SPREAD ACCOUNT AGREEMENT,
dated as of March 25, 1993,
as amended and restated
as of March 1, 1997
among
OLYMPIC FINANCIAL LTD.,
OLYMPIC RECEIVABLES FINANCE CORP.,
FINANCIAL SECURITY ASSURANCE INC.
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee and as Collateral Agent
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Rules of Interpretation . . . . . . . . . . . . . . . . . . . 12
ARTICLE II
CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL
Section 2.01. Series 1993-A Credit Enhancement Fee. . . . . . . . . . . . . 12
Section 2.02. Series Supplements. . . . . . . . . . . . . . . . . . . . . . 13
Section 2.03. Grant of Security Interest by OFL and the Seller. . . . . . . 13
Section 2.04. Priority. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.05. Seller and OFL Remain Liable. . . . . . . . . . . . . . . . . 14
Section 2.06. Maintenance of Collateral . . . . . . . . . . . . . . . . . . 15
Section 2.07. Termination and Release of Rights . . . . . . . . . . . . . . 15
Section 2.08. Non-Recourse Obligations of Seller. . . . . . . . . . . . . . 16
Section 2.09. Program Spread Account and Tag Accounts . . . . . . . . . . . 16
ARTICLE III
SPREAD ACCOUNTS
Section 3.01. Establishment of Spread Accounts; Initial
Deposits into Spread Accounts . . . . . . . . . . . . . . . . 19
Section 3.02. Investments . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.03. Distributions: Priority of Payments . . . . . . . . . . . . . 21
Section 3.04. General Provisions Regarding Spread Accounts. . . . . . . . . 24
Section 3.05. Reports by the Collateral Agent . . . . . . . . . . . . . . . 25
ARTICLE IV
THE COLLATERAL AGENT
Section 4.01. Appointment and Powers. . . . . . . . . . . . . . . . . . . . 25
Section 4.02. Performance of Duties . . . . . . . . . . . . . . . . . . . . 26
Section 4.03. Limitation on Liability . . . . . . . . . . . . . . . . . . . 26
Section 4.04. Reliance upon Documents . . . . . . . . . . . . . . . . . . . 27
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Section 4.05. Successor Collateral Agent. . . . . . . . . . . . . . . . . . 27
Section 4.06. Indemnification . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.07. Compensation and Reimbursement. . . . . . . . . . . . . . . . 29
Section 4.08. Representations and Warranties of the Collateral
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.09. Waiver of Setoffs . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.10. Control by the Controlling Party. . . . . . . . . . . . . . . 30
ARTICLE V
COVENANTS OF THE SELLER
Section 5.01. Preservation of Collateral. . . . . . . . . . . . . . . . . . 30
Section 5.02. Opinions as to Collateral . . . . . . . . . . . . . . . . . . 30
Section 5.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.04. Waiver of Stay or Extension Laws; Marshalling of
Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.05. Noninterference, etc. . . . . . . . . . . . . . . . . . . . . 31
Section 5.06. Seller Changes. . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VI
CONTROLLING PARTY; INTERCREDITOR PROVISIONS
Section 6.01. Appointment of Controlling Party. . . . . . . . . . . . . . . 32
Section 6.02. Controlling Party's Authority . . . . . . . . . . . . . . . . 33
Section 6.03. Rights of Secured Parties . . . . . . . . . . . . . . . . . . 34
Section 6.04. Degree of Care. . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VII
REMEDIES UPON DEFAULT
Section 7.01. Remedies upon a Default . . . . . . . . . . . . . . . . . . . 35
Section 7.02. Waiver of Default . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.03. Restoration of Rights and Remedies. . . . . . . . . . . . . . 36
Section 7.04. No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Further Assurances. . . . . . . . . . . . . . . . . . . . . . 36
Section 8.02. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8.03. Amendments; Waivers . . . . . . . . . . . . . . . . . . . . . 37
Section 8.04. Severability. . . . . . . . . . . . . . . . . . . . . . . . . 37
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Section 8.05. Nonpetition Covenant. . . . . . . . . . . . . . . . . . . . . 37
Section 8.06. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 8.07. Term of this Agreement. . . . . . . . . . . . . . . . . . . . 39
Section 8.08. Assignments: Third-Party Rights; Reinsurance. . . . . . . . . 40
Section 8.09. Consent of Controlling Party. . . . . . . . . . . . . . . . . 40
Section 8.10. Trial by Jury Waived. . . . . . . . . . . . . . . . . . . . . 40
Section 8.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.12. Consents to Jurisdiction. . . . . . . . . . . . . . . . . . . 41
Section 8.13. Limitation of Liability . . . . . . . . . . . . . . . . . . . 41
Section 8.14. Determination of Adverse Effect . . . . . . . . . . . . . . . 41
Section 8.15. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.16. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
EXHIBIT A Form of Pooling and Servicing Agreement
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SPREAD ACCOUNT AGREEMENT, dated as of March 25, 1993, as amended and restated
as of March 1, 1997 (the "Agreement"), by and among OLYMPIC FINANCIAL LTD., a
Minnesota corporation ("OFL"), OLYMPIC RECEIVABLES FINANCE CORP., a Delaware
corporation (the "Seller"), FINANCIAL SECURITY ASSURANCE INC., a New York
stock insurance company ("Financial Security") and NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, a national banking association in its capacities as
Trustee under each Pooling and Servicing Agreement referred to below and as
Trustee under each Indenture referred to below, in such capacity as agent for
the Noteholders and Certificateholders with respect to the related Series (in
each such capacities the "Trustee") and as Collateral Agent (as defined
below).
RECITALS
1. Olympic Automobile Receivables Trust, 1993-A (the "Series
1993-A Trust") was formed pursuant to a Pooling and Servicing Agreement,
dated as of March 1, 1993 (the "Series 1993-A Pooling and Servicing
Agreement"), among OFL, as Servicer, the Seller, the Trustee and the Backup
Servicer.
2. Pursuant to Pooling and Servicing Agreements or Sale and
Servicing Agreements, the Seller from time to time sells all of its right,
title and interest in and to Receivables and certain other Trust Property.
3. The Seller has requested that Financial Security issue
Policies to guarantee payment of the Guaranteed Distributions or Scheduled
Payments (as defined in the relevant Policy) on each Distribution Date in
respect of asset-backed securities backed by such Receivables and Other Trust
Property.
4. In partial consideration of the issuance of the Policies,
the Seller has agreed that Financial Security shall have certain rights as
Controlling Party, to the extent set forth herein.
5. The Seller is a wholly owned special purpose subsidiary of
OFL. Certain of the purchasers of Receivables and Other Trust Property have
agreed to pay a Credit Enhancement Fee to the Seller in consideration of the
obligations of the Seller and OFL pursuant hereto and in consideration of the
obligations of OFL pursuant to the Insurance Agreements (such obligations
forming part of the Insurer Secured Obligations referred to herein). The
Insurer Secured Obligations form part of the consideration to Financial
Security for its issuance of the Policies.
6. In order to secure the performance of the Secured
Obligations, to further effect and enforce the subordination provisions to
which the Credit Enhancement Fee is subject, and in consideration of the
receipt of the Credit Enhancement Fee, OFL and the Seller agreed to pledge
the Collateral as Collateral to the Collateral Agent for the benefit of
Financial Security and for the benefit of the Trustees on behalf of the
Trusts, upon the terms and conditions set forth herein.
7. In connection with the issuance of Policies subsequent to
the Policy issued with respect to the Series 1993-A Trust, it is contemplated
that Financial Security will obtain certain Controlling Party rights with
respect to the related Series, and that, in connection with each such
additional Series, the parties hereto have entered into or will enter into a
Series Supplement hereto pursuant to which the Seller has pledged or will
pledge additional Collateral pursuant to the terms hereof and such Series
Supplement.
8. The Seller has entered into a Repurchase Agreement dated as
of December 3, 1996 with Arcadia Receivables Conduit Corp., a Delaware
corporation, (the "Issuer") (the "Repurchase Agreement") pursuant to which
the Seller has sold or will sell all of its right, title and interest in
certain Receivables, and that the Issuer will issue one or more classes or
tranches of Warehousing Notes pursuant to an Indenture among the Issuer, the
Indenture Trustee and the Collateral Agent, and that Financial Security in
its discretion may issue one or more Policies with respect to certain
scheduled payments on the corresponding Notes.
9. The parties have previously executed, amended and restated
this Agreement, and now wish to further amend and restate this Agreement to
supplement certain provisions therein in order to reflect the intent of the
parties.
AGREEMENTS
In consideration of the premises, and for other good and
valuable consideration, the adequacy, receipt and sufficiency of which are
hereby acknowledged the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. All terms defined in the document
entitled "OFL Grantor Trusts Standard Terms and Conditions of Agreement
Effective March 1, 1993" (the "Standard Terms and Conditions") shall have the
same meaning with respect to each Series in this Agreement. If the related
Series was issued pursuant to a Pooling and Servicing Agreement, all terms
defined in Section 1.01 of such Pooling and Servicing Agreement shall have
the same meaning with respect to the related Series in this Agreement. If
the related Series was issued pursuant to a Trust Agreement, Sale and
Servicing Agreement and Indenture, all terms defined in the related Sale and
Servicing Agreement shall have the same meaning with respect to the related
Series in this Agreement. If the related Series was issued pursuant to an
Indenture and the related Receivables were sold to the Issuer pursuant to a
Repurchase Agreement, all terms defined in the related Servicing Agreement
and Repurchase Agreement shall have the same meaning with respect to the
related Series in this Agreement. If a term is defined herein with respect
to one or more Series, if applicable, such term shall be defined with respect
to any other Series in the Series Supplement related thereto. The following
terms shall have the following respective meanings:
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"AUTHORIZED OFFICER" means, (i) with respect to Financial
Security, the Chairman of the Board, the President, the Executive Vice
President or any Managing Director of Financial Security, (ii) with respect
to the Trustee or the Collateral Agent, any Vice President or Trust Officer
thereof, (iii) with respect to OFL, the President or any Vice President
thereof, and (iv) with respect to the Seller, the President or any Vice
President thereof.
"AVERAGE DELINQUENCY RATIO" means, with respect to any Series
(other than the Warehousing Series) and any Determination Date, the
arithmetic average of the Delinquency Ratios for such Determination Date and
the two immediately preceding Determination Dates.
"CAPTURE EVENT" means the occurrence of an "Event of Default,"
as defined in the Indenture, dated as of March 12, 1997, between OFL and
Norwest Bank Minnesota, National Association, as amended or supplemented,
relating to OFL's $300,000,000 11 1/2% Senior Notes due 2007, with respect to
which a permanent waiver has not been effected in accordance with the terms
of such agreement.
"COLLATERAL" means the Series 1993-A Collateral, any property
pledged pursuant to Section 2.09(f), and, with respect to any Series, all
collateral delivered hereunder with respect to each of the Series, as
specified in the related Series Supplement.
"COLLATERAL AGENT" means, initially, Norwest Bank Minnesota,
National Association, in its capacity as collateral agent on behalf of the
Secured Parties, including its successors in interest, until a successor
Person shall have become the Collateral Agent pursuant to Section 4.05
hereof, and thereafter "Collateral Agent" shall mean such successor Person.
"COLLECTION ACCOUNT SHORTFALL" means (A), with respect to any
Series created pursuant to a Pooling and Servicing Agreement, any
Distribution Date, and a time of determination, the excess, if any, of the
amount required to be distributed on such Distribution Date pursuant to
subsections (i) through (vi) of Section 4.6(a) of the Standard Terms and
Conditions over the amount on deposit in and available for distribution (or,
for the purposes of Section 3.03(a), calculated on a pro forma basis to be on
deposit in and available for distribution) on such Distribution Date from the
Collection Account related to such Series, and (B) with respect to any Series
created pursuant to a Trust Agreement, Sale and Servicing Agreement and
Indenture, or with respect to any Series issued by the Issuer, the meaning
assigned in the related Series Supplement.
"CONTROLLING PARTY" means with respect to a Series, at any
time, the Person designated as the Controlling Party at such time pursuant to
Section 6.01 hereof.
"CRAM DOWN LOSS" means, if a court of appropriate jurisdiction
in an insolvency proceeding shall have issued an order reducing the Principal
Balance of a Receivable, the amount of such reduction. A "Cram Down Loss"
shall be deemed to have occurred on the date of issuance of such order.
3
"CUMULATIVE DEFAULT RATE" means, with respect to any
Determination Date and any Series (other than the Warehousing Series), the
fraction, expressed as a percentage, the numerator of which is equal to the
sum of (a) the Principal Balance of all Receivables which became Spread
Account Liquidated Receivables since the Cutoff Date as of the related
Accounting Date plus (b) the Principal Balance of all Receivables with
respect to which all or any portion of a Scheduled Payment has become 91 or
more days delinquent as of the related Accounting Date (not including those
Receivables included in clause (a) above) and the denominator of which is
equal to the sum of (i) the original Aggregate Principal Balance as of the
Initial Cutoff Date plus (ii) the Prefunded Amount as of the Series Closing
Date.
"CUMULATIVE NET LOSS RATE" means, with respect to any
Determination Date and any Series (other than the Warehousing Series), the
fraction, expressed as a percentage, the numerator of which is equal to the
sum of (a) Net Losses for such Determination Date plus (b) 40% of the
Principal Balance of all Receivables with respect to which all or any portion
of a Scheduled Payment has become 91 or more days delinquent (not including
Receivables included under the definition of Net Losses in clause (a) above)
as of the related Accounting Date and the denominator of which is equal to
the sum of (i) the original Aggregate Principal Balance as of the Initial
Cutoff Date plus (ii) the Prefunded Amount as of the Series Closing Date.
"DEEMED CURED" means, with respect to Series 1994-B, Series
1994-A, Series 1993-D, Series 1993-C, Series 1993-B or Series 1993-A and each
other Spread Account for which "Deemed Cured" is not defined in the related
Series Supplement, (a) with respect to a Trigger Event that has occurred
pursuant to clause (A)(i) or (ii) of the definition thereof, as of a
Determination Date that no such clause (A)(i) or clause (A)(ii) Trigger Event
with respect to such Series shall have occurred as of such Determination Date
or as of any of the five consecutively preceding Determination Dates, and (b)
with respect to a Trigger Event that has occurred pursuant to clause (A)(iii)
or clause (A)(iv) of the definition thereof, as of the next Determination
Date which occurs in a calendar month which is a multiple of three months
succeeding the Closing Date, that no such clause (A)(iii) or clause (A)(iv)
Trigger Event with respect to such Series shall have occurred as of such
Determination Date.
"DEFAULT" means, with respect to any Series, at any time, (i)
if Financial Security is then the Controlling Party with respect to such
Series, any Insurance Agreement Event of Default with respect to such Series,
and (ii) if the Trustee is then the Controlling Party with respect to such
Series, any Servicer Termination Event with respect to such Series.
"DELINQUENCY RATIO" means, with respect to any Determination
Date and any Series (other than the Warehousing Series), the fraction,
expressed as a percentage, the numerator of which is equal to the sum of the
Principal Balances (as of the related Accounting Date) of all Receivables
that were delinquent with respect to all or any portion of a Scheduled
Payment more than 30 days as of the related Accounting Date or that became a
Purchased Receivable as of the related Accounting Date and that were
delinquent with respect to all or any portion of a Scheduled Payment more
than 30 days as of such Accounting Date and the denominator of which is equal
to the Aggregate Principal Balance as of the related Accounting Date.
4
"ELIGIBLE ACCOUNT" means a segregated trust account that (i)
is either (x) maintained with a depository institution or trust company the
long-term unsecured debt obligations of which are rated "AA" or higher by
Standard & Poor's and "Aa2" or higher by Moody's, or (y) maintained with a
depository institution or trust company the commercial paper or other
short-term unsecured debt obligations of which are rated "A-l+" by Standard &
Poor's and "P-l" by Moody's and (ii) in either case, such depository
institution or trust company shall have been specifically approved by the
Controlling Party, acting in its discretion, by written notice to the
Collateral Agent.
"FINAL TERMINATION DATE" means, with respect to a Series, the
date that is the later of (i) the Insurer Termination Date with respect to
such Series and (ii) the Trustee Termination Date with respect to such Series.
"FINANCIAL SECURITY DEFAULT" means, with respect to any
Series, any one of the following events shall have occurred and be continuing:
(a) Financial Security shall have failed to make a payment
required under a related Policy;
(b) Financial Security shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter
of the United States Bankruptcy Code, the New York State
Insurance Law or any other similar federal or state law relating
to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) made a general assignment for the benefit
of its creditors, or (iii) had an order for relief entered
against it under the United States Bankruptcy Code, the New York
State Insurance Law, or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation
or reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department
of Insurance or other competent regulatory authority shall have
entered a final and nonappealable order, judgment or decree (i)
appointing a custodian, trustee, agent or receiver for Financial
Security or for all or any material portion of its property or
(ii) authorizing the taking of possession by a custodian,
trustee, agent or receiver of Financial Security (or the taking
of possession of all or any material portion of the property of
Financial Security).
"INITIAL PRINCIPAL AMOUNT" means $59,222,640.38 with respect
to Series 1993-A.
"INITIAL SPREAD ACCOUNT DEPOSIT" means $2,368,906 for Series
1993-A.
"INITIAL SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to
Series 1993-A and any Distribution Date, an amount equal to the greater of
(i) 7% of the Certificate Balance as of such Distribution Date (after giving
effect to the distribution in respect of principal made on such Distribution
Date) and (ii) the Spread Account Minimum Amount as of such Distribution Date.
5
"INSURANCE AGREEMENT" means, with respect to any Series, the
Insurance and Indemnity Agreement among Financial Security, the Seller, OFL
and such other parties as may be named therein.
"INSURER SECURED OBLIGATIONS" means, with respect to a Series,
all amounts and obligations which OFL, the Seller and such other parties as
may be named therein may at any time owe or be required to perform to or on
behalf of Financial Security (or any agents, accountants or attorneys for
Financial Security) under the Insurance Agreement related to such Series or
under any Transaction Document in respect of such Series, regardless of
whether such amounts are owed or performance is due now or in the future,
whether liquidated or unliquidated, contingent or non-contingent.
"INSURER TERMINATION DATE" means, with respect to any Series,
the date which is the latest of (i) the date of the expiration of all
Policies issued in respect of such Series, (ii) the date on which Financial
Security shall have received payment and performance in full of all Insurer
Secured Obligations with respect to such Series and (iii) the latest date on
which any payment referred to above could be avoided as a preference or
otherwise under the United States Bankruptcy Code or any other similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization, as specified in an Opinion of Counsel
delivered to the Collateral Agent and the Trustee.
"ISSUER" means Arcadia Receivables Conduit Corp., a Delaware
corporation.
"LIEN" means, as applied to the property or assets (or the
income, proceeds, products, rents or profits therefrom) of any Person, in
each case whether the same is consensual or nonconsensual or arises by
contract, operation of law, legal process or otherwise: (a) any mortgage,
lien, pledge, attachment, charge, lease, conditional sale or other title
retention agreement, or other security interest or encumbrance of any kind;
or (b) any arrangement, express or implied, under which such property or
assets (and/or such income, proceeds, products, rents or profits) are
transferred, sequestered or otherwise identified for the purpose of
subjecting or making available the same for payment of debt or performance of
any other obligation in priority to the payment of the general, unsecured
creditors of such Person.
"NET LOSSES" means, with respect to any Determination Date and
any Series (other than the Warehousing Series), the positive difference of
(A) the sum of (i) the aggregate of the Principal Balances as of the related
Accounting Date (plus accrued and unpaid interest to the end of the related
Monthly Period, at the applicable APR) of all Receivables that became Spread
Account Liquidated Receivables since the Cutoff Date, plus (ii) the Purchase
Amount of all Receivables that became Purchased Receivables as of the related
Accounting Date and that were delinquent with respect to all or any portion
of a Scheduled Payment more than 30 days as of such Accounting Date, plus
(iii) the aggregate of all Cram Down Losses as of the related Accounting Date
that occurred since the Cutoff Date, over (B) the Liquidation Proceeds
received by the Trust as of the related Accounting Date since the Cutoff
Date.
"NON-CONTROLLING PARTY" means, with respect to a Series, at
any time, the Secured Party that is not the Controlling Party at such time.
6
"OBLIGOR" means, with respect to any Receivable, the purchaser
or the co-purchasers of the Financed Vehicle and any other Person or Persons
who are primarily or secondarily obligated to make payments under a
Receivable.
"OFL" means Olympic Financial Ltd., a Minnesota corporation.
"OPINION OF COUNSEL" means a written opinion of counsel
acceptable, as to form, substance and issuing counsel, to the Controlling
Party.
"PAYMENT PRIORITIES" means the priority of PRO RATA
distributions described in clause (iii) of priority THIRD of Section 3.03(a).
"POLICY" means the Series 1993-A Policy and any insurance
policy subsequently issued by Financial Security with respect to a Series.
"POOLING AND SERVICING AGREEMENT" means, with respect to
Series 1993-A, the Series 1993-A Pooling and Servicing Agreement and, for
each other Series created pursuant to a Pooling and Servicing Agreement, the
Pooling and Servicing Agreement related to such Series.
"PROGRAM SPREAD ACCOUNT" has the meaning specified in Section
2.09(a) hereof.
"SECURED OBLIGATIONS" means, with respect to each Series, the
Insurer Secured Obligations with respect to such Series and the Trustee
Secured Obligations with respect to such Series.
"SECURED PARTIES" means, with respect to a Series and the
related Collateral, each of the Trustee, in respect of the Trustee Secured
Obligations with respect to such Series, and Financial Security, in respect
of the Insurer Secured Obligations with respect to such Series.
"SECURITY INTERESTS" means, with respect to Series 1993-A
Certificates, the security interests and Liens in the Series 1993-A
Collateral granted pursuant to Section 2.03 hereof, and, with respect to any
other Series, the security interests and Liens in the related Collateral
granted pursuant to the related Series Supplement.
"SERIES 1993-A CERTIFICATES" means the Series of Certificates
issued on the date hereof pursuant to the Series 1993-A Pooling and Servicing
Agreement.
"SERIES 1993-A COLLATERAL" has the meaning specified in
Section 2.03(a) hereof.
"SERIES 1993-A CREDIT ENHANCEMENT FEE" means the amount
distributable on each Distribution Date pursuant to Section 4.6(a)(vi) and
(vii) of the Standard Terms and Conditions as incorporated by reference in
the Series 1993-A Pooling and Servicing Agreement.
"SERIES 1993-A POOLING AND SERVICING AGREEMENT" means the
Pooling and Servicing Agreement, dated as of the date hereof, among OFL, in
its individual capacity and as
7
Servicer, the Seller, the Trustee and the Backup Servicer, as such agreement
may be supplemented, amended or modified from time to time.
"SERIES 1993-A RECEIVABLE" means each Receivable referenced on
the Schedule of Receivables attached to the Series 1993-A Pooling and
Servicing Agreement.
"SERIES OF SECURITIES" or "SERIES" means the Series 1993-A
Certificates or, as the context may require, any other series of Certificates
and/or Notes issued as described in Section 2.02 hereof, or collectively, all
such series; PROVIDED, HOWEVER, Series, as used collectively shall not
include any Series of Warehousing Notes when such term is used in, or with
respect to, the definitions "Cumulative Default Rate," "Average Delinquency
Ratio," "Cumulative Net Loss Rate," "Deemed Cured," "Delinquency Ratio," "Net
Losses," "Spread Account Shortfall" and "Spread Account Default Level."
"SERIES SUPPLEMENT" means a supplement hereto executed by the
parties hereto in accordance with Section 2.02 hereof.
"SPREAD ACCOUNT" has the meaning specified in Section 3.01(a)
hereof.
"SPREAD ACCOUNT ADDITIONAL DEPOSIT" with respect to any Series
created pursuant to a Trust Agreement, Sale and Servicing Agreement and
Indenture, has the meaning assigned in the related Series Supplement.
"SPREAD ACCOUNT LIQUIDATED RECEIVABLE" means, with respect to
any Monthly Period, a Receivable as to which (i) 91 days have elapsed since
the Servicer repossessed the related Financed Vehicle, (ii) the Servicer has
determined in good faith that all amounts it expects to recover have been
received, or (iii) all or any portion of a Scheduled Payment shall have
become more than 180 days past due.
"SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to Series
1993-A and any Distribution Date:
(i) if no Insurance Agreement Event of Default with respect to such
Series has occurred and is continuing as of the related Determination
Date, no Capture Event has occurred and is continuing as of the
related Determination Date, no Trigger Event has occurred as of the
related Determination Date, and any Trigger Event with respect to such
Series is Deemed Cured as of the related Determination Date, then the
Initial Spread Account Maximum Amount with respect to such Series and
such Distribution Date;
(ii) if (A) a Trigger Event with respect to Series 1993-A has
occurred as of the Determination Date or (B) a Trigger Event with
respect to Series 1993-A has occurred as of a prior Distribution
Date and is not Deemed Cured as of the related Determination Date,
and no Insurance Agreement Event of Default with respect to Series
1993-A has occurred and is continuing and no Capture Event has
occurred and is continuing, the Spread Account Maximum Amount shall
be equal to the greater of (i)
8
10% of the Series 1993-A Balance as of the close of business on such
Distribution Date and (ii) the Spread Account Minimum Amount as of
the close of business on such Distribution Date; or
(iii) if (A) an Insurance Agreement Event of Default with respect to
such Series has occurred and is continuing or (B) a Capture Event has
occurred and is continuing as of the related Determination Date, the
Spread Account Maximum Amount shall be equal to the greater of (i)
25% of the Series 1993-A Balance as of the close of business on such
Distribution Date and (ii) the Spread Account Minimum Amount as of the
close of business on such Distribution Date.
"SPREAD ACCOUNT MINIMUM AMOUNT" means, with respect to Series
1993-A and any Distribution Date: , an amount equal to the greater of:
(i) $100,000, and
(ii) the lesser of:
(A) 1% of the Initial Principal Amount of such Series, but in no
event less than $500,000, and
(B) the Certificate Balance as of such Distribution Date (after
giving effect to the distribution in respect of principal
made on such Distribution Date).
"SPREAD ACCOUNT SHORTFALL" means, with respect to any
Distribution Date and any Series (other than the Warehousing Series) with
respect to which an Insurance Agreement Event of Default has occurred and is
continuing, or a Capture Event has occurred and is continuing, the excess, if
any, of the Spread Account Maximum Amount for such Series and such
Distribution Date and the amount on deposit in such Spread Account as of such
Distribution Date after giving effect to distributions made on such
Distribution Date pursuant to priority SECOND of Section 3.03(b).
"STOCK PLEDGE AGREEMENT" means the Third Amended and Restated
Stock Pledge Agreement, dated as of December 3, 1996, between OFL, Financial
Security and the Collateral Agent, as amended from time to time.
"TAG ACCOUNT" has the meaning specified in Section 2.09(c).
"TRANSACTION DOCUMENTS" means, with respect to a Series, this
Agreement, each of the Pooling and Servicing Agreement or Trust Agreement,
Sale and Servicing Agreement and Indenture, or Servicing Agreement,
Repurchase Agreement, Indenture and Security Agreement, as applicable, the
Insurance Agreement, the Custodian Agreement, the Purchase Agreement, any
Subsequent Purchase Agreements and Subsequent Transfer Agreements, any
Underwriting Agreement, the Lockbox Agreement, and the Stock Pledge Agreement
related to such Series.
9
"TRIGGER EVENT" means, with respect to Series 1993-A and as of
a Determination Date, the occurrence of any of the events specified in clause
(A) together with the occurrence of the event specified in clause (B):
(A) (i) [reserved];
(ii) the Average Delinquency Ratio for such Determination Date shall
be equal to or greater than 5.00%;
(iii) the Cumulative Default Rate shall be equal to or greater than
(A) 3.15%, with respect to any Determination Date occurring
prior to or during the sixth calendar month succeeding the
Series 1993-A Closing Date, (B) 5.50%, with respect to any
Determination Date occurring after the sixth, and prior to or
during the 12th, calendar month succeeding the Series 1993-A
Closing Date, (C) 7.0%, with respect to any Determination Date
occurring after the 12th, and prior to or during the 18th,
calendar month succeeding the Series 1993-A Closing Date, (D)
7.5%, with respect to any Determination Date occurring after
the 18th, and prior to or during the 24th, calendar month
succeeding the Series 1993-A Closing Date, (E) 8.15%, with
respect to any Determination Date occurring after the 24th, and
prior to or during the 30th, calendar month succeeding the
Series 1993-A Closing Date, (F) 8.75%, with respect to any
Determination Date occurring after the 30th, and prior to or
during the 36th, calendar month succeeding the Series 1993-A
Closing Date, (G) 9.0%, with respect to any Determination Date
occurring after the 36th, and prior to or during the 42nd,
calendar month succeeding the Series 1993-A Closing Date, (H)
9.25%, with respect to any Determination Date occurring after
the 42nd, and prior to or during the 48th, calendar month
succeeding the Series 1993-A Closing Date, (I) 9.50%, with
respect to any Determination Date occurring after the 48th, and
prior to or during the 54th, calendar month succeeding the
Series 1993-A Closing Date, (J) 9.75%, with respect to any
Determination Date occurring after the 54th, and prior to or
during the 60th calendar month succeeding the Series 1993-A
Closing Date, (K) 9.9%, with respect to any Determination Date
occurring after the 60th, and prior to or during the 66th,
calendar month succeeding the Series 1993-A Closing Date, or
(L) 10.0%, with respect to any Determination Date occurring
after the 66th, and prior to or during the 72nd, calendar month
succeeding the Series 1993-A Closing Date; or
(iv) the Cumulative Net Loss Rate shall be equal to or greater than
(A) 1.25%, with respect to any Determination Date occurring
prior to or during the sixth calendar month succeeding the
Series 1993-A Closing Date, (B) 2.0%, with respect to any
Determination Date occurring after the sixth, and prior to or
during the 12th, calendar month succeeding
10
the Series 1993-A Closing Date, (C) 2.75%, with respect to any
Determination Date occurring after the 12th, and prior to or
during the 18th, calendar month succeeding the Series 1993-A
Closing Date, (D) 3.0%, with respect to any Determination Date
occurring after the 18th, and prior to or during the 24th,
calendar month succeeding the Series 1993-A Closing Date, (E)
3.25%, with respect to any Determination Date occurring after
the 24th, and prior to or during the 30th, calendar month
succeeding the Series 1993-A Closing Date, (F) 3.5%, with
respect to any Determination Date occurring after the 30th, and
prior to or during the 36th, calendar month succeeding the
Series 1993-A Closing Date, (G) 3.6%, with respect to any
Determination Date occurring after the 36th, and prior to or
during the 42nd, calendar month succeeding the Series 1993-A
Closing Date, (H) 3.7%, with respect to any Determination Date
occurring after the 42nd, and prior to or during the 48th,
calendar month succeeding the Series 1993-A Closing Date, (I)
3.8%, with respect to any Determination Date occurring after
the 48th, and prior to or during the 54th, calendar month
succeeding the Series 1993-A Closing Date, (J) 3.9%, with
respect to any Determination Date occurring after the 54th, and
prior to or during the 60th, calendar month succeeding the
Series 1993-A Closing Date, (K) 3.95%, with respect to any
Determination Date occurring after the 60th, and prior to or
during the 66th, calendar month succeeding the Series 1993-A
Closing Date, or (L) 4.0%, with respect to any Determination
Date occurring after the 66th, and prior to or during the 72nd,
calendar month succeeding the Series 1993-A Closing Date.
(B) The amount specified with respect to such Series in the last
sentence of Section 2.09(f) hereof is positive on such
Determination Date, and such amount has not been deposited in
the related Tag Account on such Determination Date.
"TRUST" means a trust formed pursuant to a Pooling and Servicing
Agreement or a Trust Agreement, as the case may be.
"TRUST PROPERTY," with respect to any Series (other than the
Warehousing Series), has the meaning specified in the related Pooling and
Servicing Agreement or Trust Agreement, as the case may be, and with respect
to the Warehousing Series, means the Seller Conveyed Property (as defined in
the Repurchase Agreement).
"TRUSTEE" means (A) with respect to any Series created pursuant to
a Pooling and Servicing Agreement, the Trustee named in such Pooling and
Servicing Agreement, or (B) with respect to any Series issued pursuant to an
Indenture, the Trustee named in such Indenture in its capacity as agent for
the Noteholders and, if applicable, the Certificateholders.
11
"TRUSTEE SECURED OBLIGATIONS" means, with respect to a Series, all
amounts and obligations which OFL or the Seller may at any time owe or be
required to perform to or on behalf of (i) the Trustee, the Trust or the
Certificateholders under the Pooling and Servicing Agreement with respect to
such Series, (ii) the Trustee, the Owner Trustee, the Trust, the
Certificateholders or the Noteholders under the Trust Agreement, the Sale and
Servicing Agreement or the Indenture with respect to such Series or (iii) the
Trustee and the Noteholders under the Indenture with respect to the
Warehousing Series.
"TRUSTEE TERMINATION DATE" means, with respect to any Series, the
date which is the later of (i) the date on which the Trustee shall have
received, as Trustee for the holders of the Certificates of such Series, or
as Indenture Trustee on behalf of (and as agent for) the Noteholders and/or
Certificateholders of such Series, payment and performance in full of all
Trustee Secured Obligations arising out of or relating to such Series or (ii)
except with respect to the Warehousing Series, the date on which all payments
in respect of the Certificates shall have been made and the related Trust
shall have been terminated pursuant to the terms of the related Pooling and
Servicing Agreement or Trust Agreement.
"UNDERWRITING AGREEMENT" means, with respect to any Series (other
than the Warehousing Series), the Underwriting Agreement among OFL, the
Seller and the Underwriters named therein.
"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform Commercial
Code in effect in the relevant jurisdiction, as the same may be amended from
time to time.
"WAREHOUSING SERIES" means all notes issued by the Issuer.
Section 1.02. RULES OF INTERPRETATION. The terms "hereof,"
"herein" or "hereunder," unless otherwise modified by more specific
reference, shall refer to this Agreement in its entirety. Unless otherwise
indicated in context, the terms "Article," "Section," "Appendix," "Exhibit"
or "Annex" shall refer to an Article or Section of, or Appendix, Exhibit or
Annex to, this Agreement. The definition of a term shall include the
singular, the plural, the past, the present, the future, the active and the
passive forms of such term. A term defined herein and used herein preceded by
a Series designation, shall mean such term as it relates to the Series
designated.
ARTICLE II
CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL
Section 2.01. SERIES 1993-A CREDIT ENHANCEMENT FEE. The Series
1993-A Pooling and Servicing Agreement provides for the payment to the Seller
of a Series 1993-A Credit Enhancement Fee, to be paid to the Seller by
distribution of such amounts to the Collateral Agent for deposit and
distribution pursuant to this Agreement. The Seller and OFL hereby agree that
payment of the Series 1993-A Credit Enhancement Fee in the manner and subject
to the conditions set forth herein and in the Series 1993-A Pooling and
Servicing Agreement is
12
adequate consideration and the exclusive consideration to be received by the
Seller or OFL for the obligations of the Seller pursuant hereto and the
obligations of OFL pursuant hereto (including, without limitation, the
transfer by the Seller to the Collateral Agent of the Initial Spread Account
Deposit) and pursuant to the Series 1993-A Insurance Agreement. The Seller
and OFL hereby agree with the Trustee and with Financial Security that
payment of the Series 1993-A Credit Enhancement Fee to the Seller is
expressly conditioned on subordination of the Series 1993-A Credit
Enhancement Fee to payments on the Certificates of any Series, payments on
the Notes of any Series, payments of amounts due to Financial Security and
the other obligations of the Trusts, in each case to the extent provided in
Section 4.6 of the Standard Terms and Conditions and Section 3.03 hereof; and
the Security Interest of the Secured Parties in the Series 1993-A Collateral
is intended to effect and enforce such subordination and to provide security
for the Series 1993-A Secured Obligations and the Secured Obligations with
respect to each other Series.
Section 2.02. SERIES SUPPLEMENTS. The parties hereto intend to enter
into a Series Supplement hereto with respect to any Series other than the Series
1993-A Certificates. The parties will enter into a Series Supplement only if the
following conditions shall have been satisfied:
(i) The Seller shall have sold or will sell Receivables to a
Trust or to a corporation pursuant to (A) a Pooling and Servicing Agreement
under which the Trustee shall act as trustee, (B) a Sale and Servicing
Agreement in form and substance satisfactory to Financial Security, with
respect to which the Trustee shall act as Indenture Trustee, and which Sale
and Servicing Agreement may provide for the sale of Subsequent Receivables
to the related Trust or (C) a Repurchase Agreement in form and substance
satisfactory to Financial Security, with respect to which the Trustee shall
act as Indenture Trustee with respect to the related Notes;
(ii) Financial Security shall have issued (A) one or more
Policies in respect of the Guaranteed Distributions on Certificates issued
pursuant to the related Pooling and Servicing Agreement or Trust Agreement,
and/or (B) one or more Note Policies in respect of the Scheduled Payments
on the Notes issued pursuant to the related Indenture; and
(iii) Pursuant to the related Series Supplement any and all
right, title and interest of the Seller, OFL or any affiliate of either of
them in the Collateral specified herein shall be pledged to the Secured
Parties substantially on the terms set forth in Section 2.03 hereof.
Section 2.03. GRANT OF SECURITY INTEREST BY OFL AND THE SELLER.
(a) In order to secure the performance of the Secured Obligations
with respect to each Series, the Seller (and OFL, to the extent it may have any
rights therein) hereby pledges, assigns, grants, transfers and conveys to the
Collateral Agent, on behalf of and for the benefit of the Secured Parties to
secure the Secured Obligations with respect to each Series, a lien on and
security interest in (which lien and security interest is intended to be prior
to all
13
other liens, security interest or other encumbrances), all of its right,
title and interest in and to the following (all being collectively referred
to herein as the "Series 1993-A Collateral"):
(i) the Series 1993-A Credit Enhancement Fee and all rights and
remedies that the Seller may have to enforce payment of the Series 1993-A
Credit Enhancement Fee whether under the Series 1993-A Pooling and
Servicing Agreement or otherwise;
(ii) the Series 1993-A Spread Account established pursuant to
Section 3.01 hereof, and each other account owned by the Seller and
maintained by the Collateral Agent (including, without limitation, all
monies, checks, securities, investments and other documents from time to
time held in or evidencing any such accounts);
(iii) all of the Seller's right, title and interest in and to
investments made with proceeds of the property described in clauses (i) and
(ii) above, or made with amounts on deposit in the Series 1993-A Spread
Account; and
(iv) all distributions, revenues, products, substitutions,
benefits, profits and proceeds, in whatever form, of any of the foregoing.
(b) In order to effectuate the provisions and purposes of this
Agreement, including for the purpose of perfecting the security interests
granted hereunder, the Seller represents and warrants that it has, prior to the
execution of this Agreement, executed and filed an appropriate Uniform
Commercial Code financing statement in Minnesota sufficient to assure that the
Collateral Agent, as agent for the Secured Parties, has a first priority
perfected security interest in all Series 1993-A Collateral which can be
perfected by the filing of a financing statement.
Section 2.04. PRIORITY. The Seller (and OFL, to the extent it may
have any rights in the Collateral) intends the security interests in favor of
the Secured Parties to be prior to all other Liens in respect of the
Collateral, and OFL and the Seller shall take all actions necessary to obtain
and maintain, in favor of the Collateral Agent, for the benefit of the
Secured Parties, a first lien on and a first priority, perfected security
interest in the Collateral. Subject to the provisions hereof specifying the
rights and powers of the Controlling Party from time to time to control
certain specified matters relating to the Collateral, each Secured Party
shall have all of the rights, remedies and recourse with respect to the
Collateral afforded a secured party under the Uniform Commercial Code of the
State of New York and all other applicable law in addition to, and not in
limitation of, the other rights, remedies and recourse granted to such
Secured Parties by this Agreement or any other law relating to the creation
and perfection of liens on, and security interests in, the Collateral.
Section 2.05. SELLER AND OFL REMAIN LIABLE. The Security Interests
are granted as security only and shall not (i) transfer or in any way affect
or modify, or relieve either the Seller or OFL from, any obligation to
perform or satisfy, any term, covenant, condition or agreement to be
performed or satisfied by the Seller or OFL under or in connection with this
Agreement, the Insurance Agreement or any other Transaction Document to which
it
14
is a party or (ii) impose any obligation on any of the Secured Parties or the
Collateral Agent to perform or observe any such term, covenant, condition or
agreement or impose any liability on any of the Secured Parties or the
Collateral Agent for any act or omission on its part relative thereto or for
any breach of any representation or warranty on its part contained therein or
made in connection therewith, except, in each case, to the extent provided
herein and in the other Transaction Documents.
Section 2.06. MAINTENANCE OF COLLATERAL.
(a) SAFEKEEPING. The Collateral Agent agrees to maintain the
Collateral received by it (or evidence thereof, in the case of book-entry
securities in the name of the Collateral Agent) and all records and documents
relating thereto at the office of the Collateral Agent specified in Section
8.06 hereof or such other address within the State of Minnesota (unless all
filings have been made to continue the perfection of the security interest in
the Collateral to the extent such security interest can be perfected by
filing a financing statement, as evidenced by an Opinion of Counsel delivered
to the Controlling Party), as may be approved by the Controlling Party. The
Collateral Agent shall keep all Collateral and related documentation in its
possession separate and apart from all other property that it is holding in
its possession and from its own general assets and shall maintain accurate
records pertaining to the Eligible Investments and Spread Accounts included
in the Collateral in such a manner as shall enable the Collateral Agent and
the Secured Parties to verify the accuracy of such record-keeping. The
Collateral Agent's books and records shall at all times show that the
Collateral is held by the Collateral Agent as agent of the Secured Parties
and is not the property of the Collateral Agent. The Collateral Agent will
promptly report to each Secured Party and the Seller any failure on its part
to hold the Collateral as provided in this Section 2.06(a) and will promptly
take appropriate action to remedy any such failure.
(b) ACCESS. The Collateral Agent shall permit each of the
Secured Parties, or their respective duly authorized representatives,
attorneys, auditors or designees, to inspect the Collateral in the possession
of or otherwise under the control of the Collateral Agent pursuant hereto at
such reasonable times during normal business hours as any such Secured Party
may reasonably request upon not less than one Business Day's prior written
notice.
Section 2.07. TERMINATION AND RELEASE OF RIGHTS.
(a) On the Insurer Termination Date relating to a Series, the
rights, remedies, powers, duties, authority and obligations conferred upon
Financial Security pursuant to this Agreement in respect of the Collateral
related to such Series shall terminate and be of no further force and effect
and all rights, remedies, powers, duties, authority and obligations of
Financial Security with respect to such Collateral shall be automatically
released; PROVIDED that any indemnity provided to or by Financial Security
herein shall survive such Insurer Termination Date. If Financial Security is
acting as Controlling Party with respect to a Series on the related Insurer
Termination Date, Financial Security agrees, at the expense of the Seller, to
execute and deliver such instruments as the successor Controlling Party may
reasonably request to effectuate such release, and any such instruments so
executed and delivered shall be fully binding on Financial Security and any
Person claiming by, through or under Financial Security.
15
(b) On the Trustee Termination Date related to a Series, the
rights, remedies, powers, duties, authority and obligations, if any,
conferred upon the Trustee pursuant to this Agreement in respect of the
Collateral related to such Series shall terminate and be of no further force
and effect and all such rights, remedies, powers, duties, authority and
obligations of the Trustee with respect to such Collateral shall be
automatically released; PROVIDED that any indemnity provided to the Trustee
herein shall survive such Trustee Termination Date. If the Trustee is acting
as Controlling Party with respect to a Series on the related Trustee
Termination Date, the Trustee agrees, at the expense of the Seller, to
execute and deliver such instruments as the Seller may reasonably request to
effectuate such release, and any such instruments so executed and delivered
shall be fully binding on the Trustee.
(c) On the Final Termination Date with respect to a Series, the
rights, remedies, powers, duties, authority and obligations conferred upon
the Collateral Agent and each Secured Party pursuant to this Agreement with
respect to such Series shall terminate and be of no further force and effect
and all rights, remedies, powers, duties, authority and obligations of the
Collateral Agent and each Secured Party with respect to the Collateral
related to such Series shall be automatically released. On the Final
Termination Date with respect to a Series, the Collateral Agent agrees, and
each Secured Party agrees, at the expense of the Seller, to execute such
instruments of release, in recordable form if necessary, in favor of the
Seller as the Seller may reasonably request, to deliver any Collateral in its
possession to the Seller, and to otherwise release the lien of this Agreement
and release and deliver to the Seller the Collateral related to such Series.
Section 2.08. NON-RECOURSE OBLIGATIONS OF SELLER. Notwithstanding
anything herein or in the other Transaction Documents to the contrary, the
parties hereto agree that the obligations of the Seller hereunder (without
limiting the obligation to apply distributions of the respective Credit
Enhancement Fees in accordance with Section 3.03(b)) shall be recourse only
to the extent of amounts released to the Seller pursuant to priority EIGHTH
of Section 3.03(b) and retained by the Seller in accordance with the next
sentence. The Seller agrees that it shall not declare or make payment of (i)
any dividend or other distribution on or in respect of any shares of its
capital stock or (ii) any payment on account of the purchase, redemption,
retirement or acquisition of (x) any shares of its capital stock or (y) any
option, warrant or other right to acquire shares of its capital stock, or
(iii) any payment of any loan made by OFL to the Seller, or of any deferred
portion of the purchase price payable by the Seller to OFL with respect to
any Receivable unless (in each case) at the time of such declaration or
payment (and after giving effect thereto) no amount payable by Seller under
any Transaction Document is then due and owing but unpaid. Nothing contained
herein shall be deemed to limit the rights of the Certificateholders (or
Certificate Owners) or Noteholders (or Note Owners) under any other
Transaction Document.
Section 2.09. PROGRAM SPREAD ACCOUNT AND TAG ACCOUNTS. (a) On or
prior to the date of any transfer of cash by the Seller pursuant to Section
2.09(b)(i), the Collateral Agent at the direction of the Seller shall
establish at the same institution at which the Spread Accounts established
hereunder are then maintained an Eligible Account, designated "Program Spread
Account -- Norwest Bank Minnesota, National Association" (the "Program
16
Spread Account"). The Program Spread Account shall continue to be maintained
at the same institution as the Spread Accounts established hereunder.
(b) The Collateral Agent shall hold, for the benefit of the Seller,
the following property in the Program Spread Account:
(i) all cash amounts from time to time on deposit in the Program
Spread Account which at the Seller's election it has delivered to the Collateral
Agent from (x) the proceeds of the sale of securities of a Series or (y) amounts
released to the Seller from the Lien of this Agreement ; and
(ii) investments made with the proceeds of the property described in
clause (i) above, or made with amounts on deposit in the Program Spread Account.
Notwithstanding anything herein or in any Series Supplement to the
contrary, the property held by the Collateral Agent under this Section 2.09(b)
shall not constitute Collateral hereunder.
(c) With respect to each Series for which the Seller has made an
election pursuant to Section 2.09(f) in connection with such Series, on or prior
to the date of any transfer of cash from the Program Spread Account in
connection with such election, the Collateral Agent at the direction of the
Seller shall establish at the same institution at which the Spread Accounts
established hereunder are then maintained an Eligible Account, designated "Tag
Account Series [series designation] - Norwest Bank Minnesota, National
Association, as Collateral Agent for Financial Security Assurance Inc. and
another Secured Party" (each such account, a "Tag Account"). Each Tag Account
shall continue to be maintained at the same institution as the Spread Accounts
established hereunder.
(d) In order to secure the performance of the Secured Obligations
with respect to each Series, the Seller hereby pledges, assigns, grants,
transfers and conveys to the Collateral Agent, on behalf of and for the benefit
of the Secured Parties to secure the Secured Obligations with respect to each
Series, a lien on and a security interest on (which lien and security interest
is intended to be prior to all other liens, security interests and other
encumbrances), all of its right, title and interest in and to the following:
(i) each Tag Account established pursuant to Section 2.09(c)
hereof, (including, without limitation, all monies, checks, securities,
investments and other documents held in or evidencing any such accounts);
(ii) all of the Seller's right, title and interest in and to
investments made with proceeds of the property described in clause (i) above;
and
(iii) all distributions, revenues, products, substitutions, benefits,
profits and proceeds, in whatever form, of any of the foregoing.
17
In order to effectuate the provisions and purposes of this Agreement,
including for the purpose of perfecting the security interests granted
hereunder, the Seller represents and warrants that it shall, prior to the
deposit of amounts in any Tag Account, execute and file an appropriate Uniform
Commercial Code financing statement in Minnesota sufficient to assure that the
Collateral Agent, as agent for the Secured Parties, has a first priority
perfected security interest on the Collateral pledged or to be pledged pursuant
to Section 2.09(d) which can be perfected by the filing of a financing
statement.
(e) The Program Spread Account and each Tag Account shall be
separate from each respective Trust or Issuer and amounts on deposit therein
will not constitute a part of the Trust Property of any Trust or the assets of
any Issuer. Except as specifically provided herein, the Program Spread Account
and each Tag Account shall be maintained by the Collateral Agent at all times
separate and apart from any other account of the Seller, OFL, the Servicer, the
Trust or the Issuer. All income or loss on investments of funds in the Program
Spread Account and any Tag Account shall be reported by the Seller as taxable
income or loss of the Seller.
(f) Upon the occurrence of an event specified in clause (A) of the
definition of Trigger Event with respect to a Series and until such event is
Deemed Cured, at the election of the Seller amounts on deposit in the Program
Spread Account may be withdrawn on the related Determination Date by the
Collateral Agent from the Program Spread Account and irrevocably deposited into
one or more Tag Accounts for each Series with respect to which an event
specified in such clause (A) shall have occurred (and which event is not Deemed
Cured) and with respect to which the Seller has made such election. In the
event of such election, the Collateral Agent shall deposit from the Program
Spread Account into the related Tag Account, on such related Determination Date,
an amount equal to the excess, if any, of amounts on deposit in the Spread
Account (excluding any amount in any related Tag Account, and taking into
account any deposits thereto to be made pursuant to the first paragraph of
Section 3.03(b) and taking into account any withdrawals therefrom to be made
pursuant to priority FIRST of Section 3.03(b) on the related Distribution Date,
but not taking into account any other changes in the amount on deposit in such
account pursuant to Section 3.03(b)) over the amount specified in clause (i) of
the definition of Spread Account Maximum Amount with respect to such Series
(taking into account the decline in the related Series Balance to be effected on
the related Distribution Date).
(g) Amounts on deposit in the Program Spread Account shall be
released from such account at any time upon the request of the Seller. Funds in
the Program Spread Account shall not be commingled with funds in any Spread
Account, any Tag Account or with any other moneys. Amounts on deposit in a
Spread Account shall be released from the Lien of this Agreement and delivered
to the Seller, or at the direction of the Seller deposited into the Program
Spread Account, upon deposit of a like amount pursuant to Section 2.09(f) into
the related Tag Account.
(h) Upon deposit pursuant to Section 2.09(f) of amounts into a Tag
Account for a Series such amounts shall be treated fungibly with all amounts on
deposit in the Spread Account with respect to the same Series, except that,
amounts deposited into a Spread Account
18
pursuant to Section 3.03(b) shall be deemed to be deposited into the Spread
Account, and amounts withdrawn from a Spread Account pursuant to Section
3.03(b) shall be withdrawn first from the related Tag Account and second from
the Spread Account. Except as otherwise explicitly specified, all references
herein to a Series Spread Account hereunder shall be deemed to include
reference to any Tag Account created with respect to such Series, and all
references herein to amounts on deposit in a Series Spread Account shall be
deemed to include reference amounts on deposit in the related Tag Account, if
any, created with respect to such Series.
ARTICLE III
SPREAD ACCOUNTS
Section 3.01. ESTABLISHMENT OF SPREAD ACCOUNTS; INITIAL
DEPOSITS INTO SPREAD ACCOUNTS.
(a) On or prior to the Closing Date relating to a Series, the
Collateral Agent shall establish with respect to such Series, at its office or
at another depository institution or trust company an Eligible Account,
designated, "Spread Account -- Series [insert Series designation] -- Norwest
Bank Minnesota, National Association, as Collateral Agent for Financial Security
Assurance Inc. and another Secured Party" (the "Spread Account"). All Spread
Accounts established under this Agreement from time to time shall be maintained
at the same depository institution (which depository institution may be changed
from time to time in accordance with this Agreement). If any Spread Account
established with respect to a Series ceases to be an Eligible Account, the
Collateral Agent shall, within five Business Days, establish a new Eligible
Account for such Series.
(b) No withdrawals may be made of funds in any Spread Account
except as provided in Section 3.03 of this Agreement and in the Warehousing
Series Supplement. Except as specifically provided in this Agreement, funds in a
Spread Account established with respect to a Series shall not be commingled with
funds in a Spread Account established with respect to another Series or with any
other moneys. All moneys deposited from time to time in such Spread Account and
all investments made with such moneys shall be held by the Collateral Agent as
part of the Collateral with respect to such Series.
(c) On the Closing Date with respect to a Series (other than the
Warehousing Series), the Collateral Agent shall deposit the Initial Spread
Account Deposit with respect to such Series, if any, received from the Seller
into the related Spread Account. On each Subsequent Transfer Date (if any) with
respect to a Series (other than the Warehousing Series), the Collateral Agent
shall deposit the Spread Account Additional Deposit delivered by the related
Trust on behalf of the Seller into the related Spread Account.
(d) Each Spread Account shall be separate from each respective
Trust and amounts on deposit therein will not constitute a part of the Trust
Property of any Trust. Except as specifically provided herein, each Spread
Account shall be maintained by the Collateral Agent at all times separate and
apart from any other account of the Seller, OFL, the Servicer or the
19
Trust or the Issuer, as the case may be. All income or loss on investments
of funds in any Spread Account shall be reported by the Seller as taxable
income or loss of the Seller.
Section 3.02. INVESTMENTS.
(a) Funds which may at any time be held in the Spread Account
established with respect to a Series or in the Program Spread Account shall be
invested and reinvested by the Collateral Agent, at the written direction (which
may include, subject to the provisions hereof, general standing instructions) of
the Seller (unless a Default shall have occurred and be continuing, in which
case at the written direction of the Controlling Party) or its designee received
by the Collateral Agent by 1:00 P.M. New York City time on the Business Day
prior to the date on which such investment shall be made, in one or more
Eligible Investments in the manner specified in Section 3.02(c). If no written
direction with respect to any portion of such Spread Account or the Program
Spread Account is received by the Collateral Agent, the Collateral Agent shall
invest such funds overnight in such Eligible Investments as the Collateral Agent
may select, provided that the Collateral Agent shall not be liable for any loss
or absence of income resulting from such investments.
(b) Each investment made pursuant to this Section 3.02 on any date
shall mature not later than the Business Day immediately preceding the
Distribution Date next succeeding the day such investment is made, except that
any investment made on the day preceding a Distribution Date shall mature on
such Distribution Date; PROVIDED that any investment of funds in any Account
maintained with the Collateral Agent in any investment as to which the
Collateral Agent is the obligor, if otherwise qualified as an Eligible
Investment (including any repurchase agreement on which the Collateral Agent in
its commercial capacity is liable as principal), may mature on the Distribution
Date next succeeding the date of such investment.
(c) Any investment of funds in the Spread Account or in the Program
Spread Account shall be made in Eligible Investments held by a financial
institution in accordance with the following requirements: (a) all Eligible
Investments shall be held in an account with such financial institution in the
name of the Collateral Agent, (b) with respect to securities held in such
account, such securities shall be (i) certificated securities (as such term is
used in N.Y. U.C.C. Section 8-313(d)(i), securities deemed to be certificated
securities under applicable regulations of the United States government, or
uncertificated securities issued by an issuer organized under the laws of the
State of New York or the State of Delaware, (ii) either (A) in the possession of
such institution, (b) in the possession of a clearing corporation (as such term
is used in Minn. Stat. Section 336.8-313(g)) in the State of New York,
registered in the name of such clearing corporation or its nominee, not endorsed
for collection or surrender or any other purpose not involving transfer, not
containing any evidence of a right or interest inconsistent with the Collateral
Agent's security interest therein, and held by such clearing corporation in an
account of such institution, (C) held in an account of such institution with the
Federal Reserve Bank of New York or the Federal Reserve Bank of Minneapolis, or
(D) in the case of uncertificated securities, issued in the name of such
institution, and (iii) identified, by book entry or otherwise, as held for the
account of, or pledged to, the Collateral Agent on the records of such
institution, and such institution shall have sent the Collateral Agent a
confirmation thereof,
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(c) with respect to repurchase obligations held in such account, such
repurchase obligations shall be identified by such institution, by book entry
or otherwise, as held for the account of, or pledged to, the Collateral Agent
on the records of such institution, and the related securities shall be held
in accordance with the requirements of clause (b) above, and (d) with respect
to other Eligible Investments other than securities and repurchase agreements,
such Eligible Investments shall be held in a manner acceptable to the Collateral
Agent. Subject to the other provisions hereof, the Collateral Agent shall have
sole control over each such investment and the income thereon, and any
certificate or other instrument evidencing any such investment, if any, shall be
delivered directly to the Collateral Agent or its agent, together with each
document of transfer, if any, necessary to transfer title to such investment to
the Collateral Agent in a manner which complies with Section 2.06 and this
subsection.
(d) If amounts on deposit in any Spread Account are at any time
invested in an Eligible Investment payable on demand, the Collateral Agent shall
(i) consistent with any notice required to be given thereunder, demand that
payment thereon be made on the last day such Eligible Investment is permitted to
mature under the provisions hereof and (ii) demand payment of all amounts due
thereunder promptly upon receipt of written notice from the Controlling Party to
the effect that such investment does not constitute an Eligible Investment.
(e) All moneys on deposit in a Spread Account together with any
deposits or securities in which such moneys may be invested or reinvested, and
any gains from such investments, shall constitute Collateral hereunder with
respect to the related Series, subject to the Security Interests of the Secured
Parties.
(f) Subject to Section 4.03 hereof, the Collateral Agent shall not
be liable by reason of any insufficiency in any Spread Account resulting from
any loss on any Eligible Investment included therein except for losses
attributable to the Collateral Agent's failure to make payments on Eligible
Investments as to which the Collateral Agent, in its commercial capacity, is
obligated.
Section 3.03. DISTRIBUTIONS: PRIORITY OF PAYMENTS.
(a) On or before each Deficiency Claim Date, the Collateral Agent
will make the following calculations on the basis of information (including,
without limitation, the amount of any Collection Account Shortfall with respect
to any Series) received pursuant to (x) Section 3.9 of the Standard Terms and
Conditions, Section 5.03 of the Pooling and Servicing Agreements, or (y) Section
3.9 of the Sale and Servicing Agreements, or (z) Section 3.11 of the Servicing
Agreement, as applicable, with respect to each Series; PROVIDED, HOWEVER, that
if the Collateral Agent receives notice from Financial Security of the
occurrence of an Insurance Agreement Event of Default with respect to any
Series, or of the occurrence of a Capture Event, such notice shall be
determinative for the purposes of determining the Spread Account Default Level
and Spread Account Maximum Amount for such Series:
FIRST, determine the amounts to be on deposit in the respective Spread
Accounts (taking into account amounts in respect of the respective Credit
Enhancement Fees to be deposited into the related Spread Accounts) on the
next succeeding Distribution Date
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which will be available to satisfy any Collection Account Shortfall and any
Warehousing Shortfall;
SECOND, determine (i) the amounts, if any, to be distributed from each
Spread Account related to each Series with respect to which there exists a
Collection Account Shortfall and (ii) whether, following distribution from
the related Spread Accounts to the respective Trustees for deposit into the
respective Collection Accounts with respect to which there exist Collection
Account Shortfalls, a Collection Account Shortfall will continue to exist
with respect to one or more Series;
THIRD, (i) if a Collection Account Shortfall will continue to exist
with respect to one or more Series following the distributions from the
related Spread Accounts contemplated by paragraph SECOND above, determine
the amount, if any, to be distributed to the Trustee with respect to each
Series from unrelated Spread Accounts in respect of such Collection Account
Shortfall(s). This determination shall be made as follows: (i) of the
aggregate of the amounts to be on deposit in the respective Spread Accounts
for such Distribution Date (as determined pursuant to paragraph FIRST
above, after making the withdrawals pursuant to paragraph SECOND above), up
to the aggregate of the Collection Account Shortfalls for such Distribution
Date, (ii) drawn from each Spread Account PRO RATA in accordance with
amounts on deposit therein, and (iii) distributed to the respective
Trustees in the following order of priority and PRO RATA within each
priority (1) in the same priority as amounts are to be distributed pursuant
to Section 4.6 of the Standard Terms and Conditions included in the
respective Pooling and Servicing Agreements and pursuant to Section 4.6 of
the respective Sale and Servicing Agreements, and pursuant to Section
3.6(a) or 3.6(b) of the Servicing Agreement, as applicable, so that any
shortfalls with respect to priority (i) of each such Section are to be
covered first, any shortfalls with respect to priority (ii) of each such
Section are to be covered second, and so forth, until priority (v) of such
Section, so that priority (v) of Section 4.6 of the Standard Terms and
Conditions and of the Sale and Servicing Agreement and priority (v) of
Section 3.6(a) or priority (v) of Section 3.6(b) of the Servicing Agreement
are to be covered fifth, (2) if Section 4.6 of one or more Sale and
Servicing Agreements provides for distribution in respect of interest or
principal on Notes or Certificates with priorities numerically greater than
(v), in the same priority as amounts are to be distributed pursuant to each
such Section 4.6, so that any shortfalls with respect to priority (vi) of
each such Section 4.6 are covered first, and so forth through all
priorities relating to interest or principal on Notes or Certificates and
(3) amounts to be distributed to the Security Insurer;
On such Deficiency Claim Date, the Collateral Agent shall deliver a
certificate to each Trustee in respect of which the Collateral Agent has
received notice pursuant to (i) Section 3.9 of the Standard Terms and Conditions
of a Collection Account Shortfall or (ii) Section 3.9 of the Sale and Servicing
Agreement of a Collection Account Shortfall or (iii) Section 3.11 of the
Servicing Agreement of a Collection Account Shortfall or Warehousing Shortfall
stating the amount (which, in the case of (i) and (ii) above, shall be the sum
of the amount, if any, to be withdrawn from the related Spread Account, as
calculated pursuant to paragraph SECOND of this Section 3.03(a), plus, the
amount, if any, to be withdrawn from
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unrelated Spread Accounts, as calculated pursuant to paragraph THIRD of this
Section 3.03(a), and which, in the case of a Collection Account Shortfall or
Warehousing Shortfall referred to in clause (iii) shall be the respective
amounts, if any, withdrawn from unrelated Spread Accounts, as calculated
pursuant to paragraph THIRD of this Section 3.03(a) or calculated to be
available pursuant to priority SEVENTH of Section 3.03(b)), if any, to be
distributed to such Trustee on the next Distribution Date in respect of such
Collection Account Shortfall or Warehousing Shortfall, as the case may be.
(b) On each Distribution Date, following delivery by the Trustee of
the respective Credit Enhancement Fees for deposit into the respective Spread
Accounts pursuant to Section 4.6 of the Standard Terms and Conditions included
in the respective Pooling and Servicing Agreements or Section 4.6 of the
respective Sale and Servicing Agreements, or the amount deposited into the
Spread Account for the Warehousing Series pursuant to Section 3.6 or Section
3.10 of the Warehousing Series Servicing Agreement, as applicable, and upon
receipt of a Deficiency Notice with respect to one or more such Series, or with
respect to priorities FIFTH and SIXTH to the extent the amounts referred to
therein are due and owing, the Collateral Agent shall make the following
distributions in the following order of priority. References herein to a Spread
Account shall include references to the related Tag Account and such amounts
shall be treated fungibly, except that amounts deposited into a Spread Account
pursuant to Section 3.03(b) shall be deemed to be deposited into a Spread
Account, and amounts withdrawn from a Spread Account pursuant to Section 3.03(b)
shall be withdrawn first from the related Tag Account and second from the Spread
Account.
FIRST, if with respect to any Series there exists a Collection Account
Shortfall from the Spread Account related to such Series, to the Trustee for
deposit in the related Collection Account the amount of such Collection Account
Shortfall;
SECOND, if with respect to any Series there exists a Collection
Account Shortfall after deposit into the Collection Account of amounts
distributed pursuant to priority FIRST, from each Spread Account, PRO RATA in
accordance with amounts on deposit therein (but in no event shall a withdrawal
from a Spread Account pursuant to this priority SECOND cause the amount on
deposit in such Spread Account to be below the Spread Account Withdrawal Floor
for such Spread Account if a Spread Account Withdrawal Floor is specified in the
Series Supplement establishing such Spread Account), an amount up to the
aggregate of the Collection Account Shortfalls for all Series, to the respective
Trustees in accordance with the Payment Priorities for deposit in the respective
Collection Accounts with respect to which there exist Collection Account
Shortfalls;
THIRD, if with respect to one or more Series (excluding the
Warehousing Series) there exists a Spread Account Shortfall, from amounts, if
any, on deposit in each Spread Account (excluding the Warehousing Series) in
excess of the related Spread Account Maximum Amount (after making any
withdrawals therefrom required by priority FIRST or SECOND of this Section
3.03(b)), an amount in the aggregate up to the aggregate of the Spread Account
Shortfalls for all Series for deposit into each Spread Account PRO RATA in
accordance with their respective Spread Account Shortfalls;
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FOURTH, if with respect to one or more Series (excluding the
Warehousing Series), amounts have been withdrawn from the related Spread Account
pursuant to priority FIRST or SECOND of this Section 3.03(b) on such
Distribution Date and/or on prior Distribution Dates and such amounts have not
been redeposited in full into such Spread Account pursuant to this priority
FOURTH (such amounts in the aggregate for a Series "Unreimbursed Amounts"), from
amounts, if any, on deposit in each Spread Account in excess of the related
Spread Account Maximum Amount (after making any withdrawals therefrom required
by priority FIRST, SECOND or THIRD of this Section 3.03(b)), an amount up to the
aggregate of the Unreimbursed Amounts for all such Series for deposit into each
Spread Account with respect to which there exist Unreimbursed Amounts PRO RATA
in accordance with the excess of the Spread Account Maximum Amount of each such
Spread Account over the amount on deposit in such Spread Account;
FIFTH, if any amounts are owed to a successor Servicer pursuant to
Section 9.3(c) of the Standard Terms and Conditions included in a Pooling and
Servicing Agreement or Section 8.3(c) of a Sale and Servicing Agreement and such
amounts are not payable pursuant to Section 4.6(a)(i) of the Standard Terms and
Conditions included in such Pooling and Servicing Agreement or Section 4.6(i) of
such Sale and Servicing Agreement, as applicable, from amounts on deposit in the
related Spread Account, an amount up to the amount so owed, to such Servicer;
SIXTH, if any amounts are owed by OFL or the Seller to a Trustee,
Indenture Trustee, Owner Trustee, Lockbox Bank, Custodian, Backup Servicer,
Administrator, Collateral Agent, the Indenture Collateral Agent or other service
provider to either the Trust or the Issuer for expenses that have not been
reimbursed by OFL or the Seller, from amounts on deposit in the related Spread
Account, an amount up to the amount so owed, to such Person;
SEVENTH, if with respect to the Warehousing Series there exists a
Warehousing Shortfall, from the aggregate of all amounts on deposit in the
Warehousing Series Spread Account and from the aggregate of all amounts in
unrelated Spread Accounts in excess of the related Spread Account Maximum Amount
(except that such limitation shall not exist with respect to a Spread Account
Maximum Amount which is unlimited), an amount up to the amount of such
Warehousing Shortfall (to the extent not distributed on such Distribution Date
pursuant to a prior priority of this Section 3.03(b)), to the Trustee for the
Warehousing Series for deposit in the Warehousing Series Collection Account; and
EIGHTH, any funds in a Spread Account in excess of the applicable
Spread Account Maximum Amount, and any funds in a Spread Account with respect to
a Series for which the Final Termination Date shall have occurred, to the
Seller.
Section 3.04. GENERAL PROVISIONS REGARDING SPREAD ACCOUNTS.
(a) Promptly upon the establishment (initially or upon any
relocation) of a Spread Account hereunder, the Collateral Agent shall advise the
Seller and each Secured Party in writing of the name and address of the
depository institution or trust company where such Spread Account has been
established (if not Norwest Bank Minnesota, National Association or
24
any successor Collateral Agent in its commercial banking capacity), the name of
the officer of the depository institution who is responsible for overseeing such
Spread Account, the account number and the individuals whose names appear on the
signature cards for such Spread Account. The Seller shall cause each such
depository institution or trust company to execute a written agreement, in form
and substance satisfactory to the Controlling Party, waiving, and the Collateral
Agent by its execution of this Agreement hereby waives (except to the extent
expressly provided herein), in each case to the extent permitted under
applicable law, (i) any banker's or other statutory or similar Lien, and (ii)
any right of set-off or other similar right under applicable law with respect to
such Spread Account and any other Spread Account and agreeing, and the
Collateral Agent by its execution of this Agreement hereby agrees, to notify the
Seller, the Collateral Agent, and each Secured Party of any charge or claim
against or with respect to such Spread Account. The Collateral Agent shall give
the Seller and each Secured Party at least ten Business Days' prior written
notice of any change in the location of such Spread Account or in any related
account information. If the Collateral Agent changes the location of any Spread
Account, it shall change the location of the other Spread Accounts, so that all
Spread Accounts shall at all times be located at the same depository
institution. Anything herein to the contrary notwithstanding, unless otherwise
consented to by the Controlling Party in writing, the Collateral Agent shall
have no right to change the location of any Spread Account.
(b) Upon the written request of the Controlling Party or the Seller
and at the expense of the Seller, the Collateral Agent shall cause, at the
expense of the Seller, the depository institution at which any Spread Account is
located to forward to the requesting party copies of all monthly account
statements for such Spread Account.
(c) If at any time any Spread Account ceases to be an Eligible
Account, the Collateral Agent shall notify the Controlling Party of such fact
and shall establish within 5 Business Days of such determination, in accordance
with paragraph (a) of this Section, a successor Spread Account thereto, which
shall be an Eligible Account, at another depository institution acceptable to
the Controlling Party and shall establish successor Spread Accounts with respect
to all other Spread Accounts, each of which shall be an Eligible Account at the
same depository institution.
(d) No passbook, certificate of deposit or other similar instrument
evidencing a Spread Account shall be issued, and all contracts, receipts and
other papers, if any, governing or evidencing a Spread Account shall be held by
the Collateral Agent.
Section 3.05. REPORTS BY THE COLLATERAL AGENT. The Collateral Agent
shall report to the Seller, Financial Security, the Trustee and the Servicer on
a monthly basis no later than each Distribution Date with respect to the amount
on deposit in each Spread Account and the identity of the investments included
therein as of the last day of the related Monthly Period, and shall provide
accountings of deposits into and withdrawals from the Spread Accounts, and of
the investments made therein, to the independent accountants upon their request
for purposes of their reports pursuant to Section 3.11 of the Pooling and
Servicing Agreements and Section 3.11 of the Sale and Servicing Agreements.
25
ARTICLE IV
THE COLLATERAL AGENT
Section 4.01. APPOINTMENT AND POWERS. Subject to the terms and
conditions hereof, each of the Secured Parties hereby appoints Norwest Bank
Minnesota, National Association as the Collateral Agent with respect to the
Series 1993-A Collateral and the related Collateral subsequently specified in a
Series Supplement, and Norwest Bank Minnesota, National Association hereby
accepts such appointment and agrees to act as Collateral Agent with respect to
the Series 1993-A Collateral, and upon execution of any Series Supplement, shall
be deemed to accept such appointment, and agree to act as Collateral Agent with
respect to such Collateral, in each case, for the Secured Parties, to maintain
custody and possession of such Collateral (except as otherwise provided
hereunder) and to perform the other duties of the Collateral Agent in accordance
with the provisions of this Agreement. Each Secured Party hereby authorizes the
Collateral Agent to take such action on its behalf, and to exercise such rights,
remedies, powers and privileges hereunder, as the Controlling Party may direct
and as are specifically authorized to be exercised by the Collateral Agent by
the terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto. The Collateral Agent shall act
upon and in compliance with the written instructions of the Controlling Party
delivered pursuant to this Agreement promptly following receipt of such written
instructions; provided that the Collateral Agent shall not act in accordance
with any instructions (i) which are not authorized by, or in violation of the
provisions of, this Agreement, (ii) which are in violation of any applicable
law, rule or regulation or (iii) for which the Collateral Agent has not received
reasonable indemnity. Receipt of such instructions shall not be a condition to
the exercise by the Collateral Agent of its express duties hereunder, except
where this Agreement provides that the Collateral Agent is permitted to act only
following and in accordance with such instructions.
Section 4.02. PERFORMANCE OF DUTIES. The Collateral Agent shall have
no duties or responsibilities except those expressly set forth in this Agreement
and the other Transaction Documents to which the Collateral Agent is a party or
as directed by the Controlling Party in accordance with this Agreement. The
Collateral Agent shall not be required to take any discretionary actions
hereunder except at the written direction and with the indemnification of the
Controlling Party.
Section 4.03. LIMITATION ON LIABILITY. Neither the Collateral Agent
nor any of its directors, officers or employees, shall be liable for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith,
except that the Collateral Agent shall be liable for its negligence, bad faith
or willful misconduct; nor shall the Collateral Agent be responsible for the
validity, effectiveness, value, sufficiency or enforceability against the Seller
or OFL of this Agreement or any of the Collateral (or any part thereof).
Notwithstanding any term or provision of this Agreement, the Collateral Agent
shall incur no liability to the Seller, OFL or the Secured Parties for any
action taken or omitted by the Collateral Agent in connection with the
Collateral, except for the negligence or willful misconduct on the part of the
Collateral Agent, and, further, shall incur no liability to the Secured Parties
except for negligence or willful misconduct in carrying out its duties to the
Secured Parties. Subject to Section 4.04, the
26
Collateral Agent shall be protected and shall incur no liability to any such
party in relying upon the accuracy, acting in reliance upon the contents, and
assuming the genuineness of any notice, demand, certificate, signature,
instrument or other document reasonably believed by the Collateral Agent to
be genuine and to have been duly executed by the appropriate signatory, and
(absent actual knowledge to the contrary) the Collateral Agent shall not be
required to make any independent investigation with respect thereto. The
Collateral Agent shall at all times be free independently to establish to its
reasonable satisfaction, but shall have no duty to independently verify, the
existence or nonexistence of facts that are a condition to the exercise or
enforcement of any right or remedy hereunder or under any of the Transaction
Documents. The Collateral Agent may consult with counsel, and shall not be
liable for any action taken or omitted to be taken by it hereunder in good
faith and in accordance with the written advice of such counsel. The
Collateral Agent shall not be under any obligation to exercise any of the
remedial rights or powers vested in it by this Agreement or to follow any
direction from the Controlling Party unless it shall have received reasonable
security or indemnity satisfactory to the Collateral Agent against the costs,
expenses and liabilities which might be incurred by it.
Section 4.04. RELIANCE UPON DOCUMENTS. In the absence of bad faith or
negligence on its part, the Collateral Agent shall be entitled to rely on any
communication, instrument, paper or other document reasonably believed by it to
be genuine and correct and to have been signed or sent by the proper Person or
Persons and shall have no liability in acting, or omitting to act, where such
action or omission to act is in reasonable reliance upon any statement or
opinion contained in any such document or instrument.
Section 4.05. SUCCESSOR COLLATERAL AGENT.
(a) MERGER. Any Person into which the Collateral Agent may be
converted or merged, or with which it may be consolidated, or to which it may
sell or transfer its trust business and assets as a whole or substantially as a
whole, or any Person resulting from any such conversion, merger, consolidation,
sale or transfer to which the Collateral Agent is a party, shall (provided it is
otherwise qualified to serve as the Collateral Agent hereunder) be and become a
successor Collateral Agent hereunder and be vested with all of the title to and
interest in the Collateral and all of the trusts, powers, discretions,
immunities, privileges and other matters as was its predecessor without the
execution or filing of any instrument or any further act, deed or conveyance on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding, except to the extent, if any, that any such action is necessary
to perfect, or continue the perfection of, the security interest of the Secured
Parties in the Collateral.
(b) RESIGNATION. The Collateral Agent and any successor Collateral
Agent may resign only (i) upon a determination that by reason of a change in
legal requirements the performance of its duties under this Agreement would
cause it to be in violation of such legal requirements in a manner which would
result in a material adverse effect on the Collateral Agent, and the Controlling
Party does not elect to waive the Collateral Agent's obligation to perform those
duties which render it legally unable to act or elect to delegate those duties
to another Person, or (ii) with the prior written consent of the Controlling
Party. The Collateral Agent shall give not less than 60 days' prior written
notice of any such permitted resignation by registered or certified mail to the
other Secured Party and the Seller; PROVIDED, that such
27
resignation shall take effect only upon the date which is the latest of (i)
the effective date of the appointment of a successor Collateral Agent and the
acceptance in writing by such successor Collateral Agent of such appointment
and of its obligation to perform its duties hereunder in accordance with the
provisions hereof, (ii) delivery of the Collateral to such successor to be
held in accordance with the procedures specified in Article II hereof, and
(iii) receipt by the Controlling Party of an Opinion of Counsel to the effect
described in Section 5.02. Notwithstanding the preceding sentence, if by the
contemplated date of resignation specified in the written notice of
resignation delivered as described above no successor Collateral Agent or
temporary successor Collateral Agent has been appointed Collateral Agent or
becomes the Collateral Agent pursuant to subsection (d) hereof, the resigning
Collateral Agent may petition a court of competent jurisdiction in New York,
New York for the appointment of a successor.
(c) REMOVAL. The Collateral Agent may be removed by the Controlling
Party at any time, with or without cause, by an instrument or concurrent
instruments in writing delivered to the Collateral Agent, the other Secured
Party and the Seller. A temporary successor may be removed at any time to allow
a successor Collateral Agent to be appointed pursuant to subsection (d) below.
Any removal pursuant to the provisions of this subsection (c) shall take effect
only upon the date which is the latest of (i) the effective date of the
appointment of a successor Collateral Agent and the acceptance in writing by
such successor Collateral Agent of such appointment and of its obligation to
perform its duties hereunder in accordance with the provisions hereof, (ii)
delivery of the Collateral to such successor to be held in accordance with the
procedures specified in Article II hereof and (iii) receipt by the Controlling
Party of an Opinion of Counsel to the effect described in Section 5.02.
(d) ACCEPTANCE BY SUCCESSOR. The Controlling Party shall have the
sole right to appoint each successor Collateral Agent. Every temporary or
permanent successor Collateral Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to each Secured Party and the
Seller an instrument in writing accepting such appointment hereunder and the
relevant predecessor shall execute, acknowledge and deliver such other documents
and instruments as will effectuate the delivery of all Collateral to the
successor Collateral Agent to be held in accordance with the procedures
specified in Article II hereof, whereupon such successor, without any further
act, deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, duties and obligations of its predecessor. Such
predecessor shall, nevertheless, on the written request of either Secured Party
or the Seller, execute and deliver an instrument transferring to such successor
all the estates, properties, rights and powers of such predecessor hereunder. In
the event that any instrument in writing from the Seller or a Secured Party is
reasonably required by a successor Collateral Agent to more fully and certainly
vest in such successor the estates, properties, rights, powers, duties and
obligations vested or intended to be vested hereunder in the Collateral Agent,
any and all such written instruments shall, at the request of the temporary or
permanent successor Collateral Agent, be forthwith executed, acknowledged and
delivered by the Seller. The designation of any successor Collateral Agent and
the instrument or instruments removing any Collateral Agent and appointing a
successor hereunder, together with all other instruments provided for herein,
shall be maintained with the records relating to the Collateral and, to the
extent required by applicable law, filed or recorded by the successor Collateral
Agent in each place where such filing or
28
recording is necessary to effect the transfer of the Collateral to the
successor Collateral Agent or to protect or continue the perfection of the
security interests granted hereunder.
(e) Any resignation or removal of a Collateral Agent and
appointment of a successor Collateral Agent shall be effected with respect to
this Agreement and all Series Supplements simultaneously, so that at no time is
there more than one Collateral Agent acting hereunder and under all Series
Supplements.
Section 4.06. INDEMNIFICATION. The Seller and OFL shall indemnify the
Collateral Agent, its directors, officers, employees and agents for, and hold
the Collateral Agent, its directors, officers, employees and agents harmless
against, any loss, liability or expense (including the costs and expenses of
defending against any claim of liability) arising out of or in connection with
the Collateral Agent's acting as Collateral Agent hereunder, except such loss,
liability or expense as shall result from the negligence, bad faith or willful
misconduct of the Collateral Agent or its officers or agents. The obligation of
the Seller and OFL under this Section shall survive the termination of this
Agreement and the resignation or removal of the Collateral Agent. The
Collateral Agent covenants and agrees that the obligations of the Seller
hereunder and under Section 4.07 shall be limited to the extent provided in
Section 2.08, and further covenants not to take any action to enforce its rights
to indemnification hereunder with respect to the Seller and to payment under
Section 4.07 except in accordance with the provisions of Section 8.05, or
otherwise to assert any Lien or take any other action in respect of the
Collateral or the Trust Property of a Series until the applicable Final
Termination Date.
Section 4.07. COMPENSATION AND REIMBURSEMENT. The Seller agrees for
the benefit of the Secured Parties and as part of the Secured Obligations (a) to
pay to the Collateral Agent, 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 collateral trustee); and
(b) to reimburse the Collateral Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Collateral Agent in
accordance with any provision of, or carrying out its duties and obligations
under, this Agreement (including the reasonable compensation and fees and the
expenses and disbursements of its agents, any independent certified public
accountants and independent counsel), except any expense, disbursement or
advances as may be attributable to negligence, bad faith or willful misconduct
on the part of the Collateral Agent.
Section 4.08. REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL AGENT.
The Collateral Agent represents and warrants to the Seller and to each Secured
Party as follows:
(a) DUE ORGANIZATION. The Collateral Agent is a national banking
association, duly organized, validly existing and in good standing under the
laws of the United States and is duly authorized and licensed under applicable
law to conduct its business as presently conducted.
(b) CORPORATE POWER. The Collateral Agent has all requisite right,
power and authority to execute and deliver this Agreement and to perform all of
its duties as Collateral Agent hereunder.
29
(c) DUE AUTHORIZATION. The execution and delivery by the Collateral
Agent of this Agreement and the other Transaction Documents to which it is a
party, and the performance by the Collateral Agent of its duties hereunder and
thereunder, have been duly authorized by all necessary corporate proceedings and
no further approvals or filings, including any governmental approvals, are
required for the valid execution and delivery by the Collateral Agent, or the
performance by the Collateral Agent, of this Agreement and such other
Transaction Documents.
(d) VALID AND BINDING AGREEMENT. The Collateral Agent has duly
executed and delivered this Agreement and each other Transaction Document to
which it is a party, and each of this Agreement and each such other Transaction
Document constitutes the legal, valid and binding obligation of the Collateral
Agent, enforceable against the Collateral Agent in accordance with its terms,
except as (i) such enforceability may be limited by bankruptcy, insolvency,
reorganization and similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.
Section 4.09. WAIVER OF SETOFFS. The Collateral Agent hereby
expressly waives any and all rights of setoff that the Collateral Agent may
otherwise at any time have under applicable law with respect to any Spread
Account and agrees that amounts in the Spread Accounts shall at all times be
held and applied solely in accordance with the provisions hereof.
Section 4.10. CONTROL BY THE CONTROLLING PARTY. The Collateral Agent
shall comply with notices and instructions given by the Seller only if
accompanied by the written consent of the Controlling Party, except that if any
Default shall have occurred and be continuing, the Collateral Agent shall act
upon and comply with notices and instructions given by the Controlling Party
alone in the place and stead of the Seller.
ARTICLE V
COVENANTS OF THE SELLER
Section 5.01. PRESERVATION OF COLLATERAL. Subject to the rights,
powers and authorities granted to the Collateral Agent and the Controlling Party
in this Agreement, the Seller shall take such action as is necessary and proper
with respect to the Collateral in order to preserve and maintain such Collateral
and to cause (subject to the rights of the Secured Parties) the Collateral Agent
to perform its obligations with respect to such Collateral as provided herein.
The Seller will do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, such instruments of transfer or take such
other steps or actions as may be necessary, or required by the Controlling
Party, to perfect the Security Interests granted hereunder in the Collateral, to
ensure that such Security Interests rank prior to all other Liens and to
preserve the priority of such Security Interests and the validity and
enforceability thereof. Upon any delivery or substitution of Collateral, the
Seller shall be obligated to execute such documents and perform such actions as
are necessary to create in the Collateral Agent for the benefit of the Secured
Parties a valid first Lien on, and valid and
30
perfected, first priority security interest in, the Collateral so delivered
and to deliver such Collateral to the Collateral Agent, free and clear of any
other Lien, together with satisfactory assurances thereof, and to pay any
reasonable costs incurred by any of the Secured Parties or the Collateral
Agent (including its agents) or otherwise in connection with such delivery.
Section 5.02. OPINIONS AS TO COLLATERAL. Not more than 90 days nor
less than 30 days prior to (i) each anniversary of the date hereof during the
term of this Agreement and (ii) each date on which the Seller proposes to take
any action contemplated by Section 5.06, the Seller shall, at its own cost and
expense, furnish to each Secured Party and the Collateral Agent an Opinion of
Counsel with respect to each Series either (a) stating that, in the opinion of
such counsel, such action has been taken with respect to the execution and
filing of any financing statements and continuation statements and other actions
as are necessary to perfect, maintain and protect the lien and security interest
of the Collateral Agent (and the priority thereof), on behalf of the Secured
Parties, with respect to such Collateral against all creditors of and purchasers
from the Seller or OFL and reciting the details of such action, or (b) stating
that, in the opinion of such counsel, no such action is necessary to maintain
such perfected lien and security interest. Such Opinion of Counsel shall further
describe each execution and filing of any financing statements and continuation
statements and such other actions as will, in the opinion of such counsel, be
required to perfect, maintain and protect the lien and security interest of the
Collateral Agent, on behalf of the Secured Parties, with respect to such
Collateral against all creditors of and purchasers from the Seller or OFL for a
period, specified in such Opinion, continuing until a date not earlier than
eighteen months from the date of such Opinion.
Section 5.03. NOTICES. In the event that OFL or the Seller acquires
knowledge of the occurrence and continuance of any Insurance Agreement Event of
Default or Servicer Termination Event or of any event of default or like event,
howsoever described or called, under any of the Transaction Documents, the
Seller shall immediately give notice thereof to the Collateral Agent and each
Secured Party.
Section 5.04. WAIVER OF STAY OR EXTENSION LAWS; MARSHALLING OF
ASSETS. The Seller covenants, to the fullest extent permitted by applicable law,
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any appraisement, valuation, stay,
extension or redemption law wherever enacted, now or at any time hereafter in
force, in order to prevent or hinder the enforcement of this Agreement or any
absolute sale of the Collateral or any part thereof, or the possession thereof
by any purchaser at any sale under Article VII of this Agreement; and the
Seller, to the fullest extent permitted by applicable law, for itself and all
who may claim under it, hereby waives the benefit of all such laws, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Collateral Agent, but will suffer and permit the execution
of every such power as though no such law had been enacted. The Seller, for
itself and all who may claim under it, waives, to the fullest extent permitted
by applicable law, all right to have the Collateral marshalled upon any
foreclosure or other disposition thereof.
Section 5.05. NONINTERFERENCE, ETC. The Seller shall not (i) waive or
alter any of its rights under the Collateral (or any agreement or instrument
relating thereto) without the prior written consent of the Controlling Party; or
(ii) fail to pay any tax, assessment, charge
31
or fee levied or assessed against the Collateral, or to defend any action, if
such failure to pay or defend may adversely affect the priority or
enforceability of the Seller's right, title or interest in and to the Collateral
or the Collateral Agent's lien on, and security interest in, the Collateral for
the benefit of the Secured Parties; or (iii) take any action, or fail to take
any action, if such action or failure to take action will interfere with the
enforcement of any rights under the Transaction Documents.
Section 5.06. SELLER CHANGES.
(a) CHANGE IN NAME, STRUCTURE, ETC. The Seller shall not change its
name, identity or corporate structure unless it shall have given each Secured
Party and the Collateral Agent at least 60 days' prior written notice thereof,
shall have effected any necessary or appropriate assignments or amendments
thereto and filings of financing statements or amendments thereto, and shall
have delivered to the Collateral Agent and each Secured Party an Opinion of
Counsel of the type described in Section 5.02. The parties hereto acknowledge
receipt of prior written notice of the Seller's intent to change its name on or
after January 1, 1997 to Arcadia Receivables Finance Corp.
(b) RELOCATION OF THE SELLER. Neither OFL nor the Seller shall
change its principal executive office unless it gives each Secured Party and the
Collateral Agent at least 90 days' prior written notice of any relocation of its
principal executive office. If the Seller relocates its principal executive
office or principal place of business from Minnesota, the Seller shall give
prior notice thereof to the Controlling Party and the Collateral Agent and shall
effect whatever appropriate recordations and filings are necessary and shall
provide an Opinion of Counsel to the Controlling Party and the Collateral Agent,
to the effect that, upon the recording of any necessary assignments or
amendments to previously-recorded assignments and filing of any necessary
amendments to the previously filed financing or continuation statements or upon
the filing of one or more specified new financing statements, and the taking of
such other actions as may be specified in such opinion, the security interests
in the Collateral shall remain, after such relocation, valid and perfected.
ARTICLE VI
CONTROLLING PARTY; INTERCREDITOR PROVISIONS
Section 6.01. APPOINTMENT OF CONTROLLING PARTY. From and after the
Closing Date of a Series until the Insurer Termination Date related to such
Series, Financial Security shall be the Controlling Party with respect to such
Series and shall be entitled to exercise all the rights given the Controlling
Party hereunder with respect to such Series. From and after the Insurer
Termination Date related to such Series until the Trustee Termination Date
related to such Series, the Trustee shall be the Controlling Party with respect
to such Series. Notwithstanding the foregoing, in the event that a Financial
Security Default shall have occurred and be continuing, the Trustee shall be the
Controlling Party with respect to such Series until the applicable Trustee
Termination Date. If prior to an Insurer Termination Date the Trustee shall have
become the Controlling Party with respect to a Series as a result of the
occurrence
32
of a Financial Security Default and either such Financial Security Default is
cured or for any other reason ceases to exist or the Trustee Termination Date
with respect to a Series occurs, then upon such cure or other cessation or on
such Trustee Termination Date, as the case may be, Financial Security shall,
upon notice thereof being duly given to the Collateral Agent, again be the
Controlling Party with respect to such Series.
Section 6.02. CONTROLLING PARTY'S AUTHORITY.
(a) Each of OFL and the Seller hereby irrevocably appoint the
Controlling Party, and any successor to the Controlling Party appointed pursuant
to Section 6.01, its true and lawful attorney, with full power of substitution,
in the name of OFL, the Seller, the Secured Parties or otherwise, but (subject
to Section 2.08) at the expense of the Seller, to the extent permitted by law to
exercise, at any time and from time to time while any Insurance Agreement Event
of Default has occurred and is continuing, any or all of the following powers
with respect to all or any of the Collateral related to the relevant Series: (i)
to demand, xxx for, collect, receive and give acquittance for any and all monies
due or to become due upon or by virtue thereof, (ii) to settle, compromise,
compound, prosecute or defend any action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal with the same or the proceeds
thereof as fully and effectively as if the Collateral Agent were the absolute
owner thereof, and (iv) to extend the time of payment of any or all thereof and
to make any allowance or other adjustments with respect thereto; PROVIDED that
the foregoing powers and rights shall be exercised in accordance with the
provisions of Article VII hereof.
(b) With respect to each Series of Certificates and the related
Collateral, each Secured Party hereby irrevocably and unconditionally
constitutes and appoints the Controlling Party with respect to such Series, and
any successor to such Controlling Party appointed pursuant to Section 6.01 from
time to time, as the true and lawful attorney-in-fact of such Secured Party for
so long as such Secured Party is the Non-Controlling Party, with full power of
substitution, to execute, acknowledge and deliver any notice, document,
certificate, paper, pleading or instrument and to do in the name of the
Controlling Party as well as in the name, place and stead of such Secured Party
such acts, things and deeds for and on behalf of and in the name of such Secured
Party under this Agreement with respect to such Series which such Secured Party
could or might do or which may be necessary, desirable or convenient in such
Controlling Party's sole discretion to effect the purposes contemplated
hereunder and, without limitation, exercise full right, power and authority to
take, or defer from taking, any and all acts with respect to the administration
of the Collateral related to such Series, and the enforcement of the rights of
the Secured Parties hereunder with respect to such Series, on behalf of and for
the benefit of such Controlling Party and such Non-Controlling Party, as their
interests may appear.
(c) So long as Financial Security shall be the Controlling Party
with respect to a Series (other than the Warehousing Series), the Trustee hereby
agrees, that if there exists an Insurance Agreement Event of Default with
respect to such Series:
(i) Financial Security shall have the exclusive right to
direct the Trustee as to any and all actions to be taken under the related
Transaction Documents,
33
including without limitation all actions with respect to the giving of
directions to the Servicer and any subservicer with respect to the
servicing of the Receivables of such Series; enforcement of any rights of
the Trustee under such Transaction Documents; and the giving or withholding
of any other consents, requests, notices, directions, approvals, extensions
or waivers under or in respect of any such Transaction Documents; and
(ii) Financial Security shall have the right to control 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 the related Pooling and Servicing Agreement or under any
other Transaction Document, including the remedies provided in Article VII.
PROVIDED, HOWEVER, that the Trustee may decline to follow any of the above
directions from Financial Security, if the Trustee, in accordance with an
opinion of counsel to the Trustee, that is independent of the Trustee,
determines that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith determines that the action or proceeding so
directed would involve it in personal liability for which adequate indemnity is
not reasonably assured to it or, in the case of actions or directions not
specifically permitted to be taken by Financial Security so long as no Financial
Security Default has occurred and is continuing, would adversely affect the
interests of the Certificateholders in any material respect.
(d) So long as Financial Security shall be the Controlling Party
with respect to a Series (other than the Warehousing Series), the Trustee shall
not, without the prior written consent of Financial Security:
(i) appoint new independent accountants with respect to the
Series;
(ii) consent to the amendment of or supplement to any of the
Transaction Documents related to the Series; or
(iii) waive a Servicer Termination Event under the related Pooling
and Servicing Agreement or Sale and Servicing Agreement, as applicable.
(e) So long as Financial Security shall be the Controlling Party
with respect to a Series:
(i) Financial Security shall have the rights provided in
Section 5.3 of each Pooling and Servicing Agreement, Section 5.4 of each
Sale and Servicing Agreement and Section 5.19 of each Indenture in respect
of the direction of insolvency proceedings.
(ii) Financial Security shall have the right to direct the
Trustee as to any and all actions to be taken in the event of the
occurrence of a Servicer Termination Event under the related Pooling and
Servicing Agreement and shall have such other rights in respect of the
appointment of a successor servicer as are provided in such Pooling and
Servicing Agreement.
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Section 6.03. RIGHTS OF SECURED PARTIES. With respect to each Series
of Certificates and the related Collateral, the Non-Controlling Party at any
time expressly agrees that it shall not assert any rights that it may otherwise
have, as a Secured Party with respect to the Collateral, to direct the
maintenance, sale or other disposition of the Collateral or any portion thereof,
notwithstanding the occurrence and continuance of any Default with respect to
such Series or any non-performance by OFL or the Seller of any obligation owed
to such Secured Party hereunder or under any other Transaction Document, and
each party hereto agrees that the Controlling Party shall be the only Person
entitled to assert and exercise such rights.
Section 6.04. DEGREE OF CARE.
(a) CONTROLLING PARTY. Notwithstanding any term or provision of
this Agreement, the Controlling Party shall incur no liability to OFL or the
Seller for any action taken or omitted by the Controlling Party in connection
with the Collateral, except for any gross negligence, bad faith or willful
misconduct on the part of the Controlling Party and, further, shall incur no
liability to the Non-Controlling Party except for a breach of the terms of this
Agreement or for gross negligence, bad faith or willful misconduct in carrying
out its duties, if any, to the Non-Controlling Party. The Controlling Party
shall be protected and shall incur no liability to any such party in relying
upon the accuracy, acting in reliance upon the contents and assuming the
genuineness of any notice, demand, certificate, signature, instrument or other
document believed by the Controlling Party to be genuine and to have been duly
executed by the appropriate signatory, and (absent manifest error or actual
knowledge to the contrary) the Controlling Party shall not be required to make
any independent investigation with respect thereto. The Controlling Party shall,
at all times, be free independently to establish to its reasonable satisfaction
the existence or nonexistence, as the case may be, of any fact the existence or
nonexistence of which shall be a condition to the exercise or enforcement of any
right or remedy under this Agreement or any of the Transaction Documents.
(b) THE NON-CONTROLLING PARTY. The Non-Controlling Party shall not
be liable to the Seller for any action or failure to act by the Controlling
Party or the Collateral Agent in exercising, or failing to exercise, any rights
or remedies hereunder.
ARTICLE VII
REMEDIES UPON DEFAULT
Section 7.01. REMEDIES UPON A DEFAULT. If a Default with respect to a
Series has occurred and is continuing, the Collateral Agent shall, at the
direction of the Controlling Party, take whatever action at law or in equity as
may appear necessary or desirable in the judgment of the Controlling Party to
collect and satisfy all Insurer Secured Obligations (including, but not limited
to, foreclosure upon the Collateral and all other rights available to secured
parties under applicable law) or to enforce performance and observance of any
obligation, agreement or covenant under any of the Transaction Documents related
to such Series. Notwithstanding the foregoing, the Collateral Agent shall not be
entitled to take any action and the Controlling Party shall not be entitled to
give any direction with respect to the
35
Trust Property, except to the extent provided in the Transaction Documents
and Sections 6.02(a), (c), (d) and (e) hereof.
Section 7.02. WAIVER OF DEFAULT. The Controlling Party shall have the
sole right, to be exercised in its complete discretion, to waive any Default by
a writing setting forth the terms, conditions and extent of such waiver signed
by the Controlling Party and delivered to the Collateral Agent, the other
Secured Party and the Seller. Any such waiver shall be binding upon the Non-
Controlling Party and the Collateral Agent. Unless such writing expressly
provides to the contrary, any waiver so granted shall extend only to the
specific event or occurrence which gave rise to the Default so waived and not to
any other similar event or occurrence which occurs subsequent to the date of
such waiver.
Section 7.03. RESTORATION OF RIGHTS AND REMEDIES. If the Collateral
Agent has instituted any proceeding to enforce any right or remedy under this
Agreement, and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to such Collateral Agent, then and in
every such case the Seller, the Collateral Agent and each of the Secured Parties
shall, subject to any determination in such proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Secured Parties shall continue as though no such proceeding
had been instituted.
Section 7.04. NO REMEDY EXCLUSIVE. No right or remedy herein
conferred upon or reserved to the Collateral Agent, the Controlling Party or
either of the Secured Parties is intended to be exclusive of any other right or
remedy, and every right or 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, in equity or otherwise (but, in each case,
shall be subject to the provisions of this Agreement limiting such remedies),
and each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Controlling Party, and the exercise of
or the beginning of the exercise of any right or power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or thereafter
any other right, power or remedy.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. FURTHER ASSURANCES. Each party hereto shall take such
action and deliver such instruments to any other party hereto, in addition to
the actions and instruments specifically provided for herein, as may be
reasonably requested or required to effectuate the purpose or provisions of this
Agreement or to confirm or perfect any transaction described or contemplated
herein.
Section 8.02. WAIVER. Any waiver by any party of any provision of
this Agreement or any right, remedy or option hereunder shall only prevent and
estop such party
36
from thereafter enforcing such provision, right, remedy or option if such
waiver is given in writing and only as to the specific instance and for the
specific purpose for which such waiver was given. The failure or refusal of
any party hereto to insist in any one or more instances, or in a course of
dealing, upon the strict performance of any of the terms or provisions of
this Agreement by any party hereto or the partial exercise of any right,
remedy or option hereunder shall not be construed as a waiver or
relinquishment of any such term or provision, but the same shall continue in
full force and effect.
Section 8.03. AMENDMENTS; WAIVERS. No amendment, modification, waiver
or supplement to this Agreement or any provision of this Agreement shall in any
event be effective unless the same shall have been made or consented to in
writing by each of the parties hereto and each Rating Agency shall have
confirmed in writing that such amendment will not cause a reduction or
withdrawal of a rating on any Series; PROVIDED, HOWEVER, that, for so long as
Financial Security shall be the Controlling Party with respect to a Series,
amendments, modifications, waivers or supplements hereto relating to such
Series, the related Collateral or Spread Account or any requirement hereunder to
deposit or retain any amounts in such Spread Account or to distribute any
amounts therein as provided in Section 3.03 shall be effective if made or
consented to in writing by Financial Security, the Seller, OFL and the
Collateral Agent (the consent of which shall not be withheld or delayed with
respect to any amendment that does not adversely affect the Collateral Agent)
but shall in no circumstances require the consent of the Trustee or the
Certificateholders related to such Series or any other Series.
Section 8.04. SEVERABILITY. In the event that any provision of this
Agreement or the application thereof to any party hereto or to any circumstance
or in any jurisdiction governing this Agreement shall, to any extent, be invalid
or unenforceable under any applicable statute, regulation or rule of law, then
such provision shall be deemed inoperative to the extent that it is invalid or
unenforceable and the remainder of this Agreement, and the application of any
such invalid or unenforceable provision to the parties, jurisdictions or
circumstances other than to whom or to which it is held invalid or
unenforceable, shall not be affected thereby nor shall the same affect the
validity or enforceability of any other provision of this Agreement. The parties
hereto further agree that the holding by any court of competent jurisdiction
that any remedy pursued by the Collateral Agent, or any of the Secured Parties,
hereunder is unavailable or unenforceable shall not affect in any way the
ability of the Collateral Agent or any of the Secured Parties to pursue any
other remedy available to it or them (subject, however, to the provisions of
this Agreement limiting such remedies).
Section 8.05. NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, each of the parties hereto agrees that it shall
not, prior to one year and one day after the Final Scheduled Distribution Date
with respect to each Series, acquiesce, petition or otherwise invoke or cause
the Seller or OFL to invoke the process of the United States of America, any
State or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government for the purpose of commencing or sustaining a case by or against
the Seller, OFL or the Trust under a Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Seller, OFL or the Trust or all or
any part of its property or assets or ordering the winding up or liquidation of
the affairs
37
of the Seller, OFL or the Trust. The parties agree that damages will be an
inadequate remedy for breach of this covenant and that this covenant may be
specifically enforced.
Section 8.06. NOTICES. All notices, demands, certificates, requests
and communications hereunder ("notices") shall be in writing and shall be
effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an Authorized Officer of the party to which sent, or (d)
on the date transmitted by legible telecopier transmission with a confirmation
of receipt, in all cases addressed to the recipient as follows:
(i) If to OFL:
Olympic Financial Ltd.
0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Treasurer
Telecopier No.: (000) 000-0000
(ii) If to the Seller:
Olympic Receivables Finance Corp.
0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Treasurer
Telecopier No.: (000) 000-0000
(iii) If to Financial Security:
Financial Security Assurance Inc.
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance Department
Telecopier No.: (000) 000-0000
(000) 000-0000
(in each case in which notice or other communication to Financial
Security refers to a Default or a claim on the Policy or in which
failure on the part of Financial Security to respond shall be deemed
to constitute consent or acceptance, then with a copy to the attention
of the Senior Vice President Surveillance)
38
(iv) If to the Trustee:
Norwest Bank Minnesota, National Association
0xx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Services - Asset Backed
Administration
Telecopier No.: (000) 000-0000
(v) If to the Collateral Agent:
Norwest Bank Minnesota, National Association
0xx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Services - Asset Backed
Administration
Telecopier No.: (000) 000-0000
(vi) If to Xxxxx'x:
Xxxxx'x Investor's Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
(vii) If to Standard & Poor's:
Standard & Poor's Ratings Group
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
A copy of each notice given hereunder to any party hereto shall also be given to
(without duplication) Financial Security, the Seller, the Trustee and the
Collateral Agent. Each party hereto may, by notice given in accordance herewith
to each of the other parties hereto, designate any further or different address
to which subsequent notices shall be sent.
Section 8.07. TERM OF THIS AGREEMENT. This Agreement shall take
effect on the Closing Date of the Series 1993-A Certificates and shall continue
in effect until the last Final Termination Date to occur with respect to each
Series. On such Final Termination Date, this Agreement shall terminate, all
obligations of the parties hereunder shall cease and terminate and the
Collateral, if any, held hereunder and not to be used or applied in discharge of
any obligations of the Seller or OFL in respect of the Secured Obligations or
otherwise under this Agreement, shall be released to and in favor of the Seller,
PROVIDED that the provisions of
39
Sections 4.06, 4.07 and 8.05 shall survive any termination of this Agreement
and the release of any Collateral upon such termination.
Section 8.08. ASSIGNMENTS: THIRD-PARTY RIGHTS; REINSURANCE.
(a) This Agreement shall be a continuing obligation of the parties
hereto and shall (i) be binding upon the parties and their respective successors
and assigns, and (ii) inure to the benefit of and be enforceable by each Secured
Party and the Collateral Agent, and by their respective successors, transferees
and assigns. Neither the Seller nor OFL may assign this Agreement, or delegate
any of its duties hereunder, without the prior written consent of the
Controlling Party.
(b) Financial Security shall have the right (unless a Financial
Security Default shall have occurred and be continuing) to give participations
in its rights under this Agreement and to enter into contracts of reinsurance
with respect to any Policy issued in connection with a Series of Certificates
and each such participant or reinsurer shall be entitled to the benefit of any
representation, warranty, covenant and obligation of each party (other than
Financial Security) hereunder as if such participant or reinsurer was a party
hereto and, subject only to such agreement regarding such reinsurance or
participation, shall have the right to enforce the obligations of each such
other party directly hereunder; PROVIDED, HOWEVER, that no such reinsurance or
participation agreement or arrangement shall relieve Financial Security of its
obligations hereunder, under the Transaction Documents to which it is a party or
under any such Policy. In addition, nothing contained herein shall restrict
Financial Security from assigning to any Person pursuant to any liquidity
facility or credit facility any rights of Financial Security under this
Agreement or with respect to any real or personal property or other interests
pledged to Financial Security, or in which Federal Security has a security
interest, in connection with the transactions contemplated hereby. The terms of
any such assignment or participation shall contain an express acknowledgment by
such Person of the condition of this Section and the limitations of the rights
of Financial Security hereunder.
Section 8.09. CONSENT OF CONTROLLING PARTY. In the event that the
Controlling Party's consent is required under the terms hereof or under the
terms of any Transaction Document, it is understood and agreed that, except as
otherwise provided expressly herein, the determination whether to grant or
withhold such consent shall be made solely by the Controlling Party in its sole
discretion.
Section 8.10. TRIAL BY JURY WAIVED. Each of the parties hereto
waives, to the fullest extent permitted by law, any right it may have to a trial
by jury in respect of any litigation arising directly or indirectly out of,
under or in connection with this Agreement, any of the other Transaction
Documents or any of the transactions contemplated hereunder or thereunder. Each
of the parties hereto (a) certifies that no representative, agent or attorney of
any other party has represented, expressly or otherwise, that such other party
would not, in the event of litigation, seek to enforce the foregoing waiver and
(b) acknowledges that it has been induced to enter into this Agreement and the
other Transaction Documents to which it is a party, by among other things, this
waiver.
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Section 8.11. GOVERNING LAW. This Agreement shall be governed by and
construed, and the obligations, rights and remedies of the parties hereunder
shall be determined, in accordance with the laws of the State of New York.
Section 8.12. CONSENTS TO JURISDICTION. Each of the parties hereto
irrevocably submits to the jurisdiction of the United States District Court for
the Southern District of New York, any court in the state of New York located in
the city and county of New York, and any appellate court from any thereof, in
any action, suit or proceeding brought against it and related to or in
connection with this Agreement, the other Transaction Documents or the
transactions contemplated hereunder or thereunder or for recognition or
enforcement of any judgment and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such suit or action or
proceeding may be heard or determined in such New York State court or, to the
extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. To the extent permitted by applicable law,
each of the parties hereby waives and agrees not to assert by way of motion, as
a defense or otherwise in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such courts, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement or any of the
other Transaction Documents or the subject matter hereof or thereof may not be
litigated in or by such courts. Each of OFL and the Seller hereby irrevocably
appoints and designates CT Corporation System, whose address is 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, as its true and lawful attorney and duly authorized
agent for acceptance of service of legal process. Each of OFL and the Seller
agrees that service of such process upon such Person shall constitute personal
service of such process upon it. Nothing contained in this Agreement shall limit
or affect the rights of any party hereto to serve process in any other manner
permitted by law or to start legal proceedings relating to any of the
Transaction Documents against OFL or the Seller or their respective property in
the courts of any jurisdiction.
Section 8.13. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) Norwest Bank Minnesota, National
Association is executing this Agreement (i) not in its individual capacity but
in its capacity as trustee of the Trusts pursuant to the Transaction Documents
and (ii) as Collateral Agent hereunder (b) in no case whatsoever shall Norwest
Bank Minnesota, National Association in its capacity as trustee of Trusts be
personally liable on, or for any loss in respect of, any of the statements,
representations, warranties, covenants, agreements or obligations of the Trust
hereunder, all such liability, if any, being expressly waived by the parties
hereto.
Section 8.14. DETERMINATION OF ADVERSE EFFECT. Any determination of
an adverse effect on the interest of the Secured Parties or the
Certificateholders shall be made without consideration of the availability of
funds under the Policies.
Section 8.15. COUNTERPARTS. This Agreement may be executed in two or
more counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
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Section 8.16. HEADINGS. The headings of sections and paragraphs and
the Table of Contents contained in this Agreement are provided for convenience
only. They form no part of this Agreement and shall not affect its construction
or interpretation.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
as amended and restated, as of the date set forth on the first page hereof.
OLYMPIC FINANCIAL LTD.
By
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Name:
Title
OLYMPIC RECEIVABLES FINANCE CORP.
By
-------------------------------------------
Name:
Title:
FINANCIAL SECURITY ASSURANCE INC.
By
-------------------------------------------
Authorized Officer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By
-------------------------------------------
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Collateral Agent
By
-------------------------------------------
Name:
Title:
