Trustee and the Indenture Trustee, adversely affect in any material
respect the interests of any Certificateholder or Noteholder.
12
(b) This Agreement may also be amended from time to time by the
Originator and the Depositor, with the prior written consent of the
Controlling Party, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement.
(c) Prior to the execution of any such amendment or consent, the
Originator will have furnished written notification of the substance of
such amendment or consent to each Rating Agency.
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: General Counsel
If to the Depositor:
Triad Financial Special Purpose LLC
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
or such other address as will be designated by a party in a written notice
delivered to the other party or to the Issuer, the 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.
13
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 the Originator and the Depositor that they intend that
the assignments and transfers herein contemplated constitute sales and
assignments outright, and not for security, of the Receivables and the
Other Conveyed Property, conveying good title thereto free and clear of
any Liens, from the Originator to the Depositor and that the Receivables
and the Other Conveyed Property will not be a part of the 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, the Originator. If such conveyance
is determined to be made as security for a loan made by the Depositor, the
Issuer, the Noteholders or the Certificateholder to the Originator the
parties intend that the Originator will have granted to the Depositor a
security interest in all of the Originator's right, title and interest,
respectively, in and to:
(1) the Receivables and all moneys received thereon after the
Cutoff Date,
(2) the Other Conveyed Property conveyed to the Depositor by
the 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 interest of the Originator or
the Depositor in such Financed Vehicles, (b) any proceeds and the right to
receive any proceeds with respect to the Receivables from claims on any
physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors and any proceeds from the liquidation of the
Receivables, (c) the right to cause the related Dealer or a Third-Party
Lender to repurchase Receivables pursuant to a Dealer Agreement or an Auto
Loan Purchase and Sale Agreement, respectively, as a result of the breach
of representation or warranty in the related Dealer Agreement or Auto Loan
Purchase and Sale Agreement, respectively, (d) all rights, if any, to
refunds for the costs of any Service Contracts on the related Financed
Vehicles, (e) the related Receivables Files and (f) the proceeds of any
and all of the foregoing, and
(3) all proceeds and investments with respect to items (1) and
(2) above.
(b) This Agreement will constitute a security agreement under
applicable law.
Section 6.10 Governing Law. This Agreement will be construed in
accordance with the laws of the State of New York without regard to the
principles of conflicts of laws
14
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. The Originator acknowledges that the Depositor intends,
pursuant to the Sale and Servicing Agreement, to convey the Receivables and the
Other Conveyed Property, together with its rights under this Agreement, to the
Issuer on the date hereof. The 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 the Originator contained in
this Agreement and the rights of the Depositor hereunder are intended to benefit
[the Insurer,] the Issuer, the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholder. In furtherance of the foregoing, the
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, the 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 the Related Documents)
and that the Indenture Trustee may enforce the duties and obligations of the
Originator under this Agreement against the Originator for the benefit of [the
Insurer,] the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholder.
Section 6.13 Nonpetition Covenant. The 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 Depositor or the Issuer
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Depositor or the Issuer or any substantial part of their
respective property, or ordering the winding up or liquidation of the affairs of
the Depositor or the Issuer.
Section 6.14 Payment Obligations of the Depositor Limited.
Notwithstanding anything to the contrary herein, the payment obligations of the
Depositor are limited to the extent it has funds available to make such payment.
15
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 ___________________________________
Name:
Title:
TRIAD FINANCIAL SPECIAL PURPOSE LLC,
as Depositor
By ___________________________________
Name:
Title:
Accepted:
[INDENTURE TRUSTEE],
as Indenture Trustee
By: ______________________________________
Name:
Title:
[Signature page to Purchase Agreement]
SCHEDULE A
SCHEDULE OF RECEIVABLES
SCHEDULE B
REPRESENTATIONS AND WARRANTIES
OF THE ORIGINATOR
1. Characteristics of Receivables. Each Receivable (A) was originated (i)
by the Originator, (ii) by a Dealer and purchased by the Originator from such
Dealer under an existing Dealer Agreement or pursuant to a Dealer Assignment
with the Originator and was validly assigned by such Dealer to the Originator
pursuant to a Dealer Assignment, or (iii) by a Third-Party Lender and purchased
by the Originator from such Third-Party Lender under an existing Auto Loan
Purchase and Sale Agreement or pursuant to a Third-Party Lender Assignment with
the Originator and was validly assigned by such Third-Party Lender to the
Originator pursuant to a Third-Party Lender Assignment, (B) was originated by
the Originator, such Dealer or such Third-Party Lender for the retail sale of a
Financed Vehicle in the ordinary course of the Originator's, the Dealer's or the
Third-Party Lender's business, in each case, in accordance with the Originator's
credit policies and was fully and properly executed by the parties thereto, and
the Originator, each Dealer and each Third-Party Lender had all necessary
licenses and permits to originate Receivables in the state where the Originator,
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 are 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 the
Originator, (ii) by a Dealer and was sold by the Dealer to the Originator, or
(iii) by a Third-Party Lender and was sold by the Third-Party Lender to the
Originator, and was transferred by the Originator to the Depositor and by the
Depositor to the Issuer without any fraud or misrepresentation on the part of
the Originator, the Depositor, such Dealer or Third-Party Lender in any case.
3. Compliance with Law. All requirements of applicable federal, state and
local laws, and regulations thereunder (including, without limitation, usury
laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Xxxx-Xxxxxxxx Warranty Act,
the Federal Reserve Board's Regulations "B" and "Z" (including amendments to the
Federal Reserve's Official Staff Commentary to Regulation Z, effective October
1, 1998, concerning negative equity loans), the Servicemembers Civil Relief Act,
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
Servicemembers Civil Relief Act, 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 Cutoff Date no Obligor had been identified
on the records of the Originator 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 Cutoff Date.
9. Marking Records. By the Closing Date, the Originator will have caused
the portions of the Electronic Ledger relating to the Receivables to be clearly
and unambiguously marked to show that the Receivables have been sold to the
Depositor by the Originator and sold by the Depositor to the Issuer in
accordance with the terms of the Sale and Servicing Agreement.
10. Computer Tape. The Computer Tape made available by the Originator to
the Issuer on the Closing Date, was complete and accurate as of the 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 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
SCH B-2
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 Servicemembers Civil Relief Act, 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
the Originator, the Depositor, and the Issuer, 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, the Originator or the Depositor, as
the case may be, to any Person other than the Originator, the Depositor and the
Issuer, as the case may be. Immediately prior to the conveyance of the
Receivables to the Depositor pursuant to this Agreement, as applicable, the
Originator was the sole owner thereof and had good title thereto, free of any
Lien and, upon execution and delivery of this Agreement by the Originator, the
Depositor will have good title to and will be the sole owner of such
Receivables, free of any Lien, and upon execution and delivery of the Sale and
Servicing Agreement by the Depositor, the Issuer will have good title to and
will be the sole owner of the Receivables, free and clear from any Lien (other
than the Lien of the Indenture). No Dealer or Third-Party Lender has an unpaid
participation in, or other right to receive, proceeds of any Receivable. Neither
the Originator nor the Depositor has 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, or that such Receivable has been assigned to the
Originator, as the holder of a first priority security interest in such Financed
Vehicle. With respect to each Receivable for which the Lien Certificate has not
yet been returned from the Registrar of Titles, the Originator has applied for
or received written evidence from the related Dealer or Third-Party Lender that
such Lien Certificate showing the Originator as first lienholder has been
applied for and the Originator's security interest has been validly assigned by
the Originator to the Depositor pursuant to this Agreement and by the Depositor
to the Issuer pursuant to the Sale and Servicing Agreement.
SCH B-3
Immediately after the sale, transfer and assignment thereof by the Originator to
the Depositor and by the Depositor to the Issuer, 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 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 Issuer 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. Neither the Originator nor the Depositor has 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 Issuer, [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 the Originator 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 the
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 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 the
Originator or a purchase of a Receivable by the Originator from a Dealer or
Third-Party Lender, each Financed Vehicle was covered by a comprehensive and
collision insurance policy (i) subject to maximum deductibles of $_____ for
collision coverage and $_____ for comprehensive coverage, (ii) naming the
Originator 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 the Originator and its
successors and assigns as additional insured parties, and each
SCH B-4
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
Cutoff Date.
25. Past Due. At the Cutoff Date no Scheduled Receivable Payment was more
than __ days past due.
26. Remaining Principal Balance. At the 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 __ months and not
less than __ months; (B) each Receivable had an original maturity of not more
than __ months; (C) not more than __% of Receivables (calculated by Aggregate
Principal Balance) will have an original term to maturity of __ months; (D) each
Receivable had a remaining Principal Balance as of the Cutoff Date of at least
$_____ and not more than $_____; and (E) each Receivable has an Annual
Percentage Rate of at least ___% and not more than ___%.
SCH B-5
