EXECUTION COPY
LONG BEACH ACCEPTANCE CORP.
LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2002-A
ASSET-BACKED NOTES, SERIES 2002-A
UNDERWRITING AGREEMENT
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July 17, 2002
Greenwich Capital Markets, Inc.
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Ladies and Gentlemen:
Long Beach Acceptance Receivables Corp., a Delaware corporation (the
"Transferor") and a wholly owned subsidiary of Long Beach Acceptance Corp., a
Delaware corporation ("LBAC"), has authorized the issuance and sale by Long
Beach Acceptance Auto Receivables Trust 2002-A, a Delaware business trust (the
"Trust"), of its 1.840% Asset Backed Notes, Class A-1, in the original principal
amount of $35,500,000 (the "Class A-1 Notes"), 2.470% Asset Backed Notes, Class
A-2, in the original principal amount of $75,000,000 (the "Class A-2 Notes"),
3.175% Asset Backed Notes, Class A-3, in the original principal amount of
$58,000,000 (the "Class A-3 Notes") and 3.983% Asset Backed Notes, Class A-4, in
the original principal amount of $74,000,000 (the "Class A-4 Notes" and,
together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes,
the "Offered Notes").
The assets of the Trust will include primarily a pool (the "Pool") of
retail installment sale contracts (the "Receivables") secured by the new and
used automobiles, vans, sport utility vehicles and light duty trucks financed
thereby. The Receivables will be serviced for the Trust by LBAC. The Offered
Notes will be issued pursuant to an Indenture, dated as of August 1, 2002 (the
"Indenture"), between the Trust and JPMorgan Chase Bank ("JPMorgan Chase"), as
indenture trustee (in such capacity, the "Indenture Trustee"). The Offered Notes
will be secured by the assets of the Trust, which will be pledged by the Trust
to the Indenture Trustee pursuant to the Indenture. Holders of the Offered Notes
will have the benefit of a financial guarantee insurance policy issued by
Financial Security Assurance Inc. ("FSA"). In addition, simultaneously with the
issuance and sale of the Offered Notes, the Trust will also issue its 8.500%
Asset Backed Notes, Class B, in the original principal amount of $7,500,000 (the
"Class B Notes" and, together with the Offered Notes, the "Notes"), and a
certificate (the "Certificate") which will represent the equity ownership
interest in the Trust. The Certificate will be issued pursuant to the Amended
and Restated Trust Agreement, dated as of August 1, 2002 (the "Trust
Agreement"), between the Transferor and Wilmington Trust Company, as owner
trustee (in such capacity, the "Owner Trustee"). Only the Offered Notes are
being purchased by Greenwich Capital Markets, Inc. (the "Underwriter")
hereunder. The Certificate will be issued to and retained by the Transferor. The
Class B Notes will be privately placed with institutional investors. Capitalized
terms used but not otherwise defined herein shall have the respective meanings
assigned to them in Annex A to the Sale and Servicing Agreement (as defined
below).
The Offered Notes are more fully described in a Registration Statement (as
defined herein) which the Transferor and LBAC have furnished to the Underwriter.
The Trust will acquire the Receivables from the Transferor pursuant to a
Sale and Servicing Agreement, dated as of August 1, 2002 (the "Sale and
Servicing Agreement"), among the Trust, the Transferor, LBAC, as originator and
servicer, and JPMorgan Chase, as back-up servicer, custodian and trust
collateral agent. The Transferor will acquire the Receivables from LBAC pursuant
to an assignment by LBAC to the Transferor (the "Assignment") on the Closing
Date (as defined herein) and a Purchase Agreement, dated as of August 1, 2002
(the "Purchase Agreement"), between the Transferor and LBAC.
Section I. Representations and Warranties of Transferor and LBAC. The
Transferor and LBAC jointly and severally represent and warrant to, and agree
with the Underwriter that:
A. A Registration Statement on Form S-3 (No. 333-75958) has (i) been
prepared by LBAC in conformity with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations") of the United States Securities and Exchange Commission
(the "Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act. Copies of
such Registration Statement have been delivered by the Transferor and LBAC to
the Underwriter. As used in this Agreement, "Effective Time" means the date and
the time as of which such Registration Statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective Time; "Registration
Statement" means such registration statement, at the Effective Time, including
any documents incorporated by reference therein at such time; and "Prospectus"
means such final prospectus, as first supplemented by a prospectus supplement
(the "Prospectus Supplement") relating to the Offered Notes, as first filed with
the Commission pursuant to paragraph (1), (4) or (5) of Rule 424(b) of the Rules
and Regulations. Reference made herein to the Prospectus shall be deemed to
refer to and include any documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the date of the Prospectus,
and any reference to any amendment or supplement to the Prospectus shall be
deemed to refer to and include any document filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), after the date of the Prospectus
and incorporated by reference in the Prospectus; and any reference to any
amendment to the Registration Statement shall be deemed to include any report
filed with the Commission with respect to the Trust pursuant to Section 13(a) or
15(d) of the Exchange Act after the date of the Prospectus that is incorporated
by reference in the Registration Statement. There are no contracts or documents
of the Transferor or LBAC which are required to be filed as exhibits to the
Registration Statement pursuant to the Securities Act or the Rules and
Regulations which have not been so filed or incorporated by reference therein on
or prior to the Effective Date of the Registration Statement. The conditions for
use of Form S-3, as set forth in the General Instructions thereto, have been
satisfied.
B. The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus will,
when they become effective or are filed with the Commission, as the case may be,
conform in all respects to the requirements of the Securities Act and the Rules
and Regulations. The Registration
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Statement, as of the Effective Date thereof and of any amendment thereto, did
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Prospectus as of its date and as amended or supplemented as
of the Closing Date does not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with the Underwriter Information
(as defined herein).
C. The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material respects
to the requirements of the Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder and will not contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with the Underwriter Information.
D. Since the respective dates as of which information is given in the
Prospectus, there has not been any material adverse change in the general
affairs, management, financial condition, or results of operations of the
Transferor or LBAC, otherwise than as set forth or contemplated in the
Prospectus as supplemented or amended as of the Closing Date.
E. Each of the Transferor and LBAC has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, has full power and authority (corporate and other) necessary to own or
hold its properties and to conduct its business as now conducted by it and to
enter into and perform its obligations under this Agreement, the Sale and
Servicing Agreement, the Purchase Agreement, the Assignment, the Trust
Agreement, the Insurance and Indemnity Agreement, dated as of August 1, 2002,
among FSA, LBAC and the Transferor (the "Insurance Agreement") and the
Indemnification Agreement, dated as of August 1, 2002, among FSA, the
Underwriter and the Transferor (the "Indemnification Agreement") (all such
agreements, with the exception of this Agreement, are collectively referred to
herein as the "Other Agreements"), and, with respect to the Transferor, to cause
the Trust to authorize, issue and sell the Offered Notes as contemplated by this
Agreement.
F. This Agreement has been duly authorized, executed and delivered by each
of the Transferor and LBAC.
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G. The Sale and Servicing Agreement, when executed and delivered as
contemplated hereby and thereby, will have been duly authorized, executed and
delivered by each of the Transferor and LBAC, and when so executed and
delivered, will constitute a legal, valid, binding and enforceable agreement of
each of the Transferor and LBAC, subject, as to enforceability, to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and to general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at law.
H. The Purchase Agreement, when executed and delivered as contemplated
hereby and thereby, will have been duly authorized, executed and delivered by
each of LBAC and the Transferor, and when so executed and delivered, will
constitute a legal, valid, binding and enforceable agreement of each of LBAC and
the Transferor, subject, as to enforceability, to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and to general principles of equity regardless of whether enforcement
is sought in a proceeding in equity or at law.
I. The Trust Agreement, when executed and delivered as contemplated hereby
and thereby, will have been duly authorized, executed and delivered by the
Transferor, and when so executed and delivered, will constitute a legal, valid,
binding and enforceable agreement of the Transferor, subject, as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and to general principles of
equity regardless of whether enforcement is sought in a proceeding in equity or
at law.
J. The Assignment, when executed and delivered as contemplated hereby and
thereby, will have been duly authorized, executed and delivered by LBAC, and
when so executed and delivered, will be legal, valid, binding and enforceable
against LBAC, subject, as to enforceability, to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and to general principles of equity regardless of whether enforcement
is sought in a proceeding in equity or at law.
K. Each Other Agreement to which LBAC or the Transferor is party, when
executed and delivered as contemplated hereby and thereby, will have been duly
authorized, executed and delivered by the Transferor and/or LBAC, as the case
may be, and when so executed and delivered, will constitute legal, valid,
binding and enforceable agreements of the Transferor and/or LBAC, as the case
may be, subject, as to enforceability, to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and to general principles of equity regardless of whether enforcement
is considered in a proceeding in equity or at law, and except insofar as the
indemnification provisions therein may be limited by applicable law.
L. The execution, delivery and performance of this Agreement, the Sale and
Servicing Agreement, the Indemnification Agreement, the Insurance Agreement, the
Purchase Agreement, the Assignment and the Trust Agreement, and the issuance and
sale of the Offered Notes, the Class B Notes and the Certificate and compliance
with the terms and provisions hereof and thereof, will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any agreement or instrument to which the Transferor or LBAC is a party or by
which the Transferor or LBAC is bound or to which any of the properties of the
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Transferor or LBAC is subject or of any statute, order or regulation applicable
to the Transferor or LBAC of any court, regulatory body, administrative agency
or governmental body having jurisdiction over the Transferor or LBAC or any of
their respective properties, in each case which could reasonably be expected to
have a material adverse effect on the transactions contemplated herein.
M. As of the Closing Date, the Offered Notes, the Indenture, the Class B
Notes, the Certificate, the Sale and Servicing Agreement, the Trust Agreement,
the Assignment and the Purchase Agreement will conform in all material respects
to the respective descriptions thereof contained in the Prospectus. As of the
Closing Date, the Notes will be duly and validly authorized and, when duly and
validly executed, authenticated and delivered in accordance with the Indenture
and delivered to the Underwriter against payment therefor as provided herein,
will be duly and validly issued and outstanding and entitled to the benefits of
Indenture and will constitute legal, valid and binding obligations of the Trust,
enforceable against the Trust in accordance with their terms, subject, as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and to general principles of
equity regardless of whether enforcement is considered in a proceeding in equity
or at law. As of the Closing Date, the Indenture will be duly and validly
authorized and, when duly and validly executed and delivered, will constitute a
legal, valid, binding and enforceable agreement of the Trust, subject, as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and to general principles of
equity regardless of whether enforcement is sought in a proceeding in equity or
at law. As of the Closing Date, the Certificate will be duly and validly
authorized and, when duly and validly executed, authenticated and delivered in
accordance with the Trust Agreement and delivered to the Transferor, will be
duly and validly issued and outstanding and entitled to the benefits of the
Trust Agreement.
N. The Transferor's and LBAC's respective representations and warranties in
the Sale and Servicing Agreement, the Purchase Agreement, the Trust Agreement,
the Insurance Agreement and the Indemnification Agreement will be true and
correct in all material respects as of the Closing Date.
O. Neither the Transferor nor LBAC is in violation of its certificate of
incorporation or by-laws or in default under any agreement, indenture or
instrument to which it is a party, the effect of which violation or default
would be material to it. Neither the issuance and sale of the Notes, nor the
issuance of the Certificate, nor the execution and delivery by the Transferor or
LBAC of this Agreement or any Other Agreement to which it is a party, nor the
consummation by the Transferor or LBAC of any of the transactions herein or
therein contemplated, nor compliance by the Transferor or LBAC with the
provisions hereof or thereof, does or will conflict with or result in a breach
of any term or provision of the certificate of incorporation or by-laws of the
Transferor or LBAC or conflict with, result in a breach, violation or
acceleration of, or constitute a default under, the terms of any indenture or
other agreement or instrument to which the Transferor or LBAC is a party or by
which either of them is bound, or any statute, order or regulation applicable to
the Transferor or LBAC of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Transferor or LBAC. Neither the
Transferor nor LBAC is a party to, bound by or in breach or violation of any
indenture or other agreement or instrument to which it is a party, or subject to
or in violation of
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any statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it that materially and
adversely affects, or may in the future materially and adversely affect, (i) the
ability of the Transferor or LBAC to perform its obligations under this
Agreement or any Other Agreement or (ii) the business, operations, financial
condition, properties, assets or prospects of the Transferor or LBAC.
P. There are no actions or proceedings against, or investigations of, the
Transferor or LBAC pending, or, to the knowledge of the Transferor or LBAC,
threatened, before any court, arbitrator, administrative agency or other
tribunal (i) asserting the invalidity of this Agreement, any Other Agreement,
the Notes or the Certificate, (ii) seeking to prevent the issuance of the Notes
or the Certificate or the consummation of any of the transactions contemplated
by this Agreement or any Other Agreement, (iii) that are reasonably likely to be
adversely determined and that might materially and adversely affect the
Receivables or the business, operations, financial condition, properties, assets
or prospects of the Transferor or LBAC or the validity or enforceability of, or
the performance by the Transferor or LBAC of its obligations under, this
Agreement, any Other Agreement, the Notes or the Certificate or (iv) seeking to
affect adversely the federal income tax attributes of the Offered Notes as
described in the Prospectus.
Q. Immediately prior to the assignment of the Receivables to the Trust as
contemplated by the Sale and Servicing Agreement, the Transferor (i) had good
title to, and was the sole owner of, each Receivable and the other property
purported to be transferred by it to the Trust pursuant to the Sale and
Servicing Agreement free and clear of any pledge, mortgage, lien, security
interest or other encumbrance (collectively, "Liens") (except for the Lien of
the Indenture) and (ii) had not assigned to any person any of its right, title
or interest in such Receivables or property or in the Purchase Agreement. Upon
delivery to the Underwriter of the Offered Notes, the Offered Notes will be free
of any Liens.
R. Neither the Transferor nor the Trust is, and neither the issuance and
sale of the Notes or the Certificate nor the activities of the Trust pursuant to
the Indenture or the Trust Agreement will cause the Transferor or the Trust to
be, an "investment company" or under the "control" of an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
S. It is not necessary to qualify the Trust Agreement under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Indenture has
been duly qualified under the Trust Indenture Act.
T. None of the Transferor, LBAC or any affiliate thereof has paid or agreed
to pay to any person any compensation for soliciting another to purchase any
Offered Notes or the Certificate (except as contemplated herein).
U. Any taxes, fees and other governmental charges in connection with the
execution and delivery of this Agreement and the Other Agreements or the
execution, delivery and sale of the Notes and the Certificate have been or will
be paid on or prior to the Closing Date.
V. Deloitte & Touche LLP is an independent public accountant with respect
to the Transferor and LBAC, as required by the Securities Act and the Rules and
Regulations.
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W. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States is required for the issuance of the Notes and the Certificate and the
sale of the Offered Notes to the Underwriter, or the consummation by the
Transferor or LBAC of the other transactions contemplated by this Agreement or
the Other Agreements, except such consents, approvals, authorizations,
registrations or qualifications as may be required under State securities or
Blue Sky laws in connection with the purchase and distribution of the Offered
Notes by the Underwriter or as have been obtained.
Any certificates signed by officers of the Transferor and LBAC and
delivered to the Underwriter or counsel for the Underwriter in connection with
an offering of the Offered Notes shall be deemed a representation and warranty
as to the matters covered thereby to each person to whom the representations and
warranties in this Section I are made.
Section II. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties set forth herein, the
Transferor agrees to sell to the Underwriter and the Underwriter agrees to
purchase (a) the Class A-1 Notes for the purchase price equal to 100% of the
original principal amount of such Class A-1 Notes, (b) the Class A-2 Notes for
the purchase price equal 100% of the original principal amount of such Class A-2
Notes, (c) the Class A-3 Notes for the purchase price equal to 100% of the
original principal amount of such Class A-3 Notes and (d) the Class A-4 Notes
for the purchase price equal to 100% of the original principal amount of such
Class A-4 Notes. In consideration of the Underwriter's purchase of the Offered
Notes, the Transferor shall pay to the Underwriter a fee equal to $727,500.00.
Section III. Delivery and Payment. Delivery of and payment for the Offered
Notes to be purchased by the Underwriter shall be made at the offices of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at
such other place as shall be agreed upon by the Underwriter and LBAC at 10:00
a.m. New York City time on August 15, 2002, or at such other time or date as
shall be agreed upon in writing by the Underwriter and LBAC (such date being
referred to as the "Closing Date"). Delivery of the Offered Notes shall be made
to, or at the direction of, the Underwriter against payment by the Underwriter
of the purchase price therefor in immediately available funds. Each of the
Offered Notes to be so delivered shall be represented by one or more global
notes registered in the name of Cede & Co., as nominee for The Depository Trust
Company.
The Transferor agrees to have the Offered Notes available for inspection,
checking and packaging by the Underwriter in New York, New York, not later than
10:00 a.m. on the business day prior to the Closing Date.
Section IV. Offering by the Underwriter. It is understood that, subject to
the terms and conditions hereof, the Underwriter proposes to offer the Offered
Notes for sale to the public as set forth in the Prospectus.
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Section V. Covenants of the Transferor and LBAC. The Transferor and LBAC
jointly and severally covenant and agree as follows:
A. To prepare the Prospectus in a form approved by the Underwriter and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act not later
than the time required thereby; to make no further amendment or any supplement
to the Registration Statement or to the Prospectus prior to the Closing Date
except as permitted herein; to advise the Underwriter, promptly after it
receives notice thereof, of the time, during the period that a Prospectus is
required to be delivered in connection with the offer and sale of the Offered
Notes, when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended Prospectus
has been filed and to furnish the Underwriter with copies thereof; to file
promptly all reports and any definitive proxy or information statements required
to be filed by LBAC with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and, for so
long as the delivery of a prospectus is required under the Securities Act or the
Rules and Regulations thereunder in connection with the offering or sale of the
Offered Notes, to promptly advise the Underwriter of its receipt of notice of
the issuance by the Commission of any stop order or of: (i) any order preventing
or suspending the use of the Prospectus; (ii) the suspension of the
qualification of the Offered Notes for offering or sale in any jurisdiction;
(iii) the initiation of or threat of any proceeding for any such purpose; (iv)
any request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information. In the
event of the issuance of any stop order or of any order preventing or suspending
the use of the Prospectus or suspending any such qualification, LBAC promptly
shall use its best efforts to obtain the withdrawal of such order by the
Commission.
B. To furnish promptly to the Underwriter and to counsel for the
Underwriter a signed copy of the Registration Statement as originally filed with
the Commission, including all consents and exhibits filed therewith.
C. To deliver promptly to the Underwriter such number of the following
documents as the Underwriter shall reasonably request: (i) conformed copies of
the Registration Statement as originally filed with the Commission and each
amendment thereto (in each case including exhibits); (ii) the Prospectus and any
amended or supplemented Prospectus; and (iii) any document filed by LBAC and
incorporated by reference in the Prospectus (including exhibits thereto). If the
delivery of a prospectus is required at any time prior to the expiration of nine
months after the Effective Time in connection with the offering or sale of the
Offered Notes, and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, LBAC shall notify the Underwriter and, upon
the request of the Underwriter based on advice of counsel (which may consist of
oral advice of internal or outside counsel), shall file such document and
prepare and furnish without charge to the Underwriter and to any dealer in
securities as many copies as the Underwriter may from time to time reasonably
request of an amended Prospectus or a
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supplement to the Prospectus which corrects such statement or omission or
effects such compliance, and in case the Underwriter is required to deliver a
Prospectus in connection with sales of any of the Offered Notes at any time nine
months or more after the Effective Time, upon the request of the Underwriter but
at LBAC's expense, LBAC shall prepare and deliver to the Underwriter as many
copies as the Underwriter may reasonably request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Securities Act.
Neither the Underwriter's consent to, nor the Underwriter's delivery of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section VII.
D. To file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may, in the
judgment of LBAC or the Underwriter, be required by the Securities Act or
requested by the Commission.
▇. ▇▇▇▇▇ to filing with the Commission any (i) supplement to the Prospectus
or (ii) Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish
a copy thereof to the Underwriter and counsel for the Underwriter and obtain the
consent of the Underwriter to the filing, which consent shall not be
unreasonably delayed.
F. To use its best efforts, in cooperation with the Underwriter, to qualify
the Offered Notes for offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States as the Underwriter may
designate, and maintain or cause to be maintained such qualifications in effect
for as long as may be required for the distribution of the Offered Notes;
provided that the Transferor and LBAC shall not be required to become subject to
any general consent to service of process or jurisdiction in any jurisdiction in
which it is not subject as of the date of this Agreement. LBAC will file or
cause the filing of such statements and reports as may be required by the laws
of each jurisdiction in which the Offered Notes have been so qualified.
G. The Transferor and LBAC jointly and severally agree to pay all costs and
expenses in connection with the transactions herein contemplated, including, but
not limited to, the fees and disbursements of its counsel; the costs incident to
the underwriter's due diligence exercises; the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement and any amendments and exhibits thereto; the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), the
preliminary prospectus, if any, the Prospectus and any amendment or supplement
to the Prospectus or any document incorporated by reference therein, all as
provided in this Agreement; the costs and expenses of printing (or otherwise
reproducing) and delivering the Sale and Servicing Agreement, the Indenture, the
Trust Agreement, the Offered Notes and the Certificate; the fees, costs and
expenses of JPMorgan Chase and the Owner Trustee (to the extent permitted under
the Sale and Servicing Agreement and the Trust Agreement, and except to the
extent that another party is obligated to pay such amounts thereunder); any fees
and expenses of any rating agency issuing a rating in respect of the Offered
Notes; the fees and disbursements of accountants for the Transferor, LBAC; the
costs and expenses in connection with the qualification of the Offered Notes
under state securities or "blue sky" laws, including filing fees and reasonable
fees and disbursements of
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counsel in connection therewith, in connection with the preparation of any blue
sky survey and the preparation of any legal investment survey; the expenses of
printing any such blue sky survey and legal investment survey; provided that
except as provided in this Section VI, the Underwriter shall pay its own costs.
If this Agreement is terminated by the Underwriter in accordance with the
provisions of Section VII, Section VIII or Section XI, LBAC and the Transferor
shall jointly and severally reimburse the Underwriter for all reasonable
out-of-pocket expenses, including the costs and expenses of its counsel, any
transfer taxes on the Offered Notes which they may sell and the expenses of
advertising any offering of the Offered Notes.
H. For a period from the date of this Agreement until the payment in full
of all amounts in respect of the Offered Notes, the Transferor and LBAC will
deliver to the Underwriter the monthly servicing reports, the annual statements
of compliance and the annual independent certified public accountants reports
furnished to the Indenture Trustee or the Trust Collateral Agent pursuant to the
Sale and Servicing Agreement or the Indenture as soon as such statements are
furnished to the Indenture Trustee or the Trust Collateral Agent.
I. To apply the net proceeds from the sale of the Offered Notes in the
manner set forth in the Prospectus.
J. To file with the Commission within fifteen days of the issuance of the
Offered Notes a current report on Form 8-K setting forth specific information
concerning the Offered Notes and the Receivables to the extent that such
information is not set forth in the Prospectus and also to file with the
Commission a current report on Form 8-K setting forth all Computational
Materials, ABS Term Sheets and Collateral Term Sheets (as each defined in
Section VI hereof) provided to LBAC by the Underwriter within the applicable
time periods allotted for such filing pursuant to the No-Action Letters (as
defined in Section VI hereof); provided that LBAC's obligation to file such
Computational Materials, ABS Term Sheets and Collateral Term Sheets within such
time shall be subject to the Underwriter's timely performance of its obligations
under Section VI.
K. In connection with any Computational Materials, ABS Term Sheets or
Collateral Term Sheets provided by the Underwriter pursuant to Section VI, to
receive a letter from Deloitte & Touche LLP certified public accountants,
satisfactory in form and substance to LBAC, to the effect that such accountants
have performed certain specified procedures, all of which have been agreed to by
LBAC, as a result of which they have determined that the information included in
the Computational Materials, ABS Term Sheets or Collateral Term Sheets (if any),
provided by the Underwriter to LBAC for filing on Form 8-K pursuant to Section
VI and subsection K, is accurate except as to such matters that are not deemed
by LBAC to be material. The foregoing letter shall be obtained at the expense of
the Underwriter.
L. In the event that the Underwriter must prepare corrected Computational
Materials, ABS Term Sheets or Collateral Term Sheets pursuant to Section VI(D),
to file any corrected Computational Materials, ABS Term Sheets or Collateral
Term Sheets no later than two days following receipt thereof.
M. Except with respect to the sale of the Class B Notes, unless the
Underwriter shall otherwise have given its written consent, no pass-through
certificates or debt securities backed
10
by retail installment sale contracts secured by the new and used automobiles,
vans, sport utility vehicles and light duty trucks financed thereby or other
similar securities representing interest in or secured by other auto
receivable-related assets originated or owned by LBAC shall be publicly offered
or sold nor shall LBAC enter into any contractual arrangements that contemplate
the public offering or sale of such securities for a period of thirty (30) days
following the commencement of the offering of the Offered Notes to the public.
N. If, at any time prior to 90 days after the Closing Date or such earlier
date as the Underwriter shall have resold all of the Offered Notes, any event
occurs as a result of which the Prospectus (as then amended or supplemented)
would include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it should be
necessary to amend or supplement the Prospectus to comply with applicable law,
the Transferor and LBAC will promptly prepare and furnish to the Underwriter an
amendment or supplement to the Prospectus satisfactory to the Underwriter that
will correct such statement or omission.
O. To the extent, if any, that any rating provided with respect to the
Offered Notes by the applicable rating agency is conditional upon the furnishing
of documents or the taking of any actions by the Transferor or LBAC, the
Transferor or LBAC, as the case may be, shall furnish such documents and take
any such other actions.
P. On the date of the Prospectus and on the Closing Date, Deloitte & Touche
LLP shall furnish to the Underwriter a letter or letters, dated respectively as
of the date of the Prospectus and as of the Closing Date substantially in the
forms of the drafts to which the Underwriter will have previously agreed and
otherwise in form and substance satisfactory to the Underwriter and to counsel
to the Underwriter.
Q. On the Closing Date, the Transferor and LBAC shall furnish to the
Underwriter a letter from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, dated the Closing Date, to the
effect that (i) such counsel has no reason to believe that (a) the Registration
Statement, as of the Effective Date, and as amended or supplemented, if
applicable, as of the Closing Date, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or (b) the Prospectus as
of its date and as of the Closing Date contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (ii) and that the descriptions in Registration
Statement and the Prospectus, as the case may be, of the Offered Notes, the Sale
and Servicing Agreement, the Trust Agreement, the Indenture and the Purchase
Agreement are accurate in all material respects; it being understood that such
counsel need express no opinion or belief as to the financial and statistical
statements or other financial data contained in or incorporated by reference in
the Registration Statement or the Prospectus, as applicable.
Section VI. Investor Information. The Underwriter may prepare and provide
to prospective investors certain Computational Materials, ABS Term Sheets or
Collateral Term Sheets (collectively "Investor Materials") in connection with
its offering of the Offered Notes, subject to the following conditions:
11
A. The Underwriter shall comply with the requirements of the No-Action
Letter of May 20, 1994, issued by the Commission to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Acceptance
Corporation I, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇▇▇▇▇ Structured Asset
Corporation, as made applicable to other issuers and underwriters by the
Commission in response to the request of the Public Securities Association dated
May 24, 1994 (collectively, the "▇▇▇▇▇▇/PSA Letter"), and the requirements of
the No-Action Letter of February 17, 1995, issued by the Commission to the
Public Securities Association (the "PSA Letter" and, together with the
▇▇▇▇▇▇/PSA Letter, the "No-Action Letters").
B. For purposes hereof, "Computational Materials" shall have the meaning
given such term in the No-Action Letters, but shall include only those
Computational Materials that have been prepared or delivered to prospective
investors by the Underwriter. For purposes hereof, "ABS Term Sheets" and
"Collateral Term Sheets" shall have the meanings given such terms in the PSA
Letter but shall include only those ABS Term Sheets or Collateral Term Sheets
that have been prepared or delivered to prospective investors by the
Underwriter.
C. The Underwriter shall provide to LBAC any Computational Materials, ABS
Term Sheets or Collateral Term Sheets which are provided to investors, together
with a letter, reasonably acceptable to the Underwriter and LBAC, from Deloitte
& Touche LLP, with regard to such Computational Materials, ABS Term Sheets or
Collateral Term Sheets, no later than the two Business Days preceding the date
such Computational Materials, ABS Term Sheets or Collateral Term Sheets are
required to be filed pursuant to the applicable No-Action Letters. The
Underwriter may provide copies of the foregoing in a consolidated or aggregated
form including all information required to be filed. The materials so furnished
shall be furnished to LBAC in hard copy and on computer disk.
D. In the event that LBAC or the Underwriter discovers an error in the
Computational Materials, ABS Term Sheets or Collateral Term Sheets, the
Underwriter shall promptly prepare corrected Computational Materials, ABS Term
Sheets or Collateral Term Sheets and deliver them to LBAC for filing pursuant to
Section V(M).
E. The Underwriter represents to the Transferor and LBAC as follows:
1. The Investor Materials do not contain an untrue statement of a
material fact or, when read in conjunction with the Prospectus as an integral
document, omit to state a material fact necessary to make such statements, in
light of the circumstances under which they were made, not misleading; provided,
however, that no representation is made (x) with respect to any untrue
statements or omissions that are the result of untrue statements or omissions in
LBAC-Provided Information (as defined herein) or (y) that the Prospectus
(exclusive of such Investor Materials) does not include any untrue statements of
a material fact and does not omit to state any material facts necessary to make
the statements contained therein, in light of the circumstances under which they
were made, not misleading.
2. The Investor Materials contain customary legends referring to the
assumptions on which they are based and the absence of assurances or
representations as to the actual rate or timing of payments on any of the
Receivables or the performance characteristics of
12
the Offered Notes, and a statement to the effect that the Investor Materials
were prepared by the Underwriter based on information regarding the Receivables
furnished by LBAC.
3. Neither the Transferor, LBAC nor any of their respective affiliates
participated in the preparation of the Investor Materials other than by
supplying LBAC-Provided Information (as defined herein) to the Underwriter.
Section VII. Conditions to the Underwriter's Obligations. The obligation of
the Underwriter to purchase the Offered Notes pursuant to this Agreement is
subject: (i) to the accuracy of the representations and warranties on the part
of the Transferor and LBAC contained herein and in the Other Agreements as of
the date hereof and as of the Closing Date; (ii) to the accuracy of the
statements of the Transferor and LBAC made in any certificate delivered pursuant
to the provisions hereof; (iii) to the performance by the Transferor and LBAC of
all of their respective obligations hereunder and in the Other Agreements; and
(iv) to the following additional conditions:
A. The Underwriter shall have received confirmation of the effectiveness of
the Registration Statement. No stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission. Any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus shall have been
complied with.
B. The Underwriter shall not have discovered and disclosed to LBAC on or
prior to the Closing Date that the Registration Statement or the Prospectus or
any amendment or supplement thereto contains an untrue statement of a fact or
omits to state a fact which, in the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel for the Underwriter, is material and is required to be stated therein or
is necessary to make the statements therein not misleading.
C. All corporate proceedings and other legal matters relating to the
authorization, form and validity of this Agreement, the Other Agreements, the
Notes, the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement, the Other Agreements and the transactions
contemplated hereby and thereby shall be satisfactory in all respects to counsel
for the Underwriter, and LBAC and the Transferor shall have furnished to such
counsel all documents and information that they may reasonably request to enable
them to pass upon such matters.
D. Each of the Transferor and LBAC shall have delivered to the Underwriter
an Officer's Certificate dated the Closing Date, to the effect that the signer
of such certificate has carefully examined this Agreement and the Prospectus and
that, to the best of such signer's knowledge: (i) the representations and
warranties of the Transferor or LBAC, as the case may be, in this Agreement are
true and correct in all material respects at and as of the Closing Date with the
same effect as if made on the Closing Date; (ii) it has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date; and (iii) such person has carefully
examined the Registration Statement and the Prospectus and, in such person's
opinion (w) as of the Effective Date, the Registration Statement did not include
an untrue statement of material fact and did not omit to state a material fact
required to be stated
13
therein or necessary to make the statements therein not misleading, (x) as of
its date and as of the Closing Date the Prospectus did not include an untrue
statement of material fact and did not omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, (y) since the Effective Date no event has
occurred which should have been set forth in a supplement or amendment to the
Registration Statement or (z) since the date of the Prospectus, no event has
occurred which should have been set forth in a supplement or amendment to the
Prospectus.
E. The Underwriter shall have received a favorable opinion addressed to it
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriter, dated the
Closing Date, with respect to the validity of the Offered Notes, the
Registration Statement, the Prospectus and such other related matters as the
Underwriter shall require, and LBAC and the Transferor shall have furnished or
caused to be furnished to such counsel such documents as such counsel may
reasonably request for the purpose of enabling them to pass upon such matters.
F. The Underwriter shall have received a favorable opinion addressed to it,
dated the Closing Date, from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, special counsel for the
Transferor, LBAC and Ameriquest Mortgage Company ("AMC"), in form and substance
satisfactory to the Underwriter and its counsel.
G. The Underwriter shall have received a favorable opinion addressed to it,
dated the Closing Date, from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel of LBAC
and Counsel of the Transferor, in form and substance satisfactory to the
Underwriter and its counsel.
H. The Underwriter shall have received a favorable opinion addressed to it,
dated the Closing Date, from Corporate Counsel of AMC, in form and substance
satisfactory to the Underwriter and its counsel.
I. The Underwriter shall have received a favorable opinion addressed to it,
dated the Closing Date, from ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, counsel to the Trust, in
form and substance satisfactory to the Underwriter and its counsel.
J. The Underwriter shall have received a favorable opinion addressed to it,
dated the Closing Date, from ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, counsel to the Owner
Trustee, in form and substance satisfactory to the Underwriter and its counsel.
K. The Underwriter have received a favorable opinion addressed to it, dated
the Closing Date, from Thacher, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel for JPMorgan
Chase, in form and substance satisfactory to the Underwriter and its counsel, to
the effect that each of the Indenture and the Sale and Servicing Agreement has
been duly authorized, executed and delivered by JPMorgan Chase and constitutes
the legal, valid, binding and enforceable agreement of JPMorgan Chase, subject,
as to enforceability, to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights in general and by general
principles of equity regardless of whether enforcement is considered in a
proceeding in equity or at law, and as to such other matters as may be agreed
upon by the Underwriter and JPMorgan Chase.
14
L. The Underwriter shall have received from in-house counsel for Financial
Security Assurance Inc. ("FSA") a favorable opinion addressed to it, dated the
Closing Date, in form and substance satisfactory to the Underwriter and its
counsel.
M. The Underwriter shall have received evidence satisfactory to the
Underwriter that, on or before the Closing Date, UCC-1 financing statements have
been or are being filed (a) in the office of the Secretary of State of the State
of the State of Delaware reflecting the transfer of the interest of LBAC and the
Transferor in the Receivables and the proceeds thereof to the Transferor and the
Trust, respectively, and (b) in the office of the Secretary of the State of
Delaware reflecting the pledge of such interest to the Indenture Trustee.
N. On the date of the Prospectus, and on the Closing Date, Deloitte &
Touche LLP shall furnish to the Underwriter a letter or letters, dated
respectively as of the date of the Prospectus, and as of the Closing Date,
substantially in the forms of the drafts to which the Underwriter has previously
agreed and otherwise in form and substance satisfactory to the Underwriter.
O. The Underwriter shall have received from Standard & Poor's Ratings
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., a rating letter
assigning a rating of "A-1+" to the Class A-1 Notes, "AAA" to the Class A-2
Notes, "AAA" to the Class A-3 Notes and "AAA" to the Class A-4 Notes, which
ratings shall not have been modified, lowered or withdrawn.
P. The Underwriter shall have received from ▇▇▇▇▇'▇ Investors Service,
Inc., a rating letter or letters assigning a rating of "P-1" to the Class A-1
Notes, "Aaa" to the Class A-2 Notes, "Aaa" to the Class A-3 Notes and "Aaa" to
the Class A-4 Notes, and Ba3 to the Class B Notes, which ratings shall not have
been modified, lowered or withdrawn.
Q. AMC shall have executed and delivered its guaranty of LBAC's and the
Transferor's obligations hereunder. R. The Certificate shall have been issued
and delivered to the Transferor.
S. The financial guaranty insurance policy relating to the Offered Notes
shall have been issued and delivered by FSA.
T. The Owner Trustee shall have furnished to the Underwriter a certificate
of the Owner Trustee, signed by one or more duly authorized officers of the
Owner Trustee, dated the Closing Date, as to the due authorization, execution
and delivery of the Trust Agreement by the Owner Trustee and the acceptance by
the Owner Trustee of the trusts created by the Trust Agreement and such other
matters as the Underwriter shall reasonably request.
U. The Indenture Trustee shall have furnished to the Underwriter a
certificate of the Indenture Trustee, signed by one or more duly authorized
officers of the Indenture Trustee, dated the Closing Date, as to the due
authorization, execution and delivery of the Indenture by the Indenture Trustee
and the due execution, authentication and delivery of the Notes by the Indenture
Trustee under the Indenture and such other matters as the Underwriter shall
reasonably request.
15
V. Prior to the Closing Date, counsel for the Underwriter shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the Offered
Notes as herein contemplated and related proceedings or in order to evidence the
accuracy and completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained, and all proceedings
taken by LBAC and the Transferor in connection with the issuance and sale of the
Offered Notes as herein contemplated shall be satisfactory in form and substance
to the Underwriter and counsel for the Underwriter.
W. Subsequent to the execution and delivery of this Agreement none of the
following shall have occurred: (i) trading in securities generally on the New
York Stock Exchange, the American Stock Exchange or the over-the-counter market
shall have been suspended or minimum prices shall have been established on
either of such exchanges or such market by the Commission, by such exchange or
by any other regulatory body or governmental authority having jurisdiction; (ii)
a banking moratorium shall have been declared by Federal or state authorities;
(iii) the United States shall have become engaged in hostilities, there shall
have been an escalation of hostilities involving the United States or there
shall have been a declaration of a national emergency or war by the United
States; or (iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets of the United States shall be
such) as to make it, in the judgment of the Underwriter, impractical or
inadvisable to proceed with the public offering or delivery of the Offered Notes
on the terms and in the manner contemplated in the Prospectus.
X. All proceedings in connection with the transactions contemplated by this
Agreement and all documents incident hereto shall be satisfactory in form and
substance to the Underwriter and its counsel, and the Underwriter and its
counsel shall have received such information, certificates and documents as the
Underwriter or its counsel may have reasonably requested.
If any of the conditions specified in this Section VII shall not have been
fulfilled in all material respects when and as provided in this Agreement, if
either the Transferor or LBAC is in breach of any covenants or agreements
contained herein or if any of the opinions and certificates referred to above or
elsewhere in this Agreement shall not be in all material respects satisfactory
in form and substance to the Underwriter and its counsel, this Agreement and all
the obligations of the Underwriter hereunder may be canceled by the Underwriter
at, or at any time on or prior to, the Closing Date. Notice of such cancellation
shall be given to the Transferor and LBAC in writing, or by telephone or
facsimile transmission confirmed in writing, and such cancellation shall be
without liability of any party to any other party, except as provided in Section
V(H).
Section VIII. Indemnification and Contribution. A. LBAC and the Transferor,
jointly and severally, agree to indemnify and hold harmless the Underwriter and
each person, if any, who controls the Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act from and against any
and all loss, claim, damage or liability, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of the Offered Notes), to which the Underwriter
or any such controlling person may become subject, under the Securities Act, the
Exchange Act or otherwise,
16
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon: (a)(i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereto,
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(iii) any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus or any amendment or supplement thereto or (iv) the
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading and shall reimburse the Underwriter and each such
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Underwriter or such controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that neither LBAC nor the Transferor shall be liable in any such case
to the extent that any such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made (i) in the Prospectus (or any amendment
thereof or supplement thereto) or the Registration Statement (or any amendment
thereof) in reliance upon and in conformity with written information furnished
to either LBAC or the Transferor by or on behalf of the Underwriter specifically
for inclusion therein and (ii) to the extent that such misstatement or omission
was corrected at least one day prior to the written confirmation of such sale
and the Underwriter did not deliver, at or prior to the written confirmation of
such sale, a copy of the Prospectus as then revised, amended or supplemented in
any case where such delivery is required by the Securities Act or the Exchange
Act, if either LBAC or the Transferor has previously furnished copies thereof to
the Underwriter in accordance with the terms of this Agreement or (iii) in the
Derived Information except to the extent such misstatement or omission arises
from a misstatement or omission in LBAC-Provided Information; or (b) the breach
of any representation or warranty by the Transferor or LBAC in this Agreement or
any Other Agreement to which it is a party, or in any document executed in
connection herewith or therewith or which is related to or arises out of the
transactions contemplated hereby or thereby, and the Transferor and LBAC will
jointly and severally reimburse the Underwriter and any other indemnified party
for any reasonable legal or other expenses incurred by the Underwriter or such
indemnified party (including, without limitation, reasonable fees and
disbursements of counsel incurred by the Underwriter or such other indemnified
party in any action or proceeding between the Underwriter or such indemnified
party and LBAC, the Transferor and/or any third party, or otherwise), as
incurred, in connection with investigating or defending such loss, claim,
damage, liability or action. The foregoing indemnity agreement is in addition to
any liability which LBAC and the Transferor may otherwise have to the
Underwriter or any controlling person of the Underwriter.
B. The Underwriter agrees to indemnify and hold harmless LBAC and the
Transferor, each of their respective directors, each of their respective
officers who signed the Registration Statement, and each person, if any, who
controls LBAC or the Transferor, respectively, within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act against any and all
loss, claim, damage or liability, or any action in respect thereof, to which
LBAC, the Transferor or any such director, officer or controlling person may
become subject, under the Securities Act, the Exchange Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement (or any
17
amendment thereof), (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus (or any amendment thereof or
supplement thereto) or (iv) the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, but in each case
to the extent, and only to the extent, that the untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with the Underwriter Information, other than a misstatement or
omission arising from a misstatement or omission in LBAC-Provided Information,
and shall reimburse LBAC, the Transferor and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by LBAC,
the Transferor or any director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in addition to
any liability which the Underwriter may otherwise have to LBAC, the Transferor
or any such director, officer or controlling person.
C. Promptly after receipt by any indemnified party under this Section VIII
of notice of any claim or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section VIII notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section VIII except to the extent it has been materially
prejudiced by such failure and, provided, further, that the failure to notify
any indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under this Section VIII.
If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section IX for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that 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 in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
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
18
of such action on behalf of such indemnified party, it being understood,
however, the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions 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 (in addition to local counsel) at any time for all such indemnified
parties, which firm shall be designated in writing by the Underwriter, if the
indemnified parties under this Section VIII consist of the Underwriter or any of
its controlling persons, or by LBAC or the Transferor, if the indemnified
parties under this Section VIII consist of LBAC or the Transferor or any of
LBAC's or the Transferor's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section VIII(A) and (B), shall use its best efforts to cooperate
with the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement.
D. For purposes of this Agreement, as to the Underwriter, "Derived
Information" means such portion, if any, of the information delivered to LBAC or
the Transferor by the Underwriter pursuant to Section V for filing with the
Commission on Form 8-K which information (i) is not contained in the Prospectus
without taking into account information incorporated therein by reference, and
(ii) does not constitute LBAC-Provided Information. "LBAC-Provided Information"
means any computer tape (or other information) furnished to the Underwriter by
or on behalf of LBAC or the Transferor concerning the Transferor, LBAC or the
Receivables.
E. If the indemnification provided for in this Section VIII shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section VIII(A) or (B), in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof (a) if
such loss, claim, damage or liability does not arise from Underwriter
Information, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by LBAC and the Transferor on the one hand and the
Underwriter on the other from the offering of the Offered Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law or if
the indemnified party failed to give the notice required under Section VIII(C),
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of LBAC and the
Transferor on the one hand and the Underwriter on the other with respect to the
statements or
19
omissions which resulted if such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations and (b)
if such loss, claim, damage or liability arises from Underwriter Information, in
such proportion as is appropriate to reflect the relative benefits received by
LBAC and the Transferor on the one hand and the Underwriter on the other from
the offering of the Offered Notes and the relative fault of LBAC and the
Transferor on the one hand and the Underwriter on the other with respect to the
statements or omissions which resulted in such loss, claims, damages or
liability, or actions in respect thereof, as well as any other relevant
equitable consideration.
The relative benefits of the Underwriter on the one hand and LBAC and the
Transferor on the other hand shall be deemed to be in such proportions that the
Underwriter is responsible for that portion of such losses, liabilities, claims,
damages and expenses represented by the percentage that the underwriting
discount on the cover of the Prospectus as amended or supplemented bears to the
initial public offering price of the Offered Notes as set forth thereon, and
LBAC and the Transferor shall be jointly and severally responsible for the
balance.
The relative fault of the Underwriter on the one hand and LBAC and the
Transferor on the other hand shall be determined by reference to whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
LBAC, the Transferor or by the Underwriter, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission and other equitable considerations.
LBAC, the Transferor and the Underwriter agree that it would not be just
and equitable if contributions pursuant to this Section VIII(E) were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section VIII(E) shall be deemed to include, for purposes of this Section
VIII(E), any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
In no case shall the Underwriter be responsible, in the aggregate, for any
amount in excess of (x) the amount received by the Underwriter in connection
with its resale of the Offered Notes over (y) the amount paid by the Underwriter
to the Transferor for the Offered Notes hereunder. 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.
F. The Underwriter confirms and each of the Transferor and LBAC hereby
acknowledge, that the information set forth (i) in the second, third and sixth
paragraphs under the caption "Underwriting" in the Prospectus Supplement and
(ii) the Derived Information (collectively, the "Underwriter Information")
constitutes the only information furnished in writing to LBAC and the Transferor
by or on behalf of the Underwriter specifically for inclusion in the
Registration Statement and the Prospectus.
20
Section IX. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of LBAC and the Transferor submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Underwriter or controlling
persons thereof, or by or on behalf of LBAC or the Transferor and shall survive
delivery of any Offered Notes to the Underwriter.
Section X. Termination of Agreement. The Underwriter may terminate this
Agreement immediately upon notice to LBAC and the Transferor, at any time at or
prior to the Closing Date if any of the events or conditions described in
Section VII(W) of this Agreement shall occur and be continuing. In the event of
any such termination, the covenant set forth in Section V(D), the provisions of
Section V(H), the indemnity agreement set forth in Section VIII, and the
provisions of Sections IX and XIII shall remain in effect.
Section XI. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriter, will be mailed,
delivered or transmitted by facsimile and confirmed to Greenwich Capital
Markets, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Asset-Backed Finance, Fax: (▇▇▇) ▇▇▇-▇▇▇▇; or, if sent to the Transferor or LBAC
will be mailed, delivered or transmitted by facsimile and confirmed to it at
Long Beach Acceptance Corp., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel.
Section XII. Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriter,
LBAC and the Transferor, and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that the representations, warranties, indemnities and agreements
contained in this Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control the Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and for the
benefit of directors of LBAC or the Transferor, officers of LBAC or the
Transferor who have signed the Registration Statement and any person controlling
LBAC or the Transferor within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act. Nothing in this Agreement is intended or shall
be construed to give any person, other than the persons referred to in this
Section XIII, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.
Section XIII. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
Section XIV. Counterparts. This Agreement may be executed in counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
Section XV. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this letter and
your acceptance shall represent a binding agreement between you, the Transferor
and LBAC.
Very truly yours,
LONG BEACH ACCEPTANCE RECEIVABLES CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
LONG BEACH ACCEPTANCE CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
GREENWICH CAPITAL MARKETS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
