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EXHIBIT 10.119
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SALE AND SERVICING AGREEMENT
between
ONYX ACCEPTANCE CORPORATION
as Seller and Servicer
and
ONYX ACCEPTANCE RECEIVABLES CORPORATION,
as Purchaser
Dated as of August 9, 1999
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS...................................1
SECTION 1.1. Definitions.................................................1
ARTICLE II PURCHASES AND SALES...........................2
SECTION 2.1. Agreements to Purchase and to Sell..........................2
SECTION 2.2. Purchase Price..............................................3
SECTION 2.3. Payment of Purchase Price...................................3
SECTION 2.4. Delivery....................................................4
ARTICLE III CONDITIONS TO PURCHASE........................4
SECTION 3.1. Conditions to Effectiveness.................................4
SECTION 3.2. Conditions Precedent to Payment of Purchase Price...........4
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS.....5
SECTION 4.1. Representations and Warranties of the Seller
and the Servicer............................................5
SECTION 4.2. Representations and Warranties of the Seller
Concerning Contracts.......................................11
SECTION 4.3. Covenants of Seller........................................13
SECTION 4.4. Covenants of Servicer......................................20
SECTION 4.5. Repurchase of Ineligible Contracts.........................22
SECTION 4.6. Financial Covenants of Seller..............................22
SECTION 4.7. Representations and Warranties of Recco....................24
ARTICLE V SUBORDINATED NOTE............................25
SECTION 5.1. Subordinated Note..........................................25
SECTION 5.2. Restrictions on Transfer of Subordinated Note..............28
ARTICLE VI TERMINATION OF COMMITMENT....................29
SECTION 6.1. Remedies Following the Termination Date. ..................29
ARTICLE VII INDEMNIFICATION, ADDITIONAL COSTS
AND INSPECTION...............................29
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SECTION 7.1. Indemnities................................................29
SECTION 7.2. Rights of Inspection.......................................32
ARTICLE VIII THE SERVICER.................................32
SECTION 8.1. Appointment of Servicer....................................32
SECTION 8.2. Collections................................................32
SECTION 8.3. Maintenance of Records; Quarterly and Annual Reports.......33
SECTION 8.4. Servicing Fee..............................................35
SECTION 8.5. Resignation; Sub-Contracting...............................35
SECTION 8.6. Termination................................................36
SECTION 8.7. Delivery of Monthly Report.................................36
SECTION 8.8. Daily Report...............................................37
SECTION 8.9. [RESERVED].................................................37
SECTION 8.10. Servicer Termination Events................................37
SECTION 8.11. Servicer Termination.......................................38
SECTION 8.12. Appointment of Successor Servicer..........................39
ARTICLE IX MISCELLANEOUS................................40
SECTION 9.1. Notices, Etc...............................................40
SECTION 9.2. Successors and Assigns.....................................42
SECTION 9.3. Confirmation of Intent; Security Interest..................42
SECTION 9.4. Payments...................................................42
SECTION 9.5. [RESERVED].................................................43
SECTION 9.6. Costs; Expenses and Taxes..................................43
SECTION 9.7. Severability Clause........................................43
SECTION 9.8. Amendments; Governing Law; Jury Trial Waiver...............43
SECTION 9.9. No Recourse................................................43
SECTION 9.10. Further Assurances.........................................44
SECTION 9.11. Termination................................................44
SECTION 9.12. Assignment to Funding Agent................................44
SECTION 9.13. Counterparts...............................................45
SECTION 9.14. Headings...................................................45
SECTION 9.15. No Bankruptcy Petition Against Recco.......................45
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EXHIBITS
EXHIBIT A [RESERVED]................................................A-1
EXHIBIT B SUBORDINATED NOTE.........................................B-1
EXHIBIT C ONYX ACCEPTANCE CORPORATION OFFICER'S CERTIFICATE.........C-1
EXHIBIT D LIST OF LOCK-BOX BANKS AND NUMBERS OF LOCK-BOXES..........D-1
EXHIBIT E CLEARING ACCOUNT BANK AND ACCOUNT NUMBER..................E-1
EXHIBIT F [RESERVED]................................................F-1
EXHIBIT G [Form of Servicer's Certificate]..........................G-1
EXHIBIT H [FORM OF DAILY REPORT]....................................H-1
EXHIBIT I [FORM OF MONTHLY REPORT]..................................I-1
SCHEDULE 4.1(h)-1 PRINCIPAL PLACE OF BUSINESS, ETC.
OF SELLER.................................................I-1
SCHEDULE 4.1(h)-2 PRINCIPAL PLACE OF BUSINESS, ETC. OF SERVICER.............I-2
SCHEDULE 4.1(k)-1 TRADE NAMES OF SELLER.....................................I-3
SCHEDULE 4.1(k)-2 TRADE NAMES OF SERVICER...................................I-4
SCHEDULE 4.1(r)-1 SUBSIDIARIES OF SELLER....................................I-5
SCHEDULE 4.1(r)-2 SUBSIDIARIES OF SERVICER..................................I-6
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SALE AND SERVICING AGREEMENT
This SALE AND SERVICING AGREEMENT (as amended, supplemented or otherwise
modified and in effect from time to time, this "Agreement"), dated as of August
9, 1999, is between ONYX ACCEPTANCE CORPORATION, a Delaware corporation, as
seller (together with its successors and assigns in such capacity, the "Seller")
and as servicer (together with its successors and assigns in such capacity, the
"Servicer"), and ONYX ACCEPTANCE RECEIVABLES CORPORATION, a Delaware corporation
(together with its successors and assigns, "Recco"), as the purchaser.
W I T N E S S E T H:
WHEREAS, the Seller in the ordinary course of its business originates
and purchases loans secured by automobiles, vans and light trucks;
WHEREAS, the Seller wishes to sell certain of such loans from time to
time to Recco and Recco desires to purchase such loans; and
WHEREAS, from time to time in accordance with the consummation of the
transactions contemplated herein, Recco desires to finance the purchases of such
loans by advances made by the Lenders, which advances will be secured by the
loans purchased by Recco.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
(1) As used in this Agreement, capitalized terms used herein shall,
unless otherwise defined herein, have the meanings assigned to them in the
Definitions List dated as of the date hereof that refers to this Agreement,
which is incorporated herein by reference (as amended from time to time, the
"Definitions List").
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(2) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(3) Capitalized terms used herein shall be equally applicable to
both the singular and plural forms of such terms.
ARTICLE II
PURCHASES AND SALES
SECTION 1.2. Agreements to Purchase and to Sell.
(1) On each Purchase Date occurring prior to the Termination Date,
the Seller does hereby agree to sell, transfer, assign, set over and otherwise
convey, without recourse (except as expressly provided herein), to Recco and
Recco does hereby agree to purchase, without recourse (except as expressly
provided herein) all right, title and interest of the Seller in and to (i) all
Contracts listed on a Contract List delivered by the Seller to Recco, the Surety
Provider and the Funding Agent that have Outstanding Balances as of the close of
business on the Business Day immediately preceding such Purchase Date and all
payment and enforcement rights (but not any obligations) to, in and under such
Contracts, all rights in and to any Insurance Policies and any and all security
interests in the Vehicles, (ii) all monies due and to become due, and all
amounts received, with respect to the foregoing, (iii) any and all Files related
to such Contracts, including the Dealer Assignment related to each Contract (iv)
all proceeds of the foregoing (including, without limitation, "proceeds" as
defined in Section 9-306 of the UCC as in effect in the State of California) and
(v) all Recoveries related to such Contracts. The Seller may sell Contracts not
listed on a Contract List to its Affiliates and other entities from time to
time.
(2) It is the express and specific intent of the parties that the
transfer of the Purchased Contracts from the Seller to Recco, as provided in
this Agreement, is and shall be construed for all purposes as a true, complete
and absolute sale of the Purchased Contracts.
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(3) The Seller acknowledges that the Purchased Contracts are subject
to the security interest of the Funding Agent for the benefit of the Secured
Parties.
(4) In selecting the Contracts to be sold pursuant to clauses (a)
and (b), the Seller shall employ selection procedures which are not adverse to
the interests of Recco, the Funding Agent or the Secured Parties.
SECTION 1.3. Purchase Price.
(1) The amount payable to the Seller by Recco on each Purchase Date
occurring prior to the Termination Date in connection with any sale hereunder
shall be equal to the aggregate Outstanding Balances of the Contracts set forth
on the Contract List for such Purchase Date (the "Purchase Price"), as set forth
in the Daily Report dated such Purchase Date.
(2) The Outstanding Balance of Finance Charges shall not be included
in the calculation of the Purchase Price of any Contracts purchased on any
Purchase Date.
SECTION 1.4. Payment of Purchase Price.
(1) Prior to 5:00 P.M. (New York City time) on the second Business
Day preceding each Purchase Date, the Servicer will determine the Purchase Price
to be paid on such Purchase Date. The Purchase Price shall be paid on the
related Purchase Date in the manner provided below:
(1) in cash, in an amount equal to the lesser of (A)
Available Funds on such Purchase Date and (B) the Purchase Price;
(2) to the extent that the Purchase Price exceeds the amount
of the cash payment in (i) above, such excess shall be paid, on the
initial Purchase Date, by means of the issuance to the Seller of the
Subordinated Note in an initial principal amount equal to the
Subordinated Interest on such Purchase Date, and on each Purchase Date
thereafter, by adjusting the principal amount of the Subordinated Note
to equal the Subordinated Interest on such Purchase Date; and
(3) to the extent that the Purchase Price exceeds the amount
of the cash payment in (i) above and the adjustment to the principal
amount of the Subordinated Note in accordance with (ii)
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above, such excess shall be paid on the initial Purchase Date by means of a
contribution to the capital of Recco.
(2) Unless otherwise specified herein, all payments of the Purchase
Price shall be made not later than 4:00 P.M. (New York City time) on the date
specified therefor in lawful money of the United States of America in same day
funds by depositing such amounts in the bank account designated in writing by
the Seller to Recco, with a copy to the Funding Agent.
SECTION 1.5. Delivery. The Seller hereby agrees that all chattel paper
and instruments (as each such term is defined in the UCC), if any, representing
or evidencing any of the Purchased Contracts shall be promptly transferred to
Recco pursuant to duly executed transfer instruments in form and substance
satisfactory to Recco, the Surety Provider and the Funding Agent. All such
chattel paper and instruments shall be delivered into the possession of Recco or
to such Person as Recco may designate, on or prior to the related Purchase Date.
ARTICLE III
CONDITIONS TO PURCHASE
SECTION 1.6. Conditions to Effectiveness. On or prior to the date
hereof, the following conditions shall have been satisfied:
(1) the conditions set forth in Section 4.1 of the Funding Agreement
shall have been satisfied; and
(2) a Responsible Officer of the Servicer shall have executed and
delivered an officer's certificate to Recco, with copies to Surety Provider and
the Funding Agent, listing the servicing officers of the Servicer.
SECTION 1.7. Conditions Precedent to Payment of Purchase Price. As a
condition precedent to the obligation of Recco to make payment of the Purchase
Price on any Purchase Date, the following conditions shall have been satisfied
on or prior to such Purchase Date:
(1) no Unmatured Event of Default, Event of Default or Replacement
Event shall have occurred and be continuing on such Purchase Date or would
result from such payment or from the application of the proceeds therefrom.
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By accepting payment for the Purchased Contracts the Seller shall be deemed to
certify that this condition has been satisfied;
(2) Recco shall have received all other approvals, legal opinions,
documents, instruments or items of information as it may request and all of the
foregoing shall be satisfactory in form and substance to Recco, and all
corporate and other proceedings required to be taken following the Closing Date
shall be satisfactory in form and substance to Recco;
(3) all corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement and the other Operative Documents shall be
satisfactory in form and substance to Recco;
(4) an authorized officer of the Seller shall have executed and
delivered an officer's certificate to Recco, with copies to the Surety Provider
and the Funding Agent, substantially in the form of Exhibit C; and
(5) the conditions set forth in Sections 4.1, 4.2 and 4.3 of the
Funding Agreement shall have been satisfied.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 1.8. Representations and Warranties of the Seller and the
Servicer. The Seller represents and warrants to Recco, the Surety Provider and
the Funding Agent, as of the date of this Agreement and as of any future
Purchase Date, and the Servicer represents and warrants (except as to clause (m)
of this Section 4.1, as to which the Servicer makes no representation or
warranty) to Recco and the Funding Agent, as of the date of this Agreement and
as of each Purchase Date, as follows:
(1) Corporate Existence. It is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of its
incorporation, and is duly qualified to do business and is in good standing in
every jurisdiction in which the nature of its business requires it to be so
qualified.
(2) Corporate Power; Authorization; Non-Contravention. The
execution, delivery and performance by it of this Agreement and all other
agreements, instruments and documents to be delivered by it hereunder, and the
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transactions contemplated hereby and thereby, are within its corporate powers,
have been duly authorized by all necessary corporate action, do not contravene
(i) any Requirement of Law applicable to it or (ii) any Contractual Obligation
of it, and do not result in or require the creation of any Lien or any other
claim upon or with respect to any of its properties (other than those
contemplated hereunder); and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law. This Agreement and all the
other Operative Documents to which it is a party have been duly executed and
delivered on its behalf.
(3) No Consents. No authorization or approval or other action by,
and no notice to or filing with, any Governmental Authority or regulatory body
is required for the due execution, delivery and performance by it of this
Agreement or any other agreement, document or instrument to be delivered by it
hereunder, or for the perfection of, or the exercise by, Recco of its rights or
remedies under this Agreement, or any other agreement, document or instrument,
except for the filing of the UCC financing statements referred to in clause (o)
of this Section 4.1, all of which, on or prior to the Closing Date, shall have
been duly made and shall be in full force and effect.
(4) Enforceable Obligation. This Agreement is and will be its legal,
valid and binding obligation, enforceable against it in accordance with its
terms except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally and by general equitable
principles (whether considered in proceedings in equity or at law).
(5) Financial Condition. Its unaudited, consolidated and
consolidating balance sheets and those of its consolidated Subsidiaries as at
June 30, 1999 and the related unaudited statements of income and retained
earnings and of cash flows of it and its consolidated Subsidiaries for the
fiscal year then ended, certified by PricewaterhouseCoopers LLP or other
independent certified public accountants of nationally recognized standing,
copies of all of which have been furnished to Recco, the Surety Provider and the
Funding Agent, fairly present the financial condition of it and its consolidated
Subsidiaries as at such date and the results of the operations of it and its
consolidated Subsidiaries for the period ending on such date, all in accordance
with GAAP, and since June 30, 1999 there has been no adverse change in such
condition or operations or in the collectibility of the Contracts.
(6) Material Litigation. Except as otherwise disclosed in writing to
Recco, the Surety Provider and the Funding Agent prior to the date hereof, there
is
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no pending or threatened material action, suit or proceeding against or
affecting it or any of its Subsidiaries or any of their respective officers or
directors, in such capacity, or the property of it or of any of its
Subsidiaries, in any court, or before any arbitrator of any kind, or before or
by any governmental body.
(7) Accuracy of Information. (i) Each exhibit, financial statement,
document, book, record, report and other item of written information furnished
by it to the Funding Agent, the Surety Provider or Recco in connection with the
Operative Documents is accurate as of its date and as of the date so furnished
and (ii) all financial projections contained therein are based on reasonable and
stated assumptions, and no such document contains any material misstatement of
fact or omits to state a material fact.
(8) Principal Place of Business. Its principal place of business and
chief executive office is located at the address referred to in Section 9.1 and
the locations of the offices where it keeps all the records relating to the
Contracts, including without limitation, the Files are listed on Schedule
4.1(h)-1 (as to the Seller) and on Schedule 4.1(h)-2 (as to the Servicer)
hereto.
(9) Lock-Box. The names and addresses of all the Lock-Box Banks,
together with the account numbers of each Lock-Box, are specified in Exhibit D
hereto. Each Obligor has been directed to remit all funds in respect of the
Purchased Contracts only into the Lock-Boxes.
(10) Clearing Account. The Clearing Account is specified in Exhibit
E.
(11) Names. Except as set forth on Schedule 4.1(k)-1 (as to the
Seller) and Schedule 4.1(k)-2 (as to the Servicer), it has no tradenames,
fictitious names, assumed names or "doing business as" names.
(12) ERISA.
(1) Schedule B (Actuarial Information) to its 1994 annual
report (Form 5500 Series) for each Plan, copies of which will be filed
with the IRS and furnished to the Funding Agent, the Surety Provider and
Recco, will be complete and accurate and fairly present the funding
status of such Plan.
(2) Each Plan which is intended to be qualified under
Section 401(a) of the Code has been determined by the IRS to be so
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qualified or such determination has been requested, and each trust
related to any such Plan has been determined to be exempt from federal
income tax under Section 501(a) of the Code, or such determination has
been requested, and neither it nor any ERISA Affiliate has breached any
of the responsibilities, obligations or duties imposed on it by ERISA,
the Code or regulations promulgated thereunder with respect to any Plan.
(3) Neither it nor any ERISA Affiliate maintains or
contributes to any employee welfare benefit plan within the meaning of
Section 3(1) of ERISA which provides benefits to employees after
termination of employment other than as required by Section 601 of
ERISA.
(4) No Plan has incurred any accumulated funding deficiency
(as defined in Section 302 of ERISA and 412(a) of the Code), whether or
not waived.
(5) Neither it nor any ERISA Affiliate nor any fiduciary of
any Plan (i) has engaged in a nonexempt prohibited transaction described
in Sections 406 of ERISA or 4975 of the Code or (ii) has taken or failed
to take any action which would constitute or result in an ERISA
Termination Event.
(6) Neither it nor any ERISA Affiliate has incurred, and no
condition exists or event or transaction has occurred with respect to
any Plan that could result in, any withdrawal liability under Section
4201 of ERISA that remains unpaid or liability to the PBGC which remains
outstanding other than the payment of premiums, and there are no premium
payments which have become due which are unpaid.
(7) Neither it nor any ERISA Affiliate has (i) failed to
make a required contribution or payment to a Plan, (ii) made a complete
or partial withdrawal from a Multiple Employer Plan or a Multiemployer
Plan or (iii) failed to make a required installment or any other
required payment under Section 412 of the Code on or before the due date
for such installment or other payment.
(8) Neither it nor any ERISA Affiliate is required to
provide security to a Plan under Section 401(a)(29) of the Code due to
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a Plan amendment that results in an increase in current liabilities for
the plan year.
(13) Treatment of Transaction. It has not prepared any financial
statement which accounts for the transactions contemplated hereby in any manner
other than the sale of the Purchased Contracts by it, and it has not in any
other respect accounted for or treated the transactions in the Purchased
Contracts by it contemplated hereby (including, but not limited to, accounting
and tax reporting purposes) in any manner other than as a sale of, or absolute
assignment of, its full right, title and ownership interest in, the Purchased
Contracts, to Recco.
(14) Requirements of Law. Neither it nor any Subsidiary is in
violation of any Requirement of Law that could materially adversely affect its
operations or the conduct of its businesses or which is inconsistent with the
transactions contemplated by this Agreement.
(15) UCC Filings to Evidence Sale and Ownership Transfer. All filings
and recordings (including pursuant to the UCC in effect in the state in which
its principal place of business is located) required to perfect a first priority
ownership interest in the Purchased Contracts in favor of Recco have been
accomplished and are in full force and effect.
(16) Taxes. It has filed or caused to be filed all Federal, state and
other tax returns which are required to be filed and has paid all taxes shown to
be due and payable on said returns or on any Federal, state and other tax
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
having taxing power (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Seller); no tax Lien has been filed, and no claim is being
asserted, with respect to any such tax, fee or other charge.
(17) Investment Company Act; other Regulations. It is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. It is not
subject to regulation under any Federal or state statute or regulation which
limits its ability to incur Debt.
(18) Subsidiaries. Schedule 4.1(r)-1 (as to the Seller) and Schedule
4.1(r)-2 (as to the Servicer) lists all of its Subsidiaries.
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(19) Year 2000 Compliance.
(1) It has (a) initiated a review and assessment of all
areas within its and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors and customers) that
could be adversely affected by the "Year 2000 Problem" (that is, the
risk that computer applications used by it or any of its Subsidiaries
(or suppliers, vendors and customers) may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior
to and any date after December 31, 1999), (b) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (c)
to date, implemented that plan in accordance with that timetable. Based
on the foregoing, it believes that all computer applications (including
those of its suppliers, vendors and customers) that are material to its
or any of its Subsidiaries' business and operations are reasonably
expected on a timely basis to be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000 (that is, be
"Year 2000 Compliant"), except to the extent that a failure to do so
could not be reasonably expected to have a material adverse effect on it
or on the Program, or result in a Event of Default.
(2) It (a) has completed a review and assessment of all
computer applications (including, but not limited to those of its
suppliers, vendors, customers, and any third party servicers), which are
related to or involved in the origination, collection, management or
servicing of the Purchased Contracts (the "Receivables Systems") and
(ii) has determined that such Receivable Systems are Year 2000 Compliant
or will be Year 2000 Compliant on or before December 31, 1999 and
thereafter.
(3) The costs of all assessment, remediation, testing and
integration related to its plan for becoming Year 2000 Compliant will
not have a material adverse effect on its financial condition or
operations.
SECTION 1.9. Representations and Warranties of the Seller Concerning
Contracts. On each Purchase Date the Seller represents and warrants to Recco,
the Surety Provider and the Funding Agent as follows:
(1) Eligible Contract. Each Contract to be sold by it on such day is
an Eligible Contract.
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(2) Liens. Each Contract to be sold by it on such day is owned by it
free and clear of any Lien or claim of any kind or any offset and, upon transfer
to Recco pursuant to this Agreement, Recco will acquire a valid ownership
interest in each Purchased Contract free and clear of any Lien or claim of any
kind or any offset and no effective financing statement or other instrument
similar in effect covering any such Purchased Contract shall at any time be on
file in any recording office except those relating to this Agreement and the
transactions contemplated hereby.
(3) Compliance with Laws. Each Contract to be sold by it on such day
complies with all laws and regulations applicable thereto, including, without
limitation, all consumer credit laws.
(4) Enforceable Obligations. Each Contract to be sold by it on such
day is in full force and effect and represents a legal, valid and binding
obligation of the Obligor enforceable against the Obligor in accordance with its
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally and by general equitable
principles whether considered in proceedings in equity or at law) and
constitutes "chattel paper" under the UCC in effect in the state in which the
principal place of business of the Seller is located.
(5) Valid Sale. The sale pursuant to this Agreement by the Seller
and the purchase by Recco of the Purchased Contracts on such Purchase Date
constitutes and will constitute a valid sale of such Purchased Contracts and the
other Collateral and the proceeds thereof, which sale is and will be enforceable
against the Seller and all existing and future creditors of the Seller and all
subsequent purchasers from the Seller or Recco of any of the Purchased
Contracts. Upon the filing of the financing statements described in Section
4.1(o) with the Secretary of State of the State of California evidencing the
sale of the Purchased Contracts to Recco and, in the case of Purchased Contracts
hereafter created and the proceeds thereof, upon the sale, transfer and
assignment thereof to Recco, Recco shall have a first priority perfected
ownership interest in the Purchased Contracts and the other Collateral.
(6) Credit and Collection Policy. The Credit and Collection Policy
has been complied with in all respects with respect to each Contract to be sold
by it on such day and no change has been made in the character of its business
or (except to the extent required by law and of which the Surety Provider and
the Funding Agent have received written notice prior to the applicable Purchase
Date) in the Credit and Collection Policy, which change could, in either case,
impair the collectibility of any Purchased Contract.
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(7) Contract Information. The Contract Information delivered by the
Seller to Recco (if the Seller is the Servicer) or by the Seller to the Servicer
(if the Seller is not the Servicer) with respect to each Purchased Contract on
such Purchase Date is true and correct.
(8) Inspections. Each Contract that is not originated by a Vehicle
Dealer has been inspected by CSI Escrow Document Services, Inc., the Servicer or
any other inspection company reasonably acceptable to the Funding Agent and the
Surety Provider ("Inspector"), and the Inspector has issued a written inspection
report (the "Vehicle Condition Report") describing the Vehicle and the equipment
in the Vehicle, confirming the vehicle identification number and certifying that
the Vehicle is in good repair.
(9) Repossessed Vehicles. As of the last day of any month, the
aggregate Outstanding Balance of Purchased Contracts secured by Vehicles
previously repossessed by the Seller (each, a "Repossessed Vehicle") shall not
exceed 1% of the aggregate Outstanding Balance of all Purchased Contracts then
financed by the Lenders.
(10) Documentation. (A) All documents used by the Seller in
connection with the purchase or origination of Contracts (including, without
limitation, any security agreement, loan contract or promissory note), and all
certificates of title and entries in the Paperless Title System for Vehicles
securing Contracts use the following words to identify the lender, secured party
or obligee: (i) "Onyx Acceptance Corporation" or some abbreviation thereof which
unmistakably identifies the Seller as secured party or (ii) "ABNI, Inc." or
"C.U. Acceptance Corporation"; provided, however, that the name "ABNI, Inc." or
"C.U. Acceptance Corporation" may only be used in such documents with respect to
Contracts in a given state to the extent that an opinion of counsel, addressed
to the Surety Provider and in form and substance reasonably acceptable to the
Surety Provider, shall be delivered to the Surety Provider with respect to any
state where the Outstanding Balance of all Contracts, in all facilities for
which the Surety Provider has issued an insurance policy and which have Obligors
with mailing addresses in such state and for which the related certificates of
title and/or entries in the related Paperless Title System have the secured
party, lender or obligee named as "ABNI, Inc." or "C.U. Acceptance Corporation,"
exceeds $350,000 in the aggregate for such state.
(11) Contract Files. It has delivered to Recco the Files relating to
each Contract sold to Recco on such Purchase Date; provided, however, that as to
any Purchased Contract, if (a) as evidenced by an opinion of counsel delivered
to and in form and substance satisfactory to the Funding Agent and the Surety
Provider, (x) an optical image or other representation of the Files is
enforceable in the relevant
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jurisdictions to the same extent as the original of such document and (y) such
optical image or other representation does not impair the ability of an owner of
such Contract to transfer its interest in such Contract, and (b) the retention
of such documents in such format will not result in a reduction of the then
current rating of the transaction and PARCO, without regard to the Note Policy,
such optical image or other representation may be held by the Servicer, as
custodian for PARCO in lieu of the Files.
SECTION 1.10. Covenants of Seller. The Seller covenants and agrees with
Recco that so long as this Agreement shall remain in effect:
(1) Corporate Existence. It will preserve and maintain its corporate
existence, rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified and in good standing as a
foreign corporation in each jurisdiction where the failure to maintain such
existence, rights, franchises, privileges and qualifications could affect (i)
the rights or interests of Recco hereunder, (ii) the collectibility of any
Contract or (iii) its ability to perform its obligations hereunder.
(2) Master Record of the Contracts. It will, at its own cost and
expense, retain a master record of the Contracts sold by it and copies of all
documents and records relating to each such Purchased Contract and, at its own
cost and expense, ▇▇▇▇ such master record to the effect that the Purchased
Contracts listed thereon have been sold to Recco.
(3) Recovery Procedure. It will maintain its Recovery Procedure in
good operational order and permit representatives of Recco access to its
management employees to fully discuss such Recovery Procedure during normal
business hours. If it obtains a third party to maintain such Recovery Procedure,
then it shall arrange to permit representatives of Recco access during normal
business hours to such system to make such inspections and examinations as it
deems necessary.
(4) Conduct of Business. It will comply with all applicable laws,
rules, regulations, and orders with respect to it, its business and properties
and all Contracts it originates or purchases, the failure to comply with which
could have a material adverse affect on it or on such Contracts.
(5) Defense of the Purchased Contracts. It will not create, permit
or suffer to exist, and will take such other actions as are necessary to remove,
any Lien, claim or right in, to or on any Purchased Contract, and will defend
the right, title and interest of Recco in and to the Purchased Contracts against
the claims and
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demands of all Persons whomsoever, other than (i) the Liens created hereby and
by the transactions contemplated hereby or (ii) Liens for taxes which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of Recco in conformity
with GAAP.
(6) Notice. It will advise Recco (with a copy to the Funding Agent
and the Surety Provider) in detail, of (i) any Lien asserted or claim made
against any Purchased Contract, (ii) the occurrence of any breach by it of any
of its representations, warranties and covenants contained herein, (iii) the
occurrence of any Event of Default or Unmatured Event of Default (with notice to
S&P and ▇▇▇▇▇'▇), (iv) any litigation, investigation or proceeding which may
exist at any time between it and any Governmental Authority or other Person or
default or event of default under any of its Contractual Obligations, which in
either case could have a material adverse effect on the value of the Purchased
Contracts or its ability to satisfy its obligations hereunder and (v) any
material adverse change in its business, properties, operations or financial or
other condition or the occurrence of any other event which could have an adverse
effect on the collectibility or value of the Purchased Contracts, in each case
immediately upon ascertaining or obtaining knowledge of any of the foregoing.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action it proposes to take with respect thereto.
(7) Maintain Interest.
(1) It shall, with respect to any and all Purchased
Contracts and security interests in Vehicles sold hereunder, at its
expense, perform all acts and execute all documents requested by Recco,
the Surety Provider or the Funding Agent, as the case may be, at any
time to evidence, perfect, maintain and enforce the ownership interest
and security interest, respectively, of Recco and the Funding Agent
therein and the first priority of such ownership interest and security
interest, respectively. It will, at the request of a duly authorized
officer of Recco or the Funding Agent or the Surety Provider, execute
and deliver financing statements evidencing the ownership interest of
Recco in all of the foregoing, which financing statements must be
satisfactory in form and substance to the Funding Agent and the Surety
Provider, and the Seller authorizes Recco to file one or more financing
statements signed only by Recco. It also hereby irrevocably appoints
Recco its attorney-in-fact to file one or more financing
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statements signed on behalf of the Seller by Recco as the
attorney-in-fact of the Seller.
(2) It will not, without providing 30 days' notice to Recco,
the Surety Provider and the Funding Agent, and without filing such
amendments to any previously filed financing statements as Recco, the
Surety Provider or the Funding Agent may require, (A) change the
location of its chief executive office or the location of the offices
where the documents and records relating to the Contracts are kept or
(B) change its name, identity or corporate structure in any manner which
might make any financing statement or continuation statement filed by it
pursuant to the transactions contemplated hereby seriously misleading
within the meaning of 9-402(7) of any applicable enactment of the UCC.
(8) Annual Certificate. It will deliver to Recco, the Surety
Provider and the Funding Agent concurrently with the delivery of its annual
financial statements delivered pursuant to subsection (l) of this Section 4.3, a
Certificate of a Responsible Officer dated as of a date during the 90-day period
following the end of the immediately preceding fiscal year, either (i) stating
that such action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and re-filing of financing statements,
continuation statements or other instructions or documents as is necessary to
preserve and protect the interest of Recco in and to the Purchased Contracts and
Vehicles and reciting the details of such action or referring to opinions of
counsel in which such details are given and stating what action is required to
be taken in the subsequent 13-month period to preserve and protect such interest
or (ii) stating that no such action is necessary to preserve and protect such
interest.
(9) Credit and Collection Policy. It will (i) at all times comply
with its Credit and Collection Policy, including, but not limited to, its
customary practices with respect to granting rebates and discounts and (ii) not
change the terms of the contracts and agreements relating to the Contracts
(including, without limitation, the terms of sale or the interest rate charged
to any Obligor under any Contract), its normal policies and procedures with
respect to the servicing thereof (including, without limitation, the amount and
timing of finance charges, fees and write-offs) or its Credit and Collection
Policy, except with the prior written consent of the Surety Provider and the
Funding Agent or as required by any Requirement of Law (in which case the
Servicer shall give the Surety Provider and the Funding Agent immediate written
notice of such Requirement of Law).
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(10) Collections. If it receives Collections, it agrees to hold such
Collections in trust for the benefit of Recco and any such Collections received
in the Lock-Boxes shall be transferred to the Clearing Account on the same
Business Day and any Collections received in any other manner shall be
transferred to the Clearing Account on the next Business Day after receipt.
Collections shall be transferred from the Clearing Account to the Collection
Account on the next Business Day after deposit into the Clearing Account.
(11) Obligations Under the Contracts and Dealer Assignments. It will
duly fulfill all obligations on its part to be fulfilled under or in connection
with each Contract and Dealer Assignment and will do nothing (except as may be
permitted by Section 4.5 hereof) to impair the rights of Recco in the Purchased
Contracts. It agrees that, for the benefit of Recco, it will continue to make
and pursue claims on the Contracts sold by it hereunder to the extent that any
law, regulation or contractual provision requires that it directly make and
pursue such claims, for the benefit of Recco; provided that the Seller agrees
that it is making and pursuing such claims for the benefit of Recco and its
assignees, and that any funds received by the Seller based on such claims will
be transferred to the Clearing Account within one Business Day of being received
and will thereafter be transferred to the Collection Account on the next
Business Day after deposit into the Clearing Account.
(12) Financial Statements. It will furnish to Recco (with a copy to
the Funding Agent and the Surety Provider):
(1) as soon as available, but in any event within 90 days
after the end of each fiscal year, a copy of its consolidated balance
sheets as at the end of such year and the related statements of income
and retained earnings and of cash flows for such year, setting forth in
each case in comparative form the figures for the previous year, audited
by PricewaterhouseCoopers or other independent certified public
accountants of nationally recognized standing;
(2) as soon as available, but in any event not later than 90
days after the end of each of its fiscal years, a copy of its unaudited
consolidating balance sheets as at the end of such year and the related
consolidating statements of income and retained earnings and of cash
flows for such year, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as
being fairly stated in all respects;
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(3) as soon as available, but in any event not later than 45
days (or 90 days with respect to the fourth quarter) after the end of
each quarterly period of each of its fiscal years, a copy of its
unaudited consolidated and consolidating balance sheets, as at the end
of such quarter and the related unaudited statements of income and
retained earnings and of consolidated cash flows for such period and the
portion of the fiscal year through the end of such period, setting forth
in each case in comparative form the projected budget amounts for such
period and the figures for the previous year, certified by a Responsible
Officer as being fairly stated in all respects when considered in
relation to its financial statements (subject to normal year-end audit
adjustments); and
all such financial statements to be complete and correct in all respects
and to be prepared in detail and in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior
periods; provided, however, that the unaudited financial statements
referred to in clause (iii) above need not contain footnotes required
under GAAP.
(13) Certificates; Other Information. It will furnish to Recco, with
a copy to the Funding Agent and the Surety Provider:
(1) concurrently with the delivery of the financial
statements referred to in clause (i) of paragraph (l) a certificate of
its independent certified public accountants reporting on such financial
statements stating that in making its normal examination for purposes of
its annual audit no knowledge was obtained of any Event of Default or
Unmatured Event of Default, except as specified in such certificate;
(2) concurrently with the delivery of the financial
statements referred to in clauses (i) and (ii) of paragraph (l) a
certificate of a Responsible Officer stating that during such period it
has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other
Operative Documents to be observed, performed or satisfied by it, and
that such Officer has obtained no knowledge of any Unmatured Event of
Default or Event of Default except as specified in such certificate;
such certificate shall set forth the details of each Unmatured Event of
Default and Event of Default and the action which it has taken and
proposes to take with respect thereto;
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(3) solely to the Surety Provider, no later than December
15th of each year, projections by it of its operating budget and cash
flow budget on a monthly basis for the next fiscal year, certified by a
Responsible Officer as being prepared in good faith on the basis of the
assumptions stated therein, which assumptions were reasonable in light
of conditions existing at the time of delivery thereof and represented,
at the time of delivery, as its best estimate of its future financial
performance;
(4) within five Business Days after the same are sent, made
or filed, copies of all financial statements and reports which it may
send to, make to, or file with, the Securities and Exchange Commission
or any state securities commission and any financial statements and
reports which it may send to, make to, or file with, any other
Governmental Authority; and
(5) promptly, such additional financial and other
information as Recco may from time to time reasonably request.
(14) Delivery of Other Reports. It will furnish, or instruct the
Servicer to furnish any other reports required to be delivered pursuant to this
Agreement and the other Operative Documents.
(15) Annual Certificate. Concurrently with the delivery of its
financial statements with respect to each fiscal year required to be delivered
pursuant to clauses (i) and (ii) of paragraph (l), it will furnish to Recco, the
Surety Provider and the Funding Agent, a certificate of a Responsible Officer to
the effect that the facts upon which counsel to the Seller relied in giving its
legal opinion on the Closing Date, to the effect that the Seller and Recco would
not be substantively consolidated for purposes of the Bankruptcy Code, have not
changed.
(16) Insurance.
(1) It will maintain, or cause to be maintained on its
behalf, with financially sound and reputable insurance companies,
insurance on all its property in at least such amounts and against at
least such risks as are usually insured against in the same general area
by companies engaged in the same or a similar business and furnish to
Recco (with a copy to the Funding Agent and the Surety Provider), at
least annually, and otherwise upon written request, full information as
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to the insurance carried. All such insurance policies relating to any
Collateral shall name Recco and the Funding Agent as additional insureds
and loss payees, as applicable, and shall provide that Recco, the Surety
Provider and the Funding Agent receive at least 30 days' prior written
notice of the cancellation thereof.
(2) It will require each Obligor to obtain physical damage
insurance covering the Vehicle as of the execution of the related
Purchased Contract. It will monitor such physical damage insurance with
respect to each Purchased Contract. It will maintain in full force and
effect the Blanket Policy. It will immediately deposit to the Collection
Account all amounts received by it in respect of or as proceeds of any
Insurance Policy.
(17) Merger or Consolidation. It shall not be a party to any merger,
consolidation, or other corporate transaction pursuant to which the surviving
entity or corporate successor is (i) not Onyx Acceptance Corporation, or (ii)
not rated at least investment grade by the Rating Agencies, unless the Funding
Agent and the Surety Provider shall have otherwise consented in writing (with
notice to S&P and ▇▇▇▇▇'▇).
(18) Local Counsel Opinions. In the event that, at any time, the
Outstanding Balance of all Purchased Contracts originated in a single state
(other than the State of California) equals or exceeds 10% of the aggregate
Outstanding Balance of all Purchased Contracts, then the Seller shall, within 30
days following the occurrence of such event, deliver to Recco, the Funding
Agent, the Surety Provider, S&P and ▇▇▇▇▇'▇ an opinion of counsel with respect
to the requirements under the applicable laws of such state for the assignment
of a security interest in a Vehicle to the Funding Agent for the benefit of the
Secured Parties. Such opinion of counsel shall be rendered by a firm the
attorneys of which are admitted to the practice of law in such state, and such
opinion shall be in form and substance acceptable to the Funding Agent and the
Surety Provider.
SECTION 1.11. Covenants of Servicer. The Servicer covenants and agrees
with Recco, the Surety Provider and the Funding Agent that so long as this
Agreement shall remain in effect:
(1) Corporate Existence. It will preserve and maintain its existence
as a corporation in good standing under the laws of the state of its
incorporation and in every jurisdiction where the failure to maintain such
existence or good standing could adversely affect the rights and interests of
Recco, the Funding
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Agent or the Secured Parties hereunder, or its ability to perform its
obligations hereunder.
(2) Preservation of Electronic Ledger. It will, at its own cost and
expense, (i) retain the electronic ledger used by it as a master record of the
Purchased Contracts and copies of all documents relating to each Purchased
Contract as custodian for Recco, the Funding Agent, the Secured Parties and
other Persons with interests in the Purchased Contracts, (ii) ▇▇▇▇ such
electronic ledger to the effect that the Purchased Contracts have been
transferred and assigned to Recco and are subject to a security interest in
favor of the Funding Agent for the benefit of the Secured Parties, (iii) arrange
for and maintain for the term of this Agreement an appropriate off-site location
for the storage of duplicate or back-up tapes containing the master record of
the Purchased Contracts and deliver or cause to be delivered on at least a
weekly basis to such site, such duplicate or back-up tapes, (iv) provide or
arrange for irrevocable access by the Funding Agent, the Surety Provider and
Recco to the off-site storage facility maintained by the Servicer pursuant to
subsection 4.4(b)(iii) hereof and (v) deliver duplicate or back-up tapes
containing the master record of the Purchased Contracts to the Funding Agent or
the Surety Provider upon request by the Funding Agent or the Surety Provider.
(3) Notices, etc. It will advise Recco, the Surety Provider and the
Funding Agent promptly, in reasonable detail, (i) of any Lien asserted or claim
made against any of the Purchased Contracts of which it obtains knowledge, (ii)
of the occurrence of any breach by it of any of its representations, warranties
and covenants contained herein and (iii) of the occurrence of any other event,
which could have a material adverse effect on its business, properties or
financial or other condition or on the Program or on its ability to perform its
obligations hereunder.
(4) Right of Inspection. It will permit each of Recco, the Surety
Provider and the Funding Agent, and their representatives, at all times to have
full and free access, during normal business hours, to all of its books,
correspondence and records insofar as they relate to the Contracts, the Vehicles
or the Files, and Recco, the Surety Provider and the Funding Agent, and their
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and it agrees to render to Recco, the Surety Provider and
the Funding Agent, or their representatives, at its sole cost and expense such
clerical and other assistance as may be reasonably requested with regard
thereto.
(5) Delivery of Notices, Etc. It will deliver or cause to be
delivered to Recco, the Surety Provider and the Funding Agent, as the case may
be, such notices, documents, reports, certificates and other documents (i)
required to be
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delivered by it pursuant to the Operative Documents and (ii) as may be
reasonably requested by the Funding Agent or the Surety Provider from time to
time.
(6) Merger or Consolidation. It shall not be a party to any merger,
consolidation, or other corporate transaction pursuant to which the surviving
entity or corporate successor is (i) not Onyx Acceptance Corporation, or (ii)
not rated at least investment grade by the Rating Agencies, unless the Surety
Provider and the Funding Agent shall have otherwise consented in writing (with
notice to S&P and ▇▇▇▇▇'▇).
(7) FDI Service Agreement. It will maintain the FDI Service
Agreement or a similar agreement with a service provider acceptable to the
Funding Agent and the Surety Provider in full force and effect at all times. It
shall perform its obligations under the FDI Service Agreement and the Agreement
Regarding the Use of FDI's Services for the benefit of the Funding Agent and the
Secured Parties, including, without limitation, the payment of all fees and
expenses thereunder. It shall not amend, terminate or otherwise modify the FDI
Service Agreement without the written consent of the Funding Agent and the
Surety Provider, which shall not be unreasonably withheld.
SECTION 1.12. Repurchase of Ineligible Contracts. On each Business Day,
the Seller will notify the Servicer and Recco of the aggregate Outstanding
Balances of Purchased Contracts, if any, that are determined to be Ineligible
Contracts as of the preceding Business Day. The Seller shall repurchase such
Ineligible Contracts on the next Determination Date (a "Repurchase Date") by
depositing in the Collection Account the Purchase Price originally paid by Recco
with respect to such Ineligible Contract, plus an amount equal to the amount of
interest (calculated at the rate of interest per annum as set forth in such
Ineligible Contract) that accrued on such Ineligible Contract from and including
the Purchase Date related to such Ineligible Contract to, but excluding, the
Repurchase Date, less an amount equal to the amount of Collections received by
Recco and deposited to the Collection Account with respect to such Ineligible
Contract to, but excluding the Repurchase Date. On such Repurchase Date upon the
payment in full in cash of the Repurchase Price by the Seller, Recco shall
automatically and without further action (other than the execution and filing of
applicable UCC financing statements in connection with the reconveyance of such
Ineligible Contract) be deemed to transfer, assign, set-over and otherwise
convey to the Seller, without recourse, representation or warranty, all the
right, title and interest of Recco in and to such Ineligible Contracts, all
monies due or to become due with respect thereto, and all proceeds thereof.
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SECTION 1.13. Financial Covenants of Seller. The Seller covenants and
agrees with Recco, the Funding Agent and the Surety Provider that so long as
this Agreement shall remain in effect:
(1) Ratio of Adjusted Tangible Net Worth to Total Assets. The ratio
of Adjusted Tangible Net Worth to Total Assets shall be at least 15% as of the
end of each fiscal quarter.
(2) Minimum Adjusted EBITDA Coverage. The minimum Adjusted EBITDA
Coverage shall be greater than 1.5 as of the end or each fiscal quarter.
(3) Ratio of Securitization Assets to Adjusted Tangible Net Worth.
The ratio of Securitization Assets to Adjusted Tangible Net Worth shall not be
greater than 3:1 as of the end of each fiscal quarter.
(4) Minimum Cash Balance. The Minimum Cash Balance shall be an
amount equal to not less than $ 1,000,000 as of the last day of each calendar
month.
As used in this Section 4.6, the following terms shall have the
following meanings:
"Adjusted EBITDA Coverage": The sum of: (1) pre-tax income, (2) interest
expense, (3) amortization of excess servicing asset and (4) other amortization
and depreciation, less any gain on sale recognized according to FASB 125,
divided by interest expense, each of the above listed items as they appear in
the consolidated financial statements of Onyx prepared in accordance with GAAP.
"Adjusted Tangible Net Worth": The sum of (i) Net Worth and (ii)
Subordinated Debt; provided, however, that Subordinated Debt shall not exceed
20% of Net Worth.
"Minimum Cash Balance": (a) As of the last day of each calendar month
(other than March, June, September and December), the aggregate amount of cash
on hand or on deposit in banks with respect to Onyx and its Subsidiaries and (b)
as of the last day of each calendar quarter, cash and cash equivalents as it
appears in the consolidated financial statements of Onyx and its Subsidiaries
prepared in accordance with GAAP (and filed with the SEC on Form 10-Q and 10-K).
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"Net Worth": The amount equal to Total Assets minus Total Liabilities of
Onyx and its Subsidiaries on a consolidated basis calculated in accordance with
GAAP minus any intangible assets including inter alia, good will, franchises and
intellectual property.
"Securitization Assets": The sum of: (1) trust receivables and (2)
excess servicing (retained interest in securitized assets net of amortization),
each of the above listed items as they appear in the consolidated financial
statements of Onyx and its Subsidiaries prepared in accordance with GAAP.
Subordinated Debt: The total subordinated debt and non-common equity
(i.e. preferred stock) of Onyx and its Subsidiaries on a consolidated basis
having original maturities of 3 years or more plus the outstanding principal
balance of the $10,000,000 subordinated debt of Onyx in favor of BayView Capital
Corporation, as lender.
"Total Assets": All assets which in accordance with GAAP would be
included in determining total assets as shown on the assets side of the
consolidated balance sheet of Onyx and its Subsidiaries.
"Total Liabilities": All liabilities which in accordance with GAAP would
be included in determining total liabilities as shown on the liability side of
the consolidated balance sheet of Onyx and its Subsidiaries.
SECTION 1.14. Representations and Warranties of Recco. Recco represents
and warrants to the Seller, the Surety Provider and the Funding Agent that, as
of the date hereof and as of each Purchase Date:
(1) Corporate Existence. Recco is a corporation duly incorporated,
validly existing and in good standing under the laws of Delaware and is duly
qualified to do business, and is in good standing in every jurisdiction in which
the nature of its business requires it to be so qualified.
(2) Corporate Power; Authorization; Non-Contravention. The
execution, delivery and performance by Recco of this Agreement and all other
agreements, instruments and documents to be delivered by it hereunder, and the
transactions contemplated hereby and thereby, are within Recco's corporate
powers, have been duly authorized by all necessary corporate action, do not
contravene (i) Recco's charter or by-laws, (ii) any Requirement of Law
applicable to Recco or (iii) any Contractual Obligation, and do not result in or
require the creation of any Lien
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upon or with respect to any of its properties (other than as contemplated
hereunder and under the terms and conditions of the Operative Documents). This
Agreement has been duly executed and delivered on behalf of Recco.
(3) Enforceable Obligation. This Agreement is the legal, valid and
binding obligation of Recco enforceable against Recco in accordance with its
terms except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law).
ARTICLE V
SUBORDINATED NOTE
SECTION 1.15. Subordinated Note. (a) On the Closing Date, Recco shall
issue to the Seller the subordinated note substantially in the form of Exhibit B
(the "Subordinated Note"). The principal amount of the Subordinated Note shall
be calculated pursuant to the Daily Report and, on any day, shall be equal to
the Subordinated Interest on such day; provided, however, that the principal
amount of the Subordinated Note shall be fixed on and not be recalculated after
the Termination Date; provided, further, that in no event shall the principal
amount of the Subordinated Note calculated pursuant to the Daily Report at any
time exceed the Required Overcollateralization Amount.
(1) Interest on the principal amount of the Subordinated Note shall
accrue at a rate set forth in the Subordinated Note. Principal and interest
payments on the Subordinated Note may be made to the extent permitted by the
Security Agreement. Principal amounts outstanding on the Subordinated Note shall
increase concurrently with the payment of the Purchase Price pursuant to the
terms of Section 2.3(a)(ii) hereof. Principal payments on the Subordinated Note
shall become payable only upon the release of Collateral by the Funding Agent
pursuant to Section 21(b) of the Security Agreement. Except to the extent
permitted by the Security Agreement, the Seller agrees not to ask, demand, ▇▇▇
for or take or receive from Recco in cash or other property, by set-off or in
any other manner, (including, without limitation, from or by way of the
Collateral), payment of all or any part of the Subordinated Note.
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(2) The Seller agrees upon any distribution of all or any of the
assets of Recco to creditors of Recco upon the dissolution, winding up, total or
partial liquidation, arrangement, reorganization, adjustment, protection,
relief, or composition of Recco or its debts, any payment or distribution of any
kind (including, without limitation, cash, property, securities and any payment
or distribution which may be payable or deliverable by reason of the payment of
any other Debt of Recco being subordinated to the payment of the Subordinated
Note) in respect of the Subordinated Note that otherwise would be payable or
deliverable upon or with respect to the Subordinated Note, directly or
indirectly, by set-off or in any other manner, including, without limitation,
from or by way of the Collateral, shall be paid or delivered directly to the
Funding Agent for application (in the case of cash) to or as Collateral (in the
case of non-cash property or securities) for the payment or prepayment in full
of, the Obligations (other than the Subordinated Note) until the Obligations
shall have been indefeasibly paid in full in cash. The Funding Agent is
irrevocably authorized and empowered (in its own name or in the name of the
Seller or otherwise), but shall have no obligation, to demand, ▇▇▇ for, collect
and receive every payment or distribution referred to in the preceding sentence
and give acquittance therefor and to file claims and proofs of claim and take
such other action (including, without limitation, voting the Subordinated Note
and enforcing any security interest or other lien securing payment of the
Subordinated Note) as the Funding Agent may deem necessary or advisable for the
exercise or enforcement of any of the rights or interest of the Secured Parties.
The Seller shall duly and promptly take such action as the Funding Agent or the
Surety Provider may request to (i) collect the Subordinated Note for the account
of the Secured Parties and to file appropriate claims or proofs of claim in
respect of the Subordinated Note, (ii) execute and deliver to the Funding Agent
such powers of attorney, assignments or other instruments as the Funding Agent
may request in order to enable the Funding Agent to enforce any and all claims
with respect to, and any security interests and other liens securing payment of,
the Subordinated Note, (iii) collect and receive any and all payments or
distributions which may be payable or deliverable upon or with respect to the
Subordinated Note.
(3) All payments or distributions upon or with respect to the
Subordinated Note that are received by the Seller contrary to the provisions of
the Operative Documents shall be received in trust for the benefit of the
Secured Parties, shall be segregated from other funds and property held by the
Seller and shall be forthwith paid over to the Funding Agent in the same form as
so received (with any necessary endorsement) to be applied (in the case of cash)
to, or held as Collateral (in the case of non-cash property or securities) for
the payment or prepayment in full of, the Obligations (other than the
Subordinated Note) until the Obligations shall have
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been indefeasibly paid in full in cash. The Seller agrees that no payment or
distribution to the Secured Parties pursuant to the provisions of the
Subordinated Note shall entitle the Seller to exercise any rights of subrogation
in respect thereof against Recco until the Obligations (other than the
Subordinated Note) and all principal and interest under the Seller Note shall
have been indefeasibly paid in full in cash. The Seller and Recco hereby waive
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Obligations and any requirement that the Funding Agent protect,
secure, perfect or insure any security interest or lien on any property subject
thereto or exhaust any right or take any action against Recco or any other
Person or any Collateral.
(4) The Subordinated Note is secured by the Collateral pursuant to
the Subordinated Security Agreement, subject to the prior lien of the Funding
Agent under the Security Agreement. No payments may be received, directly or
indirectly, by the Seller (and if received, the Seller agrees to return such
payments to Recco) on the Subordinated Note unless Recco has paid all amounts
required pursuant to the Security Agreement to be paid prior to any payments in
respect of the Subordinated Note.
(5) The Seller agrees and confirms that the Funding Agent shall not
have any duty whatsoever to the Seller as holder of the Subordinated Note and
that the Funding Agent shall not be liable to the Seller for any action taken or
omitted to be taken with respect to the Subordinated Note.
(6) Prior to the indefeasible payment in full in cash of the other
Obligations, the Seller will not seek to collect any amounts owing under the
Subordinated Note in any manner or exercise or enforce any of its rights under
the Subordinated Security Agreement.
(7) The Seller and Recco further agree that at no time hereafter
will any part of the indebtedness represented by the Subordinated Note be
represented by any negotiable instruments or other writings except the
Subordinated Note.
(8) The Seller and Recco waive notice of and consent to the creation
of the Loans and any of the other Obligations, any extensions granted or other
action taken by the Lenders, the Surety Provider and the Funding Agent with
respect thereto, the taking or releasing of Collateral or any obligors or
guarantors for the payment thereof, and the releasing of the Seller or any other
subordinated creditors. No failure or delay by the Lenders, the Surety Provider
or the Funding
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Agent to exercise any right granted herein, or in any other agreement or by law
shall constitute a waiver of such right or of any other right.
(9) Recco and the Seller agree to execute and deliver to the
Lenders, the Surety Provider and the Funding Agent such additional documents and
to take such further actions as the Lenders, the Surety Provider or the Funding
Agent may hereafter require.
(10) The terms of the Subordinated Note and the subordination
effected hereby, and the rights of the Lenders, the Surety Provider and the
Funding Agent and the obligations of the Seller and Recco arising hereunder,
shall not be affected, modified or impaired in any manner or to any extent by
(a) any amendment or modification of or supplement to any provision of the
Operative Documents or any instrument or document executed or delivered pursuant
thereto or in connection with the transactions contemplated thereby; (b) the
validity or enforceability of any of such documents; (c) any exercise or
non-exercise of any right, power or remedy under or in respect of the other
Obligations or any instruments or documents related thereto or arising at law;
or (d) any waiver, consent, release, indulgence, extension, renewal,
modification, delay or other action, inaction or omission in respect of the
other Obligations or any of the instruments or documents related thereto.
SECTION 1.16. Restrictions on Transfer of Subordinated Note. Neither the
Subordinated Note nor any right of the Seller to receive any payment thereunder,
shall be assigned, transferred, exchanged, pledged, hypothecated, participated
or otherwise conveyed; provided, however, that the Seller may pledge or
otherwise transfer the Subordinated Note with the prior written consent of the
Funding Agent and the Surety Provider (with notice to S&P and ▇▇▇▇▇'▇), which
consent shall not be unreasonably withheld or delayed; provided, further, that
any such transferee or pledgee of the Subordinated Note shall (i) be bound by
all of the terms applicable to the Subordinated Note set forth in the Operative
Documents and (ii) execute an agreement substantially in the form of Section
9.15 hereof.
ARTICLE VI
TERMINATION OF COMMITMENT
SECTION 1.17. Remedies Following the Termination Date.
(1) On the Termination Date, all purchases by, and sales to, Recco
of Contracts hereunder shall immediately cease.
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(2) On and after the Termination Date, Recco shall have, in addition
to all other rights under this Agreement, all rights and remedies provided under
any applicable law.
(3) On and after the Termination Date, Recco shall continue to
maintain its interest in all Purchased Contracts created prior to such date and
all amounts received as payments on Purchased Contracts will continue to be paid
to Recco.
ARTICLE VII
INDEMNIFICATION, ADDITIONAL COSTS AND INSPECTION
SECTION 1.18. Indemnities. (A) Without limiting any other rights that
Recco may have hereunder or under applicable law, the Seller hereby agrees to
indemnify Recco and its directors, employees, officers and successors and
assigns (collectively, the "Indemnified Parties") from and against any and all
damages, losses, claims, liabilities and related costs and expenses, including
all attorneys' fees and disbursements (all of the foregoing being collectively
referred to as the "Indemnified Amounts"), awarded against or incurred by any of
them arising out of or as a result of this Agreement, the Operative Documents or
Recco's ownership of any Purchased Contracts, excluding, however, recourse
(except as otherwise specifically provided in this Agreement) for uncollectible
Purchased Contracts. Without limiting the generality of the foregoing, the
Seller shall indemnify the Indemnified Parties for all Indemnified Amounts
relating to or resulting from:
(1) the transfer of an ownership interest in any Contract
other than an Eligible Contract;
(2) reliance on any representation or warranty made by the
Seller (or any of its Responsible Officers) or the Servicer (or any of
its Responsible Officers), if the Seller or any Affiliate of the Seller
is acting as the Servicer, under or in connection with the Operative
Documents, and any information or report delivered by the Seller
pursuant hereto, which shall have been false or incorrect in any
material respect when made or deemed made;
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(3) the failure by the Seller to comply with any applicable
law, rule or regulation with respect to any Purchased Contract or the
nonconformity of any Purchased Contract with any such applicable law,
rule or regulation;
(4) the failure to vest and maintain vested in Recco or to
transfer to Recco, legal and equitable title to and ownership of, an
ownership interest in the Contracts that are, or are intended to be,
Purchased Contracts, together with all proceeds thereof, including,
without limitation, all Collections and other items that constitute
proceeds, free and clear of any Lien whether existing at the time of the
Purchase of such Contract or at any time thereafter;
(5) the failure to file, in a timely manner, financing
statements or other similar instruments or documents required under the
UCC in effect in the state in which the Seller's principal place of
business is located or the location of the Collateral as required under
such law or other applicable laws with respect to any Contracts sold to
Recco, whether at the time of any Purchase or at any subsequent time;
(6) any defense, setoff, counterclaim, recoupment or
reduction of liability whatsoever under any Purchased Contract, arising
out of a breach by the Seller of any obligation under such Purchased
Contract or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of any other Person from the
Seller (it being understood that all such obligations of the Seller
shall be and remain enforceable against and only against the Seller and
shall not be enforceable against Recco);
(7) any failure of the Seller to perform its duties or
obligations in accordance with the provisions of this Agreement;
(8) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of
whatever sort arising out of or in connection with merchandise or
services which are the subject of any Purchased Contract or any Vehicle;
(9) the failure by the Seller to pay when due any taxes
payable by it, including without limitation, franchise taxes and sales,
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excise or personal property taxes payable in connection with the
Contracts;
(10) the failure by the Seller or the Servicer (if the
Servicer is the Seller or an Affiliate of the Seller) to be duly
qualified to do business, to be in good standing or to have filed
appropriate fictitious or assumed name registration documents in any
jurisdiction;
(11) the commingling of Collections at any time with other
funds;
(12) the failure of any Lock-Box Bank or the Clearing Account
Bank to remit any amounts held in its Lock-Box or in the Clearing
Account as the case may be, whether by reason of the exercise of setoff
rights or otherwise; and
(13) any failure by the Seller to be Year 2000 Compliant.
Notwithstanding the foregoing, Recco hereby agrees that under no circumstances
shall the Seller be liable for, or required to pay any Indemnified Amount, other
than as set forth in Section 4.5, resulting from, (i) the credit risk of an
Obligor, or for which payment therefor would otherwise constitute recourse to
the Seller for an uncollectible Contract or Contracts or (ii) gross negligence
or willful misconduct on the part of the Indemnified Party to which such
Indemnified Amount would otherwise be due.
(2) Any Indemnified Amount due hereunder shall be payable on demand.
SECTION 1.19. Rights of Inspection. Recco and its representatives and
assigns, including without limitation the Funding Agent and the Surety Provider,
shall at all times have full and free access during normal business hours (a) to
the Seller's officers and independent accountants in order to discuss the
affairs, finances and accounts of the Seller insofar as they relate to the
Purchased Contracts, the related Files and/or the Vehicles and the transactions
contemplated hereby and (b) to all the books, correspondence and records of the
Seller insofar as they relate to the Purchased Contracts, the related Files
and/or the Vehicles and the transactions contemplated hereby, and Recco and its
representatives and assigns, including without limitation the Funding Agent and
the Surety Provider may examine the same, take extracts therefrom and make
photocopies thereof, and the Seller agrees to render to Recco, and its
representatives and assigns, including
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without limitation the Funding Agent and the Surety Provider, at the Seller's
sole cost and expense, such clerical and other assistance as may be requested
with regard thereto. All such reasonable expenses of the Funding Agent and the
Surety Provider shall be for the account of the Seller and shall be provided for
or reimbursed upon presentment of an invoice requesting same.
ARTICLE VIII
THE SERVICER
SECTION 1.20. Appointment of Servicer. Recco hereby appoints the Seller
to act as servicer of the Purchased Contracts in the name of and on behalf of
Recco in accordance with the provisions hereof and the Seller hereby accepts
such appointment. The Servicer shall use reasonable care in performing its
duties as servicer hereunder and, without limiting the foregoing, shall service
the Purchased Contracts in accordance with the Credit and Collection Policy.
SECTION 1.21. Collections.
(1) On each Business Day, all Collections received in any Lock-Box
shall be transferred to the Clearing Account on the next Business Day. All
Collections received by the Servicer in any other manner shall be transferred to
the Clearing Account on the next Business Day following receipt and until so
transferred, the Servicer shall hold such cash and other items in trust for the
benefit of Recco. All Collections in the Clearing Account shall be transferred
to the Collection Account on the next Business Day after such Collections are
transferred into the Clearing Account.
(2) The Servicer will, at the Servicer's cost and expense and as
agent in the name of and on behalf of Recco, but subject at any time to the
right of Recco to direct and control, endeavor to collect, as and when the same
becomes due, all amounts owing on each Purchased Contract. In the event of
default by an Obligor under any Purchased Contract, the Servicer shall have the
power and authority, on behalf of Recco, to take such action in respect of such
Purchased Contract and the Vehicle related thereto as the Servicer, in the
absence of contrary instructions from Recco, may deem advisable, including the
power to sell such Purchased Contract. In the enforcement or collection of any
Purchased Contract, the Servicer shall be entitled to ▇▇▇ thereon in its own
name or as agent for Recco, in either case, for the account of Recco.
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(3) In the event the Servicer accepts in payment of any Purchased
Contract the taking of repossession of the Vehicle, the Servicer agrees to use
its reasonable efforts to resell such Vehicle for the account of Recco and shall
remit to Recco the gross sale proceeds thereof, net of any costs incurred by any
Person with respect to any such repossession and resale. Recco shall have no
obligation to take any action or commence any proceedings to realize upon any
Purchased Contract or to enforce any of its rights or remedies with respect
thereto. Any moneys collected by the Servicer pursuant to this subsection shall
be segregated by the Servicer, held in trust by the Servicer for Recco and shall
be remitted to the Collection Account on the Business Day of receipt thereof by
the Servicer.
SECTION 1.22. Maintenance of Records; Quarterly and Annual Reports.
(1) The books of account and other records pertaining to the
Purchased Contracts are the property of Recco. Recco agrees that the Servicer
shall hold such records as Recco's agent. The Servicer shall maintain all books
of account and other records pertaining to the Purchased Contracts in such form
as will enable Recco or the Funding Agent or their designees to determine at any
time the status of the Purchased Contracts. The Servicer will permit Recco, the
Surety Provider or the Funding Agent and any Person designated by Recco, the
Surety Provider or the Funding Agent, during regular business hours, to inspect,
audit, check and make abstracts from all books, accounts, records, or other
papers pertaining to such Purchased Contracts. From time to time, at the request
of Recco, the Surety Provider or the Funding Agent, the Servicer, at its own
expense, will deliver to Recco, the Surety Provider and the Funding Agent and
any Person designated by Recco, the Surety Provider or the Funding Agent any
records and invoices pertaining to the Purchased Contracts and evidence thereof
as Recco, the Surety Provider or the Funding Agent or such designee may deem
necessary to enable it to enforce its rights thereunder. In addition, at the
request of Recco, the Surety Provider or the Funding Agent after delivery of a
Servicer Termination Notice, the Servicer will deliver all such records and
invoices pertaining thereto (including bills of lading) and other evidence
thereof to any Person selected by the Funding Agent (acting at the direction of
the Controlling Party). Whether or not any such item is the property of Recco,
each computer record, invoice, ledger card, account record or other evidence of,
or record relating to, the Purchased Contracts maintained at the office of the
Servicer or the office of Seller, if requested by Recco, the Surety Provider or
the Funding Agent, will be marked as the Funding Agent or the Surety Provider
may direct. Upon request of the Funding Agent (acting at the direction of the
Controlling Party), the Servicer will segregate from all other Contracts then
owned or being serviced by the Servicer all documents relating to the Purchased
Contracts and will hold in trust (if
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such document is not owned by Recco) and safely keep such documents in separate
filing cabinets or other suitable containers marked to show Recco's interest
with such legend as shall be specified by the Funding Agent (acting at the
direction of the Controlling Party) and maintained in such place or places as
shall be designated by the Funding Agent (acting at the direction of the
Controlling Party).
(2) The Servicer will deliver to Recco, the Surety Provider and the
Funding Agent and any Person designated by the Funding Agent and the Surety
Provider, within 45 days after the end of each fiscal quarter of the Servicer, a
certificate of a Responsible Officer of the Servicer stating that (a) a review
of the activities of the Servicer during the preceding fiscal quarter and of its
performance under this Agreement was made under the supervision of the officer
signing such certificate and (b) based on such review, the Servicer has fully
performed all its obligations under this Agreement throughout such period
(including its obligations to prepare and deliver each Daily Report and Monthly
Report) in compliance with the terms of this Agreement, or, if there has been a
default in the performance of any such obligation, specifying each such default
known to such officer and the nature and status thereof.
(3) The Servicer, at its expense, will cause a firm of independent
public accountants satisfactory to the Funding Agent and the Surety Provider to
furnish a report (the "Annual Report") to Recco, the Surety Provider and the
Funding Agent and any Person designated by the Funding Agent, on or before March
31st of each year, beginning on March 31, 2000, stating that such firm has
examined certain documents and records relating to the servicing of the
Contracts during the preceding fiscal year and that such examination, which has
been conducted substantially in accordance with audit guides or audit programs
generally recognized to be applicable to audits of receivables similar to the
Contracts, has disclosed no items of noncompliance with the provisions of this
Agreement throughout such period which, in the opinion of such firm, are
material, except for such items of non-compliance as shall be set forth in such
report.
SECTION 1.23. Servicing Fee. On each Business Day, to the extent
provided for in the Security Agreement, as full compensation for its servicing
activities hereunder, the Servicer shall be entitled to receive the Servicing
Fee.
SECTION 1.24. Resignation; Sub-Contracting.
(1) The obligation of the Servicer to service the Purchased
Contracts is personal to the Servicer and the parties recognize that another
Person
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may not be qualified to perform such obligations. Accordingly, the Servicer's
obligation to service the Purchased Contracts hereunder shall be specifically
enforceable and shall be absolute and unconditional in all circumstances,
including, without limitation, after the occurrence and during the continuation
of any Servicer Termination Event hereunder; provided, however, that a Successor
Servicer may be appointed pursuant to Section 8.12 hereof.
(2) The Servicer shall not resign from the obligations and duties
hereby imposed on it as Servicer except upon determination that (i) the
performance of its duties hereunder is no longer permissible under any
applicable law and (ii) there is no reasonable action which the Servicer could
take to make the performance of its duties hereunder permissible under any such
applicable law. Any determination permitting the resignation of the Servicer
shall be evidenced as to clause (i) above by an opinion of counsel to such
effect delivered to Recco, the Surety Provider and the Funding Agent. Except to
the extent inconsistent with any such applicable law, no such resignation shall
become effective until a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 8.12
hereof.
(3) If the performance of its duties hereunder is no longer
permissible under applicable law or the cost of such performance is such that
its continuation as Servicer is not warranted as a financial matter, the
Servicer may, with the prior written consent of the Funding Agent and the Surety
Provider subcontract with any other Person to service, administer or collect the
Purchased Contracts, provided that the Person with whom the Servicer so
subcontracts shall not become the Servicer hereunder and the Servicer shall
remain liable for the performance of the duties and obligations of the Servicer
pursuant to the terms hereof.
SECTION 1.25. Termination. The Servicer's obligations under this
Agreement shall terminate upon the termination of the Funding Agreement;
provided, however, that the Servicer shall continue to be obligated to do all
things necessary to apply Collections on the Purchased Contracts that it
receives after such termination in the manner provided in this Agreement and to
perform its obligations hereunder with respect thereto. Upon termination of this
Agreement all authority and power granted to the Servicer under this Agreement
shall pass to and be vested in Recco. The Servicer shall transfer (i) its
electronic records relating to the Purchased Contracts to Recco in such
electronic form as Recco may reasonably request, (ii) all other records,
correspondence and documents to Recco in the manner and at such times as Recco
may reasonably request, (iii) at Recco's expense, upon the request of Recco,
notify all Obligors that the Servicer is no longer the Servicer, (iv) at Recco's
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expense, take all such further action as Recco shall reasonably request to
effect the termination of the rights of the Servicer to conduct servicing
hereunder, including, without limitation, the transfer to Recco of all authority
of the Servicer to (A) service Purchased Contracts as provided hereunder, and
(B) receive Collections which shall on the date of such termination be held by
the Servicer for deposit or which shall thereafter be received with respect to
any Purchased Contract.
SECTION 1.26. Delivery of Monthly Report. On each Determination Date,
the Servicer shall deliver to Recco, the Surety Provider and the Funding Agent,
no later than 3:00 P.M. (New York City time) on such Determination Date, a
report, substantially in the form of Exhibit I (the "Monthly Report"), together
with a certificate, substantially in the form of Exhibit G (the "Servicer's
Certificate"), covering the Determination Period immediately preceding such
Determination Date.
SECTION 1.27. Daily Report. No later than 3:00 P.M. (New York City time)
on each Purchase Date, the Servicer shall deliver a report, substantially in the
form of Exhibit H (the "Daily Report"), to Recco, the Surety Provider and the
Funding Agent, together with a Servicer's Certificate.
SECTION 1.28. [RESERVED]
SECTION 1.29. Servicer Termination Events. If any of the following
events (each a "Servicer Termination Event") shall have occurred and be
continuing:
(1) the Servicer shall fail to make any payment, transfer or deposit
required to be made hereunder within two Business Days of the date on which such
payment, transfer or deposit is due to be made;
(2) the Servicer shall fail to give any notice within three Business
Days after the same is required to be given hereunder;
(3) the Servicer shall fail to submit (i) a Monthly Report within
three Business Days of the day on which such report shall have been required to
be submitted, (ii) a Daily Report within one Business Day of the day on which
such report is required to be submitted or (iii) an Annual Report within 10 days
of the day on which such Annual Report shall have been required to be submitted;
(4) the Servicer shall fail to observe or perform any other covenant
or agreement applicable to it contained herein and such failure shall remain
unremedied for a period of 10 days;
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(5) the Servicer shall enter a corporate transaction in breach of
the covenant at Section 4.4(f) hereof;
(6) any representation, warranty, certification or statement made by
the Servicer in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made;
(7) a Bankruptcy Event shall have occurred with respect to the
Servicer;
(8) an Event of Default shall have occurred;
then, the Controlling Party may, in its discretion, terminate the Servicer by
giving five Business Days notice thereof in writing to the Servicer and Seller
which notice shall state the effective date of such termination (a "Servicer
Termination Notice"). On and after the effective date stated in a Servicer
Termination Notice, the Controlling Party may, in its discretion, implement a
Complete Servicing Transfer.
SECTION 1.30. Servicer Termination. (a) After the Controlling Party
gives the Servicer a Servicer Termination Notice, (i) prior to the appointment
of a Successor Servicer pursuant to Section 8.12, the Controlling Party may
administer the administrative, servicing and collection functions of the
Servicer in any manner it deems fit, (ii) the Controlling Party shall, at any
time thereafter, be entitled to notify the Obligors on any Purchased Contracts
to make payment of amounts due thereunder directly to Recco or the Controlling
Party or as the Controlling Party may direct and (iii) the Servicer shall, at
its own expense, (A) if so requested by the Controlling Party, endorse each
instrument that is payable to the Servicer, if any, evidencing any Purchased
Contract to the Funding Agent in such manner as the Controlling Party shall
direct and (B) perform any and all acts and execute any and all documents as may
be reasonably requested by the Controlling Party in order to effect the purposes
of this Agreement. After receipt by the Servicer of a Servicer Termination
Notice, if the Controlling Party does not elect to replace the Servicer with a
Successor Servicer, the Controlling Party shall have the right to appoint a firm
of public accountants or any other Person the Controlling Party may choose, to
monitor the servicing of the Purchased Contracts by the Servicer and to furnish
to Recco, at the expense of the Servicer, such letters, certificates or reports
thereon as the Controlling Party shall reasonably request. The Servicer shall
cooperate with such firm in the subsequent monitoring of its servicing of the
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Purchased Contracts pursuant to this Agreement and any fees and expenses in
connection therewith shall be paid by the Servicer.
(1) After receipt by the Servicer of a Servicer Termination Notice,
if the Controlling Party elects to appoint a Successor Servicer, then:
(1) On the date that a Successor Servicer shall have been
appointed by the Controlling Party pursuant to Section 8.12, all
authority and power of the then Servicer under this Agreement shall pass
to and be vested in such Successor Servicer, and, without limitation,
the Controlling Party is hereby authorized and empowered to execute and
deliver on behalf of the Servicer, as attorney-in-fact or otherwise, all
documents and other instruments upon the failure of the Servicer to
execute or deliver such documents or instruments, and (upon the failure
of the Servicer to cooperate) to do and accomplish all other acts or
things necessary or appropriate to effect the purposes of such transfer
of servicing rights.
(2) The Servicer agrees to cooperate with the Controlling
Party and the Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing
hereunder, including, without limitation, the transfer to such Successor
Servicer of all authority of the Servicer to service the Purchased
Contracts provided for under this Agreement, including, without
limitation, all authority to receive Collections which shall on the date
of transfer be held by the Servicer for deposit, or which shall
thereafter be received with respect to the Purchased Contracts.
(3) The Servicer shall promptly transfer duplicate, back-up,
or original tapes, and all other electronic media constituting all of
its electronic records relating to the Purchased Contracts and records
relating to the Commercial Paper to the Successor Servicer in such
electronic form as the Successor Servicer may reasonably request and
shall promptly transfer to the Successor Servicer all other records,
correspondence and documents necessary for the continued servicing of
the Purchased Contracts in the manner and at such times as the Successor
Servicer shall reasonably request.
(4) At any time following the appointment of a Successor
Servicer, such Successor Servicer shall be authorized to take any and
all steps in the name of the previous Servicer and on behalf of the
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previous Servicer necessary or desirable, in the determination of such
Successor Servicer, to collect all amounts due under any and all
Purchased Contracts, including, without limitation endorsing the name of
the previous Servicer on checks and other instruments representing
Collections, and enforcing the Purchased Contracts.
SECTION 1.31. Appointment of Successor Servicer. (a) On and after the
receipt by the Servicer of a Servicer Termination Notice, the Servicer shall
continue to perform all servicing functions under this Agreement until the later
of (i) the appointment of a Successor Servicer or (ii) the date specified in the
Servicer Termination Notice or otherwise specified by the Controlling Party in
writing or, if no such date is specified in the Servicer Termination Notice,
until a date mutually agreed upon by the Servicer and the Controlling Party. The
Controlling Party shall (as promptly as possible after the giving of a Servicer
Termination Notice) appoint a successor servicer (the "Successor Servicer") and
such Successor Servicer shall accept its appointment by a written assumption in
a form acceptable to the Controlling Party.
(1) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall be
deemed to refer to the Successor Servicer. Any Successor Servicer shall make all
representations and warranties that the Servicer makes hereunder.
(2) In connection with such appointment and assumption, the
Controlling Party may, subject to the provisions of the Security Agreement, make
arrangements for the payment of the Servicing Fee to the Successor Servicer.
ARTICLE IX
MISCELLANEOUS
SECTION 1.32. Notices, Etc. Except where telephonic instructions or
notices are authorized herein to be given, all notices, demands, instructions
and other communications required or permitted to be given to or made upon any
party hereto shall be in writing and shall be personally delivered or sent by
overnight courier service or by registered, certified or express mail, postage
prepaid, return receipt requested, or by facsimile copy, or telegram (with
messenger delivery specified in the case of a telegram) and shall be deemed to
be delivered for purposes
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of this Agreement on (a) the third Business Day following the day on which such
notice was placed in the custody of the U.S. Postal Service, (b) the next
Business Day following the day on which such notice was placed in the custody of
any overnight courier service, including express mail service or (c) the same
Business Day on which such notice is sent by telegram, messenger or facsimile.
Unless otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this subsection, notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective addresses (or to their respective facsimile
numbers) indicated below, and, in the case of telephonic instructions or
notices, by calling the telephone number or numbers indicated for such party
below:
If to the Seller: Onyx Acceptance Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice President
and Chief Financial Officer
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Servicer: Onyx Acceptance Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice President
and Chief Financial Officer
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Recco: Onyx Acceptance Receivables
Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Funding Agent: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Finance Services,
PARCO Manager
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Surety Provider: MBIA Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Insured Portfolio Management,
Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
A copy of any notice delivered to or required to be sent by the Seller
or Servicer hereunder shall be sent by the Seller or the Servicer to the holder
of the Subordinated Note.
SECTION 1.33. Successors and Assigns. This Agreement shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of the parties hereto and the Surety Provider and their
respective successors and assigns; provided that the Seller shall not assign any
of its rights or obligations hereunder without the prior written consent of
Recco, the Surety Provider and the Funding Agent. Except as expressly permitted
hereunder or in the Operative Documents, Recco shall not assign any of its
rights or obligations hereunder without the prior written consent of the Funding
Agent and the Surety Provider.
SECTION 1.34. Confirmation of Intent; Security Interest. The parties
hereto intend that the transfers to Recco by the Seller of Purchased Contracts,
all monies due or to become due with respect thereto and all collateral security
therefor, all proceeds of the foregoing, including, without limitation, all
Recoveries, as provided for herein be treated under applicable state law and
federal bankruptcy law, at all times and in each case, as absolute and complete
sales by the Seller to Recco; provided, however, that if for any reason any such
transfer is not considered a sale, the Seller hereby grants to Recco a security
interest in all such transferor's right, title and interest in the Purchased
Contracts and all other assets transferred to Recco pursuant to Sections 2.1(a)
and 2.1(b) hereof, as collateral security for the repayment by the Seller of a
loan in the amount of the aggregate Purchase Price paid to it.
SECTION 1.35. Payments. All payments made hereunder, except as provided
for in Section 2.3(b) hereof, shall be made by 2:00 P.M. (New York City time) on
the day provided for herein. Amounts not paid when due under this Agreement
shall bear interest until paid in full at a rate equal at all times to the
40
45
lesser of (a) the Default Rate and (b) the maximum rate permitted by applicable
law, payable on demand. Whenever any payment to be made under this Agreement
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day.
SECTION 1.36. [RESERVED]
SECTION 1.37. Costs; Expenses and Taxes. In addition to the rights of
indemnification granted pursuant to Section 7.1 hereof, the Seller agrees to pay
on demand to Recco (a) all costs and expenses in connection with the
development, preparation, execution, delivery and administration (including
periodic auditing by Recco or its agents or representatives) of this Agreement,
and the other Operative Documents, including, without limitation, the reasonable
fees and expenses of counsel for any Indemnified Party with respect hereto and
with respect to advising any such Indemnified Party as to their respective
rights and remedies under this Agreement, and (b) all costs and expenses, if any
(including reasonable counsel fees and expenses), in connection with the
enforcement of this Agreement, and the other Operative Documents.
SECTION 1.38. Severability Clause. Any provisions of this Agreement
which are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provisions in any other jurisdiction.
SECTION 1.39. Amendments; Governing Law; Jury Trial Waiver. This
Agreement and the rights (including those of the Funding Agent and the Surety
Provider) and obligations of the parties hereunder (a) may not be changed orally
but only by an instrument in writing signed by the party against which
enforcement is sought and the Surety Provider and (b) shall be construed in
accordance with and governed by the laws of the State of New York. No amendment
shall be effective without prior written notice thereof to S&P and ▇▇▇▇▇'▇. Each
party hereto hereby irrevocably waives all rights to trial by jury in any action
or proceeding (arising out of or relating to this Agreement or any of the
transactions contemplated hereby or by any of the other Operative Documents) in
which they shall be adverse parties.
SECTION 1.40. No Recourse. Except as otherwise expressly provided in
Section 4.5 and 7.1 of this Agreement, it is understood and agreed that the
Seller shall not be liable for the payment of the principal of the Loans, or any
41
46
Commercial Paper or for the payment of any business taxes or for any losses
suffered by Recco in respect of ownership of the Purchased Contracts. The
preceding sentence shall not relieve the Seller from any liability hereunder
with respect to its representations, warranties, covenants and other payment and
performance obligations herein described. The Seller is not making any
representations or warranties regarding the collectibility of the Purchased
Contracts or the future performance of the Obligors under the Purchased
Contracts.
SECTION 1.41. Further Assurances. The Seller agrees to do such further
acts and things and to execute and deliver to Recco such assignments,
agreements, powers and instruments as may be necessary or desirable in order for
Recco to carry into effect the purposes of this Agreement and the other
Operative Documents or to better assure and confirm unto Recco its rights,
powers and remedies hereunder and under the other Operative Documents,
including, without limitation, to record, notify, obtain consents and file and
to re-record, re-notify, re-obtain consents and re-file all such documents and
instruments, at such time or times, in such manner and at such places, all as
may be necessary to preserve and protect the position of the Seller or Recco, as
the case may be, hereunder and under the other Operative Documents. This
covenant shall survive the termination of this Agreement.
SECTION 1.42. Termination. This Agreement shall terminate on the later
of (a) the date after the Termination Date of the payment in full of all amounts
due hereunder and the performance of all obligations hereunder and (b) the date
on which the Funding Agreement is terminated; provided, however, that all
representations, warranties, remedies and indemnities of the Seller herein, and
the agreements of the Seller made pursuant to Section 9.15 hereof shall survive
the termination of this Agreement.
SECTION 1.43. Assignment to Funding Agent. Recco hereby assigns to the
Funding Agent, all of its rights hereunder, including, without limitation, the
rights of Recco under Section 6.2. The Seller consents to such assignment and
agrees that the Funding Agent shall be entitled to enforce this Agreement
directly against the Seller. In addition, Recco agrees to act as agent on behalf
of the Funding Agent and shall not consent or agree to any waiver, amendment or
other modification of this Agreement or any of the other Operative Documents to
which it is a party without the Funding Agent's and the Surety Provider's prior
written consent, and shall take and refrain from taking any action, and shall
exercise and refrain from exercising any of its rights under the Operative
Documents as requested by the Controlling Party from time to time, including,
without limitation, the right to deliver a Servicer Termination Notice.
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47
SECTION 1.44. Counterparts. This Agreement may be executed in any number
of counterparts, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument.
SECTION 1.45. Headings. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
SECTION 1.46. No Bankruptcy Petition Against Recco. The Seller covenants
and agrees that prior to the date which is one year and one day after the
payment in full of all Commercial Paper issued by, and all Loans made by, the
Lenders and all other Obligations under the Operative Documents it will not
institute against, or join any other Person in instituting against, Recco any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any federal or state bankruptcy or similar law.
43
48
IN WITNESS WHEREOF, the Seller and Recco have caused this Sale and
Servicing Agreement to be duly executed by their duly authorized officers, all
on the day and year first above written.
ONYX ACCEPTANCE CORPORATION, as Seller
and Servicer
By:
-------------------------------------
Name:
Title:
ONYX ACCEPTANCE
RECEIVABLES CORPORATION
By:
-------------------------------------
Name:
Title:
Acknowledged and Agreed:
THE CHASE MANHATTAN BANK,
as Funding Agent
By:
----------------------------------
Name:
Title:
MBIA INSURANCE CORPORATION,
as Surety Provider
By:
----------------------------------
Name:
Title:
49
EXHIBIT A
[RESERVED]
A-1
50
EXHIBIT B
SUBORDINATED NOTE
THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT FOR ANY
OFFER OR SALE PURSUANT TO, AND IN COMPLIANCE WITH, THE SECURITIES ACT AND THE
RULES AND REGULATIONS THEREUNDER.
THIS SUBORDINATED NOTE IS THE SUBORDINATED NOTE REFERRED TO IN THE SALE AND
SERVICING AGREEMENT, AND IS SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO ALL OF
THE OBLIGATIONS TO THE EXTENT AND IN THE MANNER PROVIDED IN ARTICLE V OF THE
SALE AND SERVICING AGREEMENT; AND THE HOLDER BY ACCEPTANCE HEREOF AGREES TO BE
BOUND BY ALL THE PROVISIONS OF ARTICLE V OF THE SALE AND SERVICING AGREEMENT.
New York, New York
August 9, 1999
ONYX ACCEPTANCE RECEIVABLES CORPORATION, a Delaware corporation
("Recco"), hereby promises to pay to the order of ONYX ACCEPTANCE CORPORATION, a
Delaware corporation (the "Seller"), the principal amount of this Subordinated
Note, determined as described below, together with interest thereon at a rate
per annum equal to the LIBOR Rate + 6% in lawful money of the United States of
America. Capitalized terms used herein but not defined herein shall have the
meanings assigned to such terms in the Definitions List attached to the Sale and
Servicing Agreement dated as of August 9, 1999, between Recco and the Seller
(such agreement, as it may from time to time be amended, supplemented or
otherwise modified in accordance with its terms, the "Sale Agreement").
The principal amount of this Subordinated Note at any time shall be
determined in accordance with the provisions of Section 5.3 of the Sale
Agreement. All principal of and interest on this Subordinated Note shall be due
and payable at
B-1
51
the times provided in the Sale Agreement, it being understood and agreed that,
except as provided in Section 5.3 of the Sale Agreement, no payments may be
made, directly or indirectly, on this Subordinated Note until all the
Obligations have been indefeasibly paid in full in cash. This Subordinated Note
is secured by the Collateral pursuant to the Subordinated Security Agreement
subject to the prior lien of the Funding Agent under the Security Agreement. No
payments may be received, directly or indirectly, by the Seller (and if
received, the Seller agrees to return such payments to Recco) on this
Subordinated Note unless Recco has paid all amounts required pursuant to the
Security Agreement to be paid prior to any payment in respect of this
Subordinated Note.
Payments of principal on this Subordinated Note shall be made by wire
transfer of immediately available funds to such account of the Seller as the
Seller may designate in writing.
This Subordinated Note is the Subordinated Note referred to in the Sale
Agreement, and is subordinate and junior in right of payment to all the
Obligations to the extent and in the manner provided in Section 5.3 of the Sale
Agreement and the holder by acceptance hereof agrees to be bound by all the
provisions of Section 5.3 of the Sale Agreement.
Recco hereby waives diligence, presentment, demand, protest and notice
of any kind whatsoever. The nonexercise by the holder of any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.
All amounts evidenced by this Subordinated Note and all payments and
prepayments of the principal hereof and the respective dates and maturity dates
thereof shall be endorsed by the holder hereof on Schedule 1 attached hereto and
made a part hereof or on a continuation thereof which shall be attached hereto
and made a part hereof, or otherwise recorded by such holder in its internal
records; provided, however, that the failure of the holder hereof to make such a
notation or any error in such a notation shall not affect the obligations of
Recco under this Subordinated Note.
It is the intention of Recco and the Seller to conform strictly to
applicable usury laws. Accordingly, if the transactions contemplated hereby
would be usurious under applicable law (including the laws of the State of New
York and the laws of the United States of America), then, in that event,
notwithstanding anything to the contrary in any agreement entered into in
connection with this Subordinated Note, it is agreed as follows: (i) the
aggregate of all consideration that
B-2
52
constitutes interest, if any, under applicable law that is taken, reserved,
contracted for, charged or received under this Subordinated Note or any other
agreement or document executed in connection with this Subordinated Note shall
under no circumstances exceed the maximum amount of interest allowed by
applicable law, and any excess shall be credited to other amounts due under this
Subordinated Note by the holder hereof (or if this Subordinated Note shall have
been paid in full, refunded to Recco); and (ii) in the event that maturity of
this Subordinated Note is accelerated for any reason, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest may never include more than the maximum amount allowed by applicable
law, and excess interest, if any, provided for in this Subordinated Note or
otherwise shall be cancelled automatically as of the date of such acceleration
or prepayment and, if theretofore prepaid, shall be credited to other amounts
due under this Subordinated Note (or if this Subordinated Note shall have been
paid in full, refunded to Recco). In the event that applicable law provides for
a ceiling on the rate of interest, if any, chargeable hereunder, that ceiling
shall be the indicated rate ceiling.
The Seller agrees that it shall have no right to cause, by way of
acceleration or otherwise, any payment of principal hereunder to become due or
payable, prior to the times provided in the Security Agreement.
Each holder of this Note agrees to be bound by all of the provisions of
the Operative Documents, including, without limitation, the covenant that prior
to the date which is one year and one day after the payment in full of all
Commercial Paper issued, and all Loans made, by the Lenders and all other
Obligations under the Operative Documents, it will not institute against, or
join any other Person in instituting against, Recco any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the law of the United States or any state of the United
States.
This Subordinated Note shall not be assigned, transferred, exchanged,
pledged, hypothecated, participated or otherwise conveyed, except with the prior
written consent of the Funding Agent and the Surety Provider.
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53
THIS SUBORDINATED NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.
ONYX ACCEPTANCE RECEIVABLES
CORPORATION
By:
-------------------------------------
Name:
Title:
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54
Schedule 1 to
Subordinated Note
---------------------------------------------------------------------------------------------------
Payments and Maturity Notation Made
Date Principal Amount Pre-payments Date By
---- ---------------- ------------ -------- -------------
----------- ---------------- ------------ -------- -------------
----------- ---------------- ------------ -------- -------------
----------- ---------------- ------------ -------- -------------
----------- ---------------- ------------ -------- -------------
----------- ---------------- ------------ -------- -------------
----------- ---------------- ------------ -------- -------------
----------- ---------------- ------------ -------- -------------
----------- ---------------- ------------ -------- -------------
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55
EXHIBIT C
ONYX ACCEPTANCE CORPORATION
OFFICER'S CERTIFICATE
The undersigned certifies that he is the [President] [Chief Financial
Officer] [an Executive Vice President] of Onyx Acceptance Corporation, a
Delaware corporation (the "Seller"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Seller in connection with
the Sale and Servicing Agreement, dated as of August 9, 1999 (as amended, the
"Sale Agreement"), between the Seller and Onyx Acceptance Receivables
Corporation, a Delaware corporation ("Recco") (all capitalized terms used herein
without definition having the respective meanings specified in the Definitions
List attached to the Sale Agreement), and further certifies that:
1. no event with respect to the Seller has occurred and is
continuing which would constitute an Event of Default or Unmatured Event
of Default;
2. each of the agreements and conditions of the Seller to
be performed on or before the date hereof pursuant to the Sale Agreement
have been performed in all material respects;
3. The Seller has possession of each Contract set forth on
the Contract List delivered to the Funding Agent on the date hereof (the
"Specified Contracts");
4. Within one Business Day of the date hereof, the Seller
shall apply the cash proceeds of the Purchase Price paid to it on the
date hereof by Recco to purchase the Specified Contracts.
5. The Seller has delivered the Specified Contracts to
Recco on or prior to the date hereof.
C-1
56
IN WITNESS WHEREOF, I have affixed hereunto my signature this ____ day
of _______, ______.
ONYX ACCEPTANCE CORPORATION
By:
-------------------------------------
Name:
Title:
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57
EXHIBIT D
LIST OF LOCK-BOX BANKS AND NUMBERS OF LOCK-BOXES
LOCK BOX BANK:
▇▇▇▇▇ Fargo Bank
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Lock Box Account
Acct. # 4159359066
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EXHIBIT E
CLEARING ACCOUNT BANK AND ACCOUNT NUMBER
The Clearing Account, No. 4159359173, is maintained at ▇▇▇▇▇ Fargo Bank,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
[RESERVED]
F-1
60
EXHIBIT G
[Form of Servicer's Certificate]
This Servicer's Certificate is delivered pursuant to the Sale and
Servicing Agreement (as amended, the "Sale Agreement") dated as of August 9,
1999 between Onyx Acceptance Corporation and Onyx Acceptance Receivables
Corporation. Capitalized terms not defined herein have the meanings ascribed to
such terms in the Definitions List attached to the Sale Agreement.
The undersigned hereby certifies that he is a Responsible Officer of
Onyx Acceptance Corporation holding the office set forth beneath his signature
below, and that he is duly authorized to execute this Servicer's Certificate on
behalf of the Servicer and further certifies that the information set forth in
the report to which this Certificate is attached is true and correct in all
material respects, that there is currently no Unmatured Event of Default or
Event of Default and that all calculations and applications of cash were
performed in accordance with the Operative Documents.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ____ day
of ___________, _____.
ONYX ACCEPTANCE
CORPORATION
By:
-------------------------------------
Name:
Title:
G-1
61
EXHIBIT H
[FORM OF DAILY REPORT]
DOCUMENT DELIVERED AT CLOSING.
H-1
62
EXHIBIT I
[FORM OF MONTHLY REPORT]
DOCUMENT DELIVERED AT CLOSING.
I-1
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SCHEDULE 4.1(h)-1
PRINCIPAL PLACE OF BUSINESS, ETC. OF SELLER
Onyx Acceptance Corporation's (the "Seller") principal place of
business, chief executive office and the location of the offices where it keeps
all of the records relating to the Contracts including, without limitation, the
Files, is:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Data Bank
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
I-1
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SCHEDULE 4.1(h)-2
PRINCIPAL PLACE OF BUSINESS, ETC. OF SERVICER
Onyx Acceptance Corporation's (the "Servicer") principal place of
business, chief executive office and the location of the offices where it keeps
all of the records relating to the Contracts including, without limitation, the
Files, is:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Data Bank
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
I-2
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SCHEDULE 4.1(k)-1
TRADE NAMES OF SELLER
Onyx Acceptance Corporation (the "Seller") has no trade names,
fictitious names, assumed names or "doing business as" names other than the
following:
"Doing Business As" Name Business for which Name is Used
------------------------ -------------------------------
1. Automotive Banking Network Marketing/Advertising
2. AutoBank Services Used car sales
3. Mesa Auto Used car sales
4. Auto Fund Name reserved but not used
5. Automotive Funding Services Name reserved but not used
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SCHEDULE 4.1(k)-2
TRADE NAMES OF SERVICER
Onyx Acceptance Corporation (the "Servicer") has no trade names,
fictitious names, assumed names or "doing business as" names other than the
following:
"Doing Business As" Name Business for which Name is Used
------------------------ -------------------------------
1. Automotive Banking Network Marketing/Advertising
2. AutoBank Services Used car sales
3. Mesa Auto Used car sales
4. Auto Fund Name reserved but not used
5. Automotive Funding Services Name reserved but not used
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SCHEDULE 4.1(r)-1
SUBSIDIARIES OF SELLER
The subsidiaries of Onyx Acceptance Corporation (the "Seller") are as
follows:
(i) Onyx Acceptance Financial Corporation
(ii) Onyx Acceptance Funding Corporation
(iii) ABNI, Inc.
(iv) C.U. Acceptance Corporation
(v) Onyx Acceptance Receivables Corporation
I-5
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SCHEDULE 4.1(r)-2
SUBSIDIARIES OF SERVICER
The subsidiaries of Onyx Acceptance Corporation (the "Servicer") are as
follows:
(i) Onyx Acceptance Financial Corporation
(ii) Onyx Acceptance Funding Corporation
(iii) ABNI, Inc.
(iv) C.U. Acceptance Corporation
(v) Onyx Acceptance Receivables Corporation
I-6