EXECUTION COPY
SECOND AMENDMENT
TO THE
NOTE PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO THE NOTE PURCHASE AGREEMENT, dated as of
November 14, 1997 (this "Amendment"), among ARCADIA FINANCIAL, LTD. (formerly
known as Olympic Financial, Ltd.) ("Arcadia"), ARCADIA RECEIVABLES CONDUIT CORP.
(the "Issuer"), RECEIVABLES CAPITAL CORPORATION (the "Purchaser") and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Agent").
WHEREAS, the parties hereto wish to amend the Note Purchase Agreement,
dated as of December 3, 1996, and amended as of August 4, 1997 (as amended and
in effect from time to time, the "NOTE PURCHASE AGREEMENT"), among Arcadia, the
Issuer, the Purchaser and the Agent to provide for a Floating Rate Variable
Funding Automobile Receivables-Backed Note (the "NOTE") to replace the Notes
outstanding as of the date hereof (the "ORIGINAL NOTES"); and
WHEREAS, the parties hereto desire to increase the Maximum Authorized
Amount to U.S. $400,000,000, as provided herein;
NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto agree as follows:
SECTION 1. REPLACEMENT OF INTRODUCTORY PARAGRAPH. The first
paragraph of the Note Purchase Agreement shall be deleted in its entirety and
replaced as follows:
The undersigned, Arcadia Receivables Conduit Corp., a Delaware
corporation (the "ISSUER"), and Arcadia Financial Ltd., a Minnesota corporation
("ARCADIA"), hereby agree with you as follows:
SECTION 2. AMENDMENT OF SECTION 1. Section 1 of the Note Purchase
Agreement shall be deleted in its entirety and replaced as follows:
SECTION 1. THE NOTE. On the Effective Date, the Issuer proposes to
deliver to Receivables Capital Corporation (the "PURCHASER") the Note in
exchange for the Original Notes held by the Purchaser. Subject to the terms and
conditions hereof, the Purchaser agrees to fund increases in the outstanding
principal amount of the Note (each, a "NOTE INCREASE," and the principal amount
of any such Note Increase, the "NOTE INCREASE AMOUNT") from time to time
during the Purchase Period, in a maximum authorized principal amount to be
outstanding at any time (the "MAXIMUM AUTHORIZED AMOUNT") of U.S. $400,000,000.
Each Note Increase and corresponding Note Increase Amount shall be recorded on
the grid attached to the Note. The Original Notes were issued prior to the
Effective Date, and the Note shall be issued by the Issuer on the Effective
Date, pursuant to the Indenture, dated as of December 3, 1996, as amended by the
First Supplemental Indenture, dated as of the Effective Date (as from time to
time amended, further supplemented or modified, the "INDENTURE"), between the
Issuer and Norwest Bank Minnesota, National Association, as trustee (in such
capacity, the "TRUSTEE") and as Collateral Agent (as defined in the Indenture).
The Note: (i) bears interest (subject to conversion to a fixed rate at the
option of the Agent upon the occurrence of an Amortization Event) at a
fluctuating rate per annum equal to the "APPLICABLE RATE" plus the "APPLICABLE
MARGIN," (ii) can be funded by Note Increases in a minimum amount of $5,000,000
and any higher amount on any Purchase Date (as defined below), and (iii) is
subject to prepayment at the option of the Issuer as provided in the Indenture.
The Note shall be issued in the form of a fully registered security in
certificated form (as contemplated by Article VIII of the New York Uniform
Commercial Code).
The Note is secured by a revolving pool of automobile receivables
originated by Arcadia and sold by Arcadia to its wholly-owned subsidiary,
Arcadia Receivables Finance Corp. ("ARFC"), and by ARFC to the Issuer, and by
collections received in respect thereof. Payment of principal and interest on
the entire Maximum Authorized Amount of the Note is insured by Financial
Security Assurance Inc. ("FSA") under a financial guaranty insurance policy (the
"POLICY") dated December 3, 1996, Endorsement No. 1 to the Policy, dated
December 3, 1996, Endorsement No. 2 to the Policy, dated August 4, 1997, and
Endorsement No. 3 to the Policy, dated November 14, 1997.
The Issuer, the Agent, Arcadia, ARFC and the Trustee have entered into
a Servicing Agreement, dated as of December 3, 1996 (as amended to date, and as
from time to time further amended, supplemented or modified, the "SERVICING
AGREEMENT"), to provide for the servicing of the receivables and certain other
matters.
SECTION 3. AMENDMENT OF SECTION 2. Section 2 of the Note Purchase
Agreement shall be deleted in its entirety and replaced as follows:
SECTION 2. FUNDING OF NOTE INCREASES. During the Purchase Period and
subject to the terms and conditions of, and in reliance upon the
representations, warranties and covenants set forth in, this Agreement, the
Purchaser agrees to fund from time to time on each date as specified in Section
3 hereof (each, a "PURCHASE DATE") the Note Increase on such Purchase Date in
the amount of the related Note Increase Amount up to an aggregate principal
amount at any time outstanding not to exceed the Maximum Authorized Amount, at a
purchase price equal to 100% of such Note Increase Amount (the "PURCHASE
PRICE").
SECTION 4. AMENDMENT OF SECTION 3. Section 3 of the Note Purchase
Agreement shall be deleted in its entirety and replaced as follows:
SECTION 3. DELIVERY AND PAYMENT. The Issuer will provide the Agent
with written notice of each Purchase Date and of the Note Increase Amount to be
funded on such
2
Purchase Date no later than 12:00 noon (New York City time) one Business Day
prior to the proposed Purchase Date; PROVIDED, that if the Purchase Price for
the Note Increase Amount on a Purchase Date is less than or equal to
$15,000,000, then such notice may be made no later than 11:00 a.m., New York
City time on such Purchase Date; PROVIDED FURTHER, that if such notice is given
on a Purchase Date, the Purchaser will not be obligated to fund the Note
Increase Amount on such Purchase Date unless the Purchaser is able to issue and
sell its Commercial Paper Notes in an amount sufficient to fund such Note
Increase Amount, and Arcadia and the Issuer agree to hold harmless the Purchaser
for failing to effect a funding on such Purchase Date. Each Note Increase shall
be recorded on the grid attached to the Note by the Agent on each Purchase Date.
The notation of the Note Increase shall be made against payment by wire transfer
of immediately available funds to the account of Norwest Bank Minnesota,
National Association as Trustee for Arcadia Receivables Conduit Warehouse,
Account # 0000000, Xxxxxx Trust and Savings Bank, ABA # 000000000, in the amount
of the Purchase Price.
SECTION 5. AMENDMENT TO SECTION 6. Section 6 of the Note Purchase
Agreement shall be deleted in its entirety and replaced as follows:
SECTION 6. CONDITIONS OF PURCHASER'S OBLIGATIONS.
(a) EACH FUNDING OF A NOTE INCREASE. Your obligation to fund a Note
Increase on any Purchase Date shall be subject to the fact that (v) no
Amortization Event shall have occurred; (w) the Note Increase to be funded shall
be in conformity with the description thereof contained in Section 1 hereof; (x)
the Purchase Period shall not have expired; (y) the representations and
warranties that are made on the part of the Issuer and contained in this
Agreement shall be true and correct, on and as of such Purchase Date, as if made
on and as of such Purchase Date; and (z) the Issuer shall be in continuing
compliance, in all material respects, with all of its obligations hereunder and
under the Basic Agreements and that ARFC and Arcadia are in continuing
compliance in all material respects with their obligations under the Fee Letter.
Your obligation to fund a Note Increase shall also be subject to the accuracy in
all material respects, on and as of the date of such funding, of the
representations and warranties contained herein and of the statements made by
the Issuer in any certificates furnished pursuant to the provisions hereof.
Each funding of a Note Increase hereunder shall constitute a representation and
warranty by the Issuer that all of the above conditions are satisfied on and as
of the respective Purchase Date.
(b) EFFECTIVE DATE. Your obligation to fund Note Increases commencing
on the Effective Date shall be subject to the following additional conditions:
(i) The Agent shall have received and had an opportunity to review
the Basic Agreements (and the respective appendices and exhibits thereto)
and the form of Note, and each of such documents shall be in form and
substance satisfactory to you.
(ii) Timely payment, as and when due, of all principal of and interest
on the Note shall be fully and unconditionally insured under the Policy.
3
(iii) Each of the Basic Agreements, and any amendments thereto, shall
have been duly authorized, executed and delivered by each of the parties
thereto, shall be in full force and effect and shall constitute a legal,
valid and binding agreement of each of the parties thereto, enforceable
against each of them in accordance with its terms, subject, with respect to
enforceability, to bankruptcy, insolvency, reorganization or other similar
laws affecting the enforceability of creditors' rights generally and to
general principles of equity regardless of whether enforcement is sought in
a proceeding in equity or at law, and no event shall have occurred which
constitutes or, with the passage of time or with notice or both, would
constitute a default thereunder, and the Agent shall have received one
fully executed copy of each of the Basic Agreements.
(iv) The First Supplemental Indenture shall be in form and substance
satisfactory to you, and you shall have received a true and complete copy
thereof.
SECTION 6. AMENDMENT TO SECTION 8. Section 8 of the Note Purchase
Agreement is amended as follows:
a. The following definition shall be added in alphabetical order and
Section 8 realphabetized accordingly:
the term "Original Notes" means the notes issued under the Indenture
from and after the Closing Date up to but not including the Effective Date, and
remaining outstanding as of the opening of business on the Effective Date.
b. Letter (m) is added as follows:
(m) from and after the Effective Date (a)(i) the defined term "Notes"
when used in this Note Purchase Agreement shall refer to the Floating Rate
Variable Funding Automobile Receivables-Backed Note issued under the First
Supplemental Indenture, (ii) the terms "Noteholder," "Noteholders," "Holder" or
"Holders" shall mean the holder or holders of such Note, (iii) the words
"purchase," "funding," "carrying" or "pay for" when used with respect to the
Notes shall refer to such Note, or the funding of a Note Increase, as
appropriate, (b) references to (i) Olympic and (ii) ORFC herein shall refer to
Arcadia Financial Ltd. ("Arcadia") and Arcadia Receivables Finance Corp.
("ARFC"), respectively, and (c) all provisions of this Note Purchase Agreement
shall be interpreted consistently with (a) and (b) above.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF ARCADIA. Arcadia
represents and warrants that as of the Effective Date no Event of Default has
occurred under the Repurchase Agreement and no Servicer Termination Event has
occurred under the Servicing Agreement, and to the best of Arcadia's knowledge
there is no set of circumstances existing that with the passage of time, would
constitute such an Event of Default or Servicer Termination Event.
SECTION 8. EFFECTIVENESS. The amendments provided for by this
Amendment shall become effective on the Effective Date (as that term is defined
in the Servicing Agreement), upon the occurrence of the following: (i) receipt
by the Agent, in form and substance satisfactory to the Agent, of (a) this
Amendment duly executed and delivered by each
4
of the parties hereto, (b) an opinion of counsel to Arcadia, dated the date
hereof, addressed to the Agent, the Security Insurer and the Noteholder,
covering such matters as the Agent may reasonably request, (c) amendments to the
Servicing Agreement, the Repurchase Agreement, and the Indenture, of even date
herewith and (d) an endorsement to the Note Policy covering the Floating Rate
Variable Funding Automobile Receivables-Backed Note up to the Maximum Authorized
Amount and (ii) delivery of the Original Notes to the Trustee, and appropriate
authorization by the Trustee of the Floating Rate Variable Funding Automobile
Receivables-Backed Note and the execution by and delivery of such Note to the
Issuer.
SECTION 9. NOTE PURCHASE AGREEMENT IN FULL FORCE AND EFFECT AS
AMENDED. Except as specifically amended hereby, all of the terms and conditions
of the Note Purchase Agreement shall remain in full force and effect and, except
as expressly provided herein, the effectiveness of this Amendment shall not
operate as, or constitute a waiver or modification of, any right, power remedy
of any party to the Note Purchase Agreement. All references to the Note
Purchase Agreement in any other document or instrument shall be deemed to mean
the Note Purchase Agreement as amended by this Amendment. This Amendment shall
not constitute a novation of the Note Purchase Agreement, but shall constitute
an amendment thereof.
SECTION 10. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by separate parties hereto on separate counterparts,
each of which when executed shall be deemed an original, but all such
counterparts taken together shall constitute one and the same instrument.
SECTION 11. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS.
SECTION 12. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to such terms in the Note
Purchase Agreement.
5
IN WITNESS WHEREOF, the Purchaser, the Agent, Arcadia and the Issuer
have caused this Second Amendment to Note Purchase Agreement to be duly executed
by their respective officers thereunto duly authorized as of the date first
above written.
ARCADIA RECEIVABLES CONDUIT CORP.,
as Issuer
By:
-----------------------------
Name:
Title:
ARCADIA FINANCIAL LTD.
By:
-----------------------------
Name:
Title:
RECEIVABLES CAPITAL CORPORATION,
as Purchaser
By:
-----------------------------
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By:
-----------------------------
Name:
Title:
6
