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EXHIBIT 10.108
EXECUTION COPY
AMENDED AND RESTATED TRIPLE-A ONE SECURITY AGREEMENT
AMENDED AND RESTATED TRIPLE-A ONE SECURITY AGREEMENT, dated as of
September 4, 1998, among ONYX ACCEPTANCE FINANCIAL CORPORATION, a Delaware
corporation ("Xxxxx"), TRIPLE-A ONE FUNDING CORPORATION, a Delaware corporation
("Triple-A One"), and CAPITAL MARKETS ASSURANCE CORPORATION, a New York stock
insurance company as collateral agent on behalf of and for the benefit of
Triple-A One (in such capacity, the "Collateral Agent").
W I T N E S S E T H :
WHEREAS, Triple-A One issues CP Notes or borrows from the Banks under
the Liquidity Agreement and with the proceeds thereof makes Triple-A One Loans
to Xxxxx for the purpose of purchasing Contracts;
WHEREAS, as a condition precedent to the Triple-A One Credit Agreement
Xxxxx executed and delivered this Triple-A One Security Agreement to the
Collateral Agent for the benefit of Triple-A One; and
WHEREAS, the parties hereto wish to amend and restate this Triple-A One
Security Agreement as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and to induce Triple-A
One to make its Triple-A One Loans to Xxxxx under the Triple-A One Credit
Agreement, Xxxxx hereby agrees with the Collateral Agent as follows:
SECTION 1. Defined Terms.
(a) As used in this Triple-A One Security Agreement or any
certificate or other document made or delivered pursuant
hereto, the capitalized terms used herein and therein shall,
unless otherwise defined herein, have the meanings assigned to
them in the Amended and Restated Definitions List dated as of
the date hereof that refers to this Triple-A One Security
Agreement, which is incorporated herein by reference (the
"Definitions List").
(b) As used herein and in any certificate or other document made
or delivered pursuant hereto, accounting terms not defined in
the Definitions List and accounting terms partly defined in
the Definitions List to the extent not defined, shall have the
respective meanings given to them under GAAP.
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(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Triple-A One Security
Agreement shall refer to this Triple-A One Security Agreement
as a whole and not to any particular provision of this
Triple-A One Security Agreement, and paragraph references are
to this Triple-A One Security Agreement unless otherwise
specified.
(d) Capitalized terms used herein shall be equally applicable to
both the singular and plural forms of such terms.
(e) The following terms that are defined in the UCC are used
herein as so defined: Chattel Paper, Documents, Equipment,
General Intangibles, Instruments and Proceeds.
SECTION 2. Grant of Security Interest. As collateral security for the prompt
and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, Xxxxx
hereby assigns, pledges, grants, conveys, transfers, delivers and sets
over to the Collateral Agent for its benefit and for the ratable
benefit of the holders of the Obligations a security interest in all
Xxxxx'x right, title and interest in, to and under the following,
whether now owned or hereafter acquired, in each case only as related
to the Purchased Contracts (collectively, the "Collateral"). For
further clarification, all Collateral as heretofore described in this
Section 2 shall relate to and be in respect of Purchased Contracts as
defined herein, subject to any and all provisos, as applicable,
expressly included in the definition thereof.
(a) all chattel paper, including, without limitation, the
Purchased Contracts and other contracts related to the
Purchased Contracts (as the same may be amended, modified,
supplemented, restated or replaced from time to time) and
amounts paid or payable with respect thereto;
(b) all Files (including all Dealer Assignments) and Contract
Lists, and all right, title and interest of Xxxxx in and to
the documents, agreements and instruments included in the
Files, including, without limitation, rights of recourse of
Xxxxx against Vehicle Dealers;
(c) all Insurance Policies and all rights of Xxxxx in all
Insurance Policies;
(d) all security interests, Liens, guaranties, mortgages and other
encumbrances in favor of or assigned or transferred to Xxxxx
in and to Contracts and Vehicles, and all accessions thereto
and replacements thereof, and in any other property in which a
security interest is assigned or transferred to Xxxxx;
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(e) all of Xxxxx'x Equipment and Inventory, general ledger sheets,
files, records, books of account, invoices, bills,
certificates or documents of ownership, bills of sale,
business papers, correspondence, tapes, cards, computer tapes
and all other data and data storage systems (whether in the
possession of Xxxxx or any other Person) relating to any of
the foregoing;
(f) all deposit accounts, moneys, deposits, funds, accounts and
instruments relating to the foregoing;
(g) each Lock-Box, the funds on deposit in the Clearing Account
pursuant to Section 5(d) hereof, the Collection Account
(including, without limitation, all funds at any time on
deposit therein and all Permitted Investments in which such
funds may at any time be invested);
(h) the Sale Agreement and all other Operative Documents to which
Xxxxx is a party, including, without limitation, all rights of
Xxxxx to amounts due or to become due under or in connection
with such agreements;
(i) any Hedge Agreement;
(j) all rights in and to the On-Line Service Agreement; and
(k) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing.
SECTION 3. Bank Accounts; Possession of Contracts and Files.
(a) Subject to the Collection Account Agreement and the Lock-Box
Agreements, the Collateral Agent shall have sole dominion and
control over the Bank Accounts, and no other Person shall have
any right of withdrawal therefrom.
(b) The Collateral Agent shall have the right to hold the
Purchased Contracts. The Collateral Agent may in its sole
discretion, designate the Servicer or any other Person, as
custodian and bailee of the Collateral Agent, to hold the
Purchased Contracts. For so long as the Custodian Agreement is
in effect, the Custodian shall hold the Purchased Contracts.
Thereafter, unless otherwise instructed by the Collateral
Agent, Xxxxx shall hold the Purchased Contracts as custodian
and bailee of the Collateral Agent. To the extent required to
service the Purchased Contracts in accordance with the Sale
Agreement, the Custodian or Xxxxx, as the case may be, may
release the Purchased Contracts and Files to the Servicer, to
be held by the Servicer as custodian and bailee of the
Collateral Agent during the Servicer's possession thereof. The
Servicer shall promptly return all such Purchased Contracts
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and Files to the Custodian or Xxxxx, as the case may be, or
any such other Person as the Collateral Agent shall direct
when possession thereof by the Servicer is no longer required
for servicing such Purchased Contracts in accordance with the
Sale Agreement. In addition, the Servicer shall return the
Purchased Contracts to the Custodian, Xxxxx, the Collateral
Agent or any such other person as the Collateral Agent shall
direct at any time upon receipt of a request from the
Collateral Agent to such effect.
SECTION 4. Daily Procedures and Distributions of Collections Prior to the
Commitment Termination Date. On each Business Day prior to the
Commitment Termination Date:
(a) Deposits.
(i) the Servicer and Xxxxx shall transfer to the Clearing
Account (A) all Collections received on such day in
the Lock-Boxes and (B) all Collections received by
the Servicer or Xxxxx in any other manner on the
previous Business Day;
(ii) Xxxxx shall transfer to the Collection Account all
Collections received in the Clearing Account within
one Business Day after such Collections are received
in the Clearing Account;
(iii) if a payment of the principal of the Triple-A One
Loans is required on such Business Day pursuant to
subsection 2.4 of the Triple-A One Credit Agreement,
Xxxxx shall deposit the amount required into the
Collection Account; and
(iv) the Servicer shall transfer to a sub-account of the
Collection Account (the "Accrued Costs and Interest
Sub-Account") on such Business Day an amount equal to
the sum of the Accrued Facilities Costs Amount and
the Accrued Interest Amount for such day.
Until the transfers set forth in Section 4(a)(i), (ii) and (iii) are made, Xxxxx
and the Servicer shall hold in trust for the benefit of Xxxxx and Triple-A One
all such amounts and Collections and shall not commingle such amounts and
Collections with other funds of the Servicer or Xxxxx other than funds of the
Servicer or Xxxxx in the Lock-Boxes and the Clearing Account.
(b) Distributions. The Servicer shall make distributions from
amounts on deposit in the Collection Account for the following
purposes in the following order of priority, in each case to
the extent such amounts are due and payable on such Business
Day and to the Person entitled thereto:
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(i) an amount necessary to cure any Borrowing Base
Deficiency shall be transferred to the Triple-A One
Account and applied to reduce the principal of the
Triple-A One Note;
(ii) an amount equal to the Servicing Fee;
(iii) an amount equal to interest on the Triple-A One Loans
(from the Accrued Costs and Interest Sub-Account) and
on the Seller Notes, pro rata according to the
respective amounts of interest due on the Triple-A
One Loans and Seller Notes;
(iv) from Accrued Costs and Interest Sub-Account, an
amount equal to Facilities Costs;
(v) an amount equal to the principal of the Triple-A One
Loans prepaid or required to be prepaid on such
Business Day pursuant to subsection 2.4(a) or (b) of
the Triple-A One Credit Agreement;
(vi) an amount equal to interest on all unreimbursed
drawings under the Surety Bonds;
(vii) an amount equal to all unreimbursed drawings under
the Surety Bonds;
(viii) an amount equal to the sum of the Xxxxx Expenses and
all other Obligations;
(ix) for the purchase of Contracts pursuant to the Sale
Agreement;
(x) an amount equal to interest and principal due on the
Subordinated Note; and
(xi) an amount equal to all remaining amounts in the
Collection Account for other duly authorized
corporate purposes of Xxxxx.
provided, however, that, on any Business Day, no distribution shall be made
pursuant to (ix) or (x) above if the conditions set forth in Section 3.2 of the
Sale Agreement have not been satisfied.
(c) Disbursement Sub-Account. Amounts on deposit in the
Disbursement Sub-Account shall be released in such amounts and
at such times as are set forth in Section 4.3 of the Triple-A
One Credit Agreement.
(d) Permitted Investments. Amounts on deposit in the Accrued Costs
and Interest Sub-Account and the Disbursement Sub-Account of
the Collection
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Account may be invested in Permitted Investments, provided
that such Investments shall be selected so that the maturity
dates thereof correspond to the dates on which such amounts
are required to be distributed in accordance with the
provisions of Section 4(b).
SECTION 5. Daily Procedures and Distributions of Collections on each
Liquidation Day. On each Liquidation Day:
(a) Deposits.
(i) the Servicer and Xxxxx shall transfer to the Clearing
Account (A) all Collections received on such day in
the Lock-Boxes and (B) all Collections received by
the Servicer or Xxxxx in any other manner on the
previous Business Day;
(ii) Xxxxx shall transfer to the Collection Account all
Collections received in the Clearing Account within
one Business Day after such Collections are received
in the Clearing Account;
(iii) Xxxxx shall deposit all amounts received by Xxxxx in
respect of any Hedge Agreement into the Collection
Account. Until such transfers are made, Xxxxx and the
Servicer shall hold in trust for the benefit of Xxxxx
and Triple-A One all such amounts and Collections and
shall not commingle such amounts and Collections with
other funds of the Servicer or Xxxxx other than funds
in the Lock-Boxes and the Clearing Account.
(b) Distributions. The Servicer shall make distributions from
amounts on deposit in the Collection Account for the following
purposes in the following order of priority, in each case to
the extent such amounts are due and payable on such day and to
the Person entitled thereto:
first, an amount equal to interest on the Triple-A
One Loans and the Seller Note, pro rata according to the
respective amounts of interest due on the Triple-A One Loans
and Seller Note;
second, an amount equal to Facilities Costs;
third, an amount equal to the principal of the
Triple-A One Loans required to be prepaid pursuant to
subsection 2.4(c) of the Triple-A One Credit Agreement;
fourth, an amount equal to interest on all
unreimbursed drawings under the Surety Bonds;
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fifth, an amount equal to all unreimbursed drawings
under the Surety Bonds;
sixth, an amount equal to the principal of the Seller
Note;
seventh, an amount equal to the sum of all Xxxxx
Expenses and all other Obligations;
eighth, an amount equal to the principal of and
interest due on the Subordinated Note;
ninth, an amount equal to the Servicing Fee; and
tenth, all remaining amounts to Xxxxx, or to such
Persons and in such amounts as a court of competent
jurisdiction may direct.
(c) Permitted Investments. Amounts on deposit in the Accrued Costs
and Interest Sub-Account and the Disbursement Sub-Account of
the Collection Account may be invested in Permitted
Investments, provided that such Investments shall be selected
so that the maturity dates thereof correspond to the dates on
which such amounts are required to be distributed in
accordance with the provisions of Section 5(b).
(d) Clearing Account. The Clearing Account is a general clearing
account held by and in the name of Xxxxx into which
Collections as well as collections on other assets are
deposited. The parties hereto agree and acknowledge that (i)
any Collections transferred to the Clearing Account prior to
the transfer of such Collections to the Collection Account
will be subject at all times to the security interest of
Triple-A One created hereunder and (ii) that the balance in
the Clearing Account may not at any time fall below the amount
deposited representing Collections which have not been
transferred to the Collection Account. Xxxxx hereby
represents, warrants, covenants and agrees that it shall not
move the Clearing Account set forth in Exhibit E to the Sale
Agreement or modify, amend or waive any term of the Clearing
Account Agreement without (a) providing for a successor
Clearing Account, (b) notifying the Collateral Agent 10 days
prior to such change and (c) causing such new Clearing Account
to operate in the manner described herein.
SECTION 6. Rights of Collateral Agent; Limitations on Collateral
Agent's Obligations.
(a) Collateral Agent Not Liable under Contracts. The Collateral
Agent shall not have any obligation or liability under any
Contract by reason of or
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arising out of this Triple-A One Security Agreement or the
receipt by the Collateral Agent of any payment relating to
such Contract, nor shall the Collateral Agent be obligated in
any manner to perform any such obligations under or pursuant
to any Contract, to make any payment, to make any inquiry as
to the nature or the sufficiency of any payment received by it
or as to the sufficiency of any performance by any party under
any Contract, to present or file any claim, to take any action
to enforce any performance or to collect the payment of any
amounts which may have been assigned to it or to which it may
be entitled at any time or times.
(b) Notice to Obligors. At any time upon the request of the
Collateral Agent, Xxxxx shall notify the Obligors that the
Contracts have been assigned to the Collateral Agent and that
payments in respect thereof shall be made directly to the
Collateral Agent. The Collateral Agent may in its own name or
in the name of others communicate with the Obligors to verify
with them to its satisfaction the existence, amount and terms
of any Purchased Contracts.
(c) Analysis of Contracts. The Collateral Agent shall have the
right to make test verifications of the Contracts in any
manner and through any medium that it considers advisable, and
Xxxxx shall furnish all such assistance and information as the
Collateral Agent may require in connection therewith. In
addition, at any time and from time to time, upon the
Collateral Agent's request and at the expense of Xxxxx, Xxxxx
shall cause independent public accountants or others
satisfactory to the Collateral Agent to furnish to the
Collateral Agent reports showing reconciliations, aging and
test verifications of, and trial balances for, the Contracts.
(d) Proceeds. Subject to the provisions of Section 4(a) and 5(a),
any Proceeds, when collected by Xxxxx, shall be forthwith
deposited by Xxxxx in the exact form received, duly endorsed
by Xxxxx to the Collateral Agent if required, in the
Collection Account, subject to withdrawal by the Collateral
Agent only, and, until so turned over, shall be held by Xxxxx
in trust for the Collateral Agent. Such Proceeds shall
continue to be collateral security for all of the Obligations
and shall not constitute payment thereof until applied as
hereinafter provided. The Collateral Agent shall apply all or
any part of the funds on deposit in the Collection Account in
accordance with Sections 4 and 5 hereof. Upon the request of
the Collateral Agent, Xxxxx shall deliver or cause to be
delivered to the Collateral Agent all Files relating to the
Purchased Contracts, including original and other documents
evidencing, and relating to, the transactions which created
the Purchased Contracts, including, without limitation, all
original orders, invoices, receipts and similar documents.
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(e) Document Delivery. In connection with the security interest
granted herein, on or prior to each date on which a Triple-A
One Loan is disbursed from the Disbursement Sub-Account, Xxxxx
shall have received from the Seller the original Contract and
complete Files relating to each Contract for which such
Triple-A One Loan was made on such date. Xxxxx shall hold such
Contracts and Files for the benefit of the Collateral Agent,
and, upon request of the Collateral Agent, Xxxxx shall deliver
such Contracts and Files to the Collateral Agent or to such
Person as the Collateral Agent may designate in its sole
discretion. In addition, Xxxxx shall xxxx the following
notation on the computer tape for such Contract and File: "The
Contracts herein have been pledged to secure the debt of Xxxxx
to Triple-A One Funding Corporation, and its successors and
assigns pursuant to that certain Amended and Restated Triple-A
One Security Agreement dated as of September 4, 1998 among
Triple-A One Funding Corporation, Xxxxx and Capital Markets
Assurance Corporation, as Collateral Agent".
SECTION 7. Representations and Warranties. Xxxxx hereby represents and
warrants that:
(a) Title; No Other Liens. Except for the Lien granted to the
Collateral Agent pursuant to this Triple-A One Security
Agreement and the other Liens permitted pursuant to any of the
other Operative Documents, Xxxxx owns each item of the
Collateral free and clear of any and all Liens or claims of
others. No security agreement, financing statement or other
public notice with respect to all or any part of the
Collateral is on file or of record in any public office,
except such as may have been filed in favor of the Collateral
Agent pursuant to this Triple-A One Security Agreement or as
may be permitted pursuant to the Triple-A One Credit
Agreement.
(b) Perfected First Priority Liens. The Liens granted pursuant to
this Triple-A One Security Agreement constitute perfected
first priority Liens on the Collateral in favor of the
Collateral Agent and are enforceable as such against all
creditors of and purchasers from Xxxxx and, in the case of any
Collateral constituting fixtures, against any owner or
purchaser of the real property where any of the Equipment is
located and any present or future creditor obtaining a Lien on
such real property.
(c) Chief Executive Office. Xxxxx'x chief executive office and
chief place of business is located at 0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxx 00000.
(d) Locations. All Collateral is located at the addresses listed
on Schedule 7(d) hereto.
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SECTION 8. Covenants. Xxxxx covenants and agrees with the Collateral
Agent that until the Obligations are paid in full and the
Triple-A One Commitment is terminated:
(a) Further Documentation; Pledge of Instruments. At any time and
from time to time, upon the written request of the Collateral
Agent, and at the sole expense of Xxxxx, Xxxxx will promptly
and duly execute and deliver such further instruments and
documents and take such further action as the Collateral Agent
may request for the purpose of obtaining or preserving the
full benefits of this Triple-A One Security Agreement and of
the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation
statements under the UCC with respect to the Liens created
hereby, including all steps necessary to maintain perfection
of the security interest of Xxxxx in each Vehicle. Xxxxx also
hereby authorizes the Collateral Agent to file any such
financing or continuation statement without the signature of
Xxxxx to the extent permitted by applicable law. If any amount
payable under or in connection with any of the Collateral
shall be or become evidenced by any additional promissory
note, other Instrument or Chattel Paper, such note, Instrument
or Chattel Paper shall be immediately delivered to the
Collateral Agent or such other person as the Collateral Agent
in its sole discretion may designate, duly endorsed in a
manner satisfactory to the Collateral Agent, to be held as
Collateral pursuant to this Triple-A One Security Agreement.
(b) Indemnification. Xxxxx will pay, and save the Collateral Agent
harmless from, any and all liabilities, costs and expenses
(including, without limitation, legal fees and expenses) (i)
with respect to, or resulting from, any delay in paying, any
and all excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the
Collateral, (ii) with respect to, or resulting from, any delay
in complying with any Requirement of Law applicable to any of
the Collateral or (iii) in connection with any of the
transactions contemplated by this Triple-A One Security
Agreement. In any suit, proceeding or action brought by the
Collateral Agent in respect of any Contract for any sum owing
thereunder, or to enforce any provisions of any Contract,
Xxxxx will save, indemnify and keep the Collateral Agent
harmless from and against all expense, loss or damage suffered
by reason of any defense, setoff, counterclaim, recoupment or
reduction or liability whatsoever of the account debtor or
obligor thereunder, arising out of a breach by Xxxxx of any
obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of
such account debtor or obligor or its successors from Xxxxx.
Notwithstanding the foregoing, the parties hereto hereby agree
that under no circumstances shall Xxxxx be liable for, or
required to pay any
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amount pursuant to this paragraph (b), resulting from gross
negligence or willful misconduct on the part of the Collateral
Agent.
(c) Maintenance of Records. Xxxxx will keep and maintain, or cause
to be maintained by the Servicer, at its own cost and expense
satisfactory and complete records of the Collateral,
including, without limitation, a record of all payments
received and all credits granted with respect to the Purchased
Contracts. Xxxxx will xxxx its books and records pertaining to
the Collateral to evidence this Triple-A One Security
Agreement and the security interests granted hereby. At any
time upon the request of the Collateral Agent, Xxxxx shall,
during normal business hours, turn over any books and records
to the Collateral Agent or to its representatives that the
Collateral Agent shall so request.
(d) Right of Inspection. The Collateral Agent shall at all times
have full and free access during normal business hours to all
the books, correspondence and records of Xxxxx and to all
Contracts and Files held by Xxxxx, and the Collateral Agent or
its representatives may examine the same, take extracts
therefrom and make photocopies thereof, and Xxxxx agrees to
render to the Collateral Agent, at Xxxxx'x cost and expense,
such clerical and other assistance as may be reasonably
requested with regard thereto.
(e) Compliance with Laws, etc. Xxxxx will comply with all
Requirements of Law applicable to the Collateral or any part
thereof or to the operation of Xxxxx'x business; provided,
however, that Xxxxx may contest any Requirement of Law in any
reasonable manner which shall not, in the sole opinion of the
Collateral Agent, adversely affect the Collateral Agent's
rights or the priority of its Liens on the Collateral.
(f) Compliance with Terms of Contracts, etc. Xxxxx will perform
and comply with all its obligations under the Purchased
Contracts and all its other Contractual Obligations relating
to the Collateral.
(g) Payment of Obligations. Xxxxx will pay promptly when due all
taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of its income or profits
therefrom, as well as all claims of any kind (including,
without limitation, claims for labor, materials and supplies)
against or with respect to the Collateral, except that no such
charge need be paid if (i) the validity thereof is being
contested in good faith by appropriate proceedings, (ii) such
proceedings do not involve any danger of the sale, forfeiture
or loss of any of the Collateral or any interest therein and
(iii) such charge is adequately reserved against on Xxxxx'x
books in accordance with GAAP.
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(h) Limitation on Liens on Collateral. Xxxxx will not create,
incur or permit to exist, will defend the Collateral against,
and will take such other action as is necessary to remove, any
Lien or claim on or to the Collateral, other than the Liens
created hereby and other than as permitted pursuant to the
Triple-A One Credit Agreement, and will defend the right,
title and interest of the Collateral Agent in and to any of
the Collateral against the claims and demands of all Persons
whomsoever.
(i) Limitations on Dispositions of Collateral. Xxxxx will not
sell, transfer, lease or otherwise dispose of any of the
Collateral, or attempt, offer or contract to do so.
(j) Limitations on Modifications, Waivers, Extensions of
Contracts. Xxxxx will not, and will not permit any other
Person to, (i) amend, modify, terminate or waive any provision
of any Purchased Contract in any manner which could have an
adverse effect on the value of such Purchased Contract as
Collateral except in accordance with clause (k) of this
Section 8, (ii) fail to exercise promptly and diligently each
and every right which it may have under each Purchased
Contract, (iii) fail to deliver to the Collateral Agent, upon
the request of the Collateral Agent, a copy of each demand,
notice or document received by it relating in any way to any
Purchased Contract, (iv) fail to deliver to the Collateral
Agent a copy of each demand, notice or document sent to each
Obligor; and (v) act otherwise than in accordance with the
Credit and Collection Policy.
(k) Limitations on Discounts, Compromises, Extensions of
Contracts. Other than pursuant to the Credit and Collection
Policy, Xxxxx will not, and will not permit any other Person
to, grant any extension of the time of payment of any of the
Purchased Contracts, compromise, compound or settle the same
for less than the full amount thereof, release, wholly or
partially, any Person liable for the payment thereof, or allow
any credit or discount whatsoever thereon.
(l) Maintenance of Equipment. Xxxxx will maintain each item of
Equipment in good operating condition, ordinary wear and tear
and immaterial impairments of value and damage by the elements
excepted, and will provide all maintenance, service and
repairs necessary for such purpose.
(m) Further Identification of Collateral. Xxxxx will furnish to
the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as
the Collateral Agent may reasonably request, all in reasonable
detail.
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(n) Notices. Xxxxx will advise the Collateral Agent promptly, in
detail, at its address set forth in the Triple-A One Credit
Agreement, (i) of any Lien (other than Liens created or
permitted hereby) on, or claim asserted against, any of the
Collateral and (ii) of the occurrence of any other event which
could have in the reasonable exercise of the judgment of the
Collateral Agent a material adverse effect on the Collateral
or on the Liens created hereunder.
A copy of any notice delivered to or required to be sent by Xxxxx hereunder
shall be sent by Xxxxx to the holder of the Subordinated Note.
(o) Changes in Locations, Name, etc. Xxxxx will not, without
providing 30 days prior written notice to the Collateral
Agent, Triple-A One and the Program Manager (and, in the case
of clause (iv), without the prior written consent of the
Collateral Agent), and without filing any UCC financing
statements necessary or desirable (in the opinion of Triple-A
One or the Program Manager) to maintain the perfection and
priority of the Collateral Agent's security interest in the
Collateral, as provided for herein (i) change the location of
its chief executive office/chief place of business from that
specified in Section 7(c) or remove its books and records from
such location, (ii) permit any Equipment that it may acquire
to be kept at a location other than that specified in Section
7(d), (iii) change its name, identity or corporate structure
to such an extent that any financing statement filed by the
Collateral Agent in connection with this Triple-A One Security
Agreement would become misleading or (iv) change the location
where the Purchased Contracts and the Files are maintained.
SECTION 9. Collateral Agent's Appointment as Attorney-in-Fact.
(a) Powers. Xxxxx hereby irrevocably constitutes and appoints the
Collateral Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and
stead of Xxxxx and in the name of Xxxxx or in its own name,
from time to time in the Collateral Agent's discretion, for
the purpose of carrying out the terms of this Triple-A One
Security Agreement, to take any and all lawful and appropriate
action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes
of this Triple-A One Security Agreement, and, without limiting
the generality of the foregoing, Xxxxx hereby gives the
Collateral Agent the power and right, on behalf of Xxxxx,
without notice to or assent by Xxxxx, to do the following:
(i) upon the occurrence and during the continuance of any
Unmatured Wind-Down Event or Wind-Down Event, in the
name of Xxxxx or its
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own name, or otherwise, to take possession of and
endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of
moneys due under any Instrument, General Intangible
or Contract and to file any claim or to take any
other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the
Collateral Agent for the purpose of collecting any
and all such moneys due under any Instrument, General
Intangible or Contract whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed
on or threatened against the Collateral; and
(iii) upon the occurrence and during the continuance of any
Unmatured Wind-Down Event or Wind-Down Event, (A) to
direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys
due or to become due thereunder directly to the
Collateral Agent or as the Collateral Agent shall
direct and to notify the Lock-Box Banks to follow the
instructions of the Collateral Agent; (B) to ask or
demand for, collect, receive payment of and receipt
for, any and all moneys, claims and other amounts due
or to become due at any time in respect of or arising
out of any Collateral; (C) to sign and endorse any
invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and
other documents in connection with any of the
Collateral; (D) to commence and prosecute any suits,
actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the
Collateral or any proceeds thereof and to enforce any
other right in respect of any Collateral; (E) to
defend any suit, action or proceeding brought against
Xxxxx with respect to any Collateral; (F) to settle,
compromise or adjust any suit, action or proceeding
described in clause (E) above and, in connection
therewith, to give such discharges or releases as the
Collateral Agent may deem appropriate; (G) generally,
to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the
Collateral pursuant to Section 11 hereof as fully and
completely as though the Collateral Agent were the
absolute owner thereof for all purposes, and to do,
at the Collateral Agent's option and Xxxxx'x expense,
at any time, or from time to time, all lawful acts
and things which the Collateral Agent deems necessary
to protect, preserve or realize upon the Collateral
and the Collateral Agent's Liens thereon and to
effect the intent of this Triple-A One Security
Agreement, all as fully and effectively as Xxxxx
might do; (H) implement the Alternate
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Servicing Plan; and (I) compel the transfer of
Xxxxx'x interest in all rights (by license,
sublicense or otherwise) of any computer software
necessary to collect the Contracts including without
limitation, any items on Schedule I hereto.
Xxxxx hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof.
(b) Other Powers. Xxxxx also authorizes the Collateral Agent, at
any time and from time to time, to execute, in connection with
the sale provided for in Section 11 hereof, any endorsements,
assignments or other instruments of conveyance or transfer
with respect to the Collateral.
(c) No Duty on Collateral Agent's Part. The powers conferred on
the Collateral Agent hereunder are solely to protect the
Collateral Agent's interests in the Collateral and shall not
impose any duty upon it to exercise any such powers. The
Collateral Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers,
and neither it nor any of its officers, directors, employees
or agents shall be responsible to Xxxxx for any act or failure
to act hereunder, except for its own gross negligence or
willful misconduct.
SECTION 10. Performance by Collateral Agent of Xxxxx'x Obligations. If Xxxxx
fails to perform or comply with any of its agreements contained herein
and the Collateral Agent, as provided for by the terms of this Triple-A
One Security Agreement, shall itself perform or comply, or otherwise
cause performance or compliance, with such agreement, the expenses of
the Collateral Agent incurred in connection with such performance or
compliance, together with interest thereon until paid in full at a rate
per annum equal to the Default Rate, shall be payable by Xxxxx to the
Collateral Agent on demand and shall constitute Obligations secured
hereby.
SECTION 11. Remedies. If a Wind-Down Event shall occur and be continuing, the
Collateral Agent may exercise in addition to all other rights and
remedies granted to it in this Triple-A One Security Agreement and in
any other instrument or agreement securing, evidencing or relating to
the Obligations, all rights and remedies of a secured party under the
UCC. Without limiting the generality of the foregoing, the Collateral
Agent, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except the notice
specified below of time and place of public or private sale) to or upon
Xxxxx or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon
the Collateral, or any part thereof, and/or may forthwith sell, lease,
assign, give an option or options to purchase, or otherwise dispose of
and deliver said Collateral or any part thereof (or contract to do any
of
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the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Collateral
Agent or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. The
Collateral Agent shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of said Collateral so sold,
free of any right or equity of redemption in Xxxxx, which right or
equity is hereby waived or released. Xxxxx further agrees, at the
Collateral Agent's request, to assemble the Collateral and the Files
and make them available to the Collateral Agent at places which the
Collateral Agent shall select, whether at Xxxxx'x premises or
elsewhere. The Collateral Agent shall apply the net proceeds of any
such collection, recovery, receipt, appropriation, realization or sale,
after deducting all costs and expenses of every kind incurred therein
or incidental to the care or safekeeping of any of the Collateral or in
any way relating to the Collateral or the rights of the Collateral
Agent hereunder, including, without limitation, attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations,
in such order as the Collateral Agent may elect, and only after such
application and after the payment by the Collateral Agent of any other
amount required by any provision of law, including, without limitation,
Section 9-504(1)(c) of the UCC, need the Collateral Agent account for
the surplus, if any, to Xxxxx. Subject at all times to the priority of
the security interest of the Liquidity Banks under the Note Pledge
Agreement and the powers of the Bank Agent and the Bank Collateral
Agent on behalf of the Liquidity Banks thereunder and under the other
Operative Documents, should the Collateral Agent elect to exercise its
option hereunder to liquidate or otherwise dispose of the Collateral,
the Collateral Agent shall do so for an amount sufficient to cover the
amount of the Obligations, all fees, expenses and liabilities hereunder
and the Subordinated Note. To the extent permitted by applicable law,
Xxxxx waives all claims, damages, and demands against the Collateral
Agent arising out of the repossession, retention or sale of the
Collateral. If any notice of a proposed sale or disposition of
Collateral shall be required by law, such notice shall be deemed
reasonably and properly given if given (effective upon dispatch) in any
manner provided in the Triple-A One Credit Agreement at least 10 days
before such sale or disposition. Xxxxx shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations and the fees and
disbursements of any attorneys employed by the Collateral Agent to
collect such deficiency.
SECTION 12. Limitation on Collateral Agent's Duties in Respect of Collateral.
The Collateral Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the UCC or otherwise, shall be to
deal with it in the same manner as the Collateral Agent deals with
similar property for its own account. Neither the Collateral Agent nor
any of its directors, officers, employees or agents shall be liable for
failure to demand,
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collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of Xxxxx or otherwise.
SECTION 13. Powers Coupled with an Interest. All powers of attorney,
authorizations and agencies herein contained with respect to the
Collateral are irrevocable and are powers coupled with an interest.
SECTION 14. Severability. Any provision of this Triple-A One Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 15. Assignment to Banks and Surety Provider. Xxxxx does hereby
acknowledge the pledge by Triple-A One of the Liquidity Pledged
Collateral as security under the Note Pledge Agreement. Xxxxx hereby
waives its rights under Section 9-112 of the UCC, including without
limitation all rights under Sections 9-502(2), 9-504(1), 9-208, 9-505,
9-506, 9-507(1) and 9-208(2) of the UCC otherwise granted to it
pursuant to Section 9-112 of the UCC.
SECTION 16. Triple-A One Surety Bond. Triple-A One hereby assigns to the
Collateral Agent the right of Triple-A One to make drawings under the
Surety Bond naming Triple-A One as beneficiary. The Collateral Agent
hereby agrees to make, on a timely basis, all drawings (including,
without limitation, drawings in respect of any Avoided Payment, as such
term is defined in such Surety Bond) permitted to be made by delivery
of a Notice for Payment under such Surety Bond.
SECTION 17. Section and Paragraph Headings. The section and paragraph headings
used in this Triple-A One Security Agreement are for convenience of
reference only and are not to affect the construction hereof or be
taken into consideration in the interpretation hereof.
SECTION 18. No Waiver; Cumulative Remedies. The Collateral Agent shall not by
any act (except pursuant to the execution of a written instrument
pursuant to Section 19 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to
have acquiesced in any Unmatured Wind-Down Event or Wind-Down Event or
in any breach of any of the terms and conditions hereof. No failure to
exercise, nor any delay in exercising, on the part of the Collateral
Agent, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A
waiver by the Collateral Agent of any right or remedy
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hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent would otherwise have on any
future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.
SECTION 19. Waivers and Amendments; Successors and Assigns. None of the terms
or provisions of this Triple-A One Security Agreement may be waived,
amended, supplemented or otherwise modified except by a written
instrument executed by Xxxxx and the Collateral Agent and with prior
written notice thereof to S&P and Xxxxx'x. This Triple-A One Security
Agreement shall be binding upon the successors and assigns of Xxxxx and
shall inure to the benefit of the Collateral Agent and its successors
and assigns.
SECTION 20. Integration. This Triple-A One Security Agreement represents the
agreement of Xxxxx with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties by the
Collateral Agent relative to subject matter hereof not expressly set
forth or referred to herein or in the other Operative Documents.
SECTION 21. Counterparts. This Triple-A One Security Agreement may be executed
by one or more of the parties to this Triple-A One Security Agreement
on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same
instrument.
SECTION 22. GOVERNING LAW. THIS TRIPLE-A ONE SECURITY AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF XXXXX UNDER THIS TRIPLE-A ONE SECURITY AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
SECTION 23. Termination and Release.
(a) This Triple-A One Security Agreement and the security
interests created or granted hereby shall remain in full force
and effect until the indefeasible payment in full in cash of
all of the Obligations, at which time, following the receipt
by the Collateral Agent of written notice from the Program
Manager that such Obligations have been so paid, the security
interest created or granted hereby shall terminate and the
Collateral Agent shall, at the sole expense of Xxxxx, execute
and deliver such documents and instruments (including without
limitation UCC termination statements) necessary to evidence
the termination of such security interest, as Xxxxx `may
reasonably request.
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(b) (i) Xxxxx Request for Release. Xxxxx intends from time to time
to sell Purchased Contracts and other related Collateral to
(x) entities which will then privately or publicly sell
securities backed by such Purchased Contracts and Collateral,
(y) in whole loan bulk sales to unaffiliated third parties or
(z) in whole loan bulk sales to Onyx Acceptance Funding
Corporation, in each case, for a cash purchase price of not
less than the aggregate Outstanding Balance of such Purchased
Contracts plus accrued and unpaid interest thereon.
Notwithstanding anything to the contrary in Sections 6.4, 6.5,
and 6.16 of the Triple-A One Credit Agreement, Xxxxx shall be
permitted to sell Purchased Contracts pursuant to the
foregoing provisions only upon satisfaction of the following
conditions precedent:
(A) sales pursuant to clause (x) shall occur no more
frequently than once each calendar quarter;
(B) sales pursuant to clause (y) shall occur no more
frequently than once each calendar quarter;
(C) sales pursuant to clause (z) shall occur no more
frequently than once each month;
(D) sales pursuant to clause (y) shall occur
contemporaneously with sales pursuant to clause (x);
(E) sales pursuant to clauses (x) and (y) shall not
be to any entity which is a direct competitor of CapMAC or
MBIA Insurance Corporation, including, without limitation,
Ambac Assurance Corporation, Financial Security Assurance
Corporation, Financial Guaranty Insurance Corporation or any
affiliate thereof;
(F) the aggregate Outstanding Balances of the
Purchased Contracts sold by Finco in each such sale pursuant
to clause (y) shall not exceed 20% of the aggregate
Outstanding Balances of the Purchased Contracts then owned by
Xxxxx, without the prior written consent of the Program
Manger;
(G) the aggregate Outstanding Balances of the
Purchased Contracts sold by Finco in each such sale pursuant
to clause (z) shall not exceed 35% of the aggregate
Outstanding Balances of the Purchased Contracts then owned by
Xxxxx, without the prior written consent of the Program
Manger;
(H) in no event shall the aggregate Outstanding
Balances of Purchased Contracts sold by Xxxxx during any
calendar quarter pursuant to
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clauses (y) and (z) together exceed 35% of the weighted
average daily aggregate Outstanding Balances of all Purchased
Contracts owned by Xxxxx during such calendar quarter without
the prior written consent of the Program Manger;
(I) each of the Seller and Xxxxx shall be in
compliance with all of its covenants in the Operative
Documents; and
(J) The Program Manager shall have received copies of
all documents executed in connection with such sale.
The proceeds of all sales by Xxxxx pursuant to clauses (x),
(y) and (z) above shall be applied to prepay the Triple-A One
Note and the Subordinated Note. Upon not less than 5 Business
Days' prior written notice to the Collateral Agent, Xxxxx may
request that specified Purchased Contracts and other related
Collateral be released in connection with such sales and the
prepayment of the Triple-A One Note as provided in Section
2.4(b) of the Triple-A One Credit Agreement. In connection
with such request, Xxxxx shall execute and deliver to the
Collateral Agent a Lien Release Request Certificate in the
form attached hereto as Exhibit A. In selecting the Purchased
Contracts enumerated in its Lien Release Request Certificate
delivered to the Collateral Agent pursuant hereto, Xxxxx shall
employ selection procedures which are not adverse to the
interests of Triple-A One or the Collateral Agent. Xxxxx shall
deliver to the Program Manager (i) monthly servicer reports
for all Contracts serviced but not owned by Onyx aggregated by
portfolio and owner and (ii) copies of all material
amendments, waivers or modifications to any documents executed
in connection with the sale of Purchased Contracts by Xxxxx.
(ii) Collateral Agent Release. Upon receipt of an
amount in immediately available funds equal to the sum of the
principal amount of such prepayment, all interest accrued
thereon to the day of such prepayment and unpaid and all other
Obligations of Xxxxx and the Seller accrued to the date of
such prepayment and unpaid under any Operative Document, to be
paid by Xxxxx from the Collection Account pursuant to Section
4(b) hereof, the Collateral Agent shall, at the sole expense
of Xxxxx, execute and deliver a Collateral Agent Lien Release
Certificate in the form attached hereto as Exhibit B which
shall evidence the release of its security interest in
Purchased Contracts having an Outstanding Balance equal to the
principal amount of the Triple-A One Note being prepaid
divided by the Net Advance Rate on such day.
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(iii) Documents and Filings. In connection with any
such release pursuant to this Section 23, Xxxxx and the
Collateral Agent, shall at the sole expense of Xxxxx, execute
and deliver any documents and instruments necessary to
evidence the release of the Collateral Agent's security
interest in such Purchased Contracts and other Collateral,
including without limitation, forms UCC-2 prepared for filing
in all appropriate jurisdictions.
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IN WITNESS WHEREOF, the parties hereto have caused this Triple-A One
Security Agreement to be duly executed and delivered as of the date first above
written.
ONYX ACCEPTANCE FINANCIAL CORPORATION
By:_____________________________________
Name:
Title:
TRIPLE-A ONE FUNDING CORPORATION
By: MBIA Insurance Corporation,
its attorney-in-fact
By:___________________________________
Name:
Title:
CAPITAL MARKETS ASSURANCE CORPORATION,
as Collateral Agent
By:____________________________________
Name:
Title:
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SCHEDULE 7(d)
LOCATIONS OF COLLATERAL
The Collateral is located at:
1. Onyx Acceptance Financial Corporation
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
2. Bankers Trust Company of California, N.A.
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxxx
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SCHEDULE I
Intellectual Property
1. Agreement for On-Line Service
2. Acknowledgement of Security Interest Under Agreement for On-Line
Service
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EXHIBIT A
LIEN RELEASE REQUEST CERTIFICATE
from Xxxxx to the Collateral Agent and Seller
pursuant to Section 23 of Triple-A One Security Agreement
and Section 19 of Subordinated Security Agreement
[ date ]
Capital Markets Assurance Corporation,
as Collateral Agent
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Underwriting Officer
Onyx Acceptance Corporation
0000 Xxxxxx Xxxxxx Xxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Re: Onyx Acceptance Financial Corporation/Commercial Paper Program -
Request for Release of Lien
Ladies and Gentlemen:
Onyx Acceptance Financial Corporation ("Xxxxx") refers to (i)
the Amended and Restated Triple A-One Security Agreement dated as of September
4, 1998 as amended, supplemented or otherwise modified, (the "Triple-A One
Security Agreement"), and (ii) the Amended and Restated Subordinated Security
Agreement dated as of September 4, 1998 (as amended, supplemented or otherwise
modified, the "Subordinated Security Agreement"). Terms not otherwise defined
herein are used herein as defined in the Amended and Restated Definitions List
dated September 4, 1998.
Xxxxx submits this Lien Release Request Certificate pursuant
to Section 23 of the Triple-A One Security Agreement and Section 19 of the
Subordinated Security Agreement and requests that the Capital Markets Assurance
Corporation, in its capacity as Collateral Agent under the Triple-A One Security
Agreement and Onyx Acceptance Corporation in its capacity as Seller under the
Subordinated Security Agreement ("Onyx") release (and Onyx cause its assignee to
release) all of their liens on and security interests in the assets described on
Schedule 1
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attached hereto (and all proceeds thereof, all books, records and computer
records pertaining thereto and all other assets that constitute Collateral which
are specifically related to the assets described in Schedule 1).
ONYX ACCEPTANCE FINANCIAL CORPORATION
By:_______________________________
Name:_____________________________
Title ______________________________
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EXHIBIT B
COLLATERAL AGENT LIEN RELEASE CERTIFICATE
pursuant to Section 23 of Triple-A One Security Agreement
[Date]
Onyx Acceptance Financial Corporation
0000 Xxxxxx Xxxxxx Xxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Partial Collateral Release
Ladies and Gentlemen:
We hereby refer to the Lien Release Request Certificate
submitted by Onyx Acceptance Financial Corporation ("Xxxxx") dated
__________________________, a copy of which is attached hereto (the "Request
Certificate"). Pursuant to the Request Certificate, Capital Markets Assurance
Corporation, acting in its capacity as the Collateral Agent under the Triple-A
One Security Agreement and as Bank Collateral Agent under the Note Pledge
Agreement, hereby releases its liens on and security interests in the assets
identified in Schedule 1 attached to the Request Certificate (and all proceeds
thereof, all books, records and computer records pertaining thereto and all
other assets that constitute Collateral which are specifically related to the
assets described in that Schedule 1).
This Lien Release Certificate may be executed in any number of
counterparts.
CAPITAL MARKETS ASSURANCE CORPORATION,
as Collateral Agent and Bank Collateral Agent
By ______________________________
Name:____________________________
Title _____________________________
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