EXECUTION COPY
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
AND ASSIGNMENT
between
ARCADIA RECEIVABLES FINANCE CORP. II
Purchaser
and
ARCADIA FINANCIAL LTD.
Seller
dated as of
July 31, 1997
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.1 General.........................................................1
SECTION 1.2 Specific Terms..................................................2
SECTION 1.3 Usage of Terms..................................................4
SECTION 1.4 Certain References..............................................4
SECTION 1.5 No Recourse.....................................................4
SECTION 1.6 Action by or Consent of Noteholders or Certificateholders.......4
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 Purchase Price..................................................5
SECTION 2.2. Conveyance of Receivables.......................................5
SECTION 2.3. Delivery of Receivables File....................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of AFL...........................8
SECTION 3.2 Representations and Warranties of ARFC II.......................9
ARTICLE IV
COVENANTS OF AFL
SECTION 4.1 Protection of Title of ARFC II and the Trust.................. 11
SECTION 4.2 Other Liens or Interests...................................... 13
SECTION 4.3 Costs and Expenses............................................ 13
SECTION 4.4 Indemnification............................................... 13
SECTION 4.5 Advances...................................................... 15
i
Page
----
ARTICLE V
REPURCHASES
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty or
Covenant...................................................... 15
SECTION 5.2 Reassignment of Purchased Receivables......................... 16
SECTION 5.3 Repurchase of Ineligible Receivables Upon Securitized
Offering...................................................... 16
SECTION 5.4 Waivers....................................................... 17
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Liability of AFL.............................................. 17
SECTION 6.2 [RESERVED..................................................... 17
SECTION 6.3 Merger or Consolidation of AFL or ARFC II..................... 17
SECTION 6.4 Limitation on Liability of AFL and Others..................... 18
SECTION 6.5 AFL May Own Notes or Certificates............................. 18
SECTION 6.6 Amendment..................................................... 18
SECTION 6.7 Notices....................................................... 19
SECTION 6.8 Merger and Integration........................................ 19
SECTION 6.9 Severability of Provisions.................................... 19
SECTION 6.10 Intention of the Parties...................................... 20
SECTION 6.11 Governing Law................................................. 20
SECTION 6.12 Counterparts.................................................. 20
SECTION 6.13 Conveyance of the Receivables and the Other Conveyed
Property to the Trust......................................... 20
SECTION 6.14 Nonpetition Covenant.......................................... 21
ii
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
AND ASSIGNMENT
THIS AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT AND
ASSIGNMENT, dated as of July 31, 1997, executed between Arcadia Receivables
Finance Corp. II, a Delaware corporation, as purchaser ("ARFC II"), and Arcadia
Financial Ltd., a Minnesota corporation, as seller ("AFL").
W I T N E S S E T H:
WHEREAS, ARFC II has agreed from time to time to purchase from AFL and
AFL, pursuant to this Agreement, has agreed from time to time to sell and assign
to ARFC II the Receivables and Other Conveyed Property.
WHEREAS, ARFC II and AFL are parties to a Receivables Purchase
Agreement and Assignment dated as of December 28, 1995, as previously amended
(the "Original Receivables Purchase Agreement and Assignment");
WHEREAS, ARFC II and AFL desire to further amend the Original
Receivables Purchase Agreement and Assignment in connection with amendments
being made to documents contemplated by the Original Receivables Purchase
Agreement and Assignment.
WHEREAS, ARFC II and AFL are entering into this Receivables Purchase
Agreement and Assignment, which on the Effectiveness Date (defined below) will
supersede the Original Receivables Purchase Agreement and Assignment, to make
certain amendments to the Original Receivables Purchase Agreement and Assignment
and to govern the obligations of the parties hereunder from and after the date
hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, ARFC II and AFL, intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 GENERAL. The specific terms defined in this Article
include the plural as well as the singular. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer to
Articles and Sections of and Schedules and Exhibits to this Agreement.
Capitalized terms used herein without definition shall have the respective
meanings assigned to such terms in the Amended and Restated Sale and Servicing
Agreement, dated as of July 31, 1997, by and among Arcadia Receivables Finance
Corp. II (as Seller), Arcadia Financial Ltd. (in its individual capacity and as
Servicer), Olympic Automobile Receivables Warehouse Trust (as Issuer) (the
"Trust") and Norwest Bank Minnesota, National Association, a national banking
association (as Backup Servicer).
SECTION 1.2 SPECIFIC TERMS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Agreement" means this Amended and Restated Receivables Purchase
Agreement and Assignment and all amendments hereof and supplements hereto.
"ARFC II" means Arcadia Receivables Finance Corp. II, a Delaware
corporation.
"Assignment Agreement" means, with respect to any Receivables and
related Other Conveyed Property, the assignment agreement between AFL and ARFC
II pursuant to which AFL sells and assigns Receivables and related Other
Conveyed Property to ARFC II, the form of which is attached hereto as Exhibit A.
"Effectiveness Date" has the meaning specified in Section 1.7 hereof.
"Initial Closing Date" means December 28, 1995.
"Indenture Trustee" means Norwest Bank Minnesota, National
Association, a national banking association, as trustee and indenture collateral
agent under the Amended and Restated Indenture, dated as of July 31, 1997,
between the Trust and the Indenture Trustee.
"Other Conveyed Property" means all monies at any time paid or payable
on the Receivables or in respect thereof after the applicable Cutoff Date
(including amounts due on or before the applicable Cutoff Date but receivable by
AFL after such Cutoff Date), the security interests of AFL in the Financed
Vehicles, the Insurance Policies and any proceeds from any Insurance Policies
relating to the Receivables, the Obligors or the Financed Vehicles, including
rebates of premiums, all Collateral Insurance and any Force-Placed Insurance
relating to the Receivables, rights of AFL against Dealers with respect to the
Receivables under the Dealer Agreements and the Dealer Assignments, all items
contained in the Receivables File, any and all other documents or electronic
records that AFL keeps on file in accordance with its customary procedures
relating to the Receivables, the Obligors or the Financed Vehicles, property
(including the right to receive future Liquidation Proceeds) that secures a
Receivable and that has been acquired by or on behalf of AFL pursuant to
liquidation of such Receivable, all present and future claims, demands, causes
and chooses in action in respect of the Receivables and any or all of the
foregoing and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of the Receivables and any and all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts receivables, notes,
drafts, acceptances, chattel paper, checks, deposit
2
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of the Receivables and any of the foregoing.
"Owner Trustee" means Wilmington Trust Company, a Delaware
corporation, not in its individual capacity but solely as trustee of the Trust
and any successor trustee appointed and acting pursuant to the Trust Agreement.
"Purchase Price" means, with respect to any Receivables and related
Other Conveyed Property conveyed to ARFC II by AFL on any Transfer Date, an
amount equal to the sum of the Principal Balances of all such Receivables as of
the applicable Cutoff Date.
"Receivable" means a retail installment sale contract or promissory
note (and related security agreement) for a new or used automobile or light
truck (and all accessories thereto) that is included in the Schedule of
Receivables, and all rights and obligations under such a contract.
"Related Documents" means the Notes, the Custodian Agreement, the Sale
and Servicing Agreement, the Lockbox Agreement and the Indenture. The Related
Documents to be executed by any party are referred to herein as "such party's
Related Documents," "its Related Documents" or by a similar expression.
"Repurchase Event" means the occurrence of a breach of any of AFL's
representations and warranties contained in Section 3.1(a) hereof or any other
event which requires the repurchase of a Receivable by AFL under the Sale and
Servicing Agreement or by ARFC II pursuant to Section 2.6 of the Sale and
Servicing Agreement.
"Sale and Servicing Agreement" means the Amended and Restated Sale and
Servicing Agreement, dated as of July 31, 1997, executed and delivered by
Arcadia Receivables Finance Corp. II, as Seller, Arcadia Financial Ltd., in its
individual capacity and as Servicer, Olympic Automobile Receivables Warehouse
Trust, as Issuer, and Norwest Bank Minnesota, National Association, as Backup
Servicer, together with any Transfer Agreements executed pursuant thereto and in
accordance with the terms thereof.
"Schedule of Receivables" means the schedule of all automobile retail
installment loan contracts and promissory notes sold and transferred pursuant to
each Assignment Agreement which is attached hereto as Schedule A, as such
Schedule shall be supplemented from time to time (i) by each Schedule of
Receivables with respect to each Assignment Agreement, which Schedules of
Receivables shall be deemed incorporated and made a part of Schedule A hereto
and (ii) to reflect the repurchase from ARFC II of (a) Warranty Receivables and
(b) other Receivables purchased from ARFC II by AFL, such comprehensive schedule
to be maintained by the Indenture Trustee. With respect to an Assignment
Agreement, "Schedule of Receivables" shall mean the Schedule attached to such
Assignment Agreement as Exhibit A thereto.
3
"Schedule of Representations" means the Schedule of Representations
and Warranties attached hereto as Schedule B.
"Transfer Date" means any date on which Receivables and related Other
Conveyed Property are sold and assigned to ARFC II pursuant to Section 2.2.
"Trust" means the trust created by the Trust Agreement, the estate of
which consists of the Trust Property.
"Trust Agreement" means the Amended and Restated Trust Agreement,
dated as of July 31, 1997 between ARFC II and the Owner Trustee.
"Trust Property" means the property and proceeds of every description
conveyed pursuant to Section 2.5 of the Trust Agreement, Sections 2.1 and 2.4 of
the Sale and Servicing Agreement and Section 2.2 hereof and pursuant to any
Assignment Agreement, together with the Trust Accounts (including all Eligible
Investments therein and all proceeds therefrom).
SECTION 1.3 USAGE OF TERMS. (a) With respect to all terms used in
this Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography, and other means of reproducing words in a
visible form; references to agreements and other contractual instruments include
all subsequent amendments thereto or changes therein entered into in accordance
with their respective terms and not prohibited by this Agreement or the Sale and
Servicing Agreement; references to Persons include their permitted successors
and assigns; and the terms "include" or "including" mean "include without
limitation" or "including without limitation."
(b) The references to the Related Documents entered into in
connection with this Agreement shall be read to include, where appropriate, the
original (as amended and supplemented) agreement related to each such amended
and restated document.
SECTION 1.4 CERTAIN REFERENCES. All references to the Principal
Balance of a Receivable as of an Accounting Date shall refer to the close of
business on such day, or as of the first day of a Monthly Period shall refer to
the opening of business on such day. All references to the last day of a
Monthly Period shall refer to the close of business on such day.
SECTION 1.5 NO RECOURSE. Without limiting the obligations of AFL
hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of AFL, or
of any predecessor or successor of AFL.
SECTION 1.6 ACTION BY OR CONSENT OF NOTEHOLDERS OR
CERTIFICATEHOLDERS. Whenever any provision of this Agreement refers to action
to be taken, or consented to, by Noteholders or Certificateholders, such
provision shall be deemed to refer to
4
Noteholders or Certificateholders, as the case may be, of record as of the
Record Date immediately preceding the date on which such action is to be taken,
or consent given, by Noteholders or Certificateholders, as the case may be.
Solely for the purposes of any action to be taken, or consented to, by
Noteholders or Certificateholders, any Note or Certificate registered in the
name of ARFC II, AFL or any Affiliate thereof shall be deemed not to be
outstanding, and the related Outstanding Amount or Certificate Balance, as
applicable, evidenced thereby shall not be taken into account in determining
whether the requisite Outstanding Amount or Certificate Balance necessary to
effect any such action or consent has been obtained; provided, however, that,
solely for the purpose of determining whether the Indenture Trustee or Owner
Trustee is entitled to rely upon any such action or consent, only Notes or
Certificates which the Indenture Trustee or Owner Trustee knows to be so owned
shall be so disregarded.
SECTION 1.7 EFFECTIVENESS. (a) The "Effectiveness Date" of this
Agreement shall occur on the date on which the conditions set forth in this
Agreement shall have been satisfied or waived by both parties to this Agreement.
(b) This Agreement amends and restates the Original Receivables
Purchase Agreement and Assignment and on the Effectiveness Date, replaces the
Original Receivables Purchase Agreement and Assignment without interruption of
the parties' performance thereunder.
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 PURCHASE PRICE. In consideration of the conveyance of
the Receivables and the related Other Conveyed Property to ARFC II on each
Transfer Date, ARFC II shall pay or cause to be paid to AFL an amount equal to
the product of (x) the outstanding Principal Balance (as defined in the Sale and
Servicing Agreement) of each Receivable and (y) 100%. Such amount shall be paid
to AFL, by wire transfer of immediately available funds (a) on the date of such
conveyance, in an amount equal to ninety-four percent of such Purchase Price,
and (b) upon the subsequent transfer of such Receivables for securitization or
upon a "Securitized Offering" (as defined in the Sale and Servicing Agreement),
in an amount equal to the remaining balance of the Purchase Price.
SECTION 2.2. CONVEYANCE OF RECEIVABLES.
(a) Subject to the conditions set forth in paragraph (b) below, AFL,
pursuant to the mutually agreed upon terms contained herein and pursuant to one
or more Assignment Agreements, shall sell, transfer, assign and otherwise convey
to ARFC II without recourse (but without limitation of its obligations in this
Agreement or the Sale and Servicing Agreement), all of the right, title and
interest of AFL, whether then existing or thereafter acquired, in and to the
Receivables listed on the related Schedule of Receivables and the related Other
Conveyed Property. It is the intention of ARFC II and
5
AFL that the transfers and assignments contemplated by this Agreement and each
Assignment Agreement shall constitute a sale of the Receivables and the Other
Conveyed Property from AFL to ARFC II, conveying good title thereto free and
clear of any Liens, and the Receivables and Other Conveyed Property shall not be
a part of AFL's estate in the event of the filing of a bankruptcy petition by or
against AFL under any bankruptcy or similar law.
(b) (1) AFL shall transfer to ARFC II the Receivables and the
related Other Conveyed Property as described in paragraph (a) above only upon
the satisfaction of each of the following conditions on or prior to the related
Transfer Date:
(i) AFL shall have delivered to ARFC II, the Owner Trustee and the
Indenture Trustee a duly executed Assignment Agreement (including an
acceptance by ARFC II), which shall include a Schedule of Receivables
listing the Receivables being transferred on such Transfer Date;
(ii) as of such Transfer Date, AFL shall not have been insolvent nor
shall AFL have been rendered insolvent by such sale and assignment nor
shall AFL be aware of any pending insolvency;
(iii) AFL shall have taken any action necessary or advisable to
maintain the first priority perfected ownership interest of ARFC II in the
Receivables and Other Conveyed Property;
(iv) no selection procedures adverse to the interests of ARFC II,
the Issuer or the Noteholders shall have been utilized by AFL or ARFC II in
selecting the Receivables;
(v) AFL shall have provided to ARFC II and ▇▇▇▇▇▇ any information
reasonably requested by any of the foregoing with respect to the
Receivables;
(vi) the conditions to the transfer of Receivables to the Trust
pursuant to Section 2.1(b) of the Sale and Servicing Agreement have been
met;
(vii) each of the representations and warranties made by AFL pursuant
to Section 3.1 shall be true and correct as of the related Transfer Date,
and AFL shall have performed all obligations to be performed by it
hereunder on or prior to such Transfer Date;
(viii) AFL shall, at its own expense, on or prior to the Transfer Date
indicate in its computer files that the Receivables identified in the
Assignment Agreement have been sold to ARFC II pursuant to this Agreement
and the related Assignment Agreement;
(ix) on any Transfer Date, AFL shall have established, in the name of
the Trustee for the benefit of the Noteholders and the Certificateholders,
an Eligible Interest Rate Cap Agreement in a notional amount equal to or
greater than the sum
6
of the Note Balance PLUS the Certificate Balance on such date (after taking
into account the transfer of Receivables to the Trust on such date);
(x) after giving effect to the conveyance of Receivables on such
Transfer Date, the aggregate of the Principal Balances of Receivables
attributable to loans classified as Financed Repossessions shall not exceed
3.0% of the aggregate of the Principal Balances of all Receivables on such
Transfer Date; and
(xi) AFL shall have delivered to the Indenture Trustee, the Owner
Trustee and ▇▇▇▇▇▇ an Officer's Certificate confirming the satisfaction of
each condition precedent specified in this paragraph (b)(1).
SECTION 2.3. DELIVERY OF RECEIVABLES FILE. AFL shall use its best
efforts to deliver to the Custodian within three Business Days after each
Transfer Date, but in any event AFL shall deliver to the Custodian no later than
ten Business Days after such Transfer Date, the following documents:
(i) The fully executed original of the Receivable (together with the
original of any agreements modifying the Receivable, including without
limitation any extension agreements);
(ii) A certificate of insurance, application form signed by the
Obligor or a signed representation letter from the Obligor named in the
Receivable pursuant to which the Obligor has agreed to obtain an Insurance
Policy, or a documented verbal confirmation by the insurance agent for the
Obligor of a policy number for an Insurance Policy or any other documents
evidencing or relating to any Insurance Policy;
(iii) The original credit application, or a copy thereof, of each
Obligor, on AFL's customary form, or on a form approved by AFL, for such
application; and
(iv) The original certificate of title (when received) and otherwise
such documents, if any, that AFL keeps on file in accordance with its
customary procedures indicating that the Financed Vehicle is owned by the
Obligor and subject to the interest of AFL as first lienholder or secured
party (including any Lien Certificate received by AFL), or if such original
certificate of title has not yet been received, a copy of the application
therefor, showing AFL as secured party, or a letter from the applicable
Dealer agreeing unconditionally to repurchase the related Receivable if the
certificate of title is not received by AFL within 180 days.
It is the intention of AFL and ARFC II that the transfer and assignment
contemplated by this Agreement and the related Assignment Agreements shall
constitute a sale of the Receivables and the Other Conveyed Property from AFL to
ARFC II, conveying good title thereto free and clear of any Liens, and the
Receivables and the Other Conveyed Property shall not be part of AFL's estate in
the event of the filing of a bankruptcy petition by or against AFL under any
bankruptcy or similar law.
7
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF AFL. AFL made the
following representations and warranties on the Initial Closing Date, on which
ARFC II relied in purchasing the Receivables and the Other Conveyed Property and
in transferring the Receivables and the Other Conveyed Property to the Trust
under the original Sale and Servicing Agreement and AFL hereby makes the
following representations and warranties on the Effectiveness Date, on which
ARFC II relies in purchasing the Receivables and the Other Conveyed Property to
the Trust under this Agreement. Such representations are made as of the Initial
Closing Date, the Effectiveness Date and each Transfer Date, and shall survive
the sale, transfer and assignment of the Receivables and the Other Conveyed
Property hereunder and under the Assignment Agreements and the sale, transfer
and assignment thereof by ARFC II to the Trust under the Sale and Servicing
Agreement. AFL and ARFC II agree that ARFC II will assign to the Trust all of
ARFC II's rights under this Agreement and that the Trust will thereafter be
entitled to enforce this Agreement against AFL in the Trust's own name.
(a) SCHEDULE OF REPRESENTATIONS. The representations and warranties
set forth on the Schedule of Representations are true and correct.
(b) ORGANIZATION AND GOOD STANDING. AFL has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Minnesota, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
currently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire, own and sell the Receivables and the Other
Conveyed Property transferred to ARFC II.
(c) DUE QUALIFICATION. AFL is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property or the conduct of its business requires such qualification.
(d) POWER AND AUTHORITY. AFL has the power and authority to execute
and deliver this Agreement, each Assignment Agreement and its Related Documents
and to carry out its terms and their terms, respectively; AFL has full power and
authority to sell and assign the Receivables and the Other Conveyed Property to
be sold and assigned to and deposited with ARFC II under each Assignment
Agreement and has duly authorized such sale and assignment to ARFC II by all
necessary corporate action; and the execution, delivery and performance of this
Agreement, each Assignment Agreement and AFL's Related Documents have been duly
authorized by AFL by all necessary corporate action.
(e) VALID SALE; BINDING OBLIGATIONS. This Agreement, each Assignment
Agreement and AFL's Related Documents have been duly executed and delivered,
shall effect a valid sale, transfer and assignment of the Receivables and the
Other Conveyed Property, enforceable against AFL and creditors of and purchasers
from AFL; and this
8
Agreement, each Assignment Agreement and AFL's Related Documents constitute
legal, valid and binding obligations of AFL enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(f) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement, each Assignment Agreement and the Related Documents and the
fulfillment of the terms of this Agreement, each Assignment Agreement and the
Related Documents shall not conflict with, result in any breach of any of the
terms and provisions of or constitute (with or without notice, lapse of time or
both) a default under, the articles of incorporation or bylaws of AFL, or any
indenture, agreement, mortgage, deed of trust or other instrument to which AFL
is a party or by which it is bound, or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, other than this
Agreement, each Assignment Agreement and the Sale and Servicing Agreement, or
violate any law, order, rule or regulation applicable to AFL of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over AFL or any of its
properties.
(g) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to AFL's knowledge, threatened against AFL, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over AFL or its properties (i) asserting the
invalidity of this Agreement, any Assignment Agreement or any of the Related
Documents, (ii) seeking to prevent the issuance of the Notes or the Certificates
or the consummation of any of the transactions contemplated by this Agreement,
any Assignment Agreement or any of the Related Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by AFL of its obligations under, or the validity or enforceability
of, this Agreement, any Assignment Agreement or any of the Related Documents or
(iv) seeking to affect adversely the federal income tax or other federal, state
or local tax attributes of, or seeking to impose any excise, franchise, transfer
or similar tax upon, the transfer and acquisition of the Receivables and the
Other Conveyed Property hereunder, under any Assignment Agreement or under the
Sale and Servicing Agreement.
(h) NO TERMINATION EVENTS. No Purchase Termination Event or Servicer
Termination Event shall have occurred and be continuing.
(i) CHIEF EXECUTIVE OFFICE. The chief executive office of AFL is
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇.
SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF ARFC II. ARFC II made
the following representations and warranties on the Initial Closing Date on
which AFL relied in selling, assigning, transferring and conveying the
Receivables and the Other Conveyed Property to ARFC II under the Original Sale
and Servicing Agreement and under each Assignment Agreement; and ARFC II hereby
makes the following
9
representations and warranties on the Effectiveness Date, on which AFL relies in
selling, assigning, transferring and conveying the Receivables and the Other
Conveyed Property to ARFC II under this Agreement. Such representations are
made as of the Initial Closing Date, the Effectiveness Date and each Transfer
Date, and shall survive the sale, transfer and assignment of the Receivables and
the Other Conveyed Property hereunder and under each Assignment Agreement and
the sale, transfer and assignment thereof by ARFC II to the Trust under the Sale
and Servicing Agreement.
(a) ORGANIZATION AND GOOD STANDING. ARFC II has been duly organized
and is validly existing and in good standing as a corporation under the laws of
the State of Delaware, with the power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
currently conducted, and had at all relevant times, and has, full power,
authority and legal right to acquire and own the Receivables and the Other
Conveyed Property and to transfer the Receivables and the Other Conveyed
Property to the Trust pursuant to the Sale and Servicing Agreement.
(b) DUE QUALIFICATION. ARFC II is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions where the failure to do so would materially
and adversely affect (i) ARFC II's ability to acquire the Receivables or the
Other Conveyed Property, (ii) the validity or enforceability of the Receivables
and the Other Conveyed Property or (iii) ARFC II's ability to perform its
obligations hereunder, under any Assignment Agreement and under the Related
Documents.
(c) POWER AND AUTHORITY. ARFC II has the power, authority and legal
right to execute and deliver this Agreement, each Assignment Agreement and its
Related Documents and to carry out the terms hereof and thereof and to acquire
the Receivables and the Other Conveyed Property hereunder and under each
Assignment Agreement; and the execution, delivery and performance of this
Agreement, each Assignment Agreement and its Related Documents and all of the
documents required pursuant hereto or thereto have been duly authorized by ARFC
II by all necessary action.
(d) NO CONSENT REQUIRED. ARFC II is not required to obtain the
consent of any other Person, or any consent, license, approval or authorization
or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery or performance of this
Agreement, each Assignment Agreement and the Related Documents, except for such
as have been obtained, effected or made.
(e) BINDING OBLIGATION. This Agreement, each Assignment Agreement
and each of its Related Documents constitutes a legal, valid and binding
obligation of ARFC II, enforceable against ARFC II in accordance with its terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws and to general equitable principles.
(f) NO VIOLATION. The execution, delivery and performance by ARFC II
of this Agreement and each Assignment Agreement, the consummation of the
transactions contemplated by this Agreement, each Assignment Agreement and the
Related Documents
10
and the fulfillment of the terms of this Agreement, each Assignment Agreement
and the Related Documents do not and will not conflict with, result in any
breach of any of the terms and provisions of or constitute (with or without
notice or lapse of time) a default under the certificate of incorporation or
bylaws of ARFC II, or conflict with or breach any of the terms or provisions of,
or constitute (with or without notice or lapse of time) a default under, any
indenture, agreement, mortgage, deed of trust or other instrument to which ARFC
II is a party or by which ARFC II is bound or to which any of its properties are
subject, or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument (other than the Sale and Servicing Agreement
and the Indenture), or violate any law, order, rule or regulation, applicable to
ARFC II or its properties, of any federal or state regulatory body or any court,
administrative agency, or other governmental instrumentality having jurisdiction
over ARFC II or any of its properties.
(g) NO PROCEEDINGS. There are no proceedings or investigations
pending, or, to the knowledge of ARFC II, threatened against ARFC II, before any
court, regulatory body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over ARFC II or its properties: (i)
asserting the invalidity of this Agreement, any Assignment Agreement or any of
the Related Documents, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement, any Assignment Agreement or any of
the Related Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by ARFC II of its obligations
under, or the validity or enforceability of, this Agreement, any Assignment
Agreement or any of the Related Documents or (iv) that may adversely affect the
federal or state income tax attributes of, or seeking to impose any excise,
franchise, transfer or similar tax upon, the transfer and acquisition of the
Receivables and the Other Conveyed Property hereunder or under any Assignment
Agreement or the transfer of the Receivables and the Other Conveyed Property to
the Trust pursuant to the Sale and Servicing Agreement.
In the event of any breach of a representation and warranty made by ARFC II
hereunder, AFL covenants and agrees that it will not take any action to pursue
any remedy that it may have hereunder, in law, in equity or otherwise, until a
year and a day have passed since the date on which all investor certificates,
notes or other similar securities issued by the Trust, or a trust or similar
vehicle formed by ARFC II, have been paid in full. AFL and ARFC II agree that
damages will not be an adequate remedy for such breach and that this covenant
may be specifically enforced by ARFC II or by the Owner Trustee on behalf of the
Trust.
ARTICLE IV
COVENANTS OF AFL
SECTION 4.1 PROTECTION OF TITLE OF ARFC II AND THE TRUST.
(a) At or prior to the Initial Closing Date, AFL filed or caused to
be filed a UCC-1 financing statement, executed by AFL as seller or debtor,
naming ARFC II as
11
purchaser or secured party and describing the Receivables and the Other Conveyed
Property, with respect to this Agreement and each Assignment Agreement, being
sold by it to ARFC II as collateral, with the office of the Secretary of State
of the State of Minnesota and in such other locations as ARFC II shall have
required. From time to time thereafter, AFL shall execute and file such
financing statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of ARFC II under this
Agreement and each Assignment Agreement and of the Trust under the Sale and
Servicing Agreement in the Receivables and the Other Conveyed Property and in
the proceeds thereof. AFL shall deliver (or cause to be delivered) to ARFC II,
the Owner Trustee, the Indenture Trustee and DFC file-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as available
following such filing. In the event that AFL fails to perform its obligations
under this subsection, ARFC II or the Owner Trustee may do so at the expense of
AFL.
(b) AFL shall not change its name, identity, or corporate structure
in any manner that would, could or might make any financing statement or
continuation statement filed by AFL (or by ARFC II or the Owner Trustee on
behalf of AFL) in accordance with paragraph (a) above seriously misleading
within the meaning of Section 9-402(7) of the UCC, unless it shall have given
ARFC II, the Owner Trustee and ▇▇▇▇▇▇ at least 60 days' prior written notice
thereof, and shall promptly file appropriate amendments to all previously filed
financing statements and continuation statements.
(c) AFL shall give ARFC II, ▇▇▇▇▇▇, the Indenture Trustee and the
Owner Trustee at least 60 days' prior written notice of any relocation of its
principal executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement. AFL shall at all times maintain each office from which it services
Receivables and its principal executive office within the United States of
America.
(d) AFL shall maintain its computer systems so that, from and after
the time of sale under this Agreement and under any Assignment Agreement of the
Receivables to ARFC II, and the conveyance of the Receivables by ARFC II to the
Trust, AFL's master computer records (including archives) that shall refer to a
Receivable indicate clearly that such Receivable has been sold to ARFC II and
has been conveyed by ARFC II to the Trust. Indication of the Trust's ownership
of Receivable shall be deleted from or modified on AFL's computer systems when,
and only when, the Receivable shall become a Purchased Receivable or shall have
been paid in full. AFL shall indicate in its consolidated financial statements
that Receivables have been sold to ARFC II and are not available to the
creditors of AFL.
(e) If at any time AFL shall propose to sell, grant a security
interest in, or otherwise transfer any interest in motor vehicle receivables to
any prospective purchaser, lender or other transferee, AFL shall give to such
prospective purchaser, lender, or other transferee computer tapes, records, or
print-outs (including any restored from archives) that,
12
if they shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold to ARFC II and is owned by the Trust.
SECTION 4.2 OTHER LIENS OR INTERESTS. Except for the conveyances
under any Assignment Agreement, AFL will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on
the Receivables or the Other Conveyed Property, or any interest therein, and AFL
shall defend the right, title, and interest of ARFC II and the Trust in and to
the Receivables and the Other Conveyed Property against all claims of third
parties claiming through or under AFL.
SECTION 4.3 COSTS AND EXPENSES. AFL shall pay all reasonable costs
and disbursements in connection with the performance of its obligations
hereunder and under each Assignment Agreement and its Related Documents.
SECTION 4.4 INDEMNIFICATION.
(a) AFL shall defend, indemnify and hold harmless ARFC II, the Trust,
the Owner Trustee, the Indenture Trustee, ▇▇▇▇▇▇, the Backup Servicer, the
Noteholders and the Certificateholders from and against any and all costs,
expenses, losses, damages, claims, and liabilities, arising out of or resulting
from any breach of any of AFL's representations and warranties contained herein.
(b) AFL shall defend, indemnify and hold harmless ARFC II, the Trust,
the Owner Trustee, the Indenture Trustee, ▇▇▇▇▇▇, the Backup Servicer, the
Noteholders and the Certificateholders from and against any and all costs,
expenses, losses, damages, claims, and liabilities, arising out of or resulting
from the use, ownership or operation by AFL or any affiliate thereof of a
Financed Vehicle.
(c) AFL shall defend and indemnify ARFC II, the Trust, the Owner
Trustee, the Indenture Trustee, ▇▇▇▇▇▇, the Backup Servicer, the Noteholders and
the Certificateholders against any and all costs, expenses, losses, damages,
claims and liabilities arising out of or resulting from any action taken, or
failed to be taken, by it in respect of any portion of the Trust Property other
than in accordance with this Agreement or the Sale and Servicing Agreement.
(d) AFL agrees to pay, and shall defend, indemnify and hold harmless
ARFC II, the Trust, the Owner Trustee, the Indenture Trustee, ▇▇▇▇▇▇, the Backup
Servicer, the Noteholders and the Certificateholders from and against any taxes
that may at any time be asserted against ARFC II, the Owner Trustee, the
Indenture Trustee, DFC, the Backup Servicer, the Noteholders and the
Certificateholders with respect to the transactions contemplated in this
Agreement or in any Assignment Agreement, including, without limitation, any
sales, gross receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes (but not including any taxes asserted with
respect to, and as of the date of, any sale, transfer and assignment of the
Receivables and the Other Conveyed Property to ARFC II and of the Trust Property
to the Trust or the issuance and original sale of the Notes or the Certificates,
or asserted with respect to ownership of the Receivables and Other Conveyed
Property or the Trust Property which shall be
13
indemnified by AFL pursuant to clause (e) below, or federal, state or other
income taxes, arising out of distributions on the Notes or the Certificates or
transfer taxes arising in connection with the transfer of the Notes or the
Certificates) and costs and expenses in defending against the same, arising by
reason of the acts to be performed by AFL under this Agreement or under any
Assignment Agreement or imposed against such Persons.
(e) AFL agrees to pay, and to indemnify, defend and hold harmless
ARFC II, the Trust, the Owner Trustee, the Indenture Trustee, ▇▇▇▇▇▇, the Backup
Servicer, the Noteholders and the Certificateholders from, any taxes which may
at any time be asserted against such Persons with respect to, and as of the date
of, the conveyance or ownership of any Receivables or the Other Conveyed
Property hereunder or under each Assignment Agreement and the conveyance or
ownership of the Trust Property under the Sale and Servicing Agreement or the
issuance and original sale of the Notes and the Certificates, including, without
limitation, any sales, gross receipts, personal property, tangible or intangible
personal property, privilege or license taxes (but not including any federal or
other income taxes, including franchise taxes, arising out of the transactions
contemplated hereby or transfer taxes arising in connection with the transfer of
Notes or Certificates) and costs and expenses in defending against the same,
arising by reason of the acts to be performed by AFL under this Agreement or
under any Assignment Agreement or imposed against such Persons.
(f) AFL shall defend, indemnify, and hold harmless ARFC II, the Owner
Trustee, the Indenture Trustee, DFC, the Backup Servicer, the Trust, ▇▇▇▇▇▇, the
Noteholders and the Certificateholders from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon
ARFC II, the Trust, the Indenture Trustee, ▇▇▇▇▇▇, the Noteholders and the
Certificateholders through the negligence, willful misfeasance, or bad faith of
AFL in the performance of its duties under this Agreement or under any
Assignment Agreement or by reason of reckless disregard of AFL's obligations and
duties under this Agreement or under any Assignment Agreement.
(g) AFL shall indemnify, defend and hold harmless ARFC II, the Owner
Trustee, the Indenture Trustee, ▇▇▇▇▇▇, the Backup Servicer, the Trust, the
Noteholders and the Certificateholders from and against any loss, liability or
expense incurred by reason of the violation by AFL of federal or state
securities laws in connection with the registration or the sale of the Notes and
the Certificates.
(h) AFL shall indemnify, defend and hold harmless ARFC II, the Owner
Trustee, the Indenture Trustee, ▇▇▇▇▇▇, the Backup Servicer, the Trust, the
Noteholders and the Certificateholders from and against any loss, liability or
expense imposed upon, or incurred by, ARFC II, the Owner Trustee, the Indenture
Trustee, ▇▇▇▇▇▇, the Trust, the Noteholders or the Certificateholders as a
result of the failure of any Receivable, or the sale of the related Financed
Vehicle, to comply with all requirements of applicable law.
(i) AFL shall defend, indemnify, and hold harmless ARFC II and its
assignees from and against all costs, expenses, losses, claims, damages, and
liabilities arising out of or incurred in connection with the acceptance or
performance of AFL's trusts and
14
duties as Servicer under the Sale and Servicing Agreement, except to the extent
that such cost, expense, loss, claim, damage, or liability shall be due to the
willful misfeasance, bad faith, or negligence (except for errors in judgment) of
ARFC II.
(j) AFL shall indemnify, defend and hold harmless ARFC II, the Owner
Trustee, the Indenture Trustee, ▇▇▇▇▇▇, the Backup Servicer, the Trust, the
Noteholders and the Certificateholders from and against any loss, liability or
expense imposed upon, or incurred by, ARFC II, the Owner Trustee and the
Indenture Trustee, ▇▇▇▇▇▇, the Trust, the Noteholders or the Certificateholders
as a result of AFL's or ARFC II's use of the name "Olympic."
Indemnification under this Section 4.4 shall include reasonable fees
and expenses of counsel and expenses of litigation and shall survive termination
of the Trust. The indemnity obligations hereunder shall be in addition to any
obligation that AFL may otherwise have.
SECTION 4.5 ADVANCES.
(a) As of any Determination Date as of which no Trigger Event has
occurred, AFL, as Seller hereunder, shall become obligated to pay to or upon the
order of ARFC II on the related Deposit Date, an amount equal to the lesser of
(i) the aggregate Collection Shortfall with respect to Receivables for which no
Scheduled Payment was due during such Monthly Period and (ii) the Net Advance
Shortfall; PROVIDED, HOWEVER, that AFL shall not be required to make such
payments with respect to a Receivable extended pursuant to Section 3.2(b) of the
Sale and Servicing Agreement for any Monthly Period during which no Scheduled
Payment is due according to the terms of such extension.
(b) As of any Determination Date as of which a Trigger Event has
occurred, AFL, as Seller hereunder, shall become obligated to pay to or upon the
order of ARFC II on the related Deposit Date, the following amounts: If there
are Collection Shortfalls with respect to a Receivable, an amount equal to such
Collection Shortfall; PROVIDED, HOWEVER, AFL shall only be required to make such
payments with respect to Receivables for which no Scheduled Payment was due
during such Monthly Period; PROVIDED, FURTHER, that AFL shall not be required to
make such payments with respect to a Receivable extended pursuant to Section
3.2(b) of the Sale and Servicing Agreement for any Monthly Period during which
no Scheduled Payment is due according to the terms of such extension.
ARTICLE V
REPURCHASES
SECTION 5.1 REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY OR
COVENANT. Upon the occurrence of a Repurchase Event AFL shall, unless such
breach shall have been cured in all material respects, repurchase such
Receivable from the Trust and, on or before the related Deposit Date, AFL shall
pay the Purchase Amount to the Trust
15
pursuant to Section 4.5 of the Sale and Servicing Agreement. It is understood
and agreed that, except as set forth in Section 6.1, the obligation of AFL to
repurchase any Receivable as to which a breach has occurred and is continuing
shall, if such obligation is fulfilled, constitute the sole remedy against AFL
for such breach available to ARFC II, Certificateholders, Noteholders, or the
Owner Trustee or the Indenture Trustee on behalf of Certificateholders or
Noteholders or DFC. The provisions of this Section 5.1 are intended to grant
the Owner Trustee and the Indenture Trustee a direct right against AFL to demand
performance hereunder, and in connection therewith, AFL waives any requirement
of prior demand against ARFC II with respect to such repurchase obligation. Any
such purchase shall take place in the manner specified in Section 2.6 or Section
3.7, as applicable, of the Sale and Servicing Agreement. Notwithstanding any
other provision of this Agreement or the Sale and Servicing Agreement to the
contrary, the obligation of AFL under this Section shall not terminate upon a
termination of AFL as Servicer under the Sale and Servicing Agreement and shall
be performed in accordance with the terms hereof notwithstanding the failure of
the Servicer or ARFC II to perform any of their respective obligations with
respect to such Receivable under the Sale and Servicing Agreement.
In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by AFL, AFL shall indemnify the Owner
Trustee, the Indenture Trustee, ▇▇▇▇▇▇, the Backup Servicer, the Trust, the
Noteholders and the Certificateholders against all costs, expenses, losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel, which may be asserted against or incurred by any of them as a result of
third party claims arising out of the events or facts giving rise to such
Repurchase Events.
SECTION 5.2 REASSIGNMENT OF PURCHASED RECEIVABLES. Upon deposit in
the Collection Account of the Purchase Amount of any Receivable repurchased by
AFL under Section 5.1, ARFC II and the Owner Trustee shall take such steps as
may be reasonably requested by AFL in order to assign to AFL all of ARFC II's
and the Trust's right, title and interest in and to such Receivable and all
security and documents and all Other Conveyed Property conveyed to ARFC II and
the Trust directly relating thereto, without recourse, representation or
warranty, except as to the absence of liens, charges or encumbrances created by
or arising as a result of actions of ARFC II or the Owner Trustee. Such
assignment shall be a sale and assignment outright, and not for security. If,
following the reassignment of a Purchased Receivable, in any enforcement suit or
legal proceeding, it is held that AFL may not enforce any such Receivable on the
ground that it shall not be a real party in interest or a holder entitled to
enforce the Receivable, ARFC II and the Owner Trustee shall, at the expense of
AFL, take such steps as AFL deems reasonably necessary to enforce the
Receivable, including bringing suit in ARFC II's or the Owner Trustee's name or
the names of the Certificateholders.
SECTION 5.3 REPURCHASE OF INELIGIBLE RECEIVABLES UPON SECURITIZED
OFFERING. Upon the purchase of Ineligible Receivables by ARFC II pursuant to
Section 6.5 of the Sale and Servicing Agreement, AFL shall be obligated to
purchase from ARFC II all such Ineligible Receivables for a purchase price equal
to the fair market value of such Ineligible Receivables.
16
SECTION 5.4 WAIVERS. No failure or delay on the part of ARFC II, or
the Owner Trustee as assignee of ARFC II, in exercising any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any other
or future exercise thereof or the exercise of any other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 LIABILITY OF AFL. AFL shall be liable in accordance
herewith only to the extent of the obligations in this Agreement or in any
Assignment Agreement specifically undertaken by AFL and the representations and
warranties of AFL.
SECTION 6.2 [RESERVED].
SECTION 6.3 MERGER OR CONSOLIDATION OF AFL OR ARFC II. Any
corporation or other entity (i) into which AFL or ARFC II may be merged or
consolidated, (ii) resulting from any merger or consolidation to which AFL or
ARFC II is a party or (iii) succeeding to the business of AFL or ARFC II, in the
case of ARFC II, which corporation has a certificate of incorporation containing
provisions relating to limitations on business and other matters substantively
identical to those contained in ARFC II's certificate of incorporation, provided
that in any of the foregoing cases such corporation shall execute an agreement
of assumption to perform every obligation of AFL or ARFC II, as the case may be,
under this Agreement and each Assignment Agreement and, whether or not such
assumption agreement is executed, shall be the successor to AFL or ARFC II, as
the case may be, hereunder and under each such Assignment Agreement (without
relieving AFL or ARFC II of its responsibilities hereunder, if it survives such
merger or consolidation) without the execution or filing of any document or any
further act by any of the parties to this Agreement or each Assignment
Agreement. Notwithstanding the foregoing, ARFC II shall not merge or
consolidate with any other Person or permit any other Person to become the
successor to ARFC II's business without the prior written consent of ▇▇▇▇▇▇ and
the Rating Agencies. AFL or ARFC II shall promptly inform the other party, the
Owner Trustee, the Indenture Trustee, ▇▇▇▇▇▇ and the Rating Agencies of such
merger, consolidation or purchase and assumption. Notwithstanding the
foregoing, as a condition to the consummation of the transactions referred to in
clauses (i), (ii) and (iii) above, (x) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Sections 3.1 and 3.2
and this Agreement, or similar representation or warranty made in any Assignment
Agreement, shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction), (y) AFL or ARFC II, as applicable, shall have delivered prompt
written notice of such consolidation, merger or purchase and assumption to the
Owner Trustee, the Indenture Trustee, ▇▇▇▇▇▇, and the Rating Agencies prior to
the consummation of such transaction and shall have delivered to the Owner
Trustee, the Indenture Trustee and DFC an Officer's Certificate and an Opinion
of Counsel each stating that such consolidation, merger or succession and such
17
agreement of assumption comply with this Section 6.3 and that all conditions
precedent, if any, provided for in this Agreement, or in each Assignment
Agreement, relating to such transaction have been complied with, and (z) AFL or
ARFC II, as applicable, shall have delivered to the Owner Trustee, the Indenture
Trustee and ▇▇▇▇▇▇ an Opinion of Counsel, stating that, in the opinion of such
counsel, either (A) all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary to preserve
and protect the interest of the Owner Trustee in the Trust Property and reciting
the details of the filings or (B) no such action shall be necessary to preserve
and protect such interest.
SECTION 6.4 LIMITATION ON LIABILITY OF AFL AND OTHERS. AFL and any
director, officer, employee or agent may rely in good faith on the advice of
counsel or on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this Agreement.
AFL shall not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its obligations under this Agreement, any
Assignment Agreement or its Related Documents and that in its opinion may
involve it in any expense or liability.
SECTION 6.5 AFL MAY OWN NOTES OR CERTIFICATES. Subject to the
provisions of the Sale and Servicing Agreement, AFL and any Affiliate of AFL may
in its individual or any other capacity become the owner or pledgee of Notes or
Certificates with the same rights as it would have if it were not AFL or an
Affiliate thereof.
SECTION 6.6 AMENDMENT.
(a) This Agreement and any Assignment Agreement may be amended by AFL
and ARFC II, without the consent of the Owner Trustee, the Indenture Trustee or
▇▇▇▇▇▇ (A) to cure any ambiguity or (B) to correct any provisions in this
Agreement or any such Assignment Agreement; PROVIDED, HOWEVER, that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee,
the Indenture Trustee and ▇▇▇▇▇▇ adversely affect in any material respect the
interests of any Certificateholder or Noteholder.
(b) This Agreement and any Assignment Agreement may also be amended
from time to time by AFL and ARFC II, with the prior written consent of the
Owner Trustee, the Indenture Trustee, a Certificate Majority, a Note Majority
and ▇▇▇▇▇▇ for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or any Assignment
Agreement, or of modifying in any manner the rights of the Certificateholders or
the Noteholders; PROVIDED, HOWEVER, that no such amendment shall directly or
indirectly (i) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, collections of payments on Receivables, distributions that
shall be required to be made on any Certificate or Note or the Certificate Rate
or the Note Interest Rate or (ii) reduce the aforesaid percentage required to
consent to any such amendment or any waiver hereunder, without the consent of
the Holders of all Certificates or Notes then outstanding or of the Holders of
all Notes then outstanding.
18
(c) Prior to the execution of any such amendment or consent, AFL
shall have furnished written notification of the substance of such amendment or
consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or consent,
the Owner Trustee or the Indenture Trustee, as applicable, shall furnish written
notification of the substance of such amendment or consent to ▇▇▇▇▇▇ and each
Certificateholder and Noteholder.
(e) It shall not be necessary for the consent of Certificateholders
or Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders or
Noteholders shall be subject to such reasonable requirements as the Owner
Trustee or the Indenture Trustee, as applicable, may prescribe, including the
establishment of record dates. The consent of any Holder of a Certificate or
Note given pursuant to this Section or pursuant to any other provision of this
Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Certificate or Note and of any Certificate or Note issued upon
the transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Certificate or Note.
SECTION 6.7 NOTICES. All demands, notices and communications to AFL
or ARFC II hereunder shall be in writing, personally delivered, or sent by
telecopier (subsequently confirmed in writing), reputable overnight courier or
mailed by certified mail, return receipt requested, and shall be deemed to have
been given upon receipt (a) in the case of AFL, to Arcadia Financial Ltd., ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇, or such other address as shall be designated by AFL in a written notice
delivered to the other party or to the Owner Trustee or the Indenture Trustee,
as applicable, (b) in case of ARFC II, to Arcadia Receivables Finance Corp. II,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, or (c) in the case of ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Asset Finance Group.
SECTION 6.8 MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement, each Assignment Agreement and the Related
Documents set forth the entire understanding of the parties relating to the
subject matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement, each Assignment Agreement and the Related
Documents. Neither this Agreement nor any Assignment Agreement may be modified,
amended, waived or supplemented except as provided herein.
SECTION 6.9 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, provisions or terms of this Agreement or any Assignment Agreement
shall be for any reason whatsoever held invalid, then such covenants, provisions
or terms shall be deemed severable from the remaining covenants, provisions or
terms of this Agreement or
19
any Assignment Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or any Assignment
Agreement.
SECTION 6.10 INTENTION OF THE PARTIES. The execution and delivery of
this Agreement shall constitute an acknowledgment by AFL and ARFC II that they
intend that the assignments and transfers herein contemplated pursuant to each
Assignment Agreement constitute a sale and assignment outright, and not for
security, of the Receivables and the Other Conveyed Property, conveying good
title thereto free and clear of any Liens, from AFL to ARFC II, and that the
Receivables and the Other Conveyed Property shall not be a part of AFL's estate
in the event of the bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, or the occurrence of another similar event, of, or
with respect to, AFL. In the event that such conveyance is determined to be
made as security for a loan made by ARFC II, the Trust, the Certificateholders
or the Noteholders to AFL, the parties intend that AFL shall have granted to
ARFC II a security interest in all of AFL's right, title and interest in and to
the Receivables and the Other Conveyed Property conveyed pursuant to each
Assignment Agreement and that this Agreement shall constitute a security
agreement under applicable law.
SECTION 6.11 GOVERNING LAW. This Agreement shall be construed in
accordance with, the laws of the State of New York without regard to the
principles of conflicts of laws thereof and the obligations, rights and remedies
of the parties under this Agreement shall be determined in accordance with such
laws.
SECTION 6.12 COUNTERPARTS. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
SECTION 6.13 CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED
PROPERTY TO THE TRUST. AFL acknowledges that ARFC II intends, pursuant to the
Sale and Servicing Agreement, to convey the Receivables and the Other Conveyed
Property, together with its rights under this Agreement, to the Trust on the
date hereof. AFL acknowledges and consents to such conveyance and waives any
further notice thereof and covenants and agrees that the representations and
warranties of AFL contained in this Agreement and the rights of ARFC II
hereunder are intended to benefit the Owner Trustee, the Indenture Trustee,
▇▇▇▇▇▇, the Trust, the Certificateholders and the Noteholders. In furtherance
of the foregoing, AFL covenants and agrees to perform its duties and obligations
hereunder, in accordance with the terms hereof for the benefit of the Owner
Trustee, the Indenture Trustee, ▇▇▇▇▇▇, the Trust, the Certificateholders and
the Noteholders and that, notwithstanding anything to the contrary in this
Agreement, AFL shall be directly liable to the Owner Trustee and the Trust
(notwithstanding any failure by the Servicer, the Backup Servicer or ARFC II to
perform its duties and obligations hereunder or under the Sale and Servicing
Agreement) and that the Owner Trustee may enforce the duties and obligations of
AFL under this Agreement against AFL for the benefit of the Trust, ▇▇▇▇▇▇, the
Certificateholders and the Noteholders.
20
SECTION 6.14 NONPETITION COVENANT. Neither ARFC II nor AFL shall
petition or otherwise invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Trust (or, in the
case of AFL, against ARFC II) under any federal or state bankruptcy, insolvency
or similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Trust (or ARFC II) or
any substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Trust (or ARFC II).
21
IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Receivables Purchase Agreement and Assignment to be duly executed by their
respective officers as of the day and year first above written.
Arcadia Receivables Finance Corp. II,
as Purchaser
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: EVP CFO
Arcadia Financial Ltd., as Seller
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: EVP CFO
[Signature page to Amended and Restated Receivables Purchase Agreement]