Ex.4.2
[Executed Version]
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AMENDED AND RESTATED TRUST AGREEMENT
between
LONG BEACH ACCEPTANCE RECEIVABLES CORP.
and
WILMINGTON TRUST COMPANY
Owner Trustee
Dated as of June 1, 2003
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TABLE OF CONTENTS
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Page
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ARTICLE I. DEFINITIONS.........................................................................................1
SECTION 1.1. Capitalized Terms...................................................................1
SECTION 1.2. Other Definitional Provisions.......................................................2
ARTICLE II. ORGANIZATION.......................................................................................3
SECTION 2.1. Name................................................................................3
SECTION 2.2. Office..............................................................................3
SECTION 2.3. Purposes and Powers.................................................................4
SECTION 2.4. Appointment of Owner Trustee........................................................7
SECTION 2.5. Initial Capital Contribution to the Trust...........................................7
SECTION 2.6. Declaration of Trust................................................................7
SECTION 2.7. Title to Owner Trust Estate.........................................................7
SECTION 2.8. Situs of Trust......................................................................8
SECTION 2.9. Representations and Warranties of the Transferor....................................8
SECTION 2.10. Covenants of the Certificateholders................................................10
SECTION 2.11. Federal Income Tax Treatment of the Trust..........................................10
ARTICLE III. CERTIFICATES AND TRANSFER OF INTEREST............................................................14
SECTION 3.1. Initial Ownership..................................................................14
SECTION 3.2. The Certificates...................................................................14
SECTION 3.3. Authentication of Certificates.....................................................14
SECTION 3.4. Registration of Certificates.......................................................15
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates..................................16
SECTION 3.6. Persons Deemed Certificateholders..................................................16
SECTION 3.7. Transfer of Certificates...........................................................17
SECTION 3.8. Disposition In Whole But Not In Part...............................................19
ARTICLE IV. VOTING RIGHTS AND OTHER ACTIONS...................................................................19
SECTION 4.1. Prior Notice to Certificateholders with Respect to Certain Matters.................19
SECTION 4.2. Action by Certificateholders with Respect to Certain Matters.......................19
SECTION 4.3. Restrictions on Certificateholders' Power..........................................20
SECTION 4.4. Rights of Note Insurer.............................................................20
ARTICLE V. AUTHORITY AND DUTIES OF OWNER TRUSTEE..............................................................20
SECTION 5.1. General Authority..................................................................20
SECTION 5.2. General Duties.....................................................................21
SECTION 5.3. Action upon Instruction............................................................21
SECTION 5.4. No Duties Except as Specified in this Agreement or in Instructions.................22
SECTION 5.5. No Action Except under Specified Documents or Instructions.........................23
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SECTION 5.6. Restrictions.......................................................................23
ARTICLE VI. CONCERNING THE OWNER TRUSTEE......................................................................23
SECTION 6.1. Acceptance of Trusts and Duties....................................................23
SECTION 6.2. Furnishing of Documents............................................................24
SECTION 6.3. Representations and Warranties.....................................................25
SECTION 6.4. Reliance; Advice of Counsel........................................................26
SECTION 6.5. Not Acting in Individual Capacity..................................................26
SECTION 6.6. Owner Trustee Not Liable for Certificates or Receivables...........................26
SECTION 6.7. Owner Trustee May Own Notes........................................................27
SECTION 6.8. Payments from Owner Trust Estate...................................................27
SECTION 6.9. Doing Business in Other Jurisdictions..............................................27
ARTICLE VII. COMPENSATION OF OWNER TRUSTEE....................................................................28
SECTION 7.1. Owner Trustee's Fees and Expenses..................................................28
SECTION 7.2. Indemnification....................................................................28
SECTION 7.3. Payments to the Owner Trustee......................................................28
SECTION 7.4. Non-recourse Obligations...........................................................28
ARTICLE VIII. TERMINATION OF TRUST AGREEMENT..................................................................28
SECTION 8.1. Termination of Trust Agreement.....................................................28
ARTICLE IX. SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES............................................29
SECTION 9.1. Eligibility Requirements for Owner Trustee.........................................29
SECTION 9.2. Resignation or Removal of Owner Trustee............................................30
SECTION 9.3. Successor Owner Trustee............................................................31
SECTION 9.4. Merger or Consolidation of Owner Trustee...........................................31
SECTION 9.5. Appointment of Co-Indenture Trustee or Separate Indenture Trustee..................31
ARTICLE X. MISCELLANEOUS......................................................................................33
SECTION 10.1. Supplements and Amendments.........................................................33
SECTION 10.2. No Legal Title to Owner Trust Estate in Certificateholders.........................34
SECTION 10.3. Limitations on Rights of Others....................................................34
SECTION 10.4. Notices............................................................................34
SECTION 10.5. Severability.......................................................................36
SECTION 10.6. Separate Counterparts..............................................................36
SECTION 10.7. Assignments........................................................................36
SECTION 10.8. No Recourse........................................................................36
SECTION 10.9. Headings...........................................................................36
SECTION 10.10. GOVERNING LAW......................................................................36
SECTION 10.11. Servicer...........................................................................37
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SECTION 10.12. Limitation on Liability............................................................37
SECTION 10.13. No Petition........................................................................37
SECTION 10.14. Bankruptcy Matters.................................................................37
SECTION 10.15. Effect of Policy Expiration Date...................................................37
EXHIBITS
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EXHIBIT A - Form of Certificate of Trust
EXHIBIT B-1 - Form of Class R Certificate
EXHIBIT B-2 - Form of Class C Certificate
EXHIBIT C - Form of Transferee's Certificate for Qualified Institutional Buyers
EXHIBIT D - Form of Transferee's Certificate for Institutional Accredited Investors
EXHIBIT E - Form of Transferor's Certificate
EXHIBIT F - Form of ERISA Certificate
EXHIBIT G - Form of Flow Through Entity Certificate
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AMENDED AND RESTATED TRUST AGREEMENT dated as of June 1, 2003
between LONG BEACH ACCEPTANCE RECEIVABLES CORP., a Delaware corporation (the
"Transferor"), and Wilmington Trust Company, a Delaware banking corporation,
acting hereunder not in its individual capacity but solely as Owner Trustee (in
such capacity, the "Owner Trustee").
WHEREAS, the Transferor and the Owner Trustee have entered
into a Trust Agreement dated as of May 1, 2003 (the "Original Trust Agreement");
and
WHEREAS, the Transferor and the Owner Trustee wish to amend
and restate the Original Trust Agreement by entering into this Agreement.
NOW THEREFORE, in consideration of the covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.1. Capitalized Terms. For all purposes of this
Agreement, the following terms shall have the meanings set forth below, terms
defined in the singular shall include the plural:
"Agreement" shall mean this Amended and Restated Trust
Agreement, as the same may be further amended and supplemented from time to
time.
"Certificate" shall mean each of the Class C Certificate and
the Class R Certificate.
"Certificate of Trust" shall mean the Certificate of Trust in
the form of Exhibit A to be filed for the Trust pursuant to Section 3810(a) of
the Statutory Trust Act.
"Certificate Register" and "Certificate Registrar" shall mean
the register mentioned and the registrar appointed pursuant to Section 3.4.
"Certificateholder" or "Holder" shall mean the person in whose
name a Certificate is registered on the Certificate Register.
"Class C Certificate" means the certificate substantially in
the form of Exhibit B-2 attached hereto.
"Class R Certificate" means a trust certificate evidencing the
entire beneficial interest in the Trust, substantially in the form of Exhibit
B-1 attached hereto.
"Instructing Party" shall have the meaning assigned to such
term in Section 5.3.
"Nonrecourse Debt Minimum Gain" means "nonrecourse debt
minimum gain" as defined in Treasury Regulation 1.704-2(i)(2).
"Non-Registered Trust Certificate" means a Certificate other
than a Registered Trust Certificate.
"Owner Trust Estate" shall mean all right, title and interest
of the Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in Collection Account, the Supplemental Enhancement Account or the Note
Account and all other property of the Trust from time to time, including any
rights of the Owner Trustee and the Trust pursuant to the Sale and Servicing
Agreement and the Spread Account Agreement.
"Percentage Interest" means with respect to any Certificate,
the percentage portion of the Certificate evidenced thereby as stated on the
face of such Certificate.
"Registered Trust Certificate" means a Certificate that was
sold pursuant to a registration statement that has been filed and has become
effective under the Securities Act.
"Secretary of State" means the Secretary of State of the State
of Delaware.
"Statutory Trust Act" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code (ss.) 3801 et. seq. as the same may be amended from
time to time.
"Transferee's Certificate" means a certificate in the form of
Exhibits C or D hereto.
"Transferor's Certificate" means a certificate in the form of
Exhibit E hereto.
"Treasury Regulations" means regulations, including proposed
or temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" means the trust established by this Agreement.
"Trust Minimum Gain" means "partnership minimum gain" as
defined in Treasury Regulations 1.704-2(b)(2) and 1.704-(d). In accordance with
Treasury Regulations Section 1.704-2(d), the amount of Trust Minimum Gain is
determined by first computing, for each nonrecourse liability of the Trust, any
gain the Trust would realize if it disposed of the property subject to the
liability for no consideration other than full satisfaction of the liability,
and then aggregating the separately computed gains. A Certificateholder's share
of Trust Minimum Gain shall be determined in accordance with Treasury Regulation
Section 1.704-2(g)(1).
"WTC" means Wilmington Trust Company, a Delaware banking
corporation, in its individual capacity.
SECTION 1.2. Other Definitional Provisions.
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(a) Capitalized terms used herein and not otherwise defined
herein have the meanings assigned to them in Annex A to the Sale and Servicing
Agreement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles as in effect on the
date of this Agreement or any such certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
ARTICLE II.
Organization
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SECTION 2.1. Name. There is hereby formed a trust to be known
as "Long Beach Acceptance Auto Receivables Trust 2003-B," in which name the
Owner Trustee may conduct the business of the Trust, make and execute contracts
and other instruments on behalf of the Trust and ▇▇▇ and be sued on behalf of
the Trust.
SECTION 2.2. Office. The principal office of the Trust, and
such additional offices as the Class R Certificateholder may direct the Owner
Trustee to establish, shall be located at such place or places inside or outside
the State of Delaware as the Class R Certificateholder may unanimously designate
from time to time. The Class R Certificateholder hereby designates the office of
the Owner Trustee at ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Administration as the principal
office of the Trust.
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SECTION 2.3. Purposes and Powers. The Trust and the parties to
this Agreement shall be subject to the following provisions regarding the
purposes, powers and procedures of the Trust:
(a) The purpose of the Trust is to engage solely in the
following activities:
(i) to acquire the Owner Trust Estate pursuant to Article II
of the Sale and Servicing Agreement;
(ii) to issue the Notes pursuant to the Indenture and the
Class C Certificate and the Class R Certificate pursuant to this
Agreement, to sell and exchange the Notes and to transfer the Class R
Certificate to the Transferor and sell the Class C Certificate and to pay
interest on and principal of the Notes and distributions on the
Certificates;
(iii) with the proceeds of the sale of the Notes and the Class
C Certificate, to fund the Spread Account and the Supplemental Enhancement
Account, and to pay the balance to the Transferor pursuant to the Sale and
Servicing Agreement;
(iv) to assign, grant, transfer, pledge, mortgage and convey
the Pledged Property to the Indenture Trustee pursuant to the Indenture
for the benefit of the Note Insurer and the Noteholders and to hold,
manage and distribute to the Certificateholders pursuant to the terms of
the Sale and Servicing Agreement and the Spread Account Agreement any
portion of the Pledged Property released from the Lien of the Indenture;
(v) to enter into and perform its obligations under the Basic
Documents to which it is a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions to
the Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
(b) The Trust's only assets shall be the Owner Trust Estate.
Other than the Notes, the Trust shall not secure any indebtedness with any of
the Owner Trust Estate.
(c) Other than with respect to the transfer to the Trust of
the Trust Assets, the Trust shall not do any of the following: acquire any
obligations of, make loans or advances to, borrow funds from, assume or
guarantee the obligations or liabilities of, have its obligations or
liabilities guaranteed by, or hold itself out as responsible for the debts
and
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obligations of the Owner Trustee, the Certificateholders, LBAC, LBARC-WI,
the Indenture Trustee or any other person or entity.
(d) The Owner Trustee shall not manage, control, use, sell,
dispose of or otherwise deal with any part of the Owner Trust Estate except
in accordance with the specific limitations set forth in this Agreement and
the other Basic Documents to which the Trust is a party.
(e) The Trust shall, in all dealings with the public,
identify itself under the name of the Trust and as a separate and distinct
entity from any other Person or entity. All transactions and agreements
between the Trust and third parties shall be conducted in the name of the
Trust as an entity separate and independent from the Owner Trustee, the
Indenture Trustee, the Transferor, LBAC and any Certificateholder.
(f) All transactions and agreements between the Trust, on
the one hand, and any of WTC, the Owner Trustee, the Indenture Trustee, the
Trust Collateral Agent, the Custodian, the Transferor, LBAC, the Class R
Certificateholder and the Class C Certificateholder, on the other hand, shall
reflect the separate legal existence of each entity and will be formally
documented in writing. The pricing and other material terms of all such
transactions and agreements shall be on terms substantially similar to those
that would be available on an arm's-length basis with unaffiliated third
parties.
(g) The Trust shall not commingle its funds and other assets
with those of any other Person or business entity and shall maintain its
assets and liabilities in such a manner that it shall not be costly or
difficult to segregate, ascertain or identify its individual assets and
liabilities from those of any other person or entity. The Owner Trustee shall
hold the Owner Trust Estate on behalf of the Trust.
(h) The Trust shall pay its liabilities and losses as they
become due from the Owner Trust Estate, provided, however, that none of the
Owner Trust Estate shall be used to pay the liabilities (including liability
in respect of guaranties) and losses of WTC, the Transferor, LBAC, the
Indenture Trustee, the Trust Collateral Agent, the Custodian or any
Certificateholder. The Trust has been structured to maintain capital in an
amount reasonably sufficient to meet the anticipated needs of the Trust.
(i) The Trust shall not share any of the same officers or
other employees with the Servicer, the Transferor, LBAC, the Indenture
Trustee, the Trust Collateral Agent, the Custodian or any Certificateholder.
(j) The Trust shall not, jointly with the Servicer, the
Transferor, LBAC, the Indenture Trustee, the Trust Collateral Agent, the
Custodian or any Certificateholder contract or do business with vendors or
service providers or share overhead expenses.
(k) The Trust shall maintain its own bank accounts, books
and records and annual financial statements prepared in accordance with
generally accepted accounting principles, separate from those of WTC, the
Owner Trustee, the Indenture Trustee, the Trust
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Collateral Agent, the Custodian, the Transferor, LBAC, LBARC-WI and any
Certificateholder. The foregoing will reflect that the assets and liabilities
of and all transactions and transfers of funds involving the Trust shall be
separate from those of each such other entity, and the Trust shall pay or
bear the cost of the preparation of its own financial statements and shall
not pay or bear the cost of the preparation of the financial statements of
any such other entity. Neither the accounting records nor the financial
statements of the Trust will indicate that the Owner Trust Estate is
available to pay creditors of WTC, the Indenture Trustee, the Trust
Collateral Agent, the Custodian, the Transferor, LBAC, LBARC-WI or any
Certificateholder or any other person or entity.
(l) The Owner Trustee shall not have the power to commence a
voluntary proceeding in bankruptcy relating to the Trust without the prior
approval of the Certificateholders and the Transferor and the delivery to the
Owner Trustee by each of the Certificateholders and the Transferor of a
certificate stating that such entity reasonably believes that the Trust is
insolvent.
(m) Each of the Owner Trustee and the Transferor covenants
and agrees that it will not at any time institute against any
Certificateholder, or join in any institution against any Certificateholder
of any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other proceeding under any United States of America federal or
state bankruptcy or similar law in connection with any obligations relating
to the Certificates or this Agreement. The Owner Trustee and the Transferor
each covenants and agrees that it will not, in any capacity, seek the
substantive consolidation of the assets of the Trust with any
Certificateholder.
(n) The Certificates cannot be transferred other than
pursuant to Section 3.7.
(o) The Owner Trustee may, pursuant to Section 5.2 of this
Agreement, delegate certain administrative duties relating to the Trust to
specified entities (other than the Class R Certificateholder), which will be
authorized to prepare on behalf of the Trust all documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Trust
to prepare, file and deliver. However, the Owner Trustee may not delegate any
such administrative duties to the Class R Certificateholder, and the Class R
Certificateholder may not perform any of the Trust's duties or obligations.
(p) The Class R Certificate shall entitle the Class R
Certificateholder only to the benefits and distributions as are expressly set
forth in this Agreement.
(q) The Class C Certificate shall entitle the Class C
Certificateholder only to the benefits and distributions as are expressly set
forth in this Agreement.
(r) The Trust and this Agreement may not be revoked or
terminated except in accordance with Section 8.1 of this Agreement and in no
event shall any Certificateholder have the ability to terminate the Trust
unilaterally.
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(s) The Trust shall not consensually merge or consolidate
with any of WTC, the Owner Trustee, the Transferor, LBAC, LBARC-WI or any
Certificateholder.
(t) Neither the Transferor nor any Certificateholder shall
request or instruct the Owner Trustee to take or refrain from taking any
action if such action or inaction would be contrary to any obligation of the
Trust or the Owner Trustee under this Agreement or contrary to the limited
purposes of the Trust, and the Owner Trustee shall be under no obligation to
comply with any such request or instruction if given.
SECTION 2.4. Appointment of Owner Trustee. The Transferor
hereby appoints the Owner Trustee as trustee of the Trust effective as of the
date hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5. Initial Capital Contribution to the Trust. The
Transferor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Transferor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial property of the
Trust. The Transferor shall pay organizational expenses of the Trust as they may
arise.
SECTION 2.6. Declaration of Trust. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate for the use and benefit of the
Certificateholders in trust upon and subject to the conditions set forth herein,
subject to the obligations of the Trust under the Basic Documents. It is the
intention of the parties hereto that the Trust constitute a statutory trust
under the Statutory Trust Act and that this Agreement constitute the governing
instrument of such statutory trust. Effective as of the date hereof, the Owner
Trustee shall have all rights, powers and duties set forth herein and to the
extent not inconsistent herewith, in the Statutory Trust Act with respect to
accomplishing the purposes of the Trust. The Owner Trustee shall file the
Certificate of Trust with the Secretary of State.
No Certificateholder shall have any personal liability for any
liability or obligation of the Trust.
SECTION 2.7. Title to Owner Trust Estate
(a) Legal title to all the Owner Trust Estate shall be
vested at all times in the Trust as a separate legal entity except where
applicable law in any jurisdiction requires title to any part of the Owner
Trust Estate to be vested in a trustee or trustees, in which case title shall
be deemed to be vested in the Owner Trustee, a co-trustee and/or a separate
trustee, as the case may be.
(b) No Certificateholder shall have legal title to any part
of the Owner Trust Estate. The Class R Certificateholder shall be entitled to
receive distributions with respect to its undivided ownership interest
therein only in accordance with the Sale and Servicing Agreement and the
Spread Account Agreement. The Class C Certificateholder shall be entitled to
receive distributions with respect to its undivided ownership interest
therein only in accordance with the Sale and Servicing Agreement. No
transfer, by operation of law or
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otherwise, of any right, title or interest by the Class R Certificateholder
of its ownership interest in the Owner Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee
to an accounting or to the transfer to it of legal title to any part of the
Owner Trust Estate.
SECTION 2.8. Situs of Trust. The Trust shall be administered
in the State of Delaware.
SECTION 2.9. Representations and Warranties of the Transferor.
The Transferor makes the following representations and warranties on which the
Owner Trustee relies in accepting the Trust Assets in trust and issuing the
Certificates and upon which the Note Insurer relies in issuing the Policy:
(a) Organization and Good Standing. The Transferor is duly
organized and validly existing as a Delaware corporation with power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted and
is proposed to be conducted pursuant to this Agreement and the Basic
Documents to which it is a party.
(b) Due Qualification. The Transferor is duly qualified to
do business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership
or lease of its property, the conduct of its business and the performance of
its obligations under this Agreement and the Basic Documents to which it is a
party requires such qualification.
(c) Power; Authority; Execution; Enforceability. The
Transferor has the corporate power and authority to execute and deliver this
Agreement and to carry out its terms; the Transferor has full power and
authority to sell and assign the property to be conveyed and assigned to and
deposited with the Trust and the Transferor has duly authorized such
conveyance and assignment and deposit to the Trust by all necessary corporate
action; and the execution, delivery and performance of this Agreement and the
other Basic Documents to which it is a party has been duly authorized by the
Transferor by all necessary corporate action. The Transferor has duly
executed this Agreement and the other Basic Documents to which it is a party,
and this Agreement and the other Basic Documents to which it is a party
constitute the legal, valid and binding obligations of the Transferor,
enforceable against the Transferor in accordance with their terms.
(d) No Consent Required. No consent, license, approval or
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required to be obtained by the
Transferor in connection with the execution, delivery or performance of this
Agreement and the Basic Documents to which the Transferor is a party, except
for such as have been obtained, effected or made.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents and the
fulfillment of the terms hereof
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and thereof do not conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or lapse of time) a
default under, the certificate of incorporation or by-laws of the Transferor,
or any indenture, agreement or other instrument to which the Transferor is a
party or by which it is bound; nor result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the Basic
Documents); nor violate any law or, to the best of the Transferor's
knowledge, any order, rule or regulation applicable to the Transferor of any
court or of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Transferor or
its properties.
(f) No Proceedings. There are no proceedings or
investigations pending or, to its knowledge threatened against it before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over it or its properties
(A) asserting the invalidity of this Agreement or any of the Basic Documents
to which the Transferor is a party, (B) seeking to prevent the issuance of
the Certificates or the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents to which the
Transferor is a party, (C) seeking any determination or ruling that might
materially and adversely affect its performance of its obligations under, or
the validity or enforceability of, this Agreement or any of the Basic
Documents to which the Transferor is a party, or (D) seeking to adversely
affect the federal income tax or other federal, state or local tax attributes
of the Notes or the Certificates.
(g) No Liens. Upon the conveyance, assignment or other
transfer of any of the Trust Assets by the Transferor to the Trust pursuant
to the Sale and Servicing Agreement, the Transferor will have conveyed to the
Trust good title, free and clear of any lien, encumbrance or other interests
of others (including without limitation, any claim of any creditor of the
Transferor or any of its Affiliates) of any nature and the Trust will have
the right to Grant and deliver the Pledged Property to the Indenture Trustee
in accordance with the Indenture and upon the Grant and delivery of the
Pledged Property by the Trust to the Indenture Trustee in the manner
contemplated by the Indenture, and assuming the validity and binding effect
of the Indenture, the Indenture Trustee will have obtained a valid first
priority security interest therein, prior to all liens.
(h) Records. Immediately upon the sale or other delivery of
any Trust Assets to the Trust pursuant to the Sale and Servicing Agreement,
the Transferor will make any appropriate notations on its records to indicate
that the Trust Assets have been transferred to the Trust pursuant to the Sale
and Servicing Agreement and, to the extent it constitutes Pledged Property,
has been pledged by the Trust to the Indenture Trustee to secure payment of
the Notes.
(i) No Bankruptcy Petition. The Transferor has no present
intent to cause a voluntary bankruptcy of the Trust.
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(j) Separate Entity. The Transferor will hold itself out to
the public under its own name as a separate and distinct entity and conduct
its business so as not to mislead others as to the identity of the entity
under which those others are concerned. Without limiting the generality of
the foregoing, all oral and written communications, including without
limitation, all letters, invoices, contracts, statements and applications
will be made solely in the name of the Trust if they are made on behalf of
the Trust and solely in the name of the Transferor if they are made on behalf
of the Transferor.
(k) Financial Statements. The Transferor will disclose in
all financial statements that the assets of the Trust are not available to
the Transferor's creditors.
SECTION 2.10. Covenants of the Certificateholders. Each
Certificateholder, by its acceptance of a Certificate, agrees:
(a) to be bound by the terms and conditions of the
Certificates of which the Certificateholder is the beneficial owner and of
this Agreement and the other Basic Documents, including any supplements or
amendments hereto and thereto and to perform the obligations of a
Certificateholder as set forth therein or herein, in all respects as if it
were a signatory hereto. This undertaking is made for the benefit of the
Trust, the Owner Trustee and the Note Insurer;
(b) until one year and one day after the completion of the
events specified in Section 8.1(d), not to, for any reason, institute
proceedings for the Trust to be adjudicated a bankrupt or insolvent, or
consent to the institution of bankruptcy or insolvency proceedings against
the Trust, or file a petition seeking or consenting to reorganization or
relief under any applicable federal or state law relating to bankruptcy, or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trust or a substantial part
of its property, or cause or permit the Trust to make any assignment for the
benefit of its creditors, or admit in writing its inability to pay its debts
generally as they become due, or declare or effect a moratorium on its debt
or take any action in furtherance of any such action; and
(c) with respect to the Class R Certificateholder, to
execute and deliver such instruments of conveyance, assignment, grant,
confirmation, as well as any financing statements, in each case, as the Note
Insurer shall consider reasonably necessary in order to perfect the security
interests of the Collateral Agent in the collateral pledged under the Spread
Account Agreement.
SECTION 2.11. Federal Income Tax Treatment of the Trust.
(a) The Trust will be treated as a partnership (rather than
disregarded as a separate entity) for federal income tax purposes. Therefore,
the following provisions shall apply:
(i) A separate capital account (a "Capital Account") shall
be established and maintained for each Certificateholder by the Class R
Certificateholder, in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv). No Certificateholder
10
shall be entitled to interest on its Capital Account or any capital
contribution made by such Certificateholder to the Trust.
(ii) Upon termination of the Trust pursuant to Article VII,
any amounts available for distribution to Certificateholders shall be
distributed to the Certificateholders with positive Capital Account balances
in accordance with such balances. For purposes of this Section 2.11, the
Capital Account of each Certificateholder shall be determined after all
adjustments made in accordance with this Section 2.11 resulting from the
Trust's operations and from all sales and dispositions of all or any part of
the assets of the Trust. Any distributions pursuant to this Section 2.11
shall be made by the end of the Taxable Year in which the termination occurs
(or, if later, within 90 days after the date of the termination).
(iii) No Certificateholder shall be required to restore any
deficit balance in its Capital Account. Furthermore, no Certificateholder
shall be liable for the return of the Capital Account of, or of any capital
contribution made to the Trust by, another Certificateholder.
(iv) Profit and loss of the Trust for each Taxable Year
shall be allocated to the Certificateholders in accordance with their
respective Percentage Interests.
(v) Notwithstanding any provision to the contrary, (i) any
expense of the Trust that is a "nonrecourse deduction" within the meaning of
Treasury Regulations Section 1.704-2(b)(1) shall be allocated in accordance
with the Certificateholders' respective Percentage Interests, (ii) any
expense of the Trust that is a "partner nonrecourse deduction" within the
meaning of Treasury Regulations Section 1.704-2(i)(2) shall be allocated in
accordance with Treasury Regulations Section 1.704-2(i)(1), (iii) if there is
a net decrease in Trust Minimum Gain within the meaning of Treasury
Regulations Section 1.704-2(f)(1) for any Taxable Year, items of gain and
income shall be allocated among the Certificateholders in accordance with
Treasury Regulations Section 1.704-2(f) and the ordering rules contained in
Treasury Regulations Section 1.704-2(i), and (iv) if there is a net decrease
in Certificateholder Nonrecourse Debt Minimum Gain within the meaning of
Treasury Regulations Section 1.704-2(i)(4) for any Taxable Year, items of
gain and income shall be allocated among the Certificateholders in accordance
with Treasury Regulations Section 1.704-2(i)(4) and the ordering rules
contained in Treasury Regulations Section 1.704-2(j). A Certificateholder's
"interest in partnership profits" for purposes of determining its share of
the nonrecourse liabilities of the Trust within the meaning of Treasury
Regulations Section 1.752-3(a)(3) shall be such Certificateholder's
Percentage Interest.
(vi) If a Certificateholder receives in any Taxable Year an
adjustment, allocation, or distribution described in subparagraphs (4), (5),
or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) that causes or
increases a negative balance in such Certificateholder's Capital Account that
exceeds the sum of such Certificateholder's
11
shares of Trust Minimum Gain and Certificateholder Nonrecourse Debt Minimum
Gain, as determined in accordance with Treasury Regulations Sections
1.704-2(g) and 1.704-2(i), such Certificateholder shall be allocated
specially for such Taxable Year (and, if necessary, later Taxable Years)
items of income and gain in an amount and manner sufficient to eliminate such
negative Capital Account balance as quickly as possible as provided in
Treasury Regulations Section 1.704-1(b)(2)(ii)(d). After the occurrence of an
allocation of income or gain to a Certificateholder in accordance with this
Section 6.01(c)(vi), to the extent permitted by Regulations Section
1.704-1(b), items of expense or loss shall be allocated to such
Certificateholder in an amount necessary to offset the income or gain
previously allocated to such Certificateholder under this Section
6.01(c)(vi).
(vii) Loss shall not be allocated to a Certificateholder to
the extent that such allocation would cause a deficit in such
Certificateholder's Capital Account (after reduction to reflect the items
described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and
(6)) to exceed the sum of such Certificateholder's shares of Trust Minimum
Gain and Certificateholder Nonrecourse Debt Minimum Gain. Any loss in excess
of that limitation shall be allocated to all the Certificateholders in
accordance with their respective Percentage Interests. After the occurrence
of an allocation of loss to a Certificateholder in accordance with this
Section 6.01(c)(vii), to the extent permitted by Treasury Regulations Section
1.704-1(b), profit shall be allocated to such Certificateholder in an amount
necessary to offset the loss previously allocated to such Certificateholder
under this Section 6.01(c)(vii).
(viii) If a Certificateholder transfers any part or all of
its Percentage Interest and the transferee is admitted as a Certificateholder
as provided herein (a "Transferee Certificateholder"), the distributive
shares of the various items of profit and loss allocable among the
Certificateholders during such Taxable Year shall be allocated between the
transferor and the Transferee Certificateholder (at the election of the
Certificateholders (including the transferor, but excluding the Transferee
Certificateholder)) either (i) as if the Taxable Year had ended on the date
of the transfer or (ii) based on the number of days of such Taxable Year that
each was a Certificateholder without regard to the results of Trust
activities in the respective portions of such Taxable Year in which the
transferor and Transferee Certificateholder were Certificateholders.
12
(ix) "Profit" and "loss" and any items of income, gain,
expense or loss referred to in this Section 2.11 shall be determined in
accordance with federal income tax accounting principles as modified by
Treasury Regulations Section 1.704-1(b)(2)(iv), excepting that that profits
and losses shall not include items of income, gain, and expense that are
specially allocated pursuant to Sections 2.11(a)(v), 2.11(a)(vi) or
2.11(a)(vii) hereof. All allocations of income, profits, gains, expenses, and
losses (and all items contained therein) for federal income tax purposes
shall be identical to all allocations of such items set forth in this Section
2.11, except as otherwise required by Section 704(c) of the Code and Section
1.704-1(b)(4) of the Treasury Regulations.
(x) The taxable year of the Trust (the "Taxable Year") shall
be the calendar year or such other taxable year as may be required by Section
706(b) of the Code.
(xi) As provided in Section 5.7(c) of the Sale and Servicing
Agreement, at the Servicer's expense, the Class R Certificateholder shall (i)
cause a firm of nationally recognized accountants to prepare, and file or
cause to file such tax returns relating to the Trust (including a partnership
information return, IRS Form 1065) as are required by applicable federal,
state, and local law, (ii) cause such returns to be signed in the manner
required by law, (iii) make such elections as may from time to time be
required or appropriate under any applicable law so as to maintain the
Trust's classification as a partnership for tax purposes, (iv) prepare and
deliver, or cause to be prepared and delivered, to the Certificateholders, no
later than 120 days after the close of each Taxable Year (or no later than
April l5th), a Schedule K-1, a copy of the Trust's informational tax return
(IRS Form 1065), and such other reports (collectively, the "Annual Tax
Reports") setting forth in sufficient detail all such information and data
with respect to the transactions effected by or involving the Trust during
such Taxable Year as shall enable each Certificateholder to prepare its
federal, state, and local income tax returns in accordance with the laws then
prevailing, and (v) collect, or cause to be collected, any withholding tax
with respect to income or distributions to Certificateholders.
(xii) The Class R Certificateholder shall be designated as
the tax matters partner for the Trust within the meaning of Section
6231(a)(7) of the Code (the "Tax Matters Partner"). The Tax Matters Partner
shall have the right and obligation to take all actions authorized and
required, respectively, by the Code for the Tax Matters Partner. The Tax
Matters Partner shall have the right to retain professional assistance in
respect of any audit or controversy proceeding initiated with respect to the
Trust by the Internal Revenue Service or any state or local taxing authority,
and except as provided in Section 2.11(xi), all expenses and fees incurred by
the Tax Matters Partner on behalf of the Trust shall constitute expenses of
the Trust. In the event the Tax Matters Partner receives notice of a final
partnership adjustment under Section 6223(a)(2) of the Code, the Tax Matters
Partner shall either (i) file a court petition for judicial review of such
adjustment within the period provided under Section 6226(a) of the Code, a
copy of which petition shall be mailed to all other Certificateholders on the
date such petition is filed, or (ii) mail a
13
written notice to all other Certificateholders, within such period, that
describes the Tax Matters Partner's reasons for determining not to file such
a petition.
(b) Except as otherwise provided in this Section 2.11, the
Certificateholders shall instruct the Class R Certificateholder in writing as
to whether to make any available election under the Code or any applicable
state or local tax law on behalf of the Trust. However, neither the Owner
Trustee nor any Certificateholder will, under any circumstances, and at any
time, make an election on IRS Form 8832 or otherwise, to classify the Trust
as an association taxable as a corporation for federal, state or any other
applicable tax purpose. Further, neither the Owner Trustee nor any
Certificate will, under any circumstances, and at any time, cause the Trust
to engage in any activity which would cause the Trust to become an
association or publicly traded partnership, taxable as corporation for
federal income tax purposes.
ARTICLE III.
Certificates and Transfer of Interest
-------------------------------------
SECTION 3.1. Initial Ownership. Upon the formation of the
Trust by the contribution by the Transferor pursuant to Section 2.5 and until
the issuance of the Certificates, the Transferor shall be the sole beneficiary
of the Trust.
SECTION 3.2. The Certificates. The Certificates shall be
executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee. A Certificate bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefit of this Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the authentication and delivery of such Certificate or did not hold such
offices at the date of authentication and delivery of such Certificate. A
transferee of a Certificate shall become a Certificateholder, and shall be
entitled to the rights and subject to the obligations of a Certificateholder
hereunder, upon due registration of such Certificate in such transferee's name
pursuant to Section 3.4.
SECTION 3.3. Authentication of Certificates.
(a) Concurrently with the conveyance of the Receivables to
the Trust pursuant to the Sale and Servicing Agreement, the Owner Trustee
shall cause the Class R Certificate to be executed on behalf of the Trust,
authenticated and delivered to or upon the written order of the Transferor,
signed by its chairman of the board, its president or any vice president, its
treasurer or any assistant treasurer without further corporate action by the
Transferor, in authorized denominations. No Class R Certificate shall entitle
its holder to any benefit under this Agreement, or shall be valid for any
purpose, unless there shall appear on such Class R Certificate a certificate
of authentication substantially in the form set forth in Exhibit B-1,
executed by the Owner Trustee or WTC as the Owner Trustee's authentication
agent, by manual signature; such authentication shall constitute conclusive
evidence that such Class R Certificate shall have been duly authenticated and
delivered hereunder. Each Class R Certificate shall be dated the date of its
authentication.
14
(b) Concurrently with the conveyance of the Receivables to
the Trust pursuant to the Sale and Servicing Agreement, and the execution,
authentication and delivery of the Class R Certificate, the Owner Trustee
shall cause the Class C Certificate to be executed on behalf of the Trust,
authenticated and delivered to or upon the written order of the Transferor,
signed by its chairman of the board, its president or any vice president, its
treasurer or any assistant treasurer without further corporate action by the
Transferor, in authorized denominations. No Class C Certificate shall entitle
its holder to any benefit under this Agreement or the Sale and Servicing
Agreement, or shall be valid for any purpose, unless there shall appear on
such Class C Certificate a certificate of authentication substantially in the
form set forth in Exhibit B-2, executed by the Owner Trustee or WTC as the
Owner Trustee's authentication agent, by manual signature; such
authentication shall constitute conclusive evidence that such Class C
Certificate shall have been duly authenticated and delivered hereunder. Each
Class C Certificate shall be dated the date of its authentication.
SECTION 3.4. Registration of Certificates
(a) The Certificate Registrar shall keep or cause to be
kept, at the office or agency maintained pursuant to Section 2.2, a
Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Owner Trustee shall provide for the registration of the
Certificates and of transfers and exchanges of the Certificates as herein
provided. WTC shall be the initial Certificate Registrar.
(b) The Certificate Registrar shall provide the Trust
Collateral Agent with the name and address of the Certificateholder on the
Closing Date. Upon any transfer of a Certificate, the Certificate Registrar
shall notify the Trust Collateral Agent of the name and address of the
transferee in writing, by facsimile, on the day of such transfer.
(c) Upon surrender for registration of transfer of a
Certificate at the office or agency maintained pursuant to Section 2.2, the
Owner Trustee shall execute, authenticate and deliver (or shall cause WTC as
its authenticating agent to authenticate and deliver), in the name of the
designated transferee, a new Certificate dated the date of authentication by
the Owner Trustee or any authenticating agent.
(d) A Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the Certificateholder or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate Registrar,
which requirements include membership or participation in the Securities
Transfer Agent's Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Exchange Act. Each Certificate surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the Owner Trustee
in accordance with its customary practice.
15
(e) No service charge shall be made for any registration of
transfer or exchange of a Certificate, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any
transfer or exchange of such Certificate.
(f) In furtherance of and in limitation of the foregoing,
each Certificateholder, by acceptance of its Certificate, specifically
acknowledges that it has no right to or interest in any monies at any time
held in the Supplemental Enhancement Account or the Spread Account prior to
the release of such monies pursuant to Section 5.6(c) or Section 5.6(d) of
the Sale and Servicing Agreement, such monies being held in trust for the
benefit of the Class A Noteholders and the Note Insurer. Notwithstanding the
foregoing, in the event that it is ever determined that provisions of the
Sale and Servicing Agreement and the Spread Account Agreement shall be
considered to constitute a security agreement and the Transferor and each
Certificateholder hereby grant to the Collateral Agent for the benefit of the
Class A Noteholders and the Note Insurer a first priority perfected security
interest in such amounts, to be applied as set forth in Section 3.03 of the
Spread Account Agreement and Section 5.6 of the Sale and Servicing Agreement.
In addition, the Class R Certificateholder, by acceptance of its Certificate,
hereby appoints the Transferor as its agent to pledge a first priority
perfected security interest in the Spread Account, and any amounts held
therein from time to time to the Collateral Agent pursuant to the Spread
Account Agreement and agrees to execute and deliver such instruments of
conveyance, assignment, grant and confirmation, as well as financing
statements, in each case as the Note Insurer shall consider reasonably
necessary in order to perfect the Collateral Agent's Security Interest in the
Collateral (as such terms are defined in the Spread Account Agreement).
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Certificate and (b)
there shall be delivered to the Certificate Registrar, the Owner Trustee and
(unless a Note Insurer Default shall have occurred and be continuing) the Note
Insurer, such security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Certificate shall have
been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust
shall execute and the Owner Trustee, or WTC, as the Owner Trustee's
authenticating agent, shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like class, tenor and denomination. In connection with the issuance of any
new Certificate under this Section, the Owner Trustee or the Certificate
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the Trust, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
SECTION 3.6. Persons Deemed Certificateholders. Every Person
by virtue of becoming a Certificateholder in accordance with this Agreement
shall be deemed to be bound by the terms of this Agreement. Prior to due
presentation of a Certificate for registration of transfer, the Owner Trustee,
the Certificate Registrar and the Note Insurer and any agent of the Owner
16
Trustee, the Certificate Registrar and the Note Insurer, may treat the person in
whose name any Certificate shall be registered in the Certificate Register as
the owner of such Certificate for the purpose of receiving distributions
pursuant to the Sale and Servicing Agreement and the Spread Account Agreement
and for all other purposes whatsoever, and none of the Owner Trustee, the
Certificate Registrar or the Note Insurer nor any agent of the Owner Trustee,
the Certificate Registrar or the Note Insurer shall be bound by any notice to
the contrary.
SECTION 3.7. Transfer of Certificates.
(a) No transfer of a Certificate shall be made unless (I)
such transfer (x) is made pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or (y) is
exempt from the registration requirements under the Securities Act and such
state securities laws and (II) such transfer is to a Person that satisfies
the requirements of paragraph (a)(2)(i) or (a)(2)(ii) of Rule 3a-7 as then in
effect or any successor rule ("Rule 3a-7") under the Investment Company Act.
(b) Each prospective purchaser of a Non-Registered
Certificate not held in book-entry form (other than with respect to the
initial transfer of any such Certificate by the Transferor) shall deliver a
completed and duly executed Transferee's Certificate (in the form of Exhibit
C hereto for "qualified institutional buyers" as defined in Rule 144A of the
Securities Act ("Rule 144A") or Exhibit D hereto for "accredited investors"
as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated
under the Securities Act) to the Owner Trustee and to the Transferor for
inspection prior to effecting any requested transfer. Each prospective seller
of a Non-Registered Certificate (other than with respect to the initial
transfer of any such Certificate by the Transferor) shall deliver a completed
and duly executed Transferor's Certificate (in the form of Exhibit E hereto)
to the Owner Trustee for inspection prior to effecting any requested
transfer. The Transferor and the Owner Trustee may conclusively rely upon the
information contained in any such Transferee's Certificate or Transferor's
Certificate in the absence of actual knowledge to the contrary.
(c) In connection with any transfer, the Owner Trustee may
(except in the case of (x) the initial transfer of any such Certificate by
the Transferor, (y) a transfer to a "qualified institutional buyer" who
delivers a Transferee's Certificate in the form of Exhibit C hereto, or (z) a
transfer to a "accredited investor" who delivers a Transferee's Certificate
in the form of Exhibit D hereto) require an opinion of counsel satisfactory
to the Owner Trustee and the Transferor to the effect that such transfer may
be effected without registration under the Securities Act, which opinion of
counsel, if so required, shall be addressed to the Transferor and the Owner
Trustee and shall be secured at the expense of the holder of a Certificate.
The Owner Trustee may conclusively rely upon the representation of any
purchaser made to the Owner Trustee, and upon such opinion of counsel, and
shall be fully protected in so doing.
(d) No transfer of a Certificate shall be made to any Person
unless the Owner Trustee has received a certificate (substantially in the
form of Exhibit F hereto) from such transferee to the effect that such
transferee is not a Plan, and is not acting on behalf of or investing the
assets of a Plan. The preparation and delivery of the certificate referred to
above shall not be an expense of the Trust, the Owner Trustee or the
Transferor but shall be borne by
17
the transferee. Each transferee of a beneficial ownership interest in a
book-entry Certificate shall be deemed to represent that it is not a Plan and
is not acting on behalf of or investing the assets of a Plan.
(e) No transfer of a Certificate shall be made to any Person
unless the Owner Trustee and Transferor have received a certificate
(substantially in the form of Exhibit G hereto) from such transferee to the
effect that (i) such transferee is acquiring such certificate for its own
behalf and is not acting as agent or custodian for any other Person or entity
in connection with such acquisition, (ii) if the transferee is a partnership,
grantor trust or S corporation for federal income tax purposes (a "Flow
Through Entity"), any certificate (and interest in the Trust in the
aggregate) owned by such Flow Through Entity will represent less than 50% of
the value of the assets owned by such Flow Through Entity and no special
allocation of income, gain, loss, deduction or credit from such certificate
will be made among the beneficial owners of such Flow Through Entity, and
(iii) the transferee is a United States Person within the meaning of the
Code.
(f) No transfer, pledge or encumbrance of the Class R
Certificate shall be made to any Person unless (A) such Person is a Rated
Entity, a Bankruptcy Remote Entity or a statutory trust established under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. ss. 3801 et seq. that
is a Bankruptcy Remote Entity, or (B) such pledge is made to GCFP pursuant to
the Credit and Security Agreement; provided, however, that in the event GCFP
forecloses on its security interest in the Class R Certificate, the Class R
Certificate may be registered in the name of a Person that is not a
Bankruptcy Remote Entity for a period not to exceed two (2) Business Days.
Each Certificate shall at all times be registered in the name of a single
holder.
(g) The Certificates shall bear legends stating that they
have not been registered under the Securities Act and are subject to the
restrictions on transfer described herein. By purchasing a Certificate, each
purchaser shall be deemed to have agreed to these restrictions on transfer.
(h) In order to preserve the exemption for resales and
transfers provided by Rule 144A, the Transferor shall provide to any Holder
of a Non-Registered Certificate and any prospective purchaser designated by
such Holder, upon request of such Holder or such prospective purchaser, such
information required by Rule 144A as will enable the resale of such
Non-Registered Certificate to be made pursuant to Rule 144A. The Owner
Trustee shall cooperate with the Transferor in providing the Transferor such
information regarding the Non-Registered Certificates, the Trust Assets and
other matters regarding the Trust as the Transferor shall reasonably request
to meet its obligations under the preceding sentence.
(i) Notwithstanding any provision of this Agreement to the
contrary, any transfer of Certificates that causes the total number of
beneficial owners of Certificates to exceed ninety-nine (99) shall be null
and void and the Certificate Register shall be amended to reflect such voided
transfer.
18
SECTION 3.8. Disposition In Whole But Not In Part. Each of the
Class C Certificate and the Class R Certificate may be transferred in whole but
not in part. Any attempted transfer of any Certificate that would divide the
beneficial ownership in the Trust shall be void.
ARTICLE IV.
Voting Rights and Other Actions
-------------------------------
SECTION 4.1. Prior Notice to Certificateholders with Respect
to Certain Matters. With respect to the following matters, the Owner Trustee
shall not take action unless at least thirty (30) days before the taking of such
action, the Owner Trustee shall have notified the Certificateholders and the
Note Insurer in writing of the proposed action and the Certificateholders shall
not have notified the Owner Trustee in writing prior to the 30th day after such
notice is given that any Certificateholder has withheld consent or provided
alternative direction:
(a) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Statutory Trust Act or unless such amendment would not materially and
adversely affect the interests of the Certificateholder);
(b) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the interest of any
Certificateholder; or
(d) except pursuant to Section 13.1 of the Sale and
Servicing Agreement, the amendment, change or modification of the Sale and
Servicing Agreement, except to cure any ambiguity or defect or to amend or
supplement any provision in a manner that would not materially adversely
affect the interests any Certificateholder.
The Owner Trustee shall notify each Certificateholder in
writing of any appointment of a successor Note Registrar or Trust Collateral
Agent within five Business Days after receipt of notice thereof.
SECTION 4.2. Action by Certificateholders with Respect to
Certain Matters. The Owner Trustee shall not have the power, except upon the
direction of the Controlling Party or, after the Class A Notes and Reimbursement
Obligations have been paid and full and the expiration of the Policy in
accordance with its terms, each Certificateholder in accordance with the Basic
Documents, to (a) remove the Servicer under the Sale and Servicing Agreement
pursuant to Section 9.1 thereof or (b) except as expressly provided in the Basic
Documents, sell the Receivables after the termination of the Indenture. The
Owner Trustee shall take the actions referred to in the preceding sentence only
upon written instructions signed by the Controlling Party or each
Certificateholder, as applicable and the furnishing of indemnification
satisfactory
19
to the Owner Trustee by each Certificateholder. To the fullest extent permitted
by applicable law, the Owner Trustee shall not have the power to, and shall
not, commence any proceeding or other actions contemplated by Section 2.10 (b).
SECTION 4.3. Restrictions on Certificateholders' Power.
(a) No Certificateholder shall direct the Owner Trustee to
take or refrain from taking any action if such action or inaction would be
contrary to any obligation of the Trust or the Owner Trustee under this
Agreement or any of the Basic Documents or would be contrary to Section 2.3
nor shall the Owner Trustee be obligated to follow any such direction, if
given.
(b) No Certificateholder shall have any right by virtue or
by availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to
this Agreement or any Basic Document, unless such Certificateholder is the
Instructing Party pursuant to Section 5.3 and unless such Certificateholder
previously shall have given to the Owner Trustee a written notice of default
and of the continuance thereof, as provided in this Agreement, and also
unless such Certificateholder shall have made written request upon the Owner
Trustee to institute such action, suit or proceeding in its own name as Owner
Trustee under this Agreement and shall have offered to the Owner Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Owner Trustee, for
thirty (30) days after its receipt of such notice, request, and offer of
indemnity, shall have neglected or refused to institute any such action,
suit, or proceeding, and during such 30-day period no request or waiver
inconsistent with such written request has been given to the Owner Trustee
pursuant to and in compliance with this Section or Section 5.3. For the
protection and enforcement of the provisions of this Section, the
Certificateholders and the Owner Trustee shall be entitled to such relief as
can be given either at law or in equity.
SECTION 4.4. Rights of Note Insurer. Notwithstanding anything
to the contrary in the Basic Documents, without the prior written consent of the
Note Insurer (so long as no Note Insurer Default shall have occurred and be
continuing), the Owner Trustee shall not (i) remove the Servicer, (ii) initiate
any claim, suit or proceeding by the Trust or compromise any claim, suit or
proceeding brought by or against the Trust, other than with respect to the
enforcement of any Receivable or any rights of the Trust thereunder, (iii)
authorize the merger or consolidation of the Trust with or into any other
statutory trust or other entity (other than in accordance with Section 3.10 of
the Indenture) or (iv) amend the Certificate of Trust (except as may be required
by the Statutory Trust Act).
ARTICLE V.
Authority and Duties of Owner Trustee
-------------------------------------
SECTION 5.1. General Authority.
(a) The Owner Trustee is authorized and directed to execute
and deliver the Basic Documents to which the Trust is named as a party and
each certificate or other
20
document attached as an exhibit to or contemplated by the Basic Documents to
which the Trust is named as a party and any amendment thereto, in each case,
in such form as the Transferor shall approve as evidenced conclusively by the
Owner Trustee's execution thereof, and on behalf of the Trust, to direct the
Indenture Trustee to authenticate and deliver the Class A-1 Notes in the
aggregate principal amount of $48,000,000 , the Class A-2 Notes in the
aggregate principal amount of $84,200,000 , the Class A-3 Notes in the
aggregate principal amount of $44,000,000 and the Class A-4 Notes in the
aggregate principal amount of $73,800,000 . In addition to the foregoing, the
Owner Trustee is authorized, but shall not be obligated, to take all actions
required of the Trust pursuant to the Basic Documents. The Owner Trustee is
further authorized from time to time to take such action as the Instructing
Party recommends with respect to the Basic Documents so long as such
activities are consistent with the terms of the Basic Documents.
(b) The Owner Trustee shall sign on behalf of the Trust any
applicable tax returns of the Trust, unless applicable law requires a
Certificateholder to sign such documents.
SECTION 5.2. General Duties. It shall be the duty of the Owner
Trustee:
(i) to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and to administer
the Trust in the interest of the Certificateholders, subject to the Basic
Documents and in accordance with the provisions of this Agreement; and
(ii) to execute on behalf of the Trust any license,
approval, authorization or registration required by any governmental
authority, bureau or agency, as notified by the Servicer and presented to the
Owner Trustee in final execution form, with respect to which the failure to
maintain any such license, approval, authorization or registration would have
an adverse effect on the validity and enforceability of the Indenture, the
Certificates, the Notes or the Owner Trust Estate.
Notwithstanding the foregoing, the Owner Trustee shall be
deemed to have discharged its duties and responsibilities hereunder and under
the Basic Documents to the extent the Servicer has agreed in the Sale and
Servicing Agreement to perform any act or to discharge any duty of the Trust or
the Owner Trustee hereunder or under any Basic Document, and the Owner Trustee
shall not be liable for the default or failure of the Servicer to carry out its
obligations under the Sale and Servicing Agreement.
SECTION 5.3. Action upon Instruction.
(a) Subject to Article IV and the terms of the Spread
Account Agreement, the Note Insurer (so long as a Note Insurer Default shall
not have occurred and be continuing) or the Class C Certificateholder (or if
the Class C Certificate Balance has been reduced to zero and all amounts due
to the Class C Certificateholder have been paid, the Class R
Certificateholder) (if a Note Insurer Default shall have occurred and be
continuing) (the "Instructing Party") shall have the exclusive right to
direct the actions of the Owner Trustee in the management of the Trust, so
long as such instructions are not inconsistent with the express
21
terms set forth herein or in any Basic Document. The Instructing Party shall
not instruct the Owner Trustee in a manner inconsistent with this Agreement
or the Basic Documents.
(b) The Owner Trustee shall not be required to take any
action hereunder or under any Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such
action is likely to result in liability on the part of the Owner Trustee or
is contrary to the terms hereof or of any Basic Document or is otherwise
contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Instructing Party received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten days
of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Basic Documents, as it shall deem to
be in the best interests of the Certificateholders, and shall have no
liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any
such provision is ambiguous as to its application, or is, or appears to be,
in conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any
such instruction received, the Owner Trustee shall not be liable, on account
of such action or inaction, to any Person. If the Owner Trustee shall not
have received appropriate instruction within 10 days of such notice (or
within such shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action, not inconsistent
with this Agreement or the Basic Documents, as it shall deem to be in the
best interests of the Certificateholders, and shall have no liability to any
Person for such action or inaction.
SECTION 5.4. No Duties Except as Specified in this Agreement
or in Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 5.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall
22
have no responsibility for filing any financing or continuation statement in
any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder or to
prepare or file any Commission filing for the Trust or to record this
Agreement or any Basic Document. WTC nevertheless agrees that it will, at its
own cost and expense, promptly take all action as may be necessary to discharge
any Liens on any part of the Owner Trust Estate that result from actions by, or
claims against, WTC and that are not related to the ownership or the
administration of the Owner Trust Estate.
SECTION 5.5. No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
and (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 5.3.
SECTION 5.6. Restrictions. The Owner Trustee shall not take
any action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for Federal income tax
purposes. The Instructing Party shall not direct the Owner Trustee to take
action that would violate the provisions of this Section.
ARTICLE VI.
Concerning the Owner Trustee
----------------------------
SECTION 6.1. Acceptance of Trusts and Duties. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement.
The Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the Owner Trust Estate upon the terms of the Basic
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own willful misconduct, bad faith or negligence, (ii) in the
case of the inaccuracy of any representation or warranty contained in Section
6.3 expressly made by the Owner Trustee, (iii) for liabilities arising from the
failure of WTC to perform obligations expressly undertaken by it in the last
sentence of Section 5.4 hereof, (iv) for any investments issued by the Owner
Trustee or any branch or Affiliate thereof in its commercial capacity or (v) for
taxes, fees or other charges on, based on or measured by, any fees, commissions
or compensation received by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
instructions of the Instructing Party, the Servicer or any Certificateholder;
23
(c) no provision of this Agreement or any Basic Document
shall require the Owner Trustee to expend or risk funds or otherwise incur
any financial liability in the performance of any of its rights or powers
hereunder or under any Basic Document if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or
provided to it;
(d) under no circumstances shall the Owner Trustee be liable
for indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Transferor or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate or for or in
respect of the validity or sufficiency of the Basic Documents, other than the
certificate of authentication on a Certificate, and the Owner Trustee shall
in no event assume or incur any liability, duty or obligation to the Note
Insurer, Indenture Trustee, Trust Collateral Agent, the Collateral Agent, any
Noteholder or to any Certificateholder, other than as expressly provided for
herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Note Insurer, the Indenture Trustee, the Trust Collateral
Agent or the Servicer under any of the Basic Documents or otherwise and the
Owner Trustee shall have no obligation or liability to perform the
obligations under this Agreement or the Basic Documents that are required to
be performed by the Indenture Trustee under the Indenture or the Trust
Collateral Agent or the Servicer under the Sale and Servicing Agreement;
(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or otherwise
or in relation to this Agreement or any Basic Document, at the request, order
or direction of the Instructing Party or a Certificateholder, unless such
Instructing Party or such Certificateholder has offered to the Owner Trustee
security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities that may be incurred by the Owner Trustee therein or
thereby. The right of the Owner Trustee to perform any discretionary act
enumerated in this Agreement or in any Basic Document shall not be construed
as a duty, and the Owner Trustee shall not be answerable for other than its
negligence, bad faith or willful misconduct in the performance of any such
act;
(h) with respect to the Note Insurer or Instructing Party,
the Owner Trustee undertakes to perform or observe only such of the covenants
and obligations of the Owner Trustee as are expressly set forth in this
Agreement, and no implied covenants or obligations with respect to the Note
Insurer or Instructing Party shall be read into this Agreement or the other
Basic Documents against the Owner Trustee. The Owner Trustee shall not be
deemed to owe any fiduciary duty to the Note Insurer or Instructing Party,
and shall not be liable to any such person for the failure of the Trust to
perform its obligations to such persons other than in accordance with Section
10.12 of this Agreement in the performance of its express obligations under
this Agreement; and
24
(i) notwithstanding anything to the contrary herein or in
any other document, the Owner Trustee shall not be required to execute,
deliver or certify on behalf of the Trust, the Servicer, the Transferor or
any other Person any filings, certificates, affidavits or other instruments
required by the SEC or required under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
Notwithstanding any Person's right to instruct the Owner Trustee, neither the
Owner Trustee nor any agent, employee, director or officer of the Owner
Trustee shall have any obligation to execute any certificates or other
documents required by the SEC or required pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
of 2002 or the rules and regulations promulgated thereunder, and the refusal
to comply with any such instructions shall not constitute a default or breach
under this Agreement or any other document in connection herewith.
SECTION 6.2. Furnishing of Documents. The Owner Trustee shall
furnish to each Certificateholder promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents.
SECTION 6.3. Representations and Warranties. The Owner Trustee
and WTC hereby represent and warrant to the Transferor, each Certificateholder
and the Note Insurer (which shall have relied on such representations and
warranties in issuing the Policy), that:
(a) It is a Delaware banking corporation, duly organized and
validly existing in good standing under the laws of the State of Delaware and
it holds all grants, authorizations, consents, orders and approvals from all
governmental authorities necessary under the laws of the State of Delaware to
carry on its true business as now conducted. It has all requisite corporate
power and authority to execute, deliver and perform its obligations under
this Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement will
be executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will
contravene any Delaware state or federal law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any judgment or
order binding on it, or constitute any default under its charter documents or
by-laws or any indenture, mortgage, contract, agreement or instrument to
which it is a party or by which any of its properties may be bound, or result
in the creation or imposition of any lien, charge or encumbrance on the Trust
Assets resulting from actions by or claims against the Owner Trustee in its
individual capacity except as expressly contemplated by this Agreement or
Indenture.
(d) No consent, approval, authorization or order of, or
filing with, any court or regulatory, supervisory or government agency or
body is required by the Owner Trustee under Delaware law in connection with
the execution, delivery and performance
25
by the Owner Trustee of this Agreement or the consummation by the Owner
Trustee of the transactions contemplated hereby (except for the filing of
the Certificate of Trust with the Secretary of State).
(e) The Owner Trustee has no present intent to cause a
voluntary bankruptcy of the Trust.
SECTION 6.4. Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper believed
by it to be genuine and believed by it to be signed by the proper party or
parties. The Owner Trustee may accept a certified copy of a resolution of the
board of directors or other governing body of any corporate party as
conclusive evidence that such resolution has been duly adopted by such body
and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein,
the Owner Trustee may for all purposes hereof rely on a certificate, signed
by the president or any vice president or by the treasurer, secretary or
other authorized officers of the relevant party, as to such fact or matter,
and such certificate shall constitute full protection to the Owner Trustee
for any action taken or omitted to be taken by it in good faith in reliance
thereon.
(b) In the exercise or administration of the trusts
hereunder and in the performance of its duties and obligations under this
Agreement or the Basic Documents, the Owner Trustee (i) may act directly or
through its agents or attorneys pursuant to agreements entered into with any
of them, and the Owner Trustee shall not be liable for the conduct or
misconduct of such agents or attorneys if such agents or attorneys shall have
been selected by the Owner Trustee with reasonable care, and (ii) may consult
with counsel, accountants and other skilled persons to be selected with
reasonable care and employed by it. The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
written opinion or advice of any such counsel, accountants or other such
persons and according to such opinion not contrary to this Agreement or any
Basic Document.
SECTION 6.5. Not Acting in Individual Capacity. Except as
provided in Article II and this Article VI, in accepting the trusts hereby
created WTC acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 6.6. Owner Trustee Not Liable for Certificates or
Receivables. The recitals contained herein and in the Certificates (other than
the signature and countersignature of the Owner Trustee on the Certificates)
shall be taken as the statements of the Transferor and the Owner Trustee assumes
no responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Basic Document or of the Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates) or the Notes, or of
any Receivable or related documents. The Owner Trustee shall
26
at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Receivable, or the perfection and
priority of any security interest created by any Receivable in any Financed
Vehicle or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Owner Trust Estate or its ability to generate
the payments to be distributed to each Certificateholder under this Agreement or
the Noteholders under the Indenture, including, without limitation: the
existence, condition and ownership of any Financed Vehicle; the existence and
enforceability of any insurance thereon; the existence and contents of any
Receivable on any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment; the
completeness of any Receivable; the performance or enforcement of any
Receivable; the compliance by the Transferor, the Servicer or any other Person
with any warranty or representation made under any Basic Document or in any
related document or the accuracy of any such warranty or representation or any
action of the Indenture Trustee or the Servicer or any subservicer taken in the
name of the Owner Trustee.
SECTION 6.7. Owner Trustee May Own Notes. The Owner Trustee in
its individual capacity may become the owner or pledgee of the Notes and may
deal with any Certificateholder, the Transferor, the Indenture Trustee and the
Servicer in banking transactions with the same rights as it would have if it
were not Owner Trustee.
SECTION 6.8. Payments from Owner Trust Estate. All payments to
be made by the Owner Trustee under this Agreement or any of the Basic Documents
to which the Trust or the Owner Trustee is a party shall be made only from the
income and proceeds of the Owner Trust Estate and only to the extent that the
Owner Trust shall have received income or proceeds from the Owner Trust Estate
to make such payments in accordance with the terms hereof. WTC, or any successor
thereto, in its individual capacity, shall not be liable for any amounts payable
under this Agreement or any of the Basic Documents to which the Trust or the
Owner Trustee is a party.
SECTION 6.9. Doing Business in Other Jurisdictions.
Notwithstanding anything contained to the contrary, neither WTC or any successor
thereto, nor the Owner Trustee shall be required to take any action in any
jurisdiction other than in the State of Delaware if the taking of such action
will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 9.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by WTC (or any successor thereto); or (iii) subject
WTC (or any successor thereto) to personal jurisdiction in any jurisdiction
other than the State of Delaware for causes of action arising from acts
unrelated to the consummation of the transactions by WTC (or any successor
thereto) or the Owner Trustee, as the case may be, contemplated hereby.
27
ARTICLE VII.
Compensation of Owner Trustee
-----------------------------
SECTION 7.1. Owner Trustee's Fees and Expenses. The Owner
Trustee shall receive as compensation for its services hereunder such fees as
have been separately agreed upon before the date hereof between LBAC and the
Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by LBAC
for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder and under the
Basic Documents.
SECTION 7.2. Indemnification. Each of the Owner Trustee and
WTC and its officers, directors, successors, assigns, agents and servants shall
be indemnified by the Servicer in and to the extent set forth in Section
8.2(a)(v) of the Sale and Servicing Agreement.
SECTION 7.3. Payments to the Owner Trustee. Any amounts paid
to the Owner Trustee pursuant to this Article VII shall be deemed not to be a
part of the Owner Trust Estate immediately after such payment.
SECTION 7.4. Non-recourse Obligations. Notwithstanding
anything in this Agreement or any Basic Document, the Owner Trustee agrees in
its individual capacity and in its capacity as Owner Trustee for the Trust that
all obligations of the Trust to the Owner Trustee individually or as Owner
Trustee for the Trust shall be recourse to the Owner Trust Estate only and
specifically shall not be recourse to the assets of any Certificateholder.
ARTICLE VIII.
Termination of Trust Agreement
------------------------------
SECTION 8.1. Termination of Trust Agreement.
(a) This Agreement shall terminate and the Trust shall wind
up and dissolve and be of no further force or effect upon the latest of (i)
the maturity or other liquidation of the last Receivable and the subsequent
distribution of amounts in respect of such Receivables as provided in the
Basic Documents, (ii) the payment to each Certificateholder of all amounts
required to be paid to it pursuant to this Agreement and the Sale and
Servicing Agreement and the payment to the Note Insurer of all amounts
payable or reimbursable to it pursuant to the Sale and Servicing Agreement,
(iii) the expiration of the Policy in accordance with its terms; or (iv)
payment to the Note Insurer in full of all Reimbursement Obligations;
provided, however, that the rights to indemnification under Section 7.2 and
the rights under Section 7.1 shall survive the termination of the Trust. The
Servicer shall promptly notify the Owner Trustee and the Note Insurer of any
prospective termination pursuant to this Section. The bankruptcy,
liquidation, dissolution, death or incapacity of a Certificateholder, shall
not (x) operate to terminate this Agreement or the Trust, nor (y) entitle
such Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court
28
for a partition or winding up of all or any part of the Trust or Owner Trust
Estate nor (z) otherwise affect the rights, obligations and liabilities of
the parties hereto.
(b) Neither the Transferor nor any Certificateholder shall
be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Payment Date upon which each Certificateholder shall surrender its
Certificate to the Trust Collateral Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter
to such Certificateholder mailed within five Business Days of receipt of
notice of such termination from the Servicer given pursuant to Section
10.1(c) of the Sale and Servicing Agreement, stating (i) the Payment Date
upon or with respect to which final payment of such Certificates shall be
made upon presentation and surrender of such Certificates at the office of
the Trust Collateral Agent therein designated, (ii) the amount of any such
final payment, (iii) that the Record Date otherwise applicable to such
Payment Date is not applicable, payments being made only upon presentation
and surrender of such Certificates at the office of the Trust Collateral
Agent therein specified and (iv) interest will cease to accrue on such
Certificates. The Owner Trustee shall give such notice to the Trust
Collateral Agent at the time such notice is given to the related
Certificateholder. Upon presentation and surrender of such Certificates, the
Trust Collateral Agent shall cause to be distributed to the Certificateholder
amounts distributable on such Payment Date pursuant to Section 5.6 of the
Sale and Servicing Agreement.
In the event that any Certificateholder shall not surrender
its Certificates for cancellation within six months after the date specified in
the above mentioned written notice, the Trust Collateral Agent shall give a
second written notice to such Certificateholder to surrender its Certificates
for cancellation and receive the final distribution with respect thereto. If
within one year after the second notice all the Certificates shall not have been
surrendered for cancellation, the Trust Collateral Agent may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
Certificateholder concerning surrender of the Certificates, and the cost thereof
shall be paid out of the funds and other assets that shall remain subject to
this Agreement. Any funds remaining in the Trust after exhaustion of such
remedies shall be distributed, subject to applicable escheat laws, by the Trust
Collateral Agent to the Transferor.
(d) Upon the winding up of the Trust and its dissolution,
the Owner Trustee shall cause the Certificate of Trust to be canceled by
filing a certificate of cancellation with the Secretary of State in
accordance with the provisions of Section 3810 of the Statutory Trust Act.
ARTICLE IX.
Successor Owner Trustees and Additional Owner Trustees
------------------------------------------------------
SECTION 9.1. Eligibility Requirements for Owner Trustee. The
Owner Trustee shall at all times be a corporation or national banking
association (i) satisfying the provisions of Section 3807(a) of the Statutory
Trust Act; (ii) authorized to exercise corporate
29
trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; and (iv) acceptable to the Note Insurer in its sole discretion, so
long as a Note Insurer Default shall not have occurred and be continuing. If
such entity shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
entity shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. In case at any time the Owner
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Owner Trustee shall resign immediately in the manner and with the
effect specified in Section 9.2.
SECTION 9.2. Resignation or Removal of Owner Trustee. The
Owner Trustee may at any time resign and be discharged from the trusts hereby
created by giving sixty days' written notice thereof to the Transferor, the
Certificateholders, the Note Insurer and the Servicer. Upon receiving such
notice of resignation, the Class R Certificateholder shall, with the prior
written consent of the Note Insurer, promptly appoint a successor Owner Trustee
by written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee, provided that the Class R Certificateholder shall have received written
confirmation from each of the Rating Agencies that the proposed appointment will
not result in an increased capital charge to the Note Insurer by either of the
Rating Agencies. If no successor Owner Trustee shall have been so appointed and
have accepted appointment within thirty (30) days after the giving of such
notice of resignation, the resigning Owner Trustee or the Note Insurer may
petition any court of competent jurisdiction for the appointment of a successor
Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 9.1 and shall fail to resign after
written request therefor by the Class R Certificateholder, or if at any time the
Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Class R Certificateholder with the consent
of the Note Insurer (so long as a Note Insurer Default shall not have occurred
and be continuing) may remove the Owner Trustee. If the Class R
Certificateholder shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Class R Certificateholder shall, with the
prior written consent of the Note Insurer, promptly appoint a successor Owner
Trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the outgoing Owner Trustee so removed, one copy to the Note
Insurer and one copy to the successor Owner Trustee and payment of all fees owed
to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section shall not become effective until acceptance of appointment by the
successor Owner Trustee pursuant to Section 9.3 and payment of all fees and
expenses owed to the outgoing Owner Trustee. The Class R Certificateholder shall
provide notice of such resignation or removal of the Owner Trustee to the Class
C Certificateholder and each of the Rating Agencies.
30
SECTION 9.3. Successor Owner Trustee. Any successor Owner
Trustee appointed pursuant to Section 9.2 shall execute, acknowledge and deliver
to the Transferor, the Certificateholders, the Servicer, the Note Insurer and to
its predecessor Owner Trustee an instrument accepting such appointment under
this Agreement, and thereupon the resignation or removal of the predecessor
Owner Trustee shall become effective and such successor Owner Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor under this Agreement,
with like effect as if originally named as Owner Trustee. The predecessor Owner
Trustee shall upon payment of its fees and expenses deliver to the successor
Owner Trustee all documents and statements and monies held by it under this
Agreement; and the Transferor, the Certificateholders and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
Owner Trustee shall be eligible pursuant to Section 9.1.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section, (i) the Servicer shall mail notice of the successor of
such Owner Trustee to the Certificateholders, the Indenture Trustee, the
Noteholders and the Rating Agencies and (ii) the successor Owner Trustee shall
file an amendment to the Certificate of Trust with the secretary of State
identifying its name and principal place of business in the State of Delaware.
If the Servicer shall fail to mail such notice within ten (10) days after
acceptance of appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of the Servicer.
SECTION 9.4. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 9.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided further that the Owner Trustee (i) shall mail notice of such merger or
consolidation to the Rating Agencies and (ii) shall file an amendment to the
Certificate of Trust as required under Section 9.3, above.
SECTION 9.5. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee. Notwithstanding any other provisions of this Agreement, at
any time, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Owner Trust Estate or any Financed Vehicle may at the
time be located, the Servicer and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Owner Trustee and the Note Insurer to act as co-trustee,
jointly with the Owner Trustee, or separate trustee or separate trustees, of all
or any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the Trust, or any part thereof,
31
and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Servicer and the Owner Trustee may
consider necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Owner Trustee subject, unless a Note Insurer Default shall have occurred and be
continuing, to the approval of the Note Insurer (which approval shall not be
unreasonably withheld) shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor trustee pursuant to Section 9.1 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 9.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Owner Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under this
Agreement; and
(iii) the Servicer and the Owner Trustee acting jointly may
at any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer and the Note Insurer.
Any separate trustee or co-trustee may at any time appoint the
Owner Trustee, its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
32
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE X.
Miscellaneous
-------------
SECTION 10.1. Supplements and Amendments.
(a) This Agreement may be amended by the Transferor and the
Owner Trustee, with the prior written consent of the Note Insurer (so long as
a Note Insurer Default shall not have occurred and be continuing) and with
prior written notice to the Rating Agencies, without the consent of any of
the Noteholders or the Certificateholders (so long as such Certificates are
outstanding), (i) to cure any ambiguity or defect or (ii) to correct,
supplement or modify any provisions in this Agreement; provided, however,
that such action shall not, as evidenced by an Opinion of Counsel which may
be based upon a certificate of the Servicer, delivered to the Owner Trustee,
the Rating Agencies and the Note Insurer, adversely affect in any material
respect the interests of any Noteholder or Certificateholder.
(b) This Agreement may also be amended from time to time,
with the prior written consent of the Note Insurer (so long as a Note Insurer
Default shall not have occurred and be continuing) by the Transferor and the
Owner Trustee, with prior written notice to the Rating Agencies, to the
extent such amendment materially and adversely affects the interests of the
Class A Noteholders, with the consent of the Class A Noteholders evidencing
not less than 50% of the outstanding Class A Note Balance to the extent such
amendment materially and adversely affects the interests of the Class C
Certificateholder, with the consent of the Class C Certificateholder and, the
consent of the Class R Certificateholder (which consent of the Class R
Certificateholder given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Class R
Certificateholder and any future Class R Certificateholder) for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement or of modifying in any manner the rights of
the Noteholders or any Certificateholder; provided, however, that, subject to
the express rights of the Note Insurer under the Basic Documents, no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made for the benefit of the
Noteholders or any Certificateholder or (b) reduce the aforesaid percentage
of the Class A Note Balance or the Certificateholders required to consent to
any such amendment, without the consent of the Noteholders of all the
outstanding Class A Notes, the Class C Certificateholder or the Class R
Certificateholder, as the case may be.
Promptly after the execution of any such amendment or consent,
the Owner Trustee shall furnish written notification of the substance of such
amendment or consent to the Certificateholders, the Indenture Trustee and each
of the Rating Agencies.
It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Indenture Trustee pursuant to this
Section to approve the particular form of any proposed
33
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of any Certificateholder provided for in this Agreement or in any other
Basic Document) and of evidencing the authorization of the execution thereof by
any Certificateholder shall be subject to such reasonable requirements as the
Owner Trustee may prescribe. Promptly after the execution of any amendment to
the Certificate of Trust, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State.
Prior to the execution of any amendment to this Agreement or
the Certificate of Trust, the Owner Trustee and the Note Insurer shall be
entitled to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement and
that all conditions precedent to the execution and delivery of such amendment
have been satisfied. The Owner Trustee may, but shall not be obligated to, enter
into any such amendment which affects the Owner Trustee's own rights, duties or
immunities under this Agreement or otherwise.
SECTION 10.2. No Legal Title to Owner Trust Estate in
Certificateholders. No Certificateholder shall have legal title to any part of
the Owner Trust Estate. Each Certificateholder shall be entitled to receive
distributions in accordance with this Agreement and the Sale and Servicing
Agreement. No transfer, by operation of law or otherwise, of any right, title or
interest of any Certificateholder to and in its ownership interest in the Owner
Trust Estate shall operate to terminate this Agreement or the trusts hereunder
or entitle any transferee to an accounting or to the transfer to it of legal
title to any part of the Owner Trust Estate.
SECTION 10.3. Limitations on Rights of Others. The provisions
of this Agreement are solely for the benefit of the Owner Trustee, the
Transferor, the Certificateholders, the Servicer and, to the extent expressly
provided herein, the Note Insurer, the Indenture Trustee and the Noteholders,
and nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Owner Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 10.4. Notices.
(a) Unless otherwise expressly specified or permitted by the
terms hereof, all notices shall be in writing and shall be deemed given upon
receipt personally delivered, sent by facsimile transmission (with
appropriate confirmation) delivered by overnight courier or mailed first
class mail or certified mail, in each case return receipt requested, and
shall be deemed to have been duly given upon receipt:
(i) if to the Owner Trustee, addressed to:
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
34
Attention: Corporate Trust Administration
(Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇)
(ii) if to the Transferor, addressed to:
Long Beach Acceptance Receivables Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇)
(iii) if to the Note Insurer, addressed to
Financial Security Assurance Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Transaction Oversight
Re: Long Beach Acceptance Auto Receivables Trust 2003-B
Telex No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy 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 the General Counsel and the
Head-Financial Guaranty Group "URGENT MATERIAL
ENCLOSED").
(iv) in the case of the Rating Agencies, addressed to:
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ABS Monitoring Department
and
Standard & Poor's Ratings Service
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset Backed Surveillance Department
35
(b) Any notice required or permitted to be given to a Class
R Certificateholder shall be given by first-class mail, postage prepaid, at
the address of the Class R Certificateholder in the register maintained by
the Owner Trustee. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or
not the Class R Certificateholder receives such notice.
SECTION 10.5. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 10.6. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 10.7. Assignments. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
SECTION 10.8. No Recourse.
(a) The Class R Certificateholder by accepting a Class R
Certificate acknowledges that such Class R Certificate represents a
beneficial interest in the Trust only and does not represent interests in or
obligations of the Transferor, the Servicer, the Owner Trustee, the Indenture
Trustee, the Note Insurer or any Affiliate thereof and no recourse may be had
against such parties or their assets, except as may be expressly set forth or
contemplated in this Agreement, the Class R Certificate or the Basic
Documents.
(b) The Class C Certificateholder by accepting a Class C
Certificate acknowledges that such Class C Certificate represents a right to
receive interest and cashflow in accordance with the terms of the Sale and
Servicing Agreement and a beneficial interest in the Trust and does not
represent interests in or obligations of the Transferor, the Servicer, the
Owner Trustee, the Indenture Trustee, the Note Insurer or any Affiliate
thereof and no recourse may be had against such parties or their assets,
except as may be expressly set forth or contemplated in this Agreement, the
Class C Certificate or the Basic Documents.
SECTION 10.9. Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 10.10. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
36
SECTION 10.11. Servicer. The Servicer is authorized to
prepare, or cause to be prepared, execute and deliver on behalf of the Trust all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust or Owner Trustee to prepare, file or deliver
pursuant to the Basic Documents. Upon written request, the Owner Trustee shall
execute and deliver to the Servicer a limited power of attorney appointing the
Servicer the Trust's agent and attorney-in-fact to prepare, or cause to be
prepared, execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.
SECTION 10.12. Limitation on Liability. With respect to the
Note Insurer, the Owner Trustee undertakes to perform or observe only such of
the covenants and obligations of the Owner Trustee as are expressly set forth in
this Agreement, and no implied covenants or obligations with respect to the Note
Insurer shall be read into this Agreement or the other Basic Documents against
the Owner Trustee. The Owner Trustee shall not be deemed to owe any fiduciary
duty to the Note Insurer, and shall not be liable to any such person for the
failure of the Trust to perform its obligations to such persons other than as a
result of the gross negligence or willful misconduct of the Owner Trustee in the
performance of its express obligations under this Agreement.
SECTION 10.13. No Petition. The Owner Trustee (not in its
individual capacity but solely as Owner Trustee), by entering into this
Agreement, each Certificateholder, by accepting its Certificate, and the
Indenture Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Transferor, or join in any institution against the Transferor of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Certificates, the Notes, this Agreement or any other Basic Documents.
SECTION 10.14. Bankruptcy Matters. To the fullest extent
permitted by law, no Certificateholder nor any party to this Agreement shall
take any action to cause the Trust to dissolve in whole or in part or file a
voluntary petition or otherwise initiate proceedings to have the Trust
adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against the Trust as debtor under any applicable
federal or state law relating to bankruptcy, insolvency or other relief for
debts with respect to the Trust; or seek or consent to the appointment of any
trustee, receiver, conservator, assignee, sequestrator, custodian, liquidator
(or other similar official) of the Trust or of all or any substantial part of
the properties and assets of the Trust, or cause the Trust to make any general
assignment for the benefit or creditors of the Trust or take any action in
furtherance of any of the above actions unless each Certificateholder and the
Indenture Trustee shall have provided their written consent.
SECTION 10.15. Effect of Policy Expiration Date.
Notwithstanding anything to the contrary set forth herein, all references to any
right of the Note Insurer to direct, appoint, consent to, accept, approve of,
take or omit to take any action under this Agreement or any other Basic Document
shall be inapplicable at all times after the Policy Expiration Date, and if such
reference provides for another party or parties to take or omit to take any such
action following a Note Insurer Default, such party or parties shall also be
entitled to take or omit to take such action following the Policy Expiration
Date and (ii) if such reference does not provide for
37
another party or parties to take or omit to take any such action following a
Note Insurer Default, then the Indenture Trustee acting at the direction of the
Majorityholders shall have the right to take or omit to take any such action
following the Policy Expiration Date. In addition, any other provision of this
Agreement or any other Basic Document which is operative based in whole or in
part on whether a Note Insurer Default has or has not occurred shall, at all
times on or after the Policy Expiration Date, be deemed to refer to whether or
not the Policy Expiration Date has occurred.
38
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
WILMINGTON TRUST COMPANY, as Owner Trustee
By:
---------------------------------------
Name:
Title:
LONG BEACH ACCEPTANCE RECEIVABLES CORP.
By:
---------------------------------------
Name:
Title:
[Trust Agreement]
EXHIBIT A
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST
OF
LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2003-B
This Certificate of Trust of LONG BEACH ACCEPTANCE AUTO
RECEIVABLES TRUST 2003-B (the "Trust") is being duly executed and filed by the
undersigned, as trustee, to form a statutory trust under the Statutory Trust Act
(12 Del. C. (ss.) 3801 et seq.) (the "Act").
1. Name. The name of the statutory trust formed hereby is LONG
BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2003-B.
2. Owner Trustee. The name and business address of the trustee
of the Trust in the State of Delaware is Wilmington Trust Company, ▇▇▇▇▇▇ Square
North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Corporate Trust Administration.
3. Effective Date. This Certificate of Trust will be effective
upon filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of
the Trust, has executed this Certificate of Trust in accordance with Section
3811(a) of the Act.
WILMINGTON TRUST COMPANY, as Owner Trustee
By:
----------------------------------
Name:
Title:
EXHIBIT B-1
[FORM OF CLASS R CERTIFICATE]
THIS CLASS R CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE APPLICABLE SECURITIES LAWS OF ANY
STATE. ACCORDINGLY, ANY TRANSFER OF THIS CLASS R CERTIFICATE IS SUBJECT TO
CERTAIN RESTRICTIONS SET FORTH IN SECTION 3.7 OF THE TRUST AGREEMENT. BY ITS
ACCEPTANCE OF THIS CLASS R CERTIFICATE THE HOLDER OF THIS CLASS R CERTIFICATE IS
DEEMED TO REPRESENT TO THE TRANSFEROR AND THE OWNER TRUSTEE (I) THAT IT IS AN
INSTITUTIONAL INVESTOR THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT
(AN "INSTITUTIONAL ACCREDITED INVESTOR") AND THAT IT IS ACQUIRING THIS CLASS R
CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE INSTITUTIONAL ACCREDITED
INVESTORS UNLESS THE HOLDER IS A BANK ACTING IN ITS FIDUCIARY CAPACITY) FOR
INVESTMENT AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, THE
PUBLIC DISTRIBUTION HEREOF OR (II) THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS CLASS R
CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL
BUYERS).
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CLASS R CERTIFICATE MAY BE MADE BY ANY
PERSON UNLESS EITHER (I) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO THE
TRANSFEROR, (II) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT EXECUTES A CERTIFICATE, SUBSTANTIALLY IN THE FORM
SPECIFIED IN THE TRUST AGREEMENT, TO THE EFFECT THAT IT IS AN INSTITUTIONAL
ACCREDITED INVESTOR ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF
OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE
INSTITUTIONAL ACCREDITED INVESTORS UNLESS THE HOLDER IS A BANK ACTING IN ITS
FIDUCIARY CAPACITY), (III) SO LONG AS THIS CLASS R CERTIFICATE IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, SUCH SALE, PLEDGE OR
OTHER TRANSFER IS MADE TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES AFTER
DUE INQUIRY IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A),
ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY
OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS) TO
WHOM NOTICE IS GIVEN THAT THE SALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE
ON RULE 144A, OR (IV) SUCH SALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN
WHICH CASE (A) THE OWNER TRUSTEE SHALL REQUIRE THAT BOTH THE PROSPECTIVE
TRANSFEROR AND THE PROSPECTIVE TRANSFEREE CERTIFY TO THE OWNER
TRUSTEE AND THE TRANSFEROR IN WRITING THE FACTS SURROUNDING SUCH TRANSFER, WHICH
CERTIFICATION SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE OWNER TRUSTEE
AND THE TRANSFEROR, AND (B) THE OWNER TRUSTEE MAY REQUIRE A WRITTEN OPINION OF
COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF THE TRUST, THE TRANSFEROR OR THE
OWNER TRUSTEE) SATISFACTORY TO THE TRANSFEROR AND THE OWNER TRUSTEE TO THE
EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT. NO SALE, PLEDGE
OR OTHER TRANSFER MAY BE MADE TO ANY ONE PERSON FOR CLASS R CERTIFICATES WITH A
FACE AMOUNT OF LESS THAN $100,000 AND, IN THE CASE OF ANY PERSON ACTING ON
BEHALF OF ONE OR MORE THIRD PARTIES (OTHER THAN A BANK (AS DEFINED IN SECTION
3(A)(2) OF THE SECURITIES ACT) ACTING IN ITS FIDUCIARY CAPACITY), FOR CLASS R
CERTIFICATES WITH A FACE AMOUNT OF LESS THAN $100,000 FOR EACH SUCH THIRD PARTY.
NO TRANSFER OF THIS CLASS R CERTIFICATE SHALL BE PERMITTED TO BE MADE TO ANY
PERSON UNLESS THE OWNER TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEREE
TO THE EFFECT THAT SUCH TRANSFEREE IS NOT (A) AN EMPLOYEE BENEFIT PLAN (AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA OR
(B) A PLAN (AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE CODE
(EACH, A "BENEFIT PLAN"), AND IS NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS
OF A BENEFIT PLAN. EACH TRANSFEREE OF A BENEFICIAL OWNERSHIP INTEREST IN THIS
CLASS R CERTIFICATE SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A BENEFIT PLAN
AND IS NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A BENEFIT PLAN.
NO TRANSFER OR SALE OF THIS CLASS R CERTIFICATE SHALL BE PERMITTED TO BE MADE IF
THE TRANSFER OR SALE INCREASES THE NUMBER OF CERTIFICATEHOLDERS TO MORE THAN
NINETY-NINE (99).
THE HOLDER OF THIS CLASS R CERTIFICATE REPRESENTS, BY VIRTUE OF ITS ACCEPTANCE
HEREOF, (I) THAT IT IS ACQUIRING THIS CLASS R CERTIFICATE FOR ITS OWN BEHALF AND
IS NOT ACTING AS AGENT OR CUSTODIAN FOR ANY OTHER PERSON OR ENTITY IN CONNECTION
WITH SUCH ACQUISITION, (II) IF THE HOLDER IS A PARTNERSHIP, GRANTOR TRUST OR S
CORPORATION FOR FEDERAL INCOME TAX PURPOSES (A "FLOW-THROUGH ENTITY"), ANY CLASS
R CERTIFICATE OWNED BY SUCH FLOW-THROUGH ENTITY WILL REPRESENT LESS THAN 50% OF
THE VALUE OF ALL THE ASSETS OWNED BY SUCH FLOW-THROUGH ENTITY AND NO SPECIAL
ALLOCATION OF INCOME, GAIN, LOSS, DEDUCTION OR CREDIT FROM SUCH CLASS R
CERTIFICATE WILL BE MADE AMONG THE BENEFICIAL OWNERS OF SUCH FLOW-THROUGH
ENTITY, AND (III) THE HOLDER IS A UNITED STATES PERSON WITHIN THE MEANING OF THE
CODE.
B-1-2
TRANSFER OF THIS CLASS R CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET
FORTH IN SECTION 3.7 OF THE AGREEMENT.
B-1-3
LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2003-B
UNDER AMENDED AND RESTATED TRUST AGREEMENT
DATED AS OF JUNE 1, 2003
Certificate Number:
WILMINGTON TRUST COMPANY, a Delaware banking corporation, not
in its individual capacity but solely as trustee (the "Owner Trustee") under an
Amended and Restated Trust Agreement, dated as of June 1, 2003, between Long
Beach Acceptance Receivables Corp., a Delaware corporation (the "Transferor")
and the Owner Trustee (the "Trust Agreement"), hereby certifies that LONG BEACH
ACCEPTANCE RECEIVABLES CORP. is the Holder of this Class R Certificate
representing the entire beneficial interest in the Long Beach Acceptance Auto
Receivables Trust (the "Trust") created by the Trust Agreement. This Class R
Certificate is issued pursuant to and is entitled to the benefits of the Trust
Agreement, and the Class R Certificateholder by acceptance hereof agrees to be
bound by the terms of the Trust Agreement. Reference is hereby made to the Trust
Agreement for a statement of the rights and obligations of the Class R
Certificateholder hereof. The Owner Trustee may treat the person shown on the
register maintained by the Owner Trustee pursuant to the Trust Agreement as the
absolute Class R Certificateholder hereof for all purposes.
Capitalized terms used herein without definition have the
meanings ascribed to them in or by reference to the Trust Agreement.
The Class R Certificateholder hereof, by its acceptance of
this Class R Certificate, warrants and represents to, and agrees with, the Owner
Trustee that it shall not transfer this Class R Certificate except in accordance
with the Trust Agreement.
The Class R Certificateholder, by acceptance of its Class R
Certificate, specifically acknowledges that it has no right to or interest in
any monies at any time held pursuant to the Spread Account Agreement prior to
the release of such monies pursuant to Section 5.6 of the Sale and Servicing
Agreement, such monies being held in trust for the benefit of the Class A
Noteholders and the Note Insurer. Notwithstanding the foregoing, in the event
that it is ever determined that provisions of the Sale and Servicing Agreement
and the Spread Account Agreement shall be considered to constitute a security
agreement and the Transferor and the Class R Certificateholder hereby grant to
the Collateral Agent for the benefit of the Class A Noteholders and the Note
Insurer a first priority perfected security interest in such amounts, to be
applied as set forth in Section 3.03 of the Spread Account Agreement. In
addition the Class R Certificateholder, by acceptance of its Class R
Certificate, hereby appoints the Transferor as its agent to pledge a first
priority perfected security interest in the Spread Account, and any amounts held
therein from time to time to the Collateral Agent pursuant to the Spread Account
Agreement and agrees to execute and deliver such instruments of conveyance,
assignment, grant and confirmation, as well as financing statements, in each
case as the Note Insurer shall consider reasonably necessary in order to perfect
the Collateral Agent's Security Interest in the Collateral (as such terms are
defined in the Spread Account Agreement).
B-1-4
This Class R Certificate and the Trust Agreement shall in all
respects be governed by, and construed in accordance with, the laws of the State
of Delaware, without regard to conflict-of-law principles.
B-1-5
IN WITNESS WHEREOF, the Trust, pursuant to the Trust
Agreement, has caused this Class R Certificate to be issued as of the date
hereof.
LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2003-B
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By:
---------------------------------------
Name:
Title:
Dated: June 25, 2003
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: Wilmington Trust Company,
Authenticating Agent
By:
---------------------------------------
Name:
Title:
Dated: June 25, 2003
B-1-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
-------------------------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)
-------------------------------------------------------------------------------
the within Class R Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_____________________________________ Attorney to transfer said Class R
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
*
----------------------------
*
----------------------------
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Class R Certificate in every particular,
without alteration, enlargement or any change whatever.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF CLASS C CERTIFICATE]
THIS CLASS C CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE APPLICABLE SECURITIES LAWS OF ANY
STATE. ACCORDINGLY, ANY TRANSFER OF THIS CLASS C CERTIFICATE IS SUBJECT TO
CERTAIN RESTRICTIONS SET FORTH IN SECTION 3.7 OF THE TRUST AGREEMENT. BY ITS
ACCEPTANCE OF THIS CLASS C CERTIFICATE THE HOLDER OF THIS CLASS C CERTIFICATE IS
DEEMED TO REPRESENT TO THE TRANSFEROR AND THE OWNER TRUSTEE (I) THAT IT IS AN
INSTITUTIONAL INVESTOR THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT
(AN "INSTITUTIONAL ACCREDITED INVESTOR") AND THAT IT IS ACQUIRING THIS CLASS C
CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE INSTITUTIONAL ACCREDITED
INVESTORS UNLESS THE HOLDER IS A BANK ACTING IN ITS FIDUCIARY CAPACITY) FOR
INVESTMENT AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, THE
PUBLIC DISTRIBUTION HEREOF OR (II) THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS CLASS C
CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL
BUYERS).
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CLASS C CERTIFICATE MAY BE MADE BY ANY
PERSON UNLESS EITHER (I) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO THE
TRANSFEROR, (II) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT EXECUTES A CERTIFICATE, SUBSTANTIALLY IN THE FORM
SPECIFIED IN THE TRUST AGREEMENT, TO THE EFFECT THAT IT IS AN INSTITUTIONAL
ACCREDITED INVESTOR ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF
OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE
INSTITUTIONAL ACCREDITED INVESTORS UNLESS THE HOLDER IS A BANK ACTING IN ITS
FIDUCIARY CAPACITY), (III) SO LONG AS THIS CLASS C CERTIFICATE IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, SUCH SALE, PLEDGE OR
OTHER TRANSFER IS MADE TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES AFTER
DUE INQUIRY IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A),
ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY
OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS) TO
WHOM NOTICE IS GIVEN THAT THE SALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE
ON RULE 144A, OR (IV) SUCH SALE,
PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN WHICH CASE (A) THE OWNER
TRUSTEE SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE PROSPECTIVE
TRANSFEREE CERTIFY TO THE OWNER TRUSTEE AND THE TRANSFEROR IN WRITING THE FACTS
SURROUNDING SUCH TRANSFER, WHICH CERTIFICATION SHALL BE IN FORM AND SUBSTANCE
SATISFACTORY TO THE OWNER TRUSTEE AND THE TRANSFEROR, AND (B) THE OWNER TRUSTEE
MAY REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF
THE TRUST, THE TRANSFEROR OR THE OWNER TRUSTEE) SATISFACTORY TO THE TRANSFEROR
AND THE OWNER TRUSTEE TO THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE
SECURITIES ACT. NO SALE, PLEDGE OR OTHER TRANSFER MAY BE MADE TO ANY ONE PERSON
FOR CLASS C CERTIFICATES WITH A FACE AMOUNT OF LESS THAN $100,000 AND, IN THE
CASE OF ANY PERSON ACTING ON BEHALF OF ONE OR MORE THIRD PARTIES (OTHER THAN A
BANK (AS DEFINED IN SECTION 3(A)(2) OF THE SECURITIES ACT) ACTING IN ITS
FIDUCIARY CAPACITY), FOR CLASS C CERTIFICATES WITH A FACE AMOUNT OF LESS THAN
$100,000 FOR EACH SUCH THIRD PARTY.
NO TRANSFER OF THIS CLASS C CERTIFICATE SHALL BE PERMITTED TO BE MADE TO ANY
PERSON UNLESS THE OWNER TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEREE
TO THE EFFECT THAT SUCH TRANSFEREE IS NOT (A) AN EMPLOYEE BENEFIT PLAN (AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA OR
(B) A PLAN (AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE CODE
(EACH, A "BENEFIT PLAN"), AND IS NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS
OF A BENEFIT PLAN. EACH TRANSFEREE OF A BENEFICIAL OWNERSHIP INTEREST IN THIS
CLASS C CERTIFICATE SHALL BE DEEMED TO REPRESENT THAT IT IS NOT A BENEFIT PLAN
AND IS NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A BENEFIT PLAN.
NO TRANSFER OR SALE OF THIS CLASS C CERTIFICATE SHALL BE PERMITTED TO BE MADE IF
THE TRANSFER OR SALE INCREASES THE NUMBER OF CERTIFICATEHOLDERS TO MORE THAN
NINETY-NINE (99).
THE HOLDER OF THIS CLASS C CERTIFICATE REPRESENTS, BY VIRTUE OF ITS ACCEPTANCE
HEREOF, (I) THAT IT IS ACQUIRING THIS CLASS C CERTIFICATE FOR ITS OWN BEHALF AND
IS NOT ACTING AS AGENT OR CUSTODIAN FOR ANY OTHER PERSON OR ENTITY IN CONNECTION
WITH SUCH ACQUISITION, (II) IF THE HOLDER IS A PARTNERSHIP, GRANTOR TRUST OR S
CORPORATION FOR FEDERAL INCOME TAX PURPOSES (A "FLOW-THROUGH ENTITY"), ANY CLASS
C CERTIFICATE OWNED BY SUCH FLOW-THROUGH ENTITY WILL REPRESENT LESS THAN 50% OF
THE VALUE OF ALL THE ASSETS OWNED BY SUCH FLOW-THROUGH ENTITY AND NO SPECIAL
ALLOCATION OF INCOME, GAIN, LOSS, DEDUCTION OR
B-2-2
CREDIT FROM SUCH CLASS C CERTIFICATE WILL BE MADE AMONG THE BENEFICIAL OWNERS OF
SUCH FLOW-THROUGH ENTITY, AND (III) THE HOLDER IS A UNITED STATES PERSON WITHIN
THE MEANING OF THE CODE.
TRANSFER OF THIS CLASS C CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET
FORTH IN SECTION 3.7 OF THE AGREEMENT.
B-2-3
LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2003-B
UNDER AMENDED AND RESTATED TRUST AGREEMENT
DATED AS OF JUNE 1, 2003
Certificate No. 1 Initial Principal Balance: Certificate Rate: 5.00%
$10,000,000
First Payment Date: July 15, 2003
WILMINGTON TRUST COMPANY, a Delaware banking corporation, not
in its individual capacity but solely as trustee (the "Owner Trustee") under an
Amended and Restated Trust Agreement, dated as of June 1, 2003, between Long
Beach Acceptance Receivables Corp., a Delaware corporation (the "Transferor")
and the Owner Trustee (the "Trust Agreement"), hereby certifies that
[_______________________________] is the Holder of this Class C Certificate
representing the right to receive interest and principal distributions in
accordance with the terms of the Sale and Servicing Agreement. This 5.00% Class
C Certificate is issued pursuant to and is entitled to the benefits of the Trust
Agreement, and the Class C Certificateholder by acceptance hereof agrees to be
bound by the terms of the Trust Agreement. Reference is hereby made to the Trust
Agreement for a statement of the rights and obligations of the Class C
Certificateholder hereof. The Owner Trustee may treat the person shown on the
register maintained by the Owner Trustee pursuant to the Trust Agreement as the
absolute Class C Certificateholder hereof for all purposes.
Capitalized terms used herein without definition have the
meanings ascribed to them in or by reference to the Trust Agreement.
The Class C Certificateholder hereof, by its acceptance of
this Class C Certificate, warrants and represents to, and agrees with, the Owner
Trustee that it shall not transfer this Class C Certificate except in accordance
with the Trust Agreement.
The Class C Certificateholder, by acceptance of its Class C
Certificate, specifically acknowledges that it has no right to or interest in
any monies at any time held pursuant to the Sale and Servicing Agreement or the
Spread Account Agreement prior to the release of such monies pursuant to
Sections 5.6(c) or 5.6(d) of the Sale and Servicing Agreement, such monies being
held in trust for the benefit of the Class A Noteholders and the Note Insurer.
Notwithstanding the foregoing, in the event that it is ever determined that
provisions of the Sale and Servicing Agreement and the Spread Account Agreement
shall be considered to constitute a security agreement and the Transferor and
the Class C Certificateholder hereby grant to the Collateral Agent for the
benefit of the Class A Noteholders and the Note Insurer a first priority
perfected security interest in such amounts, to be applied as
B-2-4
set forth in Section 3.03 of the Spread Account Agreement and Section 5.6 of the
Sale and Servicing Agreement.
This Class C Certificate and the Trust Agreement shall in all
respects be governed by, and construed in accordance with, the laws of the State
of Delaware, without regard to conflict-of-law principles.
B-2-5
IN WITNESS WHEREOF, the Trust, pursuant to the Trust
Agreement, has caused this Class C Certificate to be issued as of the date
hereof.
LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2003-B
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By:
------------------------------------
Name:
Title:
Dated: June 25, 2003
This is one of the Class C Certificates referred to in the
within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: Wilmington Trust Company,
Authenticating Agent
By:
------------------------------------
Name:
Title:
Dated: June 25, 2003
B-2-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
-------------------------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)
-------------------------------------------------------------------------------
the within Class C Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_____________________________________ Attorney to transfer said Class C
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
---------------------------------------- *
---------------------------------------- *
* NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Class C Certificate in every particular,
without alteration, enlargement or any change whatever.
B-2-7
EXHIBIT C
[FORM OF "QUALIFIED INSTITUTIONAL BUYER"
TRANSFEREE'S CERTIFICATE]
[Date]
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Corporate Trust Administration
Long Beach Acceptance Receivables Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Re: Long Beach Acceptance Auto Receivables Trust 2003-B
Ladies and Gentlemen:
In connection with the proposed purchase by the buyer listed
below (the "Buyer") of the Class [C][R] Certificates (as defined below) issued
pursuant to the Amended and Restated Trust Agreement, dated as of June 1, 2003
(the "Trust Agreement"), between Long Beach Acceptance Receivables Corp., as
Transferor (the "Transferor") and Wilmington Trust Company, as trustee (the
"Owner Trustee"), relating to Long Beach Acceptance Auto Receivables Trust
2003-B (the " Class [C][R] Certificates"), the Buyer advises you as follows: (i)
the Buyer is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933, as amended (the "1933 Act") and is
acquiring beneficial ownership of the Class [C][R] Certificates for its own
account or for the account of not more than _ persons, each of which is a
"qualified institutional buyer"; and (ii) the Buyer satisfies the requirements
of paragraph (a)(2)(ii) of Rule 3a-7 under the Investment Company Act of 1940,
as amended (the "1940 Act"). In addition to the foregoing, you may rely on the
information provided in Annex 1 or 2, as applicable, attached hereto and
incorporated herein.
The Buyer understands that the Class [C][R] Certificates have
not been registered under the 1933 Act or the securities laws of any state. The
Buyer acknowledges that it has independently conducted such investigation and
evaluation of the merits and the risks involved in an investment in the Class
[C][R] Certificates and has received such information (whether from the
Transferor, the Owner Trustee, the transferor from which it proposes to purchase
Class [C][R] Certificates, or from any other source) as the Buyer has deemed
necessary and advisable in order to make its investment decision. The Buyer has
had any questions arising from such investigation and evaluation answered by the
Transferor to the satisfaction of the Buyer. The Buyer is a sophisticated
institutional investor, having such knowledge and experience in financial and
business matters generally, and with respect to asset-backed securities and
investments in "non-prime" automobile loans specifically, that it is capable of
independently evaluating the merits and risks of investment in the Class [C][R]
Certificates. In the normal course of its business, the Buyer invests in or
purchases securities similar to the Class [C][R] Certificates. The Buyer is
aware that it may be required to bear the economic risk of an investment in the
Class [C][R] Certificates for an indefinite period of time, and it is able to
bear such risk for an indefinite period.
Very truly yours,
[BUYER]
By:
------------------------------
Name:
Title:
Taxpayer ID:
----------------------
Name in which Class [C][R]
Certificate is to be Registered:
-----------------------------------
Address for Notices:
-----------------------------------
Payment Instructions:
-----------------------------------
C-2
ANNEX 1 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to the parties
listed in the "Qualified Institutional Buyer" Transferee's Certificate to which
this certification relates with respect to the Rule 144A Securities described
therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $_________________(1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
[ ] Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
[ ] Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the business
of which is substantially confined to banking and is supervised by the State or
territorial banking commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at least $25,000,000
as demonstrated in its latest annual financial statements, a copy of which is
attached hereto.
[ ] Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
[ ] Broker-dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
-----------------------------
(1) Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.
C-3
[ ] Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of a State, territory
or the District of Columbia.
[ ] State or Local Plan. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
[ ] ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
[ ] Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisers Act of 1940.
[ ] Small Business Investment Company. Buyer is a small business investment
company licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958.
[ ] Business Development Company. Buyer is a business development company
as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
[ ] Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively State or Local Plans or ERISA
Plans as defined above, and no participant of the Buyer is an individual
retirement account or an H.R. 10 (▇▇▇▇▇) plan.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the Class
[C][R] Certificates are
C-4
relying and will continue to rely on the statements made herein because one or
more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of Rule 144A Securities will constitute a reaffirmation of
this certification as of the date of such purchase. In addition, if the Buyer is
a Bank or Savings and Loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
--------------------------------------
Print Name of Buyer
By:
----------------------------------
Name:
Title:
Date:
C-5
ANNEX 2 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers that are Registered Investment Companies]
The undersigned hereby certifies as follows to the parties
listed in the "Qualified Institutional Buyer" Transferee's Certificate to which
this certification relates with respect to the Rule 144A Securities described
therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
[ ] The Buyer owned $__________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
[ ] The Buyer is part of a Family of Investment Companies
which owned in the aggregate $__________ in securities (other
than the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
C-6
5. The Buyer is familiar with Rule 144A and understands that
the parties listed in the Qualified Institutional Buyer Transferee's Certificate
to which this certification relates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be in
reliance on Rule 144A. In addition, the Buyer will only purchase for the Buyer's
own account.
6. Until the date of purchase of the Rule 144A Securities, the
undersigned will notify each of the parties to which this certification is made
of any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.
-----------------------------------------
Print Name of Buyer or Adviser
By:
--------------------------------------
Name:
Title:
IF AN ADVISER:
-----------------------------------------
Print Name of Buyer
Date:
C-7
EXHIBIT D
[FORM OF "ACCREDITED INVESTOR" TRANSFEREE'S CERTIFICATE]
[Date]
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Corporate Trust Administration
Long Beach Acceptance Receivables Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Re: Long Beach Acceptance Auto Receivables Trust 2003-B
Dear Sirs:
In connection with the proposed purchase by the buyer listed
below (the "Buyer") of Class [C][R] Certificates (as defined below) issued
pursuant to the Amended and Restated Trust Agreement, dated as of June 1, 2003
(the "Trust Agreement"), between Long Beach Acceptance Receivables Corp., as
Transferor (the "Transferor"), and Wilmington Trust Company, as trustee (the
"Owner Trustee"), relating to Long Beach Acceptance Auto Receivables Trust
2003-B (the "Class [C][R] Certificates"), the Buyer confirms that:
1. The Buyer understands that the Class [C][R] Certificates
have not been registered under the Securities Act of 1933, as amended (the "1933
Act"), and may not be sold except as permitted in the following sentence. The
Buyer agrees, on its own behalf and on behalf of any accounts for which it is
acting as hereinafter stated, that such Class [C][R] Certificates may be resold,
pledged or transferred only: (i) so long as such Class [C][R] Certificates are
eligible for resale pursuant to Rule 144A under the 1933 Act ("Rule 144A"), to a
person who the Buyer reasonably believes is a "qualified institutional buyer" as
defined in Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB, to whom notice is given that the resale, pledge or transfer is
being made in reliance on Rule 144A, (ii) pursuant to an exemption from
registration under the 1933 Act provided by Rule 144 (if applicable) under the
1933 Act or (iii) to an institution that is an "Accredited Investor" as defined
in Rule 501(a)(1), (2), (3) or (7) under the 1933 Act (an "Accredited Investor")
that is acquiring the Class [C][R] Certificates for investment purposes and not
for distribution, in each case in accordance with any applicable securities laws
of any state of the United States, and the Buyer will notify any purchaser of
the Class [C][R] Certificates from it of the above resale restrictions. The
Buyer further understands that in connection with any transfer of the Class
[C][R] Certificates to an Accredited Investor by it that the Transferor or Owner
Trustee may request, and if so requested
the Buyer will furnish, such certificates and other information as they may
reasonably require to confirm any such transfer with the foregoing restrictions.
2. The Buyer is an institutional investor which is an
Accredited Investor or, if the Class [C][R] Certificates are to be purchased for
one or more institutional accounts ("investor accounts") for which it is acting
as fiduciary or agent (except if it is a bank as defined in Section 3(a)(2) of
the 1933 Act, or a savings and loan association or other institution as
described in Section 3(a)(5)(A) of the 1933 Act, whether acting in its
individual or in a fiduciary capacity), each such investor account is an
institutional investor and an Accredited Investor on a like basis. In the normal
course of its business, the Buyer invests in or purchases securities similar to
the Class [C][R] Certificates.
3. The Buyer satisfies the requirements of paragraph (a)(2)(i)
of Rule 3a-7 of the Investment Company Act of 1940, as amended.
4. The Buyer acknowledges that it has independently conducted
such investigation and evaluation of the merits and the risks involved in an
investment in the Class [C][R] Certificates and has received such information
(whether from the Transferor, the Servicer, the transferor from which it
proposes to purchase Class [C][R] Certificates, or from any other source) as the
Buyer has deemed necessary and advisable in order to make its investment
decision. The Buyer has had any questions arising from such investigation and
evaluation answered by the Transferor to the satisfaction of the Buyer. The
Buyer is a sophisticated institutional investor, having such knowledge and
experience in financial and business matters generally, and with respect to
asset-backed securities and investments in "non-prime" automobile loans
specifically, that it is capable of independently evaluating the merits and
risks of investment in the Class [C][R] Certificates. In the normal course of
its business, the Buyer invests in or purchases securities similar to the Class
[C][R] Certificates. The Buyer is aware that it (or any investor account) may be
required to bear the economic risk of an investment in the Class [C][R]
Certificates for an indefinite period of time, and it (or such account) is able
to bear such risk for an indefinite period.
Very truly yours,
[BUYER]
By:
------------------------------------
Name:
Title:
D-2
EXHIBIT E
[FORM OF TRANSFEROR'S CERTIFICATE]
[Date]
Wilmington Trust Company
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Corporate Trust Administration
Re: Long Beach Acceptance Auto Receivables Trust 2003-B
Ladies and Gentlemen:
In connection with the disposition by the transferor listed
below (the "Transferor") of Class [C][R] Certificates (as defined below) issued
pursuant to the Amended and Restated Trust Agreement, dated as of June 1, 2003
(the "Trust Agreement") between Long Beach Acceptance Receivables Corp., as
Transferor (the "Transferor"), and Wilmington Trust Company, as trustee (the
"Owner Trustee"), relating to Long Beach Acceptance Auto Receivables Trust
2003-B (the "Class [C][R] Certificates"), the Transferor certifies that:
(a) the Transferor understands that the Class [C][R]
Certificates have not been registered under the Securities Act of 1933, as
amended (the "1933 Act"), and are being disposed of by the Transferor in a
transaction that is exempt from the registration requirements of the 1933 Act;
and
(b) the Transferor has not offered or sold any Class [C][R]
Certificates to, or solicited offers to buy any Class [C][R] Certificates from,
any person, or otherwise approached or negotiated with any person with respect
thereto, in a manner that would be deemed, or taken any other action which would
result in, a violation of Section 5 of the 1933 Act.
Very truly yours,
[NAME OF TRANSFEROR]
By:
----------------------------------------
Name:
Title:
EXHIBIT F
[FORM OF ERISA CERTIFICATE]
[Date]
Wilmington Trust Company
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Corporate Trust Administration
Long Beach Acceptance Receivables Corp.
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Re: Long Beach Acceptance Auto Receivables Trust 2003-B
Ladies and Gentlemen:
[NAME OF OFFICER] hereby certifies that:
1. That he [she] is [Title of Officer] ____________________ of [Name of
Transferee] ___________________________________________ (the "Transferee"), a
[savings institution] [corporation] duly organized and existing under the laws
of [the State of ________] [the United States], on behalf of which he [she]
makes this affidavit.
2. The Transferee (1) is not, and on _______________ [insert date of
transfer of Class [C][R] Certificate to Transferee] will not be, and on such
date will not be acting on behalf of or investing the assets of (a) an "employee
benefit plan" (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) that is subject to the provisions of
Title I of ERISA or (b) a "plan" (as defined in Section 4975(e)(1) of the
Internal Revenue Code of 1986, as amended (the "Code")) that is subject to
Section 4975 of the Code (each, a "Benefit Plan").
3. In connection with the proposed purchase by the Transferee of the
Class [C][R] Certificate issued pursuant to the Trust Agreement (the
"Agreement") between Long Beach Acceptance Receivables Corp., as Transferor (the
"Transferor"), and Wilmington Trust Company, as trustee (the "Owner Trustee"),
dated as of June 1, 2003, the Transferee hereby acknowledges that under the
terms of the Agreement no transfer of any Class [C][R] Certificate (as defined
in the Agreement) shall be permitted to be made to any person unless the Owner
Trustee has received a certificate from such transferee to the effect that such
transferee is not a Benefit Plan and is not acting on behalf of or investing the
assets of a Benefit Plan.
[4. The Class [C][R] Certificates shall be registered in the name of
_______________________ as nominee for the Transferee.]
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] _______________, this__ day of ____________.
[NAME OF TRANSFEREE]
By:
----------------------------------
Name:
Title:
The undersigned hereby acknowledges
that it is holding and will hold the
Class [C][R] Certificates at the
exclusive direction of and as nominee
of the Investor named above.
[NAME OF NOMINEE]
By:______________________________
Name:
Title:
F-2
EXHIBIT G
[FORM OF FLOW THROUGH ENTITY CERTIFICATE]
[Date]
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Corporate Trust Administration
Long Beach Acceptance Receivables Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Re: Long Beach Acceptance Auto Receivables Trust 2003-B
Ladies and Gentlemen:
[NAME OF OFFICER] hereby certifies that:
1. That he [she] is [Title of Officer] ____________ of [Name of
Transferee] _______________________________ (the "Transferee"), a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of ____________] [the United States], on behalf of which he [she] makes
this affidavit.
2. The Transferee (a) is acquiring the Class [C][R] Certificate (as
defined below) for its own behalf and is not acting as agent or custodian for
any other person or entity in connection with such acquisition, (b) if the
Transferee is a partnership, grantor trust or S corporation for federal income
tax purposes (a "Flow Through Entity"), any Class [C][R] Certificate owned by
such Flow Through Entity will represent less than 50% of the value of all the
assets owned by such Flow Through Entity and no special allocation of income,
gain, loss, deduction or credit from such Class [C][R] Certificate will be made
among the beneficial owners of such Flow Through Entity, and (c) the Transferee
is a United States person within the meaning of the Internal Revenue Code of
1986, as amended.
3. The Transferee hereby acknowledges that under the terms of the
Amended and Restated Trust Agreement (the "Agreement") between Long Beach
Acceptance Receivables Corp., as Transferor (the "Transferor"), and Wilmington
Trust Company, as trustee (the "Owner Trustee"), dated as of June 1, 2003 no
transfer of any Class [C][R] Certificate (as defined in the Agreement) shall be
permitted to be made to any person unless the Owner Trustee has received a
certificate from such transferee to the effect that such transferee (a) is
acquiring the Class [C][R] Certificate for its own behalf and is not
acting as agent or custodian for any other person or entity in connection with
such acquisition, (b) if the transferee is a partnership, grantor trust or S
corporation for federal income tax purposes (a "Flow Through Entity"), any Class
[C][R] Certificate owned by such Flow Through Entity will represent less than
50% of the value of all the assets owned by such Flow Through Entity and no
special allocation of income, gain, loss, deduction or credit from such Class
[C][R] Certificate will be made among the beneficial owners of such Flow Through
Entity, and (c) the transferee is a United States person within the meaning of
the Internal Revenue Code of 1986 as amended.
[4. The Class [C][R] Certificates shall be registered in the name of as
nominee for the Transferee.]
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer) _____________________________, this ___ day of ____________.
[NAME OF TRANSFEREE]
By:________________________
Name:
Title:
The undersigned hereby acknowledges
that it is holding and will hold the
Class [C][R] Certificates at the
exclusive direction of and as nominee
of the Investor named above.
[NAME OF NOMINEE]
By:______________________________
Name:
Title:
G-2