Document:

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,

2

 

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

3

 

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

4

 

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

5

 

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.

A-2

 

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

	 	 	 
	 	 	
Citibank, N.A.
	 	 	 
	 	 	
By:
	 	 	

Authorized Officer

A-3

 

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-1exv4w19

 

	 	 	 
		 	
EXHIBIT 4.19
	 	 	 
	 	 	
1221 Avenue of the Americas

New York, New York 10020

Telephone: (212) 478-3400

Facsimile: (212) 478-3597

	 	FINANCIAL GUARANTY

INSURANCE POLICY

	 	 	 
	Obligor: Onyx Acceptance Owner Trust 2003-C	 	
Policy No: CA00647A

Effective Date: July 30, 2003
	 	 	 
	Insured Obligation: The Class A-1 Notes, the Class A-2 Notes, the

Class A-3 Notes and the Class A-4 Notes issued pursuant to that certain

Indenture dated as of July 1, 2003 (the principal amount of which shall not

exceed $400,000,000).	 	 

     XL Capital Assurance Inc. (“XLCA”), a New York stock insurance company, in
consideration of the payment of the premium hereby unconditionally and
irrevocably guarantees to the Indenture Trustee for the benefit of the Owners
of the Insured Obligations, the full and complete payment by the Obligor of
Scheduled Payments in respect of the Insured Obligation, subject only to the
terms of this Policy (which includes the Endorsement attached hereto).

     XLCA will pay the Insured Amount to the Indenture Trustee upon the
presentation of a Payment Notice to XLCA (which Payment Notice shall include an
irrevocable assignment to XLCA of all rights and claims in respect of the
relevant Insured Obligation, as specified in the Payment Notice), on the later
of (a) one (1) Business Day following receipt by XLCA of a Payment Notice or
(b) the Business Day on which Scheduled Payments are due for payment. XLCA
shall be subrogated to the Owners’ rights to payment on the Insured Obligations
to the extent of any payment by XLCA hereunder. The obligations of XLCA with
respect to a Scheduled Payment will be discharged to the extent funds to pay
such Scheduled Payment are deposited in the account specified in the Payment
Notice, whether such funds are properly applied by the Indenture Trustee or
claimed by an Owner.

     In addition, in the event that any Scheduled Payment which has become Due
for Payment and which is made to an Owner by or on behalf of the Indenture
Trustee is recovered or is recoverable from the Owner pursuant to a final order
of a court of competent jurisdiction in an Insolvency Proceeding that such
payment constitutes an avoidable preference to such Owner within the meaning of
any applicable bankruptcy or insolvency law, XLCA unconditionally and
irrevocably guarantees payment of the amount of such recovery (in accordance
with Endorsement No. 1 hereto).

     This Policy sets forth in full the undertaking of XLCA and shall not be
cancelled or revoked by XLCA for any reason, including failure to receive
payment of any premium due hereunder or under the Insurance Agreement and may
not be further endorsed or modified without the written consent of XLCA and the
Indenture Trustee. The premium on this Policy is not refundable for any
reason. This Policy does not insure against loss of any prepayment or other
acceleration payment which at any time may become due in respect of any Insured
Obligation, other than at the sole option of XLCA, nor against any risk other
than Nonpayment and Avoided Payment, including any shortfalls, if any,
attributable to the liability of the Obligor for withholding taxes if any,
including interest and penalties in respect of such liability.

     THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY
FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.

     Any capitalized terms not defined herein shall have the meaning given such
terms in the Endorsement attached hereto and forming a part hereof, or in the
Insurance Agreement referenced therein. In witness whereof, XLCA has caused
this Policy to be executed as of the Effective Date.

	 	 	 	 	 	 	 
	 	 	XL CAPITAL ASSURANCE INC
	 	 	 	 	 	 	 
	 	 	

	 	 	
Name:
	[
	 	 	]
	 	 	
Title:
	[
	 	 	]
	 	 	 	 	 	 	 
	 	 	

	 	 	
Name:
	[
	 	 	]
	 	 	
Title:
	[
	 	 	]

 

Financial Guaranty Insurance Policy Endorsement

Effective Date July 30, 2003

Attached to and forming part of

Financial Guaranty Insurance Policy No. CA00647A

	 	 	 
	Obligor:	 	
Onyx Acceptance Owner Trust 2003-C
	 	 	 
	Insured Obligation:	 	
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes
and the Class A-4 Notes issued pursuant to that certain Indenture,
dated as of July 1, 2003 (the “Indenture”), between the Obligor and
the Indenture Trustee (the principal amount of which shall not
exceed $400,000,000)
	 	 	 
	Beneficiary:	 	
JPMorgan Chase Bank as indenture trustee (the “Indenture
Trustee”) under the Indenture

Capitalized terms used herein and not otherwise defined herein or in the Policy
shall have the meanings assigned to them in the Insurance Agreement, the Sale
and Servicing Agreement and the Indenture.

     As used herein the term “Business Day” means any day other than Saturday
or Sunday on which commercial banking institutions in New York, New York, Los
Angeles, California and in Wilmington, Delaware, are generally open for banking
business.

     As used herein the term “Insolvency Proceeding” means the commencement,
after the date hereof, of any bankruptcy, insolvency, readjustment of debt,
reorganization, marshalling of assets and liabilities or similar proceedings by
or against any Person, the commencement, after the date hereof, of any
proceedings by or against any Person for the winding up or liquidation of its
affairs, or the consent, after the date hereof, to the appointment of a
trustee, conservator, receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, reorganization, marshalling of assets and liabilities or
similar proceedings of or relating to any Person.

     As used herein the term “Insurance Agreement” means the Insurance and
Indemnity Agreement, dated as of July 30, 2003, among XLCA, the Obligor, the
Seller, the Servicer and the Indenture Trustee, as may be amended or modified
from time to time.

     As used herein the term “Insured Amount” means, that portion of the
Scheduled Payments that shall become due for payment but shall be unpaid by
reason of Nonpayment.

     As used herein the term “Nonpayment” means, with respect to any
Distribution Date, the failure of the Indenture Trustee to receive in full, in
accordance with the terms of the Indenture that Scheduled Payment that is due
for payment with respect to such date.

 

 

     As used herein the term “Owner” means the registered owner of any Insured
Obligation as indicated in the registration books maintained by or on behalf of
the Obligor for such purpose or, if the Insured Obligation is in bearer form,
the holder of the Insured Obligation.

     As used herein, the term “Person” means any legal person, including
without limitations, an individual, a partnership, a limited liability company,
a joint venture, a corporation, a trust, an unincorporated organization, a
state banking corporation, a national banking association or a government or
any department or agency thereof.

     As used herein the term “Scheduled Payment” means (i) with respect to any
Distribution Date the amounts due and payable as the Servicing Fee to the
Servicer, and, if applicable, the Backup Servicer, including any accrued and
unpaid Servicing Fees with respect to one or more prior Collection Periods,
(ii) with respect to any Distribution Date any accrued and unpaid fees (which
amounts do not include any expenses) to the Indenture Trustee, the Owner
Trustee and the Trust Agent, (iii) with respect to any Distribution Date during
the Term of this Policy, the Note Interest Distributable Amount for each Class
of Notes on such Distribution Date and (iv) on a Note Final Scheduled
Distribution Date for any Class of Notes, the Note Principal Distributable
Amount for such Class of Notes on such Note Final Scheduled Distribution Date,
in each case in accordance with the original terms of the Insured Obligations
when issued and without regard to any subsequent amendment or modification of
the Insured Obligations that has not been consented to in writing by XLCA.
Notwithstanding the foregoing, “Scheduled Payments” shall in no event include
payments which become due on an accelerated basis as a result of (a) any
default by the Obligor, (b) the occurrence of an Event of Default under the
Indenture, (c) mandatory or optional redemption, in whole or in part, or (d)
any other cause, unless XLCA elects, in its sole discretion, to pay such
amounts in whole or in part (in which event Scheduled Payments shall include
such accelerated payments at such time and to the extent so elected by XLCA).
In the event that it does not make such election, Scheduled Payments shall
include payments due in accordance with the original scheduled terms without
regard to any acceleration. In addition, “Scheduled Payment” shall not
include, nor shall coverage be provided under the Policy in respect of, (i) any
make whole, redemption or call premium payable in respect of the Insured
Obligations, (ii) any amounts due in respect of the Insured Obligations
attributable to any increase in interest rate, penalty or other sum payable by
the Issuer by reason of any default or event of default in respect of the
Insured Obligations, or by reason of any deterioration of the creditworthiness
of the Issuer or (iii) any shortfalls, if any, attributable to the liability of
the Trust for withholding taxes, if any (including interest and penalties in
respect of such liability).

     As used herein the term “Term of this Policy” means the period from and
including the Effective Date to and including the first date on which (i) all
Scheduled Payments have been paid that are required to be paid by the Obligor
under the Indenture; (ii) any period during which any Scheduled Payment could
have been avoided in whole or in part as a preference payment under applicable
bankruptcy, insolvency, receivership or similar law has expired, and (iii) if
any proceedings requisite to avoidance as a

 

 

preference payment have been commenced prior to the occurrence of (i) and
(ii) above, a final and nonappealable order in resolution of each such
proceeding has been entered; provided, that if the Owners are required to
return any Avoided Payment (as defined below) as a result of an Insolvency
Proceeding, then the Term of this Policy shall terminate on the date on which
XLCA has made all payments required to be made under the terms of this Policy
in respect of all such Avoided Payments.

     To make a claim under the Policy, the Indenture Trustee shall deliver to
XLCA a Payment Notice in the form of Exhibit A hereto (a “Payment Notice”),
appropriately completed and executed by the Indenture Trustee. A Payment
Notice under this Policy may be presented to XLCA by (i) delivery of the
original Payment Notice to XLCA at its address set forth below, or (ii)
facsimile transmission of the original Payment Notice to XLCA at its facsimile
number set forth below. If presentation is made by facsimile transmission, the
Indenture Trustee shall (x) simultaneously confirm transmission by telephone to
XLCA at its telephone number set forth below, and (y) as soon as reasonably
practicable, deliver the original Payment Notice to XLCA at its address set
forth below. Any Payment Notice received by XLCA after 10:00 a.m., 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 XLCA at 9:00 a.m., New York City time, on the next
succeeding Business Day. XLCA shall make payments due in respect of Insured
Amounts to the Indenture Trustee upon the presentation of a Payment Notice to
XLCA on the later of (a) one (1) Business Day following receipt by XLCA of a
Payment Notice or (b) the Business Day on which Scheduled Payments are due for
payment. XLCA shall make such payments, in the case of (a) above, no later
than 2:00 p.m. New York City time and, in the case of (b) above, no later than
12:00 p.m. New York City time.

     Subject to the foregoing, if the payment of any amount with respect to the
Scheduled Payment is voided (a “Preference Event”) as a result of an Insolvency
Proceeding and, as a result of such Preference Event, the Owner is required to
return such voided payment, or any portion of such voided payment, made in
respect of the Insured Obligation (an “Avoided Payment”), XLCA will pay an
amount equal to such Avoided Payment, as and when such payment would otherwise
be due pursuant to the Indenture without regard to acceleration or prepayment,
and upon receipt by XLCA from the Indenture Trustee on behalf of such Owner of
(x) a certified copy of a final order of a court exercising jurisdiction in
such Insolvency Proceeding to the effect that the Owner or the Indenture
Trustee on behalf of the Owner is required to return any such payment or
portion thereof because such payment was voided under applicable law, with
respect to which order the appeal period has expired without an appeal having
been filed (the “Final Order”), (y) an assignment, substantially in the form
attached hereto as Exhibit B, properly completed and executed by such Owner
irrevocably assigning to XLCA all rights and claims of such Owner relating to
or arising under such Avoided Payment, and (z) a Payment Notice in the form of
Exhibit A hereto appropriately completed and executed by the Indenture Trustee.

     XLCA shall make payments due in respect of Avoided Payments no later than
2:00 p.m. New York City time on the Business Day following XLCA’s receipt of
the documents required under clauses (x) through (z) of the preceding
paragraph. Any

 

 

such documents received by XLCA after 10:00 a.m. 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 XLCA at 9:00 a.m., New York City time, on the next succeeding
Business Day. All payments made by XLCA hereunder on account of any Avoided
Payment shall be disbursed to the receiver, conservator, debtor-in-possession
or trustee in bankruptcy named in the Final Order and not to any Holder
directly (unless a Holder previously paid such amount to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy named in the Final
Order, in which case such payment shall be disbursed to the Indenture Trustee
for distribution to such Holder upon proof of such payment reasonably
satisfactory to XLCA).

     XLCA hereby waives and agrees not to assert any and all rights to require
the Indenture Trustee to make demand on or to proceed against any person, party
or security prior to the Indenture Trustee demanding payment under this Policy.

     If any Payment Notice received by XLCA 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 XLCA, and XLCA shall promptly so advise the
Indenture Trustee, and the Indenture Trustee may submit an amended Payment
Notice.

     Payments due hereunder unless otherwise stated herein will be disbursed by
XLCA to the Indenture Trustee on behalf of the Owners by wire transfer of
immediately available funds in the amount of such payment.

     No defenses, set-offs and counterclaims of any kind available to XLCA so
as to deny payment of any amount due in respect of this Policy will be valid
and XLCA hereby waives and agrees not to assert any and all such defenses
(including, without limitation, defense of fraud in the inducement or fact, or
any other circumstances which would have the effect of discharging a surety in
law or in equity), set-offs and counterclaims, including, without limitation,
any such rights acquired by subrogation, assignment or otherwise. Upon any
payment hereunder, in furtherance and not in limitation of XLCA’s equitable
right of subrogation and XLCA’s rights under the Insurance Agreement, XLCA will
be subrogated to the rights of the Owner in respect of which such payment was
made to receive any and all amounts due in respect of the obligations in
respect of which XLCA has made a payment hereunder. Any rights of subrogation
acquired by XLCA 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 any amounts due the Owner on account of
payments due under the Insured Obligation.

     This Policy is neither transferable nor assignable, in whole or in part,
except to a successor trustee duly appointed and qualified under the Indenture.
All Payment Notices and other notices, presentations, transmissions,
deliveries and communications made by the Indenture Trustee to XLCA with
respect to this Policy shall specifically refer to the number of this Policy
and shall be made to XLCA at:

 

 

	 	XL Capital Assurance Inc.

1221 Avenue of the Americas

New York, New York 10020

Attention: Surveillance

Telephone: (212) 478-3400

Facsimile: (212) 478- 3597

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

     The obligations of XLCA under this Policy are irrevocable, primary,
absolute and unconditional, subject to satisfaction of the conditions for
making a claim under the Policy, and neither the failure of any Person to
perform any covenant or obligation in favor of XLCA (or otherwise), nor the
failure or omission to make a demand permitted hereunder, nor the failure of
any assignment or grant of any security interest, nor the commencement of any
Insolvency Proceeding shall in any way affect or limit XLCA’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 XLCA costs and expenses reasonably incurred, including, without
limitation, reasonable fees and expenses of counsel.

     This Policy and the obligations of XLCA hereunder shall terminate on the
expiration of the Term of this Policy. This Policy shall be returned to XLCA
by the Indenture Trustee upon the expiration of the Term of this Policy.

     The Property/Casualty Insurance Security Fund specified in Article 76 of
the New York Insurance Law does not cover this Policy. The Florida Insurance
Guaranty Association created under Part II of Chapter 631 of the Florida
Insurance Code does not cover this Policy. In the event that XLCA were to
become insolvent, the California Insurance Guaranty Association, established
pursuant to Article 14.2 of Chapter 1 of Part 2 of Division 1 of the California
Insurance Code excludes from coverage any claims arising under this Policy.

     THIS POLICY SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

     In the event any term or provision of the form of this Policy is
inconsistent with the provision of this Endorsement, the provision of this
Endorsement shall take precedence and be binding.

[Remainder of Page Intentionally Left Blank]

 

 

     IN WITNESS WHEREOF, XL Capital Assurance Inc. has caused this Endorsement
to the Policy to be executed on the Effective Date.

	 	 	 
	

Name:

Title:	 	

Name:

Title:

 

 

Exhibit A to Financial Guaranty Policy No. CA00647A

	 	XL Capital Assurance Inc.

1221 Avenue of the Americas

New York, New York 10020

Attention: Surveillance

PAYMENT NOTICE

UNDER FINANCIAL GUARANTY POLICY No. CA00647A

     JPMorgan Chase Bank as Indenture Trustee (the “Indenture Trustee”), hereby
certifies to XL Capital Assurance Inc. (“XLCA”) with reference to that certain
Financial Guaranty Policy, No. CA00647A, dated July 30, 2003 (the “Policy”),
issued by XLCA in favor of the Indenture Trustee on behalf of the Owner under
the Insurance Agreement, the Sale and Servicing Agreement and the Indenture as
follows:

     1. The Indenture Trustee is the indenture trustee under the Indenture and
the beneficiary on behalf of each Owner of the Policy.

     2. The Indenture Trustee is entitled to make a demand under the Policy
pursuant to Section 4.02 of the Sale and Servicing Agreement.

     3. This notice relates to the [insert date] Distribution Date. The amount
demanded is to be paid in immediately available funds to the Payment Account at
[Identify Financial Institution Holding Account] account number[   ].

     [For a Payment Notice in respect of Insured Amounts other than Avoided
Payment, use paragraph 4.]

     4. The Indenture Trustee demands payment of $   which is an amount
equal to the amount by which the [Describe calculation of Insured Amount under
Policy].

     [For a Payment Notice in respect of an Avoided Payment use the following
paragraphs [4] or [5].]

     [4.] or [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 the Owner on account
of a Preference Event [$   ] (the “Avoided Payment Amount”), (ii) the
Owner 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
Amount, 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 XLCA or are attached hereto.

 

 

     [6] The Indenture Trustee agrees that, following payment of funds by XLCA,
it shall use reasonable efforts to procure (a) that such amounts are applied
directly to the payment of any Insured Amount which is due for payment; (b)
that such funds are not applied for any other purpose; and (c) the maintenance
of accurate record of such payments in respect of the Insured Obligation and
the corresponding claim on the Policy and the proceeds thereof.

     [7] The Indenture Trustee, on behalf of itself and the Owners, hereby
assigns to XLCA all rights and claims (including rights of actions and claims
in respect of securities laws violations or otherwise) of the Indenture Trustee
and the Owners with respect to the Insured Obligation to the extent of any
payments under the Policy. The foregoing assignment is in addition to, and not
in limitation of, rights of subrogation otherwise available to XLCA in respect
of such payments. The Indenture Trustee shall take such action and deliver
such instruments as may be reasonably required by XLCA to effectuate the
purposes of provisions [ ] of this Clause 7.

     [8] The Indenture Trustee, on behalf of itself and the Owners, hereby
appoints XLCA as agent and attorney-in-fact for the Indenture Trustee and the
Owners in any legal proceeding in respect of the Insured Obligation. The
Indenture Trustee, on behalf of itself and the Owners, thereby (and without
limiting the generality of the preceding sentence) agrees that XLCA may at any
time during the continuation of any proceeding by or against any debtor with
respect to which a Preference Claim (as defined below) or other claim with
respect to the Insured Obligation is asserted under any Insolvency Proceeding,
direct all matters relating to such Insolvency Proceeding, including, without
limitation, (a) all matters relating to any claim in connection with a
Insolvency Proceeding seeking the avoidance as a preferential transfer of any
payment made with respect to the obligations (a “Preference Claim”), (b) the
direction of any appeal of any order relating to any Preference Claim and (c)
the posting of any surety, supersedes or performance bond pending any such
appeal. In addition, the Indenture Trustee, on behalf of itself and the Owners,
hereby agrees that XLCA shall be subrogated to, and the Indenture Trustee, on
behalf of itself and the Owners, hereby delegates and assigns, to the fullest
extent permitted by law, the rights of the Indenture Trustee and the Owners in
the conduct of any Insolvency Proceeding, including, without limitation, all
rights of any party to an adversary proceeding or action with respect to any
court order issued in connection with any such Insolvency Proceeding.

 

 

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Policy or [Identify Document]

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

	 	 	 
	 	 	
________________________ , as Indenture Trustee
	 	 	 
	 	 	
By:
	 	 	

Authorized Officer

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

 

 

Exhibit B to Financial Guaranty Insurance Policy, No. CA00647A

Form of Assignment

     Reference is made to the Financial Guaranty Insurance Policy No. CA00647A,
dated July 30, 2003 (together with the Endorsement attached thereto, the
“Policy”) issued by XL Capital Assurance Inc. (“XLCA”) relating to the
[Identify Insured Obligation]. 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 “Owner”) on [     ]
and the payment by XLCA in respect of such Avoided Payment pursuant to the
Policy, the Owner hereby irrevocably and unconditionally, without recourse,
representation or warranty (except as provided below), sells, assigns,
transfers, conveys and delivers all of such Owner’s rights, title and interest
in and to any rights or claims, whether accrued, contingent or otherwise, which
the Owner now has or may hereafter acquire, against any person relating to,
arising out of or in connection with such Avoided Payment. The Owner
represents and warrants that such claims and rights are free and clear of any
lien or encumbrance created or incurred by such Owner.1

	 	 
	 	

Owner

	 	 	     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 Owner#s
right, title and interest in such rights and claims, the Owner and XLCA 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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}]]