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EXHIBIT 10.111
EXECUTION COPY
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MASTER LOAN AGREEMENT
BETWEEN
ONYX ACCEPTANCE FUNDING CORPORATION
AND
SALOMON BROTHERS REALTY CORP.
DATED AS OF SEPTEMBER 3, 1998
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TABLE OF CONTENTS
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Section 1. DEFINITIONS; CONSTRUCTION.................................................... 1
(a) Definitions....................................................................... 1
(b) Accounting Terms and Determinations............................................... 5
(c) Other Definitional Terms.......................................................... 5
Section 2. GRANT OF SECURITY INTEREST; DELIVERY OF COLLATERAL; LOANS DISCRETIONARY...... 5
(a) Grant of Security Interest........................................................ 5
(b) Delivery of Instruments of Transfer............................................... 6
(c) Funding of Loans.................................................................. 6
(d) SBRC's Duty of Care............................................................... 6
Section 3. EARNINGS ON COLLATERAL........................................................ 7
Section 4. CONFIRMATION STATEMENT........................................................ 7
Section 5. MARGIN DETERMINATIONS......................................................... 7
(a) Margin Requirement................................................................ 7
(b) Current Margin.................................................................... 7
(c) Supplemental Collateral........................................................... 7
(d) Release of Supplemental Collateral................................................ 8
Section 6. RELEASE AND SUBSTITUTION OF COLLATERAL........................................ 8
Section 7. CONDITIONS TO THE LOANS....................................................... 9
(a) Conditions to the Effective Date.................................................. 9
(b) Conditions Precedent to all Loans and Substitutions............................... 10
Section 8. REPRESENTATIONS AND WARRANTIES................................................ 11
(a) Due Incorporation................................................................. 11
(b) Authorization..................................................................... 11
(c) No Conflict....................................................................... 12
(d) Approvals, etc.................................................................... 12
(e) Good Title........................................................................ 12
(f) Tax Liens......................................................................... 12
(g) Financial Statements.............................................................. 13
(h) No Litigation..................................................................... 13
(i) Disclosure........................................................................ 13
(j) Permits, Licenses, Approvals, Consents, etc....................................... 13
(k) The Investment Company Act........................................................ 13
(l) Ownership of Borrower............................................................. 13
Section 9. AFFIRMATIVE COVENANTS......................................................... 13
(a) Financial Statements and Other Information........................................ 14
(b) Existence, Conduct of Business, etc............................................... 15
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(c) Taxes............................................................................. 15
(d) Laws.............................................................................. 15
(e) Name and Locations................................................................ 15
(f) Records........................................................................... 15
(g) Pay Obligations................................................................... 15
(h) Notices........................................................................... 15
(i) Covenant Compliance Certificate................................................... 16
(j) Monthly Collateral Report......................................................... 16
(k) Guaranty.......................................................................... 16
Section 10. NEGATIVE COVENANTS............................................................ 16
(a) Liens............................................................................. 16
(b) Mergers, Sales, Dissolution, etc.................................................. 16
(c) Corporate Changes................................................................. 16
(d) Use of Proceeds................................................................... 16
(e) Further Covenants................................................................. 16
Section 11. EVENTS OF DEFAULT............................................................. 17
(a) Nonperformance.................................................................... 17
(b) Termination of Interest........................................................... 17
(c) Act of Insolvency................................................................. 17
(d) Material Adverse Change........................................................... 17
(e) Default Under Other Contracts..................................................... 17
(f) Merger or Consolidation........................................................... 17
(g) Anticipated Insolvency............................................................ 18
(h) Final Judgment.................................................................... 18
(i) Breach of Credit Covenants........................................................ 18
(j) Breach of Representation.......................................................... 18
(k) Breach of Covenant................................................................ 18
Section 12. REMEDIES ..................................................................... 18
(a) Action Regarding Collateral....................................................... 18
(b) Deficiency........................................................................ 19
(c) Private Sale...................................................................... 19
(d) Application of Proceeds........................................................... 20
(e) Default Rate of Interest.......................................................... 20
(f) Attorney-in-Fact.................................................................. 20
(g) Payments on Collateral to Borrower................................................ 20
(h) Cross-Collateralization; Right of Set-Off......................................... 21
Section 13. MATURITY DATE; INTEREST PAYMENT DATES; REPAYMENT OF PRINCIPAL................. 21
(a) Payment on Maturity Date.......................................................... 21
(b) Interest Payment.................................................................. 21
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(c) Payment of Principal.............................................................. 21
(d) Event of Default.................................................................. 21
Section 14. PAYMENT OF LIABILITIES........................................................ 21
Section 15. GENERAL PROVISIONS............................................................ 22
(a) No Waiver......................................................................... 22
(b) Governing Law; Severability....................................................... 22
(c) Construction...................................................................... 22
(d) Assignment........................................................................ 22
(e) Notices, Payments, Deliveries..................................................... 22
(f) Termination....................................................................... 23
(g) Aggregate Amount of Loans; Disbursement of Funds.................................. 23
(h) Expenses.......................................................................... 24
(i) SBRC's Right to Pledge............................................................ 24
(j) Indemnification................................................................... 25
(k) Further Assurances................................................................ 25
(l) Remedies Cumulative............................................................... 25
(m) Litigation........................................................................ 25
EXHIBIT A................................................................................. A-1
EXHIBIT B................................................................................. B-1
EXHIBIT C................................................................................. C-1
EXHIBIT D................................................................................. D-1
EXHIBIT E................................................................................. E-1
EXHIBIT F................................................................................. F-1
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THIS AGREEMENT is made as of the 3rd day of September, 1998 by and
between ONYX ACCEPTANCE FUNDING CORPORATION ("Borrower") and SALOMON BROTHERS
REALTY CORP. ("SBRC"). By executing this Agreement, Borrower and SBRC agree to
be bound by the terms of this Agreement.
WITNESSETH
WHEREAS the parties elect to enter into this Agreement and, at the
request of Borrower, SBRC may from time to time at its option agree to make one
or more loans (in each instance, a "Loan") to Borrower, which Loans shall be
limited in aggregate outstanding principal amount to the Maximum Advance Amount,
said Loans to be evidenced by Borrower's Note (the "Note") of even date
herewith, maturing on the Maturity Date (as defined herein), a form of which is
attached hereto as Exhibit A; and
WHEREAS, in order to induce SBRC to make Loans from time to time to it,
Borrower has agreed to assign and pledge to SBRC and grant to SBRC a lien upon
and a security interest in the Collateral (as hereinafter defined) for the
purpose of securing its obligations under the Note;
NOW, THEREFORE, in consideration of the foregoing and of the covenants
and agreements hereinafter set forth, Borrower and SBRC agree as follows:
Section 1. DEFINITIONS; CONSTRUCTION
(a) Definitions. As used herein, the following terms shall have the
meaning herein specified (to be equally applicable to be the singular and plural
forms of the terms defined):
"ABS Issuance Agreements" shall mean the agreements pursuant to which
the related Pledged ABS has been issued, including any agreements relating to
the payment or distribution of amounts to the holder of such Pledged ABS, which
agreements have been previously approved by SBRC or its affiliate.
"Act of Insolvency" shall have the meaning ascribed to it in Section
11(c) hereof.
"Agreement" shall mean this Master Loan Agreement, as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Approvals" shall have the meaning set forth in Section 8(d) hereof.
"Book Net Worth" shall refer to the equity of Borrower determined in
accordance with GAAP.
"Borrower" shall have the meaning set forth in the preamble hereof.
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"Business Day" shall mean any day excluding Saturday, Sunday, or any
other day on which banks in New York, New York or California are authorized or
required by law to close or a day on which trading by and between banks in
Dollars in the London interbank market is not conducted.
"Closing Date" shall mean with respect to each Loan, the settlement date
set forth in the Confirmation Statement applicable to such Loan.
"Collateral" shall have the meaning ascribed thereto in Section 2 hereof
and shall include any Supplemental Collateral.
"Confirmation Statement" shall have the meaning set forth in Section 4
hereof.
"Covenant Compliance Certificate" shall refer to a certificate of
Borrower and Onyx to the effect that there has not occurred any of the events
listed in Section 11(i) as of the date of such certificate.
"Current Margin" shall have the meaning ascribed to it in Section 5(b)
hereof.
"Default" shall mean any condition, act or event which, with notice or
lapse of time or both, would constitute an Event of Default.
"Default Rate" shall have the meaning specified in Section 12(e) hereof.
"Dollar" and the sign "$" shall mean lawful money of the United States
of America.
"Effective Date" shall mean the date that all of the conditions set
forth in Section 7(a)(i) hereof have been met.
"Event of Default" shall have the meaning set forth in Section 11
hereof.
"GAAP" shall have the meaning specified in Section 1(b) hereof.
"Governmental Authority" shall mean any nation, government, or state, or
any political subdivision of any of them, or any court, entity or agency
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranty" shall mean the guaranty of Onyx substantially in the form set
forth at Exhibit E hereto.
"Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of property or services, other than trade
accounts
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payable (other than for borrowed money) arising, and accrued expenses incurred,
in the ordinary course of business so long as such trade accounts payable are
payable within ninety (90) days of the date the respective goods are delivered
or the respective services are rendered; (c) Indebtedness of others secured by a
lien on the property of such Person, whether or not the respective Indebtedness
so secured has been assumed by such Person; (d) obligations (contingent or
otherwise) of such Person in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for account of such
Person; (e) capital lease obligations of such Person; (f) obligations of such
Person under repurchase agreements or like arrangements; (g) Indebtedness of
others guaranteed by such Person; (h) all obligations of such Person incurred in
connection with the acquisition or carrying of fixed assets by such Person; and
(i) Indebtedness of general partnerships of which such Person is a general
partner.
"Lien" shall mean any interest in property, or a claim by, a Person
other than the owner of such property, whether such interest is based on the
common law, statute or contract, and including, but not limited to, a security
interest, security title or lien arising from a security agreement, mortgage,
deed of trust, deed to secure debt, encumbrance, pledge, conditional sale,
financing statement or trust receipt or a lease, consignment or bailment for
security purposes.
"Loan" shall have the meaning set forth in the preamble hereof.
"Loan Documents" shall mean and include this Agreement, the Note, each
Confirmation Statement, the Guaranty, when delivered, and all instruments and
documents now or hereafter executed and/or delivered pursuant hereto or thereto
or in connection herewith or therewith.
"Margin Requirement" shall have the meaning set forth in Section 5(a)
hereof.
"Margin Stock" shall have the meaning provided in Regulation U of the
Board of Governors of the Federal Reserve System.
"Market Value" shall mean the fair market value of any Pledged ABS (to
the date that it is first eligible to be redeemed in connection with an optional
purchase under the related ABS Issuance Agreement) as determined by SBRC in its
reasonable business judgment. The pricing assumptions used by SBRC in
determining the fair market value of any Pledged ABS will be set forth in the
related Confirmation Statement.
"Material Adverse Change" shall mean, with respect to Borrower or Onyx,
as applicable, a material adverse change in (a) the business, operations,
properties, prospects or condition (financial or otherwise) of such Person or
(b) the ability of such Person to perform its obligations hereunder and under
the other Loan Documents.
"Maturity Date" shall mean with respect to each Loan the earlier of (a)
one year from the related Closing Date as specified in the Confirmation
Statement with respect to such Loan and (b) the Termination Date.
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"Maximum Advance Amount" shall mean, as of any date of determination,
$50,000,000.
"Net Worth" shall refer to the sum of equity and subordinated debt of
Onyx determined in accordance with GAAP less the sum of (i) intercompany
receivables, (ii) loans to officers or employees of Onyx, (iii) goodwill and
(iv) deferred taxes, in every case determined on a consolidated basis.
"Note" shall have the meaning set forth in the preamble hereof.
"Obligations" shall mean the principal of and all interest on the Loans,
all fees, expenses, reimbursements (including, without limitation the reasonable
fees and expenses of attorneys), taxes and indemnities and other amounts payable
by the Borrower under the Loan Documents and under any other documents or
instruments executed and delivered by Borrower in connection therewith to SBRC
pursuant to Section 2 hereof or any of their respective successors or assigns,
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising and however arising.
"Onyx" shall mean Onyx Acceptance Corporation, the direct or indirect
sole shareholder of Borrower.
"Outstanding Loans" shall mean on the date of determination thereof the
aggregate unpaid principal amount of each Loan made hereunder.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated association or government (or any agency, instrumentality or
political subdivision thereof).
"Pledged ABS" shall mean any residual, subordinated or interest strip
class of asset backed securities (i) issued in connection with a securitization
involving Borrower, Onyx or an affiliate of either of them, and in which SBRC or
an affiliate of SBRC has acted as the lead underwriter or placement agent and
(ii) pledged by Borrower hereunder and accepted by SBRC in connection with a
Loan hereunder.
"Proceeds" shall have the meaning assigned to it under the UCC and, in
any event, shall include, but not be limited to, (i) any and all Proceeds of any
insurance, indemnity, warranty or guaranty payable to the Borrower from time to
time with respect to any of the Collateral, (ii) any and all payments (in any
form whatsoever) made or due and payable to Borrower from time to time in
connection with any reacquisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
and any sale, transfer or other disposition of all or any part of the
Collateral, and (iv) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"SBRC" shall have the meaning set forth in the preamble hereof.
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"Substitute Collateral" shall have the meaning set forth in Section 6
hereof.
"Supplemental Collateral" shall mean collateral acceptable to SBRC in
accordance with the provisions of Section 5(c) hereof.
"Termination Date" shall have the meaning ascribed to it in Section
15(f) hereof.
"UCC" shall mean the Uniform Commercial Code in effect from time to time
in the applicable jurisdiction.
(b) Accounting Terms and Determinations. Unless otherwise defined or
specified herein, all accounting terms shall be construed herein, all accounting
determinations hereunder shall be made, all financial statements required to be
delivered hereunder shall be prepared and all financial records shall be
maintained in accordance with generally accepted accounting principles ("GAAP")
applied on a basis consistent with the financial statements referred to in
Sections 9(a)(i) and 9(a)(ii) hereof.
(c) Other Definitional Terms. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and article, section, schedule, exhibit and like references are to
this Agreement unless otherwise specified. Any defined term which relates to a
document shall include within its definition any amendments, modifications,
renewals, restatements, extensions, supplements or substitutions which may have
been heretofore or may be hereafter executed in accordance with the terms
hereof.
Section 2. GRANT OF SECURITY INTEREST; DELIVERY OF COLLATERAL; LOANS
DISCRETIONARY
(a) Grant of Security Interest. Borrower hereby grants, pledges,
assigns, transfers and delivers to SBRC with respect to each Loan on the Closing
Date, and grants to SBRC a lien upon and continuing security interest in all of
Borrower's right, title and interest in, to and under all of the following
whether now owned or existing, or at any time hereafter acquired or arising, by
Borrower or in which Borrower now has or at any time in the future may acquire
any right, title or interest (all of which being hereinafter collectively called
the "Collateral"): (i) the Pledged ABS described in the Confirmation Statement
delivered pursuant to Section 4 relating to a Loan, (ii) any Supplemental
Collateral that may be granted to SBRC pursuant to Section 5(c) hereof
(provided, however, that any representations, warranties or covenants contained
herein, and the grant of a lien and security interest with respect to any
Supplemental Collateral, shall be effective as to any Supplemental Collateral
(or any Proceeds, distributions or other amounts realized in respect of such
Supplemental Collateral) only upon the delivery of such Supplemental Collateral
to SBRC pursuant to such Section 5(c) hereof), (iii) all Proceeds, distributions
and other amounts realized in respect of any of the foregoing, as security for
the due and punctual payment by Borrower of the Note and any amounts that may
become payable thereunder or
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hereunder and (iv) with respect to any Loan, all books and records of Borrower
pertaining to any of the foregoing.
(b) Delivery of Instruments of Transfer. Borrower shall, with respect to
each Loan, deliver to SBRC the Collateral endorsed in the name of SBRC or its
nominee or with properly endorsed instruments of transfer (including, without
limitation, any necessary assignments, corporate resolutions and opinions of
legal counsel) that will enable SBRC to cause such Collateral to be so
registered without further action on the part of the Borrower and such
instruments of transfer to the appropriate transfer agent.
(c) Funding of Loans. (i) SBRC Discretion. SBRC shall not be required to
make any Loans hereunder and any Loan hereunder shall be made by SBRC in its
sole discretion upon written request delivered by Borrower to SBRC not less than
one (1) Business Day prior to the applicable Closing Date.
(i) Loan Advances. If SBRC determines to make any Loan
hereunder, then in accordance with the related Confirmation Statement,
SBRC shall advance such Loan to Borrower at a principal amount,
described in such Confirmation Statement, up to a maximum of 70% of the
Market Value of the Collateral. Each Loan advance hereunder shall be
recorded as such by SBRC and be evidenced by the "Loan Schedule"
attached to the Note, and any repayments of each such Loan shall be
recorded as such by SBRC and be evidenced by such "Loan Schedule";
provided, however, that the failure of such recordation by SBRC shall
not affect the rights of the parties hereunder with respect to such
Loan.
(ii) Interest Rate. Each Loan shall bear interest, as calculated
on a monthly basis from and including the related Closing Date to but
excluding the date such Loan is paid in full, on the unpaid principal
amount thereof from the related Closing Date through maturity at a rate
per annum equal to two hundred and fifty (250) basis points in excess of
the prevailing London Interbank Offered Rate for one-month United States
Dollar deposits as set forth on page 8695 of Telerate as of 8:00 a.m.
New York City time on the last Business Day of the month preceding the
month in which such interest is currently accruing.
(d) SBRC's Duty of Care. Except as herein provided in this Section 2(d),
SBRC's sole duty with respect to the Collateral shall be to use reasonable care
in the safekeeping, custody, use, operation and preservation of the Collateral
in its possession or control. SBRC shall incur no liability to Borrower for any
act of government, act of God, or other destruction in whole or in part or
negligence or wrongful act of custodians or agents selected by and supervised by
SBRC with reasonable care, or SBRC's failure to provide adequate protection or
insurance for the Collateral. SBRC shall have no obligation to take any action
to preserve any rights in any of the Collateral against prior parties, and
Borrower hereby agrees to take such action. Borrower shall defend the Collateral
against all such claims and demands of all persons, at all times, as are adverse
to SBRC. SBRC shall have no obligation to realize upon any Collateral, except
through
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proper application of any distributions with respect to the Collateral made
directly to SBRC or its agent(s). So long as SBRC shall act in a commercially
reasonable manner, Borrower hereby waives the defense of impairment of the
Collateral.
Section 3. EARNINGS ON COLLATERAL
All payments and distributions, whether in cash or in kind, made on or
with respect to the Collateral shall, so long as an Event of Default as defined
in Section 11 hereof shall not have occurred and be continuing, be paid to the
registered holder thereof directly by the applicable paying agent, and upon
receipt by such holder such payments and distributions shall be released from
the lien and security interest granted to SBRC hereunder. Subject to compliance
with the ABS Issuance Agreements, SBRC may, in its sole discretion after the
occurrence and during the continuation of an Event of Default, cause all such
payments and distributions to be paid, delivered or transferred directly to
SBRC.
Section 4. CONFIRMATION STATEMENT
SBRC shall, with respect to each Loan, deliver a confirmation statement
substantially in the form attached hereto as Exhibit B (in each case, the
"Confirmation Statement") to Borrower confirming the agreement between Borrower
and SBRC as to the specific terms of the Loan. Each such Confirmation Statement
shall constitute a binding agreement between Borrower and SBRC, and this
Agreement is hereby incorporated in each such Confirmation Statement and made a
part thereof as if it were set out in full in each such Confirmation Statement.
Each such Confirmation Statement will be binding upon the parties hereto unless
written notice of objection is given by the objecting party to the other party
within two (2) Business Days after the objecting party's receipt of such
Confirmation Statement.
Section 5. MARGIN DETERMINATIONS
(a) Margin Requirement. A margin requirement (the "Margin Requirement")
expressed as a percentage shall be established by SBRC with respect to each Loan
on the related Closing Date and shall be set forth in the related Confirmation
Statement. The Margin Requirement for any Loan shall be 30%.
(b) Current Margin. SBRC may, in its reasonable discretion, from time to
time calculate the Current Margin with respect to any Loan, which shall equal
the amount by which (i) 100% exceeds (ii) a fraction (expressed as a percentage)
(A) the numerator of which is the then outstanding principal amount of such Loan
together with accrued and unpaid interest thereon to the date of determination
and (B) the denominator of which shall be the then current Market Value of the
related Collateral (including any Supplemental Collateral delivered pursuant to
this Agreement) then held by SBRC.
(c) Supplemental Collateral. If SBRC shall at any time determine with
respect to a Loan that the Current Margin is less than the related Margin
Requirement, SBRC may in its
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discretion notify Borrower of such fact, and Borrower shall, on the day of such
notice, if such notice is received prior to 10:00 a.m. New York City time, and
on the Business Day next succeeding the day of such notice, if such notice is
received after 10:00 a.m. New York City time, deliver to SBRC cash or
Supplemental Collateral acceptable to SBRC in its sole reasonable judgment as
Collateral hereunder, which cash shall be applied to reduce the principal
balance of the related Loan and which Supplemental Collateral shall, in the
aggregate, equal an amount such that, after giving effect to the application of
such cash and the delivery of such Supplemental Collateral, the Current Margin
for such Loan will be at least equal to the related Margin Requirement. Delivery
of Supplemental Collateral pursuant to this Section 5(c) shall be in such manner
as is acceptable to, and under such additional conditions as may be required by,
SBRC in its sole reasonable judgment.
(d) Release of Supplemental Collateral. If at any time the Current
Margin for a Loan exceeds the Margin Requirement for such Loan and provided that
Borrower shall not have failed to satisfy the requirements of Section 5(c) with
respect to any notice thereunder given by SBRC relating to any Loan, Borrower
may, upon notice to SBRC, demand that SBRC redeliver all or any portion of the
Supplemental Collateral, provided, however, that after giving effect to such
redelivery, the Current Margin would not be less than the Margin Requirement,
and SBRC shall make good delivery of such Supplemental Collateral, in a manner
equivalent to the manner in which such Supplemental Collateral was delivered to
SBRC, no later than the Business Day following receipt by SBRC of such notice.
In such connection, SBRC shall execute such other documents and take such other
actions as the Borrower may reasonably request in order to evidence and give
effect to the release of such Supplemental Collateral from the security interest
granted by this Agreement.
Section 6. RELEASE AND SUBSTITUTION OF COLLATERAL
(a) Borrower may obtain the release from SBRC of the security interest
in and lien on all or any part of the Collateral at any time, and from time to
time, by paying to SBRC as a repayment the amount of the Loan outstanding with
respect to such Collateral to be so released and SBRC shall effect such release
upon such repayment; provided, however, that the date of any such repayment must
be acceptable to SBRC. Any release of the security interest in and lien on all
or any part of the Collateral as a result of a repayment or a substitution
pursuant to this Section shall be evidenced by the execution and delivery by
SBRC of appropriate documentation to evidence such release.
(b) SBRC shall allow Borrower, in Borrower's sole discretion, to provide
collateral acceptable to SBRC, in SBRC's sole reasonable discretion, to be
substituted for existing Collateral of equal or greater market value. All
certificates or instruments representing such substituted collateral shall be
accompanied by duly executed instruments of transfer or assignments in blank,
all in form and substance reasonably satisfactory to SBRC.
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Section 7. CONDITIONS TO THE LOANS
(a) Conditions to the Effective Date. The obligation of SBRC to enter
into this Agreement is subject to the satisfaction by Borrower of the following
conditions on the Effective Date:
(i) Loan Documents. SBRC shall have received the following
documents each in form and substance satisfactory to SBRC and its
counsel:
a. this Agreement, executed and delivered on behalf of
Borrower by a duly authorized officer of Borrower,
b. the Note, executed and delivered on behalf of Borrower
by a duly authorized officer of Borrower,
c. the related Collateral, if delivery of the Collateral is
required in order to perfect SBRC's security interest in
such Collateral, and
d. a financing statement on form UCC-1 signed by Borrower,
describing the Collateral and naming Borrower as the
debtor and SBRC as the secured party.
(ii) Proceedings of Borrower. SBRC shall have received a copy of
the resolutions in form and substance satisfactory to SBRC and its
counsel, of Borrower authorizing (i) the execution, delivery and
performance of the Loan Documents and the other documents to be executed
and/or delivered by it pursuant hereto or thereto or in connection
herewith or therewith, (ii) the borrowings contemplated hereunder and
(iii) the granting by it of the security interest contemplated hereby,
certified by a duly authorized officer of Borrower as of the Effective
Date, which certificate shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded as of
the date of such certificate.
(iii) Corporate Documents of Borrower. SBRC shall have received
true and complete copies of the Certificate of Incorporation and By-Laws
of Borrower (including any and all amendments, supplements and
modifications thereto) certified to such effect by a duly authorized
officer of Borrower as of the Effective Date.
(iv) Proceedings of Onyx. SBRC shall have received a copy of the
resolutions, in form and substance satisfactory to SBRC and its counsel,
of Onyx authorizing the execution, delivery and performance of the
Guaranty certified by a duly authorized officer of Onyx as of the
Effective Date, which certificate shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded
as of the date of such certificate.
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(v) No Violation. The consummation of the transactions
contemplated hereby and by the other Loan Documents shall not
contravene, violate or conflict with, nor involve SBRC in a violation
of, any requirement of law.
(vi) Permits, Licenses, Approvals, Consent, etc. SBRC shall have
received a certificate of a duly authorized officer of Borrower
certifying that all permits, licenses, approvals and consents required
in connection with the execution, delivery and performance by Borrower
and the validity and enforceability against Borrower of this Agreement
and the other Loan Documents have been obtained and such permits,
licenses, approvals and consents are in full force and effect and have
not been amended, modified, revoked or rescinded.
(vii) Corporate Documents of Onyx. SBRC shall have received true
and complete copies of the Certificate of Incorporation and By-Laws of
Onyx (including any and all amendments, supplements and modifications
thereto) certified to such effect by a duly authorized officer of Onyx
as of the Effective Date.
(viii) Additional Matters. All other documents and legal matters
in connection with the transactions contemplated by this Agreement and
the other Loan Documents shall be reasonably satisfactory in form and
substance to SBRC and its counsel.
(b) Conditions Precedent to all Loans and Substitutions. The making of
any Loan or the permitting of any substitution of Substitute Collateral by SBRC
hereunder is, except as otherwise provided in this Section 7, subject to
compliance by Borrower with the following conditions precedent and the other
terms and conditions hereof and, the giving of any notice by Borrower with
respect to a Loan pursuant to Section 4 and the acceptance of the Proceeds of
any Loan by Borrower and the substitution of any Substitute Collateral shall be
deemed certification by Borrower that the following conditions shall have been
met:
(i) Representations and Warranties. Each of the representations
and warranties made by Borrower herein and in the other Loan Documents
are true and correct on and as of the Closing Date, before and after
giving effect to the Loan (and the application of the Proceeds
therefrom) or the substitution, as though made on and as of such date.
(ii) No Default. Before and after giving effect to such Loan
(and the application of Proceeds therefrom) or such substitution, no
Default or Event of Default shall have occurred and is continuing on and
as of the Closing Date.
(iii) Financing Statements. The separate financing statement,
instrument or other document, if required by SBRC to be recorded and/or
filed with respect to the subject Loan or substitution, shall have been
so recorded and/or filed.
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(iv) Good Standing Certificates. On or prior to the initial
Closing Date hereunder and from time to time thereafter as SBRC may
reasonably request (but not more frequently than quarterly), SBRC shall
have received original certificates, in form and substance satisfactory
to SBRC and its counsel, from the Secretary of State or other
appropriate authority of such jurisdiction, evidencing the good standing
of Borrower and Onyx in their respective jurisdiction of incorporation
and in each other jurisdiction where the ownership of their respective
property or the conduct of its business requires such qualification.
(v) Legal Opinion of Counsel to Borrower and Onyx. On or prior
to the initial Closing Date hereunder and on each date after the initial
Closing Date that a security interest in Collateral is granted to SBRC
hereunder Borrower shall cause to be delivered to SBRC an opinion of
counsel to Borrower and Onyx (which counsel may be internal counsel for
Onyx and shall be satisfactory to SBRC), in substantially the form
attached hereto as Exhibit C or such other form as SBRC and Borrower may
mutually agree.
(vi) Recordings and Filings. All material instruments and
documents (including, without limitation, financing statements and
continuation statements) required to be filed hereunder in order to
create in favor of SBRC a perfected security interest in the Collateral
hereunder shall have been properly filed in each office in each relevant
jurisdiction and copies of such instruments and documents, stamped to
indicate such filing, shall have been delivered to SBRC.
(vii) Guaranty. On and after the date of delivery of the
Guaranty, the Guaranty shall be in full force and effect.
Section 8. REPRESENTATIONS AND WARRANTIES
In order to induce SBRC to enter into this Agreement and to make the
Loans hereunder, Borrower hereby represents and warrants to SBRC, and shall on
and as of the Closing Date of each Loan and each date on which Substitute
Collateral is substituted, be deemed to represent and warrant to SBRC, that:
(a) Due Incorporation. Borrower has been duly organized and is validly
existing as a corporation in good standing under the laws of the state of its
incorporation and is duly qualified and in good standing in each other
jurisdiction where the conduct of its business or the ownership, lease or
operation of its property requires such qualification.
(b) Authorization. Borrower has full power and authority to execute and
deliver the Loan Documents and to perform its obligations hereunder and
thereunder; the Loan Documents have each been duly authorized by all necessary
action and neither requires any additional approval of any directors or officers
other than that which has already been obtained, each has been duly executed and
delivered by Borrower and constitutes its legal, valid and binding
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obligation, enforceable against it in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization or similar laws of
general applicability relating to or affecting creditors' rights, to the
assumption that enforcement will be undertaken in a commercially reasonable
manner and to general principles of equity and equitable remedies, regardless of
whether enforcement is considered in a proceeding in equity or at law.
(c) No Conflict. Neither the execution and delivery nor the performance
by Borrower of this Agreement or the Note will conflict with the governing
instruments of Borrower or conflict with, result in a breach of or constitute a
default or require any consent under any instrument or agreement to which
Borrower is a party or by which Borrower may be bound, or any law, order or
regulation applicable to Borrower of any court, governmental agency, authority
or body having jurisdiction over Borrower and do not and will not result in or
require the creation of any lien, security interest or other charge or
encumbrance (other than pursuant hereto) upon or with respect to any of
Borrower's properties.
(d) Approvals, etc. Neither the execution and delivery nor the
performance by Borrower of this Agreement requires any authorization, approval,
consent, license, exemption (other than any self-executing exemption), filing,
registration or the taking of any other action in respect of any federal or
state authority except where the failure to comply with such requirement would
not adversely affect the delivery, execution or performance by Borrower of this
Agreement or cause a Material Adverse Change.
(e) Good Title.
(i) Subject to the ABS Issuance Agreements, Borrower is the
owner of the Collateral and such Collateral is free and clear of all
security interests, liens, charges, encumbrances and rights of others,
except for the lien and security interest created hereby, and on the
related Closing Date, SBRC has a first priority lien on and security
interest in the Collateral (including all Proceeds, distributions and
other amounts realized in respect thereof) in favor of SBRC, subject to
no prior security interest, lien, charge, encumbrance or rights of
others, and, SBRC having taken possession of the Collateral endorsed in
the name of SBRC or its nominee or delivered with such instruments of
transfer as provided in Section 2(b) hereof, no further action,
including any filing or recordation of any document, is currently
required in order to establish and perfect the liens on and security
interests in the Collateral in favor of SBRC against any third parties
in any jurisdiction.
(ii) Borrower's chief executive office and the place where its
books and records concerning the Collateral are kept is set forth on
Exhibit D hereto. Each location of Borrower where any of the Collateral
is located is set forth on Exhibit D.
(f) Tax Liens. There are no delinquent federal, state, city, county or
other taxes relating to Borrower, the Collateral or any arrangement pursuant to
which the Collateral is issued that might, in the reasonable judgment of SBRC,
materially adversely affect any of the Collateral
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or cause a Material Adverse Change in Borrower, and all such delinquent tax
liabilities have been satisfied except those that are being contested by
Borrower in good faith and with respect to which payment has been stayed by a
court of competent jurisdiction.
(g) Financial Statements. Since the date of the most recent financial
statement delivered by Borrower to SBRC, there has been no Material Adverse
Change. Borrower shall provide SBRC with such financial statements and other
information as is contemplated in Section 9(a) hereof.
(h) No Litigation. There are no actions, suits, investigations, or other
proceedings pending, or, to the best knowledge of Borrower, after due inquiry,
threatened, against or affecting Borrower by or before any court, arbitrator,
Governmental Authority which challenge any of the transactions contemplated
under this Agreement or any other Loan Document or could result in a Material
Adverse Change and there are no preliminary or permanent injunctions or orders
by any court or other Governmental Authority pending affecting this Agreement or
any other Loan Document or any of the transactions contemplated hereby or
thereby.
(i) Disclosure. No certificate, statement, report or other document
furnished and no representation or warranty made or to be furnished or made to
SBRC by or on behalf of Borrower in or in connection with this Agreement or any
transaction contemplated hereby, or in connection with any other Loan Document
or any transaction contemplated thereby, at the time furnished, contains or will
contain any untrue statement of a material fact or omits or will omit to state
any material fact necessary in order to make the statements contained therein
not misleading.
(j) Permits, Licenses, Approvals, Consents, etc. Borrower has obtained
any and all permits, licenses, approvals and consents of any Governmental
Authority or other Person as may be required in connection with the execution,
delivery and performance by and the validity and enforceability against Borrower
of this Agreement and the other Loan Documents and the consummation of the
transactions contemplated hereby or thereby (all such permits, licenses,
approvals and consents, if any, are in full force and effect and have not been
amended, modified, revoked or rescinded).
(k) The Investment Company Act. Borrower is not an "investment company",
or an entity "controlled by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
(l) Ownership of Borrower. Borrower is a direct or indirect wholly-owned
subsidiary of Onyx.
Section 9. AFFIRMATIVE COVENANTS
Until the Obligations are paid and satisfied in full and this Agreement
has been terminated, Borrower covenants and agrees that it will:
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(a) Financial Statements and Other Information. Furnish to SBRC:
(i) as soon as available and in any event within sixty (60) days
after the close of each of the first three (3) quarters of each fiscal
year of Borrower, the Onyx applicable quarterly Form 10-Q as filed with
the Securities and Exchange Commission, including the consolidating
statements for the Borrower, subject to normal recurring year-end audit
adjustments, and as prepared in accordance with GAAP;
(ii) as soon as available and in any event within one hundred
and twenty (120) days after the close of each fiscal year of Onyx, a
consolidated balance sheet of Onyx, a consolidated statement of income
of Onyx and a consolidated statement of changes in financial position of
Onyx's consolidated financial group as at the end of and for the fiscal
year just closed, setting forth the corresponding figures of the
previous fiscal year, if applicable, in comparative form, all in
reasonable detail and certified (without any qualification or exception
deemed material by SBRC); by independent public accountants selected by
Onyx and reasonably satisfactory to SBRC;
(iii) concurrently with the delivery of the financial statements
required to be furnished by Section 9(a)(ii) hereof, a certificate
signed by the chief executive or financial officer of Borrower, stating
(1) that a review of the activities of Borrower during such quarter or
fiscal year, as the case may be, has been made under his or her
immediate supervision with a view to determining whether Borrower has
observed, performed and fulfilled all of its obligations under this
Agreement and whether Borrower is in compliance with the representations
and warranties in Section 8 hereof and the covenants in Sections 9 and
10 hereof, and (2) that there existed during such quarter or fiscal
year, as the case may be, no Event of Default and no Default or if any
such Event of Default or Default did exist, specifying the nature
thereof, the period of existence thereof and what action Borrower
proposes to take, or has taken, with respect thereto;
(iv) promptly, and in any event no later than five (5) Business
Days, after the commencement thereof, written notice of any material
actions, suits or proceedings (including arbitrations) against Borrower
or Onyx before any court or other Governmental Authority;
(v) immediately upon becoming aware of any development or other
information which is reasonably likely to result in a Material Adverse
Change of Borrower or Onyx, as applicable, written notice specifying the
nature of such development or information, such anticipated effect and
action, if any, Borrower or Onyx proposes to take or has taken with
respect thereto;
(vi) with reasonable promptness, such other information
respecting any matter likely to result in a Material Adverse Change of
Borrower or Onyx, as applicable, as SBRC may reasonably request from
time to time.
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(b) Existence, Conduct of Business, etc. Continue to engage primarily in
the business of the same general type as now conducted by it and preserve, renew
and maintain in full force and effect its existence and all permits, licenses,
approvals, consents, rights, privileges and franchises necessary or desirable in
the conduct or transaction of its business or the ownership or operation of its
properties or the lease of its properties to which it is a lessee.
(c) Taxes. Borrower will pay and discharge all taxes, levies, liens and
other charges on its assets and on the Collateral that, in each case, in any
manner would create any lien or charge upon the Collateral.
(d) Laws. Borrower will at all times comply in all material respects
with all laws, ordinances, rules and regulations of any federal, state,
municipal or other public authority having jurisdiction over Borrower or any of
its assets.
(e) Name and Locations. Borrower will immediately advise SBRC in writing
of the opening of any new chief executive office or the closing of any such
office and of any change in Borrower's name or the places where the books and
records pertaining to the Collateral are kept.
(f) Records. Borrower will maintain records with respect to the
Collateral and the conduct and operation of its business in conformity with
general industry standards and with no less a degree of prudence than if the
Collateral were held by Borrower for its own account and will furnish SBRC, upon
reasonable request by SBRC or its designated representative, with reasonable
information with respect to the Collateral and the conduct and operation of its
business. Borrower will permit SBRC or its designated representative to inspect
Borrower's records with respect to the Collateral and the conduct and operation
of its business upon reasonable notice from SBRC or its designated
representative, at such reasonable times and with reasonable frequency, and to
make copies or extracts of any and all thereof. SBRC shall act in a commercially
reasonable manner in requesting and conducting any inspection relating to the
conduct and operation of Borrower's business.
(g) Pay Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its material
obligations of whatever nature, except when the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and the
Borrower has established adequate reserves with respect thereto and no Liens
have attached to the Collateral or any portion thereof.
(h) Notices. Promptly, and in any event within one (1) Business Day of
the occurrence thereof, notify SBRC in writing of (i) the occurrence of any
Default or Event of Default hereunder or under any other Loan Document or (ii)
any event of default by any party thereto under any indenture, mortgage, deed of
trust, agreement or other instrument or contractual obligation to which the
Borrower is a party or by which any of its properties may be bound or affected
which could result in a Material Adverse Change, and specifying in each case the
action the Borrower has taken or proposes to take with respect thereto.
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(i) Covenant Compliance Certificate. Deliver or cause to be delivered a
Covenant Compliance Certificate to SBRC on the first Business Day of each
calendar month.
(j) Monthly Collateral Report. Furnish or cause to be furnished to SBRC,
on the last Business Day of each month, a report for each Pledged ABS
substantially in the form of, and containing the information set forth on,
Exhibit F hereto.
(k) Guaranty. Assignor shall proceed in good faith to cause Onyx to
amend Onyx's existing warehouse agreements so as to enable Onyx to provide to
SBRC a guaranty substantially in the form of the Guaranty, and after such
amendments have been made Assignor shall proceed in good faith to cause Onyx to
provide such guaranty to SBRC.
Section 10. NEGATIVE COVENANTS
Until the Obligations are paid and satisfied in full and this Agreement
has been terminated, the Borrower covenants and agrees that it will not:
(a) Liens. Create, incur, assume or suffer to exist, any Lien on any of
the Collateral whether now owned or hereafter acquired, other than Liens in
favor of SBRC hereunder.
(b) Mergers, Sales, Dissolution, etc. (i) Merge into or consolidate with
any other Person without the prior consent of SBRC, which consent shall not be
unreasonably withheld, or (ii) assign, transfer, sell, lease, or otherwise
dispose of any of the Collateral, or all or substantially all of its other
property or assets to any other Person or (iii) wind up, liquidate or dissolve,
or agree to do any of the foregoing.
(c) Corporate Changes. Change its name, principal place of business, the
location where its books and records are kept with respect to the Collateral or
corporate structure or ownership on less than thirty (30) days prior written
notice to SBRC. SBRC is hereby notified and acknowledges the prospective change
in Borrower's principal place of business as described in Section 9(e) above.
(d) Use of Proceeds. The Proceeds of the Loans made pursuant to this
Agreement will not be used by the Borrower, directly or indirectly, for the
purpose of purchasing or carrying any Margin Stock or for the purpose of
reducing or retiring any debt which was originally incurred to purchase or carry
Margin Stock or for any other purpose which might constitute the Loans under
this Agreement as being "purpose credit" within the meaning of Regulation U or X
of the Board of Governors of the Federal Reserve System.
(e) Further Covenants. Without prior written consent of SBRC, Borrower
will not: (i) assign, sell, transfer, pledge or grant any security interest in
or lien on any of the Collateral to anyone except SBRC, permit any financing
statement (except any financing statements in favor of SBRC) or assignment
(except for any assignments in favor of SBRC) to be on file in any public office
with respect thereto, (ii) permit or suffer to exist any security interest,
lien, charge,
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encumbrance or right of others to attach to any of the Collateral, except as
contemplated by this Agreement, or (iii) consent to any amendment or supplement
to any ABS Issuance Agreement that is reasonably likely to result in a material
adverse affect on the Market Value of the Pledged ABS, but excluding in any
event any amendment or supplement that effectuates a letter-of-credit and the
limited quarterly substitution into a related reserve fund for the release of
cash as contemplated in such ABS Issuance Agreement.
Section 11. EVENTS OF DEFAULT
Each of the following, so long as it shall not have been remedied, shall
constitute an "Event of Default" hereunder:
(a) Nonperformance. Any failure to pay, whether on the acceleration
thereof or otherwise, any amounts due under the Note or any failure to pay any
amount due under this Agreement or to perform any provision of this Agreement in
accordance herewith, or any material breach of any representation, warranty or
covenant set forth herein or in the Note.
(b) Termination of Interest. The lapse or termination of Borrower's
interest in any of the Collateral.
(c) Act of Insolvency. The filing by Borrower or any affiliate, of a
petition in bankruptcy, the adjudication of Borrower or any affiliate as
insolvent or bankrupt, the petition or application by Borrower or any affiliate
for any receiver or trustee for itself or any substantial part of its property,
the commencement by Borrower or any affiliate of any proceeding relating to it
under any reorganization, arrangement, dissolution or liquidation law, or the
initiation of any such proceeding against Borrower or any affiliate, if Borrower
or such affiliate indicates by any act its consent thereto or if such proceeding
is not dismissed within sixty (60) days.
(d) Material Adverse Change. In the reasonable judgment of SBRC, a
Material Adverse Change with respect to Borrower or Onyx shall have occurred.
(e) Default Under Other Contracts. Borrower shall be in default with
respect to any normal and customary covenants under any contract or agreement to
which it is a party (which covenants include, but are not limited to, an Act of
Insolvency of Borrower or the failure of Borrower to make required payments
under such contract or agreement as they become due) which default permits
acceleration of the obligations of Borrower under such contract or agreement by
any other party thereto and which default, in the reasonable judgment of SBRC,
is likely to result in a Material Adverse Change with respect to Borrower or
Onyx.
(f) Merger or Consolidation. Borrower shall merge or consolidate into
any entity or shall no longer be wholly-owned by Onyx unless SBRC shall have
expressly consented to such merger or consolidation in writing, which consent
shall not be unreasonably withheld.
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(g) Anticipated Insolvency. SBRC shall reasonably determine that
Borrower is or will be unable to meet its commitments hereunder or, on and after
the delivery of the Guaranty, that Onyx is or will be unable to meet its
commitments under the Guaranty, notifies Borrower of such determination and
Borrower shall not have responded with appropriate information to the contrary
to the satisfaction of SBRC within thirty-six (36) hours.
(h) Final Judgment. A final, non-appealable judgment by any competent
court in the United States for the payment of money in an amount of at least
$100,000 is rendered against Borrower or Onyx, and the same remains undischarged
and unpaid for a period of sixty (60) days during which execution of such
judgment is not effectively stayed.
(i) Breach of Credit Covenants. The occurrence of any of the following:
(1) Onyx shall experience losses or changes in its financial
condition (exclusive of amounts withdrawn for payment of taxes due and
payable by the shareholders of Onyx) that cause its Net Worth for any
two consecutive calendar quarters to be less than or equal to 80% of its
Net Worth as of the commencement of such period.
(2) The ratio of Onyx's total Indebtedness to Onyx's Net Worth
determined as of the end of each calendar quarter shall exceed 8:1.
(3) Onyx's Net Worth shall at any time be less than $35,000,000.
(j) Breach of Representation. Any representation or warranty made by
Borrower herein shall have been incorrect or untrue in any material respect when
made or repeated or when deemed to have been made or repeated and which breach,
in the reasonable judgment of SBRC, is likely to result in a Material Adverse
Change of Borrower or Onyx.
(k) Breach of Covenant. Borrower shall breach in any material respect
any covenant made by it herein and SBRC's interests shall have been materially
adversely affected thereby.
Section 12. REMEDIES
(a) Action Regarding Collateral. If an Event of Default shall occur,
SBRC, without demand of performance or other demand or notice of any kind to
Borrower or any other person, all of which are hereby expressly waived, may
forthwith apply the cash, if any, then held by it as part of the Collateral
relating to any Loan to the payment of any of the Obligations, and, if there
shall be no such cash or the cash so applied shall not be sufficient to pay in
full all such Obligations, may thereafter collect, receive, appropriate, retain
and realize upon the Collateral, or any part thereof, and may forthwith sell,
assign, give an option or options to purchase, contract to sell, or otherwise
dispose of and deliver the Collateral, or any part thereof, in one or more
parcels at such public or private sale or sales, at such place or places, at
such price or prices and upon such other terms and conditions as SBRC may deem
best (provided, however, that SBRC shall act in all respects in a commercially
reasonable manner), for cash or on credit or for future
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delivery without assumption of any credit risk, with the right of SBRC upon any
such sale or sales to purchase all or any part of the Collateral so sold. Upon
any sale, transfer or other disposition of the Collateral pursuant hereto SBRC
shall have the right to deliver, assign and transfer to the transferee thereof
the Collateral so sold. Each transferee upon any such transfer or other
disposition shall hold the property thereby acquired by it absolutely free from
any claim or right of any kind, including any equity or rights of redemption, of
Borrower, who hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any rule of law or statute whether now
existing or hereafter adopted (in the latter case, to the extent permitted
thereby). Borrower agrees that SBRC need give only such notice of the time and
place of any public or private sale (including any adjourned private sale) or
other intended disposition as may be required by market conditions and standards
of commercial reasonableness and that SBRC need not in any event give more than
five (5) Business Days' notice that such sale or disposition is to take place.
Borrower agrees that the notice provided for in the preceding sentence is
reasonable notification of such matters.
SBRC shall not be obligated to make any sale pursuant to any such
notice. SBRC may, without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may be made at any time or
place to which the same may be so adjourned. In case of any sale of all or any
part of the Collateral on credit or for future delivery, the Collateral so sold
may be retained by SBRC until the selling price is paid by the purchaser
thereof, but SBRC shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may again be sold upon like notice. SBRC, however,
instead of exercising the power of sale herein conferred upon it, may proceed by
a suit or suits at law or in equity to foreclose the lien and security interest
created hereby and sell the Collateral, or any portion thereof, under a judgment
or decree of a court or courts of competent jurisdiction.
(b) Deficiency. If the Proceeds of sale, collection, foreclosure or
other realization of or upon the Collateral are insufficient to cover the costs
and expenses of such realization and the payment in full of the Obligations,
Borrower shall remain liable for any deficiency.
(c) Private Sale. SBRC shall incur no liability as a result of the sale
of the Collateral (provided, however, that SBRC shall act in a commercially
reasonable manner) or any part thereof, at any private sale. Borrower hereby
waives any claims against SBRC or any holder or holders of the Note arising by
reason of the fact that the price at which the Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Obligations, even if
SBRC accepts the first offer received and does not offer the Collateral to more
than one offeree (provided, however, that SBRC shall act in a commercially
reasonable manner).
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(d) Application of Proceeds. The Proceeds of any sale or other
realization of all or any part of the Collateral, and any other cash at the time
held by SBRC under this Agreement, shall be applied by SBRC in the following
order of priority:
First, to the payment of the costs and expenses of such sale and
all expenses (including the reasonable fees and expenses of
counsel), liabilities and advances made or incurred by SBRC in
connection therewith.
Second, to the payment of all accrued interest under the Note
due or past due.
Third, to the payment of principal upon the Note due or past
due.
Fourth, to the payment of all other amounts owing under this
Agreement.
Fifth, to the payment to Borrower, or to such other person as a
court of competent jurisdiction may direct, of any surplus then
remaining from such Proceeds and other cash.
(e) Default Rate of Interest. After demand is made with respect to the
Note or upon acceleration thereof, until the balance thereof shall be paid, the
Loan amounts due thereunder, shall bear interest at a per annum rate (based on a
year of 360 days and actual days elapsed) equal to two hundred (200) basis
points in excess of the interest rate for such Loan, but in no event higher than
the maximum rate permitted by law.
(f) Attorney-in-Fact. Effective upon the occurrence of an Event of
Default hereunder, SBRC is hereby appointed the attorney-in-fact of Borrower for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instruments which SBRC may deem necessary or advisable
to accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, after an Event of Default has occurred, SBRC shall have the right and
power to receive, endorse and collect all checks made payable to the order of
Borrower representing any distribution in respect of the Collateral or any part
thereof and to give full discharge for the same.
(g) Payments on Collateral to Borrower.
(i) All rights of Borrower to receive any payments from the
related Collateral which it would otherwise be authorized to receive
shall cease, and all such rights shall thereupon become vested in SBRC,
which shall thereupon have the sole right to receive and hold as
Collateral such payments.
(ii) All payments which are received by Borrower contrary to the
provisions of the preceding subsection (i) shall be received in trust
for the benefit of SBRC, shall be segregated from other funds of
Borrower and shall be promptly paid to SBRC.
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(h) Cross-Collateralization; Right of Set-Off. SBRC may, in its sole
discretion upon the occurrence and during the continuation of an Event of
Default hereunder, proceed against any assets held by it under any agreement
with Borrower or Onyx and shall have a right of set-off against any amounts owed
by SBRC to Borrower or Onyx under any such agreement. In addition, the parties
agree that SBRC may, in its sole discretion upon the occurrence and during the
continuation of an event of default under any such agreement, proceed against
any assets held by it hereunder and shall have a right of set-off against any
amounts owed by SBRC to Borrower hereunder.
Section 13. MATURITY DATE; INTEREST PAYMENT DATES; REPAYMENT OF
PRINCIPAL
(a) Payment on Maturity Date. Borrower and SBRC hereby agree that the
Obligations of Borrower hereunder and under the Note are payable on the Maturity
Date unless earlier payment thereof is required pursuant to the terms of this
Agreement.
(b) Interest Payment. Interest on each Loan shall be payable on the
dates described in the related Confirmation Statement.
(c) Payment of Principal. The principal portion of each Loan may be
repaid in whole or in part at the discretion of Borrower on any date on which a
payment of interest is to be made thereon by Borrower pursuant to the terms of
this Agreement and the related Confirmation Statement provided that (i) Borrower
shall have provided SBRC with not less than two (2) Business Days' written
notice of Borrower's intention to effect such repayment and the amount thereof,
(ii) all payments of interest then due and owing on the Loan are paid in full
and (iii) no Event of Default has occurred and is continuing with respect to any
of Borrower's Obligations hereunder or under the Note.
(d) Event of Default. Nothing in this Section 13 shall be deemed to
limit the right of SBRC to require, so long as an Event of Default shall have
occurred and is continuing, the payment by Borrower of all Obligations arising
hereunder and under the Note.
Section 14. PAYMENT OF LIABILITIES
The Borrower and SBRC agree that any tax or other liability (excluding
any tax liability arising from the receipt by SBRC of interest income on any
Loan under this Agreement) incurred by the beneficial owner or the registered
holder of any Collateral pledged under the this Agreement shall be borne by
Borrower. So long as any Obligations are outstanding hereunder, Borrower agrees
to indemnify SBRC for, and to hold SBRC harmless against, any liability inuring
to SBRC as a result of the endorsement of the Collateral in SBRC's name, or
SBRC's status as the lender hereunder or beneficial holder of such Collateral,
including, without limitation, any tax liability (excluding any tax liability
arising from the receipt by SBRC of interest income on any Loan under this
Agreement) or liability for the payment of expenses of the trust funds
established under the applicable ABS Issuance Agreements.
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Section 15. GENERAL PROVISIONS
(a) No Waiver. No waiver or amendment of or forbearance in enforcing any
provision of this Agreement nor consent to any departure by either party
herefrom shall be effective unless expressly granted in writing and shall be
limited to the extent expressed therein.
(b) Governing Law; Severability. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and entirely performed therein. Unless otherwise defined herein,
terms defined in the UCC are used herein as defined therein. Each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or be invalid under such law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
(c) Construction. The captions in this Agreement are for convenience of
reference only and shall not affect the construction or interpretation of any of
the provisions hereof.
(d) Assignment. This Agreement shall be binding upon and shall inure to
the benefit of each of the parties hereto and their respective successors and
assigns; provided, however, that neither this Agreement nor any rights or other
obligations hereunder may be assigned by Borrower without prior written consent
of SBRC and any attempted or purported assignment hereof or thereof shall be
void. SBRC may assign any or all of its rights hereunder without consent.
(e) Notices, Payments, Deliveries. Unless otherwise provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, facsimile or telex communication), and such notices and
other communications shall, when mailed, telegraphed, communicated by facsimile
transmission or telexed, be effective when received at the address for notices
for the party to whom such notice or communications is to be given as follows:
If to SBRC:
Salomon Brothers Realty Corp.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. XxXxxxxxxx
33rd Floor
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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With a copy to:
Attention: Xxxxxx Xxxxxx, Esq.
39th Floor
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Borrower:
Onyx Acceptance Funding Corporation
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
provided, however, that a facsimile or other form of electronic transmission
shall be deemed to be received by the parties hereto when transmitted so long as
the transmitting machine has provided an electronic confirmation of such
transmission and such facsimile or other form of electronic transmission is
confirmed with a printed paper copy thereof by mail or overnight courier
service. All payments on and deliveries of Collateral hereunder shall be made to
the address or account for payments and deliveries of such Collateral for the
party to whom such payment or delivery is to be made as set forth above. Either
party may revise any information relating to it by notice in writing to the
other party, which notice shall be effective on the third Business Day following
receipt thereof.
(f) Termination. When all Obligations shall have been paid in full and
upon the written request of Borrower, this Agreement shall terminate (the date
of such termination, the "Termination Date") and SBRC shall release its lien and
security interest hereunder and assign, transfer and deliver, against receipt,
any remaining Collateral and money received in respect thereof to or on the
order of Borrower. Upon the request of Borrower, SBRC will then execute
termination statements and such other documents as Borrower may reasonably
request as are necessary to make clear upon the public record the termination of
the lien and security interests created hereby with respect to such assignment.
The obligations of Borrower under Section 15(h) below shall, with respect to
each transaction entered into hereunder, survive any termination hereof.
(g) Aggregate Amount of Loans; Disbursement of Funds.
(i) The aggregate outstanding principal amount of the Loans made
by SBRC hereunder shall be limited to the Maximum Advance Amount.
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(ii) Borrower may request disbursement of amounts borrowed
hereunder upon not less than two (2) Business Days' written notice to
SBRC.
(iii) SBRC is not obligated to make any Loan or advance under
this Agreement or pursuant to the Note; provided that SBRC agrees in
good faith to give reasonable notice to Borrower of its intention not to
make any further Loans or advances hereunder.
(h) Expenses.
(i) Borrower shall pay its own costs and expenses and all
reasonable costs and expenses of SBRC (including reasonable expenses for
legal services) incident to the preparation and negotiation of this
Agreement and any documents relating hereto, provided that Borrower's
liability for such costs and expenses of SBRC shall not exceed a total
of $40,000.00.
(ii) Borrower agrees to pay to SBRC on demand all reasonable
costs and expenses (including reasonable expenses for legal services) of
any subsequent enforcement of any of the provisions hereof, or of the
performance by SBRC of any Obligations of Borrower in respect of the
Collateral which Borrower has failed or refused to perform, or any
actual or attempted sale, or any exchange, enforcement, collection,
compromise or settlement in respect of any of the Collateral and for the
custody, care or preservation of the Collateral (including insurance
costs) and defending or asserting rights and claims of SBRC in respect
thereof, by litigation or otherwise, including expenses of insurance. In
addition, Borrower agrees to pay to SBRC on demand all costs and
expenses (including reasonable expenses for legal services) of the
registration of the Collateral in the name of SBRC or its nominee. All
such expenses shall be Obligations to SBRC secured under this Agreement.
(i) SBRC's Right to Pledge. Nothing in this Agreement shall preclude
SBRC from engaging in transactions with third parties involving the selling
pursuant to a repurchase arrangement, pledging or hypothecating of the
Collateral, but no such transaction shall relieve SBRC of its obligations
hereunder. SBRC hereby grants to Borrower the right to perform in SBRC's stead
under any repurchase, reverse repurchase, loan or similar transaction in which
SBRC has sold, pledged or otherwise transferred any Pledged ABS in the event
that SBRC has defaulted on its obligations to repurchase or accept redelivery of
such Pledged ABS in conformity with the terms of any such transaction and so
long as an Event of Default hereunder by Borrower shall not have occurred and be
continuing. SBRC further acknowledges that each Pledged ABS identified in a
Confirmation Statement and included as Collateral for a Loan hereunder is unique
and identifiable on the date of such Loan and that an award of money damages
would be insufficient to compensate Borrower for the losses and damages incurred
by Borrower in the event of SBRC's failure to release and redeliver any Pledged
ABS upon the repayment of the related Loan by Borrower as provided hereunder.
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29
(j) Indemnification. Borrower agrees to indemnify and hold harmless SBRC
against all liabilities and expenses to which SBRC may become subject relating
to any fees, taxes or liability to any third party resulting from any action
taken or omitted by or upon instructions of Borrower with respect to the
Collateral.
(k) Further Assurances. Borrower agrees that, from time to time upon the
prior written request of SBRC, it will (i) execute and deliver such further
documents and do such other acts and things as SBRC may reasonably request in
order to fully effectuate the purposes of this Agreement and (ii) provide such
opinions of counsel concerning matters relating to this Agreement as SBRC may
reasonably request.
(l) Remedies Cumulative. All rights, remedies and powers of SBRC
hereunder and in connection herewith are irrevocable and cumulative, and not
alternative or exclusive, and shall be in addition to all other rights, remedies
and powers of SBRC whether under law, equity or agreement. In addition to the
rights and remedies granted to it in this Agreement or under the Note, SBRC
shall have all the rights and remedies of a secured party under the UCC.
(m) Litigation. Notwithstanding any termination hereof, Borrower hereby
agrees that any legal action or proceeding against it in connection herewith may
be brought in the courts of the State of New York or of the United States of
America located in the City and State of New York, Borough of Manhattan, as SBRC
may elect, and Borrower hereby irrevocably submits to the jurisdiction of each
of said courts, and waives any objection on the grounds of venue, forum non
conveniens or similar grounds.
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30
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ONYX ACCEPTANCE FUNDING CORPORATION
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
SALOMON BROTHERS REALTY CORP.
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
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31
EXHIBIT A
THIS NOTE IS NOT A
NEGOTIABLE INSTRUMENT.
NO TRANSFER OR SALE OF THIS NOTE SHALL BE MADE UNLESS SUCH TRANSFER IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND ANY APPLICABLE STATE SECURITIES LAWS OR IS MADE IN ACCORDANCE WITH SAID ACT
AND LAWS.
NOTE
$50,000,000 New York, New York September 3, 1998
(subject to the Maximum Advance Amount)
FOR VALUE RECEIVED, ONYX ACCEPTANCE FUNDING CORPORATION (the "Borrower")
promises to pay to SALOMON BROTHERS REALTY CORP. (the "Payee") the principal sum
of Fifty Million Dollars ($50,000,000) (or so much thereof as shall have been
advanced here against pursuant to the Master Loan Agreement and shall be
outstanding), in lawful money of the United States of America, in immediately
available funds, with interest on each principal sum advanced here against or
the unpaid balance thereof with such frequency and to such location as is
specified in the related confirmation statement (in each case, the "Confirmation
Statement") for such advance (or on such other day and with such other frequency
and to such other location as may be mutually agreed upon by the Borrower and
the Payee) at said office and in said money and funds from (and including) the
date of the related Loan advance to (but excluding) the related Maturity Date
for such Loan at the rate per annum (based on a year of 360 days and actual days
elapsed) indicated on the related Confirmation Statement attached hereto, but in
no event higher than the maximum rate permitted by law, and after such Maturity
Date, or upon acceleration as hereinafter provided, until said balances shall be
paid, at the rate per annum (based on a year of 360 days and actual days
elapsed) equal to two hundred (200) basis points in excess of the interest rate
for such advance, but in no event higher than the maximum rate permitted by law.
Loans here against shall be in minimum amounts of $1,000,000. The
Borrower may request disbursement of amounts borrowed hereunder upon not less
than two (2) Business Days' written notice to the Payee. The Payee is not
obligated to make any advances hereunder. The Payee is hereby authorized by the
Borrower to endorse on the Loan Schedule amounts advanced here against, the rate
of interest relating thereto and any principal prepayments hereunder (as
permitted by the Assignment defined below), it being understood, however, that
failure to make
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32
any such endorsement shall not affect the obligations of the Borrower hereunder
in respect of the amounts advanced here against.
This Note is the Note referred to in the Master Loan Agreement (the
"Master Loan Agreement"), dated as of September 3, 1998, between Borrower and
the Payee, granting to the Payee a first priority perfected security interest in
the Collateral, as described therein. The holder is entitled to the benefits of
the Master Loan Agreement and may enforce the agreements of the Borrower
contained therein and exercise the remedies provided for thereby or otherwise
available in respect thereof. All capitalized terms used in this Note and not
otherwise defined shall have the respective meanings set forth in the Master
Loan Agreement except where the context clearly indicates otherwise.
This Note and all other present and future obligations of any and all
kinds of the Borrower in favor of the holder hereof, whether created directly or
acquired by assignment, whether absolute or contingent, shall, unless the holder
shall otherwise elect, forthwith be due and payable without notice or demand of
any kind (except as expressly provided in the Master Loan Agreement), all of
which are expressly waived upon the occurrence of an Event of Default.
The Borrower hereby agrees that any legal action or proceeding against
it for enforcement of this Note or of any judgment with respect to this Note may
be brought in the courts of the State of New York or of the United States of
America located in the City and State of New York, Borough of Manhattan, as the
holder may elect, and the Borrower hereby irrevocably submits to the
jurisdiction of each of said courts, and waives any objection on the grounds of
venue, forum non conveniens or similar ground. The Borrower irrevocably consents
that service of process in any such action or proceeding may be made upon the
Borrower by the mailing thereof by the holder by United States registered or
certified mail, postage prepaid, to the Borrower at the address set forth herein
below the signature of the Borrower, and the Borrower hereby further agrees that
service of process in such manner shall be full and sufficient notice of any
such action or proceeding.
The Borrower waives diligence, presentment of any instrument, protest
and notice of non-payment or protest and any and all other notices and demands
whatsoever in connection with the delivery, acceptance, performance, default or
enforcement of this Note. The Borrower will pay on demand all costs of
collection (including reasonable attorneys' fees) paid or incurred by the holder
in enforcing this Note on default. As used herein, the world "holder" shall mean
the Payee or any endorsee of this Note who is in possession hereof, if this Note
is at the time payable to the bearer.
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33
This Note shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and entirely performed
therein.
ONYX ACCEPTANCE FUNDING CORPORATION
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
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34
LOAN SCHEDULE
This Note evidences Loans made by the Payee to the Borrower and the repayment of
principal by the Borrower to the Payee, in the principal amounts and on the
dates and with the related interest rates set forth below as well as the total
amount advanced here against as of each such date:
PRINCIPAL INTEREST PRINCIPAL TOTAL
DATE AMOUNT LOANED RATE AMOUNT REPAID OUTSTANDING
------------ --------------------- ----------- ---------------------- -------------------
------------ --------------------- ----------- ---------------------- -------------------
------------ --------------------- ----------- ---------------------- -------------------
------------ --------------------- ----------- ---------------------- -------------------
------------ --------------------- ----------- ---------------------- -------------------
------------ --------------------- ----------- ---------------------- -------------------
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EXHIBIT B
CONFIRMATION STATEMENT
SALOMON BROTHERS REALTY CORP.
Date:
-----------------------------------
Borrower: Onyx Acceptance Funding Corporation
Address:
Attention:
Telephone:
Fax Number:
Re: LOAN PURSUANT TO MASTER LOAN AGREEMENT
Gentlemen:
Salomon Brothers Realty Corp. ("SBRC") is pleased to confirm our Loan to you
(the "Borrower") pursuant to the Master Loan Agreement (the "Master Loan
Agreement"), dated as of September 3, 1998, between you and SBRC under the
following terms and conditions:
1. Collateral Description:
-----------------------
A. Security Issue Date:
-----------------------
B. Percentage Ownership: %
-----------------------
C. Face Amount: $
-----------------------
D. Current Market Value: $
-----------------------
E. Margin Requirement: %
-----------------------
2. Loan: New Funds Roll
------ -----
A. Amount: $
-----------------------
B. Closing Date:
-----------------------
C. Interest Payment Date: The last Business Day of each month.
B-1
36
SBRC's Wiring Instructions Borrower's Wiring Instructions
The Note, dated September __, 1998, which evidences advances under the
Master Loan Agreement will be annotated on the schedule attached thereto to
reflect the date, amount and interest rate relating to this advance.
The Master Loan Agreement is incorporated by reference into this
Confirmation Statement and made a part hereof as if it were fully set forth
herein. All capitalized terms used herein but not otherwise defined shall have
the meanings specified in the Master Loan Agreement.
Very truly yours,
SALOMON BROTHERS REALTY CORP.
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
AGREED AND ACKNOWLEDGED:
ONYX ACCEPTANCE FUNDING CORPORATION
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
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EXHIBIT C
[FORM OF OPINION OF COUNSEL TO THE BORROWER]
[OPINIONS RELATING TO THE GUARANTY SHALL BE
DELIVERED WHEN THE GUARANTY IS DELIVERED]
Gentlemen:
We have acted as counsel to Onyx Acceptance Funding Corporation, a
Delaware corporation (the "Borrower"), in connection with (i) the execution and
delivery of the Master Loan Agreement, dated as of September 3, 1998 (the
"Agreement"), between the Borrower and Salomon Brothers Realty Corp., a Delaware
corporation ("SBRC") and (ii) the execution and delivery of the Note, dated
September 3, 1998 in the principal amount of $50,000,000 ("Note") made by the
Borrower to the order of SBRC. In addition, we have acted as counsel to Onyx
Acceptance Corporation, a Delaware corporation ("Onyx"), in connection with its
partial guaranty, dated September 3, 1998 (the "Guaranty"), of the obligations
of Borrower under the Agreement. Unless otherwise defined herein, all defined
terms used herein shall have the meanings assigned thereto in the Agreement.
As counsel to the Borrower and Onyx, we have participated in the
preparation and negotiation of the Agreement, the Note, the Guaranty and the
other documents and instruments executed and delivered pursuant thereto and in
connection therewith by the Borrower.
In this connection, we have examined, among other documents, the
Certificate of Incorporation and By-Laws of the Borrower and Onyx, the minutes
of meetings of the Borrower, and such other documents and records of the
Borrower and Onyx as we have deemed relevant and necessary as a basis for the
conclusions contained in the opinions hereafter set forth. As to factual
matters, we have relied, among other things, without independent investigation,
on the factual representations of each of the Borrower and Onyx in officer's
certificates and such factual representations of each of the Borrower and Onyx
as appear in the Agreement, the Note, the Guaranty and the officer's
certificates. In addition, we have obtained and relied upon such other documents
and certificates as we have deemed necessary or appropriate as a basis for the
opinions hereinafter expressed. In our examination, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity to originals of all documents submitted to us
photostatic copies.
Based upon the foregoing, we are of opinion that:
1. The Borrower is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and has the corporate
power and authority to
C-1
38
execute, deliver and perform its obligations under the Agreement and the Note.
Borrower is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it requires
such qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets or condition (financial or
other) of Borrower and its subsidiaries, considered as a whole.
2. Each of the Agreement and the Note has been duly executed and
delivered by Borrower and constitutes the legal, valid and binding obligation of
Borrower enforceable against Borrower in accordance with its terms.
3. No authorization, consent approval, license, filing or registration
with any governmental or regulatory authority or agency is required under
California, New York or federal law for the validity of the execution and
delivery of, or performance by Borrower of its obligations under the Agreement
and the Note (except (a) such as have been received or made, (b) such as may be
required under California, New York or federal securities laws, as to which no
opinion is expressed, and (c) such filings of financing or continuation
statements as may be required to be made under the Uniform Commercial Code in
any jurisdiction).
4. The execution, delivery and performance by Borrower of the Agreement
and the Note (a) has been duly authorized by all necessary corporate action on
the part of Borrower, (b) does not and will not violate, or result in a breach
of (1) the Certificate of Incorporation or Bylaws of Borrower, (2) the
provisions of the Delaware General Corporate Law or any California, New York or
federal law, rule or regulation applicable to Borrower (other than California,
New York and federal securities laws, as to which no opinion is expressed) or
(3) to the best of counsel's knowledge, any order of any court or other
governmental authority to which Borrower is a party or by which Borrower or any
of its properties are bound or subject, where, in the case of items (2) and (3),
such violation or breach could have a material and adverse effect on the ability
of Borrower to perform its obligations under the Agreement or the Note and (c)
will not conflict with, or result in a breach, violation or acceleration of, or
constitute a default under any material agreement to which Borrower is a party
or by which Borrower is bound.
5. To the best of counsel's knowledge, there is no action, suit,
proceeding or investigation before or by any court or governmental agency or
body, domestic or foreign, now pending or threatened against Borrower which
could reasonably be expected to interfere with or materially and adversely
affect the consummation of the transactions contemplated in this Agreement or
the Note.
6. Onyx is a corporation duly incorporated and validly existing and in
good standing under the laws of the State of Delaware and has the corporate
power and authority to execute, deliver and perform its obligations under the
Guarantee. Onyx is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it requires
such qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets or condition (financial or
other) of Onyx and its subsidiaries, considered as a whole.
C-2
39
7. The Guaranty has each been duly authorized, executed and delivered by
Onyx, and constitutes a valid and legally binding obligation of Onyx enforceable
against Onyx in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights generally and to general equity
principles.
8. The execution, delivery and performance by Onyx of the Guaranty (a)
has been duly authorized by all necessary corporate action on the part of Onyx,
(b) does not and will not violate, or result in a breach of (1) the Certificate
of Incorporation or Bylaws of Onyx, (2) the provisions of the Delaware General
Corporation Law, or any California, New York or federal law, rule or regulation
applicable to Onyx (other than California, New York and federal securities laws,
as to which counsel expresses no opinion) or (3) to the best of counsel's
knowledge, any order of any court or other governmental authority to which Onyx
is a party or by which Onyx or any of its properties are bound or subject, where
in the case of items (2) and (3) above, such violation or breach could have a
material and adverse effect on the ability of Onyx to perform its obligations
under the Guaranty and (d) will not conflict with, or result in a breach,
violation or acceleration of, or constitute a default under any of the material
agreements to which Onyx is a party or by which it is bound.
9. To the best of counsel's knowledge, there is no action, suit,
proceeding or investigation before or by any court or governmental agency or
body, domestic or foreign, now pending or threatened against Onyx which could
reasonably be expected to interfere with or materially and adversely affect the
consummation of the transactions contemplated in the Guaranty.
10. Each Pledged ABS will have been endorsed in a manner which satisfies
any requirement of endorsement in order to transfer all right, title and
interest in and to that Pledged ABS from Borrower to SBRC. This Agreement
together with (a) the delivery of such related Pledged ABS to SBRC and (b) the
endorsement of such Pledged ABS to SBRC, creates a valid, perfected security
interest in such Pledged ABS in favor of SBRC. Such security interest will have
the same priority and will be subject to the same security interests and liens
as apply to such Pledged ABS in the hands of Borrower.
11. Borrower acquired each Pledged ABS in a true sale from Onyx.
12. In the event of an insolvency proceeding against Onyx, the assets of
Borrower would not be consolidated with those of Onyx.
Very truly yours,
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EXHIBIT D
LOCATION OF CHIEF EXECUTIVE OFFICES AND COLLATERAL
Chief Executive Office
Onyx Acceptance Funding Corporation
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Collateral
With respect to any Loan, the Pledged ABS to be delivered to, and held
by, SBRC or its bailee.
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EXHIBIT E
ONYX ACCEPTANCE CORPORATION
0000 XXXXXX XXXXXX XXXXX
XXXXX XXXXX
XXXXXX, XXXXXXXXXX 00000
September 3, 1998
Salomon Brothers Realty Corp.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
This letter will confirm that Onyx Acceptance Corporation, a Delaware
corporation ("Guarantor"), agrees to absolutely and unconditionally guaranty to
Salomon Brothers Realty Corp. and any of its affiliates (collectively, the
"Beneficiary"), the full and prompt payment and performance of the obligations,
undertakings and liabilities of Onyx Acceptance Funding Corporation, a Delaware
corporation ("Borrower"), arising under the terms and provisions of a Master
Loan Agreement (the "Agreement"), dated as of September 3, 1998 by and between
Borrower and Salomon Brothers Realty Corp. ("SBRC"), in an amount not to exceed
10% of the aggregate outstanding amount owed by Borrower to SBRC under the
Agreement (such obligations, undertakings and liabilities are herein referred to
as the "Guarantied Obligations"). Guarantor hereby expressly consents to any
amendment to the Agreement as may be agreed upon by Borrower and SBRC and waives
notice of any such amendment. A copy of the Agreement is attached hereto as
Exhibit A. Capitalized terms used and not otherwise defined herein shall have
the meanings assigned in the Agreement.
Guarantor hereby represents and warrants to you that Borrower is a
direct or an indirect wholly-owned subsidiary of Guarantor.
Guarantor hereby agrees that if Borrower shall fail at any time to make
due and punctual payment to the Beneficiary of any Guarantied Obligation or if
Borrower shall fail at any time to perform any other Guarantied Obligation to
the Beneficiary, Guarantor will forthwith pay such amount and perform such
obligation without demand therefor.
Guarantor covenants and agrees to immediately notify SBRC if a
representation, warranty or covenant of Borrower under Agreement has been
breached or if an Event of Default shall have occurred.
X-0
00
Xxxxxxxxx, to the extent consistent with applicable law, hereby waives
any requirement that the Beneficiary take legal action against Borrower before
enforcing this guaranty; agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Guarantied Obligations or the dissolution, liquidation, reorganization or other
change regarding the Borrower or the Borrower seeking protection, or having a
case or proceeding commenced against it, under any law for the protection of
debtors or creditors; waives diligence, presentment, demand for payment or
performance, protest or notice or other formality of any kind whatsoever; waives
filing of claims with any court in case of the insolvency, reorganization or
bankruptcy of the Borrower; waives any fact, event or circumstance that might
otherwise constitute a legal or equitable defense to or discharge of Guarantor,
including (but without typifying or limiting this waiver) failure by the
Beneficiary to perfect a security interest in any collateral securing
performance of any Guarantied Obligation and any delay by the Beneficiary in
exercising any of its rights hereunder, Guarantor covenants that this guaranty
will not be discharged except by full and final payment and performance to the
Beneficiary of all Guarantied Obligations incurred while it is effective, and
agrees that this guaranty shall continue to be effective or be reinstated (as
the case may be) if at any time all or any part of any payment or interest
thereon or other performance by Borrower is avoided or must otherwise be
restored by the Beneficiary. Guarantor hereby further consents to any renewal or
modification of any Guarantied Obligation or any extension of the time within
which such is to be performed and to any other indulgences, whether before or
after the date of this guaranty.
Guarantor agrees to pay on demand all out-of-pocket expenses (including
legal fees and disbursements) incurred by the Beneficiary in connection with the
enforcement and protection of its rights hereunder.
This is a continuing guaranty and will remain in effect until thirty (30) days
after written notice of termination is received by Salomon Brothers Realty
Corp., 0 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxx X. XxXxxxxxxx. Any such termination shall not affect or reduce Guarantor's
obligations hereunder for any liability of Borrower that arose prior to the
expiration of said thirty-day period. This guaranty shall terminate and shall be
of no further force or effect upon full payment of all amounts due to SBRC under
the Agreement. This guaranty shall inure to the benefit of any successor of the
Beneficiary and be binding on any successor or assignee of Guarantor.
This guaranty shall be governed by and construed in accordance with the
laws of the State of New York. Guarantor hereby agrees that (i) any dispute or
controversy arising out of or relating to this guaranty, the Agreement or the
Note shall be submitted to arbitration before the American Arbitration
Association, (ii) the arbitration proceedings shall be conducted in New York,
New York and (iii) the decision of the arbitrators shall be final and judgment
may be entered on the award. In the event that such arbitration is unavailable,
Guarantor hereby submits to the jurisdiction of the United States Federal and
New York State courts situated in the City, County, and State of New York and
hereby agrees that any litigation arising out of or relating to this guaranty,
the Agreement or the Note shall be brought in such courts. Each provision and
agreement herein shall be treated as separate and independent from any other
provision or
E-2
43
agreement herein and shall be enforceable notwithstanding the non-enforceability
of any such other provision or agreement.
Any demand by SBRC for payment or performance by Guarantor shall be by a
written demand to Guarantor, which shall be deemed to have been duly given if
made by facsimile transmission to Onyx Acceptance Corporation, 0000 Xxxxxx
Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxx X. Xxxxx,
Phone: (000) 000-0000, Fax: (000) 000-0000 or if personally delivered at or upon
the fifth day after deposit in the mails, mailed by registered mail, postage
prepaid, to Onyx Acceptance Corporation, 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxx X. Xxxxx.
Very truly yours,
ONYX ACCEPTANCE CORPORATION
By:
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Name:
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Title:
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X-0
00
XXXXXXX X
MONTHLY COLLATERAL REPORT
F-1
