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EXHIBIT 1.2
ARCADIA FINANCIAL LTD.
ARCADIA RECEIVABLES FINANCE CORP.
ASSOCIATES AUTOMOBILE RECEIVABLES TRUSTS
STANDARD PROVISIONS FOR AUTOMOBILE
RECEIVABLES-BACKED CERTIFICATES AND
AUTOMOBILE RECEIVABLES-BACKED NOTES
(June 2000)
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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 Associates 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, including the
provisions hereof incorporated therein by reference, a "Pricing 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 Associates 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 and of
the Underwriters to purchase 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.
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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 owner 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 indenture 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 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
any other form of credit enhancement specified in the related Pricing Agreement,
such amounts as from time to time may be held in any 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 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,
if any, 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
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(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, if 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 entity specified in the related Pricing Agreement (the "Spread
Account 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 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 Indenture and certain other agreements.
At the Closing Date for the sale of Designated Securities if
specified in the 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. 333-82281)
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
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statement and prospectus may have been amended or supplemented prior to
the date of the Pricing Agreement; 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 later of the date of the
Pricing Agreement and the date of its first use (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 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
Designated 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
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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, 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, any Insurance Agreement, any Spread
Account Agreement, any Lockbox Agreement, the Designated Securities or
any 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, any
Insurance Agreement, any Spread Account Agreement and any Lockbox
Agreement and, if applicable, any 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, the Sale and Servicing Agreement, any Receivables
Purchase Agreement, any Insurance Agreement, any Spread Account
Agreement and any Lockbox Agreement, and had at all relevant times, and
on the Closing Date will have, full
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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, any Administration Agreement, the Designated
Notes and the Designated Certificates.
(h) The Trust Agreement, the Sale and Servicing Agreement, the
Receivables Purchase Agreement, any Insurance Agreement, any Spread
Account Agreement, any 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, any Insurance Agreement any Spread Account Agreement, the
Custodian Agreement, any Lockbox Agreement and the Pricing Agreement
and, if applicable, any 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, any
Insurance Agreement, the Custodian Agreement and any 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 bankruptcy, 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 Indenture Trustee or such
other entity specified in the Pricing Agreement (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,
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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, authenticated 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 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.
(m) Except as contemplated in the Prospectus, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material adverse
change, or any development involving a prospective material adverse
change, in the condition (financial or other), business, or operations
of Arcadia Financial or the Company, which would reasonably be expected
to have a material adverse effect on either (A) the ability of Arcadia
Financial or the Company to consummate the transactions contemplated
by, or to perform its respective obligations under, the related Pricing
Agreement or any of the Trust Agreement, the Sale and Servicing
Agreement, the Receivables Purchase Agreement, the Custodian Agreement
or the Administration Agreement, as applicable, or (B) the Receivables.
(n) There are no contracts or documents that are required to
be filed as exhibits to the Registration Statement that have not been
so filed.
(o) The execution, delivery and performance of the Pricing
Agreement, the Trust Agreement, the Sale and Servicing Agreement, the
Indenture, the Receivables Purchase Agreement, any Insurance Agreement,
any Spread Account Agreement, any Lockbox Agreement, the Custodian
Agreement, any 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 or the Company is a party or by which it is
bound or to which any of the property of Arcadia Financial or the
Company 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 or the Company 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 by Arcadia Financial or the Company of the transactions
contemplated by the Pricing Agreement, the Trust Agreement, the Sale
and Servicing Agreement, the Indenture, the Receivables Purchase
Agreement, any Insurance Agreement, any Spread Account Agreement, any
Lockbox Agreement, the Custodian Agreement, any Administration
Agreement and the Designated Securities, except such as have been
obtained under the
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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.
(p) None of the Company, Arcadia Financial or the Trust is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(q) The Company and 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 and Arcadia
Financial conduct their respective businesses, and neither the Company
nor 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 or the Company, or might materially and adversely
affect the properties or assets of Arcadia Financial or the Company.
(r) The Company and 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 and 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 or the Company, or might materially and adversely affect the
properties or assets of Arcadia Financial or the Company.
(s) 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, any Administration Agreement, any Spread Account Agreement
and any 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 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
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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 its execution of a Pricing Agreement, the Company
covenants and agrees 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 additional information; 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.
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(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 all reasonable 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 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 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 all reasonable 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
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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.
(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-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, if any,
pursuant to Section 2.02 of the Insurance Agreement, if any and (y)
each amendment or supplement to the Trust Agreement, the Sale and
Servicing Agreement, the Indenture, the Receivables Purchase Agreement,
any Insurance Agreement, any Spread Account Agreement, any Lockbox
Agreement, the Custodian Agreement or any 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, any
Insurance Agreement, any Spread Account Agreement, the Custodian
Agreement, any Lockbox Agreement, any Administration Agreement and the
Designated Securities, (ii) will pay the expenses of printing all
documents relating to the offering, and (iii) will reimburse the
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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
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) For a Trust that purchases Subsequent Receivables, 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 Xxxxx & Young LLP, as 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 Financial, as a result of' which they have
determined, having examined in accordance with such agreed upon
procedures,
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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) For a Trust that purchases Subsequent Receivables, 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) For a Trust that purchases Subsequent Receivables, 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 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) (1) To the extent the Underwriters use the materials
described in this clause (1) in connection with the offering of
Designated Securities, 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 Xxxxxxx & 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.
(2) Unless otherwise specify in the Pricing Agreement that it
has used or will use Term Sheets in connection with the offering of
Designated Securities, each Underwriter, severally, represents and
warrants to the Company and Arcadia Financial that it has not and will
not use any information that constitutes Term Sheets.
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
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and Arcadia Financial of their respective obligations under the Pricing
Agreement and to the following additional conditions:
(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 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, since the
respective dates as of which such information is given in the
Registration Statement and the Prospectus, there shall not have been
any change, in the capital stock, short-term debt or long-term debt of
the Security Insurer, if any, any downgrade in the ratings assigned to
any securities issued by Associates Corporation of North America, or
any material adverse change, or any development involving a prospective
adverse change, in the condition (financial or other), business, or
operations of the Security Insurer, if any, Arcadia Financial or the
Company or any change in the rating assigned to the claims-paying
ability of the Security Insurer, if any 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, if any, or (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating), that, in any such case in the reasonable
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 & Xxxxxxx 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
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security interest, other encumbrance or adverse claim other
than the security interest of Financial Security 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, any Insurance Agreement, any Spread
Account Agreement, any Lockbox Agreement, the Custodian
Agreement and the Designated Securities and, if applicable,
any 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, any Insurance Agreement, any
Spread Account Agreement, any 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
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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 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 Trust Agreement, the Sale and Servicing Agreement, the
Receivables Purchase Agreement, any Insurance Agreement, any
Spread Account Agreement and any 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;
(xi) The Sale and Servicing Agreement, the Receivables
Purchase Agreement, any Insurance Agreement, any Spread
Account Agreement, the Custodian Agreement and any Lockbox
Agreement and, if applicable, any Administration Agreement,
have each been duly authorized, executed and delivered by
Arcadia Financial and each constitutes a valid and legally
binding obligation of Arcadia
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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;
(xii) The Sale and Servicing Agreement, the Indenture, the
Custodian Agreement and any 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;
(xiii) 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, any Insurance Agreement,
any Spread Account Agreement, any Lockbox Agreement, the
Custodian Agreement, the Designated Securities or any
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, any Insurance Agreement,
any Spread Account Agreement, any Lockbox Agreement, the
Custodian Agreement, the Designated Securities or any
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, any Insurance Agreement, any
Spread Account Agreement, any Lockbox Agreement, the
Designated Securities, the Custodian Agreement or any
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
"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 delivery of the Designated Securities,
the execution, delivery and performance by Arcadia
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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,
any Insurance Agreement, any Spread Account Agreement, any
Lockbox Agreement, the Custodian Agreement, the Designated
Securities of any 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,
any Insurance Agreement, any Spread Account Agreement, any
Lockbox Agreement, the Custodian Agreement, the Designated
Securities or any 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 Noteholders, a first
priority perfected security interest therein, subject to no
prior lien mortgage, security interest, pledge, adverse claim,
charge or other incumbrance.
(xvii) The statements in the Registration Statement and the
Prospectus under the headings "Legal Aspects of the
Receivables," "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, any
Insurance Agreement, the Sale and Servicing Agreement, the
Indenture, the Receivables Purchase Agreement, any Lockbox
Agreement, the Pricing Agreement, the Custodian Agreement, any
Policies and any Administration Agreement conform in all
material respects with the descriptions thereof contained in
the Registration Statement and the Prospectus;
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(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;
(xxi) The trust fund created by the Trust Agreement will not,
for Federal, 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 Federal, 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; and
(xxii) The Designated Notes will, for Federal, New York and
Minnesota tax purposes be classified as indebtedness.
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 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) Unless otherwise specified in the Pricing Agreement, the
Representatives shall have received the opinion of in-house counsel for Arcadia
Financial and the Company (or, if so specified in the Pricing Agreement, such
other counsel as is reasonably satisfactory to the Representatives), dated the
Closing Date, to the effect that:
(i) No qualification to do business as a foreign corporation
in the State of Texas 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;
(ii) No qualification to do business as a foreign corporation
in the State of Texas 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;
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(iii) 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
Texas and to perform its other obligations under the Sale and
Servicing Agreement, the Custodian Agreement and any
Administration Agreement; and
(iv) No franchises, certificates, consents, licenses, permits
or other governmental or regulatory approvals or
authorizations are necessary in the State of Minnesota and
Texas 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;
(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 Xxxxx
& Young LLP, 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 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 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 of
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 &
Xxxxxxx 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
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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 &
Xxxxxxx 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 the Trust in the
Receivables, the other Trust Property (including property held in any Reserve
Account) and the proceeds thereof.
(j) The Representatives shall have received the opinion of special
Texas counsel for Arcadia Financial and the Company as is reasonably
satisfactory to the Representatives, dated the Closing Date, to the effect that:
(i) The trust fund created by the Trust Agreement will not,
for 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 Texas will not, by reason of their acquisition of an
interest in the Designated Securities, be subject to Texas
income, franchise, excise or similar taxes with respect to
interest on the Designated Securities or with respect to any
of the other Trust Property;
(ii) The Designated Notes will, for Texas tax purposes be
classified as indebtedness;
(iii) Arcadia Financial's assignment of the Receivables to the
Company pursuant to the Purchase Agreement will vest in the
Company a first priority perfected security interest therein,
subject to no prior lien mortgage, security interest, pledge,
adverse claim, charge or other incumbrance; and
(iv) The Seller's assignment of the Receivables to the Trust
pursuant to the Sale and Servicing Agreement will vest in the
Trust a first priority perfected security interest therein,
subject to no prior lien mortgage, security interest, pledge,
adverse claim, charge or other incumbrance
(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 Receivables were
originated, as specified in the Pricing Agreement, dated the Closing Date, to
the effect that:
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(i) The form of contract or note used by Arcadia Financial in
such state, 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 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;
(ii) 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;
(iii) 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 the Financed Vehicles securing
the 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;
(iv) 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 in the Financed Vehicles securing
the 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;
(v) 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;
(vi) 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 transactions contemplated by the Trust Agreement and the
Sale and Servicing Agreement and any Administration Agreement
will not conflict with any law or order of such state
applicable to Arcadia Financial or the Company currently in
effect;
(vii) 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; and
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(viii) The statements in the Registration Statement and the
Prospectus under headings "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 reasonable 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 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 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 and they are
validly issued and are entitled to the benefits of the Trust
Agreement;
(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, the State of Delaware 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, the State of Delaware 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 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:
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(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 the Sale and Servicing
Agreement, the Indenture, any 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 conflict 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;
(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;
(v) The Trust Agreement constitutes the valid and binding
obligation of the Owner Trustee and the Company enforceable
against the Owner Trustee and the Company in accordance with
its terms subject to (i) applicable bankruptcy, insolvency,
moratorium, receivership, reorganization, fraudulent
conveyance and similar laws relating to and affecting the
rights and remedies of creditors generally, and (ii)
principles of equity (regardless of whether considered and
applied in a proceeding in equity or at law);
(vi) Under Section 3805(b) of the Business Trust Act, no
creditor of any Certificateholder shall have any right to
obtain possession of, or otherwise exercise legal or equitable
remedies with respect to, the property of the Trust except in
accordance with the terms of the Trust Agreement; and.
(vii) Under Section 3805(c) of the Business Trust Act, and
assuming that the Sale and Servicing Agreement conveys good
title to the Receivables to the Trust as a true sale and not
as a security arrangement, the Trust rather than the
Certificateholders is the owner of the Receivables.
(n) The Representatives shall have received the opinion of counsel,
reasonably satisfactory to the Representatives, to the Indenture Trustee and the
Collateral Agent specified in the Pricing Agreement, dated the Closing Date, to
the effect that:
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(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 any Spread Account Agreement and has
taken all necessary action to authorize the execution,
delivery and performance by it of the Indenture, any Spread
Account Agreement and the Sale and Servicing Agreement;
(iii) The execution and delivery of the Indenture, the Sale
and Servicing Agreement and any Spread Account Agreement and
the performance by the Indenture 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 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 any 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
any 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 or Texas governing the powers of the Custodian,
or (B) the By-Laws of the Custodian; and
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(iii) No approval, authorization or other action by, or filing
with, any governmental authority of the United States of
America or the State of Minnesota or Texas 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
any 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 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 Articles 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
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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
containing 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 of the
circumstances in which they were made, not misleading.
(q) The Representatives shall have received the opinion of counsel,
reasonably satisfactory to Representatives, to any 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
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, Texas 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.
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(s) The Designated Securities shall have been rated the ratings set
forth in the Pricing Agreement by Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc. and 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,
certificates, letters and other documents as the Representatives shall
reasonably request.
(u) The Representatives shall have received copies of each opinion of
counsel delivered to either Rating Agency or any Security Insurer, together with
a letter addressed to the Underwriters, dated the Closing Date, to the effect
that the Underwriters may rely on each such opinion to the same extent as though
such opinion was addressed to each as of its date.
(v) The Representatives shall have received from Stroock & Stroock &
Xxxxx LLP, 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 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.
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 any amendment or supplement
thereto, or in the Prospectus, or any amendment or supplement thereto, any
Preliminary Prospectus or any Term Sheet, 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; provided further, that neither Arcadia Financial nor the
Company shall be liable to any Underwriter under the indemnity agreement in this
subsection (a) with respect to any Preliminary Prospectus to the extent that any
loss, claim, damage or liability of such Underwriter results from
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the fact that such Underwriter sold Designated Securities to a person as to whom
it is established that there was not sent or given, at or prior to written
confirmation of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) or of the Prospectus as then amended or supplemented
(excluding documents incorporated by reference) in any case where such delivery
is required by the Act if the Company notified you in writing in accordance with
Section 4(e) hereof and previously furnished copies of the Prospectus (excluding
documents incorporated by reference) or of the Prospectus as then amended or
supplemented (excluding documents incorporated by reference in the quantity
requested in accordance with Section 4(e) hereof to such Underwriter and the
loss, claim, damage or liability of such Underwriter results from an untrue
statement or omission of a material fact contained in the Preliminary Prospectus
and corrected in the Prospectus or the Prospectus as then amended or
supplemented.
(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 any amendment or supplement thereto, or in the
Prospectus or any amendment or supplement thereto, or any Preliminary
Prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, 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 in the
preparation thereof; and will 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 which it may have to
any indemnified party 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.
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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. 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 which 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 compensation or profit (before deducting
expenses) received or realized by the Underwriters from the purchase and resale,
or underwriting, of the Designated Securities. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by Arcadia Financial or the
Company or the Underwriters and
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the parties' relative intent, knowledge, access to information and opportunity,
and actions and inaction 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 determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which 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 or defending any action or
claim (which shall be limited as provided in subsection (c) above if the
indemnifying party has assumed the defense of any such action in accordance with
the provisions thereof) which 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 which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute shall be 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 which 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 or the Exchange Act; and the obligations of the Underwriters
under this Section 6 shall be in addition to any liability which 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 or the Exchange 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 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
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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 which
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 a default by any
Underwriter as set forth in this Section 8, the Closing Date shall be postponed
for such period, not to exceed seven full business days, as the Underwriters
shall determine in order that the required changes in the Registration Statement
and the Prospectus or in any other documents or arrangements may be effected. In
the event of any such termination, the Company shall not be under any liability
to any Underwriter (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
(except to the extent provided in Section 6 hereof). Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any non-defaulting Underwriter for damages occasioned by its
default hereunder.
9. Termination. Unless otherwise specified in the Pricing Agreement,
the Representatives shall have the right to terminate the Pricing Agreement if
(i) trading generally on the New York Stock Exchange shall have been suspended
or materially limited, (ii) trading in Associate First Capital Corporation's
securities on the New York Stock Exchange has been suspended or materially
limited, (iii) a general moratorium on commercial banking activities shall have
been declared by Federal or New York authorities, or (iv) there shall have
occurred since the execution of this Agreement an outbreak or escalation of
hostilities in which the United States is involved, a declaration of war by the
United States or other calamity or crisis and, in the case of any such event
specified in clauses (i) through (iv) above, the effect of such event, in the
Representatives' sole judgment after consultation (or attempted consultation)
with the Company, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Designated Securities, on the
terms and in the manner contemplated in the Prospectus. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(j) and Section 6 shall at all times be effective.
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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 c/o Associates Corporation of North America, 000 Xxxx
Xxxxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000, Attention: Senior Vice President-Capital
Markets, or if sent to the Company, shall be mailed, delivered, telexed or
telecopied and confirmed to the Company c/o Associates Corporation of North
America, 000 Xxxx Xxxxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000, Attention: Senior Vice
President-Capital Markets. Notice to any Underwriter pursuant to Section 6
hereof shall be mailed, delivered, telexed or telecopied and confirmed to such
Underwriter's address as 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 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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