SPREAD ACCOUNT AGREEMENT
dated as of March 25, 1993,
as amended and restated
as of June 23, 1998
among
ARCADIA FINANCIAL LTD.,
ARCADIA RECEIVABLES FINANCE CORP.,
FINANCIAL SECURITY ASSURANCE INC.
THE CHASE MANHATTAN BANK
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
TABLE OF CONTENTS
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 1.02. Rules of Interpretation. . . . . . . . . . . . . . . . . . . . 15
ARTICLE II CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL. . . . . . . 15
Section 2.01. Series 1993-A Credit Enhancement Fee.. . . . . . . . . . . . . 15
Section 2.02. Series Supplements.. . . . . . . . . . . . . . . . . . . . . . 15
Section 2.03. Grant of Security Interest by OFL and the Seller . . . . . . . 16
Section 2.04. Priority.. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.05. Seller and OFL Remain Liable.. . . . . . . . . . . . . . . . . 17
Section 2.06. Maintenance of Collateral. . . . . . . . . . . . . . . . . . . 17
Section 2.07. Termination and Release of Rights. . . . . . . . . . . . . . . 18
Section 2.08. Non-Recourse Obligations of Seller.. . . . . . . . . . . . . . 19
Section 2.09. Program Spread Account and Tag Accounts. (a) . . . . . . . . . 19
ARTICLE III SPREAD ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.01. Establishment of Spread Accounts; Initial Deposits into
Spread Accounts. . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.02. Investments. . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.03. Distributions: Priority of Payments. . . . . . . . . . . . . . 24
Section 3.04. General Provisions Regarding Spread Accounts.. . . . . . . . . 28
Section 3.05. Reports by the Collateral Agent. . . . . . . . . . . . . . . . 29
ARTICLE IV THE COLLATERAL AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.01. Appointment and Powers.. . . . . . . . . . . . . . . . . . . . 30
Section 4.02. Performance of Duties. . . . . . . . . . . . . . . . . . . . . 30
Section 4.03. Limitation on Liability. . . . . . . . . . . . . . . . . . . . 30
Section 4.04. Reliance upon Documents. . . . . . . . . . . . . . . . . . . . 31
Section 4.05. Successor Collateral Agent.. . . . . . . . . . . . . . . . . . 31
Section 4.06. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.07. Compensation and Reimbursement.. . . . . . . . . . . . . . . . 33
Section 4.08. Representations and Warranties of the Collateral Agent.. . . . 34
Section 4.09. Waiver of Setoffs. . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.10. Control by the Controlling Party.. . . . . . . . . . . . . . . 34
ARTICLE V COVENANTS OF THE SELLER. . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.01. Preservation of Collateral.. . . . . . . . . . . . . . . . . . 35
Section 5.02. Opinions as to Collateral. . . . . . . . . . . . . . . . . . . 35
Section 5.03. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.04. Waiver of Stay or Extension Laws; Marshalling of Assets. . . . 36
Section 5.05. Noninterference, etc.. . . . . . . . . . . . . . . . . . . . . 36
Section 5.06. Seller Changes.. . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VI CONTROLLING PARTY; INTERCREDITOR PROVISIONS . . . . . . . . . . . . . . 37
Section 6.01. Appointment of Controlling Party.. . . . . . . . . . . . . . . 37
Section 6.02. Controlling Party's Authority. . . . . . . . . . . . . . . . . 37
Section 6.03. Rights of Secured Parties. . . . . . . . . . . . . . . . . . . 39
Section 6.04. Degree of Care.. . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VII REMEDIES UPON DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.01. Remedies upon a Default. . . . . . . . . . . . . . . . . . . . 40
Section 7.02. Waiver of Default. . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.03. Restoration of Rights and Remedies.. . . . . . . . . . . . . . 40
Section 7.04. No Remedy Exclusive. . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.01. Further Assurances.. . . . . . . . . . . . . . . . . . . . . . 41
Section 8.02. Waiver.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.03. Amendments; Waivers. . . . . . . . . . . . . . . . . . . . . . 41
Section 8.04. Severability.. . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.05. Nonpetition Covenant.. . . . . . . . . . . . . . . . . . . . . 42
Section 8.06. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.07. Term of this Agreement.. . . . . . . . . . . . . . . . . . . . 44
Section 8.08. Assignments: Third-Party Rights; Reinsurance. . . . . . . . . 44
Section 8.09. Consent of Controlling Party.. . . . . . . . . . . . . . . . . 45
Section 8.10. Trial by Jury Waived.. . . . . . . . . . . . . . . . . . . . . 45
Section 8.11. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 8.12. Consents to Jurisdiction.. . . . . . . . . . . . . . . . . . . 45
Section 8.13. Limitation of Liability. . . . . . . . . . . . . . . . . . . . 46
Section 8.14. Determination of Adverse Effect. . . . . . . . . . . . . . . . 46
Section 8.15. Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 8.16. Headings.. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ii
SPREAD ACCOUNT AGREEMENT, dated as of March 25, 1993, as amended and restated as
of June 23, 1998 (the "Agreement"), by and among ARCADIA FINANCIAL LTD., a
Minnesota corporation ("Arcadia Financial"), ARCADIA RECEIVABLES FINANCE CORP.,
a Delaware corporation (the "Seller"), FINANCIAL SECURITY ASSURANCE INC., a New
York stock insurance company ("Financial Security"), NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION ("Norwest"), a national banking association in its
capacities as Trustee under each Pooling and Servicing Agreement and/or as
Trustee under each Indenture with respect to those Series specified in the
related Series Supplement (as defined below), THE CHASE MANHATTAN BANK
("Chase"), as Trustee under each Indenture with respect to those Series
specified in the related Series Supplement, each in such respective capacities
as agent for the Certificateholders and/or Noteholders with respect to the
related Series (Norwest or Chase, as Trustee as indicated in the related Sales
and Servicing Agreement or the related Series Supplement, as the case may be,
the "Trustee") and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Collateral
Agent (as defined below).
RECITALS
1. Olympic Automobile Receivables Trust, 1993-A (the "Series
1993-A Trust") was formed pursuant to a Pooling and Servicing Agreement, dated
as of March 1, 1993 (the "Series 1993-A Pooling and Servicing Agreement"), among
OFL, as Servicer, the Seller, the Trustee and the Backup Servicer.
2. Pursuant to Pooling and Servicing Agreements or Sale and
Servicing Agreements, the Seller from time to time sells all of its right, title
and interest in and to Receivables and certain other Trust Property.
3. The Seller has requested that Financial Security issue
Policies to guarantee payment of the Guaranteed Distributions or Scheduled
Payments (as defined in the relevant Policy) on each Distribution Date in
respect of asset-backed securities backed by such Receivables and Other Trust
Property.
4. In partial consideration of the issuance of the Policies,
the Seller has agreed that Financial Security shall have certain rights as
Controlling Party, to the extent set forth herein.
5. The Seller is a wholly-owned special purpose subsidiary of
OFL. Certain of the purchasers of Receivables and Other Trust Property have
agreed to pay a Credit Enhancement Fee to the Seller in consideration of the
obligations of the Seller and OFL pursuant hereto and in consideration of the
obligations of OFL pursuant to the Insurance Agreements (such obligations
forming part of the Insurer Secured Obligations referred to herein). The
Insurer Secured Obligations form part of the consideration to Financial Security
for its issuance of the Policies.
6. In order to secure the performance of the Secured
Obligations, to further effect and enforce the subordination provisions to which
the Credit Enhancement Fee is subject,
and in consideration of the receipt of the Credit Enhancement Fee, OFL and the
Seller agreed to pledge the Collateral as Collateral to the Collateral Agent for
the benefit of Financial Security and for the benefit of the Trustees on behalf
of the Trusts, upon the terms and conditions set forth herein.
7. In connection with the issuance of Policies subsequent to
the Policy issued with respect to the Series 1993-A Trust, it is contemplated
that Financial Security will obtain certain Controlling Party rights with
respect to the related Series, and that, in connection with each such additional
Series, the parties hereto have entered into or will enter into a Series
Supplement hereto pursuant to which the Seller has pledged or will pledge
additional Collateral pursuant to the terms hereof and such Series Supplement.
8. The Seller has entered into a Repurchase Agreement dated as
of December 3, 1996 with Arcadia Receivables Conduit Corp., a Delaware
corporation, (the "Issuer") (the "Repurchase Agreement") pursuant to which the
Seller has sold or will sell all of its right, title and interest in certain
Receivables, and that the Issuer will issue one or more classes or tranches of
Warehousing Notes pursuant to an Indenture among the Issuer, the Indenture
Trustee and the Collateral Agent, and that Financial Security in its discretion
may issue one or more Policies with respect to certain scheduled payments on the
corresponding Notes.
9. The parties have previously executed, amended and restated
this Agreement, and now wish to further amend and restate this Agreement to
supplement certain provisions therein in order to reflect the intent of the
parties.
AGREEMENTS
In consideration of the premises, and for other good and valuable
consideration, the adequacy, receipt and sufficiency of which are hereby
acknowledged the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. All terms defined in the document
entitled "OFL Grantor Trusts Standard Terms and Conditions of Agreement
Effective March 1, 1993" (the "Standard Terms and Conditions") shall have the
same meaning with respect to each Series in this Agreement. If the related
Series was issued pursuant to a Pooling and Servicing Agreement, all terms
defined in Section 1.01 of such Pooling and Servicing Agreement shall have
the same meaning with respect to the related Series in this Agreement. If
the related Series was issued pursuant to a Trust Agreement, Sale and
Servicing Agreement and Indenture, all terms defined in the related Sale and
Servicing Agreement shall have the same meaning with respect to the related
Series in this Agreement. If the related Series was issued pursuant to an
Indenture and the related Receivables were sold to the Issuer pursuant to a
Repurchase Agreement, all terms
2
defined in the related Servicing Agreement and Repurchase Agreement shall
have the same meaning with respect to the related Series in this Agreement.
If a term is defined herein with respect to one or more Series, if
applicable, such term shall be defined with respect to any other Series in
the Series Supplement related thereto. The following terms shall have the
following respective meanings:
"AUTHORIZED OFFICER" means, (i) with respect to Financial
Security, the Chairman of the Board, the President, the Executive Vice President
or any Managing Director of Financial Security, (ii) with respect to the Trustee
or the Collateral Agent, any Vice President or Trust Officer thereof, (iii) with
respect to OFL, the President or any Vice President thereof, and (iv) with
respect to the Seller, the President or any Vice President thereof.
"AVERAGE DELINQUENCY RATIO" means, with respect to any Series
(other than the Warehousing Series) and any Determination Date, the arithmetic
average of the Delinquency Ratios for such Determination Date and the two
immediately preceding Determination Dates.
"CAPTURE EVENT" means the occurrence of an "Event of Default," as
defined in the Indenture dated as of March 12, 1997 between Arcadia Financial
(f/k/a Olympic Financial Ltd.) and Norwest Bank Minnesota, National Association,
as amended or supplemented (including that First Supplemental Indenture dated as
of March 12, 1997 and that Second Supplemental Indenture dated as of October 8,
1997), relating to $375,000,000 principal amount of Arcadia Financial's
currently outstanding 11 1/2% Senior Notes due 2007, with respect to which a
permanent waiver has not been effected in accordance with the terms of such
agreement.
"COLLATERAL" means the Series 1993-A Collateral, any property
pledged pursuant to Section 2.09(d), and, with respect to any Series, all
collateral delivered hereunder with respect to each of the Series, as specified
in the related Series Supplement.
"COLLATERAL AGENT" means, initially, Norwest Bank Minnesota,
National Association, in its capacity as collateral agent on behalf of the
Secured Parties, including its successors in interest, until a successor Person
shall have become the Collateral Agent pursuant to Section 4.05 hereof, and
thereafter "Collateral Agent" shall mean such successor Person.
"COLLECTION ACCOUNT SHORTFALL" means (A), with respect to any
Series created pursuant to a Pooling and Servicing Agreement, any Distribution
Date, and a time of determination, the excess, if any, of the amount required to
be distributed on such Distribution Date pursuant to subsections (i) through
(vi) of Section 4.6(a) of the Standard Terms and Conditions over the amount on
deposit in and available for distribution (or, for the purposes of Section
3.03(a), calculated on a pro forma basis to be on deposit in and available for
distribution) on such Distribution Date from the Collection Account related to
such Series, and (B) with respect to any Series created pursuant to a Trust
Agreement, Sale and Servicing Agreement and Indenture, or with respect to any
Series issued by the Issuer, the meaning assigned in the related Series
Supplement.
3
"CONTROLLING PARTY" means with respect to a Series, at any time,
the Person designated as the Controlling Party at such time pursuant to Section
6.01 hereof.
"CRAM DOWN LOSS" means, if a court of appropriate jurisdiction in
an insolvency proceeding shall have issued an order reducing the Principal
Balance of a Receivable, the amount of such reduction. A "Cram Down Loss" shall
be deemed to have occurred on the date of issuance of such order.
"CUMULATIVE DEFAULT RATE" means, with respect to any Determination
Date and any Series (other than the Warehousing Series), the fraction, expressed
as a percentage, the numerator of which is equal to the sum of (a) the Principal
Balance of all Receivables which became Spread Account Liquidated Receivables
since the Cutoff Date as of the related Accounting Date plus (b) the Principal
Balance of all Receivables with respect to which all or any portion of a
Scheduled Payment has become 91 or more days delinquent as of the related
Accounting Date (not including those Receivables included in clause (a) above)
and the denominator of which is equal to the sum of (i) the original Aggregate
Principal Balance as of the Initial Cutoff Date plus (ii) the Prefunded Amount
as of the Series Closing Date.
"CUMULATIVE NET LOSS RATE" means, with respect to any
Determination Date and any Series (other than the Warehousing Series), the
fraction, expressed as a percentage, the numerator of which is equal to the sum
of (a) Net Losses for such Determination Date plus (b) with respect to Series
1994-A, Series 1994-B, Series 1994-C, Series 1994-D, Series 1995-A, Series
1995-B, Series 1995-C, Series 1995-D, Series 1996-A, Series 1996-B, Series
1996-C, Series 1996-D, Series 1997-A, Series 1997-B, Series 1997-C, Series
1997-D and Series 1998-A, 40%, and with respect to any other Series (other than
the Warehousing Series), 50%, of the Principal Balance of all Receivables with
respect to which all or any portion of a Scheduled Payment has become 91 or more
days delinquent (not including Receivables included under the definition of Net
Losses in clause (a) above) as of the related Accounting Date and the
denominator of which is equal to the sum of (i) the original Aggregate Principal
Balance as of the Initial Cutoff Date plus (ii) the Prefunded Amount as of the
Series Closing Date.
"DEEMED CURED" means, with respect to Series 1994-B, Series
1994-A, Series 1993-D, Series 1993-C, Series 1993-B or Series 1993-A and each
other Spread Account for which "Deemed Cured" is not defined in the related
Series Supplement, (a) with respect to the occurrence of the events specified in
clause (A)(i) or (ii) of the definition of Trigger Event, as of a Determination
Date that no such event specified in clause (A)(i) or clause (A)(ii) with
respect to such Series shall have occurred as of such Determination Date or as
of any of the two consecutively preceding Determination Dates, and (b) with
respect to the occurrence of the events specified in clause (A)(iii) or clause
(A)(iv) of the definition thereof, as of the next Determination Date which
occurs in a calendar month which is a multiple of three months succeeding the
Closing Date, that no such event specified in clause (A)(iii) or clause (A)(iv)
with respect to such Series shall have occurred as of such Determination Date.
"DEFAULT" means, with respect to any Series, at any time, (i) if
Financial Security is then the Controlling Party with respect to such Series,
any Insurance Agreement Event of
4
Default with respect to such Series, and (ii) if the Trustee is then the
Controlling Party with respect to such Series, any Servicer Termination Event
with respect to such Series.
"DELINQUENCY RATIO" means, with respect to any Determination Date
and any Series (other than the Warehousing Series), the fraction, expressed as a
percentage, the numerator of which is equal to the sum of the Principal Balances
(as of the related Accounting Date) of all Receivables that were delinquent with
respect to all or any portion of a Scheduled Payment more than 30 days as of the
related Accounting Date or that became a Purchased Receivable as of the related
Accounting Date and that were delinquent with respect to all or any portion of a
Scheduled Payment more than 30 days as of such Accounting Date and the
denominator of which is equal to the Aggregate Principal Balance as of the
related Accounting Date.
"DELIVERY" means, when used with respect to Spread Account
Eligible Investments, the actions to be taken with respect to the delivery
thereof to the Collateral Agent and the holding thereof by the Collateral Agent
as follows:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC (other than
certificated securities) and are susceptible of physical delivery, transfer
thereof to the Collateral Agent by physical delivery to the Collateral Agent,
indorsed to, or registered in the name of, the Collateral Agent or its nominee
or indorsed in blank and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of ownership of any
such Eligible Investment to the Collateral Agent free and clear of any adverse
claims, consistent with changes in applicable law or regulations or the
interpretation thereof;
(b) with respect to a "certificated security" (as defined in
Section 8-102(a)(4) of the UCC), transfer thereof:
1. by physical delivery of such certificated security to the
Collateral Agent, provided that if the certificated security is in
registered form, it shall be indorsed to, or registered in the name of,
the Collateral Agent or indorsed in blank;
2. by physical delivery of such certificated security in
registered form to a "securities intermediary" (as defined in Section
8-102(a)(14) of the UCC) acting on behalf of the Collateral Agent, if the
certificated security has been specially endorsed to the Collateral Agent
by an effective endorsement.
(c) with respect to any security issued by the U.S. Treasury,
the Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations, the following procedures, all
in accordance with applicable law, including applicable federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such property to an
appropriate book-entry account maintained with a Federal Reserve Bank by a
securities intermediary which is also a "depositary" pursuant to applicable
federal regulations and issuance
5
by such securities intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Collateral Agent of the
purchase by the securities intermediary on behalf of the Collateral Agent of
such book-entry security; the making by such securities intermediary of entries
in its books and records identifying such book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations as belonging
to the Collateral Agent and indicating that such securities intermediary holds
such book-entry security solely as agent for the Collateral Agent; and such
additional or alternative procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Eligible Investments to the
Collateral Agent free of any adverse claims, consistent with changes in
applicable law or regulations or the interpretation thereof;
(d) with respect to an "uncertificated security" (as defined in
Section 8-102(a)(18) of the UCC) and that is not governed by clause (c) above,
transfer thereof:
1. (A) by registration to the Collateral Agent as the
registered owner thereof, on the books and records of the issuer thereof.
(B) another Person (not a securities intermediary) either
becomes the registered owner of the uncertificated security on behalf of
the Collateral Agent, or having become the registered owner acknowledges
that it holds for the Collateral Agent.
2. the issuer thereof has agreed that it will comply with
instructions originated by the Collateral Agent without further consent of the
registered owner thereof.
(e) with respect to a "security entitlement" (as defined in
Section 8-102(a)(17) of the UCC) if a securities intermediary (A) indicates by
book-entry that a "financial asset" (as defined in Section 8-102(a)(9) of the
UCC) has been credited to the Collateral Agent's "securities account" (as
defined in Section 8-501(a) of the UCC), (B) receives a financial asset (as so
defined) from the Collateral Agent or acquires a financial asset for the
Collateral Agent, and in either case, accepts it for credit to the Collateral
Agent's securities account (as so defined), (C) becomes obligated under other
law, regulation or rule to credit a financial asset to the Collateral Agent's
securities account, or (D) has agreed that it will comply with "entitlement
orders" (as defined in Section 8-102(a)(8) of the UCC) originated by the
Collateral Agent without further consent by the "entitlement holder" (as defined
in Section 8-102(a)(7) of the UCC), of a confirmation of the purchase and the
making by such securities intermediary of entries on its books and records
identifying as belonging to the Collateral Agent of (I) a specific certificated
security in the securities intermediary's possession, (II) a quantity of
securities that constitute or are part of a fungible bulk of certificated
securities in the securities intermediary's possession, or (III) a quantity of
securities that constitute or are part of a fungible bulk of securities shown on
the account of the securities intermediary on the books of another securities
intermediary.
(f) in each case of delivery contemplated herein, the
Collateral Agent shall make appropriate notations on its records, and shall
cause the same to be made of the records of its nominees, indicating that
securities are held in trust pursuant to and as provided in this
6
Agreement.
"ELIGIBLE ACCOUNT" means a segregated trust account that (i) is
either (x) maintained with a depository institution or trust company the
long-term unsecured debt obligations of which are rated "AA" or higher by
Standard & Poor's and "Aa2" or higher by Moody's, or (y) maintained with a
depository institution or trust company the commercial paper or other short-term
unsecured debt obligations of which are rated "A-1+" by Standard & Poor's and
"P-1" by Moody's and (ii) in either case, such depository institution or trust
company shall have been specifically approved by the Controlling Party, acting
in its discretion, by written notice to the Collateral Agent.
"FINAL TERMINATION DATE" means, with respect to a Series, the date
that is the later of (i) the Insurer Termination Date with respect to such
Series and (ii) the Trustee Termination Date with respect to such Series.
"FINANCIAL SECURITY DEFAULT" means, with respect to any Series,
any one of the following events shall have occurred and be continuing:
(a) Financial Security shall have failed to make a payment
required under a related Policy;
(b) Financial Security shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the
United States Bankruptcy Code, the New York State Insurance Law or any
other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization, (ii) made a general
assignment for the benefit of its creditors, or (iii) had an order for
relief entered against it under the United States Bankruptcy Code, the
New York State Insurance Law, or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department
of Insurance or other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent or receiver for Financial Security or for all
or any material portion of its property or (ii) authorizing the taking of
possession by a custodian, trustee, agent or receiver of Financial
Security (or the taking of possession of all or any material portion of
the property of Financial Security).
"INITIAL PRINCIPAL AMOUNT" means $59,222,640.38 with respect to
Series 1993-A.
"INITIAL SPREAD ACCOUNT DEPOSIT" means $2,368,906 for Series
1993-A.
"INITIAL SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to
Series 1993-A and any Distribution Date, an amount equal to the greater of (i)
7% of the Certificate Balance as of such Distribution Date (after giving effect
to the distribution in respect of principal
7
made on such Distribution Date) and (ii) the Spread Account Minimum Amount as of
such Distribution Date.
"INSURANCE AGREEMENT" means, with respect to any Series, the
Insurance and Indemnity Agreement among Financial Security, the Seller, OFL and
such other parties as may be named therein.
"INSURER SECURED OBLIGATIONS" means, with respect to a Series, all
amounts and obligations which OFL, the Seller and such other parties as may be
named therein may at any time owe or be required to perform to or on behalf of
Financial Security (or any agents, accountants or attorneys for Financial
Security) under the Insurance Agreement related to such Series or under any
Transaction Document in respect of such Series, regardless of whether such
amounts are owed or performance is due now or in the future, whether liquidated
or unliquidated, contingent or non-contingent.
"INSURER TERMINATION DATE" means, with respect to any Series, the
date which is the latest of (i) the date of the expiration of all Policies
issued in respect of such Series, (ii) the date on which Financial Security
shall have received payment and performance in full of all Insurer Secured
Obligations with respect to such Series and (iii) the latest date on which any
payment referred to above could be avoided as a preference or otherwise under
the United States Bankruptcy Code or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, as specified in an Opinion of Counsel delivered to the
Collateral Agent and the Trustee.
"ISSUER" means Arcadia Receivables Conduit Corp., a Delaware
corporation.
"LIEN" means, as applied to the property or assets (or the income,
proceeds, products, rents or profits therefrom) of any Person, in each case
whether the same is consensual or nonconsensual or arises by contract, operation
of law, legal process or otherwise: (a) any mortgage, lien, pledge, attachment,
charge, lease, conditional sale or other title retention agreement, or other
security interest or encumbrance of any kind; or (b) any arrangement, express or
implied, under which such property or assets (and/or such income, proceeds,
products, rents or profits) are transferred, sequestered or otherwise identified
for the purpose of subjecting or making available the same for payment of debt
or performance of any other obligation in priority to the payment of the
general, unsecured creditors of such Person.
"NET LOSSES " means, with respect to any Determination Date and
any Series (other than the Warehousing Series), the positive difference of (A)
the sum of (i) the aggregate of the Principal Balances as of the related
Accounting Date (plus accrued and unpaid interest to the end of the related
Monthly Period, at the applicable APR) of all Receivables that became Spread
Account Liquidated Receivables since the Cutoff Date, plus (ii) the Purchase
Amount of all Receivables that became Purchased Receivables as of the related
Accounting Date and that were delinquent with respect to all or any portion of a
Scheduled Payment more than 30 days as of such Accounting Date, plus (iii) the
aggregate of all Cram Down Losses as of the related
8
Accounting Date that occurred since the Cutoff Date, over (B) the Liquidation
Proceeds received by the Trust as of the related Accounting Date since the
Cutoff Date.
"NON-CONTROLLING PARTY" means, with respect to a Series, at any
time, the Secured Party that is not the Controlling Party at such time.
"OBLIGOR" means, with respect to any Receivable, the purchaser or
the co-purchasers of the Financed Vehicle and any other Person or Persons who
are primarily or secondarily obligated to make payments under a Receivable.
"OFL" means Arcadia Financial Ltd., a Minnesota corporation
(formerly known as Olympic Financial Ltd.).
"OPINION OF COUNSEL" means a written opinion of counsel
acceptable, as to form, substance and issuing counsel, to the Controlling Party.
"PAYMENT PRIORITIES" means the priority of PRO RATA distributions
described in clause (iii) of priority THIRD of Section 3.03(a).
"POLICY" means the Series 1993-A Policy and any insurance policy
subsequently issued by Financial Security with respect to a Series.
"POOLING AND SERVICING AGREEMENT" means, with respect to Series
1993-A, the Series 1993-A Pooling and Servicing Agreement and, for each other
Series created pursuant to a Pooling and Servicing Agreement, the Pooling and
Servicing Agreement related to such Series.
"PROGRAM SPREAD ACCOUNT" has the meaning specified in Section
2.09(a) hereof.
"SECURED OBLIGATIONS" means, with respect to each Series, the
Insurer Secured Obligations with respect to such Series and the Trustee Secured
Obligations with respect to such Series.
"SECURED PARTIES" means, with respect to a Series and the related
Collateral, each of the Trustee, in respect of the Trustee Secured Obligations
with respect to such Series, and Financial Security, in respect of the Insurer
Secured Obligations with respect to such Series.
"SECURITY INTERESTS" means, with respect to Series 1993-A
Certificates, the security interests and Liens in the Series 1993-A Collateral
granted pursuant to Section 2.03 hereof, and, with respect to any other Series,
the security interests and Liens in the related Collateral granted pursuant to
the related Series Supplement.
"SERIES 1993-A CERTIFICATES" means the Series of Certificates
issued on the date hereof pursuant to the Series 1993-A Pooling and Servicing
Agreement.
"SERIES 1993-A COLLATERAL" has the meaning specified in Section
2.03(a) hereof.
9
"SERIES 1993-A CREDIT ENHANCEMENT FEE" means the amount
distributable on each Distribution Date pursuant to Section 4.6(a)(vi) and (vii)
of the Standard Terms and Conditions as incorporated by reference in the Series
1993-A Pooling and Servicing Agreement.
"SERIES 1993-A POOLING AND SERVICING AGREEMENT" means the Pooling
and Servicing Agreement, dated as of the date hereof, among OFL, in its
individual capacity and as Servicer, the Seller, the Trustee and the Backup
Servicer, as such agreement may be supplemented, amended or modified from time
to time.
"SERIES 1993-A RECEIVABLE" means each Receivable referenced on the
Schedule of Receivables attached to the Series 1993-A Pooling and Servicing
Agreement.
"SERIES OF SECURITIES" or "SERIES" means the Series 1993-A
Certificates or, as the context may require, any other series of Certificates
and/or Notes issued as described in Section 2.02 hereof, or collectively, all
such series; PROVIDED, HOWEVER, Series, as used collectively shall not include
any Series of Warehousing Notes when such term is used in, or with respect to,
the definitions "Cumulative Default Rate," "Average Delinquency Ratio,"
"Cumulative Net Loss Rate," "Deemed Cured," "Delinquency Ratio," "Net Losses,"
"Spread Account Shortfall" and "Spread Account Default Level."
"SERIES SUPPLEMENT" means a supplement hereto executed by the
parties hereto in accordance with Section 2.02 hereof.
"SPREAD ACCOUNT" has the meaning specified in Section 3.01(a)
hereof.
"SPREAD ACCOUNT ADDITIONAL DEPOSIT" with respect to any Series
created pursuant to a Trust Agreement, Sale and Servicing Agreement and
Indenture, has the meaning assigned in the related Series Supplement.
"SPREAD ACCOUNT LIQUIDATED RECEIVABLE" means, with respect to any
Monthly Period, a Receivable as to which (i) 91 days have elapsed since the
Servicer repossessed the related Financed Vehicle, (ii) the Servicer has
determined in good faith that all amounts it expects to recover have been
received, or (iii) all or any portion of a Scheduled Payment shall have become
more than 180 days past due.
"SPREAD ACCOUNT MAXIMUM AMOUNT" means, with respect to Series
1993-A and any Distribution Date:
(i) if no Insurance Agreement Event of Default with respect to
such Series has occurred and is continuing as of the related
Determination Date, no Capture Event has occurred and is continuing as of
the related Determination Date, no Trigger Event has occurred as of the
related Determination Date, and any Trigger Event with respect to such
Series is Deemed Cured as of the related Determination Date, then the
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Initial Spread Account Maximum Amount with respect to such Series and
such Distribution Date;
(ii) if (A) a Trigger Event with respect to Series 1993-A has
occurred as of the Determination Date or (B) a Trigger Event with respect
to Series 1993-A has occurred as of a prior Distribution Date and is not
Deemed Cured as of the related Determination Date, and no Insurance
Agreement Event of Default with respect to Series 1993-A has occurred and
is continuing and no Capture Event has occurred and is continuing, the
Spread Account Maximum Amount shall be equal to the greater of (i) 10% of
the Series 1993-A Balance as of the close of business on such
Distribution Date and (ii) the Spread Account Minimum Amount as of the
close of business on such Distribution Date; or
(iii) if (A) an Insurance Agreement Event of Default with respect
to such Series has occurred and is continuing or (B) a Capture Event has
occurred and is continuing as of the related Determination Date, the
Spread Account Maximum Amount shall be equal to the greater of (i) 25% of
the Series 1993-A Balance as of the close of business on such
Distribution Date and (ii) the Spread Account Minimum Amount as of the
close of business on such Distribution Date.
"SPREAD ACCOUNT MINIMUM AMOUNT" means, with respect to Series
1993-A and any Distribution Date, an amount equal to the greater of:
(i) $100,000, and
(ii) the lesser of:
(A) 1% of the Initial Principal Amount of such Series,
but in no event less than $500,000, and
(B) the Certificate Balance as of such Distribution
Date (after giving effect to the distribution in
respect of principal made on such Distribution
Date).
"SPREAD ACCOUNT RECOURSE MAXIMUM ADJUSTMENT AMOUNT" means, with
respect to a Distribution Date and any Spread Account in which amounts on
deposit include a Spread Account Recourse Reduction Amount, the maximum amount
by which such Spread Account Recourse Reduction Amount is permitted to decrease,
as reported to the Collateral Agent in the Servicer's Certificate delivered with
respect to the related Determination Date, so long as Financial Security does
not deliver a written objection to such amount prior to such Distribution Date.
"SPREAD ACCOUNT RECOURSE REDUCTION AMOUNT" means, with respect to
a Spread Account and Distribution Date, the specified amount deemed to be on
deposit in such Spread Account which is not cash, which amount is specified in
the Servicer's Certificate delivered with
11
respect to the related Determination Date, so long as Financial Security does
not deliver a written objection to such amount prior to such Distribution Date,
and which amount shall be treated fungibly with all other amounts on deposit in
such Spread Account, EXCEPT that such amount shall not be treated as a deposit
in the related Tag Account, and EXCEPT FURTHER, as provided in Section 3.03(b)
and 3.04(e).
"SPREAD ACCOUNT SHORTFALL" means, with respect to any Distribution
Date and any Series (other than the Warehousing Series) with respect to which an
Insurance Agreement Event of Default has occurred and is continuing, or a
Capture Event has occurred and is continuing, the excess, if any, of the Spread
Account Maximum Amount for such Series and such Distribution Date and the amount
on deposit in such Spread Account as of such Distribution Date after giving
effect to distributions made on such Distribution Date pursuant to priority
SECOND of Section 3.03(b).
"STOCK PLEDGE AGREEMENT" means the Third Amended and Restated
Stock Pledge Agreement, dated as of December 3, 1996, between OFL, Financial
Security and the Collateral Agent, as amended from time to time.
"TAG ACCOUNT" has the meaning specified in Section 2.09(c).
"TRANSACTION DOCUMENTS" means, with respect to a Series, this
Agreement, each of the Pooling and Servicing Agreement or Trust Agreement, Sale
and Servicing Agreement and Indenture, or Servicing Agreement, Repurchase
Agreement, Indenture and Security Agreement, as applicable, the Insurance
Agreement, the Custodian Agreement, the Purchase Agreement, any Subsequent
Purchase Agreements and Subsequent Transfer Agreements, any Underwriting
Agreement, the Lockbox Agreement, and the Stock Pledge Agreement related to such
Series.
"TRIGGER EVENT" means, with respect to Series 1993-A and as of a
Determination Date, the occurrence of any of the events specified in clause (A)
together with the occurrence of the event specified in clause (B):
(A) (i) [reserved];
(ii) the Average Delinquency Ratio for such Determination Date
shall be equal to or greater than 5.00%;
(iii) the Cumulative Default Rate shall be equal to or greater
than (A) 3.15%, with respect to any Determination Date
occurring prior to or during the sixth calendar month
succeeding the Series 1993-A Closing Date, (B) 5.50%, with
respect to any Determination Date occurring after the
sixth, and prior to or during the 12th, calendar month
succeeding the Series 1993-A Closing Date, (C) 7.0%, with
respect to any Determination Date occurring after the 12th,
and prior to or during the 18th, calendar month succeeding
the Series 1993-A Closing Date, (D) 7.5%, with respect to
any Determination Date occurring after the 18th, and prior
to or during the
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24th, calendar month succeeding the Series 1993-A Closing
Date, (E) 8.15%, with respect to any Determination Date
occurring after the 24th, and prior to or during the 30th,
calendar month succeeding the Series 1993-A Closing Date,
(F) 8.75%, with respect to any Determination Date occurring
after the 30th, and prior to or during the 36th, calendar
month succeeding the Series 1993-A Closing Date, (G) 3
9.0%, with respect to any Determination Date occurring
after the 36th, and prior to or during the 42nd, calendar
month succeeding the Series 1993-A Closing Date, (H) 9.25%,
with respect to any Determination Date occurring after the
42nd, and prior to or during the 48th, calendar month
succeeding the Series 1993-A Closing Date, (I) 9.50%, with
respect to any Determination Date occurring after the 48th,
and prior to or during the 54th, calendar month succeeding
the Series 1993-A Closing Date, (J) 9.75%, with respect to
any Determination Date occurring after the 54th, and prior
to or during the 60th calendar month succeeding the Series
1993-A Closing Date, (K) 9.9%, with respect to any
Determination Date occurring after the 60th, and prior to
or during the 66th, calendar month succeeding the Series
1993-A Closing Date, or (L) 10.0%, with respect to any
Determination Date occurring after the 66th, and prior to
or during the 72nd, calendar month succeeding the Series
1993-A Closing Date; or
(iv) the Cumulative Net Loss Rate shall be equal to or greater
than (A) 1.25%, with respect to any Determination Date
occurring prior to or during the sixth calendar month
succeeding the Series 1993-A Closing Date, (B) 2.0%, with
respect to any Determination Date occurring after the
sixth, and prior to or during the 12th, calendar month
succeeding the Series 1993-A Closing Date, (C) 2.75%, with
respect to any Determination Date occurring after the 12th,
and prior to or during the 18th, calendar month succeeding
the Series 1993-A Closing Date, (D) 3.0%, with respect to
any Determination Date occurring after the 18th, and prior
to or during the 24th, calendar month succeeding the Series
1993-A Closing Date, (E) 3.25%, with respect to any
Determination Date occurring after the 24th, and prior to
or during the 30th, calendar month succeeding the Series
1993-A Closing Date, (F) 3.5%, with respect to any
Determination Date occurring after the 30th, and prior to
or during the 36th, calendar month succeeding the Series
1993-A Closing Date, (G) 3.6%, with respect to any
Determination Date occurring after the 36th, and prior to
or during the 42nd, calendar month succeeding the Series
1993-A Closing Date, (H) 3.7%, with respect to any
Determination Date occurring after the 42nd, and prior to
or during the 48th, calendar month succeeding the Series
1993-A Closing Date, (I) 3.8%, with respect to any
Determination Date occurring after the 48th, and prior to
or during the 54th, calendar month succeeding the Series
1993-A Closing Date, (J) 3.9%, with respect to any
Determination Date occurring after the 54th, and prior to
or during the 60th, calendar month succeeding the Series
1993-A Closing Date, (K)
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3.95%, with respect to any Determination Date occurring
after the 60th, and prior to or during the 66th, calendar
month succeeding the Series 1993-A Closing Date, or (L)
4.0%, with respect to any Determination Date occurring
after the 66th, and prior to or during the 72nd, calendar
month succeeding the Series 1993-A Closing Date.
(B) The amount specified with respect to such Series in the
last sentence of Section 2.09(f) hereof is positive on such
Determination Date, and such amount has not been deposited
in the related Tag Account on such Determination Date.
"TRUST" means a trust formed pursuant to a Pooling and Servicing
Agreement or a Trust Agreement, as the case may be.
"TRUST PROPERTY," with respect to any Series (other than the
Warehousing Series), has the meaning specified in the related Pooling and
Servicing Agreement or Trust Agreement, as the case may be, and with respect to
the Warehousing Series, means the Seller Conveyed Property (as defined in the
Repurchase Agreement).
"TRUSTEE" means (A) with respect to any Series created pursuant to
a Pooling and Servicing Agreement, the Trustee named in such Pooling and
Servicing Agreement, or (B) with respect to any Series issued pursuant to an
Indenture, the Trustee named in such Indenture in its capacity as agent for the
Noteholders and, if applicable, the Certificateholders.
"TRUSTEE SECURED OBLIGATIONS" means, with respect to a Series, all
amounts and obligations which OFL or the Seller may at any time owe or be
required to perform to or on behalf of (i) the Trustee, the Trust or the
Certificateholders under the Pooling and Servicing Agreement with respect to
such Series, (ii) the Trustee, the Owner Trustee, the Trust, the
Certificateholders or the Noteholders under the Trust Agreement, the Sale and
Servicing Agreement or the Indenture with respect to such Series or (iii) the
Trustee and the Noteholders under the Indenture with respect to the Warehousing
Series.
"TRUSTEE TERMINATION DATE" means, with respect to any Series, the
date which is the later of (i) the date on which the Trustee shall have
received, as Trustee for the holders of the Certificates of such Series, or as
Indenture Trustee on behalf of (and as agent for) the Noteholders and/or
Certificateholders of such Series, payment and performance in full of all
Trustee Secured Obligations arising out of or relating to such Series or (ii)
except with respect to the Warehousing Series, the date on which all payments in
respect of the Certificates shall have been made and the related Trust shall
have been terminated pursuant to the terms of the related Pooling and Servicing
Agreement or Trust Agreement.
"UNDERWRITING AGREEMENT" means, with respect to any Series (other
than the Warehousing Series), the Underwriting Agreement among OFL, the Seller
and the Underwriters named therein.
14
"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform Commercial
Code in effect in the relevant jurisdiction, as the same may be amended from
time to time.
"WAREHOUSING SERIES" means all notes issued by the Issuer.
Section 1.02. RULES OF INTERPRETATION. The terms "hereof,"
"herein" or "hereunder," unless otherwise modified by more specific reference,
shall refer to this Agreement in its entirety. Unless otherwise indicated in
context, the terms "Article," "Section," "Appendix," "Exhibit" or "Annex" shall
refer to an Article or Section of, or Appendix, Exhibit or Annex to, this
Agreement. The definition of a term shall include the singular, the plural, the
past, the present, the future, the active and the passive forms of such term. A
term defined herein and used herein preceded by a Series designation, shall mean
such term as it relates to the Series designated.
ARTICLE II
CREDIT ENHANCEMENT FEE; SERIES SUPPLEMENTS; THE COLLATERAL
Section 2.01. SERIES 1993-A CREDIT ENHANCEMENT FEE. The Series
1993-A Pooling and Servicing Agreement provides for the payment to the Seller of
a Series 1993-A Credit Enhancement Fee, to be paid to the Seller by distribution
of such amounts to the Collateral Agent for deposit and distribution pursuant to
this Agreement. The Seller and OFL hereby agree that payment of the Series
1993-A Credit Enhancement Fee in the manner and subject to the conditions set
forth herein and in the Series 1993-A Pooling and Servicing Agreement is
adequate consideration and the exclusive consideration to be received by the
Seller or OFL for the obligations of the Seller pursuant hereto and the
obligations of OFL pursuant hereto (including, without limitation, the transfer
by the Seller to the Collateral Agent of the Initial Spread Account Deposit) and
pursuant to the Series 1993-A Insurance Agreement. The Seller and OFL hereby
agree with the Trustee and with Financial Security that payment of the Series
1993-A Credit Enhancement Fee to the Seller is expressly conditioned on
subordination of the Series 1993-A Credit Enhancement Fee to payments on the
Certificates of any Series, payments on the Notes of any Series, payments of
amounts due to Financial Security and the other obligations of the Trusts, in
each case to the extent provided in Section 4.6 of the Standard Terms and
Conditions and Section 3.03 hereof; and the Security Interest of the Secured
Parties in the Series 1993-A Collateral is intended to effect and enforce such
subordination and to provide security for the Series 1993-A Secured Obligations
and the Secured Obligations with respect to each other Series.
Section 2.02. SERIES SUPPLEMENTS. The parties hereto intend to
enter into a Series Supplement hereto with respect to any Series other than the
Series 1993-A Certificates. The parties will enter into a Series Supplement
only if the following conditions shall have been satisfied:
(i) The Seller shall have sold or will sell
Receivables to a Trust or
15
to a corporation pursuant to (A) a Pooling and Servicing Agreement
under which the Trustee shall act as trustee, (B) a Sale and
Servicing Agreement in form and substance satisfactory to
Financial Security, with respect to which the Trustee shall act as
Indenture Trustee, and which Sale and Servicing Agreement may
provide for the sale of Subsequent Receivables to the related
Trust or (C) a Repurchase Agreement in form and substance
satisfactory to Financial Security, with respect to which the
Trustee shall act as Indenture Trustee with respect to the related
Notes;
(ii) Financial Security shall have issued (A) one or
more Policies in respect of the Guaranteed Distributions on
Certificates issued pursuant to the related Pooling and Servicing
Agreement or Trust Agreement, and/or (B) one or more Note Policies
in respect of the Scheduled Payments on the Notes issued pursuant
to the related Indenture; and
(iii) Pursuant to the related Series Supplement any and
all right, title and interest of the Seller, OFL or any affiliate
of either of them in the Collateral specified herein shall be
pledged to the Secured Parties substantially on the terms set
forth in Section 2.03 hereof.
Section 2.03. GRANT OF SECURITY INTEREST BY OFL AND THE SELLER.
In order to secure the performance of the Secured Obligations with respect to
each Series, the Seller (and OFL, to the extent it may have any rights therein)
hereby pledges, assigns, grants, transfers and conveys to the Collateral Agent,
on behalf of and for the benefit of the Secured Parties to secure the Secured
Obligations with respect to each Series, a lien on and security interest in
(which lien and security interest is intended to be prior to all other liens,
security interest or other encumbrances), all of its right, title and interest
in and to the following (all being collectively referred to herein as the
"Series 1993-A Collateral"):
(i) the Series 1993-A Credit Enhancement Fee and all
rights and remedies that the Seller may have to enforce payment of
the Series 1993-A Credit Enhancement Fee whether under the Series
1993-A Pooling and Servicing Agreement or otherwise;
(ii) the Series 1993-A Spread Account established
pursuant to Section 3.01 hereof, and each other account owned by
the Seller and maintained by the Collateral Agent (including,
without limitation, all monies, checks, securities, investments
and other documents from time to time held in or evidencing any
such accounts);
(iii) all of the Seller's right, title and interest in
and to investments made with proceeds of the property described in
clauses (i) and (ii) above, or made with amounts on deposit in the
Series 1993-A Spread Account; and
16
(iv) all distributions, revenues, products,
substitutions, benefits, profits and proceeds, in whatever form,
of any of the foregoing.
(b) In order to effectuate the provisions and purposes of this
Agreement, including for the purpose of perfecting the security
interests granted hereunder, the Seller represents and warrants
that it has, prior to the execution of this Agreement, executed
and filed an appropriate Uniform Commercial Code financing
statement in Minnesota sufficient to assure that the Collateral
Agent, as agent for the Secured Parties, has a first priority
perfected security interest in all Series 1993-A Collateral which
can be perfected by the filing of a financing statement.
Section 2.04. PRIORITY. The Seller (and OFL, to the extent it
may have any rights in the Collateral) intends the security interests in favor
of the Secured Parties to be prior to all other Liens in respect of the
Collateral, and OFL and the Seller shall take all actions necessary to obtain
and maintain, in favor of the Collateral Agent, for the benefit of the Secured
Parties, a first lien on and a first priority, perfected security interest in
the Collateral. Subject to the provisions hereof specifying the rights and
powers of the Controlling Party from time to time to control certain specified
matters relating to the Collateral, each Secured Party shall have all of the
rights, remedies and recourse with respect to the Collateral afforded a secured
party under the Uniform Commercial Code of the State of New York and all other
applicable law in addition to, and not in limitation of, the other rights,
remedies and recourse granted to such Secured Parties by this Agreement or any
other law relating to the creation and perfection of liens on, and security
interests in, the Collateral.
Section 2.05. SELLER AND OFL REMAIN LIABLE. The Security
Interests are granted as security only and shall not (i) transfer or in any way
affect or modify, or relieve either the Seller or OFL from, any obligation to
perform or satisfy, any term, covenant, condition or agreement to be performed
or satisfied by the Seller or OFL under or in connection with this Agreement,
the Insurance Agreement or any other Transaction Document to which it is a party
or (ii) impose any obligation on any of the Secured Parties or the Collateral
Agent to perform or observe any such term, covenant, condition or agreement or
impose any liability on any of the Secured Parties or the Collateral Agent for
any act or omission on its part relative thereto or for any breach of any
representation or warranty on its part contained therein or made in connection
therewith, except, in each case, to the extent provided herein and in the other
Transaction Documents.
Section 2.06. MAINTENANCE OF COLLATERAL.
(a) Safekeeping. The Collateral Agent agrees to maintain the
Collateral received by it (or evidence thereof, in the case of book-entry
securities in the name of the Collateral Agent) and all records and documents
relating thereto at the office of the Collateral Agent specified in Section 8.06
hereof or such other address within the State of Minnesota (unless all filings
have been made to continue the perfection of the security interest in the
Collateral to the extent such security interest can be perfected by filing a
financing statement, as evidenced by an Opinion of Counsel delivered to the
Controlling Party), as may be approved by the Controlling Party. The
17
Collateral Agent shall keep all Collateral and related documentation in its
possession separate and apart from all other property that it is holding in its
possession and from its own general assets and shall maintain accurate records
pertaining to the Eligible Investments and Spread Accounts included in the
Collateral in such a manner as shall enable the Collateral Agent and the Secured
Parties to verify the accuracy of such record-keeping. The Collateral Agent's
books and records shall at all times show that the Collateral is held by the
Collateral Agent as agent of the Secured Parties and is not the property of the
Collateral Agent. The Collateral Agent will promptly report to each Secured
Party and the Seller any failure on its part to hold the Collateral as provided
in this Section 2.06(a) and will promptly take appropriate action to remedy any
such failure.
(b) ACCESS. The Collateral Agent shall permit each of the Secured
Parties, or their respective duly authorized representatives, attorneys,
auditors or designees, to inspect the Collateral in the possession of or
otherwise under the control of the Collateral Agent pursuant hereto at such
reasonable times during normal business hours as any such Secured Party may
reasonably request upon not less than one Business Day's prior written notice.
Section 2.07. TERMINATION AND RELEASE OF RIGHTS.
(a) On the Insurer Termination Date relating to a Series, the rights,
remedies, powers, duties, authority and obligations conferred upon Financial
Security pursuant to this Agreement in respect of the Collateral related to such
Series shall terminate and be of no further force and effect and all rights,
remedies, powers, duties, authority and obligations of Financial Security with
respect to such Collateral shall be automatically released; PROVIDED that any
indemnity provided to or by Financial Security herein shall survive such Insurer
Termination Date. If Financial Security is acting as Controlling Party with
respect to a Series on the related Insurer Termination Date, Financial Security
agrees, at the expense of the Seller, to execute and deliver such instruments as
the successor Controlling Party may reasonably request to effectuate such
release, and any such instruments so executed and delivered shall be fully
binding on Financial Security and any Person claiming by, through or under
Financial Security.
(b) On the Trustee Termination Date related to a Series, the rights,
remedies, powers, duties, authority and obligations, if any, conferred upon the
Trustee pursuant to this Agreement in respect of the Collateral related to such
Series shall terminate and be of no further force and effect and all such
rights, remedies, powers, duties, authority and obligations of the Trustee with
respect to such Collateral shall be automatically released; PROVIDED that any
indemnity provided to the Trustee herein shall survive such Trustee Termination
Date. If the Trustee is acting as Controlling Party with respect to a Series on
the related Trustee Termination Date, the Trustee agrees, at the expense of the
Seller, to execute and deliver such instruments as the Seller may reasonably
request to effectuate such release, and any such instruments so executed and
delivered shall be fully binding on the Trustee.
(c) On the Final Termination Date with respect to a Series, the
rights, remedies, powers, duties, authority and obligations conferred upon the
Collateral Agent and each Secured
18
Party pursuant to this Agreement with respect to such Series shall terminate and
be of no further force and effect and all rights, remedies, powers, duties,
authority and obligations of the Collateral Agent and each Secured Party with
respect to the Collateral related to such Series shall be automatically
released. On the Final Termination Date with respect to a Series, the
Collateral Agent agrees, and each Secured Party agrees, at the expense of the
Seller, to execute such instruments of release, in recordable form if necessary,
in favor of the Seller as the Seller may reasonably request, to deliver any
Collateral in its possession to the Seller, and to otherwise release the lien of
this Agreement and release and deliver to the Seller the Collateral related to
such Series.
Section 2.08. NON-RECOURSE OBLIGATIONS OF SELLER.
Notwithstanding anything herein or in the other Transaction Documents to the
contrary, the parties hereto agree that the obligations of the Seller hereunder
(without limiting the obligation to apply distributions of the respective Credit
Enhancement Fees in accordance with Section 3.03(b)) shall be recourse only to
the extent of amounts released to the Seller pursuant to priority EIGHTH of
Section 3.03(b) and retained by the Seller in accordance with the next sentence.
The Seller agrees that it shall not declare or make payment of (i) any dividend
or other distribution on or in respect of any shares of its capital stock or
(ii) any payment on account of the purchase, redemption, retirement or
acquisition of (x) any shares of its capital stock or (y) any option, warrant or
other right to acquire shares of its capital stock, or (iii) any payment of any
loan made by OFL to the Seller, or of any deferred portion of the purchase
price payable by the Seller to OFL with respect to any Receivable unless (in
each case) at the time of such declaration or payment (and after giving effect
thereto) no amount payable by Seller under any Transaction Document is then due
and owing but unpaid. Nothing contained herein shall be deemed to limit the
rights of the Certificateholders (or Certificate Owners) or Noteholders (or Note
Owners) under any other Transaction Document.
Section 2.09. PROGRAM SPREAD ACCOUNT AND TAG ACCOUNTS. (a) On
or prior to the date of any transfer of cash by the Seller pursuant to Section
2.09(b)(i), the Collateral Agent at the direction of the Seller shall establish
at an institution at which one or more Spread Accounts established hereunder are
then maintained an Eligible Account, designated "Program Spread Account--Norwest
Bank Minnesota, National Association" (the "Program Spread Account"). The
Program Spread Account shall continuously be maintained at an institution at
which one or more Spread Accounts are established hereunder.
(b) The Collateral Agent shall hold, for the benefit of the Seller,
the following property in the Program Spread Account:
(i) all cash amounts from time to time on deposit in the
Program Spread Account which at the Seller's election it has delivered to
the Collateral Agent from (x) the proceeds of the sale of securities of a
Series or (y) amounts released to the Seller from the Lien of this
Agreement; and
(ii) investments made with the proceeds of the property
described in clause (i) above, or made with amounts on deposit in the
Program Spread Account.
19
Notwithstanding anything herein or in any Series Supplement to the
contrary, the property held by the Collateral Agent under this Section 2.09(b)
shall not constitute Collateral hereunder.
(c) With respect to each Series for which the Seller has made an
election pursuant to Section 2.09(f) in connection with such Series, on or prior
to the date of any transfer of cash from the Program Spread Account in
connection with such election, the Collateral Agent at the direction of the
Seller shall establish at the same institution at which the related Spread
Account established hereunder is then maintained an Eligible Account, designated
"Tag Account Series [series designation] - Norwest Bank Minnesota, National
Association, as Collateral Agent for Financial Security Assurance Inc. and
another Secured Party" (each such account, a "Tag Account"). Each Tag Account
shall continue to be maintained at the same institution as the related Spread
Account established hereunder.
(d) In order to secure the performance of the Secured Obligations with
respect to each Series, the Seller hereby pledges, assigns, grants, transfers
and conveys to the Collateral Agent, on behalf of and for the benefit of the
Secured Parties, a lien on and a security interest on (which lien and security
interest is intended to be prior to all other liens, security interests and
other encumbrances), all of its right, title and interest in and to the
following:
(i) each Tag Account established pursuant to Section 2.09(c)
hereof, (including, without limitation, all monies, checks, securities,
investments and other documents held in or evidencing any such accounts);
(ii) all of the Seller's right, title and interest in and to
investments made with proceeds of the property described in clause (i)
above; and
(iii) all distributions, revenues, products, substitutions,
benefits, profits and proceeds, in whatever form, of any of the
foregoing.
In order to effectuate the provisions and purposes of this
Agreement, including for the purpose of perfecting the security interests
granted hereunder, the Seller represents and warrants that it shall, prior to
the deposit of amounts in any Tag Account, execute and file an appropriate
Uniform Commercial Code financing statement in Minnesota sufficient to assure
that the Collateral Agent, as agent for the Secured Parties, has a first
priority perfected security interest on the Collateral pledged or to be pledged
pursuant to Section 2.09(d) which can be perfected by the filing of a financing
statement.
(e) The Program Spread Account and each Tag Account shall be separate
from each respective Trust or Issuer and amounts on deposit therein will not
constitute a part of the Trust Property of any Trust or the assets of any
Issuer. Except as specifically provided herein, the Program Spread Account and
each Tag Account shall be maintained by the Collateral Agent at all times
separate and apart from any other account of the Seller, OFL, the Servicer, the
Trust or
20
the Issuer. All income or loss on investments of funds in the Program Spread
Account and any Tag Account shall be reported by the Seller as taxable income or
loss of the Seller.
(f) Upon the occurrence of an event specified in clause (A) of the
definition of Trigger Event with respect to a Series and until such event is
Deemed Cured, at the election of the Seller amounts on deposit in the Program
Spread Account may be withdrawn on the related Determination Date by the
Collateral Agent from the Program Spread Account and irrevocably deposited into
one or more Tag Accounts for each Series with respect to which an event
specified in such clause (A) shall have occurred (and which event is not Deemed
Cured) and with respect to which the Seller has made such election. In the
event of such election, the Collateral Agent shall deposit from the Program
Spread Account into the related Tag Account, on such related Determination Date,
an amount equal to the excess, if any, of amounts on deposit in the Spread
Account (excluding from the calculation of the amount on deposit in such Spread
Account any amount in any related Tag Account, and taking into account any
deposits thereto to be made pursuant to the first paragraph of Section 3.03(b)
and taking into account any withdrawals therefrom to be made pursuant to
priority FIRST of Section 3.03(b) on the related Distribution Date, but not
taking into account any other changes in the amount on deposit in such account
pursuant to Section 3.03(b)) over the amount specified in clause (i) of the
definition of Spread Account Maximum Amount with respect to such Series (taking
into account the decline in the related Series Balance to be effected on the
related Distribution Date).
(g) Amounts on deposit in the Program Spread Account shall be released
from such account at any time upon the request of the Seller. Funds in the
Program Spread Account shall not be commingled with funds in any Spread Account,
any Tag Account or with any other moneys. Amounts on deposit in a Spread
Account and released from the Lien of this Agreement pursuant to Section 3.03(b)
shall, at the direction of the Seller, be deposited into either the Program
Spread Account or the related Tag Account.
(h) Upon deposit pursuant to Section 2.09(f) of amounts into a Tag
Account for a Series such amounts shall be treated fungibly with all amounts on
deposit in the Spread Account with respect to the same Series, except that,
amounts deposited into a Spread Account pursuant to Section 3.03(b) shall be
deemed to be deposited into the Spread Account, and amounts withdrawn from a
Spread Account pursuant to Section 3.03(b) shall be withdrawn first from the
related Tag Account and second from the Spread Account. Except as otherwise
explicitly specified, all references herein to a Series Spread Account hereunder
shall be deemed to include reference to any Tag Account created with respect to
such Series, and all references herein to amounts on deposit in a Series Spread
Account shall be deemed to include reference to amounts on deposit in the
related Tag Account, if any, created with respect to such Series.
ARTICLE III
SPREAD ACCOUNTS
21
Section 3.01. ESTABLISHMENT OF SPREAD ACCOUNTS; INITIAL DEPOSITS
INTO SPREAD ACCOUNTS.
(a) On or prior to the Closing Date relating to a Series, the
Collateral Agent shall establish with respect to such Series, at its office or
at another depository institution or trust company an Eligible Account,
designated, "Spread Account--Series [insert Series designation]--Norwest Bank
Minnesota, National Association, as Collateral Agent for Financial Security
Assurance Inc. and another Secured Party" (the "Spread Account"). The Spread
Accounts established under this Agreement may be maintained at one or more
depository institutions (which depository institutions may be changed from time
to time in accordance with this Agreement). If any Spread Account established
with respect to a Series ceases to be an Eligible Account, the Collateral Agent
shall, within five Business Days, establish a new Eligible Account for such
Series.
(b) No withdrawals may be made of funds in any Spread Account except
as provided in Section 3.03 of this Agreement and in the Warehousing Series
Supplement. Except as specifically provided in this Agreement, funds in a
Spread Account established with respect to a Series shall not be commingled with
funds in a Spread Account established with respect to another Series or with any
other moneys. All moneys deposited from time to time in such Spread Account and
all investments made with such moneys shall be held by the Collateral Agent as
part of the Collateral with respect to such Series.
(c) On the Closing Date with respect to a Series (other than the
Warehousing Series), the Collateral Agent shall deposit the Initial Spread
Account Deposit with respect to such Series, if any, received from the Seller
into the related Spread Account. On each Subsequent Transfer Date (if any) with
respect to a Series (other than the Warehousing Series), the Collateral Agent
shall deposit the Spread Account Additional Deposit delivered by the related
Trust on behalf of the Seller into the related Spread Account.
(d) Each Spread Account shall be separate from each respective Trust
and amounts on deposit therein will not constitute a part of the Trust Property
of any Trust. Except as specifically provided herein, each Spread Account shall
be maintained by the Collateral Agent at all times separate and apart from any
other account of the Seller, OFL, the Servicer or the Trust or the Issuer, as
the case may be. All income or loss on investments of funds in any Spread
Account shall be reported by the Seller as taxable income or loss of the Seller.
Section 3.02. INVESTMENTS.
(a) Funds which may at any time be held in the Spread Account
established with respect to a Series or in the Program Spread Account shall be
invested and reinvested by the Collateral Agent, at the written direction (which
may include, subject to the provisions hereof, general standing instructions) of
the Seller (unless a Default shall have occurred and be continuing, in which
case at the written direction of the Controlling Party) or its designee received
by the Collateral Agent by 1:00 P.M. New York City time on the Business Day
prior to
22
the date on which such investment shall be made, in one or more Eligible
Investments in the manner specified in Section 3.02(c). If no written direction
with respect to any portion of such Spread Account or the Program Spread Account
is received by the Collateral Agent, the Collateral Agent shall invest such
funds overnight in such Eligible Investments as the Collateral Agent may select,
provided that the Collateral Agent shall not be liable for any loss or absence
of income resulting from such investments.
(b) Each investment made pursuant to this Section 3.02 on any date
shall mature not later than the Business Day immediately preceding the
Distribution Date next succeeding the day such investment is made, except that
any investment made on the day preceding a Distribution Date shall mature on
such Distribution Date; PROVIDED that any investment of funds in any Account
maintained with the Collateral Agent in any investment as to which the
Collateral Agent is the obligor, if otherwise qualified as an Eligible
Investment (including any repurchase agreement on which the Collateral Agent in
its commercial capacity is liable as principal), may mature on the Distribution
Date next succeeding the date of such investment.
(c) Subject to the other provisions hereof, the Collateral Agent shall
have sole control over each such investment and the income thereon, and any
certificate or other instrument evidencing any such investment, if any, shall be
delivered directly to the Collateral Agent or its agent, together with each
document of transfer, if any, necessary to transfer title to such investment to
the Collateral Agent in a manner which complies with Section 2.06 and this
subsection.
(d) If amounts on deposit in any Spread Account are at any time
invested in an Eligible Investment payable on demand, the Collateral Agent shall
(i) consistent with any notice required to be given thereunder, demand that
payment thereon be made on the last day such Eligible Investment is permitted to
mature under the provisions hereof and (ii) demand payment of all amounts due
thereunder promptly upon receipt of written notice from the Controlling Party to
the effect that such investment does not constitute an Eligible Investment.
(e) All moneys on deposit in a Spread Account together with any
deposits or securities in which such moneys may be invested or reinvested, and
any gains from such investments, shall constitute Collateral hereunder with
respect to the related Series, subject to the Security Interests of the Secured
Parties.
(f) Subject to Section 4.03 hereof, the Collateral Agent shall not be
liable by reason of any insufficiency in any Spread Account resulting from any
loss on any Eligible Investment included therein except for losses attributable
to the Collateral Agent's failure to make payments on Eligible Investments as to
which the Collateral Agent, in its commercial capacity, is obligated.
(g) With respect to Spread Account Eligible Investments, the
Collateral Agent agrees that:
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(1) any Spread Account Eligible Investment that is a bankers
acceptance or is commercial paper, negotiable certificates of deposit or
another obligation that constitutes "instruments" within the meaning of
Section 9-105(1)(i) of the UCC or that is a "certificated security" as
defined in Section 8-102 of the UCC shall be delivered to the Collateral
Agent in accordance with paragraph (a) or (b), as applicable, of the
definition of "Delivery" and shall be held, pending maturity or
disposition, solely by the Collateral Agent or its securities
intermediary as described in such paragraphs (a) and (b);
(2) any Spread Account Eligible Investment that is a book-entry
security held through the Federal Reserve System pursuant to Federal
book-entry regulations shall be delivered in accordance with paragraph
(c), as applicable, of the definition of "Delivery" and shall be
maintained by the Collateral Agent, pending maturity or disposition,
through continued book-entry registration of such Spread Account Eligible
Investment as described in such paragraph; and
(3) any Eligible Investment that is an uncertificated security
as defined in Section 8-102(1)(b) of the UCC and that is not governed by
clause (2) above shall be delivered to the Collateral Agent in accordance
with paragraph (d) of the definition of "Delivery" and shall be
maintained by the Collateral Agent, pending maturity or disposition,
through continued registration of the Collateral Agent's (or its
nominee's) ownership of such security.
Section 3.03. DISTRIBUTIONS: PRIORITY OF PAYMENTS.
(a) On or before each Deficiency Claim Date, the Collateral Agent will
make the following calculations on the basis of information (including, without
limitation, the amount of any Collection Account Shortfall with respect to any
Series) received pursuant to (x) Section 3.9 of the Standard Terms and
Conditions, Section 5.03 of the Pooling and Servicing Agreements, or (y) Section
3.9 of the Sale and Servicing Agreements, or (z) Section 3.11 of the Servicing
Agreement, as applicable, with respect to each Series; provided, however, that
if the Collateral Agent receives notice from Financial Security of the
occurrence of an Insurance Agreement Event of Default with respect to any
Series, or of the occurrence of a Capture Event, such notice shall be
determinative for the purposes of determining the Spread Account Default Level
and Spread Account Maximum Amount for such Series:
FIRST, determine the amounts to be on deposit in the respective
Spread Accounts (taking into account amounts in respect of the respective
Credit Enhancement Fees to be deposited into the related Spread Accounts)
on the next succeeding Distribution Date which will be available to
satisfy any Collection Account Shortfall and any Warehousing Shortfall;
SECOND, determine (i) the amounts, if any, to be distributed from
each Spread Account related to each Series with respect to which there
exists a Collection Account Shortfall and (ii) whether, following
distribution from the related Spread Accounts to the
24
respective Trustees for deposit into the respective Collection Accounts
with respect to which there exist Collection Account Shortfalls, a
Collection Account Shortfall will continue to exist with respect to one
or more Series;
THIRD, (i) if a Collection Account Shortfall will continue to
exist with respect to one or more Series following the distributions from
the related Spread Accounts contemplated by paragraph SECOND above,
determine the amount, if any, to be distributed to the Trustee with
respect to each Series from unrelated Spread Accounts in respect of such
Collection Account Shortfall(s). This determination shall be made as
follows: (i) of the aggregate of the amounts to be on deposit in the
respective Spread Accounts for such Distribution Date (as determined
pursuant to paragraph FIRST above, after making the withdrawals pursuant
to paragraph SECOND above), up to the aggregate of the Collection Account
Shortfalls for such Distribution Date, (ii) drawn from each Spread
Account PRO RATA in accordance with amounts on deposit therein, and (iii)
distributed to the respective Trustees in the following order of priority
and PRO RATA within each priority (1) in the same priority as amounts are
to be distributed pursuant to Section 4.6 of the Standard Terms and
Conditions included in the respective Pooling and Servicing Agreements
and pursuant to Section 4.6 of the respective Sale and Servicing
Agreements, and pursuant to Section 3.6(a) or 3.6(b) of the Servicing
Agreement, as applicable, so that any shortfalls with respect to priority
(i) of each such Section are to be covered first, any shortfalls with
respect to priority (ii) of each such Section are to be covered second,
and so forth, until priority (v) of such Section, so that priority (v) of
Section 4.6 of the Standard Terms and Conditions and of the Sale and
Servicing Agreement and priority (v) of Section 3.6(a) or priority (v) of
Section 3.6(b) of the Servicing Agreement are to be covered fifth, (2) if
Section 4.6 of one or more Sale and Servicing Agreements provides for
distribution in respect of interest or principal on Notes or Certificates
with priorities numerically greater than (v), in the same priority as
amounts are to be distributed pursuant to each such Section 4.6, so that
any shortfalls with respect to priority (vi) of each such Section 4.6 are
covered first, and so forth through all priorities relating to interest
or principal on Notes or Certificates and (3) amounts to be distributed
to the Security Insurer;
On such Deficiency Claim Date, the Collateral Agent shall deliver
a certificate to each Trustee in respect of which the Collateral Agent has
received notice pursuant to (i) Section 3.9 of the Standard Terms and Conditions
of a Collection Account Shortfall or (ii) Section 3.9 of the Sale and Servicing
Agreement of a Collection Account Shortfall or (iii) Section 3.11 of the
Servicing Agreement of a Collection Account Shortfall or Warehousing Shortfall
stating the amount (which, in the case of (i) and (ii) above, shall be the sum
of the amount, if any, to be withdrawn from the related Spread Account, as
calculated pursuant to paragraph SECOND of this Section 3.03(a), plus, the
amount, if any, to be withdrawn from unrelated Spread Accounts, as calculated
pursuant to paragraph THIRD of this Section 3.03(a), and which, in the case of a
Collection Account Shortfall or Warehousing Shortfall referred to in clause
(iii) shall be the respective amounts, if any, withdrawn from unrelated Spread
Accounts, as calculated pursuant to paragraph THIRD of this Section 3.03(a) or
calculated to be available pursuant to priority SEVENTH of Section 3.03(b)), if
any, to be distributed to such Trustee on the next Distribution
25
Date in respect of such Collection Account Shortfall or Warehousing Shortfall,
as the case may be.
(b) On each Distribution Date, following delivery by the Trustee of
the respective Credit Enhancement Fees for deposit into the respective Spread
Accounts pursuant to Section 4.6 of the Standard Terms and Conditions included
in the respective Pooling and Servicing Agreements or Section 4.6 of the
respective Sale and Servicing Agreements, or the amount deposited into the
Spread Account for the Warehousing Series pursuant to Section 3.6 or Section
3.10 of the Warehousing Series Servicing Agreement, as applicable, and upon
receipt of a Deficiency Notice with respect to one or more such Series, or with
respect to priorities FIFTH and SIXTH to the extent the amounts referred to
therein are due and owing, the Collateral Agent shall make the following
distributions in the following order of priority. References herein to a Spread
Account shall include references to the related Tag Account and such amounts
shall be treated fungibly, except that amounts deposited into a Spread Account
pursuant to Section 3.03(b) shall be deemed to be deposited into a Spread
Account, and amounts withdrawn from a Spread Account pursuant to Section 3.03(b)
shall be withdrawn first from the related Tag Account and second from the Spread
Account.
FIRST, if with respect to any Series there exists a Collection
Account Shortfall from the Spread Account related to such Series, to the Trustee
for deposit in the related Collection Account the amount of such Collection
Account Shortfall (subject, in the case of withdrawals from a Spread Account
containing Spread Account Recourse Reduction Amounts, to Section 3.04(e)(i));
SECOND, if with respect to any Series there exists a Collection
Account Shortfall after deposit into the Collection Account of amounts
distributed pursuant to priority FIRST, from each Spread Account, PRO RATA in
accordance with amounts on deposit therein (but in no event shall a withdrawal
from a Spread Account pursuant to this priority SECOND cause the cash amount on
deposit in such Spread Account to be below the Spread Account Withdrawal Floor
for such Spread Account if a Spread Account Withdrawal Floor is specified in the
Series Supplement establishing such Spread Account), an amount up to the
aggregate of the Collection Account Shortfalls for all Series, to the respective
Trustees in accordance with the Payment Priorities for deposit in the respective
Collection Accounts with respect to which there exist Collection Account
Shortfalls, (subject, in the case of withdrawals from a Spread Account
containing Spread Account Recourse Reduction Amounts, to Section 3.04(e));
THIRD, if with respect to one or more Series (excluding the
Warehousing Series) there exists a Spread Account Shortfall, from amounts, if
any, on deposit in each Spread Account (excluding the Warehousing Series) in
excess of the related Spread Account Maximum Amount (after making any
withdrawals therefrom required by priority FIRST or SECOND of this Section
3.03(b) and only from cash amounts and not from amounts representing a Spread
Account Recourse Reduction Amount), an amount in the aggregate up to the
aggregate of the Spread Account Shortfalls for all Series for deposit into each
Spread Account PRO RATA in accordance with their respective Spread Account
Shortfalls;
26
FOURTH, if with respect to one or more Series (excluding the
Warehousing Series), amounts have been withdrawn from the related Spread Account
pursuant to priority FIRST or SECOND of this Section 3.03(b) on such
Distribution Date and/or on prior Distribution Dates and such amounts have not
been redeposited in full into such Spread Account pursuant to this priority
FOURTH (such amounts in the aggregate for a Series "Unreimbursed Amounts"), from
amounts, if any, on deposit in each Spread Account in excess of the related
Spread Account Maximum Amount (after making any withdrawals therefrom required
by priority FIRST, SECOND or THIRD of this Section 3.03(b) and only from cash
amounts and not from amounts representing a Spread Account Recourse Reduction
Amount), an amount up to the aggregate of the Unreimbursed Amounts for all such
Series for deposit into each Spread Account with respect to which there exist
Unreimbursed Amounts PRO RATA in accordance with the excess of the Spread
Account Maximum Amount of each such Spread Account over the amount on deposit in
such Spread Account;
FIFTH, if any amounts are owed to a successor Servicer pursuant to
Section 9.3(c) of the Standard Terms and Conditions included in a Pooling and
Servicing Agreement or Section 8.3(c) of a Sale and Servicing Agreement and such
amounts are not payable pursuant to Section 4.6(a)(i) of the Standard Terms and
Conditions included in such Pooling and Servicing Agreement or Section 4.6(i) of
such Sale and Servicing Agreement, as applicable, from amounts on deposit in the
related Spread Account (but only from cash amounts and not from amounts
representing a Spread Account Recourse Reduction Amount), an amount up to the
amount so owed, to such Servicer;
SIXTH, if any amounts are owed by OFL or the Seller to a Trustee,
Indenture Trustee, Owner Trustee, Lockbox Bank, Custodian, Backup Servicer,
Administrator, Collateral Agent, the Indenture Collateral Agent or other service
provider to either the Trust or the Issuer for expenses that have not been
reimbursed by OFL or the Seller, from amounts on deposit in the related Spread
Account (but only from cash amounts and not from amounts representing a Spread
Account Recourse Reduction Amount), an amount up to the amount so owed, to such
Person;
SEVENTH, if with respect to the Warehousing Series there exists a
Warehousing Shortfall, from the aggregate of all amounts on deposit in the
Warehousing Series Spread Account and from the aggregate of all amounts in
unrelated Spread Accounts in excess of the related Spread Account Maximum Amount
(except that such limitation shall not exist with respect to a Spread Account
Maximum Amount which is unlimited), an amount up to the amount of such
Warehousing Shortfall (to the extent not distributed on such Distribution Date
pursuant to a prior priority of this Section 3.03(b) and only from cash amounts
and not from amounts representing a Spread Account Recourse Reduction Amount),
to the Trustee for the Warehousing Series for deposit in the Warehousing Series
Collection Account; and
EIGHTH, to the extent there are any funds in a Spread Account in
excess of the applicable Spread Account Maximum Amount and any funds in a Spread
Account with respect to a Series for which the Final Termination Date shall have
occurred, such amount shall be
27
distributed in the following order of priority: FIRST, for deposit into each
Spread Account containing Spread Account Recourse Reduction Amounts, an amount
up to the related Spread Account Recourse Maximum Adjustment Amount, if any, PRO
RATA on the basis of the respective Spread Account Recourse Reduction Amounts,
and SECOND, any remaining funds to the Seller.
Section 3.04. GENERAL PROVISIONS REGARDING SPREAD ACCOUNTS.
(a) Promptly upon the establishment (initially or upon any relocation)
of a Spread Account hereunder, the Collateral Agent shall advise the Seller and
each Secured Party in writing of the name and address of the depository
institution or trust company where such Spread Account has been established (if
not Norwest Bank Minnesota, National Association or any successor Collateral
Agent in its commercial banking capacity), the name of the officer of the
depository institution who is responsible for overseeing such Spread Account,
the account number and the individuals whose names appear on the signature cards
for such Spread Account. The Seller shall cause each such depository
institution or trust company to execute a written agreement, in form and
substance satisfactory to the Controlling Party, waiving, and the Collateral
Agent by its execution of this Agreement hereby waives (except to the extent
expressly provided herein), in each case to the extent permitted under
applicable law, (i) any banker's or other statutory or similar Lien, and (ii)
any right of set-off or other similar right under applicable law with respect to
such Spread Account and any other Spread Account and agreeing, and the
Collateral Agent by its execution of this Agreement hereby agrees, to notify the
Seller, the Collateral Agent, and each Secured Party of any charge or claim
against or with respect to such Spread Account. The Collateral Agent shall give
the Seller and each Secured Party at least ten Business Days' prior written
notice of any change in the location of such Spread Account or in any related
account information. If the Collateral Agent changes the location of any Spread
Account, it shall change the location of the other Spread Accounts, so that all
Spread Accounts shall at all times be located at the same depository
institution. Anything herein to the contrary notwithstanding, unless otherwise
consented to by the Controlling Party in writing, the Collateral Agent shall
have no right to change the location of any Spread Account.
(b) Upon the written request of the Controlling Party or the Seller
and at the expense of the Seller, the Collateral Agent shall cause, at the
expense of the Seller, the depository institution at which any Spread Account is
located to forward to the requesting party copies of all monthly account
statements for such Spread Account.
(c) If at any time any Spread Account ceases to be an Eligible
Account, the Collateral Agent shall notify the Controlling Party of such fact
and shall establish within 5 Business Days of such determination, in accordance
with paragraph (a) of this Section, a successor Spread Account thereto, which
shall be an Eligible Account, at another depository institution acceptable to
the Controlling Party and shall establish successor Spread Accounts with respect
to all other Spread Accounts, each of which shall be an Eligible Account at the
same depository institution.
(d) No passbook, certificate of deposit or other similar instrument
evidencing a Spread Account shall be issued, and all contracts, receipts and
other papers, if any, governing or evidencing a Spread Account shall be held by
the Collateral Agent.
28
(e) A Spread Account Recourse Reduction Amount with respect to a
Spread Account shall be treated fungibly with all other amounts on deposit in
such Spread Account, EXCEPT THAT:
(i) if with respect to any Series, there exists a Collection Account
Shortfall and cash amounts available pursuant to priority FIRST of
Section 3.03(b) are not sufficient to satisfy such Collection Account
Shortfall, the Collateral Agent shall next withdraw cash amounts
available pursuant to priority SECOND of Section 3.03(b) up to the
amount of any remaining Collection Account Shortfall; if such amounts
are not sufficient to satisfy such Collection Account Shortfall,
Spread Account Recourse Reduction Amounts, if any, shall be deemed to
be made available pursuant to priority FIRST of Section 3.03(b) up to
the amount of any remaining Collection Account Shortfalls, and if such
amounts are not sufficient to satisfy such Collection Account
Shortfall, all other Spread Account Recourse Reduction Amounts, if
any, shall be deemed to be made available pursuant to priority SECOND
of Section 3.03(b);
(ii) if amounts are to be made available from two or more Spread Accounts
pursuant to priority SECOND of Section 3.03(b), such amounts shall,
FIRST, be withdrawn PRO RATA from cash amounts on deposit therein and,
if such amounts are exhausted, SECOND, shall be deemed to be made
available PRO RATA from Spread Account Recourse Reduction Amounts, if
any (after taking into account amounts deemed to be made available
from Spread Account Recourse Reduction Amounts pursuant to clause (i)
above);
(iii) if amounts are to be made available from a Spread Account pursuant to
priority FIRST or SECOND of Section 3.03(b) and any portion or all of
such amounts represent Spread Account Recourse Reduction Amounts, the
Collateral Agent shall notify the Trustee with respect to the Series
receiving the benefit of such Spread Account Recourse Reduction
Amounts of the amount so to be made available which is represented by
Spread Account Recourse Reduction Amounts;
(iv) if amounts are to be made available from a Spread Account pursuant to
priority THIRD, FOURTH, FIFTH, SIXTH, SEVENTH or EIGHTH of Section
3.03(b), such amounts shall be withdrawn pro rata from cash amounts on
deposit therein and not from Spread Account Recourse Reduction
Amounts;
(v) any Spread Account Withdrawal Floor requirement for any Series must be
satisfied with cash amounts in the related Spread Account and not with
amounts representing a Spread Account Recourse Reduction Amount; and
(vi) all references to investments in Eligible Investments in this
Agreement shall apply only to cash amounts in the respective Spread
Accounts and not to amounts representing a Spread Account Recourse
Reduction Amount.
Section 3.05. REPORTS BY THE COLLATERAL AGENT. The Collateral
Agent shall report to the Seller, Financial Security, the Trustee and the
Servicer on a monthly basis no later than
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each Distribution Date with respect to the amount on deposit in each Spread
Account and the identity of the investments included therein as of the last day
of the related Monthly Period, and shall provide accountings of deposits into
and withdrawals from the Spread Accounts, and of the investments made therein,
to the independent accountants upon their request for purposes of their reports
pursuant to Section 3.11 of the Pooling and Servicing Agreements and Section
3.11 of the Sale and Servicing Agreements.
ARTICLE IV
THE COLLATERAL AGENT
Section 4.01. APPOINTMENT AND POWERS. Subject to the terms and
conditions hereof, each of the Secured Parties hereby appoints Norwest Bank
Minnesota, National Association as the Collateral Agent with respect to the
Series 1993-A Collateral and the related Collateral subsequently specified in a
Series Supplement, and Norwest Bank Minnesota, National Association hereby
accepts such appointment and agrees to act as Collateral Agent with respect to
the Series 1993-A Collateral, and upon execution of any Series Supplement, shall
be deemed to accept such appointment, and agree to act as Collateral Agent with
respect to such Collateral, in each case, for the Secured Parties, to maintain
custody and possession of such Collateral (except as otherwise provided
hereunder) and to perform the other duties of the Collateral Agent in accordance
with the provisions of this Agreement. Each Secured Party hereby authorizes the
Collateral Agent to take such action on its behalf, and to exercise such rights,
remedies, powers and privileges hereunder, as the Controlling Party may direct
and as are specifically authorized to be exercised by the Collateral Agent by
the terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto. The Collateral Agent shall act
upon and in compliance with the written instructions of the Controlling Party
delivered pursuant to this Agreement promptly following receipt of such written
instructions; provided that the Collateral Agent shall not act in accordance
with any instructions (i) which are not authorized by, or in violation of the
provisions of, this Agreement, (ii) which are in violation of any applicable
law, rule or regulation or (iii) for which the Collateral Agent has not received
reasonable indemnity. Receipt of such instructions shall not be a condition to
the exercise by the Collateral Agent of its express duties hereunder, except
where this Agreement provides that the Collateral Agent is permitted to act only
following and in accordance with such instructions.
Section 4.02. PERFORMANCE OF DUTIES. The Collateral Agent shall
have no duties or responsibilities except those expressly set forth in this
Agreement and the other Transaction Documents to which the Collateral Agent is a
party or as directed by the Controlling Party in accordance with this Agreement.
The Collateral Agent shall not be required to take any discretionary actions
hereunder except at the written direction and with the indemnification of the
Controlling Party.
Section 4.03. LIMITATION ON LIABILITY. Neither the Collateral
Agent nor any of its directors, officers or employees, shall be liable for any
action taken or omitted to be taken by it
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or them hereunder, or in connection herewith, except that the Collateral Agent
shall be liable for its negligence, bad faith or willful misconduct; nor shall
the Collateral Agent be responsible for the validity, effectiveness, value,
sufficiency or enforceability against the Seller or OFL of this Agreement or
any of the Collateral (or any part thereof). Notwithstanding any term or
provision of this Agreement, the Collateral Agent shall incur no liability to
the Seller, OFL or the Secured Parties for any action taken or omitted by the
Collateral Agent in connection with the Collateral, except for the negligence or
willful misconduct on the part of the Collateral Agent, and, further, shall
incur no liability to the Secured Parties except for negligence or willful
misconduct in carrying out its duties to the Secured Parties. Subject to
Section 4.04, the Collateral Agent shall be protected and shall incur no
liability to any such party in relying upon the accuracy, acting in reliance
upon the contents, and assuming the genuineness of any notice, demand,
certificate, signature, instrument or other document reasonably believed by the
Collateral Agent to be genuine and to have been duly executed by the appropriate
signatory, and (absent actual knowledge to the contrary) the Collateral Agent
shall not be required to make any independent investigation with respect
thereto. The Collateral Agent shall at all times be free independently to
establish to its reasonable satisfaction, but shall have no duty to
independently verify, the existence or nonexistence of facts that are a
condition to the exercise or enforcement of any right or remedy hereunder or
under any of the Transaction Documents. The Collateral Agent may consult with
counsel, and shall not be liable for any action taken or omitted to be taken by
it hereunder in good faith and in accordance with the written advice of such
counsel. The Collateral Agent shall not be under any obligation to exercise any
of the remedial rights or powers vested in it by this Agreement or to follow any
direction from the Controlling Party unless it shall have received reasonable
security or indemnity satisfactory to the Collateral Agent against the costs,
expenses and liabilities which might be incurred by it.
Section 4.04. RELIANCE UPON DOCUMENTS. In the absence of bad
faith or negligence on its part, the Collateral Agent shall be entitled to rely
on any communication, instrument, paper or other document reasonably believed by
it to be genuine and correct and to have been signed or sent by the proper
Person or Persons and shall have no liability in acting, or omitting to act,
where such action or omission to act is in reasonable reliance upon any
statement or opinion contained in any such document or instrument.
Section 4.05. SUCCESSOR COLLATERAL AGENT.
(a) MERGER. Any Person into which the Collateral Agent may be
converted or merged, or with which it may be consolidated, or to which it may
sell or transfer its trust business and assets as a whole or substantially as a
whole, or any Person resulting from any such conversion, merger, consolidation,
sale or transfer to which the Collateral Agent is a party, shall (provided it is
otherwise qualified to serve as the Collateral Agent hereunder) be and become a
successor Collateral Agent hereunder and be vested with all of the title to and
interest in the Collateral and all of the trusts, powers, discretions,
immunities, privileges and other matters as was its predecessor without the
execution or filing of any instrument or any further act, deed or conveyance on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding, except to the extent, if any, that any such action is necessary
to perfect, or
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continue the perfection of, the security interest of the Secured Parties in the
Collateral.
(b) RESIGNATION. The Collateral Agent and any successor Collateral
Agent may resign only (i) upon a determination that by reason of a change in
legal requirements the performance of its duties under this Agreement would
cause it to be in violation of such legal requirements in a manner which would
result in a material adverse effect on the Collateral Agent, and the Controlling
Party does not elect to waive the Collateral Agent's obligation to perform those
duties which render it legally unable to act or elect to delegate those duties
to another Person, or (ii) with the prior written consent of the Controlling
Party. The Collateral Agent shall give not less than 60 days' prior written
notice of any such permitted resignation by registered or certified mail to the
other Secured Party and the Seller; PROVIDED, that such resignation shall take
effect only upon the date which is the latest of (i) the effective date of the
appointment of a successor Collateral Agent and the acceptance in writing by
such successor Collateral Agent of such appointment and of its obligation to
perform its duties hereunder in accordance with the provisions hereof, (ii)
delivery of the Collateral to such successor to be held in accordance with the
procedures specified in Article II hereof, and (iii) receipt by the Controlling
Party of an Opinion of Counsel to the effect described in Section 5.02.
Notwithstanding the preceding sentence, if by the contemplated date of
resignation specified in the written notice of resignation delivered as
described above no successor Collateral Agent or temporary successor Collateral
Agent has been appointed Collateral Agent or becomes the Collateral Agent
pursuant to subsection (d) hereof, the resigning Collateral Agent may petition a
court of competent jurisdiction in New York, New York for the appointment of a
successor.
(c) REMOVAL. The Collateral Agent may be removed by the Controlling
Party at any time, with or without cause, by an instrument or concurrent
instruments in writing delivered to the Collateral Agent, the other Secured
Party and the Seller. A temporary successor may be removed at any time to allow
a successor Collateral Agent to be appointed pursuant to subsection (d) below.
Any removal pursuant to the provisions of this subsection (c) shall take effect
only upon the date which is the latest of (i) the effective date of the
appointment of a successor Collateral Agent and the acceptance in writing by
such successor Collateral Agent of such appointment and of its obligation to
perform its duties hereunder in accordance with the provisions hereof, (ii)
delivery of the Collateral to such successor to be held in accordance with the
procedures specified in Article II hereof and (iii) receipt by the Controlling
Party of an Opinion of Counsel to the effect described in Section 5.02.
(d) ACCEPTANCE BY SUCCESSOR. The Controlling Party shall have the
sole right to appoint each successor Collateral Agent. Every temporary or
permanent successor Collateral Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to each Secured Party and the
Seller an instrument in writing accepting such appointment hereunder and the
relevant predecessor shall execute, acknowledge and deliver such other documents
and instruments as will effectuate the delivery of all Collateral to the
successor Collateral Agent to be held in accordance with the procedures
specified in Article II hereof, whereupon such successor, without any further
act, deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, duties and obligations of its predecessor. Such
predecessor shall,
32
nevertheless, on the written request of either Secured Party or the Seller,
execute and deliver an instrument transferring to such successor all the
estates, properties, rights and powers of such predecessor hereunder. In the
event that any instrument in writing from the Seller or a Secured Party is
reasonably required by a successor Collateral Agent to more fully and certainly
vest in such successor the estates, properties, rights, powers, duties and
obligations vested or intended to be vested hereunder in the Collateral Agent,
any and all such written instruments shall, at the request of the temporary or
permanent successor Collateral Agent, be forthwith executed, acknowledged and
delivered by the Seller. The designation of any successor Collateral Agent and
the instrument or instruments removing any Collateral Agent and appointing a
successor hereunder, together with all other instruments provided for herein,
shall be maintained with the records relating to the Collateral and, to the
extent required by applicable law, filed or recorded by the successor Collateral
Agent in each place where such filing or recording is necessary to effect the
transfer of the Collateral to the successor Collateral Agent or to protct or
continue the perfection of the security interests granted hereunder.
(e) Any resignation or removal of a Collateral Agent and appointment
of a successor Collateral Agent shall be effected with respect to this Agreement
and all Series Supplements simultaneously, so that at no time is there more than
one Collateral Agent acting hereunder and under all Series Supplements.
Section 4.06. INDEMNIFICATION. The Seller and OFL shall
indemnify the Collateral Agent, its directors, officers, employees and agents
for, and hold the Collateral Agent, its directors, officers, employees and
agents harmless against, any loss, liability or expense (including the costs and
expenses of defending against any claim of liability) arising out of or in
connection with the Collateral Agent's acting as Collateral Agent hereunder,
except such loss, liability or expense as shall result from the negligence, bad
faith or willful misconduct of the Collateral Agent or its officers or agents.
The obligation of the Seller and OFL under this Section shall survive the
termination of this Agreement and the resignation or removal of the Collateral
Agent. The Collateral Agent covenants and agrees that the obligations of the
Seller hereunder and under Section 4.07 shall be limited to the extent provided
in Section 2.08, and further covenants not to take any action to enforce its
rights to indemnification hereunder with respect to the Seller and to payment
under Section 4.07 except in accordance with the provisions of Section 8.05, or
otherwise to assert any Lien or take any other action in respect of the
Collateral or the Trust Property of a Series until the applicable Final
Termination Date.
Section 4.07. COMPENSATION AND REIMBURSEMENT. The Seller agrees
for the benefit of the Secured Parties and as part of the Secured Obligations
(a) to pay to the Collateral Agent, from time to time, reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a collateral
trustee); and (b) to reimburse the Collateral Agent upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Collateral Agent in accordance with any provision of, or carrying out its duties
and obligations under, this Agreement (including the reasonable compensation and
fees and the expenses and disbursements of its agents, any independent certified
public accountants and independent counsel), except any expense, disbursement or
advances as may be attributable to negligence, bad faith or willful
33
misconduct on the part of the Collateral Agent.
Section 4.08. REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL
AGENT. The Collateral Agent represents and warrants to the Seller and to each
Secured Party as follows:
(a) DUE ORGANIZATION. The Collateral Agent is a national banking
association, duly organized, validly existing and in good standing under the
laws of the United States and is duly authorized and licensed under applicable
law to conduct its business as presently conducted.
(b) CORPORATE POWER. The Collateral Agent has all requisite right,
power and authority to execute and deliver this Agreement and to perform all of
its duties as Collateral Agent hereunder.
(c) DUE AUTHORIZATION. The execution and delivery by the Collateral
Agent of this Agreement and the other Transaction Documents to which it is a
party, and the performance by the Collateral Agent of its duties hereunder and
thereunder, have been duly authorized by all necessary corporate proceedings and
no further approvals or filings, including any governmental approvals, are
required for the valid execution and delivery by the Collateral Agent, or the
performance by the Collateral Agent, of this Agreement and such other
Transaction Documents.
(d) VALID AND BINDING AGREEMENT. The Collateral Agent has duly
executed and delivered this Agreement and each other Transaction Document to
which it is a party, and each of this Agreement and each such other Transaction
Document constitutes the legal, valid and binding obligation of the Collateral
Agent, enforceable against the Collateral Agent in accordance with its terms,
except as (i) such enforceability may be limited by bankruptcy, insolvency,
reorganization and similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.
Section 4.09. WAIVER OF SETOFFS. The Collateral Agent hereby
expressly waives any and all rights of setoff that the Collateral Agent may
otherwise at any time have under applicable law with respect to any Spread
Account and agrees that amounts in the Spread Accounts shall at all times be
held and applied solely in accordance with the provisions hereof.
Section 4.10. CONTROL BY THE CONTROLLING PARTY. The Collateral
Agent shall comply with notices and instructions given by the Seller only if
accompanied by the written consent of the Controlling Party, except that if any
Default shall have occurred and be continuing, the Collateral Agent shall act
upon and comply with notices and instructions given by the Controlling Party
alone in the place and stead of the Seller.
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ARTICLE V
COVENANTS OF THE SELLER
Section 5.01. PRESERVATION OF COLLATERAL. Subject to the
rights, powers and authorities granted to the Collateral Agent and the
Controlling Party in this Agreement, the Seller shall take such action as is
necessary and proper with respect to the Collateral in order to preserve and
maintain such Collateral and to cause (subject to the rights of the Secured
Parties) the Collateral Agent to perform its obligations with respect to such
Collateral as provided herein. The Seller will do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged and delivered, such
instruments of transfer or take such other steps or actions as may be necessary,
or required by the Controlling Party, to perfect the Security Interests granted
hereunder in the Collateral, to ensure that such Security Interests rank prior
to all other Liens and to preserve the priority of such Security Interests and
the validity and enforceability thereof. Upon any delivery or substitution of
Collateral, the Seller shall be obligated to execute such documents and perform
such actions as are necessary to create in the Collateral Agent for the benefit
of the Secured Parties a valid first Lien on, and valid and perfected, first
priority security interest in, the Collateral so delivered and to deliver such
Collateral to the Collateral Agent, free and clear of any other Lien, together
with satisfactory assurances thereof, and to pay any reasonable costs incurred
by any of the Secured Parties or the Collateral Agent (including its agents) or
otherwise in connection with such delivery.
Section 5.02. OPINIONS AS TO COLLATERAL. Not more than 90 days
nor less than 30 days prior to (i) each anniversary of the date hereof during
the term of this Agreement and (ii) each date on which the Seller proposes to
take any action contemplated by Section 5.06, the Seller shall, at its own cost
and expense, furnish to each Secured Party and the Collateral Agent an Opinion
of Counsel with respect to each Series either (a) stating that, in the opinion
of such counsel, such action has been taken with respect to the execution and
filing of any financing statements and continuation statements and other actions
as are necessary to perfect, maintain and protect the lien and security interest
of the Collateral Agent (and the priority thereof), on behalf of the Secured
Parties, with respect to such Collateral against all creditors of and purchasers
from the Seller or OFL and reciting the details of such action, or (b) stating
that, in the opinion of such counsel, no such action is necessary to maintain
such perfected lien and security interest. Such Opinion of Counsel shall
further describe each execution and filing of any financing statements and
continuation statements and such other actions as will, in the opinion of such
counsel, be required to perfect, maintain and protect the lien and security
interest of the Collateral Agent, on behalf of the Secured Parties, with respect
to such Collateral against all creditors of and purchasers from the Seller or
OFL for a period, specified in such Opinion, continuing until a date not earlier
than eighteen months from the date of such Opinion.
Section 5.03. NOTICES. In the event that OFL or the Seller
acquires knowledge of the occurrence and continuance of any Insurance Agreement
Event of Default or Servicer Termination Event or of any event of default or
like event, howsoever described or called, under any of the Transaction
Documents, the Seller shall immediately give notice thereof to the Collateral
Agent and each Secured Party.
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Section 5.04. WAIVER OF STAY OR EXTENSION LAWS; MARSHALLING OF
ASSETS. The Seller covenants, to the fullest extent permitted by applicable
law, that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any appraisement,
valuation, stay, extension or redemption law wherever enacted, now or at any
time hereafter in force, in order to prevent or hinder the enforcement of this
Agreement or any absolute sale of the Collateral or any part thereof, or the
possession thereof by any purchaser at any sale under Article VII of this
Agreement; and the Seller, to the fullest extent permitted by applicable law,
for itself and all who may claim under it, hereby waives the benefit of all such
laws, and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Collateral Agent, but will suffer and permit the
execution of every such power as though no such law had been enacted. The
Seller, for itself and all who may claim under it, waives, to the fullest extent
permitted by applicable law, all right to have the Collateral marshalled upon
any foreclosure or other disposition thereof.
Section 5.05. NONINTERFERENCE, ETC. The Seller shall not (i)
waive or alter any of its rights under the Collateral (or any agreement or
instrument relating thereto) without the prior written consent of the
Controlling Party; or (ii) fail to pay any tax, assessment, charge or fee levied
or assessed against the Collateral, or to defend any action, if such failure to
pay or defend may adversely affect the priority or enforceability of the
Seller's right, title or interest in and to the Collateral or the Collateral
Agent's lien on, and security interest in, the Collateral for the benefit of the
Secured Parties; or (iii) take any action, or fail to take any action, if such
action or failure 'to take action will interfere with the enforcement of any
rights under the Transaction Documents.
Section 5.06. SELLER CHANGES.
(a) CHANGE IN NAME, STRUCTURE, ETC. The Seller shall not change its
name, identity or corporate structure unless it shall have given each Secured
Party and the Collateral Agent at least 60 days' prior written notice thereof,
shall have effected any necessary or appropriate assignments or amendments
thereto and filings of financing statements or amendments thereto, and shall
have delivered to the Collateral Agent and each Secured Party an Opinion of
Counsel of the type described in Section S.02. The parties hereto acknowledge
receipt of prior written notice of the Seller's intent to change its name on or
after January 1, 1997 to Arcadia Receivables Finance Corp.
(b) RELOCATION OF THE SELLER. Neither OFL nor the Seller shall
change its principal executive office unless it gives each Secured Party and the
Collateral Agent at least 90 days' prior written notice of any relocation of its
principal executive office. If the Seller relocates its principal executive
office or principal place of business from Minnesota, the Seller shall give
prior notice thereof to the Controlling Party and the Collateral Agent and shall
effect whatever appropriate recordations and filings are necessary and shall
provide an Opinion of Counsel to the Controlling Party and the Collateral Agent,
to the effect that, upon the recording of any necessary assignments or
amendments to previously-recorded assignments and filing of any necessary
amendments to the previously filed financing or continuation statements or upon
the filing of one or more specified new financing statements, and the taking of
such other actions as may be
36
specified in such opinion, the security interests in the Collateral shall
remain, after such relocation, valid and perfected.
ARTICLE VI
CONTROLLING PARTY; INTERCREDITOR PROVISIONS
Section 6.01. APPOINTMENT OF CONTROLLING PARTY. From and after
the Closing Date of a Series until the Insurer Termination Date related to such
Series, Financial Security shall be the Controlling Party with respect to such
Series and shall be entitled to exercise all the rights given the Controlling
Party hereunder with respect to such Series. From and after the Insurer
Termination Date related to such Series until the Trustee Termination Date
related to such Series, the Trustee shall be the Controlling Party with respect
to such Series. Notwithstanding the foregoing, in the event that a Financial
Security Default shall have occurred and be continuing, the Trustee shall be the
Controlling Party with respect to such Series until the applicable Trustee
Termination Date. If prior to an Insurer Termination Date the Trustee shall
have become the Controlling Party with respect to a Series as a result of the
occurrence of a Financial Security Default and either such Financial Security
Default is cured or for any other reason ceases to exist or the Trustee
Termination Date with respect to a Series occurs, then upon such cure or other
cessation or on such Trustee Termination Date, as the case may be, Financial
Security shall, upon notice thereof being duly given to the Collateral Agent,
again be the Controlling Party with respect to such Series.
Section 6.02. CONTROLLING PARTY'S AUTHORITY.
(a) Each of OFL and the Seller hereby irrevocably appoint the
Controlling Party, and any successor to the Controlling Party appointed pursuant
to Section 6.01, its true and lawful attorney, with full power of substitution,
in the name of OFL, the Seller, the Secured Parties or otherwise, but (subject
to Section 2.08) at the expense of the Seller, to the extent permitted by law to
exercise, at any time and from time to time while any Insurance Agreement Event
of Default has occurred and is continuing, any or all of the following powers
with respect to all or any of the Collateral related to the relevant Series: (i)
to demand, xxx for, collect, receive and give acquittance for any and all monies
due or to become due upon or by virtue thereof, (ii) to settle, compromise,
compound, prosecute or defend any action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal with the same or the proceeds
thereof as fully and effectively as if the Collateral Agent were the absolute
owner thereof, and (iv) to extend the time of payment of any or all thereof and
to make any allowance or other adjustments with respect thereto; PROVIDED that
the foregoing powers and rights shall be exercised in accordance with the
provisions of Article VII hereof.
(b) With respect to each Series of Certificates and the related
Collateral, each Secured Party hereby irrevocably and unconditionally
constitutes and appoints the Controlling Party with respect to such Series, and
any successor to such Controlling Party appointed pursuant to Section 6.01 from
time to time, as the true and lawful attorney-in-fact of such Secured Party for
so long
37
as such Secured Party is the Non-Controlling Party, with full power of
substitution, to execute, acknowledge and deliver any notice, document,
certificate, paper, pleading or instrument and to do in the name of the
Controlling Party as well as in the name, place and stead of such Secured Party
such acts, things and deeds for and on behalf of and in the name of such Secured
Party under this Agreement with respect to such Series which such Secured Party
could or might do or which may be necessary, desirable or convenient in such
Controlling Party's sole discretion to effect the purposes contemplated
hereunder and, without limitation, exercise full right, power and authority to
take, or defer from taking, any and all acts with respect to the administration
of the Collateral related to such Series, and the enforcement of the rights of
the Secured Parties hereunder with respect to such Series, on behalf of and for
the benefit of such Controlling Party and such Non-Controlling Party, as their
interests may appear.
(c) So long as Financial Security shall be the Controlling Party with
respect to a Series (other than the Warehousing Series), the Trustee hereby
agrees, that if there exists an Insurance Agreement Event of Default with
respect to such Series:
(i) Financial Security shall have the exclusive right to direct
the Trustee as to any and all actions to be taken under the related
Transaction Documents, including, without limitation, all actions with
respect to the giving of directions to the Servicer and any subservicer
with respect to the servicing of the Receivables of such Series;
enforcement of any rights of the Trustee under such Transaction
Documents; and the giving or withholding of any other consents, requests,
notices, directions, approvals, extensions or waivers under or in respect
of any such Transaction Documents; and
(ii) Financial Security shall have the right to control the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee under the related Pooling and Servicing Agreement or under
any other Transaction Document, including the remedies provided in
Article VII;
PROVIDED, HOWEVER, that the Trustee may decline to follow any of the above
directions from Financial Security, if the Trustee, in accordance with an
opinion of counsel to the Trustee, that is independent of the Trustee,
determines that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith determines that the action or proceeding so
directed would involve it in personal liability for which adequate indemnity is
not reasonably assured to it or, in the case of actions or directions not
specifically permitted to be taken by Financial Security so long as no Financial
Security Default has occurred and is continuing, would adversely affect the
interests of the Certificateholders in any material respect.
(d) So long as Financial Security shall be the Controlling Party with
respect to a Series (other than the Warehousing Series), the Trustee shall not,
without the prior written consent of Financial Security:
(i) appoint new independent accountants with respect to the
Series;
38
(ii) consent to the amendment of or supplement to any of the
Transaction Documents related to the Series; or
(iii) waive a Servicer Termination Event under the related
Pooling and Servicing Agreement or Sale and Servicing Agreement, as
applicable.
(e) So long as Financial Security shall be the Controlling Party with
respect to a Series:
(i) Financial Security shall have the rights provided in
Section 5.3 of each Pooling and Servicing Agreement, Section 5.4 of each
Sale and Servicing Agreement and Section 5.19 of each Indenture in
respect of the direction of insolvency proceedings.
(ii) Financial Security shall have the right to direct the
Trustee as to any and all actions to be taken in the event of the
occurrence of a Servicer Termination Event under the related Pooling and
Servicing Agreement and shall have such other rights in respect of the
appointment of a successor servicer as are provided in such Pooling and
Servicing Agreement.
Section 6.03. RIGHTS OF SECURED PARTIES. With respect to each
Series of Certificates and the related Collateral, the Non-Controlling Party at
any time expressly agrees that it shall not assert any rights that it may
otherwise have, as a Secured Party with respect to the Collateral, to direct the
maintenance, sale or other disposition of the Collateral or any portion thereof,
notwithstanding the occurrence and continuance of any Default with respect to
such Series or any non-performance by OFL or the Seller of any obligation owed
to such Secured Party hereunder or under any other Transaction Document, and
each party hereto agrees that the Controlling Party shall be the only Person
entitled to assert and exercise such rights.
Section 6.04. DEGREE OF CARE.
(a) CONTROLLING PARTY. Notwithstanding any term or provision of this
Agreement, the Controlling Party shall incur no liability to OFL or the Seller
for any action taken or omitted by the Controlling Party in connection with the
Collateral, except for any gross negligence, bad faith or willful misconduct on
the part of the Controlling Party and, further, shall incur no liability to the
Non-Controlling Party except for a breach of the terms of this Agreement or for
gross negligence, bad faith or willful misconduct in carrying out its duties, if
any, to the Non-Controlling Party. The Controlling Party shall be protected and
shall incur no liability to any such party in relying upon the accuracy, acting
in reliance upon the contents and assuming the genuineness of any notice,
demand, certificate, signature, instrument or other document believed by the
Controlling Party to be genuine and to have been duly executed by the
appropriate signatory, and (absent manifest error or actual knowledge to the
contrary) the Controlling Party shall not be required to make any independent
investigation with respect thereto. The Controlling Party shall, at all times,
be free independently to establish to its reasonable satisfaction the existence
or nonexistence, as the case may be, of any fact the
39
existence or nonexistence of which shall be a condition to the exercise or
enforcement of any right or remedy under this Agreement or any of the
Transaction Documents.
(b) THE NON-CONTROLLING PARTY. The Non-Controlling Party shall not be
liable to the Seller for any action or failure to act by the Controlling Party
or the Collateral Agent in exercising, or failing to exercise, any rights or
remedies hereunder.
ARTICLE VII
REMEDIES UPON DEFAULT
Section 7.01. REMEDIES UPON A DEFAULT. If a Default with
respect to a Series has occurred and is continuing, the Collateral Agent shall,
at the direction of the Controlling Party, take whatever action at law or in
equity as may appear necessary or desirable in the judgment of the Controlling
Party to collect and satisfy all Insurer Secured Obligations (including, but not
limited to, foreclosure upon the Collateral and all other rights available to
secured parties under applicable law) or to enforce performance and observance
of any obligation, agreement or covenant under any of the Transaction Documents
related to such Series. Notwithstanding the foregoing, the Collateral Agent
shall not be entitled to take any action and the Controlling Party shall not be
entitled to give any direction with respect to the Trust Property, except to the
extent provided in the Transaction Documents and Sections 6.02(a), (c), (d) and
(e) hereof.
Section 7.02. WAIVER OF DEFAULT. The Controlling Party shall
have the sole right, to be exercised in its complete discretion, to waive any
Default by a writing setting forth the terms, conditions and extent of such
waiver signed by the Controlling Party and delivered to the Collateral Agent,
the other Secured Party and the Seller. Any such waiver shall be binding upon
the Non-Controlling Party and the Collateral Agent. Unless such writing
expressly provides to the contrary, any waiver so granted shall extend only to
the specific event or occurrence which gave rise to the Default so waived and
not to any other similar event or occurrence which occurs subsequent to the date
of such waiver.
Section 7.03. RESTORATION OF RIGHTS AND REMEDIES. If the
Collateral Agent has instituted any proceeding to enforce any right or remedy
under this Agreement, and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to such Collateral Agent, then and
in every such case the Seller, the Collateral Agent and each of the Secured
Parties shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Secured Parties shall continue as though no such
proceeding had been instituted.
Section 7.04. NO REMEDY EXCLUSIVE. No right or remedy herein
conferred upon or reserved to the Collateral Agent, the Controlling Party or
either of the Secured Parties is intended to be exclusive of any other right or
remedy, and every right or remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law, in equity or otherwise (but, in each case,
shall be
40
subject to the provisions of this Agreement limiting such remedies), and each
and every right, power and remedy whether specifically herein given or otherwise
existing may be exercised from time to time and as often and in such order as
may be deemed expedient by the Controlling Party, and the exercise of or the
beginning of the exercise of any right or power or remedy shall not be construed
to be a waiver of the right to exercise at the same time or thereafter any other
right, power or remedy.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. FURTHER ASSURANCES. Each party hereto shall take
such action and deliver such instruments to any other party hereto, in addition
to the actions and instruments specifically provided for herein, as may be
reasonably requested or required to effectuate the purpose or provisions of this
Agreement or to confirm or perfect any transaction described or contemplated
herein.
Section 8.02. WAIVER. Any waiver by any party of any provision
of this Agreement or any right, remedy or option hereunder shall only prevent
and estop such party from thereafter enforcing such provision, right, remedy or
option if such waiver is given in writing and only as to the specific instance
and for the specific purpose for which such waiver was given. The failure or
refusal of any party hereto to insist in any one or more instances, or in a
course of dealing, upon the strict performance of any of the terms or provisions
of this Agreement by any party hereto or the partial exercise of any right,
remedy or option hereunder shall not be construed as a waiver or relinquishment
of any such term or provision, but the same shall continue in full force and
effect.
Section 8.03. AMENDMENTS; WAIVERS. No amendment, modification,
waiver or supplement to this Agreement or any provision of this Agreement shall
in any event be effective unless the same shall have been made or consented to
in writing by each of the parties hereto and each Rating Agency shall have
confirmed in writing that such amendment will not cause a reduction or
withdrawal of a rating on any Series; PROVIDED, HOWEVER, that, for so long as
Financial Security shall be the Controlling Party with respect to a Series,
amendments, modifications, waivers or supplements hereto relating to such
Series, the related Collateral or Spread Account or any requirement hereunder to
deposit or retain any amounts in such Spread Account or to distribute any
amounts therein as provided in Section 3.03 shall be effective if made or
consented to in writing by Financial Security, the Seller, OFL and the
Collateral Agent (the consent of which shall not be withheld or delayed with
respect to any amendment that does not adversely affect the Collateral Agent)
but shall in no circumstances require the consent of the Trustee or the
Certificateholders related to such Series or any other Series.
Section 8.04. SEVERABILITY. In the event that any provision of
this Agreement or the application thereof to any party hereto or to any
circumstance or in any jurisdiction governing this Agreement shall, to any
extent, be invalid or unenforceable under any applicable statute,
41
regulation or rule of law, then such provision shall be deemed inoperative to
the extent that it is invalid or unenforceable and the remainder of this
Agreement, and the application of any such invalid or unenforceable provision to
the parties, jurisdictions or circumstances other than to whom or to which it is
held invalid or unenforceable, shall not be affected thereby nor shall the same
affect the validity or enforceability of any other provision of this Agreement.
The parties hereto further agree that the holding by any court of competent
jurisdiction that any remedy pursued by the Collateral Agent, or any of the
Secured Parties, hereunder is unavailable or unenforceable shall not affect in
any way the ability of the Collateral Agent or any of the Secured Parties to
pursue any other remedy available to it or them (subject, however, to the
provisions of this Agreement limiting such remedies).
Section 8.05. NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, each of the parties hereto agrees that it shall
not, prior to one year and one day after the Final Scheduled Distribution Date
with respect to each Series, acquiesce, petition or otherwise invoke or cause
the Seller or OFL to invoke the process of the United States of America, any
State or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government for the purpose of commencing or sustaining a case by or against
the Seller, OFL or the Trust under a Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Seller, OFL or the Trust or all
or any part of its property or assets or ordering the winding up or liquidation
of the affairs of the Seller, OFL or the Trust. The parties agree that damages
will be an inadequate remedy for breach of this covenant and that this covenant
may be specifically enforced.
Section 8.06. NOTICES. All notices, demands, certificates,
requests and communications hereunder ("notices") shall be in writing and shall
be effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an Authorized Officer of the party to which sent, or (d)
on the date transmitted by legible telecopier transmission with a confirmation
of receipt, in all cases addressed to the recipient as follows:
(i) If to OFL:
Arcadia Financial Ltd.
0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Treasurer
Telecopier No.: (000) 000-0000
(ii) If to the Seller:
Arcadia Receivables Finance Corp.
0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
00
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Treasurer
Telecopier No.: (000) 000-0000
(iii) If to Financial Security:
Financial Security Assurance Inc.
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance Department
Telecopier No.: (000) 000-0000
(000) 000-0000
(in each case in which notice or other communication to
Financial Security refers to a Default or a claim on the
Policy or in which failure on the part of Financial
Security to respond shall be deemed to constitute consent
or acceptance, then with a copy to the attention of the
Senior Vice President Surveillance)
(iv) If to the Trustee:
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Global Trust Services Group
(with respect to those Series for which Chase serves
as Trustee)
or
Norwest Bank Minnesota, National Association
0xx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Services - Asset Backed
Administration
Telecopier No.: (000) 000-0000
(with respect to those Series for which Norwest
serves as Trustee)
(v) If to the Collateral Agent:
Norwest Bank Minnesota, National Association
0xx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
43
Attention: Corporate Trust Services - Asset Backed
Administration
Telecopier No.: (000) 000-0000
(vi) If to Xxxxx'x:
Xxxxx'x Investor's Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
(vii) If to Standard & Poor's:
Standard & Poor's Ratings Group
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
A copy of each notice given hereunder to any party hereto shall also be given to
(without duplication) Financial Security, the Seller, the Trustee and the
Collateral Agent. Each party hereto may, by notice given in accordance herewith
to each of the other parties hereto, designate any further or different address
to which subsequent notices shall be sent.
Section 8.07. TERM OF THIS AGREEMENT. This Agreement shall take
effect on the Closing Date of the Series 1993-A Certificates and shall continue
in effect until the last Final Termination Date to occur with respect to each
Series. On such Final Termination Date, this Agreement shall terminate, all
obligations of the parties hereunder shall cease and terminate and the
Collateral, if any, held hereunder and not to be used or applied in discharge of
any obligations of the Seller or OFL in respect of the Secured Obligations or
otherwise under this Agreement, shall be released to and in favor of the Seller;
PROVIDED that the provisions of Sections 4.06, 4.07 and 8.05 shall survive any
termination of this Agreement and the release of any Collateral upon such
termination.
Section 8.08. ASSIGNMENTS: THIRD-PARTY RIGHTS; REINSURANCE.
(a) This Agreement shall be a continuing obligation of the parties
hereto and shall (i) be binding upon the parties and their respective successors
and assigns, and (ii) inure to the benefit of and be enforceable by each Secured
Party and the Collateral Agent, and by their respective successors, transferees
and assigns. Neither the Seller nor OFL may assign this Agreement, or delegate
any of its duties hereunder, without the prior written consent of the
Controlling Party.
(b) Financial Security shall have the right (unless a Financial
Security Default shall have occurred and be continuing) to give participations
in its rights under this Agreement and to enter into contracts of reinsurance
with respect to any Policy issued in connection with a Series
44
of Certificates and each such participant or reinsurer shall be entitled to the
benefit of any representation, warranty, covenant and obligation of each party
(other than Financial Security) hereunder as if such participant or reinsurer
was a party hereto and, subject only to such agreement regarding such
reinsurance or participation, shall have the right to enforce the obligations of
each such other party directly hereunder; PROVIDED, HOWEVER, that no such
reinsurance or participation agreement or arrangement shall relieve Financial
Security of its obligations hereunder, under the Transaction Documents to which
it is a party or under any such Policy. In addition, nothing contained herein
shall restrict Financial Security from assigning to any Person pursuant to any
liquidity facility or credit facility any rights of Financial Security under
this Agreement or with respect to any real or personal property or other
interests pledged to Financial Security, or in which Federal Security has a
security interest, in connection with the transactions contemplated hereby. The
terms of any such assignment or participation shall contain an express
acknowledgment by such Person of the condition of this Section and the
limitations of the rights of Financial Security hereunder.
Section 8.09. CONSENT OF CONTROLLING PARTY. In the event that
the Controlling Party's consent is required under the terms hereof or under the
terms of any Transaction Document, it is understood and agreed that, except as
otherwise provided expressly herein, the determination whether to grant or
withhold such consent shall be made solely by the Controlling Party in its sole
discretion.
Section 8.10. TRIAL BY JURY WAIVED. Each of the parties hereto
waives, to the fullest extent permitted by law, any right it may have to a trial
by jury in respect of any litigation arising directly or indirectly out of,
under or in connection with this Agreement, any of the other Transaction
Documents or any of the transactions contemplated hereunder or thereunder. Each
of the parties hereto (a) certifies that no representative, agent or attorney of
any other party has represented, expressly or otherwise, that such other party
would not, in the event of litigation, seek to enforce the foregoing waiver and
(b) acknowledges that it has been induced to enter into this Agreement and the
other Transaction Documents to which it is a party, by among other things, this
waiver.
Section 8.11. GOVERNING LAW. This Agreement shall be governed
by and construed, and the obligations, rights and remedies of the parties
hereunder shall be determined, in accordance with the laws of the State of New
York.
Section 8.12. CONSENTS TO JURISDICTION. Each of the parties
hereto irrevocably submits to the jurisdiction of the United States District
Court for the Southern District of New York, any court in the state of New York
located in the city and county of New York, and any appellate court from any
thereof, in any action, suit or proceeding brought against it and related to or
in connection with this Agreement, the other Transaction Documents or the
transactions contemplated hereunder or thereunder or for recognition or
enforcement of any judgment and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such suit or action or
proceeding may be heard or determined in such New York State court or, to the
extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other
45
jurisdictions by suit on the judgment or in any other manner provided by law.
To the extent permitted by applicable law, each of the parties hereby waives and
agrees not to assert by way of motion, as a defense or otherwise in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such courts, that the suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that this Agreement or any of the other Transaction Documents or the
subject matter hereof or thereof may not be litigated in or by such courts.
Each of OFL and the Seller hereby irrevocably appoints and designates CT
Corporation System, whose address is 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as
its true and lawful attorney and duly authorized agent for acceptance of service
of legal process. Each of OFL and the Seller agrees that service of such
process upon such Person shall constitute personal service of such process upon
it. Nothing contained in this Agreement shall limit or affect the rights of any
party hereto to serve process in any othr manner permitted by law or to start
legal proceedings relating to any of the Transaction Documents against OFL or
the Seller or their respective property in the courts of any jurisdiction.
Section 8.13. LIMITATION OF LIABILITY. It is expressly
understood and agreed by the parties hereto that (a) Norwest Bank Minnesota,
National Association is executing this Agreement (i) not in its individual
capacity but in its capacity as trustee of the Trusts pursuant to the
Transaction Documents and (ii) as Collateral Agent hereunder (b) in no case
whatsoever shall Norwest Bank Minnesota, National Association in its capacity as
trustee of Trusts be personally liable on, or for any loss in respect of, any of
the statements, representations, warranties, covenants, agreements or
obligations of the Trust hereunder, all such liability, if any, being expressly
waived by the parties hereto.
Section 8.14. DETERMINATION OF ADVERSE EFFECT. Any
determination of an adverse effect on the interest of the Secured Parties or the
Certificateholders shall be made without consideration of the availability of
funds under the Policies.
Section 8.15. COUNTERPARTS. This Agreement may be executed in
two or more counterparts by the parties hereto, and each such counterpart shall
be considered an original and all such counterparts shall constitute one and the
same instrument.
Section 8.16. HEADINGS. The headings of sections and paragraphs
and the Table of Contents contained in this Agreement are provided for
convenience only. They form no part of this Agreement and shall not affect its
construction or interpretation.
46
EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
amended and restated, as of the date set forth on the first page hereof.
ARCADIA FINANCIAL LTD.
By:
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President and Chief
Financial Officer
ARCADIA RECEIVABLES FINANCE CORP.
By:
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and Chief
Financial Officer
FINANCIAL SECURITY ASSURANCE INC.
By:
------------------------------------------
Authorized Officer
THE CHASE MANHATTAN BANK, as Trustee
By:
------------------------------------------
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as
Trustee
By:
------------------------------------------
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as
Collateral Agent
By:
------------------------------------------
