exv4w18



 




EXHIBIT 4.18




MBIA INSURANCE CORPORATION




FINANCIAL GUARANTEE INSURANCE POLICY

May 16, 2003




Policy No. 41233




	 	 	 
	Re:	 	
Onyx Acceptance Owner Trust 2003-B (the “Trust”)
$74,800,000 1.25% Auto Loan Backed Notes, Class
A-1 (“Class A-1 Notes”); $99,000,000 1.37% Auto
Loan Backed Notes, Class A-2 (“Class A-2 Notes”);
$122,000,000 1.77% Auto Loan Backed Notes, Class
A-3 (“Class A-3 Notes”); and $104,200,000 2.45%
Auto Loan Backed Notes, Class A-4 (“Class A-4
Notes” and together with the Class A-1 Notes,
Class A-2 Notes and Class A-3 Notes, the “Notes”)
	 	 	 
	Insured Obligation:	 	
Obligation to pay timely interest and ultimate
principal on Notes
	 	 	 
	Beneficiary:	 	
Citibank, N.A., as indenture trustee (the
“Indenture Trustee”) under the Indenture dated May
1, 2003 (the “Indenture”) between the Trust and
the Indenture Trustee (together with any successor
indenture trustee duly appointed and qualified
under the Indenture) for the benefit of the Owners
(as defined below)





MBIA INSURANCE CORPORATION (“MBIA”), for consideration received, hereby
unconditionally and irrevocably guarantees to the Beneficiary, subject only to
the terms of this Financial Guarantee Insurance Policy (the “Policy”), payment
of the Insured Obligation. MBIA agrees to pay to the Indenture Trustee, in
respect of each Distribution Date, an amount equal to the amount by which (A)
the sum of the following amounts, each as of or with respect to such
Distribution Date, (i) the Servicing Fee, including any unpaid Servicing Fees,
(ii) any accrued and unpaid fees of the Indenture Trustee, the Owner Trustee
and the Trust Agent, in each case to the extent such fees have not been paid by
the Servicer, (iii) the Note Interest Distributable Amount, and (iv) if such
Distribution Date is a Final Scheduled Distribution Date with respect to any
Class of Notes, the Note Principal Distributable Amount with respect to such
Class of Notes exceeds (B) the sum of (i) the amount of Net Collections
available to make such payments with respect to such Distribution Date, (ii)
the amount on deposit in the Spread Account as of such Distribution Date (the
“Deficiency Amount”) and (iii) amounts transferred from the Prefunding Account
and the Capitalized Interest Account to the Payment Account with respect to
such Distribution Date. MBIA also agrees to pay an amount equal to any Avoided
Payment (as defined below). This Policy does not cover shortfalls, if any,
attributable to the liability of the





 








 


Trust for withholding taxes, if any (including interest and penalties in
respect of such liability). Payments hereunder shall be made only at the time
set forth in this Policy. This Policy shall not guarantee payments of
principal on the Notes other than the outstanding principal amount of each
class of Notes on the Note Final Scheduled Distribution Date for such class of
Notes, and will not guarantee payment of any Accelerated Principal
Distributable Amount or amounts that become due on an accelerated basis as a
result of (a) a default by the Trust, (b) the occurrence of an Indenture Event
of Default under the Indenture, or (c) any other cause. MBIA may elect, in its
sole discretion, to pay in whole or in part such principal due upon
acceleration. MBIA may elect, in its sole discretion, to pay all or a portion
of any shortfalls in the amount of Net Collections available to make
distributions of principal on the Notes, other than distributions of principal
with respect to a Class of Notes on the Final Scheduled Distribution Date
therefor, which is guaranteed by MBIA as provided above.




     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Sale and Servicing Agreement dated as of
May 1, 2003 among Onyx Acceptance Financial Corporation, as seller (the
“Seller”), Onyx Acceptance Corporation, as servicer (the “Servicer”) and
custodian, Citibank, N.A., as Indenture Trustee and Trust Agent and the Trust
(the “Sale and Servicing Agreement”).




     As used herein the term “Owner” means each Noteholder who on the
applicable Distribution Date is entitled under the terms of the related Note to
receive payments thereunder.




     Payment of amounts hereunder shall be made in immediately available funds
on the later of (a) 12:00 noon, New York City time, on the related Distribution
Date and (b) 12:00 noon, New York City time, on the second Business Day
following presentation to State Street Bank and Trust Company, N.A., as Fiscal
Agent for MBIA or any successor fiscal agent appointed by MBIA (the “Fiscal
Agent”) (as hereinafter provided) and MBIA of a notice for payment in the form
of Exhibit A hereto (“Notice for Payment”), appropriately completed and
executed by the Indenture Trustee. A Notice for Payment under this Policy may
be presented to the Fiscal Agent and MBIA on any Business Day following the
Servicer Report Date in respect of which the Notice for Payment is being
presented, by (a) delivery of the original Notice for Payment to the Fiscal
Agent and MBIA at its respective address set forth below, or (b) facsimile
transmission of the original Notice for Payment to the Fiscal Agent and MBIA at
its respective facsimile number set forth below. If presentation is made by
facsimile transmission, the Indenture Trustee shall (i) simultaneously confirm
transmission by telephone to the Fiscal Agent and MBIA at its respective
telephone number set forth below, and (ii) as soon as reasonably practicable,
deliver the original Notice for Payment to the Fiscal Agent and MBIA at its
respective address set forth below. Any Notice for Payment received by the
Fiscal Agent or MBIA after 12:00 noon, New York City time, on a Business Day,
or on any day that is not a Business Day, will be deemed to be received by the
Fiscal Agent and MBIA on the next succeeding Business Day.




     Subject to the foregoing, if the payment of any amount previously
distributed to an Owner in respect of the Notes that is recoverable and sought
to be recovered as a voidable preference by a trustee in bankruptcy with
respect to the Trust, the Seller or Onyx pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with a
nonappealable order of a court having competent jurisdiction is voided
(“Avoided Payment”), MBIA will make such Avoided Payment on behalf of the Owner
to the receiver, conservator,





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debtor-in-possession or trustee in bankruptcy named in the Final Order (as
defined below) and not to any Owner directly, unless such Owner has previously
paid such Avoided Payment to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy, in which case MBIA will make such Avoided Payment to
such Owner upon receipt by the Fiscal Agent and MBIA from the Indenture
Trustee on behalf of such Noteholder of (i) a certified copy of a final,
nonappealable order of a court having competent jurisdiction to the effect
that the Owner is required to return any such payment or portion thereof prior
to the Termination Date of this Policy because such payment was voided under
applicable law (the “Final Order”) together with an opinion of counsel
satisfactory to MBIA that such Final Order is final and not subject to appeal,
(ii) an assignment, substantially in the form attached hereto as Exhibit B,
properly completed and executed by such Owner irrevocably assigning to MBIA all
rights and claims of such Owner relating to or arising under such Avoided
Payment, (iii) a Notice for Payment in the form of Exhibit A hereto
appropriately completed and executed by the Indenture Trustee and (iv)
appropriate instruments to effect the appointment of MBIA as agent for such
Owner in any legal proceeding relating to such Avoided Payment.




     MBIA shall make payments due in respect of Avoided Payments no later than
12:00 noon, New York City time on the Business Day following the Fiscal Agent’s
and MBIA’s receipt of the documents required under clauses (i) through (iv) of
the preceding paragraph. Any such documents received by the Fiscal Agent or
MBIA after 12:00 noon, New York City time, on any Business Day or on any day
that is not a Business Day shall be deemed to have been received by the Fiscal
Agent and MBIA prior to 12:00 noon on the next succeeding Business Day. All
payments made by MBIA hereunder on account of any Avoided Payment shall be made
to the receiver or the trustee in bankruptcy named in the Final Order on behalf
of Owner and not to any owner directly unless such Owner has returned such
Avoided Payment to such receiver or trustee in bankruptcy, in which case such
payment will be disbursed to such Owner.




     If any Notice for Payment received by the Fiscal Agent and MBIA is not in
proper form or is otherwise insufficient for the purpose of making a claim
hereunder, it shall be deemed not to have been received by the Fiscal Agent and
MBIA, and the Fiscal Agent or MBIA shall promptly so advise the Indenture
Trustee, and the Indenture Trustee may submit an amended Notice for Payment.




     Payments due hereunder unless otherwise stated herein will be disbursed by
the Fiscal Agent to the Indenture Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of such payment, less, in
respect of Avoided Payments, any amounts held by the Indenture Trustee for the
payment of such Avoided Payment and legally available therefor.




     The Fiscal Agent is the agent of MBIA only, and the Fiscal Agent shall in
no event be liable to Owners for any acts of the Fiscal Agent or any failure of
MBIA to deposit or cause to be deposited sufficient funds to make payments due
under this Policy.




     MBIA shall be subrogated to the rights of each Owner to receive payments
under the Notes to the extent of any payment by MBIA hereunder.




     MBIA hereby waives and agrees not to assert any and all rights to require
the Indenture





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Trustee to make demand on or to proceed against any person, party or
security prior to the Indenture Trustee demanding payment under this Policy.




     No defenses, set-offs and counterclaims of any kind available to MBIA so
as to deny payment of any amount due in respect of this Policy will be valid
and MBIA hereby waives and agrees not to assert any and all such defenses,
set-offs and counterclaims, including, without limitation, any such rights
acquired by subrogation, assignment or otherwise. Any rights of subrogation
acquired by MBIA as a result of any payment made under this Policy shall, in
all respects, be subordinate and junior in right of payment to the prior
indefeasible payment in full of all amounts due the Indenture Trustee on
account of payments due under the Notes.




     MBIA’s obligations under this Policy shall be discharged to the extent
funds to pay the Insured Obligation are deposited by the Servicer into the
Collection Account in accordance with the Sale and Servicing Agreement or
disbursed by MBIA as provided in this Policy, whether or not such funds are
properly applied by the Indenture Trustee.




     This Policy is neither transferable nor assignable, in whole or in part,
except to a successor to the Indenture Trustee pursuant to the Indenture. All
notices, presentations, transmissions, deliveries and communications made by
the Indenture Trustee to MBIA with respect to this Policy shall specifically
refer to the number of this Policy and shall be made to MBIA at:





	 	MBIA Insurance Corporation

113 King Street

Armonk, New York 10504

Attention: Insured Portfolio Management, Structured Finance

Telephone:    (914) 273-4545

Facsimile:    (914) 765-3810







or such other address, telephone number or facsimile number as MBIA may
designate to the Indenture Trustee in writing from time to time. Each such
notice, presentation, transmission, delivery and communication shall be
effective only upon actual receipt by MBIA.




     All notices, presentations, transmissions, deliveries and communications
made by the Indenture Trustee to the Fiscal Agent of MBIA shall specifically
refer to the number of this Policy and shall be made at the address listed
below for the Fiscal Agent of MBIA or such other address, telephone number or
facsimile number as MBIA or the Fiscal Agent shall specify in writing to the
Indenture Trustee.




     The notice address of the Fiscal Agent is 61 Broadway, 15th Floor, New
York, New York 10006 Attention: Municipal Registrar and Paying Agency,
Telephone: 212-612-3458, Facsimile: 212-612-3203, or such other address as the
Fiscal Agent shall specify to the Indenture Trustee in writing.




     The obligations of MBIA under this Policy are irrevocable, primary,
absolute and unconditional (except as expressly provided herein) and neither
the failure of the Trust, the Indenture Trustee, the Owner Trustee, the Trust
Agent, the Seller, the Servicer or any other





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person to perform any covenant or obligation in favor of MBIA (or
otherwise), nor the failure or omission to make a demand permitted hereunder,
nor the commencement of any bankruptcy, debtor or other insolvency proceeding
by or against the Trust, the Indenture Trustee, the Owner Trustee, the Trust
Agent, the Seller, the Servicer or any other person shall in any way affect or
limit MBIA’s obligations under this Policy. If a successful action or
proceeding to enforce this Policy is brought by the Indenture Trustee, the
Indenture Trustee shall be entitled to recover from MBIA costs and expenses
reasonably incurred, including without limitation reasonable fees and expenses
of counsel.




     This Policy and the obligations of MBIA hereunder shall terminate on the
date (the “Termination Date”) that is ninety one (91) days following the
earlier of (a) the latest Final Scheduled Distribution Date and (b) the date
on which all amounts required to be paid to the Owners have been paid in full,
provided, that, if any Insolvency Proceeding is existing by or against the
Trust, the Seller or Onyx during such ninety-one day period, then this Policy
and MBIA’s obligations hereunder shall terminate on the date of the conclusion
or dismissal of such Insolvency Proceeding without continuing jurisdiction by
the court in such Insolvency Proceeding, provided, further that, and
notwithstanding anything herein to the contrary, this Policy shall not
terminate prior to the date on which MBIA has made all payments required to be
made under the terms of this Policy in respect of Avoided Payments.




     All payments made hereunder by MBIA shall be made with MBIA’s own funds.
The payment by MBIA to the Indenture Trustee of any amount guaranteed by the
first paragraph of this Policy, and the payment by MBIA of any Avoided Payment
shall constitute “payments” for all purposes under this Policy. In no event
shall any payment be made under this Policy on account of (a) the failure of
the Indenture Trustee to deliver the proceeds of any such payment to any Owner
or (b) the failure of any such Owner to claim any such proceeds from the
Indenture Trustee.




     This Policy is not covered by the property/casualty insurance fund
specified in Article Seventy-Six of the New York State insurance law.




     This Policy sets forth in full the undertaking of MBIA, and shall not,
except with the prior written consent of the Indenture Trustee or otherwise in
accordance with the express terms hereof, be modified, altered or affected by
any other agreement or instrument, including any modification or amendment
thereto and may not be canceled or revoked by MBIA prior to the Termination
Date. The Premium on this Policy is not refundable for any reason.




     This Policy shall be returned to MBIA by the Indenture Trustee on the
Termination Date.




      




      




      




THIS POLICY SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND





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REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.




     IN WITNESS WHEREOF, MBIA has caused this Policy to be executed on the date
first written above.




	 	 	 
	 	 	
MBIA INSURANCE CORPORATION
	 	 	 
	 	 	
By:
	 	 	


Name:

Title:
	 	 	 
	 	 	
By:
	 	 	


Name:

Title:







6








 




Exhibit A to Financial Guarantee Insurance Policy, Number 41233




MBIA Insurance Corporation

113 King Street

Armonk, New York 10504

Attention: Insured Portfolio Management,

Structured Finance




NOTICE FOR PAYMENT




UNDER FINANCIAL GUARANTEE INSURANCE POLICY NUMBER 41233



Citibank, N.A., as indenture trustee (the “Indenture Trustee”), hereby
certifies to MBIA Insurance Corporation (“MBIA”) with reference to that
certain Financial Guarantee Insurance Policy, Number 41233, dated May 16, 2003
(the “Policy”), issued by MBIA in favor of the Indenture Trustee under the
Indenture, dated as of May 1, 2003 between Onyx Acceptance Owner Trust 2003-B
and the Indenture Trustee as follows:




     1. The Indenture Trustee is the Indenture Trustee under the Indenture and
the Beneficiary under the Policy.




     2. The Indenture Trustee is entitled to make a demand under the Policy
[pursuant to Section 4.02(c) of the Sale and Servicing Agreement] [in
connection with an Avoided Payment as defined in the Policy].




     [For a Notice for Payment in respect of a Distribution Date use the following
paragraphs 3, 4 and 5.]




     3. This notice relates to the [insert date] Distribution Date. The amount
claimed under the Policy, as specified to the Indenture Trustee by the
Servicer, for such Distribution Date is $   . The amount demanded by this
notice does not exceed amounts permitted to be drawn under the Policy.




     4. The Indenture Trustee demands payment of $   which is an
amount equal to the Deficiency Amount for such Distribution Date.




     5. The amount demanded is to be paid in immediately available funds to the
Collection Account at    , account number    .




     [For a Notice for Payment in respect of an Avoided Payment use the following
paragraphs 3 and 4.]




     3. The Trustee hereby represents and warrants, based upon information
available to it, that (i) the amount entitled to be drawn under the Policy on
the date hereof in respect of





A-1








 


Avoided Payments is the amount paid or to be paid simultaneously with such
draw on the Policy, by all Noteholders [$ ] (the “Avoided
Payment Amount”), (ii) each Noteholder with respect to which the drawing is
being made under the Policy has paid or simultaneously with such draw on the
Policy will pay such Avoided Payment, and (iii) the documents required by the
Policy to be delivered in connection with such Avoided Payment and Avoided
Payment Amount have previously been presented to MBIA or are attached hereto.




     4. The amount demanded is to be paid in immediately available funds by
wire transfer to [ ].




     [For a Notice for Payment relating to both an Avoided Payment and a
Distribution Date, use the following paragraphs 3, 4, 5 and 6.]




     3. This notice relates to the [insert date] Distribution Date. The amount
claimed under the Policy, as specified to the Indenture Trustee by the
Servicer, for such Distribution Date is $   . The amount demanded by this
notice does not exceed amounts permitted to be drawn under the Policy.




     4. The Indenture Trustee demands payment of $   which is an
amount equal to the Deficiency Amount for such Distribution Date.




     5. The Indenture Trustee hereby represents and warrants, based upon
information available to it, that (i) the amount entitled to be drawn under the
Policy on the date hereof in respect of Avoided Payments is the amount paid or
to be paid simultaneously with such draw on the Policy, by all Noteholders [$
] (the “Avoided Payment Amount”), and (ii) the documents required by
the Policy to be delivered in connection with such Avoided Payment and Avoided
Payment Amount have previously been presented to MBIA or are attached hereto.




     6. The amount demanded is to be paid in immediately available funds by
wire transfer to [ ].




     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Policy.




     Any Person Who Knowingly And With Intent To Defraud Any Insurance Company
Or Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading Information Concerning Any Fact Material Thereof, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A
Civil Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The
Claim For Each Such Violation.





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     IN WITNESS WHEREOF, this notice has been executed this    day of
   ,    .




	 	 	 
	 	 	
Citibank, N.A.
	 	 	 
	 	 	
By:
	 	 	


Authorized Officer







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Exhibit B to Financial Guarantee Insurance Policy, Number 41233




Form of Assignment



Reference is made to the Financial Guarantee Insurance Policy No. 41233, dated
May 16, 2003, (the “Policy”) issued by MBIA Insurance Corporation (“MBIA”)
relating to the $400,000,000 Onyx Acceptance Owner Trust 2003-B 1.25% Auto Loan
Backed Notes, Class A-1, 1.37% Auto Loan Backed Notes, Class A-2, 1.77% Auto
Loan Backed Notes, Class A-3, and 2.45% Auto Loan Backed Notes, Class A-4.
Unless otherwise defined herein, capitalized terms used in this Assignment
shall have the meanings assigned thereto in the Policy as incorporated by
reference therein. In connection with the Avoided Payment of [$       ]
paid by the undersigned (the “Holder”) on [         ] and
the payment by MBIA in respect of such Avoided Payment pursuant to the Policy,
the Holder hereby irrevocably and unconditionally, without recourse,
representation or warranty (except as provided below), sells, assigns,
transfers, conveys and delivers all of such Holder’s rights, title and interest
in and to any rights or claims, whether accrued, contingent or otherwise, which
the Holder now has or may hereafter acquire, against any person relating to,
arising out of or in connection with such Avoided Payment. The Holder
represents and warrants that such claims and rights are free and clear of any
lien or encumbrance created or incurred by such Holder.




	 	 
	 	

Holder1











	 	 	1     In the event that the terms of this form of assignment are reasonably
determined to be insufficient solely as a result of a change of law or
applicable rules after the date of the Policy to fully vest all of the Holder’s
right, title and interest in such rights and claims, the Holder and MBIA shall
agree on such other form as is reasonably necessary to effect such assignment,
which assignment shall be without recourse, representation or warranty except
as provided above.








B-1