ARCADIA FINANCIAL LTD.
ARCADIA RECEIVABLES FINANCE CORP.
ARCADIA AUTOMOBILE RECEIVABLES TRUSTS
UNDERWRITING AGREEMENT
STANDARD PROVISIONS FOR AUTOMOBILE
RECEIVABLES-BACKED CERTIFICATES AND
AUTOMOBILE RECEIVABLES-BACKED NOTES
(September 1999)
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From time to time, Arcadia Receivables Finance Corp., a Delaware
corporation (the "Company"), and Arcadia Financial Ltd., a Minnesota corporation
("Arcadia Financial"), may enter into one or more pricing agreements that
provide for the sale by an Arcadia Automobile Receivables Trust to be created by
the Company of automobile receivables-backed certificates (the "Certificates")
and automobile receivables-backed notes (the "Notes") (the Certificates and the
Notes sometimes collectively referred to herein as the "Securities") to the
several underwriters named therein (each, a "Pricing Agreement" and, including
the provisions hereof incorporated therein by reference, an "Underwriting
Agreement").
The terms and rights of any particular issuance of Certificates
(the "Designated Certificates") or Notes (the "Designated Notes") (the
Designated Certificates and the Designated Notes sometimes collectively referred
to herein as the "Designated Securities") shall be as specified in the Pricing
Agreement relating thereto. Particular sales of Designated Securities may be
made from time to time by the Arcadia Automobile Receivables Trust designated in
the Pricing Agreement relating to such Designated Securities (the "Trust") to
the several underwriters named in such Pricing Agreement (the "Underwriters"),
for whom the firms designated as representatives of the Underwriters of such
Designated Securities in the Pricing Agreement relating thereto will act as
representatives (the "Representatives"). The term Representatives also refers
to a single firm acting as sole representative of the Underwriters and to
Underwriters or a single firm acting as sole Underwriter acting without any firm
being designated as their representative. These standard provisions shall not
be construed as an obligation of the Company to sell any Designated Securities
or as an obligation of any Underwriter to purchase any Designated Securities.
The obligation of the Company to
issue and sell any Designated Securities shall be evidenced by the Pricing
Agreement relating thereto with respect to the Designated Securities named
therein. Each Pricing Agreement shall specify, among other things, the Trust
that will issue such Designated Securities, the aggregate principal amount (or
notional principal amount) of such Designated Securities, the names of the
Underwriters and the Representatives, the purchase price to the Underwriters of
such Designated Securities, the principal amount of such Designated Securities
to be purchased by each Underwriter and the date, time and manner of delivery of
such Designated Securities and payment therefor.
1. DESCRIPTION OF SECURITIES. The Company, a wholly-owned
subsidiary of Arcadia Financial, proposes to cause the Trust designated in
the related Pricing Agreement to be created pursuant to a trust agreement
(the "Trust Agreement") among the Company, as seller, the trustee specified
in the related Pricing Agreement (the "Owner Trustee") and any such other
parties as shall be specified in the related Pricing Agreement and to cause
the Trust to issue and sell to the several Underwriters the Designated
Certificates to be issued under such Trust Agreement and/or the Designated
Notes to be issued under an Indenture (the "Indenture") between the Trust,
the trustee specified in the related Pricing Agreement (the "Indenture
Trustee") and any such other parties as shall be specified in the related
Pricing Agreement. The Designated Notes will be collateralized by the Trust
Property (as defined below), and each Certificate will represent a fractional
undivided interest in the related Trust. The assets of each Trust (the "Trust
Property") will include, among other things, a pool of simple interest retail
installment sales contracts and promissory notes (the "Receivables")
purchased or to be purchased from motor vehicle dealers ("Dealers") by
Arcadia Financial and secured by new and used automobiles and light trucks
(the "Financed Vehicles"), certain monies paid or payable thereon after the
Cutoff Date (the "Cutoff Date") specified in the related Pricing Agreement
(excluding certain insurance premiums), any financial guaranty insurance
policies issued by an insurer in respect of the Designated Securities (the
"Security Insurer") pursuant to an insurance and indemnity agreement among
the Trust, the Company, Arcadia Financial and the Security Insurer and any
other parties specified in the related Pricing Agreement (an "Insurance
Agreement") or other form of credit enhancement specified in the related
Pricing Agreement, such amounts as from time to time may be held in a lockbox
account (established pursuant to a counterpart to an agency agreement and
retail lockbox agreement between Arcadia Financial, the Owner Trustee, the
lockbox bank (the "Lockbox Bank") specified in the related Pricing Agreement
(the "Lockbox Agreement") and the Security Insurer) and the Collection
Account (including all investments in the Collection Account and all income
from the investment of funds therein and proceeds thereof), an assignment of
Arcadia Financial's security interests in the Financed Vehicles, an
assignment of the right to receive proceeds from the exercise of rights
against Dealers under agreements between Arcadia Financial and such Dealers
and the assignment of rights in respect of each Receivable from the
applicable Dealer to Arcadia Financial, an assignment of the right to
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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 specified in the related
Pricing Agreement (the "Backup Servicer"), and any other parties specified in
and as more fully described in the related Pricing Agreement or the Sale and
Servicing Agreement. In addition, if so specified in the related Pricing
Agreement, the Trust Property will include monies on deposit in a pre-funding
account (the "Pre-Funding Account") which will be used to purchase Receivables
from Arcadia Financial originated subsequent to the Cutoff Date.
Unless otherwise specified in the related Pricing Agreement, the
Receivables and the related Trust Property will be conveyed to the Company by
Arcadia Financial pursuant to a Receivables Purchase Agreement and Assignment
between the Company and Arcadia Financial (a "Receivables Purchase Agreement")
and will be conveyed to the related Trust by the Company pursuant to the Sale
and Servicing Agreement. Concurrently with the issuance of the Designated
Securities, unless otherwise specified in the related Pricing Agreement, (i)
with respect to the Designated Certificates, if any, the Security Insurer will
issue a Policy to the Owner Trustee pursuant to which the Security Insurer will
unconditionally and irrevocably guarantee to the holders of the Designated
Certificates payment of the Guaranteed Distributions with respect to each
Distribution Date and certain other amounts, as set forth in such Policy (the
"Certificate Policy"), (ii) with respect to the Designated Notes, if any, the
Security Insurer will issue a Policy to the Indenture Trustee pursuant to which
the Security Insurer will unconditionally and irrevocably guarantee to the
holders of the Designated Notes payment of the Guaranteed Distributions with
respect to each Distribution Date and certain other amounts, as set forth in
such Policy (the "Note Policy" and, together with the Certificate Policy, the
"Policies"), (iii) Arcadia Financial, the Company, the Security Insurer, the
trustee and the collateral agent specified in the related Pricing Agreement (the
"Collateral Agent") will enter into a Spread Account Agreement or series
supplement thereto (the "Spread Account Agreement") regarding certain rights of
the Security Insurer in consideration of the issuance of the Policies, (iv) the
Trust, the Indenture Trustee, the Security Insurer and Arcadia Financial or the
other custodian specified in the related Pricing Agreement (the "Custodian")
will enter into a custodian agreement (the "Custodian Agreement") pursuant to
which the Custodian will hold the original installment sales contract or
promissory note as well as copies of documents and instruments relating to each
Receivable and evidencing the security interest in the Financed Vehicle securing
each Receivable (the "Receivable Files"), and (v) the Trust and the parties
specified in the related Pricing Agreement will enter into an administration
agreement (the "Administration Agreement") pursuant to which the administrator
specified in such Pricing Agreement (the "Administrator"), will perform certain
administrative tasks of the Owner Trustee and the Indenture Trustee imposed
under the Trust Agreement, the Indenture and certain other agreements. Unless
specified in the related Pricing Agreement with respect
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to a Pre-Funding Account, the Designated Securities will be issued in an
aggregate principal amount which is equal to the sum of aggregate principal
balance of the Receivables as of the Cutoff Date and the amount, if any,
deposited in the Pre-Funding Account on the Closing Date (as hereinafter
defined).
At the Closing Date for the sale of Designated Securities
specified in each Pricing Agreement, the Security Insurer and the Underwriters
will also enter into an Indemnification Agreement (the "Indemnification
Agreement") regarding indemnification for certain information included in the
Registration Statement and Prospectus, referred to below.
Capitalized terms used but not defined herein when used in
connection with any Pricing Agreement, have the meanings assigned in the related
Sale and Servicing Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ARCADIA
FINANCIAL. In addition to any representations and warranties specified in the
related Pricing Agreement, by their execution of a Pricing Agreement, the
Company and Arcadia Financial, jointly and severally, shall represent and
warrant to, and agree with, each Underwriter that:
(a) A registration statement on Form S-3 (File No. 333-82281)
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
statement and prospectus may have been amended or supplemented prior to
the date of the date hereof; any such amendment or supplement was so
prepared and filed, and any such amendment filed after the effective date
of such registration statement has become effective. No stop order
suspending the effectiveness of the registration statement has been
issued, and no proceeding for that purpose has been instituted or
threatened by the Commission. A prospectus supplement ("Prospectus
Supplement") setting forth the terms of the Designated Securities and of
their sale and distribution has been or will be so prepared and will be
filed pursuant to Rule 424(b) of the Rules and Regulations on or before
the second business day after the date hereof (or such earlier time as
may be required by the Rules and Regulations). Copies of such
registration statement and prospectus, any such amendment or supplement
and all documents incorporated by reference therein that were filed with
the Commission on or prior to the date it is first used in connection
with the offering of the Designated Securities (including one fully
executed copy of the registration statement and of 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
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Statement," and the final form of prospectus included in the Registration
Statement, as supplemented by the Prospectus Supplement, is referred to
herein as the "Prospectus." Each form of Prospectus, or Prospectus and
Prospectus Supplement, if any, heretofore made available for use in
offering the Securities is referred to herein as a "Preliminary
Prospectus." Any reference herein to the Registration Statement, the
Prospectus, any amendment or supplement thereto or any Preliminary
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration
Statement or Prospectus shall be deemed to refer to and include the
filing after the execution hereof of any document with the Commission
deemed to be incorporated by reference therein.
(b) Each part of the Registration Statement, when such
part became or becomes effective, each Preliminary Prospectus (if
any) on the date of filing thereof with the Commission, and the
Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission and at the Closing Date,
conformed or will conform in all material respects with the
requirements of the Act and the Rules and Regulations; each part
of the Registration Statement, when such part became or becomes
effective, did not or will not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; each Preliminary Prospectus (if any), on the date of
filing thereof with the Commission, and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof
with the Commission and at the Closing Date, did not or will not
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; except that the foregoing shall not apply to
statements in or omissions from any such document in reliance
upon, and in conformity with, written information furnished to the
Company by the Representatives, or by any Underwriter through the
Representatives, specifically for use in the preparation thereof.
(c) The documents incorporated by reference in the
Registration Statement, the Prospectus, any amendment or
supplement thereto or any Preliminary Prospectus, when they became
or become effective under the Act or were or are filed with the
Commission under the Securities Exchange Act of 1934 ("Exchange
Act"), as the case may be, 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
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its jurisdiction of incorporation and is duly qualified to do business,
is in good standing and has obtained all necessary licenses and approvals
in each jurisdiction in which the failure to so qualify or to obtain such
license or approval would materially and adversely affect the
enforceability of any Receivable or any other part of the Trust Property
or the ability of Arcadia Financial or the Company to perform their
respective obligations under, or adversely affect the validity or
enforceability of, the Pricing Agreement, the Sale and Servicing
Agreement, the Trust Agreement, the Indenture, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement, the
Lockbox Agreement, the Designated Securities or the Administration
Agreement; and all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid and
non-assessable and are owned beneficially and of record by the Company
subject to no security interest, other encumbrance or adverse claim other
than the security interest of Financial Security Assurance Inc.
("Financial Security") pursuant to the Stock Pledge Agreement, dated as
of March 25, 1993, as amended, by and among Arcadia Financial, the
Company and Financial Security (the "Stock Pledge Agreement").
(e) Arcadia Financial has full power and authority
(corporate and other) to conduct its business as described in the
Registration Statement and Prospectus, and to execute, deliver and
perform the obligations to be performed by it, under the Pricing
Agreement, the Sale and Servicing Agreement, the Receivables
Purchase Agreement, the Insurance Agreement, the Spread Account
Agreement and the Lockbox Agreement and, if applicable, the
Administration Agreement, and had at all relevant times, and on
the Closing Date will have, full power, authority and legal right
to acquire, own, sell and assign the Receivables and the related
Trust Property to the Company and to service the Receivables as
contemplated by the Sale and Servicing Agreement.
(f) The Company has full power and authority (corporate
and other) to conduct its business as described in the
Registration Statement and Prospectus and to execute and deliver
and perform the obligations to be performed by it, under the
Pricing Agreement, the Trust Agreement, the Sale and Servicing
Agreement, the Receivables Purchase Agreement, the Insurance
Agreement, the Spread Account Agreement and the Lockbox Agreement
and had at all relevant times, and on the Closing Date will have,
full power, authority and legal right to acquire, own, sell and
assign the Receivables and the other Trust Property.
(g) The Trust has been duly formed and is validly existing as a
business trust
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under the laws of the State of Delaware, 12 Del. C. Section 3801, ET
SEQ.; and has the power and authority to execute, deliver and perform its
obligations under the Sale and Servicing Agreement, the Indenture, the
Administration Agreement, the Designated Notes and the Designated
Certificates.
(h) The Trust Agreement, the Sale and Servicing Agreement,
the Receivables Purchase Agreement, the Insurance Agreement, the
Spread Account Agreement, the Lockbox Agreement and the Pricing
Agreement have been duly authorized and when duly executed and
delivered by the parties thereto will constitute valid and legally
binding obligations of the Company, enforceable in accordance with
their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles, provided that no representation is made with respect
to the enforceability of Section 6 hereof insofar as such
provisions relate to indemnification for liabilities arising under
applicable securities laws.
(i) The Sale and Servicing Agreement, the Receivables
Purchase Agreement, the Insurance Agreement, the Spread Account
Agreement, the Custodian Agreement, the Lockbox Agreement and the
Pricing Agreement and, if applicable, the Administration
Agreement, have been duly authorized and when duly executed and
delivered by the parties thereto will constitute valid and legally
binding obligations of Arcadia Financial, enforceable in
accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles, provided that no representation is made
with respect to the enforceability of Section 6 hereof insofar as
such provisions relate to indemnification for liabilities arising
under applicable securities laws.
(j) The Sale and Servicing Agreement, the Indenture, the
Insurance Agreement, the Custodian Agreement and the Administration
Agreement have been duly authorized and, when duly executed and delivered
by the parties thereto, each will constitute a valid and legally binding
obligation of the Trust, enforceable in accordance with its terms,
subject, as to enforcement, to 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 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.
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(k) The Designated Certificates, if any, have been duly
authorized and, when duly executed, issued and delivered as
contemplated hereby and by the Trust Agreement, will constitute
valid and legally binding obligations, enforceable in accordance
with their terms and entitled to the benefits and security
afforded by the Trust Agreement, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles.
(l) The Designated Notes, if any, have been duly authorized and,
when duly executed, issued and delivered as contemplated hereby and by
the Indenture, will constitute valid and legally binding obligations,
enforceable in accordance with their terms and entitled to the benefits
and security 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, subsequent
to the respective dates as of which information is given in the
Registration Statement and the Prospectus, none of Arcadia
Financial, the Company or the Trust has incurred any liabilities
or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are
material to Arcadia Financial, the Company or the Trust, and there
has not been any material change, on a consolidated basis, in the
capital stock, short-term debt or long-term debt of Arcadia
Financial, the Company or the Trust, or any material adverse
change, or any development involving a prospective material
adverse change, in the condition (financial or other), business,
prospects, net worth or results of operations of Arcadia
Financial, the Company or the Trust.
(n) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of Arcadia Financial or the Company,
threatened any action, suit or proceeding to which Arcadia
Financial, the Company, the Trust or any subsidiaries of Arcadia
Financial (other than the Company) is a party, before or by any
court or governmental agency or body, that might result in any
material adverse change in the condition (financial or other),
business, prospects, net worth or results of operations of Arcadia
Financial, the Company or the Trust, or might materially and
adversely affect the properties or assets thereof or the
transactions contemplated herein.
(o) There are no contracts or documents that are required
to be filed as exhibits to the Registration Statement that have
not been so filed.
(p) The execution, delivery and performance of the Pricing
Agreement,
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the Trust Agreement, the Sale and Servicing Agreement, the Indenture, the
Receivables Purchase Agreement, the Insurance Agreement, the Spread
Account Agreement, the Lockbox Agreement, the Custodian Agreement, the
Administration Agreement and the Designated Securities and the
consummation of the transactions therein contemplated will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any agreement or instrument to
which Arcadia Financial, the Company or the Trust is a party or by which
it is bound or to which any of the property of Arcadia Financial, the
Company or the Trust is subject, the articles of incorporation or by-laws
of Arcadia Financial, the certificate of incorporation or by-laws of the
Company, or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over Arcadia Financial, the Company or
the Trust or any of their properties; and no consent, approval,
authorization or order of, or filing with, any court, governmental,
regulatory or administrative authority, agency, body or official is
required for the consummation of the transactions contemplated by the
Pricing Agreement, the Trust Agreement, the Sale and Servicing Agreement,
the Indenture, the Receivables Purchase Agreement, the Insurance
Agreement, the Spread Account Agreement, the Lockbox Agreement, the
Custodian Agreement, the Administration Agreement and the Designated
Securities, except such as have been obtained under the Act and such as
may be required under state securities laws in connection with the
purchase and distribution of the Designated Securities by the
Underwriters; and the Company has full power and authority to sell the
Designated Securities as contemplated by the Pricing Agreement.
(q) None of the Company, Arcadia Financial, the Trust or any of
the other subsidiaries of Arcadia Financial is an "investment company" or
a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(r) The Trust, the Company, Arcadia Financial and the other
subsidiaries of Arcadia Financial possess all franchises, certificates,
licenses, permits and other authorizations from governmental bodies or
regulatory authorities that are necessary for the conduct of their
respective businesses or the ownership, maintenance and operation of
their respective properties and assets, including without limiting the
foregoing, licenses necessary to act as a sales finance company in each
state in which the Company, Arcadia Financial and the other subsidiaries
of Arcadia Financial conduct their respective businesses, and none of the
Trust, the Company, Arcadia Financial, or any of the other subsidiaries
of Arcadia Financial is in violation of any franchise, certificate,
license, permit or other authorization, except where such failure would
not
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result in any material adverse change in the condition (financial or
other), business, prospects, net worth or results of operations of
Arcadia Financial, the Company or the Trust, or any of such other
subsidiaries, or might materially and adversely affect the properties or
assets of Arcadia Financial, the Company or the Trust.
(s) The Company, Arcadia Financial, the Trust and the other
subsidiaries of Arcadia Financial are in compliance with, and no
violation exists under, any and all applicable rules, regulations and
orders, including without limiting the foregoing, the motor vehicle
retail installment sales acts of each state in which the Company, Arcadia
Financial, the Trust and the other subsidiaries of Arcadia Financial
conduct their respective businesses, and all applicable federal statutes
and regulations, except where the failure so to comply or a violation
thereunder would not result in any material adverse change in the
condition (financial or other), business, prospects, net worth or results
of operations of Arcadia Financial, the Company, the Trust or any such
other subsidiaries, or might materially and adversely affect the
properties or assets of Arcadia Financial, the Company or the Trust.
(t) The Company, Arcadia Financial, and the Trust have the right
to use all tradenames, service marks, trademarks and other intangible
property rights used in their business and such use by the Company and
Arcadia Financial does not infringe on the rights of any other person or
entity.
(u) As of the Closing Date, the representations and warranties of
Arcadia Financial and the Company in the Trust Agreement, the Sale and
Servicing Agreement, the Indenture, the Receivables Purchase Agreement,
the Administration Agreement, the Spread Account Agreement and the
Insurance Agreement, as applicable, will be true and correct.
3. PURCHASE, SALE AND DELIVERY OF DESIGNATED SECURITIES. On the
basis of the representations, warranties and agreements contained in the related
Pricing Agreement, but subject to the terms and conditions therein set forth,
the Company agrees to cause the Trust designated in the related Pricing
Agreement to issue and sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, (i) at the purchase
price specified in the related Pricing Agreement the aggregate principal amount
(or notional principal amount) of Designated Certificates set forth in such
Pricing Agreement and (ii) at the purchase price specified in the related
Pricing Agreement the aggregate principal amount of the Designated Notes set
forth in such Pricing Agreement.
Unless otherwise specified in the Pricing Agreement, the
Designated Securities will be delivered by the Company to the Representatives
for the accounts of the several Underwriters against payment of the purchase
price therefor by wire transfer of immediately available funds to an account
designated by the Company not later than the Closing Date at the
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time and place specified in the related Pricing Agreement, or at such other time
not later than eight full business days after the date of the Pricing Agreement
as the Representatives and the Company determine, such time being herein
referred to as the "Closing Date." The Designated Securities so to be delivered
will be represented by one or more definitive certificates having an aggregate
initial principal amount specified in the Pricing Agreement registered in such
name or names as the Underwriters may request. The Company shall make such
definitive certificates available for inspection by the Underwriters at least
one business day prior to the Closing Date.
It is understood that the Representatives, acting individually and
not in a representative capacity, may (but shall not be obligated to) make
payment to the Company on behalf of any other Underwriter for the Designated
Securities to be purchased by such Underwriter. Any such payment by the
Representatives shall not relieve any such Underwriter of any of its obligations
under any Pricing Agreement.
4. COVENANTS. In addition to any covenants specified in the
related Pricing Agreement, by their execution of a Pricing Agreement, the
Company and Arcadia Financial, jointly and severally, covenant and agree with
each Underwriter that:
(a) The Company will cause the Prospectus to be filed as required
by Section 2(a) hereof (but only if the Representatives have not
reasonably objected thereto by notice to the Company after having been
furnished a copy a reasonable time prior to filing) and will notify the
Representatives promptly of such filing. During the period in which a
prospectus relating to the Designated Securities is required to be
delivered under the Act, the Company will notify the Representatives
promptly of the time when any subsequent amendment to the Registration
Statement has become effective or any subsequent supplement to the
Prospectus has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or
for additional information; it will prepare and file with the Commission,
promptly upon the request of the Representatives, any amendments or
supplements to the Registration Statement or Prospectus that, in the
opinion of the Representatives, may be necessary or advisable in
connection with the distribution of the Designated Securities by the
Underwriters; it will file no amendment or supplement to the Registration
Statement or Prospectus (other than any prospectus supplement relating to
the offering of other securities registered under the Registration
Statement or any document required to be filed under the Exchange Act
that upon filing is deemed to be incorporated by reference therein) to
which the Representatives shall reasonably object by notice to the
Company after having been furnished a copy a reasonable time prior to the
filing; and it will furnish to the Representatives at or prior to the
filing thereof a copy of any such prospectus supplement or any document
that upon filing is
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deemed to be incorporated by reference in the Registration Statement or
Prospectus.
(b) The Company will advise the Representatives, promptly
after it shall receive notice or obtain knowledge thereof, of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of the suspension of
the qualification of the Designated Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of
any proceeding for any such purpose; and it will promptly use its
best efforts to prevent the issuance of any stop order or
suspension or to obtain its withdrawal if such a stop order or
suspension should be issued.
(c) Within the time during which a prospectus relating to
the Designated Securities is required to be delivered under the
Act, the Company will comply as far as it is able with all
requirements imposed upon it by the Act and by the Rules and
Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Designated
Securities as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of
which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such
period it is necessary to amend or supplement the Registration
Statement or Prospectus to comply with the Act, the Company will
promptly notify the Representatives and will amend or supplement
the Registration Statement or Prospectus (at the expense of the
Company and Arcadia Financial) so as to correct such statement or
omission or effect such compliance. Neither the Representatives'
consent to, nor the Underwriters' delivery of, any such amendment
or supplement shall constitute a waiver of any of the provisions
set forth in Section 6 hereof.
(d) The Company will use its best efforts to qualify the
Designated Securities for sale under the securities laws of such
jurisdictions as the Representatives reasonably designate and to continue
such qualifications in effect so long as required for the distribution of
the Designated Securities, except that the Company shall not be required
in connection therewith to qualify as a foreign corporation or to execute
a general consent to service of process in any jurisdiction. The Company
will also arrange for the determination of the eligibility for investment
of the Designated Securities under the laws of such jurisdictions as the
Representatives reasonably request.
(e) The Company will furnish to the Underwriters copies of
the Registration Statement, each Preliminary Prospectus, the
Prospectus (including all documents incorporated by reference
therein) and all amendments and
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supplements to such documents, in each case as soon as available and in
such quantities as the Representatives may from time to time reasonably
request.
(f) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will cause the Trust to make
generally available to Certificateholders and Noteholders an earnings
statement (which need not be audited), as provided in Rule 158 under the
Act or otherwise, covering a period of at least 12 months beginning after
the date of the Agreement that shall satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence, (i)
"Availability Date" means the 45th day after the end of the fourth fiscal
quarter of the Trust following the fiscal quarter of the Trust that
includes the date of the Pricing Agreement, except that, if such fourth
fiscal quarter is the last quarter of the Trust's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter and (ii) an "earnings statement" shall be sufficient if
(a) there is included the information required for statements of income
contained either in Item 8 of Form 10-K, in Part I, Item 1 of Form 10-Q
or in Rule 14a-3(b) under the Exchange Act and (b) the information is
contained in one report or any combination of reports either on Form
10-K, Form 10-Q, Form 8-K or the annual report to securityholders
pursuant to Rule 14a-3 under the Exchange Act. For purposes hereof, a
Trust's fiscal year shall end on each June 30.
(g) The Company or Arcadia Financial, on behalf of the Trust,
will file all reports on Form SR, pursuant to Rule 463 under the Act, and
all reports required to be filed with the Commission on behalf of the
Trust pursuant to the Exchange Act, any order of the Commission
thereunder or pursuant to a "no-action" letter (or similar form of
exemptive relief) from the staff of the Commission and will furnish, or
cause to be furnished, copies of all such reports to the Underwriters.
(h) For a period from the date of the Pricing Agreement to the
first date on which none of the Designated Securities are outstanding,
the Company will deliver, or cause to be delivered, to the Underwriters
(i) by first-class mail and as soon as is practicable, copies of (x) each
certificate, annual statement of compliance and accountants' report
delivered to the Indenture Trustee pursuant to Article III of the Sale
and Servicing Agreement or to the Security Insurer pursuant to Section
2.02 of the Insurance Agreement and (y) each amendment or supplement to
the Trust Agreement, the Sale and Servicing Agreement, the Indenture, the
Receivables Purchase Agreement, the Insurance Agreement, the Spread
Account Agreement, the Lockbox Agreement, the Custodian Agreement or the
Administration Agreement and (ii) on each Determination Date, or as soon
thereafter as is practicable, but in any event not later than the second
business day immediately succeeding such Determination Date, a copy of
the Servicer's
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Certificate for the related Collection Period.
(i) So long as any of the Designated Securities are outstanding,
the Company or Arcadia Financial, as applicable, will furnish to the
Underwriters, by first-class mail, as soon as practicable, (i) all
documents required to be distributed to Certificateholders and
Noteholders and (ii) from time to time, such other information concerning
the Company, Arcadia Financial or the Trust, as the Underwriters may
reasonably request.
(j) Arcadia Financial and the Company, whether or not the
transactions contemplated under any Pricing Agreement are
consummated or the Pricing Agreement is terminated, will pay (i)
all expenses incident to the performance of their obligations
under the Pricing Agreement and under the Trust Agreement, the
Sale and Servicing Agreement, the Indenture, the Receivables
Purchase Agreement, the Insurance Agreement, the Spread Account
Agreement, the Custodian Agreement, the Lockbox Agreement, the
Administration Agreement and the Designated Securities, (ii) will
pay the expenses of printing all documents relating to the
offering, and (iii) will reimburse the Underwriters for (a) any
expenses (including fees and disbursements of counsel) incurred by
them in connection with the matters referred to in Section 4(d)
hereof and the preparation of memoranda relating thereto, (b) the
fees and disbursements of counsel to the Underwriters, reasonably
incurred in connection with the registration, purchase, sale and
delivery of the Designated Securities and (c) any fees charged by
investment rating agencies for rating the Designated Securities.
If the 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.
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(l) To the extent, if any, that any rating to be provided with
respect to the Designated Securities, as set forth in Section 6(n)
hereof, is conditional upon the furnishing of documents or information or
the taking of any other actions by Arcadia Financial or the Company,
Arcadia Financial and/or the Company, as the case may be, shall furnish
such documents or information and take any such other actions.
(m) During the period ending 20 business days after the date of
the Pricing Agreement, the Company and Arcadia Financial will not,
directly or indirectly, offer or sell, or determine to offer or sell, (i)
any notes collateralized by, or certificates evidencing an ownership
interest in, receivables generated pursuant to retail automobile or
light-duty truck installment sale contracts or (ii) any debt securities
that are substantially similar to the Designated Securities of the
Company or Arcadia Financial or of an issuer for which Arcadia Financial
or the Company is a sponsor or which has been formed or is beneficially
owned by the Company or Arcadia Financial, in either case without the
Underwriters' prior written consent.
(n) On or before the final purchase of Subsequent Receivables by the
Trust and the expiration of the Pre-Funding Period, Arcadia Financial must
receive a letter from Deloitte & Touche 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, that the Subsequent Receivables conform to the related
requirements described in the Prospectus. The foregoing letter shall be at the
expense of Arcadia Financial.
(o) At the time of the execution and delivery of each Subsequent
Transfer, the Subsequent Receivables will have been duly and validly assigned to
the Trustee in accordance with the Sale and Servicing Agreement; and when such
assignment is effected, a duly and validly perfected transfer of all such
Subsequent Receivables subject to no prior lien, mortgage, security interest,
pledge charge or other encumbrance created by Arcadia Financial or the Company
will have occurred.
(p) On or prior to each Subsequent Closing Date, the Company shall
deliver to the Underwriters, or cause the delivery of, the opinions and
officer's certificates, substantially in the form of the items listed in Section
2.4(b) of the related Sale and Servicing Agreement, each dated on the Subsequent
Closing Date, with such conforming changes thereto as the Underwriters may
reasonably request. As of the related Subsequent Closing Date, each of the
Subsequent Receivables will meet the eligibility criteria described in the
Prospectus.
(q) The Company shall comply with the requirements of the No-Action
Letter of May
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20, 1994 issued by the Commission to Xxxxxx, Xxxxxxx Acceptance Corporation 1,
Xxxxxx Peabody & Company, Incorporated and Xxxxxx Structured Asset Corporation,
as made applicable to other issuers and underwriters by the Commission in
response to the request of the Public Securities Association dated May 24, 1994
(collectively, the "Xxxxxx/PSA Letter"), and the requirements of the No-Action
Letter of February 17, 1995 issued by the Commission to the Public Securities
Association (the "PSA Letter" and together with the Xxxxxx/PSA letter, the
"No-Action Letters") with regard to the filing of any "Computational Materials,"
"ABS Term Sheets" and "Collateral Term Sheets" (together "Term Sheets") as such
terms are defined in the No-Action Letters and will file with the Commission a
current report on Form 8-K setting forth all Computational Materials, ABS Term
Sheets and Collateral Term sheets within the applicable time periods allotted
for such filing pursuant to the No-Action Letters.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Designated Securities as
provided in the Pricing Agreement shall be subject to the accuracy, as of the
date of such Pricing Agreement and the Closing Date (as if made at the Closing
Date), of the representations and warranties of the Company and Arcadia
Financial in the Pricing Agreement, to the performance by the Company and
Arcadia Financial of their respective obligations under the Pricing Agreement
and to the following additional conditions:
(a) The Prospectus shall have been filed as required by
Section 2(a) hereof; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued
and no proceeding for that purpose shall have been instituted or,
to the knowledge of the Company, Arcadia Financial or any
Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have
been complied with to the satisfaction of the Representatives.
(b) No Underwriter shall have advised the Company or
Arcadia Financial that the Registration Statement or Prospectus,
or any amendment or supplement thereto, contains an untrue
statement of fact that in the opinion of the Representatives is
material, or omits to state a fact that in the opinion of the
Representatives is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent
to the respective dates as of which such information is given in
the Registration Statement and the Prospectus, there shall not
have been any change, on a consolidated basis, in the capital
stock, short-term debt (other than in the ordinary course of
Arcadia Financial's business of purchasing Receivables) or
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long-term debt of the Security Insurer, Arcadia Financial, the Company or
the other subsidiaries of Arcadia Financial, or any adverse change, or
any development involving a prospective adverse change, in the condition
(financial or other), business, prospects, net worth or results of
operations of the Security Insurer, Arcadia Financial, the Company or the
other subsidiaries of Arcadia Financial or any change in the rating
assigned to the claims-paying ability of the Security Insurer or any
securities of Arcadia Financial or the Company or any public announcement
that any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) has under surveillance
or review its rating assigned to the claims-paying ability of the
Security Insurer or any securities of Arcadia Financial or the Company
(other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such rating),
that, in the judgment of the Representatives, makes it impractical or
inadvisable to offer or deliver the Designated Securities on the terms
and in the manner contemplated in the Prospectus.
(d) Unless otherwise specified in the Pricing Agreement,
the Representatives shall have received the opinion of Xxxxxx &
Whitney LLP (or, if so specified in the Pricing Agreement, such
other counsel as is reasonably satisfactory to the
Representatives), counsel for Arcadia Financial and the Company,
dated the Closing Date, to the effect that:
(i) Each of Arcadia Financial and the Company has
been duly incorporated and is an existing corporation in
good standing under the laws of its jurisdiction of
incorporation; and all of the outstanding shares of capital
stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and are owned
beneficially and of record by Arcadia Financial subject to
no security interest, other encumbrance or adverse claim
other than the security interest of the Security Insurer
pursuant to the Stock Pledge Agreement;
(ii) No qualification to do business as a foreign corporation
in the State of Minnesota is necessary for the Company to purchase
the Receivables from Arcadia Financial and assign the Receivables
to the Trust and to perform its other obligations under the Sale
and Servicing Agreement;
(iii) No qualification to do business as a foreign corporation
in the State of Minnesota is necessary for the Owner Trustee or
the Trust to own the
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Receivables or to conduct the other transactions contemplated by
the Trust Agreement, the Sale and Servicing Agreement and the
Indenture;
(iv) Arcadia Financial has corporate power and authority to
conduct its business as described in the Registration Statement
and Prospectus, and to execute, deliver and perform the
obligations to be performed by it, under the Pricing Agreement,
the Sale and Servicing Agreement, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement,
the Lockbox Agreement, the Custodian Agreement and the Designated
Securities and, if applicable, the Administration Agreement, and
had at all relevant times, and on the Closing Date has, full power
and authority to acquire, own, sell and assign the Receivables and
the related Trust Property to the Company and to service the
Receivables as contemplated by the Sale and Servicing Agreement;
(v) The Company has corporate power and authority to conduct
its business as described in the Registration Statement and
Prospectus and to execute and deliver and perform the obligations
to be performed by it under the Pricing Agreement, the Trust
Agreement, the Sale and Servicing Agreement, the Receivables
Purchase Agreement, the Insurance Agreement, the Spread Account
Agreement, the Lockbox Agreement, the Designated Securities and
had at all relevant times, and on the Closing Date has, full power
and authority to acquire, own, sell and assign the Receivables and
the other Trust Property;
(vi) The direction by the Company to authenticate the
Designated Certificates has been duly authorized by the
Company and, when the Designated Certificates have been
duly executed, authenticated and delivered by the Owner
Trustee in accordance with the Trust Agreement and
delivered and paid for pursuant to the relevant Pricing
Agreement, will constitute valid and legally binding
obligations, enforceable in accordance with their terms and
entitled to the benefits and security afforded by the Trust
Agreement, subject as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights
and to general equity principles.
(vii) The direction by the Company to the Indenture
Trustee to authenticate the Designated Notes has been duly
authorized by the Company and, when the Designated Notes
have been duly executed and delivered by the Owner Trustee
and, when authenticated by the Indenture Trustee in
accordance with the Indenture and delivered and paid for
pursuant to the relevant
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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 descriptions in the Registration Statement
and Prospectus of statutes, legal and governmental
proceedings, contracts and other documents are accurate and
fairly present the information required to be shown; and
such counsel do not know of any statutes or legal or
governmental proceedings required to be described in the
Prospectus that are not described as required,
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or of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus (or required
to be filed under the Exchange Act if upon such filing they would
be incorporated by reference therein) or to be filed as exhibits
to the Registration Statement that are not described and filed as
required;
(xi) The Trust Agreement, the Sale and Servicing Agreement,
the Receivables Purchase Agreement, the Insurance Agreement, the
Spread Account Agreement and the Lockbox Agreement have each been
duly authorized, executed and delivered by the Company; and each
constitutes a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(xii) The Sale and Servicing Agreement, the Receivables
Purchase Agreement, the Insurance Agreement, the Spread Account
Agreement, the Custodian Agreement and the Lockbox Agreement and,
if applicable, the Administration Agreement, have each been duly
authorized, executed and delivered by Arcadia Financial and each
constitutes a valid and legally binding obligation of Arcadia
Financial, enforceable against Arcadia Financial in accordance
with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(xiii) The Sale and Servicing Agreement, the Indenture, the
Custodian Agreement and the Administration Agreement each
constitutes a valid and legally binding obligation of the Trust,
enforceable against the Trust in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(xiv) There are no actions, proceedings or investigations
pending, or to the knowledge of such counsel, threatened before
any court, governmental, regulatory or administrative authority,
agency, body or official or other tribunal (w) asserting the
invalidity of the Pricing Agreement, the Trust Agreement, the Sale
and Servicing Agreement, the Indenture, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement,
the Lockbox Agreement, the Custodian Agreement, the Designated
Securities or the Administration Agreement, (x) seeking to prevent
the issuance of the Designated Securities or the consummation of
any of the transactions
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contemplated by the Pricing Agreement, the Trust Agreement, the
Sale and Servicing Agreement, the Indenture, the Receivables
Purchase Agreement, the Insurance Agreement, the Spread Account
Agreement, the Lockbox Agreement, the Custodian Agreement, the
Designated Securities or the Administration Agreement, (y) that
would, if determined adversely to Arcadia Financial, the Company
or the Trust, materially and adversely affect the ability of
Arcadia Financial, the Company or the Trust to perform their
respective obligations under, or the validity or enforceability
of, the Pricing Agreement, the Trust Agreement, the Sale and
Servicing Agreement, the Indenture, the Receivables Purchase
Agreement, the Insurance Agreement, the Spread Account Agreement,
the Lockbox Agreement, the Designated Securities, the Custodian
Agreement or the Administration Agreement, or (z) that would
affect adversely the Federal income tax attributes of the
Designated Certificates, as described in the Prospectus under the
heading "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 Financial, the Company or the Trust, as applicable, of
the Pricing Agreement, the Trust Agreement, the Sale and Servicing
Agreement, the Indenture, the Receivables Purchase Agreement, the
Insurance Agreement, the Spread Account Agreement, the Lockbox
Agreement, the Custodian Agreement, the Designated Securities or
the Administration Agreement nor the consummation of any of the
transactions contemplated herein or therein, nor the fulfillment
of the terms hereof or thereof by Arcadia Financial, the Company
or the Trust will result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any
statute, agreement or instrument known to such counsel to which
Arcadia Financial, the Company, or the Trust is a party or by
which it is bound or to which any of the property of Arcadia
Financial, the Company or the Trust is subject, the articles of
incorporation or by-laws of Arcadia Financial, the certificate of
incorporation or by-laws of the Company, or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over Arcadia Financial, the
Company or the Trust or any of their properties; and no
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consent, approval, authorization or order of, or filing with, any
court, governmental, regulatory or administrative authority,
agency, body or official is required for the consummation of the
transactions contemplated by the Pricing Agreement, the Trust
Agreement, the Sale and Servicing Agreement, the Indenture, the
Receivables Purchase Agreement, the Insurance Agreement, the
Spread Account Agreement, the Lockbox Agreement, the Custodian
Agreement, the Designated Securities or the Administration
Agreement, or in connection with the issuance or sale of the
Designated Securities by the Company, except such as have been
obtained under the Act and such as may be required under state
securities laws in connection with the purchase and distribution
of the Designated Securities by the Underwriters;
(xvi) The Trust's assignment of the Collateral to the
Collateral Agent pursuant to the Indenture will vest in the
Collateral Agent, for the benefit of the Certificateholders and
the Noteholders, a first priority perfected security interest
therein, subject to no prior lien 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, the
Insurance Agreement, the Sale and Servicing Agreement, the
Indenture, the Receivables Purchase Agreement, the Lockbox
Agreement, the Pricing Agreement, the Custodian Agreement, the
Policies and the Administration Agreement conform in all material
respects with the descriptions thereof contained in the
Registration Statement and the Prospectus;
(xix) Neither the Trust Agreement nor the Sale and Servicing
Agreement is required to be qualified under the Trust Indenture
Act of 1939, as amended, and neither the Company nor the Trust is
required to register as an "investment company" or a company
"controlled" by an "investment company" under the Investment
Company Act of 1940, as amended;
(xx) The Indenture has been duly qualified under the Trust
Indenture Act; and
(xxi) The trust fund created by the Trust Agreement will not,
for New York or Minnesota income tax purposes, be classified as an
association taxable
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as a corporation, and Certificateholders and Noteholders who are
not residents of or otherwise subject to tax in New York or
Minnesota will not, by reason of their acquisition of an interest
in the Designated Securities, be subject to New York or Minnesota
income, franchise, excise or similar taxes with respect to
interest on the Designated Securities or with respect to any of
the other Trust Property.
In rendering their opinion as aforesaid, such counsel may rely (a)
as to matters involving the application of laws of any jurisdiction other
than the States of Minnesota and New York or the United States, to the
extent they deem proper and specify in such opinion, upon the opinion of
other counsel who are reasonably satisfactory to counsel to the
Underwriters and (b) as to matters of fact, to the extent they deem
proper, upon certificates of responsible officers of Arcadia Financial
and the Company and public officials; provided that such counsel shall
state that they believe that they and the Representatives are justified
in relying upon such opinions and certificates.
(e) The Representatives shall have received from Xxxxx,
Xxxxx & Xxxxx, counsel for the Underwriters (or, if so specified
in the Pricing Agreement, such other counsel as is reasonably
satisfactory to the Representatives), such opinion or opinions,
dated the Closing Date, with respect to the incorporation of
Arcadia Financial and the Company, the validity of the Designated
Securities, the Registration Statement, the Prospectus and other
related matters as the Representatives reasonably may request, and
such counsel shall have received such papers and information as
they request to enable them to pass upon such matters.
(f) At or prior to the time of execution of the Pricing
Agreement and at the Closing Date, the Representatives shall have
received a letter from Deloitte & Touche 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 the of Arcadia Financial and the Company,
dated the Closing Date, to the effect that, to the best of their
knowledge based upon reasonable investigation:
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(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 or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding
for that purpose has been instituted or is threatened by
the Commission; and
(iii) Since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration
Statement or Prospectus that has not been so set forth, and
there has been no document required to be filed under the
Exchange Act and the rules and regulations of the
Commission thereunder that upon such filing would be deemed
to be incorporated by reference in the Prospectus that has
not been so filed.
(h) The Representatives shall have received the opinion of Xxxxxx
& Whitney LLP (or such other counsel as is reasonably satisfactory to the
Representatives), counsel to Arcadia Financial and the Company, dated the
Closing Date, and also delivered to and satisfactory to the Rating
Agencies, substantially to the effect that (A) the transfer of the
Receivables by Arcadia Financial to the Company would be characterized as
a sale, (B) the transfer of the Receivables and the related Trust
Property by the Company to the Trust would be characterized as either a
sale or the grant of a security interest and (C) in the event of an
involuntary or voluntary case under the United States Bankruptcy Code,
the separate corporate existence of Arcadia Financial and the Company
would not properly be disregarded so as to substantively consolidate
their assets and liabilities.
(i) The Representatives shall have received the opinion of Xxxxxx
& Whitney LLP (or such other counsel as is reasonably satisfactory to the
Representatives), counsel to Arcadia Financial and the Company, dated the
Closing Date, and also delivered to and satisfactory to the Rating
Agencies, with respect to the perfection and priority of the security
interest (as defined in Section 1-201(37) of the Uniform Commercial Code)
of the Trust in the Receivables, the other Trust Property and the
proceeds thereof.
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(j) The Representatives shall have received the opinion of
special Minnesota counsel for Arcadia Financial and the Company as is
reasonably satisfactory to the Representatives, dated the Closing Date,
to the effect that:
(i) Arcadia Financial holds all franchises, certificates,
consents, licenses, permits and other governmental or regulatory
approvals or authorizations necessary to originate and service the
Receivables in the State of Minnesota and to perform its other
obligations under the Sale and Servicing Agreement, the Custodian
Agreement and the Administration Agreement;
(ii) No franchises, certificates, consents, licenses, permits
or other governmental or regulatory approvals or authorizations
are necessary in the State of Minnesota for the Company to
purchase the Receivables from Arcadia Financial and assign the
Receivables to the Trust and to perform its other obligations
under the Trust Agreement and the Sale and Servicing Agreement;
(iii) No franchises, certificates, consents, licenses, permits
or other governmental or regulatory approvals or authorizations
are necessary in the State of Minnesota for the Owner Trustee or
the Trust to own the Receivables or to conduct the other
transactions contemplated the Trust Agreement and the Sale and
Servicing Agreement; and
(iv) The form of contract or note used by Arcadia Financial in
the State of Minnesota, attached to such opinion, (A) assuming the
valid execution and delivery of such form by each of the parties
thereto, is enforceable in accordance with its terms under the
laws of the State of Minnesota and (B) complies with applicable
state and local laws relating to consumer sales and lending
transactions, consumer credit laws, equal credit opportunity and
disclosure laws.
(k) Unless otherwise specified in the Pricing Agreement, the
Representatives shall have received opinions of special counsel for
Arcadia Financial and the Company in certain of the states where the
Receivables were originated, as specified in the Pricing Agreement, dated
the Closing Date, to the effect that:
(i) Arcadia Financial is duly qualified to do business as a
foreign corporation and is in good standing in the such state;
(ii) No qualification to do business as a foreign corporation
in such state is necessary for the Company to purchase the
Receivables from Arcadia Financial and assign the Receivables to
the Trust and to perform its other obligations
-25-
under the Trust Agreement and the Sale and Servicing Agreement;
(iii) No qualification to do business as a foreign corporation
in such state is necessary for the Owner Trustee or the Trust to
own the Receivables or to conduct the other transactions
contemplated by the Trust Agreement and the Sale and Servicing
Agreement;
(iv) Arcadia Financial holds all franchises, certificates,
consents, licenses, permits and other governmental or regulatory
approvals or authorizations necessary to originate and service the
Receivables in such state and to perform its other obligations
under the Sale and Servicing Agreement and, if applicable, the
Custodian Agreement and the Administration Agreement;
(v) No franchises, certificates, consents, licenses, permits
or other governmental or regulatory approvals or authorizations
are necessary in such state for the Company to purchase the
Receivables from Arcadia Financial and assign the Receivables to
the Trust and to perform its other obligations under the Trust
Agreement and the Sale and Servicing Agreement;
(vi) No franchises, certificates, consents, licenses, permits
or other governmental or regulatory approvals or authorizations
are necessary in such state for the Owner Trustee or the Trust to
own the Receivables or conduct the other transactions contemplated
by the Trust Agreement and the Sale and Servicing Agreement;
(vii) The form of contract or note used by Arcadia Financial in
such state, attached to such opinion, (A) assuming the valid
execution and delivery of such form by each of the parties
thereto, is enforceable in accordance with its terms under the
laws of such state and (B) complies with applicable state and
local laws relating to consumer sales and lending transactions,
consumer credit laws, equal credit opportunity and disclosure
laws;
(viii) Assuming Arcadia Financial is shown as secured party on
the related title certificate, prior to the consummation of the
transactions contemplated by the Receivables Purchase Agreement,
Arcadia Financial has a valid and perfected first priority
security interest in Financed Vehicles securing Receivables that
are registered in such state;
(ix) Following the sale of the Receivables by Arcadia Financial
to the Company pursuant to the Receivables Purchase Agreement, the
Company will have a
-26-
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;
(x) Following the assignment of the Receivables by the Company
to the Trust pursuant to the Sale and Servicing Agreement, the
Trust will have a valid and perfected first priority security
interest 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;
(xi) The Trust's assignment of the Collateral to the Collateral
Agent pursuant to the Indenture will vest in the Collateral Agent,
for the benefit of the Certificateholders and the Noteholders, a
first priority perfected security interest therein, subject to no
prior lien, mortgage, security interest, pledge, adverse claim,
charge or other encumbrance;
(xii) The transfers of the Receivables from Arcadia Financial to
the Company, from the Company to the Trust and from the Trust to
the Indenture Trustee, and the consummation of the other
transactions contemplated by the Trust Agreement and the Sale and
Servicing Agreement and the Administration Agreement will not
conflict with any law or order of such state applicable to Arcadia
Financial or the Company currently in effect;
(xiii) Under the law of such state, the perfection of the
transfers of the Receivables by Arcadia Financial to the Company,
by the Company to the Trust and by the Trust to the Collateral
Agent would be governed by the law of the state (a) where the
chief executive offices of Arcadia Financial or the Company, as
applicable, are located or (b) where the Receivable Files are
located;
(xiv) The trust fund created by the Trust Agreement will not,
for the income tax purposes of such state, be classified as an
association taxable as a corporation, and Certificateholders and
Noteholders who are not residents of or otherwise subject to tax
in such state will not, by reason of their acquisition of an
interest in the Designated Securities, be subject to income,
franchise, excise or similar taxes in such state with respect to
interest on the Designated Securities or with respect to any of
the other Trust Property; and
(xv) The statements in the Registration Statement and the
Prospectus under the headings "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
-27-
been prepared or reviewed by such counsel and are correct in all
material respects.
(l) The Representatives shall have received the opinion of
Xxxxxxxx, Xxxxxx & Finger (or, if so specified in the Pricing Agreement,
such other counsel as is reasonably satisfactory to the Representatives),
counsel to the Owner Trustee, dated the Closing Date, to the effect that:
(i) The Owner Trustee has been duly incorporated and is
validly existing as a banking corporation under the laws of the
State of Delaware and has the power and authority to enter into,
and to take all action required of it under the Trust Agreement
and, on behalf of the Trust, under the Indenture, the Sale and
Servicing Agreement, the Administration Agreement and the
Custodian Agreement;
(ii) The Designated Certificates have been duly executed,
delivered and authenticated by the Owner Trustee;
(iii) The Designated Notes have been duly executed and
delivered by the Owner Trustee;
(iv) The execution and delivery of the Trust Agreement and, on
behalf of the Trust, the Indenture, the Sale and Servicing
Agreement, the Administration Agreement and the Custodian
Agreement by the Owner Trustee and the performance by the Owner
Trustee of their terms do not conflict with or result in a
violation of (A) any law or regulation of the United States of
America or the State of Minnesota governing the banking or trust
powers of the Owner Trustee, or (B) the by-laws of the Owner
Trustee; and
(v) No approval, authorization or other action by, or filing
with, any governmental authority of the United States of America
or the State of Minnesota having jurisdiction over the banking or
trust powers of the Owner Trustee is required in connection with
the execution and delivery by the Owner Trustee of the Trust
Agreement, and on behalf of the Trust, the Indenture, the Sale and
Servicing Agreement, the Administration Agreement or the Custodian
Agreement or the performance by the Owner Trustee and the of the
respective terms thereof.
(m) Unless otherwise specified in the Pricing Agreement, the
Representatives shall have received the opinion of Xxxxxxxx, Xxxxxx &
Finger (or if so specified in the
-28-
Pricing Agreement, such other counsel as is reasonably satisfactory to
the Representatives) special counsel for the Owner Trustee, dated the
Closing Date, to the effect that:
(i) The Trust has been duly formed and is validly existing as
a business trust under the laws of the State of Delaware, 12 Del.
C. Section 3801, ET SEQ.;
(ii) The Trust has the power and authority to execute, deliver
and perform its obligations under the Sale and Servicing
Agreement, the Indenture, the Administration Agreement, the
Designated Notes and the Designated Certificates;
(iii) To the extent that Article 9 of the Uniform Commercial
Code as in effect in the State of Delaware (the "UCC") is
applicable (without regard to conflicts of law principles), and
assuming that the security interest created by the Indenture in
the Receivables, the other Trust Property and the proceeds thereof
has been duly created and has attached, upon the filing of the
Financing Statement with the Secretary of State of the State of
Delaware the Indenture Trustee will have a perfected security
interest in such Receivables, other Trust Property and the
proceeds thereof, and such security interest will be prior to any
other security interest that is perfected solely by the filing of
financing statements under the UCC, excluding purchase money
security interests under Section 9-312(4) of the UCC and
temporarily perfected security interests in proceeds under Section
9-306(3) of the UCC; and
(iv) No re-filing or other action is necessary under the UCC
in the State of Delaware in order to maintain the perfection of
such security interest except for the filing of continuation
statements at five year intervals.
(n) The Representatives shall have received the opinion of
Xxxxxxx and Xxxxxx (or, if so specified in the Pricing Agreement, such
other counsel as is reasonably satisfactory to the Representatives),
counsel to the Indenture Trustee and the Collateral Agent specified in
the Pricing Agreement, dated the Closing Date, to the effect that:
(i) The Indenture Trustee and Collateral Agent is a banking
corporation duly organized and validly existing under the laws of
the jurisdiction of its incorporation and is duly authorized and
empowered to exercise trust powers under applicable law;
(ii) The Indenture Trustee and Collateral Agent has corporate
power, authority and legal right to execute, deliver and perform
its obligations under the Indenture, the Sale and Servicing
Agreement and the Spread Account
-29-
Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of the Indenture, the
Spread Account Agreement and the Sale and Servicing Agreement;
(iii) The execution and delivery of the Indenture, the Sale and
Servicing Agreement and the Spread Account Agreement and the
performance by the Indenture Trustee of their terms (including as
a Backup Servicer under the Sale and Servicing Agreement) do not
conflict with or result in a violation of (A) any law or
regulation of the United States of America of the State of
Minnesota governing the banking or trust powers of the Indenture
Trustee, or (B) the by-laws of the Indenture Trustee; and
(iv) Each of the Indenture, the Sale and Servicing Agreement
and the Spread Account Agreement has been duly executed and
delivered by the Indenture Trustee and constitutes a legal, valid
and binding obligation of the Indenture Trustee, enforceable
against the Indenture Trustee in accordance with its respective
terms, except that certain of such obligations may be enforceable
solely against the Trust Property and except that such enforcement
may be limited by bankruptcy, insolvency, reorganization,
moratorium, liquidation, or other similar laws applicable to
banking corporations affecting the enforcement of creditors'
rights generally, and by general principles of equity.
(o) The Representatives shall have received the opinion of
counsel to the Custodian (which counsel shall be reasonably satisfactory
to the Representatives), dated the Closing Date, to the effect that:
(i) The Custodian has been duly incorporated and is validly
existing and has the power and authority to enter into, and to
take all action required of it under the Custodian Agreement;
(ii) The execution and delivery of the Custodian Agreement by
the Custodian and the performance by the Custodian of its terms do
not conflict with or result in a violation of (A) any law or
regulation of the United States of America or the State of
Minnesota governing the powers of the Custodian, or (B) the
By-Laws of the Custodian; and
(iii) No approval, authorization or other action by, or filing
with, any governmental authority of the United States of America
or the State of Minnesota having jurisdiction over the powers of
the Custodian is required in connection with the execution and
delivery by the Custodian of the Custodian
-30-
Agreement or the performance by the Custodian of the terms of the
Custodian Agreement.
(p) The Representatives shall have received the opinion of
counsel to the Security Insurer as is reasonably satisfactory to the
Representatives, dated the Closing Date, to the effect that:
(i) The Security Insurer is a stock insurance company duly
organized, validly existing and authorized to transact financial
guaranty insurance business under the laws of its state of
organization;
(ii) The Policies, the Insurance Agreement, the Spread Account
Agreement, the Custodian Agreement and the Indemnification
Agreement and, if applicable, the Indenture and the Sale and
Servicing Agreement, have been duly authorized, executed and
delivered by the Security Insurer;
(iii) The Policies, the Insurance Agreement, the Spread Account
Agreement, the Custodian Agreement and Indemnification Agreement
and, if applicable, the Indenture and the Sale and Servicing
Agreement, constitute legal, valid and binding obligations of the
Security Insurer, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization, rehabilitation, moratorium and other similar laws
affecting the enforceability of creditors' rights generally
applicable in the event of the bankruptcy or insolvency of the
Security Insurer and to the application of general principles of
equity and subject, in the case of the Indemnification Agreement,
to the principles of public policy limiting the right to enforce
the indemnification provisions contained therein insofar as they
relate to indemnification for liabilities arising under applicable
securities laws;
(iv) The Policies are exempt from registration under the Act;
(v) Neither the execution or delivery of the Policies, the
Insurance Agreement, the Spread 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
-31-
Security Insurer of any governmental or regulatory body,
administrative agency, court or arbitrator having jurisdiction
over the Security Insurer (except that in the published opinion of
the Securities and Exchange Commission the indemnification
provisions of the Indemnification Agreement, insofar as they
relate to indemnification for liabilities arising under the Act,
are against public policy as expressed in the Act and are
therefore unenforceable); and
(vi) With respect to the information regarding the Security
Insurer contained in the Registration Statement and the Prospectus
and any amendment or supplement thereto, such counsel has no
reason to believe that any such information contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein, in light if the circumstances in which they were made,
not misleading.
(q) The Representatives shall have received the opinion of
Xxxxxxx and Xxxxxx (or, if so specified in the Pricing Agreement, other
counsel as is reasonably satisfactory to the Representatives), counsel to
the Lockbox Bank, dated the Closing Date, to the effect that:
(i) The Lockbox Bank has been duly incorporated and is
validly existing as a national banking association and has the
power and authority to enter into, and to take all action required
of it under the Lockbox Agreement;
(ii) The Lockbox Agreement has been duly executed and
delivered by the Lockbox Bank and constitutes a legal, valid and
binding obligation of the Lockbox Bank, enforceable in accordance
with its terms, subject, as to enforcement, to 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.
-32-
(r) The Representatives shall have received evidence that, on or
before the Closing Date, UCC-1 financing statements have been filed in
the offices of the Secretaries of State of the States of Minnesota and
Delaware, reflecting the transfer of the Receivable Files and the related
Trust Property by Arcadia Financial to the Company, by the Company to the
Owner Trustee and by the Owner Trustee to the Indenture Trustee.
(s) The Designated Securities shall have been rated "AAA" by
Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc. and "Aaa" by Xxxxx'x Investors Service, Inc. (the "Rating
Agencies") and neither of the Rating Agencies shall have placed the
rating of the Designated Securities under review with possible negative
implications.
(t) The Company and Arcadia Financial shall have furnished
to the Representatives such further certificates and documents as
the Representatives shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Representatives. The Company will furnish the Representatives
with such conformed copies of such opinions, certificates, letters and other
documents as the Representatives shall reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION. (a) Arcadia Financial and
the Company will, jointly and severally, indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any part of the Registration
Statement when such part became effective, or in the Registration Statement, any
Preliminary Prospectus, any Term Sheet, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
Arcadia Financial and the Company shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to Arcadia Financial or the Company by the
Representatives, or by any Underwriter through the Representatives, specifically
for use therein.
-33-
(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any part of the Registration Statement when such
part became effective, or in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made therein in reliance upon and in conformity with written
information furnished to the Company by the Representatives, or by such
Underwriter through the Representatives, specifically for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending against any such loss,
claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may have to
any indemnified party under such subsection to the extent the indemnifying party
was not materially prejudiced by such omission or otherwise than under such
subsection. In case any such action shall be brought against any indemnified
party, and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
In any such action, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the contrary, (ii) the
indemnified party has reasonably concluded (based upon advice of counsel to the
indemnified party) that there may be legal defenses available to it or other
indemnified
-34-
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 that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by Arcadia Financial and the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus Supplement. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
-35-
omission to state a material fact relates to information supplied by Arcadia
Financial or the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. Arcadia Financial and the Company on the one hand
and the Underwriters on the other agree that it would not be just and equitable
if contributions pursuant to this subsection (d) were to be determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the first sentence of this
subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating, preparing
to defend or defending against any action or claim that is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Designated Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of Arcadia Financial and the Company under
this Section 6 shall be in addition to any liability that Arcadia Financial and
the Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section 6
shall be in addition to any liability that the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company (including any person who, with his consent, is named in
the Registration Statement as about to become a director of the Company), to
each officer of the Company who has signed the Registration Statement and to
each person, if any, who controls the Company within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of Arcadia Financial and the Company
herein or in the Pricing Agreement or in certificates delivered pursuant hereto
or pursuant to the Pricing Agreement, and the agreements of the several
Underwriters contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling persons, or Arcadia Financial and the Company or
any of their officers, directors or any controlling persons, and shall survive
delivery of and payment
-36-
for the Designated Securities under the Pricing Agreement.
8. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter or
Underwriters shall fail to take up and pay for the amount of Designated
Securities agreed by such Underwriter or Underwriters to be purchased under a
Pricing Agreement, upon tender of such Designated Securities in accordance with
the terms such Pricing Agreement, and the amount of Designated Securities not
purchased does not aggregate more than 10% of the total amount of Designated
Securities that the Underwriters are obligated to purchase under the Pricing
Agreement at the Closing Date, the remaining Underwriters shall be obligated to
take up and pay for (in proportion to their respective underwriting obligations
under the Pricing Agreement except as may otherwise be determined by the
Representatives) the Designated Securities that the withdrawing or defaulting
Underwriter or Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and
pay for the amount of Designated Securities agreed by such Underwriter or
Underwriters to be purchased under a Pricing Agreement, upon tender of such
Designated Securities in accordance with the terms hereof, and the amount of
Designated Securities not purchased aggregates more than 10% of the total amount
of Designated Securities that the Underwriters are obligated to purchase under
the Pricing Agreement at the Closing Date, and arrangements satisfactory to the
Representatives and the Company and Arcadia Financial for the purchase of such
Designated Securities by other persons are not made within 36 hours thereafter,
the Pricing Agreement shall terminate. In the event of any such termination the
Company shall not be under any liability to any Underwriter with respect to
Designated Securities not purchased by reason of such termination (except to the
extent provided in Section 4(j) and Section 6 hereof) nor shall any Underwriter
(other than an Underwriter who shall have failed, otherwise than for some reason
permitted under the Pricing Agreement, to purchase the amount of Designated
Securities agreed by such Underwriter to be purchased under the Pricing
Agreement) be under any liability to the Company with respect to such Designated
Securities (except to the extent provided in Section 6 hereof).
9. TERMINATION. Unless otherwise specified in the Pricing
Agreement, the Representatives shall have the right by giving notice as
hereinafter specified at any time at or prior to the Closing Date, to terminate
the Pricing Agreement if (i) Arcadia Financial or the Company shall have failed,
refused or been unable, at or prior to the Closing Date, to perform any
agreement on its part to be performed under the Pricing Agreement, (ii) any
other condition of the Underwriters' obligations under the Pricing Agreement is
not fulfilled, (iii) trading on the New York Stock Exchange or the American
Stock Exchange shall have been wholly suspended, (iv) minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required, on the New York Stock Exchange or the American Stock
Exchange, by such exchange or by order of the Commission
-37-
or any other governmental authority having jurisdiction, (v) a banking
moratorium shall have been declared by Federal or New York authorities, or
(vi) an outbreak or escalation of major hostilities in which the United States
is involved, a declaration of war by Congress, any other substantial national or
international calamity or any other event or occurrence of a similar character
shall have occurred since the execution of the Pricing Agreement that, in the
judgment of the Representatives, makes it impractical or inadvisable to proceed
with the completion of the sale of and payment for the Designated Securities.
Any such termination shall be without liability of any party to any other party
with respect to Designated Securities not purchased by reason of such
termination except that the provisions of Section 4(j) and Section 6 hereof
shall at all times be effective. If the Representatives elect to terminate the
Pricing Agreement as provided in this Section, the Company and Arcadia Financial
shall be notified promptly by the Representatives by telephone, telex or
telecopy, confirmed by letter.
10. NOTICES. All notices or communications under the Pricing
Agreement shall be in writing and if sent to the Representatives shall be
mailed, delivered, telexed or telecopied and confirmed to the Representatives at
the addresses specified in the related Pricing Agreement, if sent to Arcadia
Financial, shall be mailed, delivered, telexed or telecopied and confirmed to
Arcadia Financial at 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000-0000, Attention: Secretary, or if sent to the Company, shall be mailed,
delivered, telexed or telecopied and confirmed to the Company 0000 Xxxxxxxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention:
Secretary. Notice to any Underwriter pursuant to Section 6 hereof shall be
mailed, delivered, telexed or telecopied and confirmed to such Underwriter's
address as 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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