EXH. 10.5
SPREAD ACCOUNT AGREEMENT,
dated as of March 25, 1993,
as amended and restated
as of September 12, 1996
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
PAGE
----
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
ARTICLE III
SPREAD ACCOUNTS
Section 3.01. Establishment of Spread Accounts; Initial Deposits into
Spread Accounts. . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.02. Investments. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.03. Distributions: Priority of Payments. . . . . . . . . . . . . . 19
Section 3.04. General Provisions Regarding Spread Accounts . . . . . . . . . 22
Section 3.05. Reports by the Collateral Agent. . . . . . . . . . . . . . . . 23
ARTICLE IV
THE COLLATERAL AGENT
Section 4.01. Appointment and Powers . . . . . . . . . . . . . . . . . . . . 23
Section 4.02. Performance of Duties. . . . . . . . . . . . . . . . . . . . . 24
Section 4.03. Limitation on Liability. . . . . . . . . . . . . . . . . . . . 24
Section 4.04. Reliance upon Documents. . . . . . . . . . . . . . . . . . . . 24
Section 4.05. Successor Collateral Agent . . . . . . . . . . . . . . . . . . 25
Section 4.06. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.07. Compensation and Reimbursement . . . . . . . . . . . . . . . . 27
i
Section 4.08. Representations and Warranties of the Collateral Agent . . . . 27
Section 4.09. Waiver of Setoffs. . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.10. Control by the Controlling Party . . . . . . . . . . . . . . . 28
ARTICLE V
COVENANTS OF THE SELLER
Section 5.01. Preservation of Collateral . . . . . . . . . . . . . . . . . . 28
Section 5.02. Opinions as to Collateral. . . . . . . . . . . . . . . . . . . 28
Section 5.03. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.04. Waiver of Stay or Extension Laws; Marshalling of Assets. . . . 29
Section 5.05. Noninterference, etc.. . . . . . . . . . . . . . . . . . . . . 29
Section 5.06. Seller Changes . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VI
CONTROLLING PARTY; INTERCREDITOR PROVISIONS
Section 6.01. Appointment of Controlling Party . . . . . . . . . . . . . . . 30
Section 6.02. Controlling Party's Authority. . . . . . . . . . . . . . . . . 30
Section 6.03. Rights of Secured Parties. . . . . . . . . . . . . . . . . . . 32
Section 6.04. Degree of Care . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VII
REMEDIES UPON DEFAULT
Section 7.01. Remedies upon a Default. . . . . . . . . . . . . . . . . . . . 33
Section 7.02. Waiver of Default. . . . . . . . . . . . . . . . . . . . . . . 33
Section 7.03. Restoration of Rights and Remedies . . . . . . . . . . . . . . 33
Section 7.04. No Remedy Exclusive. . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Further Assurances . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.02. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.03. Amendments; Waivers. . . . . . . . . . . . . . . . . . . . . . 34
Section 8.04. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 8.05. Nonpetition Covenant . . . . . . . . . . . . . . . . . . . . . 35
Section 8.06. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 8.07. Term of this Agreement . . . . . . . . . . . . . . . . . . . . 37
ii
Section 8.08. Assignments: Third-Party Rights; Reinsurance . . . . . . . . . 37
Section 8.09. Consent of Controlling Party . . . . . . . . . . . . . . . . . 38
Section 8.10. Trial by Jury Waived . . . . . . . . . . . . . . . . . . . . . 38
Section 8.11. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.12. Consents to Jurisdiction . . . . . . . . . . . . . . . . . . . 38
Section 8.13. Limitation of Liability. . . . . . . . . . . . . . . . . . . . 39
Section 8.14. Determination of Adverse Effect. . . . . . . . . . . . . . . . 39
Section 8.15. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.16. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
EXHIBIT A Form of Pooling and Servicing Agreement
iii
SPREAD ACCOUNT AGREEMENT, dated as of March 25, 1993, as amended and restated as
of September 12, 1996 (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 the Series 1993-A Pooling and Servicing Agreement,
the Seller sold to the Series 1993-A Trust all of its right, title and interest
in and to the Receivables and certain other Trust Property in exchange for the
Series 1993-A Certificates.
3. The Seller has requested that Financial Security issue the
Series 1993-A Policy to the Trustee to guarantee payment of the Guaranteed
Distributions (as defined in such Policy) on each Distribution Date in respect
of the Series 1993-A Certificates.
4. In partial consideration of the issuance of the Series 1993-A
Policy, the Seller has agreed that Financial Security shall have certain rights
as Controlling Party, to the extent set forth herein with respect to the
Series 1993-A Trust.
5. The Seller is a wholly owned special purpose subsidiary of OFL.
The Series 1993-A Trust has agreed to pay a certain Credit Enhancement Fee to
the Seller in consideration of the obligations of the Seller and OFL pursuant
hereto in respect of the Series 1993-A Certificates and in consideration of the
obligations of OFL pursuant to the Series 1993-A Insurance Agreement (such
obligations forming part of the Series 1993-A Insurer Secured Obligations
referred to herein). The Series 1993-A Insurer Secured Obligations form part of
the consideration to Financial Security for its issuance of the Series 1993-A
Policy.
6. In order to secure the performance of the Series 1993-A 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
Series 1993-A Collateral as Collateral to the Collateral Agent for the benefit
of Financial Security and for the benefit of the Trustee on behalf of the Trust,
upon the terms and conditions set forth herein.
7. It is contemplated (A) that the Seller and OFL may enter into one
or more additional Pooling and Servicing Agreements with the Trustee and the
Backup Servicer pursuant
to which the Seller will sell all of its right, title and interest in pools
of Receivables, and that Financial Security in its discretion may issue one
or more Policies with respect to certain guaranteed distributions on the
corresponding Series of Certificates and (B) that the Seller and OFL may
enter into one or more Sale and Servicing Agreements with the related Trust
and the Backup Servicer pursuant to which the Seller will sell all of its
right, title and interest in pools of Receivables (each, a "Sale and
Servicing Agreement"), that the Trust will issue one or more classes of
Certificates pursuant to a Trust Agreement among the Seller, Financial
Security, an Owner Trustee and certain other parties specified therein (each,
a "Trust Agreement"), and will issue one or more classes of Notes pursuant to
an Indenture among the related Trust, the Indenture Trustee and the
Collateral Agent, and that Financial Security in its discretion may issue one
or more Policies with respect to certain guaranteed distributions on the
corresponding Series of Certificates and may issue one or more Policies with
respect to certain scheduled payments on the corresponding Series of Notes.
In connection with any such issuance of additional Policies, 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 will enter into a Series
Supplement hereto pursuant to which the Seller will pledge additional
Collateral pursuant to the terms hereof.
8. The Seller has entered into a Repurchase Agreement dated as of
August 1, 1994 with Telluride Funding Corp. (the "Issuer") (the "Repurchase
Agreement") pursuant to which the Seller has sold or will sell all of its right,
title and interest in Receivables, and that the Issuer will issue one or more
classes or tranches of 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
2
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 Series 1993-A, 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:
"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 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 April 28, 1995, between OFL and Norwest
Bank Minnesota, National Association, as amended or supplemented, relating to
OFL's $145,000,000 13% Senior Notes due 2000, 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 and, with respect to
any other 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.
3
"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.
"CUMULATIVE DEFAULT RATE" means, with respect to any Determination
Date and any 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, 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, (a) with respect to a Trigger Event that has
occurred pursuant to clause (i) or (ii) of the definition thereof, as of a
Determination Date with respect to Series 1994-B, Series 1994-A, Series 1993-D,
Series 1993-C, Series 1993-B or Series 1993-A, that no such clause (i) or clause
(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 (iii) or clause (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 with respect to Series 1994-B,
Series 1994-A, Series 1993-D, Series 1993-C, Series 1993-B or Series 1993-A,
that no such clause (iii) or clause (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, the fraction, expressed as a percentage, the numerator of which is
equal to the sum of
4
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.
"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.
5
"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.
"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, pursuant to which Financial Security issued
(A) a Policy to the Trustee or (B) one or more Note Policies to the Trustee
and/or one or more Certificate Policies to the Owner Trustee.
"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 Telluride Funding Corp.
"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, 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
6
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.
"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.
"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.
7
"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 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 "Average Default Rate," "Average Delinquency Ratio," "Average
Net Loss Rate," "Deemed Cured," "Delinquency Ratio," "Net Loss Rate," "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;
8
(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) 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 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 Second Amended and Restated Stock
Pledge Agreement, dated as of August 26, 1994, between OFL, Financial Security
and the Collateral Agent.
"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
9
Subsequent Purchase Agreements and Subsequent Transfer Agreements, any
Underwriting Agreement, the Lockbox Agreement, and the Stock Pledge Agreement
related to such Series.
"TRIGGER EVENT" means, with respect to Series 1993-A and as of a
Determination Date the occurrence of any of the following event:
(i) [RESERVED];
(ii) the Average Delinquency Ratio for such Determination Date shall
be equal to or greater than 4.50%;
(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
10
Date, (B) 2.0%, 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) 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.
"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, has the meaning
specified in the related Pooling and Servicing Agreement or Trust Agreement, as
the case may be.
"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.
"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, or (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.
11
"TRUSTEE TERMINATION DATE" means, with respect to any Series, the
date which is the latest 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 and
(ii) 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, 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 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
12
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 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 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;
13
(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 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.
14
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.
(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
15
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, 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.
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
16
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. 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, 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, 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 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, 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 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 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 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
17
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 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, (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
18
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 4.1
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 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 (excluding the Warehousing 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
(including the Warehousing Series Spread Account) in respect of such
Collection Account Shortfall(s) and (ii) if a Warehousing Shortfall will
exist with respect to the Warehousing Series, determine the amount, if any,
to be distributed to the Trustee with respect to such Series from unrelated
Spread Accounts in respect of such Warehousing Shortfall. 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
19
withdrawals pursuant to paragraph SECOND above), up to the
aggregate of the Collection Account Shortfalls (excluding any Collection
Account Shortfall with respect to the Warehousing Series) and any
Warehousing Shortfall 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)(II) 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)(B) of Section 3.6(a) or priority
(v) of Section 3.6(b)(II) 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
4.1 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 unrelated
Spread Accounts, as calculated pursuant to paragraph THIRD of this Section
3.03(a), and which, in the case of a Warehousing Shortfall or Collection
Account 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 Section 3.6 of the
respective 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:
20
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 (excluding the Warehousing
Series) there exists a Collection Account Shortfall after deposit into the
Collection Account of amounts distributed pursuant to priority FIRST, or if
with respect to the Warehousing Series there exists a Warehousing Shortfall
from each Spread Account (including the Warehousing Series 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 (excluding the Warehousing Series) and any Warehousing Shortfall, 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 or a Warehousing Shortfall;
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 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;
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 or
Section 6.2 of a 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 or Section 3.6 of a Servicing Agreement, as applicable,
from amounts on deposit in the related Spread Account, an amount up to the
amount so owed, to such Servicer;
21
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
Collection Account Shortfall, from the aggregate of all amounts on deposit in
each Spread Account in excess of the related Spread Account Maximum Amount,
an amount up to the amount of such Collection Account 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 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
22
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.
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
23
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 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,
24
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 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
25
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 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
26
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.
(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
27
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 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
28
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 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.
(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
29
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 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
30
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, 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, 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.
31
(d) So long as Financial Security shall be the Controlling
Party with respect to a 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.
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
32
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 Trust Property, except to the extent provided in the Pooling and
Servicing Agreement or other 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.
33
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 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.
34
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
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: Chief Financial Officer
Telecopier No.: (000) 000-0000
35
(ii) If to the Seller:
Olympic Receivables Finance Corp.
0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: President
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)
(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
36
(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 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
37
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.
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
38
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 Norwest Bank Minnesota, National
Association, 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 not in its individual capacity but
solely in its capacity as trustee of the Trusts pursuant to the Pooling and
Servicing Agreements and (b) in no case whatsoever shall Norwest Bank
Minnesota, National Association 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.
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.
39
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 /s/Xxxx X. Xxxxxxx
----------------------------------------
Xxxx X. Xxxxxx
Executive Vice President and Chief
Financial Officer
OLYMPIC RECEIVABLES FINANCE CORP.
By /s/Xxxx X. Xxxxxxx
----------------------------------------
Xxxx X. Xxxxxx
Senior Vice President and Chief
Financial Officer
FINANCIAL SECURITY ASSURANCE INC.
By /s/Illegible
----------------------------------------
Authorized Officer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By /s/Xxxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxxxx
Corporate Trust Officer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Collateral Agent
By /s/Xxxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxxxx
Corporate Trust Officer
42
