TCF FINANCIAL CORPORATION LETTERHEAD
TO STREET HOLDERS
[DATE]
Re: 9.50% Senior Notes due 2003 of Winthrop Resources Corporation (the
"Notes")
Dear Noteholder:
As you may know, Winthrop Resources Corporation ("Winthrop") and TCF Financial
Corporation ("TCF") have entered into an agreement whereby Winthrop will become
a wholly owned subsidiary of TCF National Bank Minnesota (the "Merger").
Enclosed is a Joint Proxy Statement/Prospectus of TCF and Winthrop which
describes in greater detail the various transactions involved in the Merger.
As part of the Merger, TCF will become co-obligor of all of Winthrop's
obligations under the Notes if holders of at least a majority in interest of
the outstanding principal amount of the Notes consent to the elimination of
certain covenants contained in the indenture governing the Notes (the
"Indenture") and certain other amendments to the Indenture reflected in the
proposed First Supplemental Indenture (the "Supplemental Indenture"), a copy
of which is enclosed as Attachment A to this letter. The covenants to be
eliminated are contained in Attachment B to this letter and are also
described in the section of the Joint Proxy Statement and Prospectus entitled
"Description of Winthrop Securities -- Winthrop Senior Notes". TCF requires
the elimination of the covenants in exchange for its assumption of Winthrop's
obligations to you in order to provide sufficient flexibility after the
Merger.
In addition, the Indenture is also proposed to be amended to permit TCF to
continue Winthrop's periodic financial reporting requirements to you and
Norwest Bank Minnesota, National Association, the Trustee of the Notes under
the Indenture. Currently, Winthrop is required to prepare such reports
pursuant to the provisions of the Securities Exchange Act of 1934 (the "1934
Act"), as well as the terms of the Indenture. This amendment will allow
Winthrop to discontinue preparing these reports and instead require TCF to
provide its 1934 Act reports to you and the Trustee.
Winthrop's Board of Directors has approved the amendments to the Indenture,
subject to receipt of requisite consents from holders of Notes and
consummation of the Merger. The Board of Directors of Winthrop recommends
approval of the Supplemental Indenture by the holders of the Notes in
connection with the Merger. In order for the amendments to the Indenture to
be effective, written consents must be received from the holders of record,
as of May 21, 1997, the record date, of at least 50.1% of the outstanding
principal amount of the Notes. As of the record date, $28,750,000 in
principal amount of the Notes were outstanding, requiring consents from
holders of more than $14,375,000 in principal amount of the Notes.
If you would like TCF to assume Xxxxxxxx's obligations under the Notes as
part of the Merger, the holders of at least 50.1% of the outstanding
principal amount of the Notes must consent to the proposed amendments to the
Indenture by signing the [blue] consent form enclosed with this letter as
Attachment C and returning it in the enclosed envelope by 5:00 p.m.
(Minneapolis Time) on __________________, unless extended. Any extension,
amendment or termination will be followed as promptly as practicable by
public announcement thereof, the announcement in the case of an extension
will be issued no later than 9:00 a.m., Minneapolis time, on the next
business day after the previously scheduled expiration date. Without
limiting the manner in which any public announcement may be made, TCF shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a release to the Dow Xxxxx News
Service. Please sign, date and return today the enclosed Consent Form to
your bank or broker in the postage paid envelope provided so that your bank
or broker can deliver it to the Trustee prior to the expiration date.
Please note that the proposed amendments will not affect the payment or
maturity provisions currently in effect.
Holders who wish to consent must consent to all of the proposed amendments by
executing and returning the enclosed consent form. If the amendments are
approved, they will be binding on all holders of the Notes. In no event
should holders tender or deliver their Notes. All of the provisions of the
Indenture that are not amended would remain in full force and effect.
Adoption and effectiveness of the proposed amendments to the Indenture are in
any event subject to and contingent upon occurrence of the Merger, regardless
of the receipt from holders of the requisite consents.
IF THE AMENDMENTS ARE NOT APPROVED, THE NOTES WILL CONTINUE TO BE OUTSTANDING
AND BEAR INTEREST AS CURRENTLY PROVIDED. TCF, HOWEVER, WILL NOT ASSUME ANY
OF XXXXXXXX'S OBLIGATIONS IN SUCH EVENT.
The solicitation of consents is not being made to, nor will TCF accept consents
from, the holders of the Notes in any jurisdiction in which this solicitation
would not be in compliance with the securities or Blue Sky laws of such
jurisdiction.
If you wish to revoke a previously executed written consent, please notify
your bank or broker in time for such notification to be given to the Trustee
prior to the expiration of the consent period.
Notwithstanding anything to the contrary set forth in this letter or the
Joint Proxy Statement/Prospectus, TCF reserves the right to extend, amend or
terminate the solicitation of consents at any time prior to the effectiveness
of the proposed amendments, or to delay accepting consents.
Neither TCF nor Winthrop has authorized any person to give any information or
make any
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representation in connection with the solicitation of consents other
than those contained in this letter or in the accompanying Joint Proxy
Statement/Prospectus and, if given or made, such information or representation
must not be relied upon as having been authorized. The delivery of these
materials shall not, under any circumstance, create any implication that the
information herein is correct after the date hereof.
If you have any questions or require any assistance in executing a consent,
please contact either the Trustee at ________________, or our Information
Agent, Xxxxxxxxx & Company Inc., toll-free, at 0-000-000-0000.
Sincerely,
TCF FINANCIAL CORPORATION
By: ____________________________
Its: ____________________________
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EXHIBIT A
WINTHROP RESOURCES CORPORATION,
TCF FINANCIAL CORPORATION
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
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FIRST SUPPLEMENTAL INDENTURE
Dated as of ____________________, 1997
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Supplementing and Amending
the
Indenture
Dated as of July 1, 1996
Between
Winthrop Resources Corporation
and
Norwest Bank Minnesota, National Association
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9.50% SENIOR NOTES
Due 2003
FIRST SUPPLEMENTAL INDENTURE
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of ______________, 1997, by
and among WINTHROP RESOURCES CORPORATION, a corporation duly organized and
existing under the laws of the State of Minnesota ("Winthrop"), having its
principal office at 0000 Xxxx Xxxxxx, 0000 Xxxx Xxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxx 00000, TCF FINANCIAL CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware ("TCF"), having its
principal office at 000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx
00000 and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
corporation duly organized and existing under the laws of the United States
of America (the "Trustee"), as Trustee, having its principal corporate trust
office at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479.
RECITALS
X. Xxxxxxxx and the Trustee entered into an indenture, dated as of July 1,
1996 between Winthrop and Norwest Bank Minnesota, National Association (the
"Indenture") with respect to $28,750,000 in aggregate principal amount of
9.50% Senior Notes due 2003 (the "Notes") of Winthrop. Unless otherwise
defined, capitalized terms used herein have the same meaning ascribed to them
in the Indenture.
B. $___________________ in aggregate principal amount of the Notes is
outstanding as of the date hereof (the "Outstanding Notes").
C. TCF and Winthrop entered into an Agreement and Plan of Reorganization,
dated February 28, 1997, whereby a new first-tier subsidiary of TCF will
merge with and into Winthrop (the "Merger") and, after consummation of the
Merger, TCF will contribute the stock of Winthrop to TCF National Bank
Minnesota.
D. The Merger has been consummated.
E. Under Section 902 of the Indenture, with the consent of the Holders of not
less than the majority in principal amount of the Outstanding Notes, Winthrop
(when authorized by or pursuant to a Board Resolution) and the Trustee may enter
into one or more supplemental indentures (which shall conform with the
requirements of the Trust Indenture Act as then in effect) for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of modifying in any manner the rights of the
Holders of Notes under the Indenture.
X. Xxxxxxxx has authorized the execution and delivery of this Supplemental
Indenture pursuant to a Board Resolution, subject to receipt of the requisite
consent of Holders of Outstanding Notes.
G. The requisite consent of Holders of Outstanding Notes has been obtained.
NOW, THEREFORE, in consideration of the above premises, the parties hereto
agree that the Indenture is hereby amended to provide that, effective upon
and subject to consummation of the Merger:
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1. TCF TO ASSUME OBLIGATIONS UNDER INDENTURE AND NOTES. From and after the
date hereof, TCF hereby assumes and agrees to be obligated to perform,
jointly and severally with Winthrop, all of Winthrop's obligations under the
Indenture (as modified herein) and the Notes including without limitation,
the due and punctual payment of the principal of (and premium, if any) and
interest on all the Notes and the performance and observance of every
covenant and term of the Indenture (as modified herein) on the part of
Winthrop to be performed or observed.
1. ELIMINATION OF CERTAIN INDENTURE COVENANTS. The following Sections of the
Indenture are hereby eliminated in their entirety:
SECTION 1006. RESTRICTION ON DIVIDENDS, REDEMPTIONS AND OTHER PAYMENTS.
SECTION 1007. LIMITATION ON FUNDED RECOURSE DEBT.
SECTION 1013. LIMITATION ON RANKING OF FUTURE INDEBTEDNESS.
SECTION 1014. LIMITATIONS ON RESTRICTING SUBSIDIARY DIVIDENDS.
SECTION 1015. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
1. REPORTING OBLIGATION FOLLOWING THE MERGER. From and after the date
hereof, Section 704 of the Indenture is hereby amended to provide that
information, documents and the other reports required to be filed with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended, that are thereafter required to be filed by Winthrop
with the Trustee pursuant to Section 704(1) or transmitted to Holders of
Notes pursuant to Section 704(3) will be filed or transmitted with respect to
TCF rather than with respect to Winthrop, it being the intent of the parties
that Winthrop will, pursuant to rules and regulations of the Commission,
terminate its registration under the Securities Exchange Act of 1934, as
amended, thereby suspending its duty to file reports with the Commission
pursuant to such Act. In addition, from and after the date hereof, Sections
704(1) and 704(3) are hereby modified to provide that the required filing
with the Trustee or transmission to Holders of Notes of all information,
documents and other reports referenced in Section 704(1) or Section 704(3),
as the case may be, including, at a minimum, (a) copies of a balance sheet
and statements of income and retained earnings as of and for each fiscal
year, audited by Independent Public Accountants, and (b) a summary statement
(which need not be audited) of income and retained earnings for each
quarterly period (except the last quarterly fiscal period in each fiscal
year), will be filed or transmitted with respect to TCF rather than with
respect to Winthrop.
2. EXECUTION IN COUNTERPARTS. This First Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but such counterparts shall together constitute one
and the same instrument.
3. TERMS OF INDENTURE. Except as explicitly set forth in this First
Supplemental Indenture, all terms and conditions of the Indenture shall
remain in full force and effect following the date hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
WINTHROP RESOURCES CORPORATION
( S E A L ) By___________________________________
Name:
Title:
ATTEST:
________________________________
Name:
Title:
TCF FINANCIAL CORPORATION
( S E A L ) By___________________________________
Name:
Title:
ATTEST:
________________________________
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
( S E A L ) By___________________________________
Name:
Title:
ATTEST:
_______________________________
Name:
Title:
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EXHIBIT B
SECTION 1006. RESTRICTIONS ON DIVIDENDS, REDEMPTIONS AND OTHER PAYMENTS.
The Company shall not (i) declare or pay any dividend, either in cash or
property, on any shares of its capital stock (except dividends or other
distributions payable solely in shares of capital stock of the Company) or
(ii) purchase, redeem or retire any shares of its capital stock or any
warrants, rights or options to purchase or acquire any shares of its capital
stock or (iii) make any other payment or distribution, either directly or
indirectly through any Subsidiary, in respect of its capital stock (such
dividends, purchases, redemptions, retirements, payments and distributions
being herein collectively called "Restrictive Payments") if, after giving
effect thereto,
(1) an event of Default would have occurred; or
(2) (A) the sum of (i) such Restricted Payments plus (ii) the
aggregate amount of all Restricted Payments made during the period
after December 31, 1995 would exceed (B) the sum of (i) $5 million
plus (ii) 50% of the Company's Consolidated Net Income for each
fiscal year commencing subsequent to December 31, 1995 (with 100%
reduction for a loss in any fiscal year), plus (iii) the cumulative
net proceeds received by the Company from the issuance or sale after
June 30, 1996 of capital stock of the Company (excluding the
proceeds from the sale of the Common Stock offered concurrently with
the Notes) or of any warrants, rights, or other options to purchase
or acquire its capital stock.
Notwithstanding the foregoing, the Company may make a previously-declared
Restricted Payment if the declaration of such Restricted Payment was
permitted under this Section when made. For purposes of this Section, the
amount of any Restricted Payment payable in property shall be deemed to be
the fair market value of such property as determined by the Board of
Directors of the Company.
SECTION 1007. LIMITATION ON FUNDED RECOURSE DEBT.
Neither the Company nor any Subsidiary will create, incur, assume,
guarantee, or be liable with respect to any Funded Recourse Debt if,
immediately after giving effect to any such creation, incurrence, assumption,
or guarantee (including the retirement of any existing indebtedness from the
proceeds of such additional Funded Recourse Debt), the aggregate amount of
Funded Recourse Debt outstanding would exceed 300% of the Company's
Consolidated Net Worth.
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SECTION 1013. LIMITATION ON RANKING OF FUTURE INDEBTEDNESS.
The Company will not, directly or indirectly, incur, create, assume or
guarantee any Funded Recourse Debt that is senior in right of payment to the
Notes.
SECTION 1014. LIMITATIONS ON RESTRICTING SUBSIDIARY DIVIDENDS
The Company shall not, and shall not permit any Subsidiary of the
Company to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
the Company to (a) pay dividends or make any other distribution on its
capital stock, (b) pay any indebtedness owed to the Company or any other
Subsidiary of the Company or (c) make loans, advances, or capital
contributions to the Company or any other Subsidiary of the Company except
(i) as set forth in the instrument evidencing or agreement governing Acquired
Indebtedness of any acquired entity which becomes a Subsidiary of the
Company, provided, that any restriction or encumbrance under such instrument
or agreement existed at the time of acquisition, was not put in place in
anticipation of such acquisition, and is not applicable to any Person, other
than the Person or property or assets of the Person so acquired; (ii) by
agreements and transactions permitted under Section 1006; (iii) customary
provisions restricting subletting or assignment of any lease or license of
the Company or any Subsidiary of the Company; (iv) any encumbrance or
restriction arising under indebtedness or other agreements existing on the
date of original issuance of the Notes; (vi) any restrictions, with respect
to a Subsidiary of the Company imposed pursuant to an agreement that has been
entered into for the sale or disposition of the stock, business, assets, or
properties of such Subsidiary; (vii) any encumbrance or restriction arising
under the terms of purchase money obligations, but only to the extent such
purchase money obligations restrict or prohibit the transfer of the property
so acquired; (viii) any encumbrance or restriction arising under the
customary non-assignment provisions in installment purchase contracts; (ix)
any encumbrance or restriction on the ability of any Subsidiary to transfer
any of its property acquired after the date of hereof to the Company or any
Subsidiary that is required by a lender to, or purchaser of any indebtedness
of, such Subsidiary in connection with a financing of the acquisition of such
property by such Subsidiary; and (x) any encumbrance or restriction pursuant
to any agreement that extends, refinances, renews or replaces any agreement
described in the forgoing clauses (i) through (ix).
SECTION 1015. LIMITATION ON TRANSACTION WITH AFFILIATES
The Company shall not, and shall not permit any of its Subsidiaries to,
enter into any transaction (or series of related transactions), including but
without limitation, any loan, advance, guarantee or capital contribution to,
or for the benefit of, any sale, purchase, lease, exchange or any other
disposition of any property or the rendering of any service, or any other
direct or indirect payment, transfer or other disposition (a "Transaction"),
involving payments in excess of $60,000, with any Affiliate of the Company
(other than a wholly-owned Subsidiary), on terms and conditions less
favorable to the Company or such Subsidiary, as the case may be, than would
be available at such time in a comparable Transaction in arm's length
dealings with an unrelated Person as determined by the Board of Directors,
such approval to be evidenced by a Board Resolution.
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The provisions of the immediately preceding paragraph will not apply to:
(1) Restricted Payments otherwise permitted pursuant to this
Indenture;
(2) fees and compensation (including amounts paid pursuant to employee
benefit plans) paid to, and indemnity provided on behalf of,
officers, directors, employees or consultants of the Company or
any Subsidiary, as determined by the Board of Directors or the
senior management thereof in the exercise of their reasonable
business judgment; or
(3) payments for goods and services purchased in the ordinary course
of business on an arms length basis.
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EXHIBIT C
DIRECTION TO CONSENT
TO: _____________________________
_____________________________
_____________________________
RE: Direction to Consent to Amendments to Indenture dated as of July 1, 1996
between Winthrop Resources Corporation ("Winthrop") and Norwest Bank
Minnesota, National Association ("Norwest") (the "Indenture")
The undersigned hereby certifies to the above named record Holder, TCF
Financial Corporation ("TCF"), Winthrop and Norwest, as Trustee under
Indenture, that as of _______________, 1997, the undersigned was the
beneficial owner of $________________ aggregate principal amount of
Winthrop's 9.50% Senior Notes due 2003 (the "Notes"), for which the above
named Xxxxxx was the Holder of Record. The undersigned further certifies
that it/he/she is authorized to execute and deliver this Direction to Consent
for and on its behalf and/or for and on behalf of the beneficial owner of the
above-described Notes, and that it/he/she has received TCF's letter dated
___________, 1997, the Joint Proxy Statement/Prospectus of TCF and Winthrop
dated ____________, 1997, and the proposed Supplemental Indenture describing
the proposed amendments to the Indenture (the "Supplemental Indenture").
With respect to the principal amount of the Notes indicated above, the
undersigned hereby directs the above Holder to consent to the amendments to
the Indenture set forth in the Supplemental Indenture. The undersigned
acknowledges and agrees that the amendments to the Indenture set forth in the
Supplemental Indenture shall only become effective upon and after the Merger
described in the Joint Proxy Statement/Prospectus and upon the execution of
the Supplemental Indenture following the receipt of the requisite consents
from the Holders of a majority in principal amount of the Notes.
PLEASE DATE AND SIGN exactly as your name(s) appears below indicating, where
proper, the official position or representative capacity in which you are
signing. When signing as executor, administrator, trustee or guardian, give
full title as such; when Notes have been issued in names of two or more
persons, all should sign.
This Direction to Consent has been executed by the undersigned beneficial
owner as of _______________, 1997.
_______________________________
(Name of Record Holder)
By: __________________________
Its: ____________________________
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