Prepared by MERRILL CORPORATION www.edgaradvantage.com QuickLinks SERIES 1999-C SUPPLEMENT dated as of September 22, 1999 to SPREAD ACCOUNT AGREEMENT dated as of March 25, 1993, as amended and restated as of September 22, 1999 among ARCADIA FINANCIAL...
Prepared by XXXXXXX CORPORATION xxx.xxxxxxxxxxxxxx.xxxQuickLinks
SERIES 1999-C SUPPLEMENT
dated as of September 22, 1999
to
dated as of March 25, 1993,
as amended and restated
as of September 22, 1999
among
ARCADIA RECEIVABLES FINANCE CORP.
FINANCIAL SECURITY ASSURANCE INC.
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
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| ARTICLE I. DEFINITIONS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Section 1.1 | Definitions | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Section 1.2 | Rules of Interpretation | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ARTICLE II. CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Section 2.1 | Series 1999-C Credit Enhancement Fee | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Section 2.2 | Series Supplements | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Section 2.3 | Grant of Security Interest by Arcadia Financial and the Seller | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ARTICLE III. SPREAD ACCOUNT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Section 3.1 | Establishment of Series 1999-C Spread Account; Initial Deposit into Series 1999-C Spread Account | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Section 3.2 | Spread Account Additional Deposits | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ARTICLE IV. MISCELLANEOUS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Section 4.1 | Further Assurances | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Section 4.2 | Governing Law | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Section 4.3 | Counterparts | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Section 4.4 | Headings | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule I |
SERIES 1999-C SUPPLEMENT SERIES 1999-C SUPPLEMENT, dated as of September 22, 1999 (the "Series 1999-C Supplement"), 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") and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, in its capacity as Indenture Trustee under the Indenture 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 September 22, 1999 (the "Spread Account Agreement"), and, as contemplated by Section 2.02 of the Spread Account Agreement, this Series 1999-C Supplement constitutes a Series Supplement to the Spread Account Agreement so that hereafter this Series 1999-C 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. Arcadia Automobile Receivables Trust, 1999-C (the "Series 1999-C Trust") is being formed contemporaneously herewith pursuant to the Series 1999-C Trust Agreement (as defined herein). 3. Pursuant to the Series 1999-C Sale and Servicing Agreement, the Seller is selling to the Series 1999-C Trust all of its right, title and interest in and to the Initial Receivables (as defined in the Series 1999-C Sale and Servicing Agreement) and certain other Trust Property (as defined in the Series 1999-C Trust Agreement). 4. Pursuant to the Series 1999-C Indenture, the Series 1999-C Trust is issuing the Series 1999-C Notes (as defined herein). 5. The Seller has requested that Financial Security issue the Series 1999-C Note Policy to the Trustee to guarantee payment of the Scheduled Payments (as deemed in such Policy) on each Payment Date in respect of the Series 1999-C Notes. 6. In partial consideration of the issuance of the Series 1999-C Note Policy, the Seller has agreed that Financial Security shall have certain rights as Controlling Party, to the extent set forth in the Spread Account Agreement and the Series 1999-C Indenture. 7. The Seller is a wholly-owned special purpose subsidiary of Arcadia Financial. The Series 1999-C Trust has agreed to pay the Series 1999-C Credit Enhancement Fee to the Seller in consideration of the obligations of the Seller and Arcadia Financial pursuant hereto and in consideration of the obligations of Arcadia Financial pursuant to the Series 1999-C Insurance Agreement (such obligations forming part of the Series 1999-C Insurer Secured Obligations as referred to herein). The Series 1999-C Insurer Secured Obligations form part of the consideration to Financial Security for its issuance of the Series 1999-C Note Policy. 8. In order to secure the performance of the Series 1999-C Secured Obligations, to further effect and enforce the subordination provisions to which the Series 1999-C Credit Enhancement Fee is subject, and in consideration of the receipt of the Series 1999-C Credit Enhancement Fee, Arcadia Financial and the Seller have agreed to pledge the Series 1999-C Collateral as Collateral to the Collateral Agent for the benefit of Financial Security and for the benefit of the Trustee on behalf of the Trust, upon the terms and conditions set forth herein. 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 Series 1999-C Sale and Servicing Agreement shall have the same meaning with respect to this Series 1999-C Supplement. The following terms shall have the following meanings: "Collection Account Shortfall" means, with respect to Series 1999-C and any Distribution Date, the Deficiency Claim Amount, as defined in the Series 1999-C Sale and Servicing Agreement, with respect to such Distribution Date. "Deemed Cured" means with respect to Series 1999-C, (a) with respect to an event that has occurred pursuant to clause (A)(i) of the definition of Trigger Event, as of a Determination Date with respect to Series 1999-C, that no event as specified in clause (A)(i) of the definition thereof 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 an event that has occurred pursuant to clause (A)(ii) or clause (A)(iii) of the definition of Trigger Event, as of the next Determination Date which occurs in a calendar month which is a multiple of three months succeeding the Series 1999-C Closing Date, that no event specified in clause (A)(ii) or clause (A)(iii) of the definition of Trigger Event with respect to such Series shall have occurred as of such Determination Date. "Initial Principal Amount" means $600,000,000 with respect to Series 1999-C. "Initial Spread Account Deposit" means, with respect to Series 1999-C, 4.50% of the Initial Cutoff Date Principal Balance. "Initial Spread Account Maximum Amount" means, with respect to Series 1999-C and any Distribution Date, an amount equal to the greater of (i) 10% of the Series 1999-C 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. "Series 1999-C Balance" means, with respect to Series 1999-C and any Distribution Date, the aggregate principal amount of the Series 1999-C Notes as of such Distribution Date (after giving effect to the distributions in respect of principal on the Notes made on such Distribution Date). "Series 1999-C Collateral" has the meaning specified in Section 2.3(a) hereof. "Series 1999-C Credit Enhancement Fee" means the amount distributable on each Distribution Date pursuant to Section 4.6(vi) and (vii) of the Series 1999-C Sale and Servicing Agreement. "Series 1999-C Indenture" means the Indenture, dated as of September 1, 1999, among the Series 1999-C Trust, the Trustee and the Indenture Collateral Agent. "Series 1999-C Note Policy" means the financial guaranty insurance policy issued by Financial Security with respect to the Series 1999-C Notes. "Series 1999-C Notes" means the Class A-1, Class A-2 and Class A-3 Notes issued pursuant to the Series 1999-C Indenture. "Series 1999-C Owner Trustee" means Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee, or its successor in interest, and any successor Owner Trustee appointed as provided in the Series 1999-C Trust Agreement. "Series 1999-C Receivable" means each Receivable referenced on the Schedule of Receivables attached to the Series 1999-C Sale and Servicing Agreement, as supplemented from time to time during the Funding Period by one or more Subsequent Transfer Agreements. "Series 1999-C Reserve Account" means the Reserve Account established pursuant to Section 4.1(d) of the Series 1999-C Sale and Servicing Agreement. "Series 1999-C Sale and Servicing Agreement" means the Sale and Servicing Agreement, dated as of September 1, 1999, among the Series 1999-C Trust, Arcadia Financial, in its individual capacity and as Servicer, the Seller and the Backup Servicer, as such agreement may be supplemented, amended or modified from time to time. "Series 1999-C Secured Obligations" means the Insurer Secured Obligations and the Trustee Secured Obligations with respect to Series 1999-C. "Series 1999-C Spread Account" means the Spread Account established pursuant to Section 3.1(a) hereof. "Series 1999-C Supplement" means this Series 1999-C Supplement which constitutes a Series Supplement to the Spread Account Agreement. "Series 1999-C Trust Agreement" means the Trust Agreement, dated as of September 1, 1999, among the Seller, Financial Security and the Series 1999-C Owner Trustee. "Spread Account Additional Deposit" means, with respect to Series 1999-C and any Subsequent Transfer Date, an amount equal to 4.50% of the aggregate Principal Balance (as of the related Subsequent Cutoff Date) of the Subsequent Receivables being transferred to the Series 1999-C Trust on such Subsequent Transfer Date or such greater amount as required by the Rating Agencies to confirm that the rating assigned to the Series 1999-C Notes will be in the highest category by such Rating Agencies. "Spread Account Maximum Amount" means, with respect to Series 1999-C and any Distribution Date: (i) if no Insurance Agreement Event of Default with respect to Series 1999-C has occurred and is continuing, no Capture Event has occurred and is continuing, no Trigger Event has occurred on the related Determination Date, and if any Trigger Event with respect to Series 1999-C has occurred as of a prior Determination Date, such Trigger Event is Deemed Cured as of the related Determination Date, the Initial Spread Account Maximum Amount with respect to Series 1999-C and such Distribution Date; (ii) if an event specified in clause (A) of the definition of Trigger Event with respect to Series 1999-C has occurred as of the Determination Date or has occurred as of a prior Distribution Date (and whether or not a Trigger Event shall occur or shall have occurred in connection with such event), and such event is not Deemed Cured as of the related Determination Date and no Insurance Agreement Event of Default with respect to Series 1999-C has occurred and is continuing and no Capture Event has occurred and is continuing, the Spread Account Maximum Amount shall be equal to the greater of (i) 13% of the Series 1999-C 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 Series 1999-C 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 1999-C 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 1999-C and any Distribution Date, an amount equal to the greater of: (i) $100,000, and (ii) the lesser of:
ARTICLE II. CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL Section 2.1 Series 1999-C Credit Enhancement Fee. The Series 1999-C Sale and Servicing Agreement provides for the payment to the Seller of the Series 1999-C 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 Arcadia Financial hereby agree that payment of the Series 1999-C Credit Enhancement Fee in the manner and subject to the conditions set forth herein and in the Series 1999-C Sale and Servicing Agreement is adequate consideration and the exclusive consideration to be received by the Seller or Arcadia Financial for the obligations of the Seller pursuant hereto and the obligations of Arcadia Financial pursuant hereto (including, without limitation, the transfer by the Seller to the Collateral Agent of the Initial Spread Account Deposit with respect to Series 1999-C) and pursuant to the Series 1999-C Insurance Agreement. The Seller and Arcadia Financial hereby agree with the Trustee and with Financial Security that payment of the Series 1999-C Credit Enhancement Fee to the Seller is expressly conditioned on subordination of the Series 1999-C Credit Enhancement Fee to payments on the Notes and Certificates (if any) 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 or Section 4.6 of the related Sale and Servicing Agreement, as applicable, and Section 3.03 of the Spread Account Agreement, and the Security Interest of the Secured Parties in the Series 1999-C Collateral is intended to effect and enforce such subordination and to provide security for the Series 1999-C Secured Obligations and subject to the terms hereof the Secured Obligations with respect to other Series. Section 2.2 Series Supplements. 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 Series 1999-C Supplement with respect to the Series 1999-C Securities. Section 2.3 Grant of Security Interest by Arcadia Financial and the Seller. (a) In order to secure the performance of the Secured Obligations with respect to each Series, the Seller (and Arcadia Financial, 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, a lien on and security interest in (which lien and security interest is intended to be prior to all other liens, security interests or other encumbrances), all of its right, title and interest in and to the following (all being collectively referred to herein as the "Series 1999-C Collateral"): (i) the Series 1999-C Credit Enhancement Fee and all rights and remedies that the Seller may have to enforce payment of the Series 1999-C Credit Enhancement Fee whether under the Series 1999-C Sale and Servicing Agreement or otherwise; (ii) the Series 1999-C Spread Account established pursuant to Section 3.1 of this Series 1999-C 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 Series 1999-C 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 1999-C 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 1999-C 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 Series 1999-C Collateral which can be perfected by the filing of a financing statement. ARTICLE III. SPREAD ACCOUNT Section 3.1 Establishment of Series 1999-C Spread Account; Initial Deposit into Series 1999-C Spread Account. (a) On or prior to the Closing Date, the Collateral Agent shall establish with respect to Series 1999-C, at its office or at another depository institution or trust company, an Eligible Account, designated "Spread Account—Series 1999-C—Norwest Bank Minnesota, National Association, as Collateral Agent for Financial Security Assurance Inc. and another Secured Party" (the "Series 1999-C Spread Account"). (b) On the Closing Date relating to Series 1999-C, the Collateral Agent shall deposit the Initial Spread Account Deposit with respect to Series 1999-C received from the Seller into the Series 1999-C Spread Account. Notwithstanding anything to the contrary contained in the Spread Account Agreement, commencing on the October 15, 1999 Distribution Date, amounts which would otherwise be released to the Seller pursuant to Section 3.03(b), priority EIGHTH, clause second of the Spread Account Agreement shall instead be deposited into the Series 1999-C Spread Account until such time as cash amounts totaling $4,000,000.00 shall have been deposited into the Series 1999-C Spread Account rather than having been released to the Seller pursuant to such section of the Spread Account Agreement. Section 3.2 Spread Account Additional Deposits. On each Subsequent Transfer Date, the Series 1999-C Trust will, pursuant to Section 2.4 of the Series 1999-C Sale and Servicing Agreement, deliver on behalf of the Seller the Spread Account Additional Deposit for such Subsequent Transfer Date to the Collateral Agent. The Collateral Agent shall deposit each such Spread Account Additional Deposit received from the Series 1999-C Trust into the Series 1999-C Spread Account. 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 Series 1999-C Supplement or to confirm or perfect any transaction described or contemplated herein. Section 4.2 Governing Law. This Series 1999-C 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. Section 4.3 Counterparts. This Series 1999-C 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 Series 1999-C Supplement are provided for convenience only. They form no part of this Series 1999-C Supplement and shall not affect its construction or interpretation. IN WITNESS WHEREOF, the parties hereto have executed this Series 1999-C Supplement as of the date set forth on the first page hereof.
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