EXHIBIT 10.134
EXECUTION COPY
SECURITY AGREEMENT
SECURITY AGREEMENT (the "Security Agreement" or this "Agreement"), dated as of
January 9, 2003, among ONYX ACCEPTANCE RECEIVABLES CORPORATION, a Delaware
corporation ("Recco"), ONYX ACCEPTANCE CORPORATION, as servicer (the "Servicer")
and JPMORGAN CHASE BANK, a New York state banking corporation as collateral
agent on behalf of and for the benefit of the holders of the Obligations (in
such capacity, the "Collateral Agent").
W I T N E S S E T H :
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WHEREAS, the Lenders make Loans to Recco for the purpose of enabling
Recco to purchase Contracts with the proceeds thereof; and
WHEREAS, the parties hereto wish to enter into the Security Agreement
as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders to make their Loans to Recco under the Credit Agreement and to induce
the Surety Provider to issue the Surety Bond, the parties hereto hereby agree as
follows:
SECTION 1. Defined Terms.
(a) As used in this 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 Definitions List dated as of the date hereof that refers
to this 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.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Security Agreement shall refer to this Security
Agreement as a whole and not to any particular provision of this Security
Agreement, and paragraph references are to this Security Agreement unless
otherwise specified.
(d) Capitalized terms used herein shall be equally applicable
to both the singular and plural forms of such terms.
(e) The following terms that are defined in the UCC are used
herein as so defined: Accounts, Chattel Paper, Deposit Accounts, Documents,
Supporting Obligations, General Intangibles, Instruments, Proceeds and Tangible
Chattel Paper.
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, Recco 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 Recco's 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"):
(a) all Chattel Paper related to the Purchased Contracts, and
other contracts and Supporting Obligations related to the Purchased Contracts
(as the same may be amended, modified, supplemented, restated or replaced from
time to time) and amounts paid or payable with respect thereto;
(b) all Files (including all Dealer Assignments) and Contract
Lists, and all right, title and interest of Recco in and to the documents,
agreements and instruments included in the Files, including, without limitation,
rights of recourse of Recco against Vehicle Dealers;
(c) all Insurance Policies and all rights of Recco in all
Insurance Policies;
(d) all security interests, Liens, guaranties, mortgages and
other encumbrances in favor of or assigned or transferred to Recco in and to
Purchased Contracts and Vehicles, and all accessions thereto and replacements
thereof, and in any other property in which a security interest is assigned or
transferred to Recco;
(e) all of Recco's General Intangibles, Documents,
Instruments, Accounts, general ledger sheets, files, records, books of account,
invoices, bills, certificates or documents of ownership, bills of sale, business
papers, correspondence, tapes, cards, computer tapes and all other data and data
storage systems (whether in the possession of Recco 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 Hedge Agreement Reserve Account and
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 Recco is a party, including, without limitation, all rights of Recco to
amounts due or to become due under or in connection with, and to enforce, such
agreements;
(i) any Hedge Agreement and any guarantees or other credit
enhancement associated therewith; and
(j) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing.
SECTION 3. Bank Accounts; Possession of Contracts and Files.
(a) Subject to the Collection Account Agreement and the
Lock-Box Agreements, and except as otherwise provided in this Agreement, 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, with the prior consent of the
Controlling Party, designate the Servicer or any other Person, as custodian and
bailee of the Collateral Agent for the benefit of the holders
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of the Obligations, to hold the Purchased Contracts and the Controlling Party
hereby consents to such designation. The Collateral Agent hereby designates the
Servicer as custodian. By the execution hereof, the Servicer acknowledges and
agrees that it is holding the Purchased Contracts and related Files solely on
behalf and for the benefit of the Collateral Agent. If at any time the Servicer
shall not be acting as custodian for the Purchased Contracts, to the extent
required to service the Purchased Contracts in accordance with the Sale
Agreement, the Purchased Contracts and Files may, at the direction of the
Controlling Party, be released to the Servicer to be held by the Servicer as
custodian and bailee of the Collateral Agent during the Servicer's possession
thereof and the Servicer shall promptly return all such Purchased Contracts and
Files to 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 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.
(c) If for any reason the Servicer delivers the Purchased
Contracts and related Files to the Collateral Agent, the Servicer shall pay (i)
any and all costs of transferring the Purchased Contracts and related Files to
the Collateral Agent and (ii) any and all costs and expenses of the Collateral
Agent (including any reasonable legal fees and expenses) incurred in taking
delivery of the Purchased Contracts and related Files and meeting its
obligations hereunder relating to such transfer.
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 Recco shall transfer or
cause to be transferred to the Clearing Account (A) all Collections
received on the previous Business Day in the Lock-Boxes and (B) all
Collections received by the Servicer or Recco in any other manner on
the previous Business Day;
(ii) the Servicer shall transfer or cause to be
transferred 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 Loans
is required on such Business Day pursuant to Section 2.5 of the Credit
Agreement, Recco shall deposit the amount required into the Collection
Account;
(iv) the Servicer shall transfer from the
Collection Account 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; and
(v) Recco shall deposit all amounts received in
respect of any Hedge Agreement into the Collection Account except, so
long as no Wind-Down Event or Unmatured Wind-Down Event shall have
occurred and be continuing, for amounts received prior to the Hedge
Effective Date.
Until the transfers set forth in Section 4(a)(i), (ii), (iii) and (v) are made,
Recco and the Servicer shall hold in trust for the benefit of the Collateral
Agent for the benefit of the holders of the
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Obligations all such amounts and Collections and shall not commingle such
amounts and Collections with other funds of the Servicer or Recco other than
funds of the Servicer or Recco 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:
(i) on such Business Day, an amount necessary to
cure any Borrowing Base Deficiency shall be transferred to the Eiffel
Account and applied to reduce the principal of the Lender Note;
(ii) on each Determination Date if Onyx
Acceptance Corporation or an Affiliate thereof is not the Servicer, to
the Servicer an amount equal to the Servicing Fee (up to an amount
calculated on the basis of a Servicing Fee Percentage equal to 1%);
(iii) on such Business Day to the counterparty of
each Hedge Agreement (and pro rata on the basis of amounts owed if
there exists a deficiency in distributions) on or after the Hedge
Effective Date, the scheduled net fixed rate payment payable by Recco
under each such Hedge Agreement and any Recco Hedge Termination
Amounts;
(iv) on such Business Day, an amount equal to
interest on the Loans (from the Accrued Costs and Interest Sub-Account)
and on the Seller Note, pro rata according to the respective amounts of
interest due on the Loans and the Seller Note;
(v) on each Determination Date, to the
Collateral Agent, all amounts payable by Recco under Sections 8(b) and
10 of this Agreement and all other amounts payable by Recco to the
Collateral Agent hereunder up to an annual amount equal to $10,000 or,
if the Collateral has been delivered to the Collateral Agent, $100,000;
(vi) to the Surety Provider, Program Manager and
the Lenders, on each Determination Date, from the Accrued Costs and
Interest Sub-Account, an amount equal to the Facilities Costs and
amounts due under the Premium Letter;
(vii) on such Business Day, an amount equal to the
principal of and unpaid interest on the Loans prepaid or required to be
prepaid on such Business Day pursuant to Section 2.5(a) or (b) of the
Credit Agreement;
(viii) on such Business Day, to the extent not paid
by Recco, (A) to the Collateral Agent, all amounts payable by Recco
under Sections 8(b) and 10 of this Agreement and all other amounts
payable by Recco to the Collateral Agent hereunder not paid under
clause (v) above and (B) to the Lenders, the Program Manager, the
Surety Provider and the Collateral Agent, all amounts payable by Recco
under Section 10.5 of the Credit Agreement and Section 22(b)(iv) of
this Agreement;
(ix) to the Servicer, on each Determination Date,
either (A) an amount equal to the Servicing Fee (if Onyx Acceptance
Corporation or an Affiliate thereof is the Servicer) or (B) an amount
equal to the portion of the Servicing Fee not paid pursuant to clause
(ii) above (if Onyx Acceptance Corporation or an Affiliate thereof is
not the Servicer);
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(x) on each Determination Date, to the Surety
Provider, an amount equal to interest at the rate described in the
Insurance Agreement on all unreimbursed drawings under the Surety Bond;
(xi) on such Business Day, to the Surety
Provider, an amount equal to all unreimbursed drawings under the Surety
Bonds and all other amounts owing to the Surety Provider under the
Insurance Agreement, Fee Letters and the other Operative Documents
(including but not limited to all unreimbursed Surety Provider Defense
Costs);
(xii) on each Determination Date, to the
counterparty of each Hedge Agreement (and pro rata on the basis of
amounts owed if there exists a deficiency in distributions) on or after
the Hedge Effective Date, any Counterparty Hedge Termination Amounts;
(xiii) on such Business Day, an amount equal to
interest not distributed in accordance with clause (iv) above on the
Loans (from the Accrued Costs and Interest Sub-Account);
(xiv) on such Business Day, to the Persons
entitled thereto, pro rata according to the respective amounts owing,
an amount equal to the sum of the Recco Expenses and all other
Obligations;
(xv) on each Determination Date, an amount equal
to the amount by which the Hedge Agreement Reserve Account Required
Amount with respect to each Hedge Agreement exceeds the amount on
deposit in the Hedge Agreement with respect to such Hedge Agreement;
(xvi) on such Business Day, to the Seller, for the
purchase of Contracts pursuant to the Sale Agreement;
(xvii) to the Seller, subject to Article V of the
Sale Agreement, on each Determination Date, an amount equal to interest
and principal due on the Subordinated Note; and
(xviii) to Recco, on each Determination Date, an
amount equal to all remaining amounts in the Collection Account for
other duly authorized corporate purposes of Recco;
provided, however, that, on any Business Day, no distribution shall be made
pursuant to (xvi) or (xvii) above if the conditions set forth in Section 3.2 of
the Sale Agreement have not been satisfied.
(c) Permitted Investments. Amounts on deposit in the
Collection Account and the Hedge Agreement Reserve Account, including all
sub-accounts, may be invested in Permitted Investments, provided that such
Permitted 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). Income and gain from such
investments shall be taxable to Recco and shall be retained in the Collection
Account and the Hedge Agreement Reserve Account.
SECTION 5. Daily Procedures and Distributions of Collections on each
Liquidation Day. On each Liquidation Day:
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(a) Deposits.
(i) the Servicer and Recco shall transfer or
cause to be transferred to the Clearing Account (A) all Collections
received on the previous Business Day in the Lock-Boxes and (B) all
Collections received by the Servicer or Recco in any other manner on
the previous Business Day;
(ii) the Servicer shall transfer or cause to be
transferred to the Collection Account all Collections received in the
Clearing Account within one Business Day after such Collections are
received in the Clearing Account; and
(iii) Recco shall deposit all amounts received by
Recco in respect of any Hedge Agreement into the Collection Account
except, so long as no Wind-Down Event or Unmatured Wind-Down Event
shall have occurred and be continuing, for amounts received prior to
the Hedge Effective Date.
Until such transfers are made, Recco and the Servicer shall hold in trust for
the benefit of the Collateral Agent for the benefit of the holders of the
Obligations all such amounts and Collections and shall not commingle such
amounts and Collections with other funds of the Servicer or Recco 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, on such Business Day, to the Collateral Agent,
all amounts payable by Recco under Sections 8(b) and 10 of
this Agreement and all other amounts payable by Recco to the
Collateral Agent hereunder in connection with the exercise of
remedies under the Operative Documents, up to an annual amount
equal to $10,000 or, if the Collateral has been delivered to
the Collateral Agent, $100,000;
second, on each Determination Date to the Servicer if
Onyx Acceptance Corporation or an Affiliate thereof is not the
Servicer, an amount equal to the Servicing Fee (up to an
amount calculated on the basis of a Servicing Fee Percentage
equaling 1%);
third, on such Business Day to the counterparty of
each Hedge Agreement (and pro rata on the basis of amounts
owed if there exists a deficiency in distributions), the
scheduled net fixed rate payment payable by Recco under each
such Hedge Agreement and Recco Hedge Termination Amounts;
fourth, on each Determination Date, to the Collateral
Agent, all amounts payable by Recco under Sections 8(b) and 10
of this Agreement and all other amounts payable by Recco to
the Collateral Agent hereunder not paid under clause first
above, up to an annual amount equal, together with any amount
paid under clause first above, to $10,000 or, if the
Collateral has been delivered to the Collateral Agent,
$100,000;
fifth, on each Liquidation Day, an amount equal to
interest (other than any incremental default interest payable
following a Wind-Down Event) on the Loans
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and the Seller Note, pro rata according to the respective
amounts of interest due on the Loans and Seller Note;
sixth, to the Surety Provider, Program Manager and
the Lenders, on each Determination Date, from the Accrued
Costs and Interest Sub-Account, an amount equal to the
Facilities Costs and amounts due under the Premium Letter;
seventh, on each Liquidation Day, an amount equal to
the principal of and unpaid interest on the Loans required to
be prepaid pursuant to Section 2.5(c) of the Credit Agreement;
eighth, on each Liquidation Day, to the extent not
paid by Recco, (A) to the Collateral Agent, all amounts
payable by Recco under Sections 8(b) and 10 of this Agreement
and all other amounts payable by Recco to the Collateral Agent
hereunder not paid under clauses first and fourth above and
(B) to the Lenders, the Program Manager, the Surety Provider
and the Collateral Agent, all amounts payable by Recco under
Section 10.5 of the Credit Agreement and Section 22(b)(iv) of
this Agreement;
ninth, on each Liquidation Day, to the Surety
Provider, an amount equal to interest at the rate described in
the Insurance Agreement on all unreimbursed drawings under the
Surety Bonds;
tenth, on each Liquidation Day, to the Surety
Provider an amount equal to all unreimbursed drawings under
the Surety Bonds and all other amounts owing to the Surety
Provider under the Insurance Agreement, Premium Letter, Fee
Letter Agreement and the other Operative Documents (including
but not limited to all unreimbursed Surety Provider Defense
Costs);
eleventh, on each Determination Date, to the
counterparty of each Hedge Agreement (and pro rata on the
basis of amounts owed if there exists a deficiency in
distributions) on or after the Hedge Effective Date, any
Counterparty Hedge Termination Amounts;
twelfth, on each Liquidation Day, an amount equal to
interest not distributed in accordance with clause (fifth)
above on the Loans;
thirteenth, on each Determination Date, an amount
equal to the amount by which the Hedge Agreement Reserve
Account Required Amount with respect to each Hedge Agreement
exceeds the amount on deposit in the Hedge Agreement Reserve
Account with respect to such Hedge Agreement;
fourteenth, on each Liquidation Day, an amount equal
to the principal of the Seller Note;
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fifteenth, on each Liquidation Day, to the Persons
entitled thereto, pro rata according to the respective amounts
owing, an amount equal to the sum of the Recco Expenses and
all other Obligations;
sixteenth, to the Seller, subject to Article V of the
Sale Agreement, on each Determination Date, an amount equal to
the principal of and interest due on the Subordinated Note;
seventeenth, to the Servicer, on each Determination
Date, either (A) an amount equal to the Servicing Fee (if Onyx
Acceptance Corporation or an Affiliate thereof is the
Servicer) or (B) an amount equal to the portion of the
Servicing Fee not otherwise paid pursuant to clause first
above (if Onyx Acceptance Corporation or an Affiliate thereof
is not the Servicer); and
eighteenth, on each Determination Date, all remaining
amounts to Recco, or to such Persons and in such amounts as a
court of competent jurisdiction may direct.
(c) Permitted Investments. Amounts on deposit in the
Collection Account and the Hedge Agreement Reserve Account, including all
sub-accounts, may be invested in Permitted Investments, provided that such
Permitted 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). Income and gain from such
investments shall be taxable to Recco and shall be retained in the Collection
Account and the Hedge Agreement Reserve Account.
(d) Clearing Account. The Clearing Account is a general
clearing account held by and in the name of Recco 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 the Collateral Agent 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. Recco hereby represents, warrants, covenants and agrees that
it shall not move the Clearing Account set forth in Exhibit E to the Sale
Agreement without (a) providing for a successor Clearing Account, (b) notifying
the Collateral Agent and the Controlling Party 10 days prior to such change and
(c) causing such new Clearing Account to operate in the manner described herein.
Recco shall notify the Collateral Agent and the Controlling Party of the
location of any successor Clearing Account on the date such Clearing Account is
established.
(e) Optional Deposits by Surety Provider. The Surety Provider
shall at any time, and from time to time, have the option (but shall not be
required, except in accordance with the terms of the Surety Bond) to deliver
amounts to the Collateral Agent for deposit into the Collection Account to
provide funds in respect of the payment of fees or expenses of any provider of
services to Recco or to any other Person or in respect of any amounts payable
pursuant to Section 4(b) or 5(b) hereof. Any payment under this Section 5(e)
shall be reimbursable pursuant to Section 4(b)(x) and (xi) or clauses ninth and
tenth of Section 5(b), as the case may be.
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SECTION 6. Rights of Collateral Agent; Limitations on Collateral
Agent's Obligations.
(a) Collateral Agent Not Liable under Contracts. Neither the
Collateral Agent nor any holder of the Obligations nor the Program Manager nor
the Surety Provider shall have any obligation or liability under any Contract by
reason of or arising out of this Security Agreement or the Insurance Agreement
or the Surety Bond or the receipt by the Collateral Agent of any payment
relating to such Contract, nor shall the Collateral Agent nor the Program
Manager or the Surety Provider 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. Following a Wind-Down Event or a
Servicer Termination Event, upon the request of the Controlling Party, Recco
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. At the request and direction of the
Controlling Party, the Collateral Agent shall have the right to make test
verifications of the Purchased Contracts in any manner and through any medium
that it considers advisable, and Recco 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 Recco, Recco 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 Purchased Contracts.
(d) Proceeds. Subject to the provisions of Section 4(a) and
5(a), any Proceeds, when collected by Recco or the Servicer, shall be forthwith
deposited by Recco or the Servicer (as the case may be) in the exact form
received, in the Collection Account, and, until so turned over, shall be held by
Recco or the Servicer (as the case may be) 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 Servicer shall apply all or any part of the funds on
deposit in the Collection Account in accordance with Sections 4 and 5 hereof.
Recco shall deliver or cause to be delivered to the Collateral Agent or such
other Person as then may be acting as custodian for the Purchased Contracts in
accordance with Section 3(b) hereof 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.
(e) Document Delivery. In connection with the security
interest granted herein, on or prior to each date on which a Loan is made to
Recco under the Credit Agreement, Recco shall xxxx "83" as the company code on
the computer tape with reference to the Purchased Contract and File, which xxxx
shall designate that such Contract is owned by Recco and pledged to the
Collateral Agent, for the benefit of itself and the holders of the Obligations,
pursuant to this Program.
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SECTION 7. Representations and Warranties. Recco hereby represents and
warrants that:
(a) Title; No Other Liens. Except for the Lien granted to the
Collateral Agent pursuant to this Security Agreement and the other Liens
permitted pursuant to any of the other Operative Documents, Recco 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 Security Agreement or as may be permitted pursuant to the Credit Agreement.
(b) Perfected First Priority Liens. The Liens granted pursuant
to this 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 Recco.
(c) Chief Executive Office; Incorporation. Recco's chief
executive office and chief place of business is located at 00000 Xxxxx Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000 and its state of
incorporation is Delaware.
(d) Locations. All Collateral is located at the addresses
listed on Schedule 7(d) hereto.
(e) Other Representations. The representations and warranties
set forth in Schedule 7(e) hereto are true and correct.
SECTION 8. Covenants. Recco covenants and agrees with the Collateral
Agent that until the Obligations are paid in full and the 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 or the
Controlling Party, and at the sole expense of Recco, Recco will promptly and
duly execute and deliver such further instruments and documents and take such
further action as the Collateral Agent or the Controlling Party may request for
the purpose of obtaining or preserving the full benefits of this 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 Recco in each Vehicle. Recco
also hereby authorizes the Collateral Agent to file any such financing or
continuation statement 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 Security Agreement.
(b) Indemnification. Recco 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, transfer or other taxes
(excluding income and franchise 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 Security Agreement. In
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any suit, proceeding or action brought by the Collateral Agent in respect of any
Purchased Contract for any sum owing thereunder, or to enforce any provisions of
any Purchased Contract, Recco will save, indemnify and keep the Collateral
Agent, Program Manager and Surety Provider 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 Recco 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 Recco.
Notwithstanding the foregoing, the parties hereto hereby agree that under no
circumstances shall Recco be liable for, or required to pay any amount pursuant
to this paragraph (b), resulting from gross negligence or willful misconduct on
the part of the Collateral Agent.
(c) Maintenance of Records. Recco 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. Recco will xxxx its books and records pertaining to the Collateral to
evidence this Security Agreement and the security interests granted hereby. At
any time upon the request of the Collateral Agent, Recco 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 and Controlling
Party shall, upon reasonable prior notice and during normal business hours, have
access to all the books, correspondence and records of Recco and the Servicer
and to all Purchased Contracts and Files held by Recco or the Servicer or the
Servicer's Agent, and the Collateral Agent or its representatives may examine
the same, take extracts therefrom and make photocopies thereof, and Recco and
the Servicer agree to render to the Collateral Agent, at Recco's or the
Servicer's (as the case may be) cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto.
(e) Compliance with Laws, etc. Recco will comply with all
Requirements of Law applicable to the Collateral or any part thereof or to the
operation of Recco's business; provided, however, that Recco 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. Recco 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. Recco 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 Recco's books in
accordance with GAAP.
11
(h) Limitation on Liens on Collateral. Recco 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 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. Recco will not
sell, transfer, lease or otherwise dispose of any of the Collateral, or attempt,
offer or contract to do so, except as permitted by the Operative Documents.
(j) Limitations on Modifications, Waivers, Extensions of
Contracts and the Interest Rate Hedge Mechanisms. Recco 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, (v) act otherwise than in
accordance with the Credit and Collection Policy or (vi) amend, modify,
terminate or waive any provision of any Interest Rate Hedge Mechanism without
the prior written consent of the Controlling Party.
(k) Limitations on Discounts, Compromises, Extensions of
Contracts. Other than pursuant to the Credit and Collection Policy, Recco 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) Further Identification of Collateral. Recco 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.
(m) Notices. Recco will advise the Collateral Agent and the
Controlling Party promptly, in detail, at its address set forth in the 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 a Material Adverse Effect on the Collateral or on
the Liens created hereunder. Subject to Section 8(j) hereof, Recco will promptly
notify the Collateral Agent, the Program Manager and the Surety Provider of any
proposed amendment to any Interest Rate Hedge Mechanism prior to its execution.
A copy of any notice delivered to or required to be sent by Recco under this
paragraph shall be sent by Recco to the holder of the Subordinated Note.
(n) Changes in Locations, Name, etc. Recco will not, without
providing 30 days prior written notice to the Collateral Agent, the Surety
Provider, the Lenders 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
12
of the Surety Provider 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 state of incorporation from that specified in
Section 7(c) or remove its books and records from such location, (ii) change its
name, identity or corporate structure to such an extent that any financing
statement filed by the Collateral Agent in connection with this Security
Agreement would become misleading or (iii) change the location where the
Purchased Contracts and the Files are maintained.
SECTION 9. Collateral Agent's Appointment as Attorney-in-Fact.
(a) Powers. Recco and the Servicer hereby irrevocably
constitute and appoint 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 Recco and the
Servicer and in the name of Recco, the Servicer 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 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 Security Agreement,
and, without limiting the generality of the foregoing, Recco and the Servicer
hereby give the Collateral Agent the power and right, on behalf of Recco and the
Servicer, without notice to or assent by Recco or the Servicer, to do the
following, in each case at the direction of the Controlling Party:
(i) upon the occurrence and during the
continuance of any Wind-Down Event, in the name of Recco, the Servicer
or its own name, or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or other instruments for
the payment of moneys due under any Account, 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 Account, 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 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 Recco 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
13
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 Controlling Party's option and Recco's or the Servicer's, as
applicable, expense, at any time, or from time to time, all lawful acts
and things which the Controlling Party deems necessary to protect,
preserve or realize upon the Collateral and the Collateral Agent's
Liens thereon and to effect the intent of this Security Agreement, all
as fully and effectively as Recco or the Servicer might do; (H)
implement the Alternate Servicing Plan; (I) direct the Servicer to
deliver any Files to the Collateral Agent at Recco's expense; and (J)
compel the transfer of Recco's interest in all rights (by license,
sublicense or otherwise) of any computer software necessary to collect
the Contracts.
Recco and the Servicer hereby ratify all that said attorneys shall lawfully do
or cause to be done by virtue hereof.
(b) Other Powers. Recco 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 that it is
directed by the Controlling Party to execute.
(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
Recco for any act or failure to act hereunder, except for its own gross
negligence or willful misconduct. The Collateral Agent may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note or other paper or document
(whether in its original or facsimile form) reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties.
SECTION 10. Performance by Collateral Agent of Recco's Obligations. If
Recco fails to perform or comply with any of its agreements contained herein and
the Collateral Agent, as provided for by the terms of this 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 Recco
to the Collateral Agent on demand or to the extent that funds are available
under Section 4(b) or 5(b) (as the case may be) 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 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, at the direction of the
Controlling Party. 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
14
Recco or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances, at the
direction of the Controlling Party, forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give an option or options to purchase, or otherwise dispose of
and deliver said Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the 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 Recco, which right or equity is hereby
waived or released. Recco 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 Recco's
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 (consistent with Section 5(b)) 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 9-615(a)(3) of the UCC, need the
Collateral Agent account for the surplus, if any, to Recco. To the extent
permitted by applicable law, Recco 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 Credit
Agreement at least 10 days before such sale or disposition. Recco 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.
Upon the occurrence of a Wind-Down Event, Recco shall take such action
or shall cause such action to be taken pursuant to any and all Interest Rate
Hedge Mechanisms and/or enter into any Hedge Agreement at the sole expense of
Recco promptly upon the request of the Controlling Party.
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
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, 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 Recco or otherwise.
To the extent the Collateral Agent receives written direction from either the
Controlling Party or the Program Manager as provided herein, the party
delivering such direction agrees to indemnify and hold harmless the Collateral
Agent from, any and all liabilities, costs and expenses (including without
limitation, legal fees and expenses) with respect to or resulting
15
from any action or action set for to such direction; provided however under no
circumstances will such party be liable for, or required to pay any amount
pursuant to this paragraph resulting from gross negligence or willful misconduct
on the part of the Collateral Agent.
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 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. Section and Paragraph Headings; Notices.
(a) The section and paragraph headings used in this 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.
(b) Notices to any of the signatories hereto shall be given as
provided in the Credit Agreement.
SECTION 16. Surety Bond. The Collateral Agent agrees to hold the Surety
Bond for the benefit of the Lenders and at the written request and direction of
the Program Manager, the Collateral Agent hereby agrees to make, on a timely
basis, all drawings (including, without limitation, drawings in respect of
Avoided Payments, as such term is defined in the Surety Bond) permitted to be
made by delivery of a Notice of Payment under the Surety Bond and to deliver or
cause to be delivered to the Program Manager for the benefit of the Lenders the
proceeds of such drawings.
SECTION 17. No Waiver; Cumulative Remedies. The Collateral Agent shall
not by any act (except pursuant to the execution of a written instrument
pursuant to Section 18 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 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 provided herein and in the other Operative Documents are cumulative,
may be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
SECTION 18. Waivers and Amendments; Successors and Assigns. None of the
terms or provisions of this Security Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the parties hereto and the Controlling Party and with prior written notice
thereof to S&P and Xxxxx'x. This Security Agreement shall be binding upon the
successors and assigns of the parties hereto and shall inure to the benefit of
each of the parties hereto and their successors and assigns.
16
SECTION 19. Integration. This Security Agreement represents the
agreement of Recco, the Servicer and the Collateral Agent with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Collateral Agent, Recco and the Servicer relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Operative Documents.
SECTION 20. Counterparts. This Security Agreement may be executed by
one or more of the parties to this 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 21. GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO UNDER THIS SECURITY AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES WHICH MAY
REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
SECTION 22. Termination and Release.
(a) This Security Agreement and the security interests created
or granted hereby shall remain in full force and effect until the date after the
Commitment Termination Date on which all of the Obligations are indefeasably
paid in full in cash and the Surety Bond is returned for cancellation, at which
time, following the receipt by the Collateral Agent of written notice from the
Program Manager that such Obligations have been so paid and from the Surety
Provider that such Surety Bond has been returned, the security interest created
or granted hereby shall terminate and the Collateral Agent shall, at the sole
expense of Recco, execute and deliver such documents and instruments (including
without limitation UCC termination statements) necessary to evidence the
termination of such security interest, as Recco may reasonably request.
(b) (i) Recco Request for Release. Recco intends from time to
time to sell Purchased Contracts and other related Collateral (x) to entities
which will then privately or publicly sell securities backed by such Purchased
Contracts and Collateral or (y) in whole loan bulk sales to Onyx Acceptance
Corporation or Xxxxx or, with the prior written consent of the Controlling
Party, unaffiliated third parties, in each case, for a cash purchase price of
not less than the aggregate Outstanding Balance of such Purchased Contracts plus
accrued and unpaid interest thereon and other unpaid Finance Charges with
respect thereto. Notwithstanding anything to the contrary in Sections 6.4, 6.5,
and 6.16 of the Credit Agreement, Recco 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 (y) shall occur
no more frequently than once each month;
(B) each of the Seller and Recco shall be in
compliance with all of its covenants in the Operative
Documents, no Wind-Down Event or Unmatured Wind Down Event
shall be continuing and no adverse selection procedures shall
have been used by Recco or the Servicer in selecting Purchased
Contracts for such sales;
(C) the Program Manager and Surety Provider
shall have received copies of all documents executed in
connection with such sale; and
17
(D) sufficient moneys are available in the
Collection Account to satisfy all amounts due on such date
after the application of the Prepayment Amount including
specifically any termination payment due the counterparty of a
Hedge Agreement.
The proceeds of all sales (such proceeds, the "Prepayment
Amount") by Recco pursuant to clauses (x) and (y) above shall
be applied in accordance with Section 4(b) of this Agreement.
Upon not less than 5 Business Days' prior written notice to
the Collateral Agent, Recco may request that specified
Purchased Contracts and other related Collateral be released
in connection with such sales and the prepayment of the Lender
Note as provided in Section 2.5(b) of the Credit Agreement. In
connection with such request, Recco 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,
Recco shall employ selection procedures which are not adverse
to the interests of the Lenders, the Collateral Agent or the
Surety Provider. Recco shall deliver to the Program Manager
and Surety Provider (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 Recco.
(ii) Collateral Agent Release. Upon receipt of an
amount in immediately available funds equal to the Prepayment
Amount, the Collateral Agent shall, at the direction of the
Controlling Party and at the sole expense of Recco, 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 the Purchased Contracts
specified by Recco in accordance with clause (i) of this
Section 22(b).
(iii) Documents and Filings. In connection with any
such release pursuant to this Section 22, Recco and the
Collateral Agent, shall at the sole expense of Recco, 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, UCC release forms prepared for
filing in all appropriate jurisdictions.
(iv) Legal Fees. Recco agrees to pay on demand to the
Surety Provider, Collateral Agent, Program Manager and the
Lenders, all reasonable legal fees and disbursements incurred
by such entity in connection with the negotiation,
preparation, execution, review and delivery of any documents
related to any sale by Recco pursuant to Section 22(b)(i)(y)
of this Agreement.
SECTION 23. Third-Party Beneficiary. The parties to this Security
Agreement hereby agree that the Surety Provider and the Program Manager shall be
intended third-party beneficiaries of this Security Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the date first above written.
ONYX ACCEPTANCE RECEIVABLES CORPORATION
By: _______________________________
Name:
Title:
JPMORGAN CHASE BANK, as Collateral Agent
By: _______________________________
Name:
Title:
ONYX ACCEPTANCE CORPORATION, as Servicer
By: _______________________________
Name:
Title:
Acknowledged and agreed with respect to Section 3(b)
XL CAPITAL ASSURANCE INC.
By: _________________________
Name:
Title:
19
SCHEDULE 7(d)
LOCATIONS OF COLLATERAL
The Collateral is located at:
1. Onyx Acceptance Corporation
00000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
2. Xxxxxx DataBank
00000 Xxxxx Xxxxxxx
Xxxx Xxxxxx, Xxxxxxxxxx
SCHEDULE 7(e)
REQUIRED REPRESENTATIONS REGARDING THE COLLATERAL
The following representations and warranties (to the extent applicable)
(i) are made by Recco as of the date hereof and as of each Purchase Date, (ii)
shall survive the execution and delivery of this Security Agreement and the
purchase of the Collateral (or any part thereof) on each Purchase Date and (iii)
may not be amended, waived or otherwise modified without the prior written
consent of S&P:
A. The following representations and warranties are made with respect to all of
the Collateral:
General
This Security Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in the Collateral in favor of the Collateral
Agent, for the benefit of itself and the holders of the Obligations, which
security interest is prior to all other Liens, and is enforceable as such as
against creditors of and purchasers from Recco.
Creation
Recco owns and has good and marketable title to the Collateral free and clear of
any Lien, claim or encumbrance of any Person, except for any Lien created by
this Agreement or the Subordinated Security Agreement.
Perfection by Filing
Recco has caused the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in the Collateral granted to the
Collateral Agent, for the benefit of itself and of the holders of the
Obligations hereunder (to the extent such security interest may be perfected by
filing under the applicable UCC).
Priority
Other than the security interest granted to the Collateral Agent, for the
benefit of itself and the holders of the Obligations, pursuant to this Agreement
or granted to Onyx pursuant to the Subordinated Security Agreement, Recco has
not pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Collateral. Recco has not authorized the filing of and is
not aware of any financing statements against Recco that include a description
of collateral covering the Collateral other than any financing statement
relating to the security interest granted to the Collateral Agent, for the
benefit of itself and the holders of the Obligations, hereunder or that has been
terminated. Recco is not aware of any judgment or tax lien filings against
Recco.
B. The following additional representations and warranties are made with respect
to the Purchased Contracts which constitute Tangible Chattel Paper under the
applicable UCC (as used in this Section B, the "Subject Collateral"):
General
1. Recco has taken or caused to be taken all steps necessary to perfect its
security interest against the Obligor in the property securing the Subject
Collateral.
2. The Subject Collateral constitutes "tangible chattel paper" within the
meaning of the applicable UCC.
Perfection by Possession
1. The fully executed original of each Purchased Contract that constitutes or
evidences the Subject Collateral has been delivered to the Servicer, as
custodian for the Collateral Agent (the "Custodian").
2. Pursuant to Section 3(b) of this Agreement, the Collateral Agent has received
a written acknowledgment from the Custodian that the Custodian or its agent is
holding the Purchased Contracts that constitute or evidence the Subject
Collateral solely on behalf and for the benefit of the Collateral Agent.
3. None of the Purchased Contracts that constitute or evidence the Subject
Collateral has any marks or notations indicating that it has been pledged,
assigned or otherwise conveyed to any Person other than the Collateral Agent,
for the benefit of itself and the holders of the Obligations, and Onyx pursuant
to the Subordinated Security Agreement.
EXHIBIT A
LIEN RELEASE REQUEST CERTIFICATE
from Recco to the Collateral Agent and Seller
pursuant to Section 23 of Security Agreement
and Section 19 of Subordinated Security Agreement
[ date ]
JPMorgan Chase Bank,
as Collateral Agent
0 Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Institutional Trust Services/Structured Finance Services
Onyx Acceptance Corporation,
as Seller
00000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Re: Onyx Acceptance Receivables Corporation/Commercial Paper Program -
Request for Release of Lien
Ladies and Gentlemen:
Onyx Acceptance Receivables Corporation ("Recco") refers to
(i) the Security Agreement dated as of January 9, 2003 (as amended, supplemented
or otherwise modified, the "Security Agreement") among Recco, Onyx Acceptance
Corporation and the Collateral Agent, and (ii) the Subordinated Security
Agreement dated as of January 9, 2003 (as amended, supplemented or otherwise
modified, the "Subordinated Security Agreement") between Recco and Onyx
Acceptance Corporation. Terms not otherwise defined herein are used herein as
defined in the Definitions List dated January 9, 2003.
Recco submits this Lien Release Request Certificate pursuant
to Section 22 of the Security Agreement and Section 19 of the Subordinated
Security Agreement and requests that the Collateral Agent and the Seller release
(and the Seller cause its assignee to release) all of their liens on and
security interests in the assets described on Schedule 1 attached hereto (and
all proceeds thereof, all books, records and computer records pertaining thereto
and all other assets that constitute Collateral which are specifically related
to the assets described in Schedule 1).
ONYX ACCEPTANCE RECEIVABLES CORPORATION
By:_______________________________
Name:
Title:
EXHIBIT B
COLLATERAL AGENT LIEN RELEASE CERTIFICATE
pursuant to Section 23 of Security Agreement
[Date]
Onyx Acceptance Receivables Corporation
00000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Re: Partial Collateral Release
Ladies and Gentlemen:
We hereby refer to the Lien Release Request Certificate
submitted by Onyx Acceptance Receivables Corporation ("Recco") dated
__________________________, a copy of which is attached hereto (the "Request
Certificate"). Pursuant to the Request Certificate, JPMorgan Chase Bank, acting
in its capacity as the Collateral Agent under the Security 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).
JPMORGAN CHASE BANK,
as Collateral Agent
By ______________________________
Name:____________________________
Title _____________________________
