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                                                                   EXHIBIT 10.71

                        INSURANCE AND INDEMNITY AGREEMENT
                          Dated as of November 26, 2002

                           AMBAC ASSURANCE CORPORATION
                                   as Insurer

               ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES TRUST 2002-A
                                    as Issuer

                 ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2002 LLC
                                    as Seller

                          ALLIANCE LAUNDRY SYSTEMS LLC
                                       and

                              THE BANK OF NEW YORK
                              as Indenture Trustee

               ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES TRUST 2002-A
               Equipment Loan Backed and Receivables Backed Notes

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                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I DEFINITIONS........................................................2

   Section 1.1.  Defined Terms...............................................2

   Section 1.2.  Other Definitional Provisions...............................4

ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS.........................4

   Section 2.1.  Representations and Warranties of Alliance..................4

   Section 2.2.  Affirmative Covenants of Alliance...........................5

   Section 2.3.  Negative Covenants of Alliance..............................8

   Section 2.4.  Representations and Warranties of the Insurer...............9

   Section 2.5.  Representations; Warranties and Covenants of the Seller....10

   Section 2.6.  Affirmative Covenants of the Seller........................10

   Section 2.7.  Negative Covenants of the Seller...........................14

   Section 2.8.  Representations and Warranties of the Issuer...............14

   Section 2.9.  Affirmative Covenants of the Issuer........................16

   Section 2.10. Negative Covenants of the Issuer...........................19

ARTICLE III THE AMBAC POLICY; REIMBURSEMENT.................................20

   Section 3.1.  Issuance of the Ambac Policy...............................20

   Section 3.2.  Payment of Fees and Premium................................21

   Section 3.3.  Reimbursement Obligation...................................22

   Section 3.4.  Indemnification............................................22

   Section 3.5.  Payment Procedure..........................................26

   Section 3.6.  Subrogation................................................26

ARTICLE IV FURTHER AGREEMENTS...............................................27

   Section 4.1.  Effective Date; Term of the Insurance Agreement............27

   Section 4.2.  Further Assurances and Corrective Instruments..............27

   Section 4.3.  Obligations Absolute.......................................28

   Section 4.4.  Assignments; Reinsurance; Third-Party Rights...............29

   Section 4.5.  Liability of the Insurer...................................29

   Section 4.6.  Annual Servicing Audit and Certification...................30

   Section 4.7.  Resignation of Insurer.....................................30

   Section 4.8.  Rights and Remedies........................................30

ARTICLE V DEFAULTS AND REMEDIES.............................................31

   Section 5.1.  Defaults...................................................31

   Section 5.2.  Remedies; No Remedy Exclusive..............................32

   Section 5.3.  Waivers....................................................32

                                      -i-

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                                TABLE OF CONTENTS
                                   (continued)

                                                                           Page
                                                                           ----
ARTICLE VI MISCELLANEOUS....................................................32

   Section 6.1.  Amendments, Etc............................................32

   Section 6.2.  Notices....................................................33

   Section 6.3.  Severability...............................................34

   Section 6.4.  Governing Law..............................................34

   Section 6.5.  Consent to Jurisdiction....................................34

   Section 6.6.  Consent of the Insurer.....................................35

   Section 6.7.  Counterparts...............................................35

   Section 6.8.  Headings...................................................35

   Section 6.9.  Trial by Jury Waived.......................................35

   Section 6.10. Limited Liability..........................................35

   Section 6.11. Entire Agreement; Facsimile Signatures.....................36

   Section 6.12. Indenture Trustee..........................................36

   Section 6.13. Third-Party Beneficiary....................................36

   Section 6.14. No Proceedings.............................................36

   Section 6.15. Limited Recourse...........................................36

   Section 6.16. No Recourse................................................36

   Section 6.17. Regulatory Change..........................................37

EXHIBIT A   FORM OF AMBAC POLICY..................... .....................A-1

EXHIBIT B-1 AGREED UPON PROCEDURES FOR INDEPENDENT PUBLIC
               ACCOUNTANTS REVIEW OF EQUIPMENT LOANS......................B1-1

EXHIBIT B-2 AGREED UPON PROCEDURES FOR INDEPENDENT PUBLIC
               ACCOUNTANTS REVIEW OF RECEIVABLES..........................B2-1

                                      -ii-

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     INSURANCE AND INDEMNITY AGREEMENT (as it may be amended, modified or
supplemented from time to time, this "Insurance Agreement"), dated as of
November 26, 2002, by and among AMBAC ASSURANCE CORPORATION, as Insurer (the
"Insurer"), ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES TRUST 2002-A, as Issuer (the
"Issuer"), ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2002 LLC, as Seller (the
"Seller"), ALLIANCE LAUNDRY SYSTEMS LLC ("Alliance"), and THE BANK OF NEW YORK,
as Indenture Trustee (the "Indenture Trustee").

                             PRELIMINARY STATEMENTS

     A. The Indenture, dated as of November 26, 2002, relating to Alliance
Laundry Equipment Receivables Trust 2002-A Equipment Loan Backed and Receivables
Backed Notes, by and among the Issuer and the Indenture Trustee (as it may be
amended, modified or supplemented from time to time as set forth therein, the
"Indenture" ) provides for, among other things, the issuance of the Notes.

     B. The parties hereto desire that the Insurer issue the Ambac Policy to the
Indenture Trustee for the benefit of the Noteholders and to, among other things,
specify the conditions precedent thereto, the premium in respect thereof and the
indemnity, reimbursement, reporting and other obligations of the parties hereto
other than the Insurer in consideration thereof.

NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

Section 1.1. Defined Terms.

Unless the context clearly requires otherwise, all capitalized terms used but
not defined herein shall have the respective meanings assigned to them in the
Pooling and Servicing Agreement dated as of November 26, 2002 by and among the
Seller, the Issuer and Alliance, as Originator and Servicer (the "Agreement")
or, if not defined therein, in the Ambac Policy described below. All references
herein to any agreement that constitutes a Basic Document shall refer to such
agreement as of the date hereof without giving effect to any amendment,
supplement or other modification thereto made without the Insurer's consent. For
purposes of this Insurance Agreement, the following terms shall have the
following meanings:

     "Alliance" means Alliance Laundry Systems LLC, a Delaware limited liability
company, in its capacity as Originator, Servicer or otherwise.

     "Ambac" means Ambac Assurance Corporation, a Wisconsin domiciled stock
insurance corporation

     "Ambac Policy" means the Note Guaranty Insurance Policy, AB0613BE, together
with all endorsements thereto, issued by the Insurer to the Indenture Trustee,
for the benefit of the Noteholders, in the form attached as Exhibit A to this
Insurance Agreement.

     "Closing Date" means November 26, 2002.

     "Company Party" has the meaning specified in Section 4.1.

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     "Documents" means the Basic Documents and any other information relating to
the Trust Estate, the Issuer, the Seller, or Alliance furnished to the Insurer
by the Issuer, the Seller or Alliance.

     "Event of Default" has the meaning specified in Section 5.1 hereof.

     "Fee Letter" means that certain letter agreement dated as of the date
hereof by and among Alliance, the Issuer and Ambac setting forth certain fees
and other matters referred to herein, as the same may be amended or supplemented
from time to time in accordance therewith and with this Insurance Agreement.

     "Indemnified Party" has the meaning specified in Section 3.4 hereof.

     "Indemnifying Party" has the meaning specified in Section 3.4 hereof.

     "Indenture Trustee" means The Bank of New York, as indenture trustee under
the Indenture, and any successor thereto under the Indenture.

     "Insurance Agreement" has the meaning specified in the initial paragraph
hereof.

     "Insurer" means Ambac and any successor thereto, as issuer of the Ambac
Policy.

     "Investment Company Act" means the Investment Company Act of 1940,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

     "Issuer" means Alliance Laundry Equipment Receivables Trust 2002-A, a
Delaware statutory trust, or any of its successors or permitted assigns as
provided for in the Indenture.

     "Late Payment Rate" means the lesser of (a) the greater of (i) the per
annum rate of interest publicly announced from time to time by Citibank, N.A. as
its prime or base lending rate (any change in such rate of interest to be
effective on the date such change is announced by Citibank, N.A.), plus 2% per
annum and (ii) the then applicable highest rate of interest on the Notes and (b)
the maximum rate permissible under applicable usury or similar laws limiting
interest rates. The Late Payment Rate shall be computed on the basis of the
actual number of days elapsed over a year of 360 days.

     "Material Adverse Change" means a "Material Adverse Effect" as such term is
defined in the Purchase Agreement.

     "Moody's" means Moody's Investors Service and any successor thereto.

     "Noteholder" means any Holder of Notes, other than a Company Party.

     "Note Purchase Agreement" means the Note Purchase Agreement dated as of
November 26, 2002 among the Issuer, the Indenture Trustee, Alliance, the Seller,
the Note Purchasers (as such term is defined therein) and the other parties
named on the signature pages thereto with respect to the offer and sale of the
Notes, as amended, modified or supplemented from time to time.

     "Notes" means collectively, the Equipment Loan Notes and the Receivables
Notes, issued by the Issuer under the Indenture.

     "Originator" means Alliance Laundry Systems, LLC, a Delaware limited
liability company, as ALS under the Purchase Agreement, and Originator under the
Agreement.

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     "Person" means an individual, joint stock company, trust, unincorporated
association, joint venture, corporation, limited liability company, business or
owner trust, partnership or other organization or entity (whether governmental
or private).

     "Premium" means the premium payable in accordance with the Fee Letter.

     "Purchase Agreement" means the Purchase Agreement dated as of November 26,
2002 between ALS and the Seller with respect to the sale of the Equipment Loans
and the Receivables, as amended, modified or supplemented from time to time.

     "Rating Agencies" means Moody's and S&P.

     "Securities Act" means the Securities Act of 1933, including, unless the
context otherwise requires, the rules and regulations promulgated thereunder, as
amended from time to time.

     "Securities Exchange Act" means the Securities Exchange Act of 1934,
including, unless the context otherwise requires, the rules and regulations
promulgated thereunder, as amended from time to time.

     "Seller" means Alliance Laundry Equipment Receivables 2002 LLC, a Delaware
limited liability company.

     "Servicer" means Alliance Laundry Systems LLC, a Delaware limited liability
company, as servicer under the Agreement, and any successor thereto in such
capacity.

     "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.

     "Transaction" means the transactions contemplated by the Basic Documents.

     "Trust Agreement" means, with respect to the Issuer, the Trust Agreement of
the Issuer, as amended from time to time.

Section 1.2. Other Definitional Provisions.

The words "hereof," "herein" and "hereunder" and words of similar import when
used in this Insurance Agreement shall refer to this Insurance Agreement as a
whole and not to any particular provision of this Insurance Agreement, and
Section, subsection, Schedule and Exhibit references are to this Insurance
Agreement unless otherwise specified. The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.
The words "include" and "including" shall be deemed to be followed by the phrase
"without limitation."

                                   ARTICLE II

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 2.1. Representations and Warranties of Alliance.

Alliance hereby makes to and for the benefit of the Insurer each of the
representations and warranties made by Alliance, whether in its capacity as
Originator, Servicer or otherwise, in each of the Basic Documents to which it is
a party, including, but not limited to, Sections 2.11 and 7.01 of the Agreement

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and Sections 3.1 of the Purchase Agreement. Such representations and warranties
are incorporated herein by this reference as if fully set forth herein, and may
not be amended except by an amendment complying with the terms of the last
sentence of Section 6.1. In addition, Alliance represents and warrants as of the
Closing Date as follows:

          (a) The offer and sale of the Notes by the Issuer comply in all
material respects with all requirements of law, including all registration
requirements of applicable securities laws.

          (b) The Indenture is not required to be qualified under the Trust
Indenture Act of 1939, as amended. The Issuer is not required to be registered
as an "investment company" under the Investment Company Act. Neither the offer
nor the sale of the Notes by the Issuer will be in violation of the Securities
Act or any other federal or state securities law. Alliance will satisfy any of
the information reporting requirements of the Securities Exchange Act arising
out of the Transaction to which it, the Issuer or the Seller is subject.

          (c) The information or statements contained in the Documents furnished
to the Insurer by Alliance, as amended, supplemented or superseded on or prior
to the date hereof, taken as a whole, do not, if restated at and as of the date
hereof, contain any statement of a material fact or omit to state a material
fact necessary to make such information or statements misleading in any material
respect.

Section 2.2. Affirmative Covenants of Alliance.

Alliance hereby makes, to and for the benefit of the Insurer, all of the
covenants made by Alliance, whether in its capacity as Originator or Servicer,
in the Basic Documents to which it is a party, including, but not limited to,
Section 3.07 of the Agreement. Such covenants are hereby incorporated herein by
this reference as if fully set forth herein, and may not be amended except by an
amendment complying with the terms of the last sentence of Section 6.1. In
addition, Alliance hereby agrees that during the term of this Insurance
Agreement, unless the Insurer shall otherwise expressly consent in writing:

          (a) Compliance with Agreements and Applicable Laws. Alliance shall
comply with the terms and conditions of and perform its obligations under the
Basic Documents to which it is a party and shall comply in all material respects
with any law, rule or regulation applicable to it.

          (b) Existence. Subject to Section 2.3(c) hereof, it shall maintain its
existence as a limited liability company and shall at all times continue to be
duly organized under the laws of the State of Delaware and duly qualified and
duly authorized (as described in Sections 3.1(b) and (c) of the Purchase
Agreement) and shall conduct its business in accordance with the terms of its
certificate of formation and operating agreement and shall maintain all
licenses, permits, charters and registrations which are material to the conduct
of its business.

          (c) (Intentionally Omitted).

          (d) Notice of Material Events. Alliance shall be obligated promptly to
inform the Insurer in writing of the occurrence of any of the following:

               (i) the submission of any claim or the initiation of any legal
     process, litigation or administrative or judicial investigation, or
     disciplinary proceeding by or against Alliance that would likely result in
     a Material Adverse Change with respect to Alliance or the promulgation of
     any proceeding or any proposed or final ruling in connection with any such
     litigation, investigation or proceeding which would reasonably likely to
     result in a Material Adverse Change with respect to Alliance;

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               (ii) not less than thirty (30) days after the date thereof, any
     change in the name, location of the principal office, jurisdiction of
     organization or organization identification number (if any) of Alliance;

               (iii) within two (2) Business Days of the occurrence thereof, the
     occurrence of any Event of Default hereunder;

               (iv) within two (2) Business Days of the date of Alliance's
     knowledge thereof or the date on which Alliance should have, through the
     exercise of reasonable care and due diligence, known thereof, the
     occurrence of any Default hereunder; or

               (v) the receipt of written notice that (A) any license, permit,
     charter, registration or approval necessary for the conduct of Alliance's
     business is to be, or may be, suspended or revoked and such suspension or
     revocation would be reasonably likely to result in a Material Adverse
     Change with respect to Alliance or (B) Alliance is to cease and desist any
     practice, procedure or policy employed by Alliance in the conduct of its
     business, and such cessation would be reasonably likely to result in a
     Material Adverse Change with respect to Alliance.

          (e) Access to Records; Discussions with Officers and Accountants. Upon
reasonable prior written notice of the Insurer, at any time and in any event at
least annually, Alliance shall permit the Insurer or its authorized agents:

               (i) to inspect the books and records of Alliance, as they may
     relate to the Transaction, the Trust Estate, the Notes, or the obligations
     of Alliance under the Basic Documents;

               (ii) to discuss the affairs, finances and accounts of Alliance
     with the principal executive officer and the principal financial officer of
     Alliance; and

               (iii) through independent public accountants designated by the
     Insurer, to discuss the affairs, finances and accounts of Alliance with
     Alliance's independent accountants, provided that an officer of Alliance
     shall have the right to be present during such discussions.

     Such inspections and discussions shall be conducted during normal business
hours at Alliance's cost and expense, subject to Section 3.3(b) hereof, and
shall not unreasonably disrupt the business of Alliance.

          (f) Closing Documents. Alliance shall provide or cause to be provided
to the Insurer an executed original copy of each Basic Document and a copy of
each other document executed in connection with the closing of the Transaction
within 30 days of the Closing Date.

          (g) Field Examination by Independent Public Accountants. Upon
reasonable prior written notice by the Insurer at any time, Alliance shall
permit Alliance's independent public accountants or, if such independent public
accountants are not acceptable to the Insurer, independent public accountants
designated by the Insurer, annually to conduct a field examination of Alliance
pursuant to an agreed upon procedures scope attached in the form of Exhibit B
hereto, and in connection therewith shall permit such independent public
accountants, without limitation:

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               (i) to inspect the books and records of Alliance as they may
     relate to the Transaction, the Trust Estate, the Notes, or the obligations
     of Alliance under the Basic Documents;

               (ii) to discuss the affairs, finances and accounts of Alliance
     with the principal executive officer and the principal financial officer of
     Alliance; and

               (iii) to discuss the affairs, finances and accounts of Alliance
     with Alliance's independent accountants, provided that an officer of
     Alliance shall have the right to be present during such discussions.

Such inspections and discussions shall be conducted during normal business hours
at Alliance's cost and expense, subject to Section 3.3(b) hereof, and shall not
unreasonably disrupt the business of Alliance.

          (h) Financial Reporting. Alliance shall provide or cause to be
provided to the Insurer the following (which, other than management letters and
certificates, Alliance may deliver by electronic mail or by telecopy):

               (i) Annual and Quarterly Financial Statements. The financial
     statements required pursuant to Section 5.02(c) of the Agreement, as and
     when required pursuant to such section.

               (ii) Compliance Certificate. Together with the financial
     statements required under Section 5.02(c) of the Agreement, a compliance
     certificate signed by Alliance's principal financial officer stating that
     to the best of such Person's knowledge, (i) Alliance is in compliance with
     its obligations hereunder and under the other Basic Documents, and (ii) no
     Event of Default, Servicer Default, or Rapid Amortization Event exists
     hereunder or under the other Basic Documents and no event which but for the
     lapse of time or the giving of notice, or both, would constitute an Event
     of Default, Servicer Default, or Rapid Amortization Event exists hereunder
     or under the other Basic Documents, and if any such event exists, stating
     the nature and status thereof (including all relevant financial and other
     information and amounts used in determining whether such Event of Default,
     Servicer Default, or Rapid Amortization Event exists).

               (iii) (Intentionally Omitted).

               (iv) S.E.C. Filings and Other Information. Promptly after the
     filing thereof, copies of all registration statements and annual, quarterly
     or other regular reports which Alliance or any subsidiary files with the
     Securities and Exchange Commission or the Ontario Securities Commission.

          (i) Credit and Collections Policy. Within 90 days after the end of
each fiscal year of Alliance, Alliance shall deliver to the Insurer a complete
copy of the Credit and Collection Policy then in effect.

          (j) Financial Projections. Projected financial information prepared by
Alliance in the ordinary course of business and delivered by Alliance to any of
its other lenders, including revisions of previously delivered information, in
each case concurrently with delivery thereof to such other lenders.

          (k) Public Debt Ratings. Promptly, but in any event within 15 days
after the date of any upgrade in Alliance's public debt ratings and 2 Business
Days of any downgrade in such ratings, Alliance shall deliver to the Insurer a
written certification of Alliance's public debt ratings after giving effect to
such change.

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          (l) Trigger Events. Alliance shall include in the Servicer's
Certificate delivered pursuant to Section 3.10 of the Agreement a certification
signed by Alliance's principal financial officer stating that to the best of
such Person's knowledge, no Servicer Default, Rapid Amortization Event or Event
of Default (hereunder or under the Indenture), or any event with notice or lapse
of time would constitute any of the same, has occurred and is continuing.

          (m) Exemption from Securities Act Registration. Alliance shall take
all actions necessary to exempt the sale of the Notes from registration under
the Securities Act and under any applicable securities laws of any state of the
United States where any Notes may be offered or sold by the Issuer.

          (n) Operation of the Issuer. Alliance agrees that (i) it shall not
take any steps or actions that are inconsitent with the obligations of the
Seller and the Issuer under Sections 2.6(i) and 2.9(i), respectively, (ii) at
all times during the effectiveness of this Insurance Agreement, except as
otherwise permitted by the Agreement, it shall be the sole record and beneficial
owner of all of the outstanding equity interests of the Seller, free and clear
of all liens and other encumbrances, and (iii) the Seller shall be the sole
record and beneficial owner of all of the outstanding equity interests of the
Issuer, free and clear of all liens and other encumbrances.

          (o) Notices and Information Provided Under the Purchase Agreement.
Without limiting any of the foregoing, Alliance shall provide the Insurer with
copies of all notices and information delivered pursuant to Section 5.2(d) and
(e) of the Purchase Agreement on the same date as such items are due to be
delivered under such section of the Purchase Agreement.

          (p) Other Information. Alliance shall provide to the Insurer such
other information (including non-financial information) in respect of the Loans,
the Transaction and the Basic Documents and such other financial or operating
information in respect of Alliance, the Seller, the Issuer or any of their
Affiliates, in each case, which the Insurer may from time to time reasonably
request.

Section 2.3. Negative Covenants of Alliance.

Alliance hereby agrees that during the term of this Insurance Agreement, unless
the Insurer shall otherwise expressly consent in writing:

          (a) Impairment of Rights. Alliance shall not take any action, or fail
to take any action, if such action or failure to take action (x) is reasonably
likely to result in a Material Adverse Change or (y) is reasonably likely to
interfere with the enforcement of any rights of the Insurer under or with
respect to any of the Basic Documents. Alliance shall give the Insurer written
notice of any such action or failure to act promptly prior to the date of
consummation of such action or failure to act. Alliance shall furnish to the
Insurer all information requested by it that is reasonably necessary to
determine compliance with this paragraph.

          (b) Amendments, Etc. Alliance shall not modify, amend or waive, or
consent to any modification or amendment of, any of the terms, provisions or
conditions of the Basic Documents to which it is a party without the prior
written consent of the Insurer thereto, but excluding any amendment to the Basic
Documents required by law, provided that Alliance shall provide the Insurer with
reasonable prior written notice of any such amendment and a copy thereof.

          (c) Limitation on Mergers, Etc. Except as expressly permitted by the
Agreement, Alliance shall not consolidate with or merge with or into any Person
or transfer all or substantially all of its assets to any Person (each, a
"Combination Transaction") or liquidate or dissolve. Without limiting the
foregoing, no Combination Transaction shall be consummated unless Alliance shall
delivered to the Insurer (a) an Officer's Certificate reasonably satisfactory to
it, stating that such consolidation,

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conversion, merger, or succession and such agreement of assumption comply with
this Section and the other Basic Documents that all conditions precedent, if
any, provided for in this Agreement and the other Basic Documents relating to
such Combination Transaction have been complied with, and (b) an opinion of
counsel, reasonably satisfactory to it, stating that, in the opinion of such
counsel, (1) the agreement of assumption is the valid and binding obligations of
the parties thereto and effective to accomplish the assumption of liabilities
contemplated therein, (2) either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Issuer, the
Indenture Trustee, the Insurer and the Noteholders in the Loans and the
Receivables and reciting the details of such filings, or (B) no such action
shall be necessary to preserve and protect such interest in either case, such
opinion shall cover the matters covered in the opinion delivered pursuant to
Section 3.6(a) of the Indenture, taking into account changes of law, and (3)
after giving effect to such merger or consolidation, Alliance (or its successor)
would not be substantively consolidated with the Seller or the Issuer in the
event of a bankruptcy of Alliance or its successor.

          (d) Change in Lockbox Processor. Alliance shall not permit a change in
the Lockbox Account or the lockbox processor designated in the Lockbox Agreement
without the prior written consent of the Insurer.

Section 2.4. Representations and Warranties of the Insurer.

The Insurer represents and warrants to the Indenture Trustee (on behalf of the
Noteholders), the Issuer, the Seller and Alliance as follows:

          (a) Organization and Licensing. The Insurer is a stock insurance
corporation duly organized, validly existing and in good standing under the laws
of the State of Wisconsin.

          (b) Corporate Power. The Insurer has the corporate power and authority
to issue the Ambac Policy and execute and deliver this Insurance Agreement and
to perform all of its obligations hereunder and thereunder.

          (c) Authorization; Approvals. All proceedings legally required for the
issuance of the Ambac Policy and the execution, delivery and performance of this
Insurance Agreement have been taken and all licenses, orders, consents or other
authorizations or approvals of the Insurer's Board of Directors or stockholders
or any governmental boards or bodies legally required for the enforceability of
the Ambac Policy have been obtained or are not material to the enforceability of
the Ambac Policy.

          (d) Enforceability. The Ambac Policy, when issued, will constitute,
and this Insurance Agreement constitutes, a legal, valid and binding obligation
of the Insurer, enforceable in accordance with its terms, subject to insolvency,
reorganization, moratorium, receivership and other similar laws affecting
creditors' rights generally and by general principles of equity and subject to
principles of public policy limiting the right to enforce the indemnification
provisions contained therein and herein, insofar as such provisions relate to
indemnification for liabilities arising under federal securities laws.

          (e) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Insurer's knowledge, threatened
against it at law or in equity or before or by any court, governmental agency,
board or commission or any arbitrator which, if decided adversely, would
materially and adversely affect its ability to perform its obligations under the
Ambac Policy or this Insurance Agreement.

          (f) No Conflict. The execution by the Insurer of this Insurance
Agreement will not, and the satisfaction of the terms hereof will not, conflict
with or result in a breach of any of the terms,

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<PAGE>

conditions or provisions of the Certificate of Incorporation or By-Laws of the
Insurer, or any restriction contained in any contract, agreement or instrument
to which the Insurer is a party or by which it is bound or constitute a default
under any of the foregoing which would materially and adversely affect its
ability to perform its obligations under the Ambac Policy or this Insurance
Agreement.

Section 2.5. Representations; Warranties and Covenants of the Seller.

The Seller hereby makes to and for the benefit of the Insurer each of the
representations, warranties and covenants made by the Seller in the Basic
Documents to which it is a party, including, but not limited to, Section 2.11
and 7.01 of the Agreement. Such representations, warranties and covenants are
incorporated herein by this reference as if fully set forth herein, and may not
be amended except by an amendment complying with the terms of the last sentence
of Section 6.1. In addition, the Seller represents and warrants as of the
Closing Date as follows:

          (a) The offer and sale of the Notes by the Issuer complies in all
material respects with all requirements of law, including all registration
requirements of applicable securities laws.

          (b) The Indenture is not required to be qualified under the Trust
Indenture Act of 1939, as amended. The Issuer is not required to be registered
as an "investment company" under the Investment Company Act. Neither the offer
nor the sale of the Notes by the Issuer will be in violation of the Securities
Act or any other federal or state securities law. The Seller will satisfy any of
the information reporting requirements of the Securities Exchange Act arising
out of the Transaction to which it is subject.

          (c) The information or statements contained in the Documents furnished
to the Insurer by Seller, as amended, supplemented or superseded on or prior to
the date hereof, taken as a whole, does not, if restated at and as of the date
hereof, contain any statement of a material fact or omit to state a material
fact necessary to make such information or statements misleading in any material
respect.

          (d) The Seller is solvent and will not be rendered insolvent by the
Transaction and, after giving effect to the Transaction, the Seller will not be
left with an unreasonably small amount of capital with which to engage in its
business, and the Seller does not intend to incur, nor believes that it has
incurred, debts beyond its ability to pay as they mature. The Seller does not
contemplate the commencement of insolvency, liquidation or consolidation
proceedings or the appointment of a receiver, liquidator, conservator, trustee
or similar official with respect to it or any of its assets.

          (e) The principal place of business of the Seller is Ripon, Wisconsin
and its books and records with respect to the Loans are located at Wilmington,
Delaware, Ripon, Wisconsin and Chicago, Illinois.

Section 2.6. Affirmative Covenants of the Seller.

The Seller hereby makes, to and for the benefit of the Insurer, all of the
covenants of the Seller set forth in the Basic Documents to which it is a party.
Such covenants are incorporated herein by this reference, and may not be amended
except by an amendment complying with the terms of the last sentence of Section
6.1. In addition, the Seller hereby agrees that during the term of this
Insurance Agreement, unless the Insurer shall otherwise expressly consent in
writing:

          (a) Compliance with Agreements and Applicable Laws. It shall comply
with the terms and conditions of and perform its obligations under the Basic
Documents to which it is a party and shall comply with all material requirements
of any law, rule or regulation applicable to it.

                                       10

<PAGE>

          (b) Existence. It shall maintain its existence as a limited liability
company and shall at all times continue to be duly organized under the laws of
the State of Delaware and duly qualified and duly authorized (as described in
Sections 3.2(b) and (c) of the Purchase Agreement) and shall conduct its
business in accordance with the terms of its certificate of formation and
operating agreement and shall maintain all licenses, permits, charters and
registrations which are material to the conduct of its business.

          (c) Access to Records; Discussions with Officers and Accountants. Upon
reasonable prior written notice of the Insurer, at any time and any event at
least annually, the Seller shall permit the Insurer or its authorized agents:

               (i) to inspect the books and records of the Seller;

               (ii) to discuss the affairs, finances and accounts of the Seller
     with the principal executive officer and the principal operating officer of
     the Seller; and

               (iii) through independent public accountants designated by the
     Insurer, to discuss the affairs, finances and accounts of the Seller with
     the Seller's independent accountants, provided that an officer of the
     Seller shall have the right to be present during such discussions.

     Such inspections and discussions shall be conducted during normal business
hours at the cost and expense of the Seller, subject to Section 3.3(b) hereof,
and shall not unreasonably disrupt the business of the Seller.

          (d) Notice of Material Events. The Seller shall be obligated promptly
to inform the Insurer in writing of the occurrence of any of the following:

               (i) the submission of any claim or the initiation of any legal
     process, litigation or administrative or judicial investigation, or
     disciplinary proceeding by or against the Seller that would likely result
     in a Material Adverse Change with respect to the Seller or the promulgation
     of any proceeding or any proposed or final ruling in connection with any
     such litigation, investigation or proceeding which would reasonably likely
     to result in a Material Adverse Change with respect to the Seller;

               (ii) not less than thirty (30) days after the date thereof, any
     change in the name, location of the principal office, jurisdiction of
     organization or organization identification number (if any) of the Seller;

               (iii) within two (2) Business Days of the occurrence thereof, the
     occurrence of a Default or an Event of Default hereunder in respect of the
     Seller;

               (iv) the commencement of any proceedings by or against the Seller
     under any applicable reorganization, liquidation, rehabilitation,
     insolvency or other similar law now or hereafter in effect or of any
     proceeding in which a receiver, liquidator, conservator, trustee or similar
     official shall have been, or may be, appointed or requested for such Seller
     or any of its assets; or

               (v) the receipt of written notice that (A) any license, permit,
     charter, registration or approval necessary for the conduct of the Seller's
     business is to be, or may be, suspended or revoked and such suspension or
     revocation would be reasonably likely to result in a Material Adverse
     Change with respect to the Seller or (B) the Seller is to cease and desist
     any practice, procedure or policy employed by the Seller in the conduct of
     its business, and such

                                       11

<PAGE>

     cessation would be reasonably likely to result in a Material Adverse Change
     with respect to the Seller.

          (e) Field Examination by Independent Public Accountants. Upon the
prior written notice of the Insurer at any time, each of the Seller shall permit
the independent public accountants of the Seller or, if such independent public
accountants are not acceptable to the Insurer, independent public accountants
designated by the Insurer, annually to conduct a field examination of the Seller
pursuant to an agreed upon procedures scope attached in the form of Exhibit B
hereto, and in connection therewith shall permit such independent public
accountants without limitation:

               (i) to inspect the books and records of the Seller; and

               (ii) to discuss the affairs, finances and accounts of the Seller
     with the Seller's independent accountants, provided that an officer of the
     Seller shall have the right to be present during such discussions.

     Such inspections and discussions shall be conducted during normal business
hours at the cost and expense of such Seller, subject to Section 3.3(b) hereof,
and shall not unreasonably disrupt the business of the Seller.

          (f) Exemption from Securities Act Registration. The Seller shall take
all actions necessary to exempt the sale of the Notes from registration under
the Securities Act and under any applicable securities laws of any state of the
United States where Notes may be offered or sold by the Issuer.

          (g) Financial Reporting. To the extent the Seller shall otherwise be
preparing the same for purposes other than the preparation of the consolidated
financial statements of ALH and its subsidiaries, the Seller shall provide or
cause to be provided to the Insurer, as soon as practicable and in any event
within 90 days after the end of each fiscal year of the Seller annual balance
sheets of the Seller as at the end of such fiscal year and the notes thereto,
and the related statements of income and cash flows and the respective notes
thereto for such fiscal year certified by the principal financial officer of the
Seller.

          (h) Other Information. The Seller shall provide to the Insurer such
other information (including non-financial information) in respect of the Loans,
the Transaction and the Basic Documents and such other financial or operating
information in respect of the Seller, in each case, which the Insurer may from
time to time reasonably request.

          (i) Operation of the Seller. The Seller shall:

                    (1) be a limited purpose, Delaware limited liability company
          whose primary activities are restricted pursuant to its certificate of
          formation and operating agreement;

                    (2) not engage in any action that would cause the separate
          legal identity of the Seller not to be respected, including, without
          limitation, (a) holding itself out as being liable for the debts of
          any other party or (b) acting other than through its duly authorized
          agents;

                    (3) not be involved in the day-to-day management of
          Alliance;

                                       12

<PAGE>

                    (4) not incur, assume or guarantee any indebtedness except
          for such indebtedness as may be incurred by the Seller in connection
          with the issuance of the Notes or as otherwise permitted by the
          Insurer;

                    (5) act solely in its own name in the conduct of its
          business, including business correspondence and other communications,
          and shall conduct its business so as not to mislead others as to the
          identity of the entity with which they are concerned;

                    (6) maintain separate company records and books of account,
          deposit accounts (and funds therein) or other assets and shall not
          commingle its deposit accounts (and funds therein) with the deposit
          accounts (and funds therein) of any entity;

                    (7) not engage in any business or activity other than in
          connection with or relating to its certificate of formation and
          operating agreement;

                    (8) not form, or cause to be formed, any subsidiaries (other
          than the Issuer);

                    (9) comply with all restrictions and covenants in, and shall
          not fail to comply with the limited liability company formalities
          established in, its certificate of formation and operating agreement;

                    (10) manage its day-to-day business without the involvement
          of Alliance except pursuant to its obligations as Servicer;

                    (11) maintain a separate office from that of Alliance, which
          may be located on Alliance's premises;

                    (12) not act as an agent of Alliance;

                    (13) maintain at all times two independent managers as
          required by its articles of organization and operating agreement;

                    (14) ensure that, to the extent that it shares the same
          officers or other employees as any of its Affiliates, the salaries of
          and the expenses related to providing benefits to such officers and
          other employees shall be fairly allocated among such entities, and
          each such entity shall bear its fair share of the salary and benefit
          costs associated with all such common officers and employees;

                    (15) ensure that, to the extent that it jointly contracts
          with any of its stockholders or Affiliates to do business with vendors
          or service providers or to share overhead expenses, the costs incurred
          in doing so shall be allocated fairly among such entities, and each
          such entity shall bear its fair share of such costs. To the extent
          that the Seller contracts or does business with vendors or service
          providers when the goods and services provided are partially for the
          benefit of any other Person, the costs incurred in so doing shall be
          fairly allocated to or among such entities for whose benefit the goods
          and services are provided, and each such entity shall bear its fair
          share of such costs. All material transactions between the Seller and
          its Affiliates shall only be on an arm's-length basis;

                                       13

<PAGE>

                    (16) require that all full-time employees of the Seller
          identify themselves as such and not as employees of Alliance
          (including, without limitation, by means of providing appropriate
          employees with business or identification cards identifying such
          employees as the Seller's employees); and

                    (17) compensate all employees, consultants and agents
          directly, from the Seller's bank accounts, for services provided to
          the Seller by such employees, consultants and agents, and, to the
          extent any employee, consultant or agent of the Seller is also an
          employee, consultant or agent of Alliance, allocate the compensation
          of such employee, consultant or agent between the Seller and Alliance
          on a basis which reflects the services rendered to the Seller and
          Alliance.

Section 2.7. Negative Covenants of the Seller.

The Seller hereby agrees that during the term of this Insurance Agreement,
unless the Insurer shall otherwise expressly consent in writing:

          (a) Impairment of Rights. The Seller shall not take any action, or
fail to take any action, if such action or failure to take action (x) is
reasonably likely to result in a Material Adverse Change or (y) is reasonably
likely to interfere with the enforcement of any rights of the Insurer under or
with respect to any of the Basic Documents. The Seller shall give the Insurer
written notice of any such action or failure to act promptly prior to the date
of consummation of such action or failure to act. The Seller shall furnish to
the Insurer all information requested by it that is reasonably necessary to
determine compliance with this paragraph.

          (b) Amendments, Etc. The Seller shall not modify, amend or waive, or
consent to any modification, amendment or waiver of, any of the terms,
provisions or conditions of the Basic Documents to which it is a party or its
organizational documents, including, without limitation, its certificate of
formation and operating agreement, without the prior written consent of the
Insurer thereto, but excluding any amendment to the Basic Documents required by
law, provided that the Seller shall provide the Insurer with prior written
notice of any such amendment and a copy thereof.

          (c) Limitation on Mergers, Etc. The Seller shall not consolidate with
or merge with or into any Person or transfer all or substantially all of its
assets to any Person or liquidate or dissolve except as expressly permitted in
the Agreement.

          (d) Operating Expenses. The Seller shall not permit Alliance to pay
any of the Seller's operating expenses except pursuant to allocation
arrangements that comply with the requirements of Section 2.6(i)(17) above.

          (e) Certain Other Limitations. The Seller shall not permit the Seller
to be named as an insured on an insurance policy held by another Company Party
or covering the property of any other Company Party, except to the extent the
Seller shall bear the expenses thereof, or enter into an agreement with the
holder of such policy whereby in the event of a loss in connection with such
property not owned by the Seller, proceeds are paid to the Seller.

Section 2.8. Representations and Warranties of the Issuer.

The Issuer hereby makes, to and for the benefit of the Insurer, each of the
representations and warranties made by the Issuer in the Basic Documents to
which it is a party. Such representations and warranties are incorporated herein
by this reference as if fully set forth herein, and may not be amended except by
an

                                       14

<PAGE>

amendment complying with the terms of Section 6.1. In addition, the Issuer
represents and warrants as of the Closing Date as follows:

          (a) Due Organization and Qualification. The Issuer is a Delaware
business trust, duly organized, validly existing and in good standing under the
laws of Delaware. The Issuer is duly qualified to do business, is in good
standing and has obtained all necessary licenses, permits, charters,
registrations and approvals (together, "approvals") necessary for the conduct of
its business as currently conducted and as described in the Offering Document
and the performance of its obligations under the Basic Documents in each
jurisdiction in which the failure to be so qualified or to obtain such approvals
would render any Basic Document unenforceable in any respect or would have a
material adverse effect upon the Transaction.

          (b) Power and Authority. The Issuer has all necessary Delaware
business trust power and authority to conduct its business as currently
conducted and as described in the Offering Document, to execute, deliver and
perform its obligations under the Basic Documents and to consummate the
Transaction.

          (c) Due Authorization. The execution, delivery and performance of the
Basic Documents by the Issuer has been duly authorized by all necessary Delaware
business trust action and do not require any additional approvals or consents,
or other action by or any notice to or filing with any Person, including any
governmental entity, which have not previously been obtained.

          (d) Noncontravention. The execution and delivery by the Issuer of the
Basic Documents to which it is a party, the consummation of the Transaction and
the satisfaction of the terms and conditions of the Basic Documents do not and
will not:

               (i) conflict with or result in any breach or violation of any
     provision of the certificate of trust or Trust Agreement of the Issuer or
     any law, rule, regulation, order, writ, judgment, injunction, decree,
     determination or award currently in effect having applicability to either
     the Issuer or any of its properties, including regulations issued by any
     administrative agency or other governmental authority having supervisory
     powers over the Issuer;

               (ii) constitute a default by the Issuer under, result in the
     acceleration of any obligation under, or breach any material provision of
     any loan agreement, mortgage, indenture or other agreement or instrument to
     which the Issuer either is a party or by which any of its properties are or
     may be bound or affected; or

               (iii) result in or require the creation of any lien upon or in
     respect of any assets of the Issuer, except as otherwise expressly
     contemplated by the Basic Documents.

          (e) Legal Proceedings. There is no action, proceeding or investigation
by or before any court, governmental or administrative agency or arbitrator
against or affecting the Issuer, any properties or rights of the Issuer or the
Trust Estate pending or, to the Issuer's knowledge, threatened, which, in any
case, if decided adversely to the Issuer, is reasonably likely to result in a
Material Adverse Change with respect to the Issuer.

          (f) Valid and Binding Obligations. The Basic Documents constitute the
legal, valid and binding obligations of the Issuer, enforceable against the
Issuer in accordance with their respective terms, except as such enforceability
may be limited by insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equitable principles. The
Notes, when executed, authenticated and delivered in accordance with the
Indenture, will be validly issued and outstanding and entitled to the benefits
of the Indenture.

                                       15

<PAGE>

          (g) Compliance with Law, Etc. No practice, procedure or policy
employed, or proposed to be employed, by the Issuer in the conduct of its
business violates any law, regulation, judgment, agreement, order or decree
applicable to the Issuer, that, if enforced, is reasonably likely to result in a
Material Adverse Change with respect to the Issuer.

          (h) Accuracy of Information. The information or statements contained
in the Documents furnished to the Insurer by the Issuer, as amended,
supplemented or superseded on or prior to the date hereof, taken as a whole,
does not, if restated at and as of the date hereof, contain any statement of a
material fact or omit to state a material fact necessary to make such
information or statements misleading in any material respect.

          (i) Compliance with Securities Laws. The offer and sale of the Notes
by the Issuer complies in all material respects with all requirements of law,
including all registration requirements of applicable securities laws. Neither
the offer nor the sale of the Notes by the Issuer has been or will be in
violation of the Securities Act or any other federal or state securities laws.
The Indenture is not required to be qualified under the Trust Indenture Act of
1939, as amended. The Issuer is not required to be registered as an "investment
company" under the Investment Company Act.

          (j) Solvency; Fraudulent Conveyance. The Issuer is solvent and will
not be rendered insolvent by the Transaction and, after giving effect to the
Transaction, the Issuer will not be left with an unreasonably small amount of
capital with which to engage in its business, and the Issuer does not intend to
incur, nor believes that it has incurred, debts beyond its ability to pay as
they mature. The Issuer does not contemplate the commencement of insolvency,
liquidation or consolidation proceedings or the appointment of a receiver,
liquidator, conservator, trustee or similar official with respect to it or any
of its assets. The Issuer is not pledging the Trust Estate under the Indenture
with any intent to hinder, delay or defraud its creditors.

          (k) Principal Place of Business. The principal place of business of
the Issuer is Wilmington, Delaware and its books and records with respect to the
Loans are located at Wilmington, Delaware, Ripon, Wisconsin and Chicago,
Illinois.

Section 2.9. Affirmative Covenants of the Issuer.

The Issuer hereby makes, to and for the benefit of the Insurer, all of the
covenants of the Issuer set forth in the Basic Documents to which it is a party,
including, but not limited to, Article III of the Indenture. Such covenants are
incorporated herein by this reference, and may not be amended except by an
amendment complying with the terms of Section 6.1. In addition, the Issuer
hereby agrees that during the term of this Insurance Agreement, unless the
Insurer shall otherwise expressly consent in writing:

          (a) Compliance with Agreements and Applicable Laws. It shall comply
with the terms and conditions of and perform its obligations under the Basic
Documents to which it is a party and shall comply with all material requirements
of any law, rule or regulation applicable to it.

          (b) Existence. It shall maintain its existence as a business trust and
shall at all times continue to be duly organized under the laws of the State of
Delaware and duly qualified and duly authorized (as described in subsections
2.8(a), (b) and (c) hereof) and shall conduct its business in accordance with
the terms of its certificate of trust and Trust Agreement and shall conduct its
business in accordance with the terms of its trust agreement and shall maintain
all licenses, permits, charters and registrations which are material to the
conduct of its business.

                                       16

<PAGE>

          (c) Access to Records; Discussions with Officers and Accountants. Upon
reasonable prior written notice of the Insurer, at any time and any event at
least annually, the Issuer shall permit the Insurer or its authorized agents:

               (i) to inspect the books and records of the Issuer;

               (ii) to discuss the affairs, finances and accounts of the Issuer
     with the principal executive officer and the principal financial officer of
     the Issuer; and

               (iii) through independent public accountants designated by the
     Insurer, to discuss the affairs, finances and accounts of the Issuer with
     the Issuer's independent accountants, provided that an officer of the
     Issuer and an officer of Alliance shall have the right to be present during
     such discussions.

Such inspections and discussions shall be conducted during normal business hours
at the cost and expense of the Issuer, subject to Section 3.3(b) hereof, and
shall not unreasonably disrupt the business of the Issuer.

          (d) Notice of Material Events. The Issuer shall be obligated promptly
to inform the Insurer in writing of the occurrence of any of the following:

               (i) the submission of any claim or the initiation of any legal
     process, litigation or administrative or judicial investigation, or
     disciplinary proceeding by or against the Issuer that would likely result
     in a Material Adverse Change with respect to the Issuer or the promulgation
     of any proceeding or any proposed or final ruling in connection with any
     such litigation, investigation or proceeding which would reasonably likely
     to result in a Material Adverse Change with respect to the Issuer;

               (ii) not less than thirty (30) days after the date thereof, any
     change in the name, location of the principal office, jurisdiction of
     organization or organization identification number (if any) of the Issuer;

               (iii) the occurrence of an Event of Default hereunder in respect
     of the Issuer;

               (iv) upon the Issuer's knowledge thereof or the date on which the
     Issuer should have, through the exercise of reasonable care and due
     diligence, known thereof, the occurrence of any Default hereunder in
     respect of the Issuer;

               (v) the commencement of any proceedings by or against the Issuer
     under any applicable reorganization, liquidation, rehabilitation,
     insolvency or other similar law now or hereafter in effect or of any
     proceeding in which a receiver, liquidator, conservator, trustee or similar
     official shall have been, or may be, appointed or requested for such Issuer
     or any of its assets; or

               (vi) the receipt of written notice that (A) any license, permit,
     charter, registration or approval necessary for the conduct of the Issuer's
     business is to be, or may be, suspended or revoked and such suspension or
     revocation would be reasonably likely to result in a Material Adverse
     Change with respect to such Issuer or (B) the Issuer is to cease and desist
     any practice, procedure or policy employed by the Issuer in the conduct of
     its business, and such cessation would be reasonably likely to result in a
     Material Adverse Change with respect to such Issuer.

                                       17

<PAGE>

          (e) Field Examination by Independent Public Accountants. Upon
reasonable prior written notice of the Insurer at any time, each of the Issuer
shall permit the independent public accountants of the Issuer or, if such
independent public accountants are not acceptable to the Insurer, independent
public accountants designated by the Insurer, annually to conduct a field
examination of the Issuer pursuant to an agreed upon procedures scope attached
in the form of Exhibit B hereto, and in connection therewith shall permit such
independent public accountants without limitation:

               (i) to inspect the books and records of the Issuer; and

               (ii) to discuss the affairs, finances and accounts of the Issuer
     with the Issuer's independent accountants, provided that an officer of the
     Issuer shall have the right to be present during such discussions.

Such inspections and discussions shall be conducted during normal business hours
at the cost and expense of such Issuer, subject to Section 3.3(b) hereof, and
shall not unreasonably disrupt the business of the Issuer.

          (f) Exemption from Securities Act Registration. The Issuer shall take
all actions necessary to exempt the sale of the Notes from registration under
the Securities Act and under any applicable securities laws of any state of the
United States where Notes may be offered or sold by the Issuer.

          (g) Financial Reporting. To the extent the Issuer shall otherwise be
preparing the same for purposes other than the preparation of the consolidated
financial statements of ALH and its subsidiaries, the Issuer shall provide or
cause to be provided to the Insurer, as soon as practicable and in any event
within 90 days after the end of each fiscal year of the Issuer annual balance
sheets of the Issuer as at the end of such fiscal year and the notes thereto,
and the related statements of income and cash flows and the respective notes
thereto for such fiscal year certified by the principal financial officer of the
Issuer.

          (h) Other Information. The Issuer shall provide to the Insurer such
other information (including non-financial information) in respect of the Loans,
the Transaction and the Basic Documents and such other financial or operating
information in respect of the Issuer, in each case, which the Insurer may from
time to time reasonably request.

          (i) Operation of the Issuer. The Issuer shall:

                    (1) be a Delaware business trust whose primary activities
          are restricted pursuant to its Trust Agreement:

                    (2) not be involved in the day-to-day management of
          Alliance;

                    (3) not incur, assume or guarantee any indebtedness except
          for such indebtedness as may be incurred by the Issuer in connection
          with the issuance of the Notes or as otherwise permitted by the
          Insurer;

                    (4) not commingle its deposit accounts (and funds therein)
          or other assets with the deposit accounts (and funds therein) or other
          assets of any entity other than the Seller;

                    (5) manage its day-to-day business without the involvement
          of Alliance except pursuant to its obligations as Servicer;

                                       18

<PAGE>

                    (6) maintain a separate office from that of Alliance;

                    (7) not act as an agent of Alliance;

                    (8) not form, or cause to be formed, any subsidiaries;

                    (9) act solely in its own name or in the name of the Seller
          in the conduct of its business, including business correspondence and
          other communications, and shall conduct its business so as not to
          mislead others as to the identity of the entity with which they are
          concerned;

                    (10) ensure that, to the extent that it shares the same
          officers or other employees as any of its Affiliates (other than the
          Seller), the salaries of and the expenses related to providing
          benefits to such officers and other employees shall be fairly
          allocated among such entities, and each such entity shall bear its
          fair share of the salary and benefit costs associated with all such
          common officers and employees;

                    (11) ensure that, to the extent that it jointly contracts
          with any of its stockholders or Affiliates (other than the Seller) to
          do business with vendors or service providers or to share overhead
          expenses, the costs incurred in doing so shall be allocated fairly
          among such entities, and each such entity shall bear its fair share of
          such costs. To the extent that the Issuer contracts or does business
          with vendors or service providers when the goods and services provided
          are partially for the benefit of any other Person (other than the
          Seller), the costs incurred in so doing shall be fairly allocated to
          or among such entities for whose benefit the goods and services are
          provided, and each such entity shall bear its fair share of such
          costs. All material transactions between the Seller and its Affiliates
          (other than the Seller) shall only be on an arm's-length basis;

                    (12) require that all full-time employees of the Issuer
          identify themselves as such and not as employees of Alliance
          (including, without limitation, by means of providing appropriate
          employees with business or identification cards identifying such
          employees as the Issuer's employees); and

                    (13) compensate all employees, consultants and agents
          directly, from the Issuer's bank accounts, for services provided to
          the Issuer by such employees, consultants and agents, and, to the
          extent any employee, consultant or agent of the Issuer is also an
          employee, consultant or agent of Alliance, allocate the compensation
          of such employee, consultant or agent between the Issuer and Alliance
          on a basis which reflects the services rendered to the Issuer and
          Alliance.

Section 2.10. Negative Covenants of the Issuer.

The Issuer hereby agrees that during the term of this Insurance Agreement,
unless the Insurer shall otherwise expressly consent in writing:

          (a) Impairment of Rights. The Issuer shall not take any action, or
fail to take any action, if such action or failure to take action (x) is
reasonably likely to result in a Material Adverse Change or (y) is reasonably
likely to interfere with the enforcement of any rights of the Insurer under or
with respect to any of the Basic Documents. The Issuer shall give the Insurer
written notice of any such action or failure to act promptly prior to the date
of consummation of such action or failure to act. The Issuer shall furnish to
the Insurer all information requested by it that is reasonably necessary to
determine compliance with this paragraph.

                                       19

<PAGE>

          (b) Amendments, Etc. The Issuer shall not modify, amend or waive, or
consent to any modification, amendment or waiver of, any of the terms,
provisions or conditions of the Basic Documents to which it is a party, or any
of its organization documents, including, without limitation, its trust
agreement and certificate of trust and Trust Agreement, without the prior
written consent of the Insurer thereto, but excluding any amendment to the Basic
Documents required by law, provided that the Issuer shall provide the Insurer
with prior written notice of any such amendment and a copy thereof.

          (c) Limitation on Mergers, Etc. The Issuer shall not consolidate with
or merge with or into any Person or transfer all or substantially all of its
assets to any Person or liquidate or dissolve.

          (d) Operating Expenses. The Issuer shall not permit Alliance to pay
any of the Issuer's operating expenses except pursuant to allocation
arrangements that comply with the requirements of Section 2.9(i)(13) above.

          (e) Certain Other Limitations. The Issuer shall not permit the Issuer
to be named as an insured on an insurance policy held by another Company Party
or covering the property of any other Company Party, except to the extent the
Issuer shall bear the expenses thereof, or enter into an agreement with the
holder of such policy whereby in the event of a loss in connection with such
property not owned by the Issuer, proceeds are paid to the Issuer.

                                   ARTICLE III

                         THE AMBAC POLICY; REIMBURSEMENT

Section 3.1. Issuance of the Ambac Policy.

The Insurer agrees to issue the Ambac Policy on the Closing Date subject to
satisfaction of the conditions precedent set forth below:

          (a) Payment of Initial Premium and Expenses. The applicable parties
shall have been paid their related fees and expenses payable in accordance with
Section 3.2.

          (b) Documents. The conditions to consummation of the transactions set
forth in Section 4.1 and 4.2 of the Purchase Agreement shall have been
satisfied.

          (c) Credit and Collection Policy. The Insurer shall have received a
complete copy of the Credit and Collection Policy then in effect certified by
the principal financial officer of Alliance;

          (d) Representations and Warranties; Certificate. The representations
and warranties of Alliance, the Seller and the Issuer set forth or incorporated
by reference in this Insurance Agreement shall be true and correct on and as of
the Closing Date as if made on the Closing Date, and the Insurer shall have
received a certificate of appropriate officers of Alliance, the Seller and the
Issuer to that effect;

          (e) No Litigation, Etc. No suit, action or other proceeding,
investigation or injunction, or final judgment relating thereto, shall be
pending or, to such party's knowledge, threatened before any court, governmental
or administrative agency or arbitrator in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with any of the
Basic Documents or the consummation of the Transaction;

          (f) Legality. No statute, rule, regulation or order shall have been
enacted, entered or deemed applicable by any government or governmental or
administrative agency or court that would make the Transaction illegal or
otherwise prevent the consummation thereof;

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<PAGE>

          (g) No Event of Default. No Event of Default or Rapid Amortization
Event shall have occurred;

          (h) Satisfaction of Conditions of the Note Purchase Agreement. All
conditions in the Note Purchase Agreement relating to the Note Purchasers'
obligation to purchase the Notes shall have been fulfilled to the satisfaction
of the Insurer, with such satisfaction deemed to have occurred upon issuance of
the Ambac Policy. The Insurer shall have received copies of each of the
documents, and shall be entitled to rely on each of the documents, required to
be delivered to any Note Purchasers pursuant to the Note Purchase Agreement,
including, without limitation, the items described in Section 3.1(e) of the Note
Purchase Agreement (other than the opinion of counsel to the Insurer);

          (i) Issuance of Ratings. The Insurer shall have received confirmation
that the Notes would be rated BBB by S&P and an Baa2 by Moody's without taking
into account the Ambac Policy and shall have received copies of any opinions of
counsel delivered to the Rating Agencies, such opinions being in form and
substance satisfactory to and addressed to the Insurer;

          (j) Approvals, Etc. The Insurer shall have received true and correct
copies of all approvals, licenses and consents, if any, required in connection
with the Transaction;

          (k) Credit Agreement. The Insurer shall have received a copy of the
Credit Agreement (including all amendments, supplements or other modifications
thereto as of the Closing Date) certified by a Responsible Officer of Alliance.

          (l) Additional Items. The Insurer shall have received such other
documents, instruments, approvals or opinions in form and substance reasonably
satisfactory to the Insurer as shall be reasonably requested by the Insurer,
including evidence reasonably satisfactory to the Insurer that the conditions
precedent, if any, in the Basic Documents have been satisfied; and

          (m) Satisfactory Documentation. The Insurer and its counsel shall have
determined that all documents, the Notes and opinions to be delivered in
connection with the Notes conform to the terms of the Indenture and this
Insurance Agreement.

Section 3.2. Payment of Fees and Premium.

          (a) Legal and Accounting Fees. Seller shall pay or cause to be paid on
the Closing Date all reasonable, out-of-pocket (i.e., excluding internal legal
or accounting expenses) and documented legal fees, auditors' fees and
disbursements incurred by the Insurer in connection with the issuance of the
Ambac Policy and the other Basic Documents through the Closing Date. Additional
fees of the Insurer's counsel or auditors payable in connection with the Basic
Documents incurred after the Closing Date shall be paid by Alliance as provided
in Section 3.3 below.

          (b) Rating Agency Fees. Seller shall promptly pay the initial fees of
the Rating Agencies with respect to the Notes and the transactions contemplated
hereby following receipt of a statement with respect thereto. Alliance shall pay
or cause to be paid any subsequent fees of the Rating Agencies with respect to,
and directly allocable to, the Notes to the extent that such fees and expenses
result from actions of the Rating Agencies that are requested by Alliance. The
Insurer shall not be responsible for any fees or expenses of the Rating
Agencies. The fees for any other rating agency shall be paid by the party
requesting such other agency's rating.

          (c) Premium. In consideration of the issuance by the Insurer of the
Ambac Policy, the Issuer shall pay or cause to be paid the Premiums to the
Insurer as set forth in the Fee Letter in

                                       21

<PAGE>

accordance with and from the funds specified by Section 8.2 of the Indenture,
commencing on the day the Ambac Policy is issued, until the Ambac Policy has
terminated in accordance with its terms. The Premium paid under the Indenture
shall be nonrefundable without regard to whether any Notice (as defined in the
Ambac Policy) is delivered to the Insurer requiring the Insurer to make any
payment under the Ambac Policy or any other circumstances relating to the Notes
or provision being made for payment of the Notes prior to maturity.

Section 3.3. Reimbursement Obligation.

          (a) The Issuer agrees absolutely and unconditionally to reimburse the
Insurer for any amounts paid by the Insurer under the Ambac Policy, plus the
amount of any other due and payable and unpaid Reimbursement Amounts (as defined
in the Ambac Policy) which reimbursement shall be due and payable on the date
that any such amount is paid thereunder only from amounts available for such
payment under the Indenture, in an amount equal to the amounts so paid and all
amounts previously paid that remain unreimbursed, together (without duplication)
with interest on any and all amounts remaining unreimbursed (to the extent
permitted by law, if in respect of any unreimbursed amounts representing
interest) from the date such amounts became due until paid in full (after as
well as before judgment), at a rate of interest equal to the Late Payment Rate.

          (b) Alliance agrees to pay to the Insurer, promptly, but in no event
later than 30 days after receipt of an invoice, as follows: any and all
documented out-of-pocket (e.g., excluding internal legal or accounting
expenses), charges, fees, costs and expenses that the Insurer may reasonably pay
or incur, including reasonable attorneys' and accountants' fees and expenses, in
connection with (i) the enforcement, defense or preservation of any rights in
respect of any of the Basic Documents, including defending, monitoring or
participating in any litigation or proceeding (including any insolvency
proceeding in respect of any Transaction participant or any affiliate thereof)
relating to any of the Basic Documents, any party to any of the Basic Documents
(in its capacity as such a party) or the Transaction, including without
limitation the costs and fees of inspections by the Insurer or audits or field
examinations by accountants, or (ii) any amendment, waiver or other similar
action with respect to, or related to, any Basic Document, whether or not
executed or completed. Notwithstanding anything in this Agreement to the
contrary, provided that no Event of Default, Rapid Amortization Event or
Servicer Default has occurred and is continuing, the reimbursable costs and
expenses of the Insurer pursuant to Section 2.2(e), 2.2(h), 2.6(c), 2.6(e),
2.9(c) and 2.9(e) shall not exceed $25,000 in any period of twelve consecutive
months.

          (c) Each of Alliance, the Seller and the Issuer agrees to pay to the
party to whom such amounts are owed on demand interest at the Late Payment Rate
on any and all amounts described in Sections 3.3(b) and 3.4 after the date such
amounts become due and payable until payment thereof in full.

Section 3.4. Indemnification.

          (a) In addition to any and all of the Insurer's rights of
reimbursement, indemnification or subrogation, and to any other rights of the
Insurer pursuant hereto or under law or in equity, Alliance agrees to pay, and
to protect, indemnify and save harmless, the Insurer and its officers,
directors, shareholders, employees, agents and each Person, if any, who controls
the Insurer within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act from and against, any and all claims,
losses, liabilities (including penalties), actions, suits, judgments, demands,
damages, costs or expenses (including reasonable fees and expenses of attorneys,
consultants and auditors and reasonable costs of investigations) of any nature
arising out of or relating to the transactions contemplated by the Basic
Documents by reason of:

                                       22

<PAGE>

               (i) any statement, omission or action in connection with the
     offering, issuance, sale or delivery of any of the Notes;

               (ii) the negligence, bad faith, willful misconduct, misfeasance,
     malfeasance or theft committed by any director, officer, employee or agent
     of Alliance in connection with the Transaction;

               (iii) the violation by Alliance of any domestic or foreign law,
     rule or regulation, or any judgment, order or decree applicable to them;

               (iv) the breach by Alliance of any representation, warranty or
     covenant under any of the Basic Documents;

               (v) claims of third parties (other than parties to the Basic
     Documents unless arising at a time when a Rapid Amortization Event exists)
     arising from the commingling of Collections by the Issuer, the Seller or
     the Servicer at any time with its other funds or the funds of any other
     Person;

               (vi) claims of third parties (other than parties to the Basic
     Documents unless arising at a time when a Rapid Amortization Event exists)
     relating to products liability, lender liability or any third party claim
     arising from the transactions contemplated by any of the Basic Documents,
     except (A) to the extent that any such claim, damage, loss liability, cost
     or expense shall be caused by the bad faith, willful misconduct or gross
     negligence of the Insurer in performing its obligations under this
     Insurance Agreement, (B) for recourse for the payment of principal of or
     interest on, or other amounts due in respect of, the Equipment Loan Notes
     as a result of nonpayment by Obligors for credit reasons on the accounts of
     the related Equipment Loans, (C) for recourse for the payment of principal
     of or interest on, or other amounts due in respect of, the Receivables
     Notes as a result of nonpayment by Obligors for credit reasons on the
     accounts of the related Receivables or (D) to the extent the same
     constitute consequential, special or punitive damages;

               (vii) any increase in the cost to the Insurer of issuing or
     maintaining the Ambac Policy or of entering into or performing its
     obligations under this Insurance Agreement (including the reduction of any
     premium, fee or other sum received or receivable hereunder) after the date
     hereof due to either (x) the introduction of or any change in or to the
     interpretation of any law or regulation by any state insurance regulator or
     other governmental authority that promulgated or administers compliance
     with such law or regulation (other than laws and regulations with respect
     to taxes imposed on the overall net income of the Insurer by the United
     States of America) or (y) the compliance with any guideline or request from
     any state insurance regulator or other governmental authority, rating
     agency or similar agency (whether or not having the force of law), and
     taking into account the Insurer's obligations under the other Documents and
     otherwise in connection with Alliance's asset-supported financing business.
     (A certificate setting forth in reasonable detail the amount of such
     increased cost submitted to Alliance by the Insurer shall be conclusive and
     binding for all purposes, absent manifest error.); or

               (viii) any determination by the Insurer that compliance with any
     law or regulation or any guideline or request or any written interpretation
     from any state insurance regulator or other governmental authority, rating
     agency or similar agency (whether or not having the force of law) which is
     introduced, implemented or received by the Insurer after the date hereof,
     affects or would affect capital adequacy or the amount of capital required
     or expected to be maintained by the Insurer or any corporation controlling
     the Insurer and that the amount of

                                       23

<PAGE>

     such capital is increased by or based upon the obligations of the Insurer
     under either the Ambac Policy, this Insurance Agreement or any of the other
     Documents, and other obligations of this type, or has or would have the
     effect of reducing the rate of return on capital. (A certificate setting
     forth in reasonable detail such amounts submitted to Alliance by the
     Insurer shall be conclusive and binding for all purposes, absent manifest
     error.)

          (b) In addition to any and all of the Insurer's rights of
reimbursement, indemnification, subrogation and to any other rights of the
Insurer pursuant hereto or under law or in equity, the Servicer agrees to pay,
and to protect, indemnify and save harmless, the Insurer and its officers,
directors, shareholders, employees, agents and each Person, if any, who controls
the Insurer within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act from and against, any and all claims,
losses, liabilities (including penalties), actions, suits, judgments, demands,
damages, costs or expenses (including reasonable fees and expenses of attorneys,
consultants and auditors and reasonable costs of investigations) of any nature
arising out of or relating to the transactions contemplated by the Basic
Documents by reason of:

               (i) the negligence, bad faith, willful misconduct, misfeasance,
     malfeasance or theft committed by any director, officer, employee or agent
     of the Servicer in connection with the Transaction;

               (ii) the violation by the Servicer of any domestic or foreign
     law, rule or regulation, or any judgment, order or decree applicable to it;

               (iii) the breach by the Servicer of any representation, warranty
     or covenant (other than 3.07(i) of the Agreement) under any of the Basic
     Documents; or

               (iv) the occurrence, in respect of the Servicer, under any of the
     Basic Documents of any Servicer Default or any event which, with the giving
     of notice or the lapse of time or both, would constitute any Servicer
     Default (it being understood that this clause (iv) is not intended to cover
     losses resulting from the occurrence of a Servicer Default under Section
     9.01(p) of the Agreement).

          (c) In addition to any and all of the Insurer's rights of
reimbursement, indemnification or subrogation, and to any other rights of the
Insurer pursuant hereto or under law or in equity, each of the Seller and the
Issuer, jointly and severally, agree to pay, and to protect, indemnify and save
harmless, the Insurer and its officers, directors, shareholders, employees,
agents and each Person, if any, who controls the Insurer within the meaning of
either Section 15 of the Securities Act or Section 20 of the Securities Exchange
Act from and against, any and all claims, losses, liabilities (including
penalties), actions, suits, judgments, demands, damages, costs or expenses
(including reasonable fees and expenses of attorneys, consultants and auditors
and reasonable costs of investigations) of any nature arising out of or relating
to the transactions contemplated by the Basic Documents, including, without
limitation, by reason of:

               (i) any statement, omission or action in connection with the
     offering, issuance, sale or delivery of any of the Notes;

               (ii) the negligence, bad faith, willful misconduct, misfeasance,
     malfeasance or theft committed by any director, officer, employee or agent
     of the Seller or the Issuer in connection with the Transaction;

               (iii) the violation by the Seller or the Issuer of any domestic
     or foreign law, rule or regulation, or any judgment, order or decree
     applicable to them;

                                       24

<PAGE>

               (iv) the breach by the Seller or the Issuer of any
     representation, warranty or covenant under any of the Basic Documents;

               (v) any increase in the cost to the Insurer of issuing or
     maintaining the Ambac Policy or of entering into or performing its
     obligations under this Insurance Agreement (including the reduction of any
     premium, fee or other sum received or receivable hereunder) after the date
     hereof due to either (x) the introduction of or any change in or to the
     interpretation of any law or regulation by any state insurance regulator or
     other the governmental authority that promulgated or administers compliance
     with such law or regulation (other than laws and regulations with respect
     to taxes imposed on the overall net income of the Insurer by the United
     States of America) or (y) the compliance with any guideline or request from
     any state insurance regulator or other governmental authority, rating
     agency or similar agency (whether or not having the force of law), and
     taking into account the Insurer's obligations under the other Documents and
     otherwise in connection with Alliance's asset-supported financing business.
     (A certificate setting forth in reasonable detail the amount of such
     increased cost submitted to Alliance by the Insurer shall be conclusive and
     binding for all purposes, absent manifest error.); or

               (vi) any determination by the Insurer that compliance with any
     law or regulation or any guideline or request or any written interpretation
     from any state insurance regulator or other governmental authority, rating
     agency or similar agency (whether or not having the force of law) which is
     introduced, implemented or received by the Insurer after the date hereof,
     affects or would affect capital adequacy or the amount of capital required
     or expected to be maintained by the Insurer or any corporation controlling
     the Insurer and that the amount of such capital is increased by or based
     upon the obligations of the Insurer under either the Ambac Policy, this
     Insurance Agreement or any of the other Documents, and other obligations of
     this type, or has or would have the effect of reducing the rate of return
     on capital. (A certificate setting forth in reasonable detail such amounts
     submitted to Alliance by the Insurer shall be conclusive and binding for
     all purposes, absent manifest error.)

          (d) If any action or proceeding (including any governmental
investigation) shall be brought or asserted against any Person (each, an
"Indemnified Party") in respect of which the indemnity provided in Section
3.4(a), (b), (c) or (d) may be sought from another Person (the "Indemnifying
Party") each such Indemnified Party shall promptly notify the Indemnifying Party
in writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel satisfactory to the Indemnified Party and
the payment of all expenses and reasonable legal fees; provided that failure to
notify the Indemnifying Party shall not relieve it from any liability it may
have to such Indemnified Party except to the extent that it shall be actually
prejudiced thereby. The Indemnified Party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof at
the expense of the Indemnified Party and may assume the defense of any such
action or claim in reasonable cooperation with, and with the reasonable
cooperation of, the Indemnifying Party; provided, however, that the fees and
expenses of separate counsel to the Indemnified Party in any such proceeding
shall be at the expense of the Indemnifying Party if (i) the Indemnifying Party
has agreed to pay such fees and expenses, (ii) the Indemnifying Party shall have
failed to assume the defense of such action or proceeding or employ counsel
reasonably satisfactory to the Indemnified Party in any such action or
proceeding within a reasonable time after the commencement of such action or
(iii) the named parties to any such action or proceeding (including any
impleaded parties) include both the Indemnified Party and the Indemnifying
Party, and the Indemnified Party shall have been advised by counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to the Indemnifying Party (in which case, if the
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense of such action
or proceeding on behalf of such Indemnified Party, it being

                                       25

<PAGE>

understood, however, that the Indemnifying Party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for the
Indemnified Parties, which firm shall be designated in writing by the
Indemnified Party). Unless it shall be in default of its obligations hereunder,
the Indemnifying Party shall not be liable for any settlement of any such action
or proceeding effected without its written consent to the extent that any such
settlement shall be prejudicial to the Indemnifying Party, which consent shall
not be unreasonably withheld or delayed, but, if settled with its written
consent, or if there is a final judgment for the plaintiff in any such action or
proceeding with respect to which the Indemnifying Party shall have received
notice in accordance with this subsection (e), the Indemnifying Party agrees to
indemnify and hold the Indemnified Parties harmless from and against any loss or
liability by reason of such settlement or judgment.

          (e) To provide for just and equitable contribution if the
indemnification provided by the Indemnifying Party is determined to be
unavailable or insufficient to hold harmless any Indemnified Party (other than
due to application of this Section), each Indemnifying Party shall contribute to
the losses incurred by the Indemnified Party on the basis of the relative fault
of the Indemnifying Party, on the one hand, and the Indemnified Party, on the
other hand. The relative fault of each Indemnifying Party, on the one hand, and
each Indemnified Party, on the other, shall be determined by reference to, among
other things, whether the breach or alleged breach is within the control of, the
Indemnifying Party or the Indemnified Party, and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent such
breach. No Person guilty of fraudulent misrepresentation (within the meaning of
Section (11)f of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

          (f) Notwithstanding the foregoing indemnification obligations, nothing
in this Section 3.4 shall be intended by the parties to constitute a guaranty by
the Servicer (i) of repayment of the Loans or (ii) of the Issuer's obligation to
increase or replenish the Available Drawing Amount after the Closing Date.

Section 3.5. Payment Procedure.

In the event of any payment by the Insurer for which reimbursement is sought
under Section 3.3, the Issuer, Alliance and the Seller agree to accept the
voucher or other evidence of payment as prima facie evidence of the propriety
thereof and the liability, if any, described in Section 3.3 therefor to the
Insurer. All payments to be made to the Insurer under this Insurance Agreement
shall be made to the Insurer in lawful currency of the United States of America
in immediately available funds at the notice address for the Insurer as
specified in the Indenture by no later than 3:00 P.M. (New York time) or as the
Insurer shall otherwise direct by written notice to the other parties hereto on
the date when due. In the event that the date of any payment to the Insurer or
the expiration of any time period hereunder occurs on a day that is not a
Business Day, then such payment or expiration of time period shall be made or
occur on the next succeeding Business Day with the same force and effect as if
such payment was made or time period expired on the scheduled date of payment or
expiration date.

Section 3.6. Subrogation.

The parties hereto acknowledge that, to the extent of any payment made by the
Insurer pursuant to the Policy, the Insurer shall be fully subrogated to the
extent of such payment and any interest due thereon, to the rights of the
Noteholders to any moneys paid or payable in respect of the Notes under the
Basic Documents or otherwise subject to applicable law. The parties hereto agree
to such subrogation and further agree to execute such instruments and to take
such actions as, in the sole and reasonable judgment

                                       26

<PAGE>

of the Insurer, are necessary to evidence such subrogation and to perfect the
rights of the Insurer to receive any such moneys paid or payable in respect of
the Notes under the Basic Documents or otherwise.

                                   ARTICLE IV

                               FURTHER AGREEMENTS

Section 4.1. Effective Date; Term of the Insurance Agreement.

This Insurance Agreement shall take effect on the Closing Date and shall remain
in effect until the later of (a) such time as the Insurer is no longer subject
to a claim under the Ambac Policy and the Ambac Policy shall have been
surrendered to the Insurer for cancellation and (b) such time as all amounts
payable to the Insurer by the Issuer, the Seller or Alliance (each, together
with any affiliates thereof, a "Company Party" and collectively, the "Company
Parties") hereunder or under the Basic Documents and the Notes shall have been
irrevocably paid and redeemed in full and such Notes shall have been cancelled;
provided, however, that the provisions of Sections 3.2, 3.3 and 3.4 hereof shall
survive any termination of this Insurance Agreement.

Section 4.2. Further Assurances and Corrective Instruments.

          (a) Except at such times as an Insurer Default shall exist or shall
have occurred, neither Alliance, the Seller, the Issuer nor the Indenture
Trustee shall grant any waiver of rights under any of the Basic Documents to
which any of them is a party without the prior written consent of the Insurer
and any such waiver without prior written consent of the Insurer shall be null
and void and of no force or effect.

          (b) Each of the parties hereto agrees that it will, from time to time,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such supplements hereto and such further instruments as the Insurer
may reasonably request and as may be required in the Insurer's reasonable
judgment to effectuate the intent and purpose of this Insurance Agreement and
the other Basic Documents. Without limiting the foregoing, each of the Company
Parties which is a party to any of the Basic Documents hereby authorizes the
Indenture Trustee and the Controlling Party (in the case of the Indenture
Trustee, subject to the provisions of the Indenture), at the expense of the
Issuer, to execute and file financing statements covering the assets covered by
any Assignment or owned by the Issuer in such jurisdictions as may be required
to confirm title thereto and perfect and maintain the lien thereon, including,
without limitation, filings required to maintain perfection pursuant to Article
9 of the Uniform Commercial Code, provided, however, that prior to a Default or
Event of Default, any filings intended solely to perfect a lien on Exempt
Collateral shall be at the expense of the party effecting such filing. In
addition, each of the parties hereto agrees to cooperate with the Rating
Agencies in connection with any review of the Transaction conducted during
normal business hours and in a manner that does not unreasonably disrupt the
business of Alliance, the Seller or the Issuer, that may be undertaken by the
Rating Agencies after the date hereof upon prior written notice.

          (c) The Seller shall not cause or permit the Issuer to issue any notes
or other evidences of indebtedness, or to otherwise incur any indebtedness,
other than the indebtedness represented by the Notes.

          (d) Alliance, as Servicer, and the Indenture Trustee shall provide the
Insurer with copies of all notices required to be delivered pursuant to the
Lockbox Agreement.

                                       27

<PAGE>

Section 4.3. Obligations Absolute.

          (a) The obligations of Company Parties hereunder shall be absolute and
unconditional and shall be paid or performed strictly in accordance with this
Insurance Agreement and the other Basic Documents under all circumstances
irrespective of:

               (i) any lack of validity or enforceability of, or any amendment
     or other modifications of, or waiver with respect to, any of the Basic
     Documents or the Notes;

               (ii) any exchange or release of any other obligations hereunder;

               (iii) the existence of any claim, setoff, defense, reduction,
     abatement or other right that a Company Party which is a party to any of
     the Basic Documents may have at any time against the Insurer or any other
     Person;

               (iv) any document presented in connection with the Ambac Policy
     proving to be forged, fraudulent, invalid or insufficient in any respect or
     any statement therein being untrue or inaccurate in any respect;

               (v) any payment by the Insurer under the Ambac Policy against
     presentation of a certificate or other document that does not strictly
     comply with the terms of the Ambac Policy;

               (vi) any failure of the Company Parties to receive the proceeds
     from the sale of the Notes; and

               (vii) any other circumstances, other than payment in full, that
     might otherwise constitute a defense available to, or discharge of, such
     party in respect of any Basic Document.

          (b) The Company Parties and any and all others who are now or may
become liable for all or any part of the obligations of the Company Parties
under this Insurance Agreement agree to be bound by this Insurance Agreement and
(i) to the extent permitted by law, waive and renounce any and all redemption
and exemption rights and the benefit of all valuation and appraisement
privileges against the indebtedness and obligations evidenced by any Basic
Document or by any extension or renewal thereof; (ii) waive presentment and
demand for payment, notices of nonpayment and of dishonor, protest of dishonor
and notice of protest; (iii) waive all notices in connection with the delivery
and acceptance hereof and all other notices in connection with the performance,
default or enforcement of any payment hereunder, except as required by the Basic
Documents; (iv) waive all rights of abatement, diminution, postponement or
deduction, all defenses, other than payment, and all rights of setoff or
recoupment arising out of any breach under any of the Basic Documents, by any
party thereto or any beneficiary thereof, or out of any obligation at any time
owing to any of the Company Parties; (v) agree that their liabilities hereunder
shall be unconditional and without regard to any setoff, counterclaim or the
liability of any other Persons for the payment hereof; (vi) agree that any
consent, waiver or forbearance hereunder with respect to an event shall operate
only for such event and not for any subsequent event; (vii) consent to any and
all extensions of time that may be granted by the Insurer with respect to any
payment hereunder or other provisions hereof and to the release of any security
at any time given for any payment hereunder, or any part thereof, with or
without substitution, and to the release of any Person or entity liable for any
such payment; and (viii) consent to the addition of any and all other makers,
endorsers, guarantors and other obligors for any payment hereunder, and to the
acceptance of any and all other security for any payment hereunder, and agree
that the addition of any such obligors or security shall not affect the
liability of the parties hereto for any payment hereunder.

                                       28

<PAGE>

          (c) Nothing herein shall be construed as prohibiting any party hereto
from pursuing any rights or remedies it may have against any Person in a
separate legal proceeding.

Section 4.4. Assignments; Reinsurance; Third-Party Rights.

          (a) This Insurance Agreement shall be a continuing obligation of the
parties hereto and shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. None of the
Company Parties may assign its rights under this Insurance Agreement, or
delegate any of its duties hereunder, without the prior written consent of the
Insurer. Any assignments made in violation of this Insurance Agreement shall be
null and void.

          (b) The Insurer shall have the right to give participations in its
rights under this Insurance Agreement and to enter into contracts of reinsurance
with respect to the Ambac Policy upon such terms and conditions as the Insurer
may in its discretion determine; provided, however, that no such participation
or reinsurance agreement or arrangement shall relieve the Insurer of any of its
obligations hereunder or under the Ambac Policy, and provided further that any
reinsurer or participant will not have any rights against the Company Parties,
the Noteholders or the Indenture Trustee and that the Company Parties, the
Noteholders and the Indenture Trustee shall have no obligation to have any
communication or relationship with any reinsurer or participant in order to
enforce the obligations of the Insurer hereunder and under the Ambac Policy.

          (c) In addition, the Insurer shall be entitled to assign or pledge to
any bank, other lender or reinsurer providing liquidity or credit with respect
to Transaction or the obligations of the Insurer in connection therewith, any
rights of the Insurer under the Basic Documents or with respect to any real or
personal property or other interests pledged to the Insurer or in which the
Insurer has a security interest, in connection with the Transaction, subject in
each case to the liens granted pursuant to the Basic Documents, provided, that
no such bank or other lender shall thereby obtain any direct right against
Company Parties, the Noteholders or the Indenture Trustee, and further provided,
that no such assignment or pledge shall give any assignee the right to exercise
any discretionary authority that the Basic Documents provide shall be
exercisable by the Insurer or relieve the Insurer of any of its obligations
hereunder or under the Ambac Policy.

          (d) Except as provided herein with respect to participants and
reinsurers, nothing in this Insurance Agreement shall confer any right, remedy
or claim, express or implied, upon any Person not a party hereto, including,
particularly, any Noteholders, other than the rights of the Insurer against the
Company Parties and all the terms, covenants, conditions, promises and
agreements contained herein shall be for the sole and exclusive benefit of the
parties hereto and their successors and permitted assigns. Neither the Indenture
Trustee nor any Noteholders shall have any right to payment from any Premiums
paid or payable hereunder or under the Indenture or from any amounts paid by the
Issuer, the Seller or Alliance pursuant to Sections 3.3 or 3.4 hereof.

Section 4.5. Liability of the Insurer.

Neither the Insurer nor any of its officers, directors or employees shall be
liable or responsible for: (a) the use that may be made of the Ambac Policy by
the Indenture Trustee or for any acts or omissions of the Indenture Trustee in
connection therewith; or (b) the validity, sufficiency, accuracy or genuineness
of documents delivered to the Insurer in connection with any claim under the
Ambac Policy, or of any signatures thereon, even if such documents or signatures
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged (unless the Insurer shall have actual knowledge thereof).
In furtherance and not in limitation of the foregoing, the Insurer may accept
documents that appear on their face to be in order, without responsibility for
further investigation.

                                       29

<PAGE>

Section 4.6. Annual Servicing Audit and Certification.

If an Event of Default, Servicer Default or Rapid Amortization Event shall have
occurred and be continuing, the annual servicing audit required pursuant to
Section 5.02 of the Agreement shall be performed by independent public
accountants acceptable to the Insurer at the cost of Alliance without regard to
the limitations set forth herein on expenses of any audit. The Insurer confirms
that each of the independent public accountants (other than
PricewaterhouseCoopers) is an acceptable independent public accountant until the
Insurer otherwise notifies Alliance in writing.

Section 4.7. Resignation of Insurer.

The Insurer agrees to resign as Control Party upon thirty (30) days' prior
written notice from the Indenture Trustee (acting at the direction of the Note
Purchasers (other than the Seller) representing 66-2/3% of the aggregate
principal balance of the Notes) if the financial strength rating of the Insurer
falls below AAA by S&P and Aaa by Moody's, provided that, as a condition to any
such resignation, (a) the Ambac Policy shall be returned and canceled, (b) the
Insurer shall be released from all of its obligations in connection with the
Transaction pursuant to a general release in form and substance satisfactory to
it and (c) all amounts owed to the Insurer under this Insurance Agreement and
any other Basic Document shall be paid in full.

Section 4.8. Rights and Remedies.

Each party to this Insurance Agreement has acknowledged and agreed to, and
hereby confirms its acknowledgement and agreement to, the pledge, and collateral
sale and assignment by the Seller to the Issuer, and by the Issuer to the
Indenture Trustee, of all of its right, title and interest in, to and under the
Trust Estate, and the Documents and all of the Issuer's rights, remedies, powers
and privileges and all claims of the Seller against Alliance, and of the Issuer
against the Seller or Alliance, under or with respect to the Documents (whether
arising pursuant to the terms thereof or otherwise available at law or in
equity), including without limitation (whether or not any of a Default, an Event
of Default, a Servicer Default or a Rapid Amortization Event, or any event with
notice or lapse of time would constitute any of the same, has occurred and is
continuing) (i) the right of the Seller and/or the Issuer at any time to enforce
the Documents against Alliance or the Seller and the obligations of the Servicer
and the Seller thereunder and (ii) the right at any time to give or withhold any
and all consents, requests, notices, directions, approvals, demands, extensions
or waivers under or with respect to any Document or the obligations in respect
of Alliance or the Seller thereunder, all of which rights, remedies, powers,
privileges and claims may, notwithstanding any provision to the contrary by any
of the Documents, be exercised and/or enforced by the Indenture Trustee in lieu
of and in the place and stead of the Seller and the Issuer to the same extent as
the Seller or the Issuer would otherwise do, and neither the Seller nor the
Issuer may exercise any of the foregoing rights without the prior written
consent of the Insurer. Each party hereto further acknowledges and agrees that,
unless an Insurer Default has occurred and is continuing, the Indenture Trustee
will take or refrain from taking any action, and exercise or refrain from
exercising any rights under the Documents in its capacity as Indenture Trustee,
solely pursuant to the written direction of the Insurer; provided, however, that
the obligations of the Indenture Trustee to take or refrain from taking, or to
exercise or refrain from exercising, any such action or rights shall not apply
to routine administrative tasks required to be performed by the Indenture
Trustee pursuant to the Documents and shall be limited to those actions and
rights that can be exercised or taken (or not exercised or taken, as the case
may be) in full compliance with the provisions of the Documents and with
applicable law. No Noteholder, unless an Insurer Default has occurred and is
continuing, shall at any time be able to direct the Indenture Trustee to
exercise any of such rights.

                                       30

<PAGE>

                                    ARTICLE V

                              DEFAULTS AND REMEDIES

Section 5.1. Defaults.

The occurrence of any of the following events shall constitute an "Event of
Default" hereunder:

          (a) Any representation or warranty made by any of the Company Parties
hereunder or under the Basic Documents, or in any certificate furnished
hereunder or under the Basic Documents, shall prove to be untrue or misleading
in any material respect; provided, however, that if such Company Party
effectively cures any such defect in any representation or warranty under any
Basic Document or certificate or report furnished under any Basic Document,
within the time period specified in the related document as the cure period
therefor, such defect shall not in and of itself constitute an Event of Default;

          (b) Alliance or the Issuer shall fail to pay or deposit when due any
amount required to be paid or deposited by it hereunder or under any other Basic
Document, or (ii) a legislative body has enacted any law that declares or a
court of competent jurisdiction shall find or rule that this Insurance Agreement
or the Indenture is not valid and binding on the Company Parties hereto or
thereto;

          (c) The occurrence and continuance of a Servicer Default under the
Agreement or an Event of Default under the Indenture;

          (d) Any failure on the part of any Company Party duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of such Company Party contained in this Insurance Agreement or in any other
Basic Document which continues unremedied beyond any cure period provided
therein, or, in the case of this Insurance Agreement, for a period of 30 days
after the earlier of the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to Alliance by the Insurer (with
a copy to the Indenture Trustee) or by the Indenture Trustee (with a copy to the
Insurer), or a Responsible Officer of such Company Party shall have actual
knowledge thereof;

          (e) The entry of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for appointment of a conservator,
receiver or liquidator or similar official for any Company Party which is a
party to any Basic Document in any bankruptcy, insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings or for the winding
up or liquidation of their respective affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days;

          (f) The consent by any Company Party which is a party to any Basic
Document to the appointment of a conservator or receiver or liquidator or
similar official in any bankruptcy, insolvency, readjustment of debt, marshaling
of assets and liabilities, or similar proceedings of or relating to such Company
Party or of relating to substantially all of their respective property; or any
such Company Party shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable bankruptcy, insolvency or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations;

provided, however, that to the extent that any event described in clause (a),
(b) or (d) above in respect of any Company Party shall be based solely on breach
of a representation and warranty or covenant of such Company Party made in any
Basic Document (other than this Insurance Agreement) which breach shall also be
the basis for an Event of Default under the Indenture or a Servicer Default,
then such event shall

                                       31

<PAGE>

not constitute an Event of Default hereunder unless it shall also constitute
such Event of Default under the Indenture or a Servicer Default.

Section 5.2. Remedies; No Remedy Exclusive.

          (a) Upon the occurrence of an Event of Default hereunder, the Insurer
may take whatever action at law or in equity as may appear necessary or
desirable in its judgment to collect the amounts, if any, then due under this
Insurance Agreement, the Purchase Agreement, the Agreement, the Indenture or any
other Basic Document or to enforce performance and observance of any obligation,
agreement or covenant of the Company Parties under this Insurance Agreement, the
Purchase Agreement, the Agreement, the Indenture or any other Basic Document,
either in its own capacity or in its capacity as Controlling Party.

          (b) Unless otherwise expressly provided, no remedy herein conferred or
reserved is intended to be exclusive of any other available remedy, but each
remedy shall be cumulative and shall be in addition to other remedies given
under this Insurance Agreement, the Purchase Agreement, the Agreement, the
Indenture or any other Basic Document, or existing at law or in equity. No delay
or omission to exercise any right or power accruing under this Insurance
Agreement, the Purchase Agreement, the Agreement, the Indenture or any other
Basic Document upon the happening of any event set forth in Section 5.1 shall
impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may
be deemed expedient. In order to entitle Insurer to exercise any remedy reserved
to the Insurer in this Article, it shall not be necessary to give any notice,
other than such notice as may be required by this Article.

          (c) Each party to this Insurance Agreement hereby agrees that, in
addition to any other rights or remedies existing in its favor, the Insurer
shall be entitled to specific performance and/or injunctive relief in order to
enforce any of its rights or any obligation owed to it under the Documents.

Section 5.3. Waivers.

          (a) No failure by the Insurer to exercise, and no delay by the Insurer
in exercising, any right hereunder shall operate as a waiver thereof. The
exercise by the Insurer of any right hereunder shall not preclude the exercise
of any other right, and the remedies provided herein to the Insurer are declared
in every case to be cumulative and not exclusive of any remedies provided by law
or equity.

          (b) The Insurer shall have the right, to be exercised in its complete
discretion, to waive any Event of Default hereunder, by a writing setting forth
the terms, conditions and extent of such waiver signed by the Insurer and
delivered to Alliance and the Indenture Trustee. Unless such writing expressly
provides to the contrary, any waiver so granted shall extend only to the
specific event or occurrence which gave rise to the Event of Default so waived
and not to any other similar event or occurrence which occurs subsequent to the
date of such waiver.

                                   ARTICLE VI

                                  MISCELLANEOUS

Section 6.1. Amendments, Etc.

This Insurance Agreement may be amended, modified, supplemented or terminated
only by written instrument or written instruments signed by the parties hereto.
No consent of any reinsurer or participant contracted with by the Insurer
pursuant to Section 4.4(b) hereof shall be required for any amendment,

                                       32

<PAGE>

modification, supplement or termination hereof. Alliance agrees to provide a
copy of any amendment to this Insurance Agreement promptly to the Indenture
Trustee and the Rating Agencies. No act or course of dealing shall be deemed to
constitute an amendment, modification, supplement or termination hereof. The
other Basic Documents may be amended only with the prior written consent of the
Insurer.

Section 6.2. Notices.

All demands, notices and other communications to be given hereunder shall be in
writing (except as otherwise specifically provided herein) and shall be (i)
mailed by prepaid registered or certified mail, return receipt requested, or
(ii) personally delivered by messenger or overnight courier (with confirmation
of receipt) and in either case telecopied to the recipient as follows:

     (a)  To the Insurer:
          Ambac Assurance Corporation
          One State Street Plaza
          New York, New York 10004
          Attention: Structured Finance Department - ABS
          Telecopy No.: 212-208-3547
          Confirmation: 212-668-0340

          (in each case in which notice or other communication to the Insurer
          refers to Servicer Default, an Event of Default (hereunder or under
          the Indenture), an Rapid Amortization Event, a claim on the Ambac
          Policy or any event with respect to which failure on the part of the
          Insurer to respond shall be deemed to constitute consent or
          acceptance, then a copy of such notice or other communication shall
          also be sent to the attention of the general counsel of each of the
          Insurer and the Indenture Trustee and shall be marked to indicate
          "URGENT MATERIAL ENCLOSED.")

     (b)  To Alliance:
          Alliance Laundry Systems LLC
          Shepard Street
          P.O. Box 990
          Ripon, WI 54971-0990
          Attention: Treasurer
          Telecopy No.: 920-748-1629
          Confirmation No.: 920-748-1634

          with copies to (i) the General Counsel at the same address, Telecopy
          No. 920-748-4334, Confirmation No. 920-748-4320 and (ii) Ropes & Gray,
          One International Place, Boston, MA 02110-2624, Attention: Allison
          Bomberg, Telecopy No. 617-951-7050, Confirmation No. 617-951-7000.

     (c)  To the Issuer:

          Alliance Laundry Equipment Receivables Trust 2002-A
          c/o Wilmington Trust Company, as owner trustee
          Rodney Square North
          1100 North Market Street CFS, Ninth Floor
          Wilmington, Delaware 19890

                                       33

<PAGE>

          Attention:
          Telecopy No.:
          Confirmation No.:

          With copies to the addressees set forth in clause (b) above

     (d)  To the Seller:
          Alliance Laundry Equipment Receivables LLC
          Shepard Street
          P.O. Box 990
          Ripon, WI 54971-0990
          Attention: Treasurer
          Telecopy No.: 920-748-1629
          Confirmation No.: 920-748-1634

          with copies to (i) the General Counsel at the same address, Telecopy
          No. 920-748-4334, Confirmation No. 920-748-4320, (ii) Ropes & Gray,
          One International Place, Boston, MA 02110-2624, Attention: Allison
          Bomberg, Telecopy No. 617-951-7050, Confirmation No. 617-951-7000 and
          (iii) to Alliance at the address set forth in clause (b) above.

     (e)  To the Indenture Trustee, at its Corporate Trust Office.

A party may specify an additional or different address or addresses by writing
mailed or delivered to the other parties as aforesaid. All such notices and
other communications shall be effective upon receipt.

Section 6.3. Severability.

In the event that any provision of this Insurance Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, the parties
hereto agree that such holding shall not invalidate or render unenforceable any
other provision hereof. The parties hereto further agree that the holding by any
court of competent jurisdiction that any remedy pursued by any party hereto is
unavailable or unenforceable shall not affect in any way the ability of such
party to pursue any other remedy available to it.

Section 6.4. Governing Law.

This Insurance Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to conflicts of laws
provisions.

Section 6.5. Consent to Jurisdiction.

          (a) THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
ANY COURT IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION, SUIT OR PROCEEDING
BROUGHT AGAINST IT AND TO OR IN CONNECTION WITH ANY OF THE BASIC DOCUMENTS OR
THE TRANSACTION OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT RELATING
THERETO, AND THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREE
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL BE HEARD OR
DETERMINED IN SUCH

                                       34

<PAGE>

NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
THE PARTIES AGREE THAT A FINAL NONAPPEALABLE JUDGMENT IN ANY SUCH ACTION, SUIT
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY WAIVE AND AGREE NOT TO ASSERT BY
WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING,
ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS,
THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT
THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THE RELATED
DOCUMENTS OR THE SUBJECT MATTER THEREOF MAY NOT BE LITIGATED IN OR BY SUCH
COURTS.

          (b) To the extent permitted by applicable law, the parties shall not
seek and hereby waive the right to any review of the judgment of any such court
by any court of any other nation or jurisdiction which may be called upon to
grant an enforcement of such judgment.

          (c) Service on any party hereto may be made by mailing or delivering
copies of the summons and complaint and other process which may be served in any
suit, action or proceeding to such party at its address listed in Section 6.2(b)
herein. Such address may be changed by the applicable party or parties by
written notice to each of the other parties hereto.

          (d) Nothing contained in this Insurance Agreement shall limit or
affect any party's right to serve process in any other manner permitted by law
or to start legal proceedings relating to any of the Basic Documents against any
other party or its properties in the courts of any jurisdiction.

Section 6.6. Consent of the Insurer.

In the event that the consent of the Insurer is required under any of the Basic
Documents, the determination whether to grant or withhold such consent shall be
made by the Insurer in its sole discretion without any implied duty towards any
other Person, except to the extent a different standard may apply as expressly
provided therein.

Section 6.7. Counterparts.

This Insurance Agreement may be executed in counterparts by the parties hereto,
and all such counterparts shall constitute one and the same instrument.

Section 6.8. Headings.

The headings of Articles and Sections and the Table of Contents contained in
this Insurance Agreement are provided for convenience only. They form no part of
this Insurance Agreement and shall not affect its construction or
interpretation.

Section 6.9. Trial by Jury Waived.

Each party hereby waives, to the fullest extent permitted by law, any right to a
trial by jury in respect of any litigation arising directly or indirectly out
of, under or in connection with any of the Basic Documents or any of the
transactions contemplated thereunder. Each party hereto (A) certifies that no
representative, agent or attorney of any party hereto has represented, expressly
or otherwise, that it would not, in the event of litigation, seek to enforce the
foregoing waiver and (B) acknowledges that it has been induced to enter into the
Basic Documents to which it is a party by, among other things, this waiver.

Section 6.10. Limited Liability.

                                       35

<PAGE>

No recourse under any Basic Document shall be had against, and no personal
liability shall attach to, any officer, employee, director, affiliate or
shareholder of any party hereto, as such, by the enforcement of any assessment
or by any legal or equitable proceeding, by virtue of any statute or otherwise
in respect of any of the Basic Documents, the Notes or the Ambac Policy, it
being expressly agreed and understood that each Basic Document is solely a
corporate obligation of each party hereto, and that any and all personal
liability, either at common law or in equity, or by statute or constitution, of
every such officer, employee, director, affiliate or shareholder for breaches of
any party hereto of any obligations under any Basic Document is hereby expressly
waived as a condition of and in consideration for the execution and delivery of
this Insurance Agreement.

Section 6.11. Entire Agreement; Facsimile Signatures.

This Insurance Agreement, the Fee Letter and the Ambac Policy set forth the
entire agreement between the parties with respect to the subject matter hereof
and thereof, and supersede and replace any agreement or understanding that may
have existed between the parties prior to the date hereof in respect of such
subject matter. Execution and delivery of this Insurance Agreement by facsimile
signature shall constitute execution and delivery of this Insurance Agreement
for all purposes hereof with the same force and effect as execution and delivery
of a manually signed copy hereof.

Section 6.12. Indenture Trustee.

The Indenture Trustee hereby acknowledges and agrees to perform all its
obligations and duties pursuant to the Basic Documents to which it is a party
thereto.

Section 6.13. Third-Party Beneficiary.

Each of the parties hereto agrees that the Insurer shall have all rights of an
intended third-party beneficiary in respect of each of the Basic Documents,
including but not limited to enforcing the respective obligations of the parties
thereunder.

Section 6.14. No Proceedings.

Each of the parties hereto (other than, after the Notes are paid in full, the
Insurer) agrees that it will not institute against the Issuer or Seller any
involuntary proceeding or otherwise institute any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other proceeding under any
federal or state bankruptcy or similar law until the date which is one year and
one day since the last day on which any Notes shall have been outstanding and
all amounts payable to the Insurer hereunder shall have been paid in full.

Section 6.15. Limited Recourse.

Each of the parties hereto agrees that any obligation of the Issuer hereunder or
under any of the other Basic Documents will be payable by the Issuer solely from
funds when, if and to the extent available for such purpose pursuant to the
Indenture and that, except in the event of a claim for reimbursement for payment
of principal under the Ambac Policy or in the event of acceleration of the
principal amount of the Notes, any amount in excess of the amount so available
shall not constitute a current claim against the Issuer therefor.

Section 6.16. No Recourse.

It is expressly understood and agreed by the parties hereto that (a) this
Insurance Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as trustee of the Issuer, in the exercise
of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended

                                       36

<PAGE>

not as personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Issuer, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person claiming by, through or
under the parties hereto and (d) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses of
the Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer under this
Insurance Agreement or any other related documents.

Section 6.17. Regulatory Change.

In the event of any Regulatory Change (as defined in the Note Purchase
Agreement; provided, that for purposes of this Section 6.17, the term Regulatory
Change shall include the Insurer) which results in either (i) a determination
that the Issuer or any CP Conduit (as defined in the Note Purchase Agreement) is
not a Qualified Special Purpose Entity that is not required, under generally
accepted accounting principles, to consolidate its financial statements with any
other entity, or (ii) a cost arising under Section 2.3 of the Note Purchase
Agreement, the parties hereto agree to negotiate in good faith to amend the
Basic Documents in order to eliminate the consolidation requirement; provided,
however, that no party shall be obligated to take any action (or make any
amendments) if in the reasonable opinion of such party any such amendment to the
Basic Documents will be unlawful or otherwise disadvantageous or inconsistent
with its policies or regulatory restrictions or result in any liability,
unreimbursed cost or expense to such party.

                                       37

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, all as of
the day and year first above mentioned.

                                          AMBAC ASSURANCE CORPORATION,
                                             as Insurer


                                          By:    /s/ Gretchen E. Brigden
                                              ----------------------------------
                                              Name:  Gretchen E. Brigden
                                              Title: First Vice President


                                          ALLIANCE LAUNDRY SYSTEMS LLC


                                          By:    /s/ Scott L. Spiller
                                              ----------------------------------
                                              Name:  Scott L. Spiller
                                              Title: VP, Law and Human Resources
                                                     & Secretary


                                          ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES
                                             TRUST 2002-A, as Issuer


                                          By: WILMINGTON TRUST COMPANY,
                                              not in its individual capacity,
                                              but solely as owner trustee


                                          By:    /s/ Kathleen A. Pedelini
                                              ----------------------------------
                                              Name:  Kathleen A. Pedelini
                                              Title: Financial Services Officer

                                Signature Page 1
                        Insurance and Indemnity Agreement

<PAGE>

                                          ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES
                                             2002 LLC, as Seller


                                          By:    /s/ Todd M. Rice
                                              ----------------------------------
                                              Name:  Todd M. Rice
                                              Title: Vice President


                                          THE BANK OF NEW YORK,
                                             not in its individual capacity, but
                                             solely as Indenture Trustee


                                          By:    /s/ Erwin Soriano
                                              ----------------------------------
                                              Name:  Erwin Soriano
                                              Title: Assistant Treasurer

                                Signature Page 2
                        Insurance and Indemnity Agreement

<PAGE>

                                    EXHIBIT A
                              FORM OF AMBAC POLICY

                                       A-1

<PAGE>

                                   EXHIBIT B-1
                  AGREED UPON PROCEDURES FOR INDEPENDENT PUBLIC
                      ACCOUNTANTS REVIEW OF EQUIPMENT LOANS

Periodic On-Going Reviews

1.   Independent Public Accountants reasonably acceptable to the Insurer
     (referred to herein as "Auditor") will compare the aggregate amount of all
     Collections with respect to the Loans received by the Servicer during three
     calendar months per calendar year, as selected by the Auditor (each such
     calendar month referred to herein as a "Review Period") against (a) the
     amounts reported in the monthly Servicer's Certificate, (b) the aggregate
     amount of Collections indicated on the Servicer's accounting system or a
     "tape" derived from the accounting system ("Accounting Systems") and (c)
     the Loan Credit and Collection Policy, noting any exceptions.

2.   The Auditor will select 3 reports at random provided on a monthly basis by
     the Servicer or the Indenture Trustee and will compare all amounts on the
     report to the general ledger and cash reports, noting any exceptions.
     Information to be calculated and or confirmed includes the Aggregate Loan
     Balance, Collections with respect to Loans, Servicer Advances, Liquidation
     Proceeds, Liquidation Expenses and all related cash receipt line items. The
     Auditor will confirm, by recalculating, the Equipment Loan Borrowing Base,
     the Equipment Loan Collateral Value, the Equipment Loan Reserve
     Requirement, and the Equipment Loan LC Amount. The Auditor will recalculate
     all contributing line items reported on the report and confirm balances in
     the Servicer's book and records as well as on cash reports from bank
     statements. The Auditor will confirm that the Servicer is completing the
     report according to the Documents. The Auditor will recalculate and confirm
     all cash applications related to the payment and calculation of interest
     due on the Equipment Loan Notes. The Auditor will recalculate all Excess
     Loan Concentration Amounts on the report, verifying balances using the
     Servicer's books and records, noting any exceptions. Delinquency Ratio -
     Equipment Loans and Default Ratio - Equipment Loans will be recalculated
     and balances confirmed with the general ledger.

3.   The Auditor will select a total of 50 (25 fixed rate and 25 floating rate)
     individual cash receipts posted to the Loan Lockbox Account during the
     Review Periods (each such cash receipt being a "Selected Receipt"). The
     Auditor will compare the amount of Loan payments included on a copy of the
     check and the remittance advice relating to such Selected Receipts against
     the amounts reflected on the Accounting Systems, noting any exceptions.

4.   For each of the Selected Receipts, the Auditor will compare the amount of
     the Loan payment posted to the Accounting Systems to the amount of the loan
     payment indicated in the relevant contract for such Loan (each a
     "Contract") and files maintained by the Servicer noting any exceptions.

5.   For any of the Selected Receipts which indicate a remittance of sales tax,
     the Auditor will trace such sales tax remittances prepared by the
     management of the Servicer (the "Management Schedule") detailing tax
     payments received by tax jurisdiction noting any exceptions. The Auditor
     will also trace the sales tax remittance to the supporting schedules
     included in the applicable sales tax return noting any exceptions. The
     Auditor will recalculate the summation amounts on three of the ten largest
     sales tax returns and additionally verify that the dates or the Servicer's
     checks remitting payment to the respective states is within the required
     filing period.

6.   The Auditor will recalculate the interest expense prepared by the Servicer
     for one Review Period by using (i) the outstanding Equipment Loan Note
     balance at the beginning of the Review Period

                                      B1-1

<PAGE>

     as set forth in the related Servicer's Certificate and (ii) the amount
     shown as the Equipment Loan Note rate relating to such Review Period. The
     amount of interest expense so recalculated will be compared against the
     information provided in the monthly Servicer's Certificate, noting any
     exceptions.

7.   The Auditor will confirm the amount of early pay-offs received during each
     of the Review Periods based on a comparison of the information contained in
     the relevant Servicer's Certificates to the information contained in the
     Accounting Systems and to the Loan Credit and Collection Policy, noting any
     exceptions.

8.   Management will provide a list of all early pay-off Contracts during each
     of the Review Periods. The Auditor will select a total of five Contracts
     listed as "early pay-offs" from the pay-off schedule. For each Contract so
     selected, the Auditor will compare the amount deposited into the Loan
     Lockbox Account or the Loan Collection Account in respect of such Contract
     with the amount of early pay-off specified in the pay-off schedule and to
     the Loan Credit and Collection Policy, noting any exceptions.

9.   Using the dates reflected on the copy of the check (or top portion of the
     check) and remittance advice, the Auditor will verify that the respective
     Selected Receipt posting or effective date related to the underlying Loan
     transaction in the Accounting Systems was in the same month as reflected on
     the copy of the check (or top portion of the check) and the remittance
     advice noting any exceptions.

10.  The Auditor will obtain from management a schedule of Contracts which have
     become Defaulted Equipment Loans during each Review Period and will compare
     the Note Principal Balance of each Defaulted Contract to the information on
     the Accounting Systems and on a total basis to the related Servicer's
     Certificate and to the Loan Credit and Collection Policy, noting any
     exceptions.

11.  The Auditor will select 10 Defaulted Equipment Loans from each Review
     Period and trace recoveries for each of those Equipment Loans recorded on
     the Accounting System to the related Servicer's Certificate and to the Loan
     Credit and Collection Policy, noting any exceptions.

12.  The Auditor will select three monthly bank reconciliations for the Loan
     Lockbox Account. The Auditor will verify the mathematical accuracy of the
     bank reconciliations. The Auditor will trace the balance per the bank to
     the bank statement, the book balance to the general ledger and the amounts
     listed as reconciling items in the bank reconciliation to the Servicer's
     Certificate, as applicable.

13.  The Auditor will select three monthly bank reconciliations for the Loan
     Collection Account. The Auditor will verify the mathematical accuracy of
     the bank reconciliations. The Auditor will trace the balance per the bank
     to the bank statement, the book balance to the general ledger and the
     amounts listed as reconciling items in the bank reconciliation to the
     Servicer's Certificate, as applicable.

14.  The Auditor will verify whether the Servicer has procedures in place to
     monitor and make or cause to be made UCC financing or continuation
     statements with respect to the Loans based on reasonable details provided
     by the Servicer.

15.  The Servicer will conduct a mailing verification of 50 Contracts requesting
     confirmation as of each fiscal year end of: (i) Loan schedule number (if
     appropriate); (ii) whether the Loan is still in existence; (iii) remaining
     payments; and (iv) payment amount. Auditor will compare responses

                                      B1-2

<PAGE>

     received to such information to the information in the Accounting Systems,
     noting any exceptions.

16.  The Auditor will compare the Aggregate Loan Balance and the balance for
     each Equipment Loan Note at the close of business on the last day of each
     Review Period as reported in the Servicer's Certificate to the information
     indicated in the Accounting Systems, noting any exceptions.

17.  For the Selected Receipts, the Auditor will verify whether the Accounting
     Systems correctly identify ownership interest in the related receivables
     for the Selected Receipts.

18.  For each Review Period, the Auditor will recalculate the Delinquency Ratio
     - Equipment Loans and Default Ratio - Equipment Loans set forth in the
     Servicer's records and the related Servicer's Certificate. The Auditor will
     compare such information with the numeric information used in such
     calculations in the Accounting Systems or the Servicer's general ledger, as
     applicable, noting any exceptions, and will verify the mathematical
     accuracy of the calculations.

19.  The Auditor will compare 10 Contracts included in the Servicer's
     Certificate by delinquency category against the information in the
     Accounting Systems for accuracy of the aging and to the Loan Credit and
     Collection Policy, noting any exceptions.

20.  For each Review Period, the Auditor will compare information obtained from
     the Accounting System and provided by Management to recalculate the Excess
     Loan Concentration Amount, to information indicated in the related
     Servicer's Certificates, noting any exceptions.

21.  The Auditor will confirm, for each of the 50 Contracts, that UCC financing
     statements have been filed in respect thereof within 20 days of delivery of
     the Equipment related to such Contract, noting any exceptions. Copies of
     documents and confirmations by the Indenture Trustee shall serve as
     evidence of filing.

Ambac in its sole discretion reserves the right to add criteria or change
requirements based on transaction performance and market conditions.

                                      B1-3

<PAGE>

                                   EXHIBIT B-2
                  AGREED UPON PROCEDURES FOR INDEPENDENT PUBLIC
                        ACCOUNTANTS REVIEW OF RECEIVABLES

Annual Due Diligence Review

1.   Independent Public Accountants reasonably acceptable to the Insurer
     (referred to herein as "Auditor") will select a total of 25 individual
     credit files (as defined by a business name, the "Selected Accounts") from
     the information provided by the Servicer's accounting system or a "tape"
     derived from the accounting system ("Accounting Systems"). The Selected
     Accounts will consist of the top 10 exposures by dollar value outstanding
     and 15 other selected accounts by the Auditor. The Auditor will compare the
     following fields in the Accounting Systems to the original credit file
     ("Credit File") and to the Receivables Credit and Collection Policy, noting
     any exceptions:

     .    Loan File Number                           .    Current Balance
     .    Obligor Name                               .    Payment Status
     .    Obligor Social Security Number             .    Payment Terms
     .    Business Name                              .    Interest Rate
     .    Obligor Street Address, City and State

2.   The Auditor will select 3 reports at random provided on a monthly basis by
     the Servicer or the Indenture Trustee and will compare all amounts on the
     report to the general ledger and cash reports, noting any exceptions.
     Information to be calculated and or confirmed includes the Gross
     Receivables Balance, Net Receivables Balance, Dilution and the contributing
     line items. The Auditor will confirm, by recalculating, the Receivables
     Borrowing Base, the Receivables Required Credit Support, the Receivables
     Collateral Value and the Reserve Account related to the Receivables and the
     Receivables LC Amount. The Auditor will recalculate all contributing line
     items reported on the report and confirm balances in the Servicer's books
     and records as well as on cash reports from bank statements. The Auditor
     will confirm that the report is in compliance with the Documents. The
     Auditor will recalculate and confirm all cash applications related to the
     payment and calculation of interest due on the Receivables Notes.
     Delinquency, Default and Dilution ratios will be recalculated and balances
     confirmed with general ledger.

3.   The Auditor will select 12 reports at random provided on a daily basis by
     the Servicer or the Indenture Trustee and will compare all amounts on the
     report to the general ledger and cash reports, noting any exceptions.
     Information to be calculated and/or confirmed includes the Gross
     Receivables Balance, Net Receivables Balance, Dilution and the contributing
     line items, as applicable. The Auditor will confirm that the report is in
     compliance with the Documents. The Auditor will confirm the cash receipts
     recorded on the report and will recalculate balances and the application of
     cash to the general ledger or records of the Servicer and/or bank
     statements.

4.   The Auditor will compare the individual cash receipts posted to the
     Receivables Lockbox Account during one monthly period selected by the
     Auditor (a "Review Period") for the 25 Selected Accounts (each such cash
     receipt being a "Selected Receipt"). The Auditor will compare the amount of
     payments included on checks and the remittance advice relating to such
     Selected Receipts against the amounts reflected on the Accounting Systems,
     noting any exceptions.

                                      B2-1

<PAGE>

5.   The Auditor will compare the aggregate amount of all Collections with
     respect to Receivables received by the Servicer during the Review Period
     against the aggregate amount of Collections with respect to Receivables
     indicated on the Servicer's Accounting Systems, noting any exceptions.

6.   For any of the Selected Accounts which indicate a remittance of sales tax,
     the Auditor will trace such sales tax remittances prepared by the
     management of Alliance or the Servicer (the "Management Schedule")
     detailing tax payments received by tax jurisdiction noting any exceptions.
     The Auditor will also trace the sales tax remittance to the supporting
     schedules included in the applicable sales tax return noting any
     exceptions. The Auditor will recalculate the summation amounts on three of
     the ten largest sales tax returns and additionally verify that the dates on
     the Servicer's checks remitting payment to the respective states is within
     the required filing period.

7.   The Auditor will recalculate the interest rate for the Selected Accounts,
     as applicable. Additionally, the Auditor will recalculate the interest
     expense billed for such Selected Accounts for the current month using the
     terms outlined in the Credit File. The amount of interest expense so
     recalculated will be compared against the information provided on the
     Accounting Systems and to the Receivables Credit and Collection Policy ,
     noting any exceptions.

8.   Servicer will provide a list of all Dilutions received during the Review
     Period for each of the Selected Accounts. The Auditor will confirm the
     amount of such Dilutions received during the Review Period based on a
     comparison of the information contained in the relevant Credit File to the
     information contained in the Accounting Systems and to the policies stated
     in the Receivables Credit and Collection Policy, noting any exceptions.

9.   Management will provide a list of all Dilutions during the Review Period
     for each of the Selected Accounts. For each of the Selected Accounts, the
     Auditor will compare the amount deposited into the Receivables Lockbox
     Account or the Receivables Collection Account in respect of the relevant
     contracts for the Receivables (each a "Contract") in such Selected Accounts
     with the amount of such receipt less stated Dilutions specified in the
     Dilution schedule and to the Receivables Credit and Collection Policy,
     noting any exceptions.

10.  Using the dates reflected on the copy of the check (or top portion of the
     check) and remittance advice, the Auditor will verify that the respective
     Selected Accounts posting or effective date related to the underlying
     credit agreement in the Accounting Systems was in the same month as
     reflected on the copy of the check (or top portion of the check) and the
     remittance advice, noting any exceptions.

11.  Management will provide a list of foreign Credit Files, and Auditor will
     select a total of 10 foreign Credit Files. The Auditor will review the 10
     Contracts during the Review Period and will compare the Balance outstanding
     of each such foreign Contract to the information on the Accounting Systems
     and to the policies stated in the Receivables Credit and Collection Policy,
     noting any exceptions.

12.  Management will provide a list of foreign Credit Files, and Auditor will
     select a total of 10 foreign Credit Files. The Auditor will trace cash
     receipt for each of those Contracts recorded on the Accounting System to
     the records in the Credit Files and to the policies stated in the
     Receivables Credit and Collection Policy, noting any exceptions.

                                      B2-2

<PAGE>

13.  Management will provide a list of interest bearing Credit Files, and the
     Auditor will select a total of 10 interest bearing Credit Files. The
     Auditor will review the 10 interest bearing Credit Files during the Review
     Period and will compare the Balance outstanding of each such interest
     bearing Contract to the information on the Accounting Systems and to the
     policies stated in the Receivables Credit and Collection Policy, noting any
     exceptions.

14.  Management will provide a list of interest bearing Credit Files, and the
     Auditor will select a total of 10 interest bearing Credit Files. The
     Auditor will trace cash receipt for each of those Contracts recorded on the
     Accounting System to the records in the Credit Files and to the policies
     stated in the Receivables Credit and Collection Policy, noting any
     exceptions.

15.  Management will provide a list of government Receivables, and the Auditor
     will select a total of 10 government Receivables. The Auditor will review
     the 10 government Receivables during the Review Period and will compare the
     balance outstanding of each government Receivable to the information on the
     Accounting Systems and to the policies stated in the Receivables Credit and
     Collection Policy, noting any exceptions.

16.  Management will provide a list of government Receivables and the Auditor
     will select a total of 10 government Receivables. The Auditor will trace
     cash receipt for each of those Contracts recorded on the Accounting System
     to the records in the Credit Files and to the policies stated in the
     Receivables Credit and Collection Policy, noting any exceptions.

17.  Management will provide a list of all Receivables with repayment terms
     greater than 90 days, and the Auditor will select a total of 10 such Credit
     Files. The Auditor will review such the 10 Credit Files during the Review
     Period and will compare the balance outstanding of each Credit File to the
     information on the Accounting Systems and to the policies stated in the
     Receivables Credit and Collection Policy, noting any exceptions.

18.  Management will provide a list of all Receivables with repayment terms
     greater than 90 days, and the Auditor will select a total of 10 such Credit
     Files. The Auditor will trace cash receipt for each of those contracts
     recorded on the Accounting System to the records in the Credit Files and to
     the policies stated in the Receivables Credit and Collection Policy, noting
     any exceptions.

19.  Management will provide a list of all delinquent Receivables during the
     Review Period. The Auditor will select a total of 10 Credit Files listed as
     "delinquent" from the delinquency schedule. The Auditor will compare 10
     Credit Files categorized as delinquent in the Accounting Systems by
     delinquency category against the information in the Contract File for
     accuracy of the aging and to the policies stated in the Receivables Credit
     and Collection Policy, noting any exceptions.

20.  The Auditor will select three monthly bank reconciliations for each of the
     Domestic Receivables Lockbox and the Foreign Receivables Lockbox. The
     Auditor will verify the mathematical accuracy of each bank reconciliation.
     The Auditor will trace the balance per the bank to the bank statement, the
     book balance to the general ledger and the amounts listed as reconciling
     items in the bank reconciliation, as applicable. The Auditor will report on
     any unresolved reconciling items.

21.  The Auditor will select three monthly bank reconciliations for the
     Receivables Collection Account. The Auditor will verify the mathematical
     accuracy of the bank reconciliation. The Auditor will trace the balance per
     the bank to the bank statement, the book balance to the general ledger and
     the amounts listed as reconciling items in the bank reconciliation, as
     applicable. The Auditor will report on any unresolved reconciling items.

                                      B2-3

<PAGE>

22.  The Auditor will verify whether the Servicer has procedures in place to
     monitor and make or cause to be made UCC financing or continuation
     statements with respect to the Receivables based on reasonable details
     provided by the Servicer.

Ambac in its sole discretion reserves the right to add criteria or change
requirements based on transaction performance and market conditions.

                                      B2-4