Document:

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EXHIBIT 4.4

AMBAC ASSURANCE CORPORATION

NOTE GUARANTY INSURANCE POLICY

Policy No. AB1038BE

	 	 	 
	Insured Party:

	 	The Indenture Trustee (as defined herein) for the
benefit of the Holders (as defined herein) of the
Triad Automobile Receivables Trust 2006-C
Asset-Backed Class A Notes, issued pursuant to the
Indenture.
	 
	 	 
	Insured Obligations:

	 	To the extent set forth herein, the aggregate
interest on and the aggregate outstanding principal
balance of all Class A Notes owned by Holders, such
principal amount not to exceed in the aggregate
$1,092,200,000.
	 
	 	 
	Policy Claim Amounts:

	 	(i) With respect to each Distribution Date, the
excess, if any, without duplication, of (a) the
Scheduled Payment minus (b) the sum of, without
duplication: (w) all amounts of Available Funds for
the related Collection Period, (x) Additional Funds
Available, if any, for such Distribution Date, (y)
all other funds on deposit in the Collection
Account, the Lockbox Account, the Spread Account and
any other Trust Accounts available for payment of
Scheduled Payments on the Class A Notes on such
Distribution Date and (z) any other amounts
available pursuant to the Basic Documents to pay the
Scheduled Payments on such Distribution Date, in
each case to the extent available in accordance with
the priorities set forth in the Indenture and the
Sale and Servicing Agreement, and (ii) with respect
to any Preference Payment Date, Preference Amounts;
provided, however, that the aggregate amount of all
such Preference Amounts shall be subject to the
limitations in such definition; provided, further,
that in no event shall the aggregate amount payable
by the Insurer under this Policy exceed the Maximum
Insured Amount.

     For consideration received, AMBAC ASSURANCE CORPORATION, a Wisconsin domiciled stock insurance
corporation (“Ambac” or the “Insurer”), in consideration of the payment of the
insurance premium payable with respect hereto, hereby unconditionally and irrevocably guarantees,
subject only to (i) proper presentation of a Notice in accordance with the terms of this Note
Guaranty Insurance Policy (together with each and every endorsement, if any, hereto, the “Policy”)
and (ii) the terms of the Policy, the payment to, or at the direction of, the Indenture Trustee,
for the benefit of the Holders of the Insured Obligations, that portion of the Policy Claim Amounts
which are Due for Payment but are unpaid by reason of Nonpayment.

     1. Definitions.

     Capitalized terms used herein and not otherwise defined shall have the meaning assigned to
them in the Insurance Agreement or, if not defined therein, in the Sale and Servicing

 

 

Agreement, or, if not defined therein, in the Indenture, without giving effect to any
subsequent amendment or modification thereto unless such amendment or modification has been
approved in writing by Ambac. For purposes of the Policy, the following terms shall have the
following meanings:

     “Affiliate” shall mean, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person. For the purposes
of this definition, “control” when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

     “Bankruptcy Code” shall mean Title 11 of the United States Code.

     “Basic Documents” shall mean the Sale and Servicing Agreement, the Certificate of
Trust, the Trust Agreement, the Purchase Agreement, the Insurance Agreement, the Indenture, and all
other documents and certificates delivered in connection therewith.

     “Business Day” shall mean a day other than a Saturday, a Sunday or other day on which
commercial banks located in the states of Delaware, California, or New York are authorized or
obligated to be closed.

     “Certificate of Trust” shall mean the certificate of trust of the Issuing Entity
substantially in the form attached as an Exhibit to the Trust Agreement.

     “Class A Notes” shall mean, collectively, the Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes and the Class A-4 Notes.

     “Class A-1 Notes” shall mean the Class A-1 5.3409% Asset Backed Notes, issued pursuant
to the Indenture and substantially in the form attached as an Exhibit to the Indenture.

     “Class A-2 Notes” shall mean the Class A-2 5.40% Asset Backed Notes, issued pursuant
to the Indenture and substantially in the form attached as an Exhibit to the Indenture.

     “Class A-3 Notes” shall mean the Class A-3 5.26% Asset Backed Notes, issued pursuant
to the Indenture and substantially in the form attached as an Exhibit to the Indenture.

     “Class A-4 Notes” shall mean the Class A-4 5.31% Asset Backed Notes, issued pursuant
to the Indenture and substantially in the form attached as an Exhibit to the Indenture.

     “Collection Account” shall mean the account designated as such, established and
maintained pursuant to Section 5.1 of the Sale and Servicing Agreement.

     “Collection Period” shall mean, (i) with respect to the First Distribution Date, the
period beginning on the close of business on September 30, 2006 and ending on the close of business
on October 31, 2006, and (ii) with respect to each subsequent Distribution Date, the period
beginning on the opening of business on the first day of the immediately preceding calendar month
and ending on the close of business on the last day of the immediately preceding calendar

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month. Any amount stated “as of the close of business on the last day of a Collection Period”
will give effect to the following calculations as determined as of the end of the day on such last
day: (i) all applications of collections and (ii) all distributions.

     “Depositor” shall mean Triad Financial Special Purpose LLC, a Delaware limited
liability company.

     “Distribution Date” shall mean, with respect to each Collection Period, the 12th day
of the following Collection Period, or, if such day is not a Business Day, the immediately
following Business Day, commencing November 13, 2006.

     “Due for Payment” shall mean, with respect to any Policy Claim Amounts, such amount as
is due and payable pursuant to the terms of the Indenture.

     “Final Scheduled Distribution Date” shall mean, with respect to (i) the Class A-1
Notes, the November 13, 2007 Distribution Date, (ii) the Class A-2 Notes, the January 12, 2010
Distribution Date, (iii) the Class A-3 Notes, the November 14, 2011 Distribution Date and (iv) the
Class A-4 Notes, the May 13, 2013 Distribution Date.

     “First Distribution Date” shall mean November 13, 2006.

     “Holder” shall mean any registered owner of a Class A Note (other than a Triad Party).

     “Indenture” shall mean that certain Indenture, dated as of October 18, 2006, by and
between the Issuing Entity and the Indenture Trustee.

     “Indenture Trustee” shall mean Citibank, N.A. not in its individual capacity but as
trustee under the Indenture, and its successors and assigns in such capacity.

     “Insurance Agreement” shall mean that certain Insurance and Indemnity Agreement, dated
as of October 18, 2006, among the Insurer, the Issuing Entity, Triad, as Sponsor and Servicer, the
Depositor and the Indenture Trustee, in regard to the Class A Notes, as such agreement may be
amended, modified or supplemented from time to time.

     “Insured Payments” shall mean, (i) with respect to any Distribution Date, the
aggregate amount actually paid by the Insurer to, or at the direction of, the Indenture Trustee in
respect of the Policy Claim Amounts for such Distribution Date and (ii) the aggregate amount of any
Preference Amounts paid by the Insurer on any given Business Day.

     “Insurer” shall mean Ambac, or any successor thereto, as issuer of this Policy.

     “Interest Period” shall mean, with respect to any Distribution Date, the period from
and including the preceding Distribution Date (or, in the case of the First Distribution Date, from
and including the Closing Date) to, but excluding, such Distribution Date.

     “Interest Rate” shall mean, with respect to (i) the Class A-1 Notes, 5.3409% per
annum, (ii) the Class A-2 Notes, 5.40% per annum, (iii) the Class A-3 Notes, 5.26% per annum and
(iv) the Class A-4 Notes, 5.31% per annum (in the case of the Class A-1 Notes, computed on the

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basis of a 360-day year and the actual number of days in the related Interest Period and, in
the case of the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, computed on the basis
of a 360-day year consisting of twelve 30-day months).

     “Issuing Entity” shall mean Triad Automobile Receivables Trust 2006-C, a Delaware
statutory trust.

     “Late Payment Rate” shall mean the lesser of (a) the greater of (i) the per annum rate
of interest publicly announced from time to time by Citibank, N.A. as its prime or base lending
rate (any change in such rate of interest to be effective on the date such change is announced by
Citibank, N.A.), plus 2% per annum and (ii) the then applicable highest rate of interest on the
Class A Notes and (b) the maximum rate permissible under applicable usury or similar laws limiting
interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days
elapsed over a year of 360 days.

     “Lockbox Account” shall mean an account maintained by the Lockbox Bank pursuant to
Section 4.2(d) of the Sale and Servicing Agreement.

     “Lockbox Bank” shall mean, initially, Mellon Bank, N.A. and its successors in
interest, and thereafter a depositary institution named by the Servicer and approved by the Insurer
(so long as no Insurer Default has occurred and is continuing) which provides a lockbox as part of
its normal and customary services at which the Lockbox Account is established and maintained as of
such date; provided, however, that upon the occurrence of a Servicer Termination Event, the
Controlling Party may, in its sole discretion, cause the Lockbox Account to be established at
another bank.

     “Maximum Insured Amount” shall mean $1,092,200,000 in respect of principal, plus
interest thereon calculated at the applicable Interest Rate for the Class A Notes.

     “Nonpayment” shall mean, with respect to any Distribution Date, Policy Claim Amounts
which are Due for Payment but have not been paid pursuant to the Indenture.

     “Notice” shall mean the telephonic or telegraphic notice, promptly confirmed in
writing by telecopy substantially in the form of Exhibit A or Exhibit B, as
applicable, to this Policy, the original of which is subsequently delivered by registered or
certified mail, from the Indenture Trustee specifying the amount of any Policy Claim Amount which
shall be due and owing.

     “Order” shall have the meaning given such term in Section 8 hereto.

     “Person” shall mean any individual, corporation, estate, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.

     “Preference Amount” shall mean any interest on or principal of the Class A Notes which
has become Due for Payment, the Nonpayment of which would have been covered by the Policy, and
which was made to a Holder by or on behalf of the Issuing Entity which has been deemed a
preferential transfer and recoverable, or theretofore recovered, from a Holder pursuant to the
Bankruptcy Code in accordance with a final, nonappealable order of a court of competent

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jurisdiction; provided that any Preference Amount that constitutes interest shall be
limited to the amount of interest on the outstanding principal amount of the Class A Notes
(calculated at the Interest Rate for the relevant class of Class A Notes) that has been deemed
recoverable, or has been recovered, from a Holder and shall not, in any event, include any interest
on such interest amount; provided, further, that in no event shall Ambac be
obligated to make any payment in respect to any Preference Amount to the extent that such payment,
when added to all prior payments of Policy Claim Amounts, would exceed the Maximum Insured Amount.

     “Preference Payment Date” shall have the meaning given such term in Section 8 hereto.

     “Purchase Agreement” shall mean the Purchase Agreement between Triad Financial Special
Purpose LLC and Triad, dated as of October 18, 2006, as such Purchase Agreement may be amended from
time to time.

     “Reimbursement Amount” shall mean, as of any Distribution Date, the sum of (x)(i) all
Insured Payments paid by Ambac, but for which Ambac has not been reimbursed prior to such
Distribution Date pursuant to Section 3.3 of the Insurance Agreement, Section 5.6 of the Indenture
and Section 5.7 of the Sale and Servicing Agreement, plus (ii) interest accrued on such
Insured Payments not previously repaid calculated at the Late Payment Rate from the date the
Indenture Trustee, or any other Person at its direction, received the related Insured Payments or
the date such Insured Payments were made, and (y) without duplication (i) any amounts then due and
owing to Ambac under the Insurance Agreement, Section 5.6 of the Indenture and Sections 5.7(a)(vi),
(vii) and (x) of the Sale and Servicing Agreement, as certified to the Indenture Trustee by Ambac
plus (ii) interest on such amounts at the Late Payment Rate.

     “Sale and Servicing Agreement” shall mean that certain Sale and Servicing Agreement,
dated as of October 18, 2006, by and among the Issuing Entity, the Depositor, Triad, as Servicer
and Custodian, and Citibank, N.A. as Indenture Trustee and Backup Servicer, as the same may be
amended or supplemented from time to time.

     “Scheduled Payments” shall mean, with respect to any Distribution Date, an amount
equal to the sum of (a) the Class A Noteholders’ Monthly Interest Distributable Amount and the
Class A Noteholders’ Parity Deficit Amount for the related Distribution Date and, without
duplication, (b) if the related Distribution Date is the Final Scheduled Distribution Date for any
class of Class A Notes, the outstanding principal amount of such Class on such date after
application of all funds available to pay principal amounts on such Class of Class A Notes from all
sources other than the Policy; provided that Scheduled Payments shall not include (x) any
portion of a Class A Noteholders’ Monthly Interest Distributable Amount or of a Class A
Noteholders’ Interest Carryover Amount due to Holders because the Notice in proper form was not
timely received by Ambac, or (y) any portion of a Class A Noteholders’ Interest Distributable
Amount due to Holders representing interest on any Class A Noteholders’ Interest Carryover Amount
accrued from and including the date of payment of the amount of such Class A Noteholders’ Interest
Carryover Amount pursuant to the Policy.

     “Servicer” shall mean Triad Financial Corporation, a California corporation, and its
successors and assigns.

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     “Sponsor” shall mean Triad Financial Corporation, a California corporation, and its
successors and assigns.

     “Spread Account” shall mean the account designated as such, established and maintained
pursuant to Section 5.5 of the Sale and Servicing Agreement.

     “Triad” shall mean Triad Financial Corporation, a California corporation, and its
successors and assigns.

     “Triad Party” shall mean any of the Issuing Entity, the Depositor, Triad, the
Servicer, the originator, the Holder of the Residual Certificate and any of their respective
Affiliates.

     “Trust Accounts” shall have the meaning assigned thereto in Section 5.1 of the Sale
and Servicing Agreement.

     “Trust Agreement” shall mean the Trust Agreement dated as of June 9, 2006 among Triad,
as Administrator, the Depositor and Wilmington Trust Company, not in its individual capacity but
solely as Owner Trustee, as amended and restated as of October 18, 2006, as the same may be amended
or supplemented from time to time.

     2. Payments under the Policy.

     (a) Upon the presentation by the Indenture Trustee to Ambac at Ambac’s principal office in
respect of the applicable Distribution Date of a duly executed Notice, Ambac will make or cause to
be made to the Indenture Trustee, on the guarantee set forth in the first paragraph of this Policy,
payment in an amount equal to the applicable Policy Claim Amount.

     (b) Amounts payable in respect of any Policy Claim Amounts due hereunder, unless otherwise
stated herein, will be distributed by Ambac to, or at the direction of, the Indenture Trustee, by
wire transfer of immediately available funds. Solely the Indenture Trustee on behalf of the
Holders shall have the right to make a claim for a Policy Claim Amount under this Policy.

     (c) Ambac’s payment obligations hereunder with respect to particular Policy Claim Amounts
shall be discharged to the extent funds equal to the applicable Policy Claim Amounts are paid by
Ambac to, or at the direction of, the Indenture Trustee in accordance with the Indenture Trustee’s
requests, whether or not such funds are properly applied by the Indenture Trustee. Payments of
Policy Claim Amounts shall be made only at the time set forth in this Policy, and no accelerated
Insured Payments shall be made except to the extent that Ambac has specified an earlier date for
payment at its sole option. This Policy does not insure against loss of any prepayment or other
acceleration payment which at any time may become due in respect of any Insured Obligations, other
than at the sole option of the Insurer, nor against any risk other than Nonpayment, including
failure of the Indenture Trustee to pay any Policy Claim Amounts or Scheduled Payments due to
Holders.

     (d) Notwithstanding anything to the contrary set forth herein, in no event shall the aggregate
amount paid by Ambac hereunder exceed the Maximum Insured Amount hereunder.

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     3. Presentation of Notice of Non-Payment and Demand.

     (a) Notwithstanding any other provision of this Policy but subject to Section 8 hereof with
respect to Preference Amounts, the Insurer will pay any Policy Claim Amounts payable hereunder
other than with respect to Preference Amounts to, or at the direction of, the Indenture Trustee no
later than 12:00 noon, New York City time, on the later of (i) the Distribution Date on which the
related Policy Claim Amount is due for payment under the Indenture or (ii) the second Business Day
following actual receipt in New York, New York on a Business Day by the Insurer of a Notice in the
form attached as Exhibit A, appropriately completed and executed by the Indenture Trustee;
provided that, if such Notice is received after 12:00 noon, New York City time, on such
Business Day, it will be deemed to be received before 12:00 noon, New York City time, on the
following Business Day.

     (b) If any such Notice is not in proper form or is otherwise insufficient for the purpose of
making a claim under this Policy, it shall be deemed not to have been received by the Insurer for
purposes of this Policy, and the Insurer shall promptly so advise the Indenture Trustee in writing
and the Indenture Trustee may submit an amended or corrected Notice. If such an amended or
corrected Notice is in proper form and is otherwise sufficient for the purpose of making a claim
under this Policy, it shall be deemed to have been timely received on the Business Day of such
resubmission subject to the proviso in (a) above.

     4. Waiver. To the fullest extent permitted by applicable law, Ambac hereby waives and
agrees not to assert any and all rights and defenses, to the extent such rights and defenses may be
available to Ambac, to avoid payment of its obligations under this Policy in accordance with the
express provisions hereof. Without limitation of the foregoing, Ambac hereby waives and agrees not
to assert any and all rights to require the Indenture Trustee to make demand on or to proceed
against any Person, party or security prior to demanding payment under this Policy. For the
avoidance of doubt, Ambac does not waive its right to seek payment of all Reimbursement Amounts to
which it is entitled.

     5. Subrogation. Upon any payment hereunder, in furtherance and not in limitation of
Ambac’s equitable right of subrogation and Ambac’s rights under the Insurance Agreement, Ambac
will, to the extent of such payment by Ambac hereunder, be subrogated to the rights of any Holder
to receive any and all amounts due in respect of the Insured Obligations as to which such Insured
Payment was made, to the extent of any payment by Ambac under this Policy and Ambac will be a
co-beneficiary of the Indenture Trustee’s lien under the Indenture.

     6. Communications. All notices, presentations, transmissions, deliveries and
communications made by the Indenture Trustee to Ambac with respect to this Policy shall
specifically refer to the number of this Policy and shall be made to Ambac at:

	 	 	 	 	 
	 	 	Ambac Assurance Corporation
	 	 	One State Street Plaza
	 	 	New York, New York 10004
	 

	 	Attention:
	 	Asset-Backed Securities Department Head
	 

	 	 	 	General Counsel – URGENT
	 

	 	Phone:
	 	(212) 208-3283
	 

	 	Fax:
	 	(212) 556-3556

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or to such other address, officer, telephone number or facsimile number as Ambac may designate to
the Indenture Trustee from time to time.

     7. Nature of the Obligations. Except as expressly provided herein, the obligations of
Ambac under this Policy are irrevocable, absolute and unconditional.

     8. Termination. This Policy and the obligations of Ambac hereunder shall terminate
upon the earlier of:

     (a) the date on which all of the Policy Claim Amounts have been paid in full by Ambac to, or
at the direction of, the Indenture Trustee; or

     (b) the close of business on the third (3rd) Business Day after the earlier of (a) the Final
Scheduled Distribution Date that occurs last for a class of Class A Notes and (b) the date on which
all principal and interest on the Class A Notes has been paid in full;

provided, however, that notwithstanding the occurrence of any of the foregoing
events, the Insurer shall pay any Preference Amount when due to be paid pursuant to an Order
referred to below, but in any event no earlier than the fifth Business Day following actual receipt
by the Insurer of (i) a certified copy of the final, nonappealable order of a court or other body
exercising jurisdiction to the effect that a Holder is required to return such Preference Amount
paid during the term of this Policy because the payments of such amounts were avoided as a
preferential transfer or otherwise rescinded or required to be restored by the Indenture Trustee or
such Holder (the “Order”), (ii) an opinion of counsel satisfactory to the Insurer stating
that the Order has been entered and is final and not subject to any stay, (iii) an assignment, in
form and substance satisfactory to the Insurer, duly executed and delivered by such Holder and the
Indenture Trustee, irrevocably assigning to the Insurer all rights and claims of the Indenture
Trustee and such Holder relating to or arising under the Indenture or otherwise with respect to
such Preference Amount, (iv) appropriate instruments in form satisfactory to the Insurer to effect
the appointment of the Insurer as agent for the Indenture Trustee and such Holder in any legal
proceeding related to such Preference Amount, and (v) a Notice (in the form attached as Exhibit
B) appropriately completed and executed by the Indenture Trustee (the “Preference Payment
Date”); provided, further, that (I) if such documents are received by the
Insurer after 12:00 noon, New York City time, on such Business Day, they will be deemed to be
received before 12:00 noon, New York City time, on the following Business Day, (II) the Insurer
shall not be obligated to pay any Preference Amount in respect of principal (other than the Class A
Noteholders’ Parity Deficit Amount) prior to the Final Scheduled Distribution Date for the relevant
class of Class A Notes and (III) any Preference Amount that constitutes interest shall be limited
to the amount of interest on the Outstanding Amount of the Class A Notes (calculated at the
Interest Rate for the relevant class of Class A Notes) that has been deemed recoverable, or has
been recovered, from a Holder and shall not, in any event, include any interest on such interest
amount. Such payment shall be disbursed to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Order, and not to the Indenture Trustee or the Holder directly,
unless the Indenture Trustee or the relevant Holder has made a payment of the Preference Amount to
the court or such receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the
Order, in

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which case the Insurer will pay the Indenture Trustee, or as directed by the Indenture Trustee, to
the extent of the payment of the Preference Amount, subject to the delivery of (a) the items
referred to in clauses (i), (ii), (iii), (iv) and (v) above to the Insurer and (b) evidence
satisfactory to the Insurer that payment has been made to such court or receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order.

     Notwithstanding the foregoing, in no event shall Ambac be obligated to make any payment in
respect of any Preference Amount (i) to the extent that such payment, when added to all prior
payments of Policy Claim Amounts, would exceed the Maximum Insured Amount or (ii) prior to the time
Ambac would have been required to pay a Policy Claim Amount pursuant to Section 3 of this Policy.

     9. There shall be no acceleration payment due under this Policy unless such acceleration is at
the sole option of the Insurer. This Policy does not cover (i) premiums, if any, payable in
respect of the Class A Notes, (ii) shortfalls, if any, attributable to any payment of withholding
taxes (including penalties and interest in respect of any such liability) or (iii) any risk other
than Nonpayment, including the failure of the Indenture Trustee to apply, disburse, transfer or
direct Policy payments or Available Funds or other amounts in accordance with the Indenture to
Holders or to any other party.

     10. Miscellaneous.

     (a) This Policy sets forth the full understanding of Ambac. The Policy is noncancelable by
Ambac for any reason, including failure to receive payment of any premium due hereunder.

     (b) This Policy is issued pursuant to, and shall be construed under, the laws of the State of
New York, without giving effect to the conflicts of laws rules thereof, as contemplated in Section
5-1401 of the New York General Obligations Law.

     (c) THE INSURANCE PROVIDED BY THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE
SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.

     (d) Any notice hereunder or service of process on Ambac may be made at the address listed
above for Ambac or such other address as Ambac shall specify in writing to the Indenture Trustee.

     (e) The premium of this Policy is not refundable for any reason. The premium will be payable
on this Policy on each Distribution Date as provided in the Insurance Agreement, beginning with the
First Distribution Date.

     ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON
FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE
INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL
THERETO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SHALL ALSO BE

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SUBJECT TO A CIVIL PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE
CLAIM FOR EACH SUCH VIOLATION.

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     IN WITNESS WHEREOF, Ambac has caused this Note Guaranty Insurance Policy to be executed and
attested this 18th day of October, 2006.

	 	 	 	 	 
	 	AMBAC ASSURANCE CORPORATION

 	 
	 	By:  	/s/ Michael N. Babick
 	 
	 	 	Name:  	Michael N. Babick 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	Attest:	 	 
	 
	 	 	 	 
	By:

	 	/s/ Kathleen A. Drennen	 	 
	 

	 	 	 	 
	 

	 	Name: Kathleen A. Drennen	 	 
	 

	 	Title: Assistant
Secretary	 	 

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EXHIBIT A

TO THE NOTE GUARANTY INSURANCE POLICY

Policy No. AB1038BE

NOTICE OF NONPAYMENT AND DEMAND

FOR PAYMENT OF INSURED AMOUNTS

(OTHER THAN PREFERENCE AMOUNT)

Date:                                         

	 	 	 
	Ambac Assurance Corporation
	One State Street Plaza
	New York, New York 10004
	Attention: Asset-Backed Securities Department Head

	 

	 	General Counsel – URGENT

     Reference is made to Note Guaranty Insurance Policy No. AB1038BE (the “Policy”) issued
by Ambac Assurance Corporation (“Ambac”). Terms capitalized herein and not otherwise
defined shall have the meanings specified in the Policy, unless the context otherwise requires.

     The undersigned hereby certifies as follows:

	 	1.	 	It is the Indenture Trustee under the Indenture, and is acting for the Holders.
	 
	 	2.	 	The relevant Distribution Date is [date].
	 
	 	3.	 	There is an amount of $                     with respect to such Distribution Date,
which amount is a Policy Claim Amount which is Due for Payment.
	 
	 	4.	 	The Indenture Trustee has not heretofore made a demand for the Policy Claim
Amount in respect of such Distribution Date.
	 
	 	5.	 	The Indenture Trustee hereby requests the payment of the Policy Claim Amount
that is Due for Payment be made by Ambac under the Policy and directs that payment
under the Policy be made to the Indenture Trustee to the following account by bank wire
transfer of federal or other immediately available funds in accordance with the terms
of the Policy to:                    . 1
	 
	 	6.	 	The Indenture Trustee hereby agrees that, following receipt by the Indenture
Trustee of the Insured Payment from Ambac, it shall (a) hold such amounts in trust and
apply the same directly to the distribution of payments in respect of the

 

			
	1	 	The account number of the Indenture Trustee.

 

 

	 	 	 	Class A Notes when due, (b) not apply such funds for any other purpose, and (c)
maintain an accurate record of such payments with respect to the Class A Notes and
the corresponding claim on the Policy and proceeds thereof.
	 
	 	7.	 	The Indenture Trustee hereby assigns to Ambac all rights, and confirms that the
Holders have assigned all rights, under the Insured Obligations in respect of which
payment is being requested to Ambac.

     ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON
FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE
INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL
THERETO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SHALL ALSO BE SUBJECT TO A CIVIL
PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE CLAIM FOR EACH SUCH
VIOLATION.

	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(Officer)	 	 

A-2 

 

EXHIBIT B

TO THE NOTE GUARANTY INSURANCE POLICY

Policy No. AB1038BE

NOTICE OF NONPAYMENT AND DEMAND

FOR PAYMENT OF PREFERENCE AMOUNT

Date:                                         

	 	 	 
	Ambac Assurance Corporation
	One State Street Plaza
	New York, New York 10004
	Attention: Asset-Backed Securities Department Head

	 

	 	General Counsel – URGENT

     Reference is made to Note Guaranty Insurance Policy No. AB1038BE (the “Policy”) issued
by Ambac Assurance Corporation (“Ambac”). Terms capitalized herein and not otherwise
defined shall have the meanings specified in the Policy, unless the context otherwise requires.

     The undersigned hereby certifies as follows:

	 	1.	 	It is the Indenture Trustee under the Indenture, and is acting for the Holders.
	 
	 	2.	 	[A payment previously made in respect of the Class A Notes pursuant to the
Indenture has become a Preference Amount, as indicated by the attached Order.]
	 
	 	3.	 	The Holder of the applicable Class A Notes has certified that the Order has
been entered and is not subject to stay.
	 
	 	4.	 	The amount of the Preference Amount is $                    , and consists of interest
in the amount of $                     paid on                     ,                     , [and principal in the
amount of $                     paid on                     ,                     .]
	 
	 	5.	 	Neither the Indenture Trustee nor the Holder has heretofore made a demand for
such Preference Amount.
	 
	 	6.	 	The Indenture Trustee hereby requests the payment of the Insured Payment be
made by Ambac under the Policy and directs that payment under the Policy be made to the
Indenture Trustee to the following account by bank wire transfer of

 

 

	 	 	 	federal or other immediately available funds in accordance with the terms of the
Policy to:                    . 2
	 
	 	7.	 	The Indenture Trustee hereby agrees that if such Insured Payment is made to the
Indenture Trustee, following receipt of such Insured Payment from Ambac, it shall (a)
hold such amounts in trust and apply the same directly to the Holder for payment of the
Preference Amount, (b) not apply such funds for any other purpose, and (c) maintain an
accurate record of such payments with respect to the Class A Notes and the
corresponding claim on the Policy and proceeds thereof.
	 
	 	8.	 	The Indenture Trustee hereby assigns to Ambac all rights, and confirms that the
Holders have assigned all rights, under the Insured Obligations in respect of which
payment is being requested to Ambac.

     ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON
FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE
INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL
THERETO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SHALL ALSO BE SUBJECT TO A CIVIL
PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE CLAIM FOR EACH SUCH
VIOLATION.

	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(Officer)	 	 

 

			
	2	 	The account of the relevant receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in Order, unless the Holder
or Indenture Trustee has already paid such Preference Amount to such party, in
which case, the account of the payor.

B-2exv10w1

 

EXHIBIT 10.1

PURCHASE AGREEMENT

between

TRIAD FINANCIAL CORPORATION

Originator

and

TRIAD FINANCIAL SPECIAL PURPOSE LLC

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	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	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

ii

 

PURCHASE AGREEMENT

          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.

2

 

          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

3

 

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

4

 

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.

5

 

     (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

6

 

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

7

 

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.

8

 

          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

7711 Center Avenue

Suite 100

Huntington Beach, California 92647

Attention: Chief Financial Officer

With a separate copy to:

Attention: General Counsel

If to the Depositor:

Triad Financial Special Purpose LLC

7711 Center Avenue

Suite 390

Huntington Beach, California 92647

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/ Mike L. Wilhelms	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Mike L. Wilhelms	 	 
	 

	 	Title:
	 	Senior Vice President and	 	 
	 

	 	 	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	TRIAD FINANCIAL SPECIAL PURPOSE LLC,	 	 
	 	 	    as Depositor	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Mike L. Wilhelms	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Mike L. Wilhelms	 	 
	 

	 	Title:
	 	Chief Financial Officer	 	 

	 	 	 	 	 
	Accepted:	 	 
	 
	CITIBANK, N.A.,	 	 
	not in its individual capacity	 	 
	but solely as Indenture Trustee	 	 
	 
	 	 	 	 
	By:

	 	/s/ John Hannon	 	 
	 

	 	 	 	 
	Name:

	 	John Hannon	 	 
	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 Moss-Magnuson
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

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