ARCADIA FINANCIAL LTD.
ARCADIA RECEIVABLES FINANCE CORP.
ARCADIA AUTOMOBILE RECEIVABLES TRUSTS
UNDERWRITING AGREEMENT
STANDARD PROVISIONS FOR AUTOMOBILE
RECEIVABLES-BACKED CERTIFICATES AND
AUTOMOBILE RECEIVABLES-BACKED NOTES
(March 1999)
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From time to time, Arcadia Receivables Finance Corp., a Delaware
corporation (the "Company"), and Arcadia Financial Ltd., a Minnesota corporation
("Arcadia Financial"), may enter into one or more pricing agreements that
provide for the sale by an Arcadia Automobile Receivables Trust to be created by
the Company of automobile receivables-backed certificates (the "Certificates")
and automobile receivables-backed notes (the "Notes") (the Certificates and the
Notes sometimes collectively referred to herein as the "Securities") to the
several underwriters named therein (each, a "Pricing Agreement" and, including
the provisions hereof incorporated therein by reference, an "Underwriting
Agreement").
The terms and rights of any particular issuance of Certificates (the
"Designated Certificates") or Notes (the "Designated Notes") (the Designated
Certificates and the Designated Notes sometimes collectively referred to herein
as the "Designated Securities") shall be as specified in the Pricing Agreement
relating thereto. Particular sales of Designated Securities may be made from
time to time by the Arcadia Automobile Receivables Trust designated in the
Pricing Agreement relating to such Designated Securities (the "Trust") to the
several underwriters named in such Pricing Agreement (the "Underwriters"), for
whom the firms designated as representatives of the Underwriters of such
Designated Securities in the Pricing Agreement relating thereto will act as
representatives (the "Representatives"). The term Representatives also refers
to a single firm acting as sole representative of the Underwriters and to
Underwriters or a single firm acting as sole Underwriter acting without any firm
being designated as their representative. These standard provisions shall not
be construed as an obligation of the Company to sell any Designated Securities
or as an obligation of any Underwriter to purchase any Designated Securities.
The obligation of the
Company to issue and sell any Designated Securities shall be evidenced by the
Pricing Agreement relating thereto with respect to the Designated Securities
named therein. Each Pricing Agreement shall specify, among other things, the
Trust that will issue such Designated Securities, the aggregate principal amount
(or notional principal amount) of such Designated Securities, the names of the
Underwriters and the Representatives, the purchase price to the Underwriters of
such Designated Securities, the principal amount of such Designated Securities
to be purchased by each Underwriter and the date, time and manner of delivery of
such Designated Securities and payment therefor.
1. DESCRIPTION OF SECURITIES. The Company, a wholly-owned subsidiary
of Arcadia Financial, proposes to cause the Trust designated in the related
Pricing Agreement to be created pursuant to a trust agreement (the "Trust
Agreement") among the Company, as seller, the trustee specified in the related
Pricing Agreement (the "Owner Trustee") and any such other parties as shall be
specified in the related Pricing Agreement and to cause the Trust to issue and
sell to the several Underwriters the Designated Certificates to be issued under
such Trust Agreement and/or the Designated Notes to be issued under an Indenture
(the "Indenture") between the Trust, the trustee specified in the related
Pricing Agreement (the "Indenture Trustee") and any such other parties as shall
be specified in the related Pricing Agreement. The Designated Notes will be
collateralized by the Trust Property (as defined below), and each Certificate
will represent a fractional undivided interest in the related Trust. The assets
of each Trust (the "Trust Property") will include, among other things, a pool of
simple interest retail installment sales contracts and promissory notes (the
"Receivables") purchased or to be purchased from motor vehicle dealers
("Dealers") by Arcadia Financial and secured by new and used automobiles and
light trucks (the "Financed Vehicles"), certain monies paid or payable thereon
after the Cutoff Date (the "Cutoff Date") specified in the related Pricing
Agreement (excluding certain insurance premiums), any financial guaranty
insurance policies issued by an insurer in respect of the Designated Securities
(the "Security Insurer") pursuant to an insurance and indemnity agreement among
the Trust, the Company, Arcadia Financial and the Security Insurer and any other
parties specified in the related Pricing Agreement (an "Insurance Agreement") or
other form of credit enhancement specified in the related Pricing Agreement,
such amounts as from time to time may be held in a lockbox account (established
pursuant to a counterpart to an agency agreement and retail lockbox agreement
between Arcadia Financial, the Owner Trustee, the lockbox bank (the "Lockbox
Bank") specified in the related Pricing Agreement (the "Lockbox Agreement") and
the Security Insurer) and the Collection Account (including all investments in
the Collection Account and all income from the investment of funds therein and
proceeds thereof), an assignment of Arcadia Financial's security interests in
the Financed Vehicles, an assignment of the right to receive proceeds from the
exercise of rights against Dealers under agreements between Arcadia Financial
and such Dealers and the assignment of rights in respect of each Receivable from
the applicable Dealer to Arcadia Financial, an assignment of the right to
receive the proceeds from claims on certain insurance policies covering the
Financed Vehicles or the Obligors, an assignment of the rights of the Company
under
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the Receivables Purchase Agreement (as defined below) and the other property and
the proceeds thereof to be conveyed to the Trust pursuant to the sale and
servicing agreement (the "Sale and Servicing Agreement") among the Trust, as
issuer, the Company, as seller, Arcadia Financial, in its individual capacity
and as servicer, and the backup servicer specified in the related Pricing
Agreement (the "Backup Servicer"), and any other parties specified in and as
more fully described in the related Pricing Agreement or the Sale and Servicing
Agreement. In addition, if so specified in the related Pricing Agreement, the
Trust Property will include monies on deposit in a pre-funding account (the
"Pre-Funding Account") which will be used to purchase Receivables from Arcadia
Financial originated subsequent to the Cutoff Date.
Unless otherwise specified in the related Pricing Agreement, the
Receivables and the related Trust Property will be conveyed to the Company by
Arcadia Financial pursuant to a Receivables Purchase Agreement and Assignment
between the Company and Arcadia Financial (a "Receivables Purchase Agreement")
and will be conveyed to the related Trust by the Company pursuant to the Sale
and Servicing Agreement. Concurrently with the issuance of the Designated
Securities, unless otherwise specified in the related Pricing Agreement, (i)
with respect to the Designated Certificates, if any, the Security Insurer will
issue a Policy to the Owner Trustee pursuant to which the Security Insurer will
unconditionally and irrevocably guarantee to the holders of the Designated
Certificates payment of the Guaranteed Distributions with respect to each
Distribution Date and certain other amounts, as set forth in such Policy (the
"Certificate Policy"), (ii) with respect to the Designated Notes, if any, the
Security Insurer will issue a Policy to the Indenture Trustee pursuant to which
the Security Insurer will unconditionally and irrevocably guarantee to the
holders of the Designated Notes payment of the Guaranteed Distributions with
respect to each Distribution Date and certain other amounts, as set forth in
such Policy (the "Note Policy" and, together with the Certificate Policy, the
"Policies"), (iii) Arcadia Financial, the Company, the Security Insurer, the
trustee and the collateral agent specified in the related Pricing Agreement (the
"Collateral Agent") will enter into a Spread Account Agreement or series
supplement thereto (the "Spread Account Agreement") regarding certain rights of
the Security Insurer in consideration of the issuance of the Policies, (iv) the
Trust, the Indenture Trustee, the Security Insurer and Arcadia Financial or the
other custodian specified in the related Pricing Agreement (the "Custodian")
will enter into a custodian agreement (the "Custodian Agreement") pursuant to
which the Custodian will hold the original installment sales contract or
promissory note as well as copies of documents and instruments relating to each
Receivable and evidencing the security interest in the Financed Vehicle securing
each Receivable (the "Receivable Files"), and (v) the Trust and the parties
specified in the related Pricing Agreement will enter into an administration
agreement (the "Administration Agreement") pursuant to which the administrator
specified in such Pricing Agreement (the "Administrator"), will perform certain
administrative tasks of the Owner Trustee and the Indenture Trustee imposed
under the Trust Agreement, the
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Indenture and certain other agreements. Unless specified in the related Pricing
Agreement with respect to a Pre-Funding Account, the Designated Securities will
be issued in an aggregate principal amount which is equal to the sum of
aggregate principal balance of the Receivables as of the Cutoff Date and the
amount, if any, deposited in the Pre-Funding Account on the Closing Date (as
hereinafter defined).
At the Closing Date for the sale of Designated Securities specified in
each Pricing Agreement, the Security Insurer and the Underwriters will also
enter into an Indemnification Agreement (the "Indemnification Agreement")
regarding indemnification for certain information included in the Registration
Statement and Prospectus, referred to below.
Capitalized terms used but not defined herein when used in connection
with any Pricing Agreement, have the meanings assigned in the related Sale and
Servicing Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ARCADIA
FINANCIAL. In addition to any representations and warranties specified in the
related Pricing Agreement, by their execution of a Pricing Agreement, the
Company and Arcadia Financial, jointly and severally, shall represent and
warrant to, and agree with, each Underwriter that:
(a) A registration statement on Form S-3 (File No. 333-48141) with
respect to the Securities, including a prospectus, has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933
("Act") and the rules and regulations ("Rules and Regulations") of the
Securities and Exchange Commission ("Commission") thereunder and filed with
the Commission and has become effective. Such registration statement and
prospectus may have been amended or supplemented prior to the date of the
date hereof; any such amendment or supplement was so prepared and filed,
and any such amendment filed after the effective date of such registration
statement has become effective. 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. A prospectus
supplement ("Prospectus Supplement") setting forth the terms of the
Designated Securities and of their sale and distribution has been or will
be so prepared and will be filed pursuant to Rule 424(b) of the Rules and
Regulations on or before the second business day after the date hereof (or
such earlier time as may be required by the Rules and Regulations). Copies
of such registration statement and prospectus, any such amendment or
supplement and all documents incorporated by reference therein that were
filed with the Commission on or prior to the date it is first used in
connection with the offering of the Designated Securities (including one
fully executed copy of the registration statement and of
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each amendment thereto for each of the Underwriters and for counsel for the
Underwriters) have been delivered to the Representatives. Such
registration statement, as it may have heretofore been amended, is referred
to herein as the "Registration Statement," and the final form of prospectus
included in the Registration Statement, as supplemented by the Prospectus
Supplement, is referred to herein as the "Prospectus." Each form of
Prospectus, or Prospectus and Prospectus Supplement, if any, heretofore
made available for use in offering the Securities is referred to herein as
a "Preliminary Prospectus." Any reference herein to the Registration
Statement, the Prospectus, any amendment or supplement thereto or any
Preliminary Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference herein to
the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or Prospectus shall be deemed to refer to and
include the filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein.
(b) Each part of the Registration Statement, when such part
became or becomes effective, each Preliminary Prospectus (if any) on
the date of filing thereof with the Commission, and the Prospectus and
any amendment or supplement thereto, on the date of filing thereof
with the Commission and at the Closing Date, conformed or will conform
in all material respects with the requirements of the Act and the
Rules and Regulations; each part of the Registration Statement, when
such part became or becomes effective, did not or 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; each Preliminary Prospectus (if any), on the
date of filing thereof with the Commission, and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with
the Commission and at the Closing Date, did not or will not include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that
the foregoing shall not apply to statements in or omissions from any
such document in reliance upon, and in conformity with, written
information furnished to the Company by the Representatives, or by any
Underwriter through the Representatives, specifically for use in the
preparation thereof.
(c) The documents incorporated by reference in the Registration
Statement, the Prospectus, any amendment or supplement thereto or any
Preliminary Prospectus, when they became or become effective under the
Act or were or are filed with the Commission under the Securities
Exchange Act of 1934 ("Exchange Act"), as the case may be,
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conformed or will conform in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder.
(d) Each of Arcadia Financial and the Company has been duly
incorporated and is an existing corporation in good standing under the
laws of its jurisdiction of incorporation and is duly qualified to do
business, is in good standing and has obtained all necessary licenses
and approvals in each jurisdiction in which the failure to so qualify
or to obtain such license or approval would materially and adversely
affect the enforceability of any Receivable or any other part of the
Trust Property or the ability of Arcadia Financial or the Company to
perform their respective obligations under, or adversely affect the
validity or enforceability of, the Pricing Agreement, the Sale and
Servicing Agreement, the Trust Agreement, the Indenture, the
Receivables Purchase Agreement, the Insurance Agreement, the Spread
Account Agreement, the Lockbox Agreement, the Designated Securities or
the Administration Agreement; and all of the outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and are owned beneficially
and of record by the Company subject to no security interest, other
encumbrance or adverse claim other than the security interest of
Financial Security Assurance Inc. ("Financial Security") pursuant to
the Stock Pledge Agreement, dated as of March 25, 1993, as amended, by
and among Arcadia Financial, the Company and Financial Security (the
"Stock Pledge Agreement").
(e) Arcadia Financial has full power and authority (corporate
and other) to conduct its business as described in the Registration
Statement and Prospectus, and to execute, deliver and perform the
obligations to be performed by it, under the Pricing Agreement, the
Sale and Servicing Agreement, the Receivables Purchase Agreement, the
Insurance Agreement, the Spread Account Agreement and the Lockbox
Agreement and, if applicable, the Administration Agreement, and had at
all relevant times, and on the Closing Date will have, full power,
authority and legal right to acquire, own, sell and assign the
Receivables and the related Trust Property to the Company and to
service the Receivables as contemplated by the Sale and Servicing
Agreement.
(f) The Company has full power and authority (corporate and
other) to conduct its business as described in the Registration
Statement and Prospectus and to execute and deliver and perform the
obligations to be performed by it, under the Pricing Agreement, the
Trust Agreement,
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the Sale and Servicing Agreement, the Receivables Purchase Agreement, the
Insurance Agreement, the Spread Account Agreement and the Lockbox Agreement
and had at all relevant times, and on the Closing Date will have, full
power, authority and legal right to acquire, own, sell and assign the
Receivables and the other Trust Property.
(g) The Trust has been duly formed and is validly existing as a
business trust under the laws of the State of Delaware, 12 Del. C. Section
3801, ET SEQ.; and has the power and authority to execute, deliver and
perform its obligations under the Sale and Servicing Agreement, the
Indenture, the Administration Agreement, the Designated Notes and the
Designated Certificates.
(h) The Trust Agreement, the Sale and Servicing Agreement, the
Receivables Purchase Agreement, the Insurance Agreement, the Spread
Account Agreement, the Lockbox Agreement and the Pricing Agreement
have been duly authorized and when duly executed and delivered by the
parties thereto will constitute valid and legally binding obligations
of the Company, enforceable in accordance with their terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles, provided that no
representation is made with respect to the enforceability of Section 6
hereof insofar as such provisions relate to indemnification for
liabilities arising under applicable securities laws.
(i) The Sale and Servicing Agreement, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement, the
Custodian Agreement, the Lockbox Agreement and the Pricing Agreement
and, if applicable, the Administration Agreement, have been duly
authorized and when duly executed and delivered by the parties thereto
will constitute valid and legally binding obligations of Arcadia
Financial, enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles, provided that no representation is
made with respect to the enforceability of Section 6 hereof insofar as
such provisions relate to indemnification for liabilities arising
under applicable securities laws.
(j) The Sale and Servicing Agreement, the Indenture, the Insurance
Agreement, the Custodian Agreement and the Administration Agreement have
been duly authorized and, when duly executed and delivered by the parties
thereto, each will constitute a valid and legally binding obligation of the
Trust, enforceable in accordance with its terms, subject, as to
enforcement, to bank-
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ruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles. The Trust's assignment of the Collateral to the Collateral
Agent pursuant to the Indenture will vest in the Collateral Agent, for the
benefit of the Certificateholders and the Noteholders, a first priority
perfected security interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(k) The Designated Certificates, if any, have been duly
authorized and, when duly executed, issued and delivered as
contemplated hereby and by the Trust Agreement, will constitute valid
and legally binding obligations, enforceable in accordance with their
terms and entitled to the benefits and security afforded by the Trust
Agreement, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(l) The Designated Notes, if any, have been duly authorized and, when
duly executed, issued and delivered as contemplated hereby and by the
Indenture, will constitute valid and legally binding obligations,
enforceable in accordance with their terms and entitled to the benefits and
security afford by the Indenture, subject as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
(m) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, none of Arcadia Financial, the Company
or the Trust has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary
course of business, that are material to Arcadia Financial, the
Company or the Trust, and there has not been any material change, on a
consolidated basis, in the capital stock, short-term debt or long-term
debt of Arcadia Financial, the Company or the Trust, or any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or other), business,
prospects, net worth or results of operations of Arcadia Financial,
the Company or the Trust.
(n) Except as set forth in the Prospectus, there is not pending
or, to the knowledge of Arcadia Financial or the Company, threatened
any action, suit or proceeding to which Arcadia Financial, the
Company, the Trust or any subsidiaries of Arcadia Financial (other
than the Company) is a party, before or by any court or governmental
agency or body, that
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might result in any material adverse change in the condition (financial or
other), business, prospects, net worth or results of operations of Arcadia
Financial, the Company or the Trust, or might materially and adversely
affect the properties or assets thereof or the transactions contemplated
herein.
(o) There are no contracts or documents that are required to be
filed as exhibits to the Registration Statement that have not been so
filed.
(p) The execution, delivery and performance of the Pricing
Agreement, the Trust Agreement, the Sale and Servicing Agreement, the
Indenture, the Receivables Purchase Agreement, the Insurance
Agreement, the Spread Account Agreement, the Lockbox Agreement, the
Custodian Agreement, the Administration Agreement and the Designated
Securities and the consummation of the transactions therein
contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute,
any agreement or instrument to which Arcadia Financial, the Company or
the Trust is a party or by which it is bound or to which any of the
property of Arcadia Financial, the Company or the Trust is subject,
the articles of incorporation or by-laws of Arcadia Financial, the
certificate of incorporation or by-laws of the Company, or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over Arcadia Financial, the Company or the Trust or any
of their properties; and no consent, approval, authorization or order
of, or filing with, any court, governmental, regulatory or
administrative authority, agency, body or official is required for the
consummation of the transactions contemplated by the Pricing Agreement
the Trust Agreement, the Sale and Servicing Agreement, the Indenture,
the Receivables Purchase Agreement, the Insurance Agreement, the
Spread Account Agreement, the Lockbox Agreement, the Custodian
Agreement, the Administration Agreement and the Designated Securities,
except such as have been obtained under the Act and such as may be
required under state securities laws in connection with the purchase
and distribution of the Designated Securities by the Underwriters; and
the Company has full power and authority to sell the Designated
Securities as contemplated by the Pricing Agreement.
(q) None of the Company, Arcadia Financial, the Trust or any of the
other subsidiaries of Arcadia Financial is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
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(r) Arcadia Financial and the other subsidiaries of Arcadia Financial
possess all franchises, certificates, licenses, permits and other
authorizations from governmental bodies or regulatory authorities that are
necessary for the conduct of their respective businesses or the ownership,
maintenance and operation of their respective properties and assets,
including without limiting the foregoing, licenses necessary to act as a
sales finance company in each state in which the Company, Arcadia Financial
and the other subsidiaries of Arcadia Financial conduct their respective
businesses, and none of the Trust, the Company, Arcadia Financial, or any
of the other subsidiaries of Arcadia Financial is in violation of any
franchise, certificate, license, permit or other authorization, except
where such failure would not result in any material adverse change in the
condition (financial or other), business, prospects, net worth or results
of operations of Arcadia Financial, the Company or the Trust, or any of
such other subsidiaries, or might materially and adversely affect the
properties or assets of Arcadia Financial, the Company or the Trust.
(s) The Company, Arcadia Financial, the Trust and the other
subsidiaries of Arcadia Financial are in compliance with, and no violation
exists under, any and all applicable rules, regulations and orders,
including without limiting the foregoing, the motor vehicle retail
installment sales acts of each state in which the Company, Arcadia
Financial, the Trust and the other subsidiaries of Arcadia Financial
conduct their respective businesses, and all applicable federal statutes
and regulations, except where the failure so to comply or a violation
thereunder would not result in any material adverse change in the condition
(financial or other), business, prospects, net worth or results of
operations of Arcadia Financial, the Company, the Trust or any such other
subsidiaries, or might materially and adversely affect the properties or
assets of Arcadia Financial, the Company or the Trust.
(t) The Company, Arcadia Financial, and the Trust have the right to
use all tradenames, service marks, trademarks and other intangible property
rights used in their business and such use by the Company and Arcadia
Financial does not infringe on the rights of any other person or entity.
(u) As of the Closing Date, the representations and warranties of
Arcadia Financial and the Company in the Trust Agreement, the Sale and
Servicing Agreement, the Indenture, the Receivables Purchase Agreement, the
Administration Agreement, the Spread Account Agreement and the Insurance
Agreement, as applicable, will be true and correct.
3. PURCHASE, SALE AND DELIVERY OF DESIGNATED SECURITIES. On the
basis of the representations, warranties and agreements contained in the related
Pricing Agreement, but subject to the terms and conditions therein set forth,
the Company
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agrees to cause the Trust designated in the related Pricing Agreement to issue
and sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, (i) at the purchase price specified in
the related Pricing Agreement the aggregate principal amount (or notional
principal amount) of Designated Certificates set forth in such Pricing Agreement
and (ii) at the purchase price specified in the related Pricing Agreement the
aggregate principal amount of the Designated Notes set forth in such Pricing
Agreement.
Unless otherwise specified in the Pricing Agreement, the Designated
Securities will be delivered by the Company to the Representatives for the
accounts of the several Underwriters against payment of the purchase price
therefor by wire transfer of immediately available funds to an account
designated by the Company not later than the Closing Date at the time and place
specified in the related Pricing Agreement, or at such other time not later than
eight full business days after the date of the Pricing Agreement as the
Representatives and the Company determine, such time being herein referred to as
the "Closing Date." The Designated Securities so to be delivered will be
represented by one or more definitive certificates having an aggregate initial
principal amount specified in the Pricing Agreement registered in such name or
names as the Underwriters may request. The Company shall make such definitive
certificates available for inspection by the Underwriters at least one business
day prior to the Closing Date.
It is understood that the Representatives, acting individually and not
in a representative capacity, may (but shall not be obligated to) make payment
to the Company on behalf of any other Underwriter for the Designated Securities
to be purchased by such Underwriter. Any such payment by the Representatives
shall not relieve any such Underwriter of any of its obligations under any
Pricing Agreement.
4. COVENANTS. In addition to any covenants specified in the related
Pricing Agreement, by their execution of a Pricing Agreement, the Company and
Arcadia Financial, jointly and severally, covenant and agree with each
Underwriter that:
(a) The Company will cause the Prospectus to be filed as required by
Section 2(a) hereof (but only if the Representatives have not reasonably
objected thereto by notice to the Company after having been furnished a
copy a reasonable time prior to filing) and will notify the Representatives
promptly of such filing. During the period in which a prospectus relating
to the Designated Securities is required to be delivered under the Act, the
Company will notify the Representatives promptly of the time when any
subsequent amendment to the Registration Statement has become effective or
any subsequent supplement to the Prospectus has been filed and of any
request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or for
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additional information; it will prepare and file with the Commission,
promptly upon the request of the Representatives, any amendments or
supplements to the Registration Statement or Prospectus that, in the
opinion of the Representatives, may be necessary or advisable in connection
with the distribution of the Designated Securities by the Underwriters; it
will file no amendment or supplement to the Registration Statement or
Prospectus (other than any prospectus supplement relating to the offering
of other securities registered under the Registration Statement or any
document required to be filed under the Exchange Act that upon filing is
deemed to be incorporated by reference therein) to which the
Representatives shall reasonably object by notice to the Company after
having been furnished a copy a reasonable time prior to the filing; and it
will furnish to the Representatives at or prior to the filing thereof a
copy of any such prospectus supplement or any document that upon filing is
deemed to be incorporated by reference in the Registration Statement or
Prospectus.
(b) The Company will advise the Representatives, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement, of the suspension of the qualification of
the Designated Securities for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its best efforts to prevent the
issuance of any stop order or suspension or to obtain its withdrawal
if such a stop order or suspension should be issued.
(c) Within the time during which a prospectus relating to the
Designated Securities is required to be delivered under the Act, the
Company will comply as far as it is able with all requirements imposed
upon it by the Act and by the Rules and Regulations, as from time to
time in force, so far as necessary to permit the continuance of sales
of or dealings in the Designated Securities as contemplated by the
provisions hereof and the Prospectus. If during such period any event
occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the
Act, the Company will promptly notify the Representatives and will
amend or supplement the Registration Statement or Prospectus (at the
expense of the Company and Arcadia Financial) so as to correct such
statement or omission or effect such compliance. Neither the
Representatives' consent to, nor the
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Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the provisions set forth in Section 6 hereof.
(d) The Company will use its best efforts to qualify the Designated
Securities for sale under the securities laws of such jurisdictions as the
Representatives reasonably designate and to continue such qualifications in
effect so long as required for the distribution of the Designated
Securities, except that the Company shall not be required in connection
therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction. The Company will also
arrange for the determination of the eligibility for investment of the
Designated Securities under the laws of such jurisdictions as the
Representatives reasonably request.
(e) The Company will furnish to the Underwriters copies of the
Registration Statement, each Preliminary Prospectus, the Prospectus
(including all documents incorporated by reference therein) and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Representatives may from time
to time reasonably request.
(f) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will cause the Trust to make generally
available to Certificateholders and Noteholders an earnings statement
(which need not be audited), as provided in Rule 158 under the Act or
otherwise, covering a period of at least 12 months beginning after the date
of the Agreement that shall satisfy the provisions of Section 11(a) of the
Act. For the purpose of the preceding sentence, (i) "Availability Date"
means the 45th day after the end of the fourth fiscal quarter of the Trust
following the fiscal quarter of the Trust that includes the date of the
Pricing Agreement, except that, if such fourth fiscal quarter is the last
quarter of the Trust's fiscal year, "Availability Date" means the 90th day
after the end of such fourth fiscal quarter and (ii) an "earnings
statement" shall be sufficient if (a) there is included the information
required for statements of income contained either in Item 8 of Form 10-K,
in Part I, Item 1 of Form 10-Q or in Rule 14a-3(b) under the Exchange Act
and (b) the information is contained in one report or any combination of
reports either on Form 10-K, Form 10-Q, Form 8-K or the annual report to
securityholders pursuant to Rule 14a-3 under the Exchange Act. For
purposes hereof, a Trust's fiscal year shall end on each June 30.
(g) The Company or Arcadia Financial, on behalf of the Trust, will
file all reports on Form SR, pursuant to Rule 463 under the Act, and all
reports required to be filed with the Commission on behalf of the Trust
pursuant to the Exchange Act, any order of the Commission thereunder or
pursuant to a "no-
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action" letter (or similar form of exemptive relief) from the staff of the
Commission and will furnish, or cause to be furnished, copies of all such
reports to the Underwriters.
(h) For a period from the date of the Pricing Agreement to the first
date on which none of the Designated Securities are outstanding, the
Company will deliver, or cause to be delivered, to the Underwriters (i) by
first-class mail and as soon as is practicable, copies of (x) each
certificate, annual statement of compliance and accountants' report
delivered to the Indenture Trustee pursuant to Article III of the Sale and
Servicing Agreement or to the Security Insurer pursuant to Section 2.02 of
the Insurance Agreement and (y) each amendment or supplement to the Trust
Agreement, the Sale and Servicing Agreement, the Indenture, the Receivables
Purchase Agreement, the Insurance Agreement, the Spread Account Agreement,
the Lockbox Agreement, the Custodian Agreement or the Administration
Agreement and (ii) on each Determination Date, or as soon thereafter as is
practicable, but in any event not later than the second business day
immediately succeeding such Determination Date, a copy of the Servicer's
Certificate for the related Collection Period.
(i) So long as any of the Designated Securities are outstanding, the
Company or Arcadia Financial, as applicable, will furnish to the
Underwriters, by first-class mail, as soon as practicable, (i) all
documents required to be distributed to Certificateholders and Noteholders
and (ii) from time to time, such other information concerning the Company,
Arcadia Financial or the Trust, as the Underwriters may reasonably request.
(j) Arcadia Financial and the Company, whether or not the
transactions contemplated under any Pricing Agreement are consummated
or the Pricing Agreement is terminated, will pay (i) all expenses
incident to the performance of their obligations under the Pricing
Agreement and under the Trust Agreement, the Sale and Servicing
Agreement, the Indenture, the Receivables Purchase Agreement, the
Insurance Agreement, the Spread Account Agreement, the Custodian
Agreement, the Lockbox Agreement, the Administration Agreement and the
Designated Securities, (ii) will pay the expenses of printing all
documents relating to the offering, and (iii) will reimburse the
Underwriters for (a) any expenses (including fees and disbursements of
counsel) incurred by them in connection with the matters referred to
in Section 4(d) hereof and the preparation of memoranda relating
thereto, (b) the fees and disbursements of counsel to the
Underwriters, reasonably incurred in connection with the registration,
purchase, sale and delivery of the Designated Securities and (c) any
fees charged by investment rating agencies for rating the Designated
Securities. If the
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sale of the Designated Securities provided for in the Pricing Agreement is
not consummated by reason of any failure, refusal or inability on the part
of the Company or Arcadia Financial to perform any agreement on its part to
be performed, or because any other condition of the Underwriters'
obligations under the Pricing Agreement required to be fulfilled by the
Company or Arcadia Financial is not fulfilled, the Company and Arcadia
Financial will reimburse the several Underwriters for all reasonable
out-of-pocket disbursements (including fees and disbursements of counsel)
incurred by the Underwriters in connection with their investigation,
preparing to market and marketing the Designated Securities or in
contemplation of performing their obligations under the Pricing Agreement.
The Company and Arcadia Financial shall not in any event be liable to any
of the Underwriters for loss of anticipated profits from the transactions
covered by the Pricing Agreement.
(k) The Company and Arcadia Financial will apply the net
proceeds from the sale of the Designated Securities as set forth in
the Prospectus.
(l) To the extent, if any, that any rating to be provided with
respect to the Designated Securities, as set forth in Section 6(n) hereof,
is conditional upon the furnishing of documents or information or the
taking of any other actions by Arcadia Financial or the Company, Arcadia
Financial and/or the Company, as the case may be, shall furnish such
documents or information and take any such other actions.
(m) During the period ending 20 business days after the date of the
Pricing Agreement, the Company and Arcadia Financial will not, directly or
indirectly, offer or sell, or determine to offer or sell, (i) any notes
collateralized by, or certificates evidencing an ownership interest in,
receivables generated pursuant to retail automobile or light-duty truck
installment sale contracts or (ii) any debt securities that are
substantially similar to the Designated Securities of the Company or
Arcadia Financial or of an issuer for which Arcadia Financial or the
Company is a sponsor or which has been formed or is beneficially owned by
the Company or Arcadia Financial, in either case without the Underwriters'
prior written consent.
(n) On or before the final purchase of Subsequent Receivables by
the Trust and the expiration of the Pre-Funding Period, Arcadia
Financial must receive a letter from the independent auditors for
Arcadia Financial, satisfactory in form and substance to Arcadia
Financial and the Underwriters, to the effect that such accountants have
performed certain specified procedures, all of which have been agreed to
by Arcadia
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Financial, as a result of which they have determined, having examined in
accordance with such agreed upon procedures, that the Subsequent Receivables
conform to the related requirements described in the Prospectus. The foregoing
letter shall be at the expense of Arcadia Financial.
(o) At the time of the execution and delivery of each Subsequent Transfer,
the Subsequent Receivables will have been duly and validly assigned to the
Trustee in accordance with the Sale and Servicing Agreement; and when such
assignment is effected, a duly and validly perfected transfer of all such
Subsequent Receivables subject to no prior lien, mortgage, security interest,
pledge charge or other encumbrance created by Arcadia Financial or the Company
will have occurred.
(p) On or prior to each Subsequent Closing Date, the Company shall deliver
to the Underwriters, or cause the delivery of, the opinions and officer's
certificates, substantially in the form of the items listed in Section 2.4(b) of
the related Sale and Servicing Agreement, each dated on the Subsequent Closing
Date, with such conforming changes thereto as the Underwriters may reasonably
request. As of the related Subsequent Closing Date, each of the Subsequent
Receivables will meet the eligibility criteria described in the Prospectus.
(q) The Company shall comply with the requirements of the No-Action Letter
of May 20, 1994 issued by the Commission to Xxxxxx, Xxxxxxx Acceptance
Corporation 1, Xxxxxx Peabody & Company, Incorporated and Xxxxxx Structured
Asset Corporation, 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") with regard to the filing of any "Computational
Materials," "ABS Term Sheets" and "Collateral Term Sheets" (together "Term
Sheets") as such terms are defined in the No-Action Letters and will file with
the Commission a current report on Form 8-K setting forth all Computational
Materials, ABS Term Sheets and Collateral Term sheets within the applicable time
periods allotted for such filing pursuant to the No-Action Letters.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Designated Securities as
provided in the Pricing Agreement shall be subject to the accuracy, as of the
date of such Pricing Agreement and the Closing Date (as if made at the Closing
Date), of the representations and warranties of the Company and Arcadia
Financial in the Pricing Agreement, to the performance by the Company and
Arcadia Financial of their respective obligations under the Pricing Agreement
and to the following additional conditions:
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(a) The Prospectus shall have been filed as required by
Section 2(a) hereof; and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding
for that purpose shall have been instituted or, to the knowledge of
the Company, Arcadia Financial or any Underwriter, threatened by the
Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the
satisfaction of the Representatives.
(b) No Underwriter shall have advised the Company or Arcadia
Financial that the Registration Statement or Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact
that in the opinion of the Representatives is material, or omits to
state a fact that in the opinion of the Representatives is material
and is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which such information is given in the
Registration Statement and the Prospectus, there shall not have been
any change, on a consolidated basis, in the capital stock, short-term
debt (other than in the ordinary course of Arcadia Financial's
business of purchasing Receivables) or long-term debt of the Security
Insurer, Arcadia Financial, the Company or the other subsidiaries of
Arcadia Financial, or any adverse change, or any development involving
a prospective adverse change, in the condition (financial or other),
business, prospects, net worth or results of operations of the
Security Insurer, Arcadia Financial, the Company or the other
subsidiaries of Arcadia Financial or any change in the rating assigned
to the claims-paying ability of the Security Insurer or any securities
of Arcadia Financial or the Company or any public announcement that
any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) has under
surveillance or review its rating assigned to the claims-paying
ability of the Security Insurer or any securities of Arcadia Financial
or the Company (other than an announcement with positive implications
of a possible upgrading, and no implication of a possible downgrading,
of such
-17-
rating), that, in the judgment of the Representatives, makes it impractical
or inadvisable to offer or deliver the Designated Securities on the terms
and in the manner contemplated in the Prospectus.
(d) Unless otherwise specified in the Pricing Agreement, the
Representatives shall have received the opinion of Xxxxxx & Whitney
LLP (or, if so specified in the Pricing Agreement, such other counsel
as is reasonably satisfactory to the Representatives), counsel for
Arcadia Financial and the Company, dated the Closing Date, to the
effect that:
(i) Each of Arcadia Financial and the Company has been duly
incorporated and is an existing corporation in good standing
under the laws of its jurisdiction of incorporation; and all of
the outstanding shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and
non-assessable and are owned beneficially and of record by
Arcadia Financial subject to no security interest, other
encumbrance or adverse claim other than the security interest of
the Security Insurer pursuant to the Stock Pledge Agreement;
(ii) No qualification to do business as a foreign corporation in
the State of Minnesota is necessary for the Company to purchase the
Receivables from Arcadia Financial and assign the Receivables to the
Trust and to perform its other obligations under the Sale and
Servicing Agreement;
(iii) No qualification to do business as a foreign corporation
in the State of Minnesota is necessary for the Owner Trustee or the
Trust to own the Receivables or to conduct the other transactions
contemplated by the Trust Agreement, the Sale and Servicing Agreement
and the Indenture;
(iv) Arcadia Financial has corporate power and authority to
conduct its business as described in the Registration Statement and
Prospectus, and to execute, deliver and perform the obligations to be
performed by it, under the Pricing Agreement, the Sale and Servicing
Agreement, the Receivables Purchase Agreement, the Insurance
Agreement, the
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Spread Account Agreement, the Lockbox Agreement, the Custodian
Agreement and the Designated Securities and, if applicable, the
Administration Agreement, and had at all relevant times, and on the
Closing Date has, full power and authority to acquire, own, sell and
assign the Receivables and the related Trust Property to the Company
and to service the Receivables as contemplated by the Sale and
Servicing Agreement;
(v) The Company has corporate power and authority to conduct its
business as described in the Registration Statement and Prospectus and
to execute and deliver and perform the obligations to be performed by
it under the Pricing Agreement, the Trust Agreement, the Sale and
Servicing Agreement, the Receivables Purchase Agreement, the Insurance
Agreement, the Spread Account Agreement, the Lockbox Agreement, the
Designated Securities and had at all relevant times, and on the
Closing Date has, full power and authority to acquire, own, sell and
assign the Receivables and the other Trust Property;
(vi) The direction by the Company to authenticate the
Designated Certificates has been duly authorized by the Company
and, when the Designated Certificates have been duly executed,
authenticated and delivered by the Owner Trustee in accordance
with the Trust Agreement and delivered and paid for pursuant to
the relevant Pricing Agreement, will constitute valid and legally
binding obligations, enforceable in accordance with their terms
and entitled to the benefits and security afforded by the Trust
Agreement, subject as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(vii) The direction by the Company to the Indenture Trustee
to authenticate the Designated Notes has been duly authorized by
the Company and, when the Designated Notes have been duly
executed and delivered by the Owner Trustee and, when
authenticated by the Indenture Trustee in accordance with the
Indenture and delivered and paid for pursuant to the relevant
Pricing Agreement, will constitute valid and legally binding
-19-
obligations, enforceable in accordance with their terms and entitled
to the benefits and security afforded by the Indenture, subject as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles;
(viii) The Registration Statement has become effective
under the Act; the Prospectus has been filed as required by
Section 2(a) hereof; and no stop order suspending the
effectiveness of the Registration Statement has been issued and
to the best knowledge of such counsel no proceeding for that
purpose has been instituted or threatened by the Commission;
(ix) Each part of the Registration Statement, when such
part became effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date, complied as to form in all
material respects with the requirements of the Act and the Rules
and Regulations; such counsel have no reason to believe that
either any part of the Registration Statement, when such part
became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission or at
the Closing Date, included an untrue statement of a material fact
or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; it being understood that such
counsel need express no opinion as to the financial statements or
other financial data included in any of the documents mentioned
in this clause;
(x) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the
information required to be shown;
-20-
and such counsel do not know of any statutes or legal or governmental
proceedings required to be described in the Prospectus that are not
described as required, or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus
(or required to be filed under the Exchange Act if upon such filing
they would be incorporated by reference therein) or to be filed as
exhibits to the Registration Statement that are not described and
filed as required;
(xi) The Trust Agreement, the Sale and Servicing Agreement, the
Receivables Purchase Agreement, the Insurance Agreement, the Spread
Account Agreement, the Lockbox Agreement have each been duly
authorized, executed and delivered by the Company; and each
constitutes a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(xii) The Sale and Servicing Agreement, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement, the
Custodian Agreement and the Lockbox Agreement and, if applicable, the
Administration Agreement, have each been duly authorized, executed and
delivered by Arcadia Financial and each constitutes a valid and
legally binding obligation of Arcadia Financial, enforceable against
Arcadia Financial in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles;
(xiii) The Sale and Servicing Agreement, the Indenture, the
Custodian Agreement and the Administration Agreement each constitutes
a valid and legally binding obligation of the Trust, enforceable
against the Trust in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights
and to general equity principles;
-21-
(xiv) There are no actions, proceedings or investigations
pending, or to the knowledge of such counsel, threatened before any
court, governmental, regulatory or administrative authority, agency,
body or official or other tribunal (w) asserting the invalidity of the
Pricing Agreement, the Trust Agreement, the Sale and Servicing
Agreement, the Indenture, the Receivables Purchase Agreement, the
Insurance Agreement, the Spread Account Agreement, the Lockbox
Agreement, the Custodian Agreement, the Designated Securities or the
Administration Agreement, (x) seeking to prevent the issuance of the
Designated Securities or the consummation of any of the transactions
contemplated by the Pricing Agreement, the Trust Agreement, the Sale
and Servicing Agreement, the Indenture, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement, the
Lockbox Agreement, the Custodian Agreement, the Designated Securities
or the Administration Agreement, (y) that would, if determined
adversely to Arcadia Financial, the Company or the Trust, materially
and adversely affect the ability of Arcadia Financial, the Company or
the Trust to perform their respective obligations under, or the
validity or enforceability of, the Pricing Agreement, the Trust
Agreement, the Sale and Servicing Agreement, the Indenture, the
Receivables Purchase Agreement, the Insurance Agreement, the Spread
Account Agreement, the Lockbox Agreement, the Designated Securities,
the Custodian Agreement or the Administration Agreement, or (z) that
would affect adversely the Federal income tax attributes of the
Designated Certificates, as described in the Prospectus under the
heading "Certain Federal Income Tax Consequences";
(xiv) The Pricing Agreement has been duly authorized,
executed and delivered by Arcadia Financial and the Company;
(xv) Neither the transfer of the Receivables and the related
Trust Property to the Company pursuant to the Receivables Purchase
Agreement nor the transfer of the Receivables and the other Trust
Property to the Owner Trustee acting on behalf of the Trust, the grant
of the security interest in the Collateral to the Collateral Agent
pursuant to the Indenture, the issuance, sale or
-22-
delivery of the Designated Securities, the execution, delivery and
performance by Arcadia Financial, the Company or the Trust, as
applicable, of the Pricing Agreement, the Trust Agreement, the Sale
and Servicing Agreement, the Indenture, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement, the
Lockbox Agreement, the Custodian Agreement, the Designated Securities
or the Administration Agreement nor the consummation of any of the
transactions contemplated herein or therein, nor the fulfillment of
the terms hereof or thereof by Arcadia Financial, the Company or the
Trust will result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, agreement
or instrument known to such counsel to which Arcadia Financial, the
Company, or the Trust is a party or by which it is bound or to which
any of the property of Arcadia Financial, the Company or the Trust is
subject, the articles of incorporation or by-laws of Arcadia
Financial, the certificate of incorporation or by-laws of the Company,
or any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over Arcadia
Financial, the Company or the Trust or any of their properties; and no
consent, approval, authorization or order of, or filing with, any
court, governmental, regulatory or administrative authority, agency,
body or official is required for the consummation of the transactions
contemplated by the Pricing Agreement, the Trust Agreement, the Sale
and Servicing Agreement, the Indenture, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement, the
Lockbox Agreement, the Custodian Agreement, the Designated Securities
or the Administration Agreement, or in connection with the issuance or
sale of the Designated Securities by the Company, except such as have
been obtained under the Act and such as may be required under state
securities laws in connection with the purchase and distribution of
the Designated Securities by the Underwriters;
(xvi) The Trust's assignment of the Collateral to the Collateral
Agent pursuant to the Indenture will vest in the Collateral Agent, for
the benefit of the Certificateholders and the Noteholders, a first
priority perfected security interest therein, subject to no prior lien
-23-
mortgage, security interest, pledge, adverse claim, charge or other
incumbrance.
(xvii) The statements in the Registration Statement and the
Prospectus under the headings "Risk--Certain Legal Aspects," "Certain
Legal Aspects of the Receivables," "Certain Federal Income Tax
Consequences" and "ERISA Considerations," to the extent that they
describe matters of law or legal conclusions with respect thereto,
have been prepared or reviewed by such counsel and are correct in all
material respects;
(xviii) The Designated Securities, the Trust Agreement, the
Insurance Agreement, the Sale and Servicing Agreement, the Indenture,
the Receivables Purchase Agreement, the Lockbox Agreement, the Pricing
Agreement, the Custodian Agreement, the Policies and the
Administration Agreement conform in all material respects with the
descriptions thereof contained in the Registration Statement and the
Prospectus;
(xix) Neither the Trust Agreement nor the Sale and Servicing
Agreement is required to be qualified under the Trust Indenture Act of
1939, as amended, and neither the Company nor the Trust is required to
register as an "investment company" or a company "controlled" by an
"investment company" under the Investment Company Act of 1940, as
amended;
(xx) The Indenture has been duly qualified under the Trust
Indenture Act; and
(xxi) The trust fund created by the Trust Agreement will not,
for New York or Minnesota income tax purposes, be classified as an
association taxable as a corporation, and Certificateholders and
Noteholders who are not residents of or otherwise subject to tax in
New York or Minnesota will not, by reason of their acquisition of an
interest in the Designated Securities, be subject to New York or
Minnesota income, franchise, excise or similar taxes with respect to
interest on the Designated Securities or with respect to any of the
other Trust Property.
In rendering their opinion as aforesaid, such counsel may rely (a) as
to matters involving the application of laws of any jurisdiction other than
the
-24-
States of Minnesota and New York or the United States, to the extent they
deem proper and specify in such opinion, upon the opinion of other counsel
who are reasonably satisfactory to counsel to the Underwriters and (b) as
to matters of fact, to the extent they deem proper, upon certificates of
responsible officers of Arcadia Financial and the Company and public
officials; provided that such counsel shall state that they believe that
they and the Representatives are justified in relying upon such opinions
and certificates.
(e) The Representatives shall have received from Xxxxx, Xxxxx &
Xxxxx, counsel for the Underwriters (or, if so specified in the
Pricing Agreement, such other counsel as is reasonably satisfactory to
the Representatives), such opinion or opinions, dated the Closing
Date, with respect to the incorporation of Arcadia Financial and the
Company, the validity of the Designated Securities, the Registration
Statement, the Prospectus and other related matters as the
Representatives reasonably may request, and such counsel shall have
received such papers and information as they request to enable them to
pass upon such matters.
(f) At or prior to the time of execution of the Pricing Agreement
and at the Closing Date, the Representatives shall have received a
letter from the independent auditors for Arcadia Financial, dated the
date of delivery thereof, confirming that they are independent public
accountants with respect to the Company and Arcadia Financial within the
meaning of the Act and the applicable published Rules and Regulations
thereunder, substantially in the form of the draft to which the
Representatives have previously agreed and otherwise in form and
substance satisfactory to the Representatives.
(g) The Representatives shall have received from the Company a
certificate, signed by the Chairman of the Board, the President or a
Vice President and by the principal financial or accounting officer of
the each of Arcadia Financial and the Company, dated the Closing Date,
to the effect that, to the best of their knowledge based upon
reasonable investigation:
(i) The representations and warranties of Arcadia Financial
or the Company, as the case may be, in the Pricing Agreement are
true and correct, as if made at and as of the
-25-
Closing Date, and Arcadia Financial or the Company, as the case may
be, has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for
that purpose has been instituted or is threatened by the
Commission; and
(iii) Since the effective date of the Registration
Statement, there has occurred no event required to be set forth
in an amendment or supplement to the Registration Statement or
Prospectus that has not been so set forth, and there has been no
document required to be filed under the Exchange Act and the
rules and regulations of the Commission thereunder that upon such
filing would be deemed to be incorporated by reference in the
Prospectus that has not been so filed.
(h) The Representatives shall have received the opinion of Xxxxxx &
Whitney LLP (or such other counsel as is reasonably satisfactory to the
Representatives), counsel to Arcadia Financial and the Company, dated the
Closing Date, and also delivered to and satisfactory to the Rating
Agencies, substantially to the effect that (A) the transfer of the
Receivables by Arcadia Financial to the Company would be characterized as a
sale, (B) the transfer of the Receivables and the related Trust Property by
the Company to the Trust would be characterized as either a sale or the
grant of a security interest and (C) in the event of an involuntary or
voluntary case under the United States Bankruptcy Code, the separate
corporate existence of Arcadia Financial and the Company would not properly
be disregarded so as to substantively consolidate their assets and
liabilities.
(i) The Representatives shall have received the opinion of Xxxxxx &
Whitney LLP (or such other counsel as is reasonably satisfactory to the
Representatives), counsel to Arcadia Financial and the Company, dated the
Closing Date, and also delivered to and satisfactory to the Rating
Agencies, with respect to the perfection and priority of the security
interest (as defined in Section 1-201(37) of the Uniform Commercial Code)
of
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the Trust in the Receivables, the other Trust Property and the proceeds
thereof.
(j) The Representatives shall have received the opinion of special
Minnesota counsel for Arcadia Financial and the Company as is reasonably
satisfactory to the Representatives, dated the Closing Date, to the effect
that:
(i) Arcadia Financial holds all franchises, certificates,
consents, licenses, permits and other governmental or regulatory
approvals or authorizations necessary to originate and service the
Receivables in the State of Minnesota and to perform its other
obligations under the Sale and Servicing Agreement, the Custodian
Agreement and the Administration Agreement;
(ii) No franchises, certificates, consents, licenses, permits or
other governmental or regulatory approvals or authorizations are
necessary in the State of Minnesota for the Company to purchase the
Receivables from Arcadia Financial and assign the Receivables to the
Trust and to perform its other obligations under the Trust Agreement
and the Sale and Servicing Agreement;
(iii) No franchises, certificates, consents, licenses, permits or
other governmental or regulatory approvals or authorizations are
necessary in the State of Minnesota for the Owner Trustee or the Trust
to own the Receivables or to conduct the other transactions
contemplated the Trust Agreement and the Sale and Servicing Agreement;
and
(iv) The form of contract or note used by Arcadia Financial in the
State of Minnesota, attached to such opinion, (A) assuming the valid
execution and delivery of such form by each of the parties thereto, is
enforceable in accordance with its terms under the laws of the State
of Minnesota and (B) complies with applicable state and local laws
relating to consumer sales and lending transactions, consumer credit
laws, equal credit opportunity and disclosure laws.
(k) Unless otherwise specified in the Pricing Agreement, the
Representatives shall have received opinions of special counsel for Arcadia
Financial and the Company in certain of the states where the
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Receivables were originated, as specified in the Pricing Agreement, dated
the Closing Date, to the effect that:
(i) Arcadia Financial is duly qualified to do business as a
foreign corporation and is in good standing in the such state;
(ii) No qualification to do business as a foreign corporation in
such state is necessary for the Company to purchase the Receivables
from Arcadia Financial and assign the Receivables to the Trust and to
perform its other obligations under the Trust Agreement and the Sale
and Servicing Agreement;
(iii) No qualification to do business as a foreign corporation in
such state is necessary for the Owner Trustee or the Trust to own the
Receivables or to conduct the other transactions contemplated by the
Trust Agreement and the Sale and Servicing Agreement;
(iv) Arcadia Financial holds all franchises, certificates,
consents, licenses, permits and other governmental or regulatory
approvals or authorizations necessary to originate and service the
Receivables in such state and to perform its other obligations under
the Sale and Servicing Agreement and, if applicable, the Custodian
Agreement and the Administration Agreement;
(v) No franchises, certificates, consents, licenses, permits or
other governmental or regulatory approvals or authorizations are
necessary in such state for the Company to purchase the Receivables
from Arcadia Financial and assign the Receivables to the Trust and to
perform its other obligations under the Trust Agreement and the Sale
and Servicing Agreement;
(vi) No franchises, certificates, consents, licenses, permits or
other governmental or regulatory approvals or authorizations are
necessary in such state for the Owner Trustee or the Trust to own the
Receivables or conduct the other transactions contemplated by the
Trust Agreement and the Sale and Servicing Agreement;
(vii) The form of contract or note used by Arcadia Financial in such
state, attached to such opinion, (A) assuming the valid execution and
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delivery of such form by each of the parties thereto, is enforceable
in accordance with its terms under the laws of such state and
(B) complies with applicable state and local laws relating to consumer
sales and lending transactions, consumer credit laws, equal credit
opportunity and disclosure laws;
(viii) Assuming Arcadia Financial is shown as secured party on the
related title certificate, prior to the consummation of the
transactions contemplated by the Receivables Purchase Agreement,
Arcadia Financial has a valid and perfected first priority security
interest in Financed Vehicles securing Receivables that are registered
in such state;
(ix) Following the sale of the Receivables by Arcadia Financial to
the Company pursuant to the Receivables Purchase Agreement, the
Company will have a valid and perfected first priority security
interest in Financed Vehicles securing Receivables that are registered
in such state, notwithstanding the fact that the certificates of title
to such Financed Vehicles have not been marked, amended or otherwise
noted to reflect the Company's security interest;
(x) Following the assignment of the Receivables by the Company to
the Trust pursuant to the Sale and Servicing Agreement, the Trust will
have a valid and perfected first priority security interest Financed
Vehicles securing Receivables that are registered in such state,
notwithstanding the fact that the certificates of title to such
Financed Vehicles have not been marked, amended or otherwise noted to
reflect the Trust's security interest;
(xi) The Trust's assignment of the Collateral to the Collateral
Agent pursuant to the Indenture will vest in the Collateral Agent, for
the benefit of the Certificateholders and the Noteholders, a first
priority perfected security interest therein, subject to no prior
lien, mortgage, security interest, pledge, adverse claim, charge or
other encumbrance;
(xii) The transfers of the Receivables from Arcadia Financial to the
Company, from the Company to the Trust and from the Trust to the
Indenture Trustee, and the consummation of the other
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transactions contemplated by the Trust Agreement and the Sale and
Servicing Agreement and the Administration Agreement will not conflict
with any law or order of such state applicable to Arcadia Financial or
the Company currently in effect;
(xiii) Under the law of such state, the perfection of the transfers
of the Receivables by Arcadia Financial to the Company, by the Company
to the Trust and by the Trust to the Collateral Agent would be
governed by the law of the state (a) where the chief executive offices
of Arcadia Financial or the Company, as applicable, are located or (b)
where the Receivable Files are located;
(xiv) The trust fund created by the Trust Agreement will not, for the
income tax purposes of such state, be classified as an association
taxable as a corporation, and Certificateholders and Noteholders who
are not residents of or otherwise subject to tax in such state will
not, by reason of their acquisition of an interest in the Designated
Securities, be subject to income, franchise, excise or similar taxes
in such state with respect to interest on the Designated Securities or
with respect to any of the other Trust Property; and
(xv) The statements in the Registration Statement and the Prospectus
under the headings "Certain Legal Aspects of the Receivables" to the
extent that they describe matters of the law of such state or legal
conclusions with respect thereto, have been prepared or reviewed by
such counsel and are correct in all material respects.
(l) The Representatives shall have received the opinion of Xxxxxxxx,
Xxxxxx & Finger (or, if so specified in the Pricing Agreement, such other
counsel as is reasonably satisfactory to the Representatives), counsel to
the Owner Trustee, dated the Closing Date, to the effect that:
(i) The Owner Trustee has been duly incorporated and is validly
existing as a banking corporation under the laws of the State of
Delaware and has the power and authority to enter into, and to take
all action required of it under
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the Trust Agreement and, on behalf of the Trust, under the Indenture,
the Sale and Servicing Agreement, the Administration Agreement and the
Custodian Agreement;
(ii) The Designated Certificates have been duly executed,
delivered and authenticated by the Owner Trustee;
(iii) The Designated Notes have been duly executed and delivered by
the Owner Trustee;
(iv) The execution and delivery of the Trust Agreement and, on
behalf of the Trust, the Indenture, the Sale and Servicing Agreement,
the Administration Agreement and the Custodian Agreement by the Owner
Trustee and the performance by the Owner Trustee of their terms do not
conflict with or result in a violation of (A) any law or regulation of
the United States of America or the State of Minnesota governing the
banking or trust powers of the Owner Trustee, or (B) the by-laws of
the Owner Trustee; and
(v) No approval, authorization or other action by, or filing with,
any governmental authority of the United States of America or the
State of Minnesota having jurisdiction over the banking or trust
powers of the Owner Trustee is required in connection with the
execution and delivery by the Owner Trustee of the Trust Agreement,
and on behalf of the Trust, the Indenture, the Sale and Servicing
Agreement, the Administration Agreement or the Custodian Agreement or
the performance by the Owner Trustee and the of the respective terms
thereof.
(m) Unless otherwise specified in the Pricing
Agreement, the Representatives shall have received the opinion of Xxxxxxxx,
Xxxxxx & Finger (or if so specified in the Pricing Agreement, such other
counsel as is reasonably satisfactory to the Representatives) special
counsel for the Owner Trustee, dated the Closing Date, to the effect that:
(i) The Trust has been duly formed and is validly existing as a
business trust under the laws of the State of Delaware, 12 Del. C.
Section 3801, ET SEQ.;
(ii) The Trust has the power and authority to execute, deliver and
perform its obligations under
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the Sale and Servicing Agreement, the Indenture, the Administration
Agreement, the Designated Notes and the Designated Certificates;
(iii) To the extent that Article 9 of the Uniform Commercial Code
as in effect in the State of Delaware (the "UCC") is applicable
(without regard to conflicts of law principles), and assuming that the
security interest created by the Indenture in the Receivables, the
other Trust Property and the proceeds thereof has been duly created
and has attached, upon the filing of the Financing Statement with the
Secretary of State of the State of Delaware the Indenture Trustee will
have a perfected security interest in such Receivables, other Trust
Property and the proceeds thereof, and such security interest will be
prior to any other security interest that is perfected solely by the
filing of financing statements under the UCC, excluding purchase money
security interests under Section 9-312(4) of the UCC and temporarily
perfected security interests in proceeds under Section 9-306(3) of the
UCC; and
(iv) No re-filing or other action is necessary under the UCC in
the State of Delaware in order to maintain the perfection of such
security interest except for the filing of continuation statements at
five year intervals.
(n) The Representatives shall have received the opinion of Xxxxxxx
and Xxxxxx (or, if so specified in the Pricing Agreement, such other
counsel as is reasonably satisfactory to the Representatives), counsel to
the Indenture Trustee and the Collateral Agent specified in the Pricing
Agreement, dated the Closing Date, to the effect that:
(i) The Indenture Trustee and Collateral Agent is a banking
corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation and is duly authorized and empowered
to exercise trust powers under applicable law;
(ii) The Indenture Trustee and Collateral Agent has corporate
power, authority and legal right to execute, deliver and perform its
obligations under the Indenture, the Sale and Servicing Agreement and
the Spread Account Agreement and has taken all necessary action to
authorize the execution, delivery and performance
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by it of the Indenture, the Spread Account Agreement and the Sale and
Servicing Agreement;
(iii) The execution and delivery of the Indenture, the Sale and
Servicing Agreement and the Spread Account Agreement and the
performance by the Indenture Trustee of their terms (including as a
Backup Servicer under the Sale and Servicing Agreement) do not
conflict with or result in a violation of (A) any law or regulation of
the United States of America of the State of Minnesota governing the
banking or trust powers of the Indenture Trustee, or (B) the by-laws
of the Indenture Trustee; and
(iv) Each of the Indenture, the Sale and Servicing Agreement and
the Spread Account Agreement has been duly executed and delivered by
the Indenture Trustee and constitutes a legal, valid and binding
obligation of the Indenture Trustee, enforceable against the Indenture
Trustee in accordance with its respective terms, except that certain
of such obligations may be enforceable solely against the Trust
Property and except that such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation, or
other similar laws applicable to banking corporations affecting the
enforcement of creditors' rights generally, and by general principles
of equity.
(o) The Representatives shall have received the opinion of counsel to
the Custodian (which counsel shall be reasonably satisfactory to the
Representatives), dated the Closing Date, to the effect that:
(i) The Custodian has been duly incorporated and is validly
existing and has the power and authority to enter into, and to take
all action required of it under the Custodian Agreement;
(ii) The execution and delivery of the Custodian Agreement by the
Custodian and the performance by the Custodian of its terms do not
conflict with or result in a violation of (A) any law or regulation of
the United States of America or the State of Minnesota governing the
powers of the Custodian, or (B) the By-Laws of the Custodian; and
(iii) No approval, authorization or other action by, or filing
with, any governmental
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authority of the United States of America or the State of Minnesota
having jurisdiction over the powers of the Custodian is required in
connection with the execution and delivery by the Custodian of the
Custodian Agreement or the performance by the Custodian of the terms
of the Custodian Agreement.
(p) The Representatives shall have received the opinion of counsel to
the Security Insurer as is reasonably satisfactory to the Representatives,
dated the Closing Date, to the effect that:
(i) The Security Insurer is a stock insurance company duly
organized, validly existing and authorized to transact financial
guaranty insurance business under the laws of its state of
organization;
(ii) The Policies, the Insurance Agreement, the Spread Account
Agreement, the Custodian Agreement and the Indemnification Agreement
and, if applicable, the Indenture and the Sale and Servicing
Agreement, have been duly authorized, executed and delivered by the
Security Insurer;
(iii) The Policies, the Insurance Agreement, the Spread Account
Agreement, the Custodian Agreement and Indemnification Agreement and,
if applicable, the Indenture and the Sale and Servicing Agreement,
constitute legal, valid and binding obligations of the Security
Insurer, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
rehabilitation, moratorium and other similar laws affecting the
enforceability of creditors' rights generally applicable in the event
of the bankruptcy or insolvency of the Security Insurer and to the
application of general principles of equity and subject, in the case
of the Indemnification Agreement, to the principles of public policy
limiting the right to enforce the indemnification provisions contained
therein insofar as they relate to indemnification for liabilities
arising under applicable securities laws;
(iv) The Policies are exempt from registration under the Act;
(v) Neither the execution or delivery of the Policies, the
Insurance Agreement, the Spread
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Account Agreement, the Custodian Agreement and the Indemnification
Agreement and, if applicable, the Indenture and the Sale and Servicing
Agreement, by the Security Insurer, nor the performance by the
Security Insurer of its obligations thereunder, will conflict with or
result in a violation of the Security of Incorporation or By-Laws of
the Security Insurer, or result in a breach of, or constitute a
default under, any agreement or other instrument to which the
Security Insurer is a party or by which any of its properties are
bound, or violate any judgment, order or decree applicable to the
Security Insurer of any governmental or regulatory body,
administrative agency, court or arbitrator having jurisdiction over
the Security Insurer (except that in the published opinion of the
Securities and Exchange Commission the indemnification provisions of
the Indemnification Agreement, insofar as they relate to
indemnification for liabilities arising under the Act, are against
public policy as expressed in the Act and are therefore
unenforceable); and
(vi) With respect to the information regarding the Security
Insurer contained in the Registration Statement and the Prospectus and
any amendment or supplement thereto, such counsel has no reason to
believe that any such information contains any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light if the
circumstances in which they were made, not misleading.
(q) The Representatives shall have received the opinion of Xxxxxxx
and Xxxxxx (or, if so specified in the Pricing Agreement, other counsel as
is reasonably satisfactory to the Representatives), counsel to the Lockbox
Bank, dated the Closing Date, to the effect that:
(i) The Lockbox Bank has been duly incorporated and is validly
existing as a national banking association and has the power and
authority to enter into, and to take all action required of it under
the Lockbox Agreement;
(ii) The Lockbox Agreement has been duly executed and delivered by
the Lockbox Bank and constitutes a legal, valid and binding obligation
of the Lockbox Bank, enforceable in accordance with its terms,
subject, as to enforcement, to
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bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
(iii) The execution and delivery of the Lockbox Agreement by the
Lockbox Bank and the performance by the Lockbox Bank of its terms do
not conflict with or result in a violation of (A) any law or
regulation of the United States of America or the State of Illinois
governing the banking powers of the Lockbox Bank, or (B) the By-Laws
of the Lockbox Bank; and
(iv) No approval, authorization or other action by, or filing
with, any governmental authority of the United States of America or
the State of Illinois having jurisdiction over the banking powers of
the Lockbox Bank is required in connection with the execution and
delivery by the Lockbox Bank of the Lockbox Agreement or the
performance by the Lockbox Bank of the terms of the Lockbox Agreement.
(r) The Representatives shall have received evidence that, on or
before the Closing Date, UCC-1 financing statements have been filed in the
offices of the Secretaries of State of the States of Minnesota and
Delaware, reflecting the transfer of the Receivable Files and the related
Trust Property by Arcadia Financial to the Company, by the Company to the
Owner Trustee and by the Owner Trustee to the Indenture Trustee.
(s) The Designated Securities shall have been rated "AAA" by Standard
& Poor's Rating Services, a division of The XxXxxx-Xxxx Companies, Inc. and
"Aaa" by Xxxxx'x Investors Service, Inc. (the "Rating Agencies") and
neither of the Rating Agencies shall have placed the rating of the
Designated Securities under review with possible negative implications.
(t) The Company and Arcadia Financial shall have furnished to
the Representatives such further certificates and documents as the
Representatives shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Representatives. The Company will furnish the Representatives
with such conformed copies of such opinions,
-36-
certificates, letters and other documents as the Representatives shall
reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION. (a) Arcadia Financial and the
Company will, jointly and severally, indemnify and hold harmless each
Underwriter 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 an untrue statement or alleged
untrue statement of a material fact contained in any part of the Registration
Statement when such part became effective, or in the Registration Statement, any
Preliminary Prospectus, any Term Sheet, the Prospectus, 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 not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
Arcadia Financial and the Company shall 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 or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to Arcadia Financial or the Company by the
Representatives, or by any Underwriter through the Representatives, specifically
for use therein.
(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company against any losses, claims, damages or liabilities to
which the Company 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 an untrue statement or alleged untrue statement
of a material fact contained in any part of the Registration Statement when such
part became effective, or in the Registration Statement, any Preliminary
Prospectus, the Prospectus 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 not misleading; in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made therein in reliance upon and in conformity with written
information furnished to the Company by the Representatives, or by such
Underwriter through the Representatives, specifically for use therein; and will
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reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending against any such loss,
claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may have to
any indemnified party under such subsection to the extent the indemnifying party
was not materially prejudiced by such omission or otherwise than under such
subsection. In case any such action shall be brought against any indemnified
party, and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall 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.
In any such action, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the contrary, (ii) the
indemnified party has reasonably concluded (based upon advice of counsel to the
indemnified party) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (iii) a conflict or potential conflict exists (based
upon advice of counsel to the indemnified party) between the indemnified party
and the indemnifying party (in which case the indemnifying party will not have
the right to direct the defense of such action on behalf of the indemnified
party) or (iv) the indemnifying party has elected to assume the defense of such
proceeding but has failed within a reasonable time to retain counsel reasonably
satisfactory to the indemnified person. It is understood that the indemnifying
party shall not, with respect to any action brought against any indemnified
party, be liable for the fees and expenses of more than one firm (in addition to
any local counsel) for all indemnified parties, and that all such fees and
expenses shall be reimbursed within a reasonable period of time as they are
incurred.
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Unless it shall assume the defense of any proceeding, an indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party shall indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. If any indemnifying party assumes the defense of a
proceeding, it shall not settle, compromise or consent to the entry of any
judgment with respect thereto if indemnification or contribution could be sought
under this Section 6 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such proceeding and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above,
(i) in such proportion as is appropriate to reflect the relative benefits
received by Arcadia Financial and the Company on the one hand and the
Underwriters on the other from the offering of the Designated Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
Arcadia Financial and the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by Arcadia Financial and the
Company 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 Company 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. 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 Arcadia
Financial or the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. Arcadia Financial and the Company on the one hand
and the Underwriters on the other agree that it would not be just and equitable
if contributions pursuant to this subsection (d) were to be
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determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the first sentence of
this subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating, preparing
to defend or defending against any action or claim that is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Designated Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages that 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 Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of Arcadia Financial and the Company under this
Section 6 shall be in addition to any liability that Arcadia Financial and the
Company 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; and the obligations of the Underwriters under this Section 6 shall be in
addition to any liability that the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each director of the
Company (including any person who, with his consent, is named in the
Registration Statement as about to become a director of the Company), to each
officer of the Company who has signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of Arcadia Financial and the Company
herein or in the Pricing Agreement or in certificates delivered pursuant hereto
or pursuant to the Pricing Agreement, and the agreements of the several
Underwriters contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling persons, or Arcadia Financial and the
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Company or any of their officers, directors or any controlling persons, and
shall survive delivery of and payment for the Designated Securities under the
Pricing Agreement.
8. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter or
Underwriters shall fail to take up and pay for the amount of Designated
Securities agreed by such Underwriter or Underwriters to be purchased under a
Pricing Agreement, upon tender of such Designated Securities in accordance with
the terms such Pricing Agreement, and the amount of Designated Securities not
purchased does not aggregate more than 10% of the total amount of Designated
Securities that the Underwriters are obligated to purchase under the Pricing
Agreement at the Closing Date, the remaining Underwriters shall be obligated to
take up and pay for (in proportion to their respective underwriting obligations
under the Pricing Agreement except as may otherwise be determined by the
Representatives) the Designated Securities that the withdrawing or defaulting
Underwriter or Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Designated Securities agreed by such Underwriter or
Underwriters to be purchased under a Pricing Agreement, upon tender of such
Designated Securities in accordance with the terms hereof, and the amount of
Designated Securities not purchased aggregates more than 10% of the total amount
of Designated Securities that the Underwriters are obligated to purchase under
the Pricing Agreement at the Closing Date, and arrangements satisfactory to the
Representatives and the Company and Arcadia Financial for the purchase of such
Designated Securities by other persons are not made within 36 hours thereafter,
the Pricing Agreement shall terminate. In the event of any such termination the
Company shall not be under any liability to any Underwriter with respect to
Designated Securities not purchased by reason of such termination (except to the
extent provided in Section 4(j) and Section 6 hereof) nor shall any Underwriter
(other than an Underwriter who shall have failed, otherwise than for some reason
permitted under the Pricing Agreement, to purchase the amount of Designated
Securities agreed by such Underwriter to be purchased under the Pricing
Agreement) be under any liability to the Company with respect to such Designated
Securities (except to the extent provided in Section 6 hereof).
9. TERMINATION. Unless otherwise specified in the Pricing Agreement,
the Representatives shall have the right by giving notice as hereinafter
specified at any time at or prior to the Closing Date, to terminate the Pricing
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Agreement if (i) Arcadia Financial or the Company shall have failed, refused or
been unable, at or prior to the Closing Date, to perform any agreement on its
part to be performed under the Pricing Agreement, (ii) any other condition of
the Underwriters' obligations under the Pricing Agreement is not fulfilled,
(iii) trading on the New York Stock Exchange or the American Stock Exchange
shall have been wholly suspended, (iv) minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required, on the New York Stock Exchange or the American Stock Exchange, by
such exchange or by order of the Commission or any other governmental authority
having jurisdiction, (v) a banking moratorium shall have been declared by
Federal or New York authorities, or (vi) an outbreak or escalation of major
hostilities in which the United States is involved, a declaration of war by
Congress, any other substantial national or international calamity or any other
event or occurrence of a similar character shall have occurred since the
execution of the Pricing Agreement that, in the judgment of the Representatives,
makes it impractical or inadvisable to proceed with the completion of the sale
of and payment for the Designated Securities. Any such termination shall be
without liability of any party to any other party with respect to Designated
Securities not purchased by reason of such termination except that the
provisions of Section 4(j) and Section 6 hereof shall at all times be effective.
If the Representatives elect to terminate the Pricing Agreement as provided in
this Section, the Company and Arcadia Financial shall be notified promptly by
the Representatives by telephone, telex or telecopy, confirmed by letter.
10. NOTICES. All notices or communications under the Pricing
Agreement shall be in writing and if sent to the Representatives shall be
mailed, delivered, telexed or telecopied and confirmed to the Representatives at
the addresses specified in the related Pricing Agreement, if sent to Arcadia
Financial, shall be mailed, delivered, telexed or telecopied and confirmed to
Arcadia Financial at 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000-0000, Attention: Secretary, or if sent to the Company, shall be mailed,
delivered, telexed or telecopied and confirmed to the Company 0000 Xxxxxxxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention:
Secretary. Notice to any Underwriter pursuant to Section 6 hereof shall be
mailed, delivered, telexed or telecopied and confirmed to such Underwriter's
address as it appears in such Underwriter's questionnaire or other notice
furnished to the Company in writing for the purpose of communications under the
Pricing Agreement. Any party to the Pricing Agreement may change such address
for notices by sending to the
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parties to the Pricing Agreement written notice of a new address for such
purpose.
11. PARTIES. The Pricing Agreement shall inure to the benefit of and
be binding upon Arcadia Financial and the Company on the one hand and the
Underwriters on the other and their respective successors and the controlling
persons, officers and directors referred to in Section 6 hereof, and no other
person will have any right or obligation under the Pricing Agreement.
In all dealings with Arcadia Financial and the Company under the
Pricing Agreement, the Representatives shall act on behalf of each of the
several Underwriters, and any action under the Pricing Agreement taken by the
Representatives will be binding upon all the Underwriters.
12. APPLICABLE LAW. The Pricing Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
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