RECEIVABLES PURCHASE AGREEMENT
AND ASSIGNMENT
between
ARCADIA RECEIVABLES FINANCE CORP. III
Purchaser
and
ARCADIA FINANCIAL LTD.
Seller
dated as of
October 17, 1997
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 General. . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Specific Terms . . . . . . . . . . . . . . . . . . 1
SECTION 1.3 Usage of Terms . . . . . . . . . . . . . . . . . . 3
SECTION 1.4 Certain References . . . . . . . . . . . . . . . . 3
SECTION 1.5 No Recourse. . . . . . . . . . . . . . . . . . . . 3
SECTION 1.6 Effectiveness. . . . . . . . . . . . . . . . . . . 3
ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED
PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.1 Purchase Price . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Conveyance of Receivables. . . . . . . . . . . . . 4
SECTION 2.3 Delivery of Receivables File . . . . . . . . . . . 5
ARTICLE III REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . 5
SECTION 3.1 Representations and Warranties of Arcadia. . . . . 5
SECTION 3.2 Representations and Warranties of ARFC III . . . . 7
ARTICLE IV COVENANTS OF ARCADIA. . . . . . . . . . . . . . . . . . 9
SECTION 4.1 Protection of Title of ARFC III. . . . . . . . . . 9
SECTION 4.2 Other Liens or Interests . . . . . . . . . . . . . 10
SECTION 4.3 Costs and Expenses; Fees . . . . . . . . . . . . . 11
SECTION 4.4 Indemnification. . . . . . . . . . . . . . . . . . 11
ARTICLE V REPURCHASES . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty
or Covenant. . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2 Reassignment of Purchased Receivables. . . . . . . 13
SECTION 5.3 Waivers. . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.1 Liability of Arcadia . . . . . . . . . . . . . . . 14
SECTION 6.2 Merger or Consolidation of Arcadia or ARFC III . . 14
SECTION 6.3 Limitation on Liability of Arcadia and Others. . . 15
SECTION 6.4 Amendment. . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.5 Notices. . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.6 Merger and Integration . . . . . . . . . . . . . . 15
SECTION 6.7 Severability of Provisions . . . . . . . . . . . . 15
SECTION 6.8 Intention of the Parties . . . . . . . . . . . . . 16
SECTION 6.9 Governing Law. . . . . . . . . . . . . . . . . . . 16
SECTION 6.10 Counterparts . . . . . . . . . . . . . . . . . . . 16
SECTION 6.11 Pledge of the Receivables and the Other Conveyed
Property to the Collateral Agent on behalf of the
Investors. . . . . . . . . . . . . . . . . . . . . 16
RECEIVABLES PURCHASE AGREEMENT
AND ASSIGNMENT
THIS RECEIVABLES PURCHASE AGREEMENT AND ASSIGNMENT, dated as of October 17,
1997, executed between ARCADIA RECEIVABLES FINANCE CORP. III, a Delaware
corporation, as purchaser ("ARFC III"), and ARCADIA FINANCIAL LTD., a
Minnesota corporation, as seller ("Arcadia").
W I T N E S S E T H:
WHEREAS, ARFC III has agreed from time to time to purchase from Arcadia and
Arcadia, pursuant to this Agreement, has agreed from time to time to sell and
assign to ARFC III the Receivables and Other Conveyed Property;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable
consideration, the receipt of which is acknowledged, ARFC III and Arcadia,
intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 GENERAL. The specific terms defined in this Article include the
plural as well as the singular. The words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Agreement as a whole and not
to any particular Article, Section or other subdivision, and Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer
to Articles and Sections of and Schedules and Exhibits to this Agreement.
Capitalized terms used herein without definition shall have the respective
meanings assigned to such terms in the Receivables Funding and Servicing
Agreement (defined below).
SECTION 1.2 SPECIFIC TERMS. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"AGREEMENT" means this Receivables Purchase Agreement and Assignment and all
amendments hereof and supplements hereto.
"ARFC III" means Arcadia Receivables Finance Corp. III, a Delaware
corporation.
"ASSIGNMENT AGREEMENT" means, with respect to any Receivables and related
Other Conveyed Property, the assignment agreement between Arcadia and ARFC
III pursuant to which Arcadia sells and assigns such Receivables and related
Other Conveyed Property to ARFC III, the form of which is attached hereto as
Exhibit A.
"EFFECTIVENESS DATE" has the meaning specified in SECTION 1.6 hereof.
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"OTHER CONVEYED PROPERTY" means, with respect to any Receivable, all
monies at any time paid or payable on such Receivable or in respect thereof
after the applicable Transfer Date (including amounts due on or before the
applicable Transfer Date but received by ARFC III or Arcadia after such
Transfer Date), an assignment of security interests of Arcadia in the related
Financed Vehicle, the Insurance Policies and any proceeds from any Insurance
Policies relating to such Receivable, the Obligors or the Financed Vehicle,
including rebates of premiums, rights under any Collateral Insurance and any
Force Placed Insurance relating to such Receivable, rights of Arcadia against
Dealers with respect to such Receivable under the Dealer Agreements and the
Dealer Assignments, all items contained in the related Receivable File, any
and all other documents or electronic records that Arcadia keeps on file in
accordance with its customary procedures relating to such Receivable, the
Obligors or the Financed Vehicles, property (including the right to receive
Recoveries) that secures such Receivable and that has been acquired by or on
behalf of Arcadia pursuant to liquidation of such Receivable, and all
proceeds of the foregoing.
"PURCHASE AMOUNT" has the meaning specified in SECTION 5.1 hereof.
"PURCHASE PRICE" has the meaning specified in Section 2.1 hereof.
"RECEIVABLE" means a retail installment contract or promissory note and
related security agreement for a new or used automobile or light truck (and
all accessories thereto) that is originated or purchased by Arcadia, and all
rights and obligations thereunder.
"RECEIVABLES FUNDING AND SERVICING AGREEMENT" means the Receivables
Funding and Servicing Agreement, dated as of October 17, 1997, executed and
delivered by ARFC III, as Borrower, Arcadia, in its individual capacity, as
Servicer and as Custodian, DLJ Mortgage Capital, Inc., individually and as
Agent, the financial institutions set forth on the signature pages thereto
and Norwest Bank Minnesota, National Association, as Backup Servicer and
Collateral Agent.
"REPURCHASE EVENT" means the occurrence of a breach of any of Arcadia's
representations and warranties contained in SECTION 3.1(A) hereof or any
other event which requires the repurchase of a Receivable by Arcadia under
the Receivables Funding and Servicing Agreement.
"SCHEDULE OF RECEIVABLES" means the schedule of all Receivables sold and
transferred pursuant to each Assignment Agreement which is attached hereto as
Schedule A, as such Schedule shall be supplemented from time to time (i) by
each Schedule of Receivables with respect to each Assignment Agreement, which
Schedules of Receivables shall be deemed incorporated and made a part of
Schedule A hereto and (ii) to reflect the repurchase from ARFC III of (a)
Warranty Receivables and (b) other Receivables purchased from ARFC III by
Arcadia. With respect to an Assignment Agreement, "Schedule of Receivables"
shall mean the Schedule attached to such Assignment Agreement as Exhibit A
thereto.
"SCHEDULE OF REPRESENTATIONS" means the Schedule of Representations and
Warranties attached hereto as Schedule B.
"TRANSACTION DOCUMENTS" means the Note, the Collateral Agent Agreement,
the Receivables Funding and Servicing Agreement and the Lockbox Agreement.
The Transaction Documents to be executed by any party are referred to herein
as "SUCH PARTY'S TRANSACTION DOCUMENTS," "ITS TRANSACTION DOCUMENTS" or by a
similar expression.
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"TRANSFER DATE" means any date on which Receivables and related Other
Conveyed Property are sold and assigned to ARFC III pursuant to SECTION 2.2.
SECTION 1.3 USAGE OF TERMS. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other gender references to "writing"
include printing, typing, lithography, and other means of reproducing words
in a visible form; references to agreements and other contractual instruments
include all subsequent amendments thereto or changes therein entered into in
accordance with their respective terms and not prohibited by this Agreement
or the Receivables Funding and Servicing Agreement; references to Persons
include their permitted successors and assigns; and the terms "include" or
"including" mean "include without limitation" or "including without
limitation."
SECTION 1.4 CERTAIN REFERENCES. All references to the Principal Balance of
a Receivable as of a Transfer Date shall refer to the close of business on
such day, and as of the first day of a Settlement Period shall refer to the
opening of business on such day. All references to the last day of a
Settlement Period shall refer to the close of business on such day.
SECTION 1.5 NO RECOURSE. Without limiting the obligations of Arcadia
hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection
herewith or therewith, against any stockholder, officer or director, as such,
of Arcadia, or of any predecessor or successor of Arcadia.
SECTION 1.6 EFFECTIVENESS. The "Effectiveness Date" of this Agreement shall
occur on the date on which the conditions set forth in this Agreement shall
have been satisfied or waived by both parties to this Agreement.
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 PURCHASE PRICE. In consideration of the conveyance of the
Receivables and the related Other Conveyed Property to ARFC III on each
Transfer Date, ARFC III shall pay or cause to be paid to Arcadia an amount
(the "PURCHASE PRICE") equal to the product of (x) the outstanding Principal
Balance (as defined in the Receivables Funding and Servicing Agreement) of
each Receivable and (y) 100%. Such amount shall be paid to Arcadia, by wire
transfer of immediately available funds (a) on the date of such conveyance,
in an amount equal to (i) with respect to Premier Receivables, 95%, (ii) with
respect to Classic Receivables (other than Financial Repo Receivables) 93%,
and (iii) with respect to Financial Repo Receivables, 85% and (b) upon the
subsequent transfer by ARFC III of such Receivables for securitization or
upon a Take-Out Securitization, in an amount equal to the remaining balance
of the Purchase Price.
SECTION 2.2 CONVEYANCE OF RECEIVABLES.
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() Subject to the conditions set forth in paragraph (b) below, Arcadia,
pursuant to the mutually agreed upon terms contained herein and pursuant to
one or more Assignment Agreements, shall sell, transfer, assign and otherwise
convey to ARFC III without recourse (but without limitation of its
obligations in this Agreement or the Receivables Funding and Servicing
Agreement), all of the right, title and interest of Arcadia, whether then
existing or thereafter acquired, in and to the Receivables listed on the
Schedule of Receivables and the related Other Conveyed Property. It is the
intention of ARFC III and Arcadia that the transfers and assignments
contemplated by this Agreement and each Assignment Agreement shall constitute
a sale of the Receivables and the Other Conveyed Property from Arcadia to
ARFC III, conveying good title thereto free and clear of any Liens, and the
Receivables and Other Conveyed Property shall not be a part of Arcadia's
estate in the event of the filing of a bankruptcy petition by or against
Arcadia under any bankruptcy or similar law.
() Arcadia shall transfer to ARFC III the Receivables and the related
Other Conveyed Property as described in paragraph (a) above only upon the
satisfaction of each of the following conditions on or prior to the related
Transfer Date:
() Arcadia shall have delivered to ARFC III a duly executed Assignment
Agreement (including an acceptance by ARFC III), which shall include a
Schedule of Receivables listing the Receivables being transferred on such
Transfer Date, including the loan numbers thereof;
() as of such Transfer Date, Arcadia shall not have been insolvent nor
shall Arcadia have been rendered insolvent by such sale and assignment nor
shall Arcadia be aware of any pending insolvency;
() Arcadia shall have taken any action necessary or advisable to
maintain the first priority perfected ownership interest of ARFC III in the
Receivables and Other Conveyed Property;
() no selection procedures adverse to the interests of ARFC III shall
have been used by Arcadia or ARFC III in selecting the Receivables;
() Arcadia shall have provided to ARFC III any information reasonably
requested by ARFC III with respect to the Receivables;
() each of the representations and warranties made by Arcadia pursuant
to SECTION 3.1 shall be true and correct as of the related Transfer Date, and
Arcadia shall have performed all obligations to be performed by it hereunder
on or prior to such Transfer Date;
() Arcadia shall, at its own expense, on or prior to the Transfer Date,
indicate in its computer files that the Receivables identified in the
Assignment Agreement have been sold to ARFC III pursuant to this Agreement
and the related Assignment Agreement;
() if Arcadia is not acting as a Custodian under the Receivables
Funding and Servicing Agreement, Arcadia shall have delivered the Receivable
Files with respect to such Receivables to the Custodian.
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() Arcadia shall have delivered to the Agent an Officer's Certificate
confirming the satisfaction of each condition precedent specified in this
paragraph (b).
SECTION 2.3 DELIVERY OF RECEIVABLES FILE. In the event that at any time
Arcadia is not acting as Custodian under the Receivables Financing and
Servicing Agreement, Arcadia shall deliver or cause to be delivered to ARFC
III within three Business Days after each Transfer Date a notice indicating
transfer of the related Receivable Files to the Custodian.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF ARCADIA. Arcadia hereby
makes the following representations and warranties, on which ARFC III relies
in purchasing the Receivables and the Other Conveyed Property. Such
representations are made as of the Effectiveness Date and each Transfer Date,
and shall survive the sale, transfer and assignment of the Receivables and
the Other Conveyed Property hereunder and under the Assignment Agreements and
the pledge thereof by ARFC III to the Collateral Agent on behalf of the
Investors under the Receivables Funding and Servicing Agreement. Arcadia and
ARFC III agree that ARFC III will pledge to the Collateral Agent for the
benefit of the Investors all of ARFC III's rights under this Agreement and
that the Collateral Agent on behalf of the Investors will, to the extent
provided in the Transaction Documents, thereafter be entitled to enforce this
Agreement against Arcadia.
() SCHEDULE OF REPRESENTATIONS. The representations and warranties set
forth on the Schedule of Representations are true and correct.
() ORGANIZATION AND GOOD STANDING. Arcadia has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Minnesota, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such business
is currently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire, own and sell the Receivables and the
Other Conveyed Property transferred to ARFC III.
() DUE QUALIFICATION. Arcadia is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property or the conduct of its business requires such qualification.
() POWER AND AUTHORITY. Arcadia has the power and authority to execute
and deliver this Agreement, each Assignment Agreement and its Transaction
Documents and to carry out its terms and their terms, respectively; Arcadia
has full power and authority to sell and assign the Receivables and the Other
Conveyed Property to be sold and assigned to and deposited with ARFC III
under each Assignment Agreement and has duly authorized such sale and
assignment to ARFC III by all necessary corporate action; and the execution,
delivery and performance of this Agreement, each Assignment Agreement and
Arcadia's Transaction Documents have been duly authorized by Arcadia by all
necessary corporate action.
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() VALID SALE; BINDING OBLIGATIONS. This Agreement, each Assignment
Agreement and Arcadia's Transaction Documents have been duly executed and
delivered, shall effect a valid sale, transfer and assignment of the
Receivables and the Other Conveyed Property, enforceable against Arcadia and
creditors of and purchasers from Arcadia; and this Agreement, each Assignment
Agreement and Arcadia's Transaction Documents constitute legal, valid and
binding obligations of Arcadia enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability
of specific remedies, regardless of whether such enforceability is considered
in a proceeding in equity or at law.
() NO VIOLATION. The consummation of the transactions contemplated by
this Agreement, each Assignment Agreement and the Transaction Documents and
the fulfillment of the terms of this Agreement, each Assignment Agreement and
the Transaction Documents shall not conflict with, result in any breach of
any of the terms and provisions of or constitute (with or without notice,
lapse of time or both) a default under, the articles of incorporation or
bylaws of Arcadia, or any indenture, agreement, mortgage, deed of trust or
other instrument to which Arcadia is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument, other than this Agreement, each Assignment
Agreement and the Receivables Funding and Servicing Agreement, or violate any
law, order, rule or regulation applicable to Arcadia of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over Arcadia or any of its properties.
() NO PROCEEDINGS. There are no proceedings or investigations pending
or, to, Arcadia's knowledge, threatened against Arcadia, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over Arcadia or its properties (i)
asserting the invalidity of this Agreement, any Assignment Agreement or any
of the Transaction Documents, (ii) seeking any determination or ruling that
might materially and adversely affect the performance by Arcadia of its
obligations under, or the validity or enforceability of, this Agreement, any
Assignment Agreement or any of the Transaction Documents or (iii) seeking to
affect adversely the federal income tax or other federal, state or local tax
attributes of, or seeking to impose any excise, franchise, transfer or
similar tax upon, the transfer and acquisition of the Receivables and the
Other Conveyed Property hereunder, under any Assignment Agreement or under
the Receivables Funding and Servicing Agreement.
() NO TERMINATION EVENTS. No default hereunder or Servicer Termination
Event shall have occurred and be continuing.
() CHIEF EXECUTIVE OFFICE. The chief executive office of Arcadia is
located at 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, XX
00000-0000.
SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF ARFC III. ARFC III hereby
makes the following representations and warranties, on which Arcadia relies
in selling, assigning, transferring and conveying the Receivables and the
Other Conveyed Property to ARFC III under this Agreement and each Assignment
Agreement. Such representations are made as of the Effectiveness Date and
each Transfer Date, and shall survive the sale, transfer and assignment of
the Receivables and the Other Conveyed Property
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hereunder and under each Assignment Agreement and the pledge thereof by ARFC
III to the Collateral Agent for the benefit of the Investors under the
Receivables Funding and Servicing Agreement.
() ORGANIZATION AND GOOD STANDING. ARFC III has been duly organized and
is validly existing and in good standing as a corporation under the laws of
the State of Delaware, with the power and authority to own its properties and
to conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and has, full
power, authority and legal right to acquire and own the Receivables and the
Other Conveyed Property and to pledge the Receivables and the Other Conveyed
Property to the Collateral Agent for the benefit of the Investors pursuant to
the Receivables Funding and Servicing Agreement.
() DUE QUALIFICATION. ARFC III is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions where the failure to do so would
materially and adversely affect (i) ARFC III's ability to acquire the
Receivables or the Other Conveyed Property, (ii) the validity or
enforceability of the Receivables and the Other Conveyed Property or (iii)
ARFC III's ability to perform its obligations hereunder, under any Assignment
Agreement and under its Transaction Documents.
() POWER AND AUTHORITY. ARFC III has the power, authority and legal
right to execute and deliver this Agreement, each Assignment Agreement and
its Transaction Documents and to carry out the terms hereof and thereof and
to acquire the Receivables and the Other Conveyed Property hereunder and
under each Assignment Agreement; and the execution, delivery and performance
of this Agreement, each Assignment Agreement and its Transaction Documents
and all of the documents required pursuant hereto or thereto have been duly
authorized by ARFC III by all necessary action.
() NO CONSENT REQUIRED. ARFC III is not required to obtain the consent
of any other Person, or any consent, license, approval or authorization or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery or performance of this
Agreement, each Assignment Agreement and the Transaction Documents, except
for such as have been obtained, effected or made.
() BINDING OBLIGATION. This Agreement, each Assignment Agreement and
each of its Transaction Documents constitutes a legal, valid and binding
obligation of ARFC III, enforceable against ARFC III in accordance with its
terms, subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws and to general equitable principles.
() NO VIOLATION. The execution, delivery and performance by ARFC III of
this Agreement and each Assignment Agreement, the consummation of the
transactions contemplated by this Agreement, each Assignment Agreement and
the Transaction Documents and the fulfillment of the terms of this Agreement,
each Assignment Agreement and the Transaction Documents do not and will not
conflict with, result in any breach of any of the terms and provisions of or
constitute (with or without notice or lapse of time) a default under the
certificate of incorporation or bylaws of ARFC III, or conflict with or
breach any of the terms or provisions of, or constitute (with or without
notice or lapse of time) a default under, any indenture, agreement, mortgage,
deed of trust or other instrument to which ARFC III is a party or by which
ARFC III is bound or to which any of its properties are subject, or result in
the creation or imposition of any Lien upon any of its
7
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument (other than the Receivables Funding and
Servicing Agreement), or violate any law, order, rule or regulation,
applicable to ARFC III or its properties, of any federal or state regulatory
body or any court, administrative agency, or other governmental
instrumentality having jurisdiction over ARFC III or any of its properties.
() NO PROCEEDINGS. There are no proceedings or investigations pending,
or, to the knowledge of ARFC III, threatened against ARFC III, before any
court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over ARFC III or its
properties: (i) asserting the invalidity of this Agreement, any Assignment
Agreement or any of the Transaction Documents, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement, any
Assignment Agreement or any of the Transaction Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by ARFC III of its obligations under, or the validity or
enforceability of, this Agreement, any Assignment Agreement or any of the
Transaction Documents or (iv) that may adversely affect the federal or state
income tax attributes of, or seeking to impose any excise, franchise,
transfer or similar tax upon, the transfer and acquisition of the Receivables
and the Other Conveyed Property hereunder or under any Assignment Agreement
or the pledge of the Receivables and the Other Conveyed Property to the
Collateral Agent on behalf of the Investors pursuant to the Receivables
Funding and Servicing Agreement. In the event of any breach of a
representation and warranty made by ARFC III hereunder, Arcadia and ARFC III
agree that damages will not be an adequate remedy for such breach and that
this covenant may be specifically enforced by ARFC III or by the Collateral
Agent on behalf of the Investors.
ARTICLE IV
COVENANTS OF ARCADIA
SECTION 4.1 PROTECTION OF TITLE OF ARFC III.
() At or prior to the Closing Date, Arcadia shall have filed or caused
to be filed a UCC-1 financing statement, executed by Arcadia as seller or
debtor, naming ARFC III as purchaser or secured party and describing the
Receivables and the Other Conveyed Property, with respect to this Agreement
and each Assignment Agreement, being sold by it to ARFC III as collateral,
with the office of the Secretary of State of the State of Minnesota and in
such other locations as ARFC III shall have required. From time to time
thereafter, Arcadia shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of ARFC III under this Agreement and each
Assignment Agreement and of the Collateral Agent under the Receivables
Funding and Servicing Agreement in the Receivables and the Other Conveyed
Property and in the proceeds thereof. Arcadia shall deliver (or cause to be
delivered) to ARFC III, the Agent and the Collateral Agent file-stamped
copies of, or filing receipts for, any document filed as provided above, as
soon as available following such filing. In the event that Arcadia fails to
perform its obligations under this subsection, ARFC III may do so at the
expense of Arcadia.
() Arcadia shall not change its name, identity, or corporate structure
in any manner that would, could or might make any financing statement or
continuation statement filed by Arcadia (or by ARFC III, the Agent or the
Collateral Agent on behalf of Arcadia) in accordance with
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paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC, unless it shall have given ARFC III, the Agent and the
Collateral Agent at least 60 days' prior written notice thereof, and shall
promptly file appropriate amendments to all previously filed financing
statements and continuation statements.
() Arcadia shall give ARFC III, the Agent and the Collateral Agent at
least 60 days' prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement. Arcadia shall at all times maintain each office from which it
services Receivables and its principal executive office within the United
States of America.
() Arcadia shall maintain its computer systems so that, from and after
the time of sale under this Agreement and under any Assignment Agreement of
the Receivables to ARFC III, and the pledge of the Receivables by ARFC III to
the Collateral Agent for the benefit of the Investors, Arcadia's master
computer records (including archives) that shall refer to a Receivable
indicate clearly that such Receivable has been sold to ARFC III and has been
pledged by ARFC III to the Collateral Agent on behalf of the Investors.
Indication of the Collateral Agent's security interest in the Receivable
shall be deleted from or modified on Arcadia's computer systems when, and
only when, the Receivable shall become a Pledged Receivable, shall have been
paid in full or shall otherwise have been released from such security
interest pursuant to the Transaction Documents. Arcadia shall indicate in
its consolidated financial statements that Receivables have been sold to ARFC
III and are not available to the creditors of Arcadia.
() If at any time Arcadia shall propose to sell, grant a security
interest in, or otherwise transfer any interest in motor vehicle receivables
to any prospective purchaser, lender or other transferee, Arcadia shall give
to such prospective purchaser, lender, or other transferee computer tapes,
records, or print-outs (including any restored from archives) that, if they
shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold to ARFC III and is subject to a
security interest in favor of the Collateral Agent for the benefit of the
Investors.
SECTION 4.2 OTHER LIENS OR INTERESTS. Except for the conveyances under
any Assignment Agreement, Arcadia will not sell, pledge, assign or transfer
to any other Person, or grant, create, incur, assume or suffer to exist any
Lien on the Receivables or the Other Conveyed Property, or any interest
therein, and Arcadia shall defend the right, title and interest of ARFC III
and the Collateral Agent on behalf of the Investors in and to the Receivables
and the Other Conveyed Property against all claims of third parties claiming
through or under Arcadia.
SECTION 4.3 COSTS AND EXPENSES; FEES.
() Arcadia shall pay all reasonable costs and disbursements in
connection with the performance of its obligations hereunder and under each
Assignment Agreement and its Transaction Documents.
() In consideration of ARFC III's purchase of Receivables (and the
related Other Conveyed Property) from time to time hereunder, Arcadia hereby
agrees to pay to ARFC III the
9
amount of any fees payable by ARFC III pursuant to the Fee Letter in respect
of the unused portion of the Facility.
SECTION 4.4 INDEMNIFICATION.
() Arcadia shall defend, indemnify and hold harmless ARFC III, each
Investor, the Agent, the Collateral Agent and the Backup Servicer from and
against any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from any breach of any of Arcadia's
representations and warranties contained herein.
() Arcadia shall defend, indemnify and hold harmless ARFC III, each
Investor, the Agent, the Collateral Agent and the Backup Servicer from and
against any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the use, ownership or operation
by Arcadia or any affiliate thereof of a Financed Vehicle.
() Arcadia shall defend, indemnify and hold harmless ARFC III, each
Investor, the Agent, the Collateral Agent and the Backup Servicer against any
and all costs, expenses, losses, damages, claims and liabilities arising out
of or resulting from any action taken, or failed to be taken, by it in
respect of any portion of the Receivables and the Other Conveyed Property
transferred hereunder other than in accordance with this Agreement or the
Receivables Funding and Servicing Agreement.
() Arcadia agrees to pay, and shall defend, indemnify and hold harmless
ARFC III, each Investor, the Agent, the Collateral Agent and the Backup
Servicer from and against any taxes that may at any time be asserted against
ARFC III, each Investor, the Agent, the Collateral Agent or the Backup
Servicer with respect to the transactions contemplated in this Agreement or
in any Assignment Agreement, including, without limitation, any sales, gross
receipts, general corporation, tangible or intangible personal property,
privilege, or license taxes (but not including any taxes asserted with
respect to, and as of the date of, any sale, transfer and assignment of the
Receivables and the Other Conveyed Property to ARFC III, or asserted with
respect to ownership of the Receivables and Other Conveyed Property which
shall be indemnified by Arcadia pursuant to clause (e) below, or federal,
state or other income taxes, arising out of distributions on the Note or
transfer taxes arising in connection with the transfer of the Note) and costs
and expenses in defending against the same, arising by reason of the acts to
be performed by Arcadia under this Agreement or under any Assignment
Agreement or imposed against such Persons.
() Arcadia agrees to pay, and to indemnify, defend and hold harmless
ARFC III, each Investor, the Agent, the Collateral Agent and the Backup
Servicer from, any taxes which may at any time be asserted against such
Persons with respect to, and as of the date of, the conveyance or ownership
of any Receivables or the Other Conveyed Property hereunder or under each
Assignment Agreement and the pledge of such Receivables and Other Conveyed
Property under the Receivables Funding and Servicing Agreement, including,
without limitation, any sales, gross receipts, personal property, tangible or
intangible personal property, privilege or license taxes (but not including
any federal or other income taxes, including franchise taxes, arising out of
the transactions contemplated hereby or transfer taxes arising in connection
with the transfer of Note) and costs and expenses in defending against the
same, arising by reason of the acts to be performed by Arcadia under this
Agreement or under any Assignment Agreement or imposed against such Persons.
10
() Arcadia shall defend, indemnify, and hold harmless ARFC III, each
Investor, the Agent, the Collateral Agent and the Backup Servicer from and
against any and all costs, expenses, losses, claims, damages, and liabilities
to the extent that such cost, expense, loss, claim, damage, or liability
arose out of, or was imposed upon ARFC III, any Investor, the Agent, the
Collateral Agent or the Backup Servicer through the negligence, willful
misfeasance, or bad faith of Arcadia in the performance of its duties under
this Agreement or under any Assignment Agreement or by reason of reckless
disregard of Arcadia's obligations and duties under this Agreement or under
any Assignment Agreement.
() Arcadia shall indemnify, defend and hold harmless ARFC III, each
Investor, the Agent, the Collateral Agent and the Backup Servicer from and
against any loss, liability or expense imposed upon, or incurred by, ARFC
III, each Investor, the Agent, the Collateral Agent or the Backup Servicer as
a result of the failure of any Receivable, or the sale of the related
Financed Vehicle, to comply with all requirements of applicable law.
() Arcadia shall defend, indemnify, and hold harmless ARFC III and its
assignees from and against all costs, expenses, losses, claims, damages, and
liabilities arising out of or incurred in connection with the acceptance or
performance of Arcadia's duties as Servicer under the Receivables Funding and
Servicing Agreement, except to the extent that such cost, expense, loss,
claim, damage, or liability shall be due to the willful misfeasance, bad
faith, or negligence (except for errors in judgment) of ARFC III.
Indemnification under this SECTION 4.4 shall include reasonable fees and
expenses of counsel and expenses of litigation. The indemnity obligations
hereunder shall be in addition to any obligation that Arcadia may otherwise
have.
ARTICLE V
REPURCHASES
SECTION 5.1 REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY OR
COVENANT. Upon the occurrence of a Repurchase Event, Arcadia shall, unless
such breach shall have been cured in all material respects, repurchase such
Receivable from ARFC III by the last day of the first full calendar month
following discovery or notice to Arcadia of such breach, and Arcadia shall
pay the sum of the outstanding principal amount of such Receivable plus
accrued interest thereon in each case as of the date of repurchase (the
"PURCHASE AMOUNT"). It is understood and agreed that, except as set forth in
SECTION 6.1, the obligation of Arcadia to repurchase any Receivable as to
which a breach has occurred and is continuing shall, if such obligation is
fulfilled, constitute the sole remedy against Arcadia for such breach
available to ARFC III, the Investors the Agent, the Collateral Agent and the
Backup Servicer. The provisions of this SECTION 5.1 are intended to grant the
Collateral Agent, for the benefit of the Investors, a direct right against
Arcadia to demand performance hereunder, and in connection therewith, Arcadia
waives any requirement of prior demand against ARFC III with respect to such
repurchase obligation. Any such purchase shall take place in the manner
specified in Section 8.7 of the Receivables Funding and Servicing Agreement.
Notwithstanding any other provision of this Agreement or the Receivables
Funding and Servicing Agreement to the contrary, the obligation of Arcadia
under this Section shall not terminate upon a termination of Arcadia as
Servicer under the Receivables Funding and Servicing Agreement and shall be
performed in accordance with the terms hereof notwithstanding the failure of
the Servicer or ARFC
11
III to perform any of their respective obligations with respect to such
Receivable under the Receivables Funding and Servicing Agreement.
In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by Arcadia, Arcadia shall indemnify the
Collateral Agent on behalf of the Investors against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them
as a result of third party claims arising out of the events or facts giving
rise to such Repurchase Events.
SECTION 5.2 REASSIGNMENT OF PURCHASED RECEIVABLES. Upon deposit in the
Collection Account of the Purchase Amount of any Receivable repurchased by
Arcadia under SECTION 5.1, ARFC III and the Collateral Agent on behalf of the
Investors shall take such steps as may be reasonably requested by Arcadia in
order to assign to Arcadia all of ARFC III's right, title and interest in and
to such Receivable and all security and documents and all Other Conveyed
Property conveyed to ARFC III directly relating thereto, and to release the
Collateral Agent's security interest therein, without recourse,
representation or warranty, except as to the absence of liens, charges or
encumbrances created by or arising as a result of actions of ARFC III. Such
assignment shall be a sale and assignment outright, and not for security.
If, following the reassignment of a Purchased Receivable, in any enforcement
suit or legal proceeding, it is held that Arcadia may not enforce any such
Receivable on the ground that it shall not be a real party in interest or a
holder entitled to enforce the Receivable, ARFC III shall, at the expense of
Arcadia, take such steps as Arcadia deems reasonably necessary to enforce the
Receivable, including bringing suit in ARFC III's name.
SECTION 5.3 WAIVERS. No failure or delay on the part of ARFC III, or the
Collateral Agent on behalf of the Investors as assignee of ARFC III, in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other or future exercise thereof or the exercise
of any other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 LIABILITY OF ARCADIA. Arcadia shall be liable in accordance
herewith only to the extent of the obligations in this Agreement or in any
Assignment Agreement specifically undertaken by Arcadia and the
representations and warranties of Arcadia.
SECTION 6.2 MERGER OR CONSOLIDATION OF ARCADIA OR ARFC III. Any
corporation or other entity (i) into which Arcadia or ARFC III may be merged
or consolidated, (ii) resulting from any merger or consolidation to which
Arcadia or ARFC III is a party or (iii) succeeding to the business of Arcadia
or ARFC III, in the case of ARFC III, which corporation has a certificate of
incorporation containing provisions relating to limitations on business and
other matters substantively identical to those contained in ARFC III's
certificate of incorporation, provided that in any of the foregoing cases
such corporation shall execute an agreement of assumption to perform every
obligation of Arcadia or ARFC III, as the case may be, under this Agreement
and each Assignment Agreement and,
12
whether or not such assumption agreement is executed, shall be the successor
to Arcadia or ARFC III, as the case may be, hereunder and under each such
Assignment Agreement (without relieving Arcadia or ARFC III of its
responsibilities hereunder, if it survives such merger or consolidation)
without the execution or filing of any document or any further act by any of
the parties to this Agreement or each Assignment Agreement. Notwithstanding
the foregoing, ARFC III shall not merge or consolidate with any other Person
or permit any other Person to become the successor to ARFC III's business
without the prior written consent of the Agent. Arcadia or ARFC III shall
promptly inform the other party, the Agent, the Collateral Agent and the
Backup Servicer of any such merger, consolidation or purchase and assumption.
Notwithstanding the foregoing, as a condition to the consummation of the
transactions referred to in clauses (i), (ii) and (iii) above, (x)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to SECTIONS 3.1 and 3.2 of this Agreement, or similar
representation or warranty made in any Assignment Agreement, shall have been
breached (for purposes hereof, such representations and warranties shall
speak as of the date of the consummation of such transaction), (y) Arcadia or
ARFC III, as applicable, shall have delivered prompt written notice of such
consolidation, merger or purchase and assumption to the Agent, the Collateral
Agent and the Backup Servicer prior to the consummation of such transaction
and shall have delivered to the Agent an Officer's Certificate and an Opinion
of Counsel each stating that such consolidation, merger or succession and
such agreement of assumption comply with this SECTION 6.2 and that all
conditions precedent, if any, provided for in this Agreement, or in each
Assignment Agreement, relating to such transaction have been complied with,
and (z) Arcadia or ARFC III, as applicable, shall have delivered to the Agent
an Opinion of Counsel, stating that, in the opinion of such counsel, either
(A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary to preserve and
protect the interest of the Collateral Agent for the benefit of the Investors
in the Receivables and Other Conveyed Property and reciting the details of
the filings or (B) no such action shall be necessary to preserve and protect
such interest.
SECTION 6.3 LIMITATION ON LIABILITY OF ARCADIA AND OTHERS. Arcadia and
any director, officer, employee or agent may rely in good faith on the advice
of counsel or on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this Agreement.
Arcadia shall not be under any obligation to appear in, prosecute or defend
any legal action that is not incidental to its obligations under this
Agreement, any Assignment Agreement or its Transaction Documents and that in
its opinion may involve it in any expense or liability.
SECTION 6.4 AMENDMENT.
This Agreement and any Assignment Agreement may be amended by Arcadia and
ARFC III, with the consent of the Agent.
SECTION 6.5 NOTICES. All demands, notices and communications to Arcadia
or ARFC III hereunder shall be in writing, personally delivered, or sent by
telecopier (subsequently confirmed in writing), reputable overnight courier
or mailed by certified mail, return receipt requested, and shall be deemed to
have been given upon receipt (a) in the case of Arcadia, to Arcadia Financial
Ltd., 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000,
Attention: Xxxx X. Xxxxxx, or such other address as shall be designated by
Arcadia in a written notice delivered to Arcadia and to the Agent, as
applicable, or (b) in case of ARFC III, to Arcadia Receivables Finance Corp.
II, 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx
00000-0000, Attention: Xxxx X. Xxxxxx.
13
SECTION 6.6 MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement, each Assignment Agreement and the
Transaction Documents set forth the entire understanding of the parties
relating to the subject matter hereof, and all prior understandings, written
or oral, are superseded by this Agreement, each Assignment Agreement and the
Transaction Documents. Neither this Agreement nor any Assignment Agreement
may be modified, amended, waived or supplemented except as provided herein.
SECTION 6.7 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, provisions or terms of this Agreement or any Assignment Agreement
shall be for any reason whatsoever held invalid, then such covenants,
provisions or terms shall be deemed severable from the remaining covenants,
provisions or terms of this Agreement or any Assignment Agreement and shall
in no way affect the validity or enforceability of the other provisions of
this Agreement or any Assignment Agreement.
SECTION 6.8 INTENTION OF THE PARTIES. The execution and delivery of this
Agreement shall constitute an acknowledgment by Arcadia and ARFC III that
they intend that the assignments and transfers herein contemplated pursuant
to each Assignment Agreement constitute a sale and assignment outright, and
not for security, of the Receivables and the Other Conveyed Property,
conveying good title thereto free and clear of any Liens, from Arcadia to
ARFC III, and that the Receivables and the Other Conveyed Property shall not
be a part of Arcadia's estate in the event of the bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding, or other proceeding under
any federal or state bankruptcy or similar law, or the occurrence of another
similar event, of, or with respect to, Arcadia. In the event that such
conveyance is determined to be made as security for a loan made by ARFC III
to Arcadia, the parties intend that Arcadia shall have granted (and Arcadia
does hereby grant) to ARFC III a security interest in all of Arcadia's right,
title and interest in and to the Receivables and the Other Conveyed Property
conveyed pursuant to each Assignment Agreement and that this Agreement shall
constitute a security agreement under applicable law.
SECTION 6.9 GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
ANY OTHERWISE APPLICABLE CONFLICT OF LAW PRINCIPLES (OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
SECTION 6.10 COUNTERPARTS. For the purpose of facilitating the execution
of this Agreement and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts
shall be deemed to be an original, and all of which counterparts shall
constitute but one and the same instrument.
SECTION 6.11 PLEDGE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY TO
THE COLLATERAL AGENT ON BEHALF OF THE INVESTORS. Arcadia acknowledges that
ARFC III intends, pursuant to the Receivables Funding and Servicing
Agreement, to pledge and assign the Receivables and the Other Conveyed
Property together with its rights under this Agreement to the Collateral
Agent for the benefit of the Investors on the date hereof. Arcadia
acknowledges and consents to such pledge and assignment and waives any
further notice thereof and covenants and
14
agrees that the representations and warranties of Arcadia contained in this
Agreement and the rights of ARFC III hereunder are intended to benefit the
Collateral Agent for the benefit of the Investors. In furtherance of the
foregoing, Arcadia covenants and agrees to perform its duties and obligations
hereunder, in accordance with the terms hereof for the benefit of the
Collateral Agent for the benefit of the Investors and that, notwithstanding
anything to the contrary in this Agreement, Arcadia shall be directly liable
to the Collateral Agent for the benefit of the Investors (notwithstanding any
failure by the Servicer, the Backup Servicer or ARFC III to perform its
duties and obligations hereunder or under the Receivables Funding and
Servicing Agreement) and that the Collateral Agent for the benefit of the
Investors may enforce the duties and obligations of Arcadia under this
Agreement against Arcadia.
[Signature Pages to Follow]
15
IN WITNESS WHEREOF, the parties have caused this Receivables
Purchase Agreement and Assignment to be duly executed by their respective
officers as of the day and year first above written.
ARCADIA RECEIVABLES FINANCE CORP. III,
AS PURCHASER
By:
Name:
Title:
ARCADIA FINANCIAL LTD., AS SELLER
By:
Name:
Title:
[Signature page to Receivables Purchase Agreement]
EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT, dated as of ___________ __, executed
between ARCADIA RECEIVABLES FINANCE CORP. III, a Delaware corporation, as
purchaser ("ARFC III"), and ARCADIA FINANCIAL LTD., a Minnesota corporation,
as seller ("Arcadia").
W I T N E S S E T H:
WHEREAS, ARFC III and Arcadia are parties to the Receivables
Purchase Agreement and Assignment dated as of October 17, 1997 (hereinafter
as such agreement may have been, or may from time to time be, amended,
supplemented or otherwise modified, the "PURCHASE AGREEMENT"); and
WHEREAS, pursuant to the Purchase Agreement, Arcadia wishes to
convey Receivables and Other Conveyed Property (as each such term is defined
in the Purchase Agreement) to ARFC III hereunder;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, ARFC III and
Arcadia, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS. All terms defined in the Purchase Agreement
(whether directly or by reference to other documents) and used herein shall
have such defined meanings when used herein, unless otherwise defined herein.
"Transfer Date" shall mean, with respect to the Receivables and the
related Other Conveyed Property being conveyed hereby, ____________________
__, ____.
2. SCHEDULE OF RECEIVABLES. The Schedule of Receivables attached
hereto as Exhibit A is a supplement to the Schedule of Receivables attached
as Schedule A to the Purchase Agreement. The Receivables listed in the
Schedule of Receivables constitute the Receivables to be conveyed pursuant to
this Agreement on the Transfer Date.
3. CONVEYANCE OF RECEIVABLES. Subject to the conditions specified
in Section 2.2(b) of the Purchase Agreement and subject to the mutually
agreed upon terms contained in the Purchase Agreement, Arcadia hereby sells,
transfers, assigns and otherwise conveys to ARFC III without recourse (but
without limitation of its obligations in the Purchase Agreement or the
Receivables Funding and Servicing Agreement), all of the right, title and
interest of Arcadia, whether now existing or hereafter acquired, in and to
all accounts, contract rights, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of deposit,
goods, letters of credit, advices of credit and uncertified securities
consisting of, arising from or relating to the Receivables listed on Schedule
A hereto and the related Other Conveyed Property.
A-25
4. INCORPORATION OF PURCHASE AGREEMENT. This Assignment Agreement
is made pursuant to and in reliance upon the representations, warranties and
agreements on the part of Arcadia and ARFC III contained in the Purchase
Agreement and shall be governed in all respects by the Purchase Agreement.
5. RATIFICATION OF PURCHASE AGREEMENT. As supplemented by this
Agreement, the Purchase Agreement is in all respects ratified and confirmed
and the Purchase Agreement as so supplemented by this Agreement shall be
read, taken and construed as one and the same instrument.
6. COUNTERPARTS. This Assignment Agreement may be executed in two
or more counterparts, each of which shall be an original, but all of which
together shall constitute one and the same instrument.
7. GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
ANY OTHERWISE APPLICABLE CONFLICT OF LAW PRINCIPLES (OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
IN WITNESS WHEREOF, the undersigned have caused this Assignment
Agreement to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
ARCADIA RECEIVABLES FINANCE CORP. III,
AS PURCHASER
By:______________________________
Name:
Title:
ARCADIA FINANCIAL LTD.,
AS SELLER
By:______________________________
Name:
Title:
A-26
SCHEDULE A
SCHEDULE OF RECEIVABLES
[Deemed Incorporated from each Assignment Agreement]
SCHEDULE B
REPRESENTATIONS AND WARRANTIES OF ARCADIA
As of the date which any Receivable is sold to ARFC III, Arcadia
represents and warrants the following as to each such Receivable:
(a) the Receivable (i) was originated by a Dealer for the
retail sale of a Financed Vehicle in the ordinary course of such
Dealer's business and such Dealer had all necessary licenses and
permits to originate Receivables in the state where such Dealer was
located, was fully and properly executed by the parties thereto, was
purchased by Arcadia from such Dealer under an existing Dealer
Agreement with Arcadia and was validly assigned by such Dealer to
Arcadia, (ii) contains customary and enforceable provisions such as
to render the rights and remedies of the holder thereof adequate for
realization against the collateral security, and (iii) is interest
bearing, fully amortizing and provides for level monthly payments
(PROVIDED that the payment in the first monthly period and the final
monthly period of the life of the Receivable may be minimally
different from the level monthly payment) which, if made when due,
shall fully amortize the related Amount Financed over the original
term;
(b) the Receivable is a United States dollar obligation of an
Obligor domiciled in the United States and was sold by the Dealer to
Arcadia without any fraud or material misrepresentation on the part
of such Dealer;
(c) with respect to the Receivable, all requirements of
applicable federal, state and local laws, and regulations thereunder
(including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair
Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the
Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's Regulations
"B" and "Z", the Soldiers' and Sailors' Act, the Minnesota Motor
Vehicle Retail Installment Sales Act and state adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code and
other consumer credit laws and equal credit opportunity and
disclosure laws), in respect of such Receivable, the sale of the
Financed Vehicle related thereto and the sale of credit life and
credit accident and health insurance and any extended service
contracts, if any, in connection with such Receivable, have been
complied with in all material respects;
(d) the Receivable was originated in the United States of
America and, at the time of origination, materially conformed to all
requirements of the Dealer Underwriting Guidelines applicable to
such Receivable;
(e) the Receivable represents the genuine, legal, valid and
binding payment obligation of the Obligor thereon, enforceable by
the holder thereof in accordance with its terms, except (i) as
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of
B-30
creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law and
(ii) as such Receivable may be modified by the application of the
Soldiers' and Sailors' Act; and all parties to such Receivable had
full legal capacity to execute and deliver such Receivable and all
other documents related thereto and to grant the security interest
purported to be granted thereby;
(f) the Receivable is not an obligation due from the United
States of America or any State or from any agency, department,
subdivision or instrumentality thereof;
(g) with respect to the Receivable, the information pertaining
to such Receivable set forth in the applicable Schedule of
Receivables has been produced from the Electronic Ledger and is true
and correct in all material respects;
(h) with respect to the Receivable, Arcadia will have caused
the portions of the Electronic Ledger to be clearly and
unambiguously marked to show that such Receivable is owned by ARFC
III and is subject to the Lien of the Collateral Agent;
(i) the Monthly Tape with respect to such Receivable made
available by the Servicer to the Agent was complete and accurate in
all respects as of the date delivered and includes a description of
such Receivable;
(j) the Receivable constitutes chattel paper within the
meaning of the UCC;
(k) the Receivable is evidenced by only one original executed
copy;
(l) a Receivable File with respect to the Receivable is in
the possession of the Custodian at its office specified in the
Receivables Funding and Servicing Agreement and such Receivable File
contains (i) the fully executed original of such Receivable, (ii) a
certificate of insurance, an application form for insurance signed
by the related Obligor, or a signed representation letter from the
Obligor named in such Receivable pursuant to which such Obligor has
agreed to obtain physical damage insurance for the related Financed
Vehicle, or copies thereof, or a documented verbal confirmation by
an insurance agent for such Obligor of a policy number for an
insurance policy for the Financed Vehicle, (iii) the original Lien
Certificate or application therefor or a letter from the applicable
Dealer agreeing unconditionally to repurchase the related Receivable
if the certificate of title is not received by the Servicer within
180 days (provided that the Lien Certificate is delivered to the
Custodian within 180 days), and (iv) a credit application signed by
the Obligor, or a copy thereof; each of such documents which is
required to be signed by the Obligor has been signed by the Obligor
in the appropriate spaces; and all blanks on any form have been
properly filled in and each form has otherwise been correctly
prepared;
B-31
(m) the Receivable has not been satisfied, subordinated or
rescinded, and the Financed Vehicle securing such Receivable has not
been released from the lien of such Receivable in whole or in part;
no provisions of such Receivable have been waived, altered or
modified in any respect since its origination, except by instruments
or documents identified in the Receivable File; and no Receivable
has been modified as a result of application of the Soldiers' and
Sailors' Act;
(n) the Receivable was not originated in, or is subject to the
laws of, any jurisdiction the laws of which would make unlawful,
void or voidable the sale, transfer and assignment of such
Receivable under this Agreement; with respect to such sale, transfer
and assignment of such Receivable under this Agreement and any
Assignment Agreement or the pledge of such Receivable under the
Receivables Funding and Servicing Agreement, either (i) no consent
of any Person is required or (ii) all required consents have been
obtained;
(o) the Receivable has not been sold, transferred, assigned or
pledged by Arcadia to any Person other than ARFC III or by ARFC III
to any Person other than the Collateral Agent. Arcadia was the sole
owner of and had good and indefeasible title thereto, free and clear
of any Lien immediately prior to the conveyance of such Receivable
pursuant to this Agreement. ARFC III was the sole owner thereof and
had good and indefeasible title thereto, free of any Lien
immediately prior to the pledge of such Receivable to the Collateral
Agent;
(p) the Receivable has created, or will create when all
required procedures are completed by the Servicer, a valid, binding
and enforceable first priority perfected security interest in the
related Financed Vehicle in favor of Arcadia as secured party, and
such security interest is, or will be upon the completion of all
required procedures by the Servicer, prior to all other liens upon
and security interests in such Financed Vehicle that now exist or
may hereafter arise or be created (except, as to priority, for any
tax liens, mechanic's liens or that may arise after such Receivables
is conveyed to ARFC III);
(q) all filings (including, without limitation, UCC filings)
required to be made by any Person and actions required to be taken
or performed by any Person in any jurisdiction to give the
Collateral Agent, for the benefit of the Investors, a first priority
perfected lien on such Receivable and the proceeds thereof and the
other Collateral related thereto have been made, taken or performed;
(r) neither Arcadia nor ARFC III has done anything to convey
any right to any Person that would result in such Person having a
right to payments due under such Receivable or otherwise to impair
the rights of the Collateral Agent in such Receivable or the
proceeds thereof;
(s) the Receivable is not assumable by another Person in a
manner which would release the Obligor thereof from such Obligor's
obligations to ARFC III with respect to such Receivable;
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(t) the Receivable is not subject to any right of rescission,
setoff, counterclaim or defense and no such right has been asserted
or threatened with respect to such Receivable;
(u) there has been no default, breach, violation or event
permitting acceleration under the terms of such Receivable (other
than payment delinquencies of not more than 30 days) and no
condition exists or event has occurred and is continuing that with
notice, the lapse of time or both would constitute a default,
breach, violation or event permitting acceleration under the terms
of such Receivable, and there has been no waiver of any of the
foregoing except as otherwise permitted herein;
(v) the related Financed Vehicle has not been repossessed from
the related Obligor;
(w) on the date such Receivable was conveyed to ARFC III, the
related Financed Vehicle was covered by a comprehensive and
collision insurance policy (i) in an amount at least equal to the
lesser of (A) its maximum insurable value and (B) the Amount
Financed, (ii) naming Arcadia as loss payee and (iii) insuring
against loss and damage due to fire, theft, transportation,
collision and other risks generally covered by comprehensive and
collision coverage and with respect to which the Obligor is required
to maintain physical loss and damage insurance, naming Arcadia and
its successors and assigns as additional insured parties, and such
Receivable permits the holder thereof to obtain physical loss and
damage insurance at the expense of the Obligor if the Obligor fails
to do so unless otherwise prohibited by the law of the state in
which the contract was entered into; and the related Financed
Vehicle is not nor has previously been insured under a policy of
Forced Placed Insurance;
(x) the following is true with respect to such Receivable:
() the Lien Certificate for the related Financed
Vehicle shows, or, if a new or replacement Lien Certificate is
being applied for with respect to such Financed Vehicle, the
Lien Certificate will be received within 180 days of the date
such Receivable was conveyed to ARFC III and will show, Arcadia
named as the original secured party under such Receivable and,
accordingly, Arcadia will be the holder of a first priority
security interest in such Financed Vehicle;
() if the Lien Certificate has not yet been returned
from the Registrar of Titles, Arcadia has received written
evidence from the related Dealer or the Obligor that such Lien
Certificate showing Arcadia as first lienholder has been
applied for;
() if the Receivable was originated in a state in
which a filing or recording is required of the secured party to
perfect a security interest in motor vehicles, such filings or
recordings have been duly made to show Arcadia named as the
original secured party under the related Receivable;
B-33
() Arcadia's security interest has been validly
assigned by Arcadia to ARFC III pursuant to this Agreement and
pledged by ARFC III to the Collateral Agent pursuant to the
Receivables Funding and Servicing Agreement;
() immediately after the pledge thereof to the
Collateral Agent, such Receivable will be secured by an
enforceable and perfected first priority security interest in
the related Financed Vehicle in favor of ARFC III, as assignee
from Arcadia, which security interest is prior to all other
liens upon any security interests in such Financed Vehicle
which now exist or may hereafter arise or be created (except,
as to priority, for any lien for taxes, labor or materials
affecting a Finance Vehicle); and
() as of the date such Receivable was conveyed to
ARFC III, there are no Liens or claims for taxes, work, labor
or materials affecting the related Financed Vehicle which are
or may be Liens prior or equal to the lien of the related
Receivable;
(y) no selection procedures adverse to the Investors have been
utilized in selecting the Receivable from all other similar
Receivables originated by Arcadia;
(z) that, as of the last day of the immediately preceding
Settlement Period, if applicable, the Receivable is not a Delinquent
Receivable and none of the Servicer, ARFC III, any Dealer or anyone
acting on behalf of any of them has made any advance of funds in
order to cause such Receivable not to be a Delinquent Receivable;
(aa) such Receivable, when included in the Pledged Receivables,
would not cause the Aggregate Outstanding Principal Balance of
Pledged Receivables which are Financed Repo Receivables to exceed 5%
of the Aggregate Outstanding Principal Balance of the Pledged
Receivables;
(bb) the Receivable has, on the related Advance Date, a
remaining principal balance equal to or greater than $500.00;
(cc) (i) the Receivable does not have an initial payment date
more than three months subsequent to the related date of conveyance
to ARFC III; (ii) the Receivable does not have a final scheduled
payment date on or before the related Advance Date; (iii) after
giving effect to the pledge of the Receivable to the Collateral
Agent on such date, the Aggregate Principal Balances of Pledged
Receivables with original maturities ranging from 73 to 84 months
shall not exceed 7.5% of the Aggregate Outstanding Principal Balance
of the Pledged Receivables on such date; and (iv) the Receivable, as
of such date, (A) had an original maturity of at least three months
but not more than 84 months, (B) had an original amount financed of
at least $1,000 and not more than $77,000, (C) had an APR of at
least 7.75% and not more than 27%, and (D) such Receivable, when
included in the Pledged Receivables would not cause the weighted
average APR of the Pledged Receivables to be reduced below 12%; and
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(dd) the related Obligor with respect to the Receivable, as of
the related Advance Date, is required to make all Scheduled Payments
to the Lockbox Bank.
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