EXHIBIT 1.1
TRIAD AUTOMOBILE RECEIVABLES TRUST 2002-A
CLASS A-1 1.72313% ASSET BACKED NOTES
CLASS A-2 1.99% ASSET BACKED NOTES
CLASS A-3 2.62% ASSET BACKED NOTES
CLASS A-4 3.24% ASSET BACKED NOTES
TRIAD FINANCIAL SPECIAL PURPOSE LLC
(SELLER)
August 14, 2002
UNDERWRITING AGREEMENT
Banc of America Securities LLC
On behalf of itself and
as representative (the "Representative")
of the several Underwriters
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
1. Introductory. Triad Financial Special Purpose LLC, a Delaware limited
liability company (the "Seller"), proposes to sell to the Underwriters named
herein:
(a) $202,000,000 principal amount of Class A-1 1.72313% Asset
Backed Notes (the "Class A-1 Notes ");
(b) $231,000,000 principal amount of Class A-2 1.99% Asset Backed
Notes (the "Class A-2 Notes");
(c) $187,000,000 principal amount of Class A-3 2.62% Asset Backed
Notes (the "Class A-3 Notes");
(d) $206,374,000 principal amount of Class A-4 3.24% Asset Backed
Notes (the "Class A-4 Notes" and, together with the Class A-1 Notes, the Class
A-2 Notes and the Class A-3 Notes, the "Class A Notes" or "Underwritten
Securities");
in each case issued by Triad Automobile Receivables Trust 2002-A (the "Trust").
Simultaneously with the issuance and sale of the Underwritten Securities
as contemplated herein, the Trust will issue $52,747,026 principal amount of
Class B 8.00% Asset Backed Notes (the "Class B Notes" and, together with the
Class A Notes, the "Notes") and 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 August 1, 2002 (the "Indenture") by and between
the Trust and JPMorgan Chase Bank (the "Indenture Trustee"). Payments in respect
of the Class B Notes, to the extent specified in the Indenture and the Sale and
Servicing Agreement (as hereinafter defined), are subordinated to the rights of
the holders of the Class A Notes.
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 Amended and Restated Trust Agreement
(the "Trust Agreement") to be dated as of August 1, 2002 between the Seller,
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 Seller pursuant to the Purchase Agreement (the "Purchase Agreement") dated
as of August 1, 2002, and certain monies due or in some cases received
thereunder on or after August 1, 2002. The Receivables will be sold to the Trust
by the Seller 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 August 1, 2002 by and among the Seller, the
Servicer, the Indenture Trustee and the Trust.
The Class A Notes will have the benefit of a note insurance policy (the
"Note Policy"), issued by Ambac Assurance Corporation, a financial guaranty
insurance company incorporated under the laws of the State of Wisconsin (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 August 1, 2002 (the "Insurance Agreement")
and (ii) the Representative and the Insurer will execute and deliver an
Indemnification Agreement dated as of August 14, 2002 (the "Indemnification
Agreement").
Capitalized terms used herein and not otherwise defined shall have the
meanings given them in the Sale and Servicing Agreement.
2. Representations and Warranties of the Seller. The Seller represents
and warrants to and agrees with the several underwriters named in Schedule I
hereto (the "Underwriters") that:
(a) Registration statement on Form S-3 No. 333-90130 including a
form of prospectus and such amendments thereto as may have been required to the
date hereof, relating to the Underwritten Securities and the offering thereof
from time to time in accordance with Rule 415 under the Securities Act of 1933,
as amended (the "Act"), have been filed with the Securities and Exchange
Commission (the "Commission") and such registration statement, as amended, has
become effective. Such registration statement, as amended at the Effective Time,
including the exhibits thereto (but excluding Form T-1) and any material
incorporated by reference therein, are
2
hereinafter referred to as the "Registration Statement," and the prospectus
(including the base prospectus and any prospectus supplement) relating to the
Underwritten Securities, as last filed with the Commission pursuant to Rule
424(b) ("Rule 424(b)") under the Act is hereinafter referred to as the
"Prospectus." For purposes of this Underwriting Agreement, "Effective Time"
means the date and time as of which such Registration Statement, or the most
recent post-effective amendment thereto, is declared effective by the
Commission, and "Effective Date" means the date of the Effective Time.
(b) On the Effective Date, the Registration Statement did conform
in all material respects to the requirements of the Act, the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), where applicable, and the rules
and regulations of the Commission under the Act or the Exchange Act, as
applicable, and did not, as of the Effective Date, contain any 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; provided,
however, that this representation and warranty shall not apply to any statement
or omission made in reliance upon and in conformity with information furnished
in writing to the Seller by the Underwriters through the Representative
expressly for use in the Registration Statement; and when the Indenture is
executed by the parties thereto, the Indenture will conform in all material
respects with the Trust Indenture Act and at all times thereafter the Indenture
will be duly qualified under the Trust Indenture Act.
(c) On the date of this Underwriting Agreement, the Registration
Statement conforms, and at the time of the last filing of the Prospectus
pursuant to Rule 424(b), the Registration Statement and the Prospectus will
conform, in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder (the "Rules and Regulations"), and,
except as aforesaid, neither of such documents includes, or will include, any
untrue statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(d) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the rules and regulations thereunder;
and any further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission, will conform in
all material respects to the requirements of the Exchange Act and the rules and
regulations thereunder.
(e) The Seller has been duly formed and is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware, and is duly qualified to transact business and is in good standing in
each jurisdiction in the United States of America in which the conduct of its
business or the ownership of its property requires such qualification, other
than where the failure to be so qualified or in good standing would not have a
material adverse effect on the transactions contemplated herein or in the Basic
Documents.
(f) The consummation by the Seller of the transactions
contemplated by this Underwriting Agreement and the Basic Documents and the
fulfillment of the terms hereof and thereof 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
3
of the property or assets of the Seller pursuant to the terms of, any indenture,
mortgage, deed of trust, loan agreement, guarantee, lease financing agreement,
or similar agreement or instrument under which the Seller is a debtor or
guarantor.
(g) This Underwriting Agreement has been duly authorized,
executed and delivered by the Seller; 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 Seller is a party will have been duly
authorized, executed and delivered by and will constitute valid and binding
obligations of the Seller 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.
(h) 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 Representative, will
be complete and accurate in all material respects as of the date thereof.
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 Seller agrees to sell
to the Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Seller, the aggregate principal amounts of the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 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 100.000000%
Class A-2 Notes 99.993103%
Class A-3 Notes 99.991087%
Class A-4 Notes 99.991235%
Against payment of the purchase price in immediately available funds
drawn to the order of the Seller, the Seller will deliver the Underwritten
Securities to the Representative, for the account of the Underwriters, at the
office of Xxxxx Xxxxxxxxxx LLP on August 21, 2002, at 9:00 a.m., New York time,
or at such other time not later than seven full business days thereafter as the
Representative and the Seller determine, such time being referred to as the
"Closing Date". Each of the Class A Notes to be so delivered will be initially
represented by one or more notes registered in the name of Cede & Co., the
nominee of The Depository Trust Company ("DTC").
4
The interests of beneficial owners of the Class A 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 Seller. The Seller covenants and agrees with the
Underwriters:
(a) If required, to file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b) not later than the time specified
therein. The Seller will advise the Underwriters promptly of any such filing
pursuant to Rule 424(b).
(b) To make no amendment or any supplement to the Registration
Statement or the Prospectus as amended or supplemented prior to the Closing
Date, without furnishing the Representative with a copy of the proposed form
thereof and providing the Representative with a reasonable opportunity to review
the same; and during such same period to advise the Representative, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus as amended or supplemented or any amended Prospectus has been
filed or mailed for filing, of the issuance of any stop order by the Commission,
of the suspension of the qualification of any of the Underwritten Securities for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus as
amended or supplemented or for additional information; and, in the event of the
issuance of any such stop order or of any order preventing or suspending the use
of any prospectus relating to the Underwritten Securities or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal.
(c) Promptly from time to time to take such action as the
Representative may reasonably request in order to qualify the Underwritten
Securities for offering and sale under the securities laws of such states as the
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 Seller 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, and provided
further that the expense of maintaining any such qualification more than one
year from the Closing Date with respect to such Underwritten Securities shall be
at the Representative's expense.
(d) To furnish the Underwriters with copies of the Registration
Statement (including exhibits) and copies of the Prospectus as amended or
supplemented in such quantities as the Representative may from time to time
reasonably request; and if, before a period of six months shall have elapsed
after the Closing Date and the delivery of a prospectus or offering document
shall be at the time required by law in connection with sales of any such
Underwritten Securities, either (i) any event shall have occurred as a result of
which the Prospectus would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
5
made, not misleading, or (ii) for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus as amended or
supplemented, to notify the Representative and to prepare and furnish to the
Representative as the Representative may from time to time reasonably request an
amendment or a supplement to the Prospectus which will correct such statement or
omission or effect such compliance; and in case any Underwriter is required by
law to deliver a prospectus or other offering document in connection with sales
of any of such Underwritten Securities at any time six months or more after the
Closing Date, upon the Representative's request, but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as the
Representative may request of an amended or supplemented prospectus or offering
document complying with the Act.
(e) To make generally available to Noteholders as soon as
practicable, but in any event no later than eighteen months after the Closing
Date, an earnings statement of the Seller complying with Rule 158 under the Act
and covering a period of at least twelve consecutive months beginning after the
Closing Date.
(f) To furnish to the Representative copies of the Registration
Statement (one of which will be signed and will include all exhibits), each
related preliminary prospectus and the Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in such
quantities as the Representative reasonably requests.
(g) So long as any of the Underwritten Securities are
outstanding, to furnish the Representative copies of all reports or other
communications (financial or other) furnished to Noteholders, and to deliver to
the Representative 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
Seller or the Trust as the Representative may from time to time reasonably
request.
(h) To pay or cause to be paid the following costs and expenses
incident to the performance of its obligations hereunder: (i) the Commission's
filing fees with respect to the Underwritten Securities; (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 PricewaterhouseCoopers LLP relating
to the letter referred to in Section 6(a) hereof; (vii) 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; (viii) the cost of printing any term sheets, computational materials
and preliminary and final prospectuses provided to investors (including any
amendments and supplements thereto required within six months from the Closing
Date pursuant to Section 5(d) hereof) relating to the Underwritten Securities
and the Registration Statement; and (ix) any other fees and expenses incurred in
connection with the performance of its obligations hereunder.
(i) The Underwriters shall pay the following costs and expenses
incident to the performance of their obligations hereunder: all Blue Sky fees
and expenses as well as reasonable
6
fees and expenses of counsel in connection with state securities law
qualifications and any legal investment surveys. Except as provided in this
subsection (h) and Section 10 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 Xxxxx, Xxxxx, Xxxx & Maw,
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.
(j) 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 Representative (i) copies
of each certificate, the annual statements of compliance 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 Payment 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.
(k) On or before the Closing Date, the Seller 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 Seller nor the Servicer shall take any action inconsistent with the
Trust's ownership of such Receivables, other than as permitted by the Basic
Documents.
(l) 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 Seller, the Seller 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
Seller herein, to the accuracy of the statements of officers of the Seller and
Triad made pursuant to the provisions hereof, to the performance by the Seller
of its obligations hereunder and to the following additional conditions
precedent:
(a) On or prior to the Closing Date, PricewaterhouseCoopers LLP
shall have furnished to the Representative a letter dated as of the Closing Date
substantially in the form and substance of the draft to which the Representative
has previously agreed.
(b) The Representative 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
7
Representative and duly executed by the signatories required pursuant to the
respective terms thereof.
(c) On the Closing Date, the Registration Statement shall be
effective and no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Seller, shall be contemplated by the Commission. Any request of the
Commission for inclusion of additional information in the Registration Statement
or the Prospectus shall have been complied with.
(d) The Representative shall have received as of the Closing Date
an officer's certificate signed by an authorized officer of the Seller
representing and warranting that, as of the Closing Date, except to the extent
that they relate expressly to another date in which case they will be true and
correct as of such date on the Closing Date, the representations and warranties
of the Seller in this Underwriting Agreement will be true and correct in all
material respects, that the Seller has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date in all material respects, that 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 and that neither the Registration Statement nor the Prospectus, as
amended or supplemented, 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 not misleading; provided, however, that no such
certificate shall apply to any statements or omissions made in reliance upon and
in conformity with information furnished by an Underwriter through the
Representative expressly for use therein.
(e) Since the respective dates as of which information is given
in the Prospectus as amended or supplemented, there shall not have occurred any
material adverse change, or any development involving a prospective material
adverse change, in or affecting particularly the business or assets of the
Seller, or any material adverse change in the financial position or results or
operations of the Seller, otherwise than as set forth or contemplated in the
Prospectus, which in any such case makes it impracticable or inadvisable in the
Representative's reasonable judgment to proceed with the public offering or the
delivery of the Underwritten Securities on the terms and in the manner
contemplated in the Prospectus as amended or supplemented.
(f) Since the respective dates as of which information is
provided in the Prospectus as amended or supplemented, there shall not have
occurred any material adverse change, or any development involving a prospective
material adverse change, in or affecting particularly the business or assets of
Triad and its subsidiaries considered as a whole, or any material adverse change
in the financial position or results of operations of Triad and its subsidiaries
considered as a whole, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented, which makes it impracticable or
inadvisable in the Representative's reasonable judgment to proceed with the
public offering or the delivery of the Underwritten Securities on the terms and
in the manner contemplated in the Prospectus as amended or supplemented.
(g) Subsequent to the execution and delivery of this Underwriting
Agreement,
8
(i) (A) there shall not have occurred a declaration of a
general moratorium on commercial banking activities by either
the Federal or New York State authorities or a material
disruption in the securities settlement or clearance systems in
the United States, which moratorium or disruption remains in
effect and which, in the Representative's reasonable judgment,
substantially impairs the Underwriters' ability to settle the
transaction; provided that the exercise of such judgment shall
take into account the availability of alternative means for
settlement and the likely duration of such moratorium or
disruption with the understanding that if the United States
Securities and Exchange Commission or, with respect to a banking
moratorium, the Board of Governors of the Federal Reserve System
or New York State banking authority, as applicable, has
unequivocally stated prior to the Closing Date that the
resumption of such systems will occur within 3 business days of
the scheduled Closing Date for such Underwritten Securities, the
ability to settle the transaction shall not be deemed to be
substantially impaired and (B) the United States shall not have
become engaged in hostilities which have resulted in the
declaration of a national emergency or a declaration of war,
which makes it impracticable or inadvisable, in the
Representative's reasonable judgment, to proceed with the public
offering or the delivery of the Underwritten Securities on the
terms and in the manner contemplated in the Prospectus as
amended or supplemented, and
(ii) there shall not have occurred (A) any suspension or
limitation on trading in securities generally on the New York
Stock Exchange or the National Association of Securities Dealers
National Market system, or any setting of minimum prices for
trading on such exchange or market system, (B) any material
outbreak or material escalation of hostilities involving the
engagement of armed conflict in which the United States is
involved or (C) any 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 Representative's view has caused a
substantial deterioration in the price and/or value of such
Underwritten Securities, that in the case of clause (A), (B) or
(C), in the mutual reasonable determination of the
Representative and Triad, the effect of any such event or
circumstance makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Underwritten
Securities on the terms and in the manner contemplated in the
Prospectus as amended or supplemented.
(h) Counsel satisfactory to the Representative in its reasonable
judgment shall have furnished to the Representative a written opinion, dated as
of the Closing Date, in form satisfactory to the Representative in its
reasonable judgment, to the effect that:
(i) The Seller has been duly organized and is validly
existing as a limited liability company in good standing under
the laws of the State of Delaware, and is duly qualified to
transact business and is in good standing in each jurisdiction
in the United States of America in which the conduct of its
business or the ownership of its property requires such
qualification.
9
(ii) This Underwriting Agreement has been duly
authorized, executed and delivered by the Seller.
(iii) The Purchase Agreement, the Insurance Agreement,
the Trust Agreement and the Sale and Servicing Agreement have
been duly authorized, executed and delivered by, and each
constitutes a valid and binding obligation of, the Seller.
(iv) The consummation of the transactions contemplated
by this Underwriting Agreement and the Basic Documents, and the
fulfillment of the terms hereof and thereof, will not conflict
with or result in a material breach of any of the terms or
provisions of, or constitute a default under, or result in the
creation or imposition of any material lien, charge or
encumbrance upon any of the property or assets of the Seller
pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement, guarantee, lease financing agreement or
similar agreement or instrument known to such counsel under
which the Seller is a debtor or guarantor, nor will such action
result in any violation of the provisions of the Certificate of
Formation or the Limited Liability Company Agreement of the
Seller.
(v) The Notes have been duly authorized; when executed
by the Owner Trustee and authenticated by the Indenture Trustee
in accordance with the Indenture and delivered and paid for by
the purchasers thereof, the Notes will constitute valid and
binding obligations of the Trust enforceable in accordance with
their terms.
(vi) The Registration Statement has become effective
under the Act and, to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has
been instituted or threatened by the Commission; the
Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto
made by the Seller prior to the Closing Date (other than the
financial statements and other accounting information contained
in the Registration Statement or the Prospectus as amended or
supplemented or any further amendments or supplements thereto,
or omitted therefrom, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder
and the Trust Indenture Act.
(vii) Such counsel believes that neither the
Registration Statement (other than the financial statements and
other accounting information contained therein or omitted
therefrom, as to which such counsel need express no opinion) nor
any amendment thereto, at the time the same became effective,
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
10
(viii) Such counsel believes that at the Closing Date
the Prospectus as amended or supplemented (other than the
financial statements and the other accounting information
contained therein or omitted therefrom, as to which such counsel
need express no opinion) does not contain any untrue statement
of a material fact or omit to state any 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.
(ix) Such counsel does not know of any contract or other
document of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or
required to be described in the Registration Statement or the
Prospectus as amended or supplemented which is not filed or
incorporated by reference or described as required.
(x) Such counsel does not know of any legal or
governmental proceedings pending to which the Seller is a party
or of which any property of the Seller is the subject, and no
such proceedings are known by such counsel to be threatened or
contemplated by governmental authorities or threatened by
others, other than as set forth or contemplated in the
Prospectus as amended or supplemented and other than such
proceedings which, in such counsel's opinion, will not have a
material adverse effect upon the general affairs, financial
position, net worth or results of operations (on an annual
basis) of the Seller and will not materially and adversely
affect the performance by the Seller of its obligations under,
or the validity and enforceability of, this Underwriting
Agreement, the Basic Documents or the Notes.
(xi) The Notes, the Indemnification Agreement, the Basic
Documents and this Underwriting Agreement each conform in all
material respects with the descriptions thereof contained in the
Registration Statement or the Prospectus.
(xii) The Seller is not required to be registered under
the Investment Company Act of 1940, as amended.
(xiii) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein or in the
Basic Documents, except such as may be required under the Act,
the Trust Indenture Act and other federal and state securities
laws; filings with respect to the transfer of the Receivables to
the Seller pursuant to the Purchase Agreement and to the Trust
pursuant to the Sale and Servicing Agreement and the grant of a
security interest in the Receivables to the Indenture Trustee
pursuant to the Indenture; and such other approvals as have been
obtained.
Such opinion may be made subject to the qualifications that the
enforceability of the terms of the Indenture, the Insurance Agreement, the
Purchase Agreement, the Trust Agreement, the Sale and Servicing Agreement and
the Notes may be limited by bankruptcy, insolvency,
11
reorganizations 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.
(i)Counsel satisfactory to the Representative in its reasonable
judgment shall have furnished to the Representative a written opinion, dated as
of the Closing Date, in form satisfactory to the Representative in its
reasonable judgment, to the effect that:
(i) Triad has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of California, and is duly qualified to transact business
and is in good standing in each jurisdiction in the United
States of America in which the conduct of its business or the
ownership of its property requires such qualification, with only
such exceptions as are not material to the business of Triad and
its subsidiaries considered as a whole.
(ii) The indemnification agreement relating to the
Underwritten Securities (the "Triad Indemnification Agreement")
dated August 14, 2002 between Triad and the Representative, has
been duly authorized, executed and delivered by Triad.
(iii) The Limited Liability Company Agreement, the
Insurance Agreement, the Purchase Agreement, and the Sale and
Servicing Agreement have been duly authorized, executed and
delivered by, and each constitutes a valid and binding
obligation of, Triad. The Indenture, the Insurance Agreement and
the Sale and Servicing Agreement, have been duly authorized,
executed and delivered by the Trust and each constitutes a valid
and binding obligation of the Trust.
(iv) The consummation of the transactions contemplated
by this Underwriting Agreement, the Triad Indemnification
Agreement and the Basic Documents, and the fulfillment of the
terms hereof and thereof, will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under (in each case material to Triad and its
subsidiaries considered as a whole), or result in the creation
or imposition of any lien, charge or encumbrance (in each case
material to Triad and its subsidiaries considered as a whole)
upon any of the property or assets of Triad pursuant to the
terms of, any indenture, mortgage, deed of trust, loan
agreement, guarantee, lease financing agreement or similar
agreement or instrument known to such counsel under which Triad
is a debtor or guarantor, nor will such action result in any
violation of the provisions of the Certificate of Incorporation
or the By-Laws of Triad.
(v) Such counsel does not know of any legal or
governmental proceedings pending to which Triad is a party or of
which any property of Triad is the subject, and no such
proceedings are known by such counsel to be threatened or
contemplated by governmental authorities or threatened by
others, other than as set forth or contemplated in the
Prospectus as amended or supplemented and other than such
proceedings which, in such counsel's opinion, will not have a
material adverse effect upon the general affairs, financial
position, net worth or results of
12
operations (on an annual basis) of Triad and its subsidiaries
considered as a whole and will not materially and adversely
affect the performance by Triad of its obligations under, or the
validity and enforceability of, the Basic Documents or the Triad
Indemnification Agreement.
(vi) Triad has full power and authority to sell and
assign the property to be sold and assigned to the Seller
pursuant to the Purchase Agreement and has duly authorized such
sale and assignment to the Seller by all necessary corporate
action.
(vii) The Seller has full power and authority to sell
and assign the property to be sold and assigned to the Trust
pursuant to the Sale and Servicing Agreement and has duly
authorized such sale and assignment to the Trust by all
necessary limited liability company action.
(viii) The Trust has full power and authority to grant a
security interest in the property to be pledged to the Indenture
Trustee pursuant to the Indenture and has duly authorized such
grant by all necessary trustee action.
(ix) The statements in the Prospectus under the captions
"Risk Factors", "Material Federal Income Tax Consequences",
"State and Local Tax Considerations", "ERISA Considerations",
"Legal Investment" and "Material Legal Aspects of the Automobile
Loans" to the extent they constitute matters of law or legal
conclusions, are correct in all material respects.
(x) Immediately prior to the sale of the Receivables to
the Seller, Triad owned the Receivables free and clear of any
lien, security interest or charge; immediately prior to the
assignment of the Receivables to the Trust, the Seller owned the
Receivables free and clear of any lien, security interest or
charge; and immediately prior to the grant of a security
interest in the Receivables to the Indenture Trustee, the Trust
owned the Receivables free and clear of any lien, security
interest or charge. With respect to each Receivable constituting
part of the Trust, such Receivable is secured by a validly
perfected first priority security interest in the vehicle
financed thereby in favor of Triad as a secured party or Triad
has instituted appropriate procedures that if followed (and such
counsel has no reason to believe that they will not be so
followed) will result in the perfection of a first priority
security interest in the vehicle financed thereby in favor of
Triad as a secured party. Each such Receivable has been duly and
validly assigned to the Seller by Triad and to the Trust by the
Seller, and a security interest in each such Receivable has been
duly and validly granted to the Indenture Trustee by the Trust.
(xi) All filings necessary under applicable law to
perfect the sale of the Receivables by Triad to the Seller
pursuant to the Purchase Agreement, the sale of the Receivables
by the Seller to the Trust pursuant to the Sale and Servicing
Agreement and the grant of a security interest in the
Receivables to the Indenture Trustee pursuant to the Indenture
have been made and, provided that neither Triad
13
nor the Seller relocates its principal place of business in a
state other than California or changes its jurisdiction of
organization, no other filings (other than the filing of
continuation statements) need be made to maintain the perfection
of the sale of the Receivables either to the Seller pursuant to
the Purchase Agreement or to the Trust pursuant to the Sale and
Servicing Agreement and of the grant of a security interest in
the Receivables to the Indenture Trustee pursuant to the
Indenture.
(xii) The Trust Agreement is not required to be
qualified under the Trust Indenture Act, the Indenture has been
duly qualified under the Trust Indenture Act, and neither the
Trust nor Triad is required to be registered under the
Investment Company Act of 1940, as amended.
(xiii) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein or in the
Basic Documents, the Triad Indemnification Agreement, or the
Indemnification Agreement, except such as may be required under
the Act, the Trust Indenture Act and other federal and state
securities laws; filings with respect to the transfer of the
Receivables to the Seller pursuant to the Purchase Agreement and
to the Trust pursuant to the Sale and Servicing Agreement and
the grant of a security interest in the Receivables to the
Indenture Trustee pursuant to the Indenture; and such other
approvals as have been obtained.
(xiv) Such counsel does not know of any legal or
governmental proceedings pending to which either Triad or the
Seller is a party or of which any property of either Triad or
the Seller is the subject, and no such proceedings are known by
such counsel to be threatened or contemplated by governmental
authorities or threatened by others (1) seeking to prevent the
issuance of the Notes or the consummation of any of the
transactions contemplated by this Underwriting Agreement, the
Indemnification Agreement, the Triad Indemnification Agreement,
or the Basic Documents, or (2) seeking adversely to affect the
federal income tax attributes of the Class A Notes as described
in the Prospectus under the heading "Material Federal Income Tax
Consequences."
(xv) Neither the issuance or sale of the Notes, nor the
execution and delivery of the Notes, this Underwriting
Agreement, the Indemnification Agreement, the Triad
Indemnification Agreement, or the Basic Documents, nor the
consummation of any of the other transactions contemplated
herein or in the Indemnification Agreement, the Triad
Indemnification Agreement, or the Basic Documents by Triad or
the Seller, as the case may be, will contravene the terms of any
material provision of any statute, order, or regulation
applicable to Triad or the Seller, as the case may be, the
failure with which to comply could have a material adverse
effect on Triad and its subsidiaries considered as a whole or
the Seller, as the case may be.
14
(j) Xxxxx Xxxxxxxxxx LLP (or such other counsel satisfactory to
the Representative) 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 Seller as a sale and with respect to the security
interest of the Trust in the Receivables (which opinion shall state that it may
be relied upon by the Indenture Trustee), to the Representative and to Triad,
and such opinion shall be in substantially the form previously discussed with
the Representative and counsel to the Representative and in any event
satisfactory in form and in substance to the Representative and to counsel to
the Representative and to Triad.
(k) Xxxxx Xxxxxxxxxx LLP (or such other counsel satisfactory to
the Representative), 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 Seller 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 Representative and to Triad,
and such opinion shall be in substantially the form previously discussed with
the Representative and counsel to the Representative and in any event
satisfactory in form and in substance to the Representative and counsel to the
Representative and to Triad.
(l) Xxxxx Xxxxxxxxxx LLP, special tax counsel to the Seller,
shall have furnished to the Representative their written opinion, dated as of
the Closing Date, in form and in substance satisfactory to the Representative in
its 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 and
the 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
conclusions with respect thereto, have been prepared or reviewed
by such counsel and are correct in all material respects.
(m) Counsel satisfactory to the Representative in its reasonable
judgment shall have furnished to the Representative a written opinion, dated as
of the Closing Date, in form satisfactory to the Representative in its
reasonable judgment, to the effect that, assuming the Seller 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.
15
(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 Representative shall have received an opinion addressed
to the Representative of Xxxxx Xxxxxxxxxx LLP, dated the Closing Date, with
respect to the validity of the Underwritten Securities, and such other related
matters as the Representative shall require and the Seller 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 Representative shall have received an opinion addressed
to the Representative, the Seller and Triad of counsel to the Owner Trustee,
dated the Closing Date and satisfactory in form and substance to the
Representative and counsel to the Representative, addressing such matters as the
Representative 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.
(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.
16
(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 Representative shall have received an opinion addressed
to the Representative, the Seller and Triad of counsel to the Trust, dated the
Closing Date and satisfactory in form and substance to the Representative and
counsel to the Representative, addressing such matters as the Representative may
request and substantially to the effect that:
(i) the Trust has been duly formed and is validly
existing as a business trust under the Delaware Business 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 Seller and the Owner Trustee,
enforceable against Triad, the Seller 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 Seller in accordance with the Trust Agreement,
17
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, 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 business 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
18
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 Representative shall have received an opinion addressed
to the Representative, the Seller, the Trust, the Indenture Trustee and Triad of
counsel to the Insurer, dated the Closing Date and satisfactory in form and
substance to the Representative and counsel to the Representative, 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 Wisconsin. The Insurer (a) is a stock
insurance company validly existing and in good standing under
the laws of the State of Wisconsin, (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 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 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 Wisconsin.
(v) The statements set forth in 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 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.
19
(vi) The Note Policy constitutes an insurance policy
within the meaning of Section 3(a)(8) of the Securities Act.
(vii) Neither the execution or delivery by the Insurer
of the Note Policy 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.
(r) The Representative shall have received an opinion addressed
to the Representative, the Seller and Triad of counsel to the Indenture Trustee
and Backup Servicer, dated the Closing Date and satisfactory in form and
substance to the Representative and counsel to the Representative, to the effect
that:
(i) The Indenture Trustee has been legally incorporated
under the laws of the State of New York and, based upon a
certificate of good standing issued by that State, is validly
existing as a banking association in good standing under the
laws of that State, 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
20
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 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 Representative shall have received an officer's
certificate dated the Closing Date of an authorized officer of:
(i) Triad, in which such officers shall state that, to
the best of their knowledge after reasonable investigation, the
representations and warranties of the Servicer contained in the
Sale and Servicing Agreement and of Triad contained in the
Purchase Agreement are true and correct in all material respects
and that Triad has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied under
such agreements at or prior to the Closing Date in all material
respects.
(ii) The Seller, in which such officers shall state
that, to the best of their knowledge after reasonable
investigation, the representations and warranties of the Seller
contained in the Trust Agreement, the Sale and Servicing
Agreement and the Purchase Agreement are true and correct in all
material respects, and that the Seller has complied with all
agreements and satisfied all conditions on its part to be
performed or satisfied under such agreements at or prior to the
Closing Date in all material respects.
(t) The Class A-1 Notes shall have been rated in the highest
short-term rating category by each of Xxxxx'x, Fitch and Standard & Poor's; the
Class A-2 Notes and 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, Fitch and
Standard & Poor's.
(u) At the Closing Date, the Class A Notes shall have been
validly issued and paid for by the Seller.
(v) The Note Policy shall have been issued by the Note Insurer
and shall have been duly countersigned by an authorized agent of the Note
Insurer, if so required under applicable state law or regulation.
21
(w) All proceedings in connection with the transactions
contemplated by this Agreement, and all documents incident hereto, shall be
reasonably satisfactory in form and substance to the Representative and counsel
for the Representative, and the Representative and counsel for the
Representative shall have received such other information, opinion, certificates
and documents as they may reasonably request in writing.
(x) The Representative 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 Seller will indemnify and
hold each Underwriter harmless against any losses, claims, damages, or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, any amendment or supplement thereto,
or any related preliminary prospectus 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, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Seller 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 an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Seller by any Underwriter through the Representative specifically for use
therein; and provided further, that the Seller shall not be liable to any
Underwriter or any person controlling any Underwriter under the indemnity
agreement in this subsection (a) with respect to any of such documents to the
extent that any such loss, claim, damage or liability of such Underwriter or
such controlling person results from the fact that such Underwriter sold the
Underwritten Securities to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the Prospectus or of
the Prospectus as then amended or supplemented (excluding documents incorporated
by reference), whichever is most recent, if the Seller has previously furnished
copies thereof to such Underwriter.
The indemnity agreement in this subsection (a) shall be in addition to
any liability which the Seller may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act.
(b) Each Underwriter, severally and not jointly, will indemnify
and hold harmless the Seller against any losses, claims, damages or liabilities
to which the Seller may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, the Prospectus any
amendment or supplement thereto, or any related preliminary prospectus, or 8-K
Information, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement
22
or omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Seller by such Underwriter through the
Representative specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Seller in connection with
investigating or defending any such action or claim.
The indemnity agreement in this subsection (b) shall be in addition to
any liability which each Underwriter may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls the Seller
within the meaning of the Act.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) of written 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 subsection (a) or (b) above, notify the indemnifying
party of the commencement thereof, and in the event that such indemnified party
shall not so notify the indemnifying party within 30 days following receipt of
any such notice by such indemnified party, the indemnifying party shall have no
further liability under such subsection to such indemnified party unless the
indemnifying party shall have received other notice addressed and delivered in
the manner provided in Section 11 hereof of the commencement of such action; but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under such
subsection. In case any such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party in its
reasonable judgment, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under such
subsection for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
(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 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 Seller 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
Seller 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 Seller 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 Seller bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus Supplement as amended or supplemented with
respect to the
23
Underwritten Securities. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Seller or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission, including, with respect to any
Underwriter, the extent to which such losses, claims, damages or liabilities (or
actions in respect thereof) result from the fact that such Underwriter sold
Underwritten Securities to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the Prospectus or the
Prospectus as then amended or supplemented (excluding documents incorporated by
reference), whichever is most recent, if the Seller has previously furnished
copies thereof to such Underwriter. The Seller 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. 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 amount by which the total price at which the Underwritten Securities
underwritten by it and distributed to the public were offered to the public,
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. 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 in proportion to their
respective underwriting obligations with respect to such Underwritten Securities
as set forth in Schedule I hereto.
8. Other Information. None of the Underwriters have provided or will
provide to prospective investors "Computational Materials," "ABS Term Sheets" or
"Collateral Term Sheets" (collectively, the "8-K Information") in connection
with its offering of the Notes, as described in the No-Action Letter of May 20,
1994, issued by the Commission to Xxxxxx, Xxxxxxx Acceptance Corporation I and
certain affiliates, as made applicable to other issuers and underwriters by the
Commission in response to the request of the Public Securities Association dated
May 24, 1994 (collectively, the "Xxxxxx/PSA Letter"), and the requirements of
the No-Action Letter of February 17, 1995 issued by the Commission to the Public
Securities Association (the "PSA Letter" and, together with the Xxxxxx/PSA
Letter, the "No-Action Letters"). For purposes hereof, "Computational Materials"
shall have the meaning given such term in the No-Action Letters and "ABS Term
Sheets" and "Collateral Term Sheets" shall have the meanings given such terms in
the PSA Letter.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements
(including, without limitation, Section 5(k) hereof) of the Seller or the
officers of the Seller and of the Underwriters set forth in or made pursuant to
this Underwriting Agreement will remain in full force and effect, regardless
24
of any investigation or statement as to the results thereof, made by or on
behalf of any Underwriter, the Seller or any of their respective
representatives, officers or directors of any controlling person, and will
survive delivery of and payment for the Underwritten Securities.
10. Failure to Purchase the Underwritten Securities. If the purchase of
the Underwritten Securities shall not be consummated because the circumstances
described in Section 6(f) shall have occurred, then the Seller shall not have
any liability to the Underwriters with respect to the Underwritten Securities
except as provided in Section 5(h) and Section 7 hereof; but if for any other
reason the Underwritten Securities are not delivered to the Underwriters as
provided herein, the Seller will be liable to reimburse the Underwriters,
through the Representative, for all out-of-pocket expenses, including counsel
fees and disbursements reasonably incurred by the Underwriters in making
preparations for the offering of the Underwritten Securities, but the Seller
shall not then have any further liability to any Underwriter with respect to the
Underwritten Securities except as provided in Section 5(h) and Section 7 hereof.
If any Underwriter or Underwriters default on their obligations to purchase
Underwritten Securities hereunder and the aggregate principal amount of
Underwritten Securities that such defaulting Underwriter or Underwriters agreed
but failed to purchase does not exceed 10% of the total principal amount of the
Underwritten Securities, the Representative may make arrangements satisfactory
to the Seller for the purchase of such Underwritten Securities by other persons,
including the non-defaulting Underwriter or Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriter or
Underwriters shall be obligated, in proportion to their commitments hereunder,
to purchase the Underwritten Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase. If any Underwriter or Underwriters
so default and the aggregate principal amount of Underwritten Securities with
respect to which such default or defaults occur exceeds 10% of the total
principal amount of the Underwritten Securities and arrangements satisfactory to
the non-defaulting Underwriter or Underwriters and the Seller 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 non-defaulting Underwriter and the Seller, except as provided
in Section 5(h) and Section 7 hereof. As used in this Underwriting Agreement,
the term "Underwriter" includes any person substituted for an Underwriter under
this Section. Nothing herein will relieve a defaulting Underwriter or
Underwriters from liability for its default.
11. Notices. All communications hereunder will be in writing and will be
mailed, delivered or sent by facsimile transmission and confirmed.
Communications to the Representative or the Underwriters shall be given to the
Representative at (i) Banc of America Securities LLC, 000 X. Xxxxx Xxxxxx,
Xxxxxxxxx, XX 00000, (000) 000-0000. Communications to the Seller 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.
12. Successors. This Underwriting Agreement will inure to the benefit of
and be binding upon the Underwriters and the Seller 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.
13. Applicable Law. This Underwriting Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
25
14. 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.
26
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 X. Xxxxxxxx
Title: Chief Financial Officer
Accepted in Charlotte, North Carolina,
as of the date hereof:
BANC OF AMERICA SECURITIES LLC
By: /s/ XXXXX X. XXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Principal
Acting on behalf of itself and
as the Representative of the
several Underwriters
SCHEDULE I
Initial Initial Initial Initial
Principal Principal Principal Principal
Amount of Amount of Amount of Amount of
Class A-1 Class A-2 Class A-3 Class A-4
Notes Notes Notes Notes
--------------------------------------------------------------------------------
Banc of America 141,000,000 161,500,000 131,000,000 144,374,000
Securities LLC
Credit Suisse 30,500,000 34,750,000 28,000,000 31,000,000
First Boston
Corporation
Deutsche Bank 30,500,000 34,750,000 28,000,000 31,000,000
Securities Inc.
Total $202,000,000 $231,000,000 $187,000,000 $206,374,000
