Document:

Administration Agreement

 EXECUTION COPY 
  
 Exhibit 10.3 
  

  
 ADMINISTRATION AGREEMENT 

 
 among 
  
 ONYX ACCEPTANCE OWNER TRUST 2005-B, 
  

as Issuer, 
  
 ONYX ACCEPTANCE CORPORATION, 
 as Administrator, 
  
 ONYX ACCEPTANCE FINANCIAL CORPORATION, 
 as Seller, 
  
 and 
  
 JPMORGAN CHASE BANK, N.A. 
 as Indenture Trustee 
 and Trust Agent 
  
 Dated as of
July 21, 2005 
  

  

  
 TABLE OF CONTENTS

  

					
			
	 	  	 	  	Page

			
	 Section 1.
	  	Duties of the Administrator	  	2
			
	 Section 2.
	  	Records	  	8
			
	 Section 3.
	  	Compensation	  	8
			
	 Section 4.
	  	Additional Information to be Furnished to the Issuer	  	8
			
	 Section 5.
	  	Independence of the Administrator	  	8
			
	 Section 6.
	  	No Joint Venture	  	8
			
	 Section 7.
	  	Other Activities of Administrator	  	8
			
	 Section 8.
	  	Term of Agreement; Resignation and Removal of Administrator	  	8
			
	 Section 9.
	  	Resignation of Trust Agent	  	9
			
	 Section 10.
	  	Action upon Termination, Resignation or Removal	  	9
			
	 Section 11.
	  	Notices	  	10
			
	 Section 12.
	  	Amendments	  	11
			
	 Section 13.
	  	Successors and Assigns	  	11
			
	 Section 14.
	  	Governing Law	  	12
			
	 Section 15.
	  	Headings	  	12
			
	 Section 16.
	  	Counterparts	  	12
			
	 Section 17.
	  	Severability	  	12
			
	 Section 18.
	  	Not Applicable to Onyx in Other Capacities	  	12
			
	 Section 19.
	  	Limitation of Liability of Owner Trustee and Indenture Trustee	  	12
			
	 Section 20.
	  	Third-Party Beneficiary	  	13
			
	 Section 21.
	  	Nonpetition Covenants	  	13
			
	 Section 22.
	  	Certain Matters Regarding the Insurer	  	13
			
	 Section 23.
	  	Assignment by Issuer	  	13
			
	 Section 24.
	  	SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL	  	14

  

 i 

 This ADMINISTRATION AGREEMENT, dated as of July 21, 2005, is among ONYX ACCEPTANCE OWNER TRUST 2005-B
(the “Issuer”), ONYX ACCEPTANCE CORPORATION (“Onyx” or in its capacity as administrator, the “Administrator”), ONYX ACCEPTANCE FINANCIAL CORPORATION (the “Seller”) and JPMORGAN CHASE BANK, N.A., not in its
individual capacity but solely as Indenture Trustee (the “Indenture Trustee”), and Trust Agent (“Trust Agent”). 
  
 WITNESSETH: 
  
 WHEREAS, the Issuer is a statutory trust under the Delaware Statutory Trust Act governed by an Amended and Restated Trust Agreement dated as of July 21,
2005 (the “Trust Agreement”) between the Seller, as Depositor, Wilmington Trust Company, as Owner Trustee (the “Owner Trustee”) and JPMorgan Chase Bank, N.A., as Trust Agent. 
  
 WHEREAS, the Issuer is issuing 3.61522% Auto Loan Backed Notes, Class A-1,
4.03% Auto Loan Backed Notes, Class A-2, 4.18% Auto Loan Backed Notes, Class A-3, and 4.34% Auto Loan Backed Notes, Class A-4 (collectively, the “Notes”) pursuant to the Indenture, dated as of the date hereof (the “Indenture”),
between the Issuer and the Indenture Trustee (capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Indenture or if not defined therein, then in the Sale and Servicing Agreement (as defined
below)); 
  
 WHEREAS, the Issuer has entered into certain
agreements in connection with the issuance of the Notes including (i) a Sale and Servicing Agreement, dated as of the date hereof (the “Sale and Servicing Agreement”), between the Issuer, the Seller, Onyx, as servicer and custodian (in
such capacity, the “Servicer” or the “Custodian”), the Indenture Trustee and the Trust Agent, (ii) a Letter of Representations, dated July 21, 2005, between the Issuer and The Depository Trust Company (“DTC”) relating
to the Notes (the “Depository Agreement”), (iii) the Trust Agreement and (iv) the Indenture (the Sale and Servicing Agreement, the Depository Agreement, the Trust Agreement and the Indenture being referred to hereinafter collectively as
the “Related Agreements”); 
  
 WHEREAS, pursuant to the
Related Agreements, the Issuer and the Owner Trustee or the Trust Agent, as the case may be, are required to perform certain duties in connection with (i) the Notes and the Collateral therefor pledged pursuant to the Indenture and (ii) the
beneficial ownership interests in the Issuer represented by the residual interest instruments (the “Residual Interest Instruments”) (the registered holders of such interests being referred to herein as the “Owners”); 

 
 WHEREAS, the Issuer, the Owner Trustee and the Trust Agent desire to have
the Administrator perform certain of the duties of the Issuer, the Owner Trustee and the Trust Agent referred to in the preceding clause and to provide such additional services consistent with the terms of this Agreement and the Related Agreements
as the Issuer, the Owner Trustee and the Trust Agent may from time to time request; and 
  

 WHEREAS, the Administrator has the capacity to provide the services required hereby and is willing to
perform such services for the Issuer, the Owner Trustee and the Trust Agent on the terms set forth herein; 
  
 NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows: 
  
 Section 1. Duties of the Administrator. 
  
 (a)
Duties with Respect to the Depository Agreement and the Indenture. 
  
 (i) The Administrator agrees to perform all its duties as Administrator and the duties of the Issuer and the Owner Trustee under the Depository Agreement. In addition, the Administrator shall consult with the Owner
Trustee regarding the duties of the Issuer or the Owner Trustee under the Indenture and the Depository Agreement. The Administrator shall monitor the performance of the Issuer and shall advise the Owner Trustee when action is necessary to comply
with the respective duties of the Issuer, the Owner Trustee or the Trust Agent under the Indenture and the Depository Agreement. The Administrator shall prepare for execution by the Issuer, or shall cause the preparation by other appropriate persons
of, all such documents, reports, filings, instruments, certificates and opinions that it shall be the duty of the Issuer, the Owner Trustee or the Trust Agent to prepare, file or deliver pursuant to the Indenture and the Depository Agreement. In
furtherance of the foregoing, the Administrator shall take all appropriate action that the Issuer or the Owner Trustee or Trust Agent is required to take pursuant to the Indenture including, without limitation, such of the foregoing as are required
with respect to the following matters under the Indenture (references are to Sections of the Indenture): 
  
 (A) the preparation of or obtaining of the documents and instruments required for execution and authentication of the Notes and delivery
of the same to the Indenture Trustee (Section 2.02); 
  
 (B) the duty to cause the Note Register to be kept and to give the Indenture Trustee notice of any appointment of a new Note Registrar and the location, or change in location, of the Note Register (Section 2.04); 
  
 (C) the notification of Noteholders, Financial Guaranty
Insurance Company (the “Insurer”) and the Rating Agencies of the final principal payment on the Notes or the duty to cause the Indenture Trustee to provide such notification (Section 2.07(b)); 
  
 (D) the acceptance of delivery, cancellation and disposition
of Notes surrendered for payment, registration of transfer, exchange or redemption (Section 2.08); 
  

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 (E) the preparation, obtaining or filing of the instruments, opinions and certificates
and other documents required for the release of Collateral (Section 2.12); 
  
 (F) the duty to cause newly appointed Paying Agents, if any, to deliver to the Indenture Trustee the instrument specified in the Indenture regarding funds held in trust (Section 3.03); 
  
 (G) the direction to the Indenture Trustee to deposit monies
with Paying Agents, if any, other than the Indenture Trustee (Section 3.03); 
  
 (H) the obtaining and preservation of the Issuer’s qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the
Indenture, the Notes and the Collateral (Section 3.04); 
  
 (I) the preparation of all supplements and amendments to the Indenture and all financing statements, continuation statements, instruments of further assurance and other instruments and the taking of such other action
as is necessary or advisable to protect the Collateral (Section 3.05); 
  
 (J) the delivery of the Opinion of Counsel on the Closing Date and the annual delivery of Opinions of Counsel as to the Collateral, and the annual delivery of the Officer’s Certificate and certain other
statements as to compliance with the Indenture (Sections 3.06 and 3.09); 
  
 (K) the identification to the Indenture Trustee and the Insurer in an Officer’s Certificate of a Person with whom the Issuer has contracted to perform its duties under the Indenture (Section 3.07(b)); 

 
 (L) the preparation and obtaining of documents and
instruments required for the release of the Issuer from its obligations under the Indenture (Section 3.10(b)); 
  
 (M) the delivery of written notice to the Indenture Trustee, Trust Agent, the Insurer and each Rating Agency of each Event of Default
under the Indenture and each default by the Servicer or the Seller under the Sale and Servicing Agreement (Section 3.15); 
  
 (N) the monitoring of the Issuer’s obligations as to the satisfaction and discharge of the Indenture, the release of the Collateral
from the lien of the Indenture, and the preparation of an Officer’s Certificate and the obtaining of the Opinion of Counsel and the Independent Certificate relating thereto (Section 4.01); 
  
 (O) the compliance with any written directive of the
Indenture Trustee or the Insurer, as the case may be, with respect to the sale of the Collateral in a 

  

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commercially reasonable manner if an Event of Default shall have occurred and be continuing (Section 5.04); 
  
 (P) the preparation and delivery of notice to Noteholders of
the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee (Section 6.08); 
  
 (Q) the preparation of any written instruments required to confirm more fully the authority of any co-trustee or separate trustee and any
written instruments necessary in connection with the resignation or removal of the Indenture Trustee or any co-trustee or separate trustee (Sections 6.08 and 6.10); 
  
 (R) the furnishing of the Indenture Trustee with the names and addresses of Noteholders during any period
when the Indenture Trustee is not the Note Registrar (Section 7.01); 
  
 (S) the preparation and, after execution by the Issuer, the filing with the Commission, any applicable state agencies and the Indenture Trustee of documents required to be filed on a periodic basis with, and summaries
thereof as may be required by rules and regulations prescribed by, the Commission and any applicable state agencies and the transmission of such summaries, as necessary, to the Noteholders (Section 7.03); 
  
 (T) the opening of one or more accounts in the Issuer’s
name, the preparation and delivery of Issuer Orders, Officer’s Certificates and Opinions of Counsel and all other actions necessary with respect to investment and reinvestment of funds in the Trust Accounts (Section 8.02); 
  
 (U) the preparation of an Issuer Request and Officer’s
Certificate and the obtaining of an Opinion of Counsel and Independent Certificates, if necessary, for the release of the Collateral (Sections 8.04 and 8.05); 
  

(V) the preparation of Issuer Orders and the obtaining of Opinions of Counsel with respect to the execution of supplemental indentures
and the mailing to the Noteholders of notices with respect to such supplemental indentures (Sections 9.01, 9.02 and 9.03); 
  
 (W) the execution and delivery of new Notes conforming to any supplemental indenture (Section 9.06); 
  
 (X) the duty to notify Noteholders, the Insurer and the
Rating Agencies of redemption of the Notes or to cause the Indenture Trustee to provide such notification (Section 10.02); 
  
 (Y) the preparation and delivery of all Officer’s Certificates, Opinions of Counsel and Independent Certificates with respect to any
requests by the Issuer to the Indenture Trustee to take any action under the Indenture (Section 11.01); 
  

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 (Z) the preparation and delivery of Officer’s Certificates and the obtaining of
Independent Certificates, if necessary, for the release of property from the lien of the Indenture (Section 11.01(b)); 
  
 (AA) the notification of the Rating Agencies, upon the failure of the Issuer, the Trust Agent or the Indenture Trustee to give such
notification, of the information required pursuant to Section 11.04 of the Indenture (Section 11.04); 
  
 (BB) the preparation and delivery to Noteholders and the Indenture Trustee of any agreements with respect to alternate payment and notice
provisions (Section 11.06); 
  
 (CC) the
recording of the Indenture, if applicable (Section 11.15). 
  
 (ii) The Administrator will: 
  
 (A) pay the Indenture Trustee from time to time reasonable compensation for all services rendered by the Indenture Trustee under the Indenture (which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust) (Section 6.07); 
  
 (B) except as otherwise expressly provided in the Indenture, reimburse each of the Indenture Trustee and the Trust Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the
Indenture Trustee or the Trust Agent in accordance with any provision of the Indenture or the Trust Agreement, as applicable (including the reasonable compensation, expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith (Section 6.07); 
  
 (C) indemnify the Indenture Trustee and its agents for, and hold them harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of the transactions contemplated by the Indenture, including the reasonable costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of their powers or duties under the Indenture (Section 6.07); 
  
 (D) pay to each of the Owner Trustee and the Trust Agent from time to time reasonable compensation for all services rendered by the Owner
Trustee and the Trust Agent under the Trust Agreement, as set forth in Section 8.01 of the Trust Agreement and reimburse each of the Owner Trustee and the Trust Agent upon their request for all reasonable expenses, disbursements and advances
incurred or made by each of the Owner Trustee and the Trust Agent in accordance with any provision of the Trust Agreement (including the reasonable compensation, expenses and disbursements of their agents and counsel), except any such expense,
disbursement or advance as may be attributable to their negligence or bad faith; and 
  

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 (E) indemnify the Owner Trustee, the Trust Agent, each co-trustee and their respective
agents for, and hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of the transactions contemplated by the Trust
Agreement, including the reasonable costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties under the Trust Agreement. 
  
 (b) Additional Duties. 
  
 (i) In addition to the duties set forth in Section 1(a)(i),
the Administrator shall perform such calculations and shall prepare or shall cause the preparation by other appropriate persons of, and shall execute on behalf of the Issuer or the Owner Trustee or the Trust Agent, all such documents, reports,
filings, instruments, certificates and opinions that the Issuer is required to prepare, file or deliver pursuant to the Related Agreements or Section 5.05 of the Trust Agreement, and at the request of the Owner Trustee shall take all appropriate
action that the Issuer is required to take pursuant to the Related Agreements. In furtherance thereof, the Owner Trustee and the Trust Agent shall each, on behalf of itself and in the case of the Owner Trustee, on behalf of the Issuer, execute and
deliver to the Administrator and to each successor Administrator appointed pursuant to the terms hereof, one or more powers of attorney substantially in the forms of Exhibits A and B hereto, appointing the Administrator the attorney-in-fact of the
Owner Trustee, the Trust Agent and the Issuer for the purpose of executing on behalf of the Owner Trustee, the Trust Agent and the Issuer all such documents, reports, filings, instruments, certificates and opinions. Subject to Section 5, and in
accordance with the directions of the Owner Trustee and the Trust Agent, the Administrator shall administer, perform or supervise the performance of such other activities in connection with the Collateral (including the Related Agreements) as are
not covered by any of the foregoing provisions and as are expressly requested by the Owner Trustee or the Trust Agent and are reasonably within the capability of the Administrator. 
  
 (ii) Notwithstanding anything in this Agreement or the Related Agreements to the contrary, the Administrator
shall be responsible for promptly notifying the Owner Trustee in the event that any withholding tax is imposed on the Trust’s payments (or allocations of income) to an Owner as contemplated in Section 5.02(c) of the Trust Agreement. Any such
notice shall specify the amount of any withholding tax required to be withheld by the Trust Agent pursuant to such provision. 
  
 (iii) Notwithstanding anything in this Agreement or the Related Agreements to the contrary, the Administrator shall be responsible for
performance of the duties of the Owner Trustee and Trust Agent set forth in Section 5.05(a), (b), (c) and (d), the penultimate sentence of Section 5.05 and Section 5.06(a) of the Trust Agreement with respect to, among other things, accounting and
reports to Owners; provided, however, that the Trust Agent shall retain responsibility for the distribution of the Schedule K-1s necessary to enable each Owner to prepare its federal and state income tax returns. 
  
 (iv) [Reserved]. 
  

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 (v) The Administrator shall provide written notice to the Indenture Trustee upon
notification to the Administrator that the Clearing Agency is no longer willing or able to properly discharge its responsibilities as described in the Depository Agreement. Upon the receipt of such notification from the Clearing Agency, the
Administrator shall use reasonable efforts to locate and appoint a qualified successor Clearing Agency. 
  
 (vi) The Administrator shall have the rights and perform the duties of the Administrator specified in Section 2.11 of the Trust Agreement
in connection with the separateness covenants of the Trust, Section 3.04 of the Trust Agreement in connection with the appointment of the Certificate Registrar, Section 3.10 of the Trust Agreement in connection with the removal and appointment of
the Paying Agent, and Section 10.02 of the Trust Agreement required to be performed in connection with the resignation or removal of the Owner Trustee, and any other duties expressly required to be performed by the Administrator under the Trust
Agreement. 
  
 (vii) In carrying out the
foregoing duties or any of its other obligations under this Agreement, the Administrator may enter into transactions or otherwise deal with any of its Affiliates; provided, however, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer or the Insurer and shall be, in the Administrator’s opinion, no less favorable to the Issuer than would be available from unaffiliated parties. 
  
 (c) Non-Ministerial Matters. 
  
 (i) With respect to matters that in the reasonable judgment
of the Administrator are non-ministerial, the Administrator shall not take any action unless within a reasonable time before the taking of such action, the Administrator shall have notified the Trust Agent and the Insurer of the proposed action and
the Trust Agent and the Insurer shall not have withheld consent or provided an alternative direction. For the purpose of the preceding sentence, “non-ministerial matters” shall include, without limitation: 
  
 (A) the amendment of or any supplement to the Indenture;

  
 (B) the initiation of any claim or lawsuit by
the Issuer and the compromise of any action, claim or lawsuit brought by or against the Issuer (other than in connection with the collection of the Contracts); 
  

(C) the amendment, change or modification of the Related Agreements; 
  
 (D) the appointment of successor Note Registrars, successor Paying Agents and successor Indenture Trustees
pursuant to the Indenture or the appointment of a successor Administrator or a successor Servicer, or the consent to the assignment by the Note Registrar, Paying Agent or Indenture Trustee of its obligations under the Indenture; and 
  
 (E) the removal of the Indenture Trustee. 
  

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 (ii) Notwithstanding anything to the contrary in this Agreement, the Administrator shall
not be obligated to, and shall not, (A) make any payments to the Noteholders under the Related Agreements, (B) sell the Collateral pursuant to clause (iv) of Section 5.04(a) of the Indenture, (C) take any other action that the Issuer directs the
Administrator not to take on its behalf or (D) take any other action which may be construed as having the effect of varying the investment of the Holders. 
  
 Section 2. Records. The Administrator shall maintain appropriate books of account and records relating to services performed hereunder, which books
of account and records shall be accessible for inspection by the Issuer at any time during normal business hours. 
  
 Section 3. Compensation. As compensation for the performance of the Administrator’s obligations under this Agreement and as reimbursement for
its expenses related thereto, the Administrator, if the Administrator is not Onyx, shall be entitled to an annual payment of compensation which shall be payable by the Trust pursuant to the Trust Agreement. 
  
 Section 4. Additional Information to be Furnished to the Issuer. The
Administrator shall furnish to the Issuer from time to time such additional information regarding the Collateral as the Issuer shall reasonably request. 
  
 Section 5. Independence of the Administrator. For all purposes of this Agreement, the Administrator shall be an independent contractor and shall
not be subject to the supervision of the Issuer, the Owner Trustee, the Indenture Trustee or the Trust Agent with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuer,
the Administrator shall have no authority to act for or represent the Issuer, the Owner Trustee, the Indenture Trustee or the Trust Agent in any way and shall not otherwise be deemed an agent of the Issuer, the Owner Trustee, the Indenture Trustee
or the Trust Agent. 
  
 Section 6. No Joint Venture.
Nothing contained in this Agreement (i) shall constitute the Administrator and either of the Issuer, the Owner Trustee, the Indenture Trustee or the Trust Agent as members of any partnership, joint venture, association, syndicate, unincorporated
business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of
the others. 
  
 Section 7. Other Activities of
Administrator. Nothing herein shall prevent the Administrator or its Affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity as an administrator for any other Person or entity even though such
person or entity may engage in business activities similar to those of the Issuer, the Owner Trustee, the Trust Agent or the Indenture Trustee. 
  
 Section 8. Term of Agreement; Resignation and Removal of Administrator. This Agreement shall continue in force until the dissolution of the Issuer,
upon which event this Agreement shall automatically terminate. 
  
 (a) Subject to Sections 8(d) and 8(e), the Administrator may resign its duties hereunder by providing the Issuer with at least 60 days’ prior written notice. 
  

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 (b) Subject to Sections 8(d) and 8(e), the Issuer may remove the Administrator without cause by providing
the Administrator with at least 60 days’ prior written notice. 
  
 (c) Subject to Sections 8(d) and 8(e), at the sole option of the Issuer, the Administrator may be removed immediately upon written notice of termination from the Issuer to the Administrator if any of the following events shall occur:

  
 (i) any failure by the Administrator to duly
observe or perform in any material respect any of its material covenants or agreements in this Agreement or the Related Agreements, which failure materially and adversely affects the rights of the Issuer, the Insurer or the Noteholders, and which
continues unremedied for 60 days (or for such longer period not in excess of 90 days as may be reasonably necessary to remedy such failure; provided that (i) such failure is capable of remedy within 90 days or less and (ii) the Controlling
Party consents to such longer cure period) after discovery thereof by a Responsible Officer of the Administrator or receipt by the Administrator of written notice thereof from the Indenture Trustee or the Insurer; 
  
 (ii) the Administrator suffers a Bankruptcy Event.

  
 The Administrator agrees that if any of the events specified
in clauses (ii) or (iii) above shall occur, it shall give written notice thereof to the Issuer and the Indenture Trustee within seven days after the occurrence of such event. 
  
 (d) No resignation or removal of the Administrator pursuant to this Section shall be effective until (i) a successor
Administrator shall have been appointed by the Issuer with the consent of the Insurer and (ii) such successor Administrator shall have agreed in writing to be bound by the terms of this Agreement in the same manner as the Administrator is bound
hereunder. 
  
 (e) The appointment of any successor Administrator
shall be effective only after satisfaction of the Rating Agency Condition with respect to the proposed appointment. 
  
 (f) Subject to Section 8(d) and 8(e), the Administrator acknowledges that upon the appointment of a Successor Servicer pursuant to the Sale and Servicing
Agreement and the consent of such Successor Servicer to its appointment as Administrator, the Administrator shall immediately resign and such Successor Servicer shall automatically become the Administrator under this Agreement; provided, however,
that this subsection (f) shall not apply at such times as the Indenture Trustee shall be the Successor Servicer. 
  
 Section 9. Resignation of Trust Agent. If the Trust Agent shall become incapable of acting, resign or be removed in accordance with the Trust
Agreement, the Owner Trustee shall assume all rights, duties and obligations of the Trust Agent under this Agreement. 
  
 Section 10. Action upon Termination, Resignation or Removal. Promptly upon the effective date of termination of this Agreement pursuant to the
first sentence of Section 8 or the resignation or removal of the Administrator pursuant to Section 8(a), (b) or (c), respectively, the Administrator shall be entitled to be paid all fees and reimbursable expenses accruing to it to the date of such
termination, resignation or removal. The Administrator shall forthwith upon such 

  

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termination pursuant to the first sentence of Section 8 deliver to the Issuer all property and documents of or relating to the Collateral then in the custody
of the Administrator. In the event of the resignation or removal of the Administrator pursuant to Section 8(a), (b) or (c), respectively, the Administrator shall cooperate with the Issuer and take all reasonable steps requested to assist the Issuer
in making an orderly transfer of the duties of the Administrator. 
  
 Section 11. Notices. All demands, notices and communications under this Agreement shall be in writing, personally delivered or mailed by certified mail, return receipt requested, and shall be deemed to have been duly given upon
receipt in the case of 
  

	 	(a)	the Issuer or the Owner Trustee, to: 

  
 Onyx Acceptance Owner Trust 2005-B 
 c/o
Wilmington Trust Company 
 Rodney Square North 
 1100 North Market Street 
 Wilmington, Delaware 19890-1600 
  

	 	(b)	the Administrator, to: 

  
 Onyx Acceptance Corporation 
 27051 Towne
Centre Drive, Suite 100 
 Foothill Ranch, California 92610 
 Attention: Director of Securitization 
  
 and to: 
  
 Capital One Auto Finance, Inc.

 and at Capital One Auto Finance, Inc., 
 1680 Capital One Drive, McLean, Virginia 22102, 
 Attention: Director of Securitization 
  

	 	(c)	the Seller, to: 

  
 Onyx Acceptance Financial Corporation 
 27051 Towne Centre Drive, Suite 200 
 Foothill Ranch, California 92610 
 Attention: Trust Director 
  
 and to: 
  
 Capital One Auto Finance, Inc. 
 and at
Capital One Auto Finance, Inc., 
 1680 Capital One Drive, McLean, Virginia 22102, 
 Attention: Manager of Securitization 
  

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	 	(d)	the Indenture Trustee or the Trust Agent, to: 

  
 JPMorgan Chase Bank, N.A. 
 4 New York
Plaza, 6th Floor 
 New York, New York 10004 
 Attention: Worldwide Securities Services/Global Debt – 
 Onyx Acceptance Owner Trust 2005-B 

 

	 	(e)	the Insurer, to: 

  
 Financial Guaranty Insurance Company 
 125
Park Avenue 
 New York, New York 10017 
 Attention: Research and Risk Management, Re: Onyx Acceptance Owner Trust 2005-B 
  
 or to such other address as any party shall have provided to the other parties in writing. Any notice required to be in writing hereunder shall be deemed given if such notice is mailed by certified mail, postage
prepaid, or hand-delivered to the address of such party as provided above. 
  
 Section 12. Amendments. This Agreement may be amended from time to time by a written amendment duly executed and delivered by the parties hereto, with the written consent of the Insurer and the Owner Trustee
but without the consent of the Noteholders, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders; provided that such
amendment will not, in the Opinion of Counsel satisfactory to the Indenture Trustee, materially and adversely affect the interest of any Noteholder. This Agreement may also be amended by the parties hereto with the written consent of the Owner
Trustee, the Insurer and the holders of Notes evidencing at least a majority of the Outstanding Amount of the Notes for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of Noteholders; provided, however, that no such amendment may (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on the Contracts or distributions that
are required to be made for the benefit of the Noteholders or (ii) reduce the aforesaid percentage of the holders of Notes which are required to consent to any such amendment, without the consent of the holders of all outstanding Notes.
Notwithstanding the foregoing, the Administrator may not amend this Agreement without the permission of the Seller, which permission shall not be unreasonably withheld. 
  
 Section 13. Successors and Assigns. This Agreement may not be assigned by the Administrator unless such assignment is
previously consented to in writing by the Issuer, the Owner Trustee, the Insurer, the Indenture Trustee and the Trust Agent and subject to the satisfaction of the Rating Agency Condition in respect thereof. An assignment with such consent and
satisfaction, if accepted by the assignee, shall bind the assignee hereunder in the same manner as the Administrator is bound hereunder. Notwithstanding the foregoing, this Agreement may be assigned by the Administrator without the consent of the
Issuer, the Insurer, the Indenture Trustee, the Owner Trustee or the Trust Agent to a corporation or other organization 

  

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that is a successor (by merger, consolidation or purchase of assets) to the Administrator; provided that such successor organization executes and delivers to
the Issuer, the Insurer, the Owner Trustee, the Trust Agent and the Indenture Trustee an agreement, in form and substance reasonably satisfactory to the Issuer, the Owner Trustee, the Trust Agent, the Indenture Trustee and the Insurer, in which such
corporation or other organization agrees to be bound hereunder by the terms of said assignment in the same manner as the Administrator is bound hereunder. Subject to the foregoing, this Agreement shall bind any successors or assigns of the parties
hereto. 
  
 Section 14. Governing Law. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL, SUBSTANTIVE LAWS OF THE STATE OF NEW YORK INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING TO THE MAXIMUM EXTENT PERMITTED BY LAW ALL OTHER RULES
THEREOF RELATING TO CONFLICTS OF LAW AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
  
 Section 15. Headings. The section and subsection headings hereof have been inserted for convenience of reference only and shall not be construed to
affect the meaning, construction or effect of this Agreement. 
  
 Section 16. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement. 
  
 Section 17. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall 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 18. Not Applicable to Onyx in Other Capacities. Nothing in this Agreement shall affect any obligation Onyx may have in any other capacity. 
  
 Section 19. Limitation of Liability of Owner Trustee and Indenture Trustee. 
  
 (a) Notwithstanding anything contained herein to the contrary, this
instrument has been countersigned by Wilmington Trust Company, not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer, and in no event shall Wilmington Trust Company in its individual capacity or any beneficial
owner of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this
Agreement, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust Agreement. 
  

 -12- 

 (b) Notwithstanding anything contained herein to the contrary, this Agreement has been countersigned by
JPMorgan Chase Bank, N.A. not in its individual capacity but solely as Indenture Trustee and Trust Agent and in no event shall JPMorgan Chase Bank, N.A. have any liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. 
  
 Section 20. Third-Party Beneficiary. The Owner Trustee and the Insurer
are third-party beneficiaries to this Agreement and are entitled to the rights and benefits hereunder and may enforce the provisions hereof as if they were parties hereto. 
  
 Section 21. Nonpetition Covenants. 
  
 (a) Notwithstanding any prior termination of this Agreement, the Seller, the Administrator, the Owner Trustee, the Trust
Agent and the Indenture Trustee shall not, prior to the date which is one year and one day after the termination of this Agreement with respect to the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case against the Issuer under any Federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer. 
  
 (b) Notwithstanding any prior termination of this Agreement, the Issuer, the Administrator, the Owner Trustee, the Trust Agent and the Indenture Trustee
shall not, at any time, acquiesce, petition or otherwise invoke or cause the Seller to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Seller under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Seller or any substantial part of its property, or ordering the winding up or liquidation of the
affairs of the Seller. 
  
 Section 22. Certain Matters
Regarding the Insurer. Notwithstanding any provision in this Agreement to the contrary, in the event an Insurer Default shall have occurred and be continuing, the Insurer shall not have the right to take any action under this Agreement or to
control or direct the actions of the Issuer, the Administrator, the Indenture Trustee, the Seller, the Owner Trustee or the Trust Agent pursuant to the terms of this Agreement, nor shall the consent of the Insurer be required with respect to any
action (or waiver of right to take action) to be taken by the Issuer, the Administrator, the Indenture Trustee, the Seller, the Owner Trustee, the Trust Agent or the holders of the Notes or the Residual Interest Instruments; provided, that the
consent of the Insurer shall be required at all times with respect to any amendment of this Agreement. 
  
 Section 23. Assignment by Issuer. Each of the Seller and the Administrator hereby acknowledges and consents to any mortgage, pledge, assignment and
grant of a security interest by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders of all right, title and interest of the Issuer in, to and under this Agreement and/or the assignment of any or all of
the Issuer’s rights and obligations hereunder to the Indenture Trustee. 
  

 -13- 

 Section 24. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. 
  
 Each of the parties hereto hereby irrevocably and unconditionally: 
  
 (a) submits for itself and its property in any legal action or proceeding
relating to this Agreement or any documents executed and delivered in connection herewith, or for recognition and enforcement of any judgment in respect thereof, to the nonexclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York and appellate courts from any thereof; 
  
 (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of
such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; 
  
 (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person at its address determined in accordance with Section 11 of this Agreement; 
  
 (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and 
  
 (e) TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER BASIC DOCUMENT, OR ANY MATTER ARISING
HEREUNDER OR THEREUNDER. 
  

 -14- 

  
 IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. 
  

					
	ONYX ACCEPTANCE OWNER TRUST 2005-B
		
	By:	 	WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee
			
	By:	 	 	 	/s/    W. CHRIS
SPONENBERG        
	 	 	 Name:
	 	W. Chris Sponenberg
	 	 	 Title:
	 	Vice President
	
	ONYX ACCEPTANCE FINANCIAL CORPORATION, as Seller
			
	 By:
	 	 	 	/s/    ALBERT A.
CIAFRE        
	 	 	 Name:
	 	Albert A. Ciafre
	 	 	 Title:
	 	Assistant Vice President
	
	JPMORGAN CHASE BANK, N.A., not in its individual capacity but solely as Indenture Trustee and Trust Agent
			
	 By:
	 	 	 	/s/    ARANKA R. PAUL        
	 	 	 Name:
	 	Aranka R. Paul
	 	 	 Title:
	 	Assistant Vice President
	
	 ONYX ACCEPTANCE CORPORATION,
 as
Administrator

			
	 By:
	 	 	 	/s/    VINCENT M.
SCARDINA        
	 	 	 Name:
	 	Vincent M. Scardina
	 	 	 Title:
	 	Treasurer

  
 Administration Agreement
– Signature Page 
  

			
	ACKNOWLEDGED AND AGREED TO:
	
	ONYX ACCEPTANCE CORPORATION, in its capacity as Servicer
		
	By:	 	/S/    VINCENT M.
SCARDINA        
	 Name:
	 	Vincent M. Scardina
	 Title:
	 	Treasurer

  
 Administration Agreement –
Signature Page 

  
 EXHIBIT A 
 [Form of Owner Trustee Power of Attorney] 
  
 POWER OF ATTORNEY 
  

					
	 STATE OF____________________
	  	)	  	 
	 	  	)	  	 
	 COUNTY OF__________________
	  	)	  	 

  
 KNOW ALL MEN BY THESE
PRESENTS, that WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its individual capacity but solely as owner trustee (“Owner Trustee”) for the Onyx Acceptance Owner Trust 2005-B (“Trust”), does hereby make,
constitute, and appoint ONYX ACCEPTANCE CORPORATION, as Administrator under the Administration Agreement (as defined below), and its agents and attorneys, as Attorneys-in-Fact to execute on behalf of the Owner Trustee or the Trust all such
documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Owner Trustee or the Trust to prepare, file or deliver pursuant to the Related Agreements (as defined in the Administration Agreement), including,
without limitation, to appear for and represent the Owner Trustee and the Trust in connection with the preparation, filing and audit of federal, state and local tax returns pertaining to the Trust, and with full power to perform any and all acts
associated with such returns and audits that the Owner Trustee could perform, including without limitation, the right to distribute and receive confidential information, defend and assert positions in response to audits, initiate and defend
litigation, and to execute waivers of restriction on assessments of deficiencies, consents to the extension of any statutory or regulatory time limit, and settlements. For the purpose of this Power of Attorney, the term “Administration
Agreement” means the Administration Agreement dated as of July 21, 2005, among the Trust, Onyx Acceptance Corporation, as Administrator, Onyx Acceptance Financial Corporation, as Seller, and JPMorgan Chase Bank, N.A., as Indenture Trustee and
Trust Agent, as such may be amended from time to time. 
  
 All
powers of attorney for this purpose heretofore filed or executed by the Owner Trustee are hereby revoked. 
  
 EXECUTED this          day of July, 2005. 
  

					
	WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee
		
	 By:
	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

  
 EXHIBIT B 
 [Form of Trust Agent Power of Attorney] 
  
 POWER OF ATTORNEY 
  

					
	 STATE OF____________________
	  	)	  	 
	 	  	)	  	 
	 COUNTY OF__________________
	  	)	  	 

  
 KNOW ALL MEN BY THESE
PRESENTS, that JPMorgan Chase Bank, N.A., a national banking association, not in its individual capacity but solely as trust agent (“Trust Agent”) for the Onyx Acceptance Owner Trust 2005-B (“Trust”), does hereby make,
constitute, and appoint ONYX ACCEPTANCE CORPORATION, as Administrator under the Administration Agreement (as defined below), and its agents and attorneys, as Attorneys-in-Fact to execute on behalf of the Trust Agent all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the Trust Agent to prepare, file or deliver pursuant to the Related Documents (as defined in the Administration Agreement), including, without limitation, to appear for and
represent the Trust Agent in connection with the preparation, filing and audit of federal, state and local tax returns pertaining to the Trust, and with full power to perform any and all acts associated with such returns and audits that the Trust
Agent could perform, including without limitation, the right to distribute and receive confidential information, defend and assert positions in response to audits, initiate and defend litigation, and to execute waivers of restriction on assessments
of deficiencies, consents to the extension of any statutory or regulatory time limit, and settlements. For the purpose of this Power of Attorney, the term “Administration Agreement” means the Administration Agreement dated as of July 21,
2005, among the Trust, Onyx Acceptance Corporation, as Administrator, Onyx Acceptance Financial Corporation, as Seller, and JPMorgan Chase Bank, N.A., as Indenture Trustee and Trust Agent, as such may be amended from time to time. 
  
 All powers of attorney for this purpose heretofore filed or executed by the
Trust Agent are hereby revoked. 
  
 EXECUTED this
         day of July, 2005. 
  

					
	JPMORGAN CHASE BANK, N.A., not in its individual capacity but solely as Trust Agent
		
	 By:
	 	 
	 	 	 Name:
	 	 
	 	 	 Title:Insurance and Reimbursement Agreement

 Exhibit 10.4 
  
 INSURANCE AND REIMBURSEMENT AGREEMENT 
  
 THIS INSURANCE AND REIMBURSEMENT AGREEMENT (the “Insurance Agreement”) is made as of July 21, 2005
among Financial Guaranty Insurance Company, a New York stock insurance company (“FGIC”), Onyx Acceptance Financial Corporation (the “Seller”), Onyx Acceptance Corporation, in its individual capacity
(“Onyx”), and as servicer (in such capacity, together with its successors and assigns, including without limitation any successor servicer appointed pursuant to the Sale and Servicing Agreement (as defined below), the
“Servicer”), and, with respect to Section 4.03 hereof, JPMorgan Chase Bank, N.A. (the “Indenture Trustee”) 
  
 PRELIMINARY STATEMENTS 
  
 The Seller will sell to the Onyx Acceptance Owner Trust 2005-B (the “Trust”) certain assets (the “Assets”) consisting of
a pool of motor vehicle installment sales contracts and installment loan agreements and certain other assets and rights pursuant to and described in the Sale and Servicing Agreement dated as of July 21, 2005 (the “Sale and Servicing
Agreement”), among the Seller, the Servicer, the Trust and the Indenture Trustee, as trust agent and indenture trustee. 
  
 The Trust will (i) grant a security interest in certain of the Assets to the Indenture Trustee under an Indenture dated as of July 21, 2005 between the
Trust and the Indenture Trustee (the “Indenture”) and (ii) issue the Notes (as defined in the Trust Agreement) under the Indenture. 
  
 FGIC is authorized to transact a financial guaranty insurance business in the State of New York and has agreed to issue to the Indenture Trustee for the
benefit of the holders of the Notes a financial guarantee insurance policy substantially in the form of Exhibit A hereto (the “Policy”). 
  

The parties hereto, among other things, desire to specify the conditions precedent to the issuance by FGIC of the Policy, the payment of the premium
and other amounts in respect thereof, the obligations of the parties to FGIC thereunder, and to provide for certain other matters related thereto. 
  
 NOW, THEREFORE, in consideration of the premises and of the agreements herein contained, the parties hereto agree as follows: 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 Section 1.01 General Definitions. The terms defined in this Article I shall have the meanings provided herein for all purposes of this Insurance
Agreement, unless the context clearly requires otherwise, in both singular and plural form, as appropriate. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Sale and Servicing Agreement.

  

 “Base Rate” means the fluctuating rate of interest as published from time to time in the
New York, New York edition of The Wall Street Journal, under the caption “Money Rates” as the “prime rate”, the Base Rate to change when and as such published prime rate changes. 
  
 “Closing Date” means July 21, 2005. 
  
 “Cumulative Net Charge-Off Ratio” means, as of any Servicer
Report Date, the ratio of (a) the aggregate Principal Balance of Contracts that became Defaulted Contracts plus all the Cram Down Losses which occurred during the period from the Initial Cut-Off Date through the end of the related Collection Period
reduced by the amount of Liquidation Proceeds with respect to Defaulted Contracts received during such period which are applied to principal of the Defaulted Contracts to (b) the sum of (i) the initial aggregate Principal Balance of the Initial
Contracts as of the Initial Cut-Off Date, plus (ii) the initial aggregate principal balance of the Subsequent Contracts as of the Subsequent Cut-Off Date plus (iii) the initial aggregate Principal Balance of the Prefunded Contracts as of their
respective Prefunding Cut-Off Dates. 
  
 “Delinquency
Ratio” means, as of any Servicer Report Date, the ratio of (a) the aggregate Principal Balance of Contracts that were Delinquent Contracts at the end of the related Collection Period to (b) the aggregate Principal Balance of all Contracts
as of the first day of such Collection Period. 
  
 “Delinquent Contract” means any Contract (other than a Defaulted Contract) as to which any portion of a scheduled payment remains unpaid for more than 30 days from the date on which it is due and payable. 
  
 “GAAP” means Generally Accepted Accounting Principles in
effect from time to time in the United States of America. 
  
 “Governmental Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining
to government. 
  
 “Indemnification Agreement”
means the Indemnification Agreement, dated as of July 12, 2005 among FGIC, Onyx, the Seller and the Underwriters (as defined therein). 
  
 “Initial Cash Deposit” means 1.25% of the Original Pool Balance plus the Negative Carry Amount. 
  
 “Insurer Information” means the information relating to
FGIC in the Prospectus Supplement as of the date thereof under the heading “The Policy and the Insurer” and the financial statements of FGIC incorporated by reference into the Prospectus Supplement. 
  
 “Negative Carry Amount” means $0. 
  
 “Notes Balance” means the aggregate principal balance of
the Notes then outstanding. 
  

 2 

 “Premium” has the meaning given to such term in Section 2.03 hereof. 
  
 “Premium Side Letter Agreement” means the letter dated the
Closing Date from FGIC to the Seller and Onyx setting forth the payment arrangement for the premium on the Policy and certain fees and expenses related to payment arrangements. 
  
 “Prospectus” means, collectively, (a) the Preliminary Prospectus Supplement dated July 11, 2005 to the
Prospectus dated February 14, 2005 and (b) the Final Prospectus Supplement dated July 12, 2005 to the Prospectus dated February 14, 2005, each relating to the sale of the Notes on the Closing Date. 
  
 “Registration Statement” means the Registration Statement
on Form S-3 of the Seller (Registration No. 333-113136 as amended), relating to the Notes, at the time it becomes effective. 
  
 “Repayment Amount” has the meaning given to such term in Section 2.04(a) hereof. 
  
 “Spread Account Increase Condition” means as of the Servicer
Report Date in any month prior to and including the applicable month set forth in the table below, the Delinquency Ratio exceeds the level specified for such month in such table: 
  

				
	 Collection Period

	  	Delinquency Ratio

	 
	 July 2005 – October 2005
	  	3.00	%
	 November 2005 - March 2006
	  	3.25	%
	 April 2006 – September 2006
	  	4.00	%
	 October 2006 – March 2007
	  	4.75	%
	 April 2007 – October 2007
	  	5.25	%
	 November 2007 – March 2008
	  	6.50	%
	 April 2008 – October 2008
	  	7.00	%
	 November 2008 and thereafter
	  	7.50	%

  
 “Spread
Account Maximum” means, on any day, an amount equal to the sum of (a) during the Funding Period, the Negative Carry Amount and (b) 1.25% of the Notes Balance as of the Closing Date; provided, however, that if a Spread Account
Increase Condition has occurred and is continuing, the Spread Account Maximum shall equal the greater of (x) 12.0% of the current Notes Balance with respect to such Distribution Date and (y) 2.0% of the Notes Balance as of the Closing Date.

  
 “Trigger Event” shall have the meaning set
forth in Section 6.01(a) hereof. 
  
 “Underwriter
Information” means the information furnished by the Underwriters in writing expressly for use in the Prospectus and included in the second paragraph (regarding concessions and discounts) under the caption “Underwriting” in the
Prospectus Supplement. 
  

 3 

 “Underwriting Agreement” means the Underwriting Agreement, dated July 12, 2005 among the
Seller, Onyx and Credit Suisse First Boston LLC and J.P. Morgan Securities, Inc., as representatives for the Underwriters named therein. 
  
 Section 1.02 Generic Terms. All words used herein shall be construed to be of such gender or number as the circumstances require. The words
“herein,” “hereby,” “hereof,” “hereto,” “hereinbefore” and “hereinafter,” and words of similar import, refer to this Insurance Agreement in its entirety and not to any particular paragraph,
clause or other subdivision, unless otherwise specified. 
  
 ARTICLE II 
  
 THE POLICY AND REIMBURSEMENT

  
 Section 2.01 Policy. FGIC agrees, subject to the
conditions hereinafter set forth, on the Closing Date to issue the Policy. 
  
 Section 2.02 Conditions Precedent to Obligations of the Parties. The obligation of FGIC to issue the Policy under this Insurance Agreement is subject to the satisfaction of the following conditions on the
Closing Date: 
  
 (a) The following documents shall have been duly
authorized, executed and delivered by each of the parties thereto (other than FGIC) and shall be in full force and effect and in form and substance satisfactory to FGIC and an executed counterpart of each thereof shall have been delivered to FGIC:

  

	 	(i)	this Insurance Agreement; 

  

	 	(ii)	the Sale and Servicing Agreement; 

  

	 	(iii)	the Trust Agreement; 

  

	 	(iv)	the Indenture; 

  

	 	(v)	the Limited Guaranty; 

  

	 	(vi)	the Underwriting Agreement; 

  

	 	(vii)	the Indemnification Agreement; and 

  

	 	(viii)	the Premium Side Letter Agreement. 

  
 (items (i) through (vii) collectively, the “Basic Documents”). 
  
 (b) FGIC shall have received: 
  
 (i) copies certified by the Secretary or an Assistant Secretary of each of the Seller and Servicer, dated the Closing Date, of its charter
and by-laws and the resolutions of its Board of Directors or a duly authorized committee thereof authorizing its execution and 

  

 4 

 
delivery of the Basic Documents and of all documents evidencing other corporate action and governmental approvals, if any, that are necessary for the
consummation of the transactions contemplated in such documents; 
  
 (ii) a certificate, dated the Closing Date, of the Secretary or an Assistant Secretary of each of the Seller and Servicer certifying the names and true signatures of its officers authorized to sign such Basic
Documents; 
  
 (iii) a certificate, dated the
Closing Date, of the Chief Financial Officer, an Assistant Treasurer or Senior Vice President of the Seller certifying that representations and warranties set forth in or incorporated by reference in Section 3.01 hereof are true and correct as of
the date made; 
  
 (iv) a favorable opinion or
opinions, dated the Closing Date, satisfactory in form and substance to FGIC, from counsel to each of the Seller and Onyx, acceptable to FGIC, to the effect that (A) each of the Basic Documents has been duly executed and delivered by such entity and
each constitutes the legal, valid and binding agreement of such entity, enforceable in accordance with their respective terms, subject to bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or other laws of general
applicability relating to or affecting creditors’ rights generally from time to time in effect and general principles of equity, and (B) no registration with or consent or approval of any Governmental Authority having jurisdiction over such
entity is required in connection with the execution, delivery or performance by such entity of any Basic Document which has not been obtained, and with respect to such other matters, including, without limitation, true sale, nonconsolidation,
perfection and tax issues as FGIC may reasonably require; 
  
 (v) evidence that a UCC financing statement or statements covering the ownership interest of the Trust in the Trust Property (as defined in the Sale and Servicing Agreement) conveyed by the Seller to the Trust
pursuant to the Sale and Servicing Agreement, has been prepared and/or executed by the Seller in favor of the Trust and has been (or within 10 days after the Closing Date will be) duly filed in such place or places which, in the opinion of counsel
for the Seller and FGIC, are necessary or desirable to protect said interests; 
  
 (vi) evidence that a UCC financing statement or statements covering the security interest of the Indenture Trustee, for the benefit of the
Noteholders and FGIC, created by or pursuant to the Indenture, in the Collateral (as defined in the Indenture) which the Indenture Trustee is granted pursuant to the Indenture, has been prepared and/or executed by the Trust in favor of the Indenture
Trustee for the benefit of the Noteholders and FGIC, and has been (or within 10 days after the Closing Date will be) duly filed in such place or places which, in the opinion of counsel for the Seller and FGIC, are necessary or desirable to protect
said interests; and 
  
 (vii) such other
documents, certificates, instruments, approvals (and, if requested by FGIC, certified duplicates or executed copies thereof) or opinions as FGIC may reasonably request. 
  

 5 

 (c) No statute, rule, regulation or order shall have been enacted, entered or deemed applicable by any
government or governmental or administrative agency or court, which would make the transactions contemplated by the Basic Documents illegal or otherwise prevent the consummation thereof. 
  
 (d) FGIC shall have received specimens of the Notes and the Residual Interest Instrument (as defined in the Trust
Agreement). 
  
 (e) FGIC shall have received an executed copy of
all legal opinions, certificates, accountant’s reports and other documents required to be furnished by Onyx, the Seller and the Servicer pursuant to the Basic Documents or pursuant to the requirements of Standard & Poor’s,
Moody’s, Fitch or any other rating agency rating the Notes. Such documents shall be in form and substance satisfactory to FGIC and each such legal opinion or certificate (other than any accountant’s report) shall be addressed to FGIC or
accompanied by appropriate reliance letters to FGIC. 
  
 (f)
Simultaneously with the issuance of the Policy, the Notes shall have been duly executed and authenticated and delivered to the purchaser(s) thereof pursuant to the Underwriting Agreement. 
  
 (g) All amounts payable pursuant to the Premium Side Letter Agreement on or prior to the Closing Date shall have been paid.

  
 (h) The Seller shall have deposited into the Spread Account an
amount equal to the Initial Cash Deposit from the proceeds of the sale of the Notes. 
  
 Section 2.03 Premium. FGIC shall be entitled to receive a premium (the “Premium”) for the Policy on each Distribution Date in accordance with the terms and conditions of the Premium Side Letter
Agreement. 
  
 Section 2.04 Reimbursement Obligations.

  
 (a) FGIC shall be entitled to reimbursement by the Issuer for
any payment made under the Policy, which reimbursement shall be paid to FGIC on the date that any amount is to be paid pursuant to a Notice for Payment (as defined in the Policy). Such reimbursement shall be made in an amount (the “Repayment
Amount”) equal to the sum of the amount to be paid under the Policy and all amounts previously paid that remain unpaid, together with interest on any and all amounts remaining unpaid (to the extent permitted by law, if in respect of any
unpaid amounts representing interest) from the date such amounts became due until paid in full (after as well as before judgment), at a rate of interest equal to the Base Rate from time to time in effect plus 1%. The Repayment Amount shall be
payable to FGIC pursuant to Section 4.03(a) of the Sale and Servicing Agreement and the provisions of this Insurance Agreement. 
  
 (b) Anything in Section 2.04(a) to the contrary notwithstanding, FGIC shall be entitled to reimbursement from the Servicer (i) for payments made under the
Policy arising as a result of the Servicer’s failure to repurchase any Contract required to be repurchased pursuant to Section 2.03 of the Sale and Servicing Agreement, together with interest on any and all such amounts remaining unpaid (to the
extent permitted by law, if in respect of any unpaid amounts 

  

 6 

 
representing interest) from the date such amounts became due until paid in full (after as well as before judgment), at a rate of interest equal to the Base
Rate from time to time in effect plus 1%, and (ii) for payments made under the Policy, arising as a result of (A) the Servicer’s failure to deposit into the Collection Account any amount required to be so deposited pursuant to the Sale and
Servicing Agreement or (B) the Servicer’s failure to purchase any Contract required to be purchased under Section 3.06 of the Sale and Servicing Agreement, together with interest on any and all such amounts remaining unpaid (to the extent
permitted by law, if in respect of any unpaid amounts representing interest) from the date such amounts became due until paid in full (after as well as before judgment), at a rate of interest equal to the Base Rate from time to time in effect plus
1%. 
  
 (c) FGIC shall be entitled to reimbursement by the Issuer
for amounts expended by FGIC pursuant to Section 4.03 hereof, which amounts shall be payable to FGIC pursuant to Section 4.03(a) of the Sale and Servicing Agreement and the provisions of this Insurance Agreement. 
  
 (d) Interest payable to FGIC under this Insurance Agreement shall be
calculated on the basis of a 360-day year for the actual number of days elapsed and shall be payable on demand. 
  
 ARTICLE III 
  
 REPRESENTATIONS AND WARRANTIES 
  
 Section 3.01
Representations and Warranties of the Seller. The Seller represents and warrants to FGIC, as of the Closing Date that: 
  
 (a) Each of the representations and warranties made by the Seller in the Trust Agreement and the Sale and Servicing Agreement are true and correct in all
material respects as of the date made. 
  
 (b) The initial offer
and sale of the Notes comply in all material respects with all requirements of law, including all registration requirements of applicable securities laws. Without limitation of the foregoing, the Prospectus does not contain any untrue statement of a
material fact and does not omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; provided, however, that no representation is made with respect to the
Insurer Information or the Underwriter Information. Neither the offer nor the sale of the Notes has been or will be in violation of the Securities Act or any other federal or state securities laws. 
  
 Section 3.02 Representations and Warranties of Onyx, individually and as
Servicer. Onyx, individually and in its capacity as Servicer, represents and warrants to FGIC, as of the Closing Date that: 
  
 (a) Each of the representations and warranties made by it in the Sale and Servicing Agreement are true and correct in all material respects as of the date
made. 
  

 7 

  
 ARTICLE IV 

 
 COVENANTS 
  
 Section 4.01 Affirmative Covenants of the Servicer. The Servicer
hereby covenants and agrees that during the term of this Insurance Agreement: 
  
 (a) It shall, for the benefit of FGIC, perform each of its agreements, warranties and indemnities contained in the Basic Documents, which are hereby incorporated by reference into this Insurance Agreement as if set
forth herein in full. 
  
 (b) Except in accordance with any
provision of the Basic Documents that expressly states that the consent of FGIC is not required, it shall not terminate (except in accordance with the terms thereof), amend, waive or otherwise modify the Basic Documents or any term or provision
thereof, or the performance of any of the terms of any of the foregoing, unless such amendment, waiver or modification is approved in writing by FGIC. 
  
 (c) It shall furnish to FGIC, promptly after the occurrence of any Servicer Default under the Sale and Servicing Agreement, any Event of Default under the
Indenture or of a Trigger Event under this Insurance Agreement, a certificate of an appropriate officer of the Servicer setting forth the circumstances of such Servicer Default, Event of Default or Trigger Event, and any action taken or proposed to
be taken by the Servicer with respect thereto and furnish to FGIC such other information with respect to any such Servicer Default, Event of Default or Trigger Event as FGIC may reasonably request. 
  
 (d) It shall deliver to FGIC the annual statement of compliance described in
Section 3.09 of the Sale and Servicing Agreement by the date specified in Section 3.09 of the Sale and Servicing Agreement. 
  
 (e) It will furnish to FGIC a copy of each material certificate, report, statement, notice or other written communication furnished by or on behalf of it,
to Noteholders or to the Indenture Trustee concurrently therewith and furnish to FGIC promptly after receipt thereof, a copy of each notice, demand or other communication received by it from the Indenture Trustee, Owner Trustee, Holder or Holders of
10% or more of the Notes or Standard & Poor’s, Moody’s or any other rating agency rating the Notes, in each case with respect to any of the Notes or the Basic Documents. 
  
 (f) It will, on each Servicer Report Date, furnish to FGIC a copy of the Distribution Date Statement with respect to the
Collection Period relating to such Servicer Report Date and if not contained therein, such information regarding the Spread Account and the Policy, in such form and substance as FGIC may reasonably require. 
  
 (g) It will, at all times during the term hereof, upon the reasonable request
of FGIC and upon reasonable notice and at FGIC’s cost and expense, permit FGIC or its authorized agent, at reasonable times, at no charge, to inspect and audit the Contract Files, including those held by any subservicer or custodian and any
other documents and records relating to the servicing of the Contracts, including computer records relating to the Contracts and will cause its personnel to assist in any examination of such records. Such inspections and discussions shall be
conducted 

  

 8 

 
during normal business hours and shall not unreasonably interfere with the business of the Servicer, any such custodian, its normal operations or its
employee or customer relations. Any information obtained by FGIC pursuant to the activities contemplated in this Section 4.01(f) shall be held in confidence by FGIC unless (i) such information has become available to the public other than as a
result of a disclosure by or through FGIC or (ii) such information was available to FGIC on a nonconfidential basis prior to its disclosure to FGIC hereunder, or (iii) FGIC should be required in connection with any legal or regulatory proceeding to
disclose such information. The Contract Files and records relating thereto will be maintained at the addresses and locations as the Servicer shall have notified FGIC in writing prior to the Closing Date and as the Servicer shall otherwise advise
FGIC in writing. 
  
 (h) So long as no Insurer Default has
occurred and is continuing, the Servicer shall not change its Customary Servicing Practices without the consent of FGIC if the Servicer determines that such a change would have a material adverse effect on the interests of FGIC or the Noteholders.

  
 Section 4.02 Affirmative Covenants of the Seller. The
Seller hereby covenants and agrees that during the term of this Insurance Agreement: 
  
 (a) It shall, for the benefit of FGIC, perform each of its agreements, warranties and indemnities contained in the Sale and Servicing Agreement, which are hereby incorporated by reference into this Insurance
Agreement, as if set forth herein in full. 
  
 (b) It shall comply
in all material respects with all applicable laws, rules, regulations and orders with respect to it, its business and properties (except to the extent contested in good faith if properly reserved in accordance with generally accepted accounting
principles or regulatory accounting principles, as the case may be, consistently applied), if the effect of noncompliance thereof would have a material adverse effect on its performance of its obligations under the Basic Documents. 
  
 (c) It shall include in any offering document for the Notes only information
concerning FGIC that is supplied or consented to in writing by FGIC expressly for inclusion therein. 
  
 (d) Except in accordance with any provision of the Basic Documents that expressly states that the consent of FGIC is not required, it shall not terminate
(except in accordance with the terms and conditions thereof), amend, waive or otherwise modify any Basic Document or any term or provision thereof, or the performance of any of the terms of any of the foregoing, unless such amendment, waiver or
modification is approved in writing by FGIC. 
  
 (e) It shall
maintain its corporate or other existence and shall at all times continue to be duly organized under the laws of its respective jurisdiction of incorporation or formation and duly qualified and duly authorized and shall conduct its business in
accordance with the terms of its certificate of incorporation and bylaws or other formation documents in all circumstances where failure could reasonably result in a material adverse change in (a) its business, financial condition or results of
operations or (b) its ability to perform its obligations under any Basic Document. 
  

 9 

 (f) It shall provide to FGIC such other information as FGIC may reasonably require. 
  
 Section 4.03 Parties To Join in Enforcement Action 
  
 (a) To the extent necessary to enforce any right of FGIC in or remedy of FGIC
under any Contract or related asset, the Indenture Trustee, the Issuer and Onyx agree to join in any action initiated by FGIC for the protection of such right or exercise of such remedy. 
  
 (b) In the event of any court proceeding (x) with respect to which Onyx or the Seller is a party (including, without
limitation, an insolvency or bankruptcy proceeding in respect of Onyx or the Seller) which affects the Trust Estate, the Policies or the obligations of FGIC under the Basic Documents, and (y) with respect to which Onyx or the Seller fails to defend
or answer, FGIC shall have the right to direct, assume or otherwise participate in the defense thereof. In such event, FGIC shall, following written notice to the Indenture Trustee, have the exclusive right to determine, in its sole discretion, the
actions necessary to preserve and protect the Trust Estate. All costs and expenses of FGIC in connection with such action, proceeding or investigation, (including, without limitation, any judgment or settlement entered into or paid by FGIC), shall
be included in the Reimbursement Obligations. 
  
 (c) The
Indenture Trustee shall cooperate with, and take such action as directed by FGIC, including (without limitation) entering into such agreements and settlements as FGIC in its sole discretion shall direct with respect to such court proceeding. The
Indenture Trustee shall not be liable to FGIC for any such action that conforms to the direction of FGIC. The Indenture Trustee’s reasonable out-of-pocket costs and expenses (including attorneys’ fees and expenses) with respect to any such
action shall be reimbursed by FGIC. 
  
 (d) The Indenture Trustee
hereby agrees to provide to FGIC prompt written notice of any action, proceeding or investigation of which any Responsible Officer of the Indenture Trustee has actual knowledge that names the Owner Trustee or the Issuer as a party or that could
adversely affect the Trust Estate or the rights or obligations of FGIC hereunder or under the Policies or the other Basic Documents, including (without limitation) any insolvency or bankruptcy proceeding in respect of Onyx, the Seller or any
affiliate thereof. 
  
 (e) Notwithstanding anything contained
herein or in any of the other Basic Documents to the contrary, the Indenture Trustee shall not, without FGIC’s prior written consent or unless directed by FGIC, undertake or join any litigation or agree to any settlement of any action,
proceeding or investigation affecting the Owner Trustee, the Issuer or the Trust Estate or the rights or obligations of FGIC hereunder or under the Policy or the other Basic Documents. 
  
 ARTICLE V 
  
 FURTHER AGREEMENTS 
  
 Section 5.01 Obligations Absolute. The obligations of Onyx, the Seller and the Servicer pursuant to this Insurance Agreement are absolute and
unconditional and will be paid or performed strictly in accordance with the respective terms hereof, irrespective of: 
  
 (a) any lack of validity or enforceability of, or any amendment or other modifications of, or waiver with respect to, the Basic Documents; 
  

 10 

 (b) any amendment or waiver of, or consent to departure from the Basic Documents; 
  
 (c) the existence of any claim, set off, defense or other rights it may have
at any time against the Indenture Trustee, any beneficiary or any transferee of the Policy (or any persons or entities for whom the Indenture Trustee, any such beneficiary or any such transferee may be acting), FGIC or any other person or entity
whether in connection with the Policy, the Basic Documents or any unrelated transactions; 
  
 (d) any statement or any other document presented under the Policy (including any Notice for Payment) proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever; 
  
 (e) the inaccuracy or
alleged inaccuracy of any Distribution Date Statement or Notice for Payment upon which any drawing under the Policy is based; 
  
 (f) payment by FGIC under the Policy against presentation of a draft or certificate which does not comply with the terms of the relevant Policy,
provided that such payment shall not have constituted gross negligence or willful misconduct of FGIC; 
  
 (g) the bankruptcy or insolvency of FGIC, the Trust or any other party; 
  
 (h) any default or alleged default of FGIC under the Policy; 
  
 (i) any defense based upon the failure of the Trust to receive all or part of the proceeds of the sale of the Notes or of
the Servicer to receive any or all of the Servicing Fee or other compensation required under the Sale and Servicing Agreement or otherwise, or any nonapplication or misapplication of the proceeds of any drawing upon the Policy; and 
  
 (j) any other circumstance or happening whatsoever, provided
that the same shall not have constituted gross negligence or willful misconduct of FGIC. 
  
 Section 5.02 Reinsurance. FGIC shall have the right to give participations in its rights under this Insurance Agreement and to enter into contracts
of reinsurance with respect to the Policy, provided that FGIC agrees that any such disposition will not alter or affect in any way whatsoever FGIC’s direct obligations hereunder and under the Policy and provided
further that any reinsurer or participant will not have any rights against the Trust, the Seller, the Servicer, Onyx, any Noteholders or the Indenture Trustee and that the Trust, the Seller, the Servicer, Onyx, the Noteholders or the
Indenture Trustee shall have no obligation to have any communication or relationship whatsoever with any reinsurer or participant in order to enforce the obligations of FGIC hereunder and under the Policy. None of Onyx, the Seller or the Servicer
may assign its obligations under this Insurance Agreement without the prior written consent of FGIC, such consent not to be unreasonably withheld. 
  
 Section 5.03 Liability of FGIC. The Seller and the Servicer agree that neither FGIC nor any of its officers, directors or employees shall be liable
or responsible for (except to the extent 

  

 11 

 
of its own gross negligence, willful misconduct or bad faith): (a) the use which may be made of the Policy by or for any acts or omissions of another Person
in connection therewith or (b) the validity, sufficiency, accuracy or genuineness of any documents delivered to FGIC or of any endorsement(s) thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged. In furtherance and not in limitation of the foregoing, FGIC may accept documents that appear on their face to be in order, without responsibility for further investigation. 
  
 Section 5.04 Successor Servicer. 
  
 (a) Any successor Servicer, by accepting its appointment pursuant to the Sale
and Servicing Agreement, (i) shall agree to be bound by the terms, covenants and conditions contained herein applicable to the Servicer and subject to the duties and obligations of the Servicer hereunder, (ii) as of the date of its acceptance, shall
be deemed to have made with respect to itself the representations and warranties made by the Servicer in this Insurance Agreement to the extent applicable, and (iii) shall agree to indemnify and hold harmless FGIC from and against any and all
claims, damages, losses, liabilities, costs or expenses whatsoever which FGIC may incur (or which may be claimed against FGIC) by reason of the negligence or willful misconduct of the successor Servicer in exercising its powers and carrying out its
obligations as Servicer under the Sale and Servicing Agreement. No such appointment shall make the successor Servicer responsible with respect to any liabilities of the outgoing Servicer incurred prior to such appointment or for any acts, omissions
or misrepresentations of such outgoing Servicer. 
  
 (b) All costs
and expenses incurred by FGIC in connection with the replacement of the Servicer pursuant to Section 7.02 of the Sale and Servicing Agreement shall be paid by Onyx. 
  
 Section 5.05 Fees and Expenses. 
  
 (a) On the Closing Date, the Seller agrees to pay, in accordance with the Premium Side Letter Agreement, FGIC’s
attorneys’ fees and all other reasonable costs and expenses (including without limitation accountants’ fees) incurred by FGIC in connection with the negotiation, preparation, execution and delivery of the Registration Statement, including
the core prospectus and any supplement thereto, the Basic Documents, and all other documents delivered with respect thereto, and all rating agency fees incurred by FGIC in connection with this Insurance Agreement and the transactions described in
the Basic Documents. Such attorney’s fees and expenses shall be payable on the Closing Date upon the presentation of an invoice for any such fees, costs and expenses. All other costs and expenses payable hereunder, including without limitation,
all rating agency fees incurred at any time by FGIC in connection with this Insurance Agreement and the transactions described in the Basic Documents shall be payable by Onyx within 30 days from the delivery of an invoice therefor by FGIC to Onyx.

  
 (b) Onyx, the Seller and the Servicer each agree to pay all
costs and expenses (including reasonable fees and expenses of legal counsel) incurred by FGIC in connection with the amendment, modification, waiver or similar action and/or the enforcement against Onyx, the Seller or the Servicer, as the case may
be, of FGIC’s rights under the Basic Documents; 

  

 12 

 
provided, however, that FGIC will not have recourse against assets of the Seller which secure any obligation rated by the Rating Agencies and
FGIC will not have any claim against such assets until all such obligations have been paid in full. 
  
 (c) Onyx agrees to pay any and all charges, fees, costs and expenses that FGIC may reasonably pay or incur, including, but not limited to, attorneys’
and accountants’ fees and expenses, in connection with (i) the enforcement, defense or preservation of any rights in respect of any of the Basic Documents, including, without limitation, instituting, defending, monitoring or participating in
any litigation or proceeding (including, without limitation, under Section 4.03(c) hereof and any insolvency or bankruptcy proceeding in respect of Onyx, Onyx Acceptance Financial Corporation, the Seller, the Servicer (so long as Onyx is the
Servicer) or any Affiliate thereof) relating to any of the Basic Documents, any party to any of the Basic Documents, in its capacity as such a party, or the transactions contemplated thereby and (ii) any consent, amendment, waiver or other action
with respect to, or related to, any Basic Document, whether or not executed or completed (items (i) and (ii) collectively referred to as “Reimbursable Amounts”). Reimbursable Amounts due to FGIC shall bear interest at a rate equal 1% if
not paid within 30 days. In the event that Onyx fails to pay to FGIC any Reimbursable Amounts, FGIC shall be entitled to reimbursement of such amount together with interest thereon from the Trust pursuant to Section 4.03 of the Sale and Servicing
Agreement or from the Spread Account pursuant to Section 4.04 of the Sale and Servicing Agreement, as applicable. In addition, FGIC reserves the right to charge a reasonable fee as a condition to executing any waiver, consent or amendment proposed
in respect of any of the Basic Documents. 
  
 ARTICLE VI

  
 TRIGGER EVENTS; REMEDIES 
  
 Section 6.01 Trigger Events. 
  
 (a) The occurrence of any of the following events shall constitute a Trigger
Event hereunder: 
  
 (i) the failure of any
Person to deposit into the Collection Account or the Spread Account all amounts required to be deposited therein by the required deposit date and such failure could reasonably have a material adverse effect on the interests of FGIC or the
Noteholders (as determined in FGIC’s sole discretion) and such failure has continued for a period of at least five (5) Business Days (A) after notice is received by such Person from the Indenture Trustee or FGIC or (B) after discovery of such
failure by a responsible officer of such Person; 
  
 (ii) a Servicer Default occurs under the Sale and Servicing Agreement; 
  
 (iii) any failure to observe or perform any covenant or obligation of the Owner Trustee, Onyx, the Seller, the Issuer or the Servicer set
forth herein, or in the Indenture or the Sale and Servicing Agreement which has not been cured within sixty (60) days (or such longer period not in excess of ninety (90) as may be reasonably necessary to remedy such failure; provided that (i) that
failure is capable of remedy within ninety (90) days or less and (ii) FGIC 

  

 13 

 
consents in its sole discretion to that longer period) from the date of receipt by the Owner Trustee, Onyx, the Seller, the Issuer or the Servicer, as the
case may be, of written notice from the Indenture Trustee or FGIC of such breach or default and such breach or default could reasonably have a material adverse effect on the interests of FGIC or the Noteholders (as determined in FGIC’s sole
discretion); provided, however, that no Trigger Event will result from the breach by the Servicer of any covenant for which the repurchase of the affected Contracts is specified as the sole remedy pursuant to Section 3.06 of the Sale and Servicing
Agreement and such repurchase takes place within the time frame required by Section 3.06 of the Sale and Servicing Agreement; 
  
 (iv) the cessation of a valid perfected first priority security interest in the Contracts or the Trust Accounts in favor of the Indenture
Trustee which is not cured within seven (7) Business Days of receipt of notice thereof; 
  
 (v) a draw is made on the Policy; or 
  
 (vi) as of the Servicer Report Date in any month prior to and including the applicable month set forth in the table below, the Cumulative
Net Charge-Off Ratio exceeds the level specified for such month in such table: 
  

				
	 Collection Period

	  	Cumulative Net Charge-Off Ratio

	 
	 July 2005 – December 2005
	  	N/A	 
	 January 2006 – March 2006
	  	2.25	%
	 April 2006 – June 2006
	  	2.75	%
	 July 2006 – September 2006
	  	3.50	%
	 October 2006 – December 2006
	  	4.25	%
	 January 2007 – March 2007
	  	5.00	%
	 April 2007 – June 2007
	  	6.00	%
	 July 2007 – September 2007
	  	6.75	%
	 October 2007 – December 2007
	  	7.25	%
	 January 2008 – March 2008
	  	7.50	%
	 April 2007 – June 2008
	  	7.75	%
	 July 2008 and thereafter
	  	8.25	%

  
 provided, however, that the occurrence
of any of the foregoing events shall not form the basis of a Trigger Event unless FGIC, upon written notice to each Rating Agency, has delivered to the Issuer and the Indenture Trustee written notice specifying that such event constitutes a Trigger
Event. 
  
 (b) Upon the occurrence of any Trigger Event, FGIC may:

  
 (i) inform the Indenture Trustee in writing
or by facsimile transmission of the occurrence of any Trigger Event and inform the Indenture Trustee in writing or by facsimile transmission of any other information FGIC may have with respect to the performance of the Servicer; 
  

 14 

 (ii) instruct the Indenture Trustee in writing or by facsimile transmission to deliver a
notice of termination to the extent permitted in the Sale and Servicing Agreement of all the rights and obligations of the Servicer; 
  
 (iii) declare all indebtedness of every type or description then owed by Onyx, the Issuer or the Seller to FGIC pursuant to the Basic
Documents to be immediately due and payable, and the same shall thereupon be immediately due and payable; provided, however, that any such payment by Onyx, the Issuer or the Seller shall be paid in accordance with Section 4.03 of the Sale and
Servicing Agreement; or 
  
 (iv) exercise any
rights and remedies under the Basic Documents in accordance with the terms of the Basic Documents or direct the Indenture Trustee to exercise such remedies in accordance with the terms of the Basic Documents; or 
  
 (v) take whatever action at law or in equity as may appear
necessary or desirable in its judgment to collect the amounts then due to FGIC under this Insurance Agreement or the Basic Documents or to enforce performance and observance of any obligation, agreement or covenant of Onyx or the Seller under this
Insurance Agreement or the Basic Documents. 
  
 ARTICLE VII

  
 MISCELLANEOUS 
  
 Section 7.01 Amendments, Etc. No amendment or waiver of any provision
of this Insurance Agreement, nor consent to any departure therefrom, shall in any event be effective unless in writing and signed by all of the parties hereto, with written notice thereof to Standard & Poor’s and Moody’s;
provided that any waiver so granted shall extend only to the specific event or occurrence so waived and not to any other similar event or occurrence which occurs subsequent to the date of such waiver. 
  

 15 

 Section 7.02 Notices. Except to the extent otherwise expressly provided herein, all notices,
requests and demands to or upon the respective parties hereto to be effective shall be in writing (and if sent by mail, certified or registered, return receipt requested) or facsimile transmission and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or three (3) Business Days after being deposited in the mail, postage prepaid, or, in the case of facsimile transmission, when sent, addressed as follows or to such other
address or facsimile number as set forth in a written notice delivered by a party to each other party hereto: 
  

			
	If to Seller:
	
	Capital One Auto Finance, Inc.
	1680 Capital One Drive
	McLean, VA 22102
	Attention: Director of Securitization
	Facsimile:	  	(703) 720-2121
	Confirmation:	  	(703) 720-1000
	
	With a copy to:
	
	Onyx Acceptance Financial Corporation
	27051 Towne Centre Drive, Suite 200
	Foothill Ranch, California 92610
	Attention: Don P. Duffy CFO
	Telephone:	  	(949) 465-3505
	Facsimile:	  	(949) 465-3530
	
	If to the Servicer and Onyx:
	
	Capital One Auto Finance, Inc.
	1680 Capital One Drive
	McLean, VA 22102
	Attention: Director of Securitization
	Facsimile:	  	(703) 720-2121
	Confirmation:	  	(703) 720-1000
	
	With a copy to:
	
	Onyx Acceptance Corporation
	27051 Towne Centre Drive, Suite 100
	Foothill Ranch, California 92610
	Attention: Don P. Duffy CFO
	Telephone:	  	(949) 465-3505
	Facsimile:	  	(949) 465-3992
	
	If to FGIC:
	
	Financial Guaranty Insurance Company
	125 Park Avenue
	New York, New York 10017
	Attention: Research and Risk Management
	                   Re: Onyx Acceptance Owner Trust 2005-B
	Facsimile:	  	(212) 312-3225
	Confirmation:	  	(800) 352-0001

  
 Section 7.03 No
Waiver; Remedies and Severability. No failure on the part of FGIC to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor 

  

 16 

 
shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law. The parties further agree that the holding by any court of competent jurisdiction that any remedy pursued by FGIC hereunder is unavailable or unenforceable shall not affect
in any way the ability of FGIC to pursue any other remedy available to it. In the event any provision of this Insurance Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, the parties hereto agree that such
holding shall not invalidate or render unenforceable any other provision hereof. 
  
 Section 7.04 Payments. 
  
 (a) All payments to FGIC hereunder (other than in respect of any structuring fee pursuant to the Premium Side Letter Agreement) shall be made in lawful currency of the United States and in immediately available funds and shall be made prior
to 2:00 p.m. (New York City time) on the date such payment is due by wire transfer to Financial Guaranty Insurance Company, JPMorgan Chase Bank, N.A., Routing/Transit No. 021000021, For Credit to Financial Guaranty Insurance Company, Branch and
Account No. 904951812, REF Onyx, FGIC Policy Number 05030057 or to such other office or account as FGIC may direct. Payments received by FGIC after 2:00 p.m. (New York City time) shall be deemed to have been received on the next succeeding Business
Day, and such extension of time shall be included in computing interest, commissions or fees, if any, in connection with such payment. 
  
 (b) [Reserved]. 
  
 (c) Whenever any payment under this Insurance Agreement shall be stated to be due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such cases be included in computing interest, commissions or fees, if any, in connection with such payment. 
  
 (d) Unless otherwise specified herein, FGIC shall be entitled to interest on all amounts owed to FGIC under this Insurance
Agreement, from the date such amounts become due until paid in full, at a rate of interest equal to the Base Rate from time to time in effect plus 1%. 
  
 (e) Unless otherwise specified herein, interest payable to FGIC under this Insurance Agreement shall be calculated on the basis of a 360 day year and the
actual number of days elapsed and shall be payable on demand. 
  
 Section 7.05 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL, SUBSTANTIVE LAWS OF THE STATE OF NEW YORK INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW
BUT EXCLUDING TO THE MAXIMUM EXTENT PERMITTED BY LAW ALL OTHER RULES THEREOF RELATING TO CONFLICTS OF LAW AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
  

 17 

 Section 7.06 Counterparts. This Insurance Agreement may be executed in counterparts by the parties
hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument. 
  
 Section 7.07 Paragraph Headings, Etc. The headings of paragraphs contained in this Insurance Agreement are provided for convenience only. They form
no part of this Insurance Agreement and shall not affect its construction or interpretation. 
  
 Section 7.08 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. Each of the parties hereto hereby irrevocably and unconditionally: 
  
 (a) submits for itself and its property in any legal action or proceeding relating to this Agreement or any
documents executed and delivered in connection herewith, or for recognition and enforcement of any judgment in respect thereof, to the nonexclusive general jurisdiction of the courts of the State of New York, the courts of the United States of
America for the Southern District of New York and appellate courts from any thereof; 
  
 (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have
to the venue of such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; 
  
 (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Person at its address determined in accordance with Section 9.04 of this Agreement; 
  
 (d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and 
  
 (e) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER BASIC DOCUMENT, OR ANY MATTER ARISING HEREUNDER OR THEREUNDER. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 18 

  
 IN WITNESS WHEREOF, the
parties hereto have executed this Insurance Agreement, all as of the day and year first above mentioned. 
  

			
	FINANCIAL GUARANTY INSURANCE COMPANY
		
	By:	 	/s/    MATTHEW FANELLI        
	 Name:
	 	Matthew Fanelli
	 Title:
	 	Vice President
	
	 ONYX ACCEPTANCE FINANCIAL CORPORATION,
 as Seller

		
	By:	 	/s/    ALBERT A. CIAFRE        
	 Name:
	 	Albert A. Ciafre
	 Title:
	 	Assistant Vice President
	
	 ONYX ACCEPTANCE CORPORATION,
 individually
and as Servicer

		
	By:	 	/s/    VINCENT M.
SCARDINA        
	 Name:
	 	Vincent M. Scardina
	 Title:
	 	Treasurer
	
	 JPMORGAN CHASE BANK, N.A., not in its individual capacity but solely as
 as Indenture Trustee

		
	By:	 	/s/    ARANKA R. PAUL        
	 Name:
	 	Aranka R. Paul
	 Title:
	 	Assistant Vice President

  

 EXHIBIT A 
  

FORM OF FINANCIAL GUARANTEE INSURANCE POLICY 
  

 A-1

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