WAREHOUSING SERIES SUPPLEMENT
dated as of December 3, 1996
amended and restated as of July 21, 1998
to
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.
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee and as Collateral Agent
TABLE OF CONTENTS
PAGE
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WAREHOUSING SUPPLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . .1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . .2
Section 1.2. Rules of Interpretation. . . . . . . . . . . . . . . . . .3
ARTICLE II SERIES SUPPLEMENTS; THE COLLATERAL . . . . . . . . . . . . . . .4
Section 2.1. Series Supplement. . . . . . . . . . . . . . . . . . . . .4
Section 2.2. Grant of Security Interest by AFL and the Seller.. . . . .4
ARTICLE III SPREAD ACCOUNT. . . . . . . . . . . . . . . . . . . . . . . . .5
Section 3.1. Establishment of Warehousing Series Spread Account . . . .5
Section 3.2. Release of Funds Upon Repurchase . . . . . . . . . . . . .5
ARTICLE IV MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . .5
Section 4.1. Further Assurances . . . . . . . . . . . . . . . . . . . .5
Section 4.2. Governing Law. . . . . . . . . . . . . . . . . . . . . . .6
Section 4.3. Counterparts . . . . . . . . . . . . . . . . . . . . . . .6
Section 4.4. Headings . . . . . . . . . . . . . . . . . . . . . . . . .6
WAREHOUSING SERIES SUPPLEMENT
WAREHOUSING SERIES SUPPLEMENT, dated as of December 3, 1996,
amended and restated as of July 21, 1998 (the "Warehousing Series
Supplement"), by and among ARCADIA FINANCIAL LTD., a Minnesota corporation
("AFL"), ARCADIA RECEIVABLES FINANCE CORP., a Delaware corporation (the
"Seller"), FINANCIAL SECURITY ASSURANCE INC., a New York stock insurance
company ("Financial Security") and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, a national banking association, in its capacity as Indenture
Trustee under the Indenture referred to below, for the Noteholders with
respect to the related Series (in each of such capacities, the "Trustee") and
as Collateral Agent hereunder.
RECITALS
1. The parties hereto have previously entered into a Spread
Account Agreement, dated as of March 25, 1993, as amended and restated as of
June 23, 1998 (the "Spread Account Agreement"), and, as contemplated by
Section 2.02 of the Spread Account Agreement, this Warehousing Series
Supplement constitutes a Series Supplement to the Spread Account Agreement so
that hereafter this Warehousing Series Supplement shall form a part of the
Spread Account Agreement for all purposes thereof, and all references herein
and hereafter to the Spread Account Agreement shall mean the Spread Account
Agreement, as supplemented hereby.
2. Pursuant to the Amended and Restated Sale and Servicing
Agreement dated as of July 21, 1998 among Arcadia Automobile Receivables
Warehouse Trust, a Delaware business trust (the "Issuer"), Arcadia
Receivables Conduit Corp. (the "Original Issuer"), a Delaware corporation,
AFL, Bank of America National Trust and Savings Association, as
Administrative Agent and RCC Agent, Xxxxxx Guaranty Trust Company of New
York, as DFC Agent, Norwest Bank Minnesota National Association, as Backup
Servicer, Collateral Agent and Indenture Trustee, and the Seller (the
"Warehousing Series Sale and Servicing Agreement"), the Seller intends to
sell from time to time to the Issuer all of its right, title and interest in
and to Receivables and certain other Seller Conveyed Property (as defined in
the Warehousing Series Sale and Servicing Agreement).
3. Pursuant to the Amended and Restated Indenture dated as of July
21, 1998 between the Original Issuer, the Issuer and the Trustee (the
"Warehousing Series Indenture"), the Issuer is issuing the Warehousing Notes.
4. The Seller has requested that Financial Security issue the Note
Policy to the Trustee to guarantee payment of the Scheduled Payments (as
defined in such Policy) on each Payment Date in respect of the Warehousing
Notes.
5. In partial consideration of the issuance of the Note Policy,
the Seller has agreed that Financial Security shall have certain rights as
Controlling Party, to the extent set forth herein and in the Transaction
Documents.
6. The Seller is a wholly owned special purpose subsidiary of AFL.
The Issuer has agreed to pay the amount earned on the Receivables, net of
certain amounts as set forth in the Warehousing Series Sale and Servicing
Agreement, to the Seller pursuant to the Warehousing Series Sale and
Servicing Agreement. The Warehousing Series Insurer Secured Obligations form
part of the consideration to Financial Security for its issuance of the Note
Policy.
7. In order to secure the performance of the Warehousing Series
Secured Obligations, the Seller have agreed to pledge the Warehousing Series
Collateral as Collateral to the Collateral Agent for the benefit of Financial
Security and for the benefit of the Trustee on behalf of the Noteholders,
upon the terms and conditions set forth herein.
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 1.1. DEFINITIONS. All terms defined in Section 1.1 of the
Warehousing Series Sale and Servicing Agreement shall have the same meaning
with respect to this Warehousing Series Supplement. The following terms shall
have the following respective meanings:
"COLLECTION ACCOUNT SHORTFALL" means, with respect to the
Warehousing Series, (I) with respect to any Distribution Date prior to the
occurrence of an Amortization Event, the excess, if any, of (A) the amount
required to be distributed on such Distribution Date pursuant to priorities
(i) through (vi) of Section 4.6(a) of the Warehousing Series Sale and
Servicing Agreement over (B) Spread Account Available Funds with respect to
the immediately preceding Deficiency Claim Date and (II) with respect to any
Distribution Date following the occurrence of an Amortization Event, the
excess, if any, of (A) the amount required to be distributed on such
Distribution Date pursuant to priorities (i) through (vi) of Section 4.6(b)
of the Warehousing Series Sale and Servicing Agreement over (B) the Spread
Account Available Funds with respect to such Distribution Date.
"SPREAD ACCOUNT MAXIMUM AMOUNT," with respect to the Warehousing
Series and any Distribution Date:
(i) if no Insurance Agreement Event of Default with respect to the
Warehousing Series has occurred and is continuing and no Capture Event
has occurred and is continuing as of the related Determination Date, is
equal to 1.5 percent of the principal balance of the Receivables (as
defined in the Warehousing Series Sale and Servicing Agreement); or
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(ii) if (A) an Insurance Agreement Event of Default with respect to
the Warehousing 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 not be limited.
"WAREHOUSING SERIES COLLATERAL" has the meaning specified in
Section 2.2(a) hereof.
"WAREHOUSING SERIES INDENTURE" means the Amended and Restated
Indenture, dated as of July 21, 1998 among the Original Issuer, the Issuer
and the Trustee.
"WAREHOUSING SERIES NOTE POLICY" means the financial guaranty
insurance policy issued by Financial Security with respect to the Warehousing
Series Notes.
"WAREHOUSING SERIES NOTES" means the Notes issued pursuant to the
Warehousing Series Indenture.
"WAREHOUSING SERIES SALE AND SERVICING AGREEMENT" means Amended and
Restated Sale and Servicing Agreement dated as of July 21, 1998 among the
Issuer, the Original Issuer, AFL, Bank of America National Trust and Savings
Association, as Administrative Agent and RCC Agent, Xxxxxx Guaranty Trust
Company of New York, as DFC Agent, Norwest Bank National Association, as
Backup Servicer, Collateral Agent and Indenture Trustee, and the Seller.
"WAREHOUSING SHORTFALL" means, with respect to the Warehousing
Series and any Distribution Date following the occurrence of an Amortization
Event, the sum of (1) the excess, if any, of (A) the amount required to be
distributed on such Distribution Date pursuant to priorities (i) through
(viii) of Section 4.6(b) of the Warehousing Series Sale and Servicing
Agreement over (B) the Warehousing Shortfall Available Funds with respect to
such Distribution Date.
"WAREHOUSING SERIES SUPPLEMENT" means this Warehousing Series
Supplement which constitutes a Series Supplement to the Spread Account
Agreement.
Section 1.2. RULES OF INTERPRETATION. The terms "hereof, "herein",
"hereto" or "hereunder," unless otherwise modified by more specific
reference, shall refer to this Warehousing Series Supplement. Unless
otherwise indicated in context, the terms "Article," "Section," or "Exhibit"
shall refer to an Article or Section of, or Exhibit to, this Warehousing
Series Supplement. 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 or defined in the Servicing Agreement, shall mean such term as it
relates to the Warehousing Series.
ARTICLE II
SERIES SUPPLEMENTS; THE COLLATERAL
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Section 2.1. SERIES SUPPLEMENT. As provided in and subject to the
conditions specified in Section 2.02 of the Spread Account Agreement, the
parties hereto are entering into this Warehousing Series Supplement with
respect to the Warehousing Series.
Section 2.2. GRANT OF SECURITY INTEREST BY AFL AND THE SELLER.
(a) In order to secure the performance of the Secured Obligations
with respect to each Series, the Seller (and AFL, 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 (as defined in the Spread Account
Agreement), 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 "Warehousing
Series Collateral"):
(i) all amounts distributable pursuant to Sections
4.6(a)(x) and 4.6(b)(x) of the Warehousing Series Sale and Servicing
Agreement (the "Receivables Income") and all rights and remedies that
the Seller may have to enforce payment of the Receivables Income whether
under the Warehousing Series Servicing Agreement or otherwise;
(ii) the Warehousing Series Spread Account established
pursuant to Section 3.1 of this Series Supplement and Section 3.01 of
the Spread Account Agreement, 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 Warehousing
Series 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
Series Supplement, 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 Series Supplement, executed and filed an
appropriate Uniform Commercial Code financing statement in Minnesota
sufficient to ensure that the Collateral Agent, as agent for the Secured
Parties, has a first priority perfected security interest in all Warehousing
Series Collateral which can be perfected by the filing of a financing
statement.
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ARTICLE III
SPREAD ACCOUNT
Section 3.1. ESTABLISHMENT OF WAREHOUSING SERIES SPREAD ACCOUNT.
On or prior to the Closing Date relating to the Warehousing Series, the
Collateral Agent shall establish with respect to the Warehousing Series, at
its office or at another depository institution or trust company, an Eligible
Account, designated "Spread Account - Warehousing Series - Norwest Bank
Minnesota, National Association, as Collateral Agent for Financial Security
Assurance Inc. and another Secured Party" (the "Warehousing Series Spread
Account").
Section 3.2. RELEASE OF FUNDS UPON REPURCHASE. On the Repurchase
Date for any Purchased Receivables in respect of which the Collateral Agent
has received a Notice of Repurchase in the form of Exhibit F to the
Warehousing Series Sale and Servicing Agreement for Purchased Receivables
with an aggregate principal balance equal to or greater than $20,000,000 and
a corresponding executed reconveyance in the form of Exhibit G to the
Warehousing Series Sale and Servicing Agreement pursuant to Section 2.1(d)
thereof, the Collateral Agent, upon reconveyance of such Purchased
Receivables, shall recalculate the Spread Account Maximum Amount for the
Warehousing Series Spread Account and release funds from the Warehousing
Series Spread Account in excess of the recalculated Spread Account Maximum
Amount to the Seller. In addition, on (i) the closing date of any
Securitized Offering or (ii) the date on which the Issuer transfers all or
substantially all of the Seller Conveyed Property to another Person and in
connection therewith, the outstanding principal balance of the Notes is
reduced to zero, the Collateral Agent shall recalculate the Spread Account
Maximum Amount for the Warehousing Series Spread Account and release funds
from the Warehousing Series Spread Account in excess of the recalculated
Spread Account Maximum Amount to the Seller, PROVIDED, in each case, that no
Insurance Agreement Event of Default shall have occurred and be outstanding
as of such date.
ARTICLE IV
MISCELLANEOUS
Section 4.1. FURTHER ASSURANCES. EACH PARTY HERETO SHALL TAKE
SUCH ACTION AND DELIVER SUCH INSTRUMENTS TO ANY OTHER PARTY HERETO, IN
ADDITION TO THE ACTIONS AND INSTRUMENTS SPECIFICALLY PROVIDED FOR HEREIN, AS
MAY BE REASONABLY REQUESTED OR REQUIRED TO EFFECTUATE THE PURPOSE OR
PROVISIONS OF THIS WAREHOUSING SERIES SUPPLEMENT OR TO CONFIRM OR PERFECT ANY
TRANSACTION DESCRIBED OR CONTEMPLATED HEREIN.
Section 4.2. GOVERNING LAW. THIS WAREHOUSING SERIES SUPPLEMENT
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.
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Section 4.3. COUNTERPARTS. This Warehousing Series Supplement
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 4.4. HEADINGS. The headings of sections and paragraphs
and the Table of Contents contained in this Warehousing Series Supplement are
provided for convenience only. They form no part of this Warehousing Series
Supplement and shall not affect its construction or interpretation.
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IN WITNESS WHEREOF, the parties hereto have executed this
Warehousing Series Supplement 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
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------------
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Collateral Agent
By:
------------------------------------------
Name:
Title:
