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EXHIBIT 4.3
[LOGO} Master Repurchase
Agreement
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September 1996 Version
Dated as of MAY 16, 2000
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Between: Merrill Lynch International (BUYER)
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and ONYX ACCEPTANCE FUNDING CORPORATION (SELLER)
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and Merrill Lynch, Pierce, Fenner & Smith Incorporated acting as
Agent as described in Annex III
1. APPLICABILITY
From time to time the parties hereto may enter into transactions in which
one party ("Seller") agrees to transfer to the other ("Buyer") securities
or other assets ("Securities") against the transfer of funds by Buyer,
with a simultaneous agreement by Buyer to transfer to Seller such
Securities at a date certain or on demand, against the transfer of funds
by Seller. Each such transaction shall be referred to herein as a
"Transaction" and, unless otherwise agreed in writing, shall be governed
by this Agreement, including any supplemental terms or conditions
contained in Annex I hereto and in any other annexes identified herein or
therein as applicable hereunder.
2. DEFINITIONS
(a) "Act of Insolvency'', with respect to any party, (i) the
commencement by such party as debtor of any case or proceeding under
any bankruptcy, insolvency, reorganization, liquidation, moratorium,
dissolution, delinquency or similar law, or such party seeking the
appointment or election of a receiver, conservator, trustee,
custodian or similar official for such party or any substantial part
of its property, or the convening of any meeting of creditors for
purposes of commencing any such case or proceeding or seeking such
an appointment or election, (ii) the commencement of any such case
or proceeding against such party, or another seeking such an
appointment or election, or the filing against a party of an
application for a protective decree under the provisions of the
Securities Investor Protection Act of 1970, which (A) is consented
to or not timely contested by such party, (B) results in the entry
of an order for relief, such an appointment or election, the
issuance of such a protective decree or the entry of an order having
a similar effect, or (C) is not dismissed within 15 days, (iii) the
making by such party of a general assignment for the benefit of
creditors, or (iv) the admission in writing by such party of such
party's inability to pay such party's debts as they become due;
(b) "Additional Purchased Securities", Securities provided by Seller to
Buyer pursuant to Paragraph 4(a) hereof;
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(c) "Buyer's Margin Amount", with respect to any Transaction as of any
date, the amount obtained by application of the Buyer's Margin
Percentage to the Repurchase Price for such Transaction as of such
date:
(d) "Buyer's Margin Percentage", with respect to any Transaction as of
any date, a percentage (which may be equal to the Seller's Margin
Percentage) agreed to by Buyer and Seller or, in the absence of any
such agreement, the percentage obtained by dividing the Market Value
of the Purchased Securities on the Purchase Date by the Purchase
Price on the Purchase Date for such Transaction;
(e) "Confirmation", the meaning specified in Paragraph 3(b) hereof;
(f) "Income", with respect to any Security at any time, any principal
thereof and all interest, dividends or other distributions thereon;
(g) "Margin Deficit", the meaning specified in Paragraph 4(a) hereof;
(h) "Margin Excess", the meaning specified in Paragraph 4(b) hereof;
(i) "Margin Notice Deadline", the time agreed to by the parties in the
relevant Confirmation, Annex I hereto or otherwise as the deadline
for giving notice requiring same-day satisfaction of margin
maintenance obligations as provided in Paragraph 4 hereof (or, in
the absence of any such agreement, the deadline for such purposes
established in accordance with market practice);
(j) "Market Value", with respect to any Securities as of any date, the
price for such Securities on such date obtained from a generally
recognized source agreed to by the parties or the most recent
closing bid quotation from such a source, plus accrued Income to the
extent not included therein (other than any Income credited or
transferred to, or applied to the obligations of, Seller pursuant to
Paragraph 5 hereof) as of such date (unless contrary to market
practice for such Securities);
(k) "Price Differential", with respect to any Transaction as of any
date, the aggregate amount obtained by daily application of the
Pricing Rate for such Transaction to the Purchase Price for such
Transaction on a 360 day per year basis for the actual number of
days during the period commencing on (and including) the Purchase
Date for such Transaction and ending on (but excluding) the date of
determination (reduced by any amount of such Price Differential
previously paid by Seller to Buyer with respect to such
Transaction);
(l) "Pricing Rate", the per annum percentage rate for determination of
the Price Differential;
(m) "Prime Rate", the prime rate of U.S. commercial banks as published
in The Wall Street Journal (or, if more than one such rate is
published, the average of such rates);
(n) "Purchase Date", the date on which Purchased Securities are to be
transferred by Seller to Buyer;
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(o) "Purchase Price", (i) on the Purchase Date, the price at which
Purchased Securities are transferred by Seller to Buyer, and (ii)
thereafter, except where Buyer and Seller agree otherwise, such
price increased by the amount of any cash transferred by Buyer to
Seller pursuant to Paragraph 4(b) hereof and decreased by the amount
of any cash transferred by Seller to Buyer pursuant to Paragraph
4(a) hereof or applied to reduce Seller's obligations under clause
(ii) of Paragraph 5 hereof;
(p) "Purchased Securities", the Securities transferred by Seller to
Buyer in a Transaction hereunder, and any Securities substituted
therefor in accordance with Paragraph 9 hereof. The term "Purchased
Securities" with respect to any Transaction at any time also shall
include Additional Purchased Securities delivered pursuant to
Paragraph 4(a) hereof and shall exclude Securities returned pursuant
to Paragraph 4(b) hereof;
(q) "Repurchase Date", the date on which Seller is to repurchase the
Purchased Securities from Buyer, including any date determined by
application of the provisions of Paragraph 3(c) or 11 hereof;
(r) "Repurchase Price", the price at which Purchased Securities are to
be transferred from Buyer to Seller upon termination of a
Transaction, which will be determined in each case (including
Transactions terminable upon demand) as the sum of the Purchase
Price and the Price Differential as of the date of such
determination;
(s) "Seller's Margin Amount", with respect to any Transaction as of any
date, the amount obtained by application of the Seller's Margin
Percentage to the Repurchase Price for such Transaction as of such
date;
(t) "Seller's Margin Percentage", with respect to any Transaction as
of any date, a percentage (which may be equal to the Buyer's Margin
Percentage) agreed to by Buyer and Seller or, in the absence of any
such agreement, the percentage obtained by dividing the Market Value
of the Purchased Securities on the Purchase Date by the Purchase
Price on the Purchase Date for such Transaction.
3. INITIATION; CONFIRMATION; TERMINATION
(a) An agreement to enter into a Transaction may be made orally or in
writing at the initiation of either Buyer or Seller. On the Purchase
Date for the Transaction, the Purchased Securities shall be
transferred to Buyer or its agent against the transfer of the
Purchase Price to an account of Seller.
(b) Upon agreeing to enter into a Transaction hereunder, Buyer or Seller
(or both), as shall be agreed, shall promptly deliver to the other
party a written confirmation of each Transaction (a "Confirmation").
The Confirmation shall describe the Purchased Securities (including
CUSIP number; if any), identify Buyer and Seller and set forth (i)
the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase
Date, unless the Transaction is to be terminable on demand, (iv) the
Pricing Rate or Repurchase Price applicable to the Transaction, and
(v) any additional terms or conditions of the Transaction not
inconsistent with this Agreement. The Confirmation, together with
this Agreement, shall constitute conclusive evidence of the terms
agreed between Buyer and Seller with respect to the Transaction to
which the Confirmation relates, unless with
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respect to the Confirmation specific objection is made promptly
after receipt thereof. In the event of any conflict between the
terms of such Confirmation and this Agreement, this Agreement shall
prevail.
(c) In the case of Transactions terminable upon demand, such demand
shall be made by Buyer or Seller, no later than such time as is
customary in accordance with market practice, by telephone or
otherwise on or prior to the business day on which such termination
will be effective. On the date specified in such demand, or on the
date fixed for termination in the case of Transactions having a
fixed term, termination of the Transaction will be effected by
transfer to Seller or its agent of the Purchased Securities and any
Income in respect thereof received by Buyer (and not previously
credited or transferred to, or applied to the obligations of, Seller
pursuant to Paragraph 5 hereof) against the transfer of the
Repurchase Price to an account of Buyer.
4. MARGIN MAINTENANCE
(a) If at any time the aggregate Market Value of all Purchased
Securities subject to all Transactions in which a particular party
hereto is acting as Buyer is less than the aggregate Buyer's Margin
Amount for all such Transactions (a "Margin Deficit"), then Buyer
may by notice to Seller require Seller in such Transactions, at
Seller's option, to transfer to Buyer cash or additional Securities
reasonably acceptable to Buyer ("Additional Purchased Securities"),
so that the cash and aggregate Market Value of the Purchased
Securities, including any such Additional Purchased Securities, will
thereupon equal or exceed such aggregate Buyer's Margin Amount
(decreased by the amount of any Margin Deficit as of such date
arising from any Transactions in which such Buyer is acting as
Seller).
(b) If at any time the aggregate Market Value of all Purchased
Securities subject to all Transactions in which a particular party
hereto is acting as Seller exceeds the aggregate Seller's Margin
Amount for all such Transactions at such time (a "Margin Excess"),
then Seller may by notice to Buyer require Buyer in such
Transactions, at Buyer's option, to transfer cash or Purchased
Securities to Seller, so that the aggregate Market Value of the
Purchased Securities, after deduction of any such cash or any
Purchased Securities so transferred, will thereupon not exceed such
aggregate Seller's Margin Amount (increased by the amount of any
Margin Excess as of such date arising from any Transactions in which
such Seller is acting as Buyer).
(c) If any notice is given by Buyer or Seller under subparagraph (a) or
(b) of this Paragraph at or before the Margin Notice Deadline on any
business day, the party receiving such notice shall transfer cash or
Additional Purchased Securities as provided in such subparagraph no
later than the close of business in the relevant market on such day.
If any such notice is given after the Margin Notice Deadline, the
party receiving such notice shall transfer such cash or Securities
no later than the close of business in the relevant market on the
next business day following such notice.
(d) Any cash transferred pursuant to this Paragraph shall be attributed
to such Transactions as shall be agreed upon by Buyer and Seller.
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(e) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer or Seller (or both)
under subparagraphs (a) and (b) of this Paragraph may be exercised
only where a Margin Deficit or Margin Excess, as the case may be,
exceeds a specified dollar amount or a specified percentage of the
Repurchase Prices for such Transactions (which amount or percentage
shall be agreed to by Buyer and Seller prior to entering into any
such Transactions).
(f) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer and Seller under
subparagraphs (a) and (b) of this Paragraph to require the
elimination of a Margin Deficit or a Margin Excess, as the case may
be, may be exercised whenever such a Margin Deficit or Margin Excess
exists with respect to any single Transaction hereunder (calculated
without regard to any other Transaction outstanding under this
Agreement).
5. INCOME PAYMENTS
Seller shall be entitled to receive an amount equal to all Income paid or
distributed on or in respect of the Securities that is not otherwise
received by Seller, to the full extent it would be so entitled if the
Securities had not been sold to Buyer. Buyer shall, as the parties may
agree with respect to any Transaction (or, in the absence of any such
agreement, as Buyer shall reasonably determine in its discretion), on the
date such Income is paid or distributed either (i) transfer to or credit
to the account of Seller such Income with respect to any Purchased
Securities subject to such Transaction or (ii) with respect to Income paid
in cash, apply the Income payment or payments to reduce the amount, if
any, to be transferred to Buyer by Seller upon termination of such
Transaction. Buyer shall not be obligated to take any action pursuant to
the preceding sentence (A) to the extent that such action would result in
the creation of a Margin Deficit, unless prior thereto or simultaneously
therewith Seller transfers to Buyer cash or Additional Purchased
Securities sufficient to eliminate such Margin Deficit, or (B) if an Event
of Default with respect to Seller has occurred and is then continuing at
the time such Income is paid or distributed.
6. SECURITY INTEREST
Although the parties intend that all Transactions hereunder be sales and
purchases and not loans, in the event any such Transactions are deemed to
be loans, Seller shall be deemed to have pledged to Buyer as security for
the performance by Seller of its obligations under each such Transaction,
and shall be deemed to have granted to Buyer a security Interest in, all
of the Purchased Securities with respect to all Transactions hereunder and
all Income thereon and other proceeds thereof.
7. PAYMENT AND TRANSFER
Unless otherwise mutually agreed, all transfers of funds hereunder shall
be in immediately available funds. All Securities transferred by one party
hereto to the other party (i) shall be in suitable form for transfer or
shall be accompanied by duly executed instruments of transfer or
assignment in blank and such other documentation as the party receiving
possession may reasonably request, (ii) shall be transferred on the
book-entry system of a Federal Reserve Bank, or (iii) shall be transferred
by any other method mutually acceptable to Seller and Buyer.
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8. SEGREGATION OF PURCHASED SECURITIES
To the extent required by applicable law, all Purchased Securities in the
possession of Seller shall be segregated from other securities in its
possession and shall be identified as subject to this Agreement.
Segregation may be accomplished by appropriate identification on the books
and records of the holder, including a financial or securities
intermediary or a clearing corporation. All of Seller's interest in the
Purchased Securities shall pass to Buyer on the Purchase Date and, unless
otherwise agreed by Buyer and Seller, nothing in this Agreement shall
preclude Buyer from engaging in repurchase transactions with the Purchased
Securities or otherwise selling, transferring, pledging or hypothecating
the Purchased Securities, but no such transaction shall relieve Buyer of
its obligations to transfer Purchased Securities to Seller pursuant to
Paragraph 3, 4 or 11 hereof, or of Buyer's obligation to credit or pay
Income to, or apply Income to the obligations of, Seller pursuant to
Paragraph 5 hereof.
REQUIRED DISCLOSURE FOR TRANSACTIONS IN WHICH THE SELLER RETAINS CUSTODY
OF THE PURCHASED SECURITIES
Seller is not permitted to substitute other securities for those subject
to this Agreement and therefore must keep Buyer's securities segregated at
all times, unless in this Agreement Buyer grants Seller the right to
substitute other securities. If Buyer grants the right to substitute, this
means that Buyer's securities will likely be commingled with Seller's own
securities during the trading day. Buyer is advised that, during any
trading day that Buyer's securities are commingled with Seller's
securities, they [will]* [may]** be subject to liens granted by Seller to
[its clearing bank]* [third parties]** and may be used by Seller for
deliveries on other securities transactions. Whenever the securities are
commingled, Seller's ability to resegregate substitute securities for
Buyer will be subject to Seller's ability to satisfy [the clearing]*
[any]** lien or to obtain substitute securities.
* Language to be used under 17 C.F.R. B403.4(e) if Seller is a government
securities broker or dealer other than a financial institution.
** Language to be used under 17 C.F.R. B403.5(d) if Seller is a financial
institution.
9. SUBSTITUTION
(a) Seller may, subject to agreement with and acceptance by Buyer,
substitute other Securities for any Purchased Securities. Such
substitution shall be made by transfer to Buyer of such other
Securities and transfer to Seller of such Purchased Securities.
After substitution, the substituted Securities shall be deemed to be
Purchased Securities.
(b) In Transactions in which Seller retains custody of Purchased
Securities, the parties expressly agree that Buyer shall be deemed,
for purposes of subparagraph (a) of this Paragraph, to have agreed
to and accepted in this Agreement substitution by Seller of other
Securities for Purchased Securities; provided, however, that such
other Securities shall have a Market Value at least equal to the
Market Value of the Purchased Securities for which they are
substituted.
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10. REPRESENTATIONS
Each of Buyer and Seller represents and warrants to the other that (i) it
is duly authorized to execute and deliver this Agreement, to enter into
Transactions contemplated hereunder and to perform its obligations
hereunder and has taken all necessary action to authorize such execution,
delivery and performance, (ii) it will engage in such Transactions as
principal (or, if agreed in writing, in the form of an annex hereto or
otherwise, in advance of any Transaction by the other party hereto, as
agent for a disclosed principal), (iii) the person signing this Agreement
on its behalf is duly authorized to do so on its behalf (or on behalf of
any such disclosed principal), (iv) it has obtained all authorizations of
any governmental body required in connection with this Agreement and the
Transactions hereunder and such authorizations are in full force and
effect and (v) the execution, delivery and performance of this Agreement
and the Transactions hereunder will not violate any law, ordinance,
charter, bylaw or rule applicable to it or any agreement by which it is
bound or by which any of its assets are affected. On the Purchase Date for
any Transaction Buyer and Seller shall each be deemed to repeat all the
foregoing representations made by it.
11. EVENTS OF DEFAULT
In the event that (i) Seller fails to transfer or Buyer fails to purchase
Purchased Securities upon the applicable Purchase Date, (ii) Seller fails
to repurchase or Buyer fails to transfer Purchased Securities upon the
applicable Repurchase Date, (iii) Seller or Buyer fails to comply with
Paragraph 4 hereof, (iv) Buyer fails, after one business day's notice, to
comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with
respect to Seller or Buyer, (vi) any representation made by Seller or
Buyer shall have been incorrect or untrue in any material respect when
made or repeated or deemed to have been made or repeated, or (vii) Seller
or Buyer shall admit to the other its inability to, or its intention not
to, perform any of its obligations hereunder (each an "Event of Default"):
(a) The nondefaulting party may, at its option (which option shall be
deemed to have been exercised immediately upon the occurrence of an
Act of Insolvency), declare an Event of Default to have occurred
hereunder and, upon the exercise or deemed exercise of such option,
the Repurchase Date for each Transaction hereunder shall, if it has
not already occurred, be deemed immediately to occur (except that,
in the event that the Purchase Date for any Transaction has not yet
occurred as of the date of such exercise or deemed exercise, such
Transaction shall be deemed immediately canceled). The nondefaulting
party shall (except upon the occurrence of an Act of Insolvency)
give notice to the defaulting party of the exercise of such option
as promptly as practicable.
(b) In all Transactions in which the defaulting party is acting as
Seller, if the nondefaulting party exercises or is deemed to have
exercised the option referred to in subparagraph (a) of this
Paragraph, (i) the defaulting party's obligations in such
Transactions to repurchase all Purchased Securities, at the
Repurchase Price therefor on the Repurchase Date determined in
accordance with subparagraph (a) of this Paragraph, shall thereupon
become Immediately due and payable, (ii) all Income paid after such
exercise or deemed exercise shall be retained by the nondefaulting
party and applied to the aggregate unpaid Repurchase Prices and any
other amounts owing by the defaulting party hereunder, and (iii) the
defaulting party shall immediately deliver to the nondefaulting
party any Purchased Securities subject to such Transactions then in
the defaulting party's possession or control.
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(c) In all Transactions in which the defaulting party is acting as
Buyer, upon tender by the nondefaulting party of payment of the
aggregate Repurchase Prices for all such Transactions, all right,
title and interest in and entitlement to all Purchased Securities
subject to such Transactions shall be deemed transferred to the
nondefaulting party, and the defaulting party shall deliver all such
Purchased Securities to the nondefaulting party.
(d) If the nondefaulting party exercises or is deemed to have exercised
the option referred to in subparagraph (a) of this Paragraph, the
nondefaulting party, without prior notice to the defaulting party,
may:
(i) as to Transactions in which the defaulting party is acting as
Seller, (A) immediately sell, in a recognized market (or
otherwise in a commercially reasonable manner) at such price
or prices as the nondefaulting party may reasonably deem
satisfactory, any or all Purchased Securities subject to such
Transactions and apply the proceeds thereof to the aggregate
unpaid Repurchase Prices and any other amounts owing by the
defaulting party hereunder or (B) in its sole discretion
elect, in lieu of selling all or a portion of such Purchased
Securities, to give the defaulting party credit for such
Purchased Securities in an amount equal to the price therefor
on such date, obtained from a generally recognized source or
the most recent closing bid quotation from such a source,
against the aggregate unpaid Repurchase Prices and any other
amounts owing by the defaulting party hereunder; and
(ii) as to Transactions in which the defaulting party is acting as
Buyer, (A) immediately purchase, in a recognized market (or
otherwise in a commercially reasonable manner) at such price
or prices as the nondefaulting party may reasonably deem
satisfactory, securities ("Replacement Securities") of the
same class and amount as any Purchased Securities that are not
delivered by the defaulting party to the nondefaulting party
as required hereunder or (B) in its sole discretion elect; in
lieu of purchasing Replacement Securities, to be deemed to
have purchased Replacement Securities at the price therefor
on such date, obtained from a generally recognized source or
the most recent closing offer quotation from such a source.
Unless otherwise provided in Annex I, the parties acknowledge and
agree that (1) the Securities subject to any Transaction hereunder
are instruments traded in a recognized market, (2) in the absence of
a generally recognized source for prices or bid or offer quotations
for any Security, the nondefaulting party may establish the source
therefor in its sole discretion and (3) all prices, bids and offers
shall be determined together with accrued Income (except to the
extent contrary to market practice with respect to the relevant
Securities).
(e) As to Transactions in which the defaulting party is acting as Buyer,
the defaulting party shall be liable to the nondefaulting party for
any excess of the price paid (or deemed paid) by the nondefaulting
party for Replacement Securities over the Repurchase Price for the
Purchased Securities replaced thereby and for any amounts payable by
the defaulting party under Paragraph 5 hereof or otherwise
hereunder.
(f) For purposes of this Paragraph 11, the Repurchase Price for each
Transaction hereunder in respect of which the defaulting party is
acting as Buyer shall not increase above the
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amount of such Repurchase Price for such Transaction determined as
of the date of the exercise or deemed exercise by the nondefaulting
party of the option referred to in subparagraph (a) of this
Paragraph.
(g) The defaulting party shall be liable to the nondefaulting party for
(i) the amount of all reasonable legal or other expenses incurred by
the nondefaulting party in connection with or as a result of an
Event of Default, (ii) damages in an amount equal to the cost
(including all fees, expenses and commissions) of entering into
replacement transactions and entering into or terminating hedge
transactions in connection with or as a result of an Event of
Default, and (iii) any other loss, damage, cost or expense directly
arising or resulting from the occurrence of an Event of Default in
respect of a Transaction.
(h) To the extent permitted by applicable law, the defaulting party
shall be liable to the nondefaulting party for interest on any
amounts owing by the defaulting party hereunder, from the date the
defaulting party becomes liable for such amounts hereunder until
such amounts are (i) paid in full by the defaulting party or (ii)
satisfied in full by the exercise of the nondefaulting party's
rights hereunder. Interest on any sum payable by the defaulting
party to the nondefaulting party under this Paragraph 11(h) shall
be at a rate equal to the greater of the Pricing Rate for the
relevant Transaction or the Prime Rate.
(i) The nondefaulting party shall have, in addition to its rights
hereunder, any rights otherwise available to it under any other
agreement or applicable law.
12. SINGLE AGREEMENT
Buyer and Seller acknowledge that, and have entered hereinto and will
enter into each Transaction hereunder in consideration of and in reliance
upon the fact that, all Transactions hereunder constitute a single
business and contractual relationship and have been made in consideration
of each other. Accordingly, each of Buyer and Seller agrees (i) to perform
all of its obligations in respect of each Transaction hereunder, and that
a default in the performance of any such obligations shall constitute a
default by it in respect of all Transactions hereunder, (ii) that each of
them shall be entitled to set off claims and apply property held by them
in respect of any Transaction against obligations owing to them in respect
of any other Transactions hereunder and (iii) that payments, deliveries
and other transfers made by either of them in respect of any Transaction
shall be deemed to have been made in consideration of payments, deliveries
and other transfers in respect of any other Transactions hereunder, and
the obligations to make any such payments, deliveries and other transfers
may be applied against each other and netted.
13. NOTICES AND OTHER COMMUNICATIONS
Any and all notices, statements, demands or other communications hereunder
may be given by a party to the other by mail, facsimile, telegraph,
messenger or otherwise to the address specified in Annex II hereto, or so
sent to such party at any other place specified in a notice of change of
address hereafter received by the other. All notices, demands and requests
hereunder may be made orally, to be confirmed promptly in writing, or by
other communication as specified in the preceding sentence.
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14. ENTIRE AGREEMENT; SEVERABILITY
This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions. Each
provision and agreement herein shall be treated as separate and
independent from any other provision or agreement herein and shall be
enforceable notwithstanding the unenforceability of any such other
provision or agreement.
15. NON-ASSIGNABILITY; TERMINATION
(a) The rights and obligations of the parties under this Agreement and
under any Transaction shall not be assigned by either party without
the prior written consent of the other party, and any such
assignment without the prior written consent of the other party
shall be null and void. Subject to the foregoing, this Agreement and
any Transactions shall be binding upon and shall inure to the
benefit of the parties and their respective successors and assigns.
This Agreement may be terminated by either party upon giving written
notice to the other, except that this Agreement shall,
notwithstanding such notice, remain applicable to any Transactions
then outstanding.
(b) Subparagraph (a) of this Paragraph 15 shall not preclude a party
from assigning, charging or otherwise dealing with all or any part
of its interest in any sum payable to it under Paragraph 11 hereof.
16. GOVERNING LAW
This Agreement shall be governed by the laws of the State of New York
without giving effect to the conflict of law principles thereof.
17. NO WAIVERS, ETC.
No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any
remedy hereunder by any party shall constitute a waiver of its right to
exercise any other remedy hereunder. No modification or waiver of any
provision of this Agreement and no consent by any party to a departure
herefrom shall be effective unless and until such shall be in writing and
duly executed by both of the parties hereto. Without limitation on any of
the foregoing, the failure to give a notice pursuant to Paragraph 4(a) or
4(b) hereof will not constitute a waiver of any right to do so at a later
date.
18. USE OF EMPLOYEE PLAN ASSETS
(a) If assets of an employee benefit plan subject to any provision of
the Employee Retirement Income Security Act of 1974 ("ERISA") are
intended to be used by either party hereto (the "Plan Party") in a
Transaction, the Plan Party shall so notify the other party prior to
the Transaction. The Plan Party shall represent in writing to the
other party that the Transaction does not constitute a prohibited
transaction under ERISA or is otherwise exempt therefrom, and the
other party may proceed In reliance thereon but shall not be
required so to proceed.
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(b) Subject to the last sentence of subparagraph (a) of this Paragraph,
any such Transaction shall proceed only if Seller furnishes or has
furnished to Buyer its most recent available audited statement of
its financial condition and its most recent subsequent unaudited
statement of its financial condition.
(c) By entering into a Transaction pursuant to this Paragraph, Seller
shall be deemed (i) to represent to Buyer that since the date of
Seller's latest such financial statements, there has been no
material adverse change in Seller's financial condition which Seller
has not disclosed to Buyer, and (ii) to agree to provide Buyer with
future audited and unaudited statements of its financial condition
as they are issued, so long as it is a Seller in any outstanding
Transaction involving a Plan Party.
19. INTENT
(a) The parties recognize that each Transaction is a "repurchase
agreement" as that term is defined in Section 101 of Title 11 of
the United States Code, as amended (except insofar as the type of
Securities subject to such Transaction or the term of such
Transaction would render such definition inapplicable), and a
"securities contract" as that term is defined in Section 741 of
Title 11 of the United States Code, as amended (except insofar as
the type of assets subject to such Transaction would render such
definition inapplicable).
(b) It is understood that either party's right to liquidate Securities
delivered to it in connection with Transactions hereunder or to
exercise any other remedies pursuant to Paragraph 11 hereof is a
contractual right to liquidate such Transaction as described in
Sections 555 and 559 of Title 11 of the United States Code, as
amended.
(c) The parties agree and acknowledge that if a party hereto is an
"insured depository institution," as such term is defined in the
Federal Deposit Insurance Act, as amended ("FDIA"), then each
Transaction hereunder is a "qualified financial contract" as that
term is defined in FDIA and any rules, orders or policy statements
thereunder (except insofar as the type of assets subject to such
Transaction would render such definition inapplicable).
(d) It is understood that this Agreement constitutes a "netting
contract" as defined in and subject to Title IV of the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") and
each payment entitlement and payment obligation under any
Transaction hereunder shall constitute a covered contractual payment
entitlement" or "covered contractual payment obligation",
respectively, as defined in and subject to FDICIA (except insofar as
one or both of the parties is not a "financial institution" as that
term is defined in FDICIA).
20. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that:
(a) in the case of Transactions in which one of the parties is a broker
or dealer registered with the Securities and Exchange Commission
("SEC") under Section 15 of the Securities Exchange Act of 1934
("1934 Act"), the Securities Investor Protection Corporation has
SEPTEMBER 1996 - MASTER REPURCHASE AGREEMENT - 11
<PAGE> 12
taken the position that the provisions of the Securities Investor
Protection Act of 1970 ("SIPA") do not protect the other party with
respect to any Transaction hereunder;
(b) in the case of Transactions in which one of the parties is a
government securities broker or a government securities dealer
registered with the SEC under Section 15C of the 1934 Act, SIPA will
not provide protection to the other party with respect to any
Transaction hereunder; and
(c) in the case of Transactions in which one of the parties is a
financial institution, funds held by the financial institution
pursuant to a Transaction hereunder are not a deposit and therefore
are not insured by the Federal Deposit Insurance Corporation or the
National Credit Union Share Insurance Fund, as applicable.
Merrill Lynch International Onyx Acceptance Funding Corporation
[Name of Party]
By: By:
-------------------------- --------------------------------------
Title: Title:
----------------------- -----------------------------------
Date: Date:
------------------------ ------------------------------------
Merrill Lynch, Pierce, Fenner &
Smith Incorporated acting as Agent
as described in Annex III
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
12 - SEPTEMBER 1996 - MASTER REPURCHASE AGREEMENT
<PAGE> 13
ANNEX I
SUPPLEMENTAL TERMS AND CONDITIONS
This ANNEX I forms a part of the Master Repurchase Agreement dated as of May 16,
2000 (the "Agreement") between Merrill Lynch International, as Buyer (the
"Buyer"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), as
Agent, and Onyx Acceptance Funding Corporation, as Seller (the "Seller"). To the
extent that the terms of this Annex I conflict with the terms of the Agreement,
the terms of this Annex I shall control.
In connection with each Purchased Security, the Buyer and the Seller shall enter
into a Letter Agreement setting forth the assumptions used in calculating Market
Value for such Purchased Security and other related terms for such Transaction.
To the extent that the terms of the Letter Agreement conflict with the terms of
the Agreement or Annex I, the Letter Agreement shall control. The terms set
forth in each Letter Agreement are in addition to the terms set forth in the
Agreement and this Annex.
1. ADDITIONAL DEFINITIONS.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement. Capitalized terms used in the
Agreement whose definitions are modified in this Annex I shall, for all
purposes of this Agreement, be deemed to have such modified definitions.
"Market Value" shall mean the fair market value as determined by Buyer in
its reasonable business judgment from time to time and at such times as it
may elect in its sole discretion in accordance with the assumptions set
forth in the related Letter Agreement.
2. ADDITIONAL TERMS
(i) Buyer's Margin Percentage shall be 223% (which is the percentage
obtained by dividing 1 by an advance rate of 45%).
(ii) All payments and distributions, whether in cash or in kind, made on
or with respect to the Purchased Securities will, unless otherwise
agreed by Buyer, be paid, delivered or transferred directly to Buyer
(or such Affiliate or designee). During the Nine Month Period (as
defined in the related Letter Agreement) applicable to the related
Purchased Security, provided that no Event of Default or Excess
Spread Trigger Event (as defined in the related Letter Agreement)
has occurred, Buyer may, in its sole discretion, use such Income to
(a) satisfy a Margin Deficit, under Section 4 of the Agreement, (b)
reduce the Repurchase Price or (c) satisfy any other amounts due and
owing to Buyer under the Agreement. Any amounts in excess of the
amounts in clauses (a), (b) and (c) shall be transferred by Buyer to
Seller promptly. Following the occurrence and continuation of the
Excess Spread Trigger Event or Event of Default or after the Nine
Month Period applicable to the related Purchased Security, Buyer
shall retain all income. If Seller shall receive any payment or
distribution on or with respect to the Purchased Securities, it
shall hold such payment or distribution in trust for the benefit of
Buyer and shall forward such payment, at the direction of Buyer, to
be applied by Buyer to the then outstanding obligations.
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<PAGE> 14
(iii) The aggregate outstanding Repurchase Price for all Purchased
Securities under this Agreement shall not exceed $20,000,000.
(iv) The Purchased Securities shall be registered in the name of Merrill
Lynch International.
(v) Clause (vi) of Paragraph 11 is amended by adding thereto (a) after
"any representation" the words "or covenant" and (b) after
"incorrect or untrue" the words "or breached."
(vi) Any event of default on the part of Seller under any other agreement
between Seller and Buyer or any affiliate of Buyer, whether now
existing or hereafter entered into, shall constitute an Event of
Default hereunder.
(vii) The entering into any Transaction hereunder is discretionary on the
part of both parties and each Security must be acceptable to Buyer
for purchase hereunder, which determination shall be made by Buyer
in its sole discretion. Buyer may, in its sole discretion, reject
any Security from inclusion in a Transaction hereunder for any
reason.
3. MODIFICATION OF SECTION 9 OF THE AGREEMENT.
Section 9 of the Agreement is hereby amended by adding the following
paragraphs:
(c) In the case of any Transaction for which the Repurchase Date is other
than the business day immediately following the Purchase Date and with
respect to which Seller does not have any existing right to substitute
substantially the same Securities for the Purchased Securities, Seller
shall have the right, subject to the proviso in this sentence, upon notice
to Buyer, which notice shall be given at or prior to 10 am (New York time)
on such business day, to substitute substantially the same Securities for
any Purchased Securities; provided, however, that Buyer may elect, by the
close of business on the business day notice is received, or by the close
of the next business day if notice is given after 10 am (New York time) on
such day, not to accept such substitution. In the event such substitution
is accepted by Buyer, such substitution shall be made by Seller's transfer
to Buyer of such other Securities and Buyer's transfer to Seller of such
Purchased Securities, and after substitution, the substituted Securities
shall be deemed to be Purchased Securities. In the event Buyer elects not
to accept such substitution, Buyer shall offer Seller the right to
terminate the Transaction.
(d) In the event Seller exercises its right to substitute or terminate
under sub-paragraph (c), Seller shall be obligated to pay to Buyer, by the
close of the business day of such substitution or termination, as the case
may be, an amount equal to (A) Buyer's actual cost (including all fees,
expenses and commissions) of (i) entering into replacement transactions;
(ii) entering into or terminating hedge transactions; and/or (iii)
terminating transactions or substituting securities in like transactions
with third parties in connection with or as a result of such substitution
or termination, and (B) to the extent Buyer determines not to enter into
replacement transactions, the loss incurred by Buyer directly arising or
resulting from such substitution or termination. The foregoing amounts
shall be solely determined and calculated by Buyer in good faith.
4. TERMINATION
Notwithstanding any provisions of Paragraph 15 of the Master Repurchase
Agreement to the contrary, this Agreement and all Transactions outstanding
hereunder shall terminate automatically without any requirement for notice
on the date occurring three hundred sixty four
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<PAGE> 15
days after the date as of which this Agreement is entered into; provided,
however, that this Agreement and any Transaction outstanding hereunder
may be extended by mutual agreement of Buyer and the Seller; and provided
further, however, that no such party shall be obligated to agree to such
an extension.
5. OTHER APPLICABLE ANNEXES.
In addition to this Annex I and Annex II, the following Annexes (if
applicable) and any Schedules thereto shall form a part of the Agreement
and shall be applicable thereunder:
Annex III
Annex IV
Annex V
6. COUNTERPARTS.
The Agreement may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
Merrill Lynch International Onyx Acceptance Funding Corporation
By: By:
--------------------------------- --------------------------------------
Title: Title:
----------------------------- -----------------------------------
Date: Date:
------------------------------ ------------------------------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Acting as Agent as described in Annex III
By:
--------------------------------
Title:
-----------------------------
Date:
------------------------------
15
<PAGE> 16
ANNEX II
NAMES AND ADDRESSES FOR COMMUNICATIONS BETWEEN PARTIES
[MERRILL LYNCH LOGO]
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Stephanie S. Wolf, Esq.
World Financial Center
North Tower, 12th Floor
New York, NY 10281-1312
(212) 449-3562
RETURN AGREEMENTS TO:
Barbara H. Ross
Legal Department
World Financial Center
North Tower, 12th Floor
New York, NY 10281-1312
Tel: (212) 449-0105
Fax: (212) 449-6993
Name of Party: Onyx Acceptance Funding Corporation
Contact: Don P. Duffy, CFO
Street Address: 27051 Towne Centre Drive, Ste. 200
City, State, Zip Code: Foothill Ranch, CA 92610
Telephone No.: 949-465-3505
Fax No.: 949-465-3992
16
<PAGE> 17
ANNEX III
This ANNEX III forms a part of the Master Repurchase Agreement dated as of 5/16,
2000 (the "Agreement") between Merrill Lynch International ("MLI") and Onyx
Acceptance Funding Corporation ("Counterparty"). Capitalized terms used but not
defined in this Annex III shall have the meaning ascribed to them in the
Agreement. In the event of any conflict between the provisions of this Annex and
the Agreement and/or any other Annex, the terms of this Annex shall prevail.
1. As a broker-dealer registered with the U.S. Securities and Exchange
Commission ("SEC"), Merrill Lynch, Pierce, Fenner & Smith Incorporated
("MLPF&S"), as agent of MLI and Counterparty, will be responsible for (i)
effecting Transactions hereunder, (ii) issuing all required confirmations
and statements to MLI and Counterparty, (iii) maintaining books and
records relating to Transactions as required by SEC regulations, and (iv)
receiving, delivering and safeguarding Counterparty's funds and any
securities in connection with Transactions hereunder, in compliance with
SEC regulations.
2. MLPF&S is acting in connection with Transactions hereunder solely in its
capacity as agent for MLI and Counterparty pursuant to instructions from
MLI and Counterparty. MLPF&S shall have no responsibility or personal
liability to MLI or Counterparty arising from any failure by MLI or
Counterparty to make payment, deliver securities, or perform any other
obligations hereunder, including without limitation obligations to
transfer margin or collateral, except for MLPF&S's gross negligence or
willful misconduct in performing its duties as agent hereunder. Each of
MLI and Counterparty agrees to proceed solely against the other to collect
or recover any securities or money owing to it or to enforce any of its
rights in connection with or as a result of Transactions hereunder.
3. Notwithstanding any provisions of the Agreement, the parties hereby agree
that any and all notices, demands or communications of any kind relating
to Transactions hereunder between MLI and Counterparty shall be
transmitted exclusively through MLPF&S in the manner specified in
paragraph 13 of the Agreement to the address specified in Annex II to the
Agreement.
4. The parties acknowledge and agree that the Agreement shall not govern any
repurchase transaction between (i) MLPF&S, acting in its individual
capacity, and Counterparty or (ii) Counterparty and any entity other than
MLI, regardless of whether MLPF&S is acting as agent for such other
entity.
17
