EXHIBIT 99.1
TRIAD AUTOMOBILE RECEIVABLES TRUST 2006-B
CLASS A-1 5.143684% ASSET BACKED NOTES
CLASS A-2 5.36% ASSET BACKED NOTES
CLASS A-3 5.41% ASSET BACKED NOTES
CLASS A-4 5.52% ASSET BACKED NOTES
TRIAD FINANCIAL SPECIAL PURPOSE LLC
(DEPOSITOR)
May 17, 2006
UNDERWRITING AGREEMENT
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as representatives of the several Underwriters (the "Representatives")
Ladies and Gentlemen:
1. Introductory. Triad Financial Special Purpose LLC, a Delaware
limited liability company (the "Depositor"), proposes to sell to the
Underwriters named herein:
(a) $167,000,000 principal amount of Class A-1 5.143684% Asset
Backed Notes (the "Class A-1 Notes");
(b) $257,000,000 principal amount of Class A-2 5.36% Asset
Backed Notes (the "Class A-2 Notes");
(c) $327,500,000 principal amount of Class A-3 5.41% Asset
Backed Notes (the "Class A-3 Notes");
(d) $164,000,000 principal amount of Class A-4 5.52% Asset
Backed Notes (the "Class A-4 Notes" and, collectively with the Class A-1
Notes, the Class A-2 Notes and the Class A-3 Notes, the "Class A Notes",
"Notes" or "Underwritten Securities");
in each case issued by Triad Automobile Receivables Trust 2006-B (the "Trust").
Simultaneously with the issuance and sale of the Underwritten Securities
as contemplated herein, the Trust will issue a trust certificate representing
the beneficial ownership interest in the Trust (the "Certificate").
The Notes will be secured by the Receivables (as hereinafter defined) and
certain other property of the Trust. The Notes will be issued pursuant to the
Indenture to be dated as of May 25, 2006 (the "Indenture") by and between the
Trust and Citibank, N.A. (the "Indenture Trustee").
The Certificate will represent a beneficial interest in the Trust, the
assets of which will include the Receivables and certain other property. The
Certificate will be issued pursuant to the Trust Agreement (the "Trust
Agreement") to be dated as of May 25, 2006 between the Depositor, Triad
Financial Corporation ("Triad") and Wilmington Trust Company (the "Owner
Trustee"). Payments in respect of the Certificate, to the extent specified in
the Indenture, the Sale and Servicing Agreement and the Trust Agreement, are
subordinated to the rights of the holders of the Notes.
The property of the Trust will include, among other things, a pool of
motor vehicle retail installment sales contracts and installment loans for new
and used automobiles and light duty trucks (the "Receivables"), sold by Triad to
the Depositor pursuant to the Purchase Agreement (the "Purchase Agreement")
dated as of May 25, 2006, and certain monies due or in some cases received
thereunder on or after April 30, 2006. The Receivables will be sold to the Trust
by the Depositor and will be serviced for the Trust by Triad (the "Servicer" or
"Triad"), pursuant to the Sale and Servicing Agreement (the "Sale and Servicing
Agreement") to be dated as of May 25, 2006 by and among the Depositor, the
Servicer, the Indenture Trustee and the Trust.
The Class A Notes will have the benefit of a financial guaranty insurance
policy (the "Note Policy"), issued by Financial Security Assurance Inc., a
financial guaranty insurance company incorporated under the laws of the State of
New York (the "Insurer").
In connection with the issuance of the Note Policy (i) the Indenture
Trustee, Triad, the Trust and the Insurer will execute and deliver an Insurance
and Indemnity Agreement dated as of May 25, 2006 (the "Insurance Agreement") and
(ii) the Representatives and the Insurer will execute and deliver an
Indemnification Agreement dated as of May 25, 2006 (the "Indemnification
Agreement").
Capitalized terms used herein and not otherwise defined shall have the
meanings given them in the Sale and Servicing Agreement.
At or prior to the time when sales to purchasers of the Offered Securities
were first made to investors by the Underwriters, which was approximately 2:30
p.m., New York City time, on May 17, 2006 (the "Applicable Time"), the Depositor
had prepared the following information (collectively, the "Time of Sale
Information"): the preliminary prospectus supplement dated May 16, 2006 (the
"Preliminary Prospectus Supplement") to the base prospectus dated May 16, 2006
(the "Preliminary Base Prospectus" together, along with information referred to
under the caption "Static Pool Data" therein regardless of whether it is deemed
a part of the Registration Statement or Prospectus, the "Preliminary
Prospectus"). If, subsequent to the Applicable Time
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and prior to May 25, 2006 (the "Closing Date"), such information included an
untrue statement of material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and as a result investors in the
Underwritten Securities may terminate their prior "Contracts of Sale" (within
the meaning of Rule 159 under the Securities Act of 1933, as amended (the
"Act")) for any Underwritten Securities and the Underwriters enter into new
Contracts of Sale with investors in the Underwritten Securities, then "Time of
Sale Information" will refer to the information conveyed to investors at the
time of entry into the first such new Contract of Sale, in an amended
Preliminary Prospectus approved by the Depositor and the Underwriters that
corrects such material misstatements or omissions (a "Corrected Prospectus") and
"Applicable Time" will refer to the time and date on which such new Contracts of
Sale were entered into.
2. Representations and Warranties of the Depositor. The Depositor
represents and warrants to and agrees with the underwriters named in
Schedule I hereto (the "Underwriters") that as of the Execution Time (as
hereinafter defined), as of the Applicable Time (as hereinafter defined)
and as of the Closing Date:
(a) The Depositor has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (Registration No.
333-132215) on Form S-3, including a base prospectus and forms of
prospectus supplement, for registration under the Act of the offering and
sale of the Underwritten Securities, and such registration statement has
become effective. The Depositor may have filed one or more amendments
thereto as may have been required to the date hereof, each of which
amendments has been previously furnished to the Representatives. Promptly
after execution and delivery of this Underwriting Agreement, the Depositor
will prepare and file with the Commission a final base prospectus and a
final prospectus supplement relating to the Underwritten Securities in
accordance with the provisions of Rule 430B and Rule 424(b). Any
information included in such base prospectus and prospectus supplement
that was omitted from such registration statement at the time it became
effective but that is deemed to be part of and included in such
registration statement pursuant to Rule 430B is referred to as "Rule 430B
Information". Such registration statement, at any given time, including
the amendments thereto to such time, the exhibits and any schedules
thereto at such time, the documents incorporated by reference pursuant to
the Act at such time and documents otherwise deemed to be a part thereof
or included therein by the rules and regulations (the "Rules and
Regulations") of the Commission under the Act, is herein called the
"Registration Statement"; provided that references to the Registration
Statement or other matters relating to the Registration Statement shall be
deemed to be references to the Registration Statement or such other
matters relating to the Registration Statement as of the Effective Date
(as hereinafter defined). The Registration Statement at the time it
originally became effective is herein called the "Original Registration
Statement." "Base Prospectus" means the base prospectus included in the
Registration Statement, as amended at the time of the filing of the
Prospectus. "Prospectus" means the prospectus supplement to the Base
Prospectus that is first filed after the Execution Time pursuant to Rule
424(b), together with the Base Prospectus, as amended at the time of such
filing, including the documents incorporated by reference therein pursuant
to the Act at the time of execution of this Agreement.
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"Prospectus Supplement" means the prospectus supplement to the Base
Prospectus included in the Prospectus.
The Depositor has included in the Registration Statement, as
amended at the Effective Date, all information required by the Act and the
rules thereunder to be included in the Prospectus with respect to the
Underwritten Securities and the offering thereof. As filed, the
Preliminary Prospectus includes all information with respect to the
Underwritten Securities and the offering thereof required by the Act and
the rules thereunder. As filed, the Prospectus shall include all
information with respect to the Underwritten Securities and the offering
thereof required by the Act and the rules thereunder and, except to the
extent that the Underwriters shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to the
Representatives prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
Preliminary Prospectus) as the Depositor has advised the Representatives,
prior to the Execution Time, will be included or made therein. If the
registration statement contains the undertaking specified by Regulation
S-K Item 512(a), the registration statement, at the Execution Time, meets
the requirements set forth in Rule 415(a)(1)(x).
For purposes of this Underwriting Agreement, "Applicable Time"
shall have the meaning referred to in Section 2(c) hereof. "Effective
Time" means, with respect to the Registration Statement, the date and time
as of which the Registration Statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission, or
the earlier of the date of filing of a prospectus required under Rule 424
deemed to be part of the Registration Statement or the date and time of
the first sale of Underwritten Securities and "Effective Date" means the
date of the Effective Time. "Execution Time" shall mean the date and time
that this Underwriting Agreement is executed and delivered by the parties
hereto. "Rule 158," "Rule 164," "Rule 405," "Rule 415", "Rule 424", "Rule
430B," "Rule 433" and "Regulation S-K" refer to such rules or regulations
under the Act. Any reference herein to the Registration Statement, the
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), on or before the Effective Date of the
Registration Statement or the issue date of the Preliminary Prospectus or
the Prospectus, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration
Statement, the Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the issue date
of the Preliminary Prospectus or the Prospectus, as the case may be,
deemed to be incorporated therein by reference or otherwise deemed by the
Rules and Regulations to be a part thereof or included therein. For
purposes of this Underwriting Agreement, all references to the
Registration Statement, the Preliminary Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
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(b) The Depositor meets the requirements for use of Form S-3
under the Act. If the Registration Statement contains the undertaking
specified by Regulation S-K Item 512(a), the Registration Statement, at
the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
At the earliest time after the time of filing the Original Registration
Statement that the Depositor or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2)), of the Underwritten
Securities and at the date hereof, the Depositor was not and is not an
"ineligible issuer", as defined in Rule 405 of the Act.
(c) The Original Registration Statement became effective on
May 8, 2006, and any post-effective amendment thereto also has become
effective. No stop order suspending the effectiveness of the Registration
Statement has been issued under the Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Depositor, are contemplated by the Commission, and any request on the part
of the Commission for additional information has been complied with.
At the respective times the Original Registration Statement
and each amendment thereto became effective, at each deemed effective date
with respect to the Underwriters pursuant to Rule 430B(f)(2) and at the
Closing Time, the Registration Statement complied and will comply in all
material respects with the applicable requirements of the Act, the Trust
Indenture Act and the respective Rules and Regulations thereunder, and did
not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; at the Applicable Time, the
Preliminary Prospectus did not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and neither the Prospectus nor any amendment or
supplement thereto, at the time the Prospectus or any such amendment or
supplement was issued and at the Closing Time, included or will include an
untrue statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Depositor makes no representation or warranty
as to the information contained in or omitted from the Registration
Statement, the Preliminary Prospectus or the Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished in
writing to the Depositor by any Underwriter through either Representative
specifically for use in connection with preparation of the Registration
Statement, the Preliminary Prospectus or the Prospectus (or any supplement
thereto) , it being agreed that the only such information consists of the
statements in the third and fourth paragraphs (concerning concessions,
reallowances and initial offering prices) and in the sixth, seventh,
eighth and ninth paragraphs (concerning overallotment, stabilizing
transactions and penalty bids) under the heading "Underwriting" in the
Prospectus Supplement (such information, the "Underwriter Information");
and provided further that the Depositor makes no representation or
warranty as to the information contained in or omitted from any Form T-1
filed with respect to the Indenture Trustee (the "T-1 Information"). The
Time of Sale Information, at the Applicable Time, did not, and at the
Closing Date will not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the
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circumstances under which they were made, not misleading; provided that
the Depositor makes no representation and warranty as to (i) the T-1
Information and (ii) any statements or omissions made in reliance upon and
in conformity with the Underwriter Information.
When filed with the Commission, each Preliminary Prospectus
(including the prospectus and prospectus supplement filed as part of the
Original Registration Statement or any amendment thereto) complied when so
filed in all material respects with the Rules and Regulations.
(d) The documents incorporated by reference in the
Registration Statement, the Preliminary Prospectus and the Prospectus,
when they became effective under the Act or were filed with the Commission
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as the case may be, conformed in all material respects with the
requirements of the Exchange Act and the Rules and Regulations thereunder.
(e) Since the respective dates as of which information is
given in the Registration Statement, the Preliminary Prospectus and the
Prospectus, (i) there has not been any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, business, management, financial condition,
members' or stockholders' equity, results of operations, regulatory status
or business prospects of the Depositor or Triad, and (ii) neither the
Depositor nor Triad has entered into any transaction or agreement (whether
or not in the ordinary course of business) that, in either case, would
reasonably be expected to materially adversely affect the interests of the
holders of the Class A Notes, other than as set forth or contemplated in
the Preliminary Prospectus and the Prospectus.
(f) 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 full power and authority to own its properties
and conduct its businesses as described in the Preliminary Prospectus and
the Prospectus, and is duly qualified to transact business as a foreign
limited liability company in good standing under the laws of each
jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, other than where the
failure to be so qualified would not have a material adverse effect on the
transactions contemplated herein or in the Basic Documents.
(g) As of the Closing Date, the representations and warranties
(other than the representations and warranties concerning the
characteristics of the Receivables, which representations and warranties
will be true and correct in all material respects as of the date set forth
in the applicable agreement) of Triad in the Purchase Agreement and of the
Depositor in the Sale and Servicing Agreement and the Trust Agreement will
be true and correct in all material respects.
(h) No consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required to be obtained
or made by the
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Depositor for the consummation of the transactions contemplated by this
Underwriting Agreement, except such as have been obtained and made under
the Act, such as may be required under state securities laws and the
filing of any financing statements required to perfect the Trust's
interest in the Receivables.
(i) The Depositor is not in violation of its limited liability
company operating agreement or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained
in any agreement or instrument to which it is a party or by which it or
its properties are bound which violation or default would have a material
adverse effect on the transactions contemplated herein or in any of the
Basic Documents to which the Depositor is a party. The execution, delivery
and performance by the Depositor of this Underwriting Agreement and the
Basic Documents to which the Depositor is a party and the issuance and
sale of the Class A Notes and compliance with the terms and provisions
thereof (i) will not result in a breach or violation of any of the terms
and provisions of or constitute a default under, any statute, rule,
regulation or order of any governmental agency or body or any court having
jurisdiction over the Depositor or any of its properties, or the limited
liability company operating agreement or by-laws of the Depositor and (ii)
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation of
any lien, charge, or encumbrance upon any of the property or assets of the
Depositor pursuant to the terms of, any material indenture, mortgage, deed
of trust, loan agreement, guarantee, lease financing agreement, or similar
agreement or instrument under which the Depositor is a debtor or
guarantor. The Depositor has full power and authority to authorize, cause
the Trust to issue, and sell the Notes as contemplated by this
Underwriting Agreement, to enter into this Underwriting Agreement and the
Basic Documents and to consummate the transactions contemplated herein and
therein.
(j) This Underwriting Agreement has been duly authorized,
executed and delivered by the Depositor; on the Closing Date (as hereafter
defined), the Notes will have been duly executed, authenticated, issued
and delivered and will constitute valid and binding obligations of the
Trust entitled to the benefits provided by the Indenture; on the Closing
Date, the Certificate will have been duly executed, authenticated, issued
and delivered and entitled to the benefits provided by the Trust
Agreement; on the Closing Date, the Basic Documents to which the Depositor
is a party will have been duly authorized, executed and delivered by and
will constitute valid and binding obligations of the Depositor enforceable
in accordance with their terms except as the same may be limited by
bankruptcy, insolvency, reorganization or other similar laws relating to
or affecting the enforcement of creditors' rights generally and by general
equitable principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law; and the Basic Documents
will conform to the description thereof in the Prospectus in all material
respects.
(k) The computer tape with respect to the Receivables (the
"Computer Tape") to be delivered by Triad as seller under the Purchase
Agreement to each of the Owner Trustee, the Indenture Trustee and the
Representatives will be complete and accurate in all material respects as
of the date thereof.
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3. Purchase, Sale, and Delivery of the Underwritten
Securities. On the basis of the representations, warranties, and
agreements herein contained, but subject to the terms and conditions
herein set forth, the Depositor agrees to sell to the Underwriters, and
the Underwriters agree, severally and not jointly, to purchase from the
Depositor, the aggregate principal amounts of the Class A Notes set forth
opposite the names of the Underwriters in Schedule I hereto. The
Underwritten Securities are to be purchased at the following purchase
prices:
PURCHASE PRICE
(as a % of the aggregate
principal amount)
------------------------
Class A-1 Notes 99.877500%
Class A-2 Notes 99.782527%
Class A-3 Notes 99.779270%
Class A-4 Notes 99.762152%
Delivery of and payment for the Notes shall be made at the office of
Xxxxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 (or such
other place as the Depositor and the Representatives shall agree), on the
Closing Date. Delivery of the Notes shall be made against payment of the
purchase price in immediately available funds drawn to the order of the
Depositor. The Notes to be so delivered will be initially represented by one or
more global notes registered in the name of Cede & Co., the nominee of The
Depository Trust Company ("DTC"). The Depositor shall make such global notes
representing the Notes available for inspection by the Underwriters at the
office at which the Notes are to be delivered, no later than 5:00 p.m. (Chicago
time) on the business day prior to the Closing Date. The interests of beneficial
owners of the Notes will be represented by book entries on the records of DTC
and participating members thereof.
4. Offering by Underwriters. It is understood that the Underwriters
propose to offer the Underwritten Securities for sale to the public (which
may include selected dealers), as set forth in the Prospectus.
5. Covenants of the Depositor. The Depositor covenants and agrees
with the Underwriters:
(a) The Depositor, subject to Section 5(b), will comply with
the requirements of Rules 424(b) and 430B and will notify the Underwriters
immediately, and confirm the notice in writing, of (i) the effectiveness
of any post-effective amendment to the Registration Statement or the
filing of any supplement or amendment to the Prospectus, (ii) the receipt
of any comments from the Commission, (iii) any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or any document incorporated by reference
therein or otherwise deemed to be a part thereof or for additional
information and (iv) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus, or of the
suspension of the qualification of the Underwritten Securities for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings
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for any of such purposes. The Depositor will make every reasonable effort
to prevent the issuance of any stop order and, if any stop order is
issued, to obtain as soon as possible the lifting thereof.
(b) Prior to the termination of the offering of the Notes, not
to file any amendment to the Registration Statement or any amendment,
supplement or revision to either the Preliminary Prospectus (including any
prospectus included in the Original Registration Statement or amendment
thereto at the time it became effective) or to the Prospectus unless the
Depositor has furnished each Representative with a copy for such
Representative's review prior to such proposed filing or use, as the case
may be, and not to file or use any document to which either Representative
shall reasonably object.
(c) Subject to Section 5(b), to effect the filings required
under Rule 424(b) in the manner and within the time period required by
Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps
as it deems necessary to ascertain promptly whether the Preliminary
Prospectus and the Prospectus transmitted for filing under Rule 424(b)
were each received for filing by the Commission and, in the event that
either was not, it will file the Preliminary Prospectus or the Prospectus,
as applicable.
(d) Promptly from time to time to take such action as either
Representative may reasonably request in order to qualify the Underwritten
Securities for offering and sale under the securities laws of such states
as either Representative may request and to continue such qualifications
in effect so long as necessary under such laws for the distribution of
such Underwritten Securities; provided, that in connection therewith, the
Depositor shall not be required to qualify as a foreign limited liability
company to do business, or to file a general consent to service of process
in any jurisdiction.
(e) The Depositor will comply with the Act and the Rules and
Regulations, the Exchange Act and the rules and regulations thereunder and
the Trust Indenture Act and the rules and regulations thereunder so as to
permit the completion of the distribution of the Underwritten Securities
as contemplated in this Agreement, the Registration Statement and the
Prospectus. If, at any time when a prospectus is required by the Act to be
delivered in connection with sales of the Underwritten Securities, any
event shall occur or condition shall exist as a result of which it is
necessary to amend the Registration Statement or amend or amend or
supplement the Preliminary Prospectus or the Prospectus in order that the
Preliminary Prospectus or Prospectus, as applicable, will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall
be necessary at any such time to amend the Registration Statement or amend
or supplement the Preliminary Prospectus or the Prospectus in order to
comply with the Act or the requirements of the Act or the Rules and
Regulations, the Depositor will promptly notify the Representatives and
will prepare and file, or cause to be prepared and filed, with the
Commission (subject to Section 5(b)) the review and approval provisions
afforded to the Underwriters described in Section 5(b) such amendment or
supplement as may be necessary to correct such statement or omission or to
make the Registration Statement, the Preliminary Prospectus or the
9
Prospectus comply with such requirements, the Depositor will use its best
efforts to have such amendment or new registration statement declared
effective as soon as practicable (it being understood that any such filing
shall not operate as a waiver or limitation on any right of any
Underwriter hereunder).
(f) To cause the Trust to make generally available to
Noteholders as soon as practicable, but in any event no later than
eighteen months after the original effective date of the Registration
Statement, an earnings statement of the Trust covering a period of at
least twelve months beginning after the Effective Date of the Registration
Statement that will satisfy the provisions of Section 11(a) of the Act and
Rule 158 promulgated thereunder.
(g) To furnish to the Underwriters copies of the Registration
Statement (one of which will be signed and will include all exhibits),
each related preliminary prospectus (including the Preliminary
Prospectus), the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as the
Underwriters reasonably request.
(h) So long as any of the Underwritten Securities are
outstanding, to furnish the Representatives copies of all reports or other
communications (financial or other) furnished to Noteholders, and to
deliver to the Representatives during such same period, (i) as soon as
they are available, copies of any reports and financial statements
furnished to or filed with the Commission; (ii) copies of each amendment
to any of the Basic Documents; (iii) on each Determination Date or as soon
thereafter as practicable, notice by facsimile of the pool factors as of
the related Record Date; and (iv) such additional information concerning
the business and financial condition of the Depositor or the Trust as
either Representative may from time to time reasonably request.
(i) To pay or cause to be paid the following costs and
expenses incident to the performance of its obligations hereunder: (i) the
printing and filing of the Registration Statement as originally filed and
of each amendment thereto; (ii) all fees of any rating agencies rating the
Notes; (iii) all fees and expenses of the Indenture Trustee and the Owner
Trustee; (iv) all reasonable fees and expenses of counsel to the Indenture
Trustee; (v) all reasonable fees and expenses of counsel to the Owner
Trustee; (vi) all fees and expenses of Triad's and the Depositor's
counsel; (vii) all fees and expenses of PricewaterhouseCoopers LLP
relating to the letter referred to in Section 6(a) hereof; (viii) all fees
and expenses of accountants incurred in connection with the delivery of
any accountant's or auditor's reports required pursuant to the Indenture
or the Sale and Servicing Agreement; (ix) the preparation, issuance and
delivery of the Notes to the Underwriters; (x) the delivery to the
Underwriters of copies of the Registration Statement as originally filed
and of each amendment thereto; (xi) the printing and delivery to the
Underwriters of the Preliminary Prospectus and the Prospectus and of each
amendment and supplement thereto; (xii) any up-front fees and premiums
payable to the Insurer and fees and disbursements of counsel to the
Insurer; (xiii) any other fees and expenses incurred in connection with
the performance of its obligations hereunder and (xiv) the costs and
expenses (including any damages or other amounts payable in connection
with legal and contractual liability) associated with the reforming of any
Contracts of Sale of
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the Underwritten Securities made by the Underwriters caused by a breach of
the representation in Section 2(c).
(j) The Underwriters shall pay all Blue Sky fees and expenses
as well as reasonable fees and expenses of counsel in connection with
State securities law qualifications under Section 5(d) and any legal
investment surveys. Except as provided in Sections 5(i) and 9 hereof, the
Underwriters will pay all their own costs and expenses, including, without
limitation, the cost of printing any agreement among underwriters, the
fees and expenses of Xxxxxx Xxxxxx LLP, counsel to the Underwriters,
transfer taxes on resale of the Underwritten Securities by the
Underwriters, and any advertising expenses connected with any offers that
the Underwriters may make.
(k) For a period from the date of this Underwriting Agreement
until the retirement of the Underwritten Securities, or until such time as
the Underwriters shall cease to maintain a secondary market in the
Underwritten Securities, whichever occurs first, to deliver to the
Representatives (i) copies of each certificate, the annual statements of
compliance, annual assessment of compliance with servicing criteria,
accountants' attestations in respect of such assessments and the annual
independent certified public accountants' servicing reports furnished to
the Owner Trustee and the Indenture Trustee pursuant to Article IV of the
Sale and Servicing Agreement, by first-class mail as soon as practicable
after such statements and reports are furnished to the Owner Trustee and
the Indenture Trustee, (ii) copies of each certificate and the annual
statements of compliance delivered to the Indenture Trustee pursuant to
Article III of the Indenture, by first-class mail as soon as practicable
after such statements and reports are furnished to the Indenture Trustee,
(iii) copies of each amendment to any Basic Document and (iv) on or about
each Distribution Date, a copy of the statement furnished by the Indenture
Trustee to the Noteholders pursuant to Section 5.10 of the Sale and
Servicing Agreement, by express mail or telecopy.
(l) On or before the Closing Date, the Depositor shall cause
Xxxxx's computer records relating to the Receivables to be marked to show
the Trust's absolute ownership of the Receivables, and from and after the
Closing Date neither the Depositor nor the Servicer shall take any action
inconsistent with the Trust's ownership of such Receivables, other than as
permitted by the Basic Documents.
(m) To the extent, if any, that the ratings provided with
respect to the Underwritten Securities by the rating agency or agencies
that initially rate the Underwritten Securities are conditional upon the
furnishing of documents or the taking of any other actions by the
Depositor, the Depositor shall furnish such documents and take any such
other actions.
6. Conditions of the Obligations of the Underwriters. The
obligations of the Underwriters to purchase and pay for the Underwritten
Securities will be subject to the accuracy of the representations and
warranties on the part of the Depositor herein, to the accuracy of the
statements of officers of the Depositor and Triad made pursuant to the
provisions hereof, to the performance by the Depositor of its obligations
hereunder and to the following additional conditions precedent:
11
(a) On or prior to the Closing Date, PricewaterhouseCoopers
LLP shall have furnished to the Representatives a letter dated as of the
Closing Date substantially in the form and substance of the draft to which
the Representatives have previously agreed.
(b) The Representatives shall have received the Sale and
Servicing Agreement, the Purchase Agreement, the Indenture, the Trust
Agreement, the Indemnification Agreement, the Class A Notes and the other
Basic Documents in form and substance satisfactory to the Representatives
and duly executed by the signatories required pursuant to the respective
terms thereof.
(c) The Registration Statement shall be effective at the
Execution Time and, and prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or,
to the knowledge of the Depositor or the Representatives, shall be
contemplated by the Commission or by any authority administering any state
securities or blue sky law; the Preliminary Prospectus shall have been
filed with the Commission in the manner and within the time period
required by Rule 424(b); and the Prospectus shall be filed with the
Commission in the manner and within the time period required by Rule
424(b).
(d) The Representatives shall have received certificates dated
the Closing Date of any one of the Chairman of the Board, the President,
the Executive Vice President, any Vice President, the Treasurer, any
Assistant Treasurer, the principal financial officer or the principal
accounting officer of each of Triad and the Depositor, in which such
officers shall state that, to the best of their knowledge after reasonable
investigation, (i) the representations and warranties of each of Triad and
the Depositor contained in the Trust Agreement, the Purchase Agreement,
the Sale and Servicing Agreement and this Underwriting Agreement, as
applicable, are true and correct in all material respects, (ii) each of
Triad and the Depositor, has complied in all material respects with all
agreements and satisfied in all material respects all conditions on its
part to be performed or satisfied under such agreements at or prior to the
Closing Date, (iii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or are contemplated by the Commission, (iv) since
March 31, 2006 except as may be disclosed in the Preliminary Prospectus
and the Prospectus, no material adverse change in or affecting
particularly the business or properties of the Depositor or Triad has
occurred, and (v) none of the Registration Statement, the Preliminary
Prospectus or the Prospectus contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein (in the case of the Preliminary
Prospectus and the Prospectus, in light of the circumstances under which
they were made) not misleading; provided, however, that no such
certificate shall apply to any statements or omissions made in the Insurer
Information or the Underwriter Information. "Insurer Information" means
the information in the Preliminary Prospectus Supplement and the
Prospectus Supplement set forth or incorporated by reference under the
captions "The Insurer" (including the financial information incorporated
by reference under such caption) and "The Policy".
12
(e) At and after the Applicable Time and the dates as of which
information is given in the Registration Statement (exclusive of any
amendment thereto), the Preliminary Prospectus and the Prospectus
(exclusive of any supplement thereto), there shall not have occurred (i)
any change, or any development involving a prospective change, in or
affecting particularly the business or properties of the Trust, the
Depositor or Triad or any of its other affiliates which, in the reasonable
judgment of the Underwriters, materially impairs the investment quality of
the Notes or makes it impractical or inadvisable to market the Notes; (ii)
any change, or any development involving a prospective change, in or
affecting particularly the business or properties of the Insurer which, in
the reasonable judgment of the Underwriters, materially impairs the
investment quality of the Notes or makes it impractical or inadvisable to
market the Notes; (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange or any setting of
minimum prices for trading on such exchange; (iv) any banking moratorium
declared by federal or New York authorities; (v) any outbreak or
escalation of major hostilities in which the United States is involved,
any declaration of war by Congress or any other substantial national or
international calamity or emergency or any material change in the
financial markets if, in the reasonable judgment of the Underwriters, the
effect of any such outbreak, escalation, declaration, calamity, emergency
or change makes it impractical or inadvisable to proceed with completion
of the sale of and payment for the Notes; (vi) a material disruption in
securities settlement or clearance services in the United States; or (vii)
any other material adverse change in the general economic, political,
legal, tax, regulatory or financial conditions or currency exchange rates
in the United States (whether resulting from events within or outside the
United States) which, in the reasonable judgment of the Underwriters,
materially impairs the investment quality of the Notes or makes it
impractical or inadvisable to proceed with completion of the sale of and
payment for the Notes.
(f) Internal counsel to Triad shall have furnished to the
Representatives a written opinion, dated as of the Closing Date, with
respect to general corporate matters reasonably satisfactory in form and
scope to the Representatives.
(g) Xxxxxxxx & Xxxxx LLP (or such other counsel reasonably
satisfactory to the Representatives), special counsel to the Depositor and
Triad, shall have furnished to the Representatives a written opinion or
written opinions, dated as of the Closing Date, with respect to general
corporate matters, enforceability of the Notes, the Indenture, the
Insurance Agreement, the Sale and Servicing Agreement, securities laws and
other matters reasonably satisfactory in form and scope to the
Representatives. Such counsel shall have also furnished to the
Representatives a written letter or letters containing a negative
assurance statement with respect to the Original Registration Statement,
the Registration Statement, the Preliminary Prospectus (or the Time of
Sale Information to the extent the Preliminary Prospectus was amended) and
the Prospectus reasonably satisfactory in form and scope to the
Representatives.
(h) Xxxxxxxx, Xxxxxx & Xxxxxx, PA (or such other Delaware
counsel reasonably satisfactory to the Representatives), special Delaware
counsel to
13
the Depositor, shall have furnished to the Representatives a written
opinion, dated as of the Closing Date, reasonably satisfactory in form and
scope to the Representatives.
(i) Xxxxxxxx & Xxxxx LLP (or such other counsel reasonably
satisfactory to the Representatives), special counsel to Triad and the
Depositor, shall have furnished their written opinion, dated the Closing
Date, with respect to certain matters related to the creation, perfection
and priority of the security interests in the Receivables, and such
opinion shall be in substantially the form previously discussed with the
Representatives and counsel to the Representatives and in any event
satisfactory in form and in substance to the Representatives and counsel
to the Representatives and to Triad.
(j) Xxxxxxxx & Xxxxx LLP (or such other counsel reasonably
satisfactory to the Representatives), special counsel to Triad, shall have
furnished their written opinion, dated the Closing Date, with respect to
the characterization of the transfer of the Receivables by Triad to the
Depositor as a sale (which opinion shall state that it may be relied upon
by the Indenture Trustee), to the Representatives and to Triad, and such
opinion shall be in substantially the form previously discussed with the
Representatives and counsel to the Representatives and in any event
satisfactory in form and in substance to the Representatives and to
counsel to the Representatives and to Triad.
(k) Xxxxxxxx & Xxxxx LLP (or such other counsel reasonably
satisfactory to the Representatives), special counsel to Triad, shall have
furnished their written opinion, dated the Closing Date, with respect to
the nonconsolidation under the Bankruptcy Code of the assets and
liabilities of the Depositor with the assets and liabilities of Triad in
the event that Triad were to become the subject of a case under the
Bankruptcy Code to the Representatives and to Triad, and such opinion
shall be in substantially the form previously discussed with the
Representatives and counsel to the Representatives and in any event
satisfactory in form and in substance to the Representatives and counsel
to the Representatives and to Triad.
(l) Xxxxxxxx & Xxxxx LLP, special tax counsel to the Trust,
shall have furnished to the Representatives their written opinion, dated
as of the Closing Date, in form and in substance satisfactory to the
Representatives in their reasonable judgment, to the effect that:
(i) The Trust will not be characterized as an
association, or a publicly traded partnership, taxable as a
corporation for federal income tax purposes, and the Notes
will be characterized as debt for federal income tax purposes.
(ii) The statements in the Registration Statement, the
Prospectus and the Preliminary Prospectus under the heading
"Summary - Federal Income Tax Consequences" as they relate to
federal income tax matters and under the heading "Material
Federal Income Tax Consequences," to the extent that they
constitute matters of law or legal
14
conclusions with respect thereto, have been prepared or
reviewed by such counsel and are correct in all material
respects.
(m) Counsel satisfactory to the Representatives in their
reasonable judgment shall have furnished to the Representatives a written
opinion, dated as of the Closing Date, in form satisfactory to the
Representatives in their reasonable judgment, to the effect that, assuming
the Depositor and the Trust will each not be classified as an association,
or a publicly traded partnership, taxable as a corporation for federal
income tax purposes and the Notes will be characterized as debt for
federal income tax purposes:
(i) The Trust will not be classified as an association,
or a publicly traded partnership, taxable as a corporation for
California state tax purposes.
(ii) The Notes will be characterized as debt for
California income tax purposes.
(iii) Noteholders not otherwise subject to tax in
California should not be subject to tax in California solely
because of a Noteholder's ownership of the Notes.
(n) The Representatives shall have received an opinion
addressed to the Representatives of Xxxxxx Xxxxxx LLP, in its capacity as
counsel for the Underwriters, dated the Closing Date, with respect to the
validity of the Underwritten Securities, and such other related matters as
the Representatives shall require, and Triad and the Depositor shall have
furnished or caused to be furnished to such counsel such documents as they
may reasonably request for the purpose of enabling them to pass upon such
matters.
(o) The Representatives shall have received an opinion
addressed to the Representatives, the Depositor and Triad of counsel to
the Owner Trustee, dated the Closing Date and satisfactory in form and
substance to the Representatives and counsel to the Representatives,
addressing such matters as the Representatives may request and
substantially to the effect that:
(i) The Owner Trustee is a Delaware banking corporation
duly created, validly existing and in good standing under the
laws of Delaware, with its principal place of business in the
State of Delaware.
(ii) The Owner Trustee has all necessary power and
authority to execute and deliver the Trust Agreement and the
Certificate of Trust and to execute and deliver, on behalf of
the Trust, each of the Indenture, the Insurance Agreement and
the Sale and Servicing Agreement. The Owner Trustee has all
necessary power and authority to execute the Certificate and
the Notes on behalf of the Trust and to authenticate the
Certificate.
15
(iii) Each of the Trust Agreement and the Certificate of
Trust has been duly executed and delivered by the Owner
Trustee and each of the Indenture, the Insurance Agreement and
the Sale and Servicing Agreement has been duly executed and
delivered by the Owner Trustee on behalf of the Trust. Each of
the Notes has been duly executed and delivered by the Owner
Trustee, on behalf of the Trust.
(iv) The execution and delivery of the Trust Agreement
and the Certificate of Trust by the Owner Trustee and the
execution and delivery of the Indenture, Sale and Servicing
Agreement, the Insurance Agreement, the Notes and the
Certificate by the Owner Trustee, on behalf of the Trust, does
not conflict with or result in a breach of or constitute a
default under the Owner Trustee's organization certificate or
by-laws, any federal or Delaware law, rule or regulation
governing its banking or trust powers or, to the best of
counsel's knowledge, without independent investigation, any
judgment or order applicable to it or its acts, properties or,
to the best of counsel's knowledge, without independent
investigation, any indenture, mortgage, contract or other
agreement or instrument to which the Owner Trustee in its
respective capacities is a party or by which it is bound.
(v) Neither the execution and delivery by the Owner
Trustee, on behalf of the Trust, of the Indenture, the
Insurance Agreement or Sale and Servicing Agreement, nor the
execution and delivery of the Trust Agreement or the
Certificate of Trust by the Owner Trustee, requires the
consent, authorization, order or approval of, the giving of
notice to, the registration with, or the taking of any other
action with respect to, any governmental authority or agency
under the laws of the State of Delaware or the federal laws of
the United States governing the banking or trust powers of the
Owner Trustee.
(vi) To the best of counsel's knowledge, without
independent investigation, there are no actions or proceedings
pending or threatened against the Owner Trustee in any court
or before any governmental authority, arbitration board or
tribunal of the State of Delaware which involve the Trust
Agreement, the Indenture, the Sale and Servicing Agreement,
the Insurance Agreement or the Certificate of Trust or the
Notes or would question the right, power or authority of the
Owner Trustee to enter into or perform its obligations under
the Trust Agreement or the Certificate of Trust or to execute
and deliver, on behalf of the Trust, the Indenture, Sale and
Servicing Agreement or the Insurance Agreement.
(p) The Representatives shall have received an opinion
addressed to the Representatives, the Depositor and Triad of counsel to
the Trust, dated the Closing Date and satisfactory in form and substance
to the Representatives and counsel to the Representatives, addressing such
matters as the Representatives may request and substantially to the effect
that:
16
(i) The Trust has been duly formed and is validly
existing as a statutory trust under the Delaware Statutory
Trust Act, 12 Del. C. Section 3801, et seq. (the "Delaware
Act"), and has the power and authority under the Trust
Agreement and the Delaware Act to execute, deliver and perform
its obligations under the Trust Agreement, the Indenture, the
Sale and Servicing Agreement, the Insurance Agreement and the
Notes.
(ii) The Trust Agreement is the legal, valid and binding
agreement of Triad, the Depositor and the Owner Trustee,
enforceable against Triad, the Depositor and the Owner
Trustee, in accordance with its terms.
(iii) The Trust has the power and authority under the
Trust Agreement and the Delaware Act to Grant the Trust
Property to the Indenture Trustee pursuant to the Indenture.
(iv) Each of the Trust Agreement, the Indenture, the
Sale and Servicing Agreement, the Insurance Agreement and the
Notes have been duly authorized by the Trust.
(v) The issuance of the Certificate has been duly
authorized by the Trust, and the Certificate, when duly
executed by the Owner Trustee on behalf of the Trust and
authenticated by the Owner Trustee in accordance with the
Trust Agreement and delivered to the Depositor in accordance
with the Trust Agreement, will be validly issued and
outstanding and entitled to the benefits of the Trust
Agreement.
(vi) Neither the execution, delivery and performance by
the Trust of the Trust Agreement, the Indenture, the Insurance
Agreement, the Sale and Servicing Agreement, and the Notes,
nor the consummation by the Trust of any of the transactions
contemplated thereby, requires the consent or approval of, the
giving of notice to, the registration with, or the taking of
any other action with respect to, any court, or governmental
or regulatory authority or agency under the laws of the State
of Delaware, except for the filing of the Certificate of Trust
with the Secretary of State (which Certificate of Trust has
been duly filed).
(vii) Neither the execution, delivery and performance by
the Trust of the Trust Agreement, the Indenture, the Insurance
Agreement and the Sale and Servicing Agreement, including the
execution and delivery of such documents by the Owner Trustee
on behalf of the Trust, nor the consummation by the Trust or
the Owner Trustee on behalf of the Trust of any of the
transactions contemplated thereby, is in violation of the
Trust Agreement or of any law, rule or regulation of the State
of Delaware applicable to the Trust or the Owner Trustee or,
to the best of counsel's knowledge, without independent
investigation, any agreement, indenture,
17
instrument, order, judgment or decree to which the Trust or
any of its property is subject.
(viii) To the best of counsel's knowledge, without
independent investigation, there are no pending or threatened
actions, suits or proceedings affecting the Trust before any
court or other governmental authority of the State of Delaware
which, if adversely decided, would adversely affect the Trust
Property or the ability of the Trust to carry out the
transactions contemplated by the Trust Agreement, the
Indenture, the Insurance Agreement and the Sale and Servicing
Agreement.
(ix) Under the Delaware Act, the Trust constitutes a
separate legal entity, separate and distinct from the holder
of any Certificate and any other entity and, insofar as the
substantive law of the State of Delaware is applicable, the
Trust rather than the holder of any Certificate in such Trust
will hold whatever title to such property as may be conveyed
to it from time to time pursuant to the Trust Agreement and
the Sale and Servicing Agreement, except to the extent that
such Trust has taken action to dispose of or otherwise
transfer or encumber any such property.
(x) Except as otherwise provided in the Trust Agreement,
under Section 3805(c) of the Delaware Act, a holder of a
Certificate has no interest in specific statutory trust
property.
(xi) Under Section 3805(b) of the Delaware Act, no
creditor of any holder of a Certificate shall have any right
to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of the Trust
except in accordance with the terms of the Trust Agreement.
(xii) Under the Trust Agreement, the Owner Trustee has
the authority to execute and deliver on behalf of the Trust
the Basic Documents to which the Trust is a party.
(q) The Representatives shall have received an opinion
addressed to the Representatives, the Depositor, the Trust, the Indenture
Trustee and Triad of counsel to the Insurer, dated the Closing Date and
satisfactory in form and substance to the Representatives and counsel to
the Representatives, to the effect that:
(i) The Insurer is a stock insurance company licensed
and authorized to transact insurance business and to issue,
deliver and perform its obligations under its surety bonds
under the laws of the State of New York. The Insurer (a) is a
stock insurance company validly existing and in good standing
under the laws of the State of New York, (b) has the corporate
power and authority to own its assets and to carry on the
business in which it is currently engaged, and (c) is duly
qualified and in good standing as a foreign corporation under
the laws of each jurisdiction
18
where failure so to qualify or to be in good standing would
have a material and adverse effect on its business or
operations.
(ii) No litigation or administrative proceedings of or
before any court, tribunal or governmental body are currently
pending or, to the best of such counsel's knowledge,
threatened against the Insurer, which, if adversely
determined, would have a material and adverse effect on the
ability of the Insurer to perform its obligations under the
Note Policy.
(iii) The Note Policy, the Insurance Agreement and the
Indemnification Agreement constitute the irrevocable, valid,
legal and binding obligations of the Insurer in accordance
with their respective terms to the extent provided therein,
enforceable against the Insurer in accordance with their
respective terms, except as the enforceability thereof and the
availability of particular remedies to enforce the respective
terms thereof against the Insurer may be limited by applicable
laws affecting the rights of creditors of the Insurer and by
the application of general principles of equity.
(iv) The Insurer, as an insurance company, is not
eligible for relief under the United States Bankruptcy Code.
Any proceedings for the liquidation, conservation or
rehabilitation of the Insurer would be governed by the
provisions of the Insurance Law of the State of New York.
(v) The statements set forth in the Preliminary
Prospectus and the Prospectus Supplement under the captions
"The Insurer" and "The Policy" are true and correct, except
that no opinion is expressed as to financial statements or
other financial information included in the Preliminary
Prospectus and the Prospectus relating to the Insurer and,
insofar as such statements constitute a summary of the Note
Policy, accurately and fairly summarize the terms of the Note
Policy.
(vi) The Note Policy constitutes an insurance policy
within the meaning of Section 3(a)(8) of the Act.
(vii) Neither the execution or delivery by the Insurer
of the Note Policy, the Insurance Agreement or the
Indemnification Agreement, nor the performance by the Insurer
of its obligations thereunder, will conflict with any
provision of the certificate of incorporation or the amended
by-laws of the Insurer nor, to the best of such counsel's
knowledge, result in a breach of, or constitute a default
under, any agreement or other instrument to which the Insurer
is a party or by which any of its property is bound nor, to
the best of such counsel's knowledge, violate any judgment,
order or decree applicable to the Insurer of any governmental
regulatory body, administrative agency, court or arbitrator
located in any jurisdiction in which the Insurer is licensed
or authorized to do business.
19
(r) The Representatives shall have received an opinion
addressed to the Representatives, the Depositor and Triad of counsel to
the Indenture Trustee and Backup Servicer, dated the Closing Date and
satisfactory in form and substance to the Representatives and counsel to
the Representatives, to the effect that:
(i) The Indenture Trustee has been legally incorporated
under the laws of the United States and is validly existing
and in good standing as a banking association in good standing
under the laws of the United States, and has the requisite
entity power and authority to execute and deliver the
Indenture, the Insurance Agreement and the Sale and Servicing
Agreement and to perform its obligations thereunder.
(ii) With respect to the Indenture Trustee, the
performance of its obligations under the Indenture, the
Insurance Agreement and the Sale and Servicing Agreement and
the consummation of the transactions contemplated thereby do
not require any consent, approval, authorization or order of,
filing with or notice to any court, agency or other
governmental body, except such as may be required under the
securities laws of any state or such as have been obtained,
effected or given.
(iii) With respect to the Indenture Trustee, the
performance of its obligations under the Indenture, the
Insurance Agreement and the Sale and Servicing Agreement and
the consummation of the transactions contemplated thereby will
not result in: (i) any breach or violation of its certificate
of incorporation or bylaws, (ii) to such counsel's knowledge,
any breach, violation or acceleration of or default under any
indenture or other material agreement or instrument to which
the Indenture Trustee is a party or by which it is bound or
(ii) any breach or violation of any statute or regulation or,
to such counsel's knowledge, any order of any court, agency or
other governmental body.
(iv) To such counsel's knowledge, with respect to the
Indenture Trustee, there is no legal action, suit, proceeding
or investigation before any court, agency or other
governmental body pending or threatened against it which,
either in one instance or in the aggregate, draws into
question the validity of the Indenture, the Insurance
Agreement or the Sale and Servicing Agreement, seeks to
prevent the consummation of any of the transactions
contemplated by the Indenture or the Sale and Servicing
Agreement or would impair materially the ability of the
Indenture Trustee to perform its obligations under the
Indenture, the Insurance Agreement or the Sale and Servicing
Agreement.
(v) Each of the Indenture, the Insurance Agreement and
the Sale and Servicing Agreement has been duly authorized,
executed and delivered by the Indenture Trustee and, assuming
the necessary authorization, execution and delivery thereof by
the other parties thereto, is a valid and legally binding
agreement under the laws of the State of
20
New York, enforceable thereunder against the Indenture Trustee
in accordance with its terms.
(vi) The Notes have been duly authenticated and
delivered by the Indenture Trustee in accordance with the
Indenture.
(s) The Representatives shall have received evidence
reasonably satisfactory to them that, on the Closing Date, UCC financing
statements have been or are being filed (i) in the office of the Secretary
of State of the State of California reflecting the transfer of the
interest of Triad in the Receivables and the proceeds thereof to the
Depositor, and (ii) in the office of the Secretary of State of the State
of Delaware reflecting the transfer of the interest of the Depositor in
the Receivables and the proceeds thereof to the Trust and the grant of the
security interest by the Trust in the Receivables and the proceeds thereof
to the Indenture Trustee.
(t) The Class A-1 Notes shall have been rated in the highest
short-term rating category by each of Xxxxx'x and Standard & Poor's; the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes shall have
been rated in the highest long-term rating category by each of Xxxxx'x and
Standard & Poor's.
(u) At the Closing Date, the Class A Notes shall have been
validly issued and paid for by the Depositor.
(v) On the Closing Date, the Certificates shall have been
issued on the order of the Depositor.
(w) The Note Policy shall have been issued by the Insurer and
shall have been duly countersigned by an authorized agent of the Insurer,
if so required under applicable state law or regulation.
(x) All proceedings in connection with the transactions
contemplated by this Underwriting Agreement, and all documents incident
hereto, shall be reasonably satisfactory in form and substance to the
Representatives and counsel for the Representatives, and the
Representatives and counsel for the Representatives shall have received
such other information, opinion, certificates and documents as they may
reasonably request in writing.
(y) The Representatives shall have received from local
counsel, in the states where there is a concentration of 10% or more of
the Receivables, an opinion dated the Closing Date as to the perfection of
security interests in automobiles in such states.
7. Indemnification and Contribution. (a) The Depositor will
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) (a)
arise out of or are based upon any
21
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (including the Rule 430B Information) or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading or (b) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Prospectus, the Prospectus, the Time of Sale
Information, the Depositor Information or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and will
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Depositor will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement, or
omission or alleged omission, made (x) in any of such documents, in
reliance upon and in conformity with the Underwriter Information or (y) in
any Derived Information (as defined in Section 8 below) unless such untrue
statement or alleged untrue statement or omission or alleged omission made
in any Derived Information results from an error or omission in the
Preliminary Prospectus, the Prospectus or in any Depositor Information (as
defined in Section 8 below). This indemnity agreement will be in addition
to any liability that the Depositor may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Depositor, its directors, each of its
officers who signed the Registration Statement and each person who
controls the Depositor within the meaning of either Section 15 of the Act
or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Depositor to the Underwriters, but only with reference
to untrue statements or omissions or alleged untrue statements or
omissions made in (x) the Registration Statement, the Preliminary
Prospectus, the Prospectus or in any amendment thereof or supplement
thereto, or the Time of Sale Information or any Free Writing Prospectus in
reliance upon and in conformity with the Underwriter Information or (y)
any Derived Information; provided, however, that the indemnity with
respect to clause (y) above shall not apply to any untrue statement or
alleged untrue statement or omission or alleged omission made in any
Derived Information that results from an error or omission in (i) the
Preliminary Prospectus, (ii) the Prospectus or (iii) any Depositor
Information. This indemnity agreement will be in addition to any liability
that the Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph
(a) or (b) above unless and to the extent it did not otherwise learn of
such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any
22
obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at
the indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the indemnified party in
an action, the indemnified party shall have the right to employ separate
counsel (including local counsel), and the indemnifying party shall bear
the reasonable fees, costs and expenses of such separate counsel if (i)
the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party,
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or
(iii) the indemnifying party shall authorize the indemnified party to
employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent (x) does not include a statement as to, or admission
of, fault, culpability or a failure to act by or on behalf of any such
indemnified party and (y) includes an unconditional release of each
indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party (in the case of the Underwriters, severally and not
jointly) shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Depositor on
the one hand and the Underwriters on the other from the offering of the
Underwritten Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then
each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Depositor
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages, or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative benefits received by the Depositor
on the one hand and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Depositor bear to the total
underwriting
23
discounts and commissions received by the Underwriters, in each case as
set forth in the table on the cover page of the Prospectus as amended or
supplemented with respect to the Underwritten Securities. The relative
fault shall be determined by reference to whether any alleged untrue
statement or omission relates to information provided by Triad or the
Depositor on the one hand or the several Underwriters on the other. The
Depositor and the Underwriters, severally and not jointly, agree that it
would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid
by an indemnified party as a result of the losses, claims, damages, or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The obligations of the Underwriters
of the Underwritten Securities in this subsection (d) to contribute are
several and not joint. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount pursuant to
this Underwriting Agreement and the Triad Indemnification Agreement
(collectively) in excess of the underwriting discount or commission
applicable to the Notes purchased by it hereunder.
8. Free Writing Prospectuses.
(a) The following terms have the specified meanings for
purposes of this Agreement:
(i) "Depositor Information" means any computer tape or other
information in respect of the Notes, the Receivables or other Trust
Property furnished by the Depositor or any of its affiliates to any
Underwriter.
(ii) "Derived Information" means such written information
regarding the Offered Securities as is disseminated by any
Underwriter to a potential investor other than (A) Issuer
Information, (B) information contained in the Registration
Statement, the Preliminary Prospectus, the Prospectus Supplement,
the Prospectus or any amendment or supplement to any of them,
including any information incorporated therein by reference (other
than information incorporated by reference from any information
regarding the Underwritten Securities that is disseminated by any
Underwriter to a potential investor) and (C) Depositor Information.
(iii) "Free Writing Prospectus" means and includes any
information relating to the Notes disseminated by the Depositor or
any Underwriter that constitutes a "free writing prospectus" within
the meaning of Rule 405 under the Act.
24
(iv) "Issuer Information" means any information of the type
specified in clause (1) - (5) of footnote 271 of Commission Release
No. 33-8591 (Securities Offering Reform).
(b) Neither the Depositor nor any Underwriter shall
disseminate or file with the Commission any information relating to the
Underwritten Securities in reliance on Rule 167 or 426 under the Act, nor
shall the Depositor or any Underwriter disseminate any Underwriter Free
Writing Prospectus (as defined below) "in a manner reasonably designed to
lead to its broad unrestricted dissemination" within the meaning of Rule
433(d) under the Act.
(c) The Depositor shall not disseminate to any potential
investor any information relating to the Underwritten Securities that
constitutes a "written communication" within the meaning of Rule 405 under
the Act, other than the Time of Sale Information and the Prospectus,
unless the Depositor has obtained the prior consent of the
Representatives.
(d) Each Underwriter represents, warrants, covenants and
agrees with the Depositor that, other than the Preliminary Prospectus and
the Prospectus, it has not made, used, prepared, authorized, approved or
referred to and will not prepare, make, use, authorize, approve or refer
to any "written communication" (as defined in Rule 405 under the Act) that
constitutes an offer to sell or solicitation of an offer to buy the Notes,
including but not limited to any "ABS informational and computational
materials" as defined in Item 1101(a) of Regulation AB under the Act;
provided, however, that (i) each Underwriter may prepare and convey one or
more "written communications" (as defined in Rule 405 under the Act)
containing no more than the following: (1) information included in the
Preliminary Prospectus, (2) information relating to the class, size,
rating, price, CUSIP numbers, coupon, yield, spread, benchmark, pricing
prepayment speed and clean up call information, status and/or legal
maturity date of the Underwritten Securities, any credit enhancement
expected to be provided with respect to the Underwritten Securities or the
Receivables or the Receivables, the weighted average life, expected final
payment date, trade date, settlement date and payment window of one or
more classes of Underwritten Securities, the names of any underwriters for
one or more classes of Underwritten Securities and the names of any credit
enhancement, (3) the eligibility of the Underwritten Securities to be
purchased by ERISA plans and (4) syndicate structure and a column or other
entry showing the status of the subscriptions for the Underwritten
Securities (both for the issuance as a whole and for each Underwriter's
retention) and/or expected pricing parameters of the Underwritten
Securities (each such written communication, an "Underwriter Free Writing
Prospectus"); (ii) each Underwriter shall provide the Depositor with a
true and accurate copy of each Free Writing Prospectus conveyed by it of
the type referred to in Rule 433(d)(5)(ii) under the Act no later than the
close of business on the date of first use; and (iii) each Underwriter is
permitted to provide information customarily included in confirmations of
sales of securities and notices of allocations and information delivered
in compliance with Rule 134 of the Act.
25
(e) The Depositor agrees to file with the Commission when
required under the Rules and Regulations, subject to the Underwriters'
compliance with Section 8(d), any Underwriter Free Writing Prospectus at
the time required to be filed.
(f) Notwithstanding the provisions of Section 8(e), the
Depositor will not be required to file any Free Writing Prospectus that
does not contain substantive changes from or additions to a Free Writing
Prospectus previously filed with the Commission.
(g) The Depositor and the Underwriters each agree that any
Free Writing Prospectuses prepared by it will contain substantially the
following legend:
The depositor has filed a registration statement (including a
prospectus) with the SEC for the offering to which this
communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents the
depositor and the issuing trust have filed with the SEC for more
complete information about the depositor, the issuing trust and this
offering. You may get these documents for free by visiting XXXXX on
the SEC website at xxx.xxx.xxx. Alternatively, the depositor, any
underwriter or any dealer participating in the offering will arrange
to send you the prospectus if you request it by calling toll-free
0-000-000-0000.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements (including, without limitation, Section 5(m) hereof) of the
Depositor or the officers of the Depositor and of the Underwriters set
forth in or made pursuant to this Underwriting Agreement or contained in
certificates of officers of the Depositor submitted pursuant hereto shall
remain operative and in full force and effect, regardless of (i) any
investigation or statement as to the results thereof made by or on behalf
of any Underwriter or of the Depositor or any of their respective
representatives, officers or directors or any controlling person, and (ii)
delivery of and payment for the Underwritten Securities. If for any reason
the purchase of the Underwritten Securities by the Underwriters is not
consummated, the Depositor shall remain responsible for the expenses to be
paid or reimbursed by the Depositor pursuant to Section 5(i) and the
respective obligations of the Depositor and the Underwriters pursuant to
Section 7 shall remain in effect. If for any reason the purchase of the
Underwritten Securities by the Underwriters is not consummated (other than
because of the occurrence of an event specified in items (ii), (iii),
(iv), (v), (vi) or (vii) of Section 6(e)), the Depositor will reimburse
any Underwriter, upon demand, for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by it in
connection with the offering of the Underwritten Securities.
10. Defaults of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Underwritten Securities hereunder
on the Closing Date and arrangements satisfactory to the Representatives
and the Depositor for the purchase of such Underwritten Securities by
other persons are not made within 36 hours after such default, this
Underwriting Agreement will terminate without liability on the part of any
26
nondefaulting Underwriter or the Depositor, except as provided in Section
9 and except that, if the aggregate principal amount of Underwritten
Securities that the defaulting Underwriter or Underwriters agreed but
failed to purchase shall be 10% or less of the aggregate principal amount
of all the Underwritten Securities set forth in Schedule I hereto, the
remaining Underwriters shall be obligated severally to take up and pay for
(in the respective proportions which the aggregate principal amount of
Underwritten Securities set forth opposite their names in Schedule I
hereto bears to the aggregate principal amount of Underwritten Securities
set forth opposite the names of all the remaining Underwriters) the
Underwritten Securities that the defaulting Underwriter or Underwriters
agreed but failed to purchase. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under
this Section 10. Nothing herein will relieve a defaulting Underwriter from
liability for its default.
11. Relationship Among Parties. The Depositor acknowledges and
agrees that the Underwriters are acting solely in the capacity of an arm's
length contractual counterparty to the Depositor with respect to the
offering of the Underwritten Securities contemplated hereby (including in
connection with determining the terms of the offering) and not as a
financial advisor or a fiduciary to, or an agent of, the Depositor or any
other person. Additionally, none of the Underwriters are advising the
Depositor or any other person as to any legal, tax, investment, accounting
or regulatory matters in any jurisdiction. The Depositor shall consult
with their own advisors concerning such matters and shall be responsible
for making their own independent investigation and appraisal of the
transactions contemplated hereby, and the Underwriters shall have no
responsibility or liability to the Depositor with respect to any legal,
tax, investment, accounting or regulatory matters. The Depositor has been
advised that the Underwriters and their respective affiliates are engaged
in a broad range of transactions that may involve interests that differ
from those of the Depositor and that the Underwriters have no obligation
to disclose such interests and transactions by virtue of any fiduciary,
advisory or agency relationship. Any review by the Underwriters of the
Depositor, the transactions contemplated hereby or other matters relating
to such transactions will be performed solely for the benefit of the
Underwriters and shall not be on behalf of the Depositor.
12. Notices. All communications hereunder will be in writing and
will be mailed, delivered or sent by facsimile transmission and confirmed.
Communications to the Representatives or the Underwriters shall be given
to each Representative at: (i) Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and (ii)
Citigroup Global Markets Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxx Xxxx. Communications to the Depositor shall be
given to it in care of Triad Financial Special Purpose LLC, 0000 Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention: Chief
Financial Officer.
13. Successors. This Underwriting Agreement will inure to the
benefit of and be binding upon the Underwriters and the Depositor and
their respective successors and the officers and directors and controlling
persons referred to in Section 7, and no other person will have any right
or obligations hereunder. No purchaser of Notes from any
27
Underwriter shall be deemed to be a successor of such Underwriter merely
because of such purchase.
14. Applicable Law. This Underwriting Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
15. Counterparts. This Underwriting Agreement may be executed by
each of the parties hereto in any number of counterparts, and by each of
the parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original, but all
such counterparts shall together constitute but one and the same
instrument.
28
If the foregoing is in accordance with your understanding, please sign
and return to us a counterpart hereof, whereupon this letter and your acceptance
hereof shall constitute a binding agreement.
Very truly yours,
TRIAD FINANCIAL SPECIAL PURPOSE LLC
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
[Signature page to Underwriting Agreement (p. 1 of 2)]
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first written above.
XXXXXXX, XXXXX & CO.
on behalf of itself and as Representative
of the several Underwriters,
By: /s/ Xxxxxxx, Xxxxx & Co.
--------------------------------
Name: Xxxxxxx, Xxxxx & Co.
Title:
CITIGROUP GLOBAL MARKETS INC.
on behalf of itself and as Representative
of the several Underwriters,
By: /s/ Xxxx Xxxx
---------------------------------
Name: Xxxx Xxxx
Title: Director
[Signature page to Underwriting Agreement (p. 2 of 2)]
SCHEDULE I
INITIAL CITIGROUP CREDIT SUISSE
PRINCIPAL GOLDMAN, GLOBAL MARKETS SECURITIES LEHMAN DEUTSCHE BANK
AMOUNT SACHS & CO. INC. (USA) LLC BROTHERS INC. SECURITIES INC.
---------------- ------------- -------------- ------------- ------------- ---------------
Class A-1 Notes $ 83,500,000 $ 83,500,000 -- -- --
Class A-2 Notes $ 97,000,000 $ 97,000,000 $ 21,000,000 $ 21,000,000 $ 21,000,000
Class A-3 Notes $ 123,250,000 $ 123,250,000 $ 27,000,000 $ 27,000,000 $ 27,000,000
Class A-4 Notes $ 82,000,000 $ 82,000,000 -- -- --
------------- ------------- ------------ ------------ ------------
TOTAL $ 385,750,000 $ 385,750,000 $ 48,000,000 $ 48,000,000 $ 48,000,000
------------- ------------- ------------ ------------ ------------
