Exhibit 1.1
[Execution Version]
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AMENDMENT NO. 1 TO SALE AND SERVICING AGREEMENT
among
LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2003-B
Issuer
LONG BEACH ACCEPTANCE RECEIVABLES CORP.
Transferor
LONG BEACH ACCEPTANCE CORP.
Originator, Servicer and Custodian
and
JPMORGAN CHASE BANK
Back-up Servicer and Trust Collateral Agent
Dated as of October 1, 2003
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AMENDMENT NO. 1, dated as of October 1, 2003 (this "Amendment") to the
Sale and Servicing Agreement (the "Sale and Servicing Agreement"), dated as of
June 1, 2003, among LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2003-B, a
Delaware statutory trust, as issuer (the "Issuer"), LONG BEACH ACCEPTANCE
RECEIVABLES CORP., a Delaware corporation, as transferor (the "Transferor"),
LONG BEACH ACCEPTANCE CORP., a Delaware corporation, as originator of the
receivables ("LBAC"), as servicer (in such capacity, the "Servicer") and as
custodian (in such capacity, the "Custodian"), and JPMORGAN CHASE BANK, a New
York banking corporation, as back-up servicer and trust collateral agent ( the
"Back-up Servicer" and the "Trust Collateral Agent", respectively).
WHEREAS, Section 13.1 of the Servicing Agreement permits amendment of
the Servicing Agreement upon the terms and conditions specified therein;
WHEREAS, the parties to the Servicing Agreement (the "Parties") wish to
amend the Servicing Agreement, pursuant to Section 13.1(a)(z) thereof;
NOW, THEREFORE, the Parties agree to the following amendments, which
amendments shall have retroactive effect to the date of initial execution and
delivery of the Servicing Agreement:
1. Defined Terms. Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to them in the Sale and Servicing
Agreement.
2. Amendment of Section 4.9(b). Section 4.9(b) of the Sale and
Servicing Agreement shall be replaced in its entirety to read:
"In addition to the information required by Section
4.9(a), the Servicer shall include in the copy of
the Servicer's Certificate delivered to the Note
Insurer (i) the Average Delinquency Ratio, the
Cumulative Default Rate, and the Cumulative Loss
Rate (as such terms are defined in the Spread
Account Agreement), (ii) whether any Trigger Event
(as such term is defined in the Spread Account
Agreement) has occurred as of such Determination
Date, (iii) whether any Trigger Event that may have
occurred as of a prior Determination Date is Deemed
Cured (as defined in the Spread Account Agreement)
as of such Determination Date, (iv) whether to the
knowledge of the Servicer an Insurance Agreement
Event of Default has occurred and (v) the number of
Receivables modified in accordance with the Loss
Mitigation Program and the General Payment Deferment
Policy as set forth on Exhibit D hereto. The
Servicer shall in addition give notice of the
occurrence of any Trigger Event or any Insurance
Agreement Event of Default to each Rating Agency."
3. Amendment of Exhibits. Exhibit D to the Sale and Servicing Agreement
shall be replaced in its entirety with Exhibit A hereto.
4. No Negative Amortization. LBAC represents and warrants to the other
parties hereto and to the Note Insurer that the amendment to the Payment
Deferment and Due Date Change Policies, as set forth on Exhibit A hereto, will
not result in the negative amortization of any Receivables modified in
accordance with such amended Payment Deferment and Due Date Change Policies.
5. Counterparts. This Amendment may be executed in several
counterparts, each of which shall be deemed an original hereof and all of which,
when taken together, shall constitute one and the same Amendment to the Sale and
Servicing Agreement.
6. Ratification of Sale and Servicing Agreement. Except as provided
herein, all provisions, terms and conditions of the Sale and Servicing Agreement
shall remain in full force and effect. As amended hereby, the Sale and Servicing
Agreement is ratified and confirmed in all respects.
7. Entire Agreement. This Amendment sets forth the entire agreement
between the Parties with respect to the subject matter hereof, and this
Amendment supersedes and replaces any agreement or understanding that may have
existed between the Parties prior to the date hereof in respect of such subject
matter.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Issuer, the Transferor, the Originator, the
Servicer, the Trust Collateral Agent, the Back-up Servicer and the Custodian
have caused this Sale and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.
LONG BEACH ACCEPTANCE RECEIVABLES
CORP., as Transferor
By:
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Name:
Title:
LONG BEACH ACCEPTANCE CORP.,
as Originator, Servicer and Custodian
By:
----------------------------------------
Name:
Title:
JPMORGAN CHASE BANK,
as Back-up Servicer and Trust Collateral
Agent
By:
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Name:
Title:
LONG BEACH ACCEPTANCE AUTO
RECEIVABLES TRUST 2003-B, as Issuer
By: Wilmington Trust Company, not in its
individual capacity, but solely as Owner
Trustee
By:
----------------------------------------
Name:
Title:
Consented to as of the date first written above.
FINANCIAL SECURITY ASSURANCE INC.
By:
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Name:
Title:
[Sale and Servicing Agreement]
EXHIBIT A
PAYMENT DEFERMENT POLICY
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A. Loss Mitigation Program
This program, which involves temporary payment modifications, is intended to
assist Obligors who are experiencing temporary financial hardships that would
otherwise lead to voluntary surrenders of their vehicles and resulting losses to
LBAC. In order to be eligible for this program, an Obligor must first have
indicated an intent to surrender his or her vehicle. LBAC will determine
individual Obligor eligibility for and the viability of this program as an
effective loss mitigation option on a case-by-case basis. Any arrangement
between an Obligor and LBAC for a temporary payment modification under this
program must be approved by LBAC's President or an Executive Vice President.
o LBAC may agree to a temporary payment modification, provided that the
modified payment amount may not be less than 60% of the contractual
payment amount. The contractual interest rate of the Receivable must
remain unchanged.
o The total number of payments modified may not exceed 9 over the entire
term of the Receivable.
o The terms of any payment modification must be set forth in a written
modification agreement between the Obligor and LBAC, and the agreement
must be included in the Legal File for the Receivable.
o The modification agreement must specify that contractual arrearages
resulting from the payment modification will be satisfied by the Obligor
either by making a balloon payment due on the maturity date of the
Receivable or by making additional payments following the maturity date,
resulting in a term extension, provided that any term extension may not
exceed 6 months beyond the current maturity date of the Receivable.
o Prior to allowing any payment modification under this program, LBAC must
conduct a financial analysis of each candidate to determine whether there
is a reasonable probability that the Obligor will satisfy the terms and
conditions of the arrangement and that the Receivable will be viable at
the expiration of the payment modification period.
o No deferments or due date adjustments may be granted during the
modification period.
o Payment modification arrangements which do not meet the above criteria may
be agreed to on an exception basis by LBAC's President or an Executive
Vice President.
o As of October 1, 2003, and the first day of each calendar month
thereafter, the aggregate number of Receivables the terms of which are
currently modified under this program may not exceed one - half of one
percent (0.5%) of (1) the number of Receivables transferred as of the
original Transfer Date plus (2) the number of Receivables transferred as
of each subsequent Transfer Date.
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B. General Payment Deferment Policy
In addition to its Loss Mitigation Program, LBAC may defer certain payments
under the following conditions and circumstances.
o LBAC may grant a payment deferment provided that the deferment period does
not exceed 1 month (2 months if 12 or more payments have been made and if
the deferment is granted in writing by the President, or an Executive Vice
President, or the National Collections Manager, or a Regional Manager).
o Not more than 1 deferment event (which may consist of a 2 month deferment
according to the exceptions included in the policy) may be granted during
any 12-month period.
o The aggregate of all deferment periods during the term of a Receivable may
not exceed the lesser of 8 months or 50% of the weighted average life of
the original term of the Receivable (including deferments granted both
before and after the related Cutoff Date).
o At least 6 payments must be made before a deferment may be granted.
o A request for a deferment must be made in writing.
o The deferment must bring the account current, so that after the deferment
is processed no payment is then due.
o Except as otherwise set forth in this policy, deferments must be granted
in writing by the Collection Manager or someone of equal or higher rank.
o A deferment fee will be collected for each deferment if allowed by
applicable law and may be waived or deferred only by the President, or an
Executive Vice President, or the National Collections Manager, or a
Regional Manager; provided, however, that no deferment will be granted
unless LBAC believes in good faith that the account probably would default
in the reasonably foreseeable future if a deferment is not approved.
o Deferments which do not meet the above criteria may be granted in writing
on an exception basis (e.g., when required by law) by the President, or an
Executive Vice President, or the National Collections Manager, or a
Regional Manager.
o As of October 1, 2003, and the first day of each calendar quarter
thereafter, the aggregate number of Receivables the terms of which have
been extended during the preceding calendar quarter shall not exceed 4% of
the number of Receivables at the beginning of the preceding calendar
quarter.
o No deferment may extend the date for final payment of a Receivable beyond
the last day of the record Collection Period preceding the Class A-4 Final
Scheduled Payment Date.
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DUE DATE CHANGE POLICY
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In addition to its Payment Deferment Policy, LBAC may grant due date changes
under the following conditions and circumstances.
o LBAC may grant a due date change, provided that the new due date is within
20 days of the current due date.
o Not more than 2 due date changes may be granted over the term of a
Receivable.
o If 2 due date changes are granted, the total number of days by which the
maturity date is extended may not exceed 20.
o A request for a due date change must be made in writing.
o The account must be current at the time the request is received.
o Due date changes must be granted in writing by the Collection Manager or
someone of equal or higher rank.
o No due date change may be granted if the aggregate of all deferment
periods and the requested due date change would exceed the lesser of 8
months or 50% of the original term of the Receivable.
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