EXECUTION COPY
--------------------------------------------------------------------------------
SECURITY AGREEMENT
among
OLYMPIC FINANCIAL LTD.,
OLYMPIC RECEIVABLES FINANCE CORP.,
ARCADIA RECEIVABLES CONDUIT CORP.,
FINANCIAL SECURITY ASSURANCE INC.,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Indenture Trustee and as Collateral Agent
Dated as of December 3, 1996
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.1. Defined Terms................................................. 2
Section 1.2. Rules of Interpretation....................................... 4
ARTICLE II
THE COLLATERAL
Section 2.1. Grant of Security Interest by the Issuer...................... 4
Section 2.2. No Transfer of Duties......................................... 5
Section 2.3. Termination and Release of Rights............................. 5
ARTICLE III
THE COLLATERAL AGENT
Section 3.1. Appointment and Powers........................................ 7
Section 3.2. Performance of Duties......................................... 7
Section 3.3. Limitation on Liability....................................... 7
Section 3.4. Reliance upon Documents....................................... 8
Section 3.5. Successor Collateral Agent.................................... 8
Section 3.6. Indemnification............................................... 10
Section 3.7. Compensation and Reimbursement................................ 10
Section 3.8. Representations and Warranties of the
Collateral Agent.............................................. 11
Section 3.9. Waiver of Setoffs............................................. 11
Section 3.10. Control by the Controlling Party.............................. 12
ARTICLE IV
COVENANTS OF THE ISSUER
Section 4.1. Preservation of Collateral.................................... 12
Section 4.2. Notices....................................................... 12
Section 4.3. Waiver of Stay or Extension Laws;
Marshalling of Assets......................................... 12
Section 4.4. Noninterference, Etc.......................................... 13
Section 4.5. Issuer Changes................................................ 13
i
ARTICLE V
CONTROLLING PARTY; INTERCREDITOR PROVISIONS
Section 5.1. Appointment of Controlling Party.............................. 14
Section 5.2. Controlling Party's Authority................................. 14
Section 5.3. Rights of Secured Parties..................................... 15
Section 5.4. Degree of Care................................................ 15
ARTICLE VI
REMEDIES UPON DEFAULT
Section 6.1. Remedies upon a Default....................................... 16
Section 6.2. Restoration of Rights and Remedies............................ 18
Section 6.3. No Remedy Exclusive........................................... 18
ARTICLE VII
MISCELLANEOUS
Section 7.1. Further Assurances............................................ 19
Section 7.2. Waiver........................................................ 19
Section 7.3. Amendments; Waivers........................................... 19
Section 7.4. Severability.................................................. 19
Section 7.5. Nonpetition Covenant.......................................... 20
Section 7.6. Notices....................................................... 20
Section 7.7. Term of this Security Agreement............................... 22
Section 7.8. Assignments; Third-Party Rights; Reinsurance.................. 23
Section 7.9. Consent of Controlling Party.................................. 23
Section 7.10. Trial by Jury Waived.......................................... 23
Section 7.11. Governing Law................................................. 24
Section 7.12. Consents to Jurisdiction...................................... 24
Section 7.13. Limitation of Liability....................................... 25
Section 7.14. Determination of Adverse Effect............................... 25
Section 7.15. Counterparts.................................................. 25
Section 7.16. Headings...................................................... 25
Section 7.17. Limited Recourse.............................................. 25
Section 7.18. Respective Rights of the Issuer and the
Secured Parties in the Collateral............................. 25
ii
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of December 3, 1996, by and among OLYMPIC
FINANCIAL LTD., a Minnesota corporation ("OFL"), OLYMPIC RECEIVABLES FINANCE
CORP., a Delaware corporation (the "Seller"), ARCADIA RECEIVABLES CONDUIT CORP.,
a Delaware corporation (the "Issuer"), FINANCIAL SECURITY ASSURANCE INC., a New
York stock insurance company (the "Security Insurer"), BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION (the "Agent") and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as collateral agent (in such capacity, the "Collateral Agent") and
as indenture trustee (in such capacity, the "Indenture Trustee").
W I T N E S E T H
- - - - - - - - -
WHEREAS, pursuant to the Receivables Purchase Agreement and Assignment
dated as of December 3, 1996 (the "Purchase Agreement") between OFL and the
Seller, OFL is selling to the Seller from time to time all of its right, title
and interest in and to certain Receivables and the other property specified
therein; and
WHEREAS, pursuant to the Repurchase Agreement dated as of December 3,
1996 (the "Repurchase Agreement"), between the Seller and the Issuer, the Seller
is selling to the Issuer from time to time all of its right, title and interest
in and to certain Receivables and the other property specified therein; and
WHEREAS, pursuant to the Indenture dated as of December 3, 1996 (the
"Indenture"), between the Issuer and the Indenture Trustee, the Issuer is
issuing from time to time its Floating Rate Automobile Receivables-Backed Notes
(the "Notes"); and
WHEREAS, the Seller has requested that the Security Insurer issue the
Note Policy to the Indenture Trustee to guarantee payment of the Scheduled
Payments (as defined in such Note Policy) on each Distribution Date in respect
of the Notes;
NOW THEREFORE, in order to secure the performance of the Secured
Obligations and for other good and valuable consideration, the adequacy, receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINED TERMS.
Terms defined in the Servicing Agreement (including by way of
reference to other documents), unless otherwise defined herein, shall have such
defined meanings when used herein, and the following terms shall have such
following meanings:
"AUTHORIZED OFFICER" shall mean, (i) with respect to Financial
Security, the Chairman of the Board, the President, the Chief Executive Officer,
Chief Operating Officer, or any Managing Director of Financial Security, (ii)
with respect to the Indenture Trustee or the Collateral Agent, any Vice
President or Trust Officer thereof, (iii) with respect to any of OFL, the Seller
or the Issuer, the President, any Vice President or the Treasurer thereof.
"COLLATERAL" shall have the meaning assigned to such term in Section
2.1(a) hereof.
"COLLATERAL AGENT" shall mean, 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 3.1, and thereafter
"Collateral Agent" shall mean such successor Person.
"CONTROLLING PARTY" shall mean at any time the Person designated as
the Controlling Party at such time pursuant to Section 5.1.
"FINAL TERMINATION DATE" shall mean the date that is the later of (i)
the Insurer Termination Date and (ii) the Trustee Termination Date.
"INSURER SECURED OBLIGATIONS" shall mean all amounts and obligations
that may at any time be owed or required to be performed to or on behalf of the
Security Insurer (or any agents, accountants or attorneys for the Security
Insurer), including the Security Insurer as third party beneficiary, under the
Insurance Agreement or under any other Transaction Document, 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" shall mean the date that is the latest of
(i) the date of the expiration of the Note Policy, (ii) the date on which the
Security Insurer shall have received payment and performance in full of all
Insurer Secured Obligations and (iii) the latest date on which any payment
referred to in clause (ii) above could be avoided as a preference under the
United States Bankruptcy Code or any other similar
2
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization, as specified in an Opinion of Counsel
delivered to the Collateral Agent.
"NON-CONTROLLING PARTY" shall mean at any time a Secured Party that is
not the Controlling Party at such time.
"OPINION OF COUNSEL" shall mean a written opinion of counsel
acceptable, as to form, substance and issuing counsel, to the Controlling Party.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"PURCHASE DATE" shall have the meaning assigned to such term in the
Repurchase Agreement.
"RECEIVABLES SCHEDULE" shall have the meaning assigned to such term in
the Repurchase Agreement.
"SECURED OBLIGATIONS" shall mean the Insurer Secured Obligations and
the Trustee Secured Obligations.
"SECURED PARTIES" shall mean each of the Indenture Trustee, in respect
of the Trustee Secured Obligations, and the Security Insurer, in respect of the
Insurer Secured Obligations.
"SECURITY AGREEMENT" shall mean this Security Agreement, as the same
may from time to time be amended, supplemented, waived or modified.
"SERVICING AGREEMENT" shall mean the Servicing Agreement dated as of
December 3, 1996 among the Issuer, the Seller, Olympic Financial Ltd., in its
individual capacity and as Servicer, Bank of America National Trust and Savings
Association, as Agent, and Norwest Bank Minnesota, National Association, as
Backup Servicer, Collateral Agent and Indenture Trustee.
"TRANSACTION DOCUMENTS" shall mean the Indenture, this Security
Agreement, the Repurchase Agreement, the Servicing Agreement, the Note Purchase
Agreement, the Purchase Agreement and any Assignment Agreements (but only with
respect to the Collateral), the Spread Account Agreement, the Insurance
Agreement, the Custodian Agreement and the Lockbox Agreement.
"TRUSTEE SECURED OBLIGATIONS" shall mean all amounts and obligations
that the Issuer may at any time owe or be required to perform to or for the
benefit of the Indenture Trustee or the Noteholders under the Indenture.
"TRUSTEE TERMINATION DATE" shall mean the date on which the Indenture
Trustee shall have received on behalf of the Noteholders payment and performance
in full of all Trustee Secured Obligations.
3
"UNIFORM COMMERCIAL CODE" or "UCC" shall mean, with respect to any
jurisdiction, the Uniform Commercial Code, or any successor statute, or any
comparable law, as the same may from time to time be amended, supplemented or
otherwise modified and in effect.
Section 1.2. RULES OF INTERPRETATION. The terms "hereof," "herein"
or "hereunder," unless otherwise modified by more specific reference, shall
refer to this Security Agreement in its entirety. Unless otherwise indicated
in context, the terms "Article" or "Section" shall refer to an Article or
Section of this Security 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 terms.
ARTICLE II
THE COLLATERAL
Section 2.1. GRANT OF SECURITY INTEREST BY THE ISSUER.
(a) The Issuer hereby grants to the Collateral Agent at the Closing
Date and on each Purchase Date, on behalf of and for the benefit of the
Secured Parties to secure the performance of the respective Secured
Obligations, a security interest in all of the Issuer's right, title and
interest, whether now owned or hereafter acquired, in and to all accounts,
contract rights, general intangibles, chattel paper, instruments, documents,
money, deposit accounts, certificates of deposit, goods, letters of credit,
advices of credit and authenticated securities consisting of, arising from or
relating to any of the following property: (i) the Receivables; (ii) the
Other Conveyed Property related thereto; (iii) the rights of the Seller under
the Purchase Agreement and each Assignment Agreement assigned to the Issuer
pursuant to the Repurchase Agreement, including the right to cause OFL to
repurchase Receivables from Seller under certain circumstances; (iv) all
amounts required to be deposited, or deposited, or delivered to the
Collateral Agent for deposit, to the Collection Account by the Seller in
respect of the WAC Deficiency Amount or the Collateral Test; (v) all funds on
deposit from time to time in the Secured Accounts, and in all investments and
proceeds thereof (including all income thereon); (vi) the Servicing Agreement
and the Repurchase Agreement; and (vii) all present and future claims,
demands, causes and choses in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any and all of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivables, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and
other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in
4
the proceeds of any of the foregoing (collectively, the "Collateral").
The Collateral Agent, for the benefit of the Indenture Trustee on
behalf of the Holders of the Notes and for the benefit of the Security Insurer
acknowledges such grant of a security interest.
(b) In order to effectuate the provisions and purposes of this
Security Agreement, including for the purpose of perfecting the security
interests granted hereunder, the Issuer represents and warrants that it has,
prior to the execution of this Security Agreement, executed and filed an
appropriate UCC-1 financing statement in Minnesota sufficient to ensure that the
Collateral Agent, as agent for the Secured Parties, has a first priority
perfected security interest in all of the Collateral that can be perfected by
the filing of a financing statement.
Section 2.2. NO TRANSFER OF DUTIES. The security interests granted
hereby are granted as security only and shall not (i) transfer or in any way
affect or modify, or relieve the Issuer from, any obligation to perform or
satisfy any term, covenant, condition or agreement to be performed or satisfied
by the Issuer under or in connection with this Security 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 specifically provided herein and in the other Transaction Documents.
Section 2.3. TERMINATION AND RELEASE OF RIGHTS.
(a) On the Insurer Termination Date, the rights, remedies, powers,
duties, authority and obligations conferred upon the Security Insurer
pursuant to this Security Agreement in respect of the Collateral shall
terminate and be of no further force and effect and all rights, remedies,
powers, duties, authority and obligations of the Security Insurer with
respect to the Collateral shall be automatically released; PROVIDED, that any
indemnity provided to or by the Security Insurer herein shall survive such
Insurer Termination Date. If the Security Insurer is acting as Controlling
Party on the Insurer Termination Date, the Security Insurer agrees, at the
expense of OFL, 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 the
Security Insurer and any Person claiming by, through or under the Security
Insurer.
5
(b) On the Trustee Termination Date, the rights, remedies, powers,
duties, authority and obligations, if any, conferred upon the Indenture Trustee
pursuant to this Security Agreement in respect of the Collateral shall terminate
and be of no further force and effect and all such rights, remedies, powers,
duties, authority and obligations of the Indenture Trustee with respect to such
Collateral shall be automatically released; PROVIDED, that any indemnity
provided to the Indenture Trustee herein shall survive such Trustee Termination
Date. If the Indenture Trustee is acting as Controlling Party on the related
Trustee Termination Date, the Indenture Trustee agrees, at the expense of OFL,
to execute and deliver such instruments as OFL may reasonably request to
effectuate such release, and any such instruments so executed and delivered
shall be fully binding on the Indenture Trustee.
(c) On the Final Termination Date, the rights, remedies, powers,
duties, authority and obligations conferred upon the Collateral Agent and each
Secured Party pursuant to this Security Agreement 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 shall be automatically released. On the Final Termination Date, the
Collateral Agent and each Secured Party agrees, at the expense of OFL, to
execute such instruments of release, in recordable form if necessary, in favor
of the Seller or OFL as the Seller or OFL may reasonably request, to deliver any
Collateral in its possession to the Issuer, and to otherwise release the lien of
this Security Agreement and release and deliver to the Issuer the Collateral.
(d) To the extent required of the Issuer and its assignees by the
terms of any Transaction Document and permitted by the terms hereof, each of the
Collateral Agent and the Controlling Party shall, and otherwise upon the prior
written instructions of an Authorized Officer of the Controlling Party, the
Collateral Agent shall, at the expense of OFL take (in each case) such steps as
may be necessary, or as the Issuer, in a manner consistent with the Transaction
Documents, may reasonably request, to release the interests of the Secured
Parties in the Collateral, including but not limited to redelivering and
reassigning to the Issuer any releases necessary to permit the Issuer to release
its interest in the Collateral in accordance with the terms thereof and of the
Repurchase Agreement.
ARTICLE III
THE COLLATERAL AGENT
Section 3.1. 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, and Norwest Bank
Minnesota, National Association hereby accepts such appointment and agrees to
act as
6
Collateral Agent with respect to the Collateral for the Secured Parties, to
maintain custody and possession of the Collateral (except as otherwise
provided hereunder and under the Custodian Agreement) and to perform the
other duties of the Collateral Agent in accordance with the provisions of
this Security 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 and under the other Transaction
Documents, as the Controlling Party may direct and as are specifically
authorized to be exercised by the Collateral Agent by the terms hereof or by
the terms of any Transaction Document, 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 Security
Agreement promptly following receipt of such written instructions; PROVIDED,
that the Collateral Agent shall not act in accordance with any instructions
(i) which are not authorized by, or are in violation of the provisions of,
this Security Agreement or any Transaction Document, (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 or under any Transaction Document, except
where this Security Agreement provides that the Collateral Agent is permitted
to act only following and in accordance with such instructions.
Section 3.2. PERFORMANCE OF DUTIES. The Collateral Agent shall have
no duties or responsibilities except those expressly set forth in this Security
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 Security
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 3.3. 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
Issuer, the Seller or OFL of this Security Agreement or any of the Collateral
(or any part thereof). Notwithstanding any term or provision of this Security
Agreement, the Collateral Agent shall incur no liability to the Seller, OFL, the
Issuer 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 shall incur no liability to
the Seller, OFL, the Issuer or the Secured Parties except for negligence or
willful misconduct in carrying out its duties. Subject to Section 3.4, the
Collateral Agent shall be protected
7
and shall incur no liability to any such party in relying upon 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 Security 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 3.4. RELIANCE UPON DOCUMENTS. In the absence of bad faith or
negligence on its part, the Collateral Agent shall be entitled to rely on any
communication, instrument, paper or other document reasonably believed by it to
be genuine and correct and to have been signed or sent by the proper Person or
Persons and shall have no liability in acting, or omitting to act, where such
action or omission to act is in reasonable reliance upon any statement or
opinion contained in any such document or instrument.
Section 3.5. 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.
8
(b) RESIGNATION. The Collateral Agent and any successor Collateral
Agent may resign upon not less than 60 days' prior written notice of such
resignation by registered or certified mail to the other Secured Parties and the
Seller; PROVIDED, that such resignation shall take effect only upon the date
that 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 and (ii) delivery of the Collateral to
such successor to be held in accordance with the procedures specified in this
Agreement and the Custodian Agreement. 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
become 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
Parties 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 that 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 the Servicing Agreement and (iii) receipt by the
Controlling Party of an Opinion of Counsel to the effect described in Section
4.5.
(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 the Servicing Agreement, 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 any Secured Party or
the Seller, execute and deliver an instrument transferring to such
9
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 or such Secured
Party. 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.
Section 3.6. INDEMNIFICATION. 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
OFL under this Section shall survive the termination of this Agreement and the
resignation or removal of the Collateral Agent. The Collateral Agent covenants
not to assert any Lien or to take any other action in respect of the Collateral
to enforce its rights to indemnification hereunder until the Final Termination
Date.
Section 3.7. 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 Security 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.
10
Section 3.8. 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 Security 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 Security 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 Security Agreement and such other
Transaction Documents.
(d) VALID AND BINDING AGREEMENT. The Collateral Agent has duly
executed and delivered this Security Agreement and each other Transaction
Document to which it is a party, and each of this Security 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 3.9. WAIVER OF SETOFFS. The Collateral Agent hereby
expressly waives any and all rights of setoff that the Collateral Agent may
otherwise at any time have under applicable law with respect to any Secured
Account and agrees that amounts in the Secured Accounts shall at all times be
held and applied solely in accordance with the provisions hereof and of the
Transaction Documents.
Section 3.10. CONTROL BY THE CONTROLLING PARTY. The Collateral Agent
shall comply with notices and instructions given by the Issuer only if
accompanied by the written consent of the Controlling Party, except that if any
Amortization Event 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 Issuer.
11
ARTICLE IV
COVENANTS OF THE ISSUER
Section 4.1. PRESERVATION OF COLLATERAL. Subject to the rights,
powers and authorities granted to the Collateral Agent and the Controlling Party
in this Security Agreement, the Issuer 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 Issuer 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
Issuer 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 4.2. NOTICES. In the event that the Issuer acquires
knowledge of the occurrence and continuance of any Amortization Event or of any
event of default or like event, howsoever described or called, under any of the
Transaction Documents, the Issuer shall immediately give notice thereof to the
Collateral Agent and each Secured Party.
Section 4.3. WAIVER OF STAY OR EXTENSION LAWS; MARSHALLING OF ASSETS.
The Issuer 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 Security Agreement or any
absolute sale of the Collateral or any part thereof, or the possession thereof
by any purchaser at any sale under Article VI of this Security Agreement; and
the Issuer, 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
12
fullest extent permitted by applicable law, all right to have the Collateral
marshalled upon any foreclosure or other disposition thereof.
Section 4.4. NONINTERFERENCE, ETC. The Issuer 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 4.5. ISSUER CHANGES.
(a) CHANGE IN NAME, STRUCTURE, ETC. The Issuer shall not change
its name, identity or corporate structure unless it shall have given each
Secured Party and the Collateral Agent at least 30 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 either (a) stating that, in the opinion of such counsel,
such action has been taken with respect to the execution and filing of any
amendments to previously recorded 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 and purchasers from the Issuer 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.
(b) RELOCATION OF THE ISSUER. The Issuer shall not change its
principal executive office unless it gives each Secured Party and the Collateral
Agent at least 30 days' prior written notice of any relocation of its principal
executive office. If the Issuer relocates its principal executive office or
principal place of business from 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, the Issuer 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
13
other actions as may be specified in such opinion, the security interests in
the Collateral shall remain, after such relocation, valid and perfected.
ARTICLE V
CONTROLLING PARTY; INTERCREDITOR PROVISIONS
Section 5.1. APPOINTMENT OF CONTROLLING PARTY. From and after the
Closing Date until the Insurer Termination Date, the Security Insurer shall be
the Controlling Party and shall be entitled to exercise all the rights given the
Controlling Party hereunder. From and after the Insurer Termination Date until
the Trustee Termination Date, the Indenture Trustee hereby agrees that the Agent
shall be the Controlling Party. Notwithstanding the foregoing, in the event
that an Insurer Default shall have occurred and be continuing, the Agent shall
be the Controlling Party until the Trustee Termination Date. If prior to an
Insurer Termination Date the Agent shall have become the Controlling Party as a
result of the occurrence of an Insurer Default and either such Insurer Default
is cured or for any other reason ceases to exist or the Trustee Termination Date
occurs, then upon such cure or other cessation or on such Trustee Termination
Date, as the case may be, the Security Insurer shall, upon notice thereof being
duly given to the Collateral Agent, again be the Controlling Party.
Section 5.2. CONTROLLING PARTY'S AUTHORITY.
(a) Each of the Issuer, OFL, the Seller and the Secured Parties hereby
irrevocably appoints the Controlling Party, and any successor to the Controlling
Party appointed pursuant to Section 5.1, its true and lawful attorney, with full
power of substitution, in the name of the Issuer, OFL, the Seller, the Secured
Parties or otherwise, but at the expense of the Seller, to the extent permitted
by law to exercise in its sole and absolute discretion, at any time and from
time to time while any Amortization Event has occurred and is continuing, any or
all of the following powers with respect to all or any of the Collateral:
(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, securitize, transfer, assign or otherwise
deal with the same or the proceeds thereof as fully and effectively as if the
Collateral Agent were the absolute owner thereof, and (iv) to extend the time
of payment of any or all thereof and to make any allowance or other
adjustments with respect thereto; PROVIDED, that the foregoing powers and
rights shall be exercised in accordance with the provisions of Article VI.
(b) Each Secured Party hereby irrevocably and unconditionally
constitutes and appoints the Controlling Party,
14
and any successor to the Controlling Party appointed pursuant to Section 5.1
from time to time, as the true and lawful attorney-in-fact of such Secured
Party for so long as such Secured Party is a 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 Security Agreement that such Secured Party
could or might do or which may be necessary, desirable or convenient in the
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, and the enforcement of the rights of the
Secured Parties hereunder, on behalf of and for the benefit of the
Controlling Party and such Non-Controlling Party, as their interests may
appear.
Section 5.3. RIGHTS OF SECURED PARTIES. The Non-Controlling Parties
at any time expressly agree that they shall not assert any right that they 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 continuation of any Amortization Event or any
non-performance by OFL, the Seller or the Issuer 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 5.4. DEGREE OF CARE.
(a) CONTROLLING PARTY. Notwithstanding any term or provision of this
Security Agreement, the Controlling Party shall incur no liability to OFL, the
Seller or the Issuer 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 Parties except for a breach of the
terms of this Security Agreement or for gross negligence, bad faith or willful
misconduct in carrying out its duties to the Non-Controlling Parties. The
Controlling Party shall be protected and shall incur no liability to any such
party in relying upon the accuracy, acting in reliance upon the contents and
assuming the genuineness of any notice, demand, certificate, signature,
instrument or other document believed by the Controlling Party to be genuine and
to have been duly executed by the appropriate signatory, and (absent manifest
error or actual knowledge to the contrary) the Controlling Party shall not be
required to make any independent investigation with respect thereto. The
Controlling Party shall, at all times, be free independently to establish to its
reasonable satisfaction the existence or nonexistence, as the case may be, of
any fact
15
the existence or nonexistence of which shall be a condition to the exercise
or enforcement of any right or remedy under this Security Agreement or any of
the Transaction Documents.
(b) THE NON-CONTROLLING PARTIES. The Non-Controlling Parties shall
not be liable to the Seller, OFL or the Issuer 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 VI
REMEDIES UPON DEFAULT
Section 6.1. REMEDIES UPON A DEFAULT.
(a) If an Amortization Event 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 Secured
Obligations (including, but not limited to, foreclosure upon the Collateral
and sale or securitization of 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. In addition to all other rights and remedies granted
to the Collateral Agent for the benefit of the Secured Parties by this
Security Agreement, the other Transaction Documents, the UCC and other
applicable law, rules, or regulations, the Collateral Agent may with the
consent of the Controlling Party, and shall upon the request of the
Controlling Party, upon the occurrence and during the continuance of any such
Amortization Event, exercise any one or more of the following rights and
remedies: (i) foreclose upon or otherwise enforce the security interests in
any or all Collateral in any manner permitted by applicable law, rules, or
regulations or in this Security Agreement; (ii) notify any or all Obligors to
make payments with respect to Receivables directly to the Collateral Agent;
(iii) sell or otherwise dispose of any or all Collateral at one or more
public or private sales, for cash or credit or future delivery, on such terms
and in such manner as the Controlling Party may determine; (iv) require OFL,
the Seller or the Issuer to assemble the Collateral and make it available to
the Collateral Agent at a place to be designated by the Collateral Agent;
(v) enter onto any property where any Collateral is located and take possession
thereof with or without judicial process; and (vi) enforce any rights of the
Issuer under any Receivable or other agreement to the extent the Controlling
Party deems appropriate. In furtherance of the Collateral Agent's rights
hereunder, each of OFL, the Seller and the Issuer hereby grants to the
Collateral Agent an irrevocable, non-exclusive license (exercisable without
royalty or other payment by the Collateral Agent) to use, license or
sublicense any patent, trademark, tradename, copyright or other intellectual
16
property in which the Issuer now or hereafter has any right, title or
interest, together with the right of access to all media in which any of the
foregoing may be recorded or stored. Each of OFL, the Seller and the Issuer
hereby agrees that ten (10) days notice of any intended sale or disposition
of any Collateral is reasonable. 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
Collateral, except to the extent provided herein and in the Servicing
Agreement or other Transaction Documents.
(b) In the event of any sale, collection, conversion or other
disposition into cash of the Collateral, or any part thereof, after deducting
any actual costs and expenses incurred in connection with any such disposition,
the Collateral Agent shall deposit the proceeds thereof into the Collection
Account for distribution on the next succeeding Distribution Date in accordance
with the priorities set forth in Section 3.6 of the Servicing Agreement.
(c) The Controlling Party and the Collateral Agent shall be entitled
to obtain from OFL, the Seller and the Issuer all records and documentation in
the possession of OFL, the Seller or the Issuer, as the case may be, pertaining
to any Collateral. Upon consummation of any sale pursuant to this Section 6.1,
the Controlling Party, or the Collateral Agent acting on behalf of and at the
direction of the Controlling Party, shall have the right to assign, transfer,
endorse and deliver to the purchaser or purchasers thereof (which may include
the Security Insurer), free and clear of any Lien, the Collateral, or any
portion thereof or any interest therein, so sold. Each purchaser at any such
sale shall hold the property purchased by it absolutely free and clear from any
claim or right on the part of the Secured Parties, OFL, the Seller or the Issuer
and OFL, the Seller and the Issuer hereby irrevocably waive all rights of
redemption, stay, marshalling of assets or appraisal that either of them now has
or may at any time in the future have under applicable law or statute now
existing or hereafter enacted.
(d) In addition to the remedies granted in this Agreement and the
other Transaction Documents, if an Amortization Event 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 the amounts then
due and thereafter to become due under this Agreement and any of the other
Transaction Documents (including but not limited to, all 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,
including the exercise of the following powers with respect to the Collateral:
(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
17
defend any action or proceeding with respect thereto, (iii) to sell,
securitize, 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 adjustment with respect thereto. All
proceeds of any portion of the Collateral liquidated pursuant to this
Section 6.1 shall be applied as set forth in Subsection (b) above.
(e) The Collateral Agent and the Controlling Party, as the case may
be, may exercise the powers and rights granted by this Section 6.1, without
notice or demand to the Indenture Trustee, OFL, the Seller or the Issuer except
as provided in (a) above.
Section 6.2. RESTORATION OF RIGHTS AND REMEDIES. If the Collateral
Agent has instituted any proceeding to enforce any right or remedy under this
Agreement, and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to such Collateral Agent, then and in
every such case the Seller, the Collateral Agent and each of the Secured Parties
shall, subject to any determination in such proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Secured Parties shall continue as though no such proceeding
had been instituted.
Section 6.3. NO REMEDY EXCLUSIVE. No right or remedy herein
conferred upon or reserved to the Collateral Agent, the Controlling Party or any
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 and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised 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 VII
MISCELLANEOUS
Section 7.1. 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
Security Agreement or to confirm or perfect any transaction described or
contemplated herein.
18
Section 7.2. WAIVER. Any waiver by any party of any provision of
this Security 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 Security 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 7.3. AMENDMENTS; WAIVERS. No amendment, modification, waiver
or supplement to this Security Agreement or any provision of this Security
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 the Notes; PROVIDED, HOWEVER, that, for so long as
the Security Insurer shall be the Controlling Party, amendments, modifications,
waivers or supplements hereto or any requirement hereunder to deposit or retain
any amounts in the Secured Accounts shall be effective if made or consented to
in writing by the Security Insurer, the Seller, OFL, the Issuer, the Agent, the
Indenture Trustee and the Collateral Agent (the consent of which shall not be
withheld or delayed with respect to any amendment that has been consented to by
the Security Insurer and that does not adversely affect the Collateral Agent)
but shall in no circumstances require the consent of the Noteholders.
Section 7.4. SEVERABILITY. In the event that any provision of this
Security Agreement or the application thereof to any party hereto or to any
circumstance or in any jurisdiction governing this Security 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 Security
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 Security
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 Security Agreement limiting such remedies).
19
Section 7.5. NONPETITION COVENANT. Notwithstanding any prior
termination of this Security Agreement, each of the parties hereto agrees that
it shall not, prior to one year and one day after the Final Termination Date,
acquiesce, petition or otherwise invoke or cause the Seller or the Issuer 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 or the
Issuer 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 or the Issuer or all or any part of its
property or assets or ordering the winding up or liquidation of the affairs of
the Seller or the Issuer. The parties agree that damages will be an inadequate
remedy for breach of this covenant and that this covenant may be specifically
enforced.
Section 7.6. NOTICES. All notices, demands, certificates, requests
and communications hereunder ("notices") shall be in writing and shall be
effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an Authorized Officer of the party to which sent, or
(d) on the date transmitted by legible telecopier transmission with a
confirmation of receipt, in all cases addressed to the recipient as follows:
(i) If to OFL:
Olympic Financial Ltd.
0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Treasurer
Telecopier No.: (000) 000-0000
(ii) If to the Seller:
Olympic Receivables Finance Corp.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Treasurer
Telecopier No.: (000) 000-0000
20
(iii) If to the Security Insurer:
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 the
Security Insurer refers to an Amortization Event or a claim on
the Policy or in which failure on the part of the Security
Insurer 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 Indenture Trustee:
Norwest Bank Minnesota, National Association
Xxxxx 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
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Services -
Asset-Backed Administration
Telecopier No.: (000) 000-0000
(vi) If to Xxxxx'x:
Xxxxx'x Investor's Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
(vii) If to Standard & Poor's:
Standard & Poor's Ratings Group
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
21
(viii) If to the Issuer:
Arcadia Receivables Conduit Corp.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
(ix) If to the Agent:
Bank of America National Trust and Savings Association
Asset Securitization Group
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
A copy of each notice given hereunder to any party hereto shall also be given to
(without duplication) the Security Insurer, the Seller, the Issuer, the Agent,
the Indenture 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 7.7. TERM OF THIS SECURITY AGREEMENT. This Security
Agreement shall continue in effect until the Final Termination Date. On such
Final Termination Date, this Security 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 Issuer, the Seller or OFL in respect of the Secured Obligations or otherwise
under this Agreement or any of the Transaction Documents, shall be released to
and in favor of the Issuer; PROVIDED, that the provisions of Sections 3.6, 3.7
and 7.5 shall survive any termination of this Security Agreement and the release
of any Collateral upon such termination.
Section 7.8. ASSIGNMENTS; THIRD-PARTY RIGHTS; REINSURANCE.
(a) This Security 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. None of the Issuer, the Seller nor OFL
may assign this Security Agreement, or delegate any of its duties hereunder,
without the prior written consent of the Controlling Party.
22
(b) The Security Insurer shall have the right (unless an Insurer
Default shall have occurred and be continuing) to give participations in its
rights under this Security Agreement and to enter into contracts of reinsurance
with respect to the Note Policy and each such participant or reinsurer shall be
entitled to the benefit of any representation, warranty, covenant and obligation
of each party (other than the Security Insurer) hereunder as if such participant
or reinsurer was a party hereto and, subject only to such agreement regarding
such reinsurance or participation, shall have the right to enforce the
obligations of each such other party directly hereunder; PROVIDED, HOWEVER, that
no such reinsurance or participation agreement or arrangement shall relieve the
Security Insurer of its obligations hereunder, under the Transaction Documents
to which it is a party or under the Note Policy. In addition, nothing contained
herein shall restrict the Security Insurer from assigning to any Person pursuant
to any liquidity facility or credit facility any rights of the Security Insurer
under this Security Agreement or with respect to any real or personal property
or other interests pledged to the Security Insurer, or in which the Security
Insurer 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 the Security Insurer hereunder.
Section 7.9. 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
and absolute discretion.
SECTION 7.10. 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 SECURITY 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 WAVIER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO
THIS SECURITY AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS TO WHICH IT IS A
PARTY, BY AMONG OTHER THINGS, THIS WAIVER.
SECTION 7.11. 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.
23
Section 7.12. 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 sate 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 Security Agreement, the other Transaction Documents or the
transactions contemplated hereunder or thereunder or for recognition or
enforcement of any judgment and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such suit or action or
proceeding may be heard or determined in such New York State court or, to the
extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. To the extent permitted by applicable law,
each of the parties hereby waives and agrees not to assert by way of motion, as
a defense or otherwise in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such courts, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Security 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, the Seller and the Issuer
hereby irrevocably appoints and designates CT Corporation System, 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 as its true and lawful attorney and duly authorized
agent for acceptance of service of legal process. Each of OFL, the Seller and
the Issuer agrees that service of such process upon such Person shall constitute
personal service of such process upon it. Nothing contained in this Security
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, the Seller, the Issuer or their
respective property in the courts of any jurisdiction.
Section 7.13. LIMITATION OF LIABILITY. It is expressly understood
and agreed by the parties hereto that Norwest Bank Minnesota, National
Association is executing this Security Agreement not in its individual capacity
but solely in its capacity as indenture trustee pursuant to the Indenture and as
Collateral Agent hereunder.
Section 7.14. DETERMINATION OF ADVERSE EFFECT. Any determination of
an adverse effect on the interest of the Secured Parties or the Noteholders
shall be made without consideration of the availability of funds under the Note
Policy.
Section 7.15. COUNTERPARTS. This Security 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.
24
Section 7.16. 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 Security Agreement and shall not affect its
construction or interpretation.
Section 7.17. LIMITED RECOURSE. Notwithstanding anything to the
contrary contained herein, the obligations of the Issuer hereunder shall not be
recourse to the Issuer (or any person or organization acting on behalf of the
Issuer or any affiliate, employee, incorporator, stockholder, officer or
director of the Issuer), other than to the Receivables and the other Collateral
and the proceeds thereof as provided in this Security Agreement, the Repurchase
Agreement and the Servicing Agreement. Each of the parties hereto hereby agree
that to the extent such funds are insufficient or assets are unavailable to pay
any amounts owing to it from the other party pursuant to this Security
Agreement, it shall not constitute a claim against the other party.
Section 7.18. RESPECTIVE RIGHTS OF THE ISSUER AND THE SECURED PARTIES
IN THE COLLATERAL. The Issuer hereby acknowledges and agrees that its interest
in the Collateral under the Repurchase Agreement is subject and subordinate in
all respects to its pledge of the Collateral to the Secured Parties under this
Security Agreement and that the Collateral Agent holds the Collateral first for
the Secured Parties hereunder and second on behalf of the Issuer in respect of
its interest in the Collateral under the Repurchase Agreement.
25
IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement as of the date set forth on the first page hereof.
OLYMPIC FINANCIAL LTD.
By: /s/ ILLEGIBLE
------------------------------------
Name:
Title:
OLYMPIC RECEIVABLES FINANCE CORP.
By: /s/ ILLEGIBLE
------------------------------------
Name:
Title:
ARCADIA RECEIVABLES CONDUIT CORP.
By: /s/ ILLEGIBLE
------------------------------------
Name:
Title:
FINANCIAL SECURITY ASSURANCE INC.
By: /s/ ILLEGIBLE
------------------------------------
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ Xxxxxx X. Wraablert
------------------------------------
Name:
Title:
[Signature Page to Security Agreement]
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Collateral Agent
By: /s/ Xxxxxx X. Wraablert
--------------------------
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Xxxx X. Xxxx
--------------------------
Name: Xxxx X. Xxxx
Title: Attorney-in-Fact
