<PAGE>
As filed with the Securities and Exchange Commission on September 30, 1999
Registration No. 333-85353
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ARCADIA FINANCIAL LTD.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1664848
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation)
7825 WASHINGTON AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55439-2435
(612) 942-9880
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
James D. Atkinson III Copy to: William B. Payne
Arcadia Financial Ltd. Dorsey & Whitney LLP
7825 Washington Avenue South Pillsbury Center South
Minneapolis, Minnesota 55439-2435 220 South Sixth Street
(612) 942-9880 Minneapolis, Minnesota 55402-1498
(612) 340-2722
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
----------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement as determined by
market 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. / /
----------------
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. / /
-------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
-------------------------
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.
IN ACCORDANCE WITH RULE 429 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, THE PROSPECTUS CONTAINED IN THIS REGISTRATION STATEMENT ALSO RELATES
TO THE COMPANY'S REGISTRATION STATEMENT ON FORM S-3 (NO. 333-18027) DECLARED
EFFECTIVE ON JANUARY 13, 1997. THIS REGISTRATION STATEMENT, WHICH IS A NEW
REGISTRATION STATEMENT, ALSO CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO
REGISTRATION STATEMENT NO. 333-18027, WHICH SHALL HEREAFTER BECOME EFFECTIVE
CONCURRENTLY WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
PROSPECTUS
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ARCADIA FINANCIAL LTD.
$225,000,000
DEBT SECURITIES, PREFERRED STOCK,
DEPOSITARY SHARES, COMMON STOCK,
SECURITIES WARRANTS AND UNITS
------------------------------------------------------------------
We will sell the securities covered by this prospectus from time to time. We
may offer the securities independently or together in any combination, called
"units," for sale directly to purchasers or through underwriters, dealers or
agents to be designated at a future date.
We will provide the specific terms and prices of these securities in supplements
to this prospectus. You should read this prospectus and the applicable
prospectus supplement carefully before you invest.
Our common stock is traded on the New York Stock Exchange under the symbol
"AAC." On September 28, 1999, the last reported sale price of our common stock
as reported on the New York Stock Exchange was $ 4.5625 per share.
---------------
SEE THE SECTION TITLED "RISK FACTORS" BEGINNING ON PAGE 3 TO READ ABOUT SOME
FACTORS YOU SHOULD CONSIDER BEFORE BUYING ANY OF OUR SECURITIES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------
Arcadia Financial Ltd.
Arcadia Financial Center
7825 Washington Avenue South
Minneapolis, MN 55439
(612) 942-9880
The date of this prospectus is September 30, 1999.
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission using a "shelf" registration process.
Under this shelf process, we may sell our:
- debt securities;
- preferred stock;
- depositary receipts;
- common stock;
- securities warrants; and
- units consisting of any combination of these securities.
This prospectus provides you with a general description of these securities.
Each time we sell securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering of securities. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read this prospectus and the applicable prospectus
supplement together with the additional information described under the heading
"Where You Can Find More Information."
You should rely only on the information incorporated by reference or
provided in this prospectus and the accompanying prospectus supplement. We have
not authorized anyone else to provide you with information that is different.
You should not assume that the information in this prospectus or the
accompanying prospectus supplement is accurate as of any date other than the
date on the cover page of the document. If any statement in one of these
documents is inconsistent with a statement in another document having a later
date--for example, a prospectus supplement or a document incorporated by
reference in this prospectus--the statement in the document having the later
date modifies or supersedes the earlier statement.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ABOUT THIS PROSPECTUS..........................................................2
RISK FACTORS...................................................................3
ABOUT ARCADIA FINANCIAL LTD...................................................11
USE OF PROCEEDS...............................................................12
RATIOS OF EARNINGS TO FIXED CHARGES AND
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
....................................................................12
DESCRIPTION OF DEBT SECURITIES................................................13
DESCRIPTION OF PREFERRED STOCK................................................26
DESCRIPTION OF DEPOSITARY SHARES..............................................30
DESCRIPTION OF COMMON STOCK...................................................33
DESCRIPTION OF SECURITIES WARRANTS............................................35
PLAN OF DISTRIBUTION..........................................................38
EXPERTS .....................................................................39
LEGAL MATTERS.................................................................39
WHERE YOU CAN FIND MORE INFORMATION...........................................39
</TABLE>
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RISK FACTORS
YOU SHOULD CONSIDER THE FOLLOWING RISKS CAREFULLY BEFORE YOU DECIDE TO
BUY ANY OF OUR SECURITIES.
RISKS RELATED TO OUR LIQUIDITY AND ACCESS TO CAPITAL RESOURCES
WE MAY NEED ADDITIONAL CAPITAL TO FUND CONTINUED NEGATIVE CASH FLOWS,
BUT MAY NOT BE ABLE TO RAISE CAPITAL ON ACCEPTABLE TERMS OR AT ALL. To date, we
have operated on a negative operating cash flow basis, and we expect to continue
to do so in the near future. Our business requires substantial cash to make
payments in connection with the purchase and securitization of loans, for
operating expenses and to service our debt. We may require additional capital in
the future to satisfy our operating and debt service requirements, to fund
growth or to repay our outstanding indebtedness at maturity. We may not,
however, be able to access the capital markets in the future on terms acceptable
to us, if at all. Factors which could affect our ability to access the capital
markets or the costs of any capital raised include:
- changes in interest rates;
- general economic conditions;
- the perception of us in the capital markets; and
- the performance of our securitization trusts.
In addition, the agreements governing our existing debt securities and credit
facilities significantly restrict our ability to incur additional indebtedness
and to issue new classes of preferred stock. Any agreements governing future
debt securities or credit facilities may contain similar restrictions.
ADVERSE CHANGES IN OUR ASSET-BACKED SECURITIES PROGRAM OR IN THE
ASSET-BACKED SECURITIES MARKET FOR AUTOMOBILE RECEIVABLES IN GENERAL COULD
MATERIALLY ADVERSELY AFFECT US. Our business depends on our ability to aggregate
and sell automobile loans in the form of publicly offered asset-backed
securities. These sales generate cash proceeds that allow us to repay amounts
outstanding under our warehouse credit facilities and to purchase additional
loans. In addition, the sale of loans to a securitization trust in preparation
for securitization, which generally occurs once per quarter, gives rise to the
gain on sale that forms a significant part of our reported earnings for each
quarter. Accordingly, adverse changes in our asset-backed securities
program--such as a delay in the consummation of a planned securitization beyond
quarter end, negative market perception of us or the failure of the loans we
intend to sell to conform to insurance company and rating agency
requirements--or in the general market for automobile loan asset-backed
securities could materially adversely affect our ability to purchase and resell
loans on a timely basis and on terms reasonably satisfactory to us.
IF IN THE FUTURE WE ARE UNABLE TO OBTAIN FINANCIAL GUARANTY INSURANCE
POLICIES, OR DETERMINE THAT THEY ARE TOO EXPENSIVE, IT COULD REDUCE OUR ABILITY
TO SELL THE ASSET-BACKED SECURITIES WE SPONSOR AND ALSO REDUCE THE PRICE AT
WHICH WE ARE ABLE TO SELL THEM. All of the securitizations we have sponsored
since March 1993 and one of our current warehouse credit facilities have
utilized credit enhancement in the form of financial guaranty insurance policies
issued by Financial Security Assurance, Inc., which is known as FSA. These
financial guaranty insurance policies have resulted in those asset-backed
securities being rated AAA/Aaa. We believe that this rating has made those
securities easier to sell than securities with a lower rating and has enhanced
the price at which they have been sold. We also believe that the use of this
form of credit enhancement was cheaper than alternative forms available to us at
the time. However, FSA is not required to insure the securitizations we sponsor
and may not continue to do so. In June 1999, FSA advised us that it expects to
modify its requirements for any future securitization transaction with respect
to which it provides financial guaranty insurance. These modifications could
significantly increase the cash cost to us of using FSA as the provider of
credit enhancement for future securitizations. We are currently examining our
options in this regard, which may include issuing uninsured asset-backed
securities with other credit enhancement features. If we were to do this, some
of those securities are likely to receive a rating that is somewhat lower than
AAA/Aaa, which could reduce our ability to sell those securities at prices
comparable to those received in the past.
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EARLY TERMINATION OF OUR WAREHOUSE CREDIT FACILITIES, OR OUR
INABILITY TO ARRANGE ADDITIONAL WAREHOUSE FACILITIES OR TO EXTEND OR REPLACE
EXISTING FACILITIES WHEN THEY EXPIRE, WOULD HAVE A MATERIAL ADVERSE EFFECT ON
US. We depend on warehouse facilities with financial institutions or
institutional lenders to finance our purchase of loans on a short-term basis
pending securitization. At June 30, 1999, we had three primary warehouse
facilities with an aggregate borrowing capacity of approximately $700 million.
One of those facilities, with a capacity of $400 million, was renewed on
July 13, 1999, and will expire in July of 2000. The FSA financial guaranty
insurance policy with respect to this facility will be reduced from $400 million
to $200 million on February 15, 2000; at the same time, the capacity of the
facility itself will also be reduced to $200 million. The remaining facilities
expire in September and October of 1999, subject to earlier termination on the
occurrence of certain events and to renewal or extension at the option of the
lenders. These or similar facilities may not continue to be available on terms
reasonably satisfactory to us. Early termination of these warehouse facilities,
or our inability to arrange additional warehouse facilities or to extend or
replace existing facilities when they expire, would significantly reduce or end
our ability to purchase and securitize automobile loans.
RISKS RELATED TO THE PERFORMANCE OF LOANS IN SECURITIZATION TRUSTS THAT WE
HAVE SPONSORED
ANY MATERIAL DEFICIENCIES BETWEEN FUTURE LOAN PERFORMANCE AND
OUR CURRENT ESTIMATES OF THAT PERFORMANCE COULD HAVE A MATERIAL ADVERSE
EFFECT ON US, INCLUDING LEADING TO A REDUCTION IN THE VALUATION OF OUR MAIN
ASSET, FINANCE INCOME RECEIVABLE. When we sell loans in connection with the
creation of a securitization trust and the issuance of asset-backed
securities by that trust, we recognize a gain on sale and establish an asset
that is called finance income receivable. Finance income receivable is our
principle asset, which represents our retained interest in the loans sold.
Finance income receivable is calculated using assumptions and estimates
concerning future delinquency, default, prepayment, repossession and net loss
rates on the securitized loans that management believes are reasonable at the
time. We base these assumptions on our historical experience, externally
generated industry information, market conditions and expectations of future
performance and present value discount rates that we believe would be
requested by an unrelated purchaser of a similar asset. However, the loans
that we securitize may not perform under varying economic conditions in the
manner we currently estimate. In particular, the actual rates of defaults,
prepayments and net losses may exceed the estimates used in valuing the
finance income receivable and would adversely affect anticipated future cash
flow. We periodically review our default, prepayment and net loss assumptions
in relation to the current performance of the loans and market conditions
and, if necessary, adjust the balance of finance income receivable. We have
made two significant permanent reductions to the value of finance income
receivable, one at June 30, 1998 ($114.5 million) and one at March 31, 1997
($98.0 million). Any future permanent reductions to finance income receivable
could adversely affect the price for our securities and our ability to raise
capital as needed. In addition, we may not be able to sell our finance income
receivable at its stated value on our balance sheet.
ANY DECREASE IN OR INTERRUPTION OF EXCESS CASH FLOW FROM
SECURITIZATION TRUSTS THAT WE HAVE SPONSORED COULD MATERIALLY ADVERSELY
AFFECT US. Our future liquidity and financial condition, and our ability to
finance the growth of our business and to repay or refinance our outstanding
indebtedness, will depend to a material extent on distributions of excess
cash flow from securitization trusts that we have sponsored. The agreements
related to the financial guaranty insurance policies on asset-backed
securities issued by these securitization trusts require us to maintain
specified amounts of cash in spread accounts for each insured securitization
trust. Our obligation to establish and fund these spread accounts is
initially met by means of letters of credit, cash deposits and/or cash flows
from the related trust. Each month after the spread account has been
established, any cash received by the related securitization trust that is in
excess of the amount needed to make payments on the asset-back securities is
first used to bring the spread account for that trust up to required levels.
In addition, under our agreements with FSA, each of these spread accounts is
cross-collateralized with the other insured securitization trusts. As a
result, cash received by one securitization trust that is in excess of the
amount needed to make payments specifically related to that trust may be used
to support negative cash flow from, or to replenish the spread account
related to, another securitization trust. Only after these uses is any of
that cash distributed as excess cash flow to Arcadia Receivables Finance
Corporation, one of our subsidiaries known as ARFC, and then on to us. Thus,
if the cash flow from all insured securitization trusts is not sufficient to
replenish all spread accounts, excess cash flow may not be available to us
for that month. The timing and amount of excess cash flow varies based on a
number of factors, including but not limited to:
- rates of loan delinquencies, defaults and net losses;
- how quickly repossessed vehicles can be resold and the
price at which this is accomplished;
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- ages of the loans in the portfolio;
- levels of voluntary prepayments; and
- required spread account levels and the amount of cash in
the spread accounts relative to those required levels.
Any negative change in these factors could reduce or eliminate excess cash flows
to us. We have in the past experienced interruptions in excess cash flows and
this may occur again in the future.
LOAN PORTFOLIO DELINQUENCY, DEFAULT AND NET LOSS RATES THAT ARE POORER
THAN PORTFOLIO PERFORMANCE TESTS COULD RESULT IN A DECREASE IN OR INTERRUPTION
OF EXCESS CASH FLOW AVAILABLE TO US. Each insured securitization trust has
portfolio performance tests that relate to levels of delinquencies, defaults and
net losses on the loans in the trust. These portfolio performance tests require
that the loan portfolio of each insured securitization trust have:
- an average delinquency ratio not equal to or in excess of a
specified percentage;
- a cumulative default rate not equal to or in excess of
specified percentages, which vary based on the aging of the
loan portfolio; and
- a cumulative net loss rate not equal to or in excess of
specified percentages, which vary based on the aging of the
loan portfolio.
If the loans in any trust perform worse than is required by any of these tests,
the amount of cash that has to be retained in the related spread account or
accounts increases significantly until the loan portfolio has performed at the
required levels for a specified period, generally three to five months. Any
violation will decrease available excess cash flow for that time period. FSA as
provider of financial guaranty insurance can waive a violation of these
portfolio performance tests. We have an arrangement with FSA under which, if
loan portfolio performance is poorer than the portfolio performance test
levels, our subsidiary ARFC may make a pledge of cash that has the effect of
preventing the violation of the portfolio performance test. Some trusts have
exceeded these portfolio performance tests in the past, and some trusts were
still in excess of these tests at June 30, 1999, but this arrangement has
prevented a violation. It has also, however, reduced the amount of cash that
would have been available to us for use if we had received a waiver of the
violation. An increase in loan delinquencies, cumulative defaults or net losses
could result in one or more additional existing securitization trusts exceeding
one or more of the portfolio performance tests unless the portfolio performance
test levels are changed. FSA is not required either to continue its arrangement
with us or to waive any future violations of portfolio performance test levels
and might not do so if additional trusts were to perform more poorly then
required.
THE OCCURRENCE OF AN INSURANCE AGREEMENT EVENT OF DEFAULT COULD HAVE
A MATERIAL ADVERSE EFFECT ON US. Our agreement with FSA specifies that there
will be an insurance agreement event of default if listed events occur with
respect to any series of insured asset-backed securities. These events include
loan portfolio performance tests similar to those described above but at
significantly higher levels. Following an insurance agreement event of default,
FSA may:
- suspend distributions of cash flow from the related
securitization trust and all other insured trusts, including
one of our warehouse credit facilities, until the amount of
cash in the affected spread account reaches a preset level
(generally 25% of the balance of outstanding asset-backed
securities in that series);
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- capture excess cash flow from performing trusts;
- increase its premiums;
- replace us as servicer with respect to all insured trusts;
and
- foreclose on its collateral security interest in the stock
of our subsidiary ARFC.
FSA may waive an insurance agreement event of default. Some of the insured
trusts have exceeded these thresholds in the past, but to date we have
obtained waivers to permit distributions of excess cash flow. A further
increase in loan delinquencies, cumulative defaults and net losses might
result in one or more additional securitization trusts exceeding one or more
of these thresholds unless the required performance levels are changed. If
this were to occur, further waivers may not be available to us. Any action
that FSA might take in the absence of a waiver could have a material adverse
effect on us, including our ability to pay our obligations. If FSA terminated
us as servicer, we would no longer receive the related servicing fees. If FSA
foreclosed on the stock that we own in ARFC, it would prevent that subsidiary
from providing cash to us.
CURRENT AND HISTORICAL DELINQUENCY AND DEFAULT RATES OF LOANS IN OUR
SERVICING PORTFOLIO MAY UNDERSTATE FUTURE DELINQUENCY AND DEFAULT RATES. The
future performance of our security portfolio may vary from current and
historical rates for a number of reasons. The incidence of delinquencies and
defaults on automobile loans tends to vary with the age of the loans. For
example, loans that are between six and 14 months old generally have a higher
likelihood of being delinquent or defaulting than loans with similar credit
characteristics that are less than six months or greater than 14 months old.
Accordingly, to the extent that our servicing portfolio grows so that it
contains disproportionately more loans originated within the prior six
months, the current and historical delinquency and default rates of loans in
the servicing portfolio may understate delinquency and default rates after
that time. In addition, to the extent we offer new loan products which
involve different underwriting policies from those we have used in the past,
the delinquency and default rates of our servicing portfolio may change.
PAST PURCHASES OF HIGHER RISK LOANS MAY CONTINUE TO NEGATIVELY
IMPACT THE PERFORMANCE OF OUR SERVICED LOAN PORTFOLIO. Through 1997, we
consistently increased our purchases of higher risk loans. These historic
increases in the proportion of higher risk loans in our serviced loan
portfolio led to an increase in the rates of delinquencies, repossessions and
losses on those loans. These higher risk loans will likely continue to
negatively impact our loan performance statistics in the near future.
INCREASES IN LOAN DELINQUENCY, DEFAULT AND LOSS RATES MAY VIOLATE TESTS
IN THE AGREEMENTS THAT GOVERN OUR WAREHOUSE CREDIT FACILITIES. The agreements
that govern our warehouse credit facilities contain tests that set limits on:
- loan delinquency rates;
- loan default rates;
- loan payment extensions;
- loan loss rates;
- interest rate yields;
- borrower bankruptcy rates;
- borrower credit scores; and
- loan-to-value ratios.
If the performance of the relevant loan portfolios exceeds these limits, lenders
under the affected warehouse facility have no further obligation to extend
credit, which would substantially reduce or eliminate our capacity to purchase
additional automobile loans. In addition, if the limits under any one agreement
are exceeded, there may be cross-defaults under other credit agreements, which
could result in our being required immediately to pay all amounts due under
those agreements.
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THERE MAY BE A FUTURE INCREASE IN THE NUMBER OF LOANS THAT WE HAVE
EXTENDED OR AMENDED, WHICH GENERALLY PRESENT SUBSTANTIALLY HIGHER DEFAULT RISKS
THAN LOANS THAT HAVE NEITHER OF THESE CHARACTERISTICS. Like others in the
industry, we give certain borrowers extensions or amendments to loan terms in
certain circumstances. Loans that have been extended or amended generally
present substantially higher default risks than loans that have neither of these
characteristics. Continued slowing of the rate of portfolio growth, which will
result in a higher percentage of loans of the age that are more likely to be
extended or amended, could contribute to an increase in these statistics. The
granting of an extension or amendment may have the effect of removing the
related loan from delinquent status.
RISKS RELATED TO GENERAL ECONOMIC CONDITIONS
ECONOMIC CONDITIONS INFLUENCE OUR LEVEL OF BUSINESS AND THE PERFORMANCE
OF THE LOANS IN THE SERVICED PORTFOLIO. Periods of economic slowdown or
recession, whether general, regional or industry-related, may increase the risk
of default on automobile loans. Any increase on defaults would have the adverse
effects noted above. These periods may also be accompanied by decreased consumer
demand for automobiles which would result in reduced demand for automobile loans
and could reduce business for us. Decreased consumer demand for automobiles also
contributes to a decline in the values of automobiles securing outstanding
loans, thereby weakening collateral coverage and increasing the possibility of
losses in the event of default.
OUR BUSINESS MAY BE AFFECTED BY PRICES FOR USED AUTOMOBILES.
Significant increases in the inventory of used automobiles during recessions
may depress the prices at which we can sell our inventory of repossessed
vehicles or delay sales. In addition, average used car prices have fluctuated
in the past, and any future softening of the used car market could cause our
recovery rate on repossessed vehicles to decline below the current level.
This, in turn, might have an adverse effect on loan loss levels, with all the
potential effects of a decline in portfolio performance, and could require
adjustments to estimated recovery rates and finance income receivable similar
to those made at June 30, 1998 and March 31, 1997, both of which included
amounts related to a reduction in the estimated recovery rates.
OUR PROFITABILITY MAY BE DIRECTLY AFFECTED BY THE LEVEL OF AND
FLUCTUATIONS IN INTEREST RATES. The level of and fluctuations in interest rates
affect the difference between the annual percentage rate paid by the borrowers
under the loans we purchase and the interest rate on the asset-back securities
we sell. This gross interest rate spread is a major source of profit for us.
We monitor the interest rate environment and employ strategies designed to
mitigate the effect of changes in interest rates on our gross interest rate
spread. However, changes in interest rates may adversely affect our
profitability.
A CONTINUATION OR INCREASE IN RECENT LEVELS OF PERSONAL BANKRUPTCY
FILINGS COULD ADVERSELY AFFECT THE PERFORMANCE OF THE LOAN PORTFOLIO WE SERVICE.
Recent media reports have suggested an increase in the number of personal
bankruptcy filings and defaults on consumer credit. During most of 1997, much
of 1998 and the first six months of 1999, we experienced a slight increase in
the proportion of our servicing portfolio representing loans to borrowers who
have filed for bankruptcy protection. A continuation or increase in this trend
could contribute to greater default and net loss rates than we have historically
experienced. In addition, this increase in consumer bankruptcy filings and
defaults on consumer credit during a period of economic growth indicates that
the impact of consumer behavior on default rates is not limited to periods of
economic slowdown or recession.
RISKS RELATED TO THE NATURE OF THE SECURITIES OFFERED BY THIS PROSPECTUS
MOST OF OUR CASH FLOW COMES FROM, AND ASSETS BELONG TO, LEGALLY
DISTINCT SUBSIDIARIES WITH NO OBLIGATIONS TO PAY AMOUNTS DUE UNDER THE
SUBORDINATED NOTES AND WHOSE CREDITORS HAVE CLAIMS ON THOSE ASSETS THAT ARE
SENIOR TO OUR CLAIMS OR THE CLAIMS OF OUR CREDITORS, INCLUDING THE HOLDERS OF
THE SUBORDINATED NOTES. A significant portion of our cash flow comes in the form
of distributions from our special-purpose subsidiaries, which have the legal
right to receive the excess cash flow from the securitization trusts we have
sponsored. These subsidiaries are separate and distinct legal entities with no
obligation to pay any amounts due under our indebtedness or to make any
funds available to us, whether by paying dividends or otherwise, so that we can
do so. As a result, if any third party were to enforce any of the restrictions
on the distribution of cash from our subsidiaries discussed above, our ability
to pay
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interest and principal on our outstanding indebtedness would be significantly
impaired. In addition, substantially all of the assets shown on our financial
statements, in particular the finance income receivable and the loans held for
sale, are legally owned by these special-purpose subsidiaries, not us. Thus,
creditors of those subsidiaries would have first claim to those assets in any
liquidation or similar event, rather than us or any of our creditors. As of
June 30, 1999, our subsidiaries had approximately $98.3 million of indebtedness.
ALL PAYMENTS ON THE SUBORDINATED DEBT WILL BE SUBORDINATED TO THE PRIOR
PAYMENT OF ALL AMOUNTS DUE ON ANY SENIOR INDEBTEDNESS. If we make a distribution
to creditor, the right of holders of any subordinated debt securities to receive
payment of any amounts due to them--whether interest or principal--will be
subordinated to the right of all holders of any senior indebtedness, as
defined in the subordinated debt indenture, to receive prior payment of all
amounts due to them. Similarly, if an event of default on any senior
indebtedness occurs, until it has been cured, we will not be able to make any
payments on account of any subordinated debt securities.
WE HAVE A LARGE AMOUNT OF OUTSTANDING DEBT, WHICH MAY MAKE IT HARDER
TO OBTAIN FINANCING, WILL INCREASE THE COST TO US OF OUR DEBT AND MAY MAGNIFY
THE RESULTS OF ANY DEFAULT UNDER ANY OF OUR OUTSTANDING INDEBTEDNESS. At June
30, 1999, we had a total of $447.6 million of debt outstanding and had a
debt-to-equity ratio of 1.96. (These amounts do not include any debt of our
subsidiaries.) The issuance of additional debt securities could increase our
debt-to-equity ratio or leverage, which may in turn make it harder for us to
obtain future financing. In addition, the issuance of any debt securities
will increase the cost of paying interest on our debt, except to the extent
that the proceeds from the sales are used to repay other outstanding
indebtedness. Although our cash flow from operations and capital raising
activities has historically been sufficient to pay amounts due on our
indebtedness, this may not continue to be the case; any additional
indebtedness may increase the risk that our cash flow is insufficient to pay
amounts due. Finally, our level of indebtedness, and in particular any
significant increase in it, may make us more vulnerable if there is a
downturn in our business.
OUR OUTSTANDING DEBT SECURITIES CONTAIN RESTRICTIVE COVENANTS THAT
MAY RESTRICT OUR ABILITY TO OBTAIN FINANCING AND NONCOMPLIANCE WITH WHICH
COULD LEAD TO A DEFAULT WITH RESPECT TO THAT AND ANY OTHER INDEBTEDNESS. We
are subject to restrictive covenants under our outstanding debt securities
and our other debt financing agreements, some of which may significantly
restrict our ability to incur additional indebtedness or to issue preferred
stock. Any future indebtedness may also contain similar restrictive
covenants. Noncompliance with any covenants under any of our outstanding
indebtedness, unless cured, modified or waived, could lead to a default not
only with respect to that indebtedness, but also under other indebtedness. If
this were to happen, we might not be able to repay or refinance all of our
debt and in particular might not be able to repay any subordinated debt
securities, since their repayment is subordinated to the prior repayment of
all senior debt outstanding at the time.
IF THE HOLDERS OF OUR SENIOR NOTES ISSUED IN MARCH AND OCTOBER OF
1997 WERE TO EXERCISE THEIR RIGHT TO REQUIRE US TO REPURCHASE THEIR NOTES, IT
MIGHT CAUSE A DEFAULT UNDER OUR OUTSTANDING INDEBTEDNESS. The holders of our
currently outstanding senior notes may require us to repurchase all or a
portion of those notes upon the occurrence of various events, including a
change of control, specified types of asset sales and specified adverse loss
experiences with respect to the securitization trusts we have sponsored. In
1996, we received an indication of interest to buy our company. At that time,
we examined our strategic alternatives, including a sale. While no definitive
offers to buy were received, a transaction like this might cause a change in
control in the future. If we were required to repurchase any of these senior
notes for this or any other reason, any funds so used would not be available
to pay principal or interest on any other indebtedness that did not have a
similar covenant, and we might not be able to access other funds to do so.
Moreover, we might not have sufficient funds available to repurchase the
senior notes. Our inability to do so could cause defaults under, and
acceleration of, both the senior notes and, under cross-default provisions,
our other indebtedness.
OUR BOARD OF DIRECTORS HAS THE POWER TO CREATE AND ISSUE A NEW CLASS OR
SERIES OF STOCK THAT COULD ADVERSELY AFFECT THE VOTING POWER, DIVIDEND,
LIQUIDATION AND OTHER RIGHTS OF HOLDERS OF OUR COMMON STOCK. Our authorized and
unissued stock includes shares that are undesignated as to rights. Under our
articles of incorporation, our board of directors has the power to create and
issue new classes or series of stock using these undesignated shares. In
connection with this, our board of directors may give the new class or series
any rights,
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preferences and privileges that the board of directors deems appropriate,
including special dividend, liquidation and voting rights. The creation and
issuance of a new class or series of stock could adversely affect the voting
power, dividend, liquidation and other rights of holders of our common stock
and, possibly, any other class or series of stock that is then in existence.
OUR CHARTER DOCUMENTS AND SHAREHOLDER RIGHTS PLAN AND MINNESOTA LAW MAY
DISCOURAGE AN ACQUISITION OF OUR COMPANY. Provisions of our articles of
incorporation and bylaws, the existence of our shareholder rights plan and the
provisions of Minnesota law could make it more difficult for a third party to
acquire us, even if doing so would be beneficial to our shareholders.
OTHER RISKS RELATING TO US
WE MAY BE UNABLE TO IMPROVE OUR SERVICING PERFORMANCE, IN PARTICULAR AS
THE RESULT OF HIGH EMPLOYEE TURNOVER OR AN INABILITY TO ATTRACT AND RETAIN
REPLACEMENT SERVICING AND COLLECTION PERSONNEL. Our ability to manage portfolio
delinquency, default and loss rates depends on the maintenance of efficient
collection and repossession procedures and on attracting and retaining an
adequate number of qualified servicing and collection personnel. We may not
succeed in the efforts we have undertaken since 1996 to improve our servicing
and collection performance. During 1997 and 1998 we experienced an increase in
employee turnover rate, especially among our collection personnel. This was due
in part to low unemployment rates driven by economic growth and the continued
expansion of the consumer credit markets and in part to our efforts to
consolidate our servicing and collection operations. This consolidation,
resulted in service centers being moved from one location to another. Similar
high turnover in the future, or an inability to attract and retain replacement
personnel, could have an adverse effect on our performance, especially our
portfolio delinquency, default and net loss rates.
WE ARE A DEFENDANT IN LEGAL PROCEEDINGS THE OUTCOME OF WHICH COULD HAVE
AN ADVERSE EFFECT ON US. We and some of our directors and officers are
defendants in a consolidated lawsuit, IN RE OLYMPIC FINANCIAL LTD. SECURITIES
LITIGATION. The plaintiffs allege that during the period from July 20, 1995
through March 3, 1997, we and our directors and officers illegally engaged in a
scheme that had the effect of artificially inflating, maintaining and otherwise
manipulating the value of our common stock. While we believe that this action is
without merit and intend to defend it vigorously, we cannot be sure of success.
In addition, in the course of our business, we are routinely a party or subject
to other items of pending or threatened litigation. This includes actions
against borrowers to collect amounts on loans or to repossess vehicles and
litigation challenging the terms of loans we have purchased. The ultimate
outcome of these matters cannot be predicted and we may not prevail in all of
these lawsuits. Any order, judgment, settlement or decree that was adverse to us
could have a material adverse effect on us.
THE FAILURE OF YEAR 2000 NON-COMPLIANT SYSTEMS, EITHER OUR OWN OR THOSE
OF OUR SIGNIFICANT THIRD PARTY PROVIDERS, MAY MAKE US UNABLE TO PERFORM KEY
OPERATING ACTIVITIES AND COULD ALSO SUBJECT US TO LITIGATION. We have reviewed
our automated information systems, including our loan accounting system,
business support systems and facility operating systems and have initiated the
replacement, modification or reprogramming of Year 2000 non- compliant hardware
and software. In addition, we have developed and are implementing a plan to
contact parties which provide services critical to the successful operation of
our business to learn how they are addressing the issue and to evaluate any
likely impact on us. However, we have not yet completed all necessary processes
of our Year 2000 plan. Nor do we have contingency plans in place in case we do
not complete all phases of our Year 2000 program. If we do not complete our Year
2000 program successfully, we may be unable to perform our key operating
activities and could also be subject to litigation regarding the results of
systems failures, such as improper application of repayments and resulting
incorrect credit reporting to credit bureaus.
OUR ABILITY TO COMPETE IN THE HIGHLY COMPETITIVE AUTOMOBILE FINANCING
MARKET MAY BE LIMITED BY OUR COMPETITORS' GREATER RESOURCES AND BECAUSE WE DO
NOT OFFER DEALERS ALL THE PROGRAMS THAT SOME COMPETITORS DO. Many of our
existing and potential competitors, which include well-established financial
institutions, such as banks, other automobile finance companies, small loan
companies, thrifts and leasing companies and captive finance companies owned by
automobile manufacturers, such as General Motors Acceptance Corporation,
Chrysler Credit Corp. and Ford Motor Credit Company, have greater financial,
technical and marketing resources than we have. From time to time these
competitors offer special buyer incentives in the form of below-market interest
rates on
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certain classes of vehicles which we are unable to match. Many of these
competitors also have longstanding relationships with automobile dealers, making
it difficult for us to develop relationships with those dealers. In addition,
some of the major entities that compete with us provide other forms of financing
to automobile dealers, including dealer floor plan financing and leasing, which
we do not provide. All of this may have the effect of making us less
competitive.
VIOLATIONS OF OR CHANGES IN THE LAWS AND REGULATIONS THAT GOVERN OUR
BUSINESS COULD HAVE A MATERIAL ADVERSE EFFECT ON US. Our business is subject to
numerous federal and state consumer protection laws and regulations. Among other
things, these laws and regulations:
- require us to obtain and maintain licenses and qualifications;
- limit interest rates, fees and other charges;
- limit or prescribe various other terms of our automobile loan
contracts;
- require specific disclosures; and
- define our rights to repossess and sell collateral vehicles.
If we were to violate these laws and regulations, even unintentionally, we could
be subject to government enforcement action or to consumer or securityholder
lawsuits seeking to recover for damages alleged to have resulted from the
violations. Changes in existing laws or regulations, or in their interpretation,
or the promulgation of additional laws or regulations could, among other things,
impose significant new restrictions on the way in which we do business or result
in significantly increased compliance costs. If any of this happened, it could
have a material adverse effect on us.
---------------
THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS
PROSPECTUS CONTAIN FORWARD-LOOKING STATEMENTS BASED ON OUR CURRENT EXPECTATIONS,
ASSUMPTIONS, ESTIMATES AND PROJECTIONS ABOUT OURSELVES AND OUR INDUSTRY.
FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF LANGUAGE SUCH AS
"MAY," "WILL," "EXPECT," "ANTICIPATE," "ESTIMATE," "SHOULD" OR "CONTINUE," AND
SIMILAR LANGUAGE. THESE FORWARD-LOOKING STATEMENTS INVOLVE RISK AND UNCERTAINTY.
OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THE
FORWARD- LOOKING STATEMENTS AS A RESULT OF MANY FACTORS, WHICH ARE DESCRIBED IN
THIS SECTION AND ELSEWHERE. WE UNDERTAKE NO OBLIGATION TO UPDATE PUBLICLY ANY
FORWARD-LOOKING STATEMENTS FOR ANY REASON, EVEN IF NEW INFORMATION BECOMES
AVAILABLE OR OTHER EVENTS OCCUR IN THE FUTURE.
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ABOUT ARCADIA FINANCIAL LTD.
We purchase, securitize and service consumer automobile loans
originated primarily by car dealers affiliated with major foreign and
domestic manufacturers. We purchase our consumer automobile loans through 18
regional buying centers located in 15 states. These buying centers are
supplemented by a network of dealer development representatives who develop
and maintain relationships with car dealers operating within each buying
center's immediate market area or in surrounding market areas. Credit
approval and loan processing are generally performed at the regional buying
center or at our headquarters in Minneapolis, Minnesota.
Our lending programs are designed to serve consumers who have limited
access to traditional automobile financing, typically because they have prior
credit difficulties or limited credit histories. Because we serve consumers who
are unable to meet the credit standards imposed by most traditional automobile
financing sources, we generally charge interest at rates higher than those
charged by traditional sources. We also expect to sustain a higher level of
credit losses than traditional sources because we provide financing to
relatively high-risk borrowers.
We employ a risk-based pricing strategy for determining which loans
to purchase and the terms of the loans we purchase. We compare the terms the
borrower wishes to obtain with the results of an evaluation of his or her
credit characteristics on the basis of our underwriting and credit scoring
criteria. Our underwriting procedures focus on a borrower's credit
characteristics and collateral value and do not distinguish between new and
used vehicles, which represented approximately 13% and 87%, respectively, of
our loan purchases in 1998. In the past, we marketed our loan products using
two programs. However, in 1998, we determined that it was more appropriate to
make underwriting decisions based on a multi-tiered risk-based pricing
matrix. We believe that this tiering provides us with a higher level of
precision in estimating future default rates and loan profitability. We base
our analysis of loan loss reserves in part on the credit performance we
expect from each risk tier and on the proportion of loan portfolio in each of
the tiers. Our goal is to maximize the difference between the borrowers'
interest rates and the level of net losses we expect on the loans we purchase.
We fund our initial purchases of loans primarily with money borrowed
under warehouse facilities, which are arrangements that allow us to borrow
cash secured by the loans we purchase with the cash. We then securitize the
loans we have purchased, generally on a quarterly or more frequent basis. To
securitize loans, we transfer them through one of our special purpose
subsidiaries to a securitization trust that has been newly created for the
transaction. The securitization trust issues one or more classes of debt
securities called asset-backed securities and sells them to investors. When the
sale of the securities is completed (which may be some time after the sale of
the asset-backed securities), we recognize an accounting gain on the sale of the
loans and use the proceeds primarily to repay amounts outstanding under our
warehouse facilities.
Each month, collections of principal and interest on the loans in
each securitization trust are used by the trustee of that trust to pay
amounts due to the holders of the trust's asset-backed securities, to
establish and maintain spread accounts as a source of cash to cover possible
shortfalls in collections on the loans in the trust and to pay expenses
associated with the securitization and the servicing of the loans. Any funds
that remain are generally distributed to us, subject to our agreements with
Financial Security Assurance Inc., our provider of financial guaranty
insurance policies.
We also act as servicer for the loans included in securitization
trusts. In return, we receive servicing fees based on the outstanding
principal balance on the loans and also receive collection fees, such as late
payment fees and insufficient fund charges, and interest on collection
accounts. To perform our servicing responsibilities, we operate a national
customer service center in Minneapolis, Minnesota, and four regional
collection centers located in Charlotte, North Carolina; Dallas, Texas;
Denver, Colorado; and Minneapolis, Minnesota.
Arcadia Financial is a Minnesota corporation that was incorporated on
March 8, 1990. Our principal executive offices are located at 7825 Washington
Avenue South, Minneapolis, Minnesota 55439-2435, and our telephone number is
(612) 942-9880.
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USE OF PROCEEDS
Unless otherwise specified in an applicable prospectus supplement,
we intend to add the net proceeds we receive from the sale of any of the
securities offered by this prospectus to our general funds, in which case
they will be available for working capital and other general corporate
purposes. These uses may include funding loan purchases, repaying maturing
obligations and redeeming outstanding indebtedness. Pending those uses, we
may temporarily invest the net proceeds in short-term investments or use them
to reduce short-term indebtedness, including indebtedness under our warehouse
facilities.
RATIOS OF EARNINGS TO FIXED CHARGES AND
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following are the consolidated ratios of earnings to fixed charges
and to combined fixed charges and preferred stock dividends for the periods
presented.
<TABLE>
<CAPTION>
Years Ended SIX MONTHS
December 31, ENDED JUNE 30,
-------------------------------------------- ---------------
1994 1995 1996 1997 1998 1998 1999
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
(Dollars in thousands)
Ratio of earnings to fixed charges....................... 1.76x 3.33x 4.08x - - - 1.95x
Deficiency in earnings to fixed charges.................. - - - 69,633 92,476 105,748 -
Ratio of earnings to combined fixed charges and
preferred stock dividends............................. 1.12x 2.76x 3.81x - - - 1.95x
Deficiency in earnings to combined fixed charges and
preferred stock dividends............................. - - - 69,633 92,476 105,748 -
</TABLE>
For purposes of calculating the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends, earnings are
defined as income (loss) before income taxes plus fixed charges. Fixed charges
consist of interest expense, amortization of debt discount and the interest
factor in rental charges. Combined fixed charges and preferred stock dividends
consist of the fixed charges described above plus the pre-tax income necessary
to pay dividends on our previously outstanding 8% Cumulative Convertible
Exchangeable Preferred Stock, all of which was converted or redeemed on or
before December 2, 1996.
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DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the debt
securities that may be offered by this prospectus. A prospectus supplement will
describe the specific terms of the series of debt securities offered under that
prospectus supplement and any general terms outlined in this section that will
not apply to those debt securities. This prospectus provides only a summary
description of the debt securities and related indentures. Because this is only
a summary, it does not contain all of the details found in the full text of the
indentures and debt securities. If you would like additional information, you
should read the forms of indentures and the forms of debt securities, which will
be filed or incorporated by reference as exhibits to the registration statement
to which this prospectus relates.
The amount of debt securities offered by this prospectus will be
limited to the amount of securities described on the cover of this prospectus
that we have not already issued or reserved for issuance. The indentures will
not limit the total principal amount of debt securities that we may issue under
the indentures.
GENERAL
We may issue senior debt securities and subordinated debt securities.
The senior debt securities will be issued under an indenture dated as of March
12, 1997, between Arcadia Financial and Norwest Bank Minnesota, National
Association, as trustee. The subordinated debt securities will be issued under
the subordinated indenture, which will be between Arcadia Financial and the
trustee named in the prospectus supplement. The indentures will be filed as
exhibits to the registration statement of which this prospectus is a part. The
debt securities may be issued either separately, together with, upon conversion
of or in exchange for other securities.
The senior debt securities will rank equally with our other unsecured,
unsubordinated indebtedness, except to the extent that they are secured by any
collateral. The subordinated debt securities will be unsecured and will be
subordinated in right of payment to the prior payment in full of our senior
debt, as described under "Description of Subordinated Debt
Securities--Subordination of Subordinated Debt Securities."
The debt securities may be issued from time to time in one or more
series. The terms of each series, including any restrictive covenants with
respect to each series, will be established by or pursuant to a resolution of
our board of directors and set forth or determined in the manner provided in an
officers' certificate or by a supplemental indenture. Under the indentures we
may, without the consent of the holders, of any debt securities, reopen a
previous series and issue additional securities in that series or establish
additional terms for that series.
The prospectus supplement will indicate the form, registered or bearer,
and denominations in which debt securities of any series may be issued. Debt
securities also may be issued in the form of one or more global securities, as
described below under "Global Securities." The debt securities, other than those
issued in the form of a global security, may be exchanged or transferred without
charge, but we may require payment of a sum sufficient to cover any required
taxes or other governmental charges. We also may require the holders to furnish
appropriate endorsements and transfer documents before exchanging or
transferring the debt securities.
Debt securities may be issued as original issue discount securities to
be sold at a substantial discount below their principal amount. If a debt
security is an original issue discount security, that means that an amount less
than the principal amount of the debt security will be due and payable upon a
declaration of acceleration of the maturity of the debt security pursuant to the
indentures. The prospectus supplement will describe the federal income tax
consequences and other special factors that should be considered prior to
purchasing any original issue discount securities.
The principal and any premium and interest on the debt securities will
be paid, and the transfer of the debt securities may be registered, at the
corporate trust office of the trustee in the case of subordinated debt
securities, and at the office or agency maintained for this purpose in the case
of the senior debt securities. Any interest payable on a debt security will be
paid to the person in whose name that debt security is registered in the
relevant security register. In the case of subordinated debt securities, we also
may pay interest by check mailed to the address of the person entitled to
payment as the address appears on the relevant security register.
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A prospectus supplement relating to a particular series of debt
securities will contain the specific terms relating to the offering of those
securities. The terms will include some or all of the following:
- the title and type of debt securities;
- any limit on the total principal amount of the debt
securities;
- the person to whom any interest on the debt securities will be
paid, if other than the person in whose name the debt
securities are registered on the regular record date for the
interest;
- the date or dates on which the principal and any premium on
the debt securities will be paid;
- the interest rate or rates on the debt securities, the date
from which interest will accrue, the record and interest
payment dates, any circumstances under which we may defer
interest payments, and the basis for calculating interest if
other than a 360-day year of twelve 30-day months;
- the place or places where the principal, premium, if any, and
interest on the debt securities will be paid and where the
debt securities may be surrendered for registration of
transfer or exchange;
- any applicable redemption provisions that would permit us to
redeem the debt securities prior to their final maturity;
- whether a sinking fund will be established, which means that
monies will be deposited on a regular basis in a separate
custodial account that we would use to redeem the debt
securities prior to their final maturity;
- whether the debt securities may be converted into or exchanged
for shares of common stock and/or for other securities, and if
so, the terms and conditions upon which the debt securities
will be converted or exchanged;
- the identity of each security registrar and paying agent, if
other than or in addition to the trustee;
- if the amount of principal or any premium or interest on the
debt securities may be determined by reference to an index or
pursuant to a formula, the manner in which those amounts will
be determined;
- any changes to or additional definitions, covenants or events
of default under the indentures and any change in the right of
the trustee or the holders to declare the principal or any
premium or interest on the debt securities due and payable;
- the denominations in which the debt securities will be issued;
- if the principal and any premium and interest on the debt
securities will be paid in a currency other than U.S. dollars,
the manner of determining the U.S. dollar equivalent of the
principal amount outstanding, and, if any payment on the debt
securities may be paid, at either our or your election, in one
or more other currencies other than those named in the initial
debt securities, the specifics of any payment in those other
currencies;
- any federal income tax consequences and other special factors
applicable to debt securities denominated in a currency other
than U.S. dollars;
- if less than the principal amount, the portion of the
principal payable upon acceleration of the debt securities
following an event of default;
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- whether the debt securities are to be issued, in whole or in
part, in the form of one or more global securities, together
with relevant information about the depositary for the global
securities and their transfer;
- whether the provisions described under the heading
"Defeasance" apply to the debt securities;
- whether any series of senior debt securities will be secured,
and the type, amount and other terms of the collateral to be
provided as the security; and
- any other terms of the debt securities not inconsistent with
the provisions of the applicable indenture.
GLOBAL SECURITIES
This section summarizes the terms and provisions of series of debt
securities issued, in whole or in part, in the form of global securities
deposited with, or on behalf of, The Depository Trust Company ("DTC"). DTC is
a limited-purpose trust company organized under the New York Banking Law that
is 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. DTC
exists to hold securities that its participants deposit with DTC and to
facilitate the settlement among participants of transactions in deposited
securities through electronic computerized book-entry changes in participants'
accounts. This computerized process eliminates the need for physical movement of
securities certificates. DTC's participants include securities brokers and
dealers, banks, trust companies, clearing corporations and other organizations.
These entities are considered to be "direct participants" of DTC. DTC 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 DTC system also is available to others, known as
"indirect participants," such as securities brokers and dealers, banks and trust
companies that clear through or maintain custodial relationships with direct
participants, either directly or indirectly. The rules applicable to DTC
and its participants are on file with the SEC.
DTC may act as securities depositary for the debt securities offered
under this prospectus. Each debt security represented by a global security is
referred to as a book-entry security. Upon initial issuance, all book-entry
securities of the same series, bearing interest, if any, at the same rate or
pursuant to the same formula, and having the same date of issuance, redemption
provisions, repayment provisions, stated maturity and other terms, will be
represented by a single global security. Each global security representing
book-entry securities will be deposited with or on behalf of DTC and will be
registered in the name of DTC or a nominee of DTC. Unless otherwise specified in
the applicable prospectus supplement, all book-entry securities will be
denominated in U.S. dollars.
Purchases of debt securities within the DTC system must be made by or
through direct participants, which will receive a credit for the debt securities
on DTC's records. The ownership interest of each actual purchaser, whom we refer
to as a "beneficial owner," is in turn recorded on the direct and indirect
participants' records. DTC has no knowledge of the identity of the actual
beneficial owners of the debt securities; its records reflect only the identity
of the direct participants to whose accounts the debt securities 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.
Beneficial owners will not receive certificates representing their ownership
interests in book-entry securities, unless use of the book-entry system is
discontinued for the relevant securities. Beneficial owners will not receive
written confirmation from DTC of their purchases, but are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the direct or indirect participants through
which the beneficial owners purchased the debt securities. Transfers of
ownership interests in the debt securities will be accomplished by entries on
the books of participants acting on behalf of beneficial owners.
Payments of principal, any premium and interest on book-entry
securities will be made directly to DTC or its nominee, as the case may be, as
the sole registered holder of the book-entry securities. We understand that
DTC's practice is to credit direct participants' accounts on the relevant
payment date in accordance with their
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respective holdings shown on DTC's records, unless DTC has reason to believe
that it will not receive payments on the payment date. Payments by participants
to beneficial owners will be governed by standing instructions and customary
practices. Neither we nor the trustee or any paying or other agent of either of
us will be responsible or liable for:
- any aspect of DTC's records relating to, or payments made on
account of, its participants;
- maintaining, supervising or reviewing any of DTC's records
relating to the interests of its participants; or
- any other aspect of the relationship between DTC and its
participants, or the relationship between DTC's participants
and the beneficial owners.
Beneficial owners will not be considered the registered holders of the
debt securities for any purpose under the applicable indenture. Accordingly,
each beneficial owner must rely on the procedures of DTC or, if the beneficial
owner is not a participant, on the procedures of the participant through which
the beneficial owner owns its interest, to exercise any rights of a registered
holder under the applicable indenture. The laws of some jurisdictions require
that some purchasers of securities take physical delivery of the securities in
certificated form. These limits and laws may impair the ability to transfer
beneficial interests in a global security.
As the registered holder of each global security, DTC may appoint
agents and otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action that a
registered holder is entitled to give or take under the applicable indenture. It
is our understanding that under existing industry practices, if we request that
the registered holders take any action, or if a beneficial owner desires to give
or take any action that a registered holder is entitled to give or take, then
DTC would authorize the participants holding the relevant beneficial interests
to give or take such action, and the participants would authorize beneficial
owners owning through them to give or take the action or would otherwise act
upon the instructions of the beneficial owners.
No global security representing book-entry securities may be exchanged
or transferred, except as a whole by a nominee of DTC to DTC or another of its
nominees, or by DTC or its nominees to a successor of DTC or a nominee of the
successor.
We may, at our option, decide to discontinue use of the system of
book-entry transfers. DTC may discontinue providing its services as securities
depositary with respect to any of the debt securities at any time by giving
reasonable notice to us and the relevant trustee. After an event of default, the
system of book-entry transfers may be terminated. In each case, if a successor
securities depositary is not obtained, certificates representing the debt
securities will be printed and delivered as DTC's participants direct.
DESCRIPTION OF SENIOR DEBT SECURITIES
This section summarizes the material terms and provisions of the senior
debt securities and the senior indenture. Because this is a summary, it does not
contain all of the details found in the full text of the senior indenture and
the senior debt securities. If you would like additional information, you should
read the form of senior indenture and the form of senior debt securities, which
will be filed as an exhibit to the registration statement to which this
prospectus relates.
REDEMPTION
The prospectus supplement for any series of senior debt securities will
specify any provisions for their redemption, including any sinking fund. Except
as described in the prospectus supplement, we are not required to
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make redemption or sinking fund payments. The senior indenture provides that in
satisfaction of all or any part of any required sinking fund payment with
respect to the senior debt securities, we may:
- deliver outstanding senior debt securities, with similar
terms, other than any previously called for redemption; and
- apply as a credit senior debt securities, with similar terms,
of a series that have been redeemed either (a) at our election
pursuant to the terms of the senior debt securities, or (b)
through the application of permitted optional sinking fund
payments pursuant to the terms of the senior debt securities.
The senior indenture also provides that if less than all of the senior debt
securities of any series are to be redeemed at any time, selection of the senior
debt securities for redemption will be made by the trustee:
- on a pro rata basis, and in a manner that complies with
applicable legal and stock exchange requirements, if any; or
- by any other method the trustee considers fair and
appropriate.
Portions of the senior debt securities selected for redemption will be in
amounts of $1,000 or whole multiples of $1,000, except that if all of a holder's
senior debt securities are to be redeemed, the entire outstanding amount will be
redeemed. Either we or the trustee will mail notices of redemption by first
class mail between 30 and 60 days before the redemption date to each holder of
senior debt securities to be redeemed at the holder's registered address. If any
senior debt security is to be redeemed in part only, the notice will state the
portion of the principal amount to be redeemed. A new senior debt security, in
principal amount equal to the unredeemed portion of the original senior debt
security, will be issued in the name of the holder upon cancellation of the
original senior debt security. On and after the redemption date, interest will
no longer accrue on senior debt securities or the portions of senior debt
securities called for redemption.
REPURCHASE AT THE OPTION OF HOLDERS
Unless otherwise set forth in the prospectus supplement for any series
of senior debt securities, the senior indenture does not require us to
repurchase or redeem the senior debt securities at the option of the holders. In
particular, the senior indenture does not have any repurchase or other covenants
designed to protect the holders in the event of a highly leveraged transaction,
a sale of assets, a takeover, a recapitalization or any other restructuring. The
senior indenture provides that if repurchase rights are provided for in a
prospectus supplement and amounts deposited in connection with all the
repurchase rights are insufficient to pay the repurchase price of all senior
debt securities having repurchase rights, then the trustee will select senior
debt securities to be repurchased on a pro rata basis from the holders of the
series who have repurchase rights and who elect to exercise the repurchase
rights.
CERTAIN COVENANTS IN THE SENIOR INDENTURE
MERGER, CONSOLIDATION OR SALE OF ASSETS. We may not consolidate or
merge with another person, or sell or lease all of our property to another
person, unless:
- in the case of a consolidation or merger, we are the surviving
corporation, or the successor or corporation is a domestic
corporation;
- the successor corporation or the person to which the sale or
lease is made assumes all our obligations under the senior
debt securities and the senior indenture in a supplemental
indenture;
- immediately after the transaction, we, or our successor, are
not in default in the performance of a covenant or condition
in the senior indenture;
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- we, or our successor, will have consolidated net worth
immediately after the transaction equal to or greater than our
consolidated net worth immediately preceding the transaction;
and
- the applicable rating agencies have reaffirmed or raised their
ratings for asset-back securities that have been rated in
whole or in part on the basis of our credit.
REPORTS. As long as any senior debt securities are outstanding, we will
file with the trustee and furnish to the holders of senior debt securities all
reports on Forms 8-K, 10-Q and 10-K and all proxy statements that we file with
the SEC, including (a) Management's Discussion and Analysis of Financial
Condition and Results of Operations, and (b) for the annual information only, a
report by our certified independent accountants.
If we are no longer subject to Section 13 or 15(d) of the Exchange Act,
we nevertheless will continue to file this information and these reports with
the SEC and the trustee and will continue to make the information available to
securities analysts and prospective investors upon request.
EVENTS OF DEFAULT UNDER THE SENIOR INDENTURE
Each of the following constitutes an event of default under the senior
indenture:
- failure to pay interest on any senior debt security of that
series for 30 days after the payment is due;
- failure to pay the principal or any premium on any senior debt
security of that series when due;
- failure to deposit any sinking fund payment, when due, for the
senior debt securities of that series;
- failure to comply with the provisions described above under
"Certain Covenants in the Senior Indenture--Merger,
Consolidation or Sale of Assets";
- failure to comply with any of our other agreements in the
senior indenture or the senior debt securities for 60 days
after notice from the trustee or holders of at least 25% of
the principal amount of the outstanding senior debt securities
of that series;
- a default by us or any of our subsidiaries under any mortgage,
indenture or instrument of indebtedness that:
(a) is caused by a failure to pay the principal, premium,
if any, or interest on the indebtedness before the
expiration of its grace period, or
(b) results in the acceleration of the indebtedness
before its express maturity,
and, in each case, the principal amount of the indebtedness,
together with the principal amount of any other indebtedness
under which there has been a payment failure or acceleration,
totals $5.0 million or more;
- failure by us or any of our subsidiaries to pay more than $5.0
million of final judgments, which are not paid, discharged or
stayed for a period of 60 days;
- certain events of bankruptcy or insolvency with respect to us
or any of our subsidiaries; and
- any other event of default that may be provided for the senior
debt securities of that series.
If an event of default under the senior indenture occurs and is
continuing, the trustee or holders of at least 25% of the total principal amount
of that series may declare the principal amount (or, if any of the senior debt
securities of that series are original issue discount senior debt securities,
the lesser portion of the principal,
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premium, if any, and interest on the senior debt securities of that series),
premium, if any, and accrued and unpaid interest to be due and payable
immediately.
In the case of an event of default arising from certain events of
bankruptcy or insolvency, all principal, premium, if any, and interest on the
outstanding senior debt securities will become due and payable without further
action or notice.
Holders of the senior debt securities may not enforce the senior
indenture or the senior debt securities except as provided in the senior
indenture. Subject to some limitations, holders of a majority (in principal
amount) of the outstanding senior debt securities of a series may direct the
trustee in its exercise of any trust or power for that series of senior debt
securities. Except in the case of a default in payment, the trustee may withhold
notice of a default if it determines that doing so is in the interest of the
holders.
If an event of default occurs as a result of the willful action (or
inaction) of us or any of our subsidiaries, the primary purpose of which was
avoiding the payment of any premium that we would have had to pay upon
redemption of those senior debt securities, then an equivalent premium also will
become immediately due and payable if the senior debt securities are repaid.
The holders of a majority in principal amount of the outstanding senior
debt securities of any series may waive an existing or past default or event of
default and their consequences. The holders must waive the rights in a written
notice to the trustee. This does not apply, however, to defaults in payment or
to covenants and other provisions that can only be modified or amended with the
consent of each holder in that series, as described below under "Modifications
and Amendments."
The holders of a majority in principal amount of the outstanding senior
debt securities of any series may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee, subject to
some exceptions. If an event of default has occurred and is continuing, the
trustee is required, when exercising its power, to use the degree of care of a
prudent person in the conduct of his or her own affairs. Subject to these
provisions, the trustee is not required to exercise any of its rights or powers
under the senior indenture unless the trustee receives indemnity satisfactory to
it against any loss, liability or expense.
We are required to deliver to the trustee annually a statement
regarding our compliance with the senior indenture. If we become aware of any
event of default with respect to the senior debt securities or any mortgage,
indenture or instrument, we are required to notify the trustee of the event of
default and any action we have taken or plan to take in response to the event of
default.
MODIFICATIONS AND AMENDMENTS
Under the senior indenture, our rights and obligations and the rights
of the holders of senior debt securities may be changed. Certain changes require
the consent of the holders of not less than a majority in total principal amount
of the outstanding senior debt securities of all series affected by the
modification or amendment. Other changes, including the following, may not be
made without the consent of each holder of the outstanding senior debt
securities:
- changes to the stated maturity of the principal or any
installment of interest or principal;
- reductions in the principal, premium or interest due;
- reductions in the amount of principal of an original issue
discount senior debt security that will be due on acceleration
of maturity;
- changes to the place or currency for payments;
- impairment of the right to institute suit for the enforcement
of payment;
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- reduction of the percentage of holders necessary to modify the
senior indenture or waive our compliance with some of its
provisions; or
- modifications to any of these requirements.
DEFEASANCE
The senior indenture includes provisions that allow us to defease the
senior debt securities. This means that we may discharge our entire indebtedness
under any series of senior debt securities if we perform specific acts.
However, under the senior indenture, we are not allowed to discharge:
- the rights of holders of the senior debt securities to receive
payments for the principal, premium, if any, and interest on
the senior debt securities when the payments are due;
- our obligations with respect to:
(a) the issuance of temporary senior debt securities;
(b) the registration of senior debt securities;
(c) the replacement of mutilated, destroyed, lost or
stolen senior debt securities;
(d) the maintenance of an office or agency for payment;
and
(e) money for security payments that is held in trust;
- the rights, powers, trusts, duties and immunities of the
trustee, and our related obligations; and
- the defeasance provisions of the senior indenture.
We also may discharge our obligations to comply with some of the
covenants under the senior indenture. If we do this, our failure to perform as
required by those covenants, will no longer constitute an event of default with
respect to the senior debt securities of the series. Likewise, some of the other
events that would be events of default will no longer have that effect. However,
nonpayment, bankruptcy, receivership, rehabilitation and insolvency events will
continue to constitute events of default notwithstanding defeasance as to any of
the other covenants in the senior indenture.
To defease any series of senior debt securities under the senior
indenture:
- we must deposit with the trustee, in trust, sufficient cash in
U.S. dollars or government securities, or a combination of the
two, to make all payments on the series of senior debt
securities when due;
- we must have delivered to the trustee an opinion of counsel
confirming that holders of senior debt securities (a) will not
recognize income, gain or loss for federal income tax purposes
as a result of the defeasance and (b) will be subject to
federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if the
defeasance had not occurred;
- we must have delivered to the trustee an opinion of counsel to
the effect that after the 91st day following the deposit, the
deposited funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar
laws;
- no event of default has occurred on the date of the deposit
or, in the case of events of default from bankruptcy or
insolvency events, at any time in the period ending on the
91st day after the date of deposit;
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- the defeasance will not result in a breach or violation of, or
constitute a default under, the senior indenture or any
material agreement or instrument to which we or any of our
subsidiaries is a party or by which we or any of our
subsidiaries is bound;
- we must deliver to the trustee an officers' certificate
stating that the deposit was not made with the intent of
preferring the holders of the senior debt securities over our
other creditors; and
- we must deliver to the trustee an officers' certificate and an
opinion of counsel stating that all conditions precedent
applicable to the defeasance have been complied with.
ABOUT THE TRUSTEE
If an event of default occurs and is continuing, the trustee is
required to exercise its rights and powers under the senior indenture, including
its right to accelerate any series of senior debt securities or pursue other
remedies to collect principal and interest. In exercising its rights and powers,
the trustee is required to use the same degree of care and skill as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs. As noted above, the holders of a majority in principal amount
of the then outstanding senior debt securities of any series issued under the
indenture have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the trustee. The trustee will
be under no obligation to exercise any of its rights or powers under the
indenture at the request of any of the holders unless they have offered the
trustee security and indemnity satisfactory to it.
The senior indenture contains a number of limitations on the right of
the trustee, if it becomes our creditor, to obtain payment of claims in various
types of cases, or to realize on listed types of property that it claims as
security or otherwise. The trustee will be permitted to engage in other
transactions. If it acquires any conflicting interest and if the senior debt
securities are in default, it must eliminate the conflict or resign. The trustee
may resign or be removed, effective upon the appointment of a successor trustee.
DESCRIPTION OF SUBORDINATED DEBT SECURITIES
This section summarizes the material terms and provisions of the
subordinated debt securities and provisions of the subordinated indenture.
Because this is only a summary, it does not contain all of the details found in
the full text of the subordinated debt securities and the subordinated
indenture. If you would like additional information, you should read the form of
subordinated indenture and the form of subordinated debt securities, which will
be filed or incorporated by reference as an exhibit to the registration
statement to which this prospectus relates.
The prospectus supplement relating to each series of subordinated debt
securities will specify any restrictive covenants applicable to that series.
Unless otherwise specified in the prospectus supplement, the subordinated debt
securities will not impose any financial or leverage restrictions on us and will
not require us to repurchase or redeem the subordinated debt securities in the
event of a takeover, recapitalization or similar restructuring.
DEFINITIONS USED IN THE SUBORDINATED INDENTURE
Set forth below are summaries of some of the defined terms used in the
subordinated indenture. Please refer to the subordinated indenture for full
definitions of these and other terms.
"JUNIOR SUBORDINATED DEBT" means our indebtedness under our
subordinated extendible notes and subordinated fixed-term notes issued pursuant
to an indenture dated July 1, 1994, as subsequently amended and restated by and
between us and Marine Midland Bank, as trustee.
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"SECURITIZATION TRANSACTION" means a public or private transfer of
installment sales contracts, loans, leases or other receivables by which we
directly or indirectly securitize a pool of specified installment sales
contracts, loans, leases or other receivables.
"SENIOR DEBT" means all our indebtedness, other than indebtedness
created or evidenced by an instrument that expressly provides that the
indebtedness is subordinated in right of payment to any of our other
indebtedness. Senior debt includes, without limitation, our guarantee of
indebtedness of any other person, including subordinated indebtedness of another
person, unless the guarantee is expressly subordinated to any of our other
indebtedness. Senior debt will not include our indebtedness under the
subordinated debt securities or the junior subordinated debt.
Senior debt also will not include:
- our indebtedness to any of our subsidiaries or other
affiliates; or
- indebtedness we incurred to purchase goods or services in the
ordinary course of business, except for goods or services
purchased with the proceeds of revolving credit borrowings
permitted by the subordinated indenture.
SUBORDINATION
The subordinated debt securities will be subordinate and subject in
right of payment, in the manner and to the extent described in the
subordinated indenture, to the prior payment in full of all senior debt. If
we make a distribution to our creditors, then the holders of senior debt will
first be entitled to receive payment in full in cash of all obligations due
on or to become due on or in respect of all senior debt, before the holders
of subordinated debt securities are entitled to receive any payment or
distribution. This will not apply to:
- securities of us or another corporation provided for by a plan
of reorganization or readjustment that are subordinated in
right of payment to the senior debt to substantially the same
extent as, or to a greater extent than, the subordinated debt
securities; and
- payments of assets from any defeasance trust that have been on
deposit for 90 consecutive days without the occurrence of
blocked payment on the related series of subordinated debt
securities.
Until the senior debt is paid in full, any payment to which the holders of
subordinated debt securities would be entitled will be paid or delivered by us,
or any other person making the payment or distribution, directly to the holders
of senior debt or someone acting on their behalf. We may not make any payments
on the account of the subordinated debt securities, or on account of the
purchase or redemption or other acquisition of the subordinated debt securities,
if there has occurred and is continuing any default in payment on any senior
debt.
If the trustee receives any payment prohibited by the subordination
provisions of the subordinated indenture, the payment will be held by the
trustee in trust for the benefit of, and will immediately be paid over upon
written request to, the holders of senior debt or someone acting on their behalf
for application to the payment of senior debt. This subordination will not
prevent the occurrence of any event of default in respect of the subordinated
debt securities.
Because of the subordination of the subordinated debt securities, if we
become insolvent, holders of senior debt may receive more, ratably, and holders
of the subordinated debt securities may receive less, ratably, than our other
creditors. There also may be an interruption of scheduled interest and principal
payments resulting from events of default on senior debt.
MERGER, CONSOLIDATION AND SALE OF ASSETS
The subordinated indenture provides that we may, without the consent of
the holders of the subordinated debt securities, consolidate or merge with or
sell or lease all of our property to a corporation, partnership or trust
organized and validly existing under the laws of any domestic jurisdiction,
provided that:
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- any successor entity assumes by supplemental indenture our
obligations on the subordinated debt securities and under the
subordinated indenture; and
- after giving effect to the transaction, no event of default,
and no event which, after the passage of time, would become an
event of default, will have occurred and be continuing under
the subordinated indenture.
EVENTS OF DEFAULT UNDER THE SUBORDINATED INDENTURE
The following are events of default under the subordinated indenture:
- failure that continues for 30 days to pay interest when due;
- failure to pay the principal or any premium when due;
- failure to deposit any sinking fund payment when due;
- failure to perform, or breach of, any other covenant or
warranty (with some exceptions) in the subordinated indenture
or the subordinated debt securities continued for 60 days
after written notice;
- an event of default under any indenture or instrument under
which we or our subsidiaries have outstanding indebtedness of
$5.0 million or more, other than as part of a securitization
transaction, the maturity of which has been accelerated and
the acceleration has not been rescinded or annulled within 60
days;
- certain events of bankruptcy, insolvency or reorganization;
- the entry against us or any subsidiary of a final judgment,
judicial decree or order for the payment of money in excess of
$5.0 million that remains unpaid, unvacated, unbounded or
unstayed for a period of 60 days; or
- any other event of default that may be provided for the
subordinated debt securities of that series.
If an event of default occurs and is continuing, then the trustee or
the holders of at least 25% of the principal amount of the outstanding
subordinated debt securities of that series may declare the principal amount
(or, if any of the subordinated debt securities of that series are original
issue discount subordinated debt securities, the lesser portion of the principal
amount specified in the terms of that series) specified in the terms of that
series of all the subordinated debt securities of that series to be due and
payable immediately. To do this, the trustee or holders must give written notice
as provided in the subordinated indenture. However, in the case of certain
events of bankruptcy, insolvency or reorganization, the principal amount (or
specified portion) of the subordinated debt securities will become due and
payable immediately, without notice.
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 of the total principal amount of the outstanding
subordinated debt securities of that series may, under some circumstances,
rescind and annul the acceleration.
Subject to the duty of the trustee during 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 subordinated indenture at the request or
direction of any of the holders of subordinated debt securities, unless the
holders have offered the trustee reasonable security or indemnity. Subject to
the provisions for the indemnification of the trustee and certain other
limitations, the holders of a majority of the total principal amount of the
outstanding subordinated debt securities of any series 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 with respect to the subordinated debt securities of that series.
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We are required to furnish to the trustee annually a statement
regarding our compliance with all the conditions and covenants under the
subordinated indenture.
MODIFICATION AND WAIVER
Under the subordinated indenture, our rights and obligations and the
rights of the holders of subordinated debt securities may be changed. Certain
changes require the consent of the holders of not less than a majority in total
principal amount of the outstanding subordinated debt securities of all series
affected by the modification or amendment. Other changes, including the
following changes, may not be made without the consent of each holder of the
outstanding subordinated debt securities affected:
- changes to the stated maturity of the principal or any
installment of interest or principal;
- reductions in the principal, premium or interest due;
- reductions in the amount of principal of an original issue
discount subordinated debt security due upon acceleration of
maturity;
- changes in the place or currency for payments;
- impairment of the right to institute suit for the enforcement
of payment;
- reduction in the percentage of holders necessary to modify or
waive compliance with some provisions of the subordinated
indenture; or
- modifications to any of these provisions, or to any of the
provisions relating to waivers of past defaults and defeasance
of certain obligations, except for some stated modifications.
The holders of not less than a majority in total principal amount of
the outstanding subordinated debt securities of each series may, on behalf of
the holders of all subordinated debt securities of that series, waive our
compliance with some of the restrictive provisions of the subordinated
indenture. The holders of not less than a majority in total principal amount of
the outstanding subordinated debt securities of each series may, on behalf of
the holders of all subordinated debt securities of that series, waive any past
default under the subordinated indenture for subordinated debt securities of
that series, except for a default:
- in payments, other than amounts due and payable solely upon
acceleration; or
- for a covenant or provision of the subordinated indenture that
cannot be modified or amended without the consent of the
holder of each outstanding subordinated debt security of the
series affected.
Additionally, the definition of "senior debt" in the subordinated indenture may
not be amended or modified in a manner adverse to the holders of the senior debt
without the consent of the holders of all senior debt affected.
DEFEASANCE
We may be discharged from all of our obligations with respect to the
subordinated debt securities of any series, other than our obligations:
- to register the transfer or exchange of the subordinated debt
securities;
- to replace destroyed, stolen, lost or mutilated subordinated
debt securities; and
- to maintain paying agencies and hold money for payment in
trust.
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This will occur on the 91st day after the date of deposit with the trustee of
money or U.S. government obligations, or a combination of the two, in an amount
sufficient to make all payments the subordinated debt securities when due.
Any discharge of our indebtedness under the subordinated debt
securities is also subject to other conditions, including the limitation that
the discharge may only occur if:
- the discharge will not cause the holders of the subordinated
debt securities to recognize income, gain or loss for federal
income tax purposes;
- the holders will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have
been the case had the deposit, defeasance and discharge not
occurred; and
- the discharge will not cause any of our outstanding
subordinated debt securities then listed on the New York Stock
Exchange or other securities exchange to be de-listed.
We may elect not to comply with any term, provision or condition of a
particular covenant relating to the subordinated debt securities of a series. To
do this, we must deposit with the trustee money, U.S. government obligations, or
a combination of the two, in an amount sufficient to make all payments on the
subordinated debt securities when due. This "covenant" defeasance is also
subject to other conditions, including:
- the delivery to the trustee of an opinion of counsel to the
effect that the deposit and related covenant defeasance will
not cause the holders of the subordinated debt securities to
recognize income, gain or loss for federal income tax
purposes; and
- that the holders will be subject to federal income tax on the
same amount, in the same manner and at the same times as would
have been the case had the deposit and defeasance not
occurred.
If we elect not to comply with some of the covenants under the
subordinated indenture and the stated maturity of the subordinated debt
securities is accelerated because of an event of default, then even though the
amount of money and U.S. government obligations on deposit with the trustee will
be sufficient to pay amounts due at the time of stated maturity, the amount may
not be sufficient to pay amounts due at the time of the acceleration.
In that case, we will remain liable for all the payments required.
ABOUT THE TRUSTEE
If an event of default occurs and is continuing, the trustee is
required to exercise its rights and powers under the subordinated indenture,
including its right to accelerate any series of subordinated debt securities or
pursue other remedies to collect principal and interest. In exercising its
rights and powers, the trustee is required to use the same degree of care and
skill as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs. As noted above, the holders of a majority in
principal amount of the then outstanding subordinated debt securities of any
series issued under the indenture have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
trustee. The trustee will be under no obligation to exercise any of its rights
or powers under the indenture at the request of any of the holders unless they
have offered the trustee security and indemnity satisfactory to it.
The subordinated indenture contains a number of limitations on the
right of the trustee, if it becomes our creditor, to obtain payment of claims in
various types of cases, or to realize on listed types of property that it claims
as security or otherwise. The trustee will be permitted to engage in other
transactions. If it acquires any conflicting interest and if the subordinated
debt securities are in default, it must eliminate the conflict or resign. The
trustee may resign or be removed, effective upon the appointment of a successor
trustee.
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DESCRIPTION OF PREFERRED STOCK
This section summarizes the general terms and provisions of the
preferred stock that may be offered by this prospectus. The prospectus
supplement will describe the specific terms of any series of preferred stock
offered under that prospectus supplement and any general terms outlined in this
section that will not apply to that series of preferred stock.
Because this is only a summary, it does not contain all of the details
found in the full text of the certificate of designation containing the rights
and preferences of the preferred stock. The certificate of designation will be
filed or incorporated by reference as an exhibit to the registration statement
to which this prospectus relates. For additional information, please read the
full text of the certificate of designation.
GENERAL
Under our articles of incorporation, as amended, we are authorized
without further shareholder action to issue shares of preferred stock, $.01 par
value, in one or more series. For shares of any series of preferred stock, our
board of directors may determine:
- the number of shares and their designation or title;
- rights as to dividends;
- whether and upon what terms the shares will be redeemable;
- the rights of holders upon the dissolution or distribution of
our assets;
- whether and upon what terms a sinking fund will be used to
purchase or redeem the shares;
- whether and upon what terms the shares may be converted;
- the voting rights, if any, that will apply; and
- any other preferences and relative, participating, optional or
other special rights, and qualifications, limitations or
restrictions of the series.
The preferred stock will, when issued, be fully paid and nonassessable.
It will not provide the holders with preemptive rights to subscribe for any
additional securities we may issue. The transfer agent and registrar for the
preferred stock will be specified in the prospectus supplement.
The preferred stock will have the dividend, liquidation, redemption,
voting and conversion rights described in this section unless the prospectus
supplement provides otherwise. You should read the prospectus supplement
relating to the particular series of the preferred stock being offered for
specific terms of that series, including:
- the title, stated value and liquidation preference of the
preferred stock and the number of shares offered;
- the initial public offering price of the preferred stock;
- the dividend rate or rates (or method of calculation), the
dividend periods, the dates on which dividends will be payable
and whether the dividends will be cumulative or noncumulative
and, if cumulative, the dates from which dividends will start
to cumulate;
- any redemption or sinking fund provisions;
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- whether, under what circumstances and in what manner the
preferred stock may be converted; and
- any additional dividend, liquidation, redemption, sinking fund
and other rights, preferences, privileges, limitations and
restrictions.
We may elect to offer depositary shares evidenced by depositary
receipts, each representing a fractional interest in a share of the particular
series of the preferred stock issued and deposited with a depositary.
DIVIDENDS
Subject to the preferential rights as to dividends of holders of other
series of our capital stock ranking prior to any series of the preferred stock,
the holders of each series of preferred stock will be entitled to receive cash
dividends, if declared by our board of directors or its duly authorized
committee, out of funds that we legally may use to pay dividends. The prospectus
supplement relating to a particular series of preferred stock will set forth the
dividend rates and dates. The rates may be fixed or variable or both. If
variable, the prospectus supplement will describe the formula used for
determining the dividend rate for each dividend period. We will pay dividends to
the holders of record as they appear on our stock books on the record dates
fixed by our board of directors or its duly authorized committee.
The prospectus supplement also will state whether the dividends on any
series of the preferred stock will be cumulative or noncumulative. If our board
of directors does not declare a dividend payable on a dividend payment date on
any noncumulative series of the preferred stock, then the holders of that series
will not be entitled to receive a dividend for that dividend period, and we will
not be obligated to pay the dividend for that dividend period, whether or not
the board of directors declares a dividend on that series on any subsequent
date.
Our board of directors will not declare or pay a dividend on any of our
stock ranking, as to dividends, equal with or junior to the preferred stock
unless full dividends on all series of preferred stock have been declared and
paid (or declared and sufficient money is set aside for payment). Until full
dividends have been paid (or declared and payment is set aside) on any of our
capital stock ranking equal with the preferred stock as to dividends:
- we will declare any dividends pro rata among the preferred
stock of each series offered under this prospectus and any
other preferred stock ranking equal with the preferred stock
offered under this prospectus (i.e., the dividends we declare
per share on each series of preferred stock will bear the same
relationship to each other that the full accrued dividends per
share on each series of the preferred stock bear to each
other);
- other than these pro rata dividends, we will not declare or
pay any dividends or make any distributions upon any security
ranking junior to or equal with the preferred stock offered
under this prospectus as to dividends or upon liquidation
(except dividends or distributions paid for with securities
ranking junior to the preferred stock as to dividends and upon
liquidation); and
- we will not redeem, purchase or otherwise acquire (or set
aside money for a sinking fund for) any securities ranking
junior to or equal with the preferred stock as to dividends or
upon liquidation (except by conversion into or exchange for
stock ranking junior to the preferred stock as to dividends
and upon liquidation).
We will not pay any interest or sum of money in lieu of interest with
respect to any dividend payment or payments on any series of the preferred stock
which have not been made when due.
REDEMPTION AND REPURCHASE
A series of the preferred stock may be redeemable, in whole or in part,
at our option, and may be subject to mandatory redemption pursuant to a sinking
fund or otherwise, or may be subject to repurchase at the option of the
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holders, as described in the prospectus supplement. Preferred stock that we
redeem will again become authorized but unissued shares of preferred stock that
we may issue in the future.
If a series of the preferred stock is subject to mandatory redemption,
the prospectus supplement will specify the number of shares that we will redeem
each year and the redemption price. If shares of preferred stock are redeemed,
we will pay all accrued and unpaid dividends on those shares to the redemption
date. The prospectus supplement also will specify whether the redemption price
will be payable in cash or other property. If the redemption price is payable
only from the net proceeds of the issuance of our capital stock, the terms of
the series of preferred stock may provide that if no capital stock has been
issued or if the net proceeds from any issuance are insufficient to pay the full
redemption price, then the applicable shares of the preferred stock
automatically and mandatorily will be converted into shares of another series of
capital stock pursuant to conversion provisions specified in the prospectus
supplement.
If fewer than all of the outstanding shares of any series of the
preferred stock are to be redeemed, our board of directors will determine the
number of shares to be redeemed. We will redeem the shares pro rata from the
holders of record in proportion to the number of shares held by them (with
adjustments to avoid redemption of fractional shares).
Even though the terms of a series of preferred stock may permit
redemption of the preferred stock in whole or in part, if any dividends,
including accumulated dividends, on that series are past due, we will not redeem
less than all of the shares of that series of preferred stock until all
dividends past due have been paid. However, we may purchase or acquire preferred
stock of the series pursuant to a purchase or exchange offer, so long as the
offer is made on the same terms to all holders of the series of preferred stock.
We will give notice of a redemption by mail to each record holder of
the shares to be redeemed between 30 and 60 days prior to the date fixed for
redemption. We will mail the notices to the holders' addresses as they appear on
our stock register. Each notice will state:
- the redemption date;
- the number of shares and series of the preferred stock to be
redeemed;
- the redemption price;
- the place or places where holders can surrender their
preferred stock certificates for payment of the redemption
price;
- that dividends on the shares to be redeemed will cease to
accrue on the redemption date; and
- the date upon which any conversion rights as to the shares, if
any, will terminate.
If we redeem fewer than all shares of any series of the preferred stock held by
any holder, we also will specify in the notice the number of shares to be
redeemed from the holder.
If we have given notice of the redemption and have provided the funds
for the payment of the redemption price, then beginning on the redemption date:
- the dividends on the shares of preferred stock called for
redemption will no longer accrue;
- those shares will no longer be considered outstanding; and
- the holders will no longer have any rights as shareholders
with respect to those shares except the right to receive the
redemption price.
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When the holder properly surrenders the redeemed shares, the redemption price
will be paid out of the funds we provided. If we redeem fewer than all of the
shares represented by any certificate, we will issue a new certificate
representing the unredeemed shares without cost to the holder.
CONVERSION OR EXCHANGE
If any series of preferred stock may be converted or exchanged into
shares of common stock, another series of preferred stock or debt securities,
the prospectus supplement will state the terms on which shares of that series
may be converted or exchanged.
RIGHTS UPON LIQUIDATION
Unless the prospectus supplement states otherwise, if we voluntarily or
involuntarily liquidate, dissolve or wind up our business, the holders of shares
of each series of the preferred stock, and any other preferred stock ranking
equal with that series of preferred stock under these circumstances, will be
entitled to receive out of our assets that are available for distribution:
- liquidation distributions in the amount stated in the
prospectus supplement; and
- all accrued and unpaid dividends (whether or not earned or
declared) for the current dividend period and, if the series
of preferred stock is cumulative, for all prior dividend
periods
before any distribution is made to holders of any securities ranking junior to
the series of preferred stock. However, this right will be subject to any
preferential rights of holders of our capital stock ranking prior to the series
of preferred stock under these circumstances.
Unless otherwise provided in the applicable prospectus supplement,
neither the sale of all of our assets nor our merger or consolidation with any
other corporation will be deemed to be a dissolution, liquidation or winding up
of our business. If, upon any voluntary or involuntary liquidation, dissolution
or winding up of our business, our assets that are available for distribution
are insufficient to pay in full all amounts due to the holders of securities
ranking equal with the series of the preferred stock, then we will make a pro
rata distribution to holders of our securities ranking equal with the preferred
stock of that series. After we pay the full amount of the liquidation
distribution to which holders of the series of preferred stock are entitled, the
holders will have no right or claim to any of our remaining assets.
VOTING RIGHTS
Unless otherwise provided in the prospectus supplement, the holders of
preferred stock will not be entitled to vote except as set forth below or as
otherwise required by the Minnesota Business Corporation Act.
If we issue shares of a series of preferred stock, each share will be
entitled to one vote on matters on which holders of the series are entitled to
vote. On matters on which holders of the series and holders of any other series
of preferred stock are entitled to vote as a single class, voting power of the
series will depend on the number of shares in the series, not the total stated
value, liquidation preference or initial offering price of the shares of the
series.
A series of the preferred stock also may have other voting rights, such
as upon the occurrence of some events or relative to the taking of some actions.
The prospectus supplement will describe any special voting rights relating to
the series of preferred stock.
As more fully described under "Description of Depositary Shares" below,
if we elect to provide for the issuance of depositary shares representing
fractional interests in a share of preferred stock, the holders of each
depositary share will be entitled to a fraction of a vote.
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DESCRIPTION OF DEPOSITARY SHARES
This section summarizes the general provisions of the depositary shares
represented by depositary receipts that may be offered by this prospectus,
including the related deposit agreement. The prospectus supplement will describe
the specific terms of the depositary shares offered under that prospectus
supplement and any general terms outlined in this section that will not apply to
those depositary shares. Because this is only a summary, it does not contain all
of the details found in the full text of the depositary receipts and the deposit
agreement. If you would like additional information, you should read the
applicable forms of depositary receipt and deposit agreement, which will be
filed or incorporated by reference as exhibits to the registration statement to
which this prospectus relates.
GENERAL
We may offer fractional interests in preferred stock, rather than full
shares of preferred stock. If we do so, we will provide for the issuance to the
public by a depositary of depositary receipts evidencing depositary shares. Each
depositary share will represent a fractional interest in a share of a particular
series of preferred stock.
The shares of any series of preferred stock underlying the depositary
shares will be deposited under a separate deposit agreement between us and a
bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50 million. The prospectus
supplement will set forth the name and address of the depositary. Subject to the
terms of the deposit agreement, each owner of a depositary share will have a
fractional interest in all the rights and preferences of the preferred stock
underlying the depositary share. Those rights include any dividend, voting,
redemption, conversion and liquidation rights.
While the final depositary receipts are being prepared, we may order
the depositary to issue temporary depositary receipts substantially identical to
the final depositary receipts, although not in final form. The holders of
temporary depositary receipts will be entitled to the same rights as if they
held the depositary receipts in final form. Holders of temporary depositary
receipts can exchange them for final depositary receipts at our expense.
WITHDRAWAL OF PREFERRED STOCK
If you surrender depositary receipts at the principal office of the
depositary you will be entitled to receive at that office the number of shares
of preferred stock and any money or other property then represented by the
depositary shares, unless the depositary shares have been called for redemption.
We will not, however, issue any fractional shares of preferred stock.
Accordingly, if you deliver depositary receipts for a number of depositary
shares that, when added together, represents more than a whole number of shares
of preferred stock, the depositary will issue to you a new depositary receipt
evidencing the excess number of depositary shares at the same time as you
receive your preferred stock. You will no longer be entitled to deposit the
shares of preferred stock you have withdrawn under the deposit agreement or to
receive depositary shares in exchange for those shares of preferred stock. There
may be no market for the withdrawn shares of preferred stock.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions received with respect to the preferred stock, less any taxes
required to be withheld, to the record holders of the depositary receipts in
proportion to the number of the depositary shares owned by each holder on the
relevant date. The depositary will distribute only the amount that can be
distributed without attributing to any holder a fraction of one cent. Any
balance will be added to the next sum to be distributed to holders of depositary
receipts.
If there is a distribution other than in cash, the depositary will
distribute property to the holders of depositary shares, unless the depositary
determines that it is not practical to make the distribution. If this occurs,
the depositary may, with our approval, sell the property and distribute the net
proceeds from the sale to the holders.
The deposit agreement will contain provisions relating to how any
subscription or similar rights offered by us to holders of the preferred stock
will be made available to the holders of depositary shares.
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REDEMPTION AND REPURCHASE OF DEPOSITED PREFERRED STOCK
If any series of preferred stock underlying the depositary shares is
subject to redemption, the depositary shares will be redeemed from the
redemption proceeds, in whole or in part, of the series of preferred stock held
by the depositary. The depositary will mail a notice of redemption between 30
and 60 days prior to the date fixed for redemption to the record holders of the
depositary receipts to be redeemed at their addresses appearing in the
depositary's records. The redemption price per depositary share will bear the
same relationship to the redemption price per share of preferred stock that the
depositary share bears to the underlying preferred stock. Whenever we redeem
preferred stock held by the depositary, the depositary will redeem, as of the
same redemption date, the number of depositary shares representing the preferred
stock redeemed. If less than all of the depositary shares are to be redeemed,
the depositary shares to be redeemed will be selected by lot or pro rata as we
may determine.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be outstanding. When the depositary shares are no
longer outstanding, the holders will have no rights other than the right to
receive money or other property that they were entitled to receive upon
redemption. The payments will be made when holders surrender their depositary
receipts to the depositary.
Depositary shares are not subject to repurchase at the option of the
holders. However, if shares of preferred stock underlying the depositary shares
become subject to repurchase at the option of the holders, the holders may
surrender their depositary receipts to the depositary and direct the depositary
to instruct us to repurchase the deposited preferred stock at the price
specified in the prospectus supplement. If we have sufficient funds available,
we will, upon receipt of the instructions, repurchase the requisite whole number
of shares of preferred stock from the depositary, which will, in turn,
repurchase the depositary receipts. However, holders of depositary receipts will
only be entitled to request the repurchase of a number of depositary shares that
represents in total one or more whole shares of the underlying preferred stock.
The repurchase price per depositary share will equal the repurchase price per
share of the underlying preferred stock multiplied by the fraction of that share
represented by one depositary share. If the depositary shares evidenced by any
depositary receipt are repurchased in part only, the depositary will issue one
or more new depositary receipts representing the depositary shares not
repurchased.
VOTING OF DEPOSITED PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the
preferred stock are entitled to vote, the depositary will mail information about
the meeting to the record holders of the related depositary shares. Each record
holder of depositary shares on the record date (which will be the same date as
the record date for the holders of the related preferred stock) will be entitled
to instruct the depositary as to how the preferred stock underlying the holder's
depositary shares should be voted. The depositary will try, if practicable, to
vote the number of shares of preferred stock underlying the depositary shares
according to the instructions it receives. We will agree to take all action
requested and considered necessary by the depositary to enable it to vote the
preferred stock in that manner. The depositary will not vote any preferred stock
for which it does not receive specific instructions from the holders of the
depositary shares.
CONVERSION AND EXCHANGE OF DEPOSITED PREFERRED STOCK
If we provide for the exchange of the preferred stock underlying the
depositary shares, the depositary will exchange, as of the same exchange date,
that number of depositary shares representing the preferred stock to be
exchanged, so long as we have issued and deposited with the depositary the
securities for which the preferred stock is to be exchanged. The exchange rate
per depositary share will equal the exchange rate per share of the underlying
preferred stock multiplied by the fraction of that share represented by one
depositary share. If less than all of the depositary shares are exchanged, the
depositary shares to be exchanged will be selected by the depositary by lot or
pro rata or other equitable method, as we determine. If the depositary shares
evidenced by a depositary receipt are exchanged in part only, the depositary
will issue one or more new depositary receipts representing the depositary
shares not exchanged.
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Depositary shares may not be converted or exchanged for other
securities or property at the option of the holders. However, if shares if
preferred stock underlying the depositary shares are converted into or exchanged
for other securities at the option of the holders, the holders may surrender
their depositary receipts to the depositary and direct the depositary to
instruct us to convert or exchange the deposited preferred stock into the whole
number or principal amount of securities specified in the applicable prospectus
supplement. Upon receipt of instructions, we will cause the conversion or
exchange and deliver to the holders the whole number or principal amount of our
securities and cash in lieu of any fractional security. The exchange or
conversion rate per depositary share will equal the exchange or conversion rate
per share of the underlying preferred stock multiplied by the fraction of that
preferred share represented by one depositary share. If we convert or exchange
only some of the depositary shares evidenced by a depositary receipt, we will
issue a new depositary receipt evidencing any depositary shares not converted or
exchanged.
TAXATION
Owners of depositary shares will be treated for federal income tax
purposes as if they were owners of the preferred stock underlying the depositary
shares. Accordingly, for U.S. federal income tax purposes, they will have the
income and deductions to which they would be entitled if they were holders of
the preferred stock. In addition:
- no gain or loss will be recognized for U.S. federal income tax
purposes upon the withdrawal of preferred stock in exchange
for depositary shares;
- the tax basis of each preferred share to an exchanging owner
of depositary shares will, upon the exchange, be the same as
the total tax basis of the depositary shares exchanged for the
preferred stock; and
- the holding period for the preferred stock, in the hands of an
exchanging owner of depositary shares who held the depositary
shares as a capital asset at the time of the exchange, will
include the period during which the owner held the depositary
shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may be amended by agreement between us and
the depositary. However, any amendment that materially and adversely alters the
rights of the existing holders of depositary shares will not be effective unless
the amendment has been approved by the record holders of at least a majority of
the depositary shares. A deposit agreement may be terminated only if all related
outstanding depositary shares have been redeemed or there has been a final
distribution on the underlying preferred stock in connection with our
liquidation, dissolution or winding up, and the distribution has been
distributed to the holders of the related depositary shares.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. We will pay
charges of the depositary for the initial deposit of the preferred stock and any
redemption of the preferred stock. Holders of depositary receipts will pay
transfer and other taxes and governmental charges and any other charges that are
stated in the deposit agreement to be their responsibility.
MISCELLANEOUS
The depositary will forward to the holders of depositary shares all
reports and communications from us that are delivered to the depositary and that
we are required to furnish to the holders of the underlying preferred stock.
Neither we nor the depositary will be liable if the depositary is
prevented or delayed by law or any circumstance beyond its control in performing
its obligations under the deposit agreement. Our obligations and the
depositary's obligations under the deposit agreement will be limited to the
performance in good faith of our respective duties under the deposit agreement.
Neither we nor the depositary will be obligated to prosecute or
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defend any legal proceeding connected with any depositary shares or preferred
stock unless satisfactory indemnity is furnished. We and the depositary may rely
upon written advice of counsel or accountants, or upon information provided by
persons presenting preferred stock for deposit, holders of depositary shares or
other persons believed to be competent, and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering notice to us. We
also may at any time remove the depositary. Resignations or removals will take
effect upon the appointment of a successor depositary and its acceptance of the
appointment. The successor depositary must be appointed within 60 days after
delivery to us of notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50 million.
DESCRIPTION OF COMMON STOCK
GENERAL
As of June 30, 1999, 39,260,938 shares of our common stock were
outstanding. 50,835,688 undesignated shares, $.01 par value, remain
authorized and unissued. We may issue these undesignated shares as common
stock or as another class (including preferred stock) or series and with
whatever rights and preferences may be determined by our board of directors.
As of June 30, 1999, 9,903,374 of the authorized, unissued shares had been
reserved for issuance as common stock upon the exercise of stock options,
warrants or other rights granted.
Subject to the prior rights of any class or series of preferred stock
then outstanding, holders of common stock are entitled to receive dividends
declared by our board of directors out of funds legally available for the
payment of dividends. Subject to any rights of any outstanding preferred stock,
all voting rights are vested in the holders of common stock. Each share of
common stock is entitled to one vote. Subject to the prior rights of any class
or series of preferred stock then outstanding, in the event of our liquidation,
dissolution or winding up, holders of shares of common stock are entitled to
receive pro rata any assets we may distribute to stockholders. Holders of common
stock do not have any preemptive right to subscribe for additional securities
that we issue. The outstanding shares of common stock are fully paid and
nonassessable. The transfer agent and registrar for the common stock is Norwest
Bank Minnesota, National Association, South St. Paul, Minnesota.
SHAREHOLDER RIGHTS PLAN ("POISON PILL")
Each share of our common stock has one preferred stock purchase right
attached to it. Each whole purchase right entitles the holder to buy one
one-hundredth of a share of our Class A preferred stock at an initial per share
price of $90, subject to adjustment. Subject to some exceptions, the purchase
rights become exercisable 10 days after a person or group (a) acquires
beneficial ownership of 20% or more of our outstanding common stock, or (b)
announces a tender or exchange offer for 20% or more of our common stock. If the
purchase rights become exercisable, a holder generally will be entitled to
acquire common stock having a value equal to twice the exercise price of the
purchase right. If we are acquired in a merger or other business combination
transaction, or if 50% or more of our assets or earning power is sold, mortgaged
or transferred, each purchase right will entitle its holder to purchase, at the
purchase right's exercise price, that number of shares of the acquiring
company's common stock having a market value of twice the purchase right's
exercise price. Until a purchase right is exercised, the holder will not have
any rights as a shareholder, including the right to vote or receive dividends.
At any time after the purchase rights become exercisable, our board of
directors may exchange them, in whole or in part, at an exchange ratio of one
share of common stock per purchase right, subject to adjustment. In addition,
after the acquisition by a person of 20% or more of our outstanding common stock
but before the tenth day following the acquisition, our board of directors will
be entitled to redeem the purchase rights, at $.01 per right, upon approval of a
majority of the "continuing directors," as defined. The purchase rights will
expire at the close of business on October 28, 2006, if not previously redeemed
or exercised.
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The purchase rights may have an anti-takeover effect. They will cause
substantial dilution to any person or group that attempts to acquire us unless
the offer is conditional on a substantial number of purchase rights being
acquired. However, the purchase rights should not affect any prospective offeror
willing to make an offer that our board of directors determines is at an
equitable price and is otherwise in our and our shareholders' best interests.
The purchase rights also should not interfere with any merger or other business
combination approved by our board of directors because the board of directors
may redeem the rights at any time before the tenth day following an acquisition
by a person or group of 20% or more of our outstanding common stock.
This summary of some terms of the purchase rights is not complete. If
you would like additional information, you should read the full text of the
related rights agreement, which has been incorporated by reference as an exhibit
to the registration statement to which this prospectus relates.
MINNESOTA ANTI-TAKEOVER LAWS
We are governed by the provisions of Sections 302A.671, 302A.673 and
302A.675 of the Minnesota Business Corporation Act These provisions may
discourage a negotiated acquisition or unsolicited takeover of us and deprive
our shareholders of an opportunity to sell their shares at a premium over the
market price.
In general, Section 302A.671 provides that a corporation's shares
acquired in a control share acquisition have no voting rights unless voting
rights are approved in a prescribed manner. A "control share acquisition" is a
direct or indirect acquisition of beneficial ownership of shares that would,
when added to all other shares beneficially owned by the acquiring person,
entitle the acquiring person to have voting power of 20% or more in the election
of directors.
In general, Section 302A.673 prohibits a public Minnesota corporation
from engaging in a business combination with an interested shareholder for a
period of four years after the date of the transaction in which the person
became an interested shareholder, unless the business combination is approved in
a prescribed manner. The term "business combination" includes mergers, asset
sales and other transactions resulting in a financial benefit to the interested
shareholder. An "interested shareholder" is a person who is the beneficial
owner, directly or indirectly, of 10% or more of a corporation's voting stock,
or who is an affiliate or associate of the corporation, and who, at any time
within four years before the date in question, was the beneficial owner,
directly or indirectly, of 10% or more of the corporation's voting stock.
Section 302A.673 does not apply if a committee of our board of directors
consisting of all of our disinterested directors (excluding our current and
former officers) approves the proposed transaction or the interested
shareholder's acquisition of shares before the interested shareholder becomes an
interested shareholder.
If a tender offer is made for our stock, Section 302A.675 of the
Minnesota Business Corporation Act precludes the offeror from acquiring
additional shares of stock (including in acquisitions pursuant to mergers,
consolidations or statutory share exchanges) within two years following the
completion of the tender offer, unless shareholders selling their shares in the
later acquisition are given the opportunity to sell their shares on terms that
are substantially the same as those contained in the earlier tender offer.
Section 302A.675 does not apply if a committee of our board of directors
consisting of all of our disinterested directors (excluding our current and
former officers) approves the proposed acquisition before any shares are
acquired pursuant to the earlier tender offer.
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DESCRIPTION OF SECURITIES WARRANTS
We may issue warrants for the purchase of debt securities, preferred
stock or common stock. This section summarizes the general terms and provisions
of the securities warrants, warrant agreements and warrant certificates. Because
this is only a summary, it does not contain all of the details found in the full
text of the warrant agreements and the warrant certificates. If you would like
additional information, you should read the applicable form of warrant agreement
and form of warrant certificate, which will be filed or incorporated by
reference as exhibits to the registration statement to which this prospectus
relates.
We may issue securities warrants alone or together with other
securities offered by the prospectus supplement. Securities warrants may be
attached to or separate from those securities. Each series of securities
warrants will be issued under a separate warrant agreement between us and a bank
or trust company, as warrant agent, as described in the prospectus supplement.
The warrant agent will act solely as our agent in connection with the securities
warrants and will not act as an agent or trustee for any holders or beneficial
owners of the securities warrants.
GENERAL
If we offer securities warrants, the applicable prospectus supplement
will describe the terms of the warrants. If securities warrants for the purchase
of debt securities are offered, the prospectus supplement will describe the
terms of those securities warrants, including the following, if applicable:
- the offering price;
- the currencies in which the securities warrants will be
offered;
- the designation, total principal amount, currencies,
denominations and terms of the series of debt securities that
may be purchased upon exercise of the securities warrants;
- the designation and terms of any series of securities with
which the securities warrants are being offered, and the
number of securities warrants offered with each security;
- the date on and after which the holder of the securities
warrants can transfer them separately from the related series
of securities;
- the principal amount of the series of debt securities that may
be purchased if a holder exercises the securities warrants and
the price at which and currencies in which the principal
amount may be purchased upon exercise;
- the date on which the right to exercise the securities
warrants begins and expires;
- whether the securities warrants will be issued in registered
or bearer form;
- a discussion of material U.S. federal income tax consequences;
and
- any other terms of the securities warrants.
If we offer securities warrants for the purchase of preferred stock or
common stock, the prospectus supplement will set forth the specific terms and
provisions of those securities warrants, including the following if applicable:
- the offering price;
- the total number of shares that may be purchased if all of the
holders exercise the securities warrants and, in the case of
securities warrants for preferred stock, the designation,
total number
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and terms of the series of preferred stock that can be
purchased upon exercise of the securities warrants;
- the designation and terms of the series of securities with
which the securities warrants are being offered, and the
number of securities warrants being offered with each
security;
- the date on and after which the holder of the securities
warrants can transfer them separately from the related series
of securities;
- the number of shares of preferred stock or common stock that
may be purchased if a holder exercises any one securities
warrant and the price at which the preferred stock or common
stock may be purchased upon exercise;
- the date on which the right to exercise the securities
warrants begins and expires;
- a discussion of any material U.S. federal income tax
consequences; and
- any other terms of the securities warrants.
Securities warrants for the purchase of preferred stock or common stock will be
offered and exercisable for U.S. dollars only and will be in registered form
only.
A holder of warrant certificates may:
- exchange them for new warrant certificates of different
denominations;
- present them for registration of transfer, if they are in
registered form; and
- exercise them at the corporate trust office of the warrant
agent or any other office indicated in the prospectus
supplement.
Until any securities warrants to purchase debt securities are exercised, holders
of the securities warrants will not have any of the rights of holders of debt
securities, including any right to receive payments of principal, premium or
interest on the underlying debt securities or to enforce covenants in the
applicable indenture. Until any securities warrants to purchase preferred stock
or common stock are exercised, holders of the securities warrants will not have
any rights of holders of the underlying preferred stock or common stock,
including any right to receive payments of dividends or to exercise any voting
rights.
EXERCISE OF SECURITIES WARRANTS
Each holder of a securities warrant is entitled to purchase the
principal amount of debt securities or number of shares of preferred stock or
common stock, as the case may be, at the exercise price described in the
prospectus supplement. After the close of business on the day when the right to
exercise terminates (or a later date if we extend the time for exercise),
unexercised securities warrants will become void.
Holders of securities warrants may exercise them by:
- delivering to the warrant agent the payment required to
purchase the underlying securities, as stated in the
applicable prospectus supplement;
- properly completing and signing the reverse side of their
warrant certificate(s); and
- delivering their warrant certificate(s) to the warrant agent
within the time specified by the prospectus supplement.
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If you comply with the procedures described above, your securities warrants will
be considered to have been exercised when we receive payment of the exercise
price. As soon as practicable after you have completed these procedures, we will
issue and deliver to you the debt securities, preferred stock or common stock,
as the case may be, that you purchased upon exercise. If you exercise fewer than
all of the securities warrants represented by a warrant certificate we will
issue to you a new warrant certificate for the unexercised amount of securities
warrants.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENTS
We may amend or supplement a warrant agreement without the consent of
the holders of the securities warrants if the changes are not inconsistent with
the provisions of the securities warrants and do not adversely affect the
interests of the holders.
COMMON STOCK WARRANT ADJUSTMENTS
The exercise price of, and the number of shares of common stock covered
by, a common stock warrant will be adjusted in the manner set forth in the
applicable prospectus supplement if certain events occur, including:
- if we issue capital stock as a dividend or distribution on the
common stock;
- if we subdivide or combine the common stock;
- if we issue rights or warrants to all holders of common stock
entitling them (within the period expiring 45 days after the
record date for determining the stockholders entitled to
receive the rights or warrants) to subscribe for or purchase
common stock at less than the current market price, as defined
in the warrant agreement; or
- if we distribute to all holders of common stock evidences of
our indebtedness or our assets (excluding some cash dividends
and distributions described below) or rights or warrants
(excluding those referred to above).
If we distribute any rights or warrants to acquire capital stock, as described
above, pursuant to which separate certificates representing the rights will be
distributed after the initial distribution of the rights, the subsequent
distribution will be considered to be the actual distribution. However, instead
of adjusting the exercise price of and the number of shares of common stock
covered by a common stock warrant upon a distribution of separate certificates
representing the right to acquire capital stock, we may make arrangements so
that:
- each holder of a common stock warrant who exercises the
warrant, or any portion of it, before the record date for the
distribution of separate certificates will be entitled to
receive shares of common stock issued with the rights; and
- each holder of a common stock warrant who exercises the
warrant, or any portion of it, after the record date but
before the date the rights expire or are redeemed or
terminated will be entitled to receive, in addition to the
shares of common stock underlying the warrant, the same number
of rights as would the holder of the number of shares of
common stock to which the warrant holder would have been
entitled if he or she exercised the warrant immediately before
the record date for the distribution.
Common stock owned by or held on our account or that of any majority-owned
subsidiary will not be considered to be outstanding for the purpose of any
adjustment.
The exercise price and number of shares of common stock underlying a
common stock warrant will not be adjusted if cash dividends or distributions are
made regularly or paid from retained earnings. An adjustment will not be
required unless it results in a change of 1% or more of the exercise price. Any
required adjustment that is not made will be carried forward and taken into
account in any subsequent adjustment. Moreover, any adjustment that is not made
at the time of the event requiring the adjustment must be made no later than
three years after the
37
<PAGE>
occurrence of the event. Except as stated above, the exercise price and number
of shares of common stock underlying a common stock warrant will not be adjusted
for the issuance of common stock or securities convertible into or exchangeable
for common stock, or securities carrying the right to purchase any of the
foregoing.
If one of the following occurs:
- a reclassification or change of the common stock, other than
changes in par value;
- a consolidation or merger involving us except where we are the
continuing corporation and reclassification or change of the
common stock is involved; or
- a sale or conveyance to another corporation of all or
substantially all of our property and assets;
then the holders of the common stock warrants will be entitled to convert their
common stock warrants into the kind and amount of securities or property that
they would have received upon the reclassification, change, consolidation,
merger, sale or conveyance, had the common stock warrants been exercised
immediately before the reclassification, change, consolidation, merger, sale or
conveyance.
PLAN OF DISTRIBUTION
We may offer and sell the securities offered by this prospectus in any
of three ways:
- through agents;
- through underwriters or dealers; or
- directly to one or more purchasers.
The securities may be distributed from time to time in one or more transactions
at negotiated prices, at a fixed price (that is subject to change), at market
prices prevailing at the time of sale or at prices related to the prevailing
market prices.
The applicable prospectus supplement will set forth the specific terms
of the offering of securities, including:
- the securities offered;
- the price of the securities;
- the proceeds to us from the sale of the securities;
- the names of the securities exchanges, if any, on which the
securities are listed;
- the name of underwriters or agents;
- any underwriting discounts, agency fees or other compensation
to underwriters or agents; and
- any discounts or concessions allowed or paid to dealers.
We may authorize underwriters, dealers and agents to solicit offers
from specified institutions to purchase the securities from us at the public
offering price listed in the applicable prospectus supplement. These sales may
be made under "delayed delivery contracts" that provide for payment and delivery
on a specified future date. Any contracts like this will be subject to the
conditions listed in the prospectus supplement. The prospectus supplement also
will state the commission to be paid to underwriters, dealers and agents who
solicit these contracts.
38
<PAGE>
Any underwriter, dealer or agent who participates in the distribution
of an offering of securities may be considered by the SEC to be an underwriter
under the Securities Act. Any discounts or commissions received by an
underwriter, dealer or agent on the sale or resale of securities may be
considered by the SEC to be underwriting discounts and commissions under the
Securities Act. Under agreements with us, underwriters, dealers and agents may
be entitled to indemnification by us against some civil liabilities, including
liabilities under the Securities Act. Underwriters, dealers and agents also may
be entitled to contributions for any payments the underwriters, dealers or
agents are required to make with respect to some civil liabilities, including
liabilities under the Securities Act. Underwriters and agents and their
affiliates are permitted to be customers of, engage in transactions with, or
perform services for us and our affiliates in the ordinary course of business.
Unless otherwise indicated in the applicable prospectus supplement, all
securities offered by this prospectus, other than the common stock, will be new
issues of securities with no established trading market. Any underwriters to
whom we sell securities for public offering and sale may make a market in the
securities. However, these underwriters will not be obligated to make a market
in the securities and may discontinue any market-making at any time without
notice. We cannot assure you that the trading market for any of the securities
will be or remain liquid at any time.
EXPERTS
Our consolidated financial statements for the year ended December 31,
1998, have been audited by Ernst & Young LLP, independent auditors, as stated in
their report appearing with the financial statements in our Annual Report on
Form 10-K for the year ended December 31, 1998. The financial statements, and
the report of Ernst & Young, are incorporated in this prospectus by reference to
our Annual Report on Form 10-K for the year ended December 31, 1998, in reliance
upon the report given upon the authority of Ernst & Young as experts in
accounting and auditing.
LEGAL MATTERS
The validity of the securities will be passed upon for us by Dorsey &
Whitney LLP, Minneapolis, Minnesota.
WHERE YOU CAN FIND MORE INFORMATION
Federal securities law requires the filing of certain information with
the SEC, including annual, quarterly and special reports, proxy statements and
other information. You can read and copy these documents at the public reference
facility maintained by the SEC at Judiciary Plaza, 450 Fifth Street, NW, Room
1024, Washington, DC 20549. You can also copy and inspect such reports, proxy
statements and other information at the following regional offices of the SEC:
New York Regional Office Chicago Regional Office
Seven World Trade Center Citicorp Center
Suite 1300 500 West Madison Street, Suite 1400
New York, NY 10048 Chicago, Illinois 60661
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. SEC filings are also available to the public on the
SEC's web site at http://www.sec.gov. Our SEC filings are also available at the
offices of the New York Stock Exchange. For further information on obtaining
copies of our public filings at the NYSE, you should call 1-212-656-5060.
This prospectus and the accompanying prospectus supplements are part
of a registration statement we filed with the SEC (Registration No. 333-85353).
The registration statement and the exhibits filed with it contain additional
information about us and the securities offered under this prospectus. The
registration statement and the exhibits filed with it are also available
at the SEC locations listed above and on the SEC's web site.
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information that we
39
<PAGE>
incorporate by reference is considered to be part of this prospectus, and later
information that we file with the SEC will automatically update and supersede
the information in this prospectus and any accompanying prospectus supplement.
We incorporate by reference the documents listed below and any future filings
made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 prior to the termination of the offering of the
securities offered under this registration statement.
a. Annual Report on Form 10-K for the year ended December 31,
1998, filed March 24, 1999;
b. Current Report on Form 8-K dated March 5, 1999, filed March 8,
1999;
c. Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, filed May 14, 1999;
d. Current Report on Form 8-K dated May 21, 1999, filed May 21,
1999;
e. Amendment to Quarterly Report on Form 10-Q/A-1 for the
quarter ended March 31, 1999, filed July 28, 1999;
f. Quarterly Report on Form 10-Q for the quarter ended June 30,
1999, filed July 28, 1999;
g. the description of our common stock contained in our
registration statement on Form 8-A filed March 22, 1996; and
h. the description of our Rights Agreement contained on our
registration statement on Form 8-A filed on November 7, 1996,
as amended by those amendments to our registration statement
on Form 8-A filed January 20, 1998, and October 8, 1998.
You may request a free copy of any of the above filings by writing or
calling:
Arcadia Financial Ltd.
Arcadia Financial Center
7825 Washington Avenue South
Minneapolis, MN 55439
Attention: Secretary
(612) 942-9880
40
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The table below sets forth expenses in connection with the issuance and
distribution of the securities registered by this prospectus. All fees and
expenses other than the SEC registration fee are estimated. The expenses listed
will be paid by Arcadia Financial.
<TABLE>
<S> <C>
SEC Registration Fee.............................................. $ 26,708
Accounting Fees and Expenses...................................... 10,000
Legal Fees and Expenses........................................... 10,000
Printing Expenses................................................. 20,000
Blue Sky and legal investment fees and related expenses 2,000
Miscellaneous (including listing fees, if applicable) 1,292
--------
Total.................................................... $ 70,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 302A.521 of the Minnesota Business Corporation Act requires
corporations to indemnify any person who is made or threatened to be made a
party to any proceeding, by reason of the person's former or present official
capacity, against judgments, penalties, fines, settlements and reasonable
expenses, including attorneys' fees and disbursements, incurred by the person in
connection with the proceeding if certain statutory standards are met.
"Proceeding" means a threatened, pending or completed civil, criminal,
administrative, arbitration or investigative proceeding, including one by or in
the right of the corporation. Section 302A.521 contains detailed terms regarding
this right of indemnification, and reference is made to Section 302A.521 for a
complete statement of indemnification rights. The general effect of Minnesota
Statutes Section 302A.521 is to require Arcadia Financial to reimburse (or pay
on behalf of) our directors and officers with respect to any personal liability
that may be imposed on them for certain acts performed in their capacity as our
directors and officers, except where they have not acted in good faith.
Article 6 of our restated bylaws, as amended, provides that our
directors, officers, employees and agents, past or present, and persons serving
as directors, officers, employees and agents of another corporation or entity at
Arcadia Financial's request, shall be indemnified by Arcadia Financial for such
expenses and liabilities, in such manner, under such circumstances, and to such
extent as permitted under Minnesota Statutes Section 302A.521.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
1.1 Underwriting Agreement (to be filed subsequently by Form 8-K).
3.1 Restated Articles of Incorporation of the Registrant, as
amended (incorporated by reference to Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998).
3.2 Restated Bylaws of the Registrant, as amended (incorporated by
reference to Exhibit 3.2 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1998).
4.1 Rights Agreement dated as of November 1, 1996, between the
Registrant and Norwest Bank Minnesota, National Association,
as Rights Agent (incorporated by reference to Exhibit 1 to the
Registrant's Registration Statement on Form 8-A filed November
7, 1996).
41
<PAGE>
4.2 Amendment No. 1 to Rights Agreement, dated January 16, 1998,
to Rights Agreement, dated as of November 1, 1996 between
Arcadia Financial Ltd. and Norwest Bank Minnesota, N.A.
(incorporated by reference to Exhibit 4.1 to the Registrant's
Current Report on Form 8-K dated January 8, 1998 and filed
January 20, 1998).
4.3 Amendment No. 2 to Rights Agreement, dated October 5, 1998, to
Right Agreement, dated as of November 1, 1996 between the
Registrant and Norwest Bank Minnesota, National Association,
as Rights Agent (incorporated by reference to Exhibit 4.1 to
the Registrant's Current Report on Form 8-K dated September
30, 1998 and filed October 8, 1998).
4.4 Indenture dated as of March 12, 1997, between the Registrant
and Norwest Bank Minnesota, National Association, as Trustee
(incorporated by reference to Exhibit 4.1 to the Registrant's
Current Report on Form 8-K dated March 12, 1997 and filed
March 18, 1997).
4.5 Form of Indenture relating to Subordinated Debt Securities
(filed herewith).
4.6 Form of Common Stock Warrant Agreement (filed herewith).
4.7 Form of Preferred Stock Warrant Agreement (filed herewith).
4.8 Form of Debt Securities Warrant Agreement (filed herewith).
4.9 Form of Deposit Agreement (filed herewith).
5.1 Opinion and consent of Dorsey & Whitney LLP regarding the
legality of the securities (filed herewith).
12.1 Computation of Ratio of Earnings to Fixed Charges
(previously filed).
12.2 Computation of Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends (previously filed).
23.1 Consent of Dorsey & Whitney LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP (filed herewith).
24.1 Power of Attorney (previously filed).
25.1 Statement of Eligibility of Norwest Bank Minnesota, National
Association, with respect to the Senior Debt Securities
(previously filed).
25.2 Statement of Eligibility of trustee with respect to the
Subordinated Debt Securities (to be filed subsequently by Form
8-K).
</TABLE>
ITEM 17. UNDERTAKINGS
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;
(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
42
<PAGE>
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 end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the SEC pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(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 (a)(1)(i) and (a)(1)(ii) of this section 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
SEC by the registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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 be 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the SEC 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.
The undersigned registrant hereby undertakes that:
(1) for purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
registration statement in reliance on Rule 430A and contained in a 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; and
(2) for the purpose of determining any liability under the
Securities 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.
43
<PAGE>
The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of section 310 of the Trust Indenture Act of 1939, as amended, in
accordance with the rules and regulations prescribed by the SEC under section
305(b)(2) thereof.
44
<PAGE>
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 2
to Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Minneapolis, State of
Minnesota, on September 30, 1999.
ARCADIA FINANCIAL LTD.
/s/ Richard A. Greenawalt
-----------------------------
Richard A. Greenawalt
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
------ ------- ------
<S> <C> <C>
/s/ Richard A. Greenawalt Chief Executive Officer and Director September 30, 1999
- -------------------------------------- (Principal Executive Officer)
Richard A. Greenawalt
/s/ Robert A. Marshall President, Chief Operating Officer September 30, 1999
- -------------------------------------- and Director
Robert A. Marshall
/s/ John A. Witham Executive Vice President and September 30, 1999
- -------------------------------------- Chief Financial Officer
John A. Witham (Principal Financial Officer)
/s/ Brian S. Anderson Senior Vice President, September 30, 1999
- -------------------------------------- Corporate Controller and
Brian S. Anderson Assistant Secretary
(Principal Accounting Officer)
* Chairman of the Board September 30, 1999
- --------------------------------------
Warren Kantor
/s/ Scott H. Anderson Director September 30, 1999
- --------------------------------------
Scott H. Anderson
* Director September 30, 1999
- --------------------------------------
Robert J. Cresci
* Director September 30, 1999
- --------------------------------------
James L. Davis
*By: /s/ Richard A. Greenawalt September 30, 1999
----------------------------------
</TABLE>
Attorney-in-fact**
- ---------------
** Executed on behalf of the indicated persons by Richard A. Greenawalt,
pursuant to the Power of Attorney included as Exhibit 24.1 to this
registration statement.
45
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- --------------
<S> <C>
1.1 Underwriting Agreement (to be filed subsequently by Form 8-K).
3.1 Restated Articles of Incorporation of the Registrant, as
amended (incorporated by reference to Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998).
3.2 Restated Bylaws of the Registrant, as amended (incorporated by
reference to Exhibit 3.2 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1998).
4.1 Rights Agreement dated as of November 1, 1996, between the
Registrant and Norwest Bank Minnesota, National Association,
as Rights Agent (incorporated by reference to Exhibit 1 to the
Registrant's Registration Statement on Form 8-A filed November
7, 1996).
4.2 Amendment No. 1 to Rights Agreement, dated January 16, 1998,
to Rights Agreement, dated as of November 1, 1996 between
Arcadia Financial Ltd. and Norwest Bank Minnesota, N.A.
(incorporated by reference to Exhibit 4.1 to the Registrant's
Current Report on Form 8-K dated January 8, 1998 and filed
January 20, 1998).
4.3 Amendment No. 2 to Rights Agreement, dated October 5, 1998, to
Right Agreement, dated as of November 1, 1996 between the
Registrant and Norwest Bank Minnesota, National Association,
as Rights Agent (incorporated by reference to Exhibit 4.1 to
the Registrant's Current Report on Form 8-K dated September
30, 1998 and filed October 8, 1998).
4.4 Indenture dated as of March 12, 1997, between the Registrant
and Norwest Bank Minnesota, National Association, as Trustee
(incorporated by reference to Exhibit 4.1 to the Registrant's
Current Report on Form 8-K dated March 12, 1997 and filed
March 18, 1997).
4.5 Form of Indenture relating to Subordinated Debt Securities
(filed herewith).
4.6 Form of Common Stock Warrant Agreement (filed herewith).
4.7 Form of Preferred Stock Warrant Agreement (filed herewith).
4.8 Form of Debt Securities Warrant Agreement (filed herewith).
4.9 Form of Deposit Agreement (filed herewith).
5.1 Opinion and consent of Dorsey & Whitney LLP regarding the
legality of the securities (filed herewith).
12.1 Computation of Ratio of Earnings to Fixed Charges
(previously filed).
12.2 Computation of Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends (previously filed).
23.1 Consent of Dorsey & Whitney LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP (filed herewith).
24.1 Power of Attorney (previously filed).
46
<PAGE>
25.1 Statement of Eligibility of Norwest Bank Minnesota, National
Association, with respect to the Senior Debt Securities
(previously filed).
25.2 Statement of Eligibility of trustee with respect to the
Subordinated Debt Securities (to be filed subsequently by Form
8-K).
</TABLE>
47
<PAGE>
Exhibit 4.5
- -------------------------------------------------------------------------------
ARCADIA FINANCIAL LTD.
to
----------------
as Trustee
-----------------
SUBORDINATED NOTES
-----------------
INDENTURE
Dated as of ____________, ____
- -------------------------------------------------------------------------------
<PAGE>
ARCADIA FINANCIAL LTD.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of ____________________,_________
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
- ----------- -----------------
<S> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . 609
(a) (3) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a) (4) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(5) . . . . . . . . . . . . . . . . . . . . . 609
(b) . . . . . . . . . . . . . . . . . . . . . 608, 610
Section 311 . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . 701, 701(a)
(b) . . . . . . . . . . . . . . . . . . . . . 701(b)
(c) . . . . . . . . . . . . . . . . . . . . . 701(c)
Section 313 . . . . . . . . . . . . . . . . . . . . . 702
Section 314(a) . . . . . . . . . . . . . . . . . . . . . 703
(b) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . 513
(a) (2) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . 508
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . 107
</TABLE>
-i-
<PAGE>
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be part of the Indenture.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION . . . . . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 102. Compliance Certificates and Opinions. . . . . . . . . . 10
SECTION 103. Form of Documents Delivered to Trustee. . . . . . . . . 11
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . 12
SECTION 105. Notices, Etc., to Trustee and Company . . . . . . . . . 14
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . 14
SECTION 107. Compliance with Trust Indenture Act . . . . . . . . . . 15
SECTION 108. Effect of Headings and Table of Contents. . . . . . . . 15
SECTION 109. Successors and Assigns. . . . . . . . . . . . . . . . . 15
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . 15
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . 15
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . 15
SECTION 113. Legal Holidays. . . . . . . . . . . . . . . . . . . . . 16
ARTICLE TWO
SECURITY FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . 16
SECTION 202. Form of Trustee's Certificate of Authentication . . . . 16
SECTION 203. Form of Legend for Global Securities. . . . . . . . . . 17
ARTICLE THREE
THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 301. Amount Unlimited; Issuable in Series. . . . . . . . . . 17
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . 20
SECTION 303. Execution, Authentication, Delivery and Dating. . . . . 21
SECTION 304. Temporary Securities. . . . . . . . . . . . . . . . . . 23
SECTION 305. Registration, Registration of Transfer and Exchange . . 24
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. . . . 25
SECTION 307. Payment of Interest; Interest Rights Preserved. . . . . 26
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . 27
SECTION 309. Cancellation. . . . . . . . . . . . . . . . . . . . . . . 28
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SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . 28
ARTICLE FOUR
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . 29
SECTION 402. Application of Trust Money. . . . . . . . . . . . . . . 30
SECTION 403. Defeasance and Discharge of Indenture . . . . . . . . . 30
ARTICLE FIVE
REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . 32
SECTION 502. Acceleration of Maturity; Rescission and Annulment. . . 34
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 504. Trustee May File Proofs of Claim. . . . . . . . . . . . 36
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities. . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 506. Application of Money Collected. . . . . . . . . . . . . 37
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . 37
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest. . . . . . . . . . . . . . . . . . . 38
SECTION 509. Restoration of Rights and Remedies. . . . . . . . . . . . 38
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . . . . 38
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . . . . . 39
SECTION 512. Control by Holders. . . . . . . . . . . . . . . . . . . . 39
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 39
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . 40
SECTION 515. Waiver of Stay or Extension Laws. . . . . . . . . . . . 40
ARTICLE SIX
THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . 40
SECTION 602. Notice of Defaults. . . . . . . . . . . . . . . . . . . 42
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . 42
SECTION 604. Not Responsible for Recitals or Issuance of
Securities. . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . 43
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . 44
SECTION 607. Compensation and Reimbursement. . . . . . . . . . . . . 44
SECTION 608. Disqualification; Conflicting Interests . . . . . . . . 44
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . 44
SECTION 610. Resignation and Removal; Appointment of Successor . . . 45
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SECTION 611. Acceptance of Appointment by Successor. . . . . . . . . . 46
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business. . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 613. Preferential Collection of Claims Against Company . . . . 48
SECTION 614. Appointment of Authenticating Agent . . . . . . . . . . . 48
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY. . . . . . . . . . . 50
SECTION 701. Preservation of Information; Communications to
Holders . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 702. Reports by Trustee. . . . . . . . . . . . . . . . . . . 50
SECTION 703. Reports by Company. . . . . . . . . . . . . . . . . . . 51
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE . . . . . . . . . 52
SECTION 801. Company May Consolidate, Etc. Only on Certain
Terms . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 802. Successor Substituted . . . . . . . . . . . . . . . . . 52
ARTICLE NINE
SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 901. Supplemental Indentures Without Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 902. Supplemental Indentures With Consent of Holders . . . . 54
SECTION 903. Execution of Supplemental Indentures. . . . . . . . . . 55
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . 55
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . 55
SECTION 906. Reference in Securities to Supplemental Indentures. . . . 55
SECTION 907. Notice of Supplemental Indentures . . . . . . . . . . . . 56
SECTION 908. Supplemental Indentures With Consent of
Holders of Senior Debt . . . . . . . . . . . . . . . . . 56
ARTICLE TEN
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 1001. Payment of Principal, Premium and Interest. . . . . . . . 56
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . 56
SECTION 1003. Money for Securities Payments to Be Held in Trust . . . . 57
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SECTION 1004. Existence . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1005. Defeasance of Certain Obligations . . . . . . . . . . . . 58
SECTION 1006. Waiver of Certain Covenants . . . . . . . . . . . . . . 60
ARTICLE ELEVEN
REDEMPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 1101. Applicability of Article. . . . . . . . . . . . . . . . 60
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . 60
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1104. Notice of Redemption. . . . . . . . . . . . . . . . . . 61
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . 62
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . 62
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . . 63
ARTICLE TWELVE
SINKING FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1201. Applicability of Article. . . . . . . . . . . . . . . . 63
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities. . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . 64
ARTICLE THIRTEEN
SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1301. Agreement to Subordinate. . . . . . . . . . . . . . . . . 64
SECTION 1302. Distribution on Dissolution, Liquidation and
Reorganization . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1303. No Payment When Senior Debt in Default. . . . . . . . . . 66
SECTION 1304. Payment to Holders of Senior Debt . . . . . . . . . . . . 66
SECTION 1305. Subrogation . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1306. Payment on Securities Permitted . . . . . . . . . . . . . 67
SECTION 1307. Authorization of Holders to Trustee to Effect
Subordination . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1308. No Waiver of Subordination Provisions . . . . . . . . . . 68
SECTION 1309. Trustee as Holder of Senior Debt. . . . . . . . . . . . . 68
SECTION 1310. Notices to Trustee. . . . . . . . . . . . . . . . . . . . 69
SECTION 1311. No Fiduciary Duty by Trustee to Holders of
Senior Debt . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1312. Paying Agent Treated as Trustee . . . . . . . . . . . . . 69
ARTICLE FOURTEEN
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REPURCHASE OF SECURITIES AT OPTION OF HOLDERS. . . . . . . . . . . . . 70
SECTION 1401. Applicability of Article. . . . . . . . . . . . . . . . 70
SECTION 1402. Notice of Repurchase Date . . . . . . . . . . . . . . . 70
SECTION 1403. Deposit of Repurchase Price . . . . . . . . . . . . . . 70
SECTION 1404. Securities Payable on Repurchase Date . . . . . . . . . 71
SECTION 1405. Securities Repurchased in Part. . . . . . . . . . . . . 71
ARTICLE FIFTEEN
CORPORATE OBLIGATION ONLY. . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 1501. Indenture and Securities Solely Corporate
Obligations . . . . . . . . . . . . . . . . . . . . . . 71
</TABLE>
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<PAGE>
INDENTURE, dated as of ______________, ____ between ARCADIA FINANCIAL
LTD., a corporation duly organized and existing under the laws of the State
of Minnesota (herein called the "Company"), having its principal office at
7825 Washington Avenue South, Minneapolis, Minnesota 55439, and
_____________________ , as Trustee (herein called the "Trustee"), having its
principal office at _______________________.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof (including holders from time to time of the Securities of any
series held through a Holder which is a Depositary (as defined herein)), as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule or regulation under the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(3) any gender used in this Indenture shall be deemed and construed
to include correlative words of the masculine, feminine or neuter gender;
(4) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP and, except as otherwise
herein expressly provided, GAAP
<PAGE>
with respect to any computation required or permitted hereunder shall mean
GAAP at the date of such computation; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the Company
or any duly authorized (generally or in any particular respect) committee
appointed by that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification. Where any provision of this Indenture refers to action
to be taken pursuant to a Board Resolution (including establishment of any
series of the Securities and the forms and terms thereof), such action may be
taken by any committee, officer or employee of the Company authorized to take
such action (generally or in any particular respect) by a Board Resolution.
"Business Day", when used with respect to any Place of Payment or other
location, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions generally in that Place of Payment or
other location are authorized or obligated by law or executive order to
close, unless otherwise specified in a form of Security.
"Capital Lease Obligation" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property, which obligations are
required to be classified and accounted for as capital lease obligations on
the balance sheet of such Person under GAAP, and the amount of such
obligations at the time any determination thereof is to be made for purposes
of this Indenture shall be the amount of the liability in
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<PAGE>
respect of a capital lease that would at such time be required to be
capitalized on a balance sheet in accordance with GAAP.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation, and any other obligor upon
the Securities.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its
President, its Chief Executive Officer, its Chief Operating Officer, its
Chief Financial Officer, a Vice President, its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, or by any other officer
of the Company authorized to sign by Board Resolution, and delivered to the
Trustee.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally
administered, which at the date of original execution of the Indenture is
__________________.
"Corporation" includes corporations, associations, companies, joint
stock companies and business trusts.
"Credit Enhancement Facility" means any document, instrument or
agreement entered into by any Person for the purpose of providing credit
support for Securitization Transactions and Warehouse Facilities.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the clearing agency registered under the Exchange Act, specified
for that purpose as contemplated by Section 301 or any successor clearing
agency registered under the Exchange Act as contemplated by Section 305, and
if at any time there is more than one such Person, "Depositary" as used with
respect to the Securities of any series shall mean the Depositary with
respect to the Securities of such series.
"Event of Default" has the meaning specified in Section 501.
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<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United
States of America set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect from time to time.
"Global Security" means a Security bearing the legend specified in
Section 202 evidencing all or part of a series of Securities, issued to the
Depositary for such series or its nominee, and registered in the name of such
Depositary or nominee.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, as to any Person, any of the following
obligations, contingent or otherwise, whether outstanding on the date of this
Indenture or thereafter created, incurred, assumed or guaranteed by such
Person:
(a) all obligations for borrowed money or for the deferred purchase
price of property or services (including, without limitation, any interest
accruing subsequent to an event of default), except any such obligation
that constitutes a trade payable or an accrued liability arising in the
ordinary course of business, if and to the extent the foregoing
Indebtedness would appear as a liability on a balance sheet of such Person
prepared in accordance with GAAP;
(b) all obligations evidenced by bonds, notes, debentures or other
similar instruments issued by such Person;
(c) all Indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired (even
though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of
such property), except any such obligation that constitutes a trade
payable or an accrued liability arising in the ordinary course of
business, if and to the extent the foregoing Indebtedness would appear as
a liability on a balance sheet of such Person prepared in accordance with
GAAP;
(d) all Capital Lease Obligations;
(e) all obligations for the payment of principal or interest, all
commitment fees and all reimbursement obligations incurred, created or
arising in connection with Securitization Transactions, Warehouse
Facilities or Credit Enhancement Facilities;
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<PAGE>
(f) all Indebtedness of the types referred to in the foregoing
clauses (a) through (e) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any lien upon or security interest in property of such Person
(including, without limitation, accounts and contract rights), even though
such Person has not assumed or become liable for the payment of such
Indebtedness;
(g) any guarantee of any Indebtedness of the types referred to in the
foregoing clauses (a) through (f), regardless of whether such obligation
would appear on a balance sheet of such Person prepared in accordance with
GAAP; and
(h) all renewals, extensions and refundings of any Indebtedness of
the types referred to in any of the foregoing clauses (a) through (g).
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more
than one Person is acting as Trustee under this instrument due to the
appointment of one or more separate Trustees for any one or more separate
series of Securities pursuant to Section 610(e), "Indenture" shall mean, with
respect to such series of Securities for which any such Person is Trustee,
this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms
of particular series of Securities for which such Person is Trustee
established as contemplated by Section 301, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for
which such Person is not Trustee, regardless of when such terms or provisions
were adopted, and exclusive of any provisions or terms adopted by means of
one or more indentures supplemental hereto executed and delivered after such
Person had become such Trustee but to which such Person, as such Trustee, was
not a party.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Junior Subordinated Debt" means the Indebtedness of the Company under
its Subordinated Extendible Notes and Subordinated Fixed-Term Notes issued
pursuant to the indenture dated as of July 1, 1994, as amended and restated
by a First Amendment and Restatement dated as of April 28, 1995 by and
between the Company and Norwest Bank Minnesota, National Association, as
Trustee, as further amended and supplemented by an Instrument of Resignation,
Appointment and Acceptance dated as of August 13, 1998, among the Company,
Norwest Bank Minnesota, National Association,
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<PAGE>
and Marine Midland Bank (now known as HSCB Bank USA) and a First Supplemental
Indenture dated as of August 13, 1998, between the Company and HSCB Bank USA,
as Trustee.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity
or by declaration of acceleration, call for redemption or otherwise.
"Obligations" has the meaning specified in Section 1302.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President, the Chief Executive Officer, the Chief Operating
Officer, the Chief Financial Officer, a Vice President or an Assistant Vice
President of the Company, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company.
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made; and
(iii) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
-6-
<PAGE>
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or
whether a quorum is present at a meeting of Holders of Securities, (i) the
principal amount of an Original Issue Discount Security that shall be deemed
to be Outstanding shall be the amount of the principal thereof that would be
due and payable as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 502, (ii) the principal amount of a
Security denominated in one or more foreign currencies or currency units that
shall be deemed to be Outstanding shall be the U.S. dollar equivalent,
determined in the manner provided as contemplated by Section 301 as of the
date of original issuance of such Security, of the principal amount (or, in
the case of an Original Issue Discount Security, the U.S. dollar equivalent,
determined as of the date of original issuance of such Security, of the
amount determined as provided in (i) above) of such Security as determined by
the Company pursuant to Section 301, and (iii) Securities owned by the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledges is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) and/or interest on any Securities on
behalf of the Company.
"Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including without
limitation the rate or rates of interest (or formula for determining the rate
or rates of interest), if any, thereon, the Stated Maturity or Maturities
thereof and the redemption provisions, if any, with respect thereto, are to
be determined by the Company or its agents upon the issuance of such
Securities.
"Person" means any individual, Corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if
any) and/or interest on the Securities of that series are payable.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security, and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a
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<PAGE>
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Proceeding" has the meaning specified in Section 1302.
"Redemption Date", when used with respect to any Security or portion
thereof to be redeemed, means the date fixed for such redemption pursuant to
this Indenture.
"Redemption Price", when used with respect to any Security or portion
thereof to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means any
officer of the Trustee assigned by it to administer its corporate trust
matters.
"Repurchase Date", when used with respect to any Security or portion
thereof to be repurchased, means the date fixed for such repurchase pursuant
to this Indenture.
"Repurchase Price", when used with respect to any Security or portion
thereof to be repurchased, means the price at which it is to be repurchased
pursuant to this Indenture.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture; provided, however, that if at any time there
is more than one Person acting as Trustee under this Indenture, "Securities"
with respect to the Indenture as to which such Person is Trustee shall have
the meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this
Indenture, exclusive, however, of Securities of any series as to which such
Person is not Trustee.
"Securities Payment" has the meaning specified in Section 1302.
"Securitization Transaction" means a public or private transfer of
installment sales contracts, loans, leases or other receivables by which the
Company directly or indirectly securitizes a pool of specified installment
sales contracts, loans, leases or other receivables.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Debt" means all Indebtedness of the Company, except Indebtedness
created or evidenced by an instrument which expressly provides that such
Indebtedness is subordinated in right of
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payment to any other Indebtedness of the Company. Without limiting the
generality of the foregoing, Senior Debt shall include: (i) the guarantee by
the Company of any Indebtedness of any other Person (including, without
limitation, subordinated Indebtedness of another Person), unless such
guarantee is expressly subordinated to any other Indebtedness of the Company;
and (ii) Indebtedness of the Company under its 11.75% Senior Notes due 2007
issued pursuant to the indenture dated as of March 12, 1997, by and between
the Company and Norwest Bank Minnesota, National Association, as Trustee, as
supplemented by a First Supplemental Indenture dated as of March 12, 1997 and
a Second Supplemental Indenture dated as of October 8, 1997. Without
limiting the generality of the foregoing, Senior Debt shall not include
Indebtedness of the Company under the Securities or the Junior Subordinated
Debt. Notwithstanding anything to the contrary in the foregoing, Senior Debt
shall not include (x) any Indebtedness of the Company to any of its
Subsidiaries or other Affiliates and (y) any Indebtedness incurred for the
purchase of goods or materials or for services obtained in the ordinary
course of business (other than with the proceeds of revolving credit
borrowings permitted hereby).
"Senior Payment Default" means any default in the payment of any
Obligation on any Senior Debt when due, whether at the stated maturity of any
such payment or by declaration of acceleration, call for redemption,
mandatory repurchase, payment or prepayment or otherwise.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any combination
thereof).
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed, except as
provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any
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time there is more than one such Person, "Trustee" as used with respect to
the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"U.S. Government Obligations" means direct obligations of the United
States of America, or any Person controlled or supervised by and acting as an
agency or instrumentality of such government, in each case where the payment
or payments thereunder are unconditionally guaranteed as a full faith and
credit obligation by such government and which are not callable or redeemable
at the option of the issuer or issuers thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with
respect to any such U.S. Government Obligation or a specific payment of
interest on or principal of or other amount with respect to any such U.S.
Government Obligation held by such custodian for the account of the holder of
a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment of interest on or principal of or other amount with respect to the
U.S. Government Obligation evidenced by such depository receipt.
"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added
before or after the title "vice president".
"Voting Stock", when used with respect to a Corporation, means stock of
the class or classes having general voting power under ordinary circumstances
to elect at least a majority of the board of directors, managers or trustees
of such Corporation (irrespective of whether at the time stock or securities
of any other class or classes shall have or might have voting power by reason
of the happening of any contingency).
"Warehouse Facility" means a funding arrangement with one or more
financial institutions or other lenders or purchasers, either directly or
through a special purpose vehicle, exclusively to finance for a period not to
exceed six months the purchase of consumer installment sales contracts,
loans, leases or other receivables pending Securitization Transactions,
including, without limitation, so-called "pool bank" arrangements and
repurchase agreements.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish
to the Trustee, if so requested by the Trustee, an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any
such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need
be furnished.
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Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion whether such covenant or condition has been
complied with; and
(4) a statement whether, in the opinion of each such individual, such
condition or covenant has been complied with.
Every such certificate provided under this Indenture shall be without
personal recourse to the individual executing the same and may include an
express statement to such effect.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of any officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate, opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company. Any certificate or opinion of counsel may be stated to be based on the
certificates or opinions of other counsel, in which event it shall be
accompanied by a copy of such other certificates or opinions.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument. All applications, requests, certificates, statements or
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other instruments given under this Indenture shall be without personal recourse
to any individual giving the same and may include an express statement to such
effect.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders (including Persons who hold their Securities
through a Holder which is a Depositary) in person or by an agent duly appointed
in writing, and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
Without limiting the generality of the foregoing, a Holder, including a
Depositary that is a Holder of a Global Security, may make, give or take, by a
proxy or proxies duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Indenture to be made, given or taken by the Holders, and a Depositary that is a
Holder of a Global Security may provide its proxy or proxies to the beneficial
owners of interest in any such Global Security.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine, provided that, in any instance, the Trustee may require further proof
with respect to any matter referred to in this Section.
(c) The ownership of Securities shall be proved by the Security Register.
(d) The Company may fix any day as the record date for the purpose of
determining the Holders (including Persons who hold Securities through a Holder
which is a Depositary) of Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders of Securities of such series. If not set by the Company prior to the
first solicitation of a Holder of Securities of such series made by any Person
in respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders
(including Persons who hold Securities through a Holder which is a Depositary)
of one
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or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action.
With regard to any action that may be given or taken hereunder only by
Holders (including Persons who hold their Securities through a Holder which is a
Depositary) of a requisite principal amount of Outstanding Securities of any
series (or their duly appointed agents) and for which a record date is set
pursuant to this subsection (d), the Company may, at its option, set an
expiration date after which no such action purported to be given or taken by any
Holder shall be effective hereunder unless given or taken on or prior to such
expiration date by Holders (including Persons who hold Securities through a
Holder which is a Depositary) of the requisite principal amount of Outstanding
Securities of such series on such record date (or their duly appointed agents).
On or prior to any expiration date set pursuant to this Subsection (d), the
Company may, on one or more occasions at its option, extend such date to any
later date. Nothing in this subsection (d) shall prevent any Holder (or any
duly appointed agent thereof) from giving or taking, after any expiration date,
any action identical to, or, at any time, contrary to or different from any
action given or taken, or purported to have been given and taken, hereunder by a
Holder on or prior to such date, in which event the Company may set a record
date in respect hereof pursuant to this subsection (d).
Notwithstanding the foregoing, upon receipt by the Trustee, with respect to
Securities of any series, of (i) any Notice of Default pursuant to Section 501,
(ii) any declaration or acceleration, or any rescission and annulment of any
such declaration, pursuant to Section 502, or (iii) any direction given pursuant
to Section 512 (any such notice, declaration, rescission and annulment, or
direction being referred to herein as a "Direction"), a record date shall
automatically and without any other action by any Person be set for the purpose
of determining the Holders (including Persons who hold Securities through a
Holder which is a Depositary) of Outstanding Securities of such series entitled
to join in such Direction, which record date shall be the close of business on
the day the Trustee receives such Direction. The Holders (including Persons who
hold Securities through a Holder which is a Depositary) of Outstanding
Securities of such series on such record date (or their duly appointed agents),
and only such Persons, shall be entitled to join in such Direction, whether or
not such Holders remain Holders after record date; provided that, unless such
Direction shall have become effective by virtue of Holders (including Persons
who hold Securities through a Holder which is a Depositary) of the requisite
principal amount of Outstanding Securities of such series on such record date
(or their duly appointed agents) having joined therein on or prior to the 90th
day after such record date, such Direction shall automatically and without any
action by any Person be canceled and be of no further effect. Nothing in this
paragraph shall prevent a Holder (or duly appointed agent thereof) from giving,
before or after the expiration of such 90-day period, a Direction contrary to or
different from, or, after the expiration of such period, identical to, a
Direction that has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date in respect thereof shall be set
pursuant to this subsection (d).
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(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing to or with a Responsible Officer
of the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument (Attention: Treasurer) or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder (including
Persons who hold Securities through a Holder which is a Depositary if the name
and address of such beneficial holder has been provided in writing to the Person
required to give such notice prior to the date such notice is given) affected by
such event, at such Holder's address as it appears in the Security Register or
as provided in writing by the Depositary, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice.
In any case where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other
Holders. Any notice mailed to the Holder in the manner herein prescribed shall
be conclusively deemed to have been received by such Holder, whether or not such
Holder actually receives such notice. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
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In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made by or with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Compliance with Trust Indenture Act.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act that are required to be part of this Indenture. If any
provision hereof limits, qualifies or conflicts with a provision of the Trust
Indenture Act that is required under such Act to be a part of and govern this
Indenture, the provision of the Trust Indenture Act shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company or the
Trustee shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto, any Authenticating Agent, any
Paying Agent, any Securities Registrar, and their successors hereunder and the
Holders (including Persons who hold Securities through a Holder which is a
Depositary), any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of Minnesota.
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SECTION 113. Legal Holidays.
Except as may be otherwise specified with respect to any particular
Securities, in any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series, including Global Securities representing
Securities of such series, shall be in the form established, without the
approval of any Holders or the Trustee, by or pursuant to a Board Resolution in
accordance with Section 301 or by one or more indentures supplemental hereto, in
each case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.
The definitive Securities may be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein and issued
pursuant to the within-mentioned Indenture.
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__________________________, as
Trustee
By ___________________________
Authorized Signature
SECTION 203. Form of Legend for Global Securities.
Any Global Security authenticated and delivered hereunder shall, in
addition to the provisions established by or pursuant to a Board Resolution
or in one or more indentures supplemental hereto in accordance with Section
201, bear a legend in substantially the following form or such similar form
as may be required by the Depositary:
"Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New
York, New York) to the issuer or to its agent for registration of
transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company 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."
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established, without the approval of any Holders or the Trustee, by or pursuant
to authority granted by one or more Board Resolutions, and, subject to Section
303, there shall be set forth in an Officers' Certificate, or established in one
or more indentures supplemental hereto, prior to the initial issuance of
Securities of any series, all or any of the following, as applicable:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
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(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906, 1107 and except for any Securities which,
pursuant to Section 303, are deemed never to have been authenticated and
delivered hereunder) and the absence of such limitation shall mean that the
Company may issue from time to time additional securities of such series
without limitation as to aggregate principal amount;
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates, or the method by which such date or dates are
determined or extended, on which the principal or installments of principal
and premium, if any, of the Securities of the series is or are payable;
(5) the rate or rates (which may be fixed or variable) at which the
Securities of the series shall bear interest, if any, or the method by
which such rate or rates shall be determined, the date or dates from which
such interest shall accrue, the Interest Payment Dates on which such
interest shall be payable, the Regular Record Date for the interest payable
on any Interest Payment Date and the circumstances, if any in which the
Company may defer interest payments and the basis upon which interest shall
be calculated if other than that of a 360-day year of twelve 30-day months;
(6) the place or places, if any, where the principal of (and premium,
if any) and interest on Securities of the series shall be payable, any
Securities of the series may be surrendered for registration of transfer or
exchange and notices and demands to or upon the Company with respect to the
Securities of the series and this Indenture may be served, other than or in
addition to the Corporate Trust Office of the Trustee;
(7) if applicable, the period or periods within which, the price or
prices at which and the terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
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(9) whether the Securities of the series will be convertible into
shares of Common Stock and/or exchangeable for other securities, and if so,
the terms and conditions upon which such Securities will be so convertible
or exchangeable, and any deletions from or modifications or additions to
this Indenture to permit or to facilitate the issuance of such convertible
or exchangeable Securities or the administration thereof;
(10) the identity of each Security Registrar and Paying Agent, if
other than or in addition to the Trustee;
(11) if the amount of principal of, or any premium or interest on, any
Securities of the series may be determined by reference to an index or
pursuant to a formula, the manner in which such amounts shall be
determined;
(12) the applicability of, and any addition to or change in, the
covenants and definitions currently set forth in this Indenture;
(13) if other than denominations of $1,000 or any amount in excess
thereof which is an integral multiple of $1,000, the denominations in which
Securities of the series shall be issuable;
(14) if other than the currency of the United States of America, the
currency, currencies, currency units or composite currencies in which
payment of the principal of and any premium and interest on any Securities
of the series shall be payable and the manner of determining the U.S.
dollar equivalent of the principal amount thereof for purposes of the
definition of "Outstanding" in Section 101, and, if the principal of or any
premium or interest on any Securities of the series is to be payable, at
the election of the Company or a Holder thereof, in one or more currencies
or currency units other than that or those in which the Securities are
stated to be payable, the currency, currencies or currency units in which
payment of the principal of and any premium and interest on Securities of
such series as to which such election is made shall be payable, and the
periods within which and the terms and conditions upon which such election
is to be made;
(15) any other event or events of default applicable with respect to
Securities of the series in addition to or in lieu of those provided in
Section 501 and any change in the right of the Trustee or the Holders to
declare the principal of or any premium or interest on such Securities due
and payable;
(16) if less than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
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(17) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Global Securities and, if so, (a) the
Depositary with respect to such Global Security or Securities and (b) the
circumstances under which any such Global Security may be exchanged for
Securities registered in the name of, and any transfer of such Global
Security may be registered to, a Person other than such Depositary or its
nominee, if other than as set forth in Section 305;
(18) if applicable, that the Securities of the series, in whole or any
specified part, shall not be defeasible pursuant to Section 403 or Section
1005 or both such Sections and, if other than by a Company Order, the
manner in which any election by the Company to defend such Securities shall
be evidenced; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series (other than Securities offered in a
Periodic Offering) shall be substantially identical except as to denomination
and except as may otherwise be provided by or pursuant to the Board Resolution
referred to above and, subject to Section 303, set forth, or determined in the
manner provided, in the Officers' Certificate referred to above or in any such
indenture supplemental hereto. All Securities of any one series need not be
issued at the same time. Unless otherwise provided, Securities of a single
series may have different terms, and a series may be reopened, without the
consent of the Holders of Securities of such series, for issuance of additional
Securities of such series.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
With respect to Securities of a series offered in a Periodic Offering, such
Board Resolution and Officers' Certificate or supplemental indenture may provide
general terms or parameters for Securities of such series and provide either
that the specific terms of particular Securities of such series shall be
specified in a Company Order or that such terms shall be determined by the
Company or its agents in accordance with other procedures specified in a Company
Order as contemplated by the third paragraph of Section 303.
SECTION 302. Denominations.
Unless otherwise provided in the applicable Officers' Certificate or
supplemental indenture, the Securities of each series shall be issued in
registered form without coupons in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such provisions with respect
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to the Securities of any series, the Securities of such series shall be issuable
in denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its President, its Chief Executive Officer, its Chief Operating
Officer, its Chief Financial Officer or one of its Vice Presidents, under its
corporate seal affixed thereto or reproduced thereon attested by its Secretary
or one of its Assistant Secretaries. The signature of any of these officers on
the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, or, in the case of Securities
offered in a Periodic Offering, from time to time in accordance with such other
procedures (including, without limitation, the receipt by the Trustee of
electronic instructions from the Company or its duly authorized agents, promptly
confirmed in writing by the Company) acceptable to the Trustee as may be
specified from time to time by a Company Order for establishing the specific
terms of particular Securities being so offered, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or forms or terms of the Securities of the series have been established by
or pursuant to one or more Board Resolutions as permitted by Sections 201 and
301, in authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon
(a) an Opinion of Counsel stating:
(1) that the form or forms of such Securities have been established
in conformity with the provisions of this Indenture;
(2) that the terms of such Securities have been established in
conformity with the provisions of this Indenture;
(3) that authentication and delivery of such Securities and the
execution and delivery of the supplemental indenture, if any, by the
Trustee will not violate the terms of the Indenture;
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(4) that the Company has the corporate power to issue, and has duly
authorized, such Securities;
(5) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable against the Company
in accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer and other
laws of general applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles, provided that such
Opinion of Counsel need not express an opinion as to whether a court in the
United States would render a money judgment in a currency other than that
of the United States; and
(6) that the issuance of such Securities will not contravene the
certificate of incorporation or bylaws of the Company or result in any
violation of any of the terms or provisions of any law or regulation or of
any indenture, mortgage or other agreement known to such Counsel by which
the Company is bound;
(b) an executed supplemental indenture, if any;
(c) a copy of a Board Resolution; and
(d) an Officers' Certificate;
provided, however, that, with respect to Securities of a series offered in a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel in connection only with the first authentication of each form of
Securities of such series and that the opinions described in clauses (a)(2) and
(a)(5) above may state, respectively, that
(2) if the terms of such Securities are to be established pursuant to
a Company Order or pursuant to such procedures as may be specified from
time to time by a Company Order, all as contemplated by a Board Resolution
or action taken pursuant thereto, such terms will have been duly authorized
by the Company and established in conformity with the provisions of this
Indenture; and
(5) that such Securities, when executed by the Company, completed,
authenticated and delivered by the Trustee in accordance with this
Indenture, and issued and delivered by the Company and paid for, all in
accordance with any agreement of the Company relating to the offering,
issuance and sale of such Securities, will be duly issued under this
Indenture and will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws
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relating to or affecting generally the enforcement of creditors' rights and
to general principles of equity.
With respect to Securities of a series offered in a Periodic Offering, the
Trustee may rely, as to the authorization by the Company of any of such
Securities, the form or forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel, Company
Order and other documents delivered pursuant to Sections 201 and 301 and this
Section, as applicable, in connection with the first authentication of a form of
Securities of such series and it shall not be necessary for the Company to
deliver such Opinion of Counsel and other documents (except as may be required
by the specified other procedures, if any, referred to above) at or prior to the
time of authentication of each Security of such series unless and until the
Trustee receives notice that such Opinion of Counsel or other documents have
been superseded or revoked, and may assume compliance with any conditions
specified in such Opinion of Counsel (other than any conditions to be performed
by the Trustee). If such form or forms or terms have been so established, the
Trustee shall not be required to authenticate such Securities if the issue of
such Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any Series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in the form of Global Securities.
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If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable, subject to Section 305, for
definitive Securities of like tenor of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of the same series and
of like tenor and of any authorized denominations. Until so exchanged the
temporary Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" of each series of Securities for the
purpose of registering Securities and transfers of Securities as herein provided
at the Corporate Trust Office.
Upon surrender for registration of transfer of any Security of any series
at the office or agency of the Company in any Place of Payment for such series,
the Company shall execute and the Trustee shall authenticate and deliver (in the
name of the designated transferee or transferees) one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor and bearing a number not contemporaneously
outstanding.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of a
like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at the office or agency of the Company in any Place of Payment for
such series. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt and entitled to the same benefits under this Indenture as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
such Holder's attorney duly authorized in writing.
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No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company may but shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing, (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part or (iii) to register the transfer of or exchange any certificated
Securities during a period beginning five days before the date of Maturity with
respect to such Security and ending on such date of Maturity.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, no Global Security shall be exchangeable pursuant
to this Section 305 for Securities registered in the name of, and no transfer of
a Global Security of any series may be registered to, any Person other than the
Depositary for such Security or its nominee, unless (i) such Depositary notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or the Company determines that the Depositary is unable to
continue as Depositary and the Company thereafter fails to appoint a successor
Depositary, (ii) the Company provides for such exchange or registration of
transfer pursuant to Section 301 of this Indenture, (iii) the Company executes
and delivers to the Trustee a Company Order that such Global Security shall be
so exchangeable and the transfer thereof so registrable, or (iv) there shall
have occurred and be continuing an Event of Default with respect to the
Securities of such series which entitles the Holders of such Securities to
accelerate the maturity thereof Upon the occurrence in respect of any Global
Security of any series of any one or more of the conditions specified in clauses
(i), (ii), (iii) or (iv) of the preceding sentence or such other conditions as
may be specified as contemplated by Section 301 for such series, such Global
Security may be exchanged for Securities not bearing the legend specified in
Section 205 and registered in the names of such Persons as may be specified by
the Depositary (including Persons other than the Depositary or its nominees).
Notwithstanding any other provision of this Indenture, a Global Security
may not be transferred except as a whole by the Depositary for such Global
Security to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security, including a Global Security, is surrendered to
the Trustee or the Company, together with such security, bond or indemnity as
may be required by the Trustee or the Company to save each of them and any agent
of either of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security, including a new
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Global Security if the mutilated Security was a Global Security, of the same
series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security, including
a Global Security if the destroyed, lost or stolen Security was a Global
Security, and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security, including a Global Security if the destroyed,
lost or stolen Security was a Global Security, of the same series and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee), if any, connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder. A new
Security shall have such legends as appeared on the old Security unless the
Company determines otherwise.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered in the Security Register at the close of business on
the Regular Record Date for such Interest Payment Date.
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Any interest on any Security of any series which is payable but is not
punctually paid or duly provided for on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Securities of
such series at such Holder's address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date. Notice
of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be paid
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of, or in exchange
for, or in lieu of, any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
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Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered in the Security Register as the
owner of such Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Sections 305 and 307) interest on such Security
and for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary (or its nominees) shall have any rights under this
Indenture with respect to such Global security or any Security represented
thereby, and such Depositary may be treated by the Company, the Trustee, and any
agent of the Company or the Trustee as the owner of such Global Security or any
Security represented thereby for all purposes whatsoever. Notwithstanding the
foregoing, with respect to any Global Security, nothing herein shall prevent the
Company, the Trustee, or any agent of the Company or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by a
Depositary as Holder of such Global Security, or impair, as between a Depositary
and the owners of beneficial interests in such Global Security, the operation of
customary practices governing the exercise of the rights of the Depositary (or
its nominees) as Holder of such Global Security.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. The Trustee is
hereby directed by the Company to destroy the canceled Securities held by the
Trustee, and the Trustee shall provide the Company with a certificate of a
Responsible Officer certifying as to the destruction of such Securities.
SECTION 310. Computation of Interest.
Except as otherwise specified pursuant to Section 301 for Securities of any
series, interest on the Securities of each series shall be computed on the basis
of a 360-day year of twelve 30-day months and no interest will accrue with
respect to the 31st day of any month.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
with respect to any series of Securities specified in a Company Request (except
as to any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(1) either
(A) all Securities of such series therefore authenticated and
delivered (other than (i) Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
306 and (ii) Securities for whose payment money has therefore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all Securities of such series not therefore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount, in the currency in which such
Securities are payable, sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the respective Stated Maturity or
Redemption Date, as the case may be;
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(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company, and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture with respect to the Securities of such series have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to a series of Securities, the obligations of the Company and the
Trustee to the Holders of Securities of other series not so satisfied and
discharged, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614, and,
if money shall have been deposited with the Trustee pursuant to Subclause (B) of
clause (1) of this Section, the obligations of the Trustee under Section 402 and
the last paragraph of Section 1003, shall survive.
SECTION 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities of each
series and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee but such money need not be segregated from other funds except to the
extent required by law.
SECTION 403. Defeasance and Discharge of Indenture.
If principal of and any premium and interest on Securities of any series
are denominated and payable in U.S. Dollars, the Company shall be deemed to have
paid and discharged the entire Indebtedness on all the Outstanding Securities of
such series on the 91st day after the date of the deposit referred to in
subparagraph (d) hereof, and the provisions of this Indenture, as it relates to
such Outstanding Securities, shall no longer be in effect (and the Trustee, at
the request and expense of the Company, shall execute proper instruments
acknowledging the same), except as to:
(a) the rights of Holders of Securities of such series to receive,
from the trust funds described in subparagraph (d) hereof, (i) payment of
the principal of (and premium, if any) or interest on the Outstanding
Securities of such series on the Stated Maturity of such principal or
installment of principal or interest and (ii) the benefit of any mandatory
sinking fund payments applicable to the Securities of such series on the
day on which such payments are due and payable in accordance with the terms
of this Indenture and such Securities;
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(b) the Company's obligations with respect to such Securities under
Sections 305, 306, 1002 and 1003; and
(c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder;
provided that, the following conditions shall have been satisfied:
(d) The Company has deposited or caused to be irrevocably deposited
with the Trustee (or another trustee satisfying the requirements of Section
609) as trust funds in the trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of such
series, (i) U.S. Dollars in an amount, or (ii) U.S. Government Obligations
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide not later than one day before the
due date of any payment referred to in clause (A) or (B) of this
subparagraph (d) U.S. Dollars in an amount or (iii) a combination thereof,
sufficient, in the opinion of a nationally-recognized firm of independent
certified public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge (A) the principal of (and
premium, if any) and each installment of principal of (and premium, if any)
and interest on the Outstanding Securities of such series on the Stated
Maturity of such principal or installment of principal and interest and (B)
any mandatory sinking fund or analogous payments applicable to the
Securities of such series on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of such
Securities;
(e) such deposit shall not cause the Trustee with respect to the
Securities of such series to have a conflicting interest as defined in
Section 608 and for purposes of the Trust Indenture Act with respect to
such Securities;
(f) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(g) such provision would not cause any Outstanding Securities of such
series then listed on the New York Stock Exchange or other securities
exchange to be delisted as a result thereof;
(h) no Event of Default or event which with notice or lapse of time
would become an Event of Default with respect to the Securities of such
series shall have occurred and be continuing on the date of such deposit or
during the period ending on the 91st day after such date;
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(i) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel to the effect that there has been a change in
applicable federal law such that, or the Company has received from, or
there has been published by, the Internal Revenue Service a ruling to the
effect that, Holders of the Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposits, defeasance and discharge and will be subject to federal income
tax on the same amount and in the same manner and at the same times, as
would have been the case if such deposit, defeasance and discharge had not
occurred; and
(j) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
relating to the defeasance contemplated by this Section have been complied
with.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, and unless otherwise provided with respect to Securities of any series
pursuant to Section 301, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security of such
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of such series when due and payable; or
(3) default in the deposit of any sinking fund payment in respect of
any Security of such series, when and as due by the terms of a Security of
such series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture or the Securities of such series
(other than a covenant or warranty a default in the performance or breach
of which is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of a
series of one or more Securities other than such series), and continuance
of such default or breach for a period of 60 days after written notice
thereof has been received by the Company from the Trustee or by the Company
and the Trustee from the Holders of at least 25% in aggregate principal
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amount of the Outstanding Securities of such series, specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) an event of default, as defined in any indenture or instrument
under which the Company or any Subsidiary shall have outstanding at least
$5,000,000 aggregate principal amount of Indebtedness (other than as part
of a Securitization Transaction), shall happen and be continuing and such
Indebtedness shall, as a result thereof, have been accelerated (or
comparable event shall have occurred) so that the same shall have become
due and payable prior to the date on which the same would otherwise have
become due and payable and such acceleration has been in effect without
rescission or annulment for a period of 60 days; provided, however, that if
such event of default under such indenture or instrument shall be remedied
or cured by the Company or waived by the holders of such Indebtedness, or
if such acceleration under such indenture or instrument shall have been
rescinded or annulled by the holders of such Indebtedness, then, unless the
Securities of such series shall have been accelerated as provided in this
Indenture, the Event of Default hereunder by reason thereof shall be deemed
likewise to have been thereupon remedied, cured or waived without further
action upon the part of either the Trustee or any Holders of the Securities
of any series; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of
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its inability to pay its debts generally as they become due, or the taking
of corporate action by the Company in furtherance of any such action; or
(8) a final judgment, judicial decree or order for the payment of
money in excess of $5,000,000 shall be rendered against the Company or any
Subsidiary, and such judgment, decree or order shall have remained unpaid,
unvacated, unbonded or unstayed for a period of 60 days; or
(9) any other Event of Default provided with respect to Securities of
such series pursuant to Section 301.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Outstanding Securities of any series
occurs and is continuing, then and in every such case the Trustee or the Holders
of not less than 25% in aggregate principal amount of the Outstanding Securities
of such series may declare the principal amount (or, if any of the Securities of
such series are Original Issue Discount Securities, such lesser portion of the
principal amount of such Securities as may be specified in the terms thereof) of
all of the Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified portion thereof)
shall become immediately due and payable; provided that in the case of an Event
of Default described in Section 501(6) or (7) hereof, the principal amount of
all Securities (or specified portion thereof) shall become due and payable
immediately, without any notice to the Company or the Trustee.
Upon payment of such principal amount (and premium, if any), such interest
and interest on overdue principal and overdue interest to the extent prescribed
therefor in the Securities of such series (to the extent payment of such
interest is legally enforceable), all of the Company's obligations in respect of
the payment of principal and interest on the Securities of such series shall
terminate.
At any time after such a declaration of acceleration with respect to
Outstanding Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in aggregate
principal amount of the Outstanding Securities of such series, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of such series,
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(B) the principal of (and premium, if any, on) any Securities of
such series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 607; and
(2) all Events of Default with respect to Securities of such series,
other than the non-payment of the principal of Securities of such series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security of
any series when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security of any series at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Security, the whole amount then due and payable on such Security
for principal (and premium, if any) and interest and, to the extent that payment
of such interest shall be legally enforceable, interest on any overdue principal
(and premium, if any) and on any overdue interest at the rate or rates
prescribed therefor in such Security, and, in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant
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or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities of any series or the property of the Company or of such other obligor
or their creditors, the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) or such portion of the principal amount of any series of
Original Issue Discount Securities as may be specified in the terms of such
series and interest owing and unpaid in respect of the Securities of such
series and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 607) and of the Holders allowed in such judicial proceeding,
and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
of any series or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any
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proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and for any other amounts due the Trustee under
Section 607, be for the ratable benefit of the Holders of the Securities in
respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee with respect to any series of Securities
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal (or premium, if any) or interest, upon presentation of the
Securities of such series and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities of such
series in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal (and
premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of such
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
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(4) the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest on such Security on the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date, or, in the case
of a repurchase right at the option of the Holder, if any, on the repurchase
date specified pursuant to Section 301) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of Securities of
any series to exercise any right or remedy accruing upon any Event of Default
with respect to such series shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series shall 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, with
respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of any series may, on behalf of the Holders of all
the Securities of such series, waive any past default hereunder with respect
to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series when due (other than amounts due
and payable solely upon acceleration pursuant to Section 502), unless
theretofore paid in full and cured in accordance with the terms of this
Indenture, or
(2) in respect of a covenant or provision hereof which under Section
902 cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
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SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
such Holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided, however, that the provisions of this Section
shall not apply to any suit instituted by the Company, to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in principal amount of the Outstanding
Securities of the affected series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of (or premium, if any)
or interest on any Security on or after the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on or after the
Redemption Date or, in the case of a repurchase right at the option of the
Holder, if any, on the repurchase date specified pursuant to Section 301).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) With respect to Securities of any series, except during the
continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon
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certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates
or opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture.
(b) With respect to Securities of any series, in case an Event of
Default has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith with respect to any series of
Securities in accordance with the direction of the Holders of a majority
in principal amount of the Outstanding Securities of such series, relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture with respect to the Notes, provided such
direction shall not be in conflict with any rule of law or with this
Indenture; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
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SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail
to all Holders of Securities of such series, as their names and addresses
appear in the Security Register, notice of such default hereunder known to
the Trustee, unless such default shall have been cured or waived; provided
however, that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Security of such series
or in the payment of any sinking fund installment with respect to Securities
of such series, the Trustee shall be protected in withholding such notice if
and so long as 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 such notice is in the interest of the
Holders of Securities of such series; and provided, further, that in the case
of any default of the character specified in Section 501(4) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 60 days after the occurrence thereof. For the purpose of this Section,
therein "default" means any event which is, or after notice or lapse of time
or both would become, an Event of Default with respect to Securities of such
series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of Indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order or as
otherwise expressly provided herein and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a maker be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
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(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities of any series pursuant to
this Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of Indebtedness or other paper or
document, but the Trustee, in its discretion, may make such furler inquiry
or investigation into such fact or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company
pertaining to the Securities, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities of each series,
except the Trustee's certificates of authentication, shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities of any series, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture and any supplemental
indenture, to authenticate such Securities and to perform its obligations
under this Indenture and such Securities. The Trustee or any Authenticating
Agent shall not be accountable for the use or application by the Company of
Securities of any series or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to TIA
Sections 310(b) and 311, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
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SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee and its agents for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
(b) As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of and interest on the Securities of
any series. "Trustee" for the purposes of this Section includes any predecessor
Trustee, but negligence or bad faith of any Trustee shall not be attributable to
any other Trustee.
(c) When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(6) or (7), the expenses and
the compensation for such services are intended to constitute expenses of
administration under any bankruptcy law.
SECTION 608. Disqualification; Conflicting Interests.
The provisions of TIA Section 310(b) shall apply to the Trustee.
SECTION 609. Corporate Trustee Required; Eligibility.
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There shall at all times be a Trustee hereunder which shall be eligible
to act under TIA Section 310(a)(1) and whose parent shall have a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by Federal, State or District of Columbia authority. If such
Corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
Corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article. Neither the Company, nor any Person
directly or indirectly controlling, controlled by or under common control
with the Company, shall act as Trustee hereunder.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company
specifying its intention to resign, the applicable series affected by such
resignation, the reason therefor and the date upon which such resignation
shall become effective. Notwithstanding the foregoing, unless the reason for
such resignations is a conflict pursuant to Section 608, the Trustee must
resign with respect to all Securities if the Trustee resigns with respect to
any series of Securities. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been delivered to the Trustee
within 60 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) The Trustee may be removed with respect to any or all series of
Securities at any time upon 30 days notice by filing with it an instrument in
writing signed on behalf of the Company by a duly authorized officer of the
Company specifying such removal and the date on which it is to become
effective.
(e) If at any time:
(1) the Trustee shall fail to comply with TIA Section 310(b) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
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(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to any one or more series of Securities or all
Securities, or (ii) subject to Section 514, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to such series of
Securities and the appointment of a successor Trustee or Trustees.
(f) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee with respect to the Securities of any
series shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(g) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and
addresses appear in the Security Register. Each notice shall include the
name of the successor Trustee with respect to the Securities of such series
and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
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(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee; but,
on the request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor
Trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees co-trustees
of the same trust and that each such Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery
of such supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company
or any successor Trustee, such retiring Trustee shall duly assign, transfer
and deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates. Whenever
there is a successor Trustee with respect to one or more (but less than all)
series of securities issued pursuant to this Indenture, the terms "Indenture"
and "Securities" shall have the meanings specified in the provisos to the
respective definitions of those terms in Section 101 which contemplate such
situation.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) and (b) of this Section, as the case may be.
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(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any Corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any Corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any Corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities; in case any of the Securities shall not have
been authenticated by the Trustee then in office, any successor by merger,
conversion or consolidation to such Trustee may authenticate such Securities
either in the name of such predecessor hereunder or in the name of the
successor Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have; provided, however,
that the right to adopt the certificate of authentication of any predecessor
Trustee or to authenticate Securities in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a). A Trustee which has
resigned or been removed is subject to TIA Section 311(a) to the extent
indicated therein.
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee,
with the concurrence of the Company, may appoint an Authenticating Agent or
Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series, and Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent shall
be acceptable to the Company and shall at all times be a Corporation
organized and doing business under the laws of the United States of America,
any State thereof or the District of Columbia authorized under such laws to
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act as Authenticating Agent, having a combined capital and surplus of not
less than $50,000,000 and subject to supervision or examination by Federal,
State or District of Columbia authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. If at any
time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any Corporation succeeding to the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such Corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at anytime
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first class mail, postage prepaid, to
all Holders of Securities of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named
as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to reimbursement for such payments subject to Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication an alternate
certificate of authentication in the following form:
This is one of the Securities of the series designated herein and issued
pursuant to the within-mentioned Indenture.
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___________________, as Trustee
By ____________________________
Authorized Signature
_____________________________,
as Authenticating Agent
By ____________________________
Authorized Signature
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of such series of Securities
received by the Trustee in its capacity as Security Registrar.
(b) The rights of Holders of any series of Securities to communicate
with other Holders of such series with respect to their rights under this
Indenture or under such Securities, and the corresponding rights and
privileges of the Trustee, shall be as provided by TIA Section 312(b).
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of
the Holders in accordance with Section 702(b), regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made
under Section 702(b).
SECTION 702. Reports by Trustee.
Within 60 days after May 15 of each year commencing with the later of
May 15, 2000 or the first May 15 after the first issuance of Securities
pursuant to this Indenture, the Trustee shall transmit by mail to all Holders
of Securities of all series as provided in TIA Section 313(c) a brief report
dated as of such May 15 if required by TIA Section 313(a). A copy of each
such report shall, at the time of
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such transmission to Holders, be filed by the Trustee with each stock
exchange upon which any Securities are listed, with the Commission and with
the Company. The Company will notify the Trustee when any series of
Securities is listed on any stock exchange.
SECTION 703. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to
file information, documents or reports pursuant to either of said
Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents
and reports which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance
by the Company with the conditions and covenants of this Indenture as may
be required from time to time by such rules and regulations;
(3) transmit by mail to all Holders of all series of Securities, as
their names and addresses appear in the Security Register, reports as may
be required by rules and regulations prescribed from time to time by the
Commission; and
(4) furnish to the Trustee, within 120 days after the end of each
fiscal year of the Company ending after the date hereof, a brief
certificate of the Company's principal executive officer, principal
financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants
under this Indenture. For purposes of this paragraph, such compliance
shall be determined without regard to any period of grace or requirement
of notice provided under this Indenture.
The Trustee has no duty to review the financial or other reports
described in paragraphs (1) and (2) of this Section for purposes of
determining compliance with this or any other provision of this Indenture.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc. Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person unless:
(1) the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company substantially
as an entirety shall be a Corporation, partnership or trust, shall be
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of (and premium, if any) and interest on all the
Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger by the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which
the Company is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
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SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by or
pursuant to a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of one
or more specified series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default (and if such Events of
Default are to be for the benefit of less than all series of Securities,
stating that such Events of Default are being included solely for the
benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities of any series in certificated or uncertificated
form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (i) shall neither (A) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (B) modify the
rights of the Holder of any such Security with respect to such provision or
(ii) shall become effective only when there is no such Security
Outstanding; or
(6) to secure the Securities of any series; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the
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administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 61 l(b); or
(9) to cure any ambiguity or defect in or to correct or supplement
any provision herein which may be inconsistent with any other provision in
this Indenture or any Security of any series, or to make any other
provisions with respect to matters or questions arising under this
Indenture, provided such action shall not adversely affect the interests of
the Holders of Securities of any series in any material respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities of all series at the time Outstanding
affected by such supplemental indenture (voting as one class), by Act of said
Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any such affected Security, or
reduce the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the coin
or currency in which, any such Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption or repayment, on or after the Redemption
Date or any repayment date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
modifications or amendments to the Indenture with respect to such series
or to the terms and conditions of such series or to approve a supplemental
indenture with respect to such series, or the consent of whose Holders is
required for any waiver with respect to such series of compliance with
certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture, or
(3) modify any of the provisions of this Section 902, Section 513 or
Section 1005, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding
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Security affected thereby; provided however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section 902
and Section 1005, or the deletion of this proviso, in accordance with the
requirements of Sections 61l(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities of the series affected thereby theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby to
the extent provided therein.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in a form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
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determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered
by the Trustee in exchange for Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice thereof to the Holders of each Outstanding Security so
affected, pursuant to Section 106, setting forth in general terms the
substance of such supplemental indenture.
SECTION 908. Supplemental Indentures With Consent of Holders of Senior Debt.
Without the consent of the holders of all Senior Debt affected thereby,
the Company and the Trustee shall not have the power to enter into an
indenture or indentures supplemental hereto for the purpose of amending or
modifying the definition of "Senior Debt" in this Indenture in a manner
adverse to the holders of such affected Senior Debt.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities of such series in accordance
with the terms of such Securities and this Indenture. In the absence of
contrary provisions with respect to the Securities of any series, interest on
the Securities of any series may, at the option of the Company, be paid by
check mailed to the address of the Person entitled thereto as it appears on
the Security Register.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of such series may be
presented or surrendered for payment, where Securities of such series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of such series
and this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location and any change in the location of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee,
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and the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Securities
of such series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum in the currency in which such series of Securities is
payable sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of such series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of such series in trust
for the benefit of the Holders of such Securities until such sums shall be
paid to such Holders or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of such series) in the making of any
payment of principal (and premium, if any) or interest on the Securities
of such series; and
(3) during the continuance of any such default by the Company (or any
other obligor upon the Securities of such series) in the making of any
payment of principal (and
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premium, if any) or interest on the Securities of such series, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent, and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in the Borough of Manhattan, The City of New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company
on Company Request.
SECTION 1004. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any-such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. Defeasance of Certain Obligations.
The following provisions shall apply to the Securities of each series
unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section
301. The Company may omit to comply with any term, provision or condition set
forth in Article Ten and Section 301(12) and any such omission with respect
Article Ten and to
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Section 301(12) shall not be an Event of Default, in each case with respect
to the Securities of that series, provided that the following conditions have
been satisfied:
(1) with reference to this Section 1005, the Company has deposited or
caused to be irrevocably deposited with the Trustee (or another trustee
satisfying the requirements of Section 609) as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit
of the Holders of the Securities of that series, (i) money in an amount, or
(ii) U.S. Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will provide
not later than one day before the due date of any payment referred to in
clause (A) or (B) of this subparagraph (1) money in an amount, or (iii) a
combination thereof, sufficient, in the opinion of a nationally-recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge (A) the principal of
(and premium, if any) and each installment of principal (and premium, if
any) and interest on the Outstanding Securities on the Stated Maturity of
such principal or installments of principal and interest and (B) any
mandatory sinking fund payments or analogous payments applicable to the
Securities of such series on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of such
Securities;
(2) such deposit shall not cause the Trustee with respect to the
Securities of that series to have a conflicting interest as defined in
Section 608 and for purposes of the Trust Indenture Act with respect to the
Securities of any series;
(3) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(4) no Event of Default or event which with notice or lapse of time
would become an Event of Default with respect to the Securities of that
series shall have occurred and be continuing on the date of such deposit;
(5) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that Holders of the Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of such
deposit and defeasance of certain obligations and will be subject to
Federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred; and
(6) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the defeasance contemplated in this Section
have been complied with.
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SECTION 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Article Ten and Section 301(12),
inclusive, with respect to the Securities of any series if before the time
for such compliance the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of such series shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee in respect of
any such term, provision or condition shall remain in full force and effect.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive any such term,
provision or condition. If a record date is fixed for such purpose, the
Holders on such record date or their duly designated proxies, and only such
Persons, shall be entitled to waive any such term, provision or condition
hereunder, whether or not such Holders remain Holders after such record date;
provided that unless the Holders of not less than a majority in principal
amount of the Outstanding Securities of such series shall have waived such
term, provision or condition prior to the date which is 90 days after such
record date, any such waiver previously given shall automatically and without
further action by any Holder be canceled and of no further effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem Securities of any series shall be
evidenced by an Officers' Certificate. The Company shall, at least 45 days
prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of
(1) such Redemption Date,
(2) the Redemption Price,
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(3) if the Securities of such series have different terms and less
than all of the Securities of such series are to be redeemed, the terms of
the Securities to be redeemed,
(4) whether the redemption is pursuant to a mandatory or optional
sinking fund, or both, if such is the case, and
(5) if less than all the Securities of such series with identical
terms are to be redeemed, the principal amount of such Securities to be
redeemed.
In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of like tenor of any series are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of like tenor of such series not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of like tenor of that series
or any integral multiple thereof of the principal amount of Securities of
such series of a denomination larger than the minimum authorized denomination
for Securities of that series).
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at each such
Holder's address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
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(2) the Redemption Price,
(3) if less than all the Outstanding Securities of like tenor of any
series are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Trustee in the name and at the expense of the
Company, unless the Company notifies the Trustee of its intention to give
such notice directly.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money in immediately available funds sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be
redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of
any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable
to the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Regular Record
Dates according to their terms and the provisions of Section 307.
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If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed in part shall be surrendered at a
Place of Payment for such series (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities
of the same series and of like tenor, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered. To the extent a series of Securities represented by a Global
Security is to be redeemed only in part, a notation of such redemption shall
be made by the Trustee in the schedule of exchanges on the Global Security.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for
by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Securities
of any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of like tenor of a
series (other than any previously called for redemption) and (2) may apply as
a credit Securities of like tenor of a series which have been redeemed either
at the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments pursuant
to the terms of such Securities, in each case in satisfaction of all or any
part of any sinking fund payment with respect to the
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Securities of like tenor of such series required to be made pursuant to the
terms of such Securities as provided for by the terms of such series;
provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at
the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment
shall be reduced accordingly. Such Securities shall be first applied to the
sinking fund payment next due and any excess shall be applied to the
following sinking fund payments in the order they are due.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for
Securities of like tenor of a series, the Company will deliver to the Trustee
an Officers' Certificate specifying the amount of the next ensuing sinking
fund payment for such Securities pursuant to the terms of such Securities,
the portion thereof, if any, which is to be satisfied by payment of cash and
the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of like tenor of that series pursuant to Section 1202
and, at the time of delivery of such Officers' Certificate, will also deliver
to the Trustee any Securities to be so delivered. Not less than 30 days
before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided
in Section 1104. Such notice having been duly given. the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
SUBORDINATION
SECTION 1301. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of Securities of each
series, by such Holder's acceptance thereof, likewise covenants and agrees,
that the indebtedness evidenced by the Securities of each series and the
payment of the principal thereof, premium, if any, sinking fund requirements
therefor and interest thereon shall be subordinate and subject in right of
payment, to the extent and in the manner hereinafter set forth, to the prior
payment in full in cash or cash equivalents of all Senior Debt.
SECTION 1302. Distribution on Dissolution, Liquidation and Reorganization.
Upon any distribution to creditors of the Company in a liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary,
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its properties, or upon an assignment
for
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the benefit of creditors or any other marshaling of the assets and
liabilities of the Company (each such event, if any, herein sometimes
referred to as a "Proceeding"):
(a) all principal of, premium, if any, interest (including interest
after the commencement of any such Proceeding at the rate specified in the
applicable Senior Debt) and commitment fees (the "Obligations") due on, or
to become due on or in respect of, all Senior Debt shall first be paid in
full in cash or cash equivalents before any payment or distribution of any
kind or character, whether in cash, property or securities, by set off or
otherwise (including any payment or distribution which may be payable or
deliverable by reason of the payment of any Junior Subordinated Debt), on
account of the principal of (and premium, if any) or interest on any
Securities or on account of any purchase, redemption, retirement or other
acquisition of Securities by the Company, any Subsidiary of the Company,
the Trustee or any Paying Agent or on account of any other obligation of
the Company in respect of any Securities (all such payments, distributions,
purchases, redemptions, retirements and acquisitions, whether or not in
connection with a Proceeding, herein referred to, individually and
collectively, as a "Securities Payment"), or before the Holders of the
Securities shall be entitled to retain any assets so paid or distributed in
respect thereof; and
(b) until the Senior Debt is paid in full in cash or cash equivalents
(as provided in subsection (a) above), any Securities Payment to which the
Holders of the Securities or the Trustee for their benefit would be
entitled except for the provisions of this Section 1302, shall be paid or
delivered by the Company or any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or
distribution directly to the holders of Senior Debt or their representative
or representatives or the trustee or trustees under any indenture pursuant
to which any instruments evidencing any Senior Debt may have been issued,
as their respective interests may appear.
For purposes of this Article Thirteen only, the words "any payment or
distribution of any kind or character, whether in cash, property or
securities" shall not be deemed to include (i) a payment or distribution of
stock or securities of the Company provided for by a plan of reorganization
or readjustment authorized by an order or decree of a court of competent
jurisdiction in a reorganization proceeding under any applicable bankruptcy
law or of any other corporation provided for by such plan of reorganization
or readjustment which stock or securities are subordinated in right of
payment to all then outstanding Senior Debt to the same extent as, or to a
greater extent than, the Securities are so subordinated as provided in this
Article; or (ii) any deposit, or payment made therefrom, pursuant to Article
Four or Section 1005, with respect to any series of Securities; provided
that, in the case of any such payment from a defeasance trust, the assets
deposited in trust to fund such payment have been so deposited for any period
of at least 90 consecutive days without the occurrence of a blockage of
payment on such series of Securities pursuant to this Section 1302 or Section
1303 hereof. The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or dissolution of the Company
following the conveyance or transfer of all or substantially all
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of its properties and assets as an entirety to another Person upon the terms
and conditions set forth in Article Eight shall not be deemed a Proceeding
for the purposes of this Section if the Person formed by such consolidation
or into which the Company is merged or the Person which acquires by
conveyance or transfer such properties and assets as an entirety, as the case
may be, shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions set forth in Article Eight.
SECTION 1303. No Payment When Senior Debt in Default.
In the event that any Senior Payment Default shall have occurred, then
no Securities Payment shall be made unless and until such Senior Payment
Default shall have been cured or waived in writing or shall have ceased to
exist or all Obligations in respect of such Senior Debt shall have been paid
in full in cash or cash equivalents.
The provisions of this Section shall not apply to any Securities Payment
with respect to which Section 1302 hereof would be applicable.
SECTION 1304. Payment to Holders of Senior Debt.
Subject to the provisions of Section 1306, in the event that,
notwithstanding the provisions of Section 1302 or Section 1303, any
Securities Payment shall be received by the Trustee on behalf of the Holders
of the Securities (i) from the Company in violation of such provisions, or
(ii) from any other Person under such circumstances that such payment would,
if made directly by the Company, be in violation of such provisions, such
payment or distribution shall be held by the Trustee in trust for the benefit
of, and shall immediately be paid over by the Trustee, upon written request
by a Person entitled to give notice on behalf of such Senior Debt as
specified in Section 1310, to the holders of Senior Debt or their
representative or representatives, or to the trustee or trustees under any
indenture under which any instrument evidencing any of such Senior Debt may
have been issued, as their respective interests may appear, for application
to the payment of Senior Debt.
Upon any payment or distribution of assets or securities of the Company
referred to in Sections 1302 and 1303, the Trustee and the Holders of the
Securities shall be entitled to rely upon any order or decree of a court of
competent jurisdiction, or upon any certificate of any liquidating trustee or
agent or other similar Person making any payment or distribution to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining
the persons entitled to participate in such payment or distribution, the
holders of the Senior Debt, the amount thereof or payment thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto
or to this Article Thirteen. In the event that the Trustee determines, in
good faith, that further evidence is required with respect to the right of
any Person as a holder of Senior Debt to participate in any payment or
distribution referred to in Sections 1302 and 1303, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Debt held by such Person, as to the extent to
which such Person is entitled to participation in such payment or
distribution, and as to other facts
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pertinent to the rights of such Person under Sections 1302 and 1303, and if
such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 1305. Subrogation.
Subject to the payment in full in cash or cash equivalents of all Senior
Debt at the time outstanding and, in the case of Warehouse Facilities, all
outstanding fees and expenses required to be paid by the Company pursuant to
the respective terms thereof, the Holders of the Securities shall be
subrogated to the rights of each holder of Senior Debt (to the extent of the
payments or distributions made to such holder pursuant to the provisions of
Sections 1302, 1303 and 1304) to receive payments or distributions of cash,
assets or securities of the Company applicable to the Senior Debt until the
Securities shall be paid in full. No payments or distributions to holders of
Senior Debt of cash, assets or securities of the Company to which Holders of
Securities would be entitled except for the provisions of this Article
Thirteen, and no payment over pursuant to the provisions of this Article
Thirteen to holders of such Senior Debt by the Holders of Securities shall,
as among the Company, its creditors other than the holders of Senior Debt,
and the Holders of the Securities, be deemed to be a payment by the Company
on account of the Senior Debt, it being understood that the provisions of
this Article Thirteen are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Debt, on the other hand, and nothing contained in this
Article Thirteen or elsewhere in this Indenture, or in the Securities, is
intended to or shall impair, as between the Company, its creditors other than
the holders of Senior Debt, and the Holders of the Securities, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of, premium, if any, and interest on the
Securities, as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of
the Holders of the Securities and creditors of the Company other than the
holders of Senior Debt, nor shall anything herein or therein prevent the
Trustee or the Holder of any Securities from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article Thirteen of the holders of
Senior Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
SECTION 1306. Payment on Securities Permitted.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture, or in any of the Securities, shall prevent the Company from making
payment of the principal of, sinking fund, if any, premium, if any, or
interest on the Securities, at any time, except under the conditions
described in Section 1303 and except during the pendency of any Proceeding
within the meaning of Section 1302. Nothing contained in this Article
Thirteen or elsewhere in this Indenture, or in any of the Securities, shall
prevent the application by the Trustee of any moneys deposited with it
hereunder for the purpose, to the payment of or on account of the principal
of, sinking fund, if any, or premium, if any, or interest on
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the Securities, unless the Trustee shall have received written notice,
directed to it at its Corporate Trust Office as provided in Section 1310.
SECTION 1307. Authorization of Holders to Trustee to Effect Subordination.
Each Holder of Securities, by such Holder's acceptance thereof,
authorizes and directs the Trustee in such Holder's behalf to take such
action as may be necessary or appropriate to effectuate, as between the
Holders of the Securities and the holders of Senior Debt, the subordination
provided in this Article Thirteen and appoints the Trustee his
attorney-in-fact for any and all such purposes.
SECTION 1308. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
act or failure to act by any such holder, or by any noncompliance by the
Company with terms, provisions and covenants of this Indenture, regardless of
any knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of
Senior Debt, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt, or otherwise amend or supplement in any manner Senior
Debt or any instrument evidencing the same or any agreement under which
Senior Debt is outstanding; (ii) permit the Company to borrow, repay and then
reborrow any or all of the Senior Debt; (iii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Debt; (iv) release any Person liable in any manner for the collection
of Senior Debt; (v) exercise or refrain from exercising any rights against
the Company and any other Person; and (vi) apply any sums received by them to
Senior Debt.
SECTION 1309. Trustee as Holder of Senior Debt.
The Trustee shall be entitled to all the rights set forth in this
Article Thirteen in respect of any Senior Debt at any time held by it, to the
same extent as any other holder of Senior Debt, and nothing in Section 613 or
elsewhere in this Indenture shall deprive or be construed to deprive the
Trustee of its rights as such holder.
Nothing in this Article Thirteen shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 607 hereof.
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SECTION 1310. Notices to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by
the Trustee in respect of the Securities, but failure to give such notice
shall not affect the subordination of the Securities to the extent herein
provided if notice is otherwise given as hereinafter provided in this Section
1310. Notwithstanding the provisions of this Article or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until a Responsible
Officer of the Trustee shall have received written notice thereof from the
Company, any holder of Senior Debt or Qualified Senior Debt or any trustee,
fiduciary or agent therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Section 601 hereof, shall
be entitled in all respects to assume that no such facts exist. Any notice
required or permitted to be given to the Trustee by a holder of Senior Debt
or Qualified Senior Debt or a trustee, fiduciary or transfer agent therefor
shall be in writing and shall be sufficient for every purpose hereunder in
writing and either (i) sent via facsimile to the Trustee, the receipt of
which shall be confirmed via telephone, or (ii) mailed, first class postage
prepaid, or sent overnight carrier, to the Trustee addressed to it at the
address of its principal office specified in the first paragraph of this
instrument or at any other address furnished in writing to such holder of the
Senior Debt or Qualified Senior Debt by the Trustee. Notwithstanding anything
else contained herein, no notice, request or other communication to or with
the Trustee shall be deemed given unless received by a Responsible Officer at
the Trustee's principal corporate trust office.
SECTION 1311. No Fiduciary Duty by Trustee to Holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt and shall not be liable to any such holders if it shall in
good faith mistakenly pay over or distribute to Holders of Securities or the
Company or any other Person moneys or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article Thirteen or otherwise.
SECTION 1312. Paying Agent Treated as Trustee.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article Thirteen shall in such case (unless the
context shall otherwise require) be construed as extending to and including
such Paying Agent within its meaning as fully for all intents and purposes as
if such Paying Agent were named in this Article Thirteen in place of the
Trustee.
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<PAGE>
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT OPTION OF HOLDERS
SECTION 1401. Applicability of Article.
Securities of any series which are repurchasable before their Stated
Maturity at the option of the Holders shall be repurchasable in accordance
with their terms and (except as otherwise specified pursuant to Section 301
for Securities of any series) in accordance with this Article.
SECTION 1402. Notice of Repurchase Date.
Notice of any Repurchase Date with respect to Securities of any series
shall, unless otherwise specified by the terms of such Securities, be given
by the Company not less than 45 nor more than 60 days prior to such
Repurchase Date to each Holder of Securities of such series subject to
repurchase in accordance with Section 105.
The notice as to Repurchase Date shall state:
(1) the Repurchase Date;
(2) the Repurchase Price;
(3) the place or places where such Securities are to be surrendered
for payment of the Repurchase Price and the date by which such Securities
must be so surrendered in order to be repurchased;
(4) a description of the procedure which a Holder must follow to
exercise a repurchase right; and
(5) that exercise of the option to elect repurchase is irrevocable.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right.
SECTION 1403. Deposit of Repurchase Price.
On or prior to the Repurchase Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own
paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money sufficient to pay the Repurchase Price of and (unless the
Repurchase Date shall be an Interest Payment Date) accrued interest, if any,
on all of the Securities of such series which are to be repurchased on that
date.
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<PAGE>
SECTION 1404. Securities Payable on Repurchase Date.
The form of option to elect repurchase having been delivered as
specified in the form of Security for such series as provided in Article Two,
the Securities of such series so to be repurchased shall, on the Repurchase
Date, become due and payable at the Repurchase Price applicable thereto and
from and after such date (unless the Company shall default in the payment of
the Repurchase Price and accrued interest) such Securities shall cease to
bear interest. Upon surrender of any such Security for repurchase in
accordance with said notice, such Security shall be paid by the Company at
the Repurchase Price together with accrued interest to the Repurchase Date;
provided, however, that installments of interest whose Stated Maturity is on
or prior to such Repurchase Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular and Special Record Dates according
to their terms and the provisions of Section 307.
If any such Security shall not be paid upon surrender thereof for
repurchase, the principal (and premium, if any) shall, until paid, bear
interest from the Repurchase Date at the rate prescribed therefor in such
Security.
SECTION 1405. Securities Repurchased in Part.
Any Security which by its terms may be repurchased in part at the option
of the Holder and which is to be repurchased only in part shall be
surrendered at any office or agency of the Company designated for that
purpose pursuant to Section 1002 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities
of the same series and of like tenor of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unrepurchased portion of the principal of the Security so
surrendered. To the extent a series of Securities represented by a Global
Security is to be repurchased in part only, a notation of such redemption
shall be made by the Trustee in the schedule of exchanges on the Global
Security.
ARTICLE FIFTEEN
CORPORATE OBLIGATION ONLY
SECTION 1501. Indenture and Securities Solely Corporate Obligations.
No recourse under or upon any obligation, covenant or agreement contained
in this Indenture, any indenture supplement, or in any Security, because of any
Indebtedness evidenced thereby, shall be had against any incorporator, or
against any past, present or future stockholder, employee, officer or director,
as such, of the Company or of any successor corporation, either directly or
through the
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<PAGE>
Company or any successor corporation, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or penalty
or by any legal or equitable proceeding or otherwise, all such liability,
whether at common law, in equity, by any constitution, statute or otherwise,
of incorporators, stockholders, employees, officers or directors being
expressly waived and released by the acceptance of the Securities by the
Holders thereof and as part of the consideration of the issuance of the
Securities.
* * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
ARCADIA FINANCIAL LTD.
By _____________________________________
[name]
[title]
____________________________, as Trustee
By _____________________________________
[name]
[title]
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<PAGE>
STATE OF )
) SS.
COUNTY OF )
On the _____ day of ____________, _____, before me personally came
____________________________, to me known, who, being by me duly sworn, did
depose and say that he is ____________________________ of Arcadia Financial
Ltd., one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed
his name thereto by like authority.
[SEAL] _______________________________
Notary Public
STATE OF )
) SS.
COUNTY OF )
On the _____ day of ____________, _____, before me personally came
personally came _________________________, to me known, who, being by me duly
sworn, did depose and say that he is a ________________ of __________________,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
[SEAL] _______________________________
Notary Public
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<PAGE>
EXHIBIT 4.6
- ------------------------------------------------------------------------------
ARCADIA FINANCIAL LTD.
AND
____________, AS WARRANT AGENT
FORM OF COMMON STOCK
WARRANT AGREEMENT
DATED AS OF ____________________, ________
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. Appointment of Warrant Agent. . . . . . . . . . . . . . . . 1
SECTION 2. Form of Warrant . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 3. Countersignature and Registration . . . . . . . . . . . . . 2
SECTION 4. Transfers and Exchanges . . . . . . . . . . . . . . . . . . 2
SECTION 5. Exercise of Warrants. . . . . . . . . . . . . . . . . . . . 2
SECTION 6. Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . 3
SECTION 7. Mutilated or Missing Warrants . . . . . . . . . . . . . . . 3
SECTION 8. Reservation of Shares, etc. . . . . . . . . . . . . . . . . 4
SECTION 9. Warrant Price; Adjustments. . . . . . . . . . . . . . . . . 4
SECTION 10. Notice to Warrantholders. . . . . . . . . . . . . . . . . . 10
SECTION 11. Certain Covenants of the Company. . . . . . . . . . . . . . 10
SECTION 12. Disposition of Proceeds, etc. . . . . . . . . . . . . . . . 11
SECTION 13. Merger or Consolidation or Change of Name of
Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 14. Duties of Warrant Agent . . . . . . . . . . . . . . . . . . 11
SECTION 15. Change of Warrant Agent . . . . . . . . . . . . . . . . . . 13
SECTION 16. Identity of Transfer Agent. . . . . . . . . . . . . . . . . 13
SECTION 17. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 18. Supplements and Amendments. . . . . . . . . . . . . . . . . 14
SECTION 19. Successors. . . . . . . . . . . . . . . . . . . . . . . . . 14
i
<PAGE>
<S> <C>
SECTION 20. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 21. Benefits of This Agreement. . . . . . . . . . . . . . . . . 18
SECTION 22. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 18
[SECTION 23. Acceleration of Warrants by the Company . . . . . . . . . . 19]
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
EXHIBIT A: Form of Warrant . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>
ii
<PAGE>
EXHIBIT 4.6
ARCADIA FINANCIAL LTD.
Form of Common Stock Warrant Agreement
COMMON STOCK WARRANT AGREEMENT, dated as of ______________, ____,
between Arcadia Financial Ltd., a Minnesota corporation (hereinafter called
the "Company"), and _____________ having a corporate trust office in
_______________________, as warrant agent (hereinafter called the "Warrant
Agent").
WHEREAS, the Company proposes to issue [Class ] Purchase
Warrants (hereinafter called the "Warrants") entitling the holders thereof to
purchase an aggregate of _______________ shares of Common Stock of the
Company (par value $.01 per share) (hereinafter called the "Shares") at an
initial cash purchase price of $_______ per Share at any time
[after __________________ and] prior to 3:30 p.m., New York City time, on
__________________, ____ (hereinafter called the "Expiration Date") (unless
extended as provided in Section 9A hereof); and
[IF WARRANTS ARE ATTACHED TO OTHER SECURITIES, INSERT -
WHEREAS, the Warrants will be offered in Units, each of which
consists of __________________ and Warrants to purchase ________________
Shares; and]
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer, exchange and exercise of Warrants to be issued
from time to time by the Company,
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions hereinafter in this Agreement set forth, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. FORM OF WARRANT. The text of the Warrants and the form
of election to purchase Shares to be set forth on the reverse thereof shall
be substantially as set forth in Exhibit A attached hereto. Each Warrant
shall, subject to the terms of this Warrant Agreement, entitle the registered
holder thereof to initially purchase the number of Shares specified therein
at an initial exercise price of $__________ per Share; PROVIDED, HOWEVER,
that the Warrant Exercise Price and the number of Shares issuable upon
exercise of Warrants are subject to adjustment upon the occurrence of certain
events, all as hereinafter provided. The Warrants shall be executed on behalf
of the Company by the manual or facsimile signature of the present or any
future Chairman of the Board, President or Vice President of the Company,
under its seal, affixed or in facsimile, and by the manual or facsimile
signature of the present or any future Secretary or Assistant Secretary of
the Company.
The Company shall promptly notify the Warrant Agent from time to time
in writing of the number of Warrants to be issued and furnish written
instructions in connection therewith signed by an executive officer of the
Company; such notification and instructions may, but need not be, in the form of
a general or continuing authorization to the Warrant Agent.
<PAGE>
The Warrants shall be dated by the Warrant Agent as of the date of
each initial issuance, and as of the date of issuance thereof upon any transfer
or exchange thereof.
SECTION 3. COUNTERSIGNATURE AND REGISTRATION. The Warrant Agent shall
maintain books for the transfer and registration of the Warrants. Upon the
initial issuance of the Warrants, the Warrant Agent shall issue and register the
Warrants in the names of the respective registered holders thereof. The Warrants
shall be countersigned by the Warrant Agent (or by any successor to the Warrant
Agent then acting as warrant agent under this Agreement) and shall not be valid
for any purpose unless so countersigned. Such Warrants may be so countersigned,
however, by the Warrant Agent (or by its successor as warrant agent) and be
delivered by the Warrant Agent, notwithstanding that the persons whose manual or
facsimile signatures appear thereon as proper officers of the Company shall have
ceased to be such officers at the time of such countersignature or delivery.
Upon issuance of any Warrant, the Company will present the same, or cause the
same to be presented, to the Warrant Agent for countersignature of such Warrant.
SECTION 4. TRANSFERS AND EXCHANGES. The Warrant Agent shall transfer,
from time to time, any outstanding Warrants upon the books to be maintained by
the Warrant Agent for that purpose, upon the surrender thereof for transfer
properly endorsed or accompanied by appropriate instructions for transfer. Upon
any such transfer, a new Warrant of like tenor shall be issued to the transferee
and the surrendered Warrant shall be cancelled by the Warrant Agent. All such
Warrants so cancelled shall be delivered by the Warrant Agent to the Company
from time to time. The Warrants may be exchanged at the option of the holder
thereof, when surrendered at the office in __________________ of the Warrant
Agent, for another Warrant, or other Warrants of different denominations, of
like tenor and representing in the aggregate the right to purchase a like number
of Shares. The Warrant Agent is hereby irrevocably authorized to countersign
and deliver, in accordance with the provisions of this Section and Section 3 of
this Agreement, such new Warrants required pursuant to the provisions of this
Section, and the Company, whenever required by the Warrant Agent, will supply
the Warrant Agent with Warrants duly executed on behalf of the Company for such
purpose.
[IF THE WARRANTS ARE ATTACHED TO OTHER SECURITIES, INSERT -
Notwithstanding the foregoing, until __________________, the
Warrants shall not be transferable apart from the ___________________ to
which they are attached, any transfer of the ____________________ shall be
deemed a transfer of the Warrants attached thereto, and any attempt to
transfer the Warrants apart from the ____________________ shall be void and
of no effect. Each Warrant shall contain a legend to the foregoing effect.]
SECTION 5. EXERCISE OF WARRANTS. The registered holder of each
Warrant shall have the right, which may be exercised as in such Warrant
expressed, to purchase from the Company (and the Company shall issue and sell
to such registered holder) the number of Shares specified in such Warrants,
upon surrender to the Company, at the office in _______________ of the
Warrant Agent of such Warrant, with the form of election to purchase on the
reverse thereof duly filled in and signed, and upon payment to the Warrant
Agent for the account of the Company of the Warrant Exercise Price,
determined in accordance with the provisions of Section 9 of this Agreement,
for the number of Shares in respect of which such Warrant is then exercised.
Payment of such Warrant Exercise Price may be made in cash, or by certified
check or bank draft or postal or express money order, payable in United
States dollars, to the
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<PAGE>
order of the Warrant Agent. No adjustment shall be made for any dividends on
any Shares issuable upon exercise of any Warrant. Subject to Section 6, upon
such surrender of Warrants, and payment of the Warrant Exercise Price as
aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the registered holder of
such Warrants, and in such name or names as such registered holder may
designate, a certificate or certificates for the number of full Shares so
purchased upon the exercise of such Warrants, together with cash, as provided
in Section 9 of this Agreement, in respect of any fraction of a Share
otherwise issuable upon such surrender. Such certificate or certificates
shall be deemed to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of record of such Shares as
of the date of the surrender of such Warrants and payment of the Warrant
Exercise Price as aforesaid; PROVIDED, HOWEVER, that if, at the date of
surrender of such Warrants and payment of such Warrant Exercise Price, the
transfer books for the Shares purchasable upon the exercise of such Warrants
shall be closed, no such surrender of such Warrants and no such payment of
such Warrant Exercise Price shall be effective to constitute the person so
designated to be named therein as the holder of record of such Shares on such
date, but shall be effective to constitute such person as the holder of
record of such Shares for all purposes at the opening of business on the next
succeeding day on which the transfer books for the Shares purchasable upon
the exercise of such Warrants shall be opened, and the certificates for the
Shares in respect of which such Warrants are then exercised shall be issuable
as of the date on which such books shall next be opened, and until such date
the Company shall be under no duty to deliver any certificate for such
Shares. The rights of purchase represented by the Warrants shall be
exercisable, at the election of the registered holders thereof, either as an
entirety or from time to time for part only of the Shares specified therein
and, in the event that any Warrant is exercised in respect of less than all
of the Shares specified therein at any time prior to the Expiration Date of
the Warrants, a new Warrant or Warrants of like tenor will be issued for the
remaining number of Shares specified in the Warrant so surrendered, and the
Warrant Agent is hereby irrevocably authorized to countersign and to deliver
the required new Warrants pursuant to the provisions of this Section and of
Section 3 of this Agreement, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrants duly executed on
behalf of the Company for such purpose.
SECTION 6. PAYMENT OF TAXES. The Company will pay any documentary
stamp taxes attributable to the initial issuance of Shares issuable upon the
exercise of Warrants; PROVIDED, HOWEVER, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any
transfer involved in the issue or delivery of any certificates for Shares in
a name other than that of the registered holder of Warrants in respect of
which such Shares are issued and the Company shall not be required to issue
and deliver the certificates for such Shares unless and until the holder has
paid to the Company the amount of any tax which may be payable in respect of
any transfer involved in such issuance or shall establish to the satisfaction
of the Company that such tax has been paid.
SECTION 7. MUTILATED OR MISSING WARRANTS. In case any of the
Warrants shall be mutilated, lost, stolen or destroyed, the Company will
issue and the Warrant Agent will countersign and deliver in exchange and
substitution for and upon cancellation of the mutilated Warrant, or in lieu
of and substitution for the Warrant lost, stolen or destroyed, a new Warrant
of like tenor and representing an equivalent right or interest, but only upon
receipt of evidence satisfactory to the Company and the Warrant Agent of such
loss, theft or destruction of such Warrants and indemnity, if requested, also
satisfactory to them. Applicants for such substitute Warrants shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company or the Warrant Agent may prescribe. Any such new
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<PAGE>
Warrant shall constitute an original contractual obligation of the Company
whether or not the allegedly lost, stolen, mutilated or destroyed Warrant
shall be at any time enforceable by anyone.
SECTION 8. RESERVATION OF SHARES, ETC. Prior to the issuance of any
Warrants there shall have been reserved, and the Company shall at all times
through the Expiration Date keep reserved, out of its authorized and unissued
Common Stock, a number of Shares sufficient to provide for the exercise of
the rights of purchase represented by the Warrants, and the Transfer Agent
for the Shares and every subsequent Transfer Agent for the Shares issuable
upon the exercise of any of the rights of purchase aforesaid are hereby
irrevocably authorized and directed at all times to reserve such number of
authorized and unissued Shares as shall be requisite for such purpose. The
Company will keep a copy of this Agreement on file with the Transfer Agent
for the Shares and with every subsequent Transfer Agent for the Shares
issuable upon the exercise of the rights of purchase represented by the
Warrants. The Warrant Agent is hereby irrevocably authorized to requisition
from time to time from such Transfer Agent certificates required to honor
outstanding Warrants that have been exercised. The Company will supply such
Transfer Agent with duly executed certificates for such purpose and will
itself provide or otherwise make available any cash which may be issuable as
provided in Section 9 of this Agreement. All Warrants surrendered in the
exercise of the rights thereby evidenced or surrendered for transfer,
exchange or partial exercise shall be cancelled by the Warrant Agent and
shall thereafter be delivered to the Company.
SECTION 9. WARRANT PRICE; ADJUSTMENTS. A. The warrant price per
share at which Shares shall be purchasable upon exercise of Warrants (herein
called the "Warrant Exercise Price") to and including the Expiration Date
(unless the Expiration Date is extended as provided below in this Section 9A)
shall be $____ per share, or, if adjusted as provided in this Section, shall
be such price as so adjusted. The Warrants will not be exercisable prior to
[the close of business on the date of any initial issuance thereof]
[_________] and will expire at 3:30 p.m., New York City time, on the
Expiration Date; PROVIDED THAT the Company reserves the right to, and may, in
its sole discretion, at any time and from time to time, at such time or times
as the Company so determines, extend the Expiration Date of the Warrants for
such periods of time as it chooses; FURTHER PROVIDED that in no case may the
Expiration Date of the Warrants (as extended) be extended beyond five years
from the Expiration Date set forth above. Whenever the Expiration Date of the
Warrants is so extended, the Company shall at least 20 days prior to the then
Expiration Date cause to be mailed to the Warrant Agent and the registered
holders of the Warrants in accordance with the provisions of Section 17
hereof a notice stating that the Expiration Date has been extended and
setting forth the new Expiration Date.
B. The above provision is, however, subject to the following:
(1) The warrant purchase price, the number of Shares
purchasable upon exercise of each Warrant and the number of
Warrants outstanding shall be subject to adjustment as follows:
(a) In case the Company shall at any time after the
date of this Agreement (i) pay a dividend, or make a
distribution, on the Common Stock which is payable in shares
of its capital stock (whether shares of Common Stock or of
capital stock of any other class), (ii) subdivide or
reclassify its outstanding shares of Common Stock into a
greater number of securities (including shares of Common
Stock), or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller
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<PAGE>
number of shares (including shares of Common Stock), the
number of shares purchasable upon exercise of each Warrant
immediately prior to the occurrence of such event shall be
adjusted so that the holder of each Warrant shall be
entitled to receive upon payment of the warrant purchase
price the aggregate number of shares of the Company
which, if such Warrant had been exercised immediately
prior to the occurrence of such event, such holder would
have owned or have been entitled to receive immediately
after the occurrence of such event. An adjustment made
pursuant to this subparagraph (a) shall become effective
immediately after the record date in the case of a
dividend and shall become effective immediately after
the effective date in the case of a subdivision or
combination. If, as a result of an adjustment made pursuant
to this subparagraph (a), the holder of any Warrant
thereafter exercised shall become entitled to receive shares
of two or more classes of capital stock of the Company, the
Board of Directors of the Company (whose determination shall
be conclusive) shall determine the allocation between or
among shares of such classes of capital stock.
In the event that at any time, as a result of an
adjustment made pursuant to this subparagraph (a), the
holder of any Warrant thereafter exercised shall become
entitled to receive any shares or other securities of the
Company other than shares of Common Stock, thereafter the
number of such other shares so received upon exercise of any
Warrant shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the shares of Common Stock
contained in this paragraph, and other provisions of this
paragraph 9B(1) with respect to the shares of Common Stock
shall apply on like terms to any such other shares or other
securities.
(b) In case the Company shall fix a record date for the
issuance of rights or warrants to all holders of its Common
Stock entitling them (for a period expiring within 45 days
after such record date) to subscribe for or purchase Common
Stock at a price per share less than the current market
price per share of Common Stock (as defined in subparagraph
(e) below) at such record date, the warrant purchase price
shall be determined by multiplying the warrant purchase
price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of
Shares of Common Stock outstanding on such record date plus
the number of Shares of Common Stock which the aggregate
offering price of the total number of Shares so offered
would purchase at such current market price, and the
denominator of which shall be the number of Shares of Common
Stock outstanding on such record date plus the number of
additional Shares of Common Stock offered for subscription
or purchase. Such adjustment shall be made successively
whenever such a record date is fixed, and shall become
effective immediately after such record date. In determining
whether any rights or warrants entitle the holders to
subscribe for or purchase shares of common stock at less
than such current market price, and in determining the
aggregate offering price of such shares, there shall be
taken into account any consideration received by the Company
for such rights or warrants, the value of such
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<PAGE>
consideration, if other than cash, to be determined by the
Board of Directors of the Company. Common Stock owned by or
held for the account of the Company or any majority owned
subsidiary shall not be deemed outstanding for the purpose
of any adjustment required under this subparagraph (b).
(c) In case the Company shall fix a record date for
making a distribution to all holders of its Common Stock of
evidences of its indebtedness or assets (excluding regular
quarterly or other periodic or recurring cash dividends or
distributions and cash dividends or distributions paid from
retained earnings or referred to in subparagraph (a) above)
or rights or warrants to subscribe or warrants to purchase
(excluding those referred to in subparagraph (b) above),
then in each such case the warrant purchase price shall be
determined by multiplying the warrant purchase price in
effect immediately prior to such record date by a fraction
(x) the numerator of which shall be such current market
price (as defined in subparagraph (e) below) per Share of
Common Stock on such record date, less the then fair market
value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive) of the
portion of the assets or evidences of indebtedness so
distributed or of such subscription rights or warrants
applicable to one share of the Common Stock and (y) the
denominator of which shall be the current market price per
share of the Common Stock on such record date. Such
adjustment shall be made successively whenever such a record
date is fixed and shall become effective immediately after
such record date. Notwithstanding the foregoing, in the
event that the Company shall distribute any rights or
warrants to acquire capital stock ("Rights") pursuant to
this subparagraph (c), the distribution of separate
certificates representing such Rights subsequent to their
initial distribution (whether or not such distribution shall
have occurred prior to the date of the issuance of such
Warrants) shall be deemed to be the distribution of such
Rights for purposes of this subparagraph (c), provided that
the Company may, in lieu of making any adjustment pursuant
to this subparagraph (c) upon a distribution of separate
certificates representing such Rights, make proper provision
so that each holder of such Warrants who exercises such
Warrants (or any portion thereof) (A) before the record date
for such distribution of separate certificates shall be
entitled to receive upon such exercise shares of Common
Stock issued with Rights and (B) after such record date and
prior to the expiration, redemption or termination of such
Rights shall be entitled to receive upon such exercise, in
addition to the shares of Common Stock issuable upon such
exercise, the same number of such Rights as would a holder
of the number of shares of Common Stock that such Warrants
so exercised would have entitled the holder thereof to
purchase in accordance with the terms and provisions of and
applicable to the Rights if such Warrants were exercised
immediately prior to the record date for such distribution.
Common Stock owned by or held for the account of the Company
or any majority owned subsidiary shall not be deemed
outstanding for the purpose of any adjustment required under
this subparagraph (c).
-6-
<PAGE>
(d) After each adjustment of the number of shares
purchasable upon exercise of each Warrant pursuant to
subparagraph 9B(1)(a), the Warrant Exercise Price shall be
adjusted by multiplying such Warrant Exercise Price
immediately prior to such adjustment by a fraction of which
the numerator shall be the number of Shares purchasable upon
exercise of each Warrant immediately prior to such
adjustment, and the denominator of which shall be the number
of Shares so purchasable immediately thereafter. After each
adjustment of the Warrant Exercise Price pursuant to
subparagraph 9B(1)(b) or (c), the total number of Shares or
fractional part thereof purchasable upon the exercise of
each Warrant shall be proportionately adjusted to such
number of shares or fractional parts thereof as the
aggregate Warrant Exercise Price of the number of shares or
fractional part thereof purchasable immediately prior to
such adjustment will buy at the adjusted Warrant Exercise
Price.
(e) For the purpose of any computation under
subparagraphs 9B(1)(b) and (c) above, the current market
price per Share of Common Stock at any date shall be deemed
to be the average of the daily closing prices for the 30
consecutive business days commencing 45 business days before
the day in question. The closing price for each day shall be
(i) if the Common Stock is listed or admitted for trading on
the New York Stock Exchange, the last sale price (regular
way), or the average of the closing bid and ask prices
(regular way), if no sale occurred, of Common Stock, in
either case as reported on the New York Stock Exchange
Composite Tape or, if the Common Stock is not listed or
admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which the Common
Stock is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on
the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or, (ii) if not listed or quoted as described in
(i), the mean between the closing high bid and low asked
quotations of Common Stock reported by NASDAQ, or any
similar system for automated dissemination of quotations of
securities prices then in common use, if so quoted, or (iii)
if not quoted as described in clause (ii), the mean between
the high bid and low asked quotations for Common Stock as
reported by the National Quotation Bureau Incorporated if at
least two securities dealers have inserted both bid and
asked quotations for Common Stock on at least 5 of the 10
preceding days. If none of the conditions set forth above is
met, the closing price of Common Stock on any day or the
average of such closing prices for any period shall be the
fair market value of Common Stock as determined by a member
firm of the New York Stock Exchange selected by the Company.
(f) (A) Nothing contained herein shall be construed to
require an adjustment as a result of the issuance of Common
Stock pursuant to, or the granting or exercise of any rights
under, the Company's [LIST EMPLOYEE AND SHAREHOLDER PLANS,
IF ANY, THAT MIGHT OTHERWISE RESULT IN ADJUSTMENTS].
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<PAGE>
(B) In addition, no adjustment in the Warrant
Exercise Price shall be required unless and until the
earlier of the following shall have occurred: (x) such
adjustment would require an increase or decrease of at
least 1% in the Warrant Exercise Price or (y) a period
of 3 years shall have elapsed from the date of the
occurrence of any event requiring any such adjustment
pursuant to subparagraphs 9B(1)(a), (b) or (c) above.
All adjustments shall be made to the nearest one
hundredth of a Share and the nearest cent, and any
adjustments which by reason of this subparagraph (f)
are not required to be made shall be carried forward
cumulatively and taken into account in any subsequent
adjustment which (including such carry-forward) is
required to be made under this subparagraph (f).
(g) In any case in which this subparagraph 9B(1) shall
require that an adjustment be made retroactively immediately
following a record date, the Company may elect to defer (but
only until five business days following the mailing of the
notice described in subparagraph 9B(5) below) issuing to the
holder of any Warrant exercised after such record date the
Shares of the Company issuable upon such exercise over and
above the Shares issuable upon such exercise only on the
basis of the Warrant Exercise Price prior to adjustment.
(h) The Company may, at its option, at any time until
the Expiration Date, reduce the then current Warrant
Exercise Price to any amount deemed appropriate by the Board
of Directors of the Company for any period not exceeding
twenty (20) consecutive days (as evidenced in a resolution
adopted by such Board of Directors), but only upon giving
the notices required by subparagraph 9(B)(5) twenty (20)
days prior to taking such action.
(i) Except as herein otherwise expressly provided, no
adjustment in the Warrant Exercise Price shall be made by
reason of the issuance of Shares, or securities convertible
into or exchangeable for Shares, or securities carrying the
right to purchase any of the foregoing or for any other
reason whatsoever.
(j) Irrespective of any of the adjustments in the
Warrant Exercise Price or the number of Shares, Warrant
Certificates theretofore issued may continue to express the
same prices and number of Shares as are stated in a similar
Warrant Certificate issuable initially, or at some
subsequent time, pursuant to this Agreement and such number
of Shares specified therein shall be deemed to have been so
adjusted.
(2) No fractional Shares of Common Stock shall be issued
upon the exercise of Warrants. If more than one Warrant shall be
exercised at one time by the same holder, the number of full
Shares which shall be issuable upon such exercise shall be
computed on the basis of the aggregate number of Shares purchased
pursuant to the Warrants so exercised. Instead of any fractional
Share of Common Stock which would otherwise be issuable upon
exercise of any Warrant, the Company shall pay a cash adjustment
in respect
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<PAGE>
of such fraction in an amount equal to the same fraction of
the last sales price (or bid price if there were no sales)
per Share of Common Stock, in either case as reported on the
New York Stock Exchange Composite Tape on the business day
which next precedes the day of exercise or, if the Common Stock
is not then listed or admitted to trading on the New York Stock
Exchange, an amount equal to the same fraction of the market
price per share of Common Stock (as determined in a manner
described by the Board of Directors of the Company) at the close
of business on the business day which next precedes the day of
exercise.
(3) In case any of the following shall occur while any
Warrants are outstanding: (a) any reclassification or change of
the outstanding Shares of Common Stock (other than a change in
par value, or from par value to no par value, or from no par
value to par value); or (b) any consolidation or merger to which
the Company is a party (other than a consolidation or a merger in
which the Company is the continuing corporation and which does
not result in any reclassification of, or change in, the
outstanding shares of Common Stock issuable upon exercise of the
Warrants); or (c) any sale or conveyance to another corporation
of the property of the Company as an entirety or substantially as
an entirety; then the Company, or such successor or purchasing
corporation, as the case may be, shall make appropriate provision
by amendment of this Agreement or otherwise so that the holders
of the Warrants then outstanding shall have the right at any time
thereafter, upon exercise of such Warrants, to purchase the kind
and amount of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as would be received by a holder of
the number of shares of Common Stock issuable upon exercise of
such Warrant immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. Such provision shall
provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this
Section 9. The above provisions of this subparagraph 9B(3) shall
similarly apply to successive reclassifications, changes,
consolidations, mergers, sales or conveyances.
(4) Before taking any action which would cause an adjustment
decreasing the Warrant Exercise Price so that the Warrant
Exercise Price is below the then par value of the shares of
Common Stock, the Company will take any corporate action which
may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and
nonassessable Shares of Common Stock at the Warrant Exercise
Price as so adjusted.
(5) Whenever the Warrant Exercise Price then in effect is
adjusted as herein provided, the Company shall mail to each
holder of the Warrants at such holder's address as it shall
appear on the books of the Company a statement setting forth the
adjusted Warrant Exercise Price then and thereafter effective
under the provisions hereof, together with the facts, in
reasonable detail, upon which such adjustment is based.
(6) In case (i) the Company shall declare a dividend (or any
other distribution) on its Common Stock payable otherwise than in
cash out of its current or retained earnings, or (ii) the Company
shall authorize the granting to the holders of its Common
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<PAGE>
Stock of rights to subscribe for or purchase any shares of
capital stock of any class or of any other rights, or (iii) there
is to be any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding
shares of Common Stock), or any consolidation or merger to which
the Company is a party and for which approval of any shareholders
of the Company is required, or (iv) any distribution is to be
made on or in respect of the Common Stock in connection with the
dissolution, liquidation or winding up of the Company, then the
Company shall mail to each holder of Warrants at such holder's
address as it shall appear on the books of the Company, at least
twenty days (or ten days in any case specified in clause (i) or
(ii) above) prior to the applicable record date hereinafter
specified, a notice stating (x) the record date for such
dividend, distribution or rights, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification,
consolidation, merger, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, consolidation,
merger, dissolution, liquidation or winding up. No failure to
mail such notice nor any defect therein or in the mailing thereof
shall affect any such transaction or any adjustment in the
Warrant Exercise Price required by this Section 9.
SECTION 10. NOTICE TO WARRANTHOLDERS. Nothing contained in this
Agreement or in any of the Warrants shall be construed as conferring upon the
holders thereof the right to vote or to consent or to receive notice as
shareholders in respect of the meetings of shareholders or the election of
directors of the Company or any other matter, or any rights whatsoever as
shareholders of the Company.
SECTION 11. CERTAIN COVENANTS OF THE COMPANY.
A. So long as any unexpired Warrants remain outstanding and
if required in order to comply with the Securities Act of 1933,
as amended (the "Act"), the Company covenants and agrees that it
will file such post-effective amendments to the registration
statement filed pursuant to the Act with respect to the Warrants
(File No. 333-_______ ) (or such other registration statements or
post-effective amendments or supplements) as may be necessary to
permit the Company to deliver to each person exercising a Warrant
a prospectus meeting the requirements of Section 10(a)(3) of the
Act and otherwise complying therewith, and will deliver such a
prospectus to each such person. The Company further covenants and
agrees that it will obtain and keep effective all permits,
consents and approvals of governmental agencies and authorities,
and will use its best efforts to take all action which may be
necessary to qualify the Shares for sale under the securities
laws of such of the United States, as may be necessary to permit
the free exercise of the Warrants, and the issuance, sale,
transfer and delivery of the Shares issued upon exercise of the
Warrants, and to maintain such qualifications during the entire
period in which the Warrants are exercisable.
B. The Company covenants and agrees that it shall take all
such action as may be necessary to ensure that all Shares will at
the time of delivery of certificates for such Shares (subject to
payment of the Warrant Exercise Price) be duly and validly
authorized and issued and
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<PAGE>
fully paid and nonassessable Shares, free from any preemptive
rights and taxes, liens, charges and security interests created
by or imposed upon the Company.
C. The Company covenants and agrees that it will take all
action which may be necessary to cause the Shares to be duly
listed on the New York Stock Exchange or any securities exchange
on which the other shares of Common Stock of the Company are
listed or on the National Market System of NASDAQ at the dates of
exercise of the Warrants.
SECTION 12. DISPOSITION OF PROCEEDS, ETC.
A. The Warrant Agent shall account promptly to the Company with
respect to Warrants exercised and concurrently pay to the Company all
moneys received by the Warrant Agent for the purchase of Shares
through the exercise of such Warrants.
B. The Warrant Agent shall keep copies of this Agreement
available for inspection by holders of Warrants during normal business
hours at its principal office in the City of , .
SECTION 13. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT
AGENT. Any corporation into which the Warrant Agent may be merged or with which
it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, PROVIDED that
such corporation would be eligible for appointment as a successor Warrant Agent
under the provisions of Section 15 of this Agreement. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement, and if any of the Warrants shall have been countersigned but not
delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such Warrants so
countersigned; and in case at that time any of the Warrants shall not have been
countersigned, any successor to the Warrant Agent may countersign such Warrants
either in the name of the predecessor Warrant Agent or in the name of the
successor Warrant Agent; and in all such cases such Warrant shall have the full
force provided in the Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior name
and deliver Warrants so countersigned; and in case at that time any of the
Warrants shall not have been countersigned, the Warrant Agent may countersign
such Warrants either in its prior name or in its changed name; and in all such
cases such Warrants shall have the full force provided in the Warrants and in
this Agreement.
SECTION 14. DUTIES OF WARRANT AGENT. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrants, by their
acceptance thereof, shall be bound:
A. The statements contained herein and in the Warrants shall be
taken as statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of any of
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<PAGE>
the same except such as describe the Warrant Agent or action taken or
to be taken by it. The Warrant Agent assumes no responsibility with
respect to the distribution of the Warrants except as herein
otherwise provided.
B. The Warrant Agent shall not be responsible for any failure of
the Company to comply with any of the covenants contained in this
Agreement or in the Warrants to be complied with by the Company.
C. The Warrant Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys, agents or employees, and the
Warrant Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys, agents or
employees or for any loss to the Company resulting from such neglect
or misconduct, provided reasonable care shall have been exercised in
the selection and continued employment thereof.
D. The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company), and the
Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
accordance with the opinion or the advice of such counsel.
E. The Warrant Agent shall incur no liability or responsibility
to the Company or to any holder of any Warrant for any action taken in
reliance on any notice, resolution, waiver, consent, order,
certificate, or other paper, document or instrument believed by it to
be genuine and to have been signed, sent or presented by the proper
party or parties.
F. The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of this Agreement, to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind
and nature incurred by the Warrant Agent in the execution of this
Agreement and to indemnify the Warrant Agent and save it harmless
against any and all liabilities, including judgments, costs and
counsel fees, for anything done or omitted by the Warrant Agent in the
execution of this Agreement except as a result of the Warrant Agent's
gross negligence or bad faith.
G. The Warrant Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more registered
holders of Warrants shall furnish the Warrant Agent with reasonable
security and indemnity for any costs and expenses which may be
incurred, but this provision shall not affect the power of the Warrant
Agent to take such action as the Warrant Agent may consider proper,
whether with or without any such security or indemnity. All rights of
action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the
Warrants or the production thereof at any trial or other proceeding
relative thereto, and any such action, suit or proceeding instituted
by the Warrant Agent shall be brought in its name as Warrant Agent,
and any recovery of judgment shall be for the ratable benefit of the
registered holders of the Warrants, as their respective rights or
interests may appear.
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<PAGE>
H. The Warrant Agent and any shareholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to or otherwise act as fully and freely
as though it were not Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
I. The Warrant Agent shall act hereunder solely as agent and not
in a ministerial capacity, and its duties shall be determined solely
by the provisions hereof. The Warrant Agent shall not be liable for
anything which it may do or refrain from doing in connection with this
Agreement except for its own gross negligence or bad faith.
SECTION 15. CHANGE OF WARRANT AGENT. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company
notice in writing, and to the holders of the Warrants notice by publication, of
such resignation, specifying a date when such resignation shall take effect,
which notice shall be published at the expense of the Company at least once a
week for two consecutive weeks in a newspaper of general circulation in the City
of New York prior to the date so specified. The Warrant Agent may be removed by
the Company by like notice from the Company to the Warrant Agent and the holders
of Warrants at the expense of the Company. If the Warrant Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the registered holder of a Warrant (who shall,
with such notice, submit his Warrant for inspection by the Company), then, at
the expense of the Company, the Warrant Agent or the registered holder of any
Warrant may apply to any court of competent jurisdiction for the appointment of
a successor to the Warrant Agent. Any successor Warrant Agent, whether appointed
by the Company or by such a court, shall be a bank or trust company, in good
standing, incorporated under the laws of any State or of the United States of
America, having at the time of its appointment as Warrant Agent a combined
capital and surplus of at least $100,000,000. After appointment the successor
Warrant Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall deliver and transfer to
the successor Warrant Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Failure to file or publish any notice provided for in this Section,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of the successor
Warrant Agent, as the case may be.
SECTION 16. IDENTITY OF TRANSFER AGENT. Forthwith upon the appointment
of any Transfer Agent for the Shares or of any subsequent Transfer Agent for
Shares issuable upon the exercise of the rights of purchase represented by the
Warrants, the Company will file with the Warrant Agent a statement setting forth
the name and address of such Transfer Agent.
SECTION 17. NOTICES. Any notice pursuant to this Agreement to be given
or made by the Warrant Agent or by the registered holder of any Warrant to or on
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing by the
Company with the Warrant Agent) as follows:
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<PAGE>
Arcadia Financial Ltd.
7825 Washington Avenue South
Minneapolis, Minnesota 55439-2435
Attn: Corporate Secretary
Any notice pursuant to this Agreement to be given or made by the Company or by
the registered holder of any Warrant to or on the Warrant Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Warrant Agent with
the Company) as follows:
Any notice pursuant to this Agreement to be given or made by the
Company or the Warrant Agent to the registered holder of any Warrant shall be
sufficiently given or made (unless otherwise specifically provided for herein)
if sent by first-class mail, postage prepaid, addressed to said registered
holder at his address appearing on the Warrant register.
SECTION 18. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrants in order to cure any ambiguity or to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which will not materially
adversely affect the interest of the registered holders of the Warrants.
SECTION 19. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 20. GOVERNING LAW. This Agreement and each Warrant Certificate
issued hereunder shall be governed by and construed in accordance with the laws
of the State of Minnesota.
SECTION 21. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or entity other than the Company and
the Warrant Agent and the holders of Warrants any legal or equitable right,
remedy or claim under this Agreement, but this Agreement shall be for the sole
and exclusive benefit of the Company and the Warrant Agent and the holders of
Warrants.
SECTION 22. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
[IF THE WARRANTS ARE SUBJECT TO ACCELERATION BY THE COMPANY, INSERT -
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<PAGE>
SECTION 23. ACCELERATION OF WARRANTS BY THE COMPANY.
A. At any time on or after _________________, the Company shall
have the right to accelerate any or all Warrants at any time by
causing them to expire at the close of business on the day next
preceding a specified date (the "Acceleration Date"), if the Market
Price (as hereinafter defined) of the Common Stock equals or exceeds
________________ percent (____%) of the then effective Warrant
Exercise Price, adjusted as if no changes in such Warrant Exercise
Price had been made pursuant to subsection 9B, on any 20 Trading Days
(as hereinafter defined) within a period of 30 consecutive Trading
Days ending no more than five Trading Days prior to the date on which
the Company gives notice to the Warrant Agent of its election to
accelerate the Warrants.
B. "Market Price" for each Trading Day shall be, if the Common
Stock is listed or admitted for trading on the New York Stock
Exchange, the last reported sale price, regular way (or, if no such
price is reported, the average of the reported closing bid and asked
prices, regular way) of Common Stock, in either case as reported on
the New York Stock Exchange Composite Tape or, if the Common Stock is
not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which Common Stock is
not listed or admitted to trading or, if not listed or admitted to
trading on any national securities exchange, on the National Market
System of NASDAQ or, if not listed or admitted to trading on any
national securities exchange or quoted on the National Market System
of NASDAQ, the average of the closing high bid and low asked prices in
the over-the-counter market, as reported by NASDAQ, or such other
system then in use, or if on any such date the Shares of Common Stock
are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by any New York Stock Exchange firm
selected from time to time by the Company for the purpose. "Trading
Day" shall be each Monday through Friday, other than any day on which
securities are not traded in the system or on the exchange that is the
principal market for the Common Stock, as determined by the Board of
Directors of the Company.
C. In the event of an acceleration of less than all of the
Warrants, the Warrant Agent shall select the Warrants to be
accelerated by lot, pro rata or in such other manner as it deems, in
its discretion, to be fair and appropriate.
D. Notice of an acceleration specifying the Acceleration Date
shall be sent by mailing first class, postage prepaid, to each
registered holder of a Warrant Certificate representing a Warrant
accelerated at such holder's address appearing on the Warrant register
not more than 60 days nor less than 30 days before the Acceleration
Date. Such notice of an acceleration also shall be given no more than
20 days, and no less than 10 days, prior to the mailing of notice to
registered holders of Warrants pursuant to this Section, by
publication at least once in a newspaper of general circulation in the
City of New York.
E. Any Warrant accelerated may be exercised until 3:30 p.m., New
York City time, on the business day next preceding the Acceleration
Date. The Warrant Exercise Price shall be payable as provided in
Section 5]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
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<PAGE>
ARCADIA FINANCIAL LTD.
By
------------------------------
[Name]
[Title]
-------------------------------, as
Warrant Agent
By
------------------------------
[Name]
[Title]
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<PAGE>
Exhibit A
FORM OF WARRANT CERTIFICATE
[Face of Warrant Certificate]
[IF WARRANTS ARE ATTACHED TO OTHER Prior to __________________ this
SECURITIES AND ARE NOT IMMEDIATELY Warrant Certificate cannot be
DETACHABLE. transferred or exchanged unless
attached to a [Title of Other
Securities].]
[FORM OF LEGEND IF WARRANTS ARE Prior to _________________,
NOT IMMEDIATELY EXERCISABLE. Warrants evidenced by this
Warrant Certificate cannot be
exercised.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
VOID AFTER 3:30 P.M., NEW YORK CITY TIME, ON ____________, ______
ARCADIA FINANCIAL LTD.
Warrants to Purchase
Warrant Certificate Representing
[Title of Warrant Securities]
No. _______________ ___________________ Warrants
This certifies that ______________________ or registered assigns is
the registered owner of the above indicated number of Warrants, each Warrant
entitling such owner [IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND ARE NOT
IMMEDIATELY DETACHABLE - , subject to the registered owner qualifying as a
"Holder" of this Warrant Certificate, as hereinafter defined) to purchase, at
any time [after 3:30 P.M., New York City time, on ________________ and] on or
before 3:30 P.M., New York City time, on __________________, _________________
shares of [Title of Warrant Securities] (the "Warrant Securities"), of Arcadia
Financial Ltd. (the "Company") on the following basis: during the period fro
_________________, through and including ___________________, the exercise
price of each Warrant will be ____________________; during the period from
___________________, through and including ____________________, the exercise
price of each warrant will be ___________________ (the "Warrant Price"). No
adjustment shall be made for any dividends on any Warrant Securities issuable
upon exercise of any Warrant. The Holder may exercise the Warrants evidenced
hereby by providing certain information set forth on the back hereof and by
paying in full [in lawful money of the United States of America] [in cash or
by certified check or official bank check or by bank wire transfer, in each
case,] [by bank wire transfer] in immediately available funds, the Warrant
Price for each Warrant exercised to the Warrant Agent (as hereinafter defined)
and by surrendering this Warrant
A-1
<PAGE>
Certificate, with the purchase form on the back hereof duly executed, at the
corporate trust office of [name of Warrant Agent], or its successor as warrant
agent (the "Warrant Agent"), [or _____________________], which is, on the date
hereof, at the address specified on the reverse hereof, and upon compliance
with and subject to the conditions set forth herein and in the Warrant
Agreement (as hereinafter defined).
The term "Holder" as used herein shall mean [IF WARRANTS ARE ATTACHED
TO OTHER SECURITIES AND ARE NOT IMMEDIATELY DETACHABLE - prior to _____________,
____ (the "Detachable Date"), the registered owner of the Company's [title of
Other Securities] to which this Warrant Certificate was initially attached, and
after such Detachable Date,] the person in whose name at the time this Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose pursuant to Section 4.01 of the Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant Certificate
may be exercised to purchase Warrant Securities in registered form. Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the Holder hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of ________________, ____ (the "Warrant
Agreement") between the Company and the Warrant Agent and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which
terms and provisions the Holder of this Warrant Certificate consents by
acceptance hereof. Copies of the Warrant Agreement are on file at the
above-mentioned office of the Warrant Agent [and at _________________________].
[IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND ARE NOT IMMEDIATELY
DETACHABLE - Prior to the Detachable Date, this Warrant Certificate may be
exchanged or transferred only together with the [Title of Other Securities] (the
"Other Securities") to which this Warrant Certificate was initially attached,
and only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Security. Additionally, on or prior to the Detachable
Date, each transfer of such Other Security or the register of the Other
Securities shall operate also to transfer this Warrant Certificate. After such
date, transfer of this] [IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND ARE
NOT IMMEDIATELY DETACHABLE - Transfer of this] Warrant Certificate may be
registered when this Warrant Certificate is surrendered at the corporate trust
office of the Warrant Agent [or __________________] by the registered owner of
such owner's assigns, in person or by an attorney duly authorized in writing,
in the manner and subject to the limitations provided in the Warrant Agreement.
[IF OTHER SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE - Except as provided in the immediately preceding paragraph, after]
[IF OTHER SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANT
ALONE - After] countersignature by the Warrant Agent and prior to the
expiration of this Warrant Certificate, this Warrant Certificate may be
exchanged at the corporate trust office of the Warrant Agent [or
____________________] for Warrant Certificates representing the same
aggregate number of Warrants.
This Warrant Certificate shall not entitle the Holder hereof to any of
the rights of a holder of the Warrant Securities, including, without limitation,
the right to receive payments of dividends or distributions, if any, on the
Warrant Securities or to exercise any voting rights.
A-2
<PAGE>
This Warrant Certificate shall not be valid or obligatory for any
purpose until countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
in its name and on its behalf by the facsimile signatures of its duly authorized
officers.
Dated:
-----------------------, ------
ARCADIA FINANCIAL LTD.
By
------------------------------
[Name]
[Title]
Countersigned:
- ------------------------------------
As Warrant Agent
By
----------------------------------
[Name]
[Title]
A-3
<PAGE>
[Reverse of Warrant Certificate]
(Instructions for Exercise of Warrant)
To exercise the Warrants evidenced hereby, the Holder must pay [in
United States dollars] [in cash or by certified check or official bank check or
by bank wire transfer, in each case] [by bank wire transfer in immediately
available funds], the Warrant Price in full for Warrants exercised, to
[Warrant Agent] [address of Warrant Agent], Attn: _________________________,
which payment must specify the name of the Holder and the number of Warrants
exercised by such Holder. In addition, the Holder must complete the
information required below and present this Warrant Certificate in person or
by mail (certified or registered mail is recommended) to the Warrant Agent at
the appropriate address set forth below. This Warrant Certificate, completed
and duly executed, must be received by the Warrant Agent within five business
days of the payment.
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise ______________
Warrants, evidenced by this Warrant Certificate, to purchase _________________
shares of the [Title of Warrant Securities] (the "Warrant Securities") of
Arcadia Financial Ltd. and represents that he has tendered payment for such
Warrant Securities [in Dollars] [in cash or by certified check or official bank
check or by bank wire transfer, in each case] [by bank wire transfer in
immediately available funds] to the order of Arcadia Financial Ltd., c/o
[insert name and address of Warrant Agent], in the amount of _______________
in accordance with the terms hereof. The undersigned requests that said
principal amount of Warrant Securities be in fully registered form in the
authorized denominations, registered in such names and delivered all as
specified in accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below.
Dated: Name
-------------------------
(Please Print)
Address
(Insert Social Security or Other
Identifying Number of Holder)
A-4
<PAGE>
Signature Guaranteed
Signature
[FOR REGISTERED WARRANTS -- Signature must conform in
all respects to name of holder as specified on the face
of this Warrant Certificate and must bear a signature
guarantee by a bank, trust company or member broker of
the New York, Midwest or Pacific Stock Exchange)
This Warrant may be exercised at the following addresses:
By hand at
By mail at
[Instructions as to form and delivery of Warrant Securities and, if
applicable, Warrant Certificates evidencing unexercised Warrants - complete as
appropriate.]
A-5
<PAGE>
ASSIGNMENT
(Form of assignment to be executed if
Warrant Holder desires to transfer Warrant)
FOR VALUE RECEIVED, ______________ hereby sells, assigns and transfers
unto ________________________________
- --------------------------------------------------------------------------------
Print or Type Name
- --------------------------------------------------------------------------------
Street Address
- --------------------------------------------------------------------------------
City State Zip Code
- --------------------------------------------------------------------------------
Social Security or other Identifying Number
the right represented by the within Warrant to purchase ______________ Shares of
Common Stock ($.01 par value) of Arcadia Financial Ltd. to which the within
Warrant relates and appoints _______________________________ attorney to
transfer such right on the books of the Warrant Agent with full power of
substitution in the premises.
Dated:
------------------------------
----------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)
Signature Guaranteed
- ------------------------------------
A-6
<PAGE>
EXHIBIT 4.7
- -------------------------------------------------------------------------------
ARCADIA FINANCIAL LTD.
AND
_____________, AS WARRANT AGENT
PREFERRED STOCK
WARRANT AGREEMENT
DATED AS OF _____________, ______
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants . . . . . . . . . . . . . . . . 2
SECTION 1.02. Execution and Delivery of Warrant Certificates . . . 2
SECTION 1.03. Issuance of Warrant Certificates . . . . . . . . . . 3
ARTICLE II
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS
SECTION 2.01. Warrant Price. . . . . . . . . . . . . . . . . . . . 3
SECTION 2.02. Duration of Warrants . . . . . . . . . . . . . . . . 3
SECTION 2.03. Exercise of Warrants . . . . . . . . . . . . . . . . 3
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
SECTION 3.01. No Rights as Warrant Securityholder Conferred
by Warrants or Warrant Certificates. . . . . . . . . 4
SECTION 3.02. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.03. Holder of Warrant Certificate May Enforce Rights . . 5
SECTION 3.04. Reclassification, Consolidation, Merger, Sale,
Conveyance or Lease. . . . . . . . . . . . . . . . . 5
ARTICLE IV
i
<PAGE>
EXCHANGE AND TRANSFER OF
WARRANT CERTIFICATES
SECTION 4.01. Exchange and Transfer of Warrant Certificates. . . . 6
SECTION 4.02. Treatment of Holders of Warrant Certificates . . . . 7
SECTION 4.03. Cancellation of Warrant Certificates . . . . . . . . 7
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. . . . . . . . . . . . . . . . . . . . 8
SECTION 5.02. Conditions of Warrant Agent's Obligations. . . . . . 8
SECTION 5.03. Resignation and Appointment of Successor . . . . . . 9
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendment. . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.02. Notices and Demands to the Company and
Warrant Agent. . . . . . . . . . . . . . . . . . . . 11
SECTION 6.03. Addresses. . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.04. Governing Law. . . . . . . . . . . . . . . . . . . . 11
SECTION 6.05. Delivery of Prospectus . . . . . . . . . . . . . . . 11
SECTION 6.06. Obtaining of Governmental Approvals. . . . . . . . . 11
SECTION 6.07. Persons Having Rights Under Warrant Agreement. . . . 11
SECTION 6.08. Headings . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 6.09. Counterparts . . . . . . . . . . . . . . . . . . . . 12
SECTION 6.10. Inspection of Agreement. . . . . . . . . . . . . . . 12
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ii
<PAGE>
EXHIBIT A: Form of Warrant Certificate. . . . . . . . . . . . . A-1
</TABLE>
iii
<PAGE>
EXHIBIT 4.7
ARCADIA FINANCIAL LTD.
Form of Preferred Stock Warrant Agreement
PREFERRED STOCK WARRANT AGREEMENT, dated as of ___________ between
Arcadia Financial Ltd., a Minnesota corporation (hereinafter called the
"Company") and ____________________________________ as Warrant Agent (herein
called the "Warrant Agent").
WHEREAS, the Company proposes to sell [IF WARRANTS ARE SOLD WITH OTHER
SECURITIES - [title of such other securities being offered] (the "Other
Securities") with] warrant certificates evidencing one or more warrants (the
"Warrants" or individually a "Warrant") representing the right to purchase
[title of Preferred Stock or Depositary Shares purchasable through exercise of
Warrants] (the "Warrant Securities"), such warrant certificates and other
warrant certificates issued pursuant to this Agreement being herein called the
"Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced;
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
- ---------
* Complete or modify the provisions of this Form as appropriate to reflect
the terms of the Warrants, Warrant Securities and Other Securities.
<PAGE>
ARTICLE I
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES
SECTION 1.01. ISSUANCE OF WARRANTS. [IF WARRANTS ALONE - Upon
issuance, each Warrant Certificate shall evidence one or more Warrants.]
[IF OTHER SECURITIES AND WARRANTS - Warrants shall be [initially] issued
in connection with the issuance of the Other Securities [but shall be
separately transferable on and after __________________________ (the
"Detachable Date")] [and shall not be separately transferable] and each
Warrant Certificate shall evidence one or more Warrants.] Each Warrant
evidenced thereby shall represent the right, subject to the provisions
contained herein and therein, to purchase one Warrant Security. [IF OTHER
SECURITIES AND WARRANTS - Warrant Certificates shall be initially issued in
units with the Other Securities and each Warrant Certificate included in
such a unit shall evidence ____________ Warrants for each [______________
principal amount] [______________ shares] of Other Securities included in
such unit.]
SECTION 1.02. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES. Each
Warrant Certificate, whenever issued, shall be in registered form
substantially in the form set forth in Exhibit A hereto, shall be dated
______________ and may have such letters, numbers, or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the officers of the Company executing the
same may approve (execution thereof to be conclusive evidence of such
approval) and as are inconsistent with the provisions of this Agreement, or
as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which the Warrants may be listed, or to conform to usage. The Warrant
Certificates shall be signed on behalf of the Company by the Chairman of the
Board, the President or a Vice President of the Company and by the Treasurer
or one of the Assistant Treasurers or the Secretary or one of the Assistant
Secretaries of the Company under its corporate seal reproduced thereon. Such
signatures may be manual or facsimile signatures of such authorized officers
and may be imprinted or otherwise reproduced on the Warrant Certificates.
The seal of the Company may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
In case any officer of the Company who shall have signed any of the Warrant
Certificates either manually or by facsimile signature shall cease to be such
officer before the Warrant Certificates so signed shall have been countersigned
and delivered by the Warrant Agent, such Warrant Certificates may be
countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution of this Agreement
any such person was not such officer.
-2-
<PAGE>
The term "holder" or "holder of a Warrant Certificate" as used herein shall
mean any person in whose name at the time any Warrant Certificate shall be
registered upon the books to be maintained by the Warrant Agent for that purpose
[IF OTHER SECURITIES AND WARRANTS ARE NOT IMMEDIATELY DETACHABLE - or upon the
register of the Other Securities prior to the Detachable Date. Prior to the
Detachable Date, the Company will, or will cause the Registrar of the Other
Securities to, make available at all times to the Warrant Agent such information
as to holders of the Other Securities with Warrants as may be necessary to keep
the Warrant Agent's records up to date].
SECTION 1.03. ISSUANCE OF WARRANT CERTIFICATES. Warrant Certificates
evidencing the right to purchase an aggregate not exceeding __________
Warrant Securities (except as provided in Sections 2.03(c), 3.02 and 4.01)
may be executed by the Company and delivered to the Warrant Agent upon the
execution of this Warrant Agreement or from time to time thereafter. The
Warrant Agent shall, upon receipt of Warrant Certificates duly executed on
behalf of the Company, countersign Warrant Certificates evidencing Warrants
representing the right to purchase up to __________ Warrant Securities and
shall deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall countersign a Warrant Certificate only if the Warrant Certificate
is issued in exchange or substitution for one or more previously
countersigned Warrant Certificates or in connection with their transfer, as
hereinafter provided.
ARTICLE II
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS
SECTION 2.01. WARRANT PRICE. During the period from __________ ,
through and including ________________ , the exercise price of each Warrant
will be ______________. During the period from __________, through and
including ______________, the exercise price of each Warrant will be
_____________. Such purchase price of Warrant Securities is referred to in
this Agreement as the "Warrant Price". No adjustment shall be made for any
dividends on any Warrant Securities issuable upon exercise of any Warrant.
SECTION 2.02. DURATION OF WARRANTS. Each Warrant may be exercised in
whole at any time, as specified herein, on or after [the date thereof]
[______________] and at or before 3:30 P.M., New York City time, on
______________ or such later date as the Company may designate, by notice to
the Warrant Agent and the holders of Warrant Certificates mailed to their
addresses as set forth in the record books of the Warrant Agent (the
"Expiration Date"). Each Warrant not exercised at or before 3:30 P.M., New
York City time, on the Expiration Date shall become void, and all rights of
the holder of the Warrant Certificate evidencing such Warrant under this
Agreement shall cease.
SECTION 2.03. EXERCISE OF WARRANTS. (a) During the period specified
in Section 2.02 any whole number of Warrants may be exercised by providing
certain information as set forth on the reverse side of the Warrant
Certificate and by paying in full, in [lawful money of the United States of
America] [in cash or by certified check or official bank check or by bank
wire transfer, in each case,][by bank wire transfer] [in immediately
available funds] the Warrant Price for each Warrant exercised to the Warrant
Agent at its corporate trust office [or at ______________], provided that
such exercise is subject to receipt within five business days of such
[payment] [wire transfer] by the Warrant Agent of the Warrant Certificate
-3-
<PAGE>
with the form of election to purchase Warrant Securities set forth on the
reverse side of the Warrant Certificate properly completed and duly executed.
The date on which payment in full of the Warrant Price is received by the
Warrant Agent shall, subject to receipt of the Warrant Certificate as
aforesaid, be deemed to be the date on which the Warrant is exercised. The
Warrant Agent shall deposit all funds received by it in payment of the
Warrant Price in an account of the Company maintained with it and shall
advise the Company by telephone at the end of each day on which a [payment]
[wire transfer] for the exercise of Warrants is received of the amount so
deposited to its account. The Warrant Agent shall promptly confirm such
telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (i) the number of Warrants exercised,
(ii) the instructions of each holder of the Warrant Certificates evidencing
such Warrants with respect to delivery of the Warrant Securities to which
such holder is entitled upon such exercise, (iii) delivery of Warrant
Certificates evidencing the balance, if any, of the Warrants remaining
after such exercise, and (iv) such other information as the Company shall
reasonably require.
(c) As soon as practicable after the exercise of any Warrant, the
Company shall issue to or upon the order of the holder of the Warrant
Certificate evidencing such Warrant the Warrant Securities to which such
holder is entitled, in fully registered form, registered in such name or
names as may be directed by such holder. If fewer than all of the Warrants
evidenced by such Warrant Certificate are exercised, the Company shall
execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, a new Warrant Certificate evidencing the number of
such Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or other tax
or other governmental charge required to be paid in connection with any
transfer involved in the issue of the Warrant Securities, and in the event
that any such transfer is involved, the Company shall not be required to
issue or deliver any Warrant Security until such tax or other charge shall
have been paid or it has been established to the Company's satisfaction
that no such tax or other charge is due.
(e) Prior to the issuance of any Warrants there shall have been
reserved, and the Company shall at all times keep reserved, out of its
authorized but unissued Warrant Securities, a number of shares sufficient
to provide for the exercise of the Warrant Certificates.
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
SECTION 3.01. NO RIGHTS AS WARRANT SECURITYHOLDER CONFERRED BY WARRANTS OR
WARRANT CERTIFICATES. No Warrant Certificates or Warrant evidenced thereby
shall entitle the holder thereof to any of the rights of a holder of Warrant
Securities, including, without limitation, the right to receive the payment of
dividends or distributions, if any, on the Warrant Securities or to exercise any
voting rights.
-4-
<PAGE>
SECTION 3.02. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
CERTIFICATES. Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to it and the Company of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and or indemnity
reasonably satisfactory to the Warrant Agent and the Company and, in the case
of mutilation, upon surrender thereof to the Warrant Agent for cancellation,
then, in the absence of notice to the Company or the Warrant Agent that such
Warrant Certificate has been acquired by a bona fide purchaser, the Company
shall execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, in exchange for or in lieu of the lost, stolen,
destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the
same tenor and evidencing a like number of Warrants. Upon the issuance of any
new Warrant Certificate under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Warrant Agent) in connection therewith. Every
substitute Warrant Certificate executed and delivered pursuant to this
Section in lieu of any lost, stolen or destroyed Warrant Certificate shall
represent an additional contractual obligation of the Company, whether or not
the lost, stolen or destroyed Warrant Certificate shall be at any time
enforceable by anyone, and shall be entitled to the benefits of this
Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder. The provisions of this
Section are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement of mutilated, lost,
stolen or destroyed Warrant Certificates.
SECTION 3.03. HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any holder of a
Warrant Certificate, without the consent of the Warrant Agent, the holder of
any Warrant Securities or the holder of any other Warrant Certificate, may,
in such holder's own behalf and for such holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such holder's right to
exercise the Warrants evidenced by such holder's Warrant Certificate in the
manner provided in such holder's Warrant Certificate and in this Agreement.
SECTION 3.04. RECLASSIFICATION, CONSOLIDATION, MERGER, SALE, CONVEYANCE OR
LEASE. In case any of the following shall occur while any Warrants are
outstanding: (a) any reclassification or change of the outstanding shares of
Warrant Securities; or (b) any consolidation or merger to which the Company is
party (other than a consolidation or a merger in which the Company is the
continuing corporation and which does not result in any reclassification of, or
change in, the outstanding shares of Warrant Securities issuable upon exercise
of the Warrants); or (c) any sale, conveyance or lease to another corporation
of the property of the Company as an entirety or substantially as an entirety;
then the Company, or such successor or purchasing corporation, as the case may
be, shall make appropriate provision by amendment of this Agreement or otherwise
so that the holders of the Warrants then outstanding shall have the right at any
time thereafter, upon exercise of such Warrants, to purchase the kind and amount
of shares of stock and other securities and property receivable upon such a
reclassification, change, consolidation, merger, sale, conveyance or lease as
would be received by a holder of the number of shares of Warrant Securities
issuable upon exercise of such Warrant immediately prior to such
reclassification, change, consolidation, merger, sale, conveyance or lease, and,
in the case of a consolidation, merger, sale, conveyance or lease, the Company
shall thereupon be relieved of any further obligation hereunder or under the
Warrants, and the Company as the predecessor corporation may thereupon or at any
time thereafter be dissolved, wound up or liquidated. Such successor or
assuming corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Warrants issuable
hereunder which
-5-
<PAGE>
heretofore shall not have been signed by the Company, and may execute and
deliver Warrant Securities in its own name, in fulfillment of its obligations
to deliver Warrant Securities upon exercise of the Warrants. All the
Warrants so issued shall in all respects have the same legal rank and benefit
under this Agreement as the Warrants theretofore or thereafter issued in
accordance with the terms of this Agreement as though all of such Warrants
had been issued at the date of the execution hereof. In any case of any such
reclassification, change, consolidation, merger, conveyance, transfer or
lease, such changes in phraseology and form (but not in substance) may be
made in the Warrants thereafter to be issued as may be appropriate.
The Warrant Agent may receive a written opinion of legal counsel as
conclusive evidence that any such reclassification, change, consolidation,
merger, conveyance, transfer or lease complies with the provisions of this
Section 3.04.
ARTICLE IV
EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES
SECTION 4.01. EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES.
[IF OTHER SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE - Upon]
[IF OTHER SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -
Prior to the Detachable Date a Warrant Certificate may be exchanged or
transferred only together with the Offered Security to which the Warrant
Certificate was initially attached, and only for the purpose of effecting
or in conjunction with an exchange or transfer of such Offered Security.
Prior to any Detachable Date, each transfer of the Offered Security [on the
register of the Other Securities] shall opertae also to transfer the related
Warrant Certificates. After the Detachable Date upon] surrender at the
corporate trust office of the Warrant Agent [or ______________], Warrant
Certificates evidencing Warrants may be exchanged for Warrant Certificates
in other denominations evidencing such Warrants or the transfer thereof may
be registered in whole or in part; provided that such other Warrant
Certificates evidence the same aggregate number of Warrants as the Warrant
Certificates so surrendered. The Warrant Agent shall keep, at its corporate
trust office [and at ______________], books in which, subject to such
reasonable regulations as it may prescribe, it shall register Warrant
Certificates and exchanges and transfers of outstanding Warrant Certificates,
upon surrender of the Warrant Certificates to the Warrant Agent at its
corporate trust office [or ______________] for exchange or registration of
transfer, properly endorsed or accompanied by appropriate instruments of
registration of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Warrant Agent. No service charge shall
be made for any exchange or registration of transfer of Warrant Certificates,
but the Company may require payment of a sum sufficient to cover any stamp
or other tax or other governmental charge that may be imposed in connection
with any such exchange or registration of transfer. Whenever any Warrant
Certificates are so surrendered for exchange or registration of transfer,
an authorized officer of the Warrant Agent shall manually countersign and
deliver to the person or persons entitled thereto a Warrant Certificate or
Warrant Certificates duly authorized and executed by the Company, as so
requested. The Warrant Agent shall not be required to effect any exchange
or registration of transfer which will result in the issuance of a Warrant
Certificate evidencing a fraction of a Warrant or a number of full Warrants
and a fraction of a Warrant. All Warrant Certificates issued upon any
exchange or registration of transfer of Warrant Certificates shall be
the valid
-6-
<PAGE>
obligations of the Company, evidencing the same obligations and entitled to
the same benefits under this Agreement as the Warrant Certificate surrendered
for such exchange or registration of transfer.
SECTION 4.02. TREATMENT OF HOLDERS OF WARRANT CERTIFICATES.
[IF OTHER SECURITIES AND WARRANTS ARE NOT IMMEDIATELY DETACHABLE -
Prior to the Detachable Date, the Company, the Warrant Agent and
all other persons may treat the owner of the Offered Security as
the owner of the Warrant Certificates initially attached thereto
for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced by such Warrant Certificates,
any notice to the contrary notwithstanding. After the Detachable
Date and prior to due presentment of a Warrant Certificate for
registration of transfer,] [T]he Company and the Warrant Agent may
treat the registered holder of a Warrant Certificate as the absolute
owner thereof for any purpose and as the person entitled to exercise
the rights represented by the Warrants evidenced thereby, any notice
to the contrary notwithstanding.
SECTION 4.03. CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered for exchange, registration of transfer or exercise of
the Warrants evidenced thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly canceled by the Warrant
Agent and shall not be reissued and, except as expressly permitted by this
Agreement, no Warrant Certificate shall be issued hereunder in exchange
therefor or in lieu thereof. The Warrant Agent shall deliver to the Company
from time to time or otherwise dispose of canceled Warrant Certificates in a
manner satisfactory to the Company.
-7-
<PAGE>
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. WARRANT AGENT. The Company hereby appoints _____ as
Warrant Agent of the Company in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth;
and ____________________________ hereby accepts such appointment. The
Warrant Agent shall have the powers and authority granted to and conferred
upon it in the Warrant Certificates and hereby and such further powers and
authority to act on behalf of the Company as the Company may hereafter grant
to or confer upon it. All of the terms and provisions with respect to such
powers and authority contained in the Warrant Certificates are subject to and
governed by the terms and provisions hereof.
SECTION 5.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following to all of which the Company agrees and to all of
which the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) COMPENSATION AND INDEMNIFICATION. The Company agrees promptly to
pay the Warrant Agent the compensation to be agreed upon with the Company
for all services rendered by the Warrant Agent and to reimburse the Warrant
Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred without gross negligence by the Warrant Agent in connection with
the services rendered hereunder by the Warrant Agent. The Company also
agrees to indemnify the Warrant Agent for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
the part of the Warrant Agent, arising out of or in connection with its
acting as Warrant Agent hereunder, as well as the costs and expenses of
defending against any claim of such liability.
(b) AGENT FOR THE COMPANY. In acting under this Warrant Agreement
and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligations
or relationship of agency or trust for or with any of the holders of
Warrant Certificates or beneficial owners of Warrants.
(c) COUNSEL. The Warrant Agent may consult with counsel satisfactory
to it, and the written advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the advice of
such counsel.
(d) DOCUMENTS. The Warrant Agent shall be protected and shall incur
no liability for or in respect of any action taken or thing suffered by it
in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(e) CERTAIN TRANSACTIONS. The Warrant Agent, and its officers,
directors and employees, may become the owner of, or acquire any interest
in, Warrants, with the same rights
-8-
<PAGE>
that it or they would have if it were not the Warrant Agent hereunder, and,
to the extent permitted by applicable law, it or they may engage or be
interested in any financial or other transaction with the Company and may
act on, or as depositary, trustee or agent for, any committee or body of
holders of Warrant Securities or other obligations of the Company as freely
as if it were not the Warrant Agent hereunder. Nothing in this Warrant
Agreement shall be deemed to prevent the Warrant Agent from acting as
Trustee under any of the Indentures.
(f) NO LIABILITY FOR INTEREST. Unless otherwise agreed with the
Company, the Warrant Agent shall have no liability for interest on any
monies at any time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.
(g) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall have no
liability with respect to any invalidity of this Agreement or any of the
Warrant Certificates (except as to the Warrant Agent's countersignature
thereon).
(h) NO RESPONSIBILITY FOR REPRESENTATIONS. The Warrant Agent shall
not be responsible for any of the recitals or representations herein or in
the Warrant Certificates (except as to the Warrant Agent's countersignature
thereon), all of which are made solely by the Company.
(i) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be obligated to
perform only such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be read
into this Agreement or the Warrant Certificates against he Warrant Agent.
The Warrant Agent shall not be under any obligation to take any action
hereunder which may tend to involve it in any expense or liability, the
payment of which within a reasonable time is not, in its reasonable
opinion, assured to it. The Warrant Agent shall not be accountable or
under any duty or responsibility for the use by the Company of any of the
Warrant Certificates authenticated by the Warrant Agent and delivered by it
to the Company pursuant to this Agreement or for the application by the
Company of the proceeds of the Warrant Certificates. The Warrant Agent
shall have no duty or responsibility in case of any default by the Company
in the performance of its covenants or agreements contained herein or in
the Warrant Certificates or in the case of the receipt of any written
demand from a holder of a Warrant Certificate with respect to such default,
including, without limiting the generality of the foregoing, any duty or
responsibility to initiate or attempt to initiate any proceedings at law or
otherwise or, except as provided in Section 6.02 hereof, to make any demand
upon the Company.
SECTION 5.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR. (a) The Company
agrees, for the benefit of the holders from time to time of the Warrant
Certificates, that there shall at all times be a Warrant Agent hereunder until
all the Warrants have been exercised or are no longer exercisable.
(b) The Warrant Agent may at any time resign as agent by giving
written notice to the Company of such intention on its part, specifying the
date on which its desired resignation shall become effective; provided that
such date shall not be less than three months after the date on which such
notice is given unless the Company otherwise agrees. The Warrant Agent
hereunder may be removed at any time by the filing with it of an instrument
in writing signed by or on behalf of the Company and specifying such
removal and the intended date when it shall become effective. Such
resignation or removal shall take effect upon the appointment by the
Company, as hereinafter
-9-
<PAGE>
provided, of a successor Warrant Agent (which shall be a bank or trust
company authorized under the laws of the jurisdiction of its organization
to exercise corporate trust powers) and the acceptance of such appointment
by such successor Warrant Agent. The obligation of the Company under
Section 5.02(a) shall continue to the extent set forth therein
notwithstanding the resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall commence a voluntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or under any other
applicable Federal or State bankruptcy, insolvency or similar law or shall
consent to the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Warrant Agent or its property or affairs, or shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action, or a decree or order
for relief by a court having jurisdiction in the premises shall have been
entered in respect of the Warrant Agent in an involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or similar law, or a
decree or order by a court having jurisdiction in the premises shall have
been entered for the appointment of a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or similar official) of the Warrant Agent
or of its property or affairs, or any public officer shall take charge or
control of the Warrant Agent or of its property or affairs for the purpose
of rehabilitation, conservation, winding up or liquidation, a successor
Warrant Agent, qualified as aforesaid, shall be appointed by the Company by
an instrument in writing, filed with the successor Warrant Agent. Upon the
appointment as aforesaid of a successor Warrant Agent and acceptance by the
successor Warrant Agent of such appointment, the Warrant Agent shall cease
to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges
and disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit
with or held by such predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any
corporation to which the Warrant Agent shall sell or otherwise transfer all
or substantially all the assets and business of the Warrant Agent, provided
that it shall be qualified as aforesaid, shall be the successor Warrant
Agent under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto.
ARTICLE VI
-10-
<PAGE>
MISCELLANEOUS
SECTION 6.01. AMENDMENT. This Agreement may be amended by the parties
hereto, without the consent of the holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement as the Company and
the Warrant Agent may deem necessary or desirable; PROVIDED that such action
shall not affect adversely the interests of the holders of the Warrant
Certificates.
SECTION 6.02. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT. If
the Warrant Agent shall receive any notice or demand addressed to the Company by
the holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.
SECTION 6.03. ADDRESSES. Any communication from the Company to the
Warrant Agent with respect to this Agreement shall be addressed to
__________, Attn: __________ and any communication from the Warrant Agent to
the Company with respect to this Agreement shall be addressed to Arcadia
Financial Ltd., 7825 Washington Avenue South, Minneapolis, Minnesota
55439-2435, Attention: Corporate Secretary (or such other address as shall
be specified in writing by the Warrant Agent or by the Company).
SECTION 6.04. GOVERNING LAW. This Agreement and each Warrant Certificate
issued hereunder shall be governed by and construed in accordance with the laws
of the State of Minnesota.
SECTION 6.05. DELIVERY OF PROSPECTUS. The Company shall furnish to the
Warrant Agent sufficient copies of a prospectus relating to the Warrant
Securities deliverable upon exercise of the Warrants (the "Prospectus"), and the
Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent
will deliver to the holder of the Warrant Certificate evidencing such Warrant,
prior to or concurrently with the delivery of the Warrant Securities issued upon
such exercise, a Prospectus. The Warrant Agent shall not, by reason of any such
delivery, assume any responsibility for the accuracy or adequacy of such
Prospectus.
SECTION 6.06. OBTAINING OF GOVERNMENTAL APPROVALS. The Company will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of governmental agencies and
authorities and securities act filings under United States Federal and State
laws (including without limitation a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933), which may be
or become requisite in connection with the issuance, sale, transfer, and
delivery of the Warrant Securities issued upon exercise of the Warrant
Certificates, the exercise of the Warrants, the issuance, sale, transfer and
delivery of the Warrants or upon the expiration of the period during which the
Warrants are exercisable.
SECTION 6.07. PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing in
this Agreement shall give to any person other than the Company, the Warrant
Agent and the holders of the Warrant Certificates any right, remedy or claim
under or by reason of this Agreement.
-11-
<PAGE>
SECTION 6.08. HEADINGS. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
SECTION 6.09. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which as so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
SECTION 6.10. INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificate for
inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
ARCADIA FINANCIAL LTD.
By _______________________
[Name]
[Title]
__________________________
Warrant Agent
By _______________________
[Name]
[Title]
-12-
<PAGE>
Exhibit A
FORM OF WARRANT CERTIFICATE
[Face of Warrant Certificate]
[IF WARRANTS ARE ATTACHED TO OTHER Prior to ______________ this warrant
SECURITIES AND ARE NOT IMMEDIATELY Certificate cannot be transferred or
DETACHABLE. exchanged unless attached to a
[Title of Other Securities].]
[FORM OF LEGEND IF WARRANTS ARE Prior to ______________, warrants
NOT IMMEDIATELY EXERCISABLE. evidenced by this Warrant Certificate
cannot be exercised.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
VOID AFTER 3:30 P.M., NEW YORK CITY TIME, ON _____________, _______
ARCADIA FINANCIAL LTD.
Warrants to Purchase
Warrant Certificate Representing
[Title of Warrant Securities]
No.___________ ___________ Warrants
This certifies that ________________ or registered assigns is the
registered owner of the above indicated number of Warrants, each Warrant
entitling such owner [IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND ARE NOT
IMMEDIATELY DETACHABLE - , subject to the registered owner qualifying as a
"Holder" of this Warrant Certificate, as hereinafter defined) to purchase, at
any time [after 3:30 P.M., New York City time, on _________ and] on or before
3:30 P.M., New York City time, on _________, _________ shares of [Title of
Warrant Securities] (the "Warrant Securities"), of Arcadia Financial Ltd. (the
"Company") on the following basis: during the period from _________, through
and including _________,the exercise price of each Warrant will be _________;
during the period from _________, through and including _________,the exercise
price of each warrant will be _________ (the "Warrant Price"). No adjustment
shall be made for any dividends on any Warrant Securities issuable upon exercise
of any Warrant. The Holder may exercise the Warrants evidenced hereby by
providing certain information set forth on the back hereof and by paying in full
[in lawful money of the United States of America] [in cash or by certified check
or official bank check or by bank wire transfer, in each case,] [by bank wire
transfer] in immediately available funds, the Warrant Price
A-1
<PAGE>
for each Warrant exercised to the Warrant Agent (as hereinafter defined) and
by surrendering this Warrant Certificate, with the purchase form on the back
hereof duly executed, at the corporate trust office of [name of Warrant Agent]
, or its successor as warrant agent (the "Warrant Agent"), [or _________], which
is, on the date hereof, at the address specified on the reverse hereof, and
upon compliance with and subject to the conditions set forth herein and in
the Warrant Agreement (as hereinafter defined).
The term "Holder" as used herein shall mean [IF WARRANTS ARE ATTACHED TO
OTHER SECURITIES AND ARE NOT IMMEDIATELY DETACHABLE - prior to _________, ___
(the "Detachable Date"), the registered owner of the Company's [title of Other
Securities] to which this Warrant Certificate was initially attached, and after
such Detachable Date,] the person in whose name at the time this Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose pursuant to Section 4.01 of the Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase Warrant Securities in registered form. Upon any exercise
of fewer than all of the Warrants evidenced by this Warrant Certificate, there
shall be issued to the Holder hereof a new Warrant Certificate evidencing the
number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of _________, _____ (the "Warrant Agreement")
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the Holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant Agreement are on file at the above-mentioned
office of the Warrant Agent [and at____________].
[IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND ARE NOT IMMEDIATELY
DETACHABLE - Prior to the Detachable Date, this Warrant Certificate may be
exchanged or transferred only together with the [Title of Other Securities] (the
"Other Securities") to which this Warrant Certificate was initially attached,
and only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Security. Additionally, on or prior to the Detachable
Date, each transfer of such Other Security or the register of the Other
Securities shall operate also to transfer this Warrant Certificate. After such
date, transfer of this] [IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND ARE
NOT IMMEDIATELY DETACHABLE - Transfer of this] Warrant Certificate may be
registered when this Warrant Certificate is surrendered at the corporate trust
office of the Warrant Agent [or ___________ ] by the registered owner of such
owner's assigns, in person or by an attorney duly authorized in writing, in the
manner and subject to the limitations provided in the Warrant Agreement.
[IF OTHER SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE -
Except as provided in the immediately preceding paragraph, after] [IF OTHER
SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANT ALONE -
After] countersignature by the Warrant Agent and prior to the expiration of this
Warrant Certificate, this Warrant Certificate may be exchanged at the corporate
trust office of the Warrant Agent [or_________] for Warrant Certificates
representing the same aggregate number of Warrants.
A-2
<PAGE>
This Warrant Certificate shall not entitle the Holder hereof to any of the
rights of a holder of the Warrant Securities, including, without limitation, the
right to receive payments of dividends or distributions, if any, on the Warrant
Securities or to exercise any voting rights.
This Warrant Certificate shall not be valid or obligatory for any purpose
until countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed in
its name and on its behalf by the facsimile signatures of its duly authorized
officers.
Dated: _________________, ________
ARCADIA FINANCIAL LTD.
By __________________________
[Name]
[Title]
Countersigned:
___________________________________
As Warrant Agent
By ____________________________
[Name]
[Title]
A-3
<PAGE>
[Reverse of Warrant Certificate]
(Instructions for Exercise of Warrant)
To exercise the Warrants evidenced hereby, the Holder must pay [in United
States dollars] [in cash or by certified check or official bank check or by bank
wire transfer, in each case] [by bank wire transfer in immediately available
funds], the Warrant Price in full for Warrants exercised, to [Warrant Agent]
[address of Warrant Agent], Attn:_________, which payment must specify the name
of the Holder and the number of Warrants exercised by such Holder. In addition,
the Holder must complete the information required below and present this Warrant
Certificate in person or by mail (certified or registered mail is recommended)
to the Warrant Agent at the appropriate address set forth below. This Warrant
Certificate, completed and duly executed, must be received by the Warrant Agent
within five business days of the payment.
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise _________ Warrants,
evidenced by this Warrant Certificate, to purchase ________ shares of the
[Title of Warrant Securities] (the "Warrant Securities") of Arcadia Financial
Ltd. and represents that he has tendered payment for such Warrant Securities [in
Dollars] [in cash or by certified check or official bank check or by bank wire
transfer, in each case] [by bank wire transfer in immediately available funds]
to the order of Arcadia Financial Ltd., c/o [insert name and address of Warrant
Agent], in the amount of _________ in accordance with the terms hereof. The
undersigned requests that said principal amount of Warrant Securities be in
fully registered form in the authorized denominations, registered in such names
and delivered all as specified in accordance with the instructions set forth
below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below.
Dated: Name _______________
(Please Print)
Address
(Insert Social Security or Other
Identifying Number of Holder)
A-4
<PAGE>
Signature Guaranteed
Signature
[FOR REGISTERED WARRANTS -- Signature
must conform in all respects to name of
holder as specified on the face of this
Warrant Certificate and must bear a
signature guarantee by a bank, trust
company or member broker of the New York,
Midwest or Pacific Stock Exchange)
This Warrant may be exercised at the following addresses:
By hand at
By mail at
[Instructions as to form and delivery of Warrant Securities and, if
applicable, Warrant Certificates evidencing unexercised Warrants - complete as
appropriate.]
A-5
<PAGE>
EXHIBIT 4.8
- ----------------------------------------------------------------------------
ARCADIA FINANCIAL LTD.
AND
____________, AS WARRANT AGENT
DEBT SECURITIES
WARRANT AGREEMENT
DATED AS OF __________________, ________
- ----------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
ISSUANCE, EXECUTION AND AUTHENTICATION
OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrant Certificates. . . . . . . . . . . . . . 2
SECTION 1.02. Form of Warrant Certificates. . . . . . . . . . . . . . . . 2
SECTION 1.03. Execution and Authentication of Warrant Certificates. . . . 2
SECTION 1.04. Temporary Warrant Certificates. . . . . . . . . . . . . . . 3
SECTION 1.05. Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.06. Definition of Holder. . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS
SECTION 2.01. Warrant Price . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.02. Duration of Warrants. . . . . . . . . . . . . . . . . . . . 4
SECTION 2.03. Exercise of Warrants. . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
[REGISTRATION;] EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
SECTION 3.01. [Registration;] Exchange and Transfer of Warrant
Certificates. . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.02. Mutilated, Destroyed, Lost or Stolen Warrant Certificates . 6
SECTION 3.03. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . 6
SECTION 3.04 Cancellation of Warrant Certificates. . . . . . . . . . . . 7
ARTICLE IV
OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF WARRANT CERTIFICATES
SECTION 4.01. No Rights as Holders of Warrant Debt Securities
Conferred by Warrants or Warrant Certificates . . . . . . . 7
SECTION 4.02. Holder of Warrant Certificate May Enforce Rights. . . . . . 7
ARTICLE V
i
<PAGE>
<S> <C>
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 5.02. Conditions of Warrant Agent's Obligations . . . . . . . . . 8
SECTION 5.03. Resignation, Removal and Appointment of Successor . . . . . 9
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Rights and Duties of Successor Corporation. . . . . . . . . 10
SECTION 6.02. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.03. Notices and Demands to the Corporation and Warrant
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.04 Addresses . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.05. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.06. Delivery of Prospectus. . . . . . . . . . . . . . . . . . . 11
SECTION 6.07. Obtaining of Governmental Approvals . . . . . . . . . . . . 11
SECTION 6.08. Persons Having Rights Under Warrant Agreement . . . . . . . 11
SECTION 6.09. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 6.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 6.11. Inspection of Agreement . . . . . . . . . . . . . . . . . . 12
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exhibit A - Form of Warrant Certificate. . . . . . . . . . . . . . . . . . A-1
</TABLE>
ii
<PAGE>
EXHIBIT 4.8
ARCADIA FINANCIAL LTD.
FORM OF DEBT SECURITIES WARRANT AGREEMENT
DEBT SECURITIES WARRANT AGREEMENT, dated as of ___________________,
between Arcadia Financial Ltd., a corporation duly incorporated and existing
under the laws of the State of Minnesota (the "Company") and
_________________, a [corporation] [national banking association]organized
and _________________ existing under the laws of ______________________, as
Warrant Agent (herein called the "Warrant Agent").
WHEREAS, the Company has entered into an indenture dated as of
[________________________________________ (the "Senior Indenture"), with
_____________________________, as trustee (such trustee, and any successors to
such trustee, herein called the "Senior Trustee"), providing for the issuance
from time to time of its unsecured and unsubordinated debt securities, to be
issued in one or more series as provided in the Senior Indenture (the "Debt
Securities");] __________________________ (the "Subordinated Indenture"), with
___________________________, as trustee (such trustee, and any successors to
such trustee, herein called the "Subordinated Trustee"), providing for the
issuance from time to time of its subordinated debt securities, to be issued in
one or more series as provided in the Subordinated Indenture (the "Debt
Securities");]
WHEREAS, the Company proposes to sell [IF OTHER DEBT SECURITIES AND
WARRANTS --title of Debt Securities being offered (the "Other Debt Securities")
with] warrant certificates (such warrant certificates and other warrant
certificates issued pursuant to this Agreement herein called the "Warrant
Certificates") evidencing one or more warrants (the "Warrants" or, individually,
a "Warrant" representing the right to purchase [title of Debt Securities
purchasable through exercise of Warrants] (the "Warrant Debt Securities"); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, exchange, exercise and replacement of the Warrant Certificates, and in
this Agreement wishes to set forth, among other things, the form and provisions
of the Warrant Certificates and the terms and conditions on which they may be
issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
<PAGE>
ARTICLE I
ISSUANCE, EXECUTION AND AUTHENTICATION OF
WARRANT CERTIFICATES
SECTION 1.01. ISSUANCE OF WARRANT CERTIFICATES. [IF WARRANTS
ALONE--Upon issuance, each Warrant Certificate shall evidence one or more
Warrants.] [IF OTHER DEBT SECURITIES AND WARRANTS--Warrant Certificates
shall be [initially] issued in units with the Other Debt Securities and shall
[not] be separately transferable [before _______________, _____ (the "Detachable
Date"). The Warrant Certificate or Certificates included in each such unit
shall evidence an aggregate of __________________________ Warrants for each
$_______________ principal amount of Other Debt Securities included in such
unit.] Each Warrant evidenced thereby shall represent the right, subject to the
provisions contained herein and therein, to purchase Warrant Debt Securities in
the aggregate principal amount of $____________.
SECTION 1.02. FORM OF WARRANT CERTIFICATES. The Warrant Certificates
(including the Form(s) of Exercise [and Assignment] to be set forth on the
reverse thereof) shall be in substantially the from set forth in Exhibit A
hereto, shall be printed, lithographed or engraved on steel engraved borders (or
in any other manner determined by the officers executing such Warrant
Certificates, as evidenced by their execution of such Warrant Certificates) and
may have such letters, numbers or other marks of identification and such legends
or endorsements placed thereon as may be required to comply with any law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any securities exchange on which the Warrant Certificates may be listed or as
may, consistently herewith, be determined by the officers executing such Warrant
Certificates, as evidenced by their execution of the Warrant Certificates.
SECTION 1.03. EXECUTION AND AUTHENTICATION OF WARRANT
CERTIFICATES. The Warrant Certificates shall be executed on behalf of the
Company by its Chairman of the Board, it President or one of its Vice
Presidents under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Warrant Certificates may be manual or facsimile.
Warrant Certificates evidencing the right to purchase an aggregate
principal amount not exceeding $__________ of Warrant Debt Securities (except as
provided in Section 1.04, 2.03(c), 3.01 and 3.02) may be executed by the Company
and delivered to the Warrant Agent upon the execution of this Warrant Agreement
or from time to time thereafter. The Warrant Agent shall, upon receipt of
Warrant Certificates duly executed on behalf of the Company, authenticate
Warrant Certificates evidencing Warrants representing the right to purchase up
to $_________ aggregate principal amount of Warrant Debt Securities and shall
deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall authenticate a Warrant Certificate only if the Warrant Certificate
is issued in exchange or substitution for one or more previously authenticated
Warrant Certificates [IF REGISTERED WARRANTS--or in connection with their
transfer], as hereinafter provided.
Each Warrant Certificate shall be dated the date of its
authentication by the Warrant Agent.
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No Warrant Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, and no Warrant evidence
thereby shall be exercisable, until such Warrant Certificate has been
authenticated by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence, and the only evidence, that the Warrant Certificate so
authenticated has been duly issued hereunder.
Warrant Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Warrant
Certificates or did not hold such offices at the date of such Warrant
Certificates.
SECTION 1.04. TEMPORARY WARRANT CERTIFICATES. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and
upon the order of the Company the Warrant Agent shall authenticate and
deliver, temporary Warrant Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced substantially of the tenor of
the definitive Warrant Certificates in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Warrant Certificates may determine, as evidenced
by their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at the corporate trust office of
the Warrant Agent [or _______________________], without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Warrant
Certificates, the Company shall execute and the Warrant Agent shall authenticate
and deliver in exchange therefor definitive Warrant Certificates representing
the same aggregate number of Warrants. Until so exchanged, the temporary
Warrant Certificates shall in all respects be entitled to the same benefits
under this Agreement as definitive Warrant Certificates.
SECTION 1.05. PAYMENT OF TAXES. The Company will pay all stamp
taxes and other duties, if any, to which, under the laws of the United States
of America or any State or political subdivision thereof, this Agreement or
the original issuance of the Warrant Certificates may be subject.
SECTION 1.06. DEFINITION OF HOLDER. The term "Holder" as used herein
shall mean [IF OTHER DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--, prior to the Detachable Date, the [bearer] [registered owner] of
the Other Debt Securities to which such Warrant Certificates was initially
attached, and, after such Detachable Date,] [the bearer of such Warrant
Certificate] [the person in whose name at the time such Warrant Certificate
shall be registered upon the books to be maintained by the Warrant Agent for
that purpose pursuant to Section 3.01.]. [IF OTHER DEBT SECURITIES AND WARRANTS
WHICH ARE NOT IMMEDIATELY DETACHABLE--Prior to the Detachable Date, the Company
will, or will cause the registrar of the Other Debt Securities to make available
to the Warrant Agent current information as to Holders of the Other Debt
Securities.]
ARTICLE II
WARRANT PRICE, DURATION AND
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EXERCISE OF WARRANTS
SECTION 2.01. WARRANT PRICE/(1)During the period from _____________,
__________ through and including _______________________, _______________,
each Warrant shall entitle the Holder thereof, subject to the
provisions of this Agreement, to purchase from the Company the principal amount
of Warrant Debt Securities stated in the Warrant Certificate at the Warrant
Price of ______% of the principal amount thereof [plus accrued amortization, if
any, of the original issue discount of the Warrant Debt Securities] [plus
accrued interest, if any, from the most recent date from which interest shall
have been paid on the Warrant Debt Securities or, if no interest shall have been
paid on the Warrant Debt Securities, from ______________________, _________].
During the period from _____________________, _____ through and including
______________________, ________, each Warrant shall entitled the Holder
thereof, subject to the provisions of this Agreement, to purchase from the
Company the principal amount of Warrant Debt Securities stated in the Warrant
Certificate at the Warrant Price of _____% of the principal amount thereof
[plus accrued amortization, if any, of the original issue discount of the
Warrant] [plus accrued interest, if any, from the most recent date from which
interest shall have been paid on the Warrant Debt Securities or, if no interest
shall have been paid on the Warrant Debt Securities, from __________________,
________]. [In each case, the original issue discount ($_________ for each
$1,000 principal amount of Warrant Debt Securities) will be amortized at a
____% annual rate, computed on a[n] [semi-] annual basis [using a 360-day
year consisting of twelve 30-day months].] Such Warrant Price of each Warrant
is referred to in this Agreement as the "Warrant Price."
SECTION 2.02. DURATION OF WARRANTS. Any Warrant evidence by a Warrant
Certificate may be exercised at any time, as specified herein, on or after [the
date thereof] [_____________, ______] and at or before 3:30 p.m., New York
City time, on ________________, ______, (the "Expiration Date"). Each Warrant
not exercised at or before such time on the Expiration Date shall become
void, and all rights of the Holder of the Warrant Certificate evidencing such
Warrant under this Agreement or otherwise shall cease.
SECTION 2.03. EXERCISE OF WARRANTS. (a) During the period specified in
Section 2.02, any whole number of Warrants may be exercised by surrendering the
Warrant Certificate evidencing such Warrants at the place or at the places set
forth in the Warrant Certificate, with the purchase form set forth in the
Warrant Certificate duly executed, accompanied by payment in full, in lawful
money of the United States of America, [in cash or by certified check or
official bank check in New York Clearing House funds] [by wire transfer in
immediately available funds], of the Warrant Price for each Warrant exercised.
The date on which payment in full of the Warrant Price for a Warrant and the
duly executed and completed Warrant Certificate are received by the Warrant
Agent shall be deemed to be the date on which such Warrant is exercised. The
Warrant Agent shall deposit all funds received by it as payment for the exercise
of Warrants to the account of the Company maintained with it for such purpose
and shall advise the Company by telephone at the end of each day on which such a
payment is received of the amount so deposited to its account. The Warrant Agent
shall promptly confirm such telephonic advice to the Company in writing.
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(1) Complete and modify the provision of this Section as appropriate to
reflect the exact terms of the Warrants and the Warrant Debt Securities.
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<PAGE>
(b) The Warrant Agent shall from time to time, as promptly as
practicable after the exercise of any Warrants in accordance with the
terms and conditions of this Agreement and the Warrant Certificates,
advise the Company and the Trustee of (i) the number of Warrants so
exercised, (ii) the instructions of each Holder of the Warrant
Certificates evidencing such Warrants with respect to delivery of the
Warrant Debt Securities to which such Holder is entitled upon such
exercise, and instructions of such Holder as to delivery of Warrant
Certificates evidencing the balance, if any, of the Warrants remaining
after such exercise, and (iii) such other information as the Company
or the Trustee shall reasonably require.
(c) As soon as practicable after the exercise of any Warrants,
the Company shall issue, pursuant to the Indenture, in authorized
denominations, to or upon the order of the Holder of the Warrant
Certificate evidencing such Warrants, the Warrant Debt Securities to
which such Holder is entitled in fully registered form, registered in
such name or names as may be directed by such Holder; and, if fewer
than all of the Warrants evidenced by such Warrant Certificate were
exercised, the Company shall execute and an authorized officer of the
Warrant Agent shall manually authenticate and deliver a new Warrant
certificate evidencing the number of Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or other
tax or other governmental charge required to be paid in connection
with any transfer involved in the issue of the Warrant Debt
Securities; and in the event that any such transfer is involved, the
Company shall not be required to issue or delivery any Warrant Debt
Securities until such tax or other charge shall have been paid or it
has been established to the Company's satisfaction that no such tax or
other charge is due.
ARTICLE III
[REGISTRATION;] EXCHANGE, TRANSFER AND
SUBSTITUTION OF WARRANT CERTIFICATES
SECTION 3.01. [REGISTRATION;] EXCHANGE AND TRANSFER OF WARRANT
CERTIFICATES. [IF REGISTERED WARRANTS--The Warrant Agent shall keep, at its
corporate trust office [and at ____________________], books in which, subject
to such reasonable regulations as it may prescribe, it shall register Warrant
Certificates and transfer of outstanding Warrant Certificates.]
[IF OTHER DEBT SECURITIES AND WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Prior to the Detachable Date, a Warrant Certificate may be exchanged
or transferred only together with the Other Debt Security to which such Warrant
Certificate was initially attached, and only for the purpose of effecting, or in
conjunction with, an exchange or transfer of such Other Debt Securities.
Additionally, on or prior to the Detachable Date, each transfer of an Other Debt
Security [on the register of the Other Debt Securities] shall operate also to
transfer the Warrant Certificate or Certificates to which such Other Debt
Security was initially attached. After the Detachable Date, upon] [IF OTHER
DEBT SECURITIES AND WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR IF WARRANTS
ALONE--Upon] current at the corporate trust office of the Warrant Agent [or
__________________] of Warrant Certificates properly endorsed [or accompanied
by appropriate instruments of transfer] and accompanied by written instructions
for [transfer or] exchange, all in form satisfactory to the Company and the
Warrant Agent,
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<PAGE>
such Warrant Certificates may be exchanged for other Warrant Certificates
[IF REGISTERED WARRANTS--or may be transferred in whole or in part]; provided
that Warrant Certificates issued in exchange for [or upon transfer of]
surrendered Warrant Certificates shall evidence the same aggregate number of
Warrants and the Warrant Certificates so surrendered. No service charge shall
be made for any exchange [or transfer] of Warrant Certificates, but the
Company may require payment of a sum sufficient to cover any stamp or other
tax or governmental charge that may be imposed in connection with any such
exchange [or transfer]. Whenever any Warrant certificates are so surrendered
for exchange [or transfer], the Company shall execute and an authorized officer
of the Warrant Agent shall manually authenticate and deliver to the person or
persons entitled thereto a Warrant Certificate or Warrant Certificates as so
requested. The Warrant Agent shall not be required to effect any exchange [or
transfer] which would result in the issuance of a Warrant Certificate evidencing
a fraction of a Warrant or a number of full Warrants and a fraction of Warrant.
All Warrant Certificates issued upon any exchange [or transfer] of Warrant
Certificates shall evidence the same obligations, and be entitled to the same
benefits under this Agreement, as the Warrant Certificates surrendered for such
exchange [or transfer].
SECTION 3.02. MUTILATED, DESTROYED, LOST OR STOLEN WARRANT
CERTIFICATES. If any mutilated Warrant Certificate is surrendered to the Warrant
Agent, the Company shall execute and an officer of the Warrant Agent shall
manually authenticate and deliver in exchange therefor a new Warrant Certificate
of like tenor and principal amount and bearing a number not contemporaneously
outstanding. If there shall be delivered to the Company and the Warrant Agent
(i) evidence to their satisfaction of the destruction, loss or theft of any
Warrant Certificate and of the ownership thereof and (ii) such security or
indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the Company or the
Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute and upon its request an officer of the
Warrant Agent shall manually authenticate and deliver, in lieu of any such
destroyed, lost or stolen Warrant Certificate, a new Warrant Certificate of like
tenor and principal amount and bearing a number not contemporaneously
outstanding, upon the issuance of any new Warrant Certificate under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Warrant Agent) connected
therewith. Every new Warrant Certificate issued pursuant to this Section in lieu
of any destroyed, lost or stolen Warrant Certificate shall evidence an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Warrant Certificate shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly issued
hereunder. The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Warrant Certificates.
SECTION 3.03. PERSONS DEEMED OWNERS. [IF OTHER DEBT SECURITIES AND
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--Prior to the Detachable Date, the
Company, the Warrant Agent and all other persons may treat the owner of any
Other Debt Security as the owner of the Warrant Certificates initially attached
thereto for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidence by such Warrant Certificates, any notice to
the contrary notwithstanding. After the Detachable Date,] [IF REGISTERED
WARRANTS--and prior to due presentment of a Warrant Certificate for registration
or transfer,] the Company, the Warrant Agent and all other person may treat
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<PAGE>
the Holder as the owner thereof for any purpose and as the person entitled to
exercise the rights represented by the Warrants evidenced thereby, any notice
to the contrary notwithstanding.
SECTION 3.04. CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered for exchange [, transfer] or exercise of the Warrants
evidenced thereby shall, if surrendered to the Corporation, be delivered to the
Warrant Agent, and [IF WARRANT CERTIFICATES ARE ISSUED IN BEARER FORM--, except
as provided bellow,] all Warrant Certificates surrendered or so delivered to the
Warrant Agent shall be promptly cancelled by it and shall not be reissued and,
except as expressly permitted by this Agreement, no Warrant Certificate shall be
issued hereunder in lieu or in exchange thereof. [IF WARRANT CERTIFICATES ARE
ISSUED IN BEARER FORM--Warrant Certificates delivered to the Warrant Agent in
exchange for Warrant Certificates of other denominations may be retained by the
Warrant Agent for reissue as authorized hereunder.] The Company may at any time
deliver to the Warrant Agent for cancellation any Warrant Certificates
previously issued hereunder which the Company may have acquired in any manner
whatsoever, and all Warrant Certificates so delivered shall be promptly
cancelled by the Warrant Agent. All cancelled Warrant certificates held by the
Warrant Agent shall be destroyed by it unless by written order the Company
requests their return to it.
ARTICLE IV
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OR WARRANT CERTIFICATES
SECTION 4.01. NO RIGHTS AS HOLDERS OF WARRANT DEBT SECURITIES
CONFERRED BY WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or Warrant
evidenced thereby shall entitle the Holder thereof to any of the rights of a
Holder of the Warrant Debt Securities, including, without limitation, the right
to receive the payment of principal of (or premium, if any) or interest, if any,
on the Warrant Debt Securities or to enforce any of the covenants in the
Indenture.
SECTION 4.02. HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any Holder of any
Warrant Certificate, without the consent of the Warrant Agent, the Trustee, the
holder of any Warrant Debt Securities or the Holder of any other Warrant
Certificate, may, on his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce or otherwise in respect of, his right to exercise the
Warrant or Warrants evidenced by this Warrant Certificate in the manner provided
in the Warrant Certificates and in this Agreement.
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. WARRANT AGENT. The Company hereby appoints
___________________ as Warrant Agent of the Company in respect of the Warrants
and the Warrant Certificates upon the terms and subject to the conditions herein
set forth, and ____________________ hereby accepts such appointment. The
Warrant Agent shall have the power and authority granted to and conferred upon
it in the Warrant Certificates and hereby and such further power and authority
to act on behalf of the Company as the Company may hereafter grant to or confer
upon it All of the terms and provisions with respect to such
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<PAGE>
power and authority contained in the Warrant Certificates are subject to and
governed by the terms and provisions hereof.
SECTION 5.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The Warrant
Agent accepts its obligations herein set forth, upon the terms and conditions
hereof, including the following, to all of which the Company agrees and to all
of which the rights hereunder of the Holders from time to time of the Warrant
Certificates shall be subject:
(a) COMPENSATION AND INDEMNIFICATION. The Company agrees promptly
to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to
reimburse the Warrant Agent for reasonable out-of-pocket expenses
(including counsel fees) incurred by the Warrant Agent in connection
with the services rendered hereunder by the Warrant Agent. The Company
also agrees to indemnify the Warrant Agent for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Warrant Agent, arising out
of or in connection with its acting as such Warrant Agent hereunder,
including the costs land expenses of defending itself against any
claim or liability in connection with the exercise or performance at
any time of its powers or duties hereunder. The obligations of the
Company under this subsection (a) shall survive the exercise of the
Warrant Certificates and the resignation or removal of the Warrant
Agent.
(b) AGENT FOR THE COMPANY. In acting under this Warrant Agreement
and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any
obligation or relationship of agency or trust for or with any of the
owners or Holders of the Warrant Certificates.
(c) COUNSEL. The Warrant Agent may consult with counsel, which
relay include counsel for the Company, and the written advice of such
counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(d) DOCUMENTS. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or omitted by
it in reliance upon any Warrant Certificates, notice, direction,
consent, certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented or
signed by the proper parties.
(e) CERTAIN TRANSACTIONS. The Warrant Agent, any of its officers,
directors and employees, or any other agent of the Company, in its
individual or any other capacity, may become the owner of, or acquire
any interest in, any Warrant Certificates, with the same rights that
it would have if it were not such Warrant Agent, officer, director,
employee or other agent, and, to the extent permitted by applicable
law, it may engage or be interested in any financial or other
transaction with the Company and may act on, or as depositary, trustee
or agent for, any committee or body of holders of Warrant Debt
Securities or other obligations of the Company as freely as if it were
not such Warrant Agent, officer, director, employee or other agent.
Nothing in this Warrant Agreement shall be deemed to prevent the
Warrant Agent from acting as Trustee under the Indenture.
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<PAGE>
(f) NO LIABILITY FOR INTEREST. The Warrant Agent shall not be
under any liability for interest on any monies at any time received by
it pursuant to any of the provisions of this Agreement or of the
Warrant Certificates.
(g) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall not
incur any liability with respect to the validity of this Agreement or
any of the Warrant Certificates.
(h) NO RESPONSIBILITY FOR REPRESENTATIONS. The Warrant Agent
shall not be responsible for any of the recitals or representations
contained herein or in the Warrant Certificates (except as to the
Warrant Agent's Certificate of Authentication thereon), all of which
are made solely by the Company.
(i) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be obligated
to perform such duties as are herein and in the Warrant Certificates
specifically set forth and no implied duties or obligations shall be
read into this Agreement or the Warrant Certificates against the
Warrant Agent. The Warrant Agent shall not be under any obligation to
take any action hereunder which may tend to involve it in any expense
or liability, the payment of which within a reasonable time is not, in
its reasonable opinion, assured to it. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the
Company of any of the Warrant Certificates authenticated by the
Warrant Agent and delivered by it to the Company pursuant to this
Agreement or for the application by the Company of the proceeds of the
Warrant Certificates or any exercise of the Warrants evidenced
thereby. The Warrant Agent shall have no duty or responsibility in
case of any default by the Company in the performance of its covenants
or agreements contained herein or in the Warrant Certificates or in
the Warrant Debt Securities or in the case of the receipt of any
written demand from a Holder of a Warrant certificate with respect to
such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise or, except as provided in
Section 6.03 hereof, to make any demand upon the Company.
SECTION 5.03. RESIGNATION, REMOVAL AND APPOINTMENT OF SUCCESSORS.
(a) The Company agrees, for the benefit of the Holders from time
to time of the Warrant Certificates, that there shall at all times be
a Warrant Agent hereunder until all of the Warrant Certificates are no
longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part,
specifying the date on which it desires its resignation to become
effective; provided that, without the consent of the Company, such
date shall not be less than [three months] after the date on which
such notice is given. The Warrant Agent hereunder may be removed at
any time by the filing with it of an instrument in writing signed by
or on behalf of the Company and specifying such removal and the date
on which the Company expects such removal to become effective. Such
resignation or removal shall take effect upon the appointment by the
Company of a successor Warrant Agent (which shall be a bank or trust
company organized and doing business under the laws of The United
States of America, any State thereof or the District of Columbia and
authorized under such laws to exercise corporate trust powers) by an
instrument in writing filed with such successor Warrant
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Agent and the acceptance of such appointment by such successor
Warrant Agent pursuant to Section 5.03(d).
(c) In case at any time the Warrant Agent shall resign, or be
removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall file a voluntary petition in
bankruptcy or make an assignment for the benefit of its creditors or
consent to the appointment of a receiver or custodian of all or any
substantial part of its property, or shall admit in writing its
inability to pay or meet its debts as they mature, or if a receiver or
custodian of it or of all or any substantial part of its property
shall be appointed, or if an order of any court shall be entered
approving any petition filed by or against it under the provisions of
any applicable bankruptcy or similar law, or if any public officer
shall have taken charge or control of the Warrant Agent or of its
property or affairs, a successor Warrant Agent, qualified as
aforesaid, shall be appointed by the Company by an instrument in
writing, filed with the successor Warrant Agent. Upon the appointment
as aforesaid of a successor Warrant Agent and acceptance by the latter
of such appointment the Warrant Agent so superseded shall cease to be
Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company
an instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or conveyance,
shall become vested with all the authority, rights, powers, trusts,
immunities, duties and obligations of such predecessor with like
effect as if originally named as Warrant Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then
unpaid, shall thereupon become obligated to transfer, deliver and pay
over, and such successor Warrant Agent shall be entitled to receive,
all monies, securities and other property on deposit with or held by
such predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent
may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation succeeding to all or substantially all the
corporate trust business of the Warrant Agent, provided that it shall
be qualified as aforesaid, shall be the successor Warrant Agent under
this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of
any consolidation, merger or sale, lease or conveyance of all or substantially
all of the assets of the Company and upon any assumption by the successor
corporation, such successor corporation shall succeed to and be substituted for
the Company, with the same effect as if it had been named herein, and the
predecessor corporation, except in the event of a lease, shall be relieved of
any further obligation under this Agreement and the Warrants. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Company, any or all of the Warrant Debt Securities
issuable pursuant to the terms hereof. All the Warrant Debt Securities so issued
shall in all respects
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have the same legal rank and benefit under the Indenture as the Warrant Debt
Securities theretofore or thereafter issued in accordance with the terms of
this Agreement and the Indenture.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Warrant Debt Securities thereafter to be issued as may be appropriate.
SECTION 6.02. AMENDMENT. This Agreement may be amended by the parties
hereto, without the consent of the Holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective provision contained herein, or making such provisions in regard to
matters or questions arising under this Agreement as the Company may deem
necessary or desirable; provided that such action shall not adversely affect the
interests of the Holders of the Warrant Certificates in any material respect.
The Warrant Agent may, but shall not be obligated to, enter into any amendment
to this agreement which affects the Warrant Agent's own rights, duties or
immunities under this Agreement or otherwise.
SECTION 6.03. NOTICES AND DEMANDS TO THE CORPORATION AND WARRANT
AGENT. If the Warrant Agent shall receive any notice or demand addressed to the
Company by the Holder of a Warrant Certificate pursuant to the provisions of the
Warrant Certificates, the Warrant Agent shall promptly forward such notice or
demand to the Company.
SECTION 6.04. ADDRESSES. Any communications from the Company to the
Warrant Agent with respect to this Agreement shall be addressed to
_______________, Attention: ______________________, and any communications
from the Warrant Agent to the Company with respect to this Agreement shall be
addressed to Arcadia Financial Ltd., 7825 Washington Avenue South, Minneapolis,
Minnesota 55439-2435, Attention: ________________, (or such other address as
shall be specified in writing by the Warrant Agent or by the Company).
SECTION 6.05. GOVERNING LAW. This Agreement and each Warrant
Certificate issued hereunder shall be governed by and construed in accordance
with the laws of the State of Minnesota.
SECTION 6.06. DELIVERY OF PROSPECTUS. The Company will furnish to
the Warrant Agent sufficient copies of a prospectus, appropriately
supplemented, relating to the Warrant Debt Securities (the "Prospectus"), and
the Warrant Agent agrees that, upon the exercise of any Warrant Certificate,
the Warrant Agent will deliver to the person designated to receive Warrant
Debt Securities prior to or concurrently with the delivery of such
Securities, a Prospectus.
SECTION 6.07. OBTAINING OF GOVERNMENTAL APPROVALS. The Company will
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of governmental
agencies and authorities and securities acts filings under United States
Federal and State laws (including, without limitation, the maintenance of the
effectiveness of a registration statement in respect of the Warrant Debt
Securities under the Securities Act of 1933), which may be or become required
in connection with exercise of the Warrant Certificates and the original
issuance and delivery of the Warrant Debt Securities.
SECTION 6.08. PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT.
Nothing in this Agreement expressed or implied and nothing that may be
inferred from any of the provisions hereof is
-11-
<PAGE>
intended, or shall be construed, to confer upon, or give to, any person or
corporation other than the Company, the Warrant Agent and the Holders of the
Warrant Certificates any right, remedy or claim under or by reason of this
Agreement or of any covenant, condition, stipulation, promise or agreement
hereof; and all covenants, conditions, stipulations, promises and agreements
in this Agreement contained shall be for the sole and exclusive benefit of
the Company and the Warrant Agent and their successors and of the Holders of
the Warrant Certificates.
SECTION 6.09. HEADINGS. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 6.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
SECTION 6.11. INSPECTION OF AGREEMENT. A copy of this Agreement shall
be available at all reasonable times at the principal corporate trust office of
the Warrant Agent [and at for inspection by the Holder of any Warrant
Certificate. The Warrant Agent may require such Holder to submit his Warrant
Certificate for inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
ARCADIA FINANCIAL LTD.
By
----------------------------------
[Name]
[Title]
------------------------------------
Warrant Agent
By
----------------------------------
[Name]
[Title]
-12-
<PAGE>
EXHIBIT A
FORM OF WARRANT CERTIFICATE
[Face of Warrant Certificate]
[FORM IF WARRANTS ARE ATTACHED Prior to _________________, this Warrant
TO OTHER SECURITIES AND Certificate cannot be transferred or
ARE NOT IMMEDIATELY exchanged unless attached to a [Title
DETACHABLE of Other Debt Security]]
[FORM OF LEGEND IF WARRANTS Prior to _________________, Warrants
ARE NOT IMMEDIATELY evidenced by this Warrant
EXERCISABLE Certificate cannot be exercised.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN.
VOID AFTER 3:30 P.M., NEW YORK CITY TIME, ON _________________, _________
ARCADIA FINANCIAL LTD.
WARRANT CERTIFICATE REPRESENTING
WARRANTS TO PURCHASE
[TITLE OF WARRANT DEBT SECURITIES]
_____________________
No. _______________________ __________ Warrants
This certifies that [the bearer is the] [________________ or registered
assigns is the registered] owner of the above indicated number of Warrants, each
Warrant entitling such [bearer [IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND
ARE NOT IMMEDIATELY DETACHABLE --, subject to the bearer qualifying as a
"Holder" of this Warrant Certificate, as hereinafter defined]] [registered
owner] to purchase, at any time [after 3:30 p.m., New York City time, on
____________________, ____________ and] on or before 3:30 p.m., New York City
time, on __________________, _________, $_____________________ principal
amount of [Title of Warrant Debt Securities] (the "Warrant Debt Securities") of
Arcadia Financial Ltd. (the "Company"), issued or to be issued under the
Indenture (as hereinafter defined), on the following basis:(a) [During the
period from _________________________, ___________ through and including
__________________, _________, each Warrant shall entitle the Holder thereof,
subject to the provisions of this Agreement, to purchase from the Company the
principal amount of Warrant Debt Securities stated in the Warrant Certificate at
the Warrant Price of _________% of the principal amount thereof [plus accrued
amortization, if any, of the original issue
- -------------------
(a) Complete and modify the following provisions as appropriate to
reflect the terms of the Warrants and the Warrant Debt Securities.
A-1
<PAGE>
discount of the Warrant Debt Securities] [plus accrued interest, if any, from
the most recent date from which interest shall have been paid on the Warrant
Debt Securities or, if no interest shall have been paid on the Warrant Debt
Securities, from ___________________, ________]; during the period from
________________________, __________ through and including __________________,
____, each Warrant shall entitle the Holder thereof, subject to the provisions
of this Agreement, to purchase from the Company the principal amount of
Warrant Debt Securities stated in the Warrant Certificate at the Warrant
Price of ________% of the principal amount thereof [plus accrued amortization,
if any, of the original issue discount of the Warrant Debt Securities] [plus
accrued interest, if any, from the most recent date from which interest shall
have been paid on the Warrant Debt Securities or, if no interest shall have been
paid on the Warrant Debt Securities, from _____________________, _______] [in
each case, the original issue discount ($____________________ for each $1,000
principal amount of Warrant Debt Securities) will be amortized at a % annual
rate, computed on a[n] [semi-]annual basis [, using a 360 day year consisting of
twelve 30 day months] (the "Warrant Price"). The Holder of this Warrant
Certificate may exercise the Warrants evidenced hereby, in whole or in part, by
surrendering this Warrant Certificate, with the purchase form set forth hereon
duly completed, accompanied by payment in full, in lawful money of the United
States of America, [in cash or by certified check or official bank check in New
York Clearing House funds] [by bank wire transfer in immediately available
funds], the Warrant Price for each Warrant exercised, to the Warrant Agent (as
hereinafter defined), at the corporate trust office of [name of Warrant Agent],
or its successor as warrant agent (the "Warrant Agent") [or at
______________________,], at the addresses specified on the reverse hereof and
upon compliance with and subject to the conditions set forth herein and in the
Warrant Agreement (as hereinafter defined). This Warrant Certificate may be
exercised only for the purchase of Warrant Debt Securities in the principal
amount of [$1,000] or any integral multiple thereof.
The term "Holder" as used herein shall mean [IF WARRANTS ARE ATTACHED TO
OTHER SECURITIES AND ARE NOT IMMEDIATELY DETACHABLE--, prior to
____________________, ___________ (the "Detachable Date"), the [bearer]
[registered owner] of the Company's [title of Other Debt Securities] to which
this Warrant Certificate was initially attached, and after such Detachable
Date,] [the bearer of such Warrant Certificate] [the person in whose name at the
time such Warrant Certificate shall be registered upon the books to be
maintained by the Warrant Agent Or that purpose pursuant to Section 3.01].
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase Warrant Debt Securities in registered form. Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the [bearer] [registered owner] hereof a
new Warrant Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement dated as of ____________________, __________ (the "Warrant
Agreement"), between the Company and the Warrant Agent and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions the holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant Agreement are on file at the above-mentioned
office of the Warrant Agent [and at __________________________].
The Warrant Debt Securities to be issued and delivered upon the exercise of
Warrants evidenced by this Warrant Certificate may be issued under and in
accordance with an Indenture, [dated as of ____________________, _________ (the
"Senior Indenture"), between the Company and _____________________, as trustee
(such trustee, and any successors to such trustee, the "Senior Trustee")] [dated
as of
A-2
<PAGE>
________________________, __________ (the "Subordinated Indenture"), between
the Company and _______________________, as trustee (such trustee, and any
successors to such trustee, the "Subordinated Trustee")] and will be subject to
the terms and provisions contained in the Warrant Debt Securities and in the
Indenture. Copies of the [Senior][Subordinated] Indenture, including the form
of the Warrant Debt Securities, are on file at the corporate trust office of the
Trustee [and at _______________________].
[IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND ARE NOT IMMEDIATELY
DETACHABLE--Prior to _____________________, _________ (the "Detachable Date"),
this Warrant Certificate may be exchanged or transferred only together with the
[title of Other Debt Security] (the "Other Debt Security") to which this Warrant
Certificate was initially attached, and only for the purpose of effecting or in
conjunction with, an exchange or transfer of such Other Debt Security.
Additionally, on or prior to the Detachable Date, each transfer of such Other
Debt Security on the register of the Other Debt Securities shall operate also to
transfer this Warrant Certificate. After the Detachable Date, this] [IF
WARRANTS ARE ATTACHED TO OTHER SECURITIES AND ARE IMMEDIATELY DETACHABLE OR
WARRANTS ALONE--This] Warrant Certificate, and all rights hereunder, may be
transferred [IF BEARER WARRANTS--by delivery and the Company and the Warrant
Agent may treat the bearer hereof as the owner for all purposes] [IF REGISTERED
WARRANTS--when surrendered at the corporate trust office of the Warrant Agent
[or __________] by the registered owner or his assigns, in person or by an
attorney duly authorized in writing in the manner and subject to the limitations
provided in the Warrant Agreement.]
[IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND ARE NOT IMMEDIATELY
DETACHABLE--Except as provided in the immediately preceding paragraph, after]
[IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND ARE IMMEDIATELY DETACHABLE OR
WARRANTS ALONE--After] authentication by the Warrant Agent and prior to the
expiration of this Warrant Certificate, this Warrant Certificate may be
exchanged at the corporate trust office of the Warrant Agent [or at __________]
for Warrant Certificates representing the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the Holder hereof to any of the
rights of a holder of the Warrant Debt Securities, including, without
limitation, the right to receive payments of principal of (and premium, if any)
or interest, if any, on the Warrant Debt Securities or to enforce any of the
covenants of the Indenture.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Warrant Certificate shall not be valid or obligatory for any purpose
until authenticated by the Warrant Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
ARCADIA FINANCIAL LTD.
A-3
<PAGE>
By
-----------------------------------
[Name]
[Title]
-------------------------------------
Warrant Agent
By
-----------------------------------
[Name]
[Title]
A-4
<PAGE>
[Reverse of Warrant Certificate]
(Instructions for Exercise of Warrants)
To exercise any Warrants evidenced hereby, the Holder of this Warrant
Certificate must pay [in cash or by certified check or official bank check in
New York Clearing House funds] [by bank wire transfer in immediately available
funds], the Warrant Price in full for each of the Warrants exercised, to
[Warrant Agent] [address of Warrant Agent], Corporate Trust Department,
__________, Attn: __________, which payment should specify the name of the
Holder of this Warrant Certificate and the number of Warrants exercised by such
Holder. In addition, the Holder of this Warrant Certificate should complete the
information required below and present in person or mail by registered mail this
Warrant Certificate to the Warrant Agent at the addresses set forth below.
FORM OF EXERCISE
(To be executed upon exercise of Warrants.)
The undersigned hereby irrevocably elects to exercise ___________________
Warrants, represented by this Warrant Certificate, to purchase
$__________________ principal amount of the [Title of Warrant Debt Securities]
(the "Warrant Debt Securities") of Arcadia Financial Ltd. and represents that he
has tendered payment for such Warrant Debt Securities [in cash or by certified
check or official bank check in New York Clearing House funds] [by bank wire
transfer in immediately available funds] to the order of Arcadia Financial Ltd.,
c/o [NAME AND ADDRESS OF WARRANT AGENT], in the amount of $____________________
in accordance with the terms hereof. The undersigned requests that said
principal amount of Warrant Debt Securities be in fully registered form, in the
authorized denominations, registered in such names and delivered, all as
specified in accordance with the instructions set forth below.
If said principal amount of Warrant Debt Securities is less than all of the
Warrant Debt Securities purchasable hereunder, the undersigned requests that a
new Warrant Certificate representing the remaining balance of the Warrants
evidenced hereby be issued and delivered to the undersigned unless otherwise
specified in the instructions below.
A-5
<PAGE>
Dated: Name
--------------------------- --------------------------------
(Please Print)
- --------------------------------- Address
(Insert Social Security or Other -------------------------------
Identifying Number of Holder)
Signature
-----------------------------
[IF REGISTERED WARRANT--
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant Certificate and must
bear a signature guarantee by
a bank, trust company or
member broker of the New York,
Midwest or Pacific Stock
Exchange.)]
This Warrant may be exercised at the following addresses:
By hand at
------------------------------------------------
------------------------------------------------
------------------------------------------------
By mail at
------------------------------------------------
------------------------------------------------
------------------------------------------------
[Instructions as to form and delivery of Warrant Debt Securities and/or Warrant
Certificates -- complete as appropriate.]
A-6
<PAGE>
[IF REGISTERED WARRANT-
FORM OF ASSIGNMENT]
(TO BE EXECUTED TO TRANSFER)
THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED ___________________________ hereby sells, assigns and
transfers unto
- --------------------------------- Please insert social security or
other identifying number
- ---------------------------------
- --------------------------------- --------------------------------
(Please print name and
address including zip code)
the right represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint __________________________________,
Attorney, to transfer said Warrant Certificate on the books of the Warrant
Agent with full power of substitution.
Dated:
--------------------------- --------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant Certificate and must bear
a signature guarantee by a bank,
trust company or member broker of
the New York, Midwest or Pacific
Stock Exchange)
Signature Guaranteed:
- -----------------------------
A-7
<PAGE>
EXHIBIT 4.9
- -------------------------------------------------------------------------------
ARCADIA FINANCIAL LTD.,
________________ , AS DEPOSITARY
AND
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
DEPOSIT AGREEMENT
DATED AS OF ______________,__________
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS
Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Deposit Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Depositary Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Depositary's Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Depositary's Office. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Receipt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Record Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
FORM OF RECEIPTS; DEPOSIT OF STOCK;
EXECUTION AND DELIVERY; TRANSFER,
SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.01. Form and Transfer of Receipts . . . . . . . . . . . . . 2
SECTION 2.02. Deposit of Stock; Execution and Delivery of
Receipts in Respect Thereof. . . . . . . . . . . . . 3
SECTION 2.03. Redemption and Repurchase of Stock. . . . . . . . . . . 4
SECTION 2.04. Registration of Transfer of Receipts. . . . . . . . . . 5
SECTION 2.05. Split-ups and Combinations of Receipts;
Surrender of Receipts and Withdrawal of Stock. . . . 5
SECTION 2.06. Limitations on Execution and Delivery, Transfer,
Surrender and Exchange of Receipts . . . . . . . . . 6
SECTION 2.07. Lost Receipts, etc. . . . . . . . . . . . . . . . . . . 6
SECTION 2.08. Cancellation and Destruction of
Surrendered Receipts . . . . . . . . . . . . . . . . 6
SECTION 2.09. Conversion and Exchange of Stock. . . . . . . . . . . . 6
ARTICLE III
-i-
<PAGE>
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.01. Filing Proofs, Certificates and Other Information . . . 7
SECTION 3.02. Payment of Taxes or Other
Governmental Charges . . . . . . . . . . . . . . . . 7
SECTION 3.03. Warranty as to Stock. . . . . . . . . . . . . . . . . . 8
ARTICLE IV
THE DEPOSITED SECURITIES; NOTICES
SECTION 4.01. Cash Distributions. . . . . . . . . . . . . . . . . . . 8
SECTION 4.02. Distributions Other than Cash, Rights,
Preferences or Privileges. . . . . . . . . . . . . . 8
SECTION 4.03. Subscription Rights, Preferences or Privileges. . . . . 9
SECTION 4.04. Notice of Dividends, etc.; Fixing of
Record Date for Holders of Receipts. . . . . . . . . 9
SECTION 4.05. Voting Rights . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.06. Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc. . . . . . 10
SECTION 4.07. Inspection of Reports . . . . . . . . . . . . . . . . . 11
SECTION 4.08. Lists of Receipt Holders. . . . . . . . . . . . . . . . 11
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.01. Maintenance of Offices, Agencies and Transfer
Books by the Depositary; Registrar . . . . . . . . . 11
SECTION 5.02. Prevention of or Delay in Performance by the
Depositary, the Depositary's Agents, the Registrar
or the Company . . . . . . . . . . . . . . . . . . . 12
SECTION 5.03. Obligations of the Depositary, the Depositary's
Agents, the Registrar and the Company. . . . . . . . 12
SECTION 5.04. Resignation and Removal of the Depositary;
Appointment of Successor Depositary. . . . . . . . . 13
SECTION 5.05. Corporate Notices and Reports . . . . . . . . . . . . . 13
SECTION 5.06. Indemnification by the Company. . . . . . . . . . . . . 13
SECTION 5.07. Charges and Expenses. . . . . . . . . . . . . . . . . . 14
-ii-
<PAGE>
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.02. Termination . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts. . . . . . . . . . . . . . . . . . . . . . 15
SECTION 7.02. Exclusive Benefit of Parties. . . . . . . . . . . . . . 15
SECTION 7.03. Invalidity of Provisions. . . . . . . . . . . . . . . . 15
SECTION 7.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 7.05. Depositary's Agents . . . . . . . . . . . . . . . . . . 15
SECTION 7.06. Holders of Receipts Are Parties . . . . . . . . . . . . 16
SECTION 7.07. Governing Law . . . . . . . . . . . . . . . . . . . . . 16
SECTION 7.08. Inspection of Deposit Agreement . . . . . . . . . . . . 16
SECTION 7.09. Headings. . . . . . . . . . . . . . . . . . . . . . . . 16
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 17
EXHIBIT A: Form of Depositary Receipt. . . . . . . . . . . . . . . A-1
-iii-
</TABLE>
<PAGE>
EXHIBIT 4.9
ARCADIA FINANCIAL LTD.
FORM OF DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of_______________,________,among ARCADIA
FINANCIAL LTD., a Minnesota corporation,_______________________, and the holders
from time to time of the Receipts described herein.
WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit
Agreement, for the deposit of shares of Preferred Stock, Series___, $.01 par
value, of ARCADIA FINANCIAL LTD. with the Depositary for the purposes set forth
in this Deposit Agreement and for the issuance hereunder of Receipts evidencing
Depositary Shares in respect of the Stock so deposited; and
WHEREAS, the Receipts are to be substantially in the form of Exhibit A
annexed hereto, with appropriate insertions, modifications and omissions, as
hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
The following definitions shall for all purposes, unless otherwise
indicated, apply to the respective terms used in this Deposit Agreement:
"Certificate" shall mean the certificate of designations filed with the
Secretary of State of Minnesota establishing the Stock as a series of preferred
stock of the Company.
"Company" shall mean Arcadia Financial Ltd., a Minnesota corporation, and
its successors.
"Deposit Agreement" shall mean this Deposit Agreement, as amended or
supplemented from time to time.
"Depositary" shall mean____________________, and any successor as
Depositary hereunder.
"Depositary Shares" shall mean Depositary Shares, each representing [one
quarter] of a share of Stock and evidenced by a Receipt.
"Depositary's Agent" shall mean an agent appointed by the Depositary
pursuant to Section 7.05.
"Depositary's Office" shall mean the office of the Depositary in [South St.
Paul], Minnesota, at which at any particular time its depositary receipt
business shall be administered.
"Receipt" shall mean one of the Depositary Receipts issued hereunder,
whether in definitive or temporary form.
<PAGE>
"Record Holder" as applied to a Receipt shall mean the person in whose name
a Receipt is registered on the books of the Depositary maintained for such
purpose.
"Registrar" shall mean any bank or trust company which shall be appointed
to register ownership and transfers of Receipts as herein provided.
"Stock" shall mean shares of the Company's Preferred Stock, Series _____,
$.01 par value.
ARTICLE II
FORM OF RECEIPTS; DEPOSIT OF STOCK;
EXECUTION AND DELIVERY; TRANSFER,
SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.01. FORM AND TRANSFER OF RECEIPTS. Definitive Receipts shall be
engraved or printed or lithographed on steel-engraved borders and shall be
substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. Pending the preparation of definitive Receipts, the
Depositary, upon the written order of the Company or any holder of Stock, as the
case may be, delivered in compliance with Section 2.02, shall execute and
deliver temporary Receipts which are printed, lithographed, typewritten,
mimeographed or otherwise substantially of the tenor of the definitive Receipts
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the persons executing such
Receipts may determine, as evidenced by their execution of such Receipts. If
temporary Receipts are issued, the Company and the Depositary will cause
definitive Receipts to be prepared without unreasonable delay. After the
preparation of definitive Receipts, the temporary Receipts shall be exchangeable
for definitive Receipts upon surrender of the temporary Receipts at an office
described in the last paragraph of Section 2.02, without charge to the holder.
Upon surrender for cancellation of any one or more temporary Receipts, the
Depositary shall execute and deliver in exchange therefor definitive Receipts
representing the same number of Depositary Shares as represented by the
surrendered temporary Receipt or Receipts. Such exchange shall be made at the
Company's expense and without any charge therefor. Until so exchanged, the
temporary Receipts shall in all respects be entitled to the same benefits under
this Deposit Agreement, and with respect to the Stock, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual signature of a
duly authorized officer of the Depositary; PROVIDED, that such signature may be
a facsimile if a Registrar for the Receipts (other than the Depositary) shall
have been appointed and such Receipts are countersigned by manual signature of a
duly authorized officer of the Registrar. No Receipt shall be entitled to any
benefits under this Deposit Agreement or be valid or obligatory for any purpose
unless it shall have been executed manually by a duly authorized officer of the
Depositary or, if a Registrar for the Receipts (other than the Depositary) shall
have been appointed, by manual or facsimile signature of a duly authorized
officer of the Depositary and countersigned manually by a duly authorized
officer of such Registrar. The Depositary shall record on its books each
Receipt so signed and delivered as hereinafter provided.
Receipts shall be in denominations of any number of whole Depositary Shares
up to but not in excess of________ Depositary Shares for any particular Receipt.
-2-
<PAGE>
Receipts may be endorsed with or have incorporated in the text thereof such
legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange upon which the Stock, the Depositary
Shares or the Receipts may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Receipts are subject.
Title to Depositary Shares evidenced by a Receipt which is properly
endorsed, or accompanied by a properly executed instrument of transfer, shall be
transferable by delivery with the same effect as in the case of a negotiable
instrument; PROVIDED, HOWEVER, that until transfer of a Receipt shall be
registered on the books of the Depositary as provided in Section 2.04, the
Depositary may, notwithstanding any notice to the contrary, treat the Record
Holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of dividends or other
distributions or to any notice provided for in this Deposit Agreement and for
all other purposes.
SECTION 2.02. DEPOSIT OF STOCK; EXECUTION AND DELIVERY OF RECEIPTS IN
RESPECT THEREOF. Subject to the terms and conditions of this Deposit Agreement,
the Company or any holder of Stock may from time to time deposit shares of the
Stock under this Deposit Agreement by delivery to the Depositary of a
certificate or certificates for the Stock to be deposited, properly endorsed or
accompanied, if required by the Depositary, by a duly executed instrument of
transfer or endorsement, in form satisfactory to the Depositary, together with
all such certifications as may be required by the Depositary in accordance with
the provisions of this Deposit Agreement, and together with a written order of
the Company or such holder, as the case may be, directing the Depositary to
execute and deliver to, or upon the written order of, the person or persons
stated in such order a Receipt or Receipts for the number of Depositary Shares
representing such deposited Stock.
Deposited Stock shall be held by the Depositary at the Depositary's Office
or at such other place or places as the Depositary shall determine.
Upon receipt by the Depositary of a certificate or certificates for Stock
deposited in accordance with the provisions of this Section, together with the
other documents required as above specified, and upon recordation of the Stock
on the books of the Company in the name of the Depositary or its nominee, the
Depositary, subject to the terms and conditions of this Deposit Agreement, shall
execute and deliver, to or upon the order of the person or persons named in the
written order delivered to the Depositary referred to in the first paragraph of
this Section, a Receipt or Receipts for the number of Depositary Shares
representing the Stock so deposited and registered in such name or names as may
be requested by such person or persons.
The Depositary shall execute and deliver such Receipt or Receipts at the
Depositary's Office or such other offices, if any, as the Depositary may
designate. Delivery at other offices shall be at the risk and expense of the
person requesting such delivery.
Other than in the case of splits, combinations or other reclassifications
affecting the Stock, or in the case of dividends or other distributions of
Stock, if any, there shall be deposited hereunder not more than ________ shares
of Stock.
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SECTION 2.03. REDEMPTION AND REPURCHASE OF STOCK. Whenever the Company
shall elect to redeem shares of Stock in accordance with the provisions of the
Certificate, if the Certificate provides for such redemption, it shall (unless
otherwise agreed in writing with the Depositary) give the Depositary not less
than 40 nor more than 70 days' notice of the date of such proposed redemption of
Stock, which notice shall be accompanied by a certificate from the Company
stating that such redemption of Stock is in accordance with the provisions of
the Certificate. Such notice, if given more than 50 days prior to the
redemption date, shall be in addition to the notice required to be given for
redemption pursuant to the Certificate. On the date of such redemption,
provided that the Company shall then have paid in full to the Depositary the
redemption price of the Stock to be redeemed, plus any accrued and unpaid
dividends thereon, the Depositary shall redeem the number of Depositary Shares
representing such Stock. The Depositary shall mail notice of such redemption
and the proposed simultaneous redemption of the number of Depositary Shares
representing the Stock to be redeemed, first-class postage prepaid, not less
than 30 and not more than 60 days prior to the date fixed for redemption of such
Stock and Depositary Shares (the "Redemption Date"), to the Record Holders of
the Receipts evidencing the Depositary Shares to be so redeemed, at the
addresses of such holders as they appear on the records of the Depositary; but
neither failure to mail any such notice to one or more such holders nor any
defect in any notice to one or more such holders shall affect the sufficiency of
the proceedings for redemption as to other holders. Each such notice shall
state: (i) the Redemption Date; (ii) the number of Depositary Shares to be
redeemed and, if less than all the Depositary Shares held by any such holder are
to be redeemed, the number of such Depositary Shares held by such holder to be
so redeemed; (iii) the redemption price; (iv) the place or places where Receipts
evidencing Depositary Shares are to be surrendered for payment of the redemption
price; and (v) that dividends in respect of the Stock represented by the
Depositary Shares to be redeemed will cease to accumulate on such Redemption
Date. In case less than all the outstanding Depositary Shares are to be
redeemed, the Depositary Shares to be so redeemed shall be selected by lot or
pro rata as determined by the Company.
Notice having been mailed by the Depositary as aforesaid, from and after
the Redemption Date (unless the Company shall have failed to redeem the shares
of Stock to be redeemed by it as set forth in the Company's notice provided for
in the preceding paragraph) all dividends in respect of the shares of Stock so
called for redemption shall cease to accumulate, the Depositary Shares being
redeemed from such proceeds shall be deemed no longer to be outstanding, all
rights of the holders of Receipts evidencing such Depositary Shares (except the
right to receive the redemption price) shall, to the extent of such Depositary
Shares cease and terminate and, upon surrender in accordance with such notice of
the Receipts evidencing any such Depositary Shares (properly endorsed or
assigned for transfer, if the Depositary shall so require), such Depositary
Shares shall be redeemed by the Depositary at a redemption price per Depositary
Share equal to [one quarter] of the redemption price per share paid in respect
of the shares of Stock plus all money and other property, if any, represented by
such Depositary Shares, including all amounts paid by the Company in respect of
dividends which on the Redemption Date have accumulated on the shares of Stock
to be so redeemed and have not theretofore been paid.
If less than all the Depositary Shares evidenced by a Receipt are called
for redemption, the Depositary will deliver to the holder of such Receipt upon
its surrender to the Depositary, together with the redemption payment, a new
Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not
called for redemption.
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It is understood and agreed that Depositary Shares, are not subject to
repurchase by the Company at the option of the holders. Nevertheless, if the
Preferred Shares represented by Depositary Shares are subject to repurchase of
the option of the holders, the related Depositary Receipts may be surrendered by
the holders thereof to the Depositary with written instructions to the
Depositary to instruct the Company to repurchase the Preferred Shares
represented by the Depositary Shares evidenced by such Depositary Receipts at
the applicable repurchase price in accordance with the terms and conditions of
the Certificate. The Company, upon receipt of such instructions and subject to
the Company having funds legally available therefor, will repurchase the
requisite whole number of such Preferred Shares from the Depositary, who in turn
will repurchase such Depositary Receipts. Notwithstanding the foregoing, holders
shall only be entitled to request the repurchase of Depositary Shares
representing one or more whole shares of the related Preferred Shares. The
repurchase price per Depositary Share will be equal to the repurchase price and
any other amounts per share payable with respect to the Preferred Shares
multiplied by the fraction of a Preferred Share represented by one Depositary
Share. If the Depositary Shares evidenced by a Depositary Receipt are to be
repurchased in part only, one or more new Depositary Receipts will be issued for
any Depositary Shares not be repurchased.
SECTION 2.04. REGISTRATION OF TRANSFER OF RECEIPTS. Subject to the terms
and conditions of this Deposit Agreement, the Depositary shall register on its
books from time to time transfers of Receipts upon any surrender thereof by the
holder in person or by duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer. Thereupon the
Depositary shall execute a new Receipt or Receipts evidencing the same aggregate
number of Depositary Shares as those evidenced by the Receipt or Receipts
surrendered and deliver such new Receipt or Receipts to or upon the order of the
person entitled thereto.
SECTION 2.05. SPLIT-UPS AND COMBINATIONS OF RECEIPTS; SURRENDER OF
RECEIPTS AND WITHDRAWAL OF STOCK. Upon surrender of a Receipt or Receipts at
the Depositary's Office or at such other offices as it may designate for the
purpose of effecting a split-up or combination of such Receipt or Receipts, and
subject to the terms and conditions of this Deposit Agreement, the Depositary
shall execute and deliver a new Receipt or Receipts in the authorized
denomination or denominations requested, evidencing the aggregate number of
Depositary Shares evidenced by the Receipt or Receipts surrendered.
Any holder of a Receipt or Receipts representing any number of whole shares
of Stock may withdraw the Stock and all money and other property, if any,
represented thereby by surrendering such Receipt or Receipts at the Depositary's
Office or at such other offices as the Depositary may designate for such
withdrawals. Thereafter, without unreasonable delay, the Depositary shall
deliver to such holder, or to the person or persons designated by such holder as
hereinafter provided, the number of whole shares of Stock and all money and
other property, if any, represented by the Receipt or Receipts so surrendered
for withdrawal, but holders of such whole shares of Stock will not thereafter be
entitled to deposit such Stock hereunder or to receive Depositary Shares
therefor. If a Receipt delivered by the holder to the Depositary in connection
with such withdrawal shall evidence a number of Depositary shares in excess of
the number of Depositary Shares representing the number of whole shares of Stock
to be so withdrawn, the Depositary shall at the same time, in addition to such
number of whole shares of Stock and such money and other property, if any, to be
so withdrawn, deliver to such holder, or (subject to Section 2.03) upon his
order, a new Receipt evidencing such excess number of Depositary Shares.
Delivery of the Stock and money and other property being withdrawn may be made
by the delivery of such certificates, documents of title and other instruments
as the Depositary may deem appropriate.
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If the Stock and the money and other property being withdrawn are to be
delivered to a person or persons other than the Record Holder of the Receipt or
Receipts being surrendered for withdrawal of Stock, such holder shall execute
and deliver to the Depositary a written order so directing the Depositary and
the Depositary may require that the Receipt or Receipts surrendered by such
holder for withdrawal of such shares of Stock be properly endorsed in blank or
accompanied by a properly executed instrument of transfer in blank.
Delivery of the Stock and the money and other property, if any, represented
by Receipts surrendered for withdrawal shall be made by the Depositary at the
Depositary's Office, except that, at the request, risk and expense of the holder
surrendering such Receipt or Receipts and for the account of the holder thereof,
such delivery may be made at such other place as may be designated by such
holder.
SECTION 2.06. LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER, SURRENDER
AND EXCHANGE OF RECEIPTS. As a condition precedent to the execution and
delivery, registration of transfer, split-up, combination, surrender or exchange
of any Receipt, the Depositary, any of the Depositary's Agents or the Company
may require payment to it of a sum sufficient for the payment (or, in the event
that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any charges or expenses payable by the holder of a
Receipt pursuant to Section 5.07, may require the production of evidence
satisfactory to it as to the identity and genuineness of any signature and may
also require compliance with such regulations, if any, as the Depositary or the
Company may establish consistent with the provisions of this Deposit Agreement.
The deposit of Stock may be refused, the delivery of Receipts against Stock
may be suspended, the registration of transfer of Receipts may be refused and
the registration of transfer, surrender or exchange of outstanding Receipts may
be suspended (i) during any period when the register of stockholders of the
Company is closed, or (ii) if any such action is deemed necessary or advisable
by the Depositary, any of the Depositary's Agents or the Company at any time or
from time to time because of any requirement of law or of any government or
governmental body or commission or under any provision of this Deposit
Agreement.
SECTION 2.07. LOST RECEIPTS, ETC. In case any Receipt shall be mutilated,
destroyed, lost or stolen, the Depositary in its discretion may execute and
deliver a Receipt of like form and tenor in exchange and substitution for such
mutilated Receipt, or in lieu of and in substitution for such destroyed, lost or
stolen Receipt, upon (i) the filing by the holder thereof with the Depositary of
evidence satisfactory to the Depositary of such destruction or loss or theft of
such Receipt, of the authenticity thereof and of his or her ownership thereof,
and (ii) the furnishing of the Depositary with an indemnity bond satisfactory to
it.
SECTION 2.08. CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS. All
Receipts surrendered to the Depositary or any Depositary's Agent shall be
canceled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy all Receipts so canceled.
SECTION 2.09. CONVERSION AND EXCHANGE OF STOCK. It is understood and
agreed that the Depositary Shares are not convertible or exchangeable at the
option of the holders into the Common Stock, par value $.01 per share, of the
Company (the "Common Stock") or any other securities or property of the Company.
Nevertheless, as a matter of convenience, the Company hereby agrees to accept or
to
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cause its conversion agent to accept the delivery of Receipts for the purpose
of effecting conversions of the Stock utilizing the same procedures as those
provided for delivery of Stock certificates to effect such conversions in
accordance with the terms and conditions of the Certificate; PROVIDED, HOWEVER,
that only whole Depositary Shares may be so submitted for conversion. If fewer
than all of the Depositary Shares evidenced by a Receipt are to be converted,
the Company shall instruct the Depositary to issue a new Receipt or Receipts for
the Depositary Shares not to be converted. For this purpose, a holder of a
Receipt or Receipts may surrender such Receipt or Receipts to the Company at the
Depositary's Office or at such other office as the Company may from time to time
designate for such purpose, together with a duly completed and executed Notice
of Conversion in the form included in the Receipt. In all cases, the foregoing
shall be conditioned upon compliance in full by the holder of such Receipt or
Receipts with the terms and conditions of the Certificate and of this Deposit
Agreement. The Company shall instruct the Depositary to cancel each Receipt
surrendered for such conversion and to deliver to the Company any certificates
for related Stock so converted, and the Company will cancel such Stock
certificates.]
If the Preferred Shares represented by Depositary Shares are exchangeable
at the option of the Company for other securities of the Company, then, whenever
the Company exercises its option to exchange all or a portion of such Preferred
Shares held by the Depositary, the Depositary will exchange as of the same
exchange date a number of such Depositary Shares representing the Preferred
Shares so exchanged, provided the Company shall have issued and deposited with
the Depositary the Securities for which such Preferred Shares are to be
exchanged. The exchange rate per Depositary Share shall be equal to the
exchange rate per Preferred Share multiplied by the fraction of a Preferred
Share represented by one Depositary Share. If less than all of the Depositary
Shares are to be exchanged, the Depositary Shares to be exchanged will be
selected by the Depositary by lot or pro rata or other equitable method, in each
case as may be determined by the Company. If the Depositary Shares evidenced by
a Depositary Receipt are to be exchanged in part only, a new Depositary Receipt
or Receipts will be issued for any Depositary Shares not to be exchanged.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.01. FILING PROOFS, CERTIFICATES AND OTHER INFORMATION. Any
holder of a Receipt may be required from time to time to file such proof of
residence, or other matters or other information, to execute such certificates
and to make such representations and warranties as the Depositary or the Company
may reasonably deem necessary or proper. The Depositary or the Company may
withhold the delivery, or delay the registration of transfer, redemption or
exchange, of any Receipt or the withdrawal of the Stock represented by the
Depositary Shares evidenced by any Receipt or the distribution of any dividend
or other distribution or the sale of any rights or of the proceeds thereof until
such proof or other information is filed or such certificates are executed or
such representations and warranties are made.
SECTION 3.02. PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES. Holders of
Receipts shall be obligated to make payments to the Depositary of certain
charges and expenses, as provided in Section 5.07. Registration of transfer of
any Receipt or any withdrawal of Stock and all money or other property, if any,
represented by the Depositary Shares evidenced by such Receipt may be refused
until any such payment due is made, and any dividends, interest payments or
other distributions may be withheld or any
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part of or all the Stock or other property represented by the Depositary
Shares evidenced by such Receipt and not theretofore sold may be sold for the
account of the holder thereof (after attempting by reasonable means to notify
such holder prior to such sale), and such dividends, interest payments or
other distributions or the proceeds of any such sale may be applied to any
payment of such charges or expenses, the holder of such Receipt remaining
liable for any deficiency.
SECTION 3.03. WARRANTY AS TO STOCK. The Company hereby represents and
warrants that the Stock, when issued, will be validly issued, fully paid and
nonassessable. Such representation and warranty shall survive the deposit of
the Stock and the issuance of Receipts.
ARTICLE IV
THE DEPOSITED SECURITIES; NOTICES
SECTION 4.01. CASH DISTRIBUTIONS. Whenever the Depositary shall receive
any cash dividend or other cash distribution on Stock, the Depositary shall,
subject to Sections 3.01 and 3.02, distribute to Record Holders of Receipts on
the record date fixed pursuant to Section 4.04 such amounts of such dividend or
distribution as are, as nearly as practicable, in proportion to the respective
numbers of Depositary Shares evidenced by the Receipts held by such holders;
PROVIDED, HOWEVER, that in case the Company or the Depositary shall be required
to withhold and shall withhold from any cash dividend or other cash distribution
in respect of the Stock an amount on account of taxes, the amount made available
for distribution or distributed in respect of Depositary Shares shall be reduced
accordingly. The Depositary shall distribute or make available for
distribution, as the case may be, only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction of
one cent, and any balance not so distributable shall be held by the Depositary
(without liability for interest thereon) and shall be added to and be treated as
part of the next sum received by the Depositary for distribution to Record
Holders of Receipts then outstanding.
SECTION 4.02. DISTRIBUTIONS OTHER THAN CASH, RIGHTS, PREFERENCES OR
PRIVILEGES. Whenever the Depositary shall receive any distribution other than
cash, rights, preferences or privileges upon Stock, the Depositary shall,
subject to Sections 3.01 and 3.02, distribute to Record Holders of Receipts on
the record date fixed pursuant to Section 4.04 such amounts of the securities or
property received by it as are, as nearly as practicable, in proportion to the
respective numbers of Depositary Shares evidenced by the Receipts held by such
holders, in any manner that the Depositary may deem equitable and practicable
for accomplishing such distribution. If in the opinion of the Depositary such
distribution cannot be made proportionately among such Record Holders, or if for
any other reason (including any requirement that the Company or the Depositary
withhold an amount on account of taxes) the Depositary deems, after consultation
with the Company, such distribution not to be feasible, the Depositary may, with
the approval of the Company, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including the sale
(at public or private sale) of the securities or property thus received, or any
part thereof, at such place or places and upon such terms as it may deem proper.
The net proceeds of any such sale shall, subject to Sections 3.01 and 3.02, be
distributed or made available for distribution, as the case may be, by the
Depositary to Record Holders of Receipts as provided by Section 4.01 in the case
of a distribution received in cash. The Company shall not make any distribution
of such securities unless the Company shall have provided an opinion of counsel
stating that such securities have been registered under the Securities Act of
1933 or do not need to be registered.
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SECTION 4.03. SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES. If the
Company shall at any time offer or cause to be offered to the persons in whose
names Stock is recorded on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance be made available by the Depositary to
the Record Holders of Receipts in such manner as the Depositary may determine,
either by the issue to such Record Holders of warrants representing such rights,
preferences or privileges or by such other method as may be approved by the
Depositary in its discretion with the approval of the Company; PROVIDED,
HOWEVER, that (i) if at the time of issue or offer of any such rights,
preferences or privileges the Depositary determines that it is not lawful or
(after consultation with the Company) not feasible to make such rights,
preferences or privileges available to holders of Receipts by the issue of
warrants or otherwise, or (ii) if and to the extent so instructed by holders of
Receipts who do not desire to exercise such rights, preferences or privileges,
then the Depositary, in its discretion (with the approval of the Company, in any
case where the Depositary has determined that it is not feasible to make such
rights, preferences or privileges available), may, if applicable laws or the
terms of such rights, preferences or privileges permit such transfer, sell such
rights, preferences or privileges at public or private sale, at such place or
places and upon such terms as it may deem proper. The net proceeds of any such
sale shall, subject to Sections 3.01 and 3.02, be distributed by the Depositary
to the Record Holders of Receipts entitled thereto as provided by Section 4.01
in the case of a distribution received in cash. The Company shall not make any
distribution of any such rights, preferences or privileges unless the Company
shall have provided an opinion of counsel stating that such rights, preferences
or privileges have been registered under the Securities Act of 1933 or do not
need to be registered.
If registration under the Securities Act of 1933 of the securities to which
any rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold the securities to which such rights, preferences
or privileges relate, the Company agrees with the Depositary that it will file
promptly a registration statement pursuant to such Act with respect to such
rights, preferences or privileges and securities and use its best efforts and
take all steps available to it to cause such registration statement to become
effective sufficiently in advance of the expiration of such rights, preferences
or privileges to enable such holders to exercise such rights, preferences or
privileges. In no event shall the Depositary make available to the holders of
Receipts any right, preference or privilege to subscribe for or to purchase any
securities unless and until such a registration statement shall have become
effective, or unless the offering and sale of such securities to such holders
are exempt from registration under the provisions of such Act.
If any other action under the laws of any jurisdiction or any governmental
or administrative authorization, consent or permit is required in order for such
rights, preferences or privileges to be made available to holders of Receipts,
the Company agrees with the Depositary that the Company will use its best
efforts to take such action or obtain such authorization, consent or permit
sufficiently in advance of the expiration of such rights, preferences or
privileges to enable such holders to exercise such rights, preferences or
privileges.
SECTION 4.04. NOTICE OF DIVIDENDS, ETC.; FIXING OF RECORD DATE FOR HOLDERS
OF RECEIPTS. Whenever any cash dividend or other cash distribution shall become
payable or any distribution other than cash shall be made, or if rights,
preferences or privileges shall at any time be offered, with respect to Stock,
or whenever the Depositary shall receive notice of any meeting at which holders
of Stock are entitled to vote or of which holders of Stock are entitled to
notice, or whenever the Depositary and the Company
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shall decide it is appropriate, the Depositary shall in each such instance
fix a record date (which shall be the same date as the record date fixed by
the Company with respect to the Stock) for the determination of the holders
of Receipts who shall be entitled to receive such dividend, distribution,
rights, preferences or privileges or the net proceeds of the sale thereof, or
to give instructions for the exercise of voting rights at any such meeting,
or who shall be entitled to notice of such meeting or for any other
appropriate reasons.
SECTION 4.05. VOTING RIGHTS. Upon receipt of notice of any meeting at
which the holders of Stock are entitled to vote, the Depositary shall, as soon
as practicable thereafter, mail to the Record Holders of Receipts a notice which
shall contain (i) such information as is contained in such notice of meeting,
and (ii) a statement that the holders may, subject to any applicable
restrictions, instruct the Depositary as to the exercise of the voting rights
pertaining to the amount of Stock represented by their respective Depositary
Shares, including an express indication that instructions may be given to the
Depositary to give a discretionary proxy to a person designated by the Company
and a brief statement as to the manner in which such instructions may be given.
Upon the written request of the holders of Receipts on the relevant record date,
the Depositary shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum number of whole shares of Stock represented by the Depositary Shares
evidenced by all Receipts as to which any particular voting instructions are
received. The Company hereby agrees to take all action which may be deemed
necessary by the Depositary in order to enable the Depositary to vote such Stock
or cause such Stock to be voted. In the absence of specific instructions from
the holder of a Receipt, the Depositary will abstain from voting (but, at its
discretion, not from appearing at any meeting with respect to such Stock unless
directed to the contrary by the holders of all the Receipts) to the extent of
the Stock represented by the Depositary Shares evidenced by such Receipt.
SECTION 4.06. CHANGES AFFECTING DEPOSITED SECURITIES AND
RECLASSIFICATIONS, RECAPITALIZATIONS, ETC. Upon any change in par or stated
value, split-up, combination or any other reclassification of the Stock, or upon
any recapitalization, reorganization, merger, amalgamation or consolidation
affecting the Company or to which it is a party, the Depositary may in its
discretion with the approval of, and shall upon the instructions of, the
Company, and (in either case) in such manner as the Depositary may deem
equitable, (i) make such adjustments as are certified by the Company in (x) the
fraction of an interest represented by one Depositary Share in one share of
Stock, and (y) the ratio of the redemption price per Depositary Share to the
redemption price of a share of Stock, in each case as may be necessary fully to
reflect the effects of such changes in par or stated value, split-up,
combination or other reclassification of Stock, or of such recapitalization,
reorganization, merger, amalgamation or consolidation, and (ii) treat any
securities which shall be received by the Depositary in exchange for or upon
conversion of or in respect of the Stock as new deposited securities so received
in exchange for or upon conversion or in respect of such Stock. In any such
case the Depositary may in its discretion, with the approval of the Company,
execute and deliver additional Receipts, or may call for the surrender of all
outstanding Receipts to be exchanged for new Receipts specifically describing
such new deposited securities. Anything to the contrary herein notwithstanding,
holders of Receipts shall have the right from and after the effective date of
any such change in par or stated value, split-up, combination or other
reclassification of the Stock or any such recapitalization, reorganization,
merger, amalgamation or consolidation to surrender such Receipts to the
Depositary with instructions to convert, exchange or surrender the Stock
represented thereby only into or for, as the case may be, the kind and amount of
shares of stock and other securities and property and
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cash into which the Stock represented by such Receipts might have been
converted or for which such Stock might have been exchanged or surrendered
immediately prior to the effective date of such transaction.
SECTION 4.07. INSPECTION OF REPORTS. The Depositary shall make available
for inspection by holders of Receipts at the Depositary's Office, and at such
other places as it may from time to time deem advisable, any reports and
communications received from the Company which are received by the Depositary as
the holder of Stock.
SECTION 4.08. LISTS OF RECEIPT HOLDERS. Promptly upon request from time
to time by the Company, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of Depositary Shares of all
persons in whose names Receipts are registered on the books of the Depositary.
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.01. MAINTENANCE OF OFFICES, AGENCIES AND TRANSFER BOOKS BY THE
DEPOSITARY; REGISTRAR. Upon execution of this Deposit Agreement, the Depositary
shall maintain at the Depositary's Office facilities for the execution and
delivery, registration and registration of transfer, surrender and exchange of
Receipts, and at the offices of the Depositary's Agents, if any, facilities for
the delivery, registration of transfer, surrender and exchange of receipts, all
in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for the
registration and registration of transfer of Receipts, which books at all
reasonable times shall be open for inspection by the Record Holders of Receipts;
PROVIDED, that any such holder requesting to exercise such right shall certify
to the Depositary that such inspection shall be for a proper purpose reasonably
related to such person's interest as an owner of Depositary Shares evidenced by
the Receipts.
The Depositary may close such books, at any time or from time to time, when
deemed expedient by it in connection with the performance of its duties
hereunder.
The Depositary may, with the approval of the Company, appoint a Registrar
for registration of the Receipts or the Depositary Shares evidenced thereby. If
the Receipts or the Depositary Shares evidenced thereby or the Stock represented
by such Depositary Shares shall be listed on the New York Stock Exchange, the
Depositary will appoint a Registrar (acceptable to the Company) for registration
of such Receipts or Depositary Shares in accordance with any requirements of
such Exchange. Such Registrar (which may be the Depositary if so permitted by
the requirements of such Exchange) may be removed and a substituted registrar
appointed by the Depositary upon the request or with the approval of the
Company. If the Receipts, such Depositary Shares or such Stock are listed on
one or more other stock exchanges, the Depositary will, at the request of the
Company, arrange such facilities for the delivery, registration, registration of
transfer, surrender and exchange of such Receipts, such Depositary Shares or
such Stock as may be required by law or applicable stock exchange regulation.
-11-
<PAGE>
SECTION 5.02. PREVENTION OF OR DELAY IN PERFORMANCE BY THE DEPOSITARY, THE
DEPOSITARY'S AGENTS, THE REGISTRAR OR THE COMPANY. Neither the Depositary nor
any Depositary's Agent nor any Registrar nor the Company shall incur any
liability to any holder of any Receipt if by reason of any provision of any
present or future law, or regulation thereunder, of the United States of America
or of any other governmental authority or, in the case of the Depositary, the
Depositary's Agent or the Registrar, by reason of any provision, present or
future, of the Company's Certificate of Incorporation (including the
Certificate) or by reason of any act of God or war or other circumstance beyond
the control of the relevant party, the Depositary, the Depositary's Agent, the
Registrar or the Company shall be prevented or forbidden from, or subjected to
any penalty on account of, doing or performing any act or thing which the terms
of this Deposit Agreement provide shall be done or performed; nor shall the
Depositary, any Depositary's Agent, any Registrar or the Company incur any
liability to any holder of a Receipt (i) by reason of any nonperformance or
delay, caused as aforesaid, in the performance of any act or thing which the
terms of this Deposit Agreement provide shall or may be done or performed, or
(ii) by reason of any exercise of, or failure to exercise, any discretion
provided for in this Deposit Agreement except, in case of any such exercise or
failure to exercise discretion not caused as aforesaid, if caused by the
negligence or willful misconduct of the party charged with such exercise or
failure to exercise.
SECTION 5.03. OBLIGATIONS OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE
REGISTRAR AND THE COMPANY. Neither the Depositary nor any Depositary's Agent
nor any Registrar nor the Company assumes any obligation or shall be subject to
any liability under this Deposit Agreement to holders of Receipts other than for
its negligence or willful misconduct.
Neither the Depositary nor any Depositary's Agent nor any Registrar nor the
Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of the Stock, the Depositary Shares
or the Receipts which in its opinion may involve it in expense or liability
unless indemnity satisfactory to it against all expense and liability be
furnished as often as may be required.
Neither the Depositary nor the any Depositary's Agent nor any Registrar nor
the Company shall be liable for any action or any failure to act by it in
reliance upon the written advice of legal counsel or accountants, or information
from any person presenting Stock for deposit, any holder of a Receipt or any
other person believed by it in good faith to be competent to give such
information. The Depositary, any Depositary's Agent, any Registrar and the
Company may each rely and shall each be protected in acting upon any written
notice, request, direction or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties.
The Depositary shall not be responsible for any failure to carry out any
instruction to vote any of the shares of Stock or for the manner or effect of
any such vote made, as long as any such action or non-action is in good faith.
The Depositary undertakes, and any Registrar shall be required to undertake, to
perform such duties and only such duties as are specifically set forth in this
Deposit Agreement, and no implied covenants or obligations shall be read into
this Deposit Agreement against the Depositary or any Registrar. The Depositary
will indemnify the Company against any liability which may arise out of acts
performed or omitted by the Depositary or its agents due to its or their
negligence or bad faith. The Depositary, the Depositary's Agents and any
Registrar may own and deal in any class of securities of the Company and its
affiliates and Receipts. The Depositary may also act as transfer agent or
registrar of any of the securities of the Company and its affiliates.
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<PAGE>
SECTION 5.04. RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF
SUCCESSOR DEPOSITARY. The Depositary may at any time resign as Depositary
hereunder by notice of its election so to do delivered to the Company, such
resignation to take effect upon the appointment of a successor Depositary and
its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of such
removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor Depositary and its acceptance of such appointment as
hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor Depositary,
which shall be a bank or trust company having its principal office in the United
States of America and having a combined capital and surplus of at least
$50,000,000. If no successor Depositary shall have been so appointed and have
accepted appointment within 60 days after delivery of such notice, the resigning
or removed Depositary may petition any court of competent jurisdiction for the
appointment of a successor Depositary. Every successor Depositary shall execute
and deliver to its predecessor and to the Company an instrument in writing
accepting its appointment hereunder, and thereupon such successor Depositary,
without any further act or deed, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor and for all purposes shall be
the Depositary under this Deposit Agreement, and such predecessor, upon payment
of all sums due it and on the written request of the Company, shall execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder, shall duly assign, transfer and deliver all right,
title and interest in the Stock and any moneys or property held hereunder to
such successor, and shall deliver to such successor a list of the Record Holders
of all outstanding Receipts. Any successor Depositary shall promptly mail
notice of its appointment to the Record Holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act, and notice thereof shall
not be required hereunder. Such successor Depositary may authenticate the
Receipts in the name of the predecessor Depositary or in the name of the
successor Depositary.
SECTION 5.05. CORPORATE NOTICES AND REPORTS. The Company agrees that it
will transmit to the Record Holders of Receipts, in each case at the addresses
furnished to it pursuant to Section 4.08, all notices and reports (including
without limitation financial statements) required by law, by the rules of any
national securities exchange upon which the Stock, the Depositary Shares or the
Receipts are listed or by the Company's Certificate of Incorporation (including
the Certificate) to be furnished by the Company to holders of Stock. Such
transmission will be at the Company's expense. Furthermore, the Depositary will
forward to the holders of Depositary Shares all reports and communications from
the Company which are delivered to the Depositary and which the Company is
required to furnish to holders of the Preferred Shares.
SECTION 5.06. INDEMNIFICATION BY THE COMPANY. The Company shall indemnify
the Depositary, any Depositary's Agent and any Registrar against, and hold each
of them harmless from, any loss, liability or expense (including the costs and
expenses of defending itself) which may arise out of (i) acts performed or
omitted in connection with this Deposit Agreement and the Receipts (a) by the
Depositary, any Registrar or any of their respective agents (including any
Depositary's Agent), except for any liability arising
-13-
<PAGE>
out of negligence or bad faith on the respective parts of any such person or
persons, or (b) by the Company or any of its agents, or (ii) the offer, sale
or registration of the Receipts or the Stock pursuant to the provisions
hereof. The obligations of the Company set forth in this Section 5.06 shall
survive any succession of any Depositary, Registrar or Depositary's Agent.
SECTION 5.07. CHARGES AND EXPENSES. The Company shall pay all transfer
and other taxes and governmental charges arising solely from the existence of
the depositary arrangements. The Company shall pay all charges of the
Depositary in connection with the initial deposit of the Stock and the initial
issuance of the Depositary Shares, redemption of the Stock at the option of the
Company and all withdrawals of shares of the Stock by owners of Depositary
Shares. All other transfer and other taxes and governmental charges shall be at
the expense of holders of Depositary Shares. If, at the request of a holder of
Receipts, the Depositary incurs charges or expenses for which it is not
otherwise liable hereunder, such holder will be liable for such charges and
expenses. All other charges and expenses of the Depositary and any Depositary's
Agent hereunder and of any Registrar (including, in each case, fees and expenses
of counsel) incident to the performance of their respective obligations
hereunder will be paid upon consultation and agreement between the Depositary
and the Company as to the amount and nature of such charges and expenses. The
Depositary shall present its statement for charges and expenses to the Company
once each month or at such other intervals as the Company and the Depositary may
agree.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. AMENDMENT. The form of the Receipts and any provisions of
this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect which they may
deem necessary or desirable; PROVIDED, HOWEVER, that no such amendment (other
than any change in the fees of any Depositary, Registrar or Transfer Agent (as
hereinafter defined), which shall go into effect not sooner than three months
after notice thereof to the holders of the Receipts) which shall materially and
adversely alter the rights of the holders of Receipts shall be effective unless
such amendment shall have been approved by the holders of at least a majority of
the Depositary Shares then outstanding. Every holder of an outstanding Receipt
at the time any such amendment becomes effective shall be deemed, by continuing
to hold such Receipt, to consent and agree to such amendment and to be bound by
this Deposit Agreement as amended thereby.
SECTION 6.02. TERMINATION. This Agreement may be terminated by the
Company or the Depositary only after (i) all outstanding Depositary Shares shall
have been redeemed pursuant to Section 2.03, or (ii) there shall have been made
a final distribution in respect of the Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution shall have been
distributed to the holders of Depositary Shares pursuant to Section 4.01 or
4.02, as applicable.
Upon the termination of this Deposit Agreement, the Company shall be
discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, any Depositary's Agent and any Registrar under
Sections 5.06 and 5.07.
-14-
<PAGE>
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. COUNTERPARTS. This Deposit Agreement may be executed in any
number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument.
SECTION 7.02. EXCLUSIVE BENEFIT OF PARTIES. This Deposit Agreement is for
the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.
SECTION 7.03. INVALIDITY OF PROVISIONS. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. NOTICES. Any and all notices to be given to the Company
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail or by telegram or telex
confirmed by letter, addressed to the Company at 7825 Washington Avenue South,
Minneapolis, MN 55439-2435, to the attention of the Secretary, or at any other
address of which the Company shall have notified the Depositary in writing.
Any and all notices to be given to the Depositary hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail or by telegram or telex confirmed by
letter, addressed to the Depositary at the Depositary's Office, at
_____________, or at any other address of which the Depositary shall have
notified the Company in writing.
Any and all notices to be given to any Record Holder of a Receipt hereunder
or under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by mail or by telegram or telex confirmed
by letter, addressed to such Record Holder at the address of such Record Holder
as it appears on the books of the Depositary, or if such holder shall have filed
with the Depositary a written request that notices intended for such holder be
mailed to some other address, at the address designated in such request.
Delivery of a notice sent by mail or by telegram or telex shall be deemed
to be effected at the time when a duly addressed letter containing the same (or
a confirmation thereof in the case of a telegram or telex message) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company
may, however, act upon any telegram or telex message received by it from the
other or from any holder of a Receipt, notwithstanding that such telegram or
telex message shall not subsequently be confirmed by letter or as aforesaid.
SECTION 7.05. DEPOSITARY'S AGENTS. The Depositary may from time to time
appoint Depositary's Agents to act in any respect for the Depositary for the
purposes of this Deposit Agreement
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<PAGE>
and may at any time appoint additional Depositary's Agents and vary or
terminate the appointment of such Depositary's Agents. The Depositary will
notify the Company of any such action.
SECTION 7.06. HOLDERS OF RECEIPTS ARE PARTIES. The holders of Receipts
from time to time shall be parties to this Deposit Agreement and shall be bound
by all of the terms and conditions hereof and of the Receipts by acceptance of
delivery thereof.
SECTION 7.07. GOVERNING LAW. This Deposit Agreement and the Receipts and
all rights hereunder and thereunder and provisions hereof and thereof shall be
governed by, and construed in accordance with, the laws of the State of
Minnesota.
SECTION 7.08. INSPECTION OF DEPOSIT AGREEMENT. Copies of this Deposit
Agreement shall be filed with the Depositary and the Depositary's Agents and
shall be open to inspection during business hours at the Depositary's Office and
the respective offices of the Depositary's Agents, if any, by any holder of a
Receipt.
SECTION 7.09. HEADINGS. The headings of articles and sections in this
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
have been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or the Receipts or have any bearing upon the meaning or
interpretation of any provision contained herein or in the Receipts.
-16-
<PAGE>
IN WITNESS WHEREOF, the Company and the Depositary have duly executed this
Agreement as of the day and year first above set forth, and all holders of
Receipts shall become parties hereto by and upon acceptance by them of delivery
of Receipts issued in accordance with the terms hereof.
ARCADIA FINANCIAL LTD.
By______________________________________
Its___________________________________
________________________________________
as Depositary
By______________________________________
Its___________________________________
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<PAGE>
EXHIBIT A
[FORM OF DEPOSITARY RECEIPT]
CERTIFICATE FOR NOT MORE THAN _______________________ DEPOSITARY SHARES
DEPOSITARY RECEIPT FOR DEPOSITARY SHARES,
REPRESENTING CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES ____ OF
ARCADIA FINANCIAL LTD.
INCORPORATED UNDER THE LAWS OF THE STATE OF MINNESOTA
Serial Number _______ Number of Depositary Shares _____
________________________________, as Depositary (the "Depositary"), hereby
certifies that __________________________ is the registered owner of
_____________________________ DEPOSITARY SHARES ("Depositary Shares"), each
Depositary Share representing [one quarter (1/4)] of one share of
[Cumulative Convertible] Preferred Stock, Series_______, $.01 par value of
Arcadia Financial Ltd., a Minnesota corporation (the "Corporation"), on
deposit with the Depositary, subject to the terms and entitled to the
benefits of the Deposit Agreement dated as of _________,______,(the "Deposit
Agreement") between the Corporation and the Depositary. By accepting this
Receipt the holder hereof becomes a party to and agrees to be bound by all
the terms and conditions of the Deposit Agreement. This Receipt shall not be
valid or obligatory for any purpose or entitled to any benefits under the
Deposit Agreement unless it shall have been executed by the Depositary by the
manual signature of a duly authorized officer and shall have been
countersigned manually by a Registrar or by the Depositary as Registrar in
respect of the Receipts by the manual signature of a duly authorized officer
thereof.
Dated: __________________________
COUNTERSIGNED AND
REGISTERED:
________________________________
DEPOSITARY AND REGISTRAR
By: _____________________________
Authorized Officer
A-1
<PAGE>
[REVERSE OF FORM OF DEPOSITARY RECEIPT]
ARCADIA FINANCIAL LTD.
ARCADIA FINANCIAL LTD. WILL FURNISH WITHOUT CHARGE TO EACH RECEIPTHOLDER
WHO SO REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A STATEMENT OR SUMMARY OF
THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR
OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF WHICH THE
CORPORATION IS AUTHORIZED TO ISSUE AND OF THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. ANY SUCH REQUEST IS TO BE
ADDRESSED TO THE DEPOSITARY NAMED ON THE FACE OF THIS RECEIPT.
The following abbreviations, when used in the inscription on the face of
this receipt, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and
not as tenants in common
Additional abbreviations may also be used though not in the above list.
For value received, ________________________________ hereby sell(s),
assign(s), and transfer(s) unto
_________________________________
(Name)
_________________________________
(Address)
_________________________________
(Address)
_________________________________
(City, State, Zip Code)
Depositary Shares represented by this Receipt, and do hereby irrevocably
constitute and appoint ______________________ to transfer the said Depositary
Shares on the books of the above named Depositary with full power of
substitution in the premises.
Dated: ____________________ _______________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of this Receipt in every particular,
without alteration or enlargement or any
change whatever.
A-2
<PAGE>
September 30, 1999
Arcadia Financial Ltd.
7825 Washington Avenue South
Minneapolis, Minnesota 55439-2435
Ladies and Gentlemen:
We have acted as counsel to Arcadia Financial Ltd., a Minnesota
corporation (the "Company"), in connection with the preparation of its
Registration Statement on Form S-3 (the "Registration Statement") relating to
the sale by the Company from time to time after the date hereof of (i) its
unsecured debt securities, which may be either senior debt securities (the
"Senior Debt Securities") or subordinated debt securities (the "Subordinated
Debt Securities" and, together with the Senior Debt Securities, the "Debt
Securities"); (ii) shares of its preferred stock, $.01 par value per share
(the "Preferred Stock"), in one or more series; (iii) depositary shares (the
"Depositary Shares") evidenced by depositary receipts; (iv) shares of its
common stock, par value $.01 per share (the "Common Stock"); and (v) warrants
to purchase Debt Securities (the "Debt Securities Warrants"), Preferred Stock
(the "Preferred Stock Warrants") or shares of Common Stock (the "Common Stock
Warrants" and, together with the Debt Securities Warrants and Preferred Stock
Warrants, the "Securities Warrants"), for an aggregate initial public
offering price of up to $225,000,000 (or the equivalent in foreign
currencies, currency units or composite currencies (each, a "Currency")).
The Debt Securities, Preferred Stock, Depositary Shares, Common Stock and
Securities Warrants are herein collectively referred to as the "Securities."
We have examined the following documents:
(a) The Articles of Incorporation of the Company, as amended,
certified by the Secretary of State of the State of Minnesota;
(b) The Restated Bylaws of the Company, certified by its Secretary;
<PAGE>
(c) Resolutions of the Board of Directors of the Company effective as
of July 13, 1999 and September 22, 1999 (the "Financing
Resolutions");
(d) The Indenture relating to Senior Debt Securities, dated as of
March 12, 1997, between the Company and Norwest Bank Minnesota,
National Association, as Trustee, filed as Exhibit 4.4 to the
Registration Statement (the "Senior Indenture");
(e) That First Supplemental Indenture dated as of March 12, 1997,
to the Senior Indenture;
(f) That Second Supplemental Indenture dated as of October 8,
1997, to the Senior Indenture;
(g) The form of Indenture relating to Subordinated Debt Securities,
between the Company and a trustee to be named in the Prospectus
Supplement, filed as Exhibit 4.5 to the Registration Statement
(the "Subordinated Indenture" and, together with the Senior
Indenture, the "Indentures");
(h) The form of Common Stock Warrant Agreement filed as Exhibit 4.6
to the Registration Statement;
(i) The form of Preferred Stock Warrant Agreement filed as Exhibit
4.7 to the Registration Statement;
(j) The form of Debt Securities Warrant Agreement filed as Exhibit
4.8 to the Registration Statement; and
(k) The form of Deposit Agreement filed as Exhibit 4.9 to the
Registration Statement.
We also have reviewed such questions of law as we have considered necessary and
appropriate for the purposes of our opinions set forth below. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
them by the Indentures.
In rendering our opinions set forth below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies. We also have assumed the legal capacity for all
purposes relevant hereto of all natural persons and, 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), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinion, we have relied
upon certificates of officers of the Company and of public officials. We have
also assumed that any Securities will be issued and sold with such terms and
in such manner as is described in the Registration Statement (as amended from
time to time), the Prospectus included therein (as amended from time to time)
and any related Prospectus Supplement.
Based on the foregoing, we are of the opinion that:
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<PAGE>
1. When Debt Securities of any series have been (a) duly
established in accordance with the requirements of the applicable Indenture,
as the same has been amended and supplemented through such date, (b) duly
executed and delivered on behalf of the Company in the form established by
the applicable Indenture, as the same has been amended and supplemented
through such date, (c) duly authenticated by the trustee under the
applicable Indenture, as the same has been amended and supplemented through
such date, and (d) delivered to the purchaser against payment therefor, then
such Debt Securities will constitute binding obligations of the Company.
2. When a Warrant Agreement has been duly authorized, executed
and delivered by the Company and a Warrant Agent and Securities Warrants of
any series have been (a) duly authorized, executed and delivered on behalf
of the Company as required by the applicable Warrant Agreement, (b) duly
authenticated by the Warrant Agent under the applicable Warrant Agreement and
(c) delivered to the purchaser or purchasers against payment therefor, then
such Securities Warrants will constitute binding obligations of the Company.
3. When (a) a Deposit Agreement has been duly authorized,
executed and delivered by the Company and a depositary, (b) duly authorized,
fully paid and nonassessable shares of Preferred Stock of the applicable
series have been deposited in accordance with the terms of such Deposit
Agreement and (c) Depositary Shares of the applicable series have been (i)
duly authorized, executed and delivered by the Company, (ii) duly
authenticated by the Depositary under the applicable Deposit Agreement and
(iii) delivered to the purchaser or purchasers against payment therefor, then
such Depositary Shares will constitute binding obligations of the Company.
3
<PAGE>
4. When (a) shares of Preferred Stock of any series have been
duly authorized for issuance by the Board of Directors of the Company in
accordance with the terms of the Articles of Incorporation and applicable law
(including the filing of a Certificate of Designation with the Secretary of
State of the State of Minnesota), (b) certificates representing the shares of
Preferred Stock have been duly executed and delivered on behalf of the
Company and countersigned by the Company's transfer agent for such series of
Preferred Stock, if certificates representing such shares are to be issued,
and (c) the purchaser or purchasers have made payment therefor, then such
shares of Preferred Stock (including any Preferred Stock (i) issued upon the
exercise of any Securities Warrants exercisable for Preferred Stock, (ii)
issued upon the exchange or conversion of Debt Securities that are
exchangeable or convertible into Preferred Stock or (iii) deposited under a
Deposit Agreement) will be validly issued, fully paid and nonassessable.
5. When (a) shares of Common Stock have been duly authorized for
issuance by the Board of Directors of the Company in accordance with the
terms of the Articles of Incorporation and applicable law, (b) certificates
representing the shares of Common Stock have been duly executed and delivered
on behalf of the Company and countersigned by the Company's transfer agent
for its Common Stock, if certificates representing such shares are to be
issued, and (c) the purchaser or purchasers have made payment therefor, then
such shares of Common Stock (including any Common Stock (i) issued upon the
exercise of any Securities Warrants exercisable for Common Stock, (ii) issued
upon the exchange or conversion of Debt Securities that are exchangeable or
convertible into Common Stock or (iii) deposited under a Deposit Agreement)
will be validly issued, fully paid and nonassessable.
The opinions set forth above are subject to the following
qualifications and exceptions:
(a) Our opinions are subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law of
general application affecting creditors' rights.
4
<PAGE>
(b) Our opinions are subject to the effect of general principles of
equity, including (without limitation) concepts of materiality, reasonableness,
good faith and fair dealing, and other similar doctrines affecting the
enforceability of agreements generally (regardless of whether considered in a
proceeding in equity or at law).
(c) We have assumed that, at the time any Securities are delivered
to purchasers against payment therefor, the terms of such Securities will
only be such as are then permitted under applicable law.
(d) As of the date of this opinion, a judgment for money in an action
based on a Debt Security denominated in a foreign currency or currency unit in a
federal or State court in the United States ordinarily would be enforced in the
United States only in United States dollars. The date used to determine the rate
of conversion into United States dollars of the Currency in which a particular
Debt Security is denominated will depend upon various factors, including which
court renders the judgment. Under Section 27 of the New York Judiciary Law, a
state court in the State of New York rendering a judgment on a Debt Security
would be required to render such judgment in the Currency in which such Debt
Security is denominated, and such judgment would be converted into United States
dollars at the exchange rate prevailing on the date of entry of the judgment.
(e) Minnesota Statutes Section 290.371, Subd. 4, provides that any
corporation required to file a Notice of Business Activities Report does not
have a cause of action upon which it may bring suit under Minnesota law unless
the corporation has filed a Notice of Business Activities Report and provides
that the use of the courts of the State of Minnesota for all contracts executed
and all causes of action that arose before the end of any period for which a
corporation failed to file a required report is precluded. Insofar as our
opinion may relate to the valid, binding and enforceable character of any
agreement under Minnesota law or in a Minnesota court, we have assumed that any
party seeking to enforce such agreement has at all times been, and will continue
at all times to be, exempt from the requirement of filing a Notice of Business
Activities Report or, if not exempt, has duly filed, and will continue to file,
all Notice of Business Activities Reports.
Our opinions expressed above are limited to the laws of the States of
Minnesota and New York.
5
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the caption
"Legal Matters" contained in the prospectus constituting part of the
Registration Statement.
Very truly yours,
/s/ Dorsey & Whitney LLP
WBP/SMD
6
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3/A) and related Prospectus of Arcadia Financial
Ltd. for the registration of $225,000,000 of Debt Securities, Preferred Stock,
Depositary Shares, Common Stock, Securities Warrants and Units and to the
incorporation by reference therein of our report dated January 25, 1999, with
respect to the consolidated financial statements of Arcadia Financial Ltd.
included in its Annual Report on Form 10-K for the year ended December 31, 1998,
filed with the Securities and Exchange Commission.
September 28, 1999
Minneapolis, Minnesota /s/ Ernst & Young LLP
