1
EXHIBIT 10.110
EXECUTION COPY
================================================================================
CAPITAL MARKETS ASSURANCE CORPORATION
--------------------------
AMENDED AND RESTATED
INSURANCE AND INDEMNITY AGREEMENT
dated as of September 4, 1998
----------------------------
TRIPLE-A ONE FUNDING CORPORATION
ONYX ACCEPTANCE FINANCIAL CORPORATION
ONYX ACCEPTANCE CORPORATION
2
TABLE OF CONTENTS
PAGE
----
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions...............................................................2
ARTICLE 2
THE SURETY BONDS; PAYMENT OBLIGATION;
INDEMNIFICATION; SUBROGATION
Section 2.1 Surety Bonds..............................................................2
Section 2.2 Conditions Precedent to Obligations of the Surety Provider................2
Section 2.3 Premium and Fees..........................................................4
Section 2.4 Payment Obligations.......................................................4
Section 2.5 Indemnification...........................................................4
Section 2.6 Payment Procedure.........................................................4
Section 2.7 No Recourse...............................................................5
Section 2.8 Subrogation...............................................................5
Section 2.9 Increased Costs...........................................................5
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Surety Provider.....................6
Section 3.2 Representations and Warranties of Xxxxx...................................7
Section 3.2 Representations and Warranties of Triple-A One............................7
Section 3.4 Representations and Warranties of Seller..................................7
ARTICLE 4
COVENANTS
Section 4.1 Covenants of Xxxxx........................................................8
Section 4.2 Covenants of Triple-A One.................................................8
Section 4.3 Covenants of Seller.......................................................8
ARTICLE 5
FURTHER AGREEMENTS
Section 5.1 Term of Insurance Agreement; Survival.....................................9
Section 5.2 Obligations Absolute......................................................9
Section 5.3 Assignments; Third-party Rights..........................................10
Section 5.4 Reinsurance..............................................................10
Section 5.5 Liability of the Surety Provider.........................................10
ARTICLE 6
EVENTS OF DEFAULT; REMEDIES
SECTION 6.1 Events of Default........................................................11
3
PAGE
----
ARTICLE 7
MISCELLANEOUS
Section 7.1 Amendments, Etc..........................................................11
Section 7.2 Notices..................................................................11
Section 7.3 No Waiver; Remedies and Severability.....................................12
Section 7.4 Limitation on Interest...................................................13
SECTION 7.5 GOVERNING LAW............................................................13
Section 7.6 Submission to Jurisdiction...............................................13
Section 7.7 Counterparts.............................................................13
Section 7.8 Paragraph Headings, Etc..................................................13
SECTION 7.9 WAIVER OF JURY TRIAL.....................................................14
Section 7.10 No Bankruptcy Petition..................................................14
Section 7.11 Expenses and Taxes......................................................14
EXHIBITS
Exhibit A Form of Note Bond
Exhibit B Form of Liquidity Bond
Exhibit C Definitions List
ii
4
AMENDED AND RESTATED INSURANCE AND INDEMNITY AGREEMENT
THIS INSURANCE AND INDEMNITY AGREEMENT ("Insurance
Agreement") is made as of September 4, 1998 among CAPITAL MARKETS ASSURANCE
CORPORATION, a New York stock insurance company (the "Surety Provider"), ONYX
ACCEPTANCE FINANCIAL CORPORATION, a Delaware corporation ("Xxxxx"), TRIPLE-A ONE
FUNDING CORPORATION, a Delaware corporation ("Triple-A One") and ONYX ACCEPTANCE
CORPORATION, a Delaware corporation (the "Seller").
WITNESSETH:
WHEREAS, Xxxxx is a special purpose corporation, whose sole
purpose is to purchase certain automobile and light truck loans and the security
interests in the Vehicles securing such loans, including certain insurance
policies related thereto from the Seller pursuant to the Sale Agreement between
the Seller and Xxxxx;
WHEREAS, in order to enable it to purchase Contracts from
the Seller, Xxxxx has entered into a revolving credit agreement with Triple-A
One, pursuant to which Triple-A One has agreed to make loans to Xxxxx secured by
the Contracts and other assets of Xxxxx. Triple-A One funds such loans by
issuing Commercial Paper from time to time or by borrowing under the Liquidity
Agreement;
WHEREAS, Triple-A One, the Bank Agent and the Banks have
entered into the Liquidity Agreement, pursuant to which the Banks have agreed to
make loans to Triple-A One from time to time in the event that amounts received
from Xxxxx are insufficient to repay maturing Commercial Paper or because
Triple-A One is unable for any reason to issue Commercial Paper;
WHEREAS, the Surety Provider is authorized to transact the
financial guaranty insurance business in the State of New York and has issued a
surety bond (the "Note Bond") for the benefit of Triple-A One guaranteeing
payment of the Triple-A One Note by Xxxxx and surety bond (the "Liquidity Bond")
for the benefit of the Bank Agent guaranteeing payment of the Liquidity Notes by
Triple-A One and has agreed to issue a swap bond under certain circumstances
(the "Swap Bond") for the benefit of the provider of the Interest Rate Hedge
Mechanism guaranteeing Xxxxx'x obligations under such Interest Rate Hedge
Mechanism (the Note Bond, the Liquidity Bond and the Swap Bond are referred to
herein collectively as the "Surety Bonds" and individually as a "Surety Bond");
WHEREAS, the parties hereto, among other things, desire to
specify the payment of the premium in respect of the Surety Bonds, the indemnity
and reimbursement obligations of Xxxxx and the Seller to the Surety Provider
under the Surety Bonds, and to provide for certain other matters related
thereto; and
WHEREAS, the parties hereto wish to amend and restate this
Insurance Agreement as hereinafter provided;
5
NOW, THEREFORE, in consideration of the premises and to
induce the Surety Provider to issue the Surety Bonds, the parties hereto hereby
agree as follows:
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions
(a) As used in this Insurance Agreement, the 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 Insurance 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 Insurance Agreement shall refer to this Insurance
Agreement as a whole and not to any particular provision of this Insurance
Agreement, and Section, subsection, Schedule and Exhibit references are to this
Insurance Agreement unless otherwise specified.
(c) Capitalized terms used herein shall be equally applicable to both
the singular and plural forms of such terms.
ARTICLE 2
THE SURETY BONDS; PAYMENT OBLIGATION;
INDEMNIFICATION; SUBROGATION
Section 2.1. Surety Bonds. The Surety Provider agrees,
subject to the conditions hereinafter set forth, on the date hereof to execute
an endorsement to the Note Bond in the form of Exhibit A hereto and an
endorsement to the Liquidity Bond in the form of Exhibit B hereto.
Section 2.2 Conditions Precedent to Obligations of the
Surety Provider. (a) The obligations of the Surety Provider under this Insurance
Agreement are subject to the satisfaction of the following conditions on the
date hereof:
(i)(A) The conditions set forth in subsection 3.1 of the
Sale Agreement, subsection 4.1 of the Liquidity Agreement and
subsection 4.1 of the Triple-A One Credit
2
6
Agreement shall have been satisfied, (B) the Surety Provider shall
have received original executed copies of each document, certificate
and opinion required to be delivered to the Program Manager or the
Collateral Agent pursuant to subsection 4.1 of the Triple-A One
Credit Agreement and Section 3.1 of the Sale Agreement, and (C) each
such document, certificate and opinion shall be in form and substance
satisfactory to the Surety Provider.
(ii) The representations and warranties of Triple-A One set
forth in subsection 3.1 of the Liquidity Agreement and Section 5 of
the Note Pledge Agreement shall be true and correct.
(iii) The representations and warranties of Xxxxx set forth
in subsection 3.2 of this Insurance Agreement and subsection 3.1 of
the Triple-A One Credit Agreement shall be true and correct.
(iv) The representations and warranties of (A) the Seller
set forth in subsection 3.4 of this Insurance Agreement and
subsections 4.1 and 4.2 of the Sale Agreement and (B) the Servicer
set forth in subsection 4.1 of the Sale Agreement shall be true and
correct.
(v) The Surety Provider shall have received certified
copies, dated the Closing Date, of (A) the articles of incorporation
and by-laws of each of the Seller and Xxxxx, (B) the resolutions of
the Board of Directors of each of the Seller and Xxxxx approving the
execution and delivery of the amended and restated Operative
Documents to which it is a party, and (C) all documents evidencing
other necessary corporate action by each of the Seller and Xxxxx and
all governmental approvals obtained by the Seller or Xxxxx, if any,
that are necessary for the consummation of the transactions
contemplated by the Operative Documents.
(vi) The Surety Provider shall have received a certificate,
dated the Closing Date, of the Secretary or an Assistant Secretary of
each of the Seller and Xxxxx, certifying the names and true
signatures of the officers of each of the Seller and Xxxxx authorized
to sign the Operative Documents to which it is a party.
(vii) No statute, rule, regulation or order shall have been
enacted, entered or deemed applicable by any government or
governmental or administrative agency or court which would make the
transactions contemplated by this Insurance Agreement or any of the
other Operative Documents illegal or otherwise prevent the
consummation thereof.
3
7
Section 2.3. Premium and Fees. In consideration of the
issuance by the Surety Provider of the Surety Bonds, Xxxxx shall pay to the
Surety Provider the premiums in the amounts and on the dates set forth in the
Fee Letter Agreement.
Section 2.4 Payment Obligations. Xxxxx agrees to pay to the
Surety Provider the following:
(a) On the date of any payment by the Surety Provider of any amount
under any Surety Bond, a sum equal to the amount so paid;
(b) Within ten days of receipt by it of any invoice therefor, any and
all unreimbursed charges and expenses of the Surety Provider in connection with
any payment under any Surety Bond including, but not limited to, all reasonable
attorneys' and accountants' fees and expenses, and all fees and charges paid or
incurred by the Surety Provider in connection with any accounts established to
facilitate payments under any Surety Bond; and
(c) On demand, interest on any amounts payable under this Insurance
Agreement (including without limitation the amounts described in Section 2.3 and
subparagraphs (a) and (b) of this Section 2.4) from the date such amounts become
due until paid in full, after as well as before judgment, at the Default Rate
calculated on the basis of the actual number of days elapsed and a 360 day year.
Section 2.5 Indemnification.
(a) In addition to any and all rights of reimbursement, subrogation
or any other rights pursuant hereto or under law or equity, Xxxxx and the
Seller, jointly and severally agree to pay, and to protect, indemnify and save
harmless, the Surety Provider and its officers, directors, shareholders,
employees and agents from and against any and all losses, liabilities (including
penalties), actions, suits, judgments, demands, damages, claims, costs or
expenses of any nature arising out of or relating to the transactions
contemplated by the Operative Documents (any such item being a "Claim").
(b) The indemnity provided by this Section 2.5 shall not inure to the
benefit of the Surety Provider to the extent of a Claim arising by reason of any
gross negligence or willful misconduct of the Surety Provider. The obligation of
the Seller to provide the indemnity under this Section 2.5 shall not inure to
the benefit of the Surety Provider to the extent of a Claim arising by reason of
the credit risk of an Obligor or for which payment therefor would otherwise
constitute recourse to the Seller for an uncollectible Contract.
Section 2.6 Payment Procedure. In the event of any payment
by the Surety Provider under any Surety Bond, Xxxxx agrees to accept the voucher
or other evidence of payment as prima facie evidence of the propriety thereof
and of Xxxxx'x liability therefor to the Surety Provider. All payments to be
made to the Surety Provider under this Insurance Agreement shall be made to the
Surety Provider in Dollars in immediately available funds to the account
designated by the Surety
4
8
Provider prior to 1:00 P.M. (New York City time) on the date when due.
Section 2.7 No Recourse. No recourse shall be had for the
payment of any amount owing hereunder or any other obligation or claim arising
out of or based upon this Insurance Agreement against any shareholder, employee,
officer, director or incorporator of Xxxxx except for claims arising out of the
gross negligence or willful misconduct of such shareholder, employee, officer,
director or incorporator of Xxxxx.
Section 2.8 Subrogation. In furtherance of and not in
limitation of the Surety Provider's equitable right of subrogation, Xxxxx and
Triple-A One acknowledge and agree that, with respect to payments made by the
Surety Provider pursuant to any Surety Bond, the Surety Provider shall be fully
subrogated, to the extent of the aggregate of all such payments and interest due
on any unreimbursed amounts thereof, to the rights of Triple-A One under the
Triple-A One Credit Agreement and the Triple-A One Security Agreement and to the
rights of Xxxxx under the Sale Agreement, including, without limitation, in
respect of the Contracts. Each of Xxxxx and Triple-A One agrees to execute such
instruments and to take such actions as the Surety Provider may request to
effectuate such subrogation and to perfect the rights of the Surety Provider.
Section 2.9 Increased Costs.
(a) If due to either (i) the introduction of or any change (including
without limitation, any change by way of imposition or increase of reserve
requirements) in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to the Surety Provider of issuing, funding or
maintaining any Surety Bond, then Xxxxx and the Seller, jointly and severally
shall from time to time, upon demand by the Surety Provider, pay to the Surety
Provider additional amounts determined as a per annum rate applied to either the
highest Face Amount of Commercial Paper plus outstanding Loans during the
preceding two Determination Periods or the outstanding amount under such Surety
Bond, as may be appropriate, sufficient to compensate the Surety Provider for
such increased cost. A certificate in reasonable detail as to the rate for such
increased cost, the basis therefor, and calculation thereof, shall be submitted
to Xxxxx and the Seller by the Surety Provider, and shall be conclusive and
binding for all purposes, absent manifest error.
(b) If either (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), affects or would affect the amount of
capital required or expected to be maintained by the Surety Provider or any
corporation controlling the Surety Provider and the Surety Provider determines
that the amount of such capital is increased by or based upon the existence of
outstanding amounts under any Surety Bond, or the Surety Provider's commitment
under any Surety Bond and other
5
9
commitments of this type, then, upon demand by the Surety Provider, Xxxxx and
the Seller shall, jointly and severally, immediately pay to the Surety Provider,
from time to time as specified by the Surety Provider, additional amounts
determined as a per annum rate applied to either the highest Face Amount of
Commercial Paper plus outstanding Loans during the preceding two Determination
Periods or the outstanding amount under such Surety Bond as may be appropriate,
sufficient to compensate the Surety Provider in the light of circumstances, to
the extent that the Surety Provider determines such increase in capital to be
allocable to the existence of such Surety Bond. A certificate in reasonable
detail as to the rate for such increased cost, the basis therefor, and
calculation thereof, submitted to Xxxxx by the Surety Provider, shall be
conclusive and binding for all purposes, absent manifest error.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Surety
Provider. The Surety Provider represents and warrants to Triple-A One and to
Xxxxx, as of the date hereof, as follows:
(a) Due Organization. The Surety Provider is a duly incorporated and
subsisting New York stock insurance company authorized under an effective
certificate of authority to do business in the State of New York, and in each
jurisdiction where the failure to be so authorized under an effective
certificate of authority would have a material adverse effect on the Surety
Provider's performance of its obligations under any Surety Bond or this
Insurance Agreement.
(b) Power and Authority. The Surety Provider has all necessary power
and authority to execute and deliver this Insurance Agreement, to issue the
endorsements to the Surety Bonds and to perform all of its obligations hereunder
and thereunder.
(c) Due Authorization. The execution, delivery and performance by the
Surety Provider of this Insurance Agreement and the Surety Bonds (i) have been
duly authorized by all necessary corporate action and (ii) do not require any
approvals or consents of, or any notice to or filing with, any person or
governmental agency or department (except for filings with the Insurance
Department of the State of New York, all of which have been made), which, if not
obtained or made, would result in a material adverse effect on the Surety
Provider's performance of its obligations hereunder and under the Surety Bonds.
(d) Valid and Binding Agreement. This Insurance Agreement has been
duly executed and delivered by the Surety Provider, and this Insurance
Agreement, when executed and delivered by all the parties thereto, and the
endorsements to the Surety Bonds, when executed by the Surety Provider, will
constitute legal, valid and binding obligations of the Surety Provider,
enforceable against the Surety Provider in accordance with their terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, conservation,
6
10
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 3.2 Representations and Warranties of Xxxxx. As of
the date hereof and each Purchase Date, Xxxxx makes to the Surety Provider each
representation and warranty set forth in Section 3.1 of the Triple-A One Credit
Agreement, and each such representation and warranty is hereby incorporated
herein by reference, as if set forth herein in full.
Section 3.3 Representations and Warranties of Triple-A One
. Triple-A One represents and warrants to the Surety Provider, as of the date
hereof, as follows:
(a) Corporate Existence; Compliance with Law. Triple-A One (i) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) has the corporate power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged,
(iii) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification and (iv) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith would not, in the aggregate, have a material adverse effect on
Triple-A One.
(b) Corporate Power; Authorization; Enforceable Obligations. Triple-A
One has the corporate power and authority, and the legal right, to make, deliver
and perform this Insurance Agreement and the other Operative Documents to which
it is a party and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Insurance Agreement and the other
Operative Documents to which it is a party. No consent or authorization of,
filing with or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the execution, delivery,
performance, validity or enforceability of the Insurance Agreement or the other
Operative Documents to which it is a party. This Insurance Agreement has been,
and each Operative Document to which Triple-A One is a party when executed and
delivered will be, duly executed and delivered on behalf of Triple-A One. This
Insurance Agreement constitutes, and each other Operative Document to which
Triple-A One is a party when executed and delivered will constitute, a legal,
valid and binding obligation of Triple-A One enforceable against Triple-A One in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
(c) No Legal Bar. Triple-A One is not an "investment company", or a
company
7
11
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
Section 3.4 Representations and Warranties of Seller. As of
the date hereof and each Purchase Date, the Seller hereby makes to Triple-A One
and to the Surety Provider each representation and warranty made by it in
Sections 4.1 and 4.2 of the Sale Agreement, and each such representation and
warranty is hereby incorporated herein by reference, as if set forth in full
herein.
ARTICLE 4
COVENANTS
Section 4.1 Covenants of Xxxxx. Xxxxx hereby covenants and
agrees that during the term of this Insurance Agreement:
(a) Xxxxx shall comply with all of the covenants, terms and
agreements set forth in (i) the Triple-A One Credit Agreement (including,
without limitation, the covenants set forth in Sections 5 and 6 thereof), (ii)
the Triple-A One Security Agreement (including, without limitation, the
covenants set forth in Section 8 thereof) and (iii) any other Operative Document
to which it is a party.
(b) Xxxxx shall provide the Surety Provider with written notice
immediately upon becoming aware of any breach by it of any covenant, term or
agreement set forth in the Triple-A One Credit Agreement, the Triple-A One
Security Agreement, this Insurance Agreement or any other Operative Document to
which it is a party.
Section 4.2 Covenants of Triple-A One. Triple-A One hereby
covenants and agrees that during the term of this Insurance and Agreement:
(a) Triple-A One shall comply with all of the covenants, terms and
agreements set forth in (i) the Liquidity Agreement (including, without
limitation, the covenants set forth in Section 5 thereof), (ii) the Note Pledge
Agreement (including, without limitation, the covenants set forth in Section 6
thereof) and (iii) any other Operative Document to which it is a party.
(b) Triple-A One shall provide the Surety Provider with written
notice immediately upon becoming aware of any breach by it under the Liquidity
Agreement, the Note Pledge Agreement, this Insurance Agreement or any other
Operative Document to which it is a party.
(c) Triple-A One shall not sell any Commercial Paper unless, on the
date of each such sale, the sum of the Face Amount of Commercial Paper, after
giving effect to the sale of Commercial Paper and the payment of any maturing
Commercial Paper on such day, and the
8
12
outstanding principal amount of the Loans, is not greater than the Maximum
Program Amount.
Section 4.3 Covenants of Seller. Seller hereby covenants
and agrees that during the term of this Insurance Agreement:
(a) It shall comply with all of the covenants, terms and agreements
made by it as Seller and as Servicer and set forth in (i) the Sale Agreement
(including, without limitation, the covenants set forth in Sections 4.3, 4.4,
4.5 and 4.6 thereof) and (ii) any other Operative Document to which it is a
party.
(b) It shall provide the Surety Provider with written notice
immediately upon becoming aware of any breach by it of any covenant, term or
agreement set forth in the Sale Agreement, this Insurance Agreement or any other
Operative Document to which it is a party.
ARTICLE 5
FURTHER AGREEMENTS
Section 5.1 Term of Insurance Agreement; Survival. This
Insurance Agreement shall terminate on the later to occur of the date that (i)
the Surety Bonds have been terminated in accordance with their terms and (ii)
all amounts due and payable under this Insurance Agreement have been irrevocably
paid in full. The representations, warranties, covenants and indemnities of each
of the Seller, Xxxxx and Triple-A One referred to or contained in this Insurance
Agreement and each Operative Document to which it is a party and the provisions
of subsections 2.4, 2.5, 2.7, 2.9 and 7.11 of this Insurance Agreement shall
survive the termination of this Insurance Agreement.
Section 5.2 Obligations Absolute. The obligations of each
of the Seller and Xxxxx under this Insurance Agreement are absolute and
unconditional and will be paid or performed strictly in accordance with the
terms hereof, irrespective of:
(a) any lack of validity or enforceability of, or any amendment or
other modifications of, or waiver with respect to, any Operative Document;
(b) any amendment or waiver of, or consent to departure from, any
Surety Bond;
(c) any exchange or release or non-perfection of any item of
Collateral;
(d) the existence of any claim, set off, defense or other rights that
the Seller or Xxxxx may have at any time against the Surety Provider, any
beneficiary or any transferee of any Surety Bond (or any persons or entities for
whom the Surety Provider, any such beneficiary or any such transferee may be
acting) or any other person or entity whether in connection with any Surety
9
13
Bond, this Insurance Agreement, any other Operative Document or any unrelated
transactions;
(e) any statement or any other document presented under any Surety
Bond proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect whatsoever;
(f) the inaccuracy or alleged inaccuracy of any statement upon which
any drawing under any Surety Bond is based;
(g) payment by the Surety Provider under any Surety Bond against
presentation of a draft or certificate which does not comply with the terms of
such Surety Bond;
(h) the bankruptcy or insolvency of the Surety Provider or any other
party to any Operative Document;
(i) any default or alleged default of the Surety Provider under any
Surety Bond;
(j) any termination of this Insurance Agreement pursuant to Section
5.1;
(k) any defense based upon the failure of the Collateral Agent to
receive all or part of the amounts payable on the Triple-A One Note, or of the
Servicer to receive all or part of the Servicing Fee or other compensation
required under the Operative Documents or otherwise, or any nonapplication or
misapplication of the proceeds of any drawing upon any Surety Bond; and
(l) any other circumstances or happenings whatsoever.
Section 5.3 Assignments; Third-party Rights. This Insurance
Agreement shall be a continuing obligation and shall (a) be binding upon the
parties hereto and their respective successors and permitted assigns and (b)
inure to the benefit of and be enforceable by each party hereto and each of
their respective successors and permitted assigns. None of the Seller, Xxxxx or
Triple-A One may assign this Insurance Agreement, or delegate any of its duties
hereunder, without the prior written consent of the Surety Provider.
Section 5.4 Reinsurance. The Surety Provider shall have the
right to give participations in its rights under this Insurance Agreement and to
enter into contracts of reinsurance with respect to any Surety Bond, provided
that the Surety Provider agrees that any such disposition will not alter or
affect in any way whatsoever its obligations hereunder and under such Surety
Bond and, provided, further, that any reinsurer or participant will not have any
rights against the Seller, Xxxxx or Triple-A One and that the Seller, Xxxxx or
Triple-A One shall have no obligation to have any communication or relationship
whatsoever with any reinsurer or participant with respect to the obligations of
the Surety Provider hereunder and under such Surety Bond.
Section 5.5 Liability of the Surety Provider. The Surety
Provider shall not be
10
14
responsible to the Seller, Triple-A One or Xxxxx for any act or omission of the
Issuing and Paying Agent, the Program Manager, Triple-A One, the Bank Agent, any
Bank, the Dealer or any other Person. It is understood that neither the Surety
Provider, nor any of its officers, directors or employees shall be liable or
responsible for: (a) the use which may be made of any Surety Bond by or for any
acts or omissions of the Issuing and Paying Agent, the Program Manager, Triple-A
One, the Bank Agent, any Bank, the Dealer or any other Person in connection
therewith or (b) the validity, sufficiency, accuracy or genuineness of documents
presented in connection with a drawing on any Surety Bond, or of any endorsement
thereon, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged.
ARTICLE 6
EVENTS OF DEFAULT; REMEDIES
SECTION 6.1 Events of Default. The occurrence of any
Wind-Down Event shall constitute an Event of Default hereunder. Upon the
occurrence of an Event of Default hereunder, the Surety Provider may at any time
thereafter: (i) deliver a Notice of Wind-Down, (ii) exercise any of its rights
and remedies under this Insurance Agreement or any other Operative Document and
(iii) take whatever action at law or in equity as may appear necessary or
desirable in its judgment to collect the amounts then due and unpaid under this
Insurance Agreement or any other Operative Document or to enforce performance
and observance of any obligation, agreement or covenant of the Seller or Xxxxx
under this Insurance Agreement or the other Operative Documents.
ARTICLE 7
MISCELLANEOUS
Section 7.1 Amendments, Etc. No amendment or waiver of any
provision of this Insurance Agreement, nor consent to any departure therefrom,
shall in any event be effective without prior written notice thereof to S&P and
Moody's and unless in writing and signed by each of the parties hereto, provided
that any waiver so granted shall extend only to the specific event or occurrence
so waived and not to any other similar event or occurrence which occurs
subsequent to the date of such waiver.
Section 7.2 Notices. 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 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
11
15
shall be deemed to be delivered for purposes of this Insurance Agreement on: (i)
the second Business Day following the day on which such notice was placed in the
custody of the U.S. Postal Service, (ii) 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 (iii) 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 Triple-A One: Triple-A One Funding Corporation
c/o MBIA Insurance Corporation,
as Administrative Agent
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Underwriting Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to the Capital Markets Assurance Corporation
Surety Provider: 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Underwriting Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to Xxxxx: Onyx Acceptance Financial Corporation
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to the Seller: Onyx Acceptance Corporation
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Executive Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
A copy of any notice delivered to or required to be sent by
the Seller or Xxxxx hereunder shall be sent by the
Seller or Finco to the holder of the Subordinate Note.
Section 7.3 No Waiver; Remedies and Severability.
12
16
No failure on the part of the Surety Provider to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise hereof or the exercise of any other right. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law. The parties
further agree that the holding by any court of competent jurisdiction that any
remedy pursued by the Surety Provider hereunder is unavailable or unenforceable
shall not affect in any way the ability of the Surety Provider to pursue any
other remedy available to it. In the event any provision of this Insurance
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, the parties hereto agree that such holding shall not invalidate or
render unenforceable any other provision hereof.
Section 7.4 Limitation on Interest. No provision of this
Insurance Agreement shall require the payment or permit the collection of
interest in excess of the maximum rate permitted by applicable law.
SECTION 7.5 GOVERNING LAW. THIS INSURANCE AGREEMENT SHALL
BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 7.6 Submission to Jurisdiction. Each of the parties
hereto hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Insurance Agreement and the other
Operative Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address set forth in Section 7.2 or at
such other address of which such party shall have given notice to
each other party pursuant thereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to xxx in any other jurisdiction.
Section 7.7 Counterparts.
13
17
This Insurance Agreement may be executed in counterparts by the parties hereto,
and each such counterpart shall be considered an original and all such
counterparts shall constitute one and the same instrument.
Section 7.8 Paragraph Headings, Etc. The headings of
paragraphs contained in this Insurance Agreement are provided for convenience
only. They form no part of this Insurance Agreement and shall not affect its
construction or interpretation.
SECTION 7.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS INSURANCE AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 7.10 No Bankruptcy Petition. Each of the Seller and
Xxxxx 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 this Insurance
Agreement and the other Operative Documents, it will not institute against, or
join any other Person in instituting against, Triple-A One any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy or similar law.
Section 7.11 Expenses and Taxes. Xxxxx agrees, within ten
days of billing, to (a) pay or reimburse the Surety Provider for all of its
out-of-pocket costs and expenses incurred in connection with the preparation and
execution of, and any amendment, supplement or modification to, this Insurance
Agreement and any other documents prepared in connection herewith, and the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Surety Provider, (b) pay or reimburse the Surety Provider for all of its costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Insurance Agreement and any such other documents, including,
without limitation, all reasonable fees and disbursements of counsel to the
Surety Provider, whether incurred in connection with the foreclosure upon, sale
or other disposition of any Collateral in which the Surety Provider has a
security interest pursuant to its rights of subrogation, to the extent not
recovered from such collateral, or otherwise and (c) pay, indemnify, and hold
the Surety Provider harmless from, any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any delay in paying, any
registration tax, stamp, duty and other similar taxes or duties, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Insurance Agreement or any such other documents.
14
18
IN WITNESS WHEREOF, the parties hereto have executed this
Insurance Agreement, all as of the day and year first
above mentioned.
CAPITAL MARKETS ASSURANCE CORPORATION,
as Surety Provider
By: _________________________________
Name:
Title:
TRIPLE-A ONE FUNDING CORPORATION
By: MBIA Insurance Corporation, its attorney in fact
By: _________________________________
Name:
Title:
ONYX ACCEPTANCE FINANCIAL CORPORATION
By: _________________________________
Name:
Title:
ONYX ACCEPTANCE CORPORATION,
as Seller
By: _________________________________
Name:
Title:
15
19
EXHIBIT A
FORM OF ENDORSEMENT TO NOTE BOND
20
EXHIBIT B
FORM OF ENDORSEMENT TO LIQUIDITY BOND
21
EXHIBIT C
DEFINITIONS LIST
See TAB 1
