PURCHASE AGREEMENT between TRIAD FINANCIAL CORPORATION Originator and TRIAD FINANCIAL SPECIAL PURPOSE LLC Depositor Dated as of October 18, 2006
EXHIBIT 10.1
between
TRIAD FINANCIAL CORPORATION
Originator
Originator
and
TRIAD FINANCIAL SPECIAL PURPOSE LLC
Depositor
Depositor
Dated as of October 18, 2006
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 | [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 Certificates | 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 | 15 | ||||||
| Section 6.11 | Counterparts | 15 | ||||||
| Section 6.12 | Conveyance of Receivables and Other Conveyed Property to the Issuer | 15 | ||||||
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| Page | ||||||||
| 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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THIS PURCHASE AGREEMENT, dated as of October 18, 2006 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 October 18, 2006 by
and among the Depositor, Triad Financial Corporation, in its individual capacity, as Custodian and
as Servicer, Triad Automobile Receivables Trust 2006-C, as Issuer, and Citibank, N.A., 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 October 18, 2006.
“Indenture Trustee” means Citibank, N.A., as Indenture Trustee and any successor
Indenture Trustee appointed and acting pursuant to the Indenture.
“Issuer” means Triad Automobile Receivables Trust 2006-C.
“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 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 Certificates, 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 Certificates, (y) transfer taxes arising in
connection with the transfer of the Notes or the Certificates 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
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 and 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; 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 Certificateholders.
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 §9-506 of the applicable UCC, unless the Originator will have given
the Depositor, Issuer, Insurer and the Indenture Trustee at
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least 60 days’ 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, the Certificateholders 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, the Certificateholders 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 Certificates, 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 Certificates 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, the Certificateholders 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, the Certificateholders 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
9
Agreement and (iii) the issuance and original sale of the
Notes and the issuance of the Certificates, 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 Certificates 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 Certificateholders, the Indenture Trustee on behalf of the
Noteholders or the Owner Trustee on behalf of the Certificateholders. This Section 5.1 is intended
to grant the Issuer and the Indenture Trustee on behalf of the Noteholders and the Insurer 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
Certificateholders 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
11
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 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 the Other
Conveyed Property 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 Certificates. 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 Certificates 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
Certificateholders 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
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
With a separate copy to:
Attention: General Counsel
If to the Depositor:
Triad Financial Special Purpose LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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 Certificateholders 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, whether now owned or existing or hereafter acquired
or arising, 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.
14
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. 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 Certificateholders. 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 Certificateholders 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 Certificateholders (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 Controlling Party may enforce the duties and
obligations of the Originator under this Agreement against the Originator for the benefit of the
Insurer, the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders.
Section 6.13 Nonpetition Covenant. The Originator will not, prior to the date that is one year and
one day after the termination of this Agreement, 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 | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||
| Name: | ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||
| Title: | Senior Vice President and | |||||
| Chief Financial Officer | ||||||
| TRIAD FINANCIAL SPECIAL PURPOSE LLC, | ||||||
| as Depositor | ||||||
| By | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||
| Name: | ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||
| Title: | Chief Financial Officer | |||||
| Accepted: | ||||
| CITIBANK, N.A., | ||||
| not in its individual capacity | ||||
| but solely as Indenture Trustee | ||||
By:
|
/s/ ▇▇▇▇ ▇▇▇▇▇▇ | |||
Name:
|
▇▇▇▇ ▇▇▇▇▇▇ | |||
Title:
|
Vice President | |||
[Signature page to Purchase Agreement]
SCHEDULE A
SCHEDULE OF RECEIVABLES
[Delivered to the Indenture Trustee at the Closing]
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 or
refinancing 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 have not
been 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 ▇▇▇▇-▇▇▇▇▇▇▇▇
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 believed to be 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. Tangible Chattel Paper. The Receivables constitute “tangible 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 such document which is required to be signed by the Obligor has been signed by the Obligor in
SCH B-2
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 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
SCH B-3
Agreement and by the Depositor to the Issuer pursuant to the Sale and Servicing Agreement.
Immediately after the sale, transfer and assignment thereof by the Originator to the Depositor and
by the Depositor to the 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 Liens are or may be 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 $1,000 for collision coverage and $1,000 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,
SCH B-4
naming the Originator 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. 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 30 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 73 months and not less than 1 month; (B) each Receivable
had an original maturity of not more than 73 months; (C) not more than 75% of Receivables
(calculated by Aggregate Principal Balance) will have an original term to maturity of 73 months;
(D) each Receivable had a remaining Principal Balance as of the Cutoff Date of at least $1,000 and
not more than $50,000; and (E) each Receivable has an Annual Percentage Rate of at least 6.00% and
not more than 27.00%.
SCH B-5