exv10w17






EXHIBIT 10.17



EXECUTION VERSION






TRIAD FINANCIAL CORPORATION




Senior Unsecured Demand Promissory Note




			
	 	 	 
	U.S.$49,500,000
	 	New York, New York
	 
	 	May 11, 2008






          FOR VALUE RECEIVED, the undersigned, Triad Financial Corporation, a corporation organized
under the laws of California (together with its successors and permitted assigns, the
“Company”), hereby promises to pay to the order of Hunter’s Glen/Ford Ltd., a limited
partnership organized under the laws of the State of Texas (together with its successors and
permitted assigns, the “Holder”), in lawful money of the United States of America, in
immediately available funds, on the earlier of (x) the twelve-month anniversary of this Note and
(y) the date fourteen days after receipt of demand for payment (such date, the “Maturity
Date”) or any earlier date upon which this Note becomes due and payable pursuant to the terms
hereof, the principal sum of FORTY-NINE MILLION AND FIVE-HUNDRED THOUSAND United States Dollars
($49,500,000) or such lesser principal amount as shall at the time be outstanding hereunder,
together with interest from the date hereof on the unpaid amount owing hereunder until payment in
full at a rate of interest per annum equal to the lesser of (i) the maximum lawful rate of interest
in effect at such time under applicable law and (ii) twenty percent (20%) per annum, compounded
quarterly. Interest shall be calculated on the basis of a year of 360 days and shall accrue on the
outstanding principal amount of this Note and, to the extent permitted by law, on any accrued but
unpaid interest thereon until all payments hereunder have been irrevocably paid in full. If the
Company fails to make any payment hereunder when due, interest will accrue on the outstanding
principal amount of this Note and, to the extent permitted by law, on the unpaid amount of such
defaulted payment at a rate of interest equal to the lesser of (i) the maximum lawful rate of
interest in effect at such time under applicable law and (ii) 2% above the rate of interest
otherwise due pursuant to clause (ii) of the preceding sentence of this Note. As used herein, the
term “Note” includes this Note and any Note issued, in whole or in part, in exchange
herefor or in replacement hereof.




          1. Borrowings.




          (a) As of the date hereof, the Holder has made loans to the Company in a principal amount
equal to $35,500,000.




          (b) It is anticipated that, on or prior to May 13, 2008, the Holder shall make loans to the
Company in a principal amount equal to $14,000,000.




          2. Payment of Interest and Principal of Note.




          (a) Payments due hereunder are to be made by wire transfer to such bank account of the Holder
as the Holder may from time to time designate, in lawful money of the United States of America.




          (b) The principal amount of this Note shall be due and payable on the Maturity Date. Accrued
and unpaid interest shall be due and payable on the last day of each March, June, September and
December to occur while the Note is outstanding.




          (c) The Company may prepay this Note, in whole or in part, at any time, without premium or
penalty. Each such prepayment shall be accompanied by payment of all interest accrued to
the date of payment on the amount so prepaid. Any payment made under this Note shall be
applied first to interest accrued and unpaid on the outstanding principal balance as of such date.




-1-









 








          3. Representations and Warranties. The Company represents and warrants to Holder
that:




          (a) the Company is duly organized and in good standing under the laws of the state of its
formation or organization and has the power to own its property and to carry on its business in
each jurisdiction in which it operates; and




          (b) the Note is a legal, valid and binding obligation of the Company, enforceable in
accordance with its terms.




          4. Restriction on Subordinated Indebtedness. The Company covenants and agrees that
until it has paid to the Holder in full all amounts owing in respect of this Note, the Company
shall not create, incur, issue, assume or guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to any subordinated indebtedness unless such
indebtedness is contractually subordinated in right of payment to the Note on terms reasonably
satisfactory to the Holder.




          5. Events of Default. If any one or more of the following events, herein called
“Events of Default”, shall occur, for any reason whatsoever, and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to
or in compliance with any judgment, decree or order of a court of competent jurisdiction or any
order, rule or regulation of any administrative or other governmental authority, and such Event of
Default shall be continuing:




          (a) default shall be made in the payment of the principal of this Note when and as the same
shall become due and payable, whether at maturity or by acceleration or otherwise; or




          (b) default shall be made in the payment of any installment of interest on this Note according
to its terms when and as the same shall become due and payable; or




          (c) default shall be made in the due observance or performance of any other covenant,
condition or agreement on the part of the Company to be observed or performed pursuant to the terms
of this Note, and such default shall continue for thirty (30) days after written notice thereof,
specifying such default and requesting that the same be remedied, shall have been given to the
Company by the Holder; or




          (d) the entry of a decree or order for relief by a court having jurisdiction in the premises
in respect of the Company in an involuntary case under the Bankruptcy Reform Act of 1978 of the
United States of America, as amended, 11 U.S.C. Sections 101, et seq. (the “Bankruptcy
Code”) or any other applicable federal or state bankruptcy, insolvency or other similar laws,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of its property, or ordering the winding-up or
liquidation of any of its affairs and the continuance of any such decree or order unstayed and in
effect for a period of sixty (60) consecutive days; or




          (e) the commencement by the Company of a voluntary case under the Bankruptcy Code or any other
applicable federal or state bankruptcy, insolvency or other similar laws, or the consent by it to
the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or for any substantial part of its
property, or the making by it of any assignment for the benefit of creditors, or the admission by
the Company in writing
of its inability to pay its debts generally as such debts become due, or the taking of
corporate action by the Company in furtherance of any such action; or




-2-









 








          (f) the Company or any of its subsidiaries shall (i) default in making any payment of any
principal of any indebtedness for borrowed money (including, without limitation, any guarantee of
any such indebtedness) on the scheduled original due date (giving effect to any amendment,
modification or waiver, contemplated as of the date hereof, to the warehouse or residual credit
facilities arranged by Citigroup Group Global Markets Realty Corp. or any of its affiliates) with
respect thereto, (ii) default in making any payment of any interest on any such indebtedness beyond
the period of grace, if any, provided in the instrument or agreement (as in effect on the date
hereof and without giving effect to any amendment, modification or waiver thereto that adversely
effects the Holder unless the Holder provides prior written consent to such amendment, modification
or waiver, other than any amendment, modification or waiver, contemplated as of the date hereof, to
the warehouse or residual credit facilities arranged by Citigroup Group Global Markets Realty Corp.
or any of its affiliates), under which such indebtedness was created, or (iii) default in the due
observance or performance of any other covenant, condition or agreement relating to any such
indebtedness or contained in any instrument or agreement (as in effect on the date hereof without
giving effect to any amendment, modification or waiver thereto that adversely effects the Holder
unless the Holder provides prior written consent to such amendment, modification or waiver, other
than any amendment, modification or waiver, contemplated as of the date hereof, to the warehouse or
residual credit facilities arranged by Citigroup Group Global Markets Realty Corp. or any of its
affiliates), evidencing, securing or relating thereto, or (iv) any other event shall occur or
condition exist, the effect of which default or other event or condition is to cause, or to permit
the holder or beneficiary of such indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, without the giving of notice if required, such indebtedness to become due
prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor
thereunder or (in the case of any indebtedness constituting a guarantee obligation) to become
payable;



then, in addition to all other rights and remedies available to the Holder at law or in equity or
otherwise, (i) if an Event of Default set forth in clauses (d) or (e) of this Section 5 shall occur
and be continuing, or shall exist, this Note automatically shall become immediately due and
payable, together with interest accrued thereon, without presentment, demand, protest or notice of
any kind, all of which are expressly waived to the fullest extent permitted by law and (ii) if an
Event of Default other than an Event of Default set forth in clauses (d) or (e) of this Section 5
shall occur and be continuing, or shall exist, Holder may, at its option, by notice to the Company,
declare this Note to be, and this Note shall thereupon be and become, immediately due and payable,
together with interest accrued thereon, without presentment, demand, protest or other notice of any
kind, all of which are expressly waived to the fullest extent permitted by law.




          6. Remedies on Default, etc. If an Event of Default has occurred and is continuing,
the Holder may proceed to protect and enforce its rights by a suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any agreement contained in
this Note, or for an injunction against a violation of any of the terms hereof or in aid of the
exercise of any right, power or remedy granted hereby or by law, equity, statute or otherwise. No
course of dealing and no delay on the part of the Holder in exercising any right, power or remedy
will operate as a waiver thereof or otherwise prejudice the Holder’s rights, powers or remedies.
No right, power or remedy conferred hereby is exclusive of any other right, power or remedy
referred to herein or now or hereafter available at law, in equity, by statute or otherwise. To
the fullest extent permitted by applicable law, the Company hereby agrees to waive, and does hereby
absolutely and irrevocably waive diligence, demand for payment, presentment, notice of dishonor and
protest of this Note and notice of any kind, and the right to interpose any defense, set-off or
counterclaim of any nature or description in any action or proceeding arising on, out of, under or
by reason of this Note.




          7. Miscellaneous.




          (a) Neither this Note nor any term hereof may be amended or waived orally or in writing,
except that any term of this Note may be amended and the observance of any term of this Note





-3-









 







may be
waived (either generally or in a particular instance and either retroactively or prospectively)
with (but only with) the written consent of the Company and the Holder. This Note shall inure to
the benefit of the Holder of this Note and the Company and their respective successors and assigns
and be binding upon the Holder of this Note and the Company and their respective successors and
assigns.




          (b) Any notice or communication must be given in writing or delivered in person, or by
overnight courier, or by facsimile addressed as follows:




          (i) if to the Company:



Triad Financial Corporation

5201 Rufe Snow Drive

North Richland Hills, TX 76180

Telecopy: (817) 605-5288

Attention: Corporate Secretary



With a copy to:



Triad Financial Corporation

7711 Center Avenue, Suite 100

Huntington Beach, California 92647

Telecopy: (714) 934-6062

Attention: Corporate Secretary




          (ii) if to the Holder, at the address specified in writing by the Holder,



or at such other address and to the attention of such other person as the Company or the Holder may
designate by written notice to the other. Any such notice or communication is effective (x) when
received, if delivered in person or by facsimile, or (y) on the next business day, if delivered by
overnight courier.




          (c) The Holder may sell, transfer, assign, encumber or otherwise dispose of this Note in whole or
in part, other than as may be prohibited by applicable law. The Company shall maintain a register
for the recordation of the name and address of the Holder, and the principal amount of the Note
owing to the Holder pursuant to the terms hereof from time to time (the “Register”). The
Register shall be available for inspection by the Holder at any time.




          (d) The Company shall pay all reasonable out-of-pocket expenses incurred by the Holder,
including fees and disbursements of counsel for the Holder, in connection with the enforcement of
this Note.




          (e) This Note is governed by and shall be construed and enforced in accordance with the laws
of the State of New York for contracts made and wholly performed within that state and shall be
construed as if drafted equally by the Company and the Holder. The Company hereby submits to the
exclusive personal jurisdiction of the courts of the State of New York and the federal courts of
the United States sitting in New York County, and any appellate court from any such state or
federal court, and hereby irrevocably and unconditionally agrees that any action or proceeding
relating to this Note shall be exclusively heard and determined in such New York court or, to the
extent permitted by law, in such federal court. The Company agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit
on the judgment or in any other manner
provided by law. The Company hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of




-4-









 







venue of any action or proceeding arising out of or relating to this Note or any
related matter in any New York state or federal court located in New York County and the defense of
an inconvenient forum to the maintenance of such action or proceeding in any such court. The
Company hereby irrevocably consents to service of process by registered mail, return receipt
requested, as provided hereinabove. Nothing in this Note will affect the right of the Holder to
serve process in any other manner permitted by law.




          (f) The Company’s obligations under this Note are absolute and unconditional and shall not be
subject to any defense, setoff or counterclaim that may at any time be available to or be asserted
by the Company. The Company hereby waives, and agrees not to assert, any right to offset or
interpose as a defense or counterclaim any claim against the Holder against its obligations under
this Note.




          (g) No failure or delay on the part of the Holder in exercising any power or right hereunder,
and no course of dealing between the Company and the Holder of this Note, shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.




          (h) As used in this Note, the term “business day” means any day that is not a Saturday, Sunday
or other day on which the commercial banks in New York City, New York are authorized or required by
applicable law to remain closed.




          (i) (x) Should any provision of this Note be judicially declared to be invalid, unenforceable
or void, such decision will not have the effect of invalidating or voiding the remainder of this
Note, and the parties hereto agree that the provision of this Note so held to be invalid,
unenforceable or void will be deemed to have been stricken herefrom and the remainder will have the
same force and effectiveness as if such provision had never been included herein (provided, however
the parties hereto shall use their best efforts replace the provision so deemed to have been
stricken herefrom with a provision that the parties reasonably believe to be valid and enforceable
and which has a substantially identical economic and legal effect as the provision so deemed to
have been stricken herefrom) or (y) should any part of the indebtedness borrowed pursuant to the
Note not be permitted by applicable law or by the terms of the organizational documents of any
party or any contract or constitute or result in any violation, breach or default of or under, or
which would give another person or persons the right to accelerate the performance of, or the right
to cancel or terminate, or which would result in the loss of any benefit or rights under, any
instrument or agreement, or the creation or imposition of any lien or encumbrance on any of the
Company’s properties or assets (any such contingency, a “Default”), the Company and the
Holder shall use their best efforts to amend, restructure or modify the indebtedness and the Note
in such a manner as to remove all legal impediments and eliminate all Defaults .






-5-









 








          IN WITNESS WHEREOF, the Company has caused this Note to be made, executed and delivered by its
duly authorized officer as of the day and year first written above.




	 	 	 	 	 
	 	TRIAD FINANCIAL CORPORATION

 	 
	 	By:  	/s/ Mike L. Wilhelms
 	 
	 	 	Name:  	Mike L. Wilhelms 	 
	 	 	Title:  	Senior Vice President & Chief Financial

Officer 	 
	 



[Senior Unsecured Demand Promissory Note — Signature Page]