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EXHIBIT 10.106
EXECUTION COPY
ONYX ACCEPTANCE FINANCIAL CORPORATION
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AMENDED AND RESTATED
SALE AND SERVICING AGREEMENT
dated as of September 4, 1998
ONYX ACCEPTANCE CORPORATION
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TABLE OF CONTENTS
Page No.
ARTICLE I
DEFINITIONS
Section 1.1 Definitions......................................................... 1
ARTICLE II
PURCHASES AND SALES
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
Section 3.1 Conditions to Effectiveness......................................... 4
Section 3.2 Conditions Precedent to Payment of Purchase......................... 4
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.1 Representations and Warranties of the Seller and the Servicer....... 5
Section 4.2 Representations and Warranties of the Seller Concerning Contracts... 9
Section 4.3 Covenants of Seller................................................. 11
Section 4.4 Covenants of Servicer.............................................. 16
Section 4.5 Repurchase of Ineligible Contracts.................................. 17
Section 4.6 Financial Covenants of Seller....................................... 18
Section 4.7 Representations and Warranties of ▇▇▇▇▇............................. 19
ARTICLE V
SELLER NOTE AND SUBORDINATED NOTE
Section 5.1 Seller Note......................................................... 21
Section 5.2 Restrictions on Transfer of Seller Note............................. 21
Section 5.3 Subordinated Note................................................... 21
Section 5.4 Restrictions on Transfer of Subordinated Note....................... 24
ARTICLE VI
TERMINATION OF COMMITMENT
Section 6.1 Termination......................................................... 24
Section 6.2 Remedies............................................................ 23
ARTICLE VII
INDEMNIFICATION, ADDITIONAL COSTS AND INSPECTION
Section 7.1 Indemnities......................................................... 24
Section 7.2 Rights of Inspection................................................ 26
ARTICLE VIII
THE SERVICER
Section 8.1 Appointment of Servicer............................................. 27
Section 8.2 Collections......................................................... 27
Section 8.3 Maintenance of Records; Quarterly and Annual Reports................ 27
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Section 8.4 Servicing Fee....................................................... 29
Section 8.5 Resignation; Sub-Contracting........................................ 29
Section 8.6 Termination......................................................... 29
Section 8.7 Delivery of Investor Report......................................... 30
Section 8.8 Daily Report........................................................ 30
Section 8.9 Monthly Report...................................................... 30
Section 8.10 Servicer Termination Events........................................ 30
Section 8.11 Servicer Termination............................................... 31
Section 8.12 Appointment of Successor Servicer.................................. 32
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices, Etc........................................................ 33
Section 9.2 Successors and Assigns.............................................. 34
Section 9.3 Confirmation of Intent; Security Interest........................... 34
Section 9.4 Payments............................................................ 34
Section 9.5 Rights to Enable Successor Servicing................................ 34
Section 9.6 Costs; Expenses and Taxes........................................... 35
Section 9.7 Severability Clause................................................. 35
Section 9.8 Amendments; Governing Law........................................... 35
Section 9.9 No Recourse......................................................... 35
Section 9.10 Further Assurances................................................. 35
Section 9.11 Termination........................................................ 36
Section 9.12 Assignment to Program Manager...................................... 36
Section 9.13 Counterparts....................................................... 36
Section 9.14 Headings........................................................... 36
Section 9.15 No Bankruptcy Petition Against ▇▇▇▇▇............................... 36
EXHIBIT A -- Seller Note
EXHIBIT B -- Subordinated Note
EXHIBIT C -- Officer's Certificate
EXHIBIT D -- List of Lock-Box Banks and Numbers of Lock-Boxes
EXHIBIT E -- Clearing Account Bank and Account Number
EXHIBIT F -- Form of Investor Report
EXHIBIT G -- Form of Servicer's Certificate
EXHIBIT H -- Form of Daily Report
EXHIBIT I -- Form of Monthly Report
SCHEDULE 4.1(h)-1 Principal Place of Business, Etc. of Seller
SCHEDULE 4.1(h)-2 Principal Place of Business, Etc. of Servicer
SCHEDULE 4.1(j)-1 Trade Names of Seller
SCHEDULE 4.1(j)-2 Trade Names of Servicer
SCHEDULE 4.1(q)-1 Subsidiaries of Seller
SCHEDULE 4.1(q)-2 Subsidiaries of Servicer
SCHEDULE 8.1 Credit and Collection Policy
SCHEDULE 9.5 Licenses, Patents, Computer Hardware and Software, Etc.
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AMENDED AND RESTATED
SALE AND SERVICING AGREEMENT
AMENDED AND RESTATED SALE AND SERVICING AGREEMENT (this
"Agreement"), dated as of September 4, 1998, among ONYX ACCEPTANCE CORPORATION,
a Delaware corporation, as seller (in such capacity, the "Seller") and as
servicer (in such capacity, the "Servicer"), and ONYX ACCEPTANCE FINANCIAL
CORPORATION, a Delaware corporation (together with its successors and assigns,
"▇▇▇▇▇"), 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 from loans secured by automobiles and light trucks; and
WHEREAS, the Seller wishes to sell certain of such loans from
time to time to ▇▇▇▇▇ and ▇▇▇▇▇ desires to purchase such loans; and
WHEREAS, from time to time in accordance with the consummation
of the transactions contemplated herein, ▇▇▇▇▇ desires to finance the purchases
of such loans by advances made by Triple-A One Funding Corporation, which
advances will be secured by the loans purchased by ▇▇▇▇▇;
WHEREAS, the Seller and ▇▇▇▇▇ have entered into the Sale and
Servicing Agreement dated as of September 8, 1994 (as amended to the date
hereof, the "Original Sale Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the
original Sale Agreement as hereinafter provided.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.
(a) As used in this Agreement, capitalized terms used herein
shall, unless otherwise defined herein, have the meanings assigned to them in
the Amended and Restated Definitions List dated as of the date hereof that
refers to this Agreement, which is incorporated herein by reference (the
"Definitions List").
(b) 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
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provision of this Agreement, and Section, subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(c) Capitalized terms used herein shall be equally applicable
to both the singular and plural forms of such terms.
ARTICLE II
PURCHASES AND SALES
Section 2.1 Agreements to Purchase and to Sell
(a) As of the Closing Date, the Seller does hereby sell,
transfer, assign, set over and otherwise convey, to ▇▇▇▇▇ and ▇▇▇▇▇ does hereby
purchase, without recourse (except as expressly provided herein) all right,
title and interest of the Seller in and to (i) all Contracts originated,
purchased or owned by the Seller that have Outstanding Balances as of the
Cut-Off 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;
provided that the Seller shall not be obligated to sell any Contract to ▇▇▇▇▇
which is purchased or originated by the Seller for the sole purpose of selling
such Contract to an unaffiliated third party.
(b) On each Purchase Date occurring prior to the Commitment
Termination Date (other than the Purchase Date occurring on the Closing Date),
the Seller does hereby agree to sell, transfer, assign, set over and otherwise
convey, without recourse (except as expressly provided herein), to ▇▇▇▇▇ and
▇▇▇▇▇ 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 originated, purchased or owned by the Seller 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; provided that the Seller shall not be obligated to sell any
Contract to ▇▇▇▇▇ which (i) the Seller sells to a Subsidiary of the Seller
pursuant to the ▇▇▇▇▇▇▇ Repurchase Facility or other similar facility with the
consent of the Program Manager or (ii) is purchased or originated by the Seller
for the sole purpose of selling such Contract to an unaffiliated third party.
▇▇▇▇▇ shall not be obligated to make any purchase hereunder on or after the
Commitment Termination Date.
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(c) It is the express and specific intent of the parties that
the transfer of the Purchased Contracts from the Seller to ▇▇▇▇▇, as provided in
this Agreement, is and shall be construed for all purposes as a true, complete
and absolute sale of the Purchased Contracts.
(d) The Seller acknowledges that the Purchased Contracts are
subject to the security interest of the Collateral Agent for the benefit of
Triple-A One pursuant to the Triple-A One Security Agreement and that Triple-A
One has assigned its rights under the Triple-A One Note (together with its
related rights under the Triple-A One Security Agreement) to the Bank Collateral
Agent pursuant to the Note Pledge Agreement.
(e) In connection with the Seller's sale of Contracts set
forth herein the Seller hereby transfers to ▇▇▇▇▇ all its right, title and
interest in and to each Lock-Box.
(f) 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 ▇▇▇▇▇, Triple-A One or the Collateral Agent.
Section 2.2. Purchase Price.
(a) The amount payable to the Seller by ▇▇▇▇▇ on the Closing
Date shall be equal to the aggregate Outstanding Balances of the Contracts set
forth on the Contract List for such Closing Date as set forth in the initial
Daily Report.
(b) The amount payable to the Seller by ▇▇▇▇▇ on each Purchase
Date occurring prior to the Commitment Termination Date (other than the Purchase
Date occurring on the Closing 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, as set forth in the Daily Report dated
such Purchase Date.
(c) 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 other than the Purchase Date occurring on the Closing Date. On
the Closing Date, the Outstanding Balance of Finance Charges shall be included
in the calculation of the Purchase Price.
Section 2.3. Payment of Purchase Price.
(a) Prior to 9 A.M. (New York City time) on each Purchase
Date, including the Closing Date, the Servicer will determine the Purchase Price
to be paid on such Purchase Date. The Purchase Price shall be paid in the manner
provided below:
(i) in cash, in an amount equal to the lesser of (A) Available
Funds on such Purchase Date and (B) the Purchase Price;
(ii) to the extent that the Purchase Price exceeds the amount
of the cash payment in (i) above, such excess shall be paid, on the
Closing Date, by means of the issuance to the Seller of the
Subordinated Note in an initial principal amount equal to the
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Subordinated Interest on the Closing Date, and on each Purchase Date
subsequent to the Closing Date, by adjusting the principal amount of
the Subordinated Note to equal the Subordinated Interest on such
Purchase Date; and
(iii) 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) above, such
excess shall be paid on the Closing Date by means of the issuance to
the Seller of the Seller Note in the initial principal amount equal to
the Seller Interest on the Closing Date, and on each Purchase Date
subsequent to the Closing Date by adjusting the principal amount of the
Seller Interest on such Purchase Date.
(b) 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 ▇▇▇▇▇, with a copy to the Program Manager.
Section 2.4 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 ▇▇▇▇▇ pursuant to duly executed transfer instruments in form and
substance satisfactory to ▇▇▇▇▇, the Collateral Agent and the Program Manager.
All such chattel paper and instruments shall be delivered into the possession of
▇▇▇▇▇ or to such Person as ▇▇▇▇▇ may designate, on or prior to the Purchase
Date.
ARTICLE III
CONDITIONS TO PURCHASE
Section 3.1. Conditions to Effectiveness. On or prior to the
date hereof, the following conditions shall have been satisfied:
(a) the conditions set forth in subsection 4.1 of the Triple-A
One Credit Agreement shall have been satisfied; and
(b) a Responsible Officer of the Servicer shall have executed
and delivered an officer's certificate to ▇▇▇▇▇, with copies to CapMAC and the
Program Manager, listing the servicing officers of the Servicer.
Section 3.2. Conditions Precedent to Payment of Purchase. As
a condition precedent to the obligation of Finco to make payment of the Purchase
Price on any Payment Date including the Closing Date, the following conditions
shall have been satisfied on or prior to such Payment Date:
(a) no Unmatured Wind-Down Event or Wind-Down Event shall have
occurred and be continuing on such Payment Date or would result from such
payment or from the application of the proceeds therefrom. By accepting payment
for the Purchased Contracts the Seller shall be deemed to certify that this
condition has been satisfied;
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(b) ▇▇▇▇▇ 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 ▇▇▇▇▇, and
all corporate and other proceedings required to be taken following the Closing
Date shall be satisfactory in form and substance to ▇▇▇▇▇;
(c) 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 ▇▇▇▇▇;
(d) an authorized officer of the Seller shall have executed
and delivered an officer's certificate to ▇▇▇▇▇, with copies to CapMAC and the
Program Manager, substantially in the form of Exhibit C; and
(e) the conditions set forth in subsections 4.1, 4.2 and 4.3
of the Triple-A One Credit Agreement shall have been satisfied.
ARTICLE IV
REPRESENTATIONS, WARRANTIES
AND COVENANTS
Section 4.1. Representations and Warranties of the Seller and
the Servicer The Seller represents and warrants to ▇▇▇▇▇ and the Program
Manager, 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
▇▇▇▇▇ and the Program Manager, as of the date of this Agreement and as of each
Payment Date, as follows:
(a) 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.
(b) 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
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.
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(c) 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, ▇▇▇▇▇ 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 (n)
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.
(d) 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).
(e) Financial Condition. Its unaudited, consolidated and
consolidating balance sheets and those of its consolidated Subsidiaries as at
June 30, 1998 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 ▇▇▇▇▇ and the Program Manager,
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, 1998 there has been no adverse change in such condition or
operations or in the collectibility of the Contracts.
(f) Material Litigation. Except as otherwise disclosed in
writing to ▇▇▇▇▇ and the Program Manager prior to the date hereof, there is no
pending or threatened 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.
(g) Accuracy of Information. (i) Each exhibit, financial
statement, document, book, record, report and other item of written information
furnished by it to the Program Manager or ▇▇▇▇▇ 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.
(h) 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.
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(i) 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.
(j) Clearing Account. The name and address of the Clearing
Account Bank, together with the account number thereof, are specified in Exhibit
E. All funds in respect of the Purchased Contracts at any time on deposit in the
Clearing Account are held by the Clearing Account Bank subject to the security
interest of Capital Markets Assurance Corporation as collateral agent on behalf
of and for the benefit of Triple-A One Funding Corporation.
(k) Names. Except as set forth on Schedule 4.1(j)-1 (as to the
Seller) and Schedule 4.1(j)-2 (as to the Servicer), it has no tradenames,
fictitious names, assumed names or "doing business as" names.
(l) ERISA
(i) 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 Program Manager and ▇▇▇▇▇, will be
complete and accurate and fairly present the funding status of such
Plan.
(ii) Each Plan which is intended to be qualified under Section
401(a) of the Code has been determined by the IRS to be so 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.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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
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PBGC which remains outstanding other than the payment of premiums, and
there are no premium payments which have become due which are unpaid.
(vii) 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.
(viii) Neither it nor any ERISA Affiliate is required to
provide security to a Plan under Section 401(a)(29) of the Code due to
a Plan amendment that results in an increase in current liabilities for
the plan year.
(m) 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 ▇▇▇▇▇.
(n) 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.
(o) 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 ▇▇▇▇▇ have
been accomplished and are in full force and effect.
(p) 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.
(q) 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.
(r) Subsidiaries. Schedule 4.1(q)-1 (as to the Seller) and
Schedule 4.1(q)-2 (as to the Servicer) lists all of its Subsidiaries.
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(s) Year 2000 Compliance.
(i) 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 Wind-Down Event.
(ii) 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 Receivables (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.
(iii) 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 4.2. Representations and Warranties of the Seller
Concerning Contracts. On each Purchase Date the Seller represents and warrants
to ▇▇▇▇▇ and the Program Manager as follows:
(a) Eligible Contract. Each Contract to be sold by it on such
day is an Eligible Contract.
(b) 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 ▇▇▇▇▇ pursuant to this Agreement, ▇▇▇▇▇ 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.
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(c) 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.
(d) 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.
(e) Valid Sale. The sale pursuant to this Agreement by the
Seller and the purchase by ▇▇▇▇▇ 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 ▇▇▇▇▇ 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 ▇▇▇▇▇ and, in the case of Purchased
Contracts hereafter created and the proceeds thereof, upon the sale, transfer
and assignment thereof to ▇▇▇▇▇, ▇▇▇▇▇ shall have a first priority perfected
ownership interest in the Purchased Contracts and the other Collateral.
(f) 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 CapMAC and the
Program Manager 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.
(g) Contract Information. The Contract Information delivered
by the Seller to ▇▇▇▇▇ (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.
(h) 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 Program
Manager ("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.
(i) 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 Triple-A One Loans.
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(j) Documentation. 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 for which the Program Manager has received an opinion of counsel
addressed to the Program Manager satisfactory in form and substance to the
Program Manager from counsel to the Seller acceptable to the Program Manager in
its reasonable judgment, to the effect that (x) under the law of the state in
which the related Vehicle is registered, the Seller has a first priority
perfected security interest in the related Vehicle notwithstanding the use of
such name and (y) under applicable law, the use of such name rather than "Onyx
Acceptance Corporation" or some other abbreviation thereof which unmistakably
identifies the Seller as secured party will not affect the Seller's ownership
interest in the Contracts and the Seller's security interest in the related
Vehicles.
(k) Lienholder on Title. Prior to January 1, 1997, the
Seller's lien in any Vehicle registered in California securing a Purchased
Contract was obtained by submitting the appropriate documents to the California
Department of Motor Vehicles and was not obtained by electronically transmitting
information to such department of Motor Vehicles.
(l) Contract Files. It has delivered to ▇▇▇▇▇ the Files
relating to each Contract sold to ▇▇▇▇▇ 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 Program
Manager and the Collateral Agent, (x) an optical image or other representation
of the Files are enforceable in the relevant 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 Triple-A One, without regard to the Surety Bonds, such optical
image or other representation may be held by the Servicer, as custodian for
Triple-A One in lieu of the Files.
Section 4.3. Covenants of Seller. The Seller covenants and
agrees with ▇▇▇▇▇ that so long as this Agreement shall remain in effect:
(a) 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 ▇▇▇▇▇ hereunder, (ii) the collectibility of any
Contract or (iii) its ability to perform its obligations hereunder.
(b) 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
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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 ▇▇▇▇▇.
(c) Recovery Procedure. It will maintain its Recovery
Procedure in good operational order and permit representatives of ▇▇▇▇▇ 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 ▇▇▇▇▇ access
during normal business hours to such system to make such inspections and
examinations as it deems necessary.
(d) 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.
(e) 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 ▇▇▇▇▇ in and to the Purchased Contracts
against the claims and 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 ▇▇▇▇▇ in conformity with GAAP.
(f) Notice. It will advise ▇▇▇▇▇ (with a copy to the Program
Manager) 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 Wind-Down
Event or Unmatured Wind-Down Event, (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.
(g) Maintain Interest.
(i) 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 ▇▇▇▇▇ or the
Program Manager, as the case may be, at any time to evidence, perfect,
maintain and enforce the ownership interest and security interest,
respectively, of ▇▇▇▇▇ and the Program Manager therein and the first
priority of such ownership interest and security interest,
respectively. It will, at the request of a duly
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authorized officer of ▇▇▇▇▇ or the Program Manager, execute and deliver
financing statements evidencing the ownership interest of ▇▇▇▇▇ in all
of the foregoing, which financing statements must be satisfactory in
form and substance to the Program Manager, and the Seller authorizes
▇▇▇▇▇ to file one or more financing statements signed only by ▇▇▇▇▇. It
also hereby irrevocably appoints ▇▇▇▇▇ its attorney-in-fact to file one
or more financing statements signed on behalf of the Seller by ▇▇▇▇▇ as
the attorney-in-fact of the Seller.
(ii) It will not, without providing 30 days' notice to ▇▇▇▇▇
and the Program Manager, and without filing such amendments to any
previously filed financing statements as ▇▇▇▇▇ or the Program Manager
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.
(h) Annual Certificate. It will deliver to ▇▇▇▇▇, the
Collateral Agent and the Program Manager 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 ▇▇▇▇▇ 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.
(i) 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 CapMAC or as required by any
Requirement of Law (in which case the Servicer shall give CapMAC and the Program
Manager immediate written notice of such Requirement of Law).
(j) Collections. If it receives Collections, it agrees to hold
such Collections in trust for the benefit of Finco 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.
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(k) 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 ▇▇▇▇▇ in the
Purchased Contracts. It agrees that, for the benefit of ▇▇▇▇▇, 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 ▇▇▇▇▇; provided that the Seller
agrees that it is making and pursuing such claims for the benefit of ▇▇▇▇▇ 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.
(l) Financial Statements. It will furnish to ▇▇▇▇▇ (with a
copy to the Program Manager):
(i) 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,
reported on by PricewaterhouseCoopers or other independent certified
public accountants of nationally recognized standing;
(ii) 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;
(iii) 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
(iv) as soon as available, but in any event not later than 30
days after the end of each month of each of its fiscal years, a copy of
its unaudited consolidated balance sheets, as at the end of such period
and the related unaudited statements of income and retained earnings
and of 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
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Officer as being fairly stated in all respects when considered in
relation to its financial statements (subject to normal year-end audit
adjustments);
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) and (iv) above need not contain
footnotes required under GAAP.
(m) Certificates; Other Information. It will furnish to ▇▇▇▇▇,
with a copy to the Program Manager:
(i) 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 Wind-Down Event or
Unmatured Wind-Down Event, except as specified in such certificate;
(ii) 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
Wind-Down Event or Wind-Down Event except as specified in such
certificate; such certificate shall set forth the details of each
Unmatured Wind-Down Event and Wind-Down Event and the action which it
has taken and proposes to take with respect thereto;
(iii) 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;
(iv) 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
(v) promptly, such additional financial and other information
as ▇▇▇▇▇ may from time to time reasonably request.
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(n) 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.
(o) 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 ▇▇▇▇▇ and
the Program Manager, 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 ▇▇▇▇▇ would not be
substantively consolidated for purposes of the Bankruptcy Code of 1978, as
amended, have not changed.
(p) Insurance.
(i) 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
▇▇▇▇▇ (with a copy to the Program Manager), at least annually, and
otherwise upon written request, full information as to the insurance
carried. All such insurance policies relating to any Collateral shall
name ▇▇▇▇▇ and the Program Manager as additional insureds and loss
payees, as applicable, and shall provide that ▇▇▇▇▇ and the Program
Manager receive at least 30 days' prior written notice of the
cancellation thereof.
(ii) 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.
(q) 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
CapMAC shall have otherwise consented in writing.
(r) Merrill Repurchase Facility. It will furnish to ▇▇▇▇▇,
with a copy to the Program Manager, concurrently with the delivery thereof to
▇▇▇▇▇▇▇ ▇▇▇▇▇, (1) a copy of all documents executed in connection with the
▇▇▇▇▇▇▇ Repurchase Facility, (2) a copy of each monthly servicer report
delivered in connection with the ▇▇▇▇▇▇▇ Repurchase Facility, and (3) copies of
all amendments, waivers or other modifications to any documents executed in
connection with such facility.
Section 4.4. Covenants of Servicer. The Servicer covenants
and agrees with ▇▇▇▇▇ and the Program Manager that so long as this Agreement
shall remain in effect:
(a) 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
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jurisdiction where the failure to maintain such existence or good standing could
adversely affect the rights and interests of ▇▇▇▇▇ or the Program Manager
hereunder, or its ability to perform its obligations hereunder.
(b) 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 ▇▇▇▇▇, the Program Manager, the Collateral
Agent 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 ▇▇▇▇▇ and are subject to a security interest in
favor of the Collateral Agent, (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 Program Manager and ▇▇▇▇▇ 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
Program Manager upon request by the Program Manager.
(c) Notices, etc. It will advise ▇▇▇▇▇ and the Program Manager
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.
(d) Right of Inspection. It will permit each of ▇▇▇▇▇ and the
Program Manager, 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
▇▇▇▇▇ and the Program Manager, and their representatives may examine the same,
take extracts therefrom and make photocopies thereof, and it agrees to render to
▇▇▇▇▇ and the Program Manager, or their representatives, at its sole cost and
expense such clerical and other assistance as may be reasonably requested with
regard thereto.
(e) Delivery of Notices, Etc. It will deliver or cause to be
delivered to ▇▇▇▇▇, Triple-A One, the Program Manager and the Collateral Agent,
as the case may be, such notices, documents, reports, certificates and other
documents (i) required to be delivered by it pursuant to the Operative Documents
and (ii) as may be reasonably requested by the Program Manager from time to
time.
(f) 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
CapMAC shall have otherwise consented in writing.
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(g) FDI Service Agreement. It will maintain the FDI Service
Agreement or a similar agreement with a service provider acceptable to the
Program Manager and the Collateral Agent 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 Program
Manager and the Collateral Agent, 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 Program
Manager and the Collateral Agent, which shall not be unreasonably withheld.
Section 4.5. Repurchase of Ineligible Contracts. On each
Business Day, the Seller will notify the Servicer and ▇▇▇▇▇ 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 ▇▇▇▇▇ 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 ▇▇▇▇▇ 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, ▇▇▇▇▇ 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 ▇▇▇▇▇ in and to
such Ineligible Contracts, all monies due or to become due with respect thereto,
and all proceeds thereof.
Section 4.6. Financial Covenants of Seller. The Seller
covenants and agrees with ▇▇▇▇▇ that so long as this Agreement shall remain in
effect:
(a) Ratio of Net Worth to Total Assets. The ratio of Net Worth
to Total Assets shall be at least 15% as of the end of each fiscal quarter.
(b) Minimum Adjusted EBITDA Coverage. The minimum Adjusted
EBITDA Coverage shall be greater than 1.5 as of the end or each fiscal quarter.
(c) 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.
(d) 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 the following terms shall have the following meanings:
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"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.
"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 maturities of 3 years or more (pre-amortization).
"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 4.7. Representations and Warranties of ▇▇▇▇▇. ▇▇▇▇▇
represents and warrants to the Seller and the Program Manager that, as of the
date hereof and as of each Purchase Date:
(a) Corporate Existence. ▇▇▇▇▇ 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.
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(b) Corporate Power; Authorization; Non-Contravention. The
execution, delivery and performance by ▇▇▇▇▇ 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 ▇▇▇▇▇'▇ corporate
powers, have been duly authorized by all necessary corporate action, do not
contravene (i) ▇▇▇▇▇'▇ charter or by-laws, (ii) any Requirement of Law
applicable to ▇▇▇▇▇ or (iii) any Contractual Obligation, and do not result in or
require the creation of any Lien 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 ▇▇▇▇▇.
(c) Enforceable Obligation. This Agreement is the legal, valid
and binding obligation of ▇▇▇▇▇ enforceable against ▇▇▇▇▇ 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).
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ARTICLE V
SELLER NOTE AND SUBORDINATED NOTE
Section 5.1. Seller Note (a) On the Closing Date, ▇▇▇▇▇ shall
issue to the Seller the seller note substantially in the form of Exhibit A (the
"Seller Note"). The principal amount of the Seller Note shall be calculated
pursuant to the Daily Report and, on any day, shall be equal to the Seller
Interest on such day. The Seller Note shall (x) be dated the Closing Date, and
(y) be stated to mature on the Scheduled Maturity Date. Interest on the
principal amount of the Seller Note shall accrue and be payable on each
Determination Date, as provided in the Triple-A One Security Agreement, at a
rate per annum equal to the Seller Note Interest Rate. Accrued but unpaid
interest on Seller Note shall not be capitalized. The principal amount of the
Seller Note shall not be increased after the Commitment Termination Date.
(a) Seller agrees and confirms that the Seller Note represents
solely an obligation of ▇▇▇▇▇ to make certain payments from funds available
under the Triple-A One Security Agreement and only to the extent, in the manner
and at the times set forth in the Triple-A One Security Agreement, and that the
Seller Note does not represent an interest in, and is not secured by, the
Purchased Contracts, the proceeds thereof or any other Collateral.
(b) ▇▇▇▇▇ may at any time and from time to time prepay the
Seller Note, in whole or in part, without premium or penalty.
Section 5.2. Restrictions on Transfer of Seller Note. Neither
the Seller Note nor any right of the Seller to receive any payment thereunder,
shall be assigned, transferred, exchanged, pledged, hypothecated, participated
or otherwise conveyed except with the prior written consent of the Program
Manager, which consent shall not be unreasonably withheld or delayed.
Section 5.3. Subordinated Note. (a) on the Closing Date,
▇▇▇▇▇ 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 Commitment 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.
(a) 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 Triple-A One 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), 2.3(a)(iii) and 2.3(b)
hereof. Principal payments on the Subordinated Note shall become payable only
upon the release of Collateral by the Collateral Agent pursuant to Section 23(b)
of the Triple-A One Security
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Agreement. Except to the extent permitted by the Triple-A One Security
Agreement, the Seller agrees not to ask, demand, ▇▇▇ for or take or receive from
▇▇▇▇▇ 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.
(b) The Seller agrees upon any distribution of all or any of
the assets of ▇▇▇▇▇ to creditors of ▇▇▇▇▇ upon the dissolution, winding up,
total or partial liquidation, arrangement, reorganization, adjustment,
protection, relief, or composition of ▇▇▇▇▇ 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 ▇▇▇▇▇ 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 Collateral 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 Collateral 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
Collateral Agent may deem necessary or advisable for the exercise or enforcement
of any of the rights or interest of Triple-A One. The Seller shall duly and
promptly take such action as the Collateral Agent may request to (i) collect the
Subordinated Note for the account of Triple-A One and to file appropriate claims
or proofs of claim in respect of the Subordinated Note, (ii) execute and deliver
to the Collateral Agent such powers of attorney, assignments or other
instruments as the Collateral Agent may request in order to enable the
Collateral 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.
(c) 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 Triple-A
One, shall be segregated from other funds and property held by Seller and shall
be forthwith paid over to the Collateral 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 been indefeasibly paid in full in cash. The
Seller agrees that no payment or distribution to Triple-A One pursuant to the
provisions of the Subordinated Note shall entitle the Seller to exercise any
rights of subrogation in respect thereof against ▇▇▇▇▇ 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
▇▇▇▇▇ hereby waive promptness, diligence,
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notice of acceptance and any other notice with respect to any of the Obligations
and any requirement that the Collateral 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 ▇▇▇▇▇ or any other Person or any Collateral.
(d) The Subordinated Note is secured by the Collateral
pursuant to the Subordinated Security Agreement, subject to the prior lien of
the Collateral Agent under the Triple-A One Security Agreement. No payments may
be received, directly or indirectly, by the Seller (and if received, the Seller
agrees to return such payments to ▇▇▇▇▇) on the Subordinated Note unless ▇▇▇▇▇
has paid all amounts required pursuant to the Triple-A One Security Agreement to
be paid prior to any payments in respect of the Subordinated Note.
(e) The Seller agrees and confirms that the Collateral Agent
shall not have any duty whatsoever to the Seller as holder of the Subordinated
Note and that the Collateral Agent shall not be liable to the Seller for any
action taken or omitted to be taken with respect to the Subordinated Note.
(f) 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.
(g) The Seller and ▇▇▇▇▇ 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.
(h) The Seller and ▇▇▇▇▇ waive notice of and consent to the
creation of the Triple-A One Loans and any of the other Obligations, any
extensions granted or other action taken by Triple-A One, the Surety Provider,
the Program Manager, the Collateral Agent or the Bank Collateral 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 Triple-A One, the Surety
Provider, the Program Manager, the Collateral Agent or the Bank Collateral 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.
(i) ▇▇▇▇▇ and the Seller agree to execute and deliver to
Triple-A One, the Surety Provider, the Program Manager, the Collateral Agent and
the Bank Collateral Agent such additional documents and to take such further
actions as Triple-A One, the Surety Provider, the Program Manager, the
Collateral Agent or the Bank Collateral Agent may hereafter require.
(j) The terms of the Subordinated Note and the subordination
effected hereby, and the rights of Triple-A One, the Surety Provider, the
Program Manager, the Collateral Agent and the Bank Collateral Agent and the
obligations of the Seller and ▇▇▇▇▇ 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
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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 5.4. 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 Program Manager, which consent shall not be unreasonably withheld
or delayed; provided, further, that any pledgee of the Subordinated Note shall
be bound by all of the terms applicable to the Subordinated Note set forth in
the Operative Documents.
ARTICLE VI
TERMINATION OF COMMITMENT
Section 6.1. Termination. (a) Subject to the payment of any
and all fees required to be paid pursuant to the Fee Letter Agreement, the
Seller may terminate the Triple-A One Commitment at any time by giving ten
Business Days prior written notice to ▇▇▇▇▇ and the Program Manager provided,
however, that such termination shall not become effective until five Business
Days after all of the Commercial Paper has matured and has been paid in full in
cash.
(a) The Triple-A One Commitment shall terminate on the
Commitment Termination Date.
Section 6.2. Remedies. (a) On the Commitment Termination
Date, all purchases by, and sales to, ▇▇▇▇▇ of Contracts hereunder shall
immediately cease.
(a) On and after the Commitment Termination Date, ▇▇▇▇▇ shall
have, in addition to all other rights under this Agreement, all rights and
remedies provided under any applicable law.
(b) On and after the Commitment Termination Date, ▇▇▇▇▇ 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 ▇▇▇▇▇.
ARTICLE VII
INDEMNIFICATION, ADDITIONAL COSTS AND INSPECTION
Section 7.1. Indemnities. (a) Without limiting any other
rights that ▇▇▇▇▇ may have hereunder or under applicable law, the Seller hereby
agrees to indemnify ▇▇▇▇▇ 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 ▇▇▇▇▇'▇ ownership of any
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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:
(i) the transfer of an ownership interest in any Contract
other than an Eligible Contract;
(ii) 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;
(iii) 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;
(iv) the failure to vest and maintain vested in ▇▇▇▇▇ or to
transfer to ▇▇▇▇▇, 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;
(v) 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
▇▇▇▇▇, whether at the time of any Purchase or at any subsequent time;
(vi) 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 ▇▇▇▇▇);
(vii) any failure of the Seller to perform its duties or
obligations in accordance with the provisions of this Agreement;
(viii) 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
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connection with merchandise or services which are the subject of any
Purchased Contract or any Vehicle;
(ix) the failure by the Seller to pay when due any taxes
payable by it, including without limitation, franchise taxes and sales,
excise or personal property taxes payable in connection with the
Contracts;
(x) 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;
(xi) the commingling of Collections at any time with other
funds;
(xii) 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 pursuant to the instructions of the Servicer
or the Collateral Agent, whether by reason of the exercise of setoff
rights or otherwise; and
(xiii) any repayment by ▇▇▇▇▇ which is required by law, or
which ▇▇▇▇▇, Triple-A One or the Collateral Agent believes in good
faith is required by law (as a preference or otherwise) of an amount
that previously caused a reduction in principal amount of the Seller
Note and any interest thereon required or believed in good faith by
▇▇▇▇▇, Triple-A One or the Collateral Agent to be required.
Notwithstanding the foregoing, ▇▇▇▇▇ 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.
(b) Any Indemnified Amount due hereunder shall be payable on
demand.
Section 7.2. Rights of Inspection. ▇▇▇▇▇ and its
representatives and assigns, including without limitation the Program Manager
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 Contracts, the 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 Contracts, the Files and/or the Vehicles
and the transactions contemplated hereby, and ▇▇▇▇▇ and its representatives and
assigns, including without limitation the Program Manager and the Surety
Provider may examine the same, take extracts therefrom and make photocopies
thereof, and the Seller agrees to render to ▇▇▇▇▇, and its representatives and
assigns, including without limitation the Program Manager and the Surety
Provider, at the Seller's sole cost and expense, such clerical and other
assistance as may be requested with regard thereto.
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ARTICLE VIII
THE SERVICER
Section 8.1. Appointment of Servicer. ▇▇▇▇▇ hereby appoints
the Seller to act as servicer of the Purchased Contracts in the name of and on
behalf of ▇▇▇▇▇ 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, attached hereto as Schedule 8.1.
Section 8.2. Collections. (a) On each Business Day, all
Collections received in any Lock-Box shall be transferred to the Clearing
Account on such 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 ▇▇▇▇▇. 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.
(a) The Servicer will, at the Servicer's cost and expense and
as agent in the name of and on behalf of ▇▇▇▇▇, but subject at any time to the
right of ▇▇▇▇▇ 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 ▇▇▇▇▇, 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 ▇▇▇▇▇, 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 ▇▇▇▇▇, in either case, for the account of ▇▇▇▇▇.
(b) 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
▇▇▇▇▇ and shall remit to ▇▇▇▇▇ the ▇▇▇▇▇ sale proceeds thereof, net of any costs
incurred by any Person with respect to any such repossession and resale. ▇▇▇▇▇
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 ▇▇▇▇▇ and shall be remitted to the Collection Account on the Business Day of
receipt thereof by the Servicer.
Section 8.3. Maintenance of Records; Quarterly and Annual
Reports. (a) The books of account and other records pertaining to the Purchased
Contracts are the property of ▇▇▇▇▇. ▇▇▇▇▇ agrees that the Servicer shall hold
such records as ▇▇▇▇▇'▇ agent. The Servicer shall maintain all books of account
and other records pertaining to the Purchased
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Contracts in such form as will enable ▇▇▇▇▇ or the Program Manager or their
designees to determine at any time the status of the Purchased Contracts. The
Servicer will permit ▇▇▇▇▇ or the Program Manager and any Person designated by
▇▇▇▇▇ or the Program Manager, 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
▇▇▇▇▇ or the Program Manager, the Servicer, at its own expense, will deliver to
▇▇▇▇▇ and the Program Manager and any Person designated by ▇▇▇▇▇ or the Program
Manager any records and invoices pertaining to the Purchased Contracts and
evidence thereof as ▇▇▇▇▇ or the Program Manager or such designee may deem
necessary to enable it to enforce its rights thereunder. In addition, at the
request of ▇▇▇▇▇ or the Program Manager 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 Program Manager. Whether or not any such item is the property of
▇▇▇▇▇, 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 ▇▇▇▇▇ or the
Program Manager, will be marked as the Program Manager may direct. Upon request
of the Program Manager, 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 such document is not owned by
▇▇▇▇▇) and safely keep such documents in separate filing cabinets or other
suitable containers marked to show ▇▇▇▇▇'▇ interest with such legend as shall be
specified by the Program Manager and maintained in such place or places as shall
be designated by the Program Manager.
(a) The Servicer will deliver to ▇▇▇▇▇ and the Program Manager
and any Person designated by the Program Manager, 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 Investor Report, 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.
(b) The Servicer, at its expense, will cause a firm of
independent public accountants satisfactory to the Program Manager to furnish a
report (the "Annual Report") to ▇▇▇▇▇ and the Program Manager and any Person
designated by the Program Manager, on or before March 31st of each year,
beginning on March 31, 1995, 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.
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Section 8.4. Servicing Fee. On each Determination Date, to
the extent provided for in the Triple-A One Security Agreement, as full
compensation for its servicing activities hereunder, the Servicer shall be
entitled to receive the Servicing Fee.
Section 8.5. Resignation; Sub-Contracting. (a) The obligation
of the Servicer to service the Purchased Contracts is personal to the Servicer
and the parties recognize that another Person 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.
(a) 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 ▇▇▇▇▇ and the Program Manager. 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.
(b) 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 Program Manager, 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 8.6. Termination. The Servicer's obligations under
this Agreement shall terminate upon the termination of the Triple-A One Credit
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 ▇▇▇▇▇. The Servicer shall transfer (i)
its electronic records relating to the Purchased Contracts to ▇▇▇▇▇ in such
electronic form as ▇▇▇▇▇ may reasonably request, (ii) all other records,
correspondence and documents to ▇▇▇▇▇ in the manner and at such times as ▇▇▇▇▇
may reasonably request, (iii) at ▇▇▇▇▇'▇ expense, upon the request of ▇▇▇▇▇,
notify all Obligors that the Servicer is no longer the Servicer, (iv) at ▇▇▇▇▇'▇
expense, take all such further action as ▇▇▇▇▇ shall reasonably request to
effect the termination of the rights of the Servicer to conduct servicing
hereunder, including, without limitation, the transfer to ▇▇▇▇▇ of all authority
of the Servicer to (A) service Purchased Contracts as provided hereunder, and
(B)
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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 8.7. Delivery of Investor Report. On each
Determination Date, the Servicer shall deliver to ▇▇▇▇▇ and the Program Manager,
no later than 9:00 A.M. (New York City time) on such Determination Date, a
report, substantially in the form of Exhibit F (the "Investor 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 8.8. Daily Report. No later than 9:00 A.M. (New York
City time) on each Payment Date, the Servicer shall deliver a report,
substantially in the form of Exhibit H (the "Daily Report"), to ▇▇▇▇▇ and the
Program Manager, together with a Servicer's Certificate.
Section 8.9. Monthly Report. No later than 9:00 A.M. (New
York City time) on each Determination Date, the Servicer shall deliver a report,
substantially in the form of Exhibit I (the "Monthly Report") to ▇▇▇▇▇ and the
Program Manager, together with a Servicer's Certificate, covering the
Determination Period immediately preceding such Determination Date.
Section 8.10. Servicer Termination Events. If any of the
following events (each a "Servicer Termination Event") shall have occurred and
be continuing:
(a) 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;
(b) the Servicer shall fail to give any notice within three
Business Days after the same is required to be given hereunder;
(c) the Servicer shall fail to submit (i) an Investor Report
or 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;
(d) 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;
(e) the Servicer shall enter a corporate transaction in breach
of the covenant at Section 4.4(f) hereof;
(f) 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;
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(g) a Bankruptcy Event shall have occurred with respect to the
Servicer;
(h) the Wind-Down Date shall have occurred;
then, the Program Manager 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 Program Manager may, in its discretion, implement a
Complete Servicing Transfer.
Section 8.11. Servicer Termination. (a) After the Program
Manager gives the Servicer a Servicer Termination Notice, (i) prior to the
appointment of a Successor Servicer pursuant to Section 8.12, the Program
Manager may administer the administrative, servicing and collection functions of
the Servicer in any manner it deems fit, (ii) the Program Manager shall, at any
time thereafter, be entitled to notify the Obligors on any Purchased Contracts
to make payment of amounts due thereunder directly to ▇▇▇▇▇ or the Program
Manager or as the Program Manager may direct and (iii) the Servicer shall, at
its own expense, (A) if so requested by the Program Manager, endorse each
instrument that is payable to the Servicer, if any, evidencing any Purchased
Contract to the Program Manager in such manner as the Program Manager shall
direct and (B) perform any and all acts and execute any and all documents as may
be reasonably requested by the Program Manager in order to effect the purposes
of this Agreement. After receipt by the Servicer of a Servicer Termination
Notice, if the Program Manager does not elect to replace the Servicer with a
Successor Servicer, the Program Manager shall have the right to appoint a firm
of public accountants or any other Person the Program Manager may choose, to
monitor the servicing of the Purchased Contracts by the Servicer and to furnish
to ▇▇▇▇▇, at the expense of the Servicer, such letters, certificates or reports
thereon as the Program Manager shall reasonably request. The Servicer shall
cooperate with such firm in the subsequent monitoring of its servicing of the
Purchased Contracts pursuant to this Agreement and any fees and expenses in
connection therewith shall be paid by the Servicer.
(a) After receipt by the Servicer of a Servicer Termination
Notice, if the Program Manager elects to appoint a Successor Servicer, then:
(i) On the date that a Successor Servicer shall have
been appointed by the Program Manager 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 Program Manager 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.
(ii) The Servicer agrees to cooperate with the
Program Manager 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
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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.
(iii) 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 Notes 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.
(iv) 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 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 8.12. 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 Program Manager
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 Program Manager. The
Program Manager 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 Program Manager.
(a) 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, by its
acceptance of its appointment, will automatically agree to be bound by the terms
and provisions of the Liquidity Agreement, if any are applicable. Any Successor
Servicer shall make all representations and warranties that the Servicer makes
hereunder.
(b) In connection with such appointment and assumption, the
Program Manager may, subject to the provisions of the Triple-A One Security
Agreement, make arrangements for the payment of the Servicing Fee to the
Successor Servicer.
ARTICLE IX
MISCELLANEOUS
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Section 9.1. 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 of this Agreement on (a) the second
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
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Servicer: Onyx Acceptance Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice President
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇: Onyx Acceptance Financial Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the
Program Manager: CapMAC Financial Services, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Underwriting Officer
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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 9.2. 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 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 ▇▇▇▇▇ and the Program
Manager. Except as expressly permitted hereunder or in the Operative Documents,
▇▇▇▇▇ shall not assign any of its rights or obligations hereunder without the
prior written consent of the Program Manager.
Section 9.3. Confirmation of Intent; Security Interest. The
parties hereto intend that the transfers to ▇▇▇▇▇ 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 ▇▇▇▇▇; provided, however, that if for any
reason any such transfer is not considered a sale, the Seller hereby grants to
▇▇▇▇▇ a security interest in all such transferor's right, title and interest in
the Purchased Contracts and all other assets transferred to ▇▇▇▇▇ 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 9.4. Payments. All payments made hereunder, except as
provided for in Section 2.3(b) hereof, shall be made by 9:00 a.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 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 9.5. Rights to Enable Successor Servicing. For the
purpose of enabling ▇▇▇▇▇ or a Successor Servicer to perform the functions of
servicing and collecting the Purchased Contracts upon a Complete Servicing
Transfer, the Servicer shall on or prior to the Closing Date execute and deliver
the On-Line Service Agreement, as set forth on Schedule 9.5. The Servicer hereby
represents and warrants to ▇▇▇▇▇ that such On-Line Service Agreement embodies
all rights and properties necessary or appropriate for the servicing and
collecting functions with respect to Purchased Contracts and hereby covenants
that to the extent ▇▇▇▇▇ or the Collateral Agent deem it necessary or
appropriate, it will immediately transfer, assign and set
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over to ▇▇▇▇▇, the Collateral Agent or such party as the Collateral Agent shall
designate any other rights or assets upon the occurrence of a Wind-Down Event to
enable and ease successor servicing hereunder.
Section 9.6. 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 ▇▇▇▇▇ (a) all costs and expenses in connection with
the development, preparation, execution, delivery and administration (including
periodic auditing by ▇▇▇▇▇ 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 9.7. 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 9.8. Amendments; Governing Law; JURY TRIAL WAIVER.
This Agreement and the rights (including those of the Program Manager and the
Collateral Agent) 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 (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 9.9. 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 Commercial Paper or for the payment of any business taxes or for
any losses suffered by Finco 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 9.10. Further Assurances. The Seller agrees to do
such further acts and things and to execute and deliver to ▇▇▇▇▇ such
assignments, agreements, powers and
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39
instruments as may be necessary or desirable in order for ▇▇▇▇▇ to carry into
effect the purposes of this Agreement and the other Operative Documents or to
better assure and confirm unto ▇▇▇▇▇ 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 ▇▇▇▇▇, as the case may be, hereunder and
under the other Operative Documents. This covenant shall survive the termination
of this Agreement.
Section 9.11. Termination. This Agreement shall terminate on
the later of (a) the date after the Commitment 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 Triple-A One Credit 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 9.12. Assignment to Program Manager. ▇▇▇▇▇ hereby
assigns to the Program Manager, all of its rights hereunder, including, without
limitation, the rights of ▇▇▇▇▇ under Section 6.2. The Seller consents to such
assignment and agrees that the Program Manager shall be entitled to enforce this
Agreement directly against the Seller. In addition, ▇▇▇▇▇ agrees to act as agent
on behalf of the Program Manager 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 Program Manager'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 Program Manager from time to time, including, without
limitation, the right to deliver a Servicer Termination Notice.
Section 9.13. 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 9.14. 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 9.15. No Bankruptcy Petition Against ▇▇▇▇▇. 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 Triple-A One
Loans made by, Triple-A One and all other obligations under the Operative
Documents it will not institute against, or join any other Person in instituting
against, ▇▇▇▇▇ any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy or similar law.
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IN WITNESS WHEREOF, the Seller and ▇▇▇▇▇ 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 FINANCIAL CORPORATION
By:______________________________
Name:
Title:
Acknowledged and Agreed:
CAPMAC FINANCIAL SERVICES, INC.,
as Program Manager
By:______________________________
Name:
Title:
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EXHIBIT A
SELLER NOTE
New York, New York
September 12, 1994
ONYX ACCEPTANCE FINANCIAL CORPORATION, a Delaware corporation
("▇▇▇▇▇"), hereby promises to pay to the order of ONYX ACCEPTANCE CORPORATION, a
California corporation (the "Seller"), the principal amount of this Seller Note,
determined as described below, together with interest thereon equal to the
Seller Note Interest Rate 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, dated as of the date hereof,
entered into in connection with the Sale and Servicing Agreement, dated as of
September 8, 1994, between the Seller and ▇▇▇▇▇ (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 Seller Note at any time shall be
determined in accordance with the provisions of Section 5.1 of the Sale
Agreement. All principal and accrued interest on this Seller Note shall be due
and payable on the Scheduled Maturity Date; provided, however, that, no payments
may be made, directly or indirectly, on this Seller Note (and if made, the
Seller agrees to return such payments to ▇▇▇▇▇) until ▇▇▇▇▇ has paid all amounts
required pursuant to the Triple-A One Security Agreement to be paid prior to any
payments in respect of this Seller Note. This Seller Note represents solely an
obligation of ▇▇▇▇▇ to make certain payments from funds available under the
Triple-A One Security Agreement and only to the extent, in the manner and at the
times set forth in the Triple-A One Security Agreement. This Seller Note does
not represent a security interest in the Collateral.
Payments of principal of and interest on this Seller 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 Seller Note is the Seller Note referred to in the Sale
Agreement.
▇▇▇▇▇ 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 Seller 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
42
notation or any error in such a notation shall not affect the obligations of
▇▇▇▇▇ under this Seller Note.
It is the intention of Finco 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 Seller Note, it is agreed as follows: (i) the aggregate of
all consideration that constitutes interest under applicable law that is taken,
reserved, contracted for, charged or received under this Seller Note or any
other agreement or document executed in connection with this Seller 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
Seller Note by the holder hereof (or if this Seller Note shall have been paid in
full, refunded to ▇▇▇▇▇); and (ii) in the event that the maturity of this Seller
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 Seller Note or otherwise shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore prepaid, shall be credited to other amounts due under this Seller
Note (or if this Seller Note shall have been paid in full, refunded to ▇▇▇▇▇).
In the event that applicable law provides for a ceiling on the rate of interest
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 Triple-A One Security Agreement.
Each holder of this Seller 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 Triple-A One Loans made, by
Triple-A One and all other obligations under the Operative Documents, it will
not institute, or join any other Person in instituting, against ▇▇▇▇▇ any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceedings under any federal or state bankruptcy law or
similar law.
This Seller Note may not be assigned, transferred, exchanged,
pledged, hypothecated, participated or otherwise conveyed, except with the prior
written consent of the Program Manager.
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THIS SELLER 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 FINANCIAL CORPORATION
By:_____________________________________
Name:
Title:
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Schedule 1 to
Seller Note
Principal Payments and Maturity Notation Made
Date Amount Pre-payments Date By
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
4
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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
September 12, 1994
ONYX ACCEPTANCE FINANCIAL CORPORATION, a Delaware corporation
("▇▇▇▇▇"), hereby promises to pay to the order of ONYX ACCEPTANCE CORPORATION, a
California corporation (the "Seller"), the principal amount of this Subordinated
Note, determined as described below, together with interest thereon at a rate
per annum of LIBOR + 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 September 8, 1994, between ▇▇▇▇▇ 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 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 Collateral Agent under the
Triple-A One Security Agreement. No payments may be received, directly or
indirectly, by the Seller (and if received, the Seller agrees to return such
payments to ▇▇▇▇▇) on this Subordinated Note unless ▇▇▇▇▇ has paid all amounts
required pursuant to the
46
Triple-A One 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.
▇▇▇▇▇ 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 ▇▇▇▇▇ under this Subordinated Note.
It is the intention of Finco 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 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 ▇▇▇▇▇);
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 ▇▇▇▇▇). 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.
2
47
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 Triple-A One 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 Triple-A One Loans made, by
Triple-A One and all other Obligations under the Operative Documents, it will
not institute against, or join any other Person in instituting against, ▇▇▇▇▇
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 Program Manager.
3
48
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 FINANCIAL CORPORATION
By:_____________________________________
Name:
Title:
4
49
Schedule 1 to
Subordinated Note
Principal Payments and Maturity Notation Made
Date Amount Pre-payments Date By
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
5
50
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 Amended and Restated Sale and Servicing Agreement dated as of September 4,
1998 (the "Sale Agreement"), between the Seller and Onyx Acceptance Financial
Corporation, a Delaware corporation ("▇▇▇▇▇") (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 a Wind-Down Event or
Unmatured Wind-Down Event;
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 Triple-A One and the
Program Manager 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 ▇▇▇▇▇ to purchase the
Specified Contracts.
5. The Seller has delivered the Specified Contracts
to ▇▇▇▇▇ on or prior to the date hereof.
IN WITNESS WHEREOF, I have affixed hereunto my signature this
day of , _____.
ONYX ACCEPTANCE FINANCIAL CORPORATION
By:_____________________________________
Name:
Title:
51
EXHIBIT D
LIST OF LOCK-BOX BANKS AND NUMBERS OF LOCK-BOXES
LOCK BOX BANK:
▇▇▇▇▇ Fargo Bank
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Lock Box Account
Acct. # 4159359066
52
EXHIBIT E
CLEARING ACCOUNT BANK AND ACCOUNT NUMBER
The Clearing Account, No. 4159359173, is maintained at ▇▇▇▇▇ Fargo
Bank, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
53
EXHIBIT F
[FORM OF INVESTOR REPORT]
To be delivered
54
EXHIBIT G
[Form of Servicer's Certificate]
This Servicer's Certificate is delivered pursuant to the
Amended and Restated Sale and Servicing Agreement (the "Sale Agreement") dated
as of September 4, 1998 between Onyx Acceptance Corporation and Onyx Acceptance
Financial 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 Wind-Down
Event or Wind-Down Event 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:
55
EXHIBIT H
[FORM OF DAILY REPORT]
56
EXHIBIT I
[FORM OF MONTHLY REPORT]
57
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:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
58
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:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
59
SCHEDULE 4.1(j)-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
60
SCHEDULE 4.1(j)-2
TRADE NAMES OF SELLER
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
61
SCHEDULE 4.1(q)-1
SUBSIDIARIES OF SELLER
The subsidiaries of the 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
62
SCHEDULE 4.1(q)-2
SUBSIDIARIES OF SERVICER
Onyx Acceptance Corporation (the "Servicer") has only one subsidiary:
Onyx Acceptance Financial Corporation, a Delaware corporation.
63
SCHEDULE 8.1
CREDIT AND COLLECTION POLICY
64
SCHEDULE 9.5
LICENSES, PATENTS, COMPUTER HARDWARE AND SOFTWARE, ETC.
1. Agreement for On-Line Service
2. Acknowledgement of Security Interest Under Agreement for On-Line
Service