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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 1999
REGISTRATION NO. 333-84179
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HOMESIDE LENDING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
FLORIDA 59-2725415
(STATE OR OTHER JURISDICTION (IRS EMPLOYER
OF IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
</TABLE>
7301 BAYMEADOWS WAY
JACKSONVILLE, FLORIDA 32256
(904) 281-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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ROBERT J. JACOBS
EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
7301 BAYMEADOWS WAY
JACKSONVILLE, FLORIDA 32256
(904) 281-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
WITH COPIES TO:
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MARY ELLEN O'MARA JONATHAN B. MILLER
HUTCHINS, WHEELER & DITTMAR BROWN & WOOD LLP
A PROFESSIONAL CORPORATION ONE WORLD TRADE CENTER
101 FEDERAL STREET NEW YORK, NEW YORK 10048
BOSTON, MASSACHUSETTS 02110 (212) 839-5300
(617) 951-6600
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
in light of market and other conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C>
Debt Securities............................................. $1,000,000,000 $278,000(2)
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(1) Such amount shall be increased if any Debt Securities are issued at an
original issue discount, by an amount such that the net proceeds to be
received by the Registrant shall be equal to the above amount to be
registered. Any offering of securities denominated other than in U.S.
dollars will be treated as the equivalent in United States dollars based
upon the official exchange rate applicable to the purchase of such
securities from the Registrant. Pursuant to Rule 429 under the Securities
Act of 1933, the Prospectus included in the Registration Statement is a
combined prospectus and also relates to the remaining unsold Debt Securities
having an aggregate offering price of $408,000,000 previously registered by
the Registrant under Registration Statement No. 333-45603 which was filed
and declared effective on March 11, 1998 and under Registration Statement
No. 333-78629, which was filed and became effective on May 17, 1999. This
Registration Statement, which is a new registration statement, also
constitutes Post-Effective Amendment No. 1 to registration statement No.
333-45603 and registration statement No. 333-78629, and such Post-Effective
Amendment No. 1 shall hereafter become effective concurrently with the
effectiveness of this Registration Statement and in accordance with Section
8(c) of the Securities Act of 1933. This Registration Statement and the
registration statements amended hereby are collectively referred to herein
as the "Registration Statement."
(2) Previously paid.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 31, 1999
PROSPECTUS
$1,408,000,000
HOMESIDE LENDING, INC.
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
----------------------
THE NOTES:
- - We will offer notes from time to time and specify the terms and conditions of
each issue of notes in a pricing supplement.
- - The notes will be senior unsecured debt securities of HomeSide.
- - The notes will have stated maturities of nine months or more from the date
they are originally issued.
- - We will pay amounts due on the notes in U.S. dollars or any other
consideration described in the pricing supplement.
- - The notes will have minimum denominations of $1,000.
- - The notes may bear interest at fixed or floating rates or may not bear any
interest. If the notes bear interest at a floating rate, the floating rate may
be based on one or more indices or formulas plus or minus a fixed amount or
multiplied by a factor.
- - We will state whether the notes can be redeemed or repaid before their
maturity and whether they are subject to mandatory redemption, redemption at
the option of HomeSide or repayment at the option of the holder of the notes.
INVESTING IN THE NOTES INVOLVES RISKS.
SEE "RISK FACTORS" ON PAGE 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus or any pricing supplement is truthful or complete. Any representation
to the contrary is a criminal offense.
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PROCEEDS,
PUBLIC OFFERING AGENT'S DISCOUNTS BEFORE EXPENSES,
PRICE AND COMMISSIONS TO HOMESIDE
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<S> <C> <C> <C>
Per note............. 100% .125% - .750% 99.875% - 99.250%
Total................ $1,408,000,000 $1,760,000 - $10,560,000 $1,406,240,000 - $1,397,440,000
</TABLE>
We may sell notes to the agents referred to below as principal for resale
at varying or fixed offering prices or through the agents as agent using their
reasonable efforts on our behalf. We may also sell notes without the assistance
of the agents, whether acting as principal or as agent.
Our executive offices are located at 7301 Baymeadows Way, Jacksonville,
Florida 32256, telephone number (904) 281-3000.
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
J.P. MORGAN & CO.
SALOMON SMITH BARNEY
WARBURG DILLON READ LLC
THE DATE OF THIS PROSPECTUS IS AUGUST , 1999.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
<PAGE> 3
TABLE OF CONTENTS
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Risk Factors................................................ 3
HomeSide.................................................... 8
Ratio of Earnings to Fixed Charges.......................... 10
Use of Proceeds............................................. 10
Description of the Notes.................................... 11
United States Federal Income Taxation....................... 34
Plan of Distribution........................................ 41
Where You Can Find More Information......................... 42
Incorporation of Information We File With the SEC........... 43
Validity of the Notes....................................... 43
Experts..................................................... 43
</TABLE>
References in this prospectus to "HomeSide", "we", "us" and "our" are to
HomeSide Lending, Inc. References in this prospectus to the "National" are to
National Australia Bank Limited, our ultimate parent entity.
References in this prospectus to the "agents" are to Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Banc of America Securities LLC, Chase Securities
Inc., J.P. Morgan Securities Inc., Salomon Smith Barney Inc. and Warburg Dillon
Read LLC, collectively.
You should rely only on the information contained or incorporated by
reference in this prospectus and any pricing supplement. Neither we nor the
agents have authorized any other person to provide you with different or
additional information. If anyone provides you with different or additional
information, you should not rely on it. Neither we nor the agents are making an
offer to sell these securities in any jurisdiction where the offer or sale is
not permitted. You should assume that the information contained or incorporated
by reference in this prospectus and any pricing supplement is accurate only as
of the date on the front cover of the pricing supplement.
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RISK FACTORS
Your investment in the notes involves risks. In consultation with your own
financial and legal advisers, you should carefully consider, among other
matters, the following discussion of risks before deciding whether an investment
in the notes is suitable for you. The notes are not an appropriate investment
for you if you are unsophisticated with respect to the significant components of
the risks described below.
NOTES INDEXED TO INTEREST RATE, CURRENCY OR OTHER INDICES OR FORMULAS HAVE
INHERENT RISKS
If you invest in notes indexed to one or more interest rate, currency or
other indices or formulas, there will be significant risks not associated with a
conventional fixed rate or floating rate debt security. These risks include
fluctuation of the indices or formulas and the possibility that you will receive
a lower, or no, amount of principal, premium or interest and at different times
than you expected. We have no control over a number of matters, including
economic, financial and political events, that are important in determining the
existence, magnitude and longevity of these risks and their results. In
addition, if an index or formula used to determine any amounts payable in
respect of the notes contains a multiplier or leverage factor, the effect of any
change in that index or formula will be magnified. In recent years, values of
certain indices and formulas have been volatile and volatility in those and
other indices and formulas may be expected in the future. However, past
experience is not necessarily indicative of what may occur in the future.
REDEMPTION MAY ADVERSELY AFFECT YOUR RETURN ON THE NOTES
If your notes are redeemable at our option or are subject to mandatory
redemption, we may, in the case of optional redemption, or must, in the case of
mandatory redemption, redeem your notes at times when prevailing interest rates
may be relatively low. Accordingly, you generally will not be able to reinvest
the redemption proceeds in a comparable security at an effective interest rate
as high as that of the notes.
THERE MAY BE AN UNCERTAIN TRADING MARKET FOR YOUR NOTES; MANY FACTORS AFFECT THE
TRADING VALUE OF YOUR NOTES
We cannot assure you that a trading market for your notes will ever develop
or be maintained. Many factors independent of our creditworthiness may affect
the trading market of your notes. These factors include:
- the complexity and volatility of the index or formula applicable to the
notes,
- the method of calculating the principal, premium and interest in respect
of the notes,
- the time remaining to the maturity of the notes,
- the outstanding amount of the notes,
- the redemption features of the notes,
- the amount of other securities linked to the index or formula applicable
to the notes, and
- the level, direction and volatility of market interest rates generally.
In addition, because some notes were designed for specific investment
objectives or strategies, these notes will have a more limited trading market
and may experience more price volatility. There may be a limited number of
buyers for these notes. This may affect the price you receive for these notes or
your ability to sell these notes at all. You should not purchase notes unless
you understand, and know that you can bear, the related investment risks.
OUR CREDIT RATINGS MAY NOT REFLECT ALL RISKS OF AN INVESTMENT IN THE NOTES
Our credit ratings are an assessment of our ability to pay our obligations.
Consequently, real or anticipated changes in our credit ratings will generally
affect the market value of your notes. Our credit ratings, however, may not
reflect the potential impact of risks related to structure, market or other
factors discussed above on the value of your notes.
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SUBSTANTIAL LEVERAGE MAY HAVE NEGATIVE CONSEQUENCES
We require substantial financing for our business operations. Our financing
is currently provided under a credit arrangement with the National, our
commercial paper program, currently limited to $1.5 billion outstanding at any
time, an amended and restated credit agreement which we originally entered into
on January 31, 1997, as well as through the sale from time to time of the notes
or other debt securities. As of June 30, 1999, we had aggregate outstanding
indebtedness of approximately $4.3 billion, none of which was secured,
consisting of $1.2 billion of notes outstanding under the indenture, $1.9
billion outstanding under HomeSide's credit arrangement with the National and
$1.2 billion outstanding under HomeSide's commercial paper program. Borrowings
under the credit agreement are secured by the capital stock of HomeSide,
HomeSide's immediate parent company and each of HomeSide's subsidiaries and
become further secured by the assets of HomeSide upon the occurrence of certain
events. See "Description of the Notes -- Terms of the Notes." We may also incur
additional indebtedness in the future, although we are limited by provisions
contained in the instruments governing our current indebtedness, other than the
indenture relating to the notes, which imposes no such limitations.
The degree to which we are leveraged could have important consequences to
you, including the following:
- our ability to grow will depend on our ability to obtain additional
financing in the future for originating loans, investment in servicing
rights, working capital, capital expenditures and general corporate
purposes, and that ability may be impaired;
- a substantial portion of our cash flow from operations must be dedicated
to the payment of the principal of and interest on our indebtedness,
thereby reducing the funds available to finance operations; and
- we may be more highly leveraged than some of our competitors, which may
place us at a competitive disadvantage and make us more vulnerable to
economic downturns.
FUNDING SOURCES MAY NOT BE AVAILABLE
In order to operate our business, we require substantial financing. If we
are not successful in negotiating renewals of our current borrowings or in
arranging new financing, we may have to curtail our origination activities
and/or sell significant portions of our servicing portfolio. This would have a
significant negative impact on our business and results of operations. Financial
market conditions and our value and performance at the time of any refinancing,
among other factors, may affect our ability to refinance our bank credit
facilities or the securities offered hereby. We cannot assure you that any
refinancing can be successfully completed.
CHANGES IN INTEREST RATES COULD ADVERSELY IMPACT HOMESIDE
Changes in interest rates can have a variety of effects on our business. In
particular, changes in interest rates can affect:
- the volume of loan originations and acquisitions,
- the interest rate spread on loans held for sale,
- the amount of gain or loss on the sale of loans, and
- the size and value of our servicing portfolio.
During periods of declining interest rates, mortgage banking companies
typically experience an increase in loan originations because of increased home
purchases and increased refinancing activity. During 1997 to 1998, a period of
generally declining interest rates, refinancing activity as a percentage of
total originations in the industry increased from 31% in 1997 to 50% in 1998. In
contrast, refinancing activity was only 32% of total originations in 1994, 25%
in 1995 and 29% in 1996 as the result of generally increasing interest rates.
Increases in interest rates may adversely affect refinancing activity, which
could have a negative impact on HomeSide's origination revenues.
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Our net warehouse interest income is the difference between the interest
income we earn on loans held for sale, which is generally based on long-term
interest rates, and the interest we pay on our borrowings, which is generally
based on short-term interest rates. If this spread narrows or becomes negative,
our results of operations could be negatively impacted.
In addition, mortgage interest rate declines and loan prepayment increases
may adversely affect the size and value of our servicing portfolio. In periods
of declining interest rates, the economic advantages to borrowers of refinancing
their mortgage loans become greater. Because borrowers do not always refinance
their mortgage loans with their existing lender, mortgage banking companies,
including HomeSide, typically experience a reduction in the size of their
servicing portfolio during periods of declining interest rates. Increases in the
rate of mortgage loan prepayments increase servicing costs and reduce the period
during which we receive servicing income from the loans. We capitalize the cost
of the acquisition of servicing rights from third parties and began in 1996 to
capitalize servicing rights on loans that we originate. The value of servicing
rights is based upon the net present value of future cash flows. If the rate of
prepayment of the related loans exceeds the rate assumed by us, the value of the
servicing portfolio will decrease and accelerated amortization of servicing
rights may become necessary. Interest rate changes can also adversely affect our
ability to sell servicing rights to a third party or reduce the proceeds from a
sale.
A FAILURE OF OUR RISK MANAGEMENT ACTIVITIES MAY ADVERSELY AFFECT OUR
PROFITABILITY
From the time the interest rate on a customer's loan application is
established to the time we sell the loan, changes in interest rates may result
in gain or loss on the sale of a mortgage loan. To manage interest rate risk, we
use a hedging strategy that is designed to minimize the negative effect of
changes in interest rates on loans that have closed and loans for which interest
rate commitments have been given that are expected to close. We then enter into
forward sale commitments and option contracts with the Federal National Mortgage
Association (Fannie Mae), Federal Home Loan Mortgage Corporation (FHLMC) and the
private investors to whom we sell loans. The results of our hedging program
depend on a variety of factors, including the relationship between mortgage
rates and Treasury securities, the hedge instruments used and other factors. If
our strategy is not successful, our profitability may be negatively affected.
For each year since 1990, we and our predecessor, BancBoston Mortgage
Corporation, have not experienced secondary market losses.
UNSUCCESSFUL HEDGING OF SERVICING RIGHTS PORTFOLIO MAY ADVERSELY AFFECT OUR
PROFITABILITY AND FINANCIAL CONDITION
As described above, in periods of declining interest rates, the rate of
mortgage loan prepayments tends to increase and the value of our servicing
portfolio will tend to decrease. To manage this interest rate risk, we use a
hedging strategy that is designed to counteract the negative effect of changes
in interest rates on the value of our servicing portfolio. The results of this
hedging program depend on a variety of factors, including the relationship
between mortgage rates and mortgage refinancings, the hedge instruments used and
other factors. If our strategy is not successful, our profitability and
financial condition may be negatively impacted.
LOAN DELINQUENCIES AND DEFAULTS ON LOANS MAY ADVERSELY AFFECT OUR PROFITABILITY
Economic downturns may have a negative impact on our profitability as the
frequency of loan defaults tends to increase. From the time that we fund the
loans we originate to the time we sell the loans, generally 10 to 40 days, we
are generally at risk for any loan defaults. Once we sell the loans we
originate, the risk of loss from loan defaults and foreclosure generally passes
to the purchaser or insurer of the loans. In connection with sales, we typically
make some representations and warranties to the purchasers and insurers of loans
and to the purchasers of servicing rights. These representations and warranties
generally relate to the origination and servicing of loans in substantial
conformance with state and federal laws and applicable investor guidelines. If a
loan defaults and there has been a breach of these representations and
warranties, we become liable for the unpaid principal and interest on the
defaulted mortgage loan. In those circumstances, we may be required to
repurchase the loan and bear the subsequent loss, if any. Historically, the
impact of loans we have repurchased as the result of breaches of representations
and warranties has not been material. However, the number and amount of loans
repurchased in the future could increase due to the high volume of loans which
we originate,
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acquire and sell. Accordingly, we believe that future charges to net income
relating to loan repurchases may be necessary as loan origination volume
increases.
We are also affected by loan delinquencies and defaults on loans that we
service. Under certain types of servicing contracts, particularly contracts to
service loans that have been pooled or securitized, the servicer must advance
all or part of the scheduled payments to the owner of the loan, even when loan
payments are delinquent. Also, to protect their liens on mortgaged properties,
owners of loans usually require the servicer to advance mortgage and hazard
insurance and tax payments on schedule even if sufficient escrow funds are not
available. The servicer will be reimbursed, subject to certain limitations with
respect to Federal Housing Administration (FHC) and Veterans Administration (VA)
loans, by the mortgage owner or from liquidation proceeds for payments advanced
that the servicer is unable to recover from the mortgagor, although the timing
of reimbursement is typically uncertain. In the interim, the servicer must
absorb the cost of funds advanced during the time the advance is outstanding. In
addition, the servicer must bear the increased costs of attempting to collect on
delinquent and defaulted loans. We also forego servicing income from the time a
loan becomes delinquent until foreclosure when the amounts may be recovered, if
any proceeds are available.
We periodically incur losses attributable to servicing FHA and VA loans for
investors. Losses include actual losses for final disposition of loans that have
been foreclosed or assigned to the FHA or VA and accrued interest on FHA or VA
loans for which payment has not been received. Our servicing losses on
investor-owned loans have historically primarily represented losses on VA loans.
Because the total principal amount of FHA loans is guaranteed, losses on FHA
loans are generally limited to expenses of collection. We have experienced
minimal losses from FHA loans. With respect to VA loans, the VA guarantees the
initial losses on a loan. The guaranteed amount generally ranges from 20% to 35%
of the original principal balance. Before each foreclosure sale, the VA
determines whether to bid by comparing the estimated net sale proceeds to the
outstanding principal balance and the servicer's accumulated reimbursable costs
and fees. If this amount is a loss and exceeds the guaranteed amount, the VA
typically issues a no-bid and pays the servicer the guaranteed amount. Whenever
a no-bid is issued, the servicer absorbs the loss, if any, in excess of the sum
of the guaranteed principal and amounts recovered at the foreclosure sale. Our
historical delinquency and foreclosure rate experience on VA loans has generally
been consistent with that of the industry. We cannot assure you that our
servicing losses on investor-owned loans will not be greater in the future.
CONCENTRATION OF OUR BUSINESS IN SOME STATES MAY ADVERSELY AFFECT US IF THOSE
STATES EXPERIENCE ECONOMIC DOWNTURNS
Economic downturns in states in which we have a significant concentration
of business could have a negative impact on our results of operations. Loans in
Florida and California represented 10% and 11%, respectively, of our servicing
portfolio at June 30, 1999. We originate and purchase servicing rights for
mortgage loans nationwide and actively monitor the geographic distribution of
our servicing portfolio to maintain a mix that we deem appropriate and make
adjustments as we deem necessary. We cannot assure you that our monitoring of
and adjustments to geographic distribution will prevent any significant negative
impact on our business, results of operations and financial condition in the
future.
HIGHLY COMPETITIVE CONDITIONS IN OUR INDUSTRY MAY ADVERSELY AFFECT OUR REVENUES
The mortgage banking business is highly competitive. We compete with other
mortgage banking companies, commercial banks, savings associations, credit
unions and other financial institutions in every aspect of our business,
including funding and purchasing loans from mortgage brokers, purchasing loans
from correspondents and acquiring loan servicing rights and origination
capabilities. We compete with mortgage banking companies and other financial
institutions that have substantially greater financial resources, greater
operating efficiencies and longer operating histories than we do. Furthermore,
increasing consolidation in the mortgage industry is leading to an increased
market share for the largest mortgage companies. At the same time, Fannie Mae
and FHLMC are developing technologies and business practices that could reduce
their reliance on large mortgage companies for loan production and enable them
to access smaller producers for volume. If market pricing becomes more
competitive, we may be unable to achieve our planned level of originations or
consummate acquisitions of servicing rights at a satisfactory cost. Retail
mortgage banking
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companies have direct access to borrowers and generally are able to sell their
loans to the same entities that purchase our loans. We depend primarily on
mortgage brokers and correspondents for originating new loans. Competitors also
seek to establish relationships with mortgage brokers and correspondents, who
are not obligated by contract or otherwise to continue to do business with us.
REGULATION AND RELATED LEGAL MATTERS AFFECTING OUR BUSINESS MAY HAVE ADVERSE
CONSEQUENCES
Our mortgage banking business is subject to the rules and regulations of
the Federal Reserve Board, the Department of Housing and Urban Development
(HUD), FHA, VA, Fannie Mae, FHLMC, Government National Mortgage Association
(GNMA) and other regulatory agencies with respect to originating, processing,
underwriting, selling, securitizing and servicing mortgage loans. In addition,
other federal and state statutes and regulations affect these activities. These
rules and regulations, among other things, impose licensing obligations on us,
prohibit discrimination and establish underwriting guidelines which include
provisions for inspections and appraisals, require credit reports on prospective
borrowers and fix maximum loan amounts. Moreover, lenders such as ourselves are
required annually to submit audited financial statements to Fannie Mae, FHLMC,
GNMA and HUD and to comply with each regulatory entity's own financial
requirements. Our business is also subject to examination by Fannie Mae, FHLMC
and GNMA and state regulatory agencies at all times to assure compliance with
applicable regulations, policies and procedures.
There are various Federal and state laws that regulate mortgage origination
activities including, among others, the Equal Credit Opportunity Act, the
Federal Truth-in-Lending Act, the Real Estate Settlement Procedures Act, the
Fair Housing Act, and the regulations promulgated thereunder. These laws, among
other things, prohibit discrimination, prohibit unfair and deceptive trade
practices, and require the disclosure of basic information to mortgagors
concerning credit terms and settlement costs, limit fees and charges paid by
borrowers and lenders, and regulate terms and conditions of credit and the
procedures by which credit is offered and administered. Many of these regulatory
requirements are designed to protect the interests of consumers, while others
protect the owners or insurers of mortgage loans. Failure to comply with these
requirements can lead to loss of approved status, termination of servicing
contracts without compensation to the servicers, demands for indemnification or
loan repurchases, class action lawsuits and administrative enforcement actions.
These regulatory requirements may be changed and may become more restrictive,
making compliance more difficult or expensive or otherwise restricting our
ability to conduct our business as currently conducted.
Our net income reflects a reduction in interest expense on our borrowings
with depository institutions for custodial balances placed with such
institutions. Proposed revisions of applicable bank regulations could cause
these escrow accounts to be recharacterized as demand deposit accounts reducing
our net income. This would require reserves to be established with Federal
Reserve Banks, and would reduce the amount of the credit. If applied
retroactively to change our ability to receive credit for escrow balances, other
regulatory changes or interpretations would likewise adversely affect us.
In addition, certain states require that interest be paid to mortgagors on
funds deposited by them in escrow to cover mortgage-related payments such as
property taxes and insurance premiums. Federal legislation has in the past been
introduced that would revise current escrow regulations and establish a uniform
interest payment requirement in all states. There would be a negative impact on
our earnings if such federal legislation were enacted or if other states enact
legislation relating to payment of, or increases in the rate of, interest on
escrow balances, or if such legislation were retroactively applied to loans in
our servicing portfolio.
In recent years, the mortgage banking industry has been subject to class
action lawsuits which allege violations of federal and state laws and
regulations, including the propriety of collecting and paying various fees and
charges and the calculation of escrow amounts. Class action lawsuits may
continue to be filed against the mortgage banking industry generally. Defending
such lawsuits in the future may be expensive and any adverse judgments may make
it more expensive or difficult for us to conduct our business as currently
conducted.
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THE CONTINUED AVAILABILITY OF FEDERAL PROGRAMS AND ACTIVE SECONDARY MARKET ARE
UNCERTAIN
Our ability to sell mortgage loans and mortgage-backed securities is
largely dependent upon the continuation of programs of Fannie Mae, FHLMC, GNMA
and private investors. These entities facilitate the sale of mortgage loans and
mortgage-backed securities. Our continued eligibility to participate in these
programs is also a necessary element to the ability to sell mortgage loans.
Although we are not aware of any proposed discontinuation of, or significant
reduction in, the various programs of Fannie Mae, FHLMC, GNMA or private
investors, this could have a material adverse effect on our operations. We
expect that we will continue to remain eligible to participate in these
programs, but any significant impairment of our eligibility could also
materially and adversely affect our operations.
The sponsoring entity may change the requirements of loans accepted under
these programs. The profitability of participating in these programs may vary
depending on a number of factors, including the administrative costs to us of
originating and purchasing qualifying loans.
We cannot assure you that we will be successful in effecting the sale of
mortgage loans at the historic price or volume levels in the future. Any
significant change in the secondary market level of activity or underwriting
criteria of Fannie Mae, FHLMC or private investors could have a significant
negative impact on the gain or loss on sales of mortgage loans that we record
and therefore on our results of operations.
CONTROL IS CONCENTRATED IN NATIONAL AUSTRALIA BANK LIMITED
HomeSide had outstanding indebtedness of $1.9 billion pursuant to a credit
agreement with the National as of June 30, 1999. Also, HomeSide International,
Inc., the parent of HomeSide, is an indirect wholly-owned subsidiary of the
National. Accordingly, the National is able to control our direction and future
operations, including decisions regarding acquisitions and other business
opportunities, the declaration of dividends and the issuance of other securities
by us. Certain decisions concerning our operations or financial structure may
present conflicts of interest between the National and the holders of the
securities offered hereby.
HOMESIDE'S BUSINESS WOULD BE DISRUPTED IF ITS COMPUTER SYSTEMS AND THOSE OF ITS
SUPPLIERS AND VENDORS CANNOT WORK PROPERLY WITH YEAR 2000 DATA
We use and are dependent upon a significant number of computer software
programs and operating systems to conduct our business. These programs and
systems include those developed and maintained by us, as well as software and
systems purchased from outside vendors. We have initiated a review and
assessment of all hardware, software systems and processes to determine whether
it will function properly in the Year 2000. We have modified our mission
critical systems and successfully conducted internal testing on these systems to
ensure that they will function properly in the Year 2000. We presently believe
that costs associated with Year 2000 compliance efforts will not have a
significant impact on our ongoing results of operations, although we cannot
assure you about this. To the extent that we will be relying on our outside
software vendors, Year 2000 compliance matters will not be within our direct
control. In addition, we have relationships with vendors, customers and other
third parties that rely on computer software that may not be Year 2000
Compliant. We cannot assure you that Year 2000 compliance failures by third
parties will not have a significant negative impact on our results of
operations.
HOMESIDE
HomeSide is one of the largest full service residential mortgage banking
companies in the United States. On February 10, 1998, the National acquired all
outstanding shares of the common stock of HomeSide International, Inc., the
parent of HomeSide. HomeSide's predecessor was formed through the acquisition of
the mortgage banking operations of BankBoston, N.A. on March 16, 1996 and
subsequent purchase of the mortgage banking operations of Barnett Banks, Inc.
HomeSide's strategy emphasizes variable cost mortgage loan originations,
low cost mortgage servicing and effective risk management. Headquartered in
Jacksonville, Florida, HomeSide ranks as the 8th largest
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<PAGE> 10
mortgage loan originator and the 6th largest servicer in the United States at
June 30, 1999 based on data published by Inside Mortgage Finance.
HomeSide's business strategy is to increase the volume of its loan
originations and the size of its servicing portfolio while continuing to improve
operating efficiencies. In originating mortgages, HomeSide focuses on variable
cost channels of production, including correspondent, broker, consumer direct,
affinity, and co-issue sources. HomeSide also pursues strategic relationships
with other production sources to acquire and service residential mortgage loans.
Management believes that these variable cost channels of production deliver
consistent origination opportunities for HomeSide without the fixed cost
investment associated with traditional retail mortgage branch networks. HomeSide
believes that its ongoing investment in technology will further enhance and
expand existing processing capabilities and improve its efficiency. Based on
independent surveys of direct cost per loan and loans serviced per employee,
management believes that HomeSide has been one of the industry's most efficient
mortgage servicers. HomeSide's average cost per employee approximates the
average cost per employee of its major competitors.
HOMESIDE PLANS TO BUILD ITS CORE OPERATIONS THROUGH:
- improved economies of scale in servicing costs,
- increased productivity using proprietary technology, and
- expanded and diversified variable cost origination channels.
In addition, HomeSide intends to pursue additional loan portfolio acquisitions
and strategic origination relationships similar to its existing agreement with
BankBoston, N.A., People's Bank and Banc One Mortgage Corporation.
HomeSide's business activities consist primarily of:
- MORTGAGE PRODUCTION: origination and purchase of residential single
family mortgage loans through multiple channels including correspondents,
strategic partners, mortgage brokers, coissue partners, direct consumer
telemarketing and affinity programs;
- SERVICING: administration, collection and remittance of monthly mortgage
principal and interest payments, collection and payment of property taxes
and insurance premiums and management of certain loan default activities;
- SECONDARY MARKETING: sale of residential single family mortgage loans as
pools underlying mortgage-backed securities guaranteed or issued by
governmental or quasi-governmental agencies or as whole loans or private
securities to investors; and
- RISK MANAGEMENT: management of a program designed primarily to protect
the economic performance of the servicing portfolio that could otherwise
be adversely affected by loan prepayments due to declines in interest
rates.
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<PAGE> 11
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
HomeSide, which for any period prior to February 11, 1998 refers to HomeSide
prior to its acquisition by the National and for any period after February 11,
1998, refers to HomeSide after its acquisition by the National. The ratio of
earnings to fixed charges is computed by dividing net fixed charges (interest
expense on all debt plus the interest portion of rent expense) into earnings
before income taxes and fixed charges.
<TABLE>
<CAPTION>
HOMESIDE
HOMESIDE PREDECESSOR COMPANY HOMESIDE PREDECESSOR COMPANY HOMESIDE
- ----------------------------------------- -------------------- -------------------- -----------------------------------------
FOR THE PERIOD FROM FOR THE PERIOD FROM FOR THE PERIOD FROM FOR THE PERIOD FROM FOR THE PERIOD FROM FOR THE NINE
MARCH 16, 1996 TO MARCH 1, 1997 TO FEBRUARY 11, 1998 TO SEPTEMBER 1, 1997 FEBRUARY 11, 1998 MONTHS ENDED
FEBRUARY 29, 1997 FEBRUARY 10, 1998 SEPTEMBER 30, 1998 TO FEBRUARY 10, 1998 TO JUNE 30, 1998 JUNE 30, 1999
- ------------------- ------------------- -------------------- -------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C>
2.36 2.65 2.26 2.49 2.18 2.03
</TABLE>
USE OF PROCEEDS
Unless otherwise stated in a pricing supplement, we intend to use the net
proceeds from the sale of the notes to repay outstanding indebtedness and for
working capital and general corporate purposes, including the purchase of
servicing rights.
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<PAGE> 12
DESCRIPTION OF THE NOTES
The notes will be issued under an indenture, dated as of May 15, 1997,
between HomeSide and The Bank of New York, as trustee, a copy of which is filed
as an exhibit to the registration statement of which this prospectus forms a
part. The terms of the notes include those stated in the indenture and those
made a part of the indenture by reference to the Trust Indenture Act of 1939, as
amended. The following summary of the material provisions of the notes and of
the indenture is not complete and is qualified in its entirety by reference to
the indenture and the notes.
The following description of notes will apply unless otherwise stated in a
pricing supplement.
TERMS OF THE NOTES
The notes will be unsecured general obligations of HomeSide and will rank
equally with all other unsecured and unsubordinated indebtedness of HomeSide.
However, the notes will be effectively subordinated to all present and future
secured indebtedness of HomeSide as to its assets which secure the indebtedness,
as well as to the claims of creditors of HomeSide's subsidiaries as to the
assets of those subsidiaries. Our financing is currently provided under a credit
arrangement with the National, our commercial paper program, currently limited
to $1.5 billion outstanding at any time, an amended and restated credit
agreement with a group of bank lenders which we originally entered into on
January 31, 1997, as well as through the sale from time to time of the notes or
other debt securities. As of June 30, 1999, we had aggregate outstanding
indebtedness of approximately $4.3 billion, none of which was secured,
consisting of $1.2 billion of notes outstanding under the indenture, $1.9
billion outstanding under HomeSide's credit arrangement with the National and
$1.2 billion outstanding under HomeSide's commercial paper program. Borrowings
under the credit agreement are guaranteed by HomeSide International, Inc.,
HomeSide's indirect parent company. In addition, HomeSide International has
pledged to the bank lenders all of the capital stock of HomeSide Holdings, Inc.,
HomeSide's direct parent company. HomeSide Holdings has pledged all the capital
stock of HomeSide and HomeSide has pledged all the capital stock of its
subsidiaries as security under the bank credit agreement. Upon certain events,
including HomeSide having ratings on its unsecured long-term senior non-
credit-enhanced debt of less than BBB by Standard & Poor's Rating Services and
less than Baa2 by Moody's Investor Services, Inc., the credit agreement also
becomes secured by (i) all mortgage loans and mortgage-backed securities
submitted for inclusion in the borrowing base for the warehouse credit facility
portion of the credit agreement and all take-out commitments and hedge contracts
related thereto, (ii) all servicing rights and hedge contracts and receivables
related thereto, and (iii) any other assets included in determining the
borrowing bases under the credit agreement. The credit agreement will again
become unsecured (except for the stock pledges) upon the occurrence of certain
other events.
The indenture does not contain any provisions that would limit HomeSide
from incurring indebtedness or from reducing or eliminating its assets, or that
would protect the holders of notes in the event of a decline in HomeSide's
credit quality or a takeover, recapitalization or highly leveraged or similar
transaction, except for those described below under the heading "Consolidation,
Merger and Transfer of Assets". In addition, subject to the limitations
described under that heading, HomeSide may enter into certain transactions, such
as the sale of all or substantially all of its assets or a merger or
consolidation, that would increase the amount of HomeSide's indebtedness or
reduce or eliminate its assets. This may have an adverse effect on HomeSide's
ability to service its indebtedness, including the notes. The bank credit
agreement and the indenture of HomeSide International, Inc., HomeSide's parent
company, contain covenants that restrict HomeSide's ability to incur
indebtedness, but subject to certain conditions, including compliance with
certain financial tests specified therein, do not limit the ability of HomeSide
to issue notes.
The notes are currently limited to up to $2,568,000,000 aggregate initial
offering price, or the equivalent thereof in one or more foreign currencies
including the $1,160,000,000 of notes already issued and currently outstanding.
HomeSide may, without the consent of the holders of the notes, issue notes or
other securities under its indenture in addition to the notes offered by this
prospectus.
The notes will be offered on a continuing basis and will mature on a day
nine months or more from the date of issue, as specified in a pricing
supplement. Interest-bearing notes will bear interest at either fixed or
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<PAGE> 13
floating rates as specified in the pricing supplement. Notes may be issued at
significant discounts from their principal amount payable at stated maturity, or
on any date before the stated maturity date on which the principal or an
installment of principal of a note becomes due and payable, whether by the
declaration of acceleration, call for redemption at the option of HomeSide,
repayment at the option of the holder or otherwise (the stated maturity date or
such prior date, as the case may be, is referred to as the "Maturity" with
respect to the principal of such note repayable on such date). Some notes may
not bear interest.
Interest rates, interest rate formulas and other variable terms of the
notes may be changed by HomeSide from time to time, but no change will affect
any note already issued or as to which HomeSide has accepted an offer to
purchase.
Unless otherwise indicated in a note and in the applicable pricing
supplement, the notes will be denominated in United States dollars, and we will
make payments of the principal of, and any premium and interest on, the notes in
United States dollars. Each note will be issued in fully registered book-entry
form or certificated form, in denominations of $1,000 and integral multiples of
$1,000, unless otherwise specified in the applicable pricing supplement. Notes
in book-entry form may be transferred or exchanged only through a participating
member of The Depository Trust Company, also known as DTC, or any other
depository as is identified in a pricing supplement. See "-- Book-Entry Notes".
Registration of transfer of notes in certificated form will be made at the
corporate trust office of the trustee. There will be no service charge for any
registration of transfer or exchange of notes, but HomeSide may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection with any transfer or exchange.
HomeSide will make payments of principal of, and any premium and interest
on, notes in book-entry form through the trustee to the depository or its
nominee. See "-- Book-Entry Notes". Unless otherwise specified in the applicable
pricing supplement, a beneficial owner of notes in book-entry form that are
denominated in a currency other than United States dollars (a "Specified
Currency") electing to receive payments of principal or any premium or interest
in that Specified Currency must notify the participant of DTC through which its
interest is held on or before the applicable regular record date, in the case of
a payment of interest, and on or before the sixteenth day, whether or not a
Business Day, as defined below, before its stated maturity, in the case of
principal or premium, of the beneficial owner's election to receive all or a
portion of any payment in a Specified Currency. The participant must notify the
depository of any election on or before the third Business Day after the regular
record date. The depository will notify the paying agent of the election on or
before the fifth Business Day after the regular record date. If complete
instructions are received by the participant and forwarded to the depository,
and forwarded by the depository to the paying agent, on or before the relevant
dates, the beneficial owner of the notes in book-entry form will receive
payments in the Specified Currency.
In the case of notes in certificated form, HomeSide will make payment of
principal or premium, if any, at the Maturity of each note in immediately
available funds upon presentation of the note and, in the case of any repayment
on an optional repayment date, upon submission of a duly completed election form
if and as required by the provisions described below, at the corporate trust
office of the trustee in the Borough of Manhattan, The City of New York, or at
any other place as HomeSide may designate. HomeSide will pay interest due at
Maturity to the person to whom payment of the principal of the note in
certificated form will be made. HomeSide will pay interest due on notes in
certificated form other than at Maturity at the corporate trust office of the
trustee or, at the option of HomeSide, by check mailed to the address of the
person entitled to receive payment as the address shall appear in the security
register. However, a holder of $10,000,000 or more, or if the Specified Currency
is other than United States dollars, the equivalent thereof in such Specified
Currency, in aggregate principal amount of notes in certificated form, whether
having identical or different terms and provisions, having the same interest
payment dates will, at the option of HomeSide, be entitled to receive interest
payments, other than at Maturity, by wire transfer of immediately available
funds if appropriate wire transfer instructions have been received in writing by
the trustee not less than 15 days before the interest payment date. Any wire
instructions received by the trustee shall remain in effect until revoked by the
holder.
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<PAGE> 14
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York;
provided, however, that, with respect to non-United States dollar-denominated
notes, the day is also not a day on which commercial banks are authorized or
required by law, regulation or executive order to close in the Principal
Financial Center, as defined below, of the country issuing the Specified
Currency or, if the Specified Currency is Euro, the day is also a day on which
the Trans-European Automated Real-time Gross Settlement Express Transfer
(TARGET) System is open; provided, further, that, with respect to notes as to
which LIBOR is an applicable Interest Rate Basis, the day is also a London
Business Day. "London Business Day" means a day on which commercial banks are
open for business, including dealings in the Designated LIBOR Currency, as
defined below, in London.
"Principal Financial Center" means, unless otherwise specified in the
applicable pricing supplement,
(1) the capital city of the country issuing the Specified Currency, except
that with respect to United States dollars, Australian dollars,
Canadian dollars, Deutsche marks, Dutch guilders, Italian lire, South
African rand and Swiss francs, the "Principal Financial Center" will be
The City of New York, Sydney and Melbourne, Toronto, Frankfurt,
Amsterdam, Milan, Johannesburg and Zurich, respectively, or
(2) the capital city of the country to which the Designated LIBOR Currency
relates, except that with respect to United States dollars, Australian
dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian
lire, Portuguese escudos, South African rand and Swiss francs, the
"Principal Financial Center" will be The City of New York, Sydney,
Toronto, Frankfurt, Amsterdam, Milan, Johannesburg and Zurich,
respectively.
TRANSACTION AMOUNT
Interest rates offered by HomeSide with respect to the notes may differ
depending upon, among other things, the aggregate principal amount of notes
purchased in any transaction. HomeSide may offer notes with similar variable
terms but different interest rates concurrently at any time. HomeSide may also
concurrently offer notes having different variable terms to different investors.
REDEMPTION AT THE OPTION OF HOMESIDE
The notes will not be subject to any sinking fund. HomeSide may redeem the
notes at its option before their stated maturity only if an initial redemption
date is specified in the notes and in the pricing supplement. If so indicated in
the pricing supplement, HomeSide may redeem the notes at its option on any date
on and after the initial redemption date specified in the pricing supplement. On
and after the initial redemption date, if any, HomeSide may redeem the related
note at any time in whole or from time to time in part at its option at the
redemption price referred to below together with interest on the principal of
the note payable to the redemption date, on notice given not more than 60 nor
less than 30 days before the redemption date. HomeSide will redeem the notes in
increments of $1,000, provided that any remaining principal amount will be an
authorized denomination of the note. The redemption price with respect to a note
will initially mean the initial redemption percentage of the principal amount of
the note to be redeemed specified in the pricing supplement and shall decline at
each anniversary of the initial redemption date by a percentage specified in the
pricing supplement, of the principal amount to be redeemed until the redemption
price is 100% of the principal amount.
REPAYMENT AT THE OPTION OF THE HOLDER
If so indicated in a pricing supplement, HomeSide will repay the notes in
whole or in part at the option of the holders of the notes on any optional
repayment date specified in the pricing supplement. If no optional repayment
date is indicated with respect to a note, it will not be repayable at the option
of the holder before its stated maturity. Any repayment in part will be in an
amount equal to $1,000 or integral multiples of $1,000, provided that any
remaining principal amount will be an authorized denomination of the note. The
repurchase price for any note so repurchased will be 100% of the principal
amount to be repaid, together with interest on
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<PAGE> 15
the principal of the note payable to the date of repayment. HomeSide's ability
to redeem the notes at the option of the holders at any time is subject to the
availability to HomeSide of funding sources at the time, including its existing
credit facilities and any refinancing or extension. Financial markets conditions
and HomeSide's value and performance at the time are among the factors that may
affect HomeSide's ability to refinance the notes or other credit facilities.
For any note to be repaid, the trustee must receive, at its office
maintained for that purpose in the Borough of Manhattan, The City of New York,
currently the corporate trust office of the trustee, not more than 60 nor less
than 30 days before the optional repayment date:
- in the case of a note in certificated form, the note and the form
entitled "Option to Elect Repayment" duly completed, or
- in the case of a note in book-entry form, instructions to that effect
from the beneficial owner of the notes to the depository and forwarded by
the depository.
Notices of elections from a holder to exercise the repayment option must be
received by the trustee by 5:00 p.m., New York City time, on the last day for
the giving of notice. Exercise of the repayment option by the holder of a note
will be irrevocable.
Only the depository may exercise the repayment option in respect of global
securities representing notes in book-entry form. Accordingly, beneficial owners
of global securities that desire to have all or any portion of the notes in
book-entry form represented by global securities repaid must instruct the
participant through which they own their interest to direct the depository to
exercise the repayment option on their behalf by forwarding the repayment
instructions to the trustee as discussed above. In order to ensure that the
instructions are received by the trustee on a particular day, the beneficial
owner must so instruct the participant through which it owns its interest before
that participant's deadline for accepting instructions for that day. Different
firms may have different deadlines for accepting instructions from their
customers. Accordingly, beneficial owners of notes in book-entry form should
consult the participants through which they own their interest for the
respective deadlines. All instructions given to participants from beneficial
owners of notes in book-entry form relating to the option to elect repayment
will be irrevocable. In addition, at the time instructions are given, each
beneficial owner will cause the participant through which it owns its interest
to transfer its interest in the global security or securities representing the
related notes in book-entry form, on the depository's records, to the trustee.
See "-- Book-Entry Notes".
If applicable, HomeSide will comply with the requirements of Section 14(e)
of the Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder and any other securities laws or regulations in connection with any
repayment at the option of the holder.
HomeSide may at any time purchase notes at any price or prices in the open
market or otherwise. Notes so purchased by HomeSide may, at the discretion of
HomeSide, be held, resold or surrendered to the trustee for cancellation.
INTEREST
Each interest-bearing note will bear interest from the date of issue at the
rate per annum or, in the case of a floating rate note, pursuant to the interest
rate formula stated in the note and in the pricing supplement until the
principal of the note is paid or made available for payment. Interest will be
payable in arrears on each interest payment date specified in the pricing
supplement on which an installment of interest is due and payable and at
Maturity. The first payment of interest on any note originally issued between a
regular record date and the related interest payment date will be made on the
interest payment date immediately following the next succeeding regular record
date to the registered holder on the next succeeding regular record date. The
regular record date will be the fifteenth calendar day, whether or not a
Business Day, immediately preceding the related interest payment date.
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<PAGE> 16
Fixed Rate Notes
Each fixed rate note will bear interest from, and including, the date of
issue, at the rate per annum stated on the face of the note until the principal
amount of the note is paid or made available for payment. Interest payments on
fixed rate notes will equal the amount of interest accrued from and including
the immediately preceding interest payment date in respect of which interest has
been paid or from and including the date of issue, if no interest has been paid
with respect to the fixed rate notes, to, but excluding, the related interest
payment date or Maturity, as the case may be. Interest on fixed rate notes will
be computed on the basis of a 360-day year of twelve 30-day months.
Interest on fixed rate notes generally will be payable semiannually on June
30 and December 31 of each year and at Maturity. If any interest payment date or
the Maturity of a fixed rate note falls on a day that is not a Business Day, the
related payment of principal, premium, if any, or interest will be made on the
next succeeding Business Day as if made on the date the payment was due, and no
interest will accrue on the amount payable for the period from and after the
interest payment date or Maturity, as the case may be.
Floating Rate Notes
Interest on floating rate notes will be determined by reference to the
applicable Interest Rate Basis or Interest Rate Bases, which may be one or more
of:
- the CD Rate,
- the CMT Rate,
- the Commercial Paper Rate,
- the Eleventh District Cost of Funds Rate,
- the Federal Funds Rate,
- LIBOR,
- the Prime Rate,
- the Treasury Rate, or
- any other Interest Rate Basis or interest rate formula that is specified
in the pricing supplement.
A floating rate note may bear interest with respect to two or more Interest
Rate Bases.
TERMS. Each pricing supplement will specify the terms of the floating rate
note being delivered, including:
- whether the floating rate note is
- a "Regular Floating Rate Note",
- a "Floating Rate/Fixed Rate Note", or
- an "Inverse Floating Rate Note",
- the Fixed Rate Commencement Date, if applicable, or the Fixed Interest
Rate, if applicable,
- the Interest Rate Basis or Bases,
- the Initial Interest Rate,
- the Interest Reset Dates,
- the interest payment dates,
- the period to maturity of the instrument or obligation with respect to
which the Interest Rate Basis or Bases will be calculated (the "Index
Maturity"),
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<PAGE> 17
- the Maximum Interest Rate and Minimum Interest Rate, if any,
- the number of basis points to be added to or subtracted from the
related Interest Rate Basis or Bases (the "Spread"),
- the percentage of the related Interest Rate Basis or Bases by which
the Interest Rate Basis or Bases will be multiplied to determine the
applicable interest rate (the "Spread Multiplier"),
- if one or more of the specified Interest Rate Bases is LIBOR, the
Designated LIBOR Currency and the Designated LIBOR Page, and
- if one or more of the specified Interest Rate Bases is the CMT Rate,
the Designated CMT Telerate Page and Designated CMT Maturity Index.
The interest rate borne by the floating rate notes will be determined as
follows:
Regular Floating Rate Notes. Unless a floating rate note is designated as
a Floating Rate/Fixed Rate Note, an Inverse Floating Rate Note or as having an
Addendum attached or as having "Other Provisions" apply relating to a different
interest rate formula, it will be a "Regular Floating Rate Note" and, except as
described below or in a pricing supplement, will bear interest at the rate
determined by reference to the applicable Interest Rate Basis or Bases:
- plus or minus the Spread, if any, and/or
- multiplied by the Spread Multiplier, if any.
Commencing on the first Interest Reset Date, the rate at which interest on the
Regular Floating Rate Note will be payable will be reset as of each Interest
Reset Date; provided, however, that the interest rate in effect for the period
from the date of issue to the first Interest Reset Date will be the Initial
Interest Rate.
Floating Rate/Fixed Rate Notes. If a floating rate note is designated as a
"Floating Rate/Fixed Rate Note", then, except as described below or in a pricing
supplement, it will bear interest at the rate determined by reference to the
applicable Interest Rate Basis or Bases:
- plus or minus the Spread, if any, and/or
- multiplied by the Spread Multiplier, if any.
Commencing on the first Interest Reset Date, the rate at which interest on
the Floating Rate/Fixed Rate Note will be payable will be reset as of each
Interest Reset Date; provided, however, that:
- the interest rate in effect for the period from the date of issue to the
first Interest Reset Date will be the Initial Interest Rate, and
- the interest rate in effect commencing on the date on which interest
begins to accrue on a fixed rate basis to Maturity will be the Fixed
Interest Rate, if the rate is specified in the pricing supplement, or if
no Fixed Interest Rate is specified, the interest rate in effect on the
Floating Rate/Fixed Rate Note on the day immediately preceding the date
on which interest begins to accrue on a fixed rate basis.
Inverse Floating Rate Notes. If a floating rate note is designated as an
"Inverse Floating Rate Note", except as described below, it will bear interest
equal to the Fixed Interest Rate specified in the related pricing supplement
minus the rate determined by reference to the applicable Interest Rate Basis or
Bases:
- plus or minus the Spread, if any, and/or
- multiplied by the Spread Multiplier, if any;
provided, however, that the interest rate on the Inverse Floating Rate Note will
not be less than zero percent. Commencing on the first Interest Reset Date, the
rate at which interest on the Inverse Floating Rate Note is payable will be
reset as of each Interest Reset Date; provided, however, that the interest rate
in effect for the period from the date of issue to the first Interest Reset Date
will be the Initial Interest Rate.
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<PAGE> 18
Each Interest Rate Basis shall be the rate determined in accordance with
the provisions below. Except as set forth above or in a pricing supplement, the
interest rate in effect on each day will be:
- if the day is an Interest Reset Date, the interest rate determined as of
the Interest Determination Date (as defined below) immediately preceding
such Interest Reset Date or
- if the day is not an Interest Reset Date, the interest rate determined as
of the Interest Determination Date immediately preceding the most recent
Interest Reset Date.
Interest Reset Dates. The pricing supplement will specify whether the
interest rate on the related floating rate note will reset daily, weekly,
monthly, quarterly, semi-annually, annually and the dates on which the interest
rate on the related floating rate note will be reset (each, an "Interest Reset
Date"). The Interest Reset Date will be, in the case of floating rate notes
which reset:
- daily -- each Business Day;
- weekly -- the Wednesday of each week, with the exception of weekly reset
Floating Rate Notes as to which the Treasury Rate is an applicable
Interest Rate Basis, which will reset the Tuesday of each week, except as
described below;
- monthly -- the third Wednesday of each month, with the exception of
monthly reset Floating Rate Notes as to which the Eleventh District Cost
of Funds Rate is an applicable Interest Rate Basis, which will reset on
the first calendar day of the month;
- quarterly -- the third Wednesday of March, June, September and December
of each year;
- semiannually -- the third Wednesday of the two months specified in the
pricing supplement; and
- annually -- the third Wednesday of the month specified in the pricing
supplement;
provided, however, that with respect to Floating Rate/Fixed Rate Notes, the rate
of interest will not reset after the date on which interest on a fixed rate
basis begins to accrue.
If any Interest Reset Date for any floating rate note would otherwise be a
day that is not a Business Day, the Interest Reset Date will be postponed to the
next succeeding day that is a Business Day, except that in the case of a
floating rate note as to which LIBOR is an applicable Interest Rate Basis, if
the Business Day falls in the next succeeding calendar month, then the Interest
Reset Date will be the immediately preceding Business Day.
Maximum and Minimum Interest Rates. A floating rate note may have either
or both of the following:
- a maximum numerical limitation, or ceiling, on the rate at which interest
may accrue during any interest period (a "Maximum Interest Rate"), and
- a minimum numerical limitation, or floor, on the rate at which interest
may accrue during any period (a "Minimum Interest Rate").
The indenture is, and any notes issued under the indenture will be,
governed by and construed in accordance with the laws of the State of New York.
In addition to any Maximum Interest Rate that may apply to any floating rate
note, the interest rate will in no event be higher than the maximum rate
permitted by New York law. Under present New York law, the maximum rate of
interest is 25% per annum on a simple interest basis. This limit may not apply
to securities in which $2,500,000 or more has been invested. While HomeSide
believes that New York law would be given effect by a state or federal court
sitting outside of New York, state laws frequently regulate the amount of
interest that may be charged to and paid by a borrower, including, in some
cases, corporate borrowers. It is suggested that prospective investors consult
their personal advisors with respect to the applicability of these laws.
HomeSide has agreed for the benefit of the beneficial owners of the notes, to
the extent permitted by law, not to claim voluntarily the benefits of any laws
concerning usurious rates of interest against a beneficial owner of the notes.
Interest Payments. Each pricing supplement will specify the dates on which
interest will be payable. Each floating rate note will bear interest from the
date of issue at the rates specified in the floating rate note
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until the principal of the note is paid or otherwise made available for payment.
Except as provided below or in the pricing supplement, the interest payment
dates with respect to floating rate notes will be, in the case of floating rate
notes which reset:
- daily, weekly or monthly -- the third Wednesday of each month or on the
third Wednesday of March, June, September and December of each year, as
specified in the pricing supplement;
- quarterly -- the third Wednesday of March, June, September and December
of each year;
- semiannually -- the third Wednesday of the two months of each year
specified in the pricing supplement;
- annually -- the third Wednesday of the month of each year specified in
the pricing supplement; and
- at Maturity.
If any interest payment date for any floating rate note, other than an
interest payment date at Maturity, would otherwise be a day that is not a
Business Day, the interest payment date will be postponed to the next succeeding
day that is a Business Day, except that in the case of a floating rate note as
to which LIBOR is an applicable Interest Rate Basis, if the Business Day falls
in the next succeeding calendar month, the interest payment date will be the
immediately preceding Business Day. If the Maturity of a floating rate note
falls on a day that is not a Business Day, the payment of principal, premium, if
any, and interest will be made on the next succeeding Business Day, and no
interest on the payment will accrue for the period from and after the Maturity.
All percentages resulting from any calculation on floating rate notes will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upwards. For example,
9.876545%, or .09876545, would be rounded to 9.87655%, or .0987655. All dollar
amounts used in or resulting from any calculation on floating rate notes will be
rounded to the nearest cent with one-half cent being rounded upward.
Interest payments on floating rate notes will equal the amount of interest
accrued from and including the immediately preceding interest payment date in
respect of which interest has been paid or from and including the date of issue,
if no interest has been paid, to but excluding the related interest payment date
or Maturity.
With respect to each floating rate note, accrued interest is calculated by
multiplying its principal amount by an accrued interest factor. The accrued
interest factor is computed by adding the interest factor calculated for each
day in the period for which accrued interest is being calculated.
- In the case of notes for which the Interest Rate Basis is the CD Rate,
the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate, the interest factor for each
day will be computed by dividing the interest rate applicable to each day
by 360.
- In the case of notes for which the Interest Rate Basis is the CMT Rate or
the Treasury Rate, the interest factor for each day will be computed by
dividing the interest rate applicable to each day by the actual number of
days in the year.
- The interest factor for notes for which the interest rate is calculated
with reference to two or more Interest Rate Bases will be calculated in
each period in the same manner as if only the applicable Interest Rate
Bases specified in the pricing supplement applied.
Interest Determination Dates. The interest rate applicable to each
interest reset period commencing on the Interest Reset Date with respect to that
interest reset period will be determined by the Calculation Agent and calculated
on or prior to the Calculation Date, as defined below, except with respect to
LIBOR and the Eleventh District Costs of Funds Rate, which will be calculated on
the Interest Determination Date.
- The Interest Determination Date with respect to the CD Rate, the CMT
Rate, the Commercial Paper Rate, Federal Funds Rate and the Prime Rate,
will be the second Business Day preceding each Interest Reset Date for
the related note.
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- The Interest Determination Date with respect to the Eleventh District
Cost of Funds Rate will be the last working day of the month immediately
preceding each Interest Reset Date on which the Federal Home Loan Bank of
San Francisco publishes the Index, as defined below.
- The Interest Determination Date with respect to LIBOR will be the second
London Business Day preceding each Interest Reset Date, unless the
Designated LIBOR Currency is in British pounds sterling, in which case
the Interest Determinate Date will be the Interest Reset Date.
- The Interest Determination Date with respect to the Treasury Rate will be
the day in the week in which the related Interest Reset Date falls on
which day Treasury Bills, as defined below, are normally auctioned.
Treasury Bills are normally sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is normally
held on the following Tuesday, except that the auction may be held on the
preceding Friday; provided, however, that if an auction is held on the
Friday of the week preceding the related Interest Reset Date, the related
Interest Determination Date will be the preceding Friday; and provided,
further, that if an auction falls on any Interest Reset Date, then the
related Interest Reset Date will instead be the first Business Day
following the auction.
- The Interest Determination Date pertaining to a floating rate note the
interest rate of which is determined with reference to two or more
Interest Rate Bases will be the latest Business Day which is at least two
Business Days before the Interest Reset Date for the floating rate note
on which each Interest Reset Basis is determinable. Each Interest Rate
Basis will be determined on the Interest Determination Date, and the
interest rate will take effect on the related Interest Reset Date.
Calculation Date. The Bank of New York is the calculation agent. Upon the
request of the holder of any floating rate note, the calculation agent will
provide the interest rate then in effect and, if determined, the interest rate
that will become effective as a result of a determination made for the next
Interest Reset Date with respect to that floating rate note. The calculation
date, if applicable, pertaining to any Interest Determination Date will be the
earlier of:
- the tenth calendar day after the Interest Determination Date, or, if the
tenth calendar day is not a Business Day, the next succeeding Business
Day or
- the Business Day preceding the Interest Payment Date or Maturity, as the
case may be.
The calculation agent will determine each Interest Rate Basis in accordance
with the following provisions, unless otherwise specified by a pricing
supplement.
CD RATE. CD Rate Notes will bear interest at the rates, calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any,
specified in the CD Rate Notes and in any pricing supplement.
"CD Rate" means:
(1) the rate on the Interest Determination Date for negotiable United
States dollar certificates of deposit having the Index Maturity
specified in the pricing supplement published in H.15(519) (as defined
below) under the heading "CDs (secondary market)", or
(2) if the rate referred to in clause (1) above is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate on
the Interest Determination Date for negotiable United States dollar
certificates of deposit of the Index Maturity specified in the pricing
supplement as published in H.15 Daily Update (as defined below), or
other recognized electronic source used for the purpose of displaying
the applicable rate, under the caption "CDs (secondary market)" , or
(3) if the rate referred to in clause (2) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
Interest Determination Date calculated by the calculation agent as the
arithmetic mean of the secondary market offered rates as of 10:00 A.M.,
New York City time, on the Interest Determination Date, of three
leading non-bank dealers in negotiable United States dollar
certificates of deposit in The City of New York, which may include the
agents or their affiliates, selected by the calculation agent for
negotiable United States dollar certificates of deposit of major United
States money center banks for negotiable certificates of deposit with a
remaining
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<PAGE> 21
maturity closest to the Index Maturity specified in the pricing
supplement in an amount that is representative for a single transaction
in that market at that time, provided, however
(4) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (3) above, the CD Rate in effect on the Interest
Determination Date.
"H.15(519)" means the weekly statistical release designated as H.15(519),
or any successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world-wide-web site of the Board of Governors of the Federal Reserve System
at http://www.bog.frb.fed.us/releases/hl5/update, or any successor site or
publication.
CMT RATE. CMT Rate Notes will bear interest at the rates, calculated with
reference to the CMT Rate and the Spread and/or Spread Multiplier, if any,
specified in the CMT Rate Notes and in any pricing supplement.
"CMT Rate" means:
(1) the rate displayed on the Designated CMT Telerate Page under the
caption ". . . Treasury Constant Maturities . . . Federal Reserve Board
Release H.15 . . . Mondays Approximately 3:45 P.M.", under the column
for the Designated CMT Maturity Index for:
(a) if the Designated CMT Telerate Page is 7051, the rate on the
Interest Determination Date, and
(b) if the Designated CMT Telerate Page is 7052, the weekly or the
monthly average, as specified in the pricing supplement, for the
week or the month, as applicable, ended immediately preceding the
week or the month, as applicable, in which the related Interest
Determination Date falls, or
(2) if the rate referred to in clause (1) is no longer displayed on the
relevant page or is not so displayed by 3:00 P.M., New York City time,
on the related calculation date, the treasury constant maturity rate
for the Designated CMT Maturity Index published in H.15(519), or
(3) if the rate referred to in clause (2) is no longer published or is not
published by 3:00 P.M., New York City time, on the related calculation
date, the treasury constant maturity rate for the Designated CMT
Maturity Index, or other United States Treasury rate for the Designated
CMT Maturity Index, for the Interest Determination Date with respect to
the Interest Reset Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department
of the Treasury that the calculation agent determines to be comparable
to the rate formerly displayed on the Designated CMT Telerate Page and
published in H.15(519), or
(4) if the rate referred to in clause (3) is not so published by 3:00 P.M.,
New York City time, on the calculation date, the rate on the Interest
Determination Date calculated by the calculation agent as a yield to
maturity, based on the arithmetic mean of the secondary market offered
rates as of approximately 3:30 P.M., New York City time, on the
Interest Determination Date reported, according to their written
records, by three leading primary United States government securities
dealers in The City of New York, which may include the agents or their
affiliates (each, a "Reference Dealer"), selected by the calculation
agent from five Reference Dealers selected by the calculation agent
after eliminating the highest quotation, or, in the event of equality,
one of the highest, and the lowest quotation or, in the event of
equality, one of the lowest, for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury
Notes") with an original maturity of approximately the Designated CMT
Maturity Index and a remaining term to maturity of not less than the
Designated CMT Maturity Index minus one year, or
(5) if the calculation agent is unable to obtain three Treasury Note
quotations as referred to in clause (4), the rate on the Interest
Determination Date calculated by the calculation agent as a yield to
maturity based on the arithmetic mean of the secondary market offered
rates as of approximately 3:30 P.M., New York City time, on the
Interest Determination Date of three Reference Dealers in
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The City of New York selected by the calculation agent from five
Reference Dealers selected by the calculation agent after eliminating
the highest quotation or, in the event of equality, one of the highest,
and the lowest quotation or, in the event of equality, one of the
lowest, for Treasury Notes with an original maturity of the number of
years that is the next highest to the Designated CMT Maturity Index and
a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100 million, or
(6) if three or four and not five Reference Dealers are quoting as referred
to in clause (5) above, the rate will be calculated by the calculation
agent as the arithmetic mean of the offered rates obtained and neither
the highest nor the lowest of quotes will be eliminated, provided,
however
(7) if fewer than three Reference Dealers selected by the calculation agent
are quoting as mentioned in clause (6), the CMT Rate in effect on the
Interest Determination Date.
If two Treasury Notes with an original maturity as described in clause (6)
have remaining terms to maturity equally close to the Designated CMT Maturity
Index, the calculation agent will obtain quotations for the Treasury Notes with
the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on Bridge Telerate, Inc.
or any successor service on the page specified in the pricing supplement or any
other page as may replace the specified page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519), or, if no page
is specified in the pricing supplement, page 7052.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities, either 1, 2, 3, 5, 7, 10, 20 or 30 years,
specified in the pricing supplement with respect to which the CMT Rate will be
calculated or, if no maturity is specified in the pricing supplement, 2 years.
COMMERCIAL PAPER RATE. Commercial Paper Rate Notes will bear interest at
the rates, calculated with reference to the Commercial Paper Rate and the Spread
and/or Spread Multiplier, if any, specified in the Commercial Paper Rate Notes
and in any pricing supplement.
"Commercial Paper Rate" means:
(1) the Money Market Yield (as defined below) on the Interest Determination
Date of the rate for commercial paper having the Index Maturity
specified in the pricing supplement published in H.15(519) under the
caption "Commercial Paper-Nonfinancial", or
(2) if the rate described in clause (1) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
Interest Determination Date for commercial paper having the Index
Maturity specified in the pricing supplement published in H.15 Daily
Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "Commercial
Paper-Nonfinancial", or
(3) if the rates referred to in clauses (1) and (2) are not so published by
3:00 P.M., New York City time, on the related calculation date, the
rate on the Interest Determination Date calculated by the calculation
agent as the Money Market Yield of the arithmetic mean of the offered
rates at approximately 11:00 A.M., New York City time, on the Interest
Determination Date of three leading dealers of United States dollar
commercial paper in The City of New York, which may include the agents
and their affiliates, selected by the calculation agent for commercial
paper having the Index Maturity specified in the pricing supplement
placed for industrial issuers whose bond rating is "Aa", or the
equivalent, from a nationally recognized statistical rating
organization; provided however
(4) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (3), the Commercial Paper Rate in effect on the
Interest Determination Date.
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"Money Market Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
Money Market Yield = D x 360 x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
ELEVENTH DISTRICT COST OF FUNDS RATE. Eleventh District Cost of Funds Rate
Notes will bear interest at the rates, calculated with reference to the Eleventh
District Cost of Funds Rate and the Spread and/or Spread Multiplier, if any,
specified in the Eleventh District Cost of Funds Rate Notes and in any pricing
supplement.
"Eleventh District Cost of Funds Rate" means:
(1) the rate equal to the monthly weighted average cost of funds for the
calendar month immediately preceding the month in which the Interest
Determination Date falls as set forth under the caption "11th District"
on the display on Bridge Telerate, Inc. or any successor service on
page 7058 or any other page as may replace the specified page on that
service ("Telerate Page 7058") as of 11:00 A.M., San Francisco time, on
the Interest Determination Date, or
(2) if the rate referred to in clause (1) does not appear on Telerate Page
7058 on the related Interest Determination Date, the monthly weighted
average cost of funds paid by member institutions of the Eleventh
Federal Home Loan Bank District that was most recently announced (the
"Index") by the Federal Home Loan Bank of San Francisco as the cost of
funds for the calendar month immediately preceding the Interest
Determination Date, or
(3) if the Federal Home Loan Bank of San Francisco fails to announce the
Index on or before the Interest Determination Date for the calendar
month immediately preceding the Interest Determination Date, the
Eleventh District Cost of Funds Rate in effect on the Interest
Determination Date.
FEDERAL FUNDS RATE. Federal Funds Rate Notes will bear interest at the
rates, calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any, specified in the Federal Funds Rate Notes and in any
pricing supplement.
"Federal Funds Rate" means:
(1) the rate on the Interest Determination Date for United States dollar
federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)", as displayed on Bridge Telerate, Inc. or any
successor service on page 120 or any other page as may replace the
applicable page on that service ("Telerate Page 120"), or
(2) if the rate referred to in clause (1) does not appear on Telerate Page
120 or is not so published by 3:00 P.M., New York City time, on the
related calculation date, the rate on the Interest Determination Date
for United States dollar federal funds published in H.15 Daily Update,
or other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "Federal
Funds/Effective Rate", or
(3) if the rates referred to in clauses (1) and (2) are not so published by
3:00 P.M., New York City time, on the related calculation date, the
rate on the Interest Determination Date calculated by the calculation
agent as the arithmetic mean of the rates for the last transaction in
overnight United States dollar federal funds arranged by three leading
brokers of United States dollar federal funds transactions in The City
of New York, which may include the agents or their affiliates, selected
by the calculation agent before 9:00 A.M., New York City time, on the
Interest Determination Date, provided, however
(4) if the brokers selected by the calculation agent are not quoting as
mentioned in clause (3), the Federal Funds Rate in effect on the
Interest Determination Date.
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<PAGE> 24
LIBOR. LIBOR Notes will bear interest at the rates, calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any, specified in
the LIBOR Notes and in any pricing supplement.
"LIBOR" means:
(1) if "LIBOR Telerate" is specified in the pricing supplement or if
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
pricing supplement as the method for calculating LIBOR, LIBOR will be
the rate for deposits in the Designated LIBOR Currency, as defined
below, having the Index Maturity specified in the pricing supplement,
commencing on the Interest Reset Date that appears on the Designated
LIBOR Page (as provided below) as of 11:00 A.M., London time, on the
Interest Determination Date, or
(2) if "LIBOR Reuters" is specified in the pricing supplement, LIBOR will
be the arithmetic mean of the offered rates for deposits in the
Designated LIBOR Currency having the Index Maturity specified in the
pricing supplement, commencing on the applicable Interest Reset Date
that appear on the Designated LIBOR Page as of 11:00 A.M., London time,
on the Interest Determination Date. If the Designated LIBOR Page by its
terms provides only for a single rate, then the single rate will be
used, or
(3) with respect to a LIBOR Interest Determination Date on which fewer than
two offered rates appear, or no rate appears, as the case may be, on
the designated LIBOR Page as specified in clauses (1) and (2),
respectively, the rate calculated by the calculation agent as the
arithmetic mean of at least two quotations obtained by the calculation
agent after requesting the principal London offices of each of four
major reference banks, which may include affiliates of the agents, in
the London interbank market to provide the calculation agent with its
offered quotation for deposits in the Designated LIBOR Currency for the
period of the Index Maturity specified in the pricing supplement,
commencing on the applicable Interest Reset Date, prime banks in the
London interbank market at approximately 11:00 A.M., London time, on
the Interest Determination Date and in a principal amount that is
representative for a single transaction in the applicable Designated
LIBOR Currency in that market at that time, or
(4) if fewer than two quotations referred to in clause (3) are so provided,
the rate on the Interest Determination Date calculated by the
calculation agent as the arithmetic mean of the rates quoted at
approximately 11:00 A.M., in the applicable Principal Financial
Center(s), on the Interest Determination Date by three major banks,
which may include affiliates of the agents, in the applicable Principal
Financial Center selected by the calculation agent for loans in the
LIBOR Currency to leading European banks, having the Index Maturity
specified designated in the pricing supplement and in a principal
amount that is representative for a single transaction in the
applicable Designated LIBOR Currency in that market at that time,
provided, however
(5) if the banks so selected by the calculation agent are not quoting as
mentioned in clause (4), the LIBOR in effect on the Interest
Determination Date.
"Designated LIBOR Currency" means the currency specified in the pricing
supplement as to which LIBOR will be calculated or, if no currency is specified
in the pricing supplement, United States dollars.
"Designated LIBOR Page" means either:
- if "LIBOR Telerate" is designated in the pricing supplement or neither
"LIBOR Reuters" nor "LIBOR Telerate" is specified in the pricing
supplement as the method for calculating LIBOR, the display on Bridge
Telerate, Inc. or any successor service on the page specified in the
pricing supplement or any page as may replace the specified page on that
service for the purpose of displaying the London interbank rates of major
banks for the Designated LIBOR Currency, or
- if "LIBOR Reuters" is specified in the pricing supplement, the display on
the Reuter Monitor Money Rates Service or any successor service on the
page specified in the pricing supplement or any other page as may replace
the specified page on that service for the purpose of displaying the
London interbank rates of major banks for the Designated LIBOR Currency.
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PRIME RATE. Prime Rate Notes will bear interest at the rates, calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any, specified in the Prime Rate Notes and any pricing supplement.
"Prime Rate" means:
(1) the rate on the Interest Determination Date as published in H.15(519)
under the heading "Bank Prime Loan", or
(2) if the rate referred to in clause (1) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
Interest Determination Date published in H.15 Daily Update, or another
recognized electronic source used for the purpose of displaying the
applicable rate under the caption "Bank Prime Loan", or
(3) if the rates referred to in clauses (1) and (2) are not so published by
3:00 P.M., New York City time, on the related calculation date, the
rate calculated by the calculation agent as the arithmetic mean of the
rates of interest publicly announced by each bank that appears on the
Reuters Screen US PRIME 1 Page (as defined below) as the particular
bank's prime rate or base lending rate as of 11:00 A.M., New York City
time, on the Interest Determination Date, or
(4) if fewer than four rates described in clause (3) by 3:00 P.M., New York
City time, on the related calculation date as shown on Reuters Screen
US PRIME 1, the rate on the Interest Determination Date calculated by
the calculation agent as the arithmetic mean of the prime rates or base
lending rates quoted on the basis of the actual number of days in the
year divided by a 360-day year as of the close of business on the
Interest Determination Date by three major banks, which may include
affiliates of the agents, in The City of New York selected by the
calculation agent, provided, however
(5) if the banks selected by the calculation agent are not quoting as
mentioned in clause (4), the Prime Rate in effect on the Interest
Determination Date.
"Reuters Screen US PRIME 1 Page" means the display on the Reuter Monitor
Money Rates Service or any successor service on the "US PRIME 1" Page 5 or other
page as may replace the US PRIME 1 Page on such service, for the purpose of
displaying prime rates or base lending rates of major United States banks.
TREASURY RATE. Treasury Rate Notes will bear interest at the rates,
calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any, specified in the Treasury Rate Notes and in any pricing
supplement.
"Treasury Rate" means:
(1) the rate from the auction held on the Interest Determination Date (the
"Auction") of direct obligations of the United States ("Treasury
Bills") having the Index Maturity specified in the pricing supplement
under the caption "INVESTMENT RATE" on the display on Bridge Telerate,
Inc. or any successor service on page 56 or any other page as may
replace page 56 on that service ("Telerate Page 56") or page 57 or any
other page as may replace page 57 on that service ("Telerate Page 57"),
or
(2) If the rate described in clause (1) is not published by 3:00 P.M., New
York City time, on the related calculation date, the Bond Equivalent
Yield (defined below) of the rate for the applicable Treasury Bills as
published in H.15 Daily Update, or other recognized electronic source
used for the purpose of displaying the applicable rate, under the
caption "U.S. Government Securities/Treasury Bills/ Auction High", or
(3) In the event that the rate referred to in clause (2) is not so
published by 3:00 P.M., New York City time, on the related calculation
date, the Bond Equivalent Yield of the auction rate of the applicable
Treasury Bills announced by the United States Department of the
Treasury, or
(4) in the event that the rate referred to in clause (3) is not announced
by the United States Department of the Treasury, or if the Auction is
not held, the Bond Equivalent Yield of the rate on the Interest
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<PAGE> 26
Determination Date of Treasury Bills having the Index Maturity
specified in the pricing supplement published in H.15(519) under the
caption "U.S. Government Securities/Treasury Bills/Secondary Market",
or
(5) if the rate referred to in clause (4) is not so published by 3:00 P.M.,
New York City time, on the related calculation date, the rate on the
Interest Determination Date of the applicable Treasury Bills as
published in H.15 Daily Update, or other recognized electronic source
used for the purpose of displaying the applicable rate, under the
caption "U.S. Government Securities/Treasury Bills/ Secondary Market",
or
(6) if the rates referred to in clause (5) are not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on
the Interest Determination Date calculated by the calculation agent as
the Bond Equivalent Yield of the arithmetic mean of the secondary
market bid rates, as of approximately 3:30 P.M., New York City time, on
the Interest Determination Date, of three primary United States
government securities dealers, which may include the agents or their
affiliates, selected by the calculation agent, for the issue of
Treasury Bills with a remaining maturity closest to the Index Maturity
specified in the pricing supplement, or
(7) if the dealers selected by the calculation agent are not quoting as
mentioned in clause (6), the rate in effect on the Interest
Determination Date.
"Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
Bond Equivalent Yield = D x N x 100
360 - (D
x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest is
being calculated.
OTHER PROVISIONS; ADDENDA
Any provisions with respect to an issue of notes, including the
determination of one or more Interest Rate Bases, the specification of one or
more Interest Rate Bases, the calculation of the interest rate applicable to a
floating rate note, the interest payment dates, the stated maturity date, any
redemption or repayment provisions or any other matter relating to the notes may
be modified by the terms as specified under "Other Provisions" on the face of
the notes or in an Addendum relating to the notes, if so specified on the face
of the notes and in the pricing supplement.
ORIGINAL ISSUE DISCOUNT NOTES
HomeSide may from time to time offer notes at a price less than their
redemption price at Maturity, resulting in the notes being treated as if they
were issued with original issue discount for federal income tax purposes
("Original Issue Discount Notes"). Original Issue Discount Notes may currently
pay no interest or interest at a rate which at the time of issuance is below
market rates. Additional considerations relating to any Original Issue Discount
Notes will be described in the pricing supplement.
AMORTIZING NOTES
HomeSide may from time to time offer notes ("Amortizing Notes"), with
amounts of principal and interest payable in installments over the term of the
notes. Interest on each Amortizing Note will be computed on the basis of a
360-day year of twelve 30-day months. Payments with respect to Amortizing Notes
will be applied first to interest due and payable on the Amortizing Notes and
then to the reduction of the unpaid principal amount of the Amortizing Notes.
Further information concerning additional terms and conditions of any issue of
Amortizing Notes will be provided in the pricing supplement. A table setting
forth repayment information in respect of each Amortizing Note will be included
in the note and the pricing supplement.
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<PAGE> 27
INDEXED NOTES
HomeSide may from time to time offer notes ("Indexed Notes") the principal
value of which at Maturity will be determined by reference to:
(a) one or more equity or debt securities, including, but not limited to,
the price or yield of such securities,
(b) any statistical measure of economic or financial performance,
including, but not limited to, any currency, consumer price or mortgage
index, or
(c) the price or value of any commodity or any other item or index or any
combination,
(collectively, the "Indexed Securities"). The payment or delivery of any
consideration on any Indexed Note at Maturity will be determined by the decrease
or increase, as applicable, in the price or value of the Indexed Securities. The
terms of and any additional considerations, including any material tax
consequences, relating to any Indexed Notes will be described in the pricing
supplement. See also "Risk Factors."
BOOK-ENTRY NOTES
HomeSide has established a depository arrangement with the depository with
respect to the book-entry notes, the terms of which are summarized below. Any
additional or differing terms of the depositary arrangement with respect to the
book-entry notes will be described in the applicable pricing supplement.
Description of the Global Securities
Upon issuance, all notes in book-entry form having the same date of issue,
Maturity and otherwise having identical terms and provisions will be represented
by one or more fully registered global notes (the "Global Notes"). Each Global
Note will be deposited with, or on behalf of, The Depository Trust Company as
depository registered in the name of the depository or a nominee of the
depository. Unless and until it is exchanged in whole or in part for notes in
certificated form, no Global Note may be transferred except as a whole by the
depository to a nominee of the depository or by a nominee of the depository to
the depository or another nominee of the depository or by the depository or any
such nominee to a successor of the depository or a nominee of the successor.
DTC Procedures
The following is based on information furnished by the depository:
The depository will act as securities depository for the notes in
book-entry form. The notes in book-entry form will be issued as fully registered
securities registered in the name of Cede & Co., the depository's partnership
nominee. One fully registered Global Note will be issued for each issue of notes
in book-entry form, each in the aggregate principal amount of the issue, and
will be deposited with the depository. If, however, the aggregate principal
amount of any issue exceeds $200,000,000, one Global Note will be issued with
respect to each $200,000,000 of principal amount and an additional Global Note
will be issued with respect to any remaining principal amount of the issue.
The depository is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The depository holds securities that its participants deposit with the
depository. The depository also facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct participants of the depository include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
The depository is owned by a number of its direct participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the depository's system is
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also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a direct
participant, either directly or indirectly. The rules applicable to the
depository and its participants are on file with the SEC.
Purchases of notes in book-entry form under the depository's system must be
made by or through direct participants, which will receive a credit for those
notes in book-entry form on the depository's records. The ownership interest of
each actual purchaser of each note in book-entry form represented by a Global
Note is, in turn, to be recorded on the records of direct participants and
indirect participants. Beneficial owners in book-entry form will not receive
written confirmation from the depository of their purchase, but beneficial
owners are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the direct
participants or indirect participants through which the beneficial owner entered
into the transaction. Transfers of ownership interests in a Global Note
representing notes in book-entry form are to be accomplished by entries made on
the books of participants acting on behalf of beneficial owners. Beneficial
owners of a Global Note representing notes in book-entry form will not receive
notes in certificated form representing their ownership interests therein,
except in the event that use of the book-entry system for the notes in
book-entry form is discontinued.
To facilitate subsequent transfers, all Global Notes representing notes in
book-entry form which are deposited with, or on behalf of, the depository are
registered in the name of the depository's nominee, Cede & Co. The deposit of
Global Notes with, or on behalf of, the depository and their registration in the
name of Cede & Co. effect no change in beneficial ownership. The depository has
no knowledge of the actual beneficial owners of the Global Notes representing
the notes in book-entry form; the depository's records reflect only the identity
of the direct participants to whose accounts the notes in book-entry form are
credited, which may or may not be the beneficial owners. The participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the depository to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners, will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither the depository nor Cede & Co. will consent or vote with respect to
the Global Notes representing the notes in book-entry form. Under its usual
procedures, the depository mails an omnibus proxy to HomeSide as soon as
possible after the applicable record date. The omnibus proxy assigns Cede &
Co.'s consenting or voting rights to those direct participants, identified in a
listing attached to the omnibus proxy, to whose accounts the notes in book-entry
form are credited on the applicable record date.
HomeSide will make principal and any premium and interest payments on the
Global Notes representing the notes in book-entry form in immediately available
funds to the depository. The depository's practice is to credit direct
participants' accounts on the applicable payment date in accordance with their
respective holdings shown on the depository's records unless the depository has
reason to believe that it will not receive payment on the applicable payment
date. Payments by participants to beneficial owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name", and
will be the responsibility of the applicable participant and not of the
depository, the trustee or HomeSide, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal and any
premium and interest to the depository is the responsibility of HomeSide and the
trustee, disbursement of payments to direct participants will be the
responsibility of the depository, and disbursement of payments to the beneficial
owners will be the responsibility of direct participants and indirect
participants.
If applicable, redemption notices shall be sent to Cede & Co. If less than
all of the notes in book-entry form of like tenor and terms are being redeemed,
the depository's practice is to determine by lot the amount of the interest of
each direct participant in the issue to be redeemed.
A beneficial owner will give notice of any option to elect to have its
notes in book-entry form repaid by HomeSide, through its participant, to the
trustee, and will effect delivery of the applicable notes in book-entry
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form by causing the direct participant to transfer the participant's interest in
the Global Note notes in book-entry form, on the depository's records, to the
trustee.
The depository may discontinue providing its services as securities
depository with respect to the notes in book-entry form at any time by giving
reasonable notice to HomeSide or the trustee. In the event that a successor
securities depository is not obtained, notes in certificated form are required
to be printed and delivered.
HomeSide may decide to discontinue use of the system of book-entry
transfers through the depository or a successor securities depository. In that
event, notes in certificated form will be printed and delivered.
The laws of some states may require that certain purchasers of securities
take physical delivery of securities in definitive form. These laws may impair
the ability to own, transfer or pledge beneficial interests in Global Notes.
So long as the depository, or its nominee, is the registered owner of a
Global Note, the depository or its nominee, as the case may be, will be
considered the sole owner or holder of the notes represented by such Global Note
for all purposes under the indenture. Except as provided below, beneficial
owners of a Global Note will not be entitled to have the notes represented by a
Global Note registered in their names, will not receive or be entitled to
receive physical delivery of the notes in definitive form and will not be
considered the owners or holders thereof under the indenture. Accordingly, each
person owning a beneficial interest in a Global Note must rely on the procedures
of the depository and, if that person is not a participant, on the procedures of
the participant through which that person owns its interest, to exercise any
rights of a holder under the indenture. HomeSide understands that under existing
industry practices, in the event that HomeSide requests any action of holders or
that an owner of a beneficial interest in a Global Note desires to give or take
any action which a holder is entitled to give or take under the indenture, the
depository would authorize the participants holding the relevant beneficial
interests to give or take the desired action, and the participants would
authorize beneficial owners owning through the participants to give or take the
desired action or would otherwise act upon the instructions of beneficial
owners.
The depository's management is aware that some computer applications,
systems, and the like for processing data ("Systems") that are dependent upon
calendar dates, including dates before, on, and after January 1, 2000, may
encounter "Year 2000 problems." The depository has informed its participants and
other members of the financial community (the "Industry") that it has developed
and is implementing a program so that its Systems, as the same relate to the
timely payment of distributions (including principal and income payments) to
securityholders, book-entry deliveries, and settlement of trades within the
depository, continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, the depository's plan includes a testing phase, which is expected
to be completed within appropriate time frames.
However, the depository's ability to perform properly its services is also
dependent upon other parties, including but not limited to issuers and their
agents, as well as the depository's direct and indirect participants and third
party vendors from whom the depository licenses software and hardware, and third
party vendors on whom the depository relies for information or the provision of
services, including telecommunication and electrical utility service providers,
among others. The depository has informed the Industry that it is contacting
(and will continue to contact) third party vendors from whom the depository
acquires services to: (i) impress upon them the importance of such services
being Year 2000 compliant; and (ii) determine the extent of their efforts for
Year 2000 remediation (and, as appropriate, testing) of their services. In
addition, the depository is in the process of developing such contingency plans
as it deems appropriate.
Exchange for Notes in Certificated Form
If:
(a) the depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by HomeSide
within 90 days,
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(b) HomeSide executes and delivers to the trustee a company order to the
effect that the Global Notes shall be exchangeable, or
(c) an Event of Default has occurred and is continuing with respect to the
notes,
the Global Note or Global Notes will be exchangeable for notes in certificated
form of like tenor and of an equal aggregate principal amount, in denominations
of $1,000 and integral multiples of $1,000. The certificated notes will be
registered in the name or names as the depository instructs the trustee. It is
expected that instructions may be based upon directions received by the
depository from participants with respect to ownership of beneficial interests
in Global Notes.
The information in this section concerning the depository and the
depository's system has been obtained from sources that HomeSide believes to be
reliable, but HomeSide takes no responsibility for the accuracy of the
information.
CONSOLIDATION, MERGER AND TRANSFER OF ASSETS
HomeSide may not
- consolidate with or merge into any person or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety
to any person, or
- permit any person to consolidate with or merge into HomeSide, or convey,
transfer or lease its properties and assets as an entirety or
substantially as an entirety to the Issuer,
unless, among other things,
- in the case of the first clause above, that person is a corporation or
limited liability company organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia
and expressly assumes the payment of the notes and the performance of
HomeSide's obligations under the indenture and the notes, and
- immediately after giving effect to the transaction, no Event of Default
and no event which, after notice or lapse of time or both, would become
an Event of Default has occurred and is continuing.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each of the following is an Event of Default with respect to the notes,
regardless of the reason for its occurrence:
- default in the payment of any interest on any note when due, and
continuance of the default for 30 days;
- default in the payment of principal of or any premium on any note, when
due;
- default in the deposit of any sinking fund payment when due;
- default in the performance or breach of any covenant or warranty of
HomeSide contained in the indenture for the benefit of the notes or in
the notes, and the continuance of the default or breach for 60 days after
written notice has been given;
- any event of default with respect to any Indebtedness (as defined below)
of HomeSide or any of its subsidiaries which results in Indebtedness of
more than $25,000,000 in principal amount being accelerated, unless the
acceleration is rescinded or annulled within 10 days after written notice
has been given;
- failure of HomeSide or any of its subsidiaries to pay, bond or otherwise
discharge within 60 days any uninsured judgment or court order for the
payment of more than $25,000,000, unless the judgment or court order is
stayed on appeal or is otherwise being appropriately contested in good
faith; and
- certain events in bankruptcy, insolvency or reorganization of HomeSide or
any of its subsidiaries.
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The term "Indebtedness" with respect to any person means all of the
following, without duplication,
- any liability of that person:
- for borrowed money, or under any reimbursement obligation relating to
a letter of credit, or
- evidenced by a bond, note, debenture or similar instrument, or
- for payment obligations arising under any conditional sale or other
title retention arrangement, including a purchase money obligation,
given in connection with the acquisition of any businesses, properties
or assets of any kind, or
- for the payment of money relating to a capitalized lease obligation;
- any liabilities of others of the type described above that the person
has guaranteed or that is otherwise its legal liability; and
- any amendment, supplement, modification, deferral, renewal, extension
or refunding of any liability of the types referred to above.
If an Event of Default, other than an event in bankruptcy, insolvency or
reorganization, occurs and is continuing, either the trustee or the holders of
at least 25% in principal amount of the outstanding notes may declare the
principal amount of all outstanding notes, to be due immediately. At any time
after a declaration of acceleration has been made, but before a judgment or
decree for payment of money has been obtained by the trustee, the holders of a
majority in aggregate principal amount of the outstanding notes may, in some
circumstances, rescind and annul the acceleration. The principal amount of and
accrued interest on the notes will become immediately due, without any
declaration or other act by the trustee or any holder, upon an Event of Default
resulting from an event in bankruptcy, insolvency or reorganization.
Within 90 days after the occurrence of any event which is, or after notice
or lapse of time or both would become, an Event of Default, the trustee must
give notice of the default to the holders of the notes unless the default has
been cured or waived. However, except in the case of a default in the payment of
principal of, or any premium or interest on, or any sinking fund or purchase
fund installment with respect to, the notes, the trustee may withhold the notice
if the board of directors, the executive committee or a trust committee of
directors and/or responsible officers of the trustee in good faith determine
that the withholding of notice is in the best interest of the holders of the
notes. Moreover, no notice will be given to holders until at least 30 days after
the occurrence of an Event of Default resulting from the acceleration of more
than $25,000,000 of Indebtedness of HomeSide or any of its subsidiaries.
If an Event of Default occurs and is continuing, the trustee may, in its
discretion, proceed to protect and enforce its rights and the rights of the
holders of notes by judicial proceedings. Except for its duty during a default
to act with the required standard of care, the trustee will be under no
obligation to exercise any of its rights or powers under the indenture at the
request or direction of any of the holders of notes, unless the holders offer
the trustee reasonable indemnity. Subject to the provisions for the
indemnification of the trustee, and subject to applicable law and certain other
provisions of the indenture and the notes, the holders of a majority in
aggregate principal amount of the outstanding notes will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee, or exercising any trust or power conferred on the
trustee.
HomeSide must furnish the trustee annually a statement as to performance by
HomeSide of certain of its obligations under the indenture and as to any default
in performance. HomeSide must also deliver to the trustee written notice within
five days after its occurrence of any Event of Default or any event which, after
notice or lapse of time or both, would constitute an Event of Default.
MODIFICATION AND WAIVER
The indenture may be modified and amended by HomeSide and the trustee with
the consent of the holders of not less than a majority in aggregate principal
amount of the outstanding notes. However, except as
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otherwise permitted in the indenture, no modification or amendment may, without
the consent of the holder of each outstanding note affected:
- change the Stated Maturity of the principal of, or any premium or
installment of interest on, any note,
- reduce the principal amount of, or the rate (or modify the calculation of
the rate) of interest on, or any premium payable upon the redemption of,
any note,
- reduce the amount of the principal of a Discount Note that would be due
upon acceleration of Maturity, or the amount provable in bankruptcy,
- change the redemption provisions of any note or adversely affect the
right of repayment at the option of any holder of any note,
- change the place or currency of payment of the principal of, or any
premium or interest on any note,
- impair the right to institute suit for the enforcement of any payment on
any note, reduce the percentage in principal amount of the outstanding
notes, the consent of whose holders is required in order to take certain
actions,
- reduce the requirements for quorum or voting by holders of notes in
Section 15.4 of the indenture,
- modify any of the provisions in the indenture regarding the waiver of
past defaults and of certain covenants by the holders of notes, except to
increase any percentage vote required or to provide that certain other
provisions of the indenture cannot be modified or waived without the
consent of the holder of each note affected, or
- modify any of the above provisions.
The holders of a majority in aggregate principal amount of the notes may,
on behalf of the holders of all notes, waive compliance by HomeSide with certain
restrictive provisions of the indenture. The holders of not less than a majority
in aggregate principal amount of the outstanding notes may, on behalf of the
holders of all notes, waive any past default and its consequences under the
indenture with respect to the notes, except a default in the payment of
principal of, or any premium or interest on, the notes, or a default in respect
of a covenant or provision of the indenture that cannot be modified or amended
without the consent of the holder of each note.
Without the consent of any holders of notes, HomeSide and the trustee may
enter into supplemental indentures for any of the following purposes:
- to evidence the succession of another Person to HomeSide and the
assumption by the successor of the covenants of HomeSide contained in the
indenture and in the notes;
- to add to the covenants of HomeSide, for the benefit of the holders of
the notes, or to surrender any right or power of HomeSide;
- to add any additional Events of Default;
- to add or change any of the provisions of the indenture to the extent
necessary to permit or facilitate the issuance of debt securities in
bearer form, which may be registrable as to principal, and with or
without interest coupons;
- to amend or supplement any of the provisions of the indenture or any
supplemental indenture, so long as such amendment or supplement does not
materially adversely affect the interests of the holders of any notes
then outstanding;
- to establish the form or terms of debt securities, including the notes,
of any series;
- to provide for the acceptance of appointment under the indenture by a
successor trustee with respect to one or more series of debt securities
issued under the indenture and to add to or change any of the provisions
of the indenture necessary to provide for or facilitate the
administration of the trusts by more than one trustee;
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- to secure the debt securities including the notes, issued under the
indenture;
- to cure any ambiguity, to correct or supplement any provision in the
indenture which may be defective or inconsistent with any other provision
of the indenture, or to make any other provisions with respect to matters
or questions arising under the indenture which do not adversely affect
the interests of the holders of the notes in any material respect; or
- to modify, eliminate or add to the provisions of the indenture in order
to qualify the indenture under the Trust Indenture Act of 1939, as
amended, and to add to the indenture such other provisions as may be
expressly required under the Trust Indenture Act.
In determining whether the holders of the requisite principal amount of
outstanding notes have given any request, demand, authorization, direction,
notice, consent or waiver, or whether a quorum is present at a meeting of
holders of the notes,
- the principal amount of a Discount Note that is deemed to be outstanding
is the amount of the principal that would be due as of the date of the
determination upon declaration of acceleration of the maturity thereof,
- the principal amount of an Indexed Note that is deemed outstanding is the
principal face amount of the Indexed Note at original issuance, unless
otherwise provided in or pursuant to the indenture, and
- notes owned by HomeSide or any other obligor or any affiliate of HomeSide
or of the other obligor are disregarded.
A meeting of the holders of notes may be called at any time by the trustee
and also, upon request, by HomeSide or the holders of at least 10% in principal
amount of the outstanding notes. Except for any consent that must be given by
the holder of each note affected by certain modifications and amendments of the
indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the holders of a majority in principal amount of the outstanding notes.
However, except as referred to above, any resolution with respect to any action
that may be taken by the holders of a specified percentage, which is less than a
majority, in principal amount of the outstanding notes may be adopted by the
affirmative vote of the holders of the specified percentage. Any resolution
passed or decision taken at any meeting of holders of notes will be binding on
all holders of notes. The quorum at any meeting called to adopt a resolution,
and at any reconvened meeting, will be Persons holding or representing a
majority in principal amount of the outstanding notes.
Nevertheless, if any action is to be taken at a meeting of holders of notes
with respect to any action that the indenture expressly provides may be taken by
the holders of a specified percentage in principal amount of outstanding debt
securities, there will be no minimum quorum requirement for the meeting and the
principal amount of the outstanding notes that vote in favor of the action will
be taken into account in determining whether the action has been taken.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
HomeSide may discharge certain obligations to holders of notes that have
not already been delivered to the trustee for cancellation and that either have
become due or will become due within one year, or scheduled for redemption
within one year, by depositing with the trustee, in trust, funds in U.S. dollars
in an amount sufficient to pay the entire indebtedness on the notes with respect
to principal, any premium and interest, to the date of the deposit, if the notes
have become due and payable, or to maturity, as the case may be.
HomeSide may elect either
- to release and be discharged from any and all obligations with respect to
the notes, except for certain obligations including, among other things,
obligations to register the transfer or exchange of the notes, to replace
temporary or mutilated, destroyed, lost or stolen notes, to maintain an
office or agency with respect to the Notes and to hold moneys for payment
in trust ("defeasance") or
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- to be released from its obligations with respect to the notes under the
covenants described under "Consolidation, Merger and Transfer of Assets"
above, and any omission to comply with those obligations will not
constitute a default or an Event of Default ("covenant defeasance").
Defeasance or covenant defeasance, as the case may be, are conditioned upon the
irrevocable deposit by HomeSide with the trustee, in trust, of an amount in U.S.
dollars or Government Obligations, or both, which through the scheduled payment
of principal and interest in accordance with their terms will provide money in
an amount sufficient to pay the principal of, and any premium and interest on,
the notes on the scheduled due dates and any mandatory sinking fund payments.
Such a trust may only be established if, among other things,
- the defeasance or covenant defeasance does not result in a breach or
violation of, or constitute a default under, the indenture or any other
material agreement or instrument to which HomeSide is a party or by which
it is bound,
- no Event of Default or event which, with notice or lapse of time or both,
would become an Event of Default with respect to the notes to be released
has occurred and is continuing on the date of such deposit and, with
respect to defeasance only, at any time during the period ending on the
123rd day after that date, and
- HomeSide has delivered to the trustee an opinion of counsel to the effect
that the holders of the notes will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of the defeasance or
covenant defeasance and will be subject to U.S. federal income tax in the
same amounts, manner and times as would have been the case if the
defeasance or covenant defeasance had not occurred, and, in the case of
defeasance, the opinion of counsel must refer to and be based upon a
letter ruling of the Internal Revenue Service received by HomeSide, a
Revenue Ruling published by the Internal Revenue Service or a change in
U.S. federal income tax law occurring after the date of the indenture.
"Government Obligations" means, with respect to the notes, securities which
are direct obligations of the United States of America for the payment of which
its full faith and credit is pledged, or obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, where the timely payment or payments thereunder are unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, and which, in each case, are not callable or redeemable at the option
of the issuer or issuers. In addition, the term "Government Obligations" also
includes a depository receipt issued by a bank or trust company as custodian
with respect to any such Government Obligation or a specific payment of interest
on or principal of or any other amount with respect to any such Government
Obligation held by such custodian for the account of the holder of such
depository receipt, as long as, except as required by law, the custodian is not
authorized to make any deduction from the amount payable to the holder of the
depository receipt from any amount received by the custodian with respect to the
Government Obligation or the specific payment of interest on or principal of or
any other amount with respect to the Government Obligation evidenced by such
depository receipt.
If HomeSide effects covenant defeasance with respect to any notes and the
notes are declared due because of the occurrence of any Event of Default or with
respect to any other covenant as to which there has been covenant defeasance,
the amount of Government Obligations on deposit with the trustee will be
sufficient to pay amounts due on the notes at the time of the Stated Maturity
but may not be sufficient to pay amounts due on the notes at the time of the
acceleration resulting from the Event of Default. However, HomeSide would remain
liable to make payment of the amounts due at the time of acceleration.
BEARER SECURITIES
HomeSide also may offer debt securities in bearer form ("Bearer
Securities") outside the United States at varying prices and terms. Offerings of
Bearer Securities may be separate from, or simultaneous with, offerings of
registered notes in the United States. The Bearer Securities are not offered by
this prospectus and may not be purchased by U.S. persons other than foreign
branches of certain U.S. financial institutions. For
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purposes of this prospectus, "U.S. person" means a citizen, national or resident
of the United States, a corporation, partnership (other than a partnership that
is not treated as a United States person under any applicable Treasury
regulations), or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or a trust if a court within
the United States is able to exercise primary supervision of the administration
of the trust and one or more United States persons have the authority to control
all substantial decisions of the trust, or an estate which is subject to United
States income taxation regardless of its source of income. In addition, certain
trusts treated as United States persons before August 20, 1996 may elect to
continue to be so treated to the extent provided in regulations.
GOVERNING LAW
The indenture and the notes are governed by, and construed in accordance
with, the laws of the State of New York.
REGARDING THE TRUSTEE
The trustee is permitted to engage in other transactions with HomeSide and
its subsidiaries and affiliates from time to time. However, if the trustee
acquires any conflicting interest, it must eliminate the conflict upon the
occurrence of an Event of Default, or else resign. The trustee also acts as
trustee under HomeSide International, Inc.'s indenture.
UNITED STATES FEDERAL INCOME TAXATION
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change, including changes in effective dates, or possible differing
interpretations. It deals only with notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or persons whose
functional currency is not the United States dollar. It also does not deal with
holders other than original purchasers, except where otherwise specifically
noted. Persons considering the purchase of the notes should consult their own
tax advisors concerning the application of United States Federal income tax laws
to their particular situations as well as any consequences of the purchase,
ownership and disposition of the notes arising under the laws of any other
taxing jurisdiction.
As used in this prospectus, the term "U.S. Holder" means a beneficial owner
of a note that is for United States Federal income tax purposes:
(1) a citizen or resident of the United States,
(2) a corporation or a partnership (including an entity treated as a
corporation or a partnership for United States Federal income tax
purposes) created or organized in or under the laws of the United
States, any state thereof or the District of Columbia (unless, in the
case of a partnership, Treasury regulations are adopted that provide
otherwise),
(3) an estate whose income is subject to United States Federal income tax
regardless of its source,
(4) a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions
of the trust, or
(5) any other person whose income or gain in respect of a note is
effectively connected with the conduct of a United States trade or
business.
Certain trusts not described in clause (4) above in existence on August 20, 1996
that elect to be treated as a United States person will also be a U.S. Holder
for purposes of the following discussion. As used herein, the term "non-U.S.
Holder" means a beneficial owner of a note that is not a U.S. Holder.
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U.S. HOLDERS
PAYMENTS OF INTEREST. Payments of interest on a note generally will be
includable in income of U.S. Holder as ordinary interest income at the time such
payments are accrued or are received (in accordance with the U.S. Holder's
regular method of tax accounting).
ORIGINAL ISSUE DISCOUNT. The following summary is a general discussion of
the United States Federal income tax consequences to U.S. Holders of the
purchase, ownership and disposition of notes issued with original issue discount
("Discount Notes"). The following summary is based upon final Treasury
regulations (the "OID Regulations") released by the Internal Revenue Service on
January 27, 1994, as amended on June 11, 1996, under the original issue discount
provisions of the Code.
For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a note over its issue
price, if such excess equals or exceeds a de minimis amount (generally 1/4 of 1%
of the note's stated redemption price at maturity multiplied by the number of
complete years to its maturity from its issue date or, in the case of a note
providing for the payment of any amount other than qualified stated interest (as
defined below) before maturity, multiplied by the weighted average maturity of
the note). The issue price of each note of an issue of notes equals the first
price at which a substantial amount of the notes has been sold (ignoring sales
to bond houses, brokers, or similar persons or organizations acting in the
capacity of underwriters, placement agents, or wholesalers). The stated
redemption price at maturity of a note is the sum of all payments provided by
the note other than "qualified stated interest" payments. The term "qualified
stated interest" generally means stated interest that is unconditionally payable
in cash or property (other than debt instruments of the issuer) at least
annually at a single fixed rate. In addition, under the OID Regulations, if a
note bears interest for one or more accrual periods at a rate below the rate
applicable for the remaining term of the note (e.g., notes with teaser rates or
interest holidays), and if the greater of either the resulting foregone interest
on the note or any "true" discount on the note (i.e., the excess of the note's
stated principal amount over its issue price) equals or exceeds a specified de
minimis amount, then the stated interest on the note would be treated as
original issue discount rather than qualified stated interest.
Payments of qualified stated interest on a note are taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Discount Note must include original issue
discount in income as ordinary interest for United States Federal income tax
purposes as it accrues under a constant yield method in advance of receipt of
the cash payments attributable to such income, regardless of the U.S. Holder's
regular method of tax accounting. In general, the amount of original issue
discount included in income by the initial U.S. Holder of a Discount Note is the
sum of the daily portions of original issue discount with respect to the
Discount Note for each day during the taxable year (or portion of the taxable
year) on which the U.S. Holder held the Discount Note. The "daily portion" of
original issue discount on any Discount Note is determined by allocating to each
day in any accrual period a ratable portion of the original issue discount
allocable to that accrual period. An "accrual period" may be of any length and
the accrual periods may vary in length over the term of the Discount Note,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs either on the final day of an accrual
period or on the first day of an accrual period. The amount of original issue
discount allocable to each accrual period is generally equal to the difference
between
- the product of the Discount Note's adjusted issue price at the beginning
of such accrual period and its yield to maturity (determined on the basis
of compounding at the close of each accrual period and appropriately
adjusted to take into account the length of the particular accrual
period) and
- the amount of any qualified stated interest payments allocable to such
accrual period.
The "adjusted issue price" of a Discount Note at the beginning of any
accrual period is the sum of the issue price of the Discount Note plus the
amount of original issue discount allocable to all prior accrual periods minus
the amount of any prior payments on the Discount Note that were not qualified
stated interest
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payments. Under these rules, U.S. Holders generally will have to include in
income increasingly greater amounts of original issue discount in successive
accrual periods.
A U.S. Holder who purchases a Discount Note for an amount that is greater
than its adjusted issue price as of the purchase date and less than or equal to
the sum of all amounts payable on the Discount Note after the purchase date
other than payments of qualified stated interest, will be considered to have
purchased the Discount Note at an "acquisition premium". Under the acquisition
premium rules, the amount of original issue discount which such U.S. Holder must
include in its gross income with respect to such Discount Note for any taxable
year (or portion thereof in which the U.S. Holder holds the Discount Note) will
be reduced (but not below zero) by the portion of the acquisition premium
properly allocable to the period.
Under the OID Regulations, Floating Rate Notes and Indexed Notes
(hereinafter "Variable Notes") are subject to special rules whereby a Variable
Note will qualify as a "variable rate debt instrument" if
- its issue price does not exceed the total noncontingent principal
payments due under the Variable Note by more than a specified de minimis
amount and
- it provides for stated interest, paid or compounded at least annually, at
current values of:
- one or more qualified floating rates,
- a single fixed rate and one or more qualified floating rates,
- a single objective rate, or
- a single fixed rate and a single objective rate that is a qualified
inverse floating rate.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Note is denominated. Although a multiple of a qualified floating rate
will generally not itself constitute a qualified floating rate, a variable rate
equal to the product of a qualified floating rate and a fixed multiple that is
greater than .65 but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than .65 but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, under the OID Regulations, two or more qualified floating rates that
can reasonably be expected to have approximately the same values throughout the
term of the Variable Note (e.g., two or more qualified floating rates with
values within 25 basis points of each other as determined on the Variable Note's
issue date) will be treated as a single qualified floating rate. Notwithstanding
the foregoing, a variable rate that would otherwise constitute a qualified
floating rate but which is subject to one or more restrictions such as a maximum
numerical limitation (i.e., a cap) or a minimum numerical limitation (i.e., a
floor) may, in some circumstances, fail to be treated as a qualified floating
rate under the OID Regulations unless such cap or floor is fixed throughout the
term of the note. An "objective rate" is a rate that is not itself a qualified
floating rate but which is determined using a single fixed formula that is based
on objective financial or economic information. A rate will not qualify as an
objective rate if it is based on information that is within the control of the
issuer (or a related party) or that is unique to the circumstances of the issuer
(or a related party), such as dividends, profits, or the value of the issuer's
stock (although a rate does not fail to be an objective rate merely because it
is based on the credit quality of the issuer). A "qualified inverse floating
rate" is any objective rate where such rate is equal to a fixed rate minus a
qualified floating rate, as long as variations in the rate can reasonably be
expected to inversely reflect contemporaneous variations in the qualified
floating rate. The OID Regulations also provide that if a Variable Note provides
for stated interest at a fixed rate for an initial period of one year or less
followed by a variable rate that is either a qualified floating rate or an
objective rate and if the variable rate on the Variable Note's issue date is
intended to approximate the fixed rate (e.g., the value of the variable rate on
the issue date does not differ from the value of the fixed rate by more than 25
basis points), then the fixed rate and the variable rate together will
constitute either a single qualified floating rate or objective rate, as the
case may be.
lf a Variable Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument" under the OID Regulations, and if
the interest on a Variable Note is unconditionally payable in cash or property
(other than
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debt instruments of the issuer) at least annually, then all stated interest on
the Variable Note will constitute qualified stated interest and will be taxed
accordingly. Thus, a Variable Note that provides for stated interest at either a
single qualified floating rate or a single objective rate throughout the term
thereof and that qualifies as a "variable rate debt instrument" under the OID
Regulations will generally not be treated as having been issued with original
issue discount unless the Variable Note is issued at a "true" discount (i.e., at
a price below the Variable Note's stated principal amount) in excess of a
specified de minimis amount. The amount of qualified stated interest and the
amount of original issue discount, if any, that accrues during an accrual period
on such a Variable Note is determined under the rules applicable to fixed rate
debt instruments by assuming that the variable rate is a fixed rate equal to
(1) in the case of a qualified floating rate or qualified inverse floating
rate, the value as of the issue date, of the qualified floating rate
or qualified inverse floating rate, or
(2) in the case of an objective rate (other than a qualified inverse
floating rate), a fixed rate that reflects the yield that is
reasonably expected for the Variable Note.
The qualified stated interest allocable to an accrual period is increased
(or decreased) if the interest actually paid during an accrual period exceeds
(or is less than) the interest assumed to be paid during the accrual period
pursuant to the foregoing rules.
In general, any other Variable Note that qualifies as a "variable rate debt
instrument" will be converted into an "equivalent" fixed rate debt instrument
for purposes of determining the amount and accrual of original issue discount
and qualified stated interest on the Variable Note. The OID Regulations
generally require that such a Variable Note be converted into an "equivalent"
fixed rate debt instrument by substituting any qualified floating rate or
qualified inverse floating rate provided for under the terms of the Variable
Note with a fixed rate equal to the value of the qualified floating rate or
qualified inverse floating rate, as the case may be, as of the Variable Note's
issue date. Any objective rate (other than a qualified inverse floating rate)
provided for under the terms of the Variable Note is converted into a fixed rate
that reflects the yield that is reasonably expected for the Variable Note. In
the case of a Variable Note that qualifies as a "variable rate debt instrument"
and provides for stated interest at a fixed rate in addition to either one or
more qualified floating rates or a qualified inverse floating rate, the fixed
rate is initially converted into a qualified floating rate (or a qualified
inverse floating rate, if the Variable Note provides for a qualified inverse
floating rate). Under those circumstances, the qualified floating rate or
qualified inverse floating rate that replaces the fixed rate must be such that
the fair market value of the Variable Note as of the Variable Note's issue date
is approximately the same as the fair market value of an otherwise identical
debt instrument that provides for either the qualified floating rate or
qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a qualified
inverse floating rate, the Variable Note is then converted into an "equivalent"
fixed rate debt instrument in the manner described above.
Once the Variable Note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument and a U.S. Holder
of the Variable Note will account for such original issue discount and qualified
stated interest as if the U.S. Holder held the "equivalent" fixed rate debt
instrument. For each accrual period appropriate adjustments will be made to the
amount of qualified stated interest or original issue discount assumed to have
been accrued or paid with respect to the "equivalent" fixed rate debt instrument
in the event that such amounts differ from the actual amount of interest accrued
or paid on the Variable Note during the accrual period.
If a Variable Note does not qualify as a "variable rate debt instrument"
under the OID Regulations, then the Variable Note would be treated as a
contingent payment debt obligation. On June 11, 1996, the Treasury Department
issued final regulations (the "CPDI Regulations") concerning the proper United
States Federal income tax treatment of contingent payment debt instruments. In
general, the CPDI Regulations would cause the timing and character of income,
gain or loss reported on a contingent payment debt instrument to substantially
differ from the timing and character of income, gain or loss reported on a
contingent payment debt instrument under general principles of current United
States Federal income tax law. Specifically, the
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CPDI Regulations generally require a U.S. Holder of such an instrument to
include future contingent and noncontingent interest payments in income as such
interest accrues based upon a projected payment schedule. Moreover, in general,
under the CPDI Regulations, any gain recognized by a U.S. Holder on the sale,
exchange, or retirement of a contingent payment debt instrument will be treated
as ordinary income and all or a portion of any loss realized could be treated as
ordinary loss as opposed to capital loss (depending upon the circumstances). The
CPDI Regulations apply to debt instruments issued on or after August 13, 1996.
The proper United States Federal income tax treatment of Variable Notes that are
treated as contingent payment debt obligations will be more fully described in
the pricing supplement. Furthermore, any other special United States Federal
income tax considerations, not otherwise discussed herein, which are applicable
to any particular issue of notes will be discussed in the pricing supplement.
HomeSide may issue notes which;
- may be redeemable at the option of HomeSide before their stated maturity
(a "call option") and/or
- may be repayable at the option of the holder before their stated maturity
(a "put option").
Notes containing such features may be subject to rules that differ from the
general rules discussed above. Investors intending to purchase notes with such
features should consult their own tax advisors, since the original issue
discount consequences will depend, in part, on the particular terms and features
of the purchased notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
FOREIGN-CURRENCY NOTES. The United States Federal income tax consequences
of the purchase, ownership and disposition of notes providing for payments
denominated in a currency other than U.S. dollars will be more fully described
in the applicable pricing supplement.
SHORT-TERM NOTES. Notes that have a fixed maturity of one year or less
("Short-Term Notes") will be treated as having been issued with original issue
discount. In general, an individual or other cash method U.S. Holder is not
required to accrue such original issue discount unless the U.S. Holder elects to
do so. If such an election is not made, any gain recognized by the U.S. Holder
on the sale, exchange or maturity of the Short-Term Note will be ordinary income
to the extent of the original issue discount accrued on a straight-line basis,
or upon election under the constant yield method (based on daily compounding),
through the date of sale or maturity, and a portion of the deductions otherwise
allowable to the U.S. Holder for interest on borrowings allocable to the
Short-Term Note will be deferred until a corresponding amount of income is
realized. U.S. Holders who report income for United States Federal income tax
purposes under the accrual method, and certain other holders including banks and
dealers in securities, are required to accrue original issue discount on a
Short-Term Note on a straight-line basis unless an election is made to accrue
the original issue discount under a constant yield method (based on daily
compounding).
MARKET DISCOUNT. If a taxpayer, such as a U.S. Holder purchases a note,
other than a Discount Note, for an amount that is less than its stated
redemption price at maturity) [or, in the case of a Discount Note, for an amount
that is less than its adjusted issue price as of the purchase date,] such U.S.
Holder may be treated as having purchased the note at a "market discount",
unless such market discount is less than a specified de minimis amount. (Market
discount is the deficiency, if any, between the amount paid for the note and the
original issue price of the note increased by the aggregate amount of original
issue discount includible in the income of all holders for periods before the
taxpayer's acquisition of the note.)
Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of a Discount Note, any payment
that does not constitute qualified stated interest) on, or any
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gain realized on the sale, exchange, retirement or other disposition of, a note
as ordinary interest income to the extent of the lesser of:
- the amount of such payment or realized gain, or
- the market discount which has not previously been included in income and
is treated as having accrued on the note at the time of such payment or
disposition.
Market discount will be considered to accrue ratably during the period from the
date of acquisition to the maturity date of the note, unless the U.S. Holder
elects to accrue market discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a note with market discount until the maturity of the note or
certain earlier dispositions, because a current deduction is only allowable to
the extent the interest expense exceeds an allocable portion of market discount.
A U.S. Holder may elect to include market discount in income currently as it
accrues (on either a ratable or semiannual compounding basis), in which case the
rules described above regarding the treatment as ordinary income of gain upon
the disposition of the note and upon the receipt of certain cash payments and
regarding the deferral of interest deductions will not apply. Generally, such
currently included market discount is treated as ordinary interest for United
States Federal income tax purposes. Such an election will apply to all debt
instruments acquired by the U.S. Holder on or after the first day of the taxable
year to which such election applies and may be revoked only with the consent of
the IRS.
PREMIUM. If a U.S. Holder purchases a note for an amount that is greater
than the sum of all amounts payable on the note after the purchase date other
than payments of qualified stated interest, the U.S. Holder will be considered
to have purchased the note with "amortizable bond premium" equal in amount to
such excess. A U.S. Holder may elect to amortize such premium using a constant
yield method over the remaining term of the note and may offset interest
otherwise required to be included in respect of the note during any taxable year
by the amortized amount of such excess for the taxable year. However, if the
note may be optionally redeemed after the U.S. Holder acquires it at a price in
excess of its stated redemption price at maturity, special rules would apply
which could result in a deferral of the amortization of some bond premium until
later in the term of the note. Any election to amortize bond premium applies to
all taxable debt obligations then owned and thereafter acquired by the U.S.
Holder and may be revoked only with the consent of the IRS.
DISPOSITION OF A NOTE. Except as discussed above, upon the sale, exchange
or retirement of a note, a U.S. Holder generally will recognize taxable gain or
loss equal to the difference between the amount realized on the sale, exchange
or retirement (other than amounts representing accrued and unpaid interest) and
the U.S. Holder's adjusted tax basis in the note. A U.S. Holder's adjusted tax
basis in a note generally will equal the U.S. Holder's initial investment in the
note increased by any original issue discount included in income (and accrued
market discount, if any, if the U.S. Holder has included such market discount in
income) and decreased by the amount of any payments, other than qualified stated
interest payments, received and amortizable bond premium taken with respect to
the note. Such gain or loss generally will be long-term capital gain or loss if
the note were held for more than one year. Long-term capital gains of
individuals are subject to reduced capital gain rates while short-term capital
gains are subject to ordinary income rates. The deductibility of capital losses
is generally subject to certain limitations. Prospective investors should
consult their own tax advisors concerning these tax law provisions.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States Federal income taxes
on payments of principal, premium (if any) or interest (including original issue
discount or market discount, if any) on a note, unless such non-U.S. Holder is a
direct or indirect 10% or greater shareholder of HomeSide, a controlled foreign
corporation related to HomeSide, a bank receiving interest described in section
881(c)(3)(A) of the Code, or in individual present in the United States for 183
days or more in the taxable year in which premium (if any)
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is paid. To qualify for the exemption from taxation, the last United States
payor in the chain of payment prior to payment to a non-U.S. Holder (the
"Withholding Agent") must have received in the year in which a payment of
interest or principal occurs, or in either of the two preceding calendar years,
a statement that (1) is signed by the beneficial owner of the note under
penalties of perjury, (2) certifies that such owner is not a U.S. Holder and (3)
provides the name and address of the beneficial owner. Absent receipt of such
statement the Withholding Agent must generally withhold U.S. tax at the rate of
30%. The statement may be made on an applicable IRS Form W-8 or a substantially
similar form, and the beneficial owner must inform the Withholding Agent of any
change in the information on the statement within 30 days of such change. If a
note is held through a securities clearing organization or certain other
financial institutions, the organization or institution may provide a signed
statement to the Withholding Agent. However, in such case, the signed statement
must be accompanied by a copy of the applicable IRS Form W-8 or the substitute
form provided by the beneficial owner to the organization or institution. The
Treasury Department is considering implementation of further certification
requirements aimed at determining whether the issuer of a debt obligation is
related to holders thereof.
In October 1997, the Treasury issued new regulations (the "New
Regulations") which make certain modifications to the withholding, backup
withholding and information reporting rules. The New Regulations attempt to
unify certification requirements and modify reliance standards. The New
Regulations will generally be effective for payments made after December 31,
2000, subject to certain transition rules. Prospective investors are urged to
consult their own tax advisors regarding the New Regulations.
Generally, a non-U.S. Holder will not be subject to United States Federal
income taxes on any amount which constitutes capital gain upon retirement or
disposition of a note, provided the gain is not effectively connected with the
conduct of a trade or business in the United States by the non-U.S. Holder and,
if the non-U.S. holder is an individual, such non-U.S. Holder is not present in
the United States for 183 days or more in the taxable year of the sale. Certain
other exceptions may be applicable, and a non-U.S. Holder should consult its tax
advisor in this regard.
The notes will not be includible in the estate of a non-U.S. Holder who is
not domiciled in the United States unless the individual is a direct or indirect
10% or greater shareholder of HomeSide or, at the time of such individual's
death, payments in respect of the notes would have been effectively connected
with the conduct by such individual of a trade or business in the United States.
BACKUP WITHHOLDING
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information,
such as the registered owner's taxpayer identification number, in the required
manner.
Generally, individuals are not exempt recipients, whereas corporations and
certain other entities generally are exempt recipients. Payments made in respect
of the notes to a U.S. Holder must be reported to the IRS, unless the U.S.
Holder is an exempt recipient or establishes an exemption. Compliance with the
identification procedures described in the preceding section would establish an
exemption from backup withholding for those non-U.S. Holders who are not exempt
recipients.
In addition, upon the sale of a note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either:
- the broker determines that the seller is a corporation or other exempt
recipient or
- the seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. Holder, certifies that such
seller is a non-U.S. Holder (and certain other conditions are met).
Such a sale must also be reported by the broker to the IRS, unless either:
- the broker determines that the seller is an exempt recipient or
- the seller certifies its non-U.S. status (and certain other conditions
are met).
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Certification of the registered owner's non-U.S. status would be made normally
on an IRS Form W-8 under penalties of perjury, although in certain cases it may
be possible to submit other documentary evidence. In addition, prospective U.S.
Holders are strongly urged to consult their own tax advisors with respect to the
New Withholding Regulations. See "United States Federal Income
Taxation -- Non-U.S. Holders".
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
PLAN OF DISTRIBUTION
HomeSide is offering the notes for sale on a continuing basis through the
agents, who will purchase the notes, as principal, from HomeSide, for resale to
investors and other purchasers at varying prices relating to prevailing market
prices at the time of resale as determined by the agents, or, if so specified in
a pricing supplement, for resale at a fixed public offering price. If agreed to
by HomeSide and an agent, the agent may utilize its reasonable efforts on an
agency basis to solicit offers to purchase the notes at 100% of the principal
amount of the notes, unless otherwise stated in a pricing supplement. HomeSide
will pay a commission to the agent, ranging from .125% to .750% of the principal
amount of a note, depending upon its stated maturity or, with respect to a note
for which the stated maturity is in excess of 30 years, a commission as agreed
upon by HomeSide and the agent at the time of sale, sold through the agent. In
addition, the expenses incurred by HomeSide in connection with the offering and
sale of the notes, including reimbursement of certain of the agents' expenses,
is currently estimated to be $1,000,000.
Unless otherwise specified in an applicable pricing supplement, any note
sold to an agent as principal will be purchased by such an agent at a price
equal to 100% of the principal amount thereof less a percentage of the principal
amount equal to the commission applicable to an agency sale of a note of
identical maturity. The agents may sell notes they have purchased from HomeSide
as principal to other dealers less a concession equal to all or any portion of
the discount received in connection with such purchase. The agents may allow,
and such dealers may reallow, a discount to certain other dealers. After the
initial public offering of notes, the public offering price, in the case of
notes to be resold at a fixed public offering price, the concession and the
discount allowed to dealers may be changed.
HomeSide reserves the right to withdraw, cancel or modify the offer made by
this prospectus without notice and may reject orders, in whole or in part,
whether placed directly with HomeSide or through the agents. The agents will
have the right, in their discretion reasonably exercised, to reject in whole or
in part any offer to purchase notes received by the agent.
Unless otherwise stated in a pricing supplement, payment of the purchase
price of the notes will be required to be made in immediately available funds in
U.S. dollars in New York City on the date of settlement.
No note will have an established trading market when issued. Unless
specified in the pricing supplement, HomeSide will not list the notes on any
securities exchange. The agents may from time to time purchase and sell notes in
the secondary market, but the agents are not obligated to do so, and there can
be no assurance that there will be a secondary market for the notes or liquidity
in the secondary market if one develops. From time to time, the agents may make
a market in the notes.
The agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. HomeSide has agreed to indemnify the agents
against or to make contributions relating to certain civil liabilities,
including liabilities under the Securities Act, or to contribute to payments the
agents may be required to make in respect thereof. HomeSide has agreed to
reimburse the agents for certain expenses.
From time to time, HomeSide may issue and sell other securities described
herein and the amount of notes that HomeSide may offer and sell under this
prospectus may be reduced as a result of such sales.
In connection with the offering of notes purchased by one or more of the
agents as principal on a fixed price basis, such agents are permitted to engage
in certain transactions that stabilize the price of the notes.
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These transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of the notes. If the agents create a short
position in the notes in connection with the offering, i.e., if they sell notes
in an aggregate principal amount exceeding that set forth in the pricing
supplement, then the agents may reduce that short position by purchasing notes
in the open market. In general, purchases of notes for the purpose of
stabilization or to reduce a short position could cause the price of the notes
to be higher than in the absence of these purchases.
Neither HomeSide nor the agents make any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the notes. In addition, neither HomeSide nor the agents
make any representation that the agents will engage in any such transactions or
that such transactions, once commenced, will not be discontinued without notice.
The agents and their affiliates may be customers of, engage in transactions
with or perform services for, HomeSide or its affiliates in the ordinary course
of business and have engaged in and may in the future engage in investment
banking transactions with HomeSide and its affiliates. HomeSide has entered into
an arrangement in the ordinary course of business with an affiliate of Merrill
Lynch & Co. to sell to such affiliate, and provide ongoing lending services and
subservicing for, certain mortgage loans originated by HomeSide. Chase
Securities Inc. ("CSI") is an affiliate of The Chase Manhattan Bank, which is
administrative agent and a lender under the amended and restated credit
agreement among HomeSide, Honolulu Mortgage Company, Inc., the lender parties
thereto and The Chase Manhattan Bank (the "bank credit agreement"). CSI, The
Chase Manhattan Bank and/or certain of their affiliates have engaged in and may
in the future engage in general financing and banking transactions with HomeSide
and certain of its subsidiaries and affiliates in the ordinary course of
business. In addition, Bank of America Corp., Morgan Guaranty Trust Company of
New York, and UBS AG, Stamford branch, affiliates of Banc of America Securities
LLC, J.P. Morgan Securities Inc. and Warburg Dillon Read LLC, respectively, are
lenders under the bank credit agreement. CSI is also a dealer with respect to
HomeSide's commercial paper program. If the proceeds from any offering of notes
are used to repay indebtedness under the bank credit agreement, such offering
will be made in accordance with the provisions of Rule 2710(c)(8) of the Conduct
Rules of the National Association of Securities Dealers, Inc., if applicable.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 with the SEC covering
the notes and other securities. For further information on HomeSide and the
notes, you should refer to our registration statement and its exhibits. This
prospectus summarizes material provisions of contracts and other documents that
we refer you to. Because the prospectus may not contain all the information that
you may find important, you should review the full text of these documents. We
have included copies of these documents as exhibits to our registration
statement of which this prospectus is a part.
We also file reports and other information with the SEC. The registration
statement and the reports and other information that we file with the SEC may be
read and copied at the Public Reference Room maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Offices of the
Commission at 7 World Trade Center, 13th Floor, New York, New York 10048 and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. You may obtain information on the operation of the Public
Reference Rooms by calling the SEC at 1-800-SEC-0330. Our SEC filings are also
available over the Internet at the SEC's web site at http://www.sec.gov.
42
<PAGE> 44
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to incorporate by reference the information we file with
them, which means:
- incorporated documents are considered part of the prospectus;
- we can disclose important information to you by referring you to those
documents; and
- information that we file with the SEC will automatically update and
supersede this incorporated information.
We incorporate by reference the documents listed below which were filed
with the SEC under the Exchange Act:
- annual report on Form 10-K for the year ended September 30, 1998;
- quarterly report on Form 10-Q for the period ended December 31, 1998;
- quarterly report on Form 10-Q for the period ended March 31, 1999; and
- quarterly report on Form 10-Q for the period ended June 30, 1999; and
- current report on Form 8-K dated April 22, 1999.
We also incorporate by reference each of the following documents that we
will file with the SEC after the date of this prospectus until this offering is
completed or after the date of this initial registration statement and before
the effectiveness of the registration statement:
- reports filed under Sections 13(a) and (c) of the Exchange Act; and
- any reports filed under Section 15(d) of the Exchange Act.
You should rely only on information contained or incorporated by reference
in this prospectus. We have not, and the agents have not, authorized any other
person to provide you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it. We are not,
and the agents are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus is
accurate as of the date of this prospectus only. Our business, financial
condition and results of operations may have changed since that date.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address: HomeSide
Lending, Inc., 7301 Baymeadows Way, Jacksonville, Florida 32256, Attn: Investor
Relations (telephone: (904) 281-3200).
VALIDITY OF THE NOTES
Certain legal matters with respect to the securities offered hereby will be
passed upon for HomeSide by Hutchins, Wheeler & Dittmar and for any underwriters
or agents by Brown & Wood LLP, New York, New York. Hutchins, Wheeler & Dittmar,
A Professional Corporation will rely as to certain matters of New York law upon
the opinion of Brown & Wood LLP. Hutchins, Wheeler & Dittmar, A Professional
Corporation, and Brown & Wood LLP will rely as to certain matters of Florida law
upon the opinion of Robert J. Jacobs, Executive Vice President and Secretary of
HomeSide.
EXPERTS
The consolidated balance sheet of HomeSide Lending, Inc. and its
subsidiaries as of September 30, 1998 and the related consolidated statements of
income, changes in stockholder's equity and cash flows for the period from
February 11, 1998 to September 30, 1998 incorporated by reference herein have
been audited by KPMG LLP, independent certified public accountants, as indicated
in their report with respect thereto, and are incorporated in reliance upon the
authority of said firm as experts in accounting and auditing.
43
<PAGE> 45
The consolidated balance sheet of HomeSide Lending, Inc. and subsidiaries
as of February 10, 1998 and February 28, 1997 and the related consolidated
statements of income, changes in stockholder's equity, and cash flows for the
period from March 1, 1997 to February 10, 1998 and March 16, 1996 to February
28, 1997, incorporated by reference in this prospectus, have been audited by
Arthur Andersen LLP, independent certified public accountants, as indicated in
their report with respect thereto, and are incorporated herein in reliance upon
the authority of said firm as experts in accounting and auditing in giving said
reports.
The consolidated balance sheet of BancBoston Mortgage Corporation, as of
March 15, 1996 and the related consolidated statements of operations and
retained earnings and cash flows for the period from January 1, 1996 to March
15, 1996, incorporated by reference in this prospectus, have been audited by
Arthur Andersen LLP, independent certified public accountants as indicated in
their report with respect thereto, and are incorporated herein in reliance upon
the authority of said firm as experts in accounting and auditing in giving said
reports.
The consolidated balance sheets of BancBoston Mortgage Corporation, as of
December 31, 1995 and the related consolidated statements of operations and
retained earnings and cash flows for the year then ended, incorporated by
reference in this prospectus have been audited by PricewaterhouseCoopers LLP,
independent certified public accountants as indicated in their report with
respect thereto, and are incorporated herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
44
<PAGE> 46
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$1,408,000,000
LOGO
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE
FROM DATE OF ISSUE
----------------------
PROSPECTUS
----------------------
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
J.P. MORGAN & CO.
SALOMON SMITH BARNEY
WARBURG DILLON READ LLC
AUGUST , 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 47
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered are estimated as follows:
<TABLE>
<S> <C>
Registration Fee............................................ $ 278,000
Fees and Expenses of Accountants............................ 200,000
Fees and Expenses of Counsel................................ 220,000
Printing and Engraving Expenses............................. 250,000
Miscellaneous............................................... 52,000
----------
Total.................................................. $1,000,000
==========
</TABLE>
- ---------------
All amounts except the registration fee are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 607.0850 of the Florida Business Corporation Act permits a
corporation to indemnify its directors and officers against liability incurred
in their capacity as such or by reason of service at the request of the
corporation as a director, officer, employee or agent of another corporation (i)
if such director or officer acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful; and (ii) in some
other circumstances.
Article IX of the By-laws of HomeSide provides as follows:
INDEMNIFICATION
SEC. 1. The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that he is or was a Director or
officer of the corporation or served, at the written request of the
President of the corporation, as a Director or officer of another
corporation (all of whom are hereinafter in this Article referred to in the
aggregate as "indemnified persons" and in the singular as an "indemnified
person") against expenses (including attorneys' fees except as otherwise
stated in Section 3 of this Article), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, has no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by a judgment, order, settlement,
adjudication or upon a plea of nolo contenders or its equivalent, shall
not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
SEC. 2. The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor against expenses (including attorneys' fees except as
otherwise stated in Section 3 of this Article) actually and reasonably
incurred by him in connection with
II-1
<PAGE> 48
the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless and only to the extent
that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
SEC. 3. The corporation will be entitled to participate at it own
expense in the defense and, if it so elects, to assume the defense of any
claim, action, suit or proceeding. If the corporation elects to assume the
defense, such defense shall be conducted by counsel of good standing,
chosen by it. In the event the corporation elects to assume the defense of
any such claim, action, suit or proceeding and retain such counsel, the
indemnified persons shall bear the fees and expense of any additional
counsel retained by them, unless there are conflicting interests as between
the corporation and the indemnified persons that are for valid reasons
objected to in writing by the indemnified persons.
SEC. 4. In discharging his duty to the corporation, an indemnified
person, when acting in good faith, may rely upon financial statements of
the corporation represented to him to be correct by the officer of the
corporation having charge of its books of accounts, or stated in a written
report by an independent public or certified public accountant or firm of
such accountants fairly to reflect the financial condition of such
corporation.
SEC. 5. Any indemnification under this Article IX (unless ordered by
a court) shall be made only as authorized in the specific case upon a
determination (1) by the Board of Directors by a majority vote of a quorum
consisting of Directors who were not parties to such action, suit or
proceeding, or (2) if such quorum is not obtainable, or, even if
obtainable, when a quorum of disinterested Directors so directs, by
independent legal counsel in a written opinion that the indemnified person
has met the standards of conduct set forth in this Article IX or (3) by the
stockholder or stockholders.
SEC. 6. Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the Board
of Directors in the manner provided in Section 5 of this Article IX upon
receipt of an undertaking by or on behalf of the indemnified person to
repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the corporation as authorized in this Article
IX.
SEC. 7. The indemnification provided by this Article IX shall not be
deemed exclusive of any other rights to which any indemnified person may be
entitled under any Agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office and shall inure to
the benefit of the heirs, executors and administrators of such a person.
SEC. 8. The Board of Directors shall have power on behalf of the
corporation to grant indemnification to any person other than an
indemnified person to such extent as the Board in its discretion may from
time to time and at any time determine, but in no event to exceed the
indemnification provided by this Article IX.
SEC. 9. If any part of this Article IX shall be found, in any action,
suit or proceeding, to be invalid or ineffective, the validity and the
effect of the remaining parts shall not be affected.
II-2
<PAGE> 49
ITEM 16.
<TABLE>
<C> <S>
1.1* Form of Distribution Agreement, as amended.
3.1 Certificate of Incorporation of HomeSide Lending, Inc.
incorporated by reference to HomeSide's Registration
Statement on Form S-1, No. 333-21193.
3.2 By-Laws of HomeSide Lending, Inc. incorporated by reference
to HomeSide's Registration Statement on Form S-1, No.
333-21193.
4.1 Form of Indenture incorporated by reference to HomeSide's
Registration Statement on Form S-1, No. 333-21193.
4.2* Form of Fixed Rate Medium-Term Note.
4.3* Form of Floating Rate Medium-Term Note.
5.1(a)* Opinion of Hutchins, Wheeler & Dittmar, regarding legality
of the securities being registered.
5.1(b)* Opinion of Robert J. Jacobs, Esq., regarding certain matters
relating to Florida law.
5.1(c)* Opinion of Brown & Wood LLP, regarding certain matters
relating to New York law.
8.1* Opinion of Hutchins, Wheeler & Dittmar, regarding certain
tax matters.
12.1 Computation of the Ratio of Earnings to Fixed Charges
incorporated by reference to HomeSide's Annual Report on
Form 10-K for the year ended September 30, 1998 and
HomeSide's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999.
23.1* Consent of Arthur Andersen LLP
23.2* Consent of PricewaterhouseCoopers L.L.P.
23.3* Consent of KPMG LLP
23.3(a)* Consent of Hutchins, Wheeler & Dittmar (included in Exhibit
5.1 (a))
23.3(b)* Consent of Robert J. Jacobs, Esq. (included in Exhibit
5.1(b))
23.3(c)* Consent of Brown & Wood LLP (included in Exhibit 5.1(c))
25.1* Form of T-1 Statement of Eligibility Under Trust Indenture
Act of 1939 of The Bank of New York.
</TABLE>
- ---------------
* Filed herewith.
ITEM 17. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes that for the purpose of
determining any liability under the Act, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
II-3
<PAGE> 50
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
provided however, that paragraphs (c)(1)(i) and (c)(1)(ii) do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
the form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared effective. For
the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-4
<PAGE> 51
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Jacksonville, State of Florida, on the 27th day
of August, 1999.
HOMESIDE LENDING, INC.
By: /s/ JOE K. PICKETT
------------------------------------
JOE K. PICKETT
Chairman
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JOE K. PICKETT Chairman of the Board August 27, 1999
- ---------------------------------------------------
JOE K. PICKETT
/s/ HUGH R. HARRIS Chief Executive Officer and August 27, 1999
- --------------------------------------------------- Director (Principal Executive
HUGH R. HARRIS Officer)
/s/ KEVIN D. RACE President and Chief Operating August 27, 1999
- --------------------------------------------------- Officer
KEVIN D. RACE
/s/ W. BLAKE WILSON Executive Vice President, Chief August 27, 1999
- --------------------------------------------------- Financial Officer and
W. BLAKE WILSON Treasurer (Principal
Financial and Accounting
Officer)
/s/ ROBERT J. JACOBS Executive Vice President, August 27, 1999
- --------------------------------------------------- Secretary and General Counsel
ROBERT J. JACOBS
</TABLE>
II-5
<PAGE> 52
EXHIBIT INDEX
<TABLE>
<C> <S>
1.1* Form of Distribution Agreement, as amended.
3.1 Certificate of Incorporation of HomeSide Lending, Inc.
incorporated by reference to HomeSide's Registration
Statement on Form S-1, No. 333-21193.
3.2 By-Laws of HomeSide Lending, Inc. incorporated by reference
to HomeSide's Registration Statement on Form S-1, No.
333-21193.
4.1 Form of Indenture incorporated by reference to HomeSide's
Registration Statement on Form S-1, No. 333-21193.
4.2* Form of Fixed Rate Medium-Term Note.
4.3* Form of Floating Rate Medium-Term Note.
5.1(a)* Opinion of Hutchins, Wheeler & Dittmar, regarding legality
of the securities being registered.
5.1(b)* Opinion of Robert J. Jacobs, Esq., regarding certain matters
relating to Florida law.
5.1(c)* Opinion of Brown & Wood LLP, regarding certain matters
relating to New York law.
8.1* Opinion of Hutchins, Wheeler & Dittmar, regarding certain
tax matters.
12.1 Computation of the Ratio of Earnings to Fixed Charges
incorporated by reference to HomeSide's Annual Report on
Form 10-K for the year ended September 30, 1998 and
HomeSide's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999.
23.1* Consent of Arthur Andersen LLP
23.2* Consent of PricewaterhouseCoopers L.L.P.
23.3* Consent of KPMG LLP
23.3(a)* Consent of Hutchins, Wheeler & Dittmar (included in Exhibit
5.1 (a))
23.3(b)* Consent of Robert J. Jacobs, Esq. (included in Exhibit
5.1(b))
23.3(c)* Consent of Brown & Wood LLP (included in Exhibit 5.1(c))
25.1* Form of T-1 Statement of Eligibility Under Trust Indenture
Act of 1939 of The Bank of New York.
</TABLE>
- ---------------
* Filed herewith.
<PAGE> 1
EXHIBIT 1.1
HOMESIDE LENDING, INC.
MEDIUM-TERM NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
___________________, 1999
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
WARBURG DILLON READ LLC
as Agents
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
250 Vesey Street
New York, New York 10281-1209
Ladies and Gentlemen:
HomeSide Lending, Inc., a Florida corporation (the "Company"), confirms its
agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Banc of America Securities LLC ("BancAmerica"),
Chase Securities Inc. ("Chase"), J.P. Morgan Securities Inc. ("J.P. Morgan"),
Salomon Smith Barney Inc. ("Salomon") and Warburg Dillon Read LLC ("Warburg")
(each an "Agent," and collectively, the "Agents") with respect to the issue and
sale by the Company of its Medium-Term Notes Due Nine Months or More From Date
of Issue (the "Notes"). The Notes are to be issued pursuant to an Indenture,
dated as of May 15, 1997, as amended or modified from time to time (the
"Indenture"), between the Company and The Bank of New York, as trustee (the
"Trustee"). As of the date of the initial execution and delivery of this
Agreement, the Company has authorized the issuance and sale of up to
U.S.$1,408,000,000 aggregate initial offering price of Notes to or through the
Agents pursuant to the terms of this Agreement. It is understood, however, that
the Company may from time to time authorize the issuance of additional Notes and
that such additional Notes may be sold to or through the Agents pursuant to the
terms of this Agreement, all as though the issuance of such Notes were
authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company to one or
more Agents as principal for resale to investors and other purchasers and for
the sale of Notes by the Company directly to investors (as may from time to time
be agreed to by the Company and the
1
<PAGE> 2
applicable Agent), in which case the applicable Agent will act as an agent of
the Company in soliciting offers for the purchase of Notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") registration statements on Form S-3 (No. 333-45603, No. 333-78629
and No. 333-84179) for the registration of debt securities, including the Notes,
under the Securities Act of 1933, as amended (the "1933 Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations"),
and the Company has filed such additional post-effective amendments thereto as
may be required prior to any acceptance by the Company of an offer for the
purchase of Notes and each such post-effective amendment has been declared
effective by the Commission. Such registration statements (as so amended, if
applicable) have been declared effective by the Commission and the Indenture has
been duly qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). To the extent required or permitted under the 1933 Act and the 1933 Act
Regulations, promptly after execution and delivery of this Agreement and from
time to time thereafter, the Company will either (i) prepare and file a
prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and/or paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations or (ii) if the Company has elected to rely upon Rule 434 ("Rule
434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Such registration statements, as amended,
including the exhibits thereto and schedules thereto at the time they became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, and as amended by each post-effective amendment thereto, if any,
are herein collectively called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus and all applicable amendments or supplements
thereto (including the final prospectus supplement, pricing supplement and Rule
430A Information or Rule 434 Information, relating to the offering of Notes, if
any), in the form first furnished to the applicable Agent(s), are collectively
referred to herein as the "Prospectus"; provided, however, that all references
to the "Registration Statement" and the "Prospectus" shall also be deemed to
include all documents filed with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, prior to any
acceptance by the Company of an offer for the purchase of Notes. A "preliminary
prospectus" shall be deemed to refer to any prospectus used before the
registration statement became effective and any prospectus furnished by the
Company after the registration statement became effective and before any
acceptance by the Company of an offer for the purchase of Notes which omitted
the relevant Rule 430A Information or Rule 434 Information. For purposes of this
Agreement, all references to the Registration Statement, Prospectus or
preliminary prospectus or to any amendment or supplement thereto shall be deemed
to include
2
<PAGE> 3
any copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "disclosed", "contained", "included", or "stated" (or
other references of like import) in the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to include all such financial statements
and schedules and other information which is incorporated by reference in the
Registration Statement, Prospectus or preliminary prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
Registration Statement, Prospectus or preliminary prospectus shall be deemed to
include the filing of any document under the 1934 Act which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be.
SECTION 1. APPOINTMENT AS AGENT.
(a) APPOINTMENT. (i) Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly on
its own behalf, the Company hereby authorizes each Agent to act as its agent to
solicit offers for the purchase of all or part of the Notes from the Company.
(ii) Notwithstanding anything to the contrary contained herein, the
Company, upon prior notice to the Agents, may authorize any other
person, partnership or corporation (an "Additional Agent") to act as
its agent to solicit offers for the purchase of all or part of the
Notes and/or accept offers to purchase Notes from any such Additional
Agent, provided, however, that any such Additional Agent shall have
entered into an agreement with the Company upon the same terms and
conditions as set forth in this Agreement.
(b) SALE OF NOTES. The Company shall not sell or approve the solicitation
of offers for the purchase of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the aggregate
initial offering price of Notes registered pursuant to the Registration
Statement. The Agents shall have no responsibility for maintaining records with
respect to the aggregate initial offering price of Notes sold, or of otherwise
monitoring the availability of Notes for sale, under the Registration Statement.
(c) PURCHASES AS PRINCIPAL. The Agents shall not have any obligation to
purchase Notes from the Company as principal. However, absent an agreement
between an Agent and the Company that such Agent shall be acting solely as an
agent for the Company, such Agent shall be deemed to be acting as principal in
connection with any offering of Notes by the Company through such Agent.
Accordingly, the Agents, individually or in a syndicate, may agree from time to
time to purchase Notes from the Company as principal for resale to investors and
other purchasers determined by such Agents. Any purchase of Notes from the
Company by an Agent as principal shall be made in accordance with Section 3(a)
hereof.
(d) SOLICITATIONS AS AGENT. If agreed upon between an Agent and the
Company, such Agent, acting solely as an agent for the Company and not as
principal, will solicit offers for the
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purchase of Notes. Such Agent will communicate to the Company, orally, each
offer for the purchase of Notes solicited by it on an agency basis other than
those offers rejected by such Agent. Such Agent shall have the right, in its
discretion reasonably exercised, to reject any offer for the purchase of Notes,
in whole or in part, and any such rejection shall not be deemed a breach of its
agreement contained herein. The Company may accept or reject any offer for the
purchase of Notes, in whole or in part. Such Agent shall make reasonable efforts
to assist the Company in obtaining performance by each purchaser whose offer for
the purchase of Notes has been solicited by it on an agency basis and accepted
by the Company. Such Agent shall not have any liability to the Company in the
event that any such purchase is not consummated for any reason. If the Company
shall default on its obligation to deliver Notes to a purchaser whose offer has
been solicited by such Agent on an agency basis and accepted by the Company, the
Company shall (i) hold such Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii) pay to such
Agent any commission to which it would otherwise be entitled absent such
default.
(e) RELIANCE. The Company and the Agents agree that any Notes purchased
from the Company by one or more Agents as principal shall be purchased, and any
Notes the placement of which an Agent arranges as an agent of the Company shall
be placed by such Agent, in reliance on the representations, warranties,
covenants and agreements of the Company contained herein and on the terms and
conditions and in the manner provided herein.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATION AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each Agent as of the date hereof, as of the date of each
acceptance by the Company of an offer for the purchase of Notes (whether to such
Agent as principal or through such Agent as agent), as of the date of each
delivery of Notes (whether to such Agent as principal or through such Agent as
agent) (the date of each such delivery to such Agent as principal is referred to
herein as a "Settlement Date"), and as of any time that the Registration
Statement or the Prospectus shall be amended or supplemented (each of the times
referenced above is referred to herein as a "Representation Date"), as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional
information has been complied with. The Indenture has been duly
qualified under the 1939 Act.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto (including the filing of the Company's most recent Annual
Report on Form 10-K with the
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Commission) became effective and at each Representation Date, the
Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations"), and did
not and 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. Neither the
Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at each
Representation Date, included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434
is used, the Company will comply with the requirements of Rule 434 and
the Prospectus shall not be "materially different", as such term is
used in Rule 434, from the prospectus included in the Registration
Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by any Agent(s) expressly for use in the
Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Agents for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to
be incorporated by reference in the Prospectus, at the time they were
or hereafter are filed with the Commission, complied and will comply
in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission under the 1934 Act (the "1934
Act Regulations") and, when read together with the other information
in the Prospectus, at the date hereof, at the date of the Prospectus
and at each Representation Date, did not and will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(iii) INDEPENDENT ACCOUNTANTS. The accountants, Arthur Andersen LLP,
PriceWaterhouseCoopers LLP and KPMG LLP, each of whom certified
certain financial statements and supporting schedules thereto included
in the Registration
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Statement and the Prospectus, are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly (a) the financial position of (1)
the Company and its consolidated subsidiaries and (2) BancBoston
Mortgage Corporation and its consolidated subsidiaries, in each case
at the dates indicated and (b) the results of operations,
stockholders' equity and cash flows of (1) the Company and its
consolidated subsidiaries and (2) BancBoston Mortgage Corporation and
its consolidated subsidiaries, in each case for the periods specified;
said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein.
The selected financial data and the summary financial information
included in the Registration Statement and the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in
the Registration Statement and the Prospectus. If applicable, the pro
forma financial statements and the related notes thereto and other pro
forma financial information included in the Registration Statement and
the Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein or contemplated
thereby, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly organized
and is validly existing as a corporation in good standing under the
laws of the State of Florida and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus, to enter into and perform its obligations
under this Agreement and to consummate the
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transactions contemplated in the Prospectus; the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in
good standing would not result in a Material Adverse Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Each subsidiary (either direct or
indirect) of the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
stated in the Registration Statement and the Prospectus, all of the
issued and outstanding shares of capital stock of each subsidiary of
the Company has been duly authorized and validly issued, is fully paid
and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; and none of the
outstanding shares of capital stock of any such subsidiary was issued
in violation of preemptive or other similar rights of any
securityholder of such subsidiary. The only subsidiaries of the
Company are (a) the subsidiaries listed on Exhibit 21 incorporated by
reference in the Registration Statement and (b) certain other
subsidiaries which, considered in the aggregate as a single
subsidiary, do not constitute a "significant subsidiary" as defined in
Rule 1-02 of Regulation S-X.
(viii) CAPITALIZATION. If applicable, the authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus as of the date specified therein under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus). The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
(ix) AUTHORIZATION, ETC., OF THIS AGREEMENT, THE INDENTURE AND THE
NOTES. This Agreement has been duly authorized, executed and delivered
by the Company; the Indenture has been duly authorized, executed and
delivered by the Company and will be a valid and legally binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be
limited by (1) bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally,
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(2) general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), (3) requirements that
a claim with respect to any debt securities issued under the Indenture
that are payable in a foreign or composite currency (or a foreign or
composite currency judgment in respect of such claim) be converted
into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (4) governmental authority to
limit, delay or prohibit the making of payments outside the United
States; the Notes have been duly authorized by the Company for offer,
sale, issuance and delivery pursuant to this Agreement and, when
issued, authenticated and delivered in the manner provided for in the
Indenture and delivered against payment of the consideration therefor,
will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as enforcement thereof may be limited by (1) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally, (2) general equitable
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law), (3) requirements that a claim with
respect to any Notes payable in a foreign or composite currency (or a
foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate or exchange prevailing on a date
determined pursuant to applicable law or (4) governmental authority to
limit, delay or prohibit the making of payments outside the United
States; the Notes will be substantially in a form previously certified
to the Agents and contemplated by the Indenture; and each holder of
Notes will be entitled to the benefits of the Indenture.
(x) DESCRIPTIONS OF THE INDENTURE AND THE NOTES. The Indenture and the
Notes conform and will conform in all material respects to the
statements relating thereto contained in the Prospectus and are
substantially in the form filed or incorporated by reference, as the
case may be, as an exhibit to the Registration Statement.
(xi) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any of
its subsidiaries is in violation of the provisions of its charter or
by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of
them may be bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject (collectively,
"Agreements and Instruments"), except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture, the Notes and any other
agreement or instrument entered into or issued or to be entered into
or issued by the Company in connection with the transactions
contemplated by the Prospectus, the consummation of the transactions
contemplated in the Prospectus (including the issuance and sale of the
Notes and the use of proceeds therefrom as described in the Prospectus
under the caption "Use of Proceeds") and the compliance by the Company
with its obligations hereunder and under the
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Indenture, the Notes and such other agreements or instruments have
been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or the passage
of time or both, conflict with or constitute a breach of, or default
or Repayment Event (as defined below) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, the
Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation
of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of their assets,
properties or operations. As used herein, a "Repayment Event" means
any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or
any of its subsidiaries.
(xii) ABSENCE OF LABOR DISPUTES. No labor dispute with the employees
of the Company or any of its subsidiaries exists or, to the knowledge
of the Company, is imminent, which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xiii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or to
the knowledge of the Company threatened, against or affecting the
Company or any of its subsidiaries which is required to be disclosed
in the Registration Statement and the Prospectus (other than as stated
therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the assets, properties or operations
thereof, the performance by the Company of its obligations under this
Agreement, the Indenture and the Notes or the consummation of the
transactions contemplated in the Prospectus; and the aggregate of all
pending legal or governmental proceedings to which the Company or any
of its subsidiaries is a party or of which any of their respective
assets, properties or operations is the subject which are not
described in the Registration Statement and the Prospectus, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(xiv) ACCURACY OF EXHIBITS. There are no contracts or documents which
are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed
as required.
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(xv) NO STABILIZATION OR MANIPULATION. Neither the Company nor any of
its subsidiaries has taken or will take, directly or indirectly, any
action designed to, or that might be reasonably expected to, cause or
result in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Notes.
(xvi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency or quasi-governmental agency (including the Federal Home Loan
Mortgage Corporation ("FHLMC"), Fannie Mae (formerly known as the
Federal National Mortgage Association), the Government National
Mortgage Association ("GNMA"), the Federal Housing Administration
("FHA") and the Veterans Administration ("VA")) is necessary or
required for the performance by the Company of its obligations
hereunder, in connection with the offering, issuance or sale of the
Notes hereunder or the consummation of the transactions contemplated
by this Agreement, except such as have been already obtained or as may
be required under the 1933 Act or the 1933 Act Regulations or the
securities or "blue sky" laws of the various states.
(xvii) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory or
quasi-governmental agencies or bodies (including FHLMC, Fannie Mae,
GNMA, FHA and VA) necessary to conduct the business now operated by
them, except where the failure so to possess such Governmental
Licenses would not, singly or in the aggregate, have a Material
Adverse Effect; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xviii) TITLE TO PROPERTY. The Company and its subsidiaries have good
and marketable title to all properties and assets described in the
Prospectus as owned by the Company and its subsidiaries, free and
clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind, except (A) as otherwise
stated in the Registration Statement and the Prospectus or (B) those
which do not, singly or in the aggregate, materially affect the value
of such property or asset and do not interfere with the use made and
proposed to be made of such property or asset by the Company or any of
its subsidiaries; and all of the leases and subleases material to the
business of the Company and its
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subsidiaries considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties or assets described in the
Prospectus, are in full force and effect, and neither the Company nor
any of its subsidiaries has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the
Company or any of its subsidiaries under any of such leases or
subleases, or affecting or questioning the rights of the Company or
such subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xix) INVESTMENT COMPANY ACT. The Company is not, and upon the
issuance and sale of the Notes as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xx) ENVIRONMENTAL LAWS. Except as otherwise stated in the
Registration Statement and the Prospectus and except as would not,
singly or in the aggregate, result in a Material Adverse Effect, (A)
neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any
of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxi) COMMODITY EXCHANGE ACT. The Notes, upon issuance, will be
excluded or exempted under, or beyond the purview of, the Commodity
Exchange Act, as amended (the "Commodity Exchange Act"), and the rules
and regulations of the
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Commodity Futures Trading Commission under the Commodity Exchange Act
(the "Commodity Exchange Act Regulations").
(xxii) RATINGS. The Medium-Term Note Program under which the Notes are
issued (the "Program"), as well as the Notes, are rated [Baa2] by
Moody's Investors Service, Inc. and [BBB] by Standard & Poor's Ratings
Service, or such other rating as to which the Company shall have most
recently notified the Agents pursuant to Section 4(a) hereof.
(xxiii) INTERNAL ACCOUNTING CONTROLS. The Company and its subsidiaries
each maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (A) transactions are executed in
accordance with management's general and specific authorization, (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain
accountability for assets, (C) access to assets is permitted only in
accordance with management's general and specific authorization, and
(D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. The Company and its
subsidiaries have not made, and, to the knowledge of the Company, no
employee or agent of the Company or any of its subsidiaries has made,
any payment of the Company's or any of its subsidiaries' funds or
received or retained any funds in violation of any applicable law,
regulation or rule or that would be required to be disclosed in the
Prospectus.
(xxiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, software,
systems or procedures), trademarks, service marks, trade names or
other intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither
the Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(b) ADDITIONAL CERTIFICATION. Any certificate signed by any officer of the
Company or any of its subsidiaries and delivered to one or more Agents or to
counsel for the Agents in connection with an offering of Notes to one or more
Agents as principal or through an Agent as agent shall be deemed a
representation and warranty by the Company to such Agent or Agents as to the
matters covered thereby on the date of such certificate and, unless subsequently
amended or supplemented, at each Representation Date subsequent thereto.
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SECTION 3. PURCHASES AS PRINCIPAL; SOLICITATIONS AS AGENT.
(a) PURCHASES AS PRINCIPAL. Purchases of Notes from the Company by the
Agents, individually or in a syndicate, as principal shall be made in accordance
with terms agreed upon between such Agent or Agents and the Company (which
terms, unless otherwise agreed, shall, to the extent applicable, include those
terms specified in Exhibit A hereto and shall be agreed upon orally, with
written confirmation prepared by such Agent or Agents and mailed to the
Company). An Agent's commitment to purchase Notes as principal shall be deemed
to have been made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and conditions herein
set forth. Unless the context otherwise requires, references herein to "this
Agreement" shall include the applicable agreement of one or more Agents to
purchase Notes from the Company as principal. Each purchase of Notes, unless
otherwise agreed, shall be at a discount from the principal amount of each such
Note equivalent to the applicable commission set forth in Schedule A hereto. The
Agents may engage the services of any broker or dealer in connection with the
resale of the Notes purchased by them as principal and may allow all or any
portion of the discount received from the Company in connection with such
purchases to such brokers or dealers. At the time of each purchase of Notes from
the Company by one or more Agents as principal, such Agent or Agents shall
specify the requirements for the officers' certificate, opinion of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof.
If the Company and two or more Agents enter into an agreement pursuant to
which such Agents agree to purchase Notes from the Company as principal and one
or more of such Agents shall fail at the relevant Settlement Date to purchase
the Notes which it or they are obligated to purchase (the "Defaulted Notes"),
then the nondefaulting Agents shall have the right, within 24 hours thereafter,
to make arrangements for one of them or one or more other Agents or underwriters
to purchase all, but not less than all, of the Defaulted Notes in such amounts
as may be agreed upon and upon the terms herein set forth; provided, however,
that if such arrangements shall not have been completed within such 24-hour
period, then:
(A) if the aggregate principal amount of Defaulted Notes does not
exceed 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on such Settlement Date, the
nondefaulting Agents shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their
respective initial underwriting obligations bear to the underwriting
obligations of all nondefaulting Agents; or
(B) if the aggregate principal amount of Defaulted Notes exceeds 10%
of the aggregate principal amount of Notes to be so purchased by all
of such Agents on such Settlement Date, such agreement shall terminate
without liability on the part of any nondefaulting Agent.
No action taken pursuant to this paragraph shall relieve any defaulting Agent
from liability in respect of its default. In the event of any such default which
does not result in a termination of such agreement, either the nondefaulting
Agents or the Company shall have the right to postpone the relevant Settlement
Date for a period not exceeding seven days in order to effect any required
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changes in the Registration Statement or the Prospectus or in any other
documents or arrangements.
(b) SOLICITATIONS AS AGENT. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers for the purchase of
Notes upon the terms set forth in the Prospectus. The Agents are not authorized
to appoint sub-agents with respect to Notes sold through them as agent. All
Notes sold through an Agent as agent will be sold at 100% of their principal
amount unless otherwise agreed upon between the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers for the purchase of Notes through an Agent, as an agent
of the Company, commencing at any time for any period of time or permanently. As
soon as practicable after receipt of instructions from the Company, such Agent
will suspend solicitation of offers for the purchase of Notes from the Company
until such time as the Company has advised such Agent that such solicitation may
be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent, as an
agent of the Company, as set forth in Schedule A hereto.
(c) ADMINISTRATIVE PROCEDURES. The purchase price, interest rate or
formula, maturity date and other terms of the Notes specified in Exhibit A
hereto (as applicable) shall be agreed upon between the Company and the
applicable Agent(s) and specified in a pricing supplement to the Prospectus
(each, a "Pricing Supplement") to be prepared by the Company in connection with
each sale of Notes. Except as otherwise specified in the applicable Pricing
Supplement, the Notes will be issued in denominations of U.S. $1,000 or any
larger amount that is an integral multiple of U.S. $1,000. Administrative
procedures with respect to the issuance and sale of the Notes (the "Procedures")
shall be agreed upon from time to time among the Company, the Agents and the
Trustee. The Agents and the Company agree to perform, and the Company agrees to
cause the Trustee to agree to perform, their respective duties and obligations
specifically provided to be performed by them in the Procedures.
SECTION 4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with each Agent as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 4(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Agents immediately, and confirm
the notice in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus or
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for additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Notes for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes, or (v) any change in the rating assigned by any nationally
recognized statistical rating organization to the Program or any debt securities
(including the Notes) of the Company, or the public announcement by any
nationally recognized statistical rating organization that it has under
surveillance or review, with possible negative implications, its rating of the
Program or any such debt securities, or the withdrawal by any nationally
recognized statistical rating organization of its rating of the Program or any
such debt securities. The Company will promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as it deems necessary to
ascertain promptly whether the form of Prospectus transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such Prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Agents advance notice
of its intention to file or prepare any additional registration statement with
respect to the registration of additional Notes, any amendment to the
Registration Statement (including any filing under Rule 462(b)) or any amendment
or supplement to the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus (other than an amendment or
supplement thereto providing solely for the determination of the variable terms
of the Notes or relating solely to the offering of securities other than the
Notes), whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish to the Agents copies of any such document a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such document to which the Agents or counsel for the Agents shall reasonably
object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or will
deliver to each Agent and counsel for the Agents, without charge, signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed and conformed copies of all consents and
certificates of experts. The Registration Statement and each amendment thereto
furnished to the Agents will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company will deliver to each Agent,
without charge, as many copies of each preliminary prospectus as such Agent may
reasonably request, and the Company hereby consents to the use of such copies
for purposes permitted by the 1933 Act. The Company will furnish to each Agent,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Agent may reasonably request.
The Prospectus and any amendments or supplements thereto furnished to the Agents
will be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
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(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply with
the 1933 Act and the 1933 Act Regulations so as to permit the completion of the
distribution of the Notes as contemplated in this Agreement and in the
Prospectus. If at any time when a Prospectus is required by the 1933 Act to be
delivered in connection with sales of the Notes any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Agents or for the Company, to amend the Registration Statement
or amend or supplement the Prospectus in order that the Prospectus will not
include any untrue statements of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of such counsel, at any such time to
amend the Registration Statement or amend or supplement the Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
4(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Agents such number of
copies of such amendment or supplement as the Agents may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the Agents, to qualify the Notes for offering and sale under
the applicable securities laws of such states and other jurisdictions (domestic
or foreign) as the Agents may designate and to maintain such qualifications in
effect for as long as may be required for the distribution of the Notes;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the Notes
have been so qualified, the Company will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification in
effect for as long as may be required for the distribution of the Notes.
(g) PREPARATION OF PRICING SUPPLEMENTS. The Company will prepare, with
respect to any Notes to be sold to or through one or more Agents pursuant to
this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents. The Company will deliver such Pricing
Supplement no later than 11:00 a.m., New York City time, on the business day
following the date of the Company's acceptance of the offer for the purchase of
such Notes and will file such Pricing Supplement pursuant to Rule 424(b)(3)
under the 1933 Act not later than the close of business of the Commission on the
fifth business day after the date on which such Pricing Supplement is first
used.
(h) REVISIONS OF PROSPECTUS -- MATERIAL CHANGES. Except as otherwise
provided in subsection (o) of this Section 4, if at any time during the term of
this Agreement any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Agents or counsel for
the Company, to amend the Registration Statement in order that the Registration
Statement 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 or to amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to
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<PAGE> 17
make the statements therein not misleading in the light of the circumstances
existing at the time the Prospectus is delivered to a purchaser, or if it shall
be necessary, in the opinion of either such counsel, to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company shall give
immediate notice, confirmed in writing, to the Agents to cease the solicitation
of offers for the purchase of Notes in their capacity as agents and to cease
sales of any Notes they may then own as principal, and the Company will promptly
prepare and file with the Commission, subject to Section 4(b) hereof, such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement and Prospectus comply with such
requirements, and the Company will furnish to the Agents, without charge, such
number of copies of such amendment or supplement as the Agents may reasonably
request. In addition, the Company will comply with the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of each offering of Notes.
(i) PROSPECTUS REVISIONS -- PERIODIC FINANCIAL INFORMATIOn. Except as
otherwise provided in subsection (o) of this Section 4, on or prior to the date
on which there shall be released to the general public interim financial
statement information related to the Company with respect to each of the first
three quarters of any fiscal year or preliminary financial statement information
with respect to any fiscal year, the Company shall furnish such information to
the Agents, confirmed in writing, and shall cause the Prospectus to be amended
or supplemented to include financial information with respect thereto and
corresponding information for the comparable period of the preceding fiscal
year, as well as such other information and explanations as shall be necessary
for an understanding thereof or as shall be required by the 1933 Act or the 1933
Act Regulations.
(j) PROSPECTUS REVISIONS -- AUDITED FINANCIAL INFORMATIOn. Except as
otherwise provided in subsection (o) of this Section 4, on or prior to the date
on which there shall be released to the general public financial information
included in or derived from the audited consolidated financial statements of the
Company for the preceding fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented to include such audited consolidated financial
statements and the report or reports, and consent or consents to such inclusion,
of the independent accountants with respect thereto, as well as such other
information and explanations as shall be necessary for an understanding of such
consolidated financial statements or as shall be required by the 1933 Act or the
1933 Act Regulations.
(k) RULE 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act and Rule 158 of the 1933 Act Regulations.
(l) 1940 ACT. The Company will not be or become an "investment company" or
an entity "controlled" by an "investment company" as such terms are defined in
the 1940 Act.
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(m) USE OF PROCEEDS. The Company will use the net proceeds received by it
from the issuance and sale of the Notes in the manner specified in the
Prospectus under the caption "Use of Proceeds."
(n) RESTRICTION ON OFFERS AND SALES OF NOTES. Unless otherwise agreed upon
between one or more Agents acting as principal and the Company, between the date
of the agreement by such Agent(s) to purchase the related Notes from the Company
and the Settlement Date with respect thereto, the Company will not, without the
prior written consent of such Agent(s), issue, sell, offer or contract to sell,
grant any option for the sale of, or otherwise dispose of, any debt securities
of the Company (other than the Notes that are to be sold pursuant to such
agreement or commercial paper in the ordinary course of business).
(o) SUSPENSION OF CERTAIN OBLIGATIONS. The Company shall not be required to
comply with the provisions of subsections (h), (i) or (j) of this Section 4
during any period from the time (i) the Agents shall have suspended solicitation
of offers for the purchase of Notes in their capacity as agents pursuant to a
request from the Company and (ii) no Agent shall then hold any Notes purchased
from the Company as principal, as the case may be, until the time the Company
shall determine that solicitation of offers for the purchase of Notes should be
resumed or an Agent shall subsequently purchase Notes from the Company as
principal.
(p) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file, and provide to the Agents a reasonable amount of time prior to such
filing, all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods prescribed by the 1934 Act and the rules and
regulations of the Commission thereunder.
SECTION 5. CONDITIONS OF AGENTS' OBLIGATIONS.
The obligations of one or more Agents to purchase Notes from the Company as
principal and to solicit offers for the purchase of Notes as an agent of the
Company, and the obligations of any purchasers of Notes sold through an Agent as
an agent of the Company, will be subject to the accuracy of the representations
and warranties on the part of the Company herein contained or contained in any
certificate of an officer of the Company or any of its subsidiaries delivered
pursuant to the provisions hereof, to the performance and observance by the
Company of its covenants and other obligations hereunder, and to the following
additional conditions precedent:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective under the
1933 Act and no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Agents. A prospectus containing the
Rule 430A Information shall have been filed with the Commission in accordance
with Rule 424(b) (or a post-effective amendment providing such information shall
have been filed and declared effective in accordance with the requirements of
Rule 430A) or, if the Company has elected to
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rely upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR COMPANY. On the date hereof, the Agents shall
have received the favorable opinion, dated as of the date hereof, of Hutchins,
Wheeler & Dittmar, A Professional Corporation, counsel for the Company, in form
and substance satisfactory to counsel for the Agents, together with signed or
reproduced copies of such letter for each of the other Agents, to the effect set
forth in Exhibit B-1 hereto and to such further effect as counsel to the Agents
may reasonably request. Such opinion shall not state that it is to be governed
or qualified by, or that it is otherwise subject to, any treatise, written
policy or other documents relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
Such counsel may state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
(c) OPINION OF GENERAL COUNSEL FOR COMPANY. On the date hereof, the Agents
shall have received the favorable opinion, dated as of date hereof, of Robert J.
Jacobs, Executive Vice President, Secretary and General Counsel for the Company,
in form and substance satisfactory to counsel for the Agents, together with
signed or reproduced copies of such letter for each of the other Agents, to the
effect set forth in Exhibit B-2 hereto and to such further effect as counsel to
the Agents may reasonably request. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any treatise,
written policy or other documents relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
Such counsel may state that, insofar as such opinion involves factual matters,
he has relied, to the extent he deems proper, upon certificates of officers of
the Company and its subsidiaries and certificates of public officials.
(d) OPINION OF COUNSEL FOR AGENTS. On the date hereof, the Agents shall
have received the favorable opinion, dated as of date hereof, of Brown & Wood
LLP, counsel for the Agents, together with signed or reproduced copies of such
letter for each of the other Agents. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the law
of the State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Agents. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(e) OFFICERS' CERTIFICATE. On the date hereof, (A) the Prospectus, as it
may then be amended or supplemented, shall not contain any untrue statement of a
material fact or any omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; (B) there shall not have been, since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business; (C)
neither the Company nor any of its subsidiaries shall have received any
communication from any regulatory, governmental or quasi-
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governmental authority or agency (including FHLMC, Fannie Mae, GNMA, FHA and VA)
which is material and adverse to the business prospects of the Company or its
subsidiaries; (D) no action, suit, proceeding at law or in equity shall be
pending or, to the knowledge of the Company, threatened, against the Company or
any of its subsidiaries before or by any government, governmental
instrumentality or court, domestic or foreign, that could result in any Material
Adverse Effect other than as set forth in the Prospectus; (E) the
representations and warranties in Section 2(a) hereof shall be true and correct
with the same force and effect as though expressly made at and as of the date
hereof; (F) the Company shall have complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the date
hereof; and (G) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission; and the
Representatives shall have received a certificate of the Chief Executive Officer
and the Chief Financial Officer of the Company, dated as of the date hereof, to
such effect.
(f) ACCOUNTANTS' COMFORT LETTERS. At the time of the execution of this
Agreement, the Agents shall have received from each of KPMG LLP, Arthur Andersen
LLP and PriceWaterhouseCoopers LLP a letter dated the date hereof, in form and
substance satisfactory to the Agents, together with signed or reproduced copies
of such letter for each of the other Agents and to such further effect as
counsel to the Agents may reasonably request, and containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
agents with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(g) ADDITIONAL DOCUMENTS. On the date hereof, counsel for the Agents shall
have been furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the Notes as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Notes as herein contemplated shall be satisfactory
in form and substance to the Agents and counsel for the Agents.
(h) TERMINATION OF AGREEMENT. If any condition specified in this Section 5
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the applicable Agent or Agents by notice to the
Company at any time and any such termination shall be without liability of any
party to any other party except as provided in Section 10 hereof and except that
Sections 8, 9, 11, 14 and 15 hereof shall survive any such termination and
remain in full force and effect.
SECTION 6. DELIVERY OF AND PAYMENT FOR NOTES SOLD THROUGH AN AGENT AS
AGENT.
Delivery of Notes sold through an Agent as an agent of the Company shall be
made by the Company to such Agent for the account of any purchaser only against
payment therefor in immediately available funds. In the event that a purchaser
shall fail either to accept delivery of or to make payment for a Note on the
date fixed for settlement, such Agent shall promptly notify the Company and
deliver such Note to the Company and, if such Agent has theretofore paid the
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Company for such Note, the Company will promptly return such funds to such
Agent. If such failure has occurred for any reason other than default by such
Agent in the performance of its obligations hereunder, the Company will
reimburse such Agent on an equitable basis for its loss of the use of the funds
for the period such funds were credited to the Company's account.
SECTION 7. ADDITIONAL COVENANTS OF THE COMPANY.
The Company further covenants and agrees with each Agent as follows:
(a) REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each acceptance by the
Company of an offer for the purchase of Notes (whether to one or more Agents as
principal or through an Agent as agent), and each delivery of Notes (whether to
one or more Agents as principal or through an Agent as agent), shall be deemed
to be an affirmation that the representations and warranties of the Company
herein contained and contained in any certificate theretofore delivered to the
Agents pursuant hereto are true and correct at the time of such acceptance or
sale, as the case may be, and an undertaking that such representations and
warranties will be true and correct at the time of delivery to such Agent(s) or
to the purchaser or its agent, as the case may be, of the Notes relating to such
acceptance or sale, as the case may be, as though made at and as of each such
time (it being understood that such representations and warranties shall relate
to the Registration Statement and Prospectus as amended and supplemented to each
such time).
(b) SUBSEQUENT DELIVERY OF CERTIFICATES. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells Notes in a
form not previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished to the Agent(s), forthwith a certificate dated
the date of filing with the Commission or the date of effectiveness of such
amendment or supplement, as applicable, or the date of such sale, as the case
may be, in form satisfactory to the Agent(s) to the effect that the statements
contained in the certificate referred to in Section 5(e) hereof which were last
furnished to the Agents are true and correct at the time of the filing or
effectiveness of such amendment or supplement, as applicable, or the time of
such sale, as the case may be, as though made at and as of such time (except
that such statements shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to such time) or, in lieu of such
certificate, a certificate of the same tenor as the certificate referred to in
Section 5(e) hereof, modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such certificate (it being understood that, in the case of clause (ii) above,
any such certificate shall also include a certification that there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise since the date of the agreement by
such Agent(s) to purchase Notes from the Company as principal).
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(c) SUBSEQUENT DELIVERY OF LEGAL OPINIONS. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells Notes in a
form not previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished forthwith to the Agent(s) and to counsel to the
Agents (1) the written opinion of Hutchins, Wheeler & Dittmar, A Professional
Corporation, counsel to the Company, or other counsel satisfactory to the
Agent(s), and (2) the written opinion of Robert J. Jacobs, Executive Vice
President, Secretary and General Counsel for the Company, each dated the date of
filing with the Commission or the date of effectiveness of such amendment or
supplement, as applicable, or the date of such sale, as the case may be, in form
and substance satisfactory to the Agent(s), of the same tenor as the opinions
referred to in Sections 5(b) and 5(c) hereof, respectively, but modified, as
necessary, to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such opinions or, in lieu of such
opinions, counsel last furnishing such opinions to the Agent(s) shall each
furnish the Agent(s) with a letter substantially to the effect that the Agent(s)
may rely on such counsel's last opinion to the same extent as though it was
dated the date of such letter authorizing reliance (except that statements in
such last opinion shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to the time of delivery of such
letter authorizing reliance).
(d) SUBSEQUENT DELIVERY OF COMFORT LETTERS. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes) or (ii) (if required in connection with the purchase of Notes
from the Company by one or more Agents as principal) the Company sells Notes to
one or more Agents as principal, the Company shall cause each of KPMG LLP,
Arthur Andersen LLP and PriceWaterhouseCoopers LLP (if applicable) to furnish to
the Agent(s) a letter, dated the date of filing with the Commission or the date
of effectiveness of such amendment or supplement, as applicable, or the date of
such sale, as the case may be, in form satisfactory to the Agent(s), of the same
tenor as the letter referred to in Section 5(f) hereof but modified to relate to
the Registration Statement and Prospectus as amended and supplemented to the
date of such letter.
SECTION 8. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE AGENTS. The Company agrees to indemnify and hold
harmless each Agent and each person, if any, who controls such Agent within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, as applicable,
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or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or arising out of an untrue statement or
alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, provided that (subject
to Section 8(d) hereof) any such settlement is effected with the
written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by such Agent),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by the Agents
expressly for use in the Registration Statement (or any amendment thereto),
including the relevant Rule 430A Information and Rule 434 Information, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto). The foregoing indemnity with respect to any untrue statement contained
in or any omission from a preliminary prospectus shall not inure to the benefit
of any Agent (or any person who controls such Agent within the meaning of
Section 15 of the 1933 Act) from whom the person asserting any such loss,
liability, claim, damage or expense purchased any of the Notes that are the
subject thereof if the Company shall sustain the burden of proving that such
person was not sent or given a copy of the Prospectus (or any amendment or
supplement thereto) at or prior to the written confirmation of the sale of such
Notes to such person and the untrue statement contained in or the omission from
such preliminary prospectus was corrected in the Prospectus (or any amendment or
supplement thereto), unless such failure resulted from noncompliance by the
Company with its obligations hereunder to furnish the Agents with copies of the
Prospectus (or any amendment or supplement thereto).
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each Agent severally
agrees to indemnify and hold harmless the Company, its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss,
23
<PAGE> 24
liability, claim, damage and expense described in the indemnity contained in
Section 8(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the relevant Rule 430A
Information and Rule 434 Information, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 8(a) hereof,
counsel to the indemnified parties shall be selected by the applicable Agent(s)
(PROVIDED, that in the case of an action involving two or more Agents that shall
have purchased Notes from the Company in a syndicate as principals, the Agent
that acted as managing underwriter shall make such selection) and, in the case
of parties indemnified pursuant to Section 8(b) hereof, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; PROVIDED,
HOWEVER, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 8 or 9 hereof (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 litigation, investigation, proceeding or claim 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) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 8(a)(ii) effected without its written consent if (i) such settlement is
entered into more than sixty (60) days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least forty-five (45) days prior to
such settlement being entered into
24
<PAGE> 25
and (iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the applicable
Agent(s), on the other hand, from the offering of the Notes that were the
subject of the claim for indemnification or (ii) if the allocation provided by
clause (i) 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 the Company on the one hand and the
applicable Agent(s) on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
applicable Agent(s) on the other hand in connection with the offering of the
Notes that were the subject of the claim for indemnification shall be deemed to
be in the same respective proportions as the total net proceeds from the
offering of such Notes (before deducting expenses) received by the Company and
the total discount or commission received by each applicable Agent, as the case
may be, bears to the aggregate initial offering price of such Notes.
The relative fault of the Company, on the one hand, and the applicable
Agent(s), on the other hand, shall be determined by reference to, among other
things, whether any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the applicable Agent(s) and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Agents agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the applicable Agent(s) were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 9. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 9 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any applicable untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, no Agent shall be
required to contribute any amount in excess of the amount by which the total
discount or commission received by such Agent in connection with the offering of
the Notes that were the subject of the claim for
25
<PAGE> 26
indemnification exceeds the amount of any damages which such Agent has otherwise
been required to pay by reason of any applicable 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 9, each person, if any, who controls an Agent
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as such Agent, and each director of
the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. In addition, in connection with an offering of
Notes purchased from the Company by two or more Agents as principal, the
respective obligations of such Agents to contribute pursuant to this Section 9
are several in proportion to the aggregate principal amount of Notes that each
such Agent has agreed to purchase from the Company and not joint.
SECTION 10. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including:
(i) The preparation, printing, filing and delivery of the Registration
Statement (including financial statements and exhibits) as originally
filed and all amendments thereto and any preliminary prospectus, the
Prospectus and any amendments or supplements thereto (including,
without limitation, any Prospectus required to be delivered pursuant
to Section 4(3) of the 1933 Act);
(ii) The preparation, printing and delivery of this Agreement and the
Indenture;
(iii) The preparation, issuance and delivery of the Notes, including
any fees and expenses relating to the eligibility and issuance of
Notes in book-entry form and the cost of obtaining CUSIP or other
identification numbers for the Notes;
(iv) The fees and disbursements of the Company's accountants, counsel
and other advisors or agents (including any calculation agent or
exchange rate agent) and of the Trustee and its counsel;
(v) The reasonable fees and disbursements of counsel for the Agents
incurred in connection with the establishment of the Program and
incurred from time to time in connection with the transactions
contemplated hereby, unless otherwise agreed to between the Company
and the applicable Agent(s) and/or Additional Agent(s) pursuant to a
terms agreement with respect to such transactions;
26
<PAGE> 27
(vi) The qualification of the Notes under securities laws in
accordance with the provisions of Section 4(f) hereof, including
filing fees and the reasonable fees and disbursements of counsel for
the Agents in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto;
(vii) The printing and delivery to the Agents of copies of each
preliminary prospectus and any amendments or supplements thereto;
(viii) The preparation, printing and delivery to the Agents of copies
of the Blue Sky Survey and any supplement thereto;
(ix) The fees charged by nationally recognized statistical rating
organizations for the rating of the Program and the Notes;
(x) The fees and expenses incurred in connection with any listing of
Notes on a securities exchange;
(xi) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agents in connection with, the review,
if any, by the National Association of Securities Dealers, Inc. (the
"NASD") of the terms of the sale of the Notes; and
(xii) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the Agents
in accordance with the provisions of Section 5 or Section 12(b)(i) hereof, the
Company shall reimburse the Agents for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Agents and
the costs and expenses incurred in connection with the updating and delivery of
any Prospectus that may be required under the 1933 Act or the 1934 Act.
SECTION 11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company or any of its subsidiaries
submitted pursuant hereto or thereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of the Agents
or any controlling person of an Agent, or by or on behalf of the Company, and
shall survive each delivery of and payment for the Notes.
SECTION 12. TERMINATION.
(a) TERMINATION OF THIS AGREEMENT. This Agreement (excluding any agreement
by one or more Agents to purchase Notes from the Company as principal) may be
terminated for any reason, at any time by either the Company or an Agent, as to
itself, upon the giving of prior written notice of such termination to the other
party hereto.
27
<PAGE> 28
(b) TERMINATION OF AGREEMENT TO PURCHASE NOTES AS PRINCIPAL. The applicable
Agent(s) may terminate any agreement by such Agent(s) to purchase Notes from the
Company as principal, immediately upon notice to the Company, at any time prior
to the Settlement Date relating thereto, if (i) there has been, since the date
of such agreement or since the respective dates as of which information is given
in the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) there has occurred any
material adverse change in the financial markets in the United States or, if
such Notes are denominated and/or payable in, or indexed to, one or more foreign
or composite currencies, in the international financial markets, or any outbreak
of hostilities or escalation thereof or other calamity or crisis or any change
or development or event involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of such Agent(s),
impracticable to market such Notes or enforce contracts for the sale of such
Notes, or (iii) trading in any securities of the Company has been suspended or
limited by the Commission or a national securities exchange, or if trading
generally on the New York Stock Exchange or the American Stock Exchange or in
the Nasdaq National Market has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by either of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) a banking
moratorium has been declared by either Federal or New York authorities or by the
relevant authorities in the country or countries of origin of any foreign or
composite currency in which such Notes are denominated and/or payable, or (v)
the rating assigned by any nationally recognized statistical rating organization
to the Program or any debt securities (including the Notes) of the Company as of
the date of such agreement shall have been lowered or withdrawn since that date
or if any such rating organization shall have publicly announced that it has
under surveillance or review its rating of the Program or any such debt
securities, or (vi) there shall have come to the attention of such Agent(s) any
facts that would cause such Agent(s) to believe that the Prospectus, at the time
it was required to be delivered to a purchaser of such Notes, included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances existing
at the time of such delivery, not misleading.
(C) GENERAL. In the event of any such termination under paragraph (a) or
(b) of this Section, neither party will have any liability to the other party
hereto, except that (i) the Agents shall be entitled to any commissions earned
in accordance with the third paragraph of Section 3(b) hereof, (ii) if at the
time of termination (a) any Agent shall own any Notes purchased by it from the
Company as principal or (b) an offer to purchase any of the Notes has been
accepted by the Company but the time of delivery to the purchaser or his agent
of such Notes relating thereto has not occurred, the covenants set forth in
Sections 4 and 7 hereof shall remain in effect until such Notes are so resold or
delivered, as the case may be, and (iii) the covenant set forth in Sections 4(e)
and 4(k) hereof, the provisions of Section 10 hereof, the indemnity and
contribution agreements set forth in Sections 8 and 9 hereof, and the provisions
of Sections 11, 14 and 15 hereof shall remain in effect.
SECTION 13. NOTICES.
28
<PAGE> 29
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication.
Notices to the Company shall be directed to it at:
7301 Baymeadows Way
Jacksonville, Florida 32256
Attention: President
Facsimile: 904 281-3745
with copies to:
7301 Baymeadows Way
Jacksonville, Florida 32256
Attention: Robert J. Jacobs
Facsimile: 904 281-3745
Notices to any Agent shall be directed to such Agent as follows:
If to Merrill Lynch, at:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
250 Vesey Street
New York, New York 10281-1201
Attention: MTN Product Management
Facsimile: 212 449-2234
If to BancAmerica, at:
Banc of America Securities LLC
100 North Tryon Street
NC1-007-07-01
Charlotte, NC 28255
Attention: Medium-Term Note Desk
Facsimile: 704 388-9939
If to Chase, at:
Chase Securities Inc.
270 Park Avenue
8th Floor
New York, New York 10017
Attention: Medium-Term Note Desk
29
<PAGE> 30
Facsimile: 212 834-6081
If to J.P. Morgan, at:
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Attention: Medium-Term Note Desk
If to Salomon, at:
Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Attention: Medium-Term Note Desk
Facsimile: 212 723-8812
If to Warburg, at:
Warburg Dillon Read LLC
677 Washington Boulevard
Stamford, CT 06901
Attention: Medium-Term Note Desk
Facsimile: 203 719-7139
SECTION 14. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the Agents
and the Company and their respective successors. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons, officers and directors referred to in Sections 8 and 9
hereof and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and their
respective successors, and said controlling persons, officers and directors and
their heirs and legal representatives, and for the benefit of no other person,
firm or corporation. No purchaser of Notes shall be deemed to be a successor by
reason merely of such purchase.
SECTION 15. GOVERNING LAW; FORUM.
THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY AGAINST ANY AGENT IN
CONNECTION WITH OR ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT SOLELY IN THE
STATE OR FEDERAL COURT OF APPROPRIATE JURISDICTION LOCATED IN THE BOROUGH
30
<PAGE> 31
OF MANHATTAN, THE CITY OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 16. EFFECT OF HEADINGS.
The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
SECTION 17. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts hereof shall constitute
a single instrument.
31
<PAGE> 32
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Distribution Agreement, along with all counterparts, will become a binding
agreement among the Agents and the Company in accordance with its terms.
Very truly yours,
HOMESIDE LENDING, INC.
By:
--------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
---------------------------------
Authorized Signatory
BANC OF AMERICA SECURITIES LLC
By:
---------------------------------
Authorized Signatory
CHASE SECURITIES INC.
By:
---------------------------------
Authorized Signatory
J.P. MORGAN SECURITIES INC.
By:
---------------------------------
Authorized Signatory
32
<PAGE> 33
SALOMON SMITH BARNEY INC.
By:
---------------------------------
Authorized Signatory
WARBURG DILLON READ LLC
By:
---------------------------------
Authorized Signatory
33
<PAGE> 34
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company shall
pay the applicable Agent, on a discount basis, a commission for the sale of each
Note equal to the principal amount of such Note multiplied by the appropriate
percentage set forth below:
<TABLE>
<CAPTION>
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
<S> <C>
From 9 months to less than 1 year................................... .125%
From 1 year to less than 18 months.................................. .150
From 18 months to less than 2 years................................. .200
From 2 years to less than 3 years................................... .250
From 3 years to less than 4 years................................... .350
From 4 years to less than 5 years................................... .450
From 5 years to less than 6 years................................... .500
From 6 years to less than 7 years................................... .550
From 7 years to less than 10 years.................................. .600
From 10 years to less than 15 years................................. .625
From 15 years to less than 20 years................................. .700
From 20 years to 30 years........................................... .750
Greater than 30 years............................................... 1
- ---------------------
(1) As agreed to by the Company and the applicable Agent at the time of sale.
</TABLE>
34
<PAGE> 35
EXHIBIT A
PRICING TERMS
Principal Amount: $_______
(or principal amount of foreign or composite currency)
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
~ LIBOR Reuters Page:
~ LIBOR Telerate Page:
Designated LIBOR Currency:
If CMT Rate,
Designated CMT Telerate Page:
If Telerate Page 7052:
~ Weekly Average
~ Monthly Average
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Day Count Convention:
Calculation Agent:
Redemption Provisions:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
Repayment Provisions:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
A-1
<PAGE> 36
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
Purchase Price: ___%, plus accrued interest, if any, from ___________
Price to Public: ___%, plus accrued interest, if any, from __________
Issue Price:
Settlement Date and Time:
Additional/Other Terms:
Also, in connection with the purchase of Notes from the Company by one or more
Agents as principal, agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 7(b) of the Distribution
Agreement.
Legal Opinion pursuant to Section 7(c) of the Distribution Agreement.
Comfort Letters pursuant to Section 7(d) of the Distribution Agreement.
A-2
<PAGE> 37
EXHIBIT B-1
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
1. The Company has the corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus, and
the Company has corporate power and authority to issue the Notes and to enter
into and perform its obligations under the Distribution Agreement, the Indenture
and the Notes.
2. If applicable, the authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption "Capitalization";
the shares of issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the Company
arising by operation of law, or under the charter or by-laws of the Company, or
under any agreement known to us to which the Company is a party.
3. The Distribution Agreement has been duly authorized, executed and delivered
by the Company.
4. The Indenture has been duly authorized, executed and delivered by the
Company and (assuming due authorization, execution and delivery thereof by the
applicable Trustee) constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, (B) general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at law), (C)
requirements that a claim with respect to any debt securities issued under the
Indenture that are payable in a foreign or composite currency (or a foreign or
composite currency judgment in respect of such claim) be converted into U.S.
dollars at a rate of exchange prevailing on a date determined pursuant to
applicable law or (D) governmental authority to limit, delay or prohibit the
making of payments outside the United States.
5. The Indenture has been duly qualified under the 1939 Act.
6. The Notes have been duly authorized by the Company for offer, sale, issuance
and delivery pursuant to the Distribution Agreement and, when issued,
authenticated and delivered in the manner provided for in the Indenture and
delivered against payment of the consideration therefor, will constitute valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their terms, except as the enforcement thereof may be limited
by
B-1-1
<PAGE> 38
(A) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, (B) general equitable
principles (regardless of whether enforcement is considered in a proceeding in
equity or at law), (C) requirements that a claim with respect to any Notes
payable in a foreign or composite currency (or a foreign or composite currency
judgment in respect of such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law or (D)
governmental authority to limit, delay or prohibit the making of payments
outside the United States; and the Notes, in the forms certified on the date
hereof, are in the form contemplated by, and each registered holder thereof is
entitled to the benefits of, the Indenture.
7. The Indenture and the Notes, in the forms certified on the date hereof,
conform in all material respects to the statements relating thereto contained in
the Prospectus and are in substantially the form filed or incorporated by
reference, as the case may be, as an exhibit to the Registration Statement.
8. The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and, to the best of our knowledge, no
stop order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission.
9. The Registration Statement, including any Rule 462(b) Registration Statement
and the relevant Rule 434 Information, as applicable, the Prospectus, excluding
the documents incorporated by reference therein, and each amendment or
supplement to the Registration Statement and Prospectus as of their respective
effective or issue dates (other than the financial statements and supporting
schedules included therein or omitted therefrom and the Trustee's Statement of
Eligibility on Form T-1 (the "Form T-1"), as to which we express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
10. The documents incorporated by reference in the Prospectus (other than the
financial statements and supporting schedules included therein or omitted
therefrom, as to which we express no opinion), when they were filed with the
Commission, complied as to form in all material respects with the requirements
of the 1934 Act and the 1934 Act Regulations.
11. If Rule 434 has been relied upon, the Prospectus was not "materially
different," as such term is used in Rule 434, from the prospectus included in
the Registration Statement at the time it became effective.
B-1-2
<PAGE> 39
12. To the best of our knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or any
of its subsidiaries is a party, or to which the property of the Company or any
of its subsidiaries is subject, before or brought by any court or governmental
or quasi-governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the properties or
assets thereof or the consummation of the transactions contemplated in the
Distribution Agreement or the performance by the Company of its obligations
thereunder.
13. The information in the Prospectus under "Description of Notes" and "Certain
United States Federal Income Tax Considerations," or any caption purporting to
cover such matters, the information in the Registration Statement under Item 15,
to the extent that such information constitutes matters of law, summaries of
legal matters, the Company's charter and bylaws or legal proceedings, or legal
conclusions, has been reviewed by us and is correct in all material respects.
14. To the best of our knowledge, there are no statutes or regulations that are
required to be described in the Prospectus that are not described as required.
15. All descriptions in the Registration Statement of contracts and other
documents to which the Company or its subsidiaries are a party are accurate in
all material respects; to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
16. To the best of our knowledge, the Company is not in violation of its
charter or by-laws and no default by the Company exists in the due performance
or observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by reference
as an exhibit to the Registration Statement.
17. All necessary corporate action by the Company has been taken in connection
with, and no filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental or
quasi-governmental authority or agency, domestic or foreign (other than under
the 1933 Act and the 1933 Act Regulations, which have been obtained, or as may
be required under the securities or blue sky laws of the various states, as to
which we need express no opinion), is necessary or required for, the due
authorization, execution, delivery and performance by the Company of its
obligations under the
B-1-3
<PAGE> 40
Distribution Agreement, the Indenture or the Notes or for the offering,
issuance or sale of the Notes or the consummation of the transactions
contemplated in the Prospectus.
18. The execution, delivery and performance of the Distribution Agreement,
the Indenture and the Notes and any other agreement or instrument entered
into or issued or to be entered into or issued by the Company in connection
with the transactions contemplated in the Prospectus, the consummation of
the transactions contemplated in the Prospectus (including the issuance and
sale of the Notes and the use of the proceeds therefrom as described in the
Prospectus) and the compliance by the Company with its obligations
thereunder do not and will not, whether with or without the giving of
notice or lapse of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined in Section 2(a)(xi) of the
Distribution Agreement) under or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument, known
to us, to which the Company is a party or by which it may be bound, or to
which any of the property or assets of the Company is subject (except for
such conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a Material Adverse Effect), nor will such action result in
any violation of the provisions of the charter or by-laws of the Company or
any applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to us, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of
its respective properties, assets or operations.
19. To the best of our knowledge, there are no persons with registration
rights or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under
the 1933 Act except as disclosed in the Prospectus.
20. The Company is not, and upon the issuance and sale of the Notes and
the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of the
1940 Act.
21. The Notes, in the forms certified on the date hereof, will be excluded
or exempted under, or beyond the purview of, the Commodity Exchange Act and
the Commodity Exchange Act Regulations.
We have participated in the preparation of the Registration Statement and
the Prospectus and in conferences and telephone conversations with officers and
representatives of the Company, representatives of Arthur Andersen LLP,
PriceWaterhouseCoopers LLP and KPMG LLP, the independent public accountants for
the Company and certain of its subsidiaries, your representatives and
representatives of your counsel, during which conferences and conversations the
contents of the Registration Statement and the Prospectus and related matters
were discussed.
B-1-4
<PAGE> 41
Except as set forth in paragraph 13 above, we have not undertaken to verify
independently the statements made and information provided to us in the
documents and conferences referred to above, but nevertheless we hereby confirm
to you that nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the relevant Rule
434 Information, (if applicable), (except for financial statements and schedules
and other financial data included or incorporated by reference therein or
omitted therefrom and for the Form T-1, as to which we need make no statement),
at the time such Registration Statement or any such amendment became effective
(or, if an Annual Report on Form 10-K has been filed by the Company with the
Commission subsequent to the effectiveness of the Registration Statement or any
such amendment, at the time of the most recent such filing) or at the date of
any agreement of the applicable Agent(s) to purchase Notes from the Company as
principal, 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 or any amendment or
supplement thereto (except for financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which we need make no statement), at the time the Prospectus
was issued, at the time any such amended or supplemented prospectus was issued
or at the date hereof, included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
B-1-5
<PAGE> 42
EXHIBIT B-2
FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
1. The Company is a corporation duly incorporated, validly existing and in
corporate good standing under the laws of the State of Florida.
2. The Company has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, and the Company has corporate power and authority to issue the
Notes and to enter into and perform its obligations under the Distribution
Agreement, the Indenture and the Notes.
3. If applicable, the authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under the caption
"Capitalization"; the shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights
of any securityholder of the Company arising by operation of law, or under
the charter or by-laws of the Company, or under any agreement known to us
to which the Company is a party.
4. Each subsidiary of the Company is a corporation duly incorporated,
validly existing and in corporate good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus. Each of the Company and its subsidiaries is
duly qualified as a foreign corporation to transact business and is in good
standing as a foreign corporation in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
5. To the best of my knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or
any of its subsidiaries is a party, or to which the property of the Company
or any of its subsidiaries is subject, before or brought by any court or
governmental or quasi-governmental agency or body, domestic or foreign,
which might reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the transactions
contemplated in the Distribution Agreement, the Indenture or the Notes or
the performance by the Company of its obligations thereunder.
B-2-1
<PAGE> 43
6. The information in the Prospectus under "Risk Factors--Regulation,
Possible Changes and Related Matters," "Business--Properties," "Business
--Regulation," "Business--Litigation" to the extent that it constitutes
matters of law, summaries of legal matters or legal conclusions, has been
reviewed by me and is correct in all material respects.
7. To the best of my knowledge, none of the Company and or any of its
subsidiaries is in violation of its charter or by-laws and no default by
the Company or any of its subsidiaries exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease
or other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement which would have a
Material Adverse Effect.
8. All necessary corporate action by the Company has been taken in
connection with, and no filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental or quasi-governmental authority or agency, domestic or foreign
(other than under the 1933 Act and the 1933 Act Regulations, or as may be
required under the securities or blue sky laws of the various states, as to
which, in each case, I need express no opinion) is necessary or required
for, the due authorization, execution and delivery of the Distribution
Agreement, the Indenture or the Notes or for the offering, issuance or sale
of the Notes.
9. The execution, delivery and performance of the Distribution Agreement,
the Indenture and the Notes and the consummation of the transactions
contemplated herein, therein and in the Registration Statement (including
the issuance and sale of the Notes and the use of the proceeds from the
sale of the Notes as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations under the
Distribution Agreement, the Indenture and the Notes do not and will not,
whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(x) of the Distribution Agreement) under or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, known to me, to which the
Company or any of its subsidiaries is a party or by which any of them may
be bound, or to which any of the property or assets of the Company or any
of its subsidiaries is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its
subsidiaries, or any applicable law, statute, rule, regulation, judgment,
order, writ or decree, known to me (other than under the 1933 Act and the
1933 Act Regulations or under the securities or blue sky
B-2-2
<PAGE> 44
laws of the various states, to which, in each case, I express no opinion),
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company, any of its subsidiaries or
any of their respective properties, assets or operations.
I have read the Registration Statement and the Prospectus. I did not
independently verify the accuracy or completeness of the statements made in the
Registration Statement and the Prospectus and I cannot and do not assume
responsibility for or pass on the accuracy and completeness of such statements,
except as set forth in paragraph 6 above and except insofar as such statements
relate to me. Subject to the foregoing, I hereby confirm to you that nothing has
come to my attention that would lead me to believe that the Registration
Statement or any amendment thereto, including the relevant Rule 434 Information
(if applicable), (except for financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which I need make no statement), at the time such Registration
Statement or any such amendment became effective (or, if an Annual Report on
Form 10-K has been filed by the Company with the Commission subsequent to the
effectiveness of the Registration Statement or any such amendment, at the time
of the most recent such filing) or at the date of any agreement of the
applicable Agent(s) to purchase Notes from the Company as principal, contained
any 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 or any amendment or supplement thereto (except
for financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which I need make
no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the date hereof, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
B-2-3
<PAGE> 1
EXHIBIT 4.2
[FACE OF NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
REGISTERED CUSIP No.: PRINCIPAL AMOUNT:
No. FXR-______ ___________ $___________
HOMESIDE LENDING, INC.
MEDIUM-TERM NOTE
(Fixed Rate)
ORIGINAL ISSUE DATE: INTEREST RATE: % STATED MATURITY DATE:
INTEREST PAYMENT DATE(S) [ ] CHECK IF DISCOUNT NOTE
[ ] Issue Price: %
[ ] Other:
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE
REDUCTION: %
OPTIONAL REPAYMENT DATE(S)
AUTHORIZED DENOMINATION: ADDENDUM ATTACHED OTHER/ADDITIONAL
[ ] $1,000 and integral [ ] Yes PROVISIONS:
multiples thereof [ ] No
[ ] Other:
<PAGE> 2
HOMESIDE LENDING, INC., a Florida corporation (the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of _____________, on the Stated Maturity Date specified above
(or any Redemption Date or Repayment Date, each as defined on the reverse
hereof) (each such Stated Maturity Date, Redemption Date or Repayment Date being
hereinafter referred to as the "Maturity Date" with respect to the principal
repayable on such date) and to pay interest thereon (and on any overdue
principal, premium and/or interest to the extent legally enforceable), at the
Interest Rate per annum specified above, until the principal hereof is paid or
duly made available for payment. The Company will pay interest in arrears on
each Interest Payment Date, if any, specified above (each, an "Interest Payment
Date"), commencing with the first Interest Payment Date next succeeding the
Original Issue Date specified above, and on the Maturity Date; PROVIDED,
HOWEVER, that if the Original Issue Date occurs between a Record Date (as
defined below) and the next succeeding Interest Payment Date, interest payments
will commence on the second Interest Payment Date next succeeding the Original
Issue Date to the holder of this Note on the Record Date with respect to such
second Interest Payment Date. Interest on this Note will be computed on the
basis of a 360-day year of twelve 30-day months.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period"). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the fifteenth calendar day (whether or
not a Business Day, as defined below) immediately preceding such Interest
Payment Date (the "Record Date"); PROVIDED, HOWEVER, that interest payable on
the Maturity Date will be payable to the person to whom the principal hereof and
premium, if any, hereon shall be payable. Any such interest not so punctually
paid or duly provided for on any Interest Payment Date other than the Maturity
Date ("Defaulted Interest") shall forthwith cease to be payable to the holder on
the close of business on any Record Date, and shall be paid to the person in
whose name this Note is registered at the close of business on a special record
date (the "Special Record Date") for the payment of such Defaulted Interest to
be fixed by the Trustee hereinafter referred to, notice whereof shall be given
to the holder of this Note by the Trustee not less than 10 calendar days prior
to such Special Record Date or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which this Note may be listed, and upon such notice as may be required by such
exchange, all as more fully provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this Note
due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, upon delivery of a duly completed election form as
contemplated on the reverse hereof) at the corporate trust office of the Trustee
maintained for that purpose in the Borough of Manhattan, The City of New York,
currently located at 101 Barclay Street, Floor 21 West, New York, New York
10286, or at such other paying agency in the Borough of Manhattan, The City of
New York, as the Company may
2
<PAGE> 3
determine. PROVIDED, HOWEVER, that if the Specified Currency specified above is
other than United States dollars and such payment is to be made in the Specified
Currency in accordance with the provisions set forth below, such payment will be
made by wire transfer of immediately available funds to an account with a bank
designated by the Holder hereof at least 15 calendar days prior to the Maturity
Date, provided that such bank has appropriate facilities therefor and that this
Note is presented and surrendered at the aforementioned office or agency
maintained by the Company in time for the Trustee to make such payment in such
funds in accordance with its normal procedures. Payment of interest due on any
Interest Payment Date other than the Maturity Date will be made at the
aforementioned office or agency maintained by the Company or, at the option of
the Company, by check mailed to the address of the person entitled thereto as
such address shall appear in the Note Register maintained by the Trustee;
PROVIDED, HOWEVER, that a Holder of U.S.$10,000,000 (or, if the Specified
Currency is other than United States dollars, the equivalent thereof in the
Specified Currency) or more in aggregate principal amount of Notes (whether
having identical or different terms and provisions) will be entitled to receive
interest payments on such Interest Payment Date by wire transfer of immediately
available funds if appropriate wire transfer instructions have been received in
writing by the Trustee not less than 15 calendar days prior to such Interest
Payment Date. Any such wire transfer instructions received by the Trustee shall
remain in effect until revoked by such Holder.
If any Interest Payment Date or the Maturity Date falls on a day that is
not a Business Day, the required payment of principal, premium, if any, and/or
interest shall be made on the next succeeding Business Day with the same force
and effect as if made on the date such payment was due, and no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date or the Maturity Date, as the case may be, to the date of such
payment on the next succeeding Business Day.
Unless otherwise disclosed on the face hereof, as used herein, "Business
Day" means any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which commercial banks are authorized or required by law,
regulation or executive order to close in The City of New York; provided
however, that, with respect to Foreign Currency Notes, such day is also not a
day on which commercial banks are authorized or required by law, regulation or
executive order to close in the Principal Financial Center (as defined herein)
of the country issuing the Specified Currency or, if the Specified Currency is
the Euro, the day is also a day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer (target) System is open. "Principal Financial
Center" means (i) the capital city of the country issuing the Specified Currency
or (ii) the capital city of the country to which the Designated LIBOR Currency
relates, as applicable, except, in each case, that with respect to United States
dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders,
Italian lire, Portuguese escudos, South African rand and Swiss francs, the
"Principal Financial Center" shall be The City of New York, Sydney and (solely
in the case of the Specified Currency) Melbourne, Toronto, Frankfurt, Amsterdam,
Milan, Johannesburg and Zurich, respectively.
The Company is obligated to make payment of principal, premium, if any, and
interest in respect of this Note in the Specified Currency (or, if the Specified
Currency is not at the time of such payment legal tender for the payment of
public and private debts of the country issuing such currency or, in the case of
the Euro, in the member states of the European Union that have adopted the
single currency in accordance with the Treaty Establishing the European
3
<PAGE> 4
Community, as amended by the Treaty on European Union, such other currency which
is then such legal tender). If the Specified Currency is other than United
States dollars, except as otherwise provided below, any such amounts so payable
by the Company will be converted by the Exchange Rate Agent specified above into
United States dollars for payment to the Holder of this Note.
If the Specified Currency is other than United States dollars, the Holder
of this Note may elect to receive any amounts payable hereunder in such
Specified Currency. If the Holder of this Note shall not have duly made an
election to receive all or a specified portion of any payment of principal,
premium, if any, and/or interest in respect of this Note in the Specified
Currency, any United States dollar amount to be received by the Holder of this
Note will be based on the highest bid quotation in The City of New York received
by the Exchange Rate Agent at approximately 11:00 A.M., New York City time, on
the second Business Day preceding the applicable payment date from three
recognized foreign exchange dealers (one of whom may be the Exchange Rate Agent)
selected by the Exchange Rate Agent and approved by the Company for the purchase
by the quoting dealer of the Specified Currency for United States dollars for
settlement on such payment date in the aggregate amount of the Specified
Currency payable to all Holders of Notes scheduled to receive United States
dollar payments and at which the applicable dealer commits to execute a
contract. All currency exchange costs will be borne by the Holder of this Note
by deductions from such payments. If three such bid quotations are not
available, payments on this Note will be made in the Specified Currency.
If the Specified Currency is other than United States dollars, the Holder
of this Note may elect to receive all or a specified portion of any payment of
principal, premium, if any, and/or interest in respect of this Note in the
Specified Currency by submitting a written request for such payment to the
Trustee at its corporate trust office in The City of New York on or prior to the
applicable Record Date or at least 15 calendar days prior to the Maturity Date,
as the case may be. Such written request may be mailed or hand delivered or sent
by cable, telex or other form of facsimile transmission. The Holder of this Note
may elect to receive all or a specified portion of all future payments in the
Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written notice of any such revocation must be received by the Trustee on or
prior to the applicable Record Date or at least 15 calendar days prior to the
Maturity Date, as the case may be.
If the Specified Currency is other than United States dollars or a
composite currency and the Holder of this Note shall have duly made an election
to receive all or a specified portion of any payment of principal, premium, if
any, and/or interest in respect of this Note in the Specified Currency, but the
Specified Currency is not available due to the imposition of exchange controls
or other circumstances beyond the control of the Company, the Company will be
entitled to satisfy its obligations to the Holder of this Note by making such
payment in United States dollars on the basis of the Market Exchange Rate (as
defined below) determined by the Exchange Rate Agent on the second Business Day
prior to such payment date or, if such Market Exchange Rate is not then
available, on the basis of the most recently available Market Exchange Rate. The
"Market Exchange Rate" for the Specified Currency means the noon dollar buying
rate in The City of New York for cable transfers for the Specified Currency as
certified for customs purposes (or, if not so certified, as otherwise
determined) by the Federal Reserve Bank of New
4
<PAGE> 5
York. Any payment made in United States dollars under such circumstances shall
not constitute an Event of Default (as defined in the Indenture).
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of this Note.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof and, if so specified on the face hereof, in an Addendum
hereto, which further provisions shall have the same force and effect as if set
forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions."
Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
5
<PAGE> 6
IN WITNESS WHEREOF, HOMESIDE LENDING, INC. has caused this Note to be duly
executed by one of its duly authorized officers.
HOMESIDE LENDING, INC.
[SEAL]
By:
-------------------------------------
Title:
Dated:
Attest:
By:
--------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities
of the series designated therein referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By
--------------------------------
Authorized Signatory
6
<PAGE> 7
[REVERSE OF NOTE]
HOMESIDE LENDING, INC.
MEDIUM-TERM NOTE
(Fixed Rate)
This Note is one of a duly authorized series of Debt Securities (the "Debt
Securities") of the Company issued and to be issued under an Indenture, dated as
of May 15, 1997, as amended, modified or supplemented from time to time (the
"Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the holders of the Debt
Securities, and of the terms upon which the Debt Securities are, and are to be,
authenticated and delivered. This Note is one of the series of Debt Securities
designated as "Medium-Term Notes Due Nine Months or More From Date of Issue"
(the "Notes"). All terms used but not defined in this Note or in an Addendum
hereto shall have the meanings assigned to such terms in the Indenture or on the
face hereof, as the case may be.
This Note is issuable only in registered form without coupons in minimum
denominations of U.S.$1,000 and integral multiples thereof or the minimum
Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
specified on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on any
date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S.$1,000 or the
minimum Authorized Denomination (provided that any remaining principal amount
hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at
the Redemption Price (as defined below), together with unpaid interest accrued
thereon to the date fixed for redemption (each, a "Redemption Date"), on written
notice given no more than 60 nor less than 30 calendar days prior to the
Redemption Date and in accordance with the provisions of the Indenture. The
"Redemption Price" shall initially be the Initial Redemption Percentage
specified on the face hereof multiplied by the unpaid principal amount of this
Note to be redeemed. The Initial Redemption Percentage shall decline at each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction, if any, specified on the face hereof until the Redemption Price is
100% of unpaid principal amount to be redeemed. In the event of redemption of
this Note in part only, a new Note of like tenor for the unredeemed portion
hereof and otherwise having the same terms as this Note shall be issued in the
name of the holder hereof upon the presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of the
holder hereof on the Optional Repayment Date(s), if any, specified on the face
hereof, in whole or in part in increments of U.S.$1,000 or the minimum
Authorized Denomination (provided that any
7
<PAGE> 8
remaining principal amount hereof shall be at least U.S.$1,000 or such minimum
Authorized Denomination), at a repayment price equal to 100% of the unpaid
principal amount to be repaid, together with unpaid interest accrued thereon to
the date fixed for repayment (each, a "Repayment Date"). For this Note to be
repaid, this Note must be received, together with the form hereon entitled
"Option to Elect Repayment" duly completed, by the Trustee at its corporate
trust office not more than 60 nor less than 30 calendar days prior to the
Repayment Date. Exercise of such repayment option by the holder hereof will be
irrevocable. In the event of repayment of this Note in part only, a new Note of
like tenor for the unrepaid portion hereof and otherwise having the same terms
as this Note shall be issued in the name of the holder hereof upon the
presentation and surrender hereof.
If this Note is an Original Issue Discount Note as specified on the face
hereof, the amount payable to the holder of this Note in the event of
redemption, repayment or acceleration of maturity will be equal to the sum of
(1) the Issue Price specified on the face hereof (increased by any accruals of
the Discount, as defined below) and, in the event of any redemption of this Note
(if applicable), multiplied by the Initial Redemption Percentage (as adjusted by
the Annual Redemption Percentage Reduction, if applicable) and (2) any unpaid
interest on this Note accrued from the Original Issue Date to the Redemption
Date, Repayment Date or date of acceleration of maturity, as the case may be.
The difference between the Issue Price and 100% of the principal amount of this
Note is referred to herein as the "Discount."
For purposes of determining the amount of Discount that has accrued as of
any Redemption Date, Repayment Date or date of acceleration of maturity of this
Note, such Discount will be accrued so as to cause the yield on the Note to be
constant. The constant yield will be calculated using a 30-day month, 360-day
year convention, a compounding period that, except for the Initial Period (as
defined below), corresponds to the shortest period between Interest Payment
Dates (with ratable accruals within a compounding period) and an assumption that
the maturity of this Note will not be accelerated. If the period from the
Original Issue Date to the initial Interest Payment Date (the "Initial Period")
is shorter than the compounding period for this Note, a proportionate amount of
the yield for an entire compounding period will be accrued. If the Initial
Period is longer than the compounding period, then such period will be divided
into a regular compounding period and a short period, with the short period
being treated as provided in the preceding sentence.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be accelerated in the manner and with
the effect provided in the Indenture.
The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Notes or (ii) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply to the Notes.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Debt Securities at any time by the
Company and the Trustee with the consent of the holders of not less than a
majority of the aggregate principal amount of all Debt Securities at the time
outstanding and affected thereby. The Indenture also contains provisions
permitting the
8
<PAGE> 9
holders of not less than a majority of the aggregate principal amount of the
outstanding Debt Securities of any series, on behalf of the holders of all such
Debt Securities, to waive compliance by the Company with certain provisions of
the Indenture. Furthermore, provisions in the Indenture permit the holders of
not less than a majority of the aggregate principal amount of the outstanding
Debt Securities of any series, in certain instances, to waive, on behalf of all
of the holders of Debt Securities of such series, certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the holder
of this Note shall be conclusive and binding upon such holder and upon all
future holders of this Note and other Notes issued upon the registration of
transfer hereof or in exchange heretofore or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein and
herein set forth, the transfer of this Note is registrable in the Security
Register of the Company upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal hereof
and any premium or interest hereon are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein and
herein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of different authorized denominations but otherwise having the
same terms and conditions, as requested by the holder hereof surrendering the
same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
holder in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
9
<PAGE> 10
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
----------------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
| |
| |
- --------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
- --------------------------------------------------------------------------------
this Note and all rights thereunder hereby irrevocably constituting and
appointing
- -----------------------------------------------. Attorney to transfer this Note
on the books of the Trustee, with full power of substitution in the premises.
Dated:
----------------------- ----------------------------------------
---------------------------------------
Notice: The signature(s) on this
Assignment must correspond with the
name(s) as written upon the face of this
Note in every particular, without
alteration or enlargement or any change
whatsoever.
10
<PAGE> 11
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to 100% of the principal amount to be repaid, together with unpaid
interest accrued hereon to the Repayment Date, to the undersigned, at
-----------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate trust
office in the Borough of Manhattan, The City of New York, currently located at
101 Barclay Street, Floor 21 West, New York, New York 10286, not more than 60
nor less than 30 calendar days prior to the Repayment Date, this Note with this
"Option to Elect Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000) which the
holder elects to have repaid and specify the denomination or denominations
(which shall be an Authorized Denomination) of the Notes to be issued to the
holder for the portion of this Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $
------------ ---------------------------------------------
Dated : Notice: The signature(s) on this Option to
------------------- Elect Repayment must correspond with the
name(s) as written upon the face of this Note
in every particular, without alteration or
enlargement or any change whatsoever.
11
<PAGE> 1
EXHIBIT 4.3
[FACE OF NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN. (1)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. (2)
REGISTERED CUSIP No.: PRINCIPAL AMOUNT:
No. FLR-
--------- ----------------
HOMESIDE LENDING, INC.
MEDIUM-TERM NOTE
(Floating Rate)
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
IF LIBOR: IF CMT RATE:
[ ] LIBOR Reuters Designated CMT Telerate
Page: Page:
[ ] LIBOR Telerate If Telerate Page 7052:
Page: [ ] Weekly Average
Designated LIBOR [ ] Monthly Average
Currency: Designated CMT Maturity
Index:
INDEX MATURITY: INITIAL INTEREST RATE: % INTEREST PAYMENT DATE(S):
SPREAD (PLUS OR SPREAD MULTIPLIER: INITIAL INTEREST RESET
MINUS): DATE:
- -----------------------------
(1) This paragraph applies to global Notes only.
(2) This paragraph applies to global Notes only.
<PAGE> 2
<TABLE>
<S> <C> <C>
MINIMUM INTEREST RATE: % MAXIMUM INTEREST RATE: % INTEREST RESET DATE(S):
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE REDUCTION: %
OPTIONAL REPAYMENT CALCULATION AGENT: [ ] CHECK IF DISCOUNT NOTE
DATE(S):
INTEREST CATEGORY: DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate Note from to .
Fixed Rate Commencement Date: [ ] Actual/360 for the period
Fixed Interest Rate: % from to .
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed Interest Rate: % from to .
[ ] Original Issue Discount Note Applicable Interest Rate Basis:
Issue Price: %
AUTHORIZED DENOMINATION:
[ ] $1,000 and integral multiples
thereof
[ ] Other:
ADDENDUM ATTACHED
[ ] Yes
[ ] No
OTHER/ADDITIONAL PROVISIONS:
</TABLE>
2
<PAGE> 3
HOMESIDE LENDING, INC., a Florida corporation (the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of ______________, on the Stated Maturity Date specified above
(or any Redemption Date or Repayment Date, each as defined on the reverse
hereof) (each such Stated Maturity Date, Redemption Date or Repayment Date being
hereinafter referred to as the "Maturity Date" with respect to the principal
repayable on such date) and to pay interest thereon (and on any overdue
principal, premium and/or interest to the extent legally enforceable) at a rate
per annum equal to the Initial Interest Rate specified above until the Initial
Interest Reset Date specified above and thereafter at a rate determined in
accordance with the provisions specified above and on the reverse hereof or in
an Addendum hereto with respect to one or more Interest Rate Bases specified
above until the principal hereof is paid or duly made available for payment. The
Company will pay interest in arrears on each Interest Payment Date, if any,
specified above (each, an "Interest Payment Date"), commencing with the first
Interest Payment Date next succeeding the Original Issue Date specified above,
and on the Maturity Date; PROVIDED, HOWEVER, that if the Original Issue Date
occurs between a Record Date (as defined below) and the next succeeding Interest
Payment Date, interest payments will commence on the second Interest Payment
Date next succeeding the Original Issue Date to the holder of this Note on the
Record Date with respect to such second Interest Payment Date.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period"). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the fifteenth calendar day (whether or
not a Business Day, as defined on the reverse hereof) immediately preceding such
Interest Payment Date (the "Record Date"); PROVIDED, HOWEVER, that interest
payable on the Maturity Date will be payable to the person to whom the principal
hereof and premium, if any, hereon shall be payable. Any such interest not so
punctually paid or duly provided for on any Interest Payment Date other than the
Maturity Date ("Defaulted Interest") shall forthwith cease to be payable to the
holder on the close of business on any Record Date, and shall be paid to the
person in whose name this Note is registered at the close of business on a
special record date (the "Special Record Date") for the payment of such
Defaulted Interest to be fixed by the Trustee hereinafter referred to, notice
whereof shall be given to the holder of this Note by the Trustee not less than
10 calendar days prior to such Special Record Date or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which this Note may be listed, and upon such notice as may be
required by such exchange, all as more fully provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this Note
due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, upon delivery of a duly completed election form as
contemplated on the reverse hereof) at the corporate trust office of the Trustee
maintained for that purpose in the Borough of Manhattan, The City of New York,
currently located at 101 Barclay Street, Floor 21 West, New York, New York
10286, or at such other paying agency in the Borough of Manhattan, The City of
New York, as the Company may determine; PROVIDED, HOWEVER, that if the Specified
Currency specified above is other than
3
<PAGE> 4
United States dollars and such payment is to be made in the Specified Currency
in accordance with the provisions set forth below, such payment will be made by
wire transfer of immediately available funds to an account with a bank
designated by the Holder hereof at least 15 calendar days prior to the Maturity
Date, provided that such bank has appropriate facilities therefor and that this
Note is presented and surrendered at the aforementioned office or agency
maintained by the Company in time for the Trustee to make such payment in such
funds in accordance with its normal procedures. Payment of interest due on any
Interest Payment Date other than the Maturity Date will be made at the
aforementioned office or agency maintained by the Company or, at the option of
the Company, by check mailed to the address of the person entitled thereto as
such address shall appear in the Note Register maintained by the Trustee;
PROVIDED, HOWEVER, that a Holder of U.S.$10,000,000 (or, if the Specified
Currency is other than United States dollars, the equivalent thereof in the
Specified Currency) or more in aggregate principal amount of Notes (whether
having identical or different terms and provisions) will be entitled to receive
interest payments on such Interest Payment Date by wire transfer of immediately
available funds if appropriate wire transfer instructions have been received in
writing by the Trustee not less than 15 calendar days prior to such Interest
Payment Date. Any such wire transfer instructions received by the Trustee shall
remain in effect until revoked by such Holder.
If any Interest Payment Date other than the Maturity Date would otherwise
be a day that is not a Business Day, such Interest Payment Date shall be
postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day. If the Maturity Date falls on a day that is not a
Business Day, the required payment of principal, premium, if any, and/or
interest shall be made on the next succeeding Business Day with the same force
and effect as if made on the date such payment was due, and no interest shall
accrue with respect to such payment for the period from and after the Date to
the date of such payment on the next succeeding Business Day.
Unless otherwise specified on the face hereof, as used herein, "Business
Day" means any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which commercial banks are authorized or required by law,
regulation or executive order to close in The City of New York; PROVIDED
HOWEVER, that, with respect to Foreign Currency Notes, such day is also not a
day on which commercial banks are authorized or required by law, regulation or
executive order to close in the Principal Financial Center (as defined herein)
of the country issuing the Specified Currency or, if the Specified Currency is
the Euro, the day is also a day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer (target) System is open; PROVIDED, FURTHER,
that, with respect to Notes as to which LIBOR is an applicable Interest Rate
Basis, such day is also a London Business Day (as defined herein). "London
Business Day" means a day on which commercial banks are open for business,
including dealings in the Designated LIBOR Currency (as defined herein) in the
London interbank market. "Principal Financial Center" means (i) the capital city
of the country issuing the Specified Currency or (ii) the capital city of the
country to which the Designated LIBOR Currency relates, as applicable, except,
in each case, that with respect to United States dollars, Australian dollars,
Canadian dollars, Deutsche marks, Dutch guilders, Italian lire, Portuguese
escudos, South African rand and Swiss francs, the "Principal Financial Center"
shall be The City of New York, Sydney and (solely in the case of the Specified
Currency) Melbourne, Toronto, Frankfurt, Amsterdam, Milan, Johannesburg and
Zurich, respectively.
4
<PAGE> 5
The Company is obligated to make payment of principal, premium, if any, and
interest in respect of this Note in the Specified Currency (or, if the Specified
Currency is not at the time of such payment legal tender for the payment of
public and private debts of the country issuing such currency or, in the case of
the Euro, in the member states of the European Union that have adopted the
single currency in accordance with the Treaty Establishing the European
Community, as amended by the Treaty on European Union, such other currency which
is then such legal tender). If the Specified Currency is other than United
States dollars, except as otherwise provided below, any such amounts so payable
by the Company will be converted by the Exchange Rate Agent specified above into
United States dollars for payment to the Holder of this Note.
If the Specified Currency is other than United States dollars, the Holder
of this Note may elect to receive any amount payable hereunder in such Specified
Currency. If the Holder of this Note shall not have duly made an election to
receive all or a specified portion of any payment of principal, premium, if any,
and/or interest in respect of this Note in the Specified Currency, any United
States dollar amount to be received by the Holder of this Note will be based on
the highest bid quotation in The City of New York received by the Exchange Rate
Agent at approximately 11:00 A.M., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign exchange
dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange
Rate Agent and approved by the Company for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on such payment
date in the aggregate amount of the Specified Currency payable to all Holders of
Notes scheduled to receive United States dollar payments and at which the
applicable dealer commits to execute a contract. All currency exchange costs
will be borne by the Holder of this Note by deductions from such payments. If
three such bid quotations are not available, payments on this Note will be made
in the Specified Currency.
If the Specified Currency is other than United States dollars, the Holder
of this Note may elect to receive all or a specified portion of any payment of
principal, premium, if any, and/or interest in respect of this Note in the
Specified Currency by submitting a written request for such payment to the
Trustee at its corporate trust office in The City of New York on or prior to the
applicable Record Date or at least 15 calendar days prior to the Maturity Date,
as the case may be. Such written request may be mailed or hand delivered or sent
by cable, telex or other form of facsimile transmission. The Holder of this Note
may elect to receive all or a specified portion of all future payments in the
Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written notice of any such revocation must be received by the Trustee on or
prior to the applicable Record Date or at least 15 calendar days prior to the
Maturity Date, as the case may be.
If the Specified Currency is other than United States dollars and the
Holder of this Note shall have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest
in respect of this Note in the Specified Currency, but the Specified Currency is
not available due to the imposition of exchange controls or other circumstances
beyond the control of the Company, the Company will be entitled to satisfy its
obligations to the Holder of this Note by making such payment in United States
dollars on the basis of the Market Exchange Rate (as defined below) determined
by the Exchange Rate Agent on the second Business Day prior to such payment date
or, if such Market Exchange Rate is not
5
<PAGE> 6
then available, on the basis of the most recently available Market Exchange
Rate. The "Market Exchange Rate" for the Specified Currency means the noon
dollar buying rate in The City of New York for cable transfers for the Specified
Currency as certified for customs purposes (or, if not so certified, as
otherwise determined) by the Federal Reserve Bank of New York. Any payment made
in United States dollars under such circumstances shall not constitute an Event
of Default (as defined in the Indenture).
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of this Note.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof and, if so specified on the face hereof, in an Addendum
hereto, which further provisions shall have the same force and effect as if set
forth on the face hereof.
Notwithstanding any provisions to the contrary contained herein, if the
face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply, this Note shall be subject to the terms set
forth in such Addendum or such "Other/Additional Provisions."
Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
6
<PAGE> 7
IN WITNESS WHEREOF, HOMESIDE LENDING, INC. has caused this Note to be duly
executed by one of its duly authorized officers.
HOMESIDE LENDING, INC.
[SEAL]
By
--------------------------------------
Title:
Attest:
By:
-------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By
-------------------------------------
Authorized Signatory
7
<PAGE> 8
[REVERSE OF NOTE]
HOMESIDE LENDING, INC.
MEDIUM-TERM NOTE
(Floating Rate)
This Note is one of a duly authorized series of Debt Securities (the "Debt
Securities") of the Company issued and to be issued under an Indenture, dated as
of May 15, 1997, as amended, modified or supplemented from time to time (the
"Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the holders of the Debt
Securities, and of the terms upon which the Debt Securities are, and are to be,
authenticated and delivered. This Note is one of the series of Debt Securities
designated as "Medium-Term Notes Due Nine Months or More From Date of Issue"
(the "Notes"). All terms used but not defined in this Note or in an Addendum
hereto shall have the meanings assigned to such terms in the Indenture or on the
face hereof, as the case may be.
This Note is issuable only in registered form without coupons in minimum
denominations of U.S.$1,000 and integral multiples thereof or the minimum
Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
specified on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on any
date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S.$1,000 or the
minimum Authorized Denomination (provided that any remaining principal amount
hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at
the Redemption Price (as defined below), together with unpaid interest accrued
thereon to the date fixed for redemption (each, a "Redemption Date"), on written
notice given no more than 60 nor less than 30 calendar days prior to the
Redemption Date and in accordance with the provisions of the Indenture. The
"Redemption Price" shall initially be the Initial Redemption Percentage
specified on the face hereof multiplied by the unpaid principal amount of this
Note to be redeemed. The Initial Redemption Percentage shall decline at each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction, if any, specified on the face hereof until the Redemption Price is
100% of unpaid principal amount to be redeemed. In the event of redemption of
this Note in part only, a new Note of like tenor for the unredeemed portion
hereof and otherwise having the same terms as this Note shall be issued in the
name of the holder hereof upon the presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of the
holder hereof on the Optional Repayment Date(s), if any, specified on the face
hereof, in whole or in part in increments of U.S.$1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S.$1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,
8
<PAGE> 9
together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form hereon entitled "Option to Elect Repayment"
duly completed, by the Trustee at its corporate trust office not more than 60
nor less than 30 calendar days prior to the Repayment Date. Exercise of such
repayment option by the holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the holder hereof upon the presentation and surrender hereof.
If the Interest Category of this Note is specified on the face hereof as an
Original Issue Discount Note, the amount payable to the holder of this Note in
the event of redemption, repayment or acceleration of maturity of this Note will
be equal to the sum of (1) the Issue Price specified on the face hereof
(increased by any accruals of the Discount, as defined below) and, in the event
of any redemption of this Note (if applicable), multiplied by the Initial
Redemption Percentage (as adjusted by the Annual Redemption Percentage
Reduction, if applicable) and (2) any unpaid interest on this Note accrued from
the Original Issue Date to the Redemption Date, Repayment Date or date of
acceleration of maturity, as the case may be. The difference between the Issue
Price and 100% of the principal amount of this Note is referred to herein as the
"Discount."
For purposes of determining the amount of Discount that has accrued as of
any Redemption Date, Repayment Date or date of acceleration of maturity of this
Note, such Discount will be accrued so as to cause an assumed yield on the Note
to be constant. The assumed constant yield will be calculated using a 30-day
month, 360-day year convention, a compounding period that, except for the
Initial Period (as defined below), corresponds to the shortest period between
Interest Payment Dates (with ratable accruals within a compounding period), a
constant coupon rate equal to the initial interest rate applicable to this Note
and an assumption that the maturity of this Note will not be accelerated. If the
period from the Original Issue Date to the initial Interest Payment Date (the
"Initial Period") is shorter than the compounding period for this Note, a
proportionate amount of the yield for an entire compounding period will be
accrued. If the Initial Period is longer than the compounding period, then such
period will be divided into a regular compounding period and a short period,
with the short period being treated as provided in the preceding sentence.
The interest rate borne by this Note will be determined as follows:
(i) Unless the Interest Category of this Note is specified on the face
hereof as a "Floating Rate/Fixed Rate Note" or an "Inverse Floating
Rate Note" or as otherwise specified as Other/Additional Provisions on
the face hereof or in an Addendum hereto, this Note shall be
designated as a "Regular Floating Rate Note" and, except as set forth
below or specified on the face hereof or in an Addendum hereto, shall
bear interest at the rate determined by reference to the applicable
Interest Rate Basis or Bases (a) plus or minus the Spread, if any,
and/or (b) multiplied by the Spread Multiplier, if any, in each case
as specified on the face hereof. Commencing on the Initial Interest
Reset Date, the rate at which interest on this Note shall be payable
shall be reset as of each Interest Reset Date specified on the face
hereof; PROVIDED, HOWEVER, that the interest rate in effect for the
period, if any, from the Original Issue Date to the Initial Interest
Reset Date shall be the Initial Interest Rate.
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<PAGE> 10
(ii) If the Interest Category of this Note is specified on the face
hereof as a "Floating Rate/Fixed Rate Note," then, except as set forth
below or specified on the face hereof or in an Addendum hereto, this
Note shall bear interest at the rate determined by reference to the
applicable Interest Rate Basis or Bases (a) plus or minus the Spread,
if any, and/or (b) multiplied by the Spread Multiplier, if any.
Commencing on the Initial Interest Reset Date, the rate at which
interest on this Note shall be payable shall be reset as of each
Interest Reset Date; PROVIDED, HOWEVER, that (y) the interest rate in
effect for the period, if any, from the Original Issue Date to the
Initial Interest Reset Date shall be the Initial Interest Rate and (z)
the interest rate in effect for the period commencing on the Fixed
Rate Commencement Date specified on the face hereof to the Maturity
Date shall be the Fixed Interest Rate specified on the face hereof or,
if no such Fixed Interest Rate is specified, the interest rate in
effect hereon on the day immediately preceding the Fixed Rate
Commencement Date.
(iii) If the Interest Category of this Note is specified on the face
hereof as an "Inverse Floating Rate Note," then, except as set forth
below or specified on the face hereof or in an Addendum hereto, this
Note shall bear interest at the Fixed Interest Rate minus the rate
determined by reference to the applicable Interest Rate Basis or Bases
(a) plus or minus the Spread, if any, and/or (b) multiplied by the
Spread Multiplier, if any; PROVIDED, HOWEVER, that, unless otherwise
specified on the face hereof or in an Addendum hereto, the interest
rate hereon shall not be less than zero. Commencing on the Initial
Interest Reset Date, the rate at which interest on this Note shall be
payable shall be reset as of each Interest Reset Date; PROVIDED,
HOWEVER, that the interest rate in effect for the period, if any, from
the Original Issue Date to the Initial Interest Reset Date shall be
the Initial Interest Rate.
Except as set forth above or specified on the face hereof or in an Addendum
hereto, the interest rate in effect on each day shall be (i) if such day is an
Interest Reset Date, the interest rate determined as of the Interest
Determination Date (as defined below) immediately preceding such Interest Reset
Date or (ii) if such day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately preceding the most
recent Interest Reset Date. If any Interest Reset Date would otherwise be a day
that is not a Business Day, such Interest Reset Date shall be postponed to the
next succeeding Business Day, except that if LIBOR is an applicable Interest
Rate Basis and such Business Day falls in the next succeeding calendar month,
such Interest Reset Date shall be the immediately preceding Business Day. In
addition, if the Treasury Rate is an applicable Interest Rate Basis and the
Interest Determination Date would otherwise fall on an Interest Reset Date, then
such Interest Reset Date will be postponed to the next succeeding Business Day.
The interest rate applicable to each Interest Reset Period commencing on
the related Interest Reset Date will be determined by the Calculation Agent as
of the applicable Interest Determination Date and will be calculated by the
Calculation Agent on or prior to the Calculation Date (as defined below), except
with respect to the LIBOR and the Eleventh District Cost of Funds Rate, which
will be calculated on such Interest Determination Date. The "Interest
Determination Date" with respect to
10
<PAGE> 11
the CD Rate, the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate and
the Prime Rate will be the second Business Day immediately preceding the
applicable Interest Reset Date; the "Interest Determination Date" with respect
to the Eleventh District Cost of Funds Rate shall be the last working day of the
month immediately preceding the applicable Interest Reset Date on which the
Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes
the Index (as defined below); and the "Interest Determination Date" with respect
to LIBOR shall be the second London Business Day immediately preceding the
applicable Interest Reset Date, unless the Designated LIBOR Currency is British
pounds sterling, in which case the "Interest Determination Date" will be the
applicable Interest Reset Date. The "Interest Determination Date" with respect
to the Treasury Rate shall be the day in the week in which the applicable
Interest Reset Date falls on which day Treasury Bills (as defined below) are
normally auctioned (Treasury Bills are normally sold at an auction held on
Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except that such auction may
be held on the preceding Friday); PROVIDED, HOWEVER, that if an auction is held
on the Friday of the week preceding the applicable Interest Reset Date, the
"Interest Determination Date" shall be such preceding Friday; and PROVIDED,
FURTHER, that if an auction falls on any Interest Reset Date, then the
applicable Interest Rest Date will instead be the first Business Day following
the auction. If the interest rate of this Note is determined with reference to
two or more Interest Rate Bases specified on the face hereof, the "Interest
Determination Date" pertaining to this Note shall be the most recent Business
Day which is at least two Business Days prior to the applicable Interest Reset
Date on which each Interest Rate Basis is determinable. Each Interest Rate Basis
shall be determined as of such date, and the applicable interest rate shall take
effect on the related Interest Reset Date.
Unless otherwise specified on the face hereof or in an Addendum hereto, the
rate with respect to each Interest Rate Basis will be determined in accordance
with the applicable provisions below.
CD RATE. If an Interest Rate Basis for this Note is specified on the face
hereof as the CD Rate, the CD Rate shall be determined as of the applicable
Interest Determination Date (a "CD Rate Interest Determination Date") as the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published in H.15(519)
under the heading "CDs (secondary market)," or, if not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on such CD
Rate Interest Determination Date for negotiable United States dollar
certificates of deposit of the Index Maturity as published in H.15 Update (as
defined herein), or such other recognized electronic source used for the purpose
of displaying such rate, under the caption "CDs (secondary market)." If such
rate is not yet published in either H.15(519), H.15 Daily Update or another
recognized electronic source by 3:00 P.M., New York City time, on the related
Calculation Date, then the CD Rate on such CD Rate Interest Determination Date
will be calculated by the Calculation Agent specified on the face hereof and
will be the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time, on such CD Rate Interest Determination Date, of three
leading non-bank dealers in negotiable United States dollar certificates of
deposit in The City of New York selected by the Calculation Agent for negotiable
United States dollar certificates of deposit of major United States money center
banks for negotiable United States dollar certificates of deposit with a
remaining maturity closest to the Index Maturity in an amount that is
representative for a single transaction in that market at that time; PROVIDED,
HOWEVER, that if the dealers so selected by the Calculation Agent are not
quoting as mentioned in this sentence, the CD Rate determined as of such CD Rate
Interest Determination Date will be the CD Rate in effect on such CD Rate
Interest Determination Date.
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<PAGE> 12
"H.15(519)" means the weekly statistical release designated as such, or any
successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world-wide-web site of the Board of Governors of the Federal Reserve System
at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or
publication.
CMT RATE. If an Interest Rate Basis for this Note is specified on the face
hereof as the CMT Rate, the CMT Rate shall be determined as of the applicable
Interest Determination Date (a "CMT Rate Interest Determination Date") as the
rate displayed on the Designated CMT Telerate Page (as defined below) under the
caption "...Treasury Constant Maturities...Federal Reserve Board Release
H.15...Mondays Approximately 3:45 P.M.," under the column for the Designated CMT
Maturity Index (as defined below) for (i) if the Designated CMT Telerate Page is
7051, the rate on such CMT Rate Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, the weekly or monthly average, as
specified on the face hereof, for the week or the month, as applicable, ended
immediately preceding the week or the month, as applicable, in which the related
CMT Rate Interest Determination Date falls. If such rate is no longer displayed
on the relevant page or is not so displayed by 3:00 P.M., New York City time, on
the related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in H.15(519). If such rate is no
longer published or is not published by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate on such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in
H.15(519). If such information is not provided by 3:00 P.M., New York City time,
on the related Calculation Date, then the CMT Rate on the CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market offered
rates as of approximately 3:30 P.M., New York City time, on such CMT Rate
Interest Determination Date reported, according to their written records, by
three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York selected by the Calculation Agent
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated
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<PAGE> 13
CMT Maturity Index minus one year. If the Calculation Agent is unable to obtain
three such Treasury Note quotations, the CMT Rate on such CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity based on the arithmetic mean of the secondary market offered
rates as of approximately 3:30 P.M., New York City time, on such CMT Rate
Interest Determination Date of three Reference Dealers in The City of New York
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for Treasury Notes with an original maturity of the number of years
that is the next highest to the Designated CMT Maturity Index and a remaining
term to maturity closest to the Designated CMT Maturity Index and in an amount
of at least U.S.$100 million. If three or four (and not five) of such Reference
Dealers are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offered rates obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided, however, that if fewer than
three Reference Dealers selected by the Calculation Agent are quoting as
mentioned herein, the CMT Rate determined as of such CMT Rate Interest
Determination Date will be the CMT Rate in effect on such CMT Rate Interest
Determination Date. If two Treasury Notes with an original maturity as described
in the second preceding sentence have remaining terms to maturity equally close
to the Designated CMT Maturity Index, the Calculation Agent will obtain
quotations for the Treasury Note with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on Bridge Telerate,
Inc.(or any successor service) on the page specified on the face hereof (or any
other page as may replace such page on such service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519) or, if no such
page is specified on the face hereof, page 7052.
"Designated CMT Maturity Index" means the original period to maturity of
the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified on the face hereof with respect to which the CMT Rate will be
calculated or, if no such maturity is specified on the face hereof, 2 years.
COMMERCIAL PAPER RATE. If an Interest Rate Basis for this Note is specified
on the face hereof as the Commercial Paper Rate, the Commercial Paper Rate shall
be determined as of the applicable Interest Determination Date (a "Commercial
Paper Rate Interest Determination Date") as the Money Market Yield (as defined
below) on such date of the rate for commercial paper having the Index Maturity
as published in H.15(519) under the caption "Commercial Paper-Nonfinancial" or,
if not so published by 3:00 P.M., New York City time, on the related Calculation
Date the rate on such Commercial Paper Rate Interest Determination Date for
commercial paper having the Index Maturity as published in H.15 Daily Update, or
such other recognized electronic source used for the purpose of displaying such
rate, under the caption "Commercial Paper-Nonfinancial". If such rate is not yet
published in either H.15(519), H.15 Daily Update or another recognized
electronic source by 3:00 P.M., New York City time, on such Calculation Date,
then the Commercial Paper Rate on such Commercial Paper Rate Interest
Determination Date will be calculated by the Calculation Agent and shall be the
Money Market Yield of the arithmetic mean of the offered rates at approximately
11:00 A.M., New York City time, on such Commercial Paper Rate Interest
Determination Date of three leading dealers of United States dollar commercial
paper in The City of New York selected by the Calculation Agent for commercial
paper having the Index Maturity placed for industrial issuers whose bond rating
is "Aa", or the equivalent, from a nationally recognized statistical rating
organization; PROVIDED, HOWEVER, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Commercial
Paper Rate determined as of such Commercial Paper Rate Interest Determination
Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate
Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:
Money Market Yield = D X 360_ X 100
---------
360 - (D x M)
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<PAGE> 14
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable Interest Reset Period.
ELEVENTH DISTRICT COST OF FUNDS RATE. If an Interest Rate Basis for this
Note is specified on the face hereof as the Eleventh District Cost of Funds
Rate, the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on the display on Bridge Telerate,
Inc. (or any successor service) on page 7058 (or any other page as may replace
such page on such service) ("Telerate Page 7058") as of 11:00 A.M., San
Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Interest Determination Date, then the
Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.
FEDERAL FUNDS RATE. If an Interest Rate Basis for this Note is specified on
the face hereof as the Federal Funds Rate, the Federal Funds Rate shall be
determined as of the applicable Interest Determination Date (a "Federal Funds
Rate Interest Determination Date") as the rate on such date for United States
dollar federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)" as such rate is displayed on Bridge Telerate, Inc. or any successor
service on page 120 (or any other page as may replace such page on such service)
("Telerate Page 120"), or, if such rate does not appear on Telerate Page 120 or
is not so published by 3:00 P.M., New York City time, on the Calculation Date,
the rate on such Federal Funds Rate Interest Determination Date for United
States dollar federal funds as published in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying such rate, under
the caption "Federal Funds/Effective Rate." If such rate does not appear on
Telerate Page 120 or is not yet published in H.15(519), H.15 Daily Update or
another recognized electronic source by 3:00 P.M., New York City time, on the
related Calculation Date, then the Federal Funds Rate on such Federal Funds Rate
Interest Determination Date shall be calculated by the Calculation Agent and
will be the arithmetic mean of the rates for the last transaction in overnight
United States dollar federal funds arranged by three leading brokers of United
States dollar federal funds transactions in The City of New York selected by the
Calculation Agent, prior to 9:00 A.M., New York City time, on such Federal Funds
Rate Interest Determination Date; PROVIDED, HOWEVER, that if the brokers so
selected by the Calculation Agent are not quoting as mentioned in this sentence,
the Federal Funds Rate determined as of such Federal Funds Rate Interest
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<PAGE> 15
Determination Date will be the Federal Funds Rate in effect on such Federal
Funds Rate Interest Determination Date.
LIBOR. If an Interest Rate Basis for this Note is specified on the face
hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a "LIBOR Interest Determination Date")
in accordance with the following provisions:
(i) With respect to any Interest Determination Date relating to a Floating
Rate Note for which the interest rate is determined with reference to LIBOR (a
"LIBOR Interest Determination Date"), LIBOR will be either: (a) if "LIBOR
Telerate" is specified on the face hereof or if neither "LIBOR Reuters" nor
"LIBOR Telerate" is specified on the face hereof as the method for calculating
LIBOR, the rate for deposits in the Designated LIBOR Currency having the Index
Maturity specified on the face hereof, commencing on such Interest Reset Date,
that appears on the Designated LIBOR Page as of 11:00 A.M., London time, on such
LIBOR Interest Determination Date; or (b) if "LIBOR Reuters" is specified on the
face hereof, the arithmetic mean of the offered rates (unless the Designated
LIBOR Page by its terms provides only for a single rate, in which case such
single rate shall be used) for deposits in the Designated LIBOR Currency having
the Index Maturity specified on the face hereof, commencing on the applicable
Interest Reset Date, that appear (or, if only a single rate is required as
aforesaid, appears) on the Designated LIBOR Page as of 11:00 A.M., London time,
on such LIBOR Interest Determination Date. If fewer than two such offered rates
so appear, or if no such rate so appears, as applicable, LIBOR on such LIBOR
Interest Determination Date will be determined in accordance with the provisions
described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on the
Designated LIBOR Page as specified in clause (i) above, the Calculation Agent
will request the principal London offices of each of four major reference banks
(which may include affiliates of the Agents) in the London interbank market, as
selected by the Calculation Agent, to provide the Calculation Agent with its
offered quotation for deposits in the Designated LIBOR Currency for the period
of the Index Maturity specified on the face hereof, commencing on the applicable
Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date
and in a principal amount that is representative for a single transaction in the
Designated LIBOR Currency in such market at such time. If at least two such
quotations are so provided, then LIBOR on such LIBOR Interest Determination Date
will be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, then LIBOR on such LIBOR Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately 11:00 A.M., in
the applicable Principal Financial Center, on such LIBOR Interest Determination
Date by three major banks (which may include affiliates of the Agents) in such
Principal Financial Center selected by the Calculation Agent for loans in the
Designated LIBOR Currency to leading European banks, having the Index Maturity
specified on the face hereof and in a principal amount that is representative
for a single transaction in the Designated LIBOR Currency in such market at such
time; provided, however, that if the banks so selected by the Calculation Agent
are not quoting as mentioned in this sentence, LIBOR determined as of such LIBOR
Interest Determination Date will be LIBOR in effect on such LIBOR Interest
Determination Date.
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<PAGE> 16
"Designated LIBOR Currency" means the currency specified on the face hereof
as to which LIBOR shall be calculated or, if no such currency is specified on
the face hereof, United States dollars.
"Designated LIBOR Page" means (a) if "LIBOR Telerate" is specified on the
face hereof or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on the
face hereof as the method for calculating LIBOR, the display on Bridge Telerate,
Inc. (or any successor service) on the page specified on the face hereof (or any
other page as may replace such page on such service) for the purpose of
displaying the London interbank rates of major banks for the Designated LIBOR
Currency, or (b) if "LIBOR Reuters" is specified on the face hereof, the display
on the Reuter Monitor Money Rates Service (or any successor service) on the page
specified on the face hereof (or any other page as may replace such page on such
service) for the purpose of displaying the London interbank rates of major banks
for the Designated LIBOR Currency.
PRIME RATE. If an Interest Rate Basis for this Note is specified on the
face hereto as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published in H.15(519) under the
caption "Bank Prime Loan" or, if not published by 3:00 P.M., New York City time,
on the related Calculation Date, the rate on such Prime Rate Interest
Determination Date as published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such rate under the caption
"Bank Prime Loan." If such rate is not yet published in H.15(519), H.15 Daily
Update or another recognized electronic source by 3:00 P.M., New York City time,
on the related Calculation Date, then the Prime Rate shall be the arithmetic
mean of the rates of interest publicly announced by each bank that appears on
the Reuters Screen US PRIME 1 Page (as defined below) as such bank's prime rate
or base lending rate as of 11:00 A.M. New York City time, on such Prime Rate
Interest Determination Date. If fewer than four such rates so appear on the
Reuters Screen US PRIME 1 Page for such Prime Rate Interest Determination Date,
then the Prime Rate shall be the arithmetic mean of the prime rates or base
lending rates quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such Prime Rate
Interest Determination Date by three major banks (which may include affiliates
of the Agents) in The City of New York selected by the Calculation Agent;
provided, however, that if the banks or trust companies so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Prime Rate
determined as of such Prime Rate Interest Determination Date will be the Prime
Rate in effect on such Prime Rate Interest Determination Date.
"Reuters Screen US PRIME 1 Page" means the display on the Reuter Monitor
Money Rates Service (or any successor service) on the "US PRIME 1" page (or such
other page as may replace the US PRIME 1 page on such service) for the purpose
of displaying prime rates or base lending rates of major United States banks.
TREASURY RATE. If an Interest Rate Basis for this Note is specified on the
face hereof as the Treasury Rate, the Treasury Rate shall be determined as of
the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity specified on the face hereof
under the caption "INVESTMENT RATE", on the display on Bridge Telerate, Inc. (or
any successor service) on page 56 (or any other page as may replace such page on
such service) ("Telerate
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<PAGE> 17
Page 56") or page 57 (or any other page as may replace such page on such
service) ("Telerate Page 57") or, if not so published by 3:00 P.M., New York
City time, on the related Calculation Date, the Bond Equivalent Yield (as
defined below) of the rate for such Treasury Bills as published in H.15 Daily
Update, or such other recognized electronic source used for the purpose of
displaying such rate, under the caption "U.S. Government Securities/Treasury
Bills/Auction High" or, if not so published by 3:00 P.M., New York City time, on
the related Calculation Date, the Bond Equivalent Yield of the auction rate of
such Treasury Bills as announced by the United States Department of the
Treasury. In the event that the auction rate of Treasury Bills having the Index
Maturity on the face hereof is not so announced by the United States Department
of the Treasury, or if no such Auction is held, then the Treasury Rate will be
the Bond Equivalent Yield of the rate on such Treasury Rate Interest
Determination Date of Treasury Bills having the Index Maturity specified on the
face hereof as published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market" or, if not yet published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on such
Treasury Rate Interest Determination Date of such Treasury Bills as published in
H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying such rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market." If such rate is not yet published
in H.15(519), H.15 Daily Update or another recognized electronic source, then
the Treasury Rate will be calculated by the Calculation Agent and will be the
Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates,
as of approximately 3:30 P.M., New York City time, on such Treasury Rate
Interest Determination Date, of three primary United States government
securities dealers (which may include the Agents or their affiliates) selected
by the Calculation Agent, for the issue of Treasury Bills with a remaining
maturity closest to the Index Maturity specified on the face hereof; provided,
however, that if the dealers so selected by the Calculation Agent are not
quoting as mentioned in this sentence, the Treasury Rate determined as of such
Treasury Rate Interest Determination Date will be the Treasury Rate in effect on
such Treasury Rate Interest Determination Date.
"Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
Bond Equivalent Yield = D X N_ X 100
-------
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the applicable Interest Reset Period.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, in each case as specified on the face hereof. The
interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application.
The "Calculation Date," if applicable, pertaining to any Interest
Determination Date shall be the earlier of (i) the tenth calendar day after such
Interest Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or the Maturity Date, as the case may be. At
the request of the Holder hereof, the Calculation Agent will provide to the
Holder hereof the interest
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<PAGE> 18
rate hereon then in effect and, if determined, the interest rate that will
become effective as a result of a determination made for the next succeeding
Interest Reset Date.
Accrued interest hereon shall be an amount calculated by multiplying the
principal amount hereof by an accrued interest factor. Such accrued interest
factor shall be computed by adding the interest factor calculated for each day
in the applicable Interest Period. Unless otherwise specified as the Day Count
Convention on the face hereof, the interest factor for each such date shall be
computed by dividing the interest rate applicable to such day by 360 if the CD
Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate is an applicable Interest Rate Basis
or by the actual number of days in the year if the CMT Rate or the Treasury Rate
is an applicable Interest Rate Basis. Unless otherwise specified as the Day
Count Convention on the face hereof, the interest factor for this Note, if the
interest rate is calculated with reference to two or more Interest Rate Bases,
shall be calculated in each period in the same manner as if only the Applicable
Interest Rate Basis specified on the face hereof applied.
All percentages resulting from any calculation on this Note shall be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards, and all amounts used in or
resulting from such calculation on this Note shall be rounded to the nearest
cent (with one-half cent being rounded upwards).
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be accelerated in the manner and with
the effect provided in the Indenture.
The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Notes or (ii) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply to the Notes.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Debt Securities at any time by the
Company and the Trustee with the consent of the holders of not less than a
majority of the aggregate principal amount of all Debt Securities at the time
outstanding and affected thereby. The Indenture also contains provisions
permitting the holders of not less than a majority of the aggregate principal
amount of the outstanding Debt Securities of any series, on behalf of the
holders of all such Debt Securities, to waive compliance by the Company with
certain provisions of the Indenture. Furthermore, provisions in the Indenture
permit the holders of not less than a majority of the aggregate principal amount
of the outstanding Debt Securities of any series, in certain instances, to
waive, on behalf of all of the holders of Debt Securities of such series,
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the holder of this Note shall be conclusive and binding
upon such holder and upon all future holders of this Note and other Notes issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.
18
<PAGE> 19
As provided in the Indenture and subject to certain limitations therein and
herein set forth, the transfer of this Note is registrable in the Security
Register of the Company upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal hereof
and any premium or interest hereon are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein and
herein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of different authorized denominations but otherwise having the
same terms and conditions, as requested by the holder hereof surrendering the
same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
holder in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
19
<PAGE> 20
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
----------------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
| |
| |
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
- --------------------------------------------------------------------------------
this Note and all rights thereunder hereby irrevocably constituting and
appointing
- -----------------------------------------------------------------------Attorney
to transfer this Note on the books of the Trustee, with full power of
substitution in the premises.
Dated:
-------------------------- -----------------------------------
-----------------------------------
Notice: The signature(s) on this
Assignment must correspond with
the name(s) as written upon
the face of this Note in every
particular, without alteration
or enlargement or any change
whatsoever.
20
<PAGE> 21
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to 100% of the principal amount to be repaid, together with unpaid
interest accrued hereon to the Repayment Date, to the undersigned, at
----------
- ----------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate trust
office in the Borough of Manhattan, The City of New York, currently located at
__________________________________________, not more than 60 nor less than 30
calendar days prior to the Repayment Date, this Note with this "Option to Elect
Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000) which the
holder elects to have repaid and specify the denomination or denominations
(which shall be an Authorized Denomination) of the Notes to be issued to the
holder for the portion of this Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $
Date:
----------------------
Notice: The signature(s) on this
Option to Elect Repayment must
correspond with the name(s) as
written upon the face of this Note
in every particular, without
alteration or enlargement or any
change whatsoever.
21
<PAGE> 1
Exhibit 5.1(a)
August 30, 1999
HomeSide Lending, Inc.
7301 Baymeadows Way
Jacksonville, Florida 32256
Ladies and Gentlemen:
We have acted as counsel to HomeSide Lending, Inc., a Florida corporation
(the "Company") in connection with the proceedings being taken to register under
the Securities Act of 1933, as amended (the "Act"), $1,000,000,000 aggregate
principal amount of debt securities pursuant to Registration Statement on Form
S-3 filed with the Securities and Exchange Commission (File Number 333-84179)
(the "Registration Statement"). The debt securities are being issued pursuant to
an indenture in the form filed as an exhibit to the registration statement on
Form S-3 (File Number 333-45603) filed by the Company with the Securities and
Exchange Commission (the "Indenture").
As such counsel, we have examined such corporate records, certificates and
other documents of or relating to the Company, and opinions of counsel in
jurisdictions other than Massachusetts, as we have deemed necessary as a basis
for the opinions hereinafter expressed. We have assumed the genuineness of all
signatures, the authenticity of all original or certified copies and the
conformity to original or certified copies of all copies submitted to us as
conformed or reproduction copies. We have also assumed, with respect to all
parties to agreements or instruments relevant hereto other than the Company,
that such parties had the requisite power and authority (corporate or otherwise)
to execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise) and have been executed and delivered by such parties
and that such agreements or instruments are valid, binding and enforceable
obligations of such parties.
Based upon the foregoing, subject to the limitations set forth herein and
having regard for such legal considerations as we deem relevant, we are of the
opinion that when the terms of the debt securities being offered pursuant to the
Registration Statement and their issue and sale have been duly established in
conformity with the Indenture and in conformity with any applicable law or
agreement or instrument then binding on the Company, and the debt securities
have been duly executed and authenticated in accordance with the terms of the
Indenture and issued and sold as contemplated in the Registration Statement, the
debt securities will constitute legal, valid and binding obligations of the
Company subject to (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and similar laws of general application relating to or
affecting the enforcement of creditors' rights, (ii) the effect of general
principles of equity, including without limitation, concepts of materiality,
reasonableness, good faith and fair dealing
<PAGE> 2
and the possible unavailability of specific performance or injunctive relief,
whether considered in a proceeding in equity or at law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the caption "Validity
of the Notes" in the Prospectus forming a part of the Registration Statement.
The opinions expressed herein are solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person and may not be
quoted in whole or in part without our prior written consent.
Very truly yours,
HUTCHINS, WHEELER & DITTMAR
A Professional Corporation
-2-
<PAGE> 1
Exhibit 5.1(b)
August 30, 1999
HomeSide Lending Inc.
7301 Baymeadows Way
Jacksonville, FL 32256
Ladies and Gentlemen:
I am General Counsel and Executive Vice President of HomeSide Lending,
Inc., a Florida corporation (the "Company"). The Company is registering under
the Securities Act of 1933, as amended (the "Act"), $1,000,000,000 aggregate
principal amount of debt securities pursuant to a Registration Statement on Form
S-3 filed with the Securities and Exchange Commission (File Number 333-84179)
(the "Registration Statement"). The debt securities are being issued pursuant to
an indenture in the form filed as an exhibit to the registration statement on
Form S-3 (No. 333-45603) filed by the Company with the Securities and
Exchange Commission (the "Indenture").
As such counsel, I have examined such corporate records, certificates and
other documents of or relating to the Company as I have deemed necessary as a
basis for the opinions hereinafter expressed. I have assumed the genuineness of
all signatures (other than those executing officers of the Company), the
authenticity of all original or certified copies and the conformity to original
or certified copies of all copies submitted to me as conformed or reproduction
copies. I have also assumed, with respect to all parties to agreements or
instruments relevant hereto other than the Company, that such parties had the
requisite power and authority (corporate or otherwise) to execute, deliver and
perform such agreements or instruments, that such agreements or instruments have
been duly authorized by all requisite action (corporate or otherwise) and have
been executed and delivered by such parties and that such agreements or
instruments are valid, binding and enforceable obligations of such parties.
I am a member of the bar of the State of Florida. I express no opinion
herein as to the laws of any jurisdiction other than the laws of the State of
Florida.
Based upon the foregoing, subject to the limitations set forth herein and
having regard for such legal considerations as I deem relevant, I am of the
opinion that: (i) the Company is a corporation duly organized and validly
existing under the laws of the State of Florida, and (ii) the Notes (as defined
in the Prospectus forming a part of the Registration Statement) have been duly
authorized by all requisite action (corporate or otherwise) by the Company.
<PAGE> 2
HomeSide Lending Inc.
August 30, 1999
Page 2
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this opinion under the caption
"Validity of the Notes" in the Prospectus forming a part of the Registration
Statement.
The opinions expressed herein are solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person and may not be
quoted in whole or in part without my prior written consent, except that Brown &
Wood LLP may rely on this opinion as to matters of Florida law in rendering
their opinion of even date herewith.
Very truly yours,
Robert J. Jacobs
Executive Vice President, Secretary and General
Counsel
HomeSide Lending Inc.
<PAGE> 1
EXHIBIT 5.1 (C)
August 30, 1999
HomeSide Lending, Inc.
7301 Baymeadows Way
Jacksonville, Florida 32256
Ladies and Gentlemen:
We have acted as special counsel as to the laws of the State of New York in
connection with the filing by HomeSide Lending, Inc. (the "Company") of a
Registration Statement on Form S-3 (No.333-84179) (the "Registration Statement")
relating to $1,000,000,000 aggregate initial public offering price of its debt
securities (the "Debt Securities"). The Debt Securities are to be issued
pursuant to an indenture dated as of May 15, 1997 between the Company and The
Bank of New York, as trustee (the "Indenture").
We have examined such documents and records and made such investigation as
we deemed appropriate or necessary, including examining the Registration
Statement and the Indenture.
Based upon the foregoing, subject to the limitations set forth herein and
having regard for such legal considerations as we deem relevant, we are of the
opinion that when appropriate corporate action has been taken by the Company to
authorize the issuance of one or more series of Debt Securities under the
Indenture and to establish the terms thereof, and when the terms of the Debt
Securities being offered pursuant to the Registration Statement and their issue
and sale have been duly established in conformity with the Indenture and in
conformity with any applicable law or agreement or instrument then binding on
the Company, and the Debt Securities have been duly executed and authenticated
in accordance with the terms of the Indenture and issued and sold as
contemplated in the Registration Statement, the Debt Securities will constitute
legal, valid and binding obligations of the Company subject to (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and similar laws
of general application relating to or affecting the enforcement of creditors'
rights, (ii) the effect of general principles of equity, including without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance or injunctive relief,
whether considered in a proceeding in equity or at law.
This opinion is confined to and is given on the basis of the laws of the
State of New York as they exist on the date hereof. In giving this opinion, we
have, with your permission, relied as to matters of Florida law upon the opinion
of Robert J. Jacobs, Executive Vice President and Secretary of the Company.
<PAGE> 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reliance by Hutchins, Wheeler & Dittmar, a
Professional Corporation, on this opinion as to matters of New York law in
rendering their opinion of even date herewith filed as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended.
Very truly yours,
Brown & Wood LLP
2
<PAGE> 1
Exhibit 8.1
August 30, 1999
HomeSide Lending, Inc.
7301 Baymeadows Way
Jacksonville, Florida 32256
Ladies and Gentlemen:
We have acted as counsel to HomeSide Lending, Inc., a Florida corporation
(the "Company"), in connection with the proceedings being taken to register
under the Securities Act of 1933, as amended (the "Act"), the Company's debt
securities pursuant to a Registration Statement on Form S-3 (File No. 333-84179)
filed with the Securities and Exchange Commission (the "Registration
Statement"). The debt securities will be issued pursuant to an Indenture in the
form incorporated by reference as an exhibit to the Registration Statement.
As such counsel, we have examined such documents as we have deemed
necessary as a basis for the opinions hereinafter expressed. Based upon the
foregoing, and having regard for such legal considerations as we deem relevant,
we are of the opinion that the material United States federal income tax
consequences to holders of the debt securities under currently applicable law
are set forth under the heading "United States Federal Income Taxation" in the
Prospectus forming a part of the Registration Statement, subject to the
assumptions and qualifications set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
The opinion expressed herein is solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person and may not be
quoted in whole or in part without our prior written consent.
Very truly yours,
HUTCHINS, WHEELER & DITTMAR
A Professional Corporation
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports dated
April 15, 1998, included in Homeside Lending, Inc.'s Form 10-K for the year
ended September 30, 1998, and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
Jacksonville, Florida
August 27, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report, dated January 18, 1996, except for the second paragraph
of Note 1 and the fifth paragraph of Note 2, as to which the date is March 4,
1996, relating to the financial statements and financial statement schedules for
the year ended December 31, 1995, which appears in HomeSide Lending, Inc.'s
Annual Report on Form 10-K for the year ended September 30, 1998. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers L.L.P.
Jacksonville, Florida
August 30, 1999
<PAGE> 1
EXHIBIT 23.3
ACCOUNTANTS' CONSENT
The Board of Directors
HomeSide Lending, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
Jacksonville, Florida
August 25, 1999
<PAGE> 1
Exhibit 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
HOMESIDE LENDING, INC.
(Exact name of obligor as specified in its charter)
Florida 59-2725415
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
7301 Baymeadows Way
Jacksonville, Florida 32256
(Address of principal executive offices) (Zip code)
---------------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Name Address
- -------------------------------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York, N.Y.
New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 11th day of August, 1999.
THE BANK OF NEW YORK
By: /s/ REMO J. REALE
------------------------
Name: REMO J. REALE
Title: VICE PRESIDENT
-3-
<PAGE> 4
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS In Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $4,508,742
Interest-bearing balances........................... 4,425,071
Securities:
Held-to-maturity securities......................... 836,304
Available-for-sale securities....................... 4,047,851
Federal funds sold and Securities purchased under
agreements to resell................................ 1,743,269
Loans and lease financing receivables:
Loans and leases, net of unearned
income...............39,349,679
LESS: Allowance for loan and
lease losses............603,025
LESS: Allocated transfer risk
reserve........................15,906
Loans and leases, net of unearned income,
allowance, and reserve............................ 38,730,748
Trading Assets......................................... 1,571,372
Premises and fixed assets (including capitalized
leases)............................................. 685,674
Other real estate owned................................ 10,331
Investments in unconsolidated subsidiaries and
associated companies................................ 182,449
Customers' liability to this bank on acceptances
outstanding......................................... 1,184,822
Intangible assets...................................... 1,129,636
Other assets........................................... 2,632,309
-----------
Total assets........................................... $61,688,578
===========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
LIABILITIES
Deposits:
In domestic offices................................. $25,731,036
Noninterest-bearing.......................10,252,589
Interest-bearing..........................15,478,447
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 18,756,302
Noninterest-bearing..........................111,386
Interest-bearing..........................18,644,916
Federal funds purchased and Securities sold under
agreements to repurchase............................ 3,276,362
Demand notes issued to the U.S.Treasury................ 230,671
Trading liabilities.................................... 1,554,493
Other borrowed money:
With remaining maturity of one year or less......... 1,154,502
With remaining maturity of more than one year
through three years............................... 465
With remaining maturity of more than three years.... 31,080
Bank's liability on acceptances executed and
outstanding......................................... 1,185,364
Subordinated notes and debentures...................... 1,308,000
Other liabilities...................................... 2,743,590
-----------
Total liabilities...................................... 55,971,865
===========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 764,443
Undivided profits and capital reserves................. 3,807,697
Net unrealized holding gains (losses) on
available-for-sale securities....................... 44,106
Cumulative foreign currency translation adjustments.... (34,817)
-----------
Total equity capital................................... 5,716,713
-----------
Total liabilities and equity capital................... $61,688,578
===========
</TABLE>
<PAGE> 6
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni
Alan R. Griffith Directors
Gerald L. Hassell
- --------------------------------------------------------------------------------
