INDEMNIFICATION AGREEMENT among FINANCIAL SECURITY ASSURANCE INC., LONG BEACH ACCEPTANCE RECEIVABLES CORP., GREENWICH CAPITAL MARKETS, INC. and CITIGROUP GLOBAL MARKETS INC. Dated as of March 13, 2007 Long Beach Acceptance Auto Receivables Trust...
EXECUTION COPY
among
FINANCIAL
SECURITY ASSURANCE INC.,
LONG
BEACH ACCEPTANCE RECEIVABLES CORP.,
GREENWICH
CAPITAL MARKETS, INC.
and
CITIGROUP
GLOBAL MARKETS INC.
Dated
as
of March 13, 2007
Long
Beach Acceptance Auto Receivables Trust 2007-A
$100,000,000
5.335% Asset Backed Notes, Class A-1,
$145,000,000
5.150% Asset Backed Notes, Class A-2,
$98,000,000
4.972% Asset Backed Notes, Class A-3,
$143,000,000
5.025% Asset Backed Notes, Class A-4
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Section
1.
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Definitions
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1
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Section
2.
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Representations,
Warranties and Agreements of Financial Security
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3
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Section
3.
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Representations,
Warranties and Agreements of the Underwriters
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6
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Section
4.
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Indemnification
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7
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Section
5.
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Indemnification
Procedures
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8
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Section
6.
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Contribution
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9
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Section
7.
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Miscellaneous
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10
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| EXHIBIT A - | Opinion of Associate General Counsel |
INDEMNIFICATION
AGREEMENT, dated as of March 13, 2007, among FINANCIAL SECURITY ASSURANCE INC.
(“Financial
Security”),
LONG
BEACH ACCEPTANCE RECEIVABLES CORP. (the “Company”),
GREENWICH CAPITAL MARKETS, INC. (“RBS
GC”)
and
CITIGROUP GLOBAL MARKETS INC., (“Citigroup”
and,
together with RBS GC, the “Underwriters”):
Section
1. Definitions.
For
purposes of this Agreement, the following terms shall have the meanings provided
below:
“Agreement”
means
this Indemnification Agreement, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms
hereof.
“Commission”
means
the Securities and Exchange Commission.
“Company
Party”
means
any of the Company, its parent, subsidiaries and affiliates and any shareholder,
director, officer, employee, agent or “controlling person” (as such term is used
in the Securities Act) of any of the foregoing.
“Federal
Securities Laws”
means
the Securities Act, the Securities Exchange Act of 1934, the Trust Indenture
Act
of 1939, the Investment Company Act of 1940, the Investment Advisers Act of
1940
and the Public Utility Holding Company Act of 1935, each as amended from time
to
time, and the rules and regulations in effect from time to time under such
Acts.
“Financial
Security Agreements”
means
this Agreement, the Spread Account Agreement and the Insurance
Agreement.
“Financial
Security Information”
has
the
meaning provided in Section 2(g) hereof.
“Financial
Security Party”
means
any of Financial Security, its parent, subsidiaries and affiliates, and any
shareholder, director, officer, employee, agent or “controlling person” (as such
term is used in the Securities Act) of any of the foregoing.
“Free
Writing Prospectus”
means
the Free Writing Prospectus dated March 12, 2007 relating to the
securities.
“Indemnified
Party”
means
any party entitled to any indemnification pursuant to Section 4
hereof.
“Indemnifying
Party”
means
any party required to provide indemnification pursuant to Section 4
hereof.
“Insurance
Agreement”
means
the Insurance and Indemnity Agreement, dated as of March 1, 2007, among
Financial Security, the Company and LBAC, and Long Beach Acceptance Auto
Receivables Trust 2007-A as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
“LBAC”
means
Long Beach Acceptance Corp., a Delaware Corporation.
“Losses”
means
(a) any actual out-of-pocket damages incurred by the party entitled to
indemnification or contribution hereunder, (b) any actual out-of-pocket costs
or
expenses incurred by such party, including reasonable fees or expenses of its
counsel and other expenses incurred in connection with investigating or
defending any claim, action or other proceeding which entitle such party to
be
indemnified hereunder (subject to the limitations set forth in Section 5
hereof), to the extent not paid, satisfied or reimbursed from funds provided
by
any other Person other than an affiliate of such party (provided that the
foregoing shall not create or imply any obligation to pursue recourse against
any such other Person), plus (c) interest on the amount paid by the party
entitled to indemnification or contribution from the date of such payment to
the
date of payment by the party who is obligated to indemnify or contribute
hereunder at the statutory rate applicable to judgments for breach of
contract.
“Offering
Document”
means
the Prospectus, Prospectus Supplement, the Free Writing Prospectus and any
other
material or documents delivered by the Underwriters or any Underwriter Party
to
any Person in connection with the offer or sale of the Securities; provided,
however, the Summary Free Writing Prospectus dated March 12, 2007, in respect
of
the Securities shall not be included in this definition of “Offering Document”.
“Person”
means
any individual, partnership, joint venture, corporation, trust, unincorporated
organization, limited liability company, limited liability partnership or other
organization or entity (whether governmental or private).
“Policy”
means
the financial guaranty insurance policy delivered by Financial Security with
respect to the Securities.
“Prospectus”
means,
collectively, the Prospectus relating to the Securities dated March 31, 2006,
and the Prospectus Supplement.
“Prospectus
Supplement”
means
the Prospectus Supplement dated March 19, 2007 relating to the
Securities.
“Rating
Agencies”
has
the
meaning provided in the last paragraph of Section 2 hereof.
“Representative”
means
RBS GC as representative of the Underwriters.
2
“Securities”
means
the Long Beach Acceptance Auto Receivables Trust $100,000,000 5.335% Asset
Backed Notes, Class A-1, $145,000,000 5.150% Asset Backed Notes, Class A-2,
$98,000,000 4.972% Asset Backed Notes, Class A-3, $143,000,000 5.025% Asset
Backed Notes, Class A-4, each as described in the Prospectus Supplement and
covered by the Policy.
“Securities
Act”
means
the Securities Act of 1933, as amended from time to time, and any rule or
regulation in effect from time to time under such Act.
“Spread
Account Agreement”
means
the Master Spread Account Agreement, dated as of March 1, 2007 among the
Company, the Collateral Agent specified therein, Financial Security and the
Trustee specified therein, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
“Underwriters”
means
RBS GC and Citigroup.
“Underwriter
Information”
has the
meaning provided in Section 3(c) hereof.
“Underwriter
Party”
means
any of the Underwriters, its respective parent, subsidiaries and affiliates
and
any shareholder, director, officer, employee, or agent of the “controlling
person” (as such item is used in the Securities Act) of any of the
foregoing.
“Underwriting
Agreement”
means
the Underwriting Agreement dated as of March 13, 2007 among the Company, LBAC
and the Underwriters with respect to the offer and sale of the Securities,
as
the same may be amended, supplemented or otherwise modified from time to time
in
accordance with the terms thereof.
Section
2. Representations,
Warranties and Agreements of Financial Security.
Financial Security represents, warrants and agrees with the parties hereto
as
follows:
(a) Organization,
Etc.
Financial Security is a stock insurance company duly organized, validly existing
and authorized to transact financial guaranty insurance business under the
laws
of the State of New York.
(b) Authorization,
Etc.
The
Policy and the Financial Security Agreements have been duly authorized, executed
and delivered by Financial Security.
(c) Validity,
Etc.
The
Policy and the Financial Security Agreements constitute valid and binding
obligations of Financial Security, enforceable against Financial Security in
accordance with their terms, subject, as to the enforcement of remedies, to
bankruptcy, insolvency, reorganization, rehabilitation, moratorium and other
similar laws affecting the enforceability of creditors’ rights generally
applicable in the event of the bankruptcy or insolvency of Financial Security
and to the application of general principles of equity and subject, in the
case
of this Agreement, to principles of public policy limiting the right to enforce
the indemnification provisions contained herein.
3
(d) Exemption
From Registration.
The
Policy is exempt from registration under the Securities Act.
(e) No
Conflicts.
Neither
the execution or delivery by Financial Security of the Policy or the Financial
Security Agreements, nor the performance by Financial Security of its
obligations thereunder, will conflict with any provision of the certificate
of
incorporation or the bylaws of Financial Security nor result in a breach of,
or
constitute a default under, any material agreement or other instrument to which
Financial Security is a party or by which any of its property is bound nor
violate any judgment, order or decree applicable to Financial Security of any
governmental or regulatory body, administrative agency, court or arbitrator
having jurisdiction over Financial Security (except that, in the published
opinion of the Securities and Exchange Commission, the indemnification
provisions of this Agreement, insofar as they relate to indemnification for
liabilities arising under the Securities Act, are against public policy as
expressed in the Securities Act and are therefore unenforceable).
(f) Financial
Information.
The
consolidated balance sheets of Financial Security as of December 31, 2005 and
December 31, 2004 and the related consolidated statements of income, changes
in
shareholder’s equity and cash flows for the fiscal years then ended, and the
interim consolidated balance sheets for Financial Security as of September
30,
2006 and September 30, 2005, and the related statements of income, changes
in
shareholders equity and cash flows for the interim period then ended, furnished
by Financial Security to the Underwriters fairly present in all material
respects the financial condition of Financial Security as of such dates and
for
such periods in accordance with generally accepted accounting principles
consistently applied (subject as to interim statements to normal year-end
adjustments) and since the date of the most current interim consolidated balance
sheet referred to above there has been no change in the financial condition
of
Financial Security which would materially and adversely affect its ability
to
perform its obligations under the Policy.
(g) Financial
Security Information.
The
information in the Prospectus Supplement set forth under the caption “THE
INSURER” (as revised from time to time in accordance with the provisions hereof,
the “Financial Security Information”) is limited and does not purport to provide
the scope of disclosure required to be included in a prospectus with respect
to
a registrant in connection with the offer and sale of securities of such
registrant registered under the Securities Act. Within such limited scope of
disclosure, however, as of the date of the Prospectus Supplement and as of
the
date hereof, the Financial Security Information does not contain any untrue
statement of a material fact, or omit to state a material fact necessary to
make
the statements contained therein, in the light of the circumstances under which
they were made, not misleading.
4
(h) Additional
Information.
Financial Security will furnish to the Underwriters or the Company, upon request
of the Underwriters or the Company, as the case may be, copies of Financial
Security’s most recent financial statements (annual or interim, as the case may
be) which fairly present in all material respects the financial condition of
Financial Security as of the dates and for the periods indicated, in accordance
with generally accepted accounting principles consistently applied except as
noted therein (subject, as to interim statements, to normal year-end
adjustments). In addition, if the delivery of a Prospectus relating to the
Securities is required at any time prior to the expiration of nine months after
the time of issuance of the Prospectus in connection with the offering or sale
of the Securities, the Company or the Underwriters will notify Financial
Security of such requirement to deliver a Prospectus and Financial Security
will
promptly provide the Underwriters and the Company with any revisions to the
Financial Security Information that are in the judgment of Financial Security
reasonably necessary to prepare a supplement to the Prospectus.
(i) Opinion
of Counsel.
Financial Security will furnish to the Underwriters and the Company, on the
closing date for the sale of the Securities, an opinion of its Assistant General
Counsel, to the effect set forth in Exhibit A attached hereto, dated such
closing date and addressed to the Company and the Underwriters.
(j) Consents
and Reports of Independent Accountants.
Financial Security will furnish to the Underwriters and the Company, upon
request, as comfort from its independent accountants in respect of its financial
condition (i) at the expense of the Person specified in the Insurance Agreement,
a copy of the Prospectus, including either a manually signed consent or a
manually signed report of Financial Security’s independent accountants and (ii)
the quarterly review letter by Financial Security’s independent accountants in
respect of the most recent interim financial statements of Financial
Security.
Nothing
in this Agreement shall be construed as a representation or warranty by
Financial Security concerning the rating of its insurance financial strength
by
Fitch Ratings, ▇▇▇▇▇’▇ Investors Service, Inc., Standard & Poor’s and Rating
and Investment Information, Inc. or any other rating assigned by a rating agency
(collectively, the “Rating
Agencies”).
The
Rating Agencies, in assigning such ratings, take into account facts and
assumptions not described in the Prospectus and the facts and assumptions which
are considered by the Rating Agencies, and the ratings issued thereby, are
subject to change over time.
5
Section
3. Representations,
Warranties and Agreements of the Underwriters.
Each of
the Underwriters represents, warrants and agrees with the parties hereto as
follows:
(a) Compliance
With Laws.
Such
Underwriter will comply in all material respects with all legal requirements
in
connection with offers and sales of the Securities and make such offers and
sales in the manner provided in any Offering Document.
(b) Offering
Document.
Such
Underwriter will not use, or distribute to other broker-dealers for use, any
Offering Document in connection with the offer and sale of the Securities unless
such Offering Document includes such information as has been furnished by
Financial Security for inclusion therein and the information therein concerning
Financial Security has been approved by Financial Security in writing. Financial
Security hereby consents to the information in respect of Financial Security
included in the Free Writing Prospectus and the Prospectus Supplement. Each
Offering Document will include the following statement:
“The
Policy is not covered by the property/casualty insurance security fund specified
in Article 76 of the New York Insurance Law”.
Each
Offering Document including financial statements (other than financial
information included in the Financial Security Information) with respect to
Financial Security prepared in accordance with generally accepted accounting
principles will include the following statement immediately preceding such
financial statements:
“The
New
York State Insurance Department recognizes only statutory accounting practices
for determining and reporting the financial condition and results of operations
of an insurance company, for determining its solvency under the New York
Insurance Law, and for determining whether its financial condition warrants
the
payment of a dividend to its stockholders. No consideration is given by the
New
York State Insurance Department to financial statements prepared in accordance
with generally accepted accounting principles in making such
determinations.”
(c) Underwriter
Information.
With
respect to any Underwriter, all material provided by such Underwriter for
inclusion in any Offering Document (as revised from time to time and certified
by such Underwriter in writing to constitute Underwriter Information, the
“Underwriter Information”), insofar as such information relates to such
Underwriter, is true and correct in all material respects. In
respect of the Prospectus Supplement, the Underwriter Information with respect
to such Underwriter is limited to the information relating to such Underwriter
set forth (i) in the body of the Prospectus Supplement under the caption
“Method
of Distribution”
the
first, second and last paragraph and (ii) any other information certified in
writing by such Underwriter to be Underwriter Information.
6
Section
4. Indemnification.
(a) Financial
Security agrees, upon the terms and subject to the conditions provided herein,
to indemnify, defend and hold harmless each Company Party and each Underwriter
Party against (i) any and all Losses incurred by them with respect to the offer
and sale of the Securities and resulting from Financial Security’s breach of any
of its representations, warranties or agreements set forth in Section 2 hereof
and (ii) any and all Losses to which any Company Party or Underwriter Party
may
become subject, under the Securities Act or otherwise, insofar as such Losses
arise out of or result from an untrue statement of a material fact contained
in
any Offering Document or the omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or omission was made in the Financial Security Information included therein
in
accordance with the provisions hereof.
(b) Each
of
the Underwriters agrees, severally and not jointly, upon the terms and subject
to the conditions provided herein, to indemnify, defend and hold harmless each
Financial Security Party against (i) any and all Losses incurred by them with
respect to the offer and sale of the Securities and resulting from such
Underwriter’s breach of any of its representations, warranties or agreements set
forth in Section 3 hereof and (ii) any and all Losses to which any Financial
Security Party may become subject, under the Securities Act or otherwise,
insofar as such Losses arise out of or result from an untrue statement of a
material fact contained in any Offering Document or the omission to state
therein a material fact required to be stated therein or necessary to make
the
statements therein not misleading, in each case to the extent, but only to
the
extent, that such untrue statement or omission was made in the Underwriter
Information with respect to such Underwriter included therein.
7
(c) Upon
the
incurrence of any Losses for which a party is entitled to indemnification
hereunder, the Indemnifying Party shall reimburse the Indemnified Party promptly
upon establishment by the Indemnified Party to the Indemnifying Party of the
Losses incurred.
Section
5. Indemnification
Procedures.
Except
as provided below in Section 6 with respect to contribution, the indemnification
provided herein by an Indemnifying Party shall be the exclusive remedy of any
and all Indemnified Parties for the breach of a representation, warranty or
agreement hereunder by an Indemnifying Party; provided,
however,
that
each Indemnified Party shall be entitled to pursue any other remedy at law
or in
equity for any such breach so long as the damages sought to be recovered shall
not exceed the Losses incurred thereby resulting from such breach. In the event
that any action or regulatory proceeding shall be commenced or claim asserted
which may entitle an Indemnified Party to be indemnified under this Agreement,
such party shall give the Indemnifying Party written or telegraphic notice
of
such action or claim reasonably promptly after receipt of written notice
thereof. The Indemnifying Party shall be entitled to participate in and, upon
notice to the Indemnified Party, assume the defense of any such action or claim
in reasonable cooperation with, and with the reasonable cooperation of, the
Indemnified Party. The Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof at the
expense of the Indemnified Party; provided,
however,
that
the fees and expenses of such separate counsel shall be at the expense of the
Indemnifying Party if (i) the Indemnifying Party has agreed to pay such fees
and
expenses, (ii) the Indemnifying Party shall have failed to assume the defense
of
such action or proceeding and employ counsel satisfactory to the Indemnified
Party in any such action or proceeding or (iii) the named parties to any such
action or proceeding (including any impleaded parties) include both the
Indemnified Party and the Indemnifying Party, and the Indemnified Party shall
have been advised by counsel that (A) there may be one or more legal defenses
available to it which are different from or additional to those available to
the
Indemnifying Party and (B) the representation of the Indemnifying Party and
the
Indemnified Party by the same counsel would be inappropriate or contrary to
prudent practice, in which case, if the Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at
the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of such action or proceeding on behalf of such
Indemnified Party, it being understood, however, that the Indemnifying Party
shall not, in connection with any one such action or proceeding or separate
but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the
reasonable fees and expenses of more than one separate firm of attorneys at
any
time for all the Company Parties, one such firm for all Underwriter Parties
and
one such firm for all Financial Security Parties, as the case may be, which
firm
shall be designated in writing by the Company in respect of the Company Parties,
by the Representative in respect of the Underwriter Parties and by Financial
Security in respect of the Financial Security Parties. The Indemnifying Party
shall not be liable for any settlement of any such claim or action unless the
Indemnifying Party shall have consented thereto or be in default in its
obligations hereunder. Any failure by an Indemnified Party to comply with the
provisions of this Section shall relieve the Indemnifying Party of liability
only if such failure is prejudicial to the position of the Indemnifying Party
and then only to the extent of such prejudice.
8
Section
6. Contribution.
(a) To
provide for just and equitable contribution if the indemnification provided
by
any Indemnifying Party is determined to be unavailable for any Indemnified
Party
(other than due to application of this Section), each Indemnifying Party shall
contribute to the Losses arising from any breach of any of its representations,
warranties or agreements contained in this Agreement on the basis of the
relative fault of each of the parties as set forth in Section 6(b) below;
provided,
however,
that an
Indemnifying Party shall in no event be required to contribute to all
Indemnified Parties an aggregate amount in excess of the Losses incurred by
such
Indemnified Parties resulting from the breach of representations, warranties
or
agreements contained in this Agreement.
(b) The
relative fault of each Indemnifying Party, on the one hand, and of each
Indemnified Party, on the other, shall be determined by reference to, among
other things, whether the breach of, or alleged breach of, any representations,
warranties or agreements contained in this Agreement relates to information
supplied by, or action within the control of, the Indemnifying Party or the
Indemnified Party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such breach.
(c) The
parties agree that Financial Security shall be solely responsible for the
Financial Security Information, each Underwriter shall be solely responsible
for
the Underwriter Information with respect to such Underwriter and that the
balance of each Offering Document shall be the responsibility of LBAC and the
Company.
(d) Notwithstanding
anything in this Section 6 to the contrary, no Underwriter shall be required
to
contribute an amount in excess of the amount by which the total principal
balance of the Securities underwritten by such Underwriter exceeds the amount
of
any damages that such Underwriter has otherwise been required to pay in respect
of any breach by such Underwriter of its representations or warranties contained
in Section 3 hereof.
(e) No
Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
9
(f) Upon
the
incurrence of any Losses entitled to contribution hereunder, the contributor
shall reimburse the party entitled to contribution promptly upon establishment
by the party entitled to contribution to the contributor of the Losses
incurred.
Section
7. Miscellaneous.
(a) Notices.
All
notices and other communications provided for under this Agreement shall be
delivered to the address set forth below or to such other address as shall
be
designated by the recipient in a written notice to the other party or parties
hereto:
If
to
Financial Security:
Financial
Security Assurance Inc.
▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Senior Vice President—Transaction Oversight Department (with a copy to the
Attention of the General Counsel)
Re:
Long
Beach Acceptance Auto Receivables Trust 2007-A
Policy
No. 51820-N
Confirmation:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile
Nos.: (▇▇▇) ▇▇▇-▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇ (in each case in which notice or other
communication to Financial Security refers to an Event of Default, a claim
on
the Policy or with respect to which failure on the part of Financial Security
to
respond shall be deemed to constitute consent or acceptance, then a copy of
such
notice or other communication should also be sent to the attention of each of
the General Counsel and the Head-Financial Guaranty Group and shall be marked
to
indicate “URGENT MATERIAL ENCLOSED.”)
If
to the
Company:
Long
Beach Acceptance Receivables Corp.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
General Counsel
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation:
(▇▇▇) ▇▇▇-▇▇▇▇
10
If
to RBS
GC:
Greenwich
Capital Markets, Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Asset-Backed Finance
Facsimile
No: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm
No: (▇▇▇) ▇▇▇-▇▇▇▇
If
to
Citigroup:
Citigroup
Global Markets Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
Asset Backed Finance
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm
No. (▇▇▇) ▇▇▇-▇▇▇▇
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
(b) Governing
Law.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND THIS AGREEMENT AND ALL
MATTERS ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT SHALL BE
GOVERNED BY, THE LAW OF THE STATE OF NEW YORK.
(c) Assignments.
This
Agreement may not be assigned by any party without the express written consent
of each other party. Any assignment made in violation of this Agreement shall
be
null and void.
(d) Amendments.
Amendments of this Agreement shall be in writing signed by each party
hereto.
(e) Survival,
Etc.
The
indemnity and contribution agreements contained in this Agreement shall remain
operative and in full force and effect, regardless of (i) any investigation
made
by or on behalf of any Indemnifying Party, (ii) the issuance of the Securities
or (iii) any termination of this Agreement or the Policy. The indemnification
provided in this Agreement will be in addition to any liability which the
parties may otherwise have and shall in no way limit any obligations of LBAC
or
the Company under the Underwriting Agreement or under the Insurance
Agreement.
(f) Counterparts.
This
Agreement may be executed in counterparts by the parties hereto, and all such
counterparts shall constitute one and the same instrument.
11
[Remainder
of Page Intentionally Blank]
12
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.
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FINANCIAL
SECURITY ASSURANCE INC.
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/s/
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Name:
▇▇▇▇ ▇▇▇▇▇▇
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Title:
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LONG
BEACH ACCEPTANCE RECEIVABLES CORP.
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| By: |
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title:
Executive Vice President
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GREENWICH
CAPITAL MARKETS, INC.
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Name:
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Title:
Managing Director
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CITIGROUP
GLOBAL MARKETS INC.
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Name:
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Title:
Director
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EXHIBIT
A
OPINION
OF ASSOCIATE GENERAL COUNSEL
Based
upon the foregoing, I am of the opinion that:
1. Financial
Security is a stock insurance company duly organized, validly existing and
authorized to transact financial guaranty insurance business under the laws
of
the State of New York.
2. The
Policy, the Insurance Agreement and the Indemnification Agreement been duly
authorized, executed and delivered by Financial Security.
3. The
Policy, the Insurance Agreement and the Indemnification Agreement constitute
valid and binding obligations of Financial Security, enforceable against
Financial Security in accordance with their terms, subject, as to the
enforcement of remedies, to bankruptcy, insolvency, reorganization,
rehabilitation, moratorium and other similar laws affecting the enforceability
of creditors’ rights generally applicable in the event of the bankruptcy or
insolvency of Financial Security and to the application of general principles
of
equity and subject, in the case of the Indemnification Agreement, to principles
of public policy limiting the right to enforce the indemnification provisions
contained therein insofar as they relate to indemnification for liabilities
arising under applicable securities laws.
4. The
Policy is exempt from registration under the Securities Act of 1933, as amended
(the “Act”).
5. Neither
the execution or delivery by Financial Security of the Policy or the Insurance
Agreement or the Indemnification Agreement, nor the performance by Financial
Security of its obligations thereunder, will conflict with any provision of
the
certificate of incorporation or the bylaws of Financial Security or, to the
best
of my knowledge, result in a breach of, or constitute a default under, any
agreement or other instrument to which Financial Security is a party or by
which
it or any of its property is bound or, to the best of my knowledge, violate
any
judgment, order or decree applicable to Financial Security of any governmental
or regulatory body, administrative agency, court or arbitrator having
jurisdiction over Financial Security (except that in the published opinion
of
the Securities and Exchange Commission the indemnification provisions of the
Indemnification Agreement, insofar as they relate to indemnification for
liabilities arising under the Act, are against public policy as expressed in
the
Act and are therefore unenforceable).
A-1
6. In
addition, please be advised that I have reviewed the description of Financial
Security under the caption “THE INSURER” in the Prospectus Supplement dated
March 19, 2007 and in the Free Writing Prospectus dated March 12, 2007 (each,
an
“Offering
Document”)
of the
Company with respect to the Securities. The information provided in each
Offering Document with respect to Financial Security is limited and does not
purport to provide the scope of disclosure required to be included in a
prospectus with respect to a registrant under the Securities Act of 1933, as
amended, in connection with the public offer and sale of securities of such
registrant. Within such limited scope of disclosure, however, there has not
come
to my attention any information which would cause me to believe that the
description of Financial Security referred to above, as of the date of the
Free
Writing Prospectus, the date of the Prospectus Supplement or the date hereof,
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (except that no opinion is rendered
with respect to any financial statements or other financial information
contained or referred to therein).
A-2