SPREAD ACCOUNT AGREEMENT
dated as of March 25, 1993,
as amended and restated
as of July 21, 1998
among
ARCADIA FINANCIAL LTD.,
ARCADIA RECEIVABLES FINANCE CORP.,
FINANCIAL SECURITY ASSURANCE INC.
THE CHASE MANHATTAN BANK
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Rules of Interpretation . . . . . . . . . . . . . . . . . . .15
ARTICLE II
CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL
Section 2.01. Series 1993-A Credit Enhancement Fee. . . . . . . . . . . . .15
Section 2.02. Series Supplements. . . . . . . . . . . . . . . . . . . . . .15
Section 2.03. Grant of Security Interest by OFL and the Seller . . . . . .16
Section 2.04. Priority. . . . . . . . . . . . . . . . . . . . . . . . . . .17
Section 2.05. Seller and OFL Remain Liable. . . . . . . . . . . . . . . . .17
Section 2.06. Maintenance of Collateral.. . . . . . . . . . . . . . . . . .17
Section 2.07. Termination and Release of Rights.. . . . . . . . . . . . . .18
Section 2.08. Non-Recourse Obligations of Seller. . . . . . . . . . . . . .19
Section 2.09. Program Spread Account and Tag Accounts . . . . . . . . . . .19
ARTICLE III
SPREAD ACCOUNTS
Section 3.01. Establishment of Spread Accounts; Initial Deposits into
Spread Accounts . . . . . . . . . . . . . . . . . . . . . . .21
Section 3.02. Investments.. . . . . . . . . . . . . . . . . . . . . . . . .22
Section 3.03. Distributions: Priority of Payments.. . . . . . . . . . . . .24
Section 3.04. General Provisions Regarding Spread Accounts. . . . . . . . .27
Section 3.05. Reports by the Collateral Agent . . . . . . . . . . . . . . .29
ARTICLE IV
THE COLLATERAL AGENT
Section 4.01. Appointment and Powers. . . . . . . . . . . . . . . . . . . .29
Section 4.02. Performance of Duties . . . . . . . . . . . . . . . . . . . .30
Section 4.03. Limitation on Liability . . . . . . . . . . . . . . . . . . .30
Section 4.04. Reliance upon Documents . . . . . . . . . . . . . . . . . . .31
Section 4.05. Successor Collateral Agent. . . . . . . . . . . . . . . . . .31
Section 4.06. Indemnification . . . . . . . . . . . . . . . . . . . . . . .32
Section 4.07. Compensation and Reimbursement. . . . . . . . . . . . . . . .33
Section 4.08. Representations and Warranties of the Collateral Agent. . . .33
Section 4.09. Waiver of Setoffs . . . . . . . . . . . . . . . . . . . . . .34
Section 4.10. Control by the Controlling Party. . . . . . . . . . . . . . .34
ARTICLE V
COVENANTS OF THE SELLER
Section 5.01. Preservation of Collateral. . . . . . . . . . . . . . . . . .34
Section 5.02. Opinions as to Collateral . . . . . . . . . . . . . . . . . .34
Section 5.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .35
Section 5.04. Waiver of Stay or Extension Laws; Marshalling of Assets . . .35
Section 5.05. Noninterference, etc. . . . . . . . . . . . . . . . . . . . .35
Section 5.06. Seller Changes. . . . . . . . . . . . . . . . . . . . . . . .35
ARTICLE VI
CONTROLLING PARTY; INTERCREDITOR PROVISIONS
Section 6.01. Appointment of Controlling Party. . . . . . . . . . . . . . .36
Section 6.02. Controlling Party's Authority.. . . . . . . . . . . . . . . .36
Section 6.03. Rights of Secured Parties . . . . . . . . . . . . . . . . . .38
Section 6.04. Degree of Care. . . . . . . . . . . . . . . . . . . . . . . .39
ARTICLE VII
REMEDIES UPON DEFAULT
Section 7.01. Remedies upon a Default . . . . . . . . . . . . . . . . . . .39
Section 7.02. Waiver of Default . . . . . . . . . . . . . . . . . . . . . .39
Section 7.03. Restoration of Rights and Remedies. . . . . . . . . . . . . .40
Section 7.04. No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . .40
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Further Assurances. . . . . . . . . . . . . . . . . . . . . .40
Section 8.02. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Section 8.03. Amendments; Waivers . . . . . . . . . . . . . . . . . . . . .40
Section 8.04. Severability. . . . . . . . . . . . . . . . . . . . . . . . .41
Section 8.05. Nonpetition Covenant. . . . . . . . . . . . . . . . . . . . .41
Section 8.06. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Section 8.07. Term of this Agreement. . . . . . . . . . . . . . . . . . . .43
Section 8.08. Assignments: Third-Party Rights; Reinsurance.. . . . . . . .43
Section 8.09. Consent of Controlling Party. . . . . . . . . . . . . . . . .44
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Section 8.10. Trial by Jury Waived. . . . . . . . . . . . . . . . . . . . .44
Section 8.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . .44
Section 8.12. Consents to Jurisdiction. . . . . . . . . . . . . . . . . . .45
Section 8.13. Limitation of Liability . . . . . . . . . . . . . . . . . . .45
Section 8.14. Determination of Adverse Effect . . . . . . . . . . . . . . .45
Section 8.15. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .45
Section 8.16. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . .45
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SPREAD ACCOUNT AGREEMENT, dated as of March 25, 1993, as amended and restated
as of July __, 1998 (the "Agreement"), by and among ARCADIA FINANCIAL LTD., a
Minnesota corporation ("Arcadia Financial"), ARCADIA RECEIVABLES FINANCE
CORP., a Delaware corporation (the "Seller"), FINANCIAL SECURITY ASSURANCE
INC., a New York stock insurance company ("Financial Security"), NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION ("Norwest"), a national banking association
in its capacities as Trustee under each Pooling and Servicing Agreement
and/or as Trustee under each Indenture with respect to those Series specified
in the related Series Supplement (as defined below), THE CHASE MANHATTAN BANK
("Chase"), as Trustee under each Indenture with respect to those Series
specified in the related Series Supplement, each in such respective
capacities as agent for the Certificateholders and/or Noteholders with
respect to the related Series (Norwest or Chase, as Trustee as indicated in
the related Sales and Servicing Agreement or the related Series Supplement,
as the case may be, the "Trustee") and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Collateral Agent (as defined below).
RECITALS
1. Olympic Automobile Receivables Trust, 1993-A (the "Series
1993-A Trust") was formed pursuant to a Pooling and Servicing Agreement,
dated as of March 1, 1993 (the "Series 1993-A Pooling and Servicing
Agreement"), among OFL, as Servicer, the Seller, the Trustee and the Backup
Servicer.
2. Pursuant to Pooling and Servicing Agreements or Sale and
Servicing Agreements, the Seller from time to time sells all of its right,
title and interest in and to Receivables and certain other Trust Property.
3. The Seller has requested that Financial Security issue
Policies to guarantee payment of the Guaranteed Distributions or Scheduled
Payments (as defined in the relevant Policy) on each Distribution Date in
respect of asset-backed securities backed by such Receivables and Other Trust
Property.
4. In partial consideration of the issuance of the Policies, the
Seller has agreed that Financial Security shall have certain rights as
Controlling Party, to the extent set forth herein.
5. The Seller is a wholly-owned special purpose subsidiary of
OFL. Certain of the purchasers of Receivables and Other Trust Property have
agreed to pay a Credit Enhancement Fee to the Seller in consideration of the
obligations of the Seller and OFL pursuant hereto and in consideration of
the obligations of OFL pursuant to the Insurance Agreements (such
obligations forming part of the Insurer Secured Obligations referred to
herein). The Insurer Secured Obligations form part of the consideration to
Financial Security for its issuance of the Policies.
6. In order to secure the performance of the Secured Obligations,
to further effect and enforce the subordination provisions to which the
Credit Enhancement Fee is subject,
and in consideration of the receipt of the Credit Enhancement Fee, OFL and
the Seller agreed to pledge the Collateral as Collateral to the Collateral
Agent for the benefit of Financial Security and for the benefit of the
Trustees on behalf of the Trusts, upon the terms and conditions set forth
herein.
7. In connection with the issuance of Policies subsequent to the
Policy issued with respect to the Series 1993-A Trust, it is contemplated
that Financial Security will obtain certain Controlling Party rights with
respect to the related Series, and that, in connection with each such
additional Series, the parties hereto have entered into or will enter into a
Series Supplement hereto pursuant to which the Seller has pledged or will
pledge additional Collateral pursuant to the terms hereof and such Series
Supplement.
8. The Seller has entered into a Amended and Restated Sale and
Servicing Agreement dated as of July __, 1998 with Arcadia Automobile
Receivables Warehouse Trust., a Delaware business trust (the "Issuer"),
Arcadia Receivables Conduit Corp. (the "Original Issuer"), Arcadia Financial,
Bank of America National Trust and Savings Association, as Administrative
Agent and RCC Agent, Xxxxxx Guaranty Trust Company of New York, as DFC Agent
and Norwest Bank Minnesota, National Association, as Backup Servicer,
Collateral Agent and Indenture Trustee (the "Warehousing Series Sale and
Servicing Agreement") pursuant to which the Seller has sold or will sell all
of its right, title and interest in certain Receivables, and that the Issuer
will issue one or more classes or tranches of Warehousing Notes pursuant to
an Amended and Restated Indenture among the Original Issuer, the Issuer, the
Indenture Trustee and the Collateral Agent, and that Financial Security in
its discretion may issue one or more Policies with respect to certain
scheduled payments on the corresponding Notes.
9. The parties have previously executed, amended and restated
this Agreement, and now wish to further amend and restate this Agreement to
supplement certain provisions therein in order to reflect the intent of the
parties.
AGREEMENTS
In consideration of the premises, and for other good and valuable
consideration, the adequacy, receipt and sufficiency of which are hereby
acknowledged the parties hereto agree as follows:
Article I
DEFINITIONS
Section 1.01. DEFINITIONS. All terms defined in the document
entitled " OFL Grantor Trusts Standard Terms and Conditions of Agreement
Effective March 1, 1993" (the "Standard Terms and Conditions") shall have the
same meaning with respect to each Series in this Agreement. If the related
Series was issued pursuant to a Pooling and Servicing Agreement, all terms
defined in Section 1.01 of such Pooling and Servicing Agreement shall have
the same
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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 Warehousing Series
Sale and Servicing Agreement, all terms defined in the Warehousing Series
Sale and Servicing Agreement shall have the same meaning with respect to the
related Series in this Agreement. If a term is defined herein with respect
to one or more Series, if applicable, such term shall be defined with respect
to any other Series in the Series Supplement related thereto. The following
terms shall have the following respective meanings:
"AUTHORIZED OFFICER" means, (i) with respect to Financial Security,
the Chairman of the Board, the President, the Executive Vice President or any
Managing Director of Financial Security, (ii) with respect to the Trustee or
the Collateral Agent, any Vice President or Trust Officer thereof, (iii) with
respect to OFL, the President or any Vice President thereof, and (iv) with
respect to the Seller, the President or any Vice President thereof.
"AVERAGE DELINQUENCY RATIO" means, with respect to any Series
(other than the Warehousing Series) and any Determination Date, the
arithmetic average of the Delinquency Ratios for such Determination Date and
the two immediately preceding Determination Dates.
"CAPTURE EVENT" means the occurrence of an "Event of Default," as
defined in the Indenture dated as of March 12, 1997 between Arcadia Financial
(f/k/a Olympic Financial Ltd.) and Norwest Bank Minnesota, National
Association, as amended or supplemented (including that First Supplemental
Indenture dated as of March 12, 1997 and that Second Supplemental Indenture
dated as of October 8, 1997), relating to $375,000,000 principal amount of
Arcadia Financial's currently outstanding 11 1/2% Senior Notes due 2007, with
respect to which a permanent waiver has not been effected in accordance with
the terms of such agreement.
"COLLATERAL" means the Series 1993-A Collateral, any property
pledged pursuant to Section 2.09(d), and, with respect to any Series, all
collateral delivered hereunder with respect to each of the Series, as
specified in the related Series Supplement.
"COLLATERAL AGENT" means, initially, Norwest Bank Minnesota,
National Association, in its capacity as collateral agent on behalf of the
Secured Parties, including its successors in interest, until a successor
Person shall have become the Collateral Agent pursuant to Section 4.05
hereof, and thereafter "Collateral Agent" shall mean such successor Person.
"COLLECTION ACCOUNT SHORTFALL" means (A), with respect to any
Series created pursuant to a Pooling and Servicing Agreement, any
Distribution Date, and a time of determination, the excess, if any, of the
amount required to be distributed on such Distribution Date pursuant to
subsections (i) through (vi) of Section 4.6(a) of the Standard Terms and
Conditions over the amount on deposit in and available for distribution (or,
for the purposes of Section 3.03(a), calculated on a pro forma basis to be on
deposit in and available for distribution) on such Distribution Date from the
Collection Account related to such Series, and (B) with respect to any Series
created pursuant to a Trust Agreement, Sale and Servicing Agreement and
3
Indenture, or with respect to any Series issued by the Issuer, the meaning
assigned in the related Series Supplement.
"CONTROLLING PARTY" means with respect to a Series, at any time,
the Person designated as the Controlling Party at such time pursuant to
Section 6.01 hereof.
"CRAM DOWN LOSS" means, if a court of appropriate jurisdiction in
an insolvency proceeding shall have issued an order reducing the Principal
Balance of a Receivable, the amount of such reduction. A "Cram Down Loss"
shall be deemed to have occurred on the date of issuance of such order.
"CUMULATIVE DEFAULT RATE" means, with respect to any Determination
Date and any Series (other than the Warehousing Series), the fraction,
expressed as a percentage, the numerator of which is equal to the sum of (a)
the Principal Balance of all Receivables which became Spread Account
Liquidated Receivables since the Cutoff Date as of the related Accounting
Date plus (b) the Principal Balance of all Receivables with respect to which
all or any portion of a Scheduled Payment has become 91 or more days
delinquent as of the related Accounting Date (not including those Receivables
included in clause (a) above) and the denominator of which is equal to the
sum of (i) the original Aggregate Principal Balance as of the Initial Cutoff
Date plus (ii) the Prefunded Amount as of the Series Closing Date.
"CUMULATIVE NET LOSS RATE" means, with respect to any Determination
Date and any Series (other than the Warehousing Series), the fraction,
expressed as a percentage, the numerator of which is equal to the sum of (a)
Net Losses for such Determination Date plus (b) with respect to Series
1994-A, Series 1994-B, Series 1994-C, Series 1994-D, Series 1995-A, Series
1995-B, Series 1995-C, Series 1995-D, Series 1996-A, Series 1996-B, Series
1996-C, Series 1996-D, Series 1997-A, Series 1997-B, Series 1997-C, Series
1997-D and Series 1998-A, 40%, and with respect to any other Series (other
than the Warehousing Series), 50%, of the Principal Balance of all
Receivables with respect to which all or any portion of a Scheduled Payment
has become 91 or more days delinquent (not including Receivables included
under the definition of Net Losses in clause (a) above) as of the related
Accounting Date and the denominator of which is equal to the sum of (i) the
original Aggregate Principal Balance as of the Initial Cutoff Date plus (ii)
the Prefunded Amount as of the Series Closing Date.
"DEEMED CURED" means, with respect to Series 1994-B, Series 1994-A,
Series 1993-D, Series 1993-C, Series 1993-B or Series 1993-A and each other
Spread Account for which "Deemed Cured" is not defined in the related Series
Supplement, (a) with respect to the occurrence of the events specified in
clause (A)(i) or (ii) of the definition of Trigger Event, as of a
Determination Date that no such event specified in clause (A)(i) or clause
(A)(ii) with respect to such Series shall have occurred as of such
Determination Date or as of any of the two consecutively preceding
Determination Dates, and (b) with respect to the occurrence of the events
specified in clause (A)(iii) or clause (A)(iv) of the definition thereof, as
of the next Determination Date which occurs in a calendar month which is a
multiple of three months succeeding the Closing Date, that no such event
specified in clause (A)(iii) or clause (A)(iv) with respect to such Series
shall have occurred as of such Determination Date.
4
"DEFAULT" means, with respect to any Series, at any time, (i) if
Financial Security is then the Controlling Party with respect to such Series,
any Insurance Agreement Event of Default with respect to such Series, and
(ii) if the Trustee is then the Controlling Party with respect to such
Series, any Servicer Termination Event with respect to such Series.
"DELINQUENCY RATIO" means, with respect to any Determination Date
and any Series (other than the Warehousing Series), the fraction, expressed
as a percentage, the numerator of which is equal to the sum of the Principal
Balances (as of the related Accounting Date) of all Receivables that were
delinquent with respect to all or any portion of a Scheduled Payment more
than 30 days as of the related Accounting Date or that became a Purchased
Receivable as of the related Accounting Date and that were delinquent with
respect to all or any portion of a Scheduled Payment more than 30 days as of
such Accounting Date and the denominator of which is equal to the Aggregate
Principal Balance as of the related Accounting Date.
"DELIVERY" means, when used with respect to Spread Account Eligible
Investments, the actions to be taken with respect to the delivery thereof to
the Collateral Agent and the holding thereof by the Collateral Agent as
follows:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC (other
than certificated securities) and are susceptible of physical delivery,
transfer thereof to the Collateral Agent by physical delivery to the
Collateral Agent, indorsed to, or registered in the name of, the Collateral
Agent or its nominee or indorsed in blank and such additional or alternative
procedures as may hereafter become appropriate to effect the complete
transfer of ownership of any such Eligible Investment to the Collateral Agent
free and clear of any adverse claims, consistent with changes in applicable
law or regulations or the interpretation thereof;
(b) with respect to a "certificated security" (as defined in
Section 8-102(a)(4) of the UCC), transfer thereof:
1. by physical delivery of such certificated security to the
Collateral Agent, provided that if the certificated security is in
registered form, it shall be indorsed to, or registered in the name of, the
Collateral Agent or indorsed in blank;
2. by physical delivery of such certificated security in registered
form to a "securities intermediary" (as defined in Section 8-102(a)(14) of
the UCC) acting on behalf of the Collateral Agent, if the certificated
security has been specially endorsed to the Collateral Agent by an
effective endorsement.
(c) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations, the following procedures,
all in accordance with applicable law, including applicable federal
regulations and Articles 8 and 9 of the UCC: book-entry registration of such
property to an appropriate book-entry account maintained with a Federal
Reserve Bank by a securities
5
intermediary which is also a "depositary" pursuant to applicable federal
regulations and issuance by such securities intermediary of a deposit advice
or other written confirmation of such book-entry registration to the
Collateral Agent of the purchase by the securities intermediary on behalf of
the Collateral Agent of such book-entry security; the making by such
securities intermediary of entries in its books and records identifying such
book-entry security held through the Federal Reserve System pursuant to
Federal book-entry regulations as belonging to the Collateral Agent and
indicating that such securities intermediary holds such book-entry security
solely as agent for the Collateral Agent; and such additional or alternative
procedures as may hereafter become appropriate to effect complete transfer of
ownership of any such Eligible Investments to the Collateral Agent free of
any adverse claims, consistent with changes in applicable law or regulations
or the interpretation thereof;
(d) with respect to an "uncertificated security" (as defined in
Section 8-102(a)(18) of the UCC) and that is not governed by clause (c)
above, transfer thereof:
1. (A) by registration to the Collateral Agent as the registered
owner thereof, on the books and records of the issuer thereof.
(B) another Person (not a securities intermediary) either
becomes the registered owner of the uncertificated security on behalf of the
Collateral Agent, or having become the registered owner acknowledges that it
holds for the Collateral Agent.
2. the issuer thereof has agreed that it will comply with
instructions originated by the Collateral Agent without further consent of
the registered owner thereof.
(e) with respect to a "security entitlement" (as defined in
Section 8-102(a)(17) of the UCC) if a securities intermediary (A) indicates
by book-entry that a "financial asset" (as defined in Section 8-102(a)(9) of
the UCC) has been credited to the Collateral Agent's "securities account" (as
defined in Section 8-501(a) of the UCC), (B) receives a financial asset (as
so defined) from the Collateral Agent or acquires a financial asset for the
Collateral Agent, and in either case, accepts it for credit to the Collateral
Agent's securities account (as so defined), (C) becomes obligated under other
law, regulation or rule to credit a financial asset to the Collateral Agent's
securities account, or (D) has agreed that it will comply with "entitlement
orders" (as defined in Section 8-102(a)(8) of the UCC) originated by the
Collateral Agent without further consent by the "entitlement holder" (as
defined in Section 8-102(a)(7) of the UCC), of a confirmation of the purchase
and the making by such securities intermediary of entries on its books and
records identifying as belonging to the Collateral Agent of (I) a specific
certificated security in the securities intermediary's possession, (II) a
quantity of securities that constitute or are part of a fungible bulk of
certificated securities in the securities intermediary's possession, or (III)
a quantity of securities that constitute or are part of a fungible bulk of
securities shown on the account of the securities intermediary on the books
of another securities intermediary.
(f) in each case of delivery contemplated herein, the Collateral
Agent shall make appropriate notations on its records, and shall cause the
same to be made of the records of its nominees, indicating that securities
are held in trust pursuant to and as provided in this
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Agreement.
"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-1+" by Standard &
Poor's and "P-1" by Moody's and (ii) in either case, such depository
institution or trust company shall have been specifically approved by the
Controlling Party, acting in its discretion, by written notice to the
Collateral Agent.
"FINAL TERMINATION DATE" means, with respect to a Series, the date
that is the later of (i) the Insurer Termination Date with respect to such
Series and (ii) the Trustee Termination Date with respect to such Series.
"FINANCIAL SECURITY DEFAULT" means, with respect to any Series, any
one of the following events shall have occurred and be continuing:
(a) Financial Security shall have failed to make a payment required
under a related Policy;
(b) Financial Security shall have (i) filed a petition or commenced
any case or proceeding under any provision or chapter of the United States
Bankruptcy Code, the New York State Insurance Law or any other similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization, (ii) made a general assignment for the
benefit of its creditors, or (iii) had an order for relief entered against
it under the United States Bankruptcy Code, the New York State Insurance
Law, or any other similar federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation or reorganization which is final
and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent or receiver for Financial Security or for all or
any material portion of its property or (ii) authorizing the taking of
possession by a custodian, trustee, agent or receiver of Financial Security
(or the taking of possession of all or any material portion of the property
of Financial Security).
"INITIAL PRINCIPAL AMOUNT" means $59,222,640.38 with respect to
Series 1993-A.
"INITIAL SPREAD ACCOUNT DEPOSIT" means $2,368,906 for Series 1993-A.
"INITIAL SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to
Series 1993-A and any Distribution Date, an amount equal to the greater of
(i) 7% of the Certificate Balance as of such Distribution Date (after giving
effect to the distribution in respect of principal made on such Distribution
Date) and (ii) the Spread Account Minimum Amount as of such Distribution Date.
7
"INSURANCE AGREEMENT" means, with respect to any Series, the
Insurance and Indemnity Agreement among Financial Security, the Seller, OFL
and such other parties as may be named therein.
"INSURER SECURED OBLIGATIONS" means, with respect to a Series, all
amounts and obligations which OFL, the Seller and such other parties as may
be named therein may at any time owe or be required to perform to or on
behalf of Financial Security (or any agents, accountants or attorneys for
Financial Security) under the Insurance Agreement related to such Series or
under any Transaction Document in respect of such Series, regardless of
whether such amounts are owed or performance is due now or in the future,
whether liquidated or unliquidated, contingent or non-contingent.
"INSURER TERMINATION DATE" means, with respect to any Series, the
date which is the latest of (i) the date of the expiration of all Policies
issued in respect of such Series, (ii) the date on which Financial Security
shall have received payment and performance in full of all Insurer Secured
Obligations with respect to such Series and (iii) the latest date on which
any payment referred to above could be avoided as a preference or otherwise
under the United States Bankruptcy Code or any other similar federal or state
law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, as specified in an Opinion of Counsel delivered to the
Collateral Agent and the Trustee.
"ISSUER" means Arcadia Automobile Receivables Warehouse Trust., a
Delaware business trust.
"LIEN" means, as applied to the property or assets (or the income,
proceeds, products, rents or profits therefrom) of any Person, in each case
whether the same is consensual or nonconsensual or arises by contract,
operation of law, legal process or otherwise: (a) any mortgage, lien, pledge,
attachment, charge, lease, conditional sale or other title retention
agreement, or other security interest or encumbrance of any kind; or (b) any
arrangement, express or implied, under which such property or assets (and/or
such income, proceeds, products, rents or profits) are transferred,
sequestered or otherwise identified for the purpose of subjecting or making
available the same for payment of debt or performance of any other obligation
in priority to the payment of the general, unsecured creditors of such Person.
"NET LOSSES " means, with respect to any Determination Date and any
Series (other than the Warehousing Series), the positive difference of (A)
the sum of (i) the aggregate of the Principal Balances as of the related
Accounting Date (plus accrued and unpaid interest to the end of the related
Monthly Period, at the applicable APR) of all Receivables that became Spread
Account Liquidated Receivables since the Cutoff Date, plus (ii) the Purchase
Amount of all Receivables that became Purchased Receivables as of the related
Accounting Date and that were delinquent with respect to all or any portion
of a Scheduled Payment more than 30 days as of such Accounting Date, plus
(iii) the aggregate of all Cram Down Losses as of the related Accounting Date
that occurred since the Cutoff Date, over (B) the Liquidation Proceeds
received by the Trust as of the related Accounting Date since the Cutoff Date.
8
"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 Arcadia Financial Ltd., a Minnesota corporation
(formerly known as Olympic Financial Ltd.).
"OPINION OF COUNSEL" means a written opinion of counsel acceptable,
as to form, substance and issuing counsel, to the Controlling Party.
"PAYMENT PRIORITIES" means the priority of PRO RATA distributions
described in clause (iii) of priority THIRD of Section 3.03(a).
"POLICY" means the Series 1993-A Policy and any insurance policy
subsequently issued by Financial Security with respect to a Series.
"POOLING AND SERVICING AGREEMENT" means, with respect to Series
1993-A, the Series 1993-A Pooling and Servicing Agreement and, for each other
Series created pursuant to a Pooling and Servicing Agreement, the Pooling and
Servicing Agreement related to such Series.
"PROGRAM SPREAD ACCOUNT" has the meaning specified in Section
2.09(a) hereof.
"SECURED OBLIGATIONS" means, with respect to each Series, the
Insurer Secured Obligations with respect to such Series and the Trustee
Secured Obligations with respect to such Series.
"SECURED PARTIES" means, with respect to a Series and the related
Collateral, each of the Trustee, in respect of the Trustee Secured
Obligations with respect to such Series, and Financial Security, in respect
of the Insurer Secured Obligations with respect to such Series.
"SECURITY INTERESTS" means, with respect to Series 1993-A
Certificates, the security interests and Liens in the Series 1993-A
Collateral granted pursuant to Section 2.03 hereof, and, with respect to any
other Series, the security interests and Liens in the related Collateral
granted pursuant to the related Series Supplement.
"SERIES 1993-A CERTIFICATES" means the Series of Certificates
issued on the date hereof pursuant to the Series 1993-A Pooling and Servicing
Agreement.
"SERIES 1993-A COLLATERAL" has the meaning specified in Section
2.03(a) hereof.
"SERIES 1993-A CREDIT ENHANCEMENT FEE" means the amount
distributable on each Distribution Date pursuant to Section 4.6(a)(vi) and
(vii) of the Standard Terms and Conditions as incorporated by reference in
the Series 1993-A Pooling and Servicing Agreement.
9
"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 "Cumulative Default Rate," "Average Delinquency
Ratio," "Cumulative Net Loss Rate," "Deemed Cured," "Delinquency Ratio," "Net
Losses," "Spread Account Shortfall" and "Spread Account Default Level."
"SERIES SUPPLEMENT" means a supplement hereto executed by the
parties hereto in accordance with Section 2.02 hereof.
"SPREAD ACCOUNT" has the meaning specified in Section 3.01(a)
hereof.
"SPREAD ACCOUNT ADDITIONAL DEPOSIT" with respect to any Series
created pursuant to a Trust Agreement, Sale and Servicing Agreement and
Indenture, has the meaning assigned in the related Series Supplement.
"SPREAD ACCOUNT LIQUIDATED RECEIVABLE" means, with respect to any
Monthly Period, a Receivable as to which (i) 91 days have elapsed since the
Servicer repossessed the related Financed Vehicle, (ii) the Servicer has
determined in good faith that all amounts it expects to recover have been
received, or (iii) all or any portion of a Scheduled Payment shall have
become more than 180 days past due.
"SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to Series
1993-A and any Distribution Date:
(i) if no Insurance Agreement Event of Default with respect to such
Series has occurred and is continuing as of the related Determination Date,
no Capture Event has occurred and is continuing as of the related
Determination Date, no Trigger Event has occurred as of the related
Determination Date, and any Trigger Event with respect to such Series is
Deemed Cured as of the related Determination Date, then the Initial Spread
Account Maximum Amount with respect to such Series and such Distribution
Date;
(ii) if (A) a Trigger Event with respect to Series 1993-A has occurred
as of the Determination Date or (B) a Trigger Event with respect to Series
1993-A has occurred as of a prior Distribution Date and is not Deemed Cured
as of the related Determination Date, and no Insurance Agreement Event of
Default with respect to Series 1993-A has occurred and is continuing and no
Capture Event has occurred and is continuing, the
10
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 RECOURSE MAXIMUM ADJUSTMENT AMOUNT" means, with
respect to a Distribution Date and any Spread Account in which amounts on
deposit include a Spread Account Recourse Reduction Amount, the maximum
amount by which such Spread Account Recourse Reduction Amount is permitted to
decrease, as reported to the Collateral Agent in the Servicer's Certificate
delivered with respect to the related Determination Date, so long as
Financial Security does not deliver a written objection to such amount prior
to such Distribution Date.
"SPREAD ACCOUNT RECOURSE REDUCTION AMOUNT" means, with respect to a
Spread Account and Distribution Date, the specified amount deemed to be on
deposit in such Spread Account which is not cash, which amount is specified
in the Servicer's Certificate delivered with respect to the related
Determination Date, so long as Financial Security does not deliver a written
objection to such amount prior to such Distribution Date, and which amount
shall be treated fungibly with all other amounts on deposit in such Spread
Account, EXCEPT that such amount shall not be treated as a deposit in the
related Tag Account, and EXCEPT FURTHER, as provided in Section 3.03(b) and
3.04(e).
"SPREAD ACCOUNT SHORTFALL" means, with respect to any Distribution
Date and any Series (other than the Warehousing Series) with respect to which
an Insurance Agreement Event of Default has occurred and is continuing, or a
Capture Event has occurred and is continuing, the excess, if any, of the
Spread Account Maximum Amount for such Series and such Distribution
11
Date and the amount on deposit in such Spread Account as of such Distribution
Date after giving effect to distributions made on such Distribution Date
pursuant to priority SECOND of Section 3.03(b).
"STOCK PLEDGE AGREEMENT" means the Third Amended and Restated Stock
Pledge Agreement, dated as of December 3, 1996, between OFL, Financial
Security and the Collateral Agent, as amended from time to time.
"TAG ACCOUNT" has the meaning specified in Section 2.09(c).
"TRANSACTION DOCUMENTS" means, with respect to a Series, this
Agreement, each of the Pooling and Servicing Agreement or Trust Agreement,
Sale and Servicing Agreement and Indenture, or Warehousing Series Sale and
Servicing Agreement, Indenture and Security Agreement, as applicable, the
Insurance Agreement, the Custodian Agreement, the Purchase Agreement, any
Subsequent Purchase Agreements and Subsequent Transfer Agreements, any
Underwriting Agreement, the Lockbox Agreement, and the Stock Pledge Agreement
related to such Series.
"TRIGGER EVENT" means, with respect to Series 1993-A and as of a
Determination Date, the occurrence of any of the events specified in clause
(A) together with the occurrence of the event specified in clause (B):
(A) (i) [reserved];
(ii) the Average Delinquency Ratio for such Determination Date
shall be equal to or greater than 5.00%;
(iii) the Cumulative Default Rate shall be equal to or greater
than (A) 3.15%, with respect to any Determination Date
occurring prior to or during the sixth calendar month
succeeding the Series 1993-A Closing Date, (B) 5.50%,
with respect to any Determination Date occurring after
the sixth, and prior to or during the 12th, calendar
month succeeding the Series 1993-A Closing Date, (C)
7.0%, with respect to any Determination Date occurring
after the 12th, and prior to or during the 18th,
calendar month succeeding the Series 1993-A Closing
Date, (D) 7.5%, with respect to any Determination Date
occurring after the 18th, and prior to or during the
24th, calendar month succeeding the Series 1993-A
Closing Date, (E) 8.15%, with respect to any
Determination Date occurring after the 24th, and prior
to or during the 30th, calendar month succeeding the
Series 1993-A Closing Date, (F) 8.75%, with respect to
any Determination Date occurring after the 30th, and
prior to or during the 36th, calendar month succeeding
the Series 1993-A Closing Date, (G) 3 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
12
Date, (H) 9.25%, with respect to any Determination Date
occurring after the 42nd, and prior to or during the
48th, calendar month succeeding the Series 1993-A
Closing Date, (I) 9.50%, with respect to any
Determination Date occurring after the 48th, and prior
to or during the 54th, calendar month succeeding the
Series 1993-A Closing Date, (J) 9.75%, with respect to
any Determination Date occurring after the 54th, and
prior to or during the 60th calendar month succeeding
the Series 1993-A Closing Date, (K) 9.9%, with respect
to any Determination Date occurring after the 60th, and
prior to or during the 66th, calendar month succeeding
the Series 1993-A Closing Date, or (L) 10.0%, with
respect to any Determination Date occurring after the
66th, and prior to or during the 72nd, calendar month
succeeding the Series 1993-A Closing Date; or
(iv) the Cumulative Net Loss Rate shall be equal to or
greater than (A) 1.25%, with respect to any
Determination Date occurring prior to or during the
sixth calendar month succeeding the Series 1993-A
Closing Date, (B) 2.0%, with respect to any
Determination Date occurring after the sixth, and prior
to or during the 12th, calendar month succeeding 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
13
occurring after the 66th, and prior to or during the
72nd, calendar month succeeding the Series 1993-A
Closing Date.
(B) The amount specified with respect to such Series in the last
sentence of Section 2.09(f) hereof is positive on such
Determination Date, and such amount has not been deposited in the
related Tag Account on such Determination Date.
"TRUST" means a trust formed pursuant to a Pooling and Servicing
Agreement or a Trust Agreement, as the case may be.
"TRUST PROPERTY," with respect to any Series (other than the
Warehousing Series), has the meaning specified in the related Pooling and
Servicing Agreement or Trust Agreement, as the case may be, and with respect
to the Warehousing Series, means the Seller Conveyed Property (as defined in
the Warehousing Series Sale and Servicing Agreement).
"TRUSTEE" means (A) with respect to any Series created pursuant to
a Pooling and Servicing Agreement, the Trustee named in such Pooling and
Servicing Agreement, or (B) with respect to any Series issued pursuant to an
Indenture, the Trustee named in such Indenture in its capacity as agent for
the Noteholders and, if applicable, the Certificateholders.
"TRUSTEE SECURED OBLIGATIONS" means, with respect to a Series, all
amounts and obligations which OFL or the Seller may at any time owe or be
required to perform to or on behalf of (i) the Trustee, the Trust or the
Certificateholders under the Pooling and Servicing Agreement with respect to
such Series, (ii) the Trustee, the Owner Trustee, the Trust, the
Certificateholders or the Noteholders under the Trust Agreement, the Sale and
Servicing Agreement or the Indenture with respect to such Series or (iii) the
Trustee and the Noteholders under the Indenture with respect to the
Warehousing Series.
"TRUSTEE TERMINATION DATE" means, with respect to any Series, the
date which is the later of (i) the date on which the Trustee shall have
received, as Trustee for the holders of the Certificates of such Series, or
as Indenture Trustee on behalf of (and as agent for) the Noteholders and/or
Certificateholders of such Series, payment and performance in full of all
Trustee Secured Obligations arising out of or relating to such Series or (ii)
except with respect to the Warehousing Series, the date on which all payments
in respect of the Certificates shall have been made and the related Trust
shall have been terminated pursuant to the terms of the related Pooling and
Servicing Agreement or Trust Agreement.
"UNDERWRITING AGREEMENT" means, with respect to any Series (other
than the Warehousing Series), the Underwriting Agreement among OFL, the
Seller and the Underwriters named therein.
"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform Commercial
Code in effect in the relevant jurisdiction, as the same may be amended from
time to time.
"WAREHOUSING SERIES" means all notes issued by the Issuer.
14
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 Terms and Conditions and
Section 3.03 hereof; and the Security Interest of the Secured Parties in the
Series 1993-A Collateral is intended to effect and enforce such subordination
and to provide security for the Series 1993-A Secured Obligations and the
Secured Obligations with respect to each other Series.
Section 2.02. SERIES SUPPLEMENTS. The parties hereto intend to
enter into a Series Supplement hereto with respect to any Series other than
the Series 1993-A Certificates. The parties will enter into a Series
Supplement only if the following conditions shall have been satisfied:
(i) The Seller shall have sold or will sell Receivables to a
Trust or to a corporation pursuant to (A) a Pooling and Servicing
Agreement under which the Trustee shall act as trustee, (B) a Sale and
Servicing Agreement in form and substance satisfactory to Financial
Security, with respect to which the Trustee shall act as Indenture
Trustee, and which Sale and Servicing Agreement may provide for the sale
of Subsequent Receivables to the related Trust or (C) a Warehousing
Series Sale and Servicing
15
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;
(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.
16
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.
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.
17
(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 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
18
obligations of the Seller hereunder (without limiting the obligation to apply
distributions of the respective Credit Enhancement Fees in accordance with
Section 3.03(b)) shall be recourse only to the extent of amounts released to
the Seller pursuant to priority EIGHTH of Section 3.03(b) and retained by the
Seller in accordance with the next sentence. The Seller agrees that it shall
not declare or make payment of (i) any dividend or other distribution on or
in respect of any shares of its capital stock or (ii) any payment on account
of the purchase, redemption, retirement or acquisition of (x) any shares of
its capital stock or (y) any option, warrant or other right to acquire shares
of its capital stock, or (iii) any payment of any loan made by OFL to the
Seller, or of any deferred portion of the purchase price payable by the
Seller to OFL with respect to any Receivable unless (in each case) at the
time of such declaration or payment (and after giving effect thereto) no
amount payable by Seller under any Transaction Document is then due and owing
but unpaid. Nothing contained herein shall be deemed to limit the rights of
the Certificateholders (or Certificate Owners) or Noteholders (or Note
Owners) under any other Transaction Document.
Section 2.09. PROGRAM SPREAD ACCOUNT AND TAG ACCOUNTS. (a) On or
prior to the date of any transfer of cash by the Seller pursuant to Section
2.09(b)(i), the Collateral Agent at the direction of the Seller shall
establish at an institution at which one or more Spread Accounts established
hereunder are then maintained an Eligible Account, designated "Program Spread
Account--Norwest Bank Minnesota, National Association" (the "Program Spread
Account"). The Program Spread Account shall continuously be maintained at an
institution at which one or more Spread Accounts are established hereunder.
(b) The Collateral Agent shall hold, for the benefit of the
Seller, the following property in the Program Spread Account:
(i) all cash amounts from time to time on deposit in the Program
Spread Account which at the Seller's election it has delivered to the
Collateral Agent from (x) the proceeds of the sale of securities of a
Series or (y) amounts released to the Seller from the Lien of this
Agreement; and
(ii) investments made with the proceeds of the property described
in clause (i) above, or made with amounts on deposit in the Program
Spread Account.
Notwithstanding anything herein or in any Series Supplement to the
contrary, the property held by the Collateral Agent under this Section
2.09(b) shall not constitute Collateral hereunder.
(c) With respect to each Series for which the Seller has made an
election pursuant to Section 2.09(f) in connection with such Series, on or
prior to the date of any transfer of cash from the Program Spread Account in
connection with such election, the Collateral Agent at the direction of the
Seller shall establish at the same institution at which the related Spread
Account established hereunder is then maintained an Eligible Account,
designated "Tag Account Series [series designation] - Norwest Bank Minnesota,
National Association, as Collateral Agent for Financial Security Assurance
Inc. and another Secured Party" (each such account, a "Tag Account"). Each
Tag Account shall continue to be maintained at the same institution as the
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related Spread Account established hereunder.
(d) In order to secure the performance of the Secured Obligations
with respect to each Series, the Seller hereby pledges, assigns, grants,
transfers and conveys to the Collateral Agent, on behalf of and for the
benefit of the Secured Parties, a lien on and a security interest on (which
lien and security interest is intended to be prior to all other liens,
security interests and other encumbrances), all of its right, title and
interest in and to the following:
(i) each Tag Account established pursuant to Section 2.09(c)
hereof, (including, without limitation, all monies, checks, securities,
investments and other documents held in or evidencing any such accounts);
(ii) all of the Seller's right, title and interest in and to
investments made with proceeds of the property described in clause (i)
above; and
(iii) all distributions, revenues, products, substitutions,
benefits, profits and proceeds, in whatever form, of any of the
foregoing.
In order to effectuate the provisions and purposes of this
Agreement, including for the purpose of perfecting the security interests
granted hereunder, the Seller represents and warrants that it shall, prior to
the deposit of amounts in any Tag Account, execute and file an appropriate
Uniform Commercial Code financing statement in Minnesota sufficient to assure
that the Collateral Agent, as agent for the Secured Parties, has a first
priority perfected security interest on the Collateral pledged or to be
pledged pursuant to Section 2.09(d) which can be perfected by the filing of a
financing statement.
(e) The Program Spread Account and each Tag Account shall be
separate from each respective Trust or Issuer and amounts on deposit therein
will not constitute a part of the Trust Property of any Trust or the assets
of any Issuer. Except as specifically provided herein, the Program Spread
Account and each Tag Account shall be maintained by the Collateral Agent at
all times separate and apart from any other account of the Seller, OFL, the
Servicer, the Trust or the Issuer. All income or loss on investments of
funds in the Program Spread Account and any Tag Account shall be reported by
the Seller as taxable income or loss of the Seller.
(f) Upon the occurrence of an event specified in clause (A) of the
definition of Trigger Event with respect to a Series and until such event is
Deemed Cured, at the election of the Seller amounts on deposit in the Program
Spread Account may be withdrawn on the related Determination Date by the
Collateral Agent from the Program Spread Account and irrevocably deposited
into one or more Tag Accounts for each Series with respect to which an event
specified in such clause (A) shall have occurred (and which event is not
Deemed Cured) and with respect to which the Seller has made such election.
In the event of such election, the Collateral Agent shall deposit from the
Program Spread Account into the related Tag Account, on such related
Determination Date, an amount equal to the excess, if any, of amounts on
deposit in the Spread Account (excluding from the calculation of the amount
on deposit in such Spread Account any amount in any related Tag Account, and
taking into account any deposits thereto to be made pursuant to the first
paragraph of Section 3.03(b) and taking into account any withdrawals
20
therefrom to be made pursuant to priority FIRST of Section 3.03(b) on the
related Distribution Date, but not taking into account any other changes in
the amount on deposit in such account pursuant to Section 3.03(b)) over the
amount specified in clause (i) of the definition of Spread Account Maximum
Amount with respect to such Series (taking into account the decline in the
related Series Balance to be effected on the related Distribution Date).
(g) Amounts on deposit in the Program Spread Account shall be
released from such account at any time upon the request of the Seller. Funds
in the Program Spread Account shall not be commingled with funds in any
Spread Account, any Tag Account or with any other moneys. Amounts on deposit
in a Spread Account and released from the Lien of this Agreement pursuant to
Section 3.03(b) shall, at the direction of the Seller, be deposited into
either the Program Spread Account or the related Tag Account.
(h) Upon deposit pursuant to Section 2.09(f) of amounts into a Tag
Account for a Series such amounts shall be treated fungibly with all amounts
on deposit in the Spread Account with respect to the same Series, except
that, amounts deposited into a Spread Account pursuant to Section 3.03(b)
shall be deemed to be deposited into the Spread Account, and amounts
withdrawn from a Spread Account pursuant to Section 3.03(b) shall be
withdrawn first from the related Tag Account and second from the Spread
Account. Except as otherwise explicitly specified, all references herein to
a Series Spread Account hereunder shall be deemed to include reference to any
Tag Account created with respect to such Series, and all references herein to
amounts on deposit in a Series Spread Account shall be deemed to include
reference to amounts on deposit in the related Tag Account, if any, created
with respect to such Series.
Article III
SPREAD ACCOUNTS
Section 3.01. ESTABLISHMENT OF SPREAD ACCOUNTS; INITIAL DEPOSITS INTO
SPREAD ACCOUNTS.
(a) On or prior to the Closing Date relating to a Series, the
Collateral Agent shall establish with respect to such Series, at its office
or at another depository institution or trust company an Eligible Account,
designated, "Spread Account--Series [insert Series designation] --Norwest
Bank Minnesota, National Association, as Collateral Agent for Financial
Security Assurance Inc. and another Secured Party" (the "Spread Account").
The Spread Accounts established under this Agreement may be maintained at one
or more depository institutions (which depository institutions may be changed
from time to time in accordance with this Agreement). If any Spread Account
established with respect to a Series ceases to be an Eligible Account, the
Collateral Agent shall, within five Business Days, establish a new Eligible
Account for such Series.
(b) No withdrawals may be made of funds in any Spread Account
except as provided in Section 3.03 of this Agreement and in the Warehousing
Series Supplement. Except as specifically provided in this Agreement, funds
in a Spread Account established with respect to
21
a Series shall not be commingled with funds in a Spread Account established
with respect to another Series or with any other moneys. All moneys
deposited from time to time in such Spread Account and all investments made
with such moneys shall be held by the Collateral Agent as part of the
Collateral with respect to such Series.
(c) On the Closing Date with respect to a Series (other than the
Warehousing Series), the Collateral Agent shall deposit the Initial Spread
Account Deposit with respect to such Series, if any, received from the Seller
into the related Spread Account. On each Subsequent Transfer Date (if any)
with respect to a Series (other than the Warehousing Series), the Collateral
Agent shall deposit the Spread Account Additional Deposit delivered by the
related Trust on behalf of the Seller into the related Spread Account.
(d) Each Spread Account shall be separate from each respective
Trust and amounts on deposit therein will not constitute a part of the Trust
Property of any Trust. Except as specifically provided herein, each Spread
Account shall be maintained by the Collateral Agent at all times separate and
apart from any other account of the Seller, OFL, the Servicer or the Trust
or the Issuer, as the case may be. All income or loss on investments of
funds in any Spread Account shall be reported by the Seller as taxable income
or loss of the Seller.
Section 3.02. INVESTMENTS.
(a) Funds which may at any time be held in the Spread Account
established with respect to a Series or in the Program Spread Account shall
be invested and reinvested by the Collateral Agent, at the written direction
(which may include, subject to the provisions hereof, general standing
instructions) of the Seller (unless a Default shall have occurred and be
continuing, in which case at the written direction of the Controlling Party)
or its designee received by the Collateral Agent by 1:00 P.M. New York City
time on the Business Day prior to the date on which such investment shall be
made, in one or more Eligible Investments in the manner specified in Section
3.02(c). If no written direction with respect to any portion of such Spread
Account or the Program Spread Account is received by the Collateral Agent,
the Collateral Agent shall invest such funds overnight in such Eligible
Investments as the Collateral Agent may select, provided that the Collateral
Agent shall not be liable for any loss or absence of income resulting from
such investments.
(b) Each investment made pursuant to this Section 3.02 on any date
shall mature not later than the Business Day immediately preceding the
Distribution Date next succeeding the day such investment is made, except
that any investment made on the day preceding a Distribution Date shall
mature on such Distribution Date; PROVIDED that any investment of funds in
any Account maintained with the Collateral Agent in any investment as to
which the Collateral Agent is the obligor, if otherwise qualified as an
Eligible Investment (including any repurchase agreement on which the
Collateral Agent in its commercial capacity is liable as principal), may
mature on the Distribution Date next succeeding the date of such investment.
(c) 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
22
evidencing any such investment, if any, shall be delivered directly to the
Collateral Agent or its agent, together with each document of transfer, if
any, necessary to transfer title to such investment to the Collateral Agent
in a manner which complies with Section 2.06 and this subsection.
(d) If amounts on deposit in any Spread Account are at any time
invested in an Eligible Investment payable on demand, the Collateral Agent
shall (i) consistent with any notice required to be given thereunder, demand
that payment thereon be made on the last day such Eligible Investment is
permitted to mature under the provisions hereof and (ii) demand payment of
all amounts due thereunder promptly upon receipt of written notice from the
Controlling Party to the effect that such investment does not constitute an
Eligible Investment.
(e) All moneys on deposit in a Spread Account together with any
deposits or securities in which such moneys may be invested or reinvested,
and any gains from such investments, shall constitute Collateral hereunder
with respect to the related Series, subject to the Security Interests of the
Secured Parties.
(f) Subject to Section 4.03 hereof, the Collateral Agent shall not
be liable by reason of any insufficiency in any Spread Account resulting from
any loss on any Eligible Investment included therein except for losses
attributable to the Collateral Agent's failure to make payments on Eligible
Investments as to which the Collateral Agent, in its commercial capacity, is
obligated.
(g) With respect to Spread Account Eligible Investments, the
Collateral Agent agrees that:
(1) any Spread Account Eligible Investment that is a bankers
acceptance or is commercial paper, negotiable certificates of deposit or
another obligation that constitutes "instruments" within the meaning of
Section 9-105(1)(i) of the UCC or that is a "certificated security" as
defined in Section 8-102 of the UCC shall be delivered to the Collateral
Agent in accordance with paragraph (a) or (b), as applicable, of the
definition of "Delivery" and shall be held, pending maturity or
disposition, solely by the Collateral Agent or its securities
intermediary as described in such paragraphs (a) and (b);
(2) any Spread Account Eligible Investment that is a book-entry
security held through the Federal Reserve System pursuant to Federal
book-entry regulations shall be delivered in accordance with paragraph
(c), as applicable, of the definition of "Delivery" and shall be
maintained by the Collateral Agent, pending maturity or disposition,
through continued book-entry registration of such Spread Account
Eligible Investment as described in such paragraph; and
(3) any Eligible Investment that is an uncertificated security as
defined in Section 8-102(1)(b) of the UCC and that is not governed by
clause (2) above shall be delivered to the Collateral Agent in
accordance with paragraph (d) of the definition of "Delivery" and shall
be maintained by the Collateral Agent, pending maturity or
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disposition, through continued registration of the Collateral Agent's
(or its nominee's) ownership of such security.
Section 3.03. DISTRIBUTIONS: PRIORITY OF PAYMENTS.
(a) On or before each Deficiency Claim Date, the Collateral Agent
will make the following calculations on the basis of information (including,
without limitation, the amount of any Collection Account Shortfall with
respect to any Series) received pursuant to (x) Section 3.9 of the Standard
Terms and Conditions, Section 5.03 of the Pooling and Servicing Agreements,
or (y) Section 3.9 of the Sale and Servicing Agreements, or (z) Section 3.11
of the Servicing Agreement, as applicable, with respect to each Series;
provided, however, that if the Collateral Agent receives notice from
Financial Security of the occurrence of an Insurance Agreement Event of
Default with respect to any Series, or of the occurrence of a Capture Event,
such notice shall be determinative for the purposes of determining the Spread
Account Default Level and Spread Account Maximum Amount for such Series:
FIRST, determine the amounts to be on deposit in the respective
Spread Accounts (taking into account amounts in respect of the
respective Credit Enhancement Fees to be deposited into the related
Spread Accounts) on the next succeeding Distribution Date which will be
available to satisfy any Collection Account Shortfall and any
Warehousing Shortfall;
SECOND, determine (i) the amounts, if any, to be distributed from
each Spread Account related to each Series with respect to which there
exists a Collection Account Shortfall and (ii) whether, following
distribution from the related Spread Accounts to the respective Trustees
for deposit into the respective Collection Accounts with respect to
which there exist Collection Account Shortfalls, a Collection Account
Shortfall will continue to exist with respect to one or more Series;
THIRD, (i) if a Collection Account Shortfall will continue to exist
with respect to one or more Series following the distributions from the
related Spread Accounts contemplated by paragraph SECOND above,
determine the amount, if any, to be distributed to the Trustee with
respect to each Series from unrelated Spread Accounts in respect of such
Collection Account Shortfall(s). This determination shall be made as
follows: (i) of the aggregate of the amounts to be on deposit in the
respective Spread Accounts for such Distribution Date (as determined
pursuant to paragraph FIRST above, after making the withdrawals pursuant
to paragraph SECOND above), up to the aggregate of the Collection
Account Shortfalls for such Distribution Date, (ii) drawn from each
Spread Account PRO RATA in accordance with amounts on deposit therein,
and (iii) distributed to the respective Trustees in the following order
of priority and PRO RATA within each priority (1) in the same priority
as amounts are to be distributed pursuant to Section 4.6 of the Standard
Terms and Conditions included in the respective Pooling and Servicing
Agreements and pursuant to Section 4.6 of the respective Sale and
Servicing Agreements, and pursuant to Section 3.6(a) or 3.6(b) of the
Servicing Agreement, as applicable, so that any shortfalls with
24
respect to priority (i) of each such Section are to be covered first,
any shortfalls with respect to priority (ii) of each such Section are to
be covered second, and so forth, until priority (v) of such Section, so
that priority (v) of Section 4.6 of the Standard Terms and Conditions
and of the Sale and Servicing Agreement and priority (v) of Section
3.6(a) or priority (v) of Section 3.6(b) of the Servicing Agreement are
to be covered fifth, (2) if Section 4.6 of one or more Sale and
Servicing Agreements provides for distribution in respect of interest or
principal on Notes or Certificates with priorities numerically greater
than (v), in the same priority as amounts are to be distributed pursuant
to each such Section 4.6, so that any shortfalls with respect to
priority (vi) of each such Section 4.6 are covered first, and so forth
through all priorities relating to interest or principal on Notes or
Certificates and (3) amounts to be distributed to the Security Insurer;
On such Deficiency Claim Date, the Collateral Agent shall deliver a
certificate to each Trustee in respect of which the Collateral Agent has
received notice pursuant to (i) Section 3.9 of the Standard Terms and
Conditions of a Collection Account Shortfall or (ii) Section 3.9 of the Sale
and Servicing Agreement of a Collection Account Shortfall or (iii) Section
3.11 of the Servicing Agreement of a Collection Account Shortfall or
Warehousing Shortfall stating the amount (which, in the case of (i) and (ii)
above, shall be the sum of the amount, if any, to be withdrawn from the
related Spread Account, as calculated pursuant to paragraph SECOND of this
Section 3.03(a), plus, the amount, if any, to be withdrawn from unrelated
Spread Accounts, as calculated pursuant to paragraph THIRD of this Section
3.03(a), and which, in the case of a Collection Account Shortfall or
Warehousing Shortfall referred to in clause (iii) shall be the respective
amounts, if any, withdrawn from unrelated Spread Accounts, as calculated
pursuant to paragraph THIRD of this Section 3.03(a) or calculated to be
available pursuant to priority SEVENTH of Section 3.03(b)), if any, to be
distributed to such Trustee on the next Distribution Date in respect of such
Collection Account Shortfall or Warehousing Shortfall, as the case may be.
(b) On each Distribution Date, following delivery by the Trustee
of the respective Credit Enhancement Fees for deposit into the respective
Spread Accounts pursuant to Section 4.6 of the Standard Terms and Conditions
included in the respective Pooling and Servicing Agreements or Section 4.6 of
the respective Sale and Servicing Agreements, or the amount deposited into
the Spread Account for the Warehousing Series pursuant to Section 4.6 or
Section 4.10 of the Warehousing Series Sale and Servicing Agreement, as
applicable, and upon receipt of a Deficiency Notice with respect to one or
more such Series, or with respect to priorities FIFTH and SIXTH to the extent
the amounts referred to therein are due and owing, the Collateral Agent shall
make the following distributions in the following order of priority.
References herein to a Spread Account shall include references to the related
Tag Account and such amounts shall be treated fungibly, except that amounts
deposited into a Spread Account pursuant to Section 3.03(b) shall be deemed
to be deposited into a Spread Account, and amounts withdrawn from a Spread
Account pursuant to Section 3.03(b) shall be withdrawn first from the related
Tag Account and second from the Spread Account.
FIRST, if with respect to any Series there exists a Collection
Account Shortfall from the Spread Account related to such Series, to the
Trustee for deposit in the related
25
Collection Account the amount of such Collection Account Shortfall (subject,
in the case of withdrawals from a Spread Account containing Spread Account
Recourse Reduction Amounts, to Section 3.04(e)(i));
SECOND, if with respect to any Series there exists a Collection
Account Shortfall after deposit into the Collection Account of amounts
distributed pursuant to priority FIRST, from each Spread Account, PRO RATA in
accordance with amounts on deposit therein (but in no event shall a
withdrawal from a Spread Account pursuant to this priority SECOND cause the
cash amount on deposit in such Spread Account to be below the Spread Account
Withdrawal Floor for such Spread Account if a Spread Account Withdrawal Floor
is specified in the Series Supplement establishing such Spread Account), an
amount up to the aggregate of the Collection Account Shortfalls for all
Series, to the respective Trustees in accordance with the Payment Priorities
for deposit in the respective Collection Accounts with respect to which there
exist Collection Account Shortfalls, (subject, in the case of withdrawals
from a Spread Account containing Spread Account Recourse Reduction Amounts,
to Section 3.04(e));
THIRD, if with respect to one or more Series (excluding the
Warehousing Series) there exists a Spread Account Shortfall, from amounts, if
any, on deposit in each Spread Account (excluding the Warehousing Series) in
excess of the related Spread Account Maximum Amount (after making any
withdrawals therefrom required by priority FIRST or SECOND of this Section
3.03(b) and only from cash amounts and not from amounts representing a Spread
Account Recourse Reduction Amount), 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, 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) and only from cash amounts and
not from amounts representing a Spread Account Recourse Reduction Amount), an
amount up to the aggregate of the Unreimbursed Amounts for all such Series
for deposit into each Spread Account with respect to which there exist
Unreimbursed Amounts PRO RATA in accordance with the excess of the Spread
Account Maximum Amount of each such Spread Account over the amount on deposit
in such Spread Account;
FIFTH, if any amounts are owed to a successor Servicer pursuant to
Section 9.3(c) of the Standard Terms and Conditions included in a Pooling and
Servicing Agreement or Section 8.3(c) of a Sale and Servicing Agreement and
such amounts are not payable pursuant to Section 4.6(a)(i) of the Standard
Terms and Conditions included in such Pooling and Servicing Agreement or
Section 4.6(i) of such Sale and Servicing Agreement, as applicable, from
amounts on deposit in the related Spread Account (but only from cash amounts
and not from amounts
26
representing a Spread Account Recourse Reduction Amount), an amount up to the
amount so owed, to such Servicer;
SIXTH, if any amounts are owed by OFL or the Seller to a Trustee,
Indenture Trustee, Owner Trustee, Lockbox Bank, Custodian, Backup Servicer,
Administrator, Collateral Agent, the Indenture Collateral Agent or other
service provider to either the Trust or the Issuer for expenses that have not
been reimbursed by OFL or the Seller, from amounts on deposit in the related
Spread Account (but only from cash amounts and not from amounts representing
a Spread Account Recourse Reduction Amount), an amount up to the amount so
owed, to such Person;
SEVENTH, if with respect to the Warehousing Series there exists a
Warehousing Shortfall, from the aggregate of all amounts on deposit in the
Warehousing Series Spread Account and from the aggregate of all amounts in
unrelated Spread Accounts in excess of the related Spread Account Maximum
Amount (except that such limitation shall not exist with respect to a Spread
Account Maximum Amount which is unlimited), an amount up to the amount of
such Warehousing Shortfall (to the extent not distributed on such
Distribution Date pursuant to a prior priority of this Section 3.03(b) and
only from cash amounts and not from amounts representing a Spread Account
Recourse Reduction Amount), to the Trustee for the Warehousing Series for
deposit in the Warehousing Series Collection Account; and
EIGHTH, to the extent there are 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, such amount shall be distributed in the following order
of priority: FIRST, for deposit into each Spread Account containing Spread
Account Recourse Reduction Amounts, an amount up to the related Spread
Account Recourse Maximum Adjustment Amount, if any, PRO RATA on the basis of
the respective Spread Account Recourse Reduction Amounts, and SECOND, any
remaining funds 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,
27
the Collateral Agent, and each Secured Party of any charge or claim against
or with respect to such Spread Account. The Collateral Agent shall give the
Seller and each Secured Party at least ten Business Days' prior written
notice of any change in the location of such Spread Account or in any related
account information. If the Collateral Agent changes the location of any
Spread Account, it shall change the location of the other Spread Accounts, so
that all Spread Accounts shall at all times be located at the same depository
institution. Anything herein to the contrary notwithstanding, unless
otherwise consented to by the Controlling Party in writing, the Collateral
Agent shall have no right to change the location of any Spread Account.
(b) Upon the written request of the Controlling Party or the
Seller and at the expense of the Seller, the Collateral Agent shall cause, at
the expense of the Seller, the depository institution at which any Spread
Account is located to forward to the requesting party copies of all monthly
account statements for such Spread Account.
(c) If at any time any Spread Account ceases to be an Eligible
Account, the Collateral Agent shall notify the Controlling Party of such fact
and shall establish within 5 Business Days of such determination, in
accordance with paragraph (a) of this Section, a successor Spread Account
thereto, which shall be an Eligible Account, at another depository
institution acceptable to the Controlling Party and shall establish successor
Spread Accounts with respect to all other Spread Accounts, each of which
shall be an Eligible Account at the same depository institution.
(d) No passbook, certificate of deposit or other similar
instrument evidencing a Spread Account shall be issued, and all contracts,
receipts and other papers, if any, governing or evidencing a Spread Account
shall be held by the Collateral Agent.
(e) A Spread Account Recourse Reduction Amount with respect to a
Spread Account shall be treated fungibly with all other amounts on deposit in
such Spread Account, EXCEPT THAT:
(i) if with respect to any Series, there exists a Collection
Account Shortfall and cash amounts available pursuant to priority FIRST
of Section 3.03(b) are not sufficient to satisfy such Collection Account
Shortfall, the Collateral Agent shall next withdraw cash amounts
available pursuant to priority SECOND of Section 3.03(b) up to the
amount of any remaining Collection Account Shortfall; if such amounts
are not sufficient to satisfy such Collection Account Shortfall, Spread
Account Recourse Reduction Amounts, if any, shall be deemed to be made
available pursuant to priority FIRST of Section 3.03(b) up to the amount
of any remaining Collection Account Shortfalls, and if such amounts are
not sufficient to satisfy such Collection Account Shortfall, all other
Spread Account Recourse Reduction Amounts, if any, shall be deemed to be
made available pursuant to priority SECOND of Section 3.03(b);
(ii) if amounts are to be made available from two or more Spread
Accounts pursuant to priority SECOND of Section 3.03(b), such amounts
shall, FIRST, be withdrawn PRO RATA from cash amounts on deposit therein
and, if such amounts are exhausted, SECOND, shall be deemed to be made
available PRO RATA from Spread Account Recourse
28
Reduction Amounts, if any (after taking into account amounts deemed to
be made available from Spread Account Recourse Reduction Amounts
pursuant to clause (i) above);
(iii) if amounts are to be made available from a Spread Account
pursuant to priority FIRST or SECOND of Section 3.03(b) and any portion
or all of such amounts represent Spread Account Recourse Reduction
Amounts, the Collateral Agent shall notify the Trustee with respect to
the Series receiving the benefit of such Spread Account Recourse
Reduction Amounts of the amount so to be made available which is
represented by Spread Account Recourse Reduction Amounts;
(iv) if amounts are to be made available from a Spread Account
pursuant to priority THIRD, FOURTH, FIFTH, SIXTH, SEVENTH or EIGHTH of
Section 3.03(b), such amounts shall be withdrawn pro rata from cash
amounts on deposit therein and not from Spread Account Recourse
Reduction Amounts;
(v) any Spread Account Withdrawal Floor requirement for any
Series must be satisfied with cash amounts in the related Spread Account
and not with amounts representing a Spread Account Recourse Reduction
Amount; and
(vi) all references to investments in Eligible Investments in this
Agreement shall apply only to cash amounts in the respective Spread
Accounts and not to amounts representing a Spread Account Recourse
Reduction Amount.
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
29
Collateral (except as otherwise provided hereunder) and to perform the other
duties of the Collateral Agent in accordance with the provisions of this
Agreement. Each Secured Party hereby authorizes the Collateral Agent to take
such action on its behalf, and to exercise such rights, remedies, powers and
privileges hereunder, as the Controlling Party may direct and as are
specifically authorized to be exercised by the Collateral Agent by the terms
hereof, together with such actions, rights, remedies, powers and privileges
as are reasonably incidental thereto. The Collateral Agent shall act upon
and in compliance with the written instructions of the Controlling Party
delivered pursuant to this Agreement promptly following receipt of such
written instructions; provided that the Collateral Agent shall not act in
accordance with any instructions (i) which are not authorized by, or in
violation of the provisions of, this Agreement, (ii) which are in violation
of any applicable law, rule or regulation or (iii) for which the Collateral
Agent has not received reasonable indemnity. Receipt of such instructions
shall not be a condition to the exercise by the Collateral Agent of its
express duties hereunder, except where this Agreement provides that the
Collateral Agent is permitted to act only following and in accordance with
such instructions.
Section 4.02. PERFORMANCE OF DUTIES. The Collateral Agent shall
have no duties or responsibilities except those expressly set forth in this
Agreement and the other Transaction Documents to which the Collateral Agent
is a party or as directed by the Controlling Party in accordance with this
Agreement. The Collateral Agent shall not be required to take any
discretionary actions hereunder except at the written direction and with the
indemnification of the Controlling Party.
Section 4.03. LIMITATION ON LIABILITY. Neither the Collateral
Agent nor any of its directors, officers or employees, shall be liable for
any action taken or omitted to be taken by it or them hereunder, or in
connection herewith, except that the Collateral Agent shall be liable for its
negligence, bad faith or willful misconduct; nor shall the Collateral Agent
be responsible for the validity, effectiveness, value, sufficiency or
enforceability against the Seller or OFL of this Agreement or any of the
Collateral (or any part thereof). Notwithstanding any term or provision of
this Agreement, the Collateral Agent shall incur no liability to the Seller,
OFL or the Secured Parties for any action taken or omitted by the Collateral
Agent in connection with the Collateral, except for the negligence or willful
misconduct on the part of the Collateral Agent, and, further, shall incur no
liability to the Secured Parties except for negligence or willful misconduct
in carrying out its duties to the Secured Parties. Subject to Section 4.04,
the 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
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Collateral Agent shall not be under any obligation to exercise any of the
remedial rights or powers vested in it by this Agreement or to follow any
direction from the Controlling Party unless it shall have received reasonable
security or indemnity satisfactory to the Collateral Agent against the costs,
expenses and liabilities which might be incurred by it.
Section 4.04. RELIANCE UPON DOCUMENTS. In the absence of bad
faith or negligence on its part, the Collateral Agent shall be entitled to
rely on any communication, instrument, paper or other document reasonably
believed by it to be genuine and correct and to have been signed or sent by
the proper Person or Persons and shall have no liability in acting, or
omitting to act, where such action or omission to act is in reasonable
reliance upon any statement or opinion contained in any such document or
instrument.
Section 4.05. SUCCESSOR COLLATERAL AGENT.
(a) MERGER. Any Person into which the Collateral Agent may be
converted or merged, or with which it may be consolidated, or to which it may
sell or transfer its trust business and assets as a whole or substantially as
a whole, or any Person resulting from any such conversion, merger,
consolidation, sale or transfer to which the Collateral Agent is a party,
shall (provided it is otherwise qualified to serve as the Collateral Agent
hereunder) be and become a successor Collateral Agent hereunder and be vested
with all of the title to and interest in the Collateral and all of the
trusts, powers, discretions, immunities, privileges and other matters as was
its predecessor without the execution or filing of any instrument or any
further act, deed or conveyance on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, except to the extent, if
any, that any such action is necessary to perfect, or continue the perfection
of, the security interest of the Secured Parties in the Collateral.
(b) RESIGNATION. The Collateral Agent and any successor
Collateral Agent may resign only (i) upon a determination that by reason of a
change in legal requirements the performance of its duties under this
Agreement would cause it to be in violation of such legal requirements in a
manner which would result in a material adverse effect on the Collateral
Agent, and the Controlling Party does not elect to waive the Collateral
Agent's obligation to perform those duties which render it legally unable to
act or elect to delegate those duties to another Person, or (ii) with the
prior written consent of the Controlling Party. The Collateral Agent shall
give not less than 60 days' prior written notice of any such permitted
resignation by registered or certified mail to the other Secured Party and
the Seller; PROVIDED, that such 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
31
jurisdiction in New York, New York for the appointment of a successor.
(c) REMOVAL. The Collateral Agent may be removed by the
Controlling Party at any time, with or without cause, by an instrument or
concurrent instruments in writing delivered to the Collateral Agent, the
other Secured Party and the Seller. A temporary successor may be removed at
any time to allow a successor Collateral Agent to be appointed pursuant to
subsection (d) below. Any removal pursuant to the provisions of this
subsection (c) shall take effect only upon the date which is the latest of
(i) the effective date of the appointment of a successor Collateral Agent and
the acceptance in writing by such successor Collateral Agent of such
appointment and of its obligation to perform its duties hereunder in
accordance with the provisions hereof, (ii) delivery of the Collateral to
such successor to be held in accordance with the procedures specified in
Article II hereof and (iii) receipt by the Controlling Party of an Opinion of
Counsel to the effect described in Section 5.02.
(d) ACCEPTANCE BY SUCCESSOR. The Controlling Party shall have the
sole right to appoint each successor Collateral Agent. Every temporary or
permanent successor Collateral Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to each Secured Party and the
Seller an instrument in writing accepting such appointment hereunder and the
relevant predecessor shall execute, acknowledge and deliver such other
documents and instruments as will effectuate the delivery of all Collateral
to the successor Collateral Agent to be held in accordance with the
procedures specified in Article II hereof, whereupon such successor, without
any further act, deed or conveyance, shall become fully vested with all the
estates, properties, rights, powers, duties and obligations of its
predecessor. Such predecessor shall, nevertheless, on the written request of
either Secured Party or the Seller, execute and deliver an instrument
transferring to such successor all the estates, properties, rights and powers
of such predecessor hereunder. In the event that any instrument in writing
from the Seller or a Secured Party is reasonably required by a successor
Collateral Agent to more fully and certainly vest in such successor the
estates, properties, rights, powers, duties and obligations vested or
intended to be vested hereunder in the Collateral Agent, any and all such
written instruments shall, at the request of the temporary or permanent
successor Collateral Agent, be forthwith executed, acknowledged and delivered
by the Seller. The designation of any successor Collateral Agent and the
instrument or instruments removing any Collateral Agent and appointing a
successor hereunder, together with all other instruments provided for herein,
shall be maintained with the records relating to the Collateral and, to the
extent required by applicable law, filed or recorded by the successor
Collateral Agent in each place where such filing or 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,
32
its directors, officers, employees and agents harmless against, any loss,
liability or expense (including the costs and expenses of defending against
any claim of liability) arising out of or in connection with the Collateral
Agent's acting as Collateral Agent hereunder, except such loss, liability or
expense as shall result from the negligence, bad faith or willful misconduct
of the Collateral Agent or its officers or agents. The obligation of the
Seller and OFL under this Section shall survive the termination of this
Agreement and the resignation or removal of the Collateral Agent. The
Collateral Agent covenants and agrees that the obligations of the Seller
hereunder and under Section 4.07 shall be limited to the extent provided in
Section 2.08, and further covenants not to take any action to enforce its
rights to indemnification hereunder with respect to the Seller and to payment
under Section 4.07 except in accordance with the provisions of Section 8.05,
or otherwise to assert any Lien or take any other action in respect of the
Collateral or the Trust Property of a Series until the applicable Final
Termination Date.
Section 4.07. COMPENSATION AND REIMBURSEMENT. The Seller agrees
for the benefit of the Secured Parties and as part of the Secured Obligations
(a) to pay to the Collateral Agent, from time to time, reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of
a collateral trustee); and (b) to reimburse the Collateral Agent upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Collateral Agent in accordance with any provision of, or carrying
out its duties and obligations under, this Agreement (including the
reasonable compensation and fees and the expenses and disbursements of its
agents, any independent certified public accountants and independent
counsel), except any expense, disbursement or advances as may be attributable
to negligence, bad faith or willful misconduct on the part of the Collateral
Agent.
Section 4.08. REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL
AGENT. The Collateral Agent represents and warrants to the Seller and to each
Secured Party as follows:
(a) DUE ORGANIZATION. The Collateral Agent is a national banking
association, duly organized, validly existing and in good standing under the
laws of the United States and is duly authorized and licensed under
applicable law to conduct its business as presently conducted.
(b) CORPORATE POWER. The Collateral Agent has all requisite
right, power and authority to execute and deliver this Agreement and to
perform all of its duties as Collateral Agent hereunder.
(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
33
and binding obligation of the Collateral Agent, enforceable against the
Collateral Agent in accordance with its terms, except as (i) such
enforceability may be limited by bankruptcy, insolvency, reorganization and
similar laws relating to or affecting the enforcement of creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.
Section 4.09. WAIVER OF SETOFFS. The Collateral Agent hereby
expressly waives any and all rights of setoff that the Collateral Agent may
otherwise at any time have under applicable law with respect to any Spread
Account and agrees that amounts in the Spread Accounts shall at all times be
held and applied solely in accordance with the provisions hereof.
Section 4.10. CONTROL BY THE CONTROLLING PARTY. The Collateral
Agent shall comply with notices and instructions given by the Seller only if
accompanied by the written consent of the Controlling Party, except that if
any Default shall have occurred and be continuing, the Collateral Agent shall
act upon and comply with notices and instructions given by the Controlling
Party alone in the place and stead of the Seller.
Article V
COVENANTS OF THE SELLER
Section 5.01. PRESERVATION OF COLLATERAL. Subject to the rights,
powers and authorities granted to the Collateral Agent and the Controlling
Party in this Agreement, the Seller shall take such action as is necessary
and proper with respect to the Collateral in order to preserve and maintain
such Collateral and to cause (subject to the rights of the Secured Parties)
the Collateral Agent to perform its obligations with respect to such
Collateral as provided herein. The Seller will do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged and delivered, such
instruments of transfer or take such other steps or actions as may be
necessary, or required by the Controlling Party, to perfect the Security
Interests granted hereunder in the Collateral, to ensure that such Security
Interests rank prior to all other Liens and to preserve the priority of such
Security Interests and the validity and enforceability thereof. Upon any
delivery or substitution of Collateral, the Seller shall be obligated to
execute such documents and perform such actions as are necessary to create in
the Collateral Agent for the benefit of the Secured Parties a valid first
Lien on, and valid and 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
34
statements and continuation statements and other actions as are necessary to
perfect, maintain and protect the lien and security interest of the
Collateral Agent (and the priority thereof), on behalf of the Secured
Parties, with respect to such Collateral against all creditors of and
purchasers from the Seller or OFL and reciting the details of such action,
or (b) stating that, in the opinion of such counsel, no such action is
necessary to maintain such perfected lien and security interest. Such
Opinion of Counsel shall further describe each execution and filing of any
financing statements and continuation statements and such other actions as
will, in the opinion of such counsel, be required to perfect, maintain and
protect the lien and security interest of the Collateral Agent, on behalf of
the Secured Parties, with respect to such Collateral against all creditors of
and purchasers from the Seller or OFL for a period, specified in such
Opinion, continuing until a date not earlier than eighteen months from the
date of such Opinion.
Section 5.03. NOTICES. In the event that OFL or the Seller
acquires knowledge of the occurrence and continuance of any Insurance
Agreement Event of Default or Servicer Termination Event or of any event of
default or like event, howsoever described or called, under any of the
Transaction Documents, the Seller shall immediately give notice thereof to
the Collateral Agent and each Secured Party.
Section 5.04. WAIVER OF STAY OR EXTENSION LAWS; MARSHALLING OF
ASSETS. The Seller covenants, to the fullest extent permitted by applicable
law, that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any appraisement,
valuation, stay, extension or redemption law wherever enacted, now or at any
time hereafter in force, in order to prevent or hinder the enforcement of
this Agreement or any absolute sale of the Collateral or any part thereof, or
the possession thereof by any purchaser at any sale under Article VII of this
Agreement; and the Seller, to the fullest extent permitted by applicable law,
for itself and all who may claim under it, hereby waives the benefit of all
such laws, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Collateral Agent, but will
suffer and permit the execution of every such power as though no such law had
been enacted. The Seller, for itself and all who may claim under it, waives,
to the fullest extent permitted by applicable law, all right to have the
Collateral marshalled upon any foreclosure or other disposition thereof.
Section 5.05. NONINTERFERENCE, ETC. The Seller shall not (i)
waive or alter any of its rights under the Collateral (or any agreement or
instrument relating thereto) without the prior written consent of the
Controlling Party; or (ii) fail to pay any tax, assessment, charge 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,
35
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 S.02. The parties hereto
acknowledge receipt of prior written notice of the Seller's intent to change
its name on or after January 1, 1997 to Arcadia Receivables Finance Corp.
(b) RELOCATION OF THE SELLER. Neither OFL nor the Seller shall
change its principal executive office unless it gives each Secured Party and
the Collateral Agent at least 90 days' prior written notice of any relocation
of its principal executive office. If the Seller relocates its principal
executive office or principal place of business from Minnesota, the Seller
shall give prior notice thereof to the Controlling Party and the Collateral
Agent and shall effect whatever appropriate recordations and filings are
necessary and shall provide an Opinion of Counsel to the Controlling Party
and the Collateral Agent, to the effect that, upon the recording of any
necessary assignments or amendments to previously-recorded assignments and
filing of any necessary amendments to the previously filed financing or
continuation statements or upon the filing of one or more specified new
financing statements, and the taking of such other actions as may be
specified in such opinion, the security interests in the Collateral shall
remain, after such relocation, valid and perfected.
Article VI
CONTROLLING PARTY; INTERCREDITOR PROVISIONS
Section 6.01. APPOINTMENT OF CONTROLLING PARTY. From and after
the Closing Date of a Series until the Insurer Termination Date related to
such Series, Financial Security shall be the Controlling Party with respect
to such Series and shall be entitled to exercise all the rights given the
Controlling Party hereunder with respect to such Series. From and after the
Insurer Termination Date related to such Series until the Trustee Termination
Date related to such Series, the Trustee shall be the Controlling Party with
respect to such Series. Notwithstanding the foregoing, in the event that a
Financial Security Default shall have occurred and be continuing, the Trustee
shall be the Controlling Party with respect to such Series until the
applicable Trustee Termination Date. If prior to an Insurer Termination Date
the Trustee shall have become the Controlling Party with respect to a Series
as a result of the occurrence 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
36
lawful attorney, with full power of substitution, in the name of OFL, the
Seller, the Secured Parties or otherwise, but (subject to Section 2.08) at
the expense of the Seller, to the extent permitted by law to exercise, at any
time and from time to time while any Insurance Agreement Event of Default has
occurred and is continuing, any or all of the following powers with respect
to all or any of the Collateral related to the relevant Series: (i) to
demand, xxx for, collect, receive and give acquittance for any and all monies
due or to become due upon or by virtue thereof, (ii) to settle, compromise,
compound, prosecute or defend any action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal with the same or the
proceeds thereof as fully and effectively as if the Collateral Agent were the
absolute owner thereof, and (iv) to extend the time of payment of any or all
thereof and to make any allowance or other adjustments with respect thereto;
PROVIDED that the foregoing powers and rights shall be exercised in
accordance with the provisions of Article VII hereof.
(b) With respect to each Series of Certificates and the related
Collateral, each Secured Party hereby irrevocably and unconditionally
constitutes and appoints the Controlling Party with respect to such Series,
and any successor to such Controlling Party appointed pursuant to Section
6.01 from time to time, as the true and lawful attorney-in-fact of such
Secured Party for so long as such Secured Party is the Non-Controlling Party,
with full power of substitution, to execute, acknowledge and deliver any
notice, document, certificate, paper, pleading or instrument and to do in the
name of the Controlling Party as well as in the name, place and stead of such
Secured Party such acts, things and deeds for and on behalf of and in the
name of such Secured Party under this Agreement with respect to such Series
which such Secured Party could or might do or which may be necessary,
desirable or convenient in such Controlling Party's sole discretion to effect
the purposes contemplated hereunder and, without limitation, exercise full
right, power and authority to take, or defer from taking, any and all acts
with respect to the administration of the Collateral related to such Series,
and the enforcement of the rights of the Secured Parties hereunder with
respect to such Series, on behalf of and for the benefit of such Controlling
Party and such Non-Controlling Party, as their interests may appear.
(c) So long as Financial Security shall be the Controlling Party
with respect to a Series (other than the Warehousing Series), the Trustee
hereby agrees, that if there exists an Insurance Agreement Event of Default
with respect to such Series:
(i) Financial Security shall have the exclusive right to
direct the Trustee as to any and all actions to be taken under the
related Transaction Documents, 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
37
Article VII;
PROVIDED, HOWEVER, that the Trustee may decline to follow any of the above
directions from Financial Security, if the Trustee, in accordance with an
opinion of counsel to the Trustee, that is independent of the Trustee,
determines that the action or proceeding so directed may not lawfully be
taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it in personal liability for which
adequate indemnity is not reasonably assured to it or, in the case of actions
or directions not specifically permitted to be taken by Financial Security so
long as no Financial Security Default has occurred and is continuing, would
adversely affect the interests of the Certificateholders in any material
respect.
(d) So long as Financial Security shall be the Controlling Party
with respect to a Series (other than the Warehousing Series), the Trustee
shall not, without the prior written consent of Financial Security:
(i) appoint new independent accountants with respect to the Series;
(ii) consent to the amendment of or supplement to any of the
Transaction Documents related to the Series; or
(iii) waive a Servicer Termination Event under the related Pooling and
Servicing Agreement or Sale and Servicing Agreement, as applicable.
(e) So long as Financial Security shall be the Controlling Party
with respect to a Series:
(i) Financial Security shall have the rights provided in Section 5.3
of each Pooling and Servicing Agreement, Section 5.4 of each Sale and
Servicing Agreement and Section 5.19 of each Indenture in respect of the
direction of insolvency proceedings.
(ii) Financial Security shall have the right to direct the Trustee
as to any and all actions to be taken in the event of the occurrence of
a Servicer Termination Event under the related Pooling and Servicing
Agreement and shall have such other rights in respect of the appointment
of a successor servicer as are provided in such Pooling and Servicing
Agreement.
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.
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Section 6.04. DEGREE OF CARE.
(a) CONTROLLING PARTY. Notwithstanding any term or provision of
this Agreement, the Controlling Party shall incur no liability to OFL or the
Seller for any action taken or omitted by the Controlling Party in connection
with the Collateral, except for any gross negligence, bad faith or willful
misconduct on the part of the Controlling Party and, further, shall incur no
liability to the Non-Controlling Party except for a breach of the terms of
this Agreement or for gross negligence, bad faith or willful misconduct in
carrying out its duties, if any, to the Non-Controlling Party. The
Controlling Party shall be protected and shall incur no liability to any such
party in relying upon the accuracy, acting in reliance upon the contents and
assuming the genuineness of any notice, demand, certificate, signature,
instrument or other document believed by the Controlling Party to be genuine
and to have been duly executed by the appropriate signatory, and (absent
manifest error or actual knowledge to the contrary) the Controlling Party
shall not be required to make any independent investigation with respect
thereto. The Controlling Party shall, at all times, be free independently to
establish to its reasonable satisfaction the existence or nonexistence, as
the case may be, of any fact the existence or nonexistence of which shall be
a condition to the exercise or enforcement of any right or remedy under this
Agreement or any of the Transaction Documents.
(b) THE NON-CONTROLLING PARTY. The Non-Controlling Party shall
not be liable to the Seller for any action or failure to act by the
Controlling Party or the Collateral Agent in exercising, or failing to
exercise, any rights or remedies hereunder.
Article VII
REMEDIES UPON DEFAULT
Section 7.01. REMEDIES UPON A DEFAULT. If a Default with respect
to a Series has occurred and is continuing, the Collateral Agent shall, at
the direction of the Controlling Party, take whatever action at law or in
equity as may appear necessary or desirable in the judgment of the
Controlling Party to collect and satisfy all Insurer Secured Obligations
(including, but not limited to, foreclosure upon the Collateral and all other
rights available to secured parties under applicable law) or to enforce
performance and observance of any obligation, agreement or covenant under any
of the Transaction Documents related to such Series. Notwithstanding the
foregoing, the Collateral Agent shall not be entitled to take any action and
the Controlling Party shall not be entitled to give any direction with
respect to the Trust Property, except to the extent provided in the
Transaction Documents and Sections 6.02(a), (c), (d) and (e) hereof.
Section 7.02. WAIVER OF DEFAULT. The Controlling Party shall have
the sole right, to be exercised in its complete discretion, to waive any
Default by a writing setting forth the terms, conditions and extent of such
waiver signed by the Controlling Party and delivered to the Collateral Agent,
the other Secured Party and the Seller. Any such waiver shall be binding
upon the Non-Controlling Party and the Collateral Agent. Unless such writing
expressly provides to the contrary, any waiver so granted shall extend only
to the specific event or occurrence which gave rise to the default so waived
and not to any other similar event or occurrence which occurs
39
subsequent to the date of such waiver.
Section 7.03. RESTORATION OF RIGHTS AND REMEDIES. If the
Collateral Agent has instituted any proceeding to enforce any right or remedy
under this Agreement, and such proceeding has been discontinued or abandoned
for any reason, or has been determined adversely to such Collateral Agent,
then and in every such case the Seller, the Collateral Agent and each of the
Secured Parties shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Secured Parties shall continue as
though no such proceeding had been instituted.
Section 7.04. NO REMEDY EXCLUSIVE. No right or remedy herein
conferred upon or reserved to the Collateral Agent, the Controlling Party or
either of the Secured Parties is intended to be exclusive of any other right
or remedy, and every right or remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law, in equity or otherwise (but, in each
case, shall be subject to the provisions of this Agreement limiting such
remedies), and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and as
often and in such order as may be deemed expedient by the Controlling Party,
and the exercise of or the beginning of the exercise of any right or power or
remedy shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any other right, power or remedy.
Article VIII
MISCELLANEOUS
Section 8.01. FURTHER ASSURANCES. Each party hereto shall take
such action and deliver such instruments to any other party hereto, in
addition to the actions and instruments specifically provided for herein, as
may be reasonably requested or required to effectuate the purpose or
provisions of this Agreement or to confirm or perfect any transaction
described or contemplated herein.
Section 8.02. WAIVER. Any waiver by any party of any provision of
this Agreement or any right, remedy or option hereunder shall only prevent
and estop such party 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
40
each Rating Agency shall have confirmed in writing that such amendment will
not cause a reduction or withdrawal of a rating on any Series; PROVIDED,
HOWEVER, that, for so long as Financial Security shall be the Controlling
Party with respect to a Series, amendments, modifications, waivers or
supplements hereto relating to such Series, the related Collateral or Spread
Account or any requirement hereunder to deposit or retain any amounts in such
Spread Account or to distribute any amounts therein as provided in Section
3.03 shall be effective if made or consented to in writing by Financial
Security, the Seller, OFL and the Collateral Agent (the consent of which
shall not be withheld or delayed with respect to any amendment that does not
adversely affect the Collateral Agent) but shall in no circumstances require
the consent of the Trustee or the Certificateholders related to such Series
or any other Series.
Section 8.04. SEVERABILITY. In the event that any provision of
this Agreement or the application thereof to any party hereto or to any
circumstance or in any jurisdiction governing this Agreement shall, to any
extent, be invalid or unenforceable under any applicable statute, regulation
or rule of law, then such provision shall be deemed inoperative to the extent
that it is invalid or unenforceable and the remainder of this Agreement, and
the application of any such invalid or unenforceable provision to the
parties, jurisdictions or circumstances other than to whom or to which it is
held invalid or unenforceable, shall not be affected thereby nor shall the
same affect the validity or enforceability of any other provision of this
Agreement. The parties hereto further agree that the holding by any court of
competent jurisdiction that any remedy pursued by the Collateral Agent, or
any of the Secured Parties, hereunder is unavailable or unenforceable shall
not affect in any way the ability of the Collateral Agent or any of the
Secured Parties to pursue any other remedy available to it or them (subject,
however, to the provisions of this Agreement limiting such remedies).
Section 8.05. NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, each of the parties hereto agrees that it
shall not, prior to one year and one day after the Final Scheduled
Distribution Date with respect to each Series, acquiesce, petition or
otherwise invoke or cause the Seller or OFL to invoke the process of the
United States of America, any State or other political subdivision thereof or
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government for the purpose of
commencing or sustaining a case by or against the Seller, OFL or the Trust
under a Federal or state bankruptcy, insolvency or similar law or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Seller, OFL or the Trust or all or any part of its
property or assets or ordering the winding up or liquidation of the affairs
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
41
recipient as follows:
(i) If to OFL:
Arcadia Financial Ltd.
0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Treasurer
Telecopier No.: (000) 000-0000
(ii) If to the Seller:
Arcadia Receivables Finance Corp.
0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Treasurer
Telecopier No.: (000) 000-0000
(iii) If to Financial Security:
Financial Security Assurance Inc.
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance Department
Telecopier No.: (000) 000-0000
(000) 000-0000
(in each case in which notice or other communication to Financial
Security refers to a Default or a claim on the Policy or in which
failure on the part of Financial Security to respond shall be
deemed to constitute consent or acceptance, then with a copy to
the attention of the Senior Vice President Surveillance)
(iv) If to the Trustee:
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Global Trust Services Group
(with respect to those Series for which Chase serves as
Trustee)
or
42
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
(with respect to those Series for which Norwest serves as
Trustee)
(v) If to the Collateral Agent:
Norwest Bank Minnesota, National Association
0xx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Services - Asset Backed
Administration
Telecopier No.: (000) 000-0000
(vi) If to Xxxxx'x:
Xxxxx'x Investor's Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
(vii) If to Standard & Poor's:
Standard & Poor's Ratings Group
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
A copy of each notice given hereunder to any party hereto shall also be given
to (without duplication) Financial Security, the Seller, the Trustee and the
Collateral Agent. Each party hereto may, by notice given in accordance
herewith to each of the other parties hereto, designate any further or
different address to which subsequent notices shall be sent.
Section 8.07. TERM OF THIS AGREEMENT. This Agreement shall take
effect on the Closing Date of the Series 1993-A Certificates and shall
continue in effect until the last Final Termination Date to occur with
respect to each Series. On such Final Termination Date, this Agreement shall
terminate, all obligations of the parties hereunder shall cease and terminate
and the Collateral, if any, held hereunder and not to be used or applied in
discharge of any obligations of the Seller or OFL in respect of the Secured
Obligations or otherwise under this Agreement, shall be released to and in
favor of the Seller; PROVIDED that the provisions of 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.
43
(a) This Agreement shall be a continuing obligation of the parties
hereto and shall (i) be binding upon the parties and their respective
successors and assigns, and (ii) inure to the benefit of and be enforceable
by each Secured Party and the Collateral Agent, and by their respective
successors, transferees and assigns. Neither the Seller nor OFL may assign
this Agreement, or delegate any of its duties hereunder, without the prior
written consent of the Controlling Party.
(b) Financial Security shall have the right (unless a Financial
Security Default shall have occurred and be continuing) to give
participations in its rights under this Agreement and to enter into contracts
of reinsurance with respect to any Policy issued in connection with a Series
of Certificates and each such participant or reinsurer shall be entitled to
the benefit of any representation, warranty, covenant and obligation of each
party (other than Financial Security) hereunder as if such participant or
reinsurer was a party hereto and, subject only to such agreement regarding
such reinsurance or participation, shall have the right to enforce the
obligations of each such other party directly hereunder; PROVIDED, HOWEVER,
that no such reinsurance or participation agreement or arrangement shall
relieve Financial Security of its obligations hereunder, under the
Transaction Documents to which it is a party or under any such Policy. In
addition, nothing contained herein shall restrict Financial Security from
assigning to any Person pursuant to any liquidity facility or credit facility
any rights of Financial Security under this Agreement or with respect to any
real or personal property or other interests pledged to Financial Security,
or in which Federal Security has a security interest, in connection with the
transactions contemplated hereby. The terms of any such assignment or
participation shall contain an express acknowledgment by such Person of the
condition of this Section and the limitations of the rights of Financial
Security hereunder.
Section 8.09. CONSENT OF CONTROLLING PARTY. In the event that the
Controlling Party's consent is required under the terms hereof or under the
terms of any Transaction Document, it is understood and agreed that, except
as otherwise provided expressly herein, the determination whether to grant or
withhold such consent shall be made solely by the Controlling Party in its
sole discretion.
Section 8.10. TRIAL BY JURY WAIVED. Each of the parties hereto
waives, to the fullest extent permitted by law, any right it may have to a
trial by jury in respect of any litigation arising directly or indirectly out
of, under or in connection with this Agreement, any of the other Transaction
Documents or any of the transactions contemplated hereunder or thereunder.
Each of the parties hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it has been induced to enter into
this Agreement and the other Transaction Documents to which it is a party, by
among other things, this waiver.
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.
44
Section 8.12. CONSENTS TO JURISDICTION. Each of the parties
hereto irrevocably submits to the jurisdiction of the United States District
Court for the Southern District of New York, any court in the state of New
York located in the city and county of New York, and any appellate court from
any thereof, in any action, suit or proceeding brought against it and related
to or in connection with this Agreement, the other Transaction Documents or
the transactions contemplated hereunder or thereunder or for recognition or
enforcement of any judgment and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such suit or action
or proceeding may be heard or determined in such New York State court or, to
the extent permitted by law, in such federal court. Each of the parties
hereto agrees that a final judgment in any such action, suit or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. To the extent permitted by
applicable law, each of the parties hereby waives and agrees not to assert by
way of motion, as a defense or otherwise in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of such courts, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is
improper or that this Agreement or any of the other Transaction Documents or
the subject matter hereof or thereof may not be litigated in or by such
courts. Each of OFL and the Seller hereby irrevocably appoints and
designates CT Corporation System, whose address is 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, as its true and lawful attorney and duly authorized agent for
acceptance of service of legal process. Each of OFL and the Seller agrees
that service of such process upon such Person shall constitute personal
service of such process upon it. Nothing contained in this Agreement shall
limit or affect the rights of any party hereto to serve process in any other
manner permitted by law or to start legal proceedings relating to any of the
Transaction Documents against OFL or the Seller or their respective property
in the courts of any jurisdiction.
Section 8.13. LIMITATION OF LIABILITY. It is expressly understood
and agreed by the parties hereto that (a) Norwest Bank Minnesota, National
Association is executing this Agreement (i) not in its individual capacity
but in its capacity as trustee of the Trusts pursuant to the Transaction
Documents and (ii) as Collateral Agent hereunder (b) in no case whatsoever
shall Norwest Bank Minnesota, National Association in its capacity as trustee
of Trusts be personally liable on, or for any loss in respect of, any of the
statements, representations, warranties, covenants, agreements or obligations
of the Trust hereunder, all such liability, if any, being expressly waived by
the parties hereto.
Section 8.14. DETERMINATION OF ADVERSE EFFECT. Any determination
of an adverse effect on the interest of the Secured Parties or the
Certificateholders shall be made without consideration of the availability of
funds under the Policies.
Section 8.15. COUNTERPARTS. This Agreement may be executed in two
or more counterparts by the parties hereto, and each such counterpart shall
be considered an original and all such counterparts shall constitute one and
the same instrument.
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.
45
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.
ARCADIA FINANCIAL LTD.
By:
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
ARCADIA RECEIVABLES FINANCE CORP.
By:
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
FINANCIAL SECURITY ASSURANCE INC.
By:
------------------------------------------
Authorized Officer
THE CHASE MANHATTAN BANK, as Trustee
By:
------------------------------------------
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------------
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Collateral Agent
By:
------------------------------------------
