EXHIBIT 10.116
SECOND AMENDED AND RESTATED
SUBORDINATED SECURITY AGREEMENT
SECOND AMENDED AND RESTATED SUBORDINATED SECURITY AGREEMENT dated as of
November 30, 2001 (the "Subordinated Security Agreement" or this "Agreement")
between ONYX ACCEPTANCE FINANCIAL CORPORATION, a Delaware corporation ("▇▇▇▇▇")
and ONYX ACCEPTANCE CORPORATION, a Delaware corporation (the "Seller").
W I T N E S S E T H :
WHEREAS, pursuant to the Amended and Restated Sale and Servicing
Agreement (the "Former Sale Agreement") dated as of September 4, 1998 between
the Seller and ▇▇▇▇▇, the Seller from time to time sold to ▇▇▇▇▇ and ▇▇▇▇▇ from
time to time purchased from the Seller certain contracts secured by automobiles,
vans and light trucks;
WHEREAS, a portion of the purchase price for such contracts is
represented by a subordinated note issued by ▇▇▇▇▇ to the Seller (the
"Subordinated Note");
WHEREAS, the parties to the Former Sale Agreement have amended and
restated the Former Sale Agreement into the Second Amended and Restated Sale and
Servicing Agreement (as the same may from time to time be amended, supplemented,
modified or amended and restated, the "Sale Agreement") dated as of the date
hereof between the Seller and ▇▇▇▇▇, pursuant to which the Seller from time to
time will sell to ▇▇▇▇▇, and ▇▇▇▇▇ from time to time will purchase from the
Seller certain contracts secured by automobiles, vans and light trucks (the
"Contracts");
WHEREAS, a portion of the purchase price for the Contracts also will be
represented by the Subordinated Note;
WHEREAS, ▇▇▇▇▇ has entered into the Second Amended and Restated Triple-A
One Security Agreement dated as of the date hereof (the "Triple-A One Security
Agreement") with Triple-A One Funding Corporation ("Triple-A One"), Onyx
Acceptance Corporation, as servicer (the "Servicer"), and Capital Markets
Assurance Corporation, as collateral agent (the "Collateral Agent") pursuant to
which ▇▇▇▇▇ has granted to the Collateral Agent a first priority security
interest in the Contracts and certain other collateral;
WHEREAS, in order to secure the Subordinated Note, ▇▇▇▇▇ has granted to
the Seller a subordinated security interest in the Contracts and certain other
collateral, subject to the prior rights of the Collateral Agent, pursuant to the
Amended and Restated Subordinated Security Agreement dated as of September 4,
1998, between the Seller and ▇▇▇▇▇ (as amended to the date hereof, the "Amended
and Restated Subordinated Security Agreement");
WHEREAS, the Seller's security interests in the Contracts and certain
other collateral granted pursuant to this Agreement is subordinated to the
rights of the Collateral Agent and its rights to exercise any remedies under
this Agreement are limited for so long as any amounts secured under the Triple-A
One Security Agreement are outstanding; and
WHEREAS, the Seller and ▇▇▇▇▇ wish to further amend and restate the
Amended and Restated Subordinated Security Agreement as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and to induce the
Seller to sell Contracts to ▇▇▇▇▇ pursuant to the Sale Agreement, ▇▇▇▇▇ hereby
agrees with the Seller as follows:
SECTION 1. Defined Terms.
(a) As used in this Subordinated Security Agreement or any certificate
or other document made or delivered pursuant hereto, the capitalized terms used
herein and therein shall, unless otherwise defined herein, have the meanings
assigned to them in the Second Amended and Restated Definitions List dated as of
the date hereof that is attached as Exhibit A to the Second Amended and Restated
Triple-A One Credit Agreement dated as of the date hereof among ▇▇▇▇▇, Triple-A
One, CapMAC Financial Services, Inc. and the Collateral Agent, as the same may
be amended, modified, restated or amended and restated from time to time, which
is incorporated herein by reference (the "Definitions List").
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms not defined in the Definitions List
and accounting terms partly defined in the Definitions List to the extent not
defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Subordinated Security Agreement shall refer to this
Subordinated Security Agreement as a whole and not to any particular provision
of this Subordinated Security Agreement, and paragraph references are to this
Subordinated Security Agreement unless otherwise specified.
(d) Capitalized terms used herein shall be equally applicable to both
the singular and plural forms of such terms.
(e) The following terms that are defined in the UCC are used herein as
so defined: Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment,
General Intangibles, Instruments, Inventory, Supporting Obligations, Tangible
Chattel Paper and Proceeds.
SECTION 2. Grant of Security Interest. As collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity or
otherwise) of the Subordinated Note and all other obligations of ▇▇▇▇▇ to the
Seller hereunder and
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under the Sale Agreement (collectively, the "Obligations") and subject to the
prior rights of the Collateral Agent under the Triple-A One Security Agreement,
▇▇▇▇▇ hereby assigns, pledges, grants, conveys, transfers, delivers and sets
over to the Seller a security interest in all ▇▇▇▇▇'▇ right, title and interest
in, to and under the following, whether now owned or hereafter acquired, in each
case (other than clause (i)) only as related to the Purchased Contracts
(collectively, the "Collateral"). For further clarification, all Collateral as
heretofore described in this Section 2 (other than clause (i)) shall relate to
and be in respect of Purchased Contracts as defined herein, subject to any and
all provisos, as applicable, expressly included in the definition thereof.
(a) all Chattel Paper, including, without limitation, the Purchased
Contracts and other contracts and Supporting Obligations related to the
Purchased Contracts (as the same may be amended, modified, supplemented,
restated or replaced from time to time) and amounts paid or payable with respect
thereto;
(b) all Files (including all Dealer Assignments) and Contract Lists, and
all right, title and interest of ▇▇▇▇▇ in and to the documents, agreements and
instruments included in the Files, including, without limitation, rights of
recourse of ▇▇▇▇▇ against Vehicle Dealers;
(c) all Insurance Policies and all rights of ▇▇▇▇▇ in all Insurance
Policies;
(d) all security interests, Liens, guaranties, mortgages and other
encumbrances in favor of or assigned or transferred to ▇▇▇▇▇ in and to Purchased
Contracts and Vehicles, and all accessions thereto and replacements thereof, and
in any other property in which a security interest is assigned or transferred to
▇▇▇▇▇;
(e) all of ▇▇▇▇▇'▇ Equipment, Inventory, General Intangibles, Documents,
Instruments, Accounts, general ledger sheets, files, records, books of account,
invoices, bills, certificates or documents of ownership, bills of sale, business
papers, correspondence, tapes, cards, computer tapes and all other data and data
storage systems (whether in the possession of ▇▇▇▇▇ or any other Person)
relating to any of the foregoing;
(f) all Deposit Accounts, moneys, deposits, funds, accounts and
instruments relating to the foregoing;
(g) each Lock-Box, the funds on deposit in the Clearing Account pursuant
to Section 5(d) of the Triple-A One Security Agreement, the Collection Account
(including, without limitation, all funds at any time on deposit therein and all
Permitted Investments in which such funds may at any time be invested);
(h) the Sale Agreement and all other Operative Documents to which ▇▇▇▇▇
is a party, including, without limitation, all rights of ▇▇▇▇▇ to amounts due or
to become due under or in connection with, and to enforce, such agreements;
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(i) any Hedge Agreement and any guarantees or other credit enhancement
associated therewith; and
(j) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing.
SECTION 3. Notice to Obligors. Subject to the terms of Section 21 hereof and
Section 5.3 of the Sale Agreement and of the other Operative Documents, at any
time upon the request of the Seller, ▇▇▇▇▇ shall notify the Obligors that the
Purchased Contracts have been reassigned to the Seller and that payments in
respect thereof shall be made directly to the Seller. Subject to the terms of
Section 21 hereof and Section 5.3 of the Sale Agreement and of the other
Operative Documents, the Seller may in its own name or in the name of others
communicate with the Obligors to verify with them to its satisfaction the
existence, amount and terms of any Purchased Contracts.
(a) Analysis of Contracts. Subject to the terms of Section 21 hereof and
Section 5.3 of the Sale Agreement and of the other Operative Documents, the
Seller shall have the right to make test verifications of the Purchased
Contracts in any manner and through any medium that it considers advisable, and
▇▇▇▇▇ shall furnish or cause to be furnished by the Servicer all such assistance
and information as the Seller may require in connection therewith. In addition,
at any time and from time to time, upon the Seller's request, ▇▇▇▇▇ shall cause
independent public accountants or others satisfactory to the Seller to furnish
to the Seller reports showing reconciliations, aging and test verifications of,
and trial balances for, the Purchased Contracts.
(b) Proceeds. Subject to the terms of Section 21 hereof and Section 5.3
of the Sale Agreement and of the other Operative Documents, any Proceeds, when
collected by ▇▇▇▇▇ or the Servicer, shall be forthwith turned over to the Seller
by ▇▇▇▇▇ or the Servicer (as the case may be) in the exact form received, duly
endorsed to the Seller, and until so turned over, shall be held by ▇▇▇▇▇ or the
Servicer (as the case may be) in trust for the Seller. Such Proceeds shall
continue to be collateral security for all of the Obligations and shall not
constitute payment thereof until applied as set forth in the Triple-A One
Security Agreement. Subject to the terms of Section 21 hereof and Section 5.3 of
the Sale Agreement and of the other Operative Documents, upon the request of the
Seller, ▇▇▇▇▇ shall deliver or cause to be delivered to the Seller (or such
other Person as then may be acting as custodian for the Purchased Contracts) all
Files relating to the Purchased Contracts, including original and other
documents evidencing, and relating to, the transactions which created the
Purchased Contracts, including, without limitation, all original orders,
invoices, receipts and similar documents.
(c) Document Delivery. Subject to the terms of Section 21 hereof (it
being understood that for so long as the Triple-A One Security Agreement is in
effect the provisions of that Agreement shall control), as necessary, ▇▇▇▇▇
shall ▇▇▇▇ the computer tape with respect to each Purchased Contract and File to
reflect the interest of the Seller.
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SECTION 4. Representations and Warranties. ▇▇▇▇▇ hereby represents and warrants
that:
(a) Title; No Other Liens. Except for the Lien granted to the Collateral
Agent pursuant to the Triple-A One Security Agreement and the Lien granted to
the Seller pursuant to this Subordinated Security Agreement and the other Liens
permitted pursuant to any of the other Operative Documents, ▇▇▇▇▇ owns each item
of the Collateral free and clear of any and all Liens or claims of others. No
security agreement, financing statement or other public notice with respect to
all or any part of the Collateral is on file or of record in any public office,
except such as may have been filed in favor of the Collateral Agent pursuant to
the Triple-A One Security Agreement and in favor of the Seller pursuant to this
Subordinated Security Agreement or as may be permitted pursuant to any Operative
Document.
(b) Perfected Liens. The Liens granted pursuant to this Subordinated
Security Agreement constitute perfected Liens on the Collateral in favor of the
Seller, subject only to the prior Lien of the Collateral Agent, and are
enforceable as such against all creditors of and purchasers from ▇▇▇▇▇.
(c) Chief Executive Office; Incorporation. ▇▇▇▇▇'▇ chief executive
office and chief place of business is located at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ and its state of incorporation is
Delaware.
(d) Locations. All Collateral is located at the addresses listed on
Schedule 4(d) hereto.
SECTION 5. Covenants. Subject to the terms of Section 21 hereof and Section 5.3
of the Sale Agreement and of the other Operative Documents, ▇▇▇▇▇ covenants and
agrees with the Seller that until the Obligations are paid in full and the Sale
Agreement is terminated:
(a) Further Documentation. At any time and from time to time, upon the
written request of the Seller, and at the sole expense of ▇▇▇▇▇, ▇▇▇▇▇ will
promptly and duly execute and deliver such further instruments and documents and
take such further action as the Seller may request for the purpose of obtaining
or preserving the full benefits of this Subordinated Security Agreement and of
the rights and powers herein granted, including, without limitation, the filing
of any financing or continuation statements under the UCC with respect to the
Liens created hereby, including all steps necessary to maintain perfection of
the security interest of ▇▇▇▇▇ in each Vehicle; provided, however, that ▇▇▇▇▇
shall not be obligated to take any action which, in the reasonable judgment of
the Collateral Agent, would violate or conflict with the terms of the Triple-A
One Security Agreement or any other Operative Document.
(b) Maintenance of Records. ▇▇▇▇▇ will keep and maintain, or cause to be
maintained by the Servicer, at its cost and expense satisfactory and complete
records of the Collateral, including, without limitation, a record of all
payments received and all credits granted with respect to the Purchased
Contracts. ▇▇▇▇▇ will ▇▇▇▇ or cause the Servicer to
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▇▇▇▇ its books and records pertaining to the Collateral to evidence this
Subordinated Security Agreement and the subordinated security interest granted
hereby. With the prior written consent of the Collateral Agent, at any time upon
the request of the Seller, ▇▇▇▇▇ shall, during normal business hours, turn over
or cause the Servicer to turn over any books and records to the Seller or to its
designated representatives.
(c) Compliance with Laws, etc. ▇▇▇▇▇ will comply with all Requirements
of Law applicable to the Collateral or any part thereof or to the operation of
▇▇▇▇▇'▇ business; provided, however, that ▇▇▇▇▇ may contest any Requirement of
Law in any reasonable manner which shall not, in the sole opinion of the Seller,
adversely affect the Seller's rights or the priority of its Liens on the
Collateral.
(d) Compliance with Terms etc. ▇▇▇▇▇ will perform and comply with all
its Contractual Obligations relating to the Subordinated Note.
(e) Limitation on Liens on Collateral. ▇▇▇▇▇ will not create, incur or
permit to exist, will defend the Collateral against, and will take such other
action as is necessary to remove, any Lien or claim on or to the Collateral,
other than the Liens created by the Triple-A One Security Agreement, the Liens
created hereby and other than as permitted pursuant to the Operative Documents,
and will defend the right, title and interest of the Seller in and to any of the
Collateral against the claims and demands of all Persons whomsoever.
(f) Limitations on Dispositions of Collateral. ▇▇▇▇▇ will not sell,
transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer
or contract to do so, except as permitted by the Operative Documents.
(g) Limitations on Modifications, Waivers, Extensions of Purchased
Contracts. ▇▇▇▇▇ will not, and will not permit the Servicer to, (i) amend,
modify, terminate or waive any provision of any Purchased Contract in any manner
which could have an adverse effect on the value of such Purchased Contract as
Collateral, (ii) fail to exercise promptly and diligently each and every right
which ▇▇▇▇▇ may have under each Purchased Contract and (iii) act otherwise than
in accordance with the Credit and Collection Policy.
(h) Limitations on Discounts, Compromises, Extensions of Contracts.
Other than pursuant to the Credit and Collection Policy, ▇▇▇▇▇ will not, and
will not permit the Servicer to, grant any extension of the time of payment of
any of the Purchased Contracts, compromise, compound or settle the same for less
than the full amount thereof, release, wholly or partially, any Person liable
for the payment thereof, or allow any credit or discount whatsoever thereon.
(i) Maintenance of Equipment. ▇▇▇▇▇ will maintain each item of Equipment
in good operating condition, ordinary wear and tear and immaterial impairments
of value and
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damage by the elements excepted, and will provide all maintenance, service and
repairs necessary for such purpose.
(j) Changes in Locations, Name, etc. ▇▇▇▇▇ will not, without providing
thirty (30) days prior written notice to the Seller, and without filing any UCC
financing statements necessary or desirable (in the opinion of the Seller) to
maintain the perfection and priority of the Seller's security interest in the
Collateral, as provided for herein (i) change the location of its state of
incorporation from that specified in Section 4(c) or remove its books and
records from such location, (ii) permit any Equipment that it may acquire to be
kept at a location other than that specified in Section 4(d), or (iii) change
its name, identity or corporate structure to such an extent that any financing
statement filed by the Seller in connection with this Subordinated Security
Agreement would become misleading.
SECTION 6. Seller's Appointment as Attorney-in-Fact.
(a) Powers. Subject to the terms of Section 21 hereof and Section 5.3 of
the Sale Agreement and of the other Operative Documents, ▇▇▇▇▇ hereby
irrevocably constitutes and appoints the Seller and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of ▇▇▇▇▇ and in the name of ▇▇▇▇▇ or in its own name, from time to time in
the Seller's discretion, for the purpose of carrying out the terms of this
Subordinated Security Agreement, to take any and all lawful and appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Subordinated Security
Agreement, and, without limiting the generality of the foregoing, ▇▇▇▇▇ hereby
gives the Seller the power and right, on behalf of ▇▇▇▇▇, without notice to or
assent by ▇▇▇▇▇, to do the following:
(i) upon the occurrence and during the continuance of any
Wind-Down Event, in the name of ▇▇▇▇▇ or its own name, or otherwise, to take
possession of and endorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due under any Instrument, General
Intangible or Purchased Contract and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Seller for the purpose of collecting any and all such moneys
due under any Instrument, General Intangible or Purchased Contract whenever
payable;
(ii) to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral; and
(iii) upon the occurrence and during the continuance of any
Wind-Down Event, (A) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Seller or as the Seller shall direct and to notify the Lock-Box
Banks to follow the instructions of the
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Seller; (B) to ask or demand for, collect, receive payment of and receipt for,
any and all moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (C) to sign and endorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any proceeds thereof and to
enforce any other right in respect of any Collateral; (E) to defend any suit,
action or proceeding brought against ▇▇▇▇▇ with respect to any Collateral; (F)
to settle, compromise or adjust any suit, action or proceeding described in
clause (E) above and, in connection therewith, to give such discharges or
releases as the Seller may deem appropriate; (G) generally, to sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of the
Collateral pursuant to Section 8 hereof as fully and completely as though the
Seller were the absolute owner thereof for all purposes, and to do, at the
Seller's option and ▇▇▇▇▇'▇ expense, at any time, or from time to time, all
lawful acts and things which the Seller deems necessary to protect, preserve or
realize upon the Collateral and the Seller's Liens thereon and to effect the
intent of this Subordinated Security Agreement, all as fully and effectively as
▇▇▇▇▇ might do; and (H) compel the transfer of ▇▇▇▇▇'▇ interest in all rights
(by license, sublicense or otherwise) of any computer software necessary to
collect the Purchased Contracts.
▇▇▇▇▇ hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof.
(b) Other Powers. Subject to the terms of Section 21 hereof and Section
5.3 of the Sale Agreement and of the other Operative Documents, ▇▇▇▇▇ also
authorizes the Seller, at any time and from time to time, to execute, in
connection with the sale provided for in Section 8 hereof, any endorsements,
assignments or other instruments of conveyance or transfer with respect to the
Collateral.
(c) No Duty on Seller's Part. The powers conferred on the Seller
hereunder are solely to protect the Seller's interests in the Collateral and
shall not impose any duty upon it to exercise any such powers. The Seller shall
be accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to ▇▇▇▇▇ for any act or failure to act
hereunder, except for its own gross negligence or willful misconduct.
SECTION 7. Performance by Seller of ▇▇▇▇▇'▇ Obligations. Subject to the terms of
Section 21 hereof and Section 5.3 of the Sale Agreement and of the other
Operative Documents, if ▇▇▇▇▇ fails to perform or comply with any of its
agreements contained herein, the Seller, as provided for by the terms of this
Subordinated Security Agreement, shall itself perform or comply, or otherwise
cause performance or compliance, with such agreement.
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SECTION 8. Remedies. Subject to the terms of Section 21 hereof and Section 5.3
of the Sale Agreement and of the other Operative Documents, if a Wind-Down Event
shall occur and be continuing, the Seller may exercise in addition to all other
rights and remedies granted to it in this Subordinated Security Agreement and in
any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the UCC. Without
limiting the generality of the foregoing, the Seller, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except the notice specified below of time and place of public or
private sale) to or upon ▇▇▇▇▇ or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
an option or options to purchase, or otherwise dispose of and deliver said
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Seller or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. The Seller shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of said Collateral so sold, free of any right or equity of redemption in ▇▇▇▇▇,
which right or equity is hereby waived or released. ▇▇▇▇▇ further agrees, at the
Seller's request, to assemble the Collateral and the Files and make them
available to the Seller at places which the Seller shall select, whether at
▇▇▇▇▇'▇ premises or elsewhere. The Seller shall apply the net proceeds of any
such collection, recovery, receipt, appropriation, realization or sale, after
deducting all costs and expenses of every kind incurred therein or incidental to
the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Seller hereunder, including, without limitation,
attorneys' fees and disbursements, to the payment in whole or in part of the
Obligations, in such order as the Seller may elect, and only after such
application and after the payment by the Seller of any other amount required by
any provision of law, including, without limitation, Section 9-615(a)(3) of the
UCC, need the Seller account for the surplus, if any, to ▇▇▇▇▇. To the extent
permitted by applicable law, ▇▇▇▇▇ waives all claims, damages, and demands
against the Seller arising out of the repossession, retention or sale of the
Collateral. If any notice of a proposed sale or disposition of Collateral shall
be required by law, such notice shall be deemed reasonably and properly given if
given (effective upon dispatch) in any manner provided in the Sale Agreement at
least ten (10) days before such sale or disposition. ▇▇▇▇▇ shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations and the fees and
disbursements of any attorneys employed by the Seller to collect such
deficiency.
SECTION 9. Limitation on Seller's Duties in Respect of Collateral. The Seller's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under the UCC or otherwise, shall be to deal
with it in the same manner as the Seller deals with similar property for its own
account. Neither the Seller nor any of its
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directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of ▇▇▇▇▇ or otherwise.
SECTION 10. Powers Coupled with an Interest. All powers of attorney,
authorizations and agencies herein contained with respect to the Collateral are
irrevocable and are powers coupled with an interest.
SECTION 11. Severability. Any provision of this Subordinated Security Agreement
which is 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 provision in any other jurisdiction.
SECTION 12. Assignment. ▇▇▇▇▇ does hereby acknowledge that the Seller may pledge
or otherwise transfer the Subordinated Note and all security therefore granted
hereunder with the prior written consent of Triple-A One and the Program
Manager.
SECTION 13. Section and Paragraph Headings. The section and paragraph headings
used in this Subordinated Security Agreement are for convenience of reference
only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
SECTION 14. No Waiver; Cumulative Remedies. The Seller shall not by any act
(except pursuant to the execution of a written instrument pursuant to Section 15
hereof), delay, indulge, omit or otherwise be deemed to have waived any right or
remedy hereunder or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the Seller, any
right, power or privilege hereunder shall operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise or any other right, power
or privilege. A waiver by the Seller of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Seller
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.
SECTION 15. Waivers and Amendments; Successors and Assigns. None of the terms or
provisions of this Subordinated Security Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
▇▇▇▇▇ and the Seller with the prior written consent of the Collateral Agent and
the Program Manager; provided, however, that for so long as the Triple-A One
Security Agreement shall be in effect, if the Collateral Agent shall have
consented to a waiver, amendment, supplement or modification under the Triple-A
One Security Agreement, the consent of the Seller shall be
10
deemed automatically given under the comparable provision of this Subordinated
Security Agreement. No amendment shall be effective without prior written notice
thereof to S&P and ▇▇▇▇▇'▇. This Subordinated Security Agreement shall be
binding upon the successors and assigns of the parties hereto and shall inure to
the benefit of each of the parties hereto and their successors and assigns.
SECTION 16. Integration. This Subordinated Security Agreement represents the
agreement of ▇▇▇▇▇ with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Seller relative to
subject matter hereof not expressly set forth or referred to herein or in the
other Operative Documents.
SECTION 17. Counterparts. This Subordinated Security Agreement may be executed
by one or more of the parties to this Subordinated Security Agreement on any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
SECTION 18. GOVERNING LAW. THIS SUBORDINATED SECURITY AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HERETO UNDER THIS SUBORDINATED SECURITY AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES WHICH MAY
REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
SECTION 19. Termination and Release.
(a) This Subordinated Security Agreement and the security interests
created or granted hereby shall remain in full force and effect until the
indefeasible payment in full in cash of the Obligations and the Subordinated
Note, at which time, following the receipt by the Seller of (i) written notice
from the Program Manager that the Obligations have been so paid, and (ii)
payment in full of the Subordinated Note, the security interest created or
granted hereby shall terminate and the Seller shall, execute and deliver such
documents and instruments (including without limitation UCC termination
statements) necessary to evidence the termination of such security interest, as
▇▇▇▇▇ may reasonably request.
(b) (i) ▇▇▇▇▇ Request for Release. ▇▇▇▇▇ intends from time to time to
sell Purchased Contracts and other related Collateral (x) to entities which will
then privately or publicly sell securities backed by such Purchased Contracts
and Collateral or (y) in whole loan bulk sales to Onyx Acceptance Corporation
or, with the prior written consent of the Surety Provider, unaffiliated third
parties, in each case, for a cash purchase price of not less than the aggregate
Outstanding Balance of such Purchased Contracts plus accrued and unpaid interest
thereon and other unpaid Finance Charges with respect thereto. The proceeds of
all sales by ▇▇▇▇▇ pursuant to clauses (x) and (y) above shall be applied first,
to prepay the Triple-A One Note in an amount such that no Borrowing Base
Deficiency exists
11
after giving effect to such sale and such prepayment, second, to pay all amounts
owing to the Surety Provider, Triple-A One, the Collateral Agent and the Program
Manager, and third, to prepay the Subordinated Note. Upon not less than five (5)
Business Days' prior written notice to the Seller, ▇▇▇▇▇ may request that
specified Purchased Contracts and other related Collateral be released in
connection with such sales and the prepayment. In connection with such request,
▇▇▇▇▇ shall execute and deliver to the Seller a Lien Release Request Certificate
in the form attached hereto as Exhibit A. In selecting the Purchased Contracts
enumerated in its Lien Release Request Certificate delivered to the Seller
pursuant hereto, ▇▇▇▇▇ shall employ selection procedures which are not adverse
to the interests of the Seller.
(ii) Seller Release. Upon the release by the Collateral Agent of
its interest in whole or in part in the Purchased Contracts pursuant to Section
23(b) of the Triple-A One Security Agreement, the Seller shall, at the sole
expense of ▇▇▇▇▇, execute and deliver a Seller Lien Release Certificate in the
form attached hereto as Exhibit B which shall evidence the release of its
security interest in the Purchased Contracts released by the Collateral Agent
under the Triple-A One Security Agreement.
(iii) Documents and Filings. In connection with any such release
pursuant to this Section 19, ▇▇▇▇▇ and the Seller, shall at the sole expense of
▇▇▇▇▇, execute and deliver any documents and instruments necessary to evidence
the release of the Seller's security interest in such Purchased Contracts and
other Collateral, including without limitation, forms UCC-2 prepared for filing
in all appropriate jurisdictions.
SECTION 20. Conflict. In the event of any conflict between the terms of this
Subordinated Security Agreement, on the one hand, and the terms of the
Subordinated Note, Section 5.3 of the Sale Agreement or any other Operative
Document, on the other hand, the terms of the Subordinated Note, Section 5.3 of
the Sale Agreement or such other Operative Document, as the case may be, shall
prevail.
SECTION 21. Standstill on Exercise of Rights. The Seller and ▇▇▇▇▇ agree that
neither the Seller nor any permitted assignee of the Seller may exercise or take
any action to enforce any of the rights granted by ▇▇▇▇▇ to the Seller in this
Subordinated Security Agreement until such time as all of the Obligations (as
defined in the Definitions List) of ▇▇▇▇▇ to Triple-A One, the Banks, the Surety
Provider, the Program Manager, the Collateral Agent, the Bank Agent and the Bank
Collateral Agent under the Operative Documents have been indefeasibly paid in
full in cash.
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IN WITNESS WHEREOF, the parties hereto have caused this Subordinated
Security Agreement to be duly executed and delivered as of the date first above
written.
ONYX ACCEPTANCE FINANCIAL CORPORATION
By:_______________________________
Name:
Title:
ONYX ACCEPTANCE CORPORATION
By:_______________________________
Name:
Title:
SCHEDULE 4(d)
Locations of Collateral
The Collateral is located at:
1. Onyx Acceptance Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
2. ▇▇▇▇▇▇ DataBank
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
EXHIBIT A
LIEN RELEASE REQUEST CERTIFICATE
from ▇▇▇▇▇ to the Collateral Agent and Seller
pursuant to Section 23 of Triple-A One Security Agreement
and Section 19 of Subordinated Security Agreement
[date]
Capital Markets Assurance Corporation,
as Collateral Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Insured Portfolio Management, Structured Finance
Onyx Acceptance Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Re: Onyx Acceptance Financial Corporation/
Commercial Paper Program - Request for Release of Lien
Ladies and Gentlemen:
Onyx Acceptance Financial Corporation ("▇▇▇▇▇") refers to (i) the
Second Amended and Restated Triple-A One Security Agreement dated as of November
30, 2001 as amended, supplemented or otherwise modified (the "Triple-A One
Security Agreement"), and (ii) the Second Amended and Restated Subordinated
Security Agreement dated as of November 30, 2001 (as amended, supplemented or
otherwise modified, the "Subordinated Security Agreement"). Terms not otherwise
defined herein are used herein as defined in the Second Amended and Restated
Definitions List dated November 30, 2001.
▇▇▇▇▇ submits this Lien Release Request Certificate pursuant to
Section 23 of the Triple-A One Security Agreement and Section 19 of the
Subordinated Security Agreement and requests that the Capital Markets Assurance
Corporation, in its capacity as
Collateral Agent under the Triple-A One Security Agreement and Onyx Acceptance
Corporation in its capacity as Seller under the Subordinated Security Agreement
("Onyx") release (and Onyx cause its assignee to release) all of their liens on
and security interests in the assets described on Schedule 1 attached hereto
(and all proceeds thereof, all books, records and computer records pertaining
thereto and all other assets that constitute Collateral which are specifically
related to the assets described in Schedule 1).
ONYX ACCEPTANCE FINANCIAL CORPORATION
By:_______________________________
Name:
Title:
EXHIBIT B
SELLER LIEN RELEASE CERTIFICATE
pursuant to Section 19 of Subordinated Security Agreement
[Date]
Onyx Acceptance Financial Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Partial Collateral Release
Ladies and Gentlemen:
We hereby refer to the Lien Release Request Certificate submitted
by Onyx Acceptance Financial Corporation ("▇▇▇▇▇") dated _____________________,
a copy of which is attached hereto (the "Request Certificate"). Pursuant to the
Request Certificate, Onyx Acceptance Corporation, acting in its capacity as
Seller under the Subordinated Security Agreement, hereby releases (and
represents and warrants that it has caused its assignee to so release) its liens
on and security interests in the assets identified in Schedule 1 attached to the
Request Certificate (and all proceeds thereof, all books, records and computer
records pertaining thereto and all other assets that constitute Collateral which
are specifically related to the assets described in that Schedule 1).
This Lien Release Certificate may be executed in any number of
counterparts.
ONYX ACCEPTANCE CORPORATION,
as Seller
By:_________________________________
Name:_______________________________
Title:______________________________