AMENDED AND RESTATED TRUST AGREEMENT between LONG BEACH ACCEPTANCE RECEIVABLES CORP. and WILMINGTON TRUST COMPANY Owner Trustee Dated as of March 1, 2007
Execution
Copy
AMENDED
AND RESTATED TRUST AGREEMENT
between
LONG
BEACH ACCEPTANCE RECEIVABLES CORP.
and
WILMINGTON
TRUST COMPANY
Owner
Trustee
Dated
as
of March 1, 2007
TABLE
OF CONTENTS
Page
Article
I. Definitions
|
1
|
|
SECTION
1.1.
|
Capitalized
Terms
|
1
|
SECTION
1.2.
|
Other
Definitional Provisions.
|
3
|
Article
II. Organization
|
4
|
|
SECTION
2.1.
|
Name
|
4
|
SECTION
2.2.
|
Office
|
4
|
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
|
8
|
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.
|
11
|
SECTION
2.12.
|
Derivatives
Contracts
|
14
|
Article
III. Certificates and Transfer of Interest
|
15
|
|
SECTION
3.1.
|
Initial
Ownership
|
15
|
SECTION
3.2.
|
The
Certificates
|
15
|
SECTION
3.3.
|
Authentication
of Certificates
|
16
|
SECTION
3.4.
|
Registration
of Certificates
|
16
|
SECTION
3.5.
|
Mutilated,
Destroyed, Lost or Stolen Certificates
|
18
|
SECTION
3.6.
|
Persons
Deemed Certificateholders
|
18
|
SECTION
3.7.
|
Transfer
of Certificates.
|
18
|
SECTION
3.8.
|
Disposition
In Whole But Not In Part.
|
20
|
Article
IV. Voting Rights and Other Actions
|
20
|
|
SECTION
4.1.
|
Prior
Notice to Certificateholders with Respect to Certain
Matters
|
20
|
SECTION
4.2.
|
Action
by Certificateholders with Respect to Certain Matters
|
21
|
SECTION
4.3.
|
Restrictions
on Certificateholders' Power.
|
21
|
SECTION
4.4.
|
Rights
of Note Insurer
|
22
|
Article
V. Authority and Duties of Owner Trustee
|
22
|
|
SECTION
5.1.
|
General
Authority.
|
22
|
SECTION
5.2.
|
General
Duties
|
22
|
SECTION
5.3.
|
Action
upon Instruction.
|
23
|
SECTION
5.4.
|
No
Duties Except as Specified in this Agreement or in
Instructions
|
24
|
SECTION
5.5.
|
No
Action Except under Specified Documents or Instructions
|
24
|
i
Page
SECTION
5.6.
|
Restrictions
|
24
|
Article
VI. Concerning the Owner Trustee
|
25
|
|
SECTION
6.1.
|
Acceptance
of Trusts and Duties
|
25
|
SECTION
6.2.
|
Furnishing
of Documents
|
26
|
SECTION
6.3.
|
Representations
and Warranties
|
27
|
SECTION
6.4.
|
Reliance;
Advice of Counsel.
|
27
|
SECTION
6.5.
|
Not
Acting in Individual Capacity
|
28
|
SECTION
6.6.
|
Owner
Trustee Not Liable for Certificates or Receivables
|
28
|
SECTION
6.7.
|
Owner
Trustee May Own Notes
|
28
|
SECTION
6.8.
|
Payments
from Owner Trust Estate
|
29
|
SECTION
6.9.
|
Doing
Business in Other Jurisdictions
|
29
|
Article
VII. Compensation of Owner Trustee
|
29
|
|
SECTION
7.1.
|
Owner
Trustee's Fees and Expenses
|
29
|
SECTION
7.2.
|
Indemnification
|
29
|
SECTION
7.3.
|
Payments
to the Owner Trustee
|
29
|
SECTION
7.4.
|
Non-recourse
Obligations
|
29
|
Article
VIII. Termination of Trust Agreement
|
30
|
|
SECTION
8.1.
|
Termination
of Trust Agreement.
|
30
|
Article
IX. Successor Owner Trustees and Additional Owner Trustees
|
31
|
|
SECTION
9.1.
|
Eligibility
Requirements for Owner Trustee
|
31
|
SECTION
9.2.
|
Resignation
or Removal of Owner Trustee
|
31
|
SECTION
9.3.
|
Successor
Owner Trustee
|
32
|
SECTION
9.4.
|
Merger
or Consolidation of Owner Trustee
|
33
|
SECTION
9.5.
|
Appointment
of Co-Indenture Trustee or Separate Indenture Trustee
|
33
|
Article
X. Miscellaneous
|
34
|
|
SECTION
10.1.
|
Supplements
and Amendments.
|
34
|
SECTION
10.2.
|
No
Legal Title to Owner Trust Estate in Certificateholders
|
35
|
SECTION
10.3.
|
Limitations
on Rights of Others
|
36
|
SECTION
10.4.
|
Notices.
|
36
|
SECTION
10.5.
|
Severability
|
37
|
SECTION
10.6.
|
Separate
Counterparts
|
37
|
SECTION
10.7.
|
Assignments
|
37
|
SECTION
10.8.
|
No
Recourse
|
37
|
SECTION
10.9.
|
Headings
|
38
|
SECTION
10.10.
|
GOVERNING
LAW
|
38
|
SECTION
10.11.
|
Servicer
|
38
|
ii
SECTION
10.12.
|
Limitation
on Liability
|
38
|
SECTION
10.13.
|
No
Petition
|
38
|
SECTION
10.14.
|
Bankruptcy
Matters
|
38
|
SECTION
10.15.
|
Effect
of Policy Expiration Date
|
39
|
EXHIBITS
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 Transferorβs Certificate
|
EXHIBIT
F
|
-
|
Form
of ERISA Certificate
|
EXHIBIT
G
|
-
|
Form
of Flow Through Entity Certificate
|
iii
AMENDED
AND RESTATED TRUST AGREEMENT dated as of March 1, 2007 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 February 15, 2007 (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.
ARTICLE
I.
Definitions
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.
"Capital
Account"
shall
have the meaning assigned to such term in Section 2.11.
"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 a beneficial interest in the Trust, substantially
in the form of Exhibit B-1 attached hereto.
"Derivative
Contract"
means
any ISDA Master Agreement, together with the related Schedule and Confirmation,
entered into by the Trust and a Derivative Counterparty in accordance with
Section 2.12.
"Derivative
Counterparty"
means
any counterparty to a Derivative Contract as provided in Section
2.12.
"Instructing
Party"
shall
have the meaning assigned to such term in Section 5.3.
"Nonrecourse
Debt Minimum Gain"
means
"partner 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 and pursuant to each Transfer Agreement, all funds on deposit from
time to time in Collection Account, the Pre-Funding 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.
"Partnership
Interest"
means
with respect to any Certificate treated as an interest in a partnership and
any
Certificateholder of such Certificate, the partnership interest as determined
by
the relative amounts in such Certificateholderβs Capital Account.
"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§ 3801
et.
seq.
as the
same may be amended from time to time.
"Tax
Matters Partner"
shall
have the meaning assigned to such term in Section 2.11(a)(xiii).
"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.
2
"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. If the Trust were to be treated as a partnership for tax
purposes, a Certificateholderβs 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.
(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.
3
ARTICLE
II.
Organization
SECTION
2.1. Name.
There
is hereby formed a trust to be known as "Long Beach Acceptance Auto Receivables
Trust 2007-A," 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 xxx 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 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate
Trust
Administration as the principal office of the Trust.
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 and each Transfer Agreement, as applicable;
(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
Pre-Funding Account, 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,
the Certificateholders and the Noteholders and to hold, manage and distribute
to
the Certificateholders pursuant to the terms of the Sale and Servicing
Agreement, each Transfer Agreement and the Spread Account Agreement any portion
of the Pledged Property released from the Lien of the Indenture;
(v) at
the
direction of the Transferor and subject to the requirements set forth in Section
2.12 hereof, to enter into Derivative Contracts for the benefit of the Class
R
Certificateholder;
4
(vi) to
enter
into and perform its obligations under the Basic Documents to which it is a
party;
(vii) 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
(viii) 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 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.
5
(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
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.
6
(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.
(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.
7
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 otherwise, of any
right, title or interest by any 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.
8
(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 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 and each
Transfer Agreement, the Transferor will have conveyed to the Trust good title,
free and clear of any lien, encumbrance or other interests of others (including
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.
9
(h) Records.
Immediately upon the sale or other delivery of any Trust Assets to the Trust
pursuant to the Sale and Servicing Agreement and each Transfer 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, each Transfer 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.
(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 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 such
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
10
(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
Transferor, the Owner Trustee and each Certificateholder, by accepting its
Certificate, agree to treat the Class C Certificate as debt for U.S. federal,
state and local income and franchise tax purposes. If, contrary to this
treatment by the parties, the IRS determined that the Class C Certificate were
properly characterized as equity interests in the Trust, or if there were ever
more than one beneficial owner of the Class R Certificates, it is possible
that
the Trust could be treated as a partnership for tax purposes. If the Trust
were
to be treated as a partnership (rather than disregarded as a separate entity)
for federal income tax purposes the following provisions shall
apply:
(i) A
separate capital account (each, a "Capital
Account")
shall
be established and maintained for each Certificateholder by the initial Class
R
Certificateholder, in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv). No Certificateholder shall be entitled to interest on its
Capital Account or any capital contribution made by such Certificateholder
to
the Trust. For the avoidance of doubt, the initial amount in the Class C
Certificateholder's Capital Account will be equal to
$12,303,797.
(ii) Distributions
on the Class C and Class R Certificates shall be made in accordance with
Sections 5.6 and 5.12 of the Sale and Servicing Agreement. Any distributions
made to a Class C or Class R Certificateholder shall reduce the amount of such
Certificateholderβs Capital Account.
(iii) Upon
termination of the Trust pursuant to Article VIII, any amounts available for
distribution to Certificateholders shall be distributed to the
Certificateholders with positive Capital Account balances in accordance with
such balances; provided, however, that any amounts remaining in the Supplemental
Enhancement Account shall first be to the Class C Certificateholder until the
principal balance of the Class C Certificate is reduced to zero and all amounts
due and owing to the Class C Certificateholder are paid in full. 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 Trustβs 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).
(iv) 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.
11
(v) Profit
and loss of the Trust for each Taxable Year shall be allocated to the
Certificateholders in accordance with their respective Partnership
Interests.
(vi) 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 Certificateholdersβ
respective Partnership 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(j), and (iv) if there
is
a net decrease in 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 Certificateholderβs "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 Certificateholderβs Partnership Interest.
(vii) 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
Certificateholderβs Capital Account that exceeds the sum of such
Certificateholderβs 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 2.11, 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 2.11.
(viii) Loss
shall not be allocated to a Certificateholder to the extent that such allocation
would cause a deficit in such Certificateholderβs 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
Certificateholderβs 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
Partnership Interests. After the occurrence of an allocation of loss to a
Certificateholder in accordance with this Section 2.11(a)(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
2.11(a)(vii).
12
(ix) If
a
Certificateholder transfers any part or all of its Partnership 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.
(x) "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.
(xi) 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.
(xii) As
provided in Section 5.7(c) of the Sale and Servicing Agreement, at the
Servicerβs expense, the Tax Matters Partner 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 Trustβs 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
Trustβs 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.
13
(xiii) The
initial Class R Certificateholder (or if the Class R Certificate is no longer
owned by the initial Class R Certificateholder, the Class R Certificateholder
owning the largest percentage interest of the Class R Certificates) 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 written notice to all other
Certificateholders, within such period, that describes the Tax Matters Partnerβs
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 Certificateholder 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.
SECTION
2.12. Derivatives
Contracts.
(a) The
Trust, at the direction of the Transferor, shall execute and deliver Derivative
Contracts in such form as the Transferor shall approve, as evidenced
conclusively by the Trust's execution thereof, such Derivative Contracts being
solely for the benefit of the Class R Certificateholder; provided, however,
that
neither the execution and delivery of any such Derivative Contract nor the
consummation of any transaction contemplated thereunder shall give rise to
a
non-exempt prohibited transaction described in Section 406 of ERISA or
4975(c)(1) of the Code. Any such Derivative Contract shall constitute a fully
prepaid agreement. Any acquisition of a Derivative Contract shall be accompanied
by (i) an Opinion of Counsel provided by, and at the expense of, the Transferor
to the effect that the existence of the Derivative Contract will not cause
the
Trust to be characterized as an association (or publicly traded partnership)
taxable as a corporation for federal income tax purposes; (ii) the prior written
consent of the Note Insurer to the acquisition of such Derivative Contract,
such
consent not to be unreasonably withheld; provided that such consent shall not
be
deemed to be unreasonably withheld if the proposed Derivative Contract does
not
satisfy the requirements set forth in clauses (b) and (c) below; and (iii)
confirmation from the Rating Agencies that the then-current rating of the Notes
will not be qualified, reduced or withdrawn (without regard to the Policy)
as a
result of the acquisition of such Derivative Contract. Prior to the acquisition
of any Derivative Contracts by the Trust, the Trust at the direction and expense
of the Transferor, shall establish and maintain in its own name an Eligible
Account (the "Derivative Contract Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit
of
the Trust on behalf of the Class R Certificateholder. All collections, proceeds
and other amounts in respect of the Derivative Contracts payable by the
Derivative Counterparty shall be deposited into the Derivative Contract
Collection Account for distribution to the Class R Certificateholder on the
Distribution Date following receipt thereof by the Trust.
14
(b) No
Derivative Contract shall provide for any payment obligation on the part of
the
Trust. Each Derivative Contract must (i) contain a non-petition covenant
provision from the Derivative Counterparty, (ii) limit payment dates thereunder
to Payment Dates and (iii) contain a provision limiting any cash payments due
to
the Derivative Counterparty on any day under such Derivative Contract solely
to
funds available therefore in the Collection Account to make payments to the
Holder of the Class R Certificates on such Payment Date.
(c) Each
Derivative Contract must (i) provide for the direct payment of any amounts
by
the Derivative Counterparty thereunder to the Certificate Account at least
one
Business Day prior to the related Payment Date, (ii) provide that in the event
of the occurrence of an Event of Default, such Derivative Contract shall
terminate upon the direction of a majority percentage interest of the Class
R
Certificateholders, (iii) prohibit the Derivative Counterparty from
"setting-off" or "netting" other obligations of the Trust and its Affiliates
against such Derivative Counterparty's payment obligations thereunder and (iv)
satisfy the Rating Agency Condition.
ARTICLE
III.
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.
15
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.
(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.
The Class C Certificate shall not entitle its holder to any benefit under this
Agreement or the Sale and Servicing Agreement, and shall not 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.
The 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 Certificateholders 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.
16
(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.
(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 or Eligible Investments 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).
17
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 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.
18
(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 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. Β§ 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.
19
(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.
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.
ARTICLE
IV.
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
Certificateholders);
(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
20
(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 in 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 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.
21
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.
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 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 $100,000,000, the Class A-2 Notes in the aggregate principal amount
of
$145,000,000, the Class A-3 Notes in the aggregate principal amount of
$98,000,000 and the Class A-4 Notes in the aggregate principal amount of
$143,000,000. 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
(a) .
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.
22
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 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.
23
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 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 an
association, or publicly traded partnership, 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.
24
ARTICLE
VI.
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;
(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;
25
(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
(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
Xxxxxxxx-Xxxxx 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
Xxxxxxxx-Xxxxx 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.
26
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 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.
27
(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 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: 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.
28
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.
ARTICLE
VII.
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.
29
ARTICLE
VIII.
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 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 11.1(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 each
Certificateholder amounts distributable on such Payment Date pursuant to Section
5.6 of the Sale and Servicing Agreement.
30
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 Certificateholders
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.
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 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.
31
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.
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.
32
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, 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;
33
(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 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.
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, to the extent such amendment materially and adversely
affects the interests of the Class R Certificateholder, 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.
34
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 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.
35
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
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attention:
Corporate Trust Administration
(Telecopy
Number: (000)
000-0000)
(ii) if
to the
Transferor, addressed to:
Long
Beach Acceptance Receivables Corp.
Xxx
Xxxx
Xxxxxx Xxxxx
Xxxxxxx,
Xxx Xxxxxx 00000
Attention:
General Counsel
(Telecopy
Number: (000) 000-0000)
(iii) if
to the
Note Insurer, addressed to
Financial
Security Assurance Inc.
00
Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention:
Transaction Oversight
Re:
Long
Beach Acceptance Auto Receivables Trust 2007-A
Telex
No.: (000) 000-0000
Confirmation:
(000) 000-0000
Telecopy
Nos.: (000) 000-0000, (000) 000-0000
(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").
36
(iv) in
the
case of the Rating Agencies, addressed to:
Xxxxx'x
Investors Service, Inc.
00
Xxxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
ABS Monitoring Department
Standard
& Poor's Ratings Services
00
Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Asset Backed Surveillance Department
(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 the 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, such Class C Certificate or the Basic Documents.
37
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, AND THIS AGREEMENT AND ALL
MATTERS ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT SHALL BE
GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS.
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, so long as the Notes remain outstanding, the Indenture
Trustee shall have provided their written consent.
38
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 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.
39
WILMINGTON
TRUST COMPANY, as Owner
Trustee
By: /s/
Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Financial Services Officer
LONG
BEACH ACCEPTANCE RECEIVABLES
CORP.
By: /s/
Xxxxxx X. Xxxxxxxx
Name:
Xxxxxx X. Xxxxxxxx
Title:
Executive Vice President
[Signature
Page to the Amended and Restated Trust Agreement]
EXHIBIT
A
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE
OF TRUST
OF
LONG
BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2007-A
This
Certificate of Trust of LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2007-A
(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. Β§3801 et
seq.)
(the
"Act").
1. Name.
The
name of the statutory trust formed hereby is LONG BEACH ACCEPTANCE AUTO
RECEIVABLES TRUST 2007-A.
2. Owner
Trustee.
The
name and business address of the trustee of the Trust in the State of Delaware
is Wilmington Trust Company, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, Attention: Corporate Trust Administration.
3. Effective
Date.
This
Certificate of Trust will be effective upon filing.
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 SECTIONS 3.7 AND 3.8 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).
THIS
CERTIFICATE MAY BE TRANSFERRED IN WHOLE BUT NOT IN PART.
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
SECTIONS 3.7 AND 3.8 OF THE TRUST AGREEMENT.
B-1-3
LONG
BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2007-A
UNDER
AMENDED AND RESTATED TRUST AGREEMENT
DATED
AS
OF MARCH 1, 2007
Certificate
Number: R-1
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 March 1, 2007, 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 this 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
LONG
BEACH ACCEPTANCE AUTO
RECEIVABLES
TRUST 2007-A
By: Wilmington
Trust Company,
not
in
its individual capacity
but
solely as Owner Trustee
By:
Name:
Title:
Dated:
March 22, 2007
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:
March 22, 2007
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.
X-0-0
XXXXXXX
X-0
[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 SECTIONS 3.7 AND 3.8 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).
THIS
CERTIFICATE MAY BE TRANSFERRED IN WHOLE BUT NOT IN PART.
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 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.
B-2-2
TRANSFER
OF THIS CLASS C CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH
IN
SECTIONS 3.7 AND 3.8 OF THE TRUST AGREEMENT.
B-2-3
LONG
BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2007-A
UNDER
AMENDED AND RESTATED TRUST AGREEMENT
DATED
AS
OF MARCH 1, 2007
Certificate
No. C-1
|
Initial
Principal Balance:
$12,303,797
|
Certificate
Rate: 5.00%
|
First
Payment Date:
April
16, 2007
|
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 March 1, 2007, between
Long
Beach Acceptance Receivables Corp., a Delaware corporation (the "Transferor")
and
the Owner Trustee (the "Trust
Agreement"),
hereby certifies that Greenwich Capital Markets, Inc. 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 this Class C Certificate, agrees with
the
Transferor, the Owner Trustee and each other Certificateholder that it will
treat the Class C Certificate as debt for U.S. federal, state and local income
and franchise tax purposes.
The
Class
C Certificateholder, by acceptance of this 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 set forth in Section 3.03 of the Spread Account Agreement and
Section
5.6 of the Sale and Servicing Agreement.
B-2-4
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
LONG
BEACH ACCEPTANCE AUTO
RECEIVABLES
TRUST 2007-A
By: Wilmington
Trust Company,
not
in
its individual capacity
but
solely as Owner Trustee
By:
Name:
Title:
Dated:
March 22, 2007
This
is
the Class C Certificate referred to in the within-mentioned Trust
Agreement.
WILMINGTON
TRUST COMPANY,
not
in
its individual capacity
but
solely as Owner Trustee
By: Wilmington
Trust Company,
Authenticating
Agent
By:
Name:
Title:
Dated:
March 22, 2007
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
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attn:
Corporate Trust Administration
Long
Beach Acceptance Receivables Corp.
Xxx
Xxxx
Xxxxxx Xxxxx
Xxxxxxx,
Xxx Xxxxxx 00000
Attn:
President
Re: Long
Beach Acceptance Auto Receivables Trust 2007-A
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 March 1, 2007 (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 2007-A (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.
C-1
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.
o 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.
o 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.
o 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.
o 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
o 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.
o 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.
o ERISA
Plan.
The
Buyer is an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974.
o Investment
Advisor.
The
Buyer is an investment advisor registered under the Investment Advisers Act
of
1940.
o 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.
o Business
Development Company.
Buyer
is a business development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
o 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 (Xxxxx) 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 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.
C-4
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.
o 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).
o 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
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attn:
Corporate Trust Administration
Long
Beach Acceptance Receivables Corp.
Xxx
Xxxx
Xxxxxx Xxxxx
Xxxxxxx,
Xxx Xxxxxx 00000
Attn:
President
Re:
Long
Beach Acceptance Auto Receivables Trust 2007-A
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 March 1, 2007 (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 2007-A (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.
D-1
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
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attn:
Corporate Trust Administration
Re:
Long
Beach Acceptance Auto Receivables Trust 2007-A
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 March 1, 2007 (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 2007-A (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:
E-1
EXHIBIT
F
[FORM
OF
ERISA CERTIFICATE]
[Date]
Wilmington
Trust Company
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attn:
Corporate Trust Administration
Long
Beach Acceptance Receivables Corp.
Xxx
Xxxx
Xxxxxx Xxxxx
Xxxxxxx,
Xxx Xxxxxx 00000
Attn:
President
Re: Long
Beach Acceptance Auto Receivables Trust 2007-A
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 March 1, 2007, 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.]
F-1
[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
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000-0000
Attn:
Corporate Trust Administration
Long
Beach Acceptance Receivables Corp.
Xxx
Xxxx
Xxxxxx Xxxxx
Xxxxxxx,
Xxx Xxxxxx 00000
Attn:
President
Re: Long
Beach Acceptance Auto Receivables Trust 2007-A
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 March 1, 2007 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.
G-1
[4. The
Class
[C][R] Certificates shall be registered in the name of as nominee for the
Transferee.]
[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