FIRST AMENDMENT
TO THE
INSURANCE AND INDEMNITY AGREEMENT
THIS FIRST AMENDMENT TO THE INSURANCE AND INDEMNITY AGREEMENT dated as
of August 1, 1997 (this "Amendment"), among FINANCIAL SECURITY ASSURANCE INC.
("FSA"), ARCADIA RECEIVABLES CONDUIT CORP. (the "Issuer"), ARCADIA RECEIVABLES
FINANCE CORP. (formerly known as Olympic Receivables Finance Corp.), as Seller
(the "Seller"), ARCADIA FINANCIAL LTD. (formerly known as Olympic Financial
Ltd.), as Servicer ("Servicer").
WHEREAS, the parties hereto wish to amend the Insurance and Indemnity
Agreement, dated as of December 3, 1996 (the "Insurance and Indemnity
Agreement"), among FSA, the Issuer, the Seller, and the Servicer herein;
NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, the parties hereto agree as follows:
SECTION 1.
a. Amendment to Section 5.01. The following subsection shall be
added to Section 5.01 of the Insurance and Indemnity Agreement:
(k) the amount on deposit in the Warehousing Spread Account as of the
end of the day on any Distribution Date shall be less than the Spread
Account Minimum Amount as of the immediately preceding or coinciding
Determination Date.
b. Amendment to Annex I. The following definition shall be
added to Annex I of the Insurance And Indemnity Agreement:
"SPREAD ACCOUNT MINIMUM AMOUNT" means, with respect to the Warehousing
Series and any Determination Date: (i) if no Amortization Event with
respect to the Warehousing Series has occurred as of the related
Determination Date, one percent of the Principal Balance as of such
Determination Date of the Purchased Receivables (as defined in the
Repurchase Agreement); or (ii) if an Amortization Event with respect
to the Warehousing Series has occurred as of the related Determination
Date, one percent of the Principal Balance of the Purchased
Receivables (as defined in the
Repurchase Agreement) as of the date of the occurrence of such
Amortization Event.
SECTION 2. REPRESENTATIONS AND WARRANTIES. Each of FSA, the Issuer,
the Seller, and the Servicer represents and warrants that as of the effective
date of this Amendment, no Event of Default has occurred under the Repurchase
Agreement, no Servicer Termination Event has occurred under the Servicing
Agreement, no Event of Default has occurred under the Insurance and Indemnity
Agreement and to the best of each of FSA, the Issuer, the Seller, and the
Servicer's knowledge there is no set of circumstances existing that with the
passage of time or the giving of notice, would constitute any such event.
SECTION 3. EFFECTIVENESS. The amendments provided for by this
Amendment shall become effective upon (i) the due execution and delivery of this
Amendment duly executed by each of the parties hereto, (ii) the effectiveness of
the Amendments dated the date hereof to the Servicing Agreement and the
Repurchase Agreement in form and substance satisfactory to FSA and (iii) an
opinion of counsel to Arcadia, dated the date hereof, addressed to the Agent and
the Security Insurer, covering such matters as the Agent and the Security
Insurer may reasonably request.
SECTION 4. INSURANCE AND INDEMNITY AGREEMENT IN FULL FORCE AND EFFECT
AS AMENDED. Except as specifically amended hereby, all of the terms and
conditions of the Insurance and Indemnity Agreement shall remain in full force
and effect and, except as expressly provided herein, the effectiveness of this
Amendment shall not operate as, or constitute a waiver or modification of, any
right, power or remedy of any party to the Insurance and Indemnity Agreement.
All references to the Insurance and Indemnity Agreement in any other document or
instrument shall be deemed to mean the Insurance and Indemnity Agreement as
amended by this Amendment. This Amendment shall not constitute a novation of
the Insurance and Indemnity Agreement, but shall constitute an amendment
thereof.
SECTION 5. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by separate parties hereto on an original, but all
such counterparts taken together shall constitute one and the same instrument.
SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. DEFINED TERMS. Capitalized terms used herein and not
otherwise defined shall have the meaning assigned to such terms in the Insurance
and Indemnity Agreement.
2
IN WITNESS WHEREOF, FSA, the Issuer, the Seller, and the Servicer have
caused this First Amendment to the Insurance and Indemnity Agreement to be duly
executed by their respective officers as of the day and year first above
written.
FINANCIAL SECURITY ASSURANCE INC.
By /s/ Xxxxxxx X. Xxxxxx XX
----------------------------------
Name: Xxxxxxx X. Xxxxxx XX
Title: Managing Director
ARCADIA RECEIVABLES CONDUIT CORP.
By /s/ Xxxx Xxxxxx
----------------------------------
Name: Xxxx Xxxxxx
Title: EVP CFO
ARCADIA RECEIVABLES FINANCE CORP.
By /s/ Xxxx Xxxxxx
----------------------------------
Name: Xxxx Xxxxxx
Title: EVP CFO
ARCADIA FINANCIAL LTD.,
in its individual capacity and as
Servicer
By /s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
Title: VP - Treasurer
3
