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                                                                   Exhibit 10.10

                                                             [Execution Version]


                         POOLING AND SERVICING AGREEMENT
                          Dated as of November 1, 1998

                                      among

                     LONG BEACH ACCEPTANCE RECEIVABLES CORP.
                                    Depositor

                                       and

                           LONG BEACH ACCEPTANCE CORP.
                             Originator and Servicer

                                       and

                    CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
            Trustee, Back-up Servicer, Custodian and Collateral Agent


                 Long Beach Acceptance Auto Grantor Trust 1998-2
                   $110,000,000.00 5.87% Class A Certificates

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                                TABLE OF CONTENTS

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<Caption>
SECTION                                                                                       PAGE
                                                                                              ----
<S>               <C>                                                                         <C>
                                    ARTICLE I
                                   Definitions

   SECTION 1.1.   Definitions...................................................................1
   SECTION 1.2.   Usage of Terms...............................................................26
   SECTION 1.3.   Section References...........................................................27
   SECTION 1.4.   Limitation on Trust Activities...............................................27
   SECTION 1.5.   Calculations.................................................................27
   SECTION 1.6.   Action by or Consent of Certificateholders...................................27
   SECTION 1.7.   Material Adverse Effect......................................................27

                                   ARTICLE II
                          The Trust and Trust Property

   SECTION 2.1.   Creation of Trust............................................................28
   SECTION 2.2.   Conveyance of Receivables....................................................28
   SECTION 2.3.   Transfer Intended as Sale; Precautionary Security Interest...................35
   SECTION 2.4.   Acceptance by Trustee........................................................35
   SECTION 2.5.   Assignment by Depositor......................................................36
   SECTION 2.6.   Delivery of Legal Files and Receivable Files.................................36
   SECTION 2.7.   Acceptance of Legal Files by Custodian.......................................36
   SECTION 2.8.   Access to Receivable Files and Legal Files; Servicer's Duties with Respect to
                   Receivable Files; Custodian's Duties with Respect to Legal Files............38
   SECTION 2.9.   Covenants of the Custodian...................................................39
   SECTION 2.10.   The Legal Files Are Not "Financial Assets"..................................41

                                   ARTICLE III
                   Administration and Servicing of Receivables

   SECTION 3.1.   Duties of Servicer...........................................................41
   SECTION 3.2.   Collection and Allocation of Receivable Payments.............................42
   SECTION 3.3.   Realization Upon Receivables.................................................43
   SECTION 3.4.   Physical Damage Insurance; Other Insurance...................................44
   SECTION 3.5.   Maintenance of Security Interests in Financed Vehicles.......................45
   SECTION 3.6.   Additional Covenants of Servicer.............................................46
   SECTION 3.7.   Purchase of Receivables Upon Breach..........................................47
   SECTION 3.8.   Servicing Fee................................................................47
   SECTION 3.9.   Servicer's Certificate.......................................................48
   SECTION 3.10.   Annual Statement as to Compliance; Notice of Default........................48
   SECTION 3.11.   Annual Independent Certified Public Accountant's Report.....................49

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   SECTION 3.12.   Servicer Expenses...........................................................49
   SECTION 3.13.   Retention and Termination of Servicer.......................................50
   SECTION 3.14.   Access to Certain Documentation and Information Regarding Receivables.......50
   SECTION 3.15.   Verification of Servicer's Certificate......................................50
   SECTION 3.16.   Fidelity Bond...............................................................52
   SECTION 3.17.   Delegation of Duties........................................................52
   SECTION 3.18.   Delivery of Back-up Tapes of Back-up Servicer...............................52

                                   ARTICLE IV
            Distributions; Accounts; Statements to Certificateholders

   SECTION 4.1.   Accounts; Lock-Box Account...................................................54
   SECTION 4.2.   Collections..................................................................56
   SECTION 4.3.   Application of Collections...................................................56
   SECTION 4.4.   Payaheads....................................................................57
   SECTION 4.5.   Additional Deposits..........................................................57
   SECTION 4.6.   Distributions; Policy Claims.................................................58
   SECTION 4.7.   [Reserved]...................................................................62
   SECTION 4.8.   Statements to Certificateholders; Tax Returns................................62
   SECTION 4.9.   [Reserved]...................................................................65
   SECTION 4.10.   Reliance on Information from the Servicer...................................65
   SECTION 4.11.   Optional Deposits by the Certificate Insurer................................65
   SECTION 4.12.   Spread Account..............................................................65
   SECTION 4.13.   Policy......................................................................65
   SECTION 4.14.   Withdrawals from Spread Account.............................................65
   SECTION 4.15.   Claims Under Policy.........................................................66
   SECTION 4.16.   Preference Claims; Direction of Proceedings.................................67
   SECTION 4.17.   Surrender of Policy.........................................................68
   SECTION 4.18.   Simple Interest Advances....................................................68
   SECTION 4.19.   Pre-Funding Account.........................................................69
   SECTION 4.20.   Capitalized Interest Account................................................69

                                    ARTICLE V
                                The Certificates

   SECTION 5.1.   The Certificates.............................................................72
   SECTION 5.2.   Appointment of Paying Agent..................................................72
   SECTION 5.3.   Authenticating Agent.........................................................73
   SECTION 5.4.   Authentication of Certificates...............................................74
   SECTION 5.5.   Registration of Transfer and Exchange of Certificates........................74
   SECTION 5.6.   Mutilated, Destroyed, Lost or Stolen Certificates............................79
   SECTION 5.7.   Persons Deemed Owners........................................................79
   SECTION 5.8.   Access to List of Certificateholders' Names and Addresses....................79
   SECTION 5.9.   Maintenance of Office or Agency..............................................80

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                                   ARTICLE VI
                                  The Depositor

   SECTION 6.1.   Representations of Depositor.................................................80
   SECTION 6.2.   Liability of Depositor; Indemnities..........................................82
   SECTION 6.3.   Merger or Consolidation of, or Assumption of the Obligations of, Depositor...83
   SECTION 6.4.   Limitation on Liability of Depositor and Others..............................84
   SECTION 6.5.   Depositor May Own Certificates...............................................84

                                   ARTICLE VII
                                  The Servicer

   SECTION 7.1.   Representations of Servicer..................................................84
   SECTION 7.2.   Indemnities of Servicer......................................................86
   SECTION 7.3.   Merger or Consolidation of, or Assumption of the Obligations of, Servicer or
                   Back-up Servicer............................................................88
   SECTION 7.4.   Limitation on Liability of Servicer and Others...............................89
   SECTION 7.5.   Servicer and Back-up Servicer Not to Resign..................................89

                                  ARTICLE VIII
                                     Default

   SECTION 8.1.   Events of Default............................................................90
   SECTION 8.2.   Appointment of Successor.....................................................93
   SECTION 8.3.   Notification to Certificateholders...........................................95
   SECTION 8.4.   [Reserved]...................................................................95
   SECTION 8.5.   Action Upon Certain Failures of the Servicer.................................95

                                   ARTICLE IX
                                   The Trustee

   SECTION 9.1.   Duties of Trustee............................................................95
   SECTION 9.2.   Trustee's Certificate........................................................97
   SECTION 9.3.   Certain Matters Affecting Trustee............................................98
   SECTION 9.4.   Trustee Not Liable for Certificates or Receivables...........................99
   SECTION 9.5.   Trustee May Own Certificates.................................................100
   SECTION 9.6.   Indemnity of Trustee and Custodian...........................................100
   SECTION 9.7.   Eligibility Requirements for Trustee.........................................101
   SECTION 9.8.   Resignation or Removal of Trustee............................................101
   SECTION 9.9.   Successor Trustee............................................................102
   SECTION 9.10.   Merger or Consolidation of Trustee..........................................103
   SECTION 9.11.   Co-Trustee; Separate Trustee................................................103
   SECTION 9.12.   Representations and Warranties of Trustee...................................104
   SECTION 9.13.   No Bankruptcy Petition......................................................105
   SECTION 9.14.   Trustee May Enforce Claims Without Possession of Certificates...............105

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   SECTION 9.15.   Rights of Certificate Insurer to Direct Trustee.............................105

                                    ARTICLE X
                                   Termination

   SECTION 10.1.   Termination of the Trust....................................................106
   SECTION 10.2.   Optional Purchase of All Receivables........................................107

                                   ARTICLE XI
                            Miscellaneous Provisions

   SECTION 11.1.   Amendment...................................................................108
   SECTION 11.2.   Protection of Title to Trust................................................108
   SECTION 11.3.   Limitation on Rights of Certificateholders..................................111
   SECTION 11.4.   GOVERNING LAW...............................................................112
   SECTION 11.5.   Notices.....................................................................112
   SECTION 11.6.   Severability of Provisions..................................................113
   SECTION 11.7.   Assignment..................................................................113
   SECTION 11.8.   Certificates Nonassessable and Fully Paid...................................113
   SECTION 11.9.   Nonpetition Covenant........................................................113
   SECTION 11.10.   Third Party Beneficiaries..................................................113
   SECTION 11.11.   Certificate Insurer as Controlling Party...................................114
</Table>

EXHIBITS

Exhibit  A      Form of Class A Certificate
Exhibit  B      [Reserved]
Exhibit  C      Form of Excess Cash Flow Certificate
Exhibit  D-1    Form of Trustee's Certificate
Exhibit  D-2    Form of Trustee's Certificate
Exhibit  E-1    Form of Monthly Certificateholder Statement
Exhibit  E-2    Form of Loan Master File Layout
Exhibit  F-1    Form of "Qualified Institutional Buyer" Transferee's Certificate
Exhibit  F-2    Form of "Accredited Investor" Transferee's Certificate
Exhibit  F-3    Form of "Registered Certificate" Transferee's Certificate
Exhibit  F-4    Form of Transferor's Certificate
Exhibit  G      Form of ERISA Representation Letter
Exhibit  H      Form of Depository Agreement
Exhibit  I      Payment Application Procedures
Exhibit  J      Payment Deferment and Due Date Change Policies
Exhibit  K      Documentation Checklist
Exhibit  L      Form of Request for Transfer of Possession
Exhibit  M      Form of Custodial Letter
Exhibit  N      Form of Transfer Agreement

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SCHEDULES

Schedule   A        Schedule of Receivables
Schedule   B        Location of Receivable Files;
                    Location of Legal Files
Schedule   C        Delivery Requirements

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         POOLING AND SERVICING AGREEMENT dated as of November 1, 1998 (the
"Agreement") among Long Beach Acceptance Receivables Corp., a Delaware
corporation, as depositor (the "Depositor"), Long Beach Acceptance Corp., a
Delaware corporation, as originator of the receivables ("LBAC"), and as servicer
(in such capacity, the "Servicer"), and Chase Bank of Texas, National
Association, a national banking association, as trustee, back-up servicer,
custodian and collateral agent (the "Trustee", "Back-up Servicer", "Custodian"
and "Collateral Agent", respectively).

         In consideration of the premises and of the mutual agreements herein
contained, and other good and valuable consideration, the receipt of which is
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:


                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.1. DEFINITIONS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, whenever
capitalized shall have the following meanings:

         "ACTUARIAL RECEIVABLE" means any Receivable under which the portion of
a payment allocable to interest and the portion of a payment allocable to
principal is determined in accordance with the "actuarial" method.

         "ADDITION NOTICE" means, with respect to the transfer of Subsequent
Receivables to the Trust pursuant to this Agreement and a Transfer Agreement, a
written notice which shall be given to the Trustee, the Certificate Insurer (in
addition to such notice, the Trustee and the Certificate Insurer shall both
receive an electronic transmission, in a format acceptable to the Trustee and
the Certificate Insurer, of the designated Subsequent Receivables to be sold to
the Trust) and each Rating Agency pursuant to Section 2.2(c) not later than five
Business Days prior to the related Subsequent Transfer Date, of the Depositor's
designation of Subsequent Receivables to be sold to the Trust and the aggregate
Principal Balance of such Subsequent Receivables as of the related Subsequent
Cutoff Date.

         "AFFILIATE" of any Person means any Person who directly or indirectly
controls, is controlled by, or is under direct or indirect common control with
such Person. For purposes of this definition of "Affiliate", the term "control"
(including the terms "controlling", "controlled by" and "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause a direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.

         "AGENCY AGREEMENT" means the Agency Agreement dated as of March 31,
1997 among Chase Texas, LBAC, GCFP and other Program Parties as defined therein,
as

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amended, modified or supplemented from time to time in accordance with the
terms thereof, including a Program Party Counterpart pursuant to Section 2
thereof among Chase Texas, as agent thereunder, the Trustee and LBAC, dated
as of the Closing Date.

         "AGREEMENT" means this Pooling and Servicing Agreement, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with the terms hereof.

         "AMC" means Ameriquest Mortgage Company, a Delaware corporation, or, as
applicable, its successors.

         "AMOUNT FINANCED" with respect to a Receivable means the aggregate
amount originally advanced under the Receivable toward the purchase price of the
Financed Vehicle and any related costs.

         "ANNUAL PERCENTAGE RATE" or "APR" of a Receivable means the annual rate
of finance charges stated in the Receivable. If after the Closing Date in the
case of an Initial Receivable, or the related Subsequent Transfer Date, in the
case of a Subsequent Receivable, the annual rate with respect to such Receivable
as of the Closing Date or related Subsequent Transfer Date, as applicable, is
reduced as a result of (i) an insolvency proceeding involving the related
Obligor or (ii) pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended, the Annual Percentage Rate or APR shall refer to such reduced rate.

         "ASSUMPTION DATE" has the meaning set forth in Section 8.2.

         "AUTHENTICATING AGENT" has the meaning assigned to such term in Section
5.3.

         "BACK-UP SERVICER" means Chase Texas, in its capacity as Back-up
Servicer pursuant to the terms of the Servicing Assumption Agreement or such
Person as shall have been appointed Back-up Servicer pursuant to Section 8.2(c).

         "BACK-UP SERVICER FEE" means the fee payable to the Back-up Servicer so
long as LBAC is the Servicer, calculated in the same manner, on the same basis
and for the same period as the Servicing Fee is calculated pursuant to Section
3.8, based on the Back-up Servicer Fee Rate rather than the Servicing Fee Rate.

         "BACK-UP SERVICER FEE RATE" shall be 0.0225% per annum, payable
monthly.

         "BANKRUPTCY REMOTE ENTITY" means any special or limited purpose
corporation, partnership or other entity generally structured in accordance with
the guidelines of one or more nationally recognized statistical rating
organizations for such entities, whose certificate of incorporation, partnership
agreement or other governing document includes limitations on purpose;
limitations on amendments to the certificate of incorporation and bylaws,
partnership agreement or other governing documents; limitations on ability to
incur debt; limitations on liquidation, consolidation and merger or the sale of
all or a

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substantial part of its assets; covenants to maintain separateness from
affiliates; a special purpose bankruptcy remote equity owner, in the case of
a partnership; and at least two independent directors (of such corporation or
of the corporate partner of such partnership).

         "BASIC DOCUMENTS" means this Agreement, each Transfer Agreement, the
Purchase Agreement, the Spread Account Agreement, the Servicer Termination Side
Letter, the Insurance Agreement, the Indemnification Agreement, the Guaranty,
the Certificate Purchase Agreement, the Premium Letter, the Lock-Box Agreement,
the Agency Agreement, the Servicing Assumption Agreement, the Stock Pledge
Agreement, the GCFP Bill of Sale and Assignment, the GCFP Releases and the Chase
Texas Release.

         "BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which commercial banking institutions or trust companies in the City of New
York, the State of Texas, the State of New Jersey, or the city in which the
Corporate Trust Office of the Trustee is relocated subject to prior written
notice with respect to such address to the Certificateholders, the Depositor,
the Servicer and the Certificate Insurer or any other location of any successor
Servicer, successor Trustee or successor Collateral Agent shall be authorized or
obligated by law, executive order, or governmental decree to be closed.

         "CAPITALIZED INTEREST ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 4.1.

         "CAPITALIZED INTEREST ACCOUNT DEPOSIT" shall have the meaning assigned
to such term in Section 4.20(a).

         "CAPITALIZED INTEREST ACCOUNT PROPERTY" shall have the meaning assigned
to such term in Section 4.20(b).

         "CASUALTY" means, with respect to a Financed Vehicle, the total loss or
destruction of such Financed Vehicle.

         "CERTIFICATE" means any one of the certificates executed by the Trustee
on behalf of the Trust and authenticated by the Trustee in substantially the
form set forth in Exhibit A, Exhibit B or Exhibit C hereto.

         "CERTIFICATE ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 4.1.

         "CERTIFICATE INSURER" means Financial Security Assurance Inc., a
monoline insurance company incorporated under the laws of the State of New York,
or its successors in interest as issuer of the Policy.

         "CERTIFICATE OWNER" means, with respect to any Certificate registered
in the name of the Clearing Agency or its nominee, the Person who is the
beneficial owner of such Certificate, as reflected on the books of the Clearing

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Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).

         "CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" mean, respectively,
the register maintained and the Certificate Registrar appointed pursuant to
Section 5.5.

         "CERTIFICATEHOLDER" or "Holder" means the Person in whose name a
Certificate shall be registered in the Certificate Register, except that so long
as any Certificates are outstanding, solely for the purposes of giving any
consent, waiver, request or demand pursuant to this Agreement, the interest
evidenced by any Certificate registered in the name of the Depositor, LBAC, the
Servicer or any of their respective Affiliates, shall not be taken into account
in determining whether the requisite percentage necessary to effect any such
consent, waiver, request or demand shall have been obtained.

         "CERTIFICATE PURCHASE AGREEMENT" means the Certificate Purchase
Agreement relating to the Class A Certificates, dated as of November 25, 1998,
among Long Beach Acceptance Receivables Corp., Long Beach Acceptance Corp. and
Greenwich Capital Markets, Inc., as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.

         "CERTIFICATES" means, collectively, the Class A Certificates and the
Excess Cash Flow Certificate.

         "CHARGEBACK OBLIGATION" means, with respect to any Receivable
liquidated or prepaid in full, any obligation of a Dealer, as provided by the
related Dealer Agreement, to refund to LBAC certain portions of amounts
previously paid to the Dealer upon origination of such Receivable on account of
the APR of such Receivable exceeding the related buy rate.

         "CHASE TEXAS" means Chase Bank of Texas, National Association, a
national banking association, and its successors in interest.

         "CHASE TEXAS RELEASE" means the security interest release executed as
of November 1, 1998 by Chase Texas in favor of LBAC.

         "CLASS A CERTIFICATE" means any one of the 5.87% Class A Certificates,
executed by the Trustee on behalf of the Trust and authenticated by the Trustee
in substantially the form set forth in Exhibit A hereto.

         "CLASS A CERTIFICATE BALANCE" shall equal, initially, the sum of the
Original Pool Balance and the Original Pre-Funded Amount and, thereafter, shall
equal the initial Class A Certificate Balance, reduced by all amounts previously
distributed to Class A Certificateholders and allocable to principal.

         "CLASS A CERTIFICATEHOLDER" means the Person in whose name a Class A
Certificate shall be registered in the Certificate Register.

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         "CLASS A DISTRIBUTABLE AMOUNT" means, for any Distribution Date, an
amount equal to the sum of the Class A Principal Distributable Amount for such
Distribution Date and the Class A Interest Distributable Amount for such
Distribution Date.

         "CLASS A INTEREST CARRYOVER SHORTFALL" means, as of the close of
business on any Distribution Date, the excess of the Class A Interest
Distributable Amount for such Distribution Date and (without duplication) any
outstanding Class A Interest Carryover Shortfall from the preceding Distribution
Date plus interest on such outstanding Class A Interest Carryover Shortfall, to
the extent permitted by applicable law, at the Class A Pass-Through Rate from
such preceding Distribution Date through the current Distribution Date
(calculated on the basis of a 360-day year consisting of twelve 30-day months),
over the amount of interest that the Holders of the Class A Certificates
actually received on such current Distribution Date.

         "CLASS A INTEREST DISTRIBUTABLE AMOUNT" means, for any Distribution
Date, an amount equal to thirty (30) days of interest at the Class A
Pass-Through Rate on the Class A Certificate Balance as of the close of business
on the last day of the related Collection Period (calculated on the basis of a
360-day year consisting of twelve 30-day months).

         "CLASS A PASS-THROUGH RATE" means 5.87% per annum.

         "CLASS A POOL FACTOR" means, with respect to any Distribution Date, a
seven-digit decimal figure equal to the Class A Certificate Balance as of the
close of business on the last day of the related Collection Period divided by
the initial Class A Certificate Balance. The Class A Pool Factor will be
1.0000000 as of the Closing Date; thereafter, the Class A Pool Factor will
decline to reflect reductions in the Class A Certificate Balance.

         "CLASS A PRINCIPAL CARRYOVER SHORTFALL" means, as of the close of
business on any Distribution Date, the excess of the Class A Principal
Distributable Amount and (without duplication) any outstanding Class A Principal
Carryover Shortfall from the preceding Distribution Date, over the amount of
principal that the Holders of the Class A Certificates actually received on such
current Distribution Date.

         "CLASS A PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date other than the Final Scheduled Distribution Date, the sum of
the following amounts (without duplication): (i) the principal portion as
calculated in accordance with Section 4.3 of all Scheduled Payments due during
the related Collection Period and all prior Collection Periods received during
the related Collection Period on Precomputed Receivables (including amounts
transferred from the Payahead Account to the Certificate Account to be applied
to the principal portion of Scheduled Payments but excluding Recoveries) and all
payments of principal received on Simple Interest Receivables during such
Collection Period (excluding Recoveries); (ii) the principal portion of all
prepayments in full received during the related Collection Period (including
prepayments in full resulting from collections with respect to a Receivable
received during the related Collection Period plus the transfer of the Payahead
Balance with respect to such Receivable to the Certificate Account pursuant to
Section 4.6(a)(ii)); (iii) the portion of

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the Purchase Amount allocable to principal of each Receivable that became a
Purchased Receivable as of the last day of the related Collection Period and,
at the option of the Certificate Insurer, the Principal Balance of each
Receivable that was required to be but was not so purchased or repurchased;
(iv) the Principal Balance of each Receivable that first became a Liquidated
Receivable during the related Collection Period and (v) the aggregate amount
of Cram Down Losses with respect to the Receivables that have occurred during
the related Collection Period. In addition, (i) on the Final Funding Period
Distribution Date, the Class A Principal Distributable Amount will include
the Prepayment Amount and (ii) on the Final Scheduled Distribution Date, the
Class A Principal Distributable Amount will equal the Class A Certificate
Balance as of the Final Scheduled Distribution Date.

         "CLASS I RECEIVABLE" means each Receivable identified as a "Class 1
Receivable" on the Schedule of Receivables.

         "CLASS IIA RECEIVABLE" means each Receivable identified as a "Class 5
Receivable" on the Schedule of Receivables.

         "CLASS IIB RECEIVABLE" means each Receivable identified as a "Class 2
Receivable" on the Schedule of Receivables.

         "CLASS III RECEIVABLE" means each Receivable identified as a "Class 3
Receivable" on the Schedule of Receivables.

         "CLASS IV RECEIVABLE" means each Receivable identified as a "Class 4
Receivable" on the Schedule of Receivables.

         "CLASS SERVICING FEE RATE" means, with respect to any (i) Class I
Receivable, 1.00% per annum, (ii) Class IIA Receivable, 1.75% per annum, (iii)
Class IIB Receivable, 2.50% per annum, (iv) Class III Receivable, 3.25% per
annum, and (v) Class IV Receivable, 3.50% per annum. Notwithstanding the
foregoing, with respect to any Receivable as of any Determination Date, in the
event that the sum of (i) the Class A Pass-Through Rate and (ii) the applicable
Class Servicing Fee Rate with respect to such Receivable as of such
Determination Date, exceeds the adjusted APR on such Receivable, the applicable
Class Servicing Fee Rate with respect to such Receivable shall be adjusted
downward in an amount equal to such excess; PROVIDED, that in no event shall
such Class Servicing Fee Rate be less than zero.

         "CLASS SUCCESSOR SERVICING FEE RATE" means, with respect to any (i)
Class I Receivable, 0.75% per annum, (ii) Class IIA Receivable, 2.50% per annum,
(iii) Class IIB Receivable, 2.50% per annum, (iv) Class III Receivable, 2.50%
per annum, and (v) Class IV Receivable, 2.50% per annum.

         "CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.

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         "CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank or other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.

         "CLOSING DATE" means November 25, 1998.

         "CODE" means the Internal Revenue Code of 1986, including any successor
or amendatory provisions.

         "COLLATERAL AGENT" means, as applicable: (a) with respect to the Spread
Account, the Collateral Agent named in the Spread Account Agreement, and any
successor thereto pursuant to the terms of the Spread Account Agreement, or (b)
with respect to the Capitalized Interest Account, the Trustee, in its capacity
as collateral agent pursuant to Section 4.20(b).

         "COLLECTED INTEREST" means for any Collection Period the sum of (i) the
portion of all payments made by or on behalf of the Obligors of Simple Interest
Receivables in respect of which any payment is actually received during such
Collection Period and (ii) all Liquidation Proceeds and Purchase Amounts with
respect to such Simple Interest Receivables, in each case that are allocable to
interest in accordance with the Servicer's customary servicing procedures.

         "COLLECTION ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 4.1.

         "COLLECTION PERIOD" means each calendar month during the term of this
Agreement. Any amount stated "as of the close of business on the last day of a
Collection Period" shall give effect to the following calculations as determined
as of the end of the day on such last day: (1) all applications of collections,
(2) all current and previous Payaheads, (3) all applications of Payahead
Balances and (4) all distributions. The term "related Collection Period" shall
mean the Collection Period ended on the last day of the month preceding a date
of determination.

         "CONFIDENTIAL INFORMATION" means, in relation to any Person, any
written information delivered or made available by or on behalf of LBAC or the
Depositor to such Person in connection with or pursuant to this Agreement or the
transactions contemplated hereby which is proprietary in nature and clearly
marked or identified as being confidential information, other than information
(i) which was publicly known, or otherwise known to such Person, at the time of
disclosure (except pursuant to disclosure in connection with this Agreement),
(ii) which subsequently becomes publicly known through no act or omission by
such Person, or (iii) which otherwise becomes known to such Person other than
through disclosure by LBAC or the Depositor.

         "CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which its corporate trust business shall be administered, which office at the
date of this Agreement is located at 600 Travis Street, 9th Floor, Houston,
Texas 77002, Attention: Global Trust

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Services - Long Beach Acceptance Auto Grantor Trust 1998-2, except that with
respect to the presentation of Certificates for payment or for registration
of transfer and exchange, such term shall also mean the office of the Trustee
in The City of New York, which on the date hereof is Texas Commerce Trust
Company, 55 Water Street, North Building, Room 234, Window 20, New York, New
York 10041, except that with respect to the delivery of Legal Files, such
term shall also mean the office of the Trustee in the city of Dallas, Texas,
which on the date hereof is 700 North Pearl Street, 18th Floor, Dallas, Texas
75201, Attention: Loan Document Custody - Long Beach Acceptance Auto Grantor
Trust 1998-2, in each case at which at any particular time its corporate
agency business shall be conducted.

         "CRAM DOWN LOSS" means, with respect to a Receivable (other than a
Liquidated Receivable), if a court of appropriate jurisdiction in an insolvency
proceeding issues a ruling that reduces the amount owed on a Receivable or
otherwise modifies or restructures the Scheduled Payments to be made thereon, an
amount equal to (a) the Principal Balance of the Receivable immediately prior to
such order MINUS the Principal Balance of such Receivable as so reduced,
modified or restructured PLUS (b) if such court shall have issued an order
reducing the effective rate of interest on such Receivable, the excess of (i)
the net present value (using a discount rate equal to the adjusted APR on such
Receivable) of the Scheduled Payments as so modified or restructured over (ii)
the net present value (using a discount rate equal to the original APR on such
Receivable) of the Scheduled Payments as so modified or restructured. A Cram
Down Loss will be deemed to have occurred on the date of issuance of such order.

         "CUSTODIAL LETTER" shall have the meaning assigned to such term in
Section 2.8(c).

         "CUSTODIAN" means the Trustee and its successors-in-interest, acting in
its capacity as such under this Agreement.

         "DEALER" means, with respect to a Receivable, the seller of the related
Financed Vehicle, who originated and assigned such Receivable to the Originator
pursuant to a Dealer Agreement, who in turn sold such Receivable to the
Depositor.

         "DEALER AGREEMENT" means each agreement between a Dealer and the
Originator pursuant to which such Dealer assigned a Receivable to the
Originator.

         "DEALER TITLE ADDENDUM" means, with respect to each Receivable as to
which the Dealer Title Guaranty, if applicable, is included in the related
Dealer Agreement, a schedule of Dealers delivered to the Custodian listing all
Dealers for which the Dealer Title Guaranty is included in the related Dealer
Agreement.

         "DEALER TITLE GUARANTY" means, where, for reasons that are reasonably
acceptable to the Servicer, the relevant Dealer is temporarily unable to furnish
a Lien Certificate, a written guaranty of such Dealer (which may be included in
the related Dealer Agreement if so indicated on the Dealer Title Addendum); each
of such documents having been

                                       8
<Page>

signed where required by the Dealer in the appropriate spaces, and with all
blanks properly filled in and otherwise correctly prepared.

         "DEFAULTED RECEIVABLE" means, with respect to any Distribution Date, a
Receivable with respect to which the earlier of any of the following shall have
occurred: (i) the related Obligor has failed to pay at least 95% of a Scheduled
Payment by its due date and such failure continues for 90 days (calculated based
on a 360-day year of twelve 30-day months), (ii) the Servicer has repossessed
the related Financed Vehicle (and any applicable redemption period has expired)
or (iii) such Receivable is in default and the Servicer has determined in good
faith that payments thereunder are not likely to be resumed.

         "DEFICIENCY CLAIM AMOUNT" shall have the meaning specified in Section
4.14(a).

         "DEFICIENCY CLAIM DATE" means, with respect to any Distribution Date,
the fourth Business Day immediately preceding such Distribution Date.

         "DEFICIENCY NOTICE" shall have the meaning specified in Section
4.14(a).

         "DEFICIENT LIQUIDATED RECEIVABLE" means a Liquidated Receivable with
respect to which the Servicer has repossessed and disposed of the related
Financed Vehicle, or with respect to which the Financed Vehicle has suffered a
total loss through casualty, confiscation or other cause, and following the
application of the Recoveries received by the Servicer as a result of the
repossession and disposition or other loss of such Financed Vehicle, the
Principal Balance of such Liquidated Receivable (assuming for purposes hereof
that such Principal Balance is not deemed to be zero) remains in excess of zero.

         "DELIVERY" means, when used with respect to Capitalized Interest
Account Property, the actions to be taken with respect to the delivery thereof
to the Collateral Agent and the holding thereof by the Collateral Agent as
follows:

         (a)      with respect to any Capitalized Interest Account Property that
consists of bankers' acceptances, commercial paper, negotiable certificates of
deposit and other obligations that constitute "instruments" within the meaning
of Section 9-105(1)(i) of the UCC (other than certificated securities) and are
susceptible of physical delivery, transfer thereof to the Collateral Agent by
physical delivery to the Collateral Agent, indorsed to, or registered in the
name of, the Collateral Agent or its nominee or indorsed in blank and such
additional or alternative procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such Capitalized Interest
Account Property to the Collateral Agent free and clear of any adverse claims,
consistent with changes in applicable law or regulations or the interpretation
thereof;

         (b)      with respect to any Capitalized Interest Account Property that
consists of a "certificated security" (as defined in Section 8-102(a)(4) of the
UCC), transfer thereof:

                                       9
<Page>


                  (i)      by physical delivery of such certificated security to
         the Collateral Agent, provided that if the certificated security is in
         registered form, it shall be indorsed to, or registered in the name of,
         the Collateral Agent or indorsed in blank;

                  (ii)     by physical delivery of such certificated security in
         registered form to a "securities intermediary" (as defined in Section
         8-102(a)(14) of the UCC) acting on behalf of the Collateral Agent, if
         the certificated security has been specially endorsed to the Collateral
         Agent by an effective endorsement;

         (c)      with respect to any Capitalized Interest Account Property that
consists of any security issued by the U.S. Treasury, the Federal Home Loan
Mortgage Corporation or by the Federal National Mortgage Association that is a
book-entry security held through the Federal Reserve System pursuant to Federal
book-entry regulations, the following procedures, all in accordance with
applicable law, including applicable federal regulations and Articles 8 and 9 of
the UCC: book-entry registration of such property to an appropriate book-entry
account maintained with a Federal Reserve Bank by a securities intermediary
which is also a "depositary" pursuant to applicable federal regulations and
issuance by such securities intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Collateral Agent of the
purchase by the securities intermediary on behalf of the Collateral Agent of
such book-entry security; the identification by the Federal Reserve Bank of such
book-entry certificates on its records being credited to the securities
intermediary's participant's securities account; the making by such securities
intermediary of entries in its books and records identifying such book-entry
security held through the Federal Reserve System pursuant to Federal book-entry
regulations as belonging to the Collateral Agent and indicating that such
securities intermediary holds such book-entry security solely as agent for the
Collateral Agent; the making by the Collateral Agent of entries in the books and
records identifying such book-entry security as belonging to the Trustee,
subject to the provisions, hereof and such additional or alternative procedures
as may hereafter become appropriate to effect complete transfer of ownership of
any such Capitalized Interest Account Property to the Collateral Agent free of
any adverse claims, consistent with changes in applicable law or regulations or
the interpretation thereof;

         (d)      with respect to any Capitalized Interest Account Property that
consists of an "uncertificated security" (as defined in Section 8-102(a)(18) of
the UCC) and that is not governed by clause (c) above, transfer thereof:

                  (i)      (A) by registration to the Collateral Agent as the
         registered owner thereof, on the books and records of the issuer
         thereof.

                  (B)      another Person (not a securities intermediary) either
         becomes the registered owner of the uncertificated security on behalf
         of the Collateral Agent, or having become the registered owner
         acknowledges that it holds for the Collateral Agent.

                                       10
<Page>

                  (ii)     the issuer thereof has agreed that it will comply
         with instructions originated by the Collateral Agent without further
         consent of the registered owner thereof;

         (e)      with respect to any Capitalized Interest Account Property that
consists of a "security entitlement" (as defined in Section 8-102(a)(17) of the
UCC) if a securities intermediary (A) indicates by book-entry that a "financial
asset" (as defined in Section 8-102(a)(9) of the UCC) has been credited to the
Collateral Agent's "securities account" (as defined in Section 8-501(a) of the
UCC), (B) receives a financial asset (as so defined) from the Collateral Agent
or acquires a financial asset for the Collateral Agent, and in either case,
accepts it for credit to the Collateral Agent's securities account (as so
defined), (C) becomes obligated under other law, regulation or rule to credit a
financial asset to the Collateral Agent's securities account, or (D) has agreed
that it will comply with "entitlement orders" (as defined in Section 8-102(a)(8)
of the UCC) originated by the Collateral Agent without further consent by the
"entitlement holder" (as defined in Section 8-102(a)(7) of the UCC), of a
confirmation of the purchase and the making by such securities intermediary of
entries on its books and records identifying as belonging to the Collateral
Agent of (I) a specific certificated security in the securities intermediary's
possession, (II) a quantity of securities that constitute or are part of a
fungible bulk of certificated securities in the securities intermediary's
possession, or (III) a quantity of securities that constitute or are part of a
fungible bulk of securities shown on the account of the securities intermediary
on the books of another securities intermediary; and

         (f)      in each case of delivery contemplated herein, the Collateral
Agent shall make appropriate notations on its records, and shall cause the same
to be made of the records of its nominees, indicating that securities are held
in trust pursuant to and as provided in this Agreement.

         "DEPOSITOR" means Long Beach Acceptance Receivables Corp., a Delaware
corporation, as the seller of the Receivables under this Agreement, and each of
its successors pursuant to Section 6.3.

         "DEPOSITORY AGREEMENT" means the agreement entered into among the
Depositor, the Trustee, and The Depository Trust Company, as the initial
Clearing Agency, in connection with the issuance of the Class A Certificates,
substantially in the form of Exhibit H hereto.

         "DETERMINATION DATE" means, with respect to any Distribution Date, the
fifth Business Day preceding such Distribution Date.

         "DISTRIBUTION DATE" means, for each Collection Period, the 19th day of
the following month, or if the 19th day is not a Business Day, the next
following Business Day, commencing December 21, 1998.

         "DOCUMENTATION CHECKLIST" means the form attached hereto as Exhibit K.

                                       11
<Page>

         "DRAW DATE" means, with respect to any Distribution Date, the third
Business Day (as defined in the Policy) immediately preceding such Distribution
Date.

         "ELIGIBLE ACCOUNT" means (i) a segregated trust account that is
maintained with a depository institution acceptable to the Certificate Insurer
(so long as an Insurer Default shall not have occurred and be continuing), or
(ii) a segregated direct deposit account maintained with a depository
institution or trust company organized under the laws of the United States of
America, or any of the States thereof, or the District of Columbia, having a
certificate of deposit, short-term deposit or commercial paper rating of at
least "A-1+" by Standard & Poor's and "P-1" by Moody's and (so long as an
Insurer Default shall not have occurred and be continuing) acceptable to the
Certificate Insurer. In either case, such depository institution or trust
company shall have been approved by the Controlling Party (as defined in the
Spread Account Agreement), acting in its discretion, by written notice to the
Collateral Agent.

         "ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:

         (a)      direct obligations of, and obligations fully guaranteed as to
the full and timely payment by, the United States of America;

         (b)      demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of the
United States of America or any State thereof and subject to supervision and
examination by Federal or State banking or depository institution authorities;
PROVIDED, HOWEVER, that at the time of the investment or contractual commitment
to invest therein, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of which is based on the
credit of a Person other than such depository institution or trust company)
thereof shall be rated "A-1+" by Standard & Poor's and "P-1" by Moody's;

         (c)      commercial paper that, at the time of the investment or
contractual commitment to invest therein, is rated "A-1+" by Standard & Poor's
and "P-1" by Moody's;

         (d)      bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;

         (e)      repurchase obligations with respect to any security pursuant
to a written agreement that is a direct obligation of, or fully guaranteed as to
the full and timely payment by, the United States of America or any agency or
instrumentality thereof the obligations of which are backed by the full faith
and credit of the United States of America, in either case entered into with (i)
a depository institution or trust company (acting as principal) described in
clause (b) or (ii) a depository institution or trust company the deposits of
which are insured by the Federal Deposit Insurance Corporation and whose
commercial paper or other short-term unsecured debt obligations are rated "A-

                                       12
<Page>

1+" by Standard & Poor's and "P-1" by Moody's and long-term unsecured debt
obligations are rated "AAA" by Standard & Poor's and "Aaa" by Moody's;

         (f)      with the prior written consent of the Certificate Insurer,
money market mutual funds registered under the Investment Company Act of 1940,
as amended, having a rating, at the time of such investment, from each of the
Rating Agencies in the highest investment category granted thereby; and

         (g)      any other investment as may be acceptable to the Certificate
Insurer and the Rating Agencies, as evidenced by the Certificate Insurer's prior
written consent to that effect, as may from time to time be confirmed in writing
to the Trustee by the Certificate Insurer, and only upon notification to each of
Moody's and Standard & Poor's.

         Any Eligible Investments may be purchased by or through the Trustee or
any of its Affiliates and shall include such securities issued by the Trustee or
its affiliates.

         "ELIGIBLE SERVICER" means LBAC, the Backup Servicer or another Person
which at the time of its appointment as Servicer, (i) is servicing a portfolio
of motor vehicle retail installment sale contracts and/or motor vehicle
installment loans, (ii) is legally qualified and has the capacity to service the
Receivables, (iii) has demonstrated the ability professionally and competently
to service a portfolio of motor vehicle retail installment sale contracts and/or
motor vehicle installment loans similar to the Receivables with reasonable skill
and care, and (iv) is qualified and entitled to use, pursuant to a license or
other written agreement, and agrees to maintain the confidentiality of, the
software which the Servicer uses in connection with performing its duties and
responsibilities under this Agreement or otherwise has available software which
is adequate to perform its duties and responsibilities under this Agreement.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "EVENT OF DEFAULT" means an event specified in Section 8.1.

         "EXCESS CASH FLOW CERTIFICATE" means the Excess Cash Flow Certificate
executed by the Trustee on behalf of the Trust and authenticated by the Trustee
in substantially the form set forth in Exhibit C hereto.

         "EXCESS CASH FLOW CERTIFICATEHOLDER" means the Person in whose name the
Excess Cash Flow Certificate shall be registered in the Certificate Register,
which initially shall be the Depositor.

         "EXPECTED INTEREST" means, with respect to any Collection Period, the
product of (i) one-twelfth of the weighted average of the APRs (calculated based
on a 360-day year of twelve 30-day months) of Simple Interest Receivables which
were neither 30 days or more delinquent (calculated based on a 360-day year of
twelve 30-day months) nor Defaulted Receivables as of the first day of the
current Collection Period, weighted on the

                                       13
<Page>

basis of the aggregate Principal Balances of such Simple Interest Receivables
as of the first day of the current Collection Period and (ii) the aggregate
Principal Balances of Simple Interest Receivables which were neither 30 days
or more delinquent (calculated based on a 360-day year of twelve 30-day
months) nor Defaulted Receivables as of the close of business on the last day
of the immediately preceding Collection Period.

         "FINAL FUNDING PERIOD DISTRIBUTION DATE" means the Distribution Date
immediately succeeding the date on which the Funding Period ends (or the
Distribution Date on which the Funding Period ends if the Funding Period ends on
a Distribution Date).

         "FINAL SCHEDULED DISTRIBUTION DATE" shall be the Distribution Date in
August, 2005.

         "FINANCED VEHICLE" means a new or used automobile, van, sport utility
vehicle or light duty truck, together with all accessions thereto, securing an
Obligor's indebtedness under a Receivable.

         "FRACTIONAL UNDIVIDED INTEREST" means the fractional undivided interest
in the Trust that is evidenced by a Certificate.

         "FUNDING PERIOD" means the period from the Closing Date until the
earliest to occur of (i) the date on which the remaining Pre-Funded Amount is
less than $100,000, (ii) the date on which an Event of Default under this
Agreement occurs or (iii) the close of business on February 23, 1999.

         "GCFP" means Greenwich Capital Financial Products, Inc.

         "GCFP BILL OF SALE AND ASSIGNMENT" means the Bill of Sale and
Assignment dated as of November 1, 1998 between GCFP, as assignor, and LBAC, as
assignee.

         "GCFP RELEASES" means the security interest releases executed as of
November 1, 1998 by GCFP in favor of LBAC.

         "GUARANTEED DISTRIBUTIONS" shall have the meaning assigned to such term
in the Policy.

         "GUARANTY" means the Guaranty, dated as of November 1, 1998, by AMC in
favor of the Trustee (in its capacity as such and for the benefit of the
Certificateholders), the Back-up Servicer, the Custodian, the Collateral Agent
and the Certificate Insurer, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.

         "INDEMNIFICATION AGREEMENT" means the Indemnification Agreement dated
as of November 1, 1998, among Greenwich Capital Markets, Inc. as the initial
purchaser of the Class A Certificates, the Depositor and the Certificate
Insurer, as the same may be

                                       14
<Page>

amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof.

         "INITIAL CUTOFF DATE" means the close of business on October 31, 1998.

         "INITIAL RECEIVABLES" means the Receivables initially transferred by
the Depositor to the Trust pursuant to this Agreement on the Closing Date, which
Receivables are listed on the Schedule of Receivables.

         "INSURANCE AGREEMENT" means the Insurance and Indemnity Agreement dated
as of November 1, 1998 among LBAC, the Depositor and the Certificate Insurer, as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.

         "INSURANCE AGREEMENT EVENT OF DEFAULT" means an "Event of Default" as
defined in the Insurance Agreement.

         "INSURER DEFAULT" shall mean any one of the following events shall have
occurred and be continuing:

                  (1)      the Certificate Insurer fails to make a payment
         required under the Policy;

                           (ii)     the Certificate Insurer (A) files any
         petition or commences any case or proceeding under any provision or
         chapter of the United States Bankruptcy Code or any other similar
         Federal or State law relating to insolvency, bankruptcy,
         rehabilitation, liquidation or reorganization, (B) makes a general
         assignment for the benefit of its creditors or (C) has an order for
         relief entered against it under the United States Bankruptcy Code or
         any other similar Federal or State law relating to insolvency,
         bankruptcy, rehabilitation, liquidation or reorganization which is
         final and nonappealable; or

                           (iii)    a court of competent jurisdiction, the New
         York Department of Insurance or other competent regulatory authority
         enters a final and nonappealable order, judgment or decree (A)
         appointing a custodian, trustee, agent or receiver for the Certificate
         Insurer or for all or any material portion of its property or (B)
         authorizing the taking of possession by a custodian, trustee, agent or
         receiver of the Certificate Insurer (or the taking of possession of all
         or any material portion of the property of the Certificate Insurer).

         "INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended.

         "LBAC" means Long Beach Acceptance Corp., a Delaware corporation, and
its successors.

                                       15
<Page>

         "LEGAL FILES" means, with respect to each Receivable, the following
documents held by the Custodian pursuant to Section 2.7: the fully executed
original of such Receivable with fully executed assignment from the related
Dealer to the Originator, (together with any agreements modifying the
Receivable, including, without limitation, any extension agreements), a fully
executed assignment in blank from the Originator, the Lien Certificate or the
Title Package, the fully executed original of any form legally required to be
executed by a co-signor, evidence of verification of physical damage insurance
coverage and the original of each credit application fully executed by the
related Obligor in respect of the such Receivable. Notwithstanding the
foregoing, in the event that customary procedures and practices of any
applicable state permit the use of any instrument or document in lieu of
evidence of verification of physical damage insurance coverage, the term "Legal
Files" shall be deemed to include any such instrument or document in lieu of
evidence of verification of physical damage insurance coverage.

         "LIEN" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens, and any liens
that may attach to a Financed Vehicle by operation of law.

         "LIEN CERTIFICATE" means, with respect to a Financed Vehicle, an
original certificate of title, certificate of lien or other notification issued
by the Registrar of Titles of the applicable state to a secured party or such
other evidence acceptable to the Registrar of Titles of the applicable state, in
each case, which indicates that the lien of the secured party on the Financed
Vehicle is recorded on the original certificate of title. In any jurisdiction in
which the original certificate of title is required to be given to the Obligor,
the terms "Lien Certificate" shall mean only a certificate or notification
issued to a secured party.

         "LIQUIDATED RECEIVABLE" means any Receivable with respect to which the
earlier of any of the following shall have occurred (without duplication): (i)
the Receivable has been liquidated by the Servicer through the sale of the
Financed Vehicle, (ii) the related Obligor has failed to pay at least 95% of a
Scheduled Payment by its due date and such failure continues for 60 days
(calculated based on a 360-day year of twelve 30-day months) after the first day
on which the Servicer may legally sell or otherwise dispose of the related
Financed Vehicle following its repossession, (iii) the related Obligor fails to
pay at least 95% of a Scheduled Payment by its due date and such failure
continues for 150 or more consecutive days (calculated based on a 360-day year
of twelve 30-day months) as of the end of a Collection Period or (iv) proceeds
have been received which, in the Servicer's good faith judgment, constitute the
final amounts recoverable in respect of such Receivable.

         "LIQUIDATION PROCEEDS" means, with respect to a Liquidated Receivable,
the monies collected from whatever source during the Collection Period in which
such Receivable became a Liquidated Receivable, net of the reasonable costs of
liquidation, including the unreimbursed reasonable expenses incurred by the
Servicer in connection

                                       16
<Page>

with (i) such liquidation and (ii) the liquidation of any other Liquidated
Receivable with respect to which the Servicer believes in good faith that any
additional monies are unlikely to be collected, plus any amounts required by
law to be remitted to the Obligor; PROVIDED, HOWEVER, that the Liquidation
Proceeds with respect to any Receivable shall in no event be less than zero.

         "LOCK-BOX" means the post-office box or boxes, maintained pursuant to
Section 4.1, into which the Servicer shall direct each Obligor under each
Receivable to forward all payments in respect of such Receivable.

         "LOCK-BOX ACCOUNT" means the segregated account or accounts designated
as such, established and maintained pursuant to Section 4.1.

         "LOCK-BOX AGREEMENT" means the Tri-Party Remittance Processing
Agreement, dated as of March 31, 1997, among the Servicer, the Lock-Box
Processor and the Trustee, as amended, modified or supplemented from time to
time in accordance with the terms thereof, unless such Agreement shall be
terminated in accordance with its terms or the terms hereof, in which event
"Lock-Box Agreement" shall mean such other agreement, in form and substance
acceptable to the Certificate Insurer, among the Servicer, the Lock-Box
Processor and the Trustee.

         "LOCK-BOX BANK" means, as of any date, a depository institution named
by the Servicer and acceptable to the Certificate Insurer at which a Lock-Box
Account is established and maintained as of such date.

         "LOCK-BOX PROCESSOR" means initially Chase Texas and its successors or
any replacement or subcontracted Lock-Box Processor acceptable to the
Certificate Insurer under the Lock-Box Agreement.

         "MONTHLY DEALER PARTICIPATION FEE" means, with respect to any
Distribution Date and Monthly Dealer Participation Fee Receivable, the portion
of the related dealer participation fee earned during the related Collection
Period as specified in the related Dealer Agreement.

         "MONTHLY DEALER PARTICIPATION FEE DISTRIBUTABLE AMOUNT" means, with
respect to any Distribution Date, an amount equal to the aggregate collections
allocable to Monthly Dealer Participation Fees actually received in respect of
all Monthly Dealer Participation Fee Receivables for the related Collection
Period.

         "MONTHLY DEALER PARTICIPATION FEE RECEIVABLE" means any Receivable to
be paid in accordance with the Originator's "As-Earned Program" and designated
as such on the Schedule of Receivables.

         "MOODY'S" means Moody's Investors Service, Inc., and any successors
thereof.

                                       17
<Page>

         "NEGATIVE CARRY AMOUNT" means, with respect to any Distribution Date
relating to the Funding Period, the amount, if any, by which (i) the Pre-Funding
Interest Amount exceeds (ii) the earnings received by the Trustee for such
Collection Period from investment of such Pre-Funded Amount.

         "NON-REGISTERED CERTIFICATE" means a Certificate other than a
Registered Certificate.

         "NOTICE OF CLAIM" means written or telecopied notice from the Trustee
to the Certificate Insurer, substantially in the form of Exhibit A to the
Policy.

         "OBLIGOR" on a Receivable means the purchaser or co-purchasers of the
related Financed Vehicle or any other Person who owes or may be liable for
payments under such Receivable.

         "OFFICER'S CERTIFICATE" means a certificate signed by the chairman of
the board, the president, any vice chairman of the board, any vice president,
the treasurer, the controller or any assistant treasurer or any assistant
controller of LBAC, the Depositor or the Servicer, as appropriate.

         "OPINION OF COUNSEL" means a written opinion of counsel who may but
need not be counsel to the Depositor or the Servicer, which counsel shall be
acceptable to the Trustee and the Certificate Insurer and which opinion shall be
acceptable to the Trustee and the Certificate Insurer in form and substance.

         "OPTIONAL PURCHASE PERCENTAGE" means 10%.

         "ORIGINAL POOL BALANCE" means $91,815,249.32.

         "ORIGINAL PRE-FUNDED AMOUNT" means $18,184,750.68.

         "ORIGINATION DATE" means, with respect to any Receivable, the date
specified in such Receivable as the date of execution thereof.

         "ORIGINATOR" means LBAC, as originator of the Receivables.

         "PAYABLE" means, with respect to any Precomputed Receivable, the sum of
(i) any amount received from or on behalf of the related Obligor which, pursuant
to the Payment Application Procedures, is to be applied as a partial principal
prepayment which is not to be applied to Scheduled Payments on such Receivable
until the earlier of (a) such time as such application would result in such
Precomputed Receivable being paid in full, including the payment of late charges
and miscellaneous fees and (b) the Collection Period in which such Precomputed
Receivable became a Liquidated Receivable, and (ii) any amounts received by the
Servicer in respect of any rebatable items (such as amounts in respect of
cancelled service contracts, extended warranties or insurance policies and
similar items, the cost of which was included in the Amount Financed for such

                                       18
<Page>

Precomputed Receivable) relating to such Precomputed Receivable which is not to
be applied as a prepayment of principal until the earlier of (a) such time as
such application would result in such Precomputed Receivable being paid in full,
including the payment of late charges and miscellaneous fees and (b) the
Collection Period in which such Precomputed Receivable became a Liquidated
Receivable.

         "PAYAHEAD" on a Precomputed Receivable means the amount, including,
without limitation, any Payable, as of the close of business on the last day of
a Collection Period, determined in accordance with Section 4.4 with respect to
such Receivable.

         "PAYAHEAD ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 4.1. The Payahead Account shall be held by
the Trustee but shall be primarily for the benefit of the Obligors of
Precomputed Receivables and shall not be part of the Trust.

         "PAYAHEAD BALANCE" on a Precomputed Receivable means the sum, as of the
close of business on the last day of a Collection Period, of all Payaheads made
by or on behalf of the Obligor with respect to such Precomputed Receivable, as
reduced by applications of previous Payaheads with respect to such Precomputed
Receivable, pursuant to Sections 4.3 and 4.4.

         "PAYING AGENT" has the meaning assigned to such term in Section 5.2.

         "PAYMENT APPLICATION PROCEDURES" means the Payment Application
Procedures attached hereto as Exhibit I.

         "PAYMENT DEFERMENT AND DUE DATE CHANGE POLICIES" means the Payment
Deferment Policy and the Due Date Change Policy attached hereto as Exhibit J, as
such policies may be amended from time to time, with the prior written consent
of the Certificate Insurer, upon delivery to the Trustee of the Opinion of
Counsel required by Section 3.2.

         "PERSON" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.

         "PLAN" means any Person that is (i) an "employee benefit plan" (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a "plan" (as defined in Section 4975(e)(1) of the Code) that is
subject to Section 4975 of the Code or (iii) an entity whose underlying assets
include assets of a plan described in (i) or (ii) above by reason of such plan's
investment in the entity.

         "POLICY" means the financial guaranty insurance policy No. 50744-N
issued by the Certificate Insurer for the benefit of the Holders of the Class A
Certificates issued hereunder, including any endorsements thereto.

                                       19
<Page>

         "POLICY CLAIM AMOUNT" shall have the meaning set forth in Section
4.15(a).

         "POLICY PAYMENTS ACCOUNT" means the account designated as the Policy
Payments Account in, and which is established and maintained pursuant to,
Section 4.1.

         "POOL BALANCE" as of the close of business on the last day of a
Collection Period means the aggregate Principal Balance of the Receivables
(excluding Liquidated Receivables and Purchased Receivables).

         "PRECOMPUTED RECEIVABLE" means any Actuarial Receivable or Rule of 78's
Receivable.

         "PREFERENCE CLAIM" shall have the meaning set forth in Section 4.16(b).

         "PRE-FUNDED AMOUNT" means, with respect to (i) the first Distribution
Date, the Original Pre-Funded Amount, and (ii) any Distribution Date thereafter,
the amount on deposit in the Pre-Funding Account (not including any investment
earnings thereon).

         "PRE-FUNDING ACCOUNT" means the account designated as such and
established and maintained pursuant to Section 4.1(b).

         "PRE-FUNDING INTEREST AMOUNT" means, with respect to any Distribution
Date relating to the Funding Period, an amount equal to one month's interest on
the Pre-Funded Amount on deposit in the Pre-Funding Account as of the last day
of the related Collection Period at a rate equal to the sum of (a) the Class A
Pass-Through Rate, (b) the Trustee Fee Rate and (c) the rate at which the
Premium for the Policy is calculated.

         "PREMIUM" has the meaning assigned to such term in the Insurance
Agreement.

         "PREMIUM LETTER" means the letter agreement dated the Closing Date
among AMC, LBAC, the Trustee and the Certificate Insurer referring to payment of
the Premium.

         "PREPAYMENT AMOUNT" means, as of the Final Funding Period Distribution
Date, the Pre-Funded Amount.

         "PRINCIPAL BALANCE" of a Receivable, as of the close of business on the
last day of a Collection Period, means the Amount Financed minus the sum of the
following amounts (without duplication): (i) in the case of a Precomputed
Receivable, that portion of all Scheduled Payments actually received on or prior
to such day allocable to principal using the actuarial or constant yield method
(excluding Payaheads retained in the Payahead Account, but including Payaheads
that have been applied to reduce the Principal Balance of such Receivable); (ii)
in the case of a Simple Interest Receivable, that portion of all Scheduled
Payments actually received on or prior to such day allocable to principal using
the Simple Interest Method; (iii) any payment of the Purchase Amount

                                       20
<Page>

with respect to the Receivable allocable to principal; (iv) any Cram Down
Loss in respect of such Receivable; and (v) any prepayment in full or any
partial prepayment applied to reduce the Principal Balance of the Receivable;
PROVIDED, HOWEVER, that the Principal Balance of a Receivable that has become
a Liquidated Receivable shall equal zero.

         "PURCHASE AGREEMENT" means the Purchase Agreement dated as of November
1, 1998, between the Depositor and LBAC, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof, relating to
the purchase of the Receivables by the Depositor from LBAC.

         "PURCHASE AMOUNT" means, with respect to a Receivable, the amount, as
of the close of business on the last day of a Collection Period, required to
prepay in full such Receivable (after giving effect to the application of any
Liquidation Proceeds and Recoveries collected in respect of such Receivable on
or prior to the last day of such Collection Period) under the terms thereof
including accrued and unpaid interest thereon to the end of the month of
purchase. The Purchase Amount relating to any Receivable that became a
Liquidated Receivable during any Collection Period preceding the month of
purchase shall be treated as Recoveries in respect of such Receivable.

         "PURCHASED RECEIVABLE" means a Receivable purchased as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 3.7 or by LBAC pursuant to Section 2.7.

         "RATED ENTITY" means a Person whose long-term unsecured debt
obligations (at the time of the transfer under Section 5.5) are rated within the
investment grade categories of each Rating Agency.

         "RATING AGENCY" means Standard & Poor's and Moody's and any successors
thereof. If such organization or successor is no longer in existence, "Rating
Agency" shall be such nationally recognized statistical rating organization or
other comparable Person designated by the Certificate Insurer, notice of which
designation shall be given to the Trustee and the Servicer.

         "RECEIVABLE" means each retail installment sale contract for a Financed
Vehicle which shall appear on the Schedule of Receivables (which Schedule of
Receivables may be in the form of microfiche) and all rights and obligations
thereunder except for Receivables that shall have become Purchased Receivables.

         "RECEIVABLE FILES" means the documents specified in Section 2.6(b).

         "RECORD DATE" means, with respect to any Distribution Date or
Determination Date, the close of business on the last day of the calendar month
immediately preceding the month in which such Distribution Date or Determination
Date occurs.

         "RECOVERIES" means, with respect to a Liquidated Receivable, the monies
collected from whatever source during any Collection Period following the
Collection

                                       21
<Page>

Period in which such Receivable became a Liquidated Receivable, net of the
reasonable costs of liquidation, including the unreimbursed reasonable
expenses incurred by the Servicer in connection with (i) such liquidation and
(ii) the liquidation of any other Liquidated Receivable with respect to which
the Servicer believes in good faith that any additional monies are unlikely
to be collected, plus any amounts required by law to be remitted to the
Obligor.

         "REGISTERED CERTIFICATE" means a Certificate that was sold pursuant to
a registration statement that has been filed and has become effective under the
Securities Act.

         "REGISTRAR OF TITLES" means, with respect to any state, the
governmental agency or body responsible for the registration of, and the
issuance of certificates of title relating to, motor vehicles and liens thereon.

         "REIMBURSEMENT OBLIGATIONS" means, with respect to each Distribution
Date, any amounts due to the Certificate Insurer under the terms hereof or under
the Insurance Agreement and with respect to which the Certificate Insurer has
not been previously paid whether or not LBAC is obligated to pay such amounts.

         "RESPONSIBLE OFFICER", as to the Trustee and the Back-up Servicer or at
such time as Chase Texas is the Servicer, the Servicer, an officer in Global
Trust Services of the Trustee, with knowledge of the Trust.

         "RULE OF 78'S RECEIVABLE" means any Receivable under which the portion
of a payment allocable to earned interest (which may be referred to in the
related retail installment sale contract as an add-on finance charge) and the
portion allocable to the Amount Financed is determined according to the method
commonly referred to as the "Rule of 78's" method, the "sum of periodic
balances" method, the "sum of monthly balances" method or any equivalent method.

         "SCHEDULED PAYMENT" means, for any Collection Period for any
Receivable, the amount indicated in such Receivable as required to be paid by
the Obligor in such Collection Period. If after the Closing Date in the case of
an Initial Receivable, or the related Subsequent Transfer Date in the case of a
Subsequent Receivable, the Obligor's obligation under such Receivable with
respect to a Collection Period has been modified so as to differ from the amount
specified in such Receivable as a result of (i) the order of a court in an
insolvency proceeding involving the Obligor, (ii) pursuant to the Soldiers' and
Sailors' Civil Relief Act of 1940, as amended or (iii) modifications or
extensions of the Receivable permitted by Section 3.2, the Scheduled Payment
with respect to such Collection Period shall refer to the Obligor's payment
obligation with respect to such Collection Period as so modified.

         "SCHEDULE OF RECEIVABLES" means the Schedule of Receivables attached as
Schedule A to this Agreement, as the same may be amended or supplemented
(including, without limitation, pursuant to any Transfer Agreement) from time to
time.

                                       22
<Page>

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SERVICER" means LBAC as the servicer of the Receivables and each
successor to LBAC (in the same capacity) pursuant to Section 7.3(a) or 8.2,
other than with respect to representations and warranties of the Servicer under
Section 7.1.

         "SERVICER TERMINATION SIDE LETTER" means the letter from the
Certificate Insurer to the Servicer, the Depositor and the Trustee dated as of
November 1, 1998, with respect to the renewal term of the Servicer.

         "SERVICER'S CERTIFICATE" means a certificate completed and executed by
a Servicing Officer pursuant to Section 3.9, substantially in the form of
Exhibit E-1.

         "SERVICING ASSUMPTION AGREEMENT" means the Servicing Assumption
Agreement, dated as of November 1, 1998, among LBAC, the Back-up Servicer and
the Trustee, as the same may be amended or supplemented from time to time in
accordance with its terms.

         "SERVICING FEE" means the fee payable to the Servicer for services
rendered during the respective Collection Period, determined pursuant to Section
3.8.

         "SERVICING FEE RATE" means, with respect to any Distribution Date, the
weighted average of the Class Servicing Fee Rates for the Receivables weighted
on the basis of the Principal Balance of the Receivables of each Class as of the
close of business on the last day of the second preceding Collection Period;
PROVIDED, HOWEVER, that if the Back-up Servicer or another entity becomes the
successor Servicer, the "Servicing Fee Rate" shall be equal to a rate not to
exceed the Successor Servicing Fee Rate.

         "SERVICING OFFICER" means any person whose name appears on a list of
Servicing Officers delivered by the Servicer to the Trustee and the Certificate
Insurer, as the same may be amended from time to time.

         "SIMPLE INTEREST ADVANCE" means the amount of interest, as of the close
of business on the last day of a Collection Period, which the Servicer is
required to advance on the Simple Interest Receivables pursuant to Section 4.18.

         "SIMPLE INTEREST EXCESS" means, for any Collection Period, the excess,
if any, of (i) Collected Interest over (ii) Expected Interest for such
Collection Period.

         "SIMPLE INTEREST METHOD" means the method of allocating a fixed level
payment between principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the APR
multiplied by the unpaid principal balance multiplied by the period of time
(expressed as a fraction of a year, based on the actual number of days in the
calendar month and the actual number of days in the calendar year) elapsed since
the preceding payment of interest was made and the remainder of such payment is
allocable to principal.

                                       23
<Page>

         "SIMPLE INTEREST RECEIVABLE" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.

         "SIMPLE INTEREST SHORTFALL" means, for any Collection Period, the
excess, if any, of (i) Expected Interest over (ii) Collected Interest for such
Collection Period.

         "SPREAD ACCOUNT" means the Spread Account established and maintained
pursuant to the Spread Account Agreement.

         "SPREAD ACCOUNT AGREEMENT" means the Master Spread Account Agreement
dated as of November 1, 1998, among the Depositor, the Certificate Insurer, the
Trustee and the Collateral Agent, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.

         "STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. and any successors thereof.

         "STOCK PLEDGE AGREEMENT" means the Stock Pledge and Collateral Agency
Agreement dated as of March 1, 1997, among LBAC, the Certificate Insurer, the
Trustee and the Collateral Agent, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.

         "STATE" means any State of the United States of America, or the
District of Columbia.

         "SUBSEQUENT CUTOFF DATE" means the close of business on the last day of
the calendar month immediately preceding the related Subsequent Transfer Date,
as set forth in the related Transfer Agreement.

         "SUBSEQUENT RECEIVABLES" means the Receivables transferred by the
Depositor to the Trust pursuant to a Transfer Agreement on the related
Subsequent Transfer Date, which Receivables will be listed on Schedule A to the
related Transfer Agreement and will be treated as incorporated by reference in
the Schedule of Receivables pursuant to the related Transfer Agreement.

         "SUBSEQUENT SPREAD ACCOUNT DEPOSIT" shall have the meaning specified in
the Spread Account Agreement.

         "SUBSEQUENT TRANSFER DATE" shall have the meaning specified in the
related Transfer Agreement.

         "SUCCESSOR SERVICING FEE RATE" means, with respect to any Distribution
Date, the weighted average of the Class Successor Servicing Fee Rates for the
Receivables, weighted on the basis of the Principal Balance of Receivables of
each Class as of the close of business on the last day of the second preceding
Collection Period.

                                       24
<Page>

         "TEXAS UCC" shall have the meaning set forth in Section 2.10.

         "TITLE PACKAGE" means (i) a Lien Certificate noting the lien of the
Originator of the Financed Vehicle, (ii) evidence that documentation has been
submitted to the appropriate state motor vehicle authority to obtain a Lien
Certificate noting the lien of the Originator of the Financed Vehicle or (iii) a
Dealer Title Guaranty, if any.

         "TOTAL DISTRIBUTION AMOUNT" shall mean, for each Distribution Date, the
sum of the following amounts (without duplication) with respect to the related
Collection Period: (i) all collections on Receivables (including amounts
transferred from the Payahead Account to the Certificate Account pursuant to
Section 4.6(a)(ii) and amounts received in connection with extensions, rebates
or adjustments on Receivables granted by the Servicer pursuant to Section 3.2,
but excluding amounts deposited in the Payahead Account); (ii) Liquidation
Proceeds received during such Collection Period with respect to Receivables that
became Liquidated Receivables during such Collection Period in accordance with
the Servicer's customary servicing procedures; (iii) proceeds from Recoveries
with respect to Liquidated Receivables; (iv) the Purchase Amount of each
Receivable that became a Purchased Receivable as of the last day of such
Collection Period; (v) any earnings on investments of funds in the Collection
Account, the Pre-Funding Account (only to the extent required to cover the
Pre-Funding Interest Amount as set forth in Section 4.1(b)) and the Payahead
Account pursuant to Section 4.1(b); (vi) the amount of any Simple Interest
Advance actually deposited to the Collection Account by the Servicer pursuant to
Section 4.18 with respect to such Collection Period; and (vii) the Negative
Carry Amount, if any, for such Collection Period to the extent it is deposited
to the Certificate Account pursuant to Section 4.6(a)(iv); PROVIDED, that the
Total Distribution Amount with respect to any Distribution Date shall not
include any Simple Interest Excess remitted to the Servicer or deposited in the
Excess Cash Flow Sub-account pursuant to Section 4.18.

         "TRANSFER AGREEMENT" means each Transfer Agreement, substantially in
the form of Exhibit N, dated as of the related Subsequent Cutoff Date, among the
Depositor, the Originator and the Trustee, pursuant to which Subsequent
Receivables are conveyed to the Trust, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with the terms thereof.

         "TRIGGER EVENT" shall have the meaning assigned to such term in the
Spread Account Agreement.

         "TRUST" means the trust created by this Agreement, the estate of which
shall consist of the Trust Assets.

         "TRUST ASSETS" means that property set forth in items (i) through (xi)
in Section 2.2(a), the Policy for the benefit of the Class A Certificateholders
and that property set forth in items (i) through (x) of Section 2.2(b);
PROVIDED, that the Payahead Account, the Spread Account and the Capitalized
Interest Account shall not under any circumstances be deemed to be a part of or
otherwise includible in the Trust or the Trust Assets.

                                       25
<Page>

         "TRUSTEE" means the Person acting as Trustee under this Agreement, its
successor-in-interest, and any successor trustee pursuant to Section 9.10.

         "TRUSTEE FEE" means the monthly fee payable on each Distribution Date
to the Trustee in its capacities as Trustee, Custodian and Collateral Agent
hereunder for services rendered during the preceding Collection Period in an
amount equal to the product of (i) one twelfth of the Trustee Fee Rate and (ii)
the Class A Certificate Balance as of the last day of the second preceding
Collection Period; PROVIDED, HOWEVER, that with respect to the initial
Distribution Date, the Trustee Fee will equal the product of one-twelfth of the
Trustee Fee Rate and the initial Class A Certificate Balance.

         "TRUSTEE FEE RATE" means 0.026% per annum.

         "TRUSTEE OFFICER" means any vice president, any assistant vice
president, any assistant secretary, any assistant treasurer, any trust officer,
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.

         "TRUSTEE'S CERTIFICATE" means a certificate completed and executed for
the Trustee by a Trustee Officer pursuant to Section 9.2, substantially in the
form of, in the case of an assignment to LBAC, Exhibit D-1 and in the case of an
assignment to the Servicer, Exhibit D-2.

         "UCC" means the Uniform Commercial Code as in effect in the respective
jurisdiction.

         "VSI POLICY" means, as of the Closing Date, (i) the vendor's single
interest physical damage insurance policy No. 1-5529-1344 NJ issued by BALBOA
Life and Casualty, (ii) the vendor's single interest physical damage insurance
policy No. LS 700 9-0254 issued by Old Republic, (iii) the vendor's single
interest physical damage insurance policy No. C1M2187817 issued by Utica
National Insurance Group or (iv) the vendor's single interest physical damage
insurance policy No. UL6160 issued by Ohio Indemnity Company, as applicable,
with respect to the Financed Vehicles covered thereby, in each case in which
LBAC is the named insured and the Trustee is an additional named insured;
PROVIDED, that in the reasonable discretion of the Servicer any of the
aforementioned policies may be cancelled and replaced with a substitute
insurance policy, or, with the prior written consent of the Certificate Insurer,
the Servicer may self-insure against the risk previously covered by the
cancelled policy.

         SECTION 1.2. USAGE OF TERMS. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto

                                       26
<Page>

or changes therein entered into in accordance with their respective terms and
not prohibited by this Agreement; references to Persons include their
permitted successors and assigns; and the term "including" means "including
without limitation."

         SECTION 1.3. SECTION REFERENCES. All section references shall be to
Sections in this Agreement.

         SECTION 1.4. LIMITATION ON TRUST ACTIVITIES. Notwithstanding any other
provision in this Agreement to the contrary, the Trustee shall have no power to
vary the investment of the Certificateholders within the meaning of Treasury
Department Regulation ss. 301.7701-4(c) or to cause the Trust to engage in
business except as expressly set forth herein, or in the documents and
instruments executed in connection herewith, unless the Trustee and the
Certificate Insurer shall have received an Opinion of Counsel that such activity
shall not cause the Trust to be an association taxable as a corporation for
federal income tax purposes.

         SECTION 1.5. CALCULATIONS. All calculations of the amount of interest
accrued on the Certificates and all calculations of the amount of the Servicing
Fee, the Back-up Servicer Fee, and the Trustee Fee shall be made on the basis of
a 360-day year consisting of twelve 30-day months. All references to the
Principal Balance of a Receivable as of the last day of a Collection Period
shall refer to the close of business on such day.

         SECTION 1.6. ACTION BY OR CONSENT OF CERTIFICATEHOLDERS. Whenever any
provision of this Agreement refers to action to be taken, or consented to, by
Certificateholders, such provision shall be deemed to refer to
Certificateholders of record as of the Record Date immediately preceding the
date on which such action is to be taken, or consent given, by
Certificateholders. Solely for the purposes of any action to be taken or
consented to by Certificateholders, any Certificate registered in the name of
the Depositor, LBAC, the Servicer or any Affiliate thereof shall be deemed not
to be outstanding and shall not be taken into account in determining whether the
requisite interest necessary to effect any such action or consent has been
obtained; PROVIDED, HOWEVER, that, solely for the purpose of determining whether
the Trustee is entitled to rely upon any such action or consent, only
Certificates which the Trustee knows to be so owned shall be so disregarded.

         SECTION 1.7. MATERIAL ADVERSE EFFECT. Whenever a determination is to be
made under this Agreement as to whether a given event, action, course of conduct
or set of facts or circumstances could or would have a material adverse effect
on the Trust or the Certificateholders (or any similar or analogous
determination), such determination shall be made without taking into account the
insurance provided by the Policy. Whenever a determination is to be made under
this Agreement whether a breach of a representation, warranty or covenant has or
could have a material adverse effect on a Receivable or the interest therein of
the Trust, the Certificateholders or the Certificate Insurer (or any similar or
analogous determination), such determination shall be made by

                                       27
<Page>

the Certificate Insurer in its sole discretion, so long as no Insurer Default
shall have occurred and be continuing.

                                   ARTICLE II

                          THE TRUST AND TRUST PROPERTY

         SECTION 2.1. CREATION OF TRUST. Upon the execution of this Agreement by
the parties hereto, there is hereby created the Long Beach Acceptance Auto
Grantor Trust 1998-2.

         SECTION 2.2. CONVEYANCE OF RECEIVABLES. ii) In consideration of the
Trustee's delivery of Certificates in an aggregate principal amount equal to the
sum of the Original Pool Balance and the Pre-Funded Amount to or upon the
written order of the Depositor, the Depositor does hereby sell, transfer,
assign, set over and otherwise convey to the Trustee, in trust for the benefit
of the Certificateholders, without recourse, all right, title and interest of
the Depositor in and to:

                           (i)      the Initial Receivables listed in Schedule A
         hereto and (A) with respect to any such Initial Receivables that are
         Precomputed Receivables, all monies received thereon on and after the
         Initial Cutoff Date (including Scheduled Payments due or to become due
         thereon on and after the Initial Cutoff Date and Scheduled Payments due
         prior to the Initial Cutoff Date but received on or after the Initial
         Cutoff Date), principal prepayments relating to such Scheduled Payments
         due on or after the Initial Cutoff Date but received by the Depositor
         or LBAC before the Initial Cutoff Date, and any Payaheads received with
         respect to payments due on the Initial Receivables on or after the
         Initial Cutoff Date (which Payaheads shall be held in the Payahead
         Account until the Collection Period in which such payments are actually
         due with respect to the related Receivable, at which time such
         Payaheads shall be applied as a component of the Total Distribution
         Amount), (B) with respect to any such Initial Receivables that are
         Simple Interest Receivables, all monies received thereunder on and
         after the Initial Cutoff Date (including Scheduled Payments due before
         the Initial Cutoff Date but received by the Depositor or LBAC on or
         after the Initial Cutoff Date) and (C) all Liquidation Proceeds and
         Recoveries received with respect to such Initial Receivables;

                           (ii)     the security interests in the related
         Financed Vehicles granted by the related Obligors pursuant to the
         Initial Receivables and any other interest of the Depositor in such
         Financed Vehicles, including, without limitation, the certificates of
         title and any other evidence of ownership with respect to such Financed
         Vehicles;

                           (iii)    any proceeds from claims on any physical
         damage, credit life and credit accident and health insurance policies
         or certificates or the VSI

                                       28
<Page>

         Policy, if any, relating to the related Financed Vehicles or the
         related Obligors, including any rebates and premiums;

                           (iv)     property (including the right to receive
         future Liquidation Proceeds) that secures an Initial Receivable and
         that has been acquired by or on behalf of the Trust pursuant to the
         liquidation of such Initial Receivable;

                           (v)      the Purchase Agreement and the Guaranty
         including, without limitation, a direct right to cause LBAC to purchase
         Initial Receivables from the Trust upon the occurrence of a breach of
         any of the representations and warranties contained in Section 3.2(b)
         of the Purchase Agreement and/or Section 4 of the related Transfer
         Agreement, or the failure of LBAC to timely comply with its obligations
         pursuant to Section 5.5 of the Purchase Agreement;

                           (vi)     refunds for the costs of extended service
         contracts with respect to the related Financed Vehicles, refunds of
         unearned premiums with respect to credit life and credit accident and
         health insurance policies or certificates covering a related Obligor or
         Financed Vehicle or his or her obligations with respect to such
         Financed Vehicle and any recourse to Dealers for any of the foregoing;

                           (vii)    the Legal Files and the Receivable Files
         related to each Initial Receivable and any and all other documents that
         LBAC keeps on file in accordance with its customary procedures relating
         to the Initial Receivables, the related Obligors or the related
         Financed Vehicles;

                           (viii)   all amounts and property from time to time
         held in or credited to the Collection Account, the Pre-Funding Account
         or the Certificate Account;

                           (ix)     all amounts and property from time to time
         held in or credited to the Lock-Box Account, to the extent such amounts
         and property relate to the Initial Receivables;

                           (x)      any proceeds from recourse against Dealers
         (other than any Chargeback Obligations), including, without limitation,
         any Dealer Title Guaranties with respect to the Initial Receivables,
         with respect to the sale of the Initial Receivables; and

                           (xi)     the proceeds of any and all of the
         foregoing.

         In addition, the Depositor shall cause the Policy to be issued to and
delivered to the Trust for the benefit of the Class A Certificateholders.

         (b)      Subject to the conditions set forth in Section 2.2(c) and the
related Transfer Agreement, in consideration of the Trustee's delivery to or
upon the order of the Depositor of the purchase price for the Subsequent
Receivables, in each case as described

                                       29
<Page>

below and set forth in the related Transfer Agreement, the Depositor shall on
each Subsequent Transfer Date sell, transfer, assign, set over and otherwise
convey to the Trustee, in trust for the benefit of the Certificateholders,
without recourse, all right, title and interest of the Depositor in and to:

                           (i)      the Subsequent Receivables listed in
         Schedule A to the related Transfer Agreement and (A) with respect to
         any such Subsequent Receivables that are Precomputed Receivables, all
         monies received thereon on and after the related Subsequent Cutoff Date
         (including Scheduled Payments due or to become due thereon on and after
         the related Subsequent Cutoff Date and Scheduled Payments due prior to
         the related Subsequent Cutoff Date but received on or after the related
         Subsequent Cutoff Date), principal prepayments relating to Scheduled
         Payments due on or after the related Subsequent Cutoff Date but
         received by the Depositor or LBAC before the related Subsequent Cutoff
         Date, and any Payaheads received with respect to any payments due on
         such Receivable on or after the related Subsequent Cutoff Date (which
         Payaheads shall be held in the Payahead Account until the Collection
         Period in which such payments are actually due with respect to the
         related Receivable, at which time such Payaheads shall be applied as
         part of the Total Distribution Amount), (B) with respect to any such
         Subsequent Receivables that are Simple Interest Receivables, all monies
         received thereunder on and after the related Subsequent Cutoff Date
         (including Scheduled Payments due before the related Subsequent Cutoff
         Date but received by the Depositor or LBAC on or after the related
         Subsequent Cutoff Date) and (C) all Liquidation Proceeds and Recoveries
         received with respect to such Subsequent Receivables;

                           (ii)     the security interests in the related
         Financed Vehicles granted by the related Obligors pursuant to such
         Subsequent Receivables and any other interest of the Depositor in such
         Financed Vehicles, including, without limitation, the certificates of
         title and any other evidence of ownership with respect to such Financed
         Vehicles;

                           (iii)    any proceeds from claims on any physical
         damage, credit life and credit accident and health insurance policies
         or certificates or the VSI Policy, if any, relating to the related
         Financed Vehicles or the related Obligors, including any rebates and
         premiums;

                           (iv)     property (including the right to receive
         future Liquidation Proceeds) that secures a Subsequent Receivable and
         that has been acquired by or on behalf of the Trust pursuant to the
         liquidation of such Subsequent Receivable;

                           (v)      the related Transfer Agreement, the Purchase
         Agreement and the Guaranty, including, without limitation, a direct
         right to cause LBAC to purchase Subsequent Receivables from the Trust
         upon the occurrence of a breach of any of the representations and
         warranties contained in Section 3.2(b) of the Purchase Agreement, or
         Section 4 of the related Transfer Agreement, or the

                                       30
<Page>

         failure of LBAC to timely comply with its obligations pursuant to
         Section 5.5 of the Purchase Agreement;

                           (vi)     refunds for the costs of extended service
         contracts with respect to the related Financed Vehicles, refunds of
         unearned premiums with respect to credit life and credit accident and
         health insurance policies or certificates covering a related Obligor or
         Financed Vehicle or his or her obligations with respect to a related
         Financed Vehicle and any recourse to Dealers for any of the foregoing;

                           (vii)    the Legal Files and the Receivable Files
         related to each such Subsequent Receivable and any and all other
         documents that LBAC keeps on file in accordance with its customary
         procedures relating to such Subsequent Receivables, the related
         Obligors or the related Financed Vehicles;

                           (viii)   all amounts and property from time to time
         held in or credited to the Lock-Box Account, to the extent such amounts
         and property relate to such Subsequent Receivables;

                           (ix)     any proceeds from recourse against Dealers
         (other than any Chargeback Obligations), including, without limitation,
         any Dealer Title Guaranties with respect to such Subsequent
         Receivables, with respect to the sale of such Subsequent Receivables;
         and

                           (x)      the proceeds of any and all of the
         foregoing.

         The purchase price to be paid by the Trust on each Subsequent Transfer
Date for the Subsequent Receivables so sold shall be set forth in the related
Transfer Agreement and shall be paid from monies released from the Pre-Funding
Account pursuant to Section 4.19(b). Such purchase price shall equal the
aggregate Principal Balance of such Subsequent Receivables as of the related
Subsequent Cutoff Date.

         (c)      The Depositor shall transfer to the Trustee the Subsequent
Receivables and the other property and rights related thereto described in
Section 2.2(b) only upon the prior written consent of the Certificate Insurer
acting in its sole and absolute discretion and the satisfaction of each of the
following conditions on or prior to the related Subsequent Transfer Date:

                           (i)      the Depositor shall have provided the
         Trustee, the Certificate Insurer and each Rating Agency with an
         Addition Notice not later than five Business Days prior to the related
         Subsequent Transfer Date and shall also have provided the Trustee and
         the Certificate Insurer with an electronic transmission of the
         information on the related Subsequent Transfer Receivables set forth in
         such Addition Notice in a format acceptable to each of the Trustee and
         the Certificate Insurer no later than such fifth Business Day prior to
         the related Subsequent Transfer Date;

                                       31
<Page>

                           (ii)     the Depositor shall have delivered to the
         Trustee an executed Transfer Agreement in substantially the form of
         Exhibit N hereto, which shall include a list of the Subsequent
         Receivables so transferred attached thereto as Schedule A, and a copy
         thereof to the Certificate Insurer and each Rating Agency;

                           (iii)    the Depositor shall have caused the Servicer
         to deposit in the Collection Account all collections on or in respect
         of the Subsequent Receivables (to the extent conveyed to the Trust as
         specified in Section 2.2(b)) received prior to the related Subsequent
         Transfer Date;

                           (iv)     the Depositor shall have deposited or caused
         to be deposited the related Subsequent Spread Account Deposit into the
         Spread Account pursuant to Section 4.12;

                           (v)      as of each Subsequent Transfer Date, neither
         the Servicer nor the Depositor was insolvent nor will either of them
         have been made insolvent by such transfer nor is any of them aware of
         any pending insolvency;

                           (vi)     such addition will not result in a material
         adverse federal tax consequence to the Trust or the Certificateholders
         as evidenced by an Opinion of Counsel;

                           (vii)    the Funding Period shall not have
         terminated;

                           (viii)   the Depositor shall have delivered to the
         Trustee, the Certificate Insurer and each Rating Agency an Officer's
         Certificate confirming the satisfaction of each condition precedent
         specified in this paragraph (c) and in Section 5 of the related
         Transfer Agreement and certifying that:

                           (A)      such sale of Subsequent Receivables by the
         Depositor to the Trust on the date hereof was made in good faith for
         legitimate business purposes and was not made with intent to hinder,
         delay or defraud any Person to which the Depositor has been, is or will
         become, on or after the date hereof, indebted;

                           (B)      the Depositor did not receive less than a
         reasonably equivalent value in exchange for the sale of the Subsequent
         Receivables by the Depositor to the Trustee on the related Subsequent
         Transfer Date pursuant to the related Transfer Agreement;

                           (C)      the Depositor is not insolvent on the
         related Subsequent Transfer Date and will not become insolvent as a
         result of the sale of the Subsequent Receivables by the Depositor to
         the Trustee on the related Subsequent Transfer Date hereof pursuant to
         the related Transfer Agreement;

                           (D)      the Depositor is not engaged in a business
         or transaction, and is not about to engage in a business or
         transaction, for which any property remaining

                                       32
<Page>

         with the Depositor after such business or transaction would be an
         unreasonably small amount of capital; and

                           (E)      the Depositor has not incurred, and does not
         believe that it will incur, debts that would be beyond the Depositor's
         ability to pay as such debts mature;

                           (ix)     the Originator shall have delivered to the
         Trustee, the Certificate Insurer and each Rating Agency an Officer's
         Certificate confirming the satisfaction of each condition precedent
         specified in this paragraph (c) and in Section 5 of the related
         Transfer Agreement and certifying that:

                           (A)      that such sale of Subsequent Receivables by
         the Originator to the Depositor on the date hereof was made in good
         faith for legitimate business purposes and was not made with intent to
         hinder, delay or defraud any Person to which the Originator has been,
         is or will become, on or after the date hereof, indebted;

                           (B)      the Originator did not receive less than a
         reasonably equivalent value in exchange for the sale of the Subsequent
         Receivables by the Originator to the Depositor on the related
         Subsequent Transfer Date pursuant to the Purchase Agreement and the
         related Assignment;

                           (C)      the Originator is not insolvent on the
         related Subsequent Transfer Date and will not become insolvent as a
         result of the sale of the Subsequent Receivables by the Originator to
         the Depositor on the related Subsequent Transfer Date hereof pursuant
         to the Purchase Agreement and the related Assignment;

                           (D)      the Originator is not engaged in a business
         or transaction, and is not about to engage in a business or
         transaction, for which any property remaining with the Originator after
         such business or transaction would be an unreasonably small amount of
         capital; and

                           (E)      the Originator has not incurred, and does
         not believe that it will incur, debts that would be beyond the
         Originator's ability to pay as such debts mature;

                           (x)      the Depositor shall have delivered to each
         Rating Agency, the Certificate Insurer and the Trustee Opinions of
         Counsel with respect to the transfer of the Subsequent Receivables
         substantially in the form of the Opinions of Counsel delivered to each
         Rating Agency, the Certificate Insurer and the Trustee on the Closing
         Date regarding true sale, non-consolidation, perfection, and other such
         matters satisfactory in form and substance to each of the Certificate
         Insurer and the Trustee in its sole discretion;

                                       33
<Page>

                           (xi)     the Depositor shall have taken all action
         required to maintain the first perfected security interest (as defined
         in the UCC) of the Trust in the assets of the Trust;

                           (xii)    no selection procedures believed by the
         Depositor or the Originator to be adverse to the interests of the
         Certificateholders or the Certificate Insurer shall have been utilized
         in selecting the Subsequent Receivables;

                           (xiii)   the conveyance of the Subsequent Receivables
         shall not result in a qualification, modification or withdrawal of the
         then-current ratings of the Class A Certificates; PROVIDED, that
         written confirmation of such ratings shall not be required from the
         Rating Agencies;

                           (xiv)    the Depositor shall have provided the
         Trustee with a supplement to the Schedule of Receivables setting forth
         the Subsequent Receivables to be transferred on such Subsequent
         Transfer Date;

                           (xv)     the Depositor shall have caused a firm of
         independent accountants to deliver to the Trustee and the Certificate
         Insurer written confirmation that the Receivables, including the
         related Subsequent Receivables, meet the following criteria:

                           (1)      the weighted average remaining term of the
         Receivables will be no more than 55 months and the weighted average
         original term for the Receivables will be no more than 58 months;

                           (2)      each Receivable will have a minimum APR of
         10.00%;

                           (3)      each Receivable will have an original term
         of no more than 72 months;

                           (4)      no more than 50% of the Receivables will be
         originated in California;

                           (5)      the weighted average APR for the Receivables
         will be greater than or equal to 18.92%;

                           (6)      5.00% or less of the aggregate Principal
         Balance of the Receivables will be Class I Receivables, 20.00% or less
         of the aggregate Principal Balance of the Receivables will be Class IIA
         Receivables, 52.00% or less of the aggregate Principal Balance of the
         Receivables will be Class IIB Receivables, 26.25% or less of the
         aggregate Principal Balance of the Receivables will be Class III
         Receivables and the remainder (but not to exceed 0.75%) of the
         aggregate Principal Balance of the Receivables will be Class IV
         Receivables; and

                                       34
<Page>

                           (7)      not more than 89.00% of the aggregate
         Principal Balance of the Receivables will represent loans to finance
         the purchase of used Financed Vehicles;

                           (xvi)    the Depositor shall satisfy the document
         delivery requirements for such Subsequent Receivables as specified in
         Section 2.6;

                           (xvii)   the representations and warranties made by
         the Depositor and the Servicer in Sections 6.1 and 7.1, respectively,
         shall be true and correct on and as of such Subsequent Transfer Date
         and the representations and warranties made by the Originator with
         respect to each such Subsequent Receivable being transferred to the
         Trust on such Subsequent Transfer Date in Section 4 of the related
         Transfer Agreement and Section 3.2(d) of the Purchase Agreement shall
         be true and correct as of such Subsequent Transfer Date;

                           (xviii)  on or before such Subsequent Transfer Date,
         the Depositor shall have provided any information reasonably requested
         by the Rating Agencies, the Certificate Insurer or the Trustee with
         respect to any Subsequent Receivables;

                           (xix)    the Custodian shall acknowledge receipt of
         files which the Depositor shall represent are the Legal Files relating
         to the Subsequent Receivables and the Custodian shall have reviewed the
         Legal Files relating to the Subsequent Receivables and shall have
         determined that it has received a Legal File for each Receivable
         identified in the supplement to the Schedule of Receivables attached as
         Schedule A to the related Subsequent Transfer Agreement; and

                           (xx)     the Servicer shall deliver the loan master
         file and history information and the information required to be set
         forth in Demographic File Report in the form attached hereto as Exhibit
         E-2 as specified in Section 3.18.

         SECTION 2.3. TRANSFER INTENDED AS SALE; PRECAUTIONARY SECURITY
INTEREST. Each conveyance to the Trust of the property set forth in Section 2.2
above is intended as a sale free and clear of all Liens, and it is intended that
the property of the Trust shall not be part of the Depositor's estate in the
event of the filing of a bankruptcy petition by or against the Depositor under
any bankruptcy law. In the event, however, that notwithstanding the intent of
LBAC, the Depositor and the Trustee, any transfer under this Agreement is held
not to be a sale, this Agreement shall constitute a grant of a security interest
in the property described in Section 2.2 above, for the benefit of the
Certificateholders and the Certificate Insurer as their interests may appear
herein.

         SECTION 2.4. ACCEPTANCE BY TRUSTEE. The Trustee does hereby accept all
consideration conveyed by the Depositor pursuant to Section 2.2, and declares
that the Trustee shall hold such consideration upon the trusts herein set forth
for the benefit of all present and future Certificateholders and the Certificate
Insurer, subject to the terms and provisions of this Agreement.

                                       35
<Page>

         SECTION 2.5. ASSIGNMENT BY DEPOSITOR. The Depositor does hereby
transfer, assign and otherwise convey unto the Trustee, for the benefit of the
Certificateholders and the Certificate Insurer, its right to any recourse to
LBAC resulting from the occurrence of a breach of any of their respective
representations and warranties contained in Section 3.2 of the Purchase
Agreement or from the failure of LBAC to comply with its obligations pursuant to
Section 5.5 of the Purchase Agreement. The provisions of this Section 2.5 are
intended to grant the Trustee a direct right against LBAC to demand performance
under the terms of the Purchase Agreement.

         SECTION 2.6. DELIVERY OF LEGAL FILES AND RECEIVABLE FILES. iii) On or
prior to the Closing Date in the case of the Initial Receivables, and on or
prior to the third Business Day immediately preceding the related Subsequent
Transfer Date in the case of the Subsequent Receivables, the Depositor shall
transfer and deliver to the Custodian at the offices specified in Schedule B to
this Agreement the Legal Files with respect to each applicable Receivable.

         (b)      On or prior to the Closing Date in the case of the Initial
Receivables, and on or prior to the related Subsequent Transfer Date in the case
of the Subsequent Receivables, the Depositor shall transfer and deliver to the
Servicer with respect to each applicable Receivable the following, either in
hard copy or in an electronic format:

                           (i)      a copy of the fully executed original of the
         Receivable with a copy of the fully executed assignment from the
         related Dealer to the Originator (together with copies of any
         agreements modifying the Receivable, including, without limitation, any
         extension agreements);

                           (ii)     a copy of the original credit application
         fully executed by the Obligor;

                           (iii)    a copy of the Lien Certificate or Title
         Package, as applicable;

                           (iv)     all other documents listed on the
         Documentation Checklist in effect on the Initial Cutoff Date or the
         related Subsequent Cutoff Date, as applicable, relating to such
         Receivable, except that the Receivable Files shall contain a copy of
         those documents the original of which constitutes a part of the Legal
         File; and

                           (v)      any and all other documents that the
         Servicer or the Originator shall keep on file, in accordance with its
         customary procedures, relating to a Receivable, an Obligor or a
         Financed Vehicle.

         SECTION 2.7. ACCEPTANCE OF LEGAL FILES BY CUSTODIAN. The Custodian
acknowledges receipt of files which the Depositor has represented are the Legal
Files relating to the Initial Receivables. The Custodian shall hold the Legal
Files subject to the terms and conditions of this Agreement. The Custodian may
perform its duties in respect

                                       36
<Page>

of custody of the Legal Files by or through its agents or employees. The
Custodian has reviewed the Legal Files relating to the Initial Receivables
and has determined that it has received a file for each Receivable identified
in Schedule A to this Agreement. The Custodian declares that it holds and
will continue to hold such files and any amendments, replacements or
supplements thereto (including, without limitation, the Legal Files relating
to any Subsequent Receivables) and all other Trust Assets as custodian, agent
and bailee for the Trustee in trust for the use and benefit of all present
and future Certificateholders. The Custodian shall review each Legal File
delivered to it no later than the Closing Date or the related Subsequent
Transfer Date, as the case may be, to determine whether, and shall certify on
the Closing Date or the related Subsequent Transfer Date, as the case may be,
that, such Legal Files contain the documents referred to in the definition of
the term "Legal File". In addition, in the case of any Legal File which does
not contain either an original Lien Certificate or a Dealer Title Guaranty
for the related Financed Vehicle, the Custodian shall certify that the
related Dealer is listed on the Dealer Title Addendum. If the Custodian finds
during its review of the Legal Files or at any time thereafter that a Legal
File for a Receivable has not been received or that any of the documents
referred to in the definition of the term "Legal File" are not contained in a
Legal File or, if applicable, the related Dealer is not listed on the Dealer
Title Addendum, the Custodian shall promptly inform the Trustee (if at such
time the Trustee is not also the Custodian hereunder), LBAC, the Depositor,
the Back-up Servicer and the Certificate Insurer promptly, in writing, of the
failure to receive a Legal File with respect to such Receivable (or of the
failure of any of the aforementioned documents to be included in the Legal
File or the failure of the related Dealer to be so listed) (it being
understood that the Custodian's obligation to review the contents of any
Legal File and the Dealer Title Addendum shall be limited as set forth in the
preceding sentence). Unless any such defect with respect to such Receivable
shall have been cured by the last day of the second Collection Period
following discovery thereof by the Custodian, LBAC shall repurchase any such
Receivable as of such last day. In consideration of the purchase of the
Receivable, LBAC shall remit the Purchase Amount, in the manner specified in
Section 4.5. The sole remedy of the Trustee, the Trust, or the
Certificateholders with respect to a breach pursuant to this Section 2.7
shall be to require LBAC to purchase the Receivables pursuant to this Section
2.7. Upon receipt of the Purchase Amount and written instructions from the
Servicer, the Trustee shall cause the Custodian to release to LBAC or its
designee the related Legal File and shall execute and deliver all reasonable
instruments of transfer or assignment, without recourse, as are prepared by
LBAC and delivered to the Trustee and are necessary to vest in LBAC or such
designee the Trustee's right, title and interest in the Receivable. The
Custodian shall make a list of Receivables for which an application for a
certificate of title or a Dealer Title Guaranty but not a Lien Certificate is
included in the Legal File as of the date of its review of the Legal Files
and deliver a copy of such list to the Servicer, the Trustee and the
Certificate Insurer. On the date which is 90 days following the Closing Date
or the related Subsequent Transfer Date, as the case may be, or in either
case, the next succeeding Business Day, the Custodian shall inform LBAC and
the other parties to this Agreement and the Certificate Insurer of any
Receivable for which the related Legal File on such date does not include a
Lien Certificate, and LBAC shall repurchase any

                                       37
<Page>

such Receivable as of the last day of the Collection Period in which the date
which is 150 days following the Closing Date, in the case of the Initial
Receivables, or the related Subsequent Transfer Date, in the case of the
Subsequent Receivables, occurs if the related Legal File does not include a
Lien Certificate as of the close of business on such 150th day. In
consideration of the purchase of such Receivable, LBAC shall remit the
Purchase Amount in the manner specified in Section 4.5. The Depositor shall
have no obligation to repurchase any Receivable upon a breach pursuant to
this Section 2.7. The Depositor shall have no liability for any action taken
or omitted to be taken by LBAC pursuant to this Section 2.7.

         SECTION 2.8. ACCESS TO RECEIVABLE FILES AND LEGAL FILES; SERVICER'S
DUTIES WITH RESPECT TO RECEIVABLE FILES; CUSTODIAN'S DUTIES WITH RESPECT TO
LEGAL FILES. iv) The Servicer and the Custodian shall, upon reasonable notice,
permit the Originator, the Trustee, the Depositor, and the Certificate Insurer
access to the Receivable Files and the Legal Files, respectively, at all
reasonable times, upon reasonable notice and during the Servicer's or the
Custodian's normal business hours. In addition, the Servicer and the Custodian
shall provide such access to any Certificateholder upon reasonable notice at all
reasonable times during the Servicer's or the Custodian's normal business hours,
as the case may be, in cases where the Certificateholders shall be required by
applicable statutes or regulations to review such documentation; PROVIDED,
HOWEVER, that the Servicer or the Custodian shall be entitled to rely upon an
Opinion of Counsel as to such fact. In each case, such access shall be afforded
without charge but only upon reasonable request. Each Certificateholder shall be
deemed to have agreed by its acceptance of a Certificate to use its best efforts
to hold in confidence all Confidential Information in accordance with its then
customary procedures; PROVIDED that nothing herein shall prevent any
Certificateholder from delivering copies of any financial statements and other
documents whether or not constituting Confidential Information, and disclosing
other information, whether or not Confidential Information, to (i) its
directors, officers, employees, agents and professional consultants, (ii) any
other institutional investor that holds Certificates, (iii) any prospective
institutional investor transferee in connection with the contemplated transfer
of a Certificate or any part thereof or participation therein who is subject to
confidentiality arrangements at least substantially similar hereto, (iv) any
governmental authority, (v) the National Association of Insurance Commissioners
or any similar organization, (vi) any nationally recognized rating agency in
connection with the rating of the Certificates by such agency or (vii) any other
Person to which such delivery or disclosure may be necessary or appropriate (a)
in compliance with any applicable law, rule, regulation or order, (b) in
response to any subpoena or other legal process, (c) in connection with any
litigation to which such Certificateholder is a party, or (d) in order to
protect or enforce such Person's investment in any Certificate.

         (b)      Upon instruction from the Trustee, the Servicer shall release
any Receivable Files to the Trustee, the Trustee's agent or the Trustee's
designee, as the case may be, at such place or places as the Trustee may
designate, as soon as practicable. The Servicer shall not be responsible for the
safekeeping of such Receivable Files following such release to the Trustee
unless and until such Receivable Files is returned to the Servicer.

                                       38
<Page>

         (c)      The Custodian shall, within two Business Days of the request
of the Servicer, the Trustee or the Certificate Insurer, execute such documents
and instruments as are prepared by the Servicer, the Trustee or the Certificate
Insurer and delivered to the Custodian, as the Servicer, the Trustee or the
Certificate Insurer deems necessary to permit the Servicer, in accordance with
its customary servicing procedures, to enforce the Receivable on behalf of the
Trust and any related insurance policies (including the VSI Policy, if any)
covering the Obligor, the Receivable or Financed Vehicle. The Custodian shall
not be obligated to release any document from any Legal File unless it receives
a request for transfer of possession signed, or, if such request is transmitted
electronically, transmitted by a Servicing Officer in the form of Exhibit L to
this Agreement and a custodial letter signed, or, if such request is transmitted
electronically, transmitted by a Servicing Officer in the form of Exhibit M to
this Agreement (the "Custodial Letter"). Such Custodial Letter shall obligate
the Servicer to return such document(s) to the Custodian when the need therefor
no longer exists. At all times while any Legal File is in the Servicer's
possession, the Servicer shall hold such Legal File in trust on behalf of the
Trust, the Trustee and the Certificate Insurer.

         SECTION 2.9. COVENANTS OF THE CUSTODIAN.

         (a)      The Custodian, either directly or by acting through an agent
or nominee (which agent shall not be the Originator or any Affiliate thereof),
shall hold the Legal File and all other documents relating to any Receivable
that comes into its possession for the exclusive use and benefit of the Trust
and shall make disposition thereof only in accordance with the provisions of
this Agreement. The Custodian shall segregate the Legal Files and such other
documents from all other motor vehicle retail installment sale contracts and
similar documents in its possession and maintain continuous custody of the Legal
File and such other documents received by it in secure facilities in accordance
with customary standards for such custody and shall not release such documents
or transfer such documents to any other party, including any subcustodian,
except as otherwise expressly provided herein.

         (b)      The Custodian covenants and warrants to the Trustee, the
Servicer and the Certificate Insurer that to the knowledge of its Responsible
Officers, as of the related date on which the Custodian makes the certification
required under Section 2.7 with respect to the Legal Files, it holds no adverse
interest, by way of security or otherwise, in any Receivable, except as Trustee
on behalf of the Trust.

         (c)      Instructions to the Custodian relating to this Agreement will
be carried out by the Custodian, in accordance with the terms and provisions of
this Agreement. The Custodian is authorized to conclusively rely on any such
instruction that it believes in good faith to have been given by the Servicer
pursuant to and in accordance with the terms and provisions of this Agreement.
The Custodian may record any such instructions given by telephone, and any other
telephone discussions with respect to this Agreement.

                                       39
<Page>

         (d)      The Custodian shall not by reason of this Agreement have a
fiduciary relationship in respect of the Servicer or LBAC or any Affiliate
thereof, and nothing in this Agreement, express or implied, is intended to or
shall be so construed so as to impose upon the Custodian any obligations in
respect of this Agreement except as expressly set forth in it. The Custodian,
acting as custodian, shall have no responsibility for (i) ascertaining or taking
action with respect to exchanges, maturities, tenders or other matters relative
to any Receivables, whether or not the Custodian has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Receivables, except as otherwise
expressly set forth herein in its capacity as Trustee of the Trust or as
Custodian. The Custodian, acting as custodian, does not assume and shall have no
responsibility for, and makes no representations as to, monitoring the value of
the Receivables and the related Legal Files. The Custodian, acting as custodian,
may rely upon the validity of documents delivered to it, without investigation
as to their authority or legal effectiveness.

         (e)      Each of the Servicer, the Depositor and LBAC acknowledges and
agrees that the Custodian:

                           (i)      shall not be responsible for any of the
         agreements set forth in the Purchase Agreement or any other documents
         or instruments other than this Agreement, including its Exhibits, but
         shall be obligated only for the performance of such duties as are
         specifically set forth in this Agreement;

                           (ii)     shall not be obligated to take any legal or
         other action that, in its judgment, might involve any expense or
         liability unless it shall have been furnished with indemnification
         acceptable in form and substance to the Custodian;

                           (iii)    may rely on, and shall be protected in
         acting or refraining from acting in good faith on, any written notice,
         instruction, instrument, statement, request or document furnished to it
         under this Agreement and reasonably believed by it to be genuine and to
         have been signed or presented by the proper Person, and shall have no
         responsibility for determining the accuracy thereof, and

                           (iv)     may consult with counsel satisfactory to it,
         including in-house counsel, and the opinion of such counsel shall be
         full and complete authorization and protection in respect of any action
         reasonably taken, suffered or omitted by it under this Agreement in
         good faith and in accordance with the opinion of such counsel.

         (f)      If the Custodian shall request instructions from the Servicer
or LBAC with respect to any act or action (including failure to act) in
connection with this Agreement, the Custodian shall be entitled to refrain from
such act or taking such action unless and until the Custodian shall have
received instructions from such Person; and the Custodian shall not incur
liability to such Person or any other Person by reason of so refraining. Without
limiting the foregoing, neither the Servicer, nor LBAC, nor any other Person

                                       40
<Page>

shall have any right of action whatsoever against the Custodian as a result of
the Custodian's acting or refraining from acting in accordance with the
Servicer's instructions hereunder, other than any such action arising out of the
Custodian's negligence, bad faith or willful misconduct in so acting or
refraining from acting.

         (g)      The Custodian shall physically segregate the Legal Files for
the Receivables from all other instruments similar in nature to such Legal Files
in its possession, and shall hold the Legal Files so as to reflect the ownership
of the Trust. The Custodian shall mark its books, accounts and records to
reflect such fact. At its own expense, the Custodian shall maintain at all times
during which this Agreement is in effect, fidelity insurance in amounts
customary for similar transactions. Such insurance may be maintained by the
Custodian in the form of self-insurance.

         (h)      The Trustee's Fee payable to Chase Texas, as Trustee, pursuant
to Section 4.6(c)(ii), shall be the only amount payable to the Custodian for its
services as Custodian hereunder.

         SECTION 2.10. THE LEGAL FILES ARE NOT "FINANCIAL ASSETS". The
parties (for themselves, their successors, trustees, receivers and assigns)
acknowledge and agree that the Legal Files held pursuant to this Agreement
are not "financial assets" within the meaning of Section 8.102(a)(9) of the
Texas Business & Commerce Code (the "Texas UCC").

                                   ARTICLE III

                   ADMINISTRATION AND SERVICING OF RECEIVABLES

         SECTION 3.1. DUTIES OF SERVICER. The Servicer, as agent for the Trust
(to the extent provided herein), and in such capacity, shall manage, service,
administer and make collections on the Receivables with reasonable care, using
that degree of skill and attention customary and usual for institutions which
service motor vehicle retail installment contracts similar to the Receivables
and, to the extent more exacting, that the Servicer exercises with respect to
all comparable automotive receivables that it services for itself or others. The
Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Obligors on such Receivables, investigating
delinquencies, sending payment statements to Obligors, reporting tax information
to Obligors, accounting for collections, furnishing monthly and annual
statements to the Trustee, the Back-Up Servicer and the Certificate Insurer with
respect to distributions and complying with the terms of the Lock-Box Agreement.
The Servicer shall also administer and enforce all rights and responsibilities
of the holders of the Receivables provided for in the Dealer Agreements to the
extent that such Dealer Agreements relate to the Receivables, the Financed
Vehicles or the Obligors. Without limiting the generality of the foregoing, and
subject to the servicing standards set forth in this Agreement, the Servicer is
authorized and empowered by the Trustee to execute and deliver, on behalf of
itself, the Trust, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or partial or full release or
discharge, and all other

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comparable instruments, with respect to such Receivables or to the Financed
Vehicles securing such Receivables and/or the certificates of title or other
evidence of ownership with respect to such Financed Vehicles; PROVIDED,
HOWEVER, that notwithstanding the foregoing, the Servicer shall not, except
pursuant to an order from a court of competent jurisdiction, release an
Obligor from payment of any unpaid amount under any Receivable or waive the
right to collect the unpaid balance of any Receivable from the Obligor,
except that the Servicer may forego collection efforts if the amount subject
to collection is de minimis and if it would forego collection in accordance
with its customary procedures. If the Servicer shall commence a legal
proceeding to enforce a Receivable, the Trustee shall thereupon be deemed to
have automatically assigned, solely for the purpose of collection, such
Receivable to the Servicer. If in any enforcement suit or legal proceeding it
shall be held that the Servicer may not enforce a Receivable on the ground
that it shall not be a real party in interest or a holder entitled to enforce
such Receivable, the Trustee shall, at the Servicer's expense and direction,
take steps to enforce such Receivable, including bringing suit in its name or
the name of the Certificateholders. The Servicer shall prepare and furnish
and the Trustee shall execute, any powers of attorney and other documents
reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.

         SECTION 3.2. COLLECTION AND ALLOCATION OF RECEIVABLE PAYMENTS.
Consistent with the standards, policies and procedures required by this
Agreement, the Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due and shall follow such collection procedures as it follows
with respect to all comparable automotive receivables that it services for
itself or others; PROVIDED, HOWEVER, that the Servicer shall notify each Obligor
prior to the Closing Date in the case of the Initial Receivables, and prior to
the related Subsequent Transfer Date, in the case of the Subsequent Receivables,
to make all payments with respect to the Receivables to the Lock-Box and shall
make reasonable efforts to cause Obligors to make all such payments to such
Lock-Box. The Servicer will provide each Obligor with a monthly statement in
order to notify such Obligors to make payments directly to the Lock-Box. The
Servicer shall allocate collections between principal and interest in accordance
with the customary servicing procedures it follows with respect to all
comparable automotive receivables that it services for itself or others and in
accordance with the terms of this Agreement. The Servicer, for so long as LBAC
is the Servicer, may grant extensions, rebates or adjustments on a Receivable in
accordance with the customary servicing procedures it follows with respect to
all comparable automotive receivables that it services for itself, which shall
not modify the original due date of the Scheduled Payments on any Receivable
other than (i) in accordance with the Payment Deferment and Due Date Change
Policies, (ii) with respect to a Deficient Liquidated Receivable and (iii) with
the prior written consent of the Certificate Insurer, with respect to any other
Liquidated Receivable. The Servicer shall not modify the Payment Deferment and
Due Date Change Policies without the prior written consent of the Certificate
Insurer and delivering to the Trustee and the Certificate Insurer an Opinion of
Counsel to the effect that such modification will not adversely affect the
status of the Trust as a grantor trust for Federal

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<Page>

income tax purposes PROVIDED, HOWEVER, that no Opinion of Counsel shall be
required for modification of the Payment Deferment and Due Date Change
Policies if either (i) such modification is necessary to permit the work out
of defaulted Receivables or (ii) the Servicer reasonably believes that such
modification is necessary to permit extensions designed to prevent the
default of Receivables. The Servicer shall notify Moody's of any modification
to the Payment Deferment and Due Date Change Policies. If the Servicer is not
LBAC, the Servicer may not make any extension on a Receivable without the
prior written consent of the Certificate Insurer. The Servicer may in its
discretion waive any late payment charge or any other fees that may be
collected in the ordinary course of servicing a Receivable if it would forgo
collection of such amount in accordance with its customary procedures.
Notwithstanding anything to the contrary contained herein, the Servicer (i)
shall not agree to any alteration of the interest rate on any Receivable or
of the amount of any Scheduled Payment on any Receivable, except (a) as
otherwise required by applicable law, (b) with respect to a Deficient
Liquidated Receivable and (c) with the prior written consent of the
Certificate Insurer, with respect to any other Liquidated Receivable, and
(ii) shall not agree to any modification that would result in a material
adverse effect on a Receivable (other than a Deficient Liquidated Receivable
and, with the prior written consent of the Certificate Insurer, any other
Liquidated Receivable) or the interest therein of the Trust, the
Certificateholders or the Certificate Insurer other than a modification in
accordance with the Payment Deferment and Due Date Change Policies or would
constitute reinvestment adversely affecting the status of the Trust as a
grantor trust for Federal income tax purposes including, without limitation,
any modification that would result in a "deemed exchange" of a Receivable
under Section 1001 of the Code on account of such modification being made at
a time when the obligations of the Obligor under the Receivable neither are
in default nor, in the reasonable good faith judgment of the Servicer,
probably will be in default in the reasonably foreseeable future.

         On each Business Day, the Servicer shall prepare and transmit to the
Trustee and the Back-up Servicer in a form acceptable to the Trustee and the
Back-up Servicer, a record setting forth the aggregate amount of collections on
the Receivables processed by the Servicer on the second preceding Business Day.

         SECTION 3.3. REALIZATION UPON RECEIVABLES. v) On behalf of the Trust,
the Certificateholders and the Certificate Insurer, the Servicer shall use its
best efforts, consistent with the servicing procedures set forth herein, to
repossess or otherwise convert the ownership of the Financed Vehicle securing
any Receivable as to which the Servicer shall have determined eventual payment
in full is unlikely. The Servicer shall commence efforts to repossess or
otherwise convert the ownership of a Financed Vehicle on or prior to the date
that an Obligor has not paid at least 95% of a Scheduled Payment thereon for 120
consecutive days or more; PROVIDED, HOWEVER, that the Servicer may elect not to
commence such efforts within such time period if in its good faith judgment it
determines either that it would be impracticable to do so or that the proceeds
ultimately recoverable with respect to such Receivable would be increased by
forbearance. The Servicer shall follow such customary and usual practices and
procedures as it shall deem

                                       43
<Page>

necessary or advisable in its servicing of automotive receivables, consistent
with the standards of care set forth in Section 3.1, which may include
reasonable efforts to realize upon any recourse to Dealers and selling the
Financed Vehicle at public or private sale. The foregoing shall be subject to
the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Servicer shall not expend funds in connection with the
repair or the repossession of such Financed Vehicle unless it shall determine
in its discretion that such repair and/or repossession will increase the
proceeds ultimately recoverable with respect to such Receivable by an amount
greater than the amount of such expenses. All Liquidation Proceeds and
Recoveries received shall be remitted directly by the Servicer to the
Collection Account, without deposit into any intervening account as soon as
practicable, but in no event later than the second Business Day after receipt
thereof.

         (b) (i) The Servicer agrees that within 45 days from the Closing
Date it shall make such filings and effect such notices as are necessary
under Section 9-114(1) of the New York UCC (or comparable section of the UCC
of any applicable state) to preserve its ownership interest (or security
interest, as the case may be) in any repossessed Financed Vehicles delivered
for sale to Dealers.

                  (2)      The Servicer agrees that at any time after 45 days
from the Closing Date there will be (a) no more than 25 repossessed Financed
Vehicles in the aggregate delivered for sale to any Dealer and (b) no more than
50 repossessed Financed Vehicles in the aggregate delivered for the sale to all
Dealers with respect to which the actions referred to in (b)(1) above have not
been effected. The Servicer agrees that prior to delivering additional Financed
Vehicles for sale to any such Dealer, it shall make such filings and effect such
notices as are necessary under Section 9-114(1) of the New York UCC (or
comparable section of the applicable UCC) to preserve its ownership interest (or
security interest, as the case may be) in any such repossessed Financed Vehicle.

         SECTION 3.4. PHYSICAL DAMAGE INSURANCE; OTHER INSURANCE. vi) The
Servicer shall continue to maintain the VSI Policy or another collateral
protection insurance policy providing physical damage insurance coverage to at
least the same extent as the VSI Policy with respect to all Financed Vehicles,
unless the Servicer shall have received the prior written consent of the
Certificate Insurer allowing the Servicer to no longer maintain any of such
polices. The Servicer, in accordance with the servicing procedures and standards
set forth herein, shall require that (i) each Obligor shall have obtained
insurance covering the Financed Vehicle, as of the date of the execution of the
Receivable, insuring against loss and damage due to fire, theft, transportation,
collision and other risks generally covered by comprehensive and collision
coverage and each Receivable requires the Obligor to maintain such physical loss
and damage insurance naming LBAC and its successors and assigns as an additional
insured, (ii) each Receivable that finances the cost of premiums for credit life
and credit accident and health insurance is covered by an insurance policy or
certificate naming LBAC as policyholder (creditor) and (iii) as to each
Receivable that finances the cost of an

                                       44
<Page>

extended service contract, the respective Financed Vehicle which secures the
Receivable is covered by an extended service contract.

         (b)      To the extent applicable, the Servicer shall not take any
action which would result in noncoverage under any of the insurance policies
referred to in Section 3.4(a) which, but for the actions of the Servicer, would
have been covered thereunder. The Servicer, on behalf of the Trustee, shall take
such reasonable action as shall be necessary to permit recovery under any of the
foregoing insurance policies. Any amounts collected by the Servicer under any of
the foregoing insurance policies shall be deposited in the Collection Account
pursuant to Section 4.2. In the event of the cancellation or non-renewal of the
insurance referred to in Section 3.4(a)(i) above with respect to any Financed
Vehicle, the Servicer will endeavor, in accordance with its customary servicing
standards and procedures, to cause the related Obligor to obtain a replacement
insurance policy. In no event shall the Servicer be required to force place
insurance on a Financed Vehicle.

         SECTION 3.5. MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.

         (a)      Consistent with the policies and procedures required by this
Agreement, the Servicer shall take such steps as are necessary to maintain
perfection of the security interest created in the name of LBAC by each
Receivable in the related Financed Vehicle, including, but not limited to,
obtaining the execution by the Obligors and the recording, registering, filing,
re-recording, re-registering and refiling of all security agreements, financing
statements and continuation statements or instruments as are necessary to
maintain the security interest granted by Obligors under the respective
Receivables. The Trustee hereby authorizes the Servicer to take such steps as
are necessary to re-perfect or continue the perfection of such security interest
on behalf of the Trust in the event of the relocation of a Financed Vehicle or
for any other reason.

         (b)      Upon the occurrence of an Insurance Agreement Event of
Default, the Certificate Insurer may (so long as an Insurer Default shall not
have occurred and be continuing) instruct the Trustee and the Servicer to take
or cause to be taken, or, if an Insurer Default shall have occurred and be
continuing, upon the occurrence of an Event of Default, the Trustee shall direct
the Servicer to take and the Servicer shall take or cause to be taken such
action as may, in the opinion of counsel to the Certificate Insurer (or, if an
Insurer Default shall have occurred and be continuing, the Trustee), which
opinion shall not be an expense of the Certificate Insurer or the Trustee (as
applicable), be necessary to perfect or reperfect the security interests in the
Financed Vehicles securing the Receivables in the name of the Trustee on behalf
of the Trust by amending the title documents of such Financed Vehicles to
reflect the security interest of the Trustee in the related Financed Vehicles or
by such other reasonable means as may, in the opinion of counsel to the
Certificate Insurer or the Trustee (as applicable), which opinion shall not be
an expense of the Certificate Insurer or the Trustee, be necessary or prudent.
The Servicer hereby agrees to pay all expenses related to such perfection or
reperfection and to take all action necessary therefor. In addition, prior to
the occurrence of an Insurance

                                       45
<Page>

Agreement Event of Default, the Certificate Insurer may (unless an Insurer
Default shall have occurred and be continuing) instruct the Trustee and the
Servicer to take or cause to be taken such action as may, in the opinion of
counsel to the Certificate Insurer, be necessary to perfect or reperfect the
security interest in the Financed Vehicles securing the Receivables in the
name of the Trustee on behalf of the Trust, including by amending the title
documents of such Financed Vehicles to reflect the security interest of the
Trustee in the related Financed Vehicle or by such other reasonable means as
may, in the opinion of counsel to the Certificate Insurer, be necessary or
prudent; PROVIDED, HOWEVER, that if the Certificate Insurer requests (unless
an Insurer Default shall have occurred and be continuing) that the title
documents be amended prior to the occurrence of an Insurance Agreement Event
of Default, the out-of-pocket expenses of the Servicer or the Trustee in
connection with such action shall be reimbursed to the Servicer or the
Trustee, as applicable, by the Certificate Insurer.

         In addition to the foregoing, in the event any of the events described
in Section 8.1(iii) or (iv) shall have occurred, or in the event LBAC shall have
been removed or replaced as Servicer pursuant to Section 7.3, Section 7.5, or
otherwise pursuant to Section 8.1, then LBAC and/or the Servicer shall
immediately cause each Lien Certificate for a Financed Vehicle to be marked to
reflect the security interest of the Trustee in the Financed Vehicle at the
expense of the Servicer.

         The Servicer hereby makes, constitutes, and appoints the Trustee acting
through its duly appointed officers or any of them, its true and lawful
attorney, for it and in its name and on its behalf, for the sole and exclusive
purpose of authorizing said attorney to execute and deliver as attorney-in-fact
or otherwise, any and all documents and other instruments and to do or
accomplish all other acts or things necessary or appropriate to show the Trustee
as lienholder or secured party on the related Lien Certificates relating to a
Financed Vehicle.

         SECTION 3.6. ADDITIONAL COVENANTS OF SERVICER. The Servicer hereby
makes the following covenants to the other parties hereto and the Certificate
Insurer on which the Trustee shall rely in accepting the Receivables in trust
and issuing the Certificates and on which the Certificate Insurer shall rely in
issuing the Policy: (i) the Servicer shall not release the Financed Vehicle
securing any Receivable from the security interest granted by such Receivable in
whole or in part except in the event of payment in full by the Obligor
thereunder or repossession or other liquidation of such Financed Vehicle, (ii)
the Servicer shall not impair the rights of the Certificateholders, the Trust or
the Certificate Insurer in such Receivables, (iii) the Servicer shall not amend
a Receivable (other than a Deficient Liquidated Receivable and, with the prior
written consent of the Certificate Insurer, any other Liquidated Receivable),
except that modifications may be made in accordance with Section 3.2, and (iv)
the Servicer shall service the Receivables as required by the terms of this
Agreement and in material compliance with its current servicing procedures for
servicing of all its other comparable motor vehicle receivables.

                                       46
<Page>

         SECTION 3.7. PURCHASE OF RECEIVABLES UPON BREACH. The Servicer, the
Depositor or the Trustee shall inform the other parties hereto and the
Certificate Insurer promptly, in writing, upon the discovery by the Servicer,
the Depositor or a Responsible Officer of the Trustee, as the case may be, of
any breach of the provisions of Section 3.2 relating to extensions, rebates,
adjustments or other modifications of the Receivables, or any breach of Sections
3.4, 3.5 or 3.6; PROVIDED, HOWEVER, that the failure to give such notice shall
not affect any obligation of the Servicer hereunder. Unless the breach shall
have been cured by the last day of the second Collection Period following such
discovery by or notice to the Servicer of such breach, the Servicer shall
purchase any Receivable with respect to which such breach has a material adverse
effect on such Receivable or the interest therein of the Trust, the
Certificateholders or the Certificate Insurer; PROVIDED, HOWEVER,
notwithstanding the foregoing, the Servicer shall purchase any Receivable with
respect to which any breach of clause (ii) of the last sentence of the first
paragraph of Section 3.2 has occurred immediately upon discovery by or notice to
the Servicer of such breach. In consideration of the purchase of such
Receivable, the Servicer shall remit the Purchase Amount in the manner specified
in Section 4.5. For purposes of this Section, the Purchase Amount shall,
whenever applicable, consist in part of a release by the Servicer of all rights
to receive Simple Interest Excess with respect to the related Receivable. The
sole remedy of the Trustee, the Trust, the Certificate Insurer or the
Certificateholders with respect to a breach of the provisions of Section 3.2
relating to extensions, rebates, adjustments or other modifications of the
Receivables or any breach of Sections 3.4, 3.5 or 3.6 shall be to require the
Servicer to repurchase Receivables pursuant to this Section 3.7; PROVIDED,
HOWEVER, that the Servicer shall indemnify the Trustee, the Back-up Servicer,
the Custodian, the Depositor, the Certificate Insurer, the Trust and the
Certificateholders and each of their respective officers, employees, directors,
agents and representatives against all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach. The Depositor
shall have no obligation to repurchase the Receivables upon a breach of the
provisions of Section 3.2 relating to extensions, rebates, adjustments or other
modifications of the Receivables, or any breach of Sections 3.4, 3.5 or 3.6. The
Depositor shall have no liability for actions taken or omitted to be taken by
the Servicer pursuant to this Section 3.7.

         SECTION 3.8. SERVICING FEE. The Servicing Fee for the initial
Distribution Date shall equal the product of (a) one-twelfth of the Servicing
Fee Rate and (b) the Original Pool Balance. Thereafter, the Servicing Fee for a
Distribution Date shall equal the product of (i) one-twelfth of the Servicing
Fee Rate and (ii) the Pool Balance as of the last day of the second preceding
Collection Period. The Servicing Fee shall in addition include all late fees,
prepayment charges including, in the case of a Rule of 78's Receivable that is
prepaid in full, to the extent not required by law to be remitted to the related
Obligor, the difference between the Principal Balance of such Rule of 78's
Receivable (plus accrued interest to the date of prepayment) and the principal
balance of such Receivable computed according to the "Rule of 78's", and other
administrative fees

                                       47
<Page>

or similar charges allowed by applicable law with respect to Receivables,
collected (from whatever source) on the Receivables.

         The Servicer shall be required to pay all expenses incurred by it in
connection with its activities under this Agreement (including taxes imposed on
the Servicer, expenses incurred by the Servicer in connection with distributions
and reports to Certificateholders, the Trustee and the Certificate Insurer and
all other fees and expenses of the Trust including taxes levied or assessed
against the Trust, and claims against the Trust in respect of indemnification
not expressly stated under this agreement to be for the account of the Trust).

         SECTION 3.9. SERVICER'S CERTIFICATE. vii) By 10:00 a.m., New York City
time, on each Determination Date, the Servicer shall deliver to the Trustee, the
Back-up Servicer, the Collateral Agent, the Depositor, the Certificate Insurer
and the Rating Agencies, a Servicer's Certificate containing all information
necessary to make the distributions pursuant to Section 4.6 (including, if
required, withdrawals from or deposits to the Payahead Account and withdrawals
from the Spread Account, the Pre-Funding Account and the Capitalized Interest
Account) for the Collection Period preceding the date of such Servicer's
Certificate and all information necessary for the Trustee to send statements to
Certificateholders and the Certificate Insurer pursuant to Section 4.8.
Receivables to be purchased by the Servicer or to be purchased by LBAC shall be
identified by the Servicer by account number with respect to such Receivable (as
specified in the Schedule of Receivables).

         (b)      In addition to the information required by Section 3.9(a), the
Servicer shall include in the copy of the Servicer's Certificate delivered to
the Certificate Insurer (i) the Delinquency Ratio, the Average Delinquency
Ratio, the Cumulative Default Rate, and the Cumulative Loss Rate (as such terms
are defined in the Spread Account Agreement), (ii) whether any Trigger Event (as
such term is defined in the Spread Account Agreement) has occurred as of such
Determination Date, (iii) whether any Trigger Event that may have occurred as of
a prior Determination Date is Deemed Cured (as defined in the Spread Account
Agreement) as of such Determination Date, and (iv) whether to the knowledge of
the Servicer an Insurance Agreement Event of Default has occurred. The Servicer
shall in addition give notice of the occurrence of any Trigger Event or any
Insurance Agreement Event of Default to each Rating Agency.

         SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
viii) The Servicer shall deliver to the Trustee, the Back-up Servicer, the
Collateral Agent, the Depositor and the Certificate Insurer, on or before March
31 of each year beginning March 31, 1999, an Officer's Certificate, dated as of
December 31 of the preceding calendar year, stating that (i) a review of the
activities of the Servicer during such preceding calendar year and of its
performance under this Agreement has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,

                                       48
<Page>

specifying each such default known to such officer and the nature and status
thereof. The Trustee shall send a copy of such certificate to the Rating
Agencies.

         (b)      The Servicer shall deliver to the Trustee, the Back-up
Servicer, the Collateral Agent, the Depositor, the Certificate Insurer and the
Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than 2 Business Days after having obtained such knowledge, written
notice in an Officer's Certificate of any event which with the giving of notice
or lapse of time, or both, would become an Event of Default under Section 8.1.

         SECTION 3.11. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S REPORT.
The Servicer shall cause a firm of nationally recognized independent certified
public accountants, who may also render other services to the Servicer or to the
Depositor, to deliver to the Trustee, the Back-up Servicer, the Collateral
Agent, the Certificateholders, the Certificate Insurer and each Rating Agency on
or before April 30 of each year beginning April 30, 1999, a report dated as of
December 31 of the preceding calendar year and reviewing the Servicer's
activities during such preceding calendar year, addressed to the Board of
Directors of the Servicer, and to the Trustee, the Back-up Servicer, the
Collateral Agent, the Depositor, and the Certificate Insurer, to the effect that
such firm has audited the financial statements of the Servicer and issued its
report therefor and that such audit (a) was made in accordance with generally
accepted auditing standards, and accordingly included such tests of the
accounting records and such other auditing procedures as such firm considered
necessary in the circumstances; (b) included tests relating to automotive loans
serviced for others in accordance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers (the "Program"), to the extent the
procedures in the Program are applicable to the servicing obligations set forth
in this Agreement; (c) included an examination of the delinquency and loss
statistics relating to the Servicer's portfolio of automobile, van, sport
utility vehicle and light duty truck installment sales contracts; and (d) except
as described in the report, disclosed no exceptions or errors in the records
relating to automobile, van, sport utility vehicle and light duty truck loans
serviced for others that, in the firm's opinion, the Program requires such firm
to report. The accountant's report shall further state that (1) a review in
accordance with agreed upon procedures was made of three randomly selected
Servicer's Certificates; (2) except as disclosed in the report, no exceptions or
errors in the Servicer's Certificates were found; and (3) the delinquency and
loss information relating to the Receivables contained in the Servicer's
Certificates were found to be accurate.

         The report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.

         SECTION 3.12. SERVICER EXPENSES. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer, and expenses incurred in connection with distributions and reports
to Certificateholders.

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<Page>

         SECTION 3.13. RETENTION AND TERMINATION OF SERVICER. The Servicer
hereby covenants and agrees to act as such under this Agreement for an initial
term, commencing on the Closing Date and ending on March 31, 1999, which term
shall be extendible by the Certificate Insurer for successive quarterly terms
ending on each successive June 30, September 30, December 31 and March 31 (or,
pursuant to revocable written standing instructions from time to time to the
Servicer and the Trustee, for any specified number of terms greater than one),
until the termination of the Trust. Each such notice (including each notice
pursuant to standing instructions, which shall be deemed delivered at the end of
successive quarterly terms for so long as such instructions are in effect) (a
"Servicer Extension Notice") shall be delivered by the Certificate Insurer to
the Trustee and the Servicer. The Servicer hereby agrees that, as of the date
hereof and upon its receipt of any such Servicer Extension Notice, the Servicer
shall become bound, for the initial term beginning on the date hereof and for
the duration of the term covered by such Servicer Extension Notice, to continue
as the Servicer subject to and in accordance with the other provisions of this
Agreement. Until such time as an Insurer Default shall have occurred and be
continuing, the Trustee agrees that if as of the fifteenth day prior to the last
day of any term of the Servicer, the Trustee shall not have received any
Servicer Extension Notice from the Certificate Insurer, the Trustee will, within
five days thereafter, give written notice of such non-receipt to the Certificate
Insurer, the Back-up Servicer (or any alternate successor servicer appointed by
the Certificate Insurer pursuant to Section 7.5) and the Servicer and the
Servicer's terms shall not be extended unless a Servicer Extension Notice is
received on or before the last day of such term.

         SECTION 3.14. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to representatives of the Trustee, the
Collateral Agent, the Back-up Servicer, the Depositor, and the Certificate
Insurer reasonable access to documentation and computer systems and information
regarding the Receivables and shall provide such access to Certificateholders in
such cases where the Certificateholders are required by applicable law or
regulation to review such documentation. In each case, such access shall be
afforded without charge but only upon reasonable request and during normal
business hours. Nothing in this Section 3.14 shall derogate from the obligation
of the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of the Servicer to provide
access as provided in this Section 3.14 as a result of such obligation shall not
constitute a breach of this Section 3.14.

         SECTION 3.15. VERIFICATION OF SERVICER'S CERTIFICATE. ix) On or before
the fifth Business Day of each month, the Servicer will deliver to the Trustee
and the Back-up Servicer a computer diskette (or other electronic transmission)
in a format acceptable to the Trustee and the Back-up Servicer containing such
information with respect to the Receivables as of the close of business on the
last day of the preceding Collection Period as is necessary for preparation of
the Servicer's Certificate. The Back-up Servicer shall use such computer
diskette (or other electronic transmission) to verify certain information
specified in Section 3.15(b) contained in the Servicer's Certificate delivered
by the Servicer, and the Back-up Servicer shall certify to the Certificate
Insurer that it has

                                       50
<Page>

verified the Servicer's Certificate in accordance with this Section 3.15 and
shall notify the Servicer, the Certificate Insurer and the Trustee of any
discrepancies, in each case, on or before the related Deficiency Claim Date.
In the event that the Back-up Servicer reports any discrepancies, the
Servicer and the Back-up Servicer shall attempt to reconcile such
discrepancies prior to the related Deficiency Claim Date, but in the absence
of a reconciliation, the Servicer's Certificate shall control for the purpose
of calculations and distributions with respect to the related Distribution
Date. In the event that the Back-up Servicer and the Servicer are unable to
reconcile discrepancies with respect to a Servicer's Certificate by the
related Distribution Date, (i) the Back-Up Servicer will notify the
Certificate Insurer and the Trustee, and (ii) the Servicer shall cause a firm
of independent certified public accountants, at the Servicer's expense, to
audit the Servicer's Certificate and, prior to the fifth calendar day of the
following month, reconcile the discrepancies. The effect, if any, of such
reconciliation shall be reflected in the Servicer's Certificate for such next
succeeding Determination Date. In addition, the Servicer shall, if so
requested by the Certificate Insurer (unless an Insurer Default shall have
occurred and be continuing) deliver to the Back-up Servicer (i) within five
(5) Business Days of demand therefor a computer tape containing as of the
close of business on the date of demand all of the data maintained by the
Servicer in computer format in connection with servicing the Receivables and
(ii) within fifteen (15) Business Days of demand therefor a copy of such
other information as is reasonably requested by the Certificate Insurer for
the purpose of reconciling such discrepancies. Other than the duties
specifically set forth in this Agreement, the Back-up Servicer shall have no
obligations hereunder, including, without limitation, to supervise, verify,
monitor or administer the performance of the Servicer. The Back-up Servicer
shall have no liability for any actions taken or omitted by the Servicer. The
duties and obligations of the Back-up Servicer shall be determined solely by
the express provisions of this Agreement and no implied covenants or
obligations shall be read into this Agreement against the Back-up Servicer.

         (b)      The Back-up Servicer shall review each Servicer's Certificate
delivered pursuant to Section 3.15(a) and shall, based upon the information
provided from the Servicer under Section 3.15(a):

                           (i)      confirm that such Servicer's Certificate is
         complete on its face;

                           (ii)     load the computer diskette (which shall be
         in a format acceptable to the Back-up Servicer) received from the
         Servicer pursuant to Section 3.15(a) hereof, confirm that such computer
         diskette is in a readable form and calculate and confirm the Principal
         Balance of each Receivable for the most recent Distribution Date; and

                           (iii)    confirm that the Total Distribution Amount,
         the Class A Distributable Amount, the Class A Principal Distributable
         Amount, the Class A Interest Distributable Amount, the Back-up Servicer
         Fee, the Servicing Fee, the Trustee Fee, the amount on deposit in the
         Pre-Funding Account, the amount on deposit in the Capitalized Interest
         Account, the amount on deposit in the Spread

                                       51
<Page>

         Account and the Premium in the Servicer's Certificate are accurate
         based solely on the recalculation of the Servicer's Certificate.

         SECTION 3.16. FIDELITY BOND. The Servicer shall maintain a fidelity
bond in such form and amount as is customary for entities acting as custodian of
funds and documents in respect of consumer contracts on behalf of institutional
investors.

         SECTION 3.17. DELEGATION OF DUTIES. The Servicer may at any time
delegate duties under this Agreement to sub-contractors who are in the business
of servicing automotive receivables with the prior written consent of the
Certificate Insurer (so long as an Insurer Default shall not have occurred and
be continuing) or the Trustee (if an Insurer Default shall have occurred and be
continuing); PROVIDED, HOWEVER, that no such delegation or sub-contracting of
duties by the Servicer shall relieve the Servicer of its responsibility with
respect to such duties. In the event the Servicer shall for any reason no longer
be the servicer of the Receivables (including by reason of an Event of Default),
the Back-up Servicer, its designee or any successor Servicer will thereupon
assume all of the rights and obligations of the predecessor Servicer under one
or more subservicing agreements that may have been entered into by the
predecessor Servicer by giving notice of such assumption to the related
subservicer or subservicers within ten (10) Business Days of the termination of
the Servicer as servicer of the Receivables. Upon the giving of such notice, the
Back-up Servicer, its designee or the successor Servicer shall be deemed to have
assumed all of the predecessor Servicer's interest therein and to have replaced
the predecessor Servicer as a party to the subservicing agreement to the same
extent as if the subservicing agreement had been assigned to the assuming party
except that the predecessor Servicer and the subservicer, if any, shall not
thereby be relieved of any liability or obligations accrued up to the date of
the replacement of the Servicer under the subservicing agreement and the
subservicer, if any, shall not be relieved of any liability or obligation to the
predecessor Servicer that survives the assignment or termination of the
subservicing agreement. The Back-up Servicer shall notify each Rating Agency and
the Certificate Insurer if any subservicing agreement is assumed by the Back-up
Servicer, its designee or the successor Servicer. The predecessor Servicer
shall, upon request of the Trustee, the Back-up Servicer or any successor
Servicer, but at the expense of the predecessor Servicer, deliver to the
assuming party all documents and records relating to the subservicing agreement
and the Receivables then being serviced and an accounting of amounts collected
and held by it and otherwise use its reasonable efforts to effect the orderly
and efficient transfer of the subservicing agreement to the assuming party.

         SECTION 3.18. DELIVERY OF BACK-UP TAPES OF BACK-UP SERVICER. x) In
addition to the information to be delivered by the Servicer to the Back-up
Servicer on or before the fifth Business Day of each month pursuant to Section
3.15(a), the Servicer shall deliver to the Back-up Servicer, or its designated
agent, a computer diskette (or other electronic transmission), in a format
acceptable to the Back-up Servicer or its designated agent, as the case may be,
with the loan master file and history information in the form attached hereto as
Exhibit E-2 on or prior to the Closing Date in the case of the

                                       52
<Page>

Initial Receivables, and on or prior to the related Subsequent Transfer Date
in the case of Subsequent Receivables, which loan master file and history
information shall be sufficiently detailed to enable the Back-up Servicer to
maintain records sufficient to assume the role of successor Servicer pursuant
to this Agreement.

         (b)      In addition to the information required to be delivered by the
Servicer to the Back-up Servicer or its designated agent on or before the fifth
Business Day of each month pursuant to Section 3.15(a) and on or prior to the
Closing Date and each Subsequent Transfer Date pursuant to Section 3.18(a), the
Servicer shall deliver the loan master file and history information to the
Back-up Servicer or its designated agent on the Determination Date occurring in
July 1999 (with respect to the period from and including the Initial Cutoff Date
to the last day of the related Collection Period) and on the Determination Date
occurring every six months thereafter in the form attached hereto as Exhibit E-2
in writing and on a computer diskette (or other electronic transmission) in a
format acceptable to the Back-up Servicer or its designated agent, as the case
may be, and as at such other times as may be requested by the Certificate
Insurer or the Back-up Servicer upon prior written notice to the Servicer,
PROVIDED that the Back-up Servicer shall deliver a copy of any such notice by
the Back-up Servicer to the Certificate Insurer simultaneously with its delivery
of such notice to the Servicer.

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                                   ARTICLE IV

                            DISTRIBUTIONS; ACCOUNTS;
                        STATEMENTS TO CERTIFICATEHOLDERS

         SECTION 4.1. ACCOUNTS; LOCK-BOX ACCOUNT. xi) The Servicer has
established the Lock-Box Account as two Eligible Accounts, one established with
the Trustee entitled "Long Beach Acceptance Corp., Chase Bank of Texas Agent
Account -- Auto Loan Programs," account number 00100916395, and one established
with Bank of America National Trust and Savings Association entitled "Long Beach
Acceptance Corp., Chase Bank of Texas Agent Account -- Auto Loan Programs,"
account number 14572-02900; PROVIDED, that the Servicer, with the prior written
consent of the Certificate Insurer, may from time to time (a) establish
additional or substitute Lock-Box Accounts, each of which shall be an Eligible
Account, and (b) close or terminate the use of any of the aforementioned
accounts or any subsequently established accounts, each of which accounts, at
such time, shall no longer be deemed to be a Lock-Box Account; PROVIDED,
FURTHER, that pursuant to the Lock-Box Agreement, the Lock-Box Processor and no
other person, save the Trustee or the Servicer, has authority to direct
disposition of funds related to the Receivables on deposit in the Lock-Box
Account consistent with the provisions of this Agreement and the Lock-Box
Agreement. The Trustee shall have no liability or responsibility with respect to
the Lock-Box Processor's or the Servicer's directions or activities as set forth
in the preceding sentence. The Lock-Box Account shall be established pursuant to
and maintained in accordance with the Lock-Box Agreement and shall be a demand
deposit account which shall at all times be an Eligible Account, initially
established and maintained with Chase Texas or, at the request of the
Certificate Insurer, an Eligible Account satisfying clause (i) of the definition
thereof. The Servicer has established and shall maintain the Lock-Box at a
United States Post Office Branch. Notwithstanding the Lock-Box Agreement or any
of the provisions of this Agreement relating to the Lock-Box and the Lock-Box
Agreement, the Servicer shall remain obligated and liable to the Trustee and the
Certificateholders for servicing and administering the Receivables and the other
Trust Assets in accordance with provisions of this Agreement without diminution
of such obligation or liability by virtue thereof.

         In the event the Servicer shall for any reason no longer be acting as
such, the Lock-Box Agreement shall terminate in accordance with its terms and
funds on deposit in the Lock-Box Account shall be distributed by Chase Texas, as
agent for the beneficial owners of funds in the Lock-Box Account at such time
(including the Trust), and Chase Texas shall deposit any such funds relating to
the Receivables to such other account as shall be identified by the Back-up
Servicer or successor Servicer for deposit therein; PROVIDED, HOWEVER, that the
outgoing Servicer shall not thereby be relieved of any liability or obligations
on the part of the outgoing Servicer to the Lock-Box Bank under such Lock-Box
Agreement. The outgoing Servicer shall, upon request of the Trustee, but at the
expense of the outgoing Servicer, deliver to the successor Servicer all
documents and records relating to the Lock-Box Agreement and an accounting of
amounts collected and held in the Lock-Box Account or held by the Lock-Box
Processor in respect of the

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<Page>

Receivables and otherwise use its best efforts to effect the orderly and
efficient transfer of any Lock-Box Agreement to the successor Servicer. In
the event that the Lock-Box Account fails at any time to qualify as an
Eligible Account, the Servicer, at its expense, shall cause the Lock-Box Bank
to deliver, at the direction of the Certificate Insurer (so long as an
Insurer Default shall not have occurred and be continuing) or the Trustee (if
an Insurer Default shall have occurred and be continuing) to the Trustee or a
successor Lock-Box Bank, all documents and records relating to the
Receivables and all amounts held (or thereafter received) on deposit in the
Lock Box Account or held by the Lock-Box Processor in respect of the
Receivables (together with an accounting of such amounts) and shall otherwise
use its best efforts to effect the orderly and efficient transfer of the
lock-box arrangements, and the Servicer shall promptly notify the Obligors to
make payments to any new Lock-Box.

         (b)      In addition to the Lock-Box Account, the Trustee shall
establish, with itself, the Collection Account, the Certificate Account in the
name of the Trustee for the benefit of the Certificateholders and the
Certificate Insurer, the Pre-Funding Account in the name of the Trustee for the
benefit of the Certificateholders and the Certificate Insurer, the Capitalized
Interest Account in the name of the Trustee for the benefit of the
Certificateholders and the Certificate Insurer, and the Policy Payments Account
in the name of the Trustee for the benefit of the Class A Certificateholders. In
addition, the Trustee shall establish with itself the Payahead Account in the
name of the Trustee for the benefit of Obligors of Receivables who make payments
thereon in excess of Scheduled Payments to the extent described in Section 4.3,
and applicable late fees and miscellaneous fees and for the benefit, to the
extent of earnings on investments of funds in the Payahead Account, of the
Certificateholders. The Payahead Account, the Capitalized Interest Account and
the Spread Account established pursuant to the Spread Account Agreement shall
not be included in the Trust. Any amounts held on deposit in the Payahead
Account and any investment earnings thereon are owned by, and will be taxable
to, LBAC for federal income tax purposes. The Collection Account, the
Certificate Account, the Pre-Funding Account, the Payahead Account and the
Policy Payments Account shall be Eligible Accounts initially established with
the Trustee; PROVIDED, HOWEVER, if any of such accounts shall cease to be an
Eligible Account, the Servicer, with the consent of the Certificate Insurer (so
long as no Insurer Default has occurred and is continuing), within 5 Business
Days shall, cause such accounts to be moved to an institution so that such
account meets the definition of Eligible Account. The Servicer shall promptly
notify the Rating Agencies and the Depositor of any change in the location of
any of the aforementioned accounts.

         All amounts held in the Collection Account, the Pre-Funding Account and
the Payahead Account shall be invested by the Trustee at the written direction
of the Depositor in Eligible Investments in the name of the Trustee as trustee
of the Trust and shall mature no later than one Business Day immediately
preceding the Distribution Date next succeeding the date of such investment.
Such written direction shall certify that any such investment is authorized by
this Section. No investment may be sold prior to its maturity. Amounts in the
Certificate Account and the Policy Payments Account shall not

                                       55
<Page>

be invested. The amount of earnings on investments of funds in the Collection
Account and Payahead Account during the Collection Period related to each
Distribution Date shall be deposited into the Certificate Account on each
Distribution Date, and shall be available for distribution pursuant to
Section 4.6(c). The amount of earnings on investments of funds in the
Pre-Funding Account during the Collection Period related to each Distribution
Date shall be deposited in the Certificate Account on each Distribution Date
in an amount not to exceed the Pre-Funding Interest Amount, and such amount
shall be available for distribution pursuant to Section 4.6(c), and any
remaining investment earnings on the funds in the Pre-Funding Account shall
remain on deposit in the Pre-Funding Account and shall be distributed by the
Trustee to the Depositor at the end of the Funding Period. The amount of
earnings on investments of funds in the Capitalized Interest Account during
the Collection Period related to each Distribution Date shall be deposited
into the Capitalized Interest Account on such Distribution Date prior to
making any transfer from the Capitalized Interest Account to the Certificate
Account pursuant to Section 4.6(a)(iv). For purposes of this paragraph, the
Trustee will take delivery of the Eligible Investments in accordance with
Schedule C.

         (c)      The Trustee shall on or prior to each Distribution Date (and
prior to the transfer from the Collection Account to the Certificate Account
described in Section 4.6(a)) transfer from the Collection Account (i) to the
Payahead Account all Payaheads as described in Section 4.3 received during the
related Collection Period, (ii) to the Servicer, as additional servicing
compensation, the amount, if any, required to be paid to the Servicer pursuant
to Section 4.18, and (iii) to the Collateral Agent for deposit into the Excess
Cash Flow Sub-account, the amount of any contribution on behalf of the Servicer
required to be made thereto pursuant to Section 4.18 as certified to the Trustee
by the Servicer in accordance with Section 4.6(b) received during the related
Collection Period.

         SECTION 4.2. COLLECTIONS. The Servicer shall use reasonable efforts to
cause the Lock-Box Processor to transfer any payments in respect of the
Receivables from or on behalf of Obligors received in the Lock-Box to the
Lock-Box Account on the Business Day on which such payments are received,
pursuant to the Lock-Box Agreement. Within two Business Days of receipt of such
funds into the Lock-Box Account, the Servicer shall cause the Lock-Box Bank to
transfer available funds related to the Receivables from the Lock-Box Account to
the Collection Account, and if such funds are not available funds, as soon
thereafter as they clear (i.e., become available for withdrawal from the
Lock-Box Account). In addition, the Servicer shall remit all payments by or on
behalf of the Obligors received by the Servicer with respect to the Receivables
(other than Purchased Receivables), and all Liquidation Proceeds no later than
the second Business Day following receipt into the Lock-Box Account or the
Collection Account.

         SECTION 4.3. APPLICATION OF COLLECTIONS. All collections for each
Collection Period shall be applied by the Servicer as follows:

                                       56
<Page>

         With respect to each Receivable (other than a Purchased Receivable),
payments actually received from or on behalf of the Obligor (other than any such
payment allocable to a Payable) shall be applied hereunder, in the case of a
Precomputed Receivable, first, to the Scheduled Payment of such Precomputed
Receivable, with interest and principal being allocated on an actuarial basis,
second, in connection with the redemption of a defaulted Receivable, to
reimburse the Servicer for reasonable and customary out-of-pocket expenses
incurred by the Servicer in connection with such Receivable, and third, to any
late fees accrued with respect to such Precomputed Receivable and, in the case
of a Simple Interest Receivable, first, to interest and principal in accordance
with the Simple Interest Method to the extent necessary to bring such Simple
Interest Receivable current, second, in connection with the redemption of a
defaulted Receivable, to reimburse the Servicer for reasonable and customary
out-of-pocket expenses incurred by the Servicer in connection with such
Receivable, third, to late fees and fourth, to principal in accordance with the
Simple Interest Method. With respect to any Precomputed Receivable, any
remaining excess shall be added to the Payahead Balance, and shall be applied to
prepay the Precomputed Receivable, but only if the sum of such excess and the
previous Payahead Balance shall be sufficient to prepay the Precomputed
Receivable in full. Otherwise, any such remaining excess payments with respect
to a Precomputed Receivable shall constitute a Payahead, shall increase the
Payahead Balance and shall be applied as set forth in Section 4.4.

         SECTION 4.4. PAYAHEADS. As of the close of business on the last day of
each Collection Period, if the payments by or on behalf of the Obligor on a
Precomputed Receivable (other than a Purchased Receivable) shall be less than
the Scheduled Payment and accrued late fees with respect to such Receivable, the
Payahead Balance of an Obligor, other than the portion, if any, of such Payahead
Balance which constitutes a Payable, shall be applied by the Servicer to the
extent of the shortfall and such Payahead Balance shall be reduced accordingly.
The portion, if any, of the Payahead Balance of an Obligor which constitutes a
Payable shall be applied by the Servicer as a payment on the related Receivable
upon the earliest to occur of (i) the Collection Period in which such Receivable
becomes a Liquidated Receivable and (ii) payment in full of all other amounts
due and owing on such Receivable, including the payment of late charges and
miscellaneous fees.

         SECTION 4.5. ADDITIONAL DEPOSITS. The following additional deposits
shall be made in immediately available funds on the dates indicated: (i) on the
Business Day immediately preceding each Determination Date, the Servicer or
LBAC, as the case may be, shall deposit or cause to be deposited in the
Collection Account the aggregate Purchase Amount with respect to Purchased
Receivables, (ii) on the Business Day immediately preceding each Determination
Date, the Originator or the Servicer, as the case may be, shall deposit in the
Collection Account all amounts to be paid under Section 10.2, (iii) on the
Determination Date immediately succeeding the date on which the Funding Period
ends (or on the Determination Date on which the Funding Period ends, if the
Funding Period ends on a Determination Date), the Trustee shall remit the
remaining Pre-Funded Amount on deposit in the Pre-Funding Account to the
Certificate Account

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<Page>

pursuant to Section 4.19(c) and (iv) on or before each Draw Date, the Trustee
shall remit to the Collection Account any amounts delivered to the Trustee by
the Collateral Agent.

         SECTION 4.6. DISTRIBUTIONS; POLICY CLAIMS. xii) On each Distribution
Date, the Trustee shall cause to be made the following transfers and
distributions based solely on the amounts set forth in the Servicer's
Certificate for the related Distribution Date:

                           (i)      from the Collection Account to the
         Certificate Account, in immediately available funds, an amount equal to
         the excess of the sum of (a) all funds that were deposited in the
         Collection Account, plus (b) earnings on investments of funds in the
         Collection Account pursuant to Section 4.1(b), for the related
         Collection Period over all funds transferred from the Collection
         Account with respect to such Collection Period pursuant to Section
         4.1(c);

                           (ii)     from the Payahead Account to the Certificate
         Account, in immediately available funds, the aggregate previous
         Payaheads to be applied to Scheduled Payments on Precomputed
         Receivables or prepayments for the related Collection Period pursuant
         to Sections 4.3 and 4.4, plus earnings on investments of funds in the
         Payahead Account for the related Collection Period pursuant to Section
         4.1(b);

                           (iii)    from the Pre-Funding Account to the
         Certificate Account, in immediately available funds, earnings on
         investments of funds in the Pre-Funding Account for the related
         Collection Period pursuant to Section 4.1(b); and

                           (iv)     from the Capitalized Interest Account to the
         Certificate Account, an amount equal to the Negative Carry Amount for
         the related Collection Period, if any.

         (b)      Prior to each Distribution Date, the Servicer shall on the
related Determination Date calculate the Total Distribution Amount, the Class A
Distributable Amount, the Class A Interest Distributable Amount, the Class A
Principal Distributable Amount, the Monthly Dealer Participation Fee
Distributable Amount, the amount, if any, required to be withdrawn from the
Collection Account and paid to the Servicer as additional servicing compensation
or contributed to the Spread Account on behalf of the Servicer, in each case
pursuant to Section 4.18 and, based on the Total Distribution Amount and the
other amounts available for distribution on such Distribution Date, determine
the amount distributable to the Certificateholders.

         (c)      On each Distribution Date, the Trustee shall (x) distribute
all amounts delivered by the Certificate Insurer to the Trustee for deposit into
the Collection Account pursuant to Section 4.11 for distribution in the amounts
and priority as directed by the Certificate Insurer, and (y) (based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to SECTION 3.9) subject to subsection (d) hereof,
make the following distributions from the Total Distribution

                                       58
<Page>

Amount withdrawn from the Certificate Account and from the other sources
described below in the following order of priority:

                           (i)      FIRST, to LBAC, from the Total Distribution
         Amount, the Monthly Dealer Participation Fee Distributable Amount and
         all unpaid Monthly Dealer Participation Fee Distributable Amounts from
         prior Collection Periods, and SECOND, to the Servicer, from the Total
         Distribution Amount (as the Total Distribution Amount has been reduced
         by payments pursuant to subclause FIRST of this clause (i)), the
         Servicing Fee and all unpaid Servicing Fees from prior Collection
         Periods and, if the Total Distribution Amount is insufficient to pay
         such Servicing Fee and such unpaid Servicing Fees from prior Collection
         Periods, the Servicer will receive such deficiency from the Deficiency
         Claim Amount with respect to such Distribution Date, if any, to the
         extent received by the Trustee from the Collateral Agent;

                           (ii)     to the Trustee, the Back-up Servicer and the
         Custodian, from the Total Distribution Amount (as such Total
         Distribution Amount has been reduced by payments pursuant to clause (i)
         above), the Trustee Fee, the Back-up Servicer Fee and all unpaid
         Trustee Fees and Back-up Servicer Fees from prior Collection Periods
         and, if the Total Distribution Amount is insufficient, the Trustee and
         Back-up Servicer will receive such deficiency from the remaining
         portion of the Deficiency Claim Amount with respect to such
         Distribution Date, if any, to the extent received by the Trustee from
         the Collateral Agent, after application thereof pursuant to clause (i)
         above;

                           (iii)    to the Class A Certificateholders, from the
         Total Distribution Amount (as such Total Distribution Amount has been
         reduced by payments pursuant to clauses (i) and (ii) above), an amount
         equal to the sum of the Class A Interest Distributable Amount and any
         Class A Interest Carryover Shortfall as of the close of business on the
         preceding Distribution Date (plus (without duplication) interest on
         such outstanding Class A Interest Carryover Shortfall, to the extent
         permitted by applicable law, at the Class A Pass-Through Rate from such
         preceding Distribution Date through the current Distribution Date
         (calculated on the basis of a 360-day year consisting of twelve 30-day
         months)) and, if the Total Distribution Amount is insufficient, the
         Class A Certificateholders will receive such deficiency from the
         following sources in the following order of priority: (A) from the
         remaining portion of the Deficiency Claim Amount with respect to such
         Distribution Date, if any, to the extent received by the Trustee from
         the Collateral Agent, after application thereof pursuant to clauses (i)
         and (ii) above and (B) from the Policy Claim Amount with respect to
         such Distribution Date, if any, received by the Trustee from the
         Certificate Insurer;

                           (iv)     to the Class A Certificateholders, from the
         Total Distribution Amount (as such Total Distribution Amount has been
         reduced by payments

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<Page>

         pursuant to clauses (i) through (iii) above) and, if such
         Distribution Date is the Final Funding Period Distribution Date,
         from any Prepayment Amount, an amount equal to the sum of the Class
         A Principal Distributable Amount and any Class A Principal
         Carryover Shortfall as of the close of business on the preceding
         Distribution Date and, if the Total Distribution Amount is
         insufficient, the Class A Certificateholders will receive such
         deficiency from the following sources in the following order of
         priority: (A) from the remaining portion of the Deficiency Claim
         Amount with respect to such Distribution Date, if any, to the
         extent received by the Trustee from the Collateral Agent, after
         application thereof pursuant to clauses (i) through (iii) above,
         plus (B) the remaining portion of the Policy Claim Amount with
         respect to such Distribution Date, if any, after application
         thereof pursuant to clause (iii) above;

                           (v)      first, to the Certificate Insurer, from the
         Total Distribution Amount (as such Total Distribution Amount has been
         reduced by payments pursuant to clauses (i) through (iv) above), an
         amount equal to the Reimbursement Obligations and, if the Total
         Distribution Amount is insufficient, the Certificate Insurer shall
         receive such deficiency from the remaining portion of the Deficiency
         Claim Amount with respect to such Distribution Date, if any, to the
         extent received by the Trustee from the Collateral Agent, after
         application thereof pursuant to clauses (i) through (iv) above, second,
         to the Trustee, the Back-up Servicer and the Custodian, as applicable,
         from the Total Distribution Amount (as such Total Distribution Amount
         has been reduced by payments pursuant to clauses (i) through (iv) above
         and subclause first of this clause (v)), all reasonable out-of-pocket
         expenses of the Trustee, the Back-up Servicer and the Custodian
         (including reasonable counsel fees and expenses), including, without
         limitation, costs and expenses required to be paid by the Servicer to
         the Back-up Servicer under Section 8.2(a), to the extent not paid by
         the Servicer, and all unpaid reasonable out-of-pocket expenses of the
         Trustee, the Back-up Servicer and the Custodian (including reasonable
         counsel fees and expenses) from prior Collection Periods; PROVIDED,
         HOWEVER, that unless an Event of Default shall have occurred and be
         continuing, expenses payable to the Trustee, the Back-up Servicer and
         the Custodian pursuant to this subclause second of clause (v) shall be
         limited to a combined aggregate amount of $50,000 per annum, and third
         to the Back-up Servicer, from the Total Distribution Amount (as such
         Total Distribution Amount has been reduced by payments pursuant to
         clauses (i) through (iv) above and subclauses first and second of this
         clause (v)), in the event that the Back-up Servicer shall have assumed
         the obligations of Servicer pursuant to Section 8.2(a) and the Servicer
         fails to pay the Back-up Servicer for system conversion expenses as
         required by said section, an aggregate amount not to exceed $100,000 in
         payment of such system conversion expenses; and

                           (vi)     to the Collateral Agent on behalf of the
         Certificate Insurer, the Trustee (on behalf of the Class A
         Certificateholders) and the trustees for certain other trusts, if any,
         to be established by the Depositor, the remaining Total

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         Distribution Amount (as such Total Distribution Amount has been
         reduced by payments pursuant to clauses (i) through (v) above) for
         application in accordance with the provisions of the Spread Account
         Agreement.

         In addition, on each Distribution Date, after giving effect to the
distributions specified in clauses (i) through (vi) above, the Trustee shall
distribute to the Excess Cash Flow Certificateholder the amount, if any, to be
released to the Excess Cash Flow Certificateholder pursuant to the terms of the
Spread Account Agreement.

         (d)      Each Certificateholder, by its acceptance of its Certificate,
will be deemed to have consented to the provisions of Section 4.6(c) relating to
the priority of distributions, and will be further deemed to have acknowledged
that no property rights in any amount or the proceeds of any such amount shall
vest in such Certificateholder until such amounts have been distributed to such
Certificateholder pursuant to such provisions; PROVIDED, that the foregoing
shall not restrict the right of any Certificateholder, upon compliance with the
provisions hereof from seeking to compel the performance of the provisions
hereof by the parties hereto. Each Certificateholder, by its acceptance of the
Certificate, will be deemed to have further agreed that withdrawals of funds by
the Collateral Agent from the Spread Account for application hereunder, shall be
made in accordance with the provisions of the Spread Account Agreement.

         In furtherance of and not in limitation of the foregoing, the Excess
Cash Flow Certificateholder by acceptance of the Excess Cash Flow Certificate,
specifically acknowledges that no amounts shall be received by it, nor shall it
have any right to receive any amounts, unless and until such amounts have been
distributed pursuant to Section 4.6(c) or released pursuant to priority SEVENTH
of Section 3.03(b) of the Spread Account Agreement for distribution to the
Excess Cash Flow Certificateholder pursuant to Section 4.6(c). The Excess Cash
Flow Certificateholder, by its acceptance of the Excess Cash Flow Certificate,
further specifically acknowledges that it has no right to or interest in any
moneys at any time held pursuant to the Spread Account Agreement prior to the
release of such moneys as aforesaid, such moneys being held in trust for the
benefit of the Class A Certificateholders and the Certificate Insurer as their
interests may appear prior to such release. Notwithstanding the foregoing, in
the event that it is ever determined that any property held in the Spread
Account constitute a pledge of collateral, then the provisions of this Agreement
and the Spread Account Agreement shall be considered to constitute a security
agreement and the Depositor and the Excess Cash Flow Certificateholder hereby
grant to the Collateral Agent and to the Trustee, respectively, a first priority
perfected security interest in such amounts, to be applied as set forth in
Section 3.03(b) of the Spread Account Agreement. In addition, the Excess Cash
Flow Certificateholder, by acceptance of its Certificate, hereby appoints the
Depositor as its agent to pledge a first priority perfected security interest in
the Spread Account, and any property held therein from time to time to the
Collateral Agent for the benefit of the Trustee and the Certificate Insurer
pursuant to the Spread Account Agreement and agrees to execute and deliver such
instruments of conveyance, assignment, grant, confirmation, etc., as well as any
financing statements, in each case as

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the Certificate Insurer shall consider reasonably necessary in order to
perfect the Collateral Agent's Security Interest in the Collateral (as such
terms are defined in the Spread Account Agreement).

         (e)      Subject to Section 10.1 respecting the final payment upon
retirement of each Certificate, the Servicer shall on each Distribution Date
instruct the Trustee to distribute to each Certificateholder of record on the
preceding Record Date either (i) by wire transfer, in immediately available
funds to the account of such Holder at a bank or other entity having appropriate
facilities therefor, if such Certificateholder is the Clearing Agency or such
Holder's Certificates in the aggregate evidence an original principal balance of
at least $1,000,000, and if such Certificateholder shall have provided to the
Trustee appropriate instructions prior to the Record Date for such Distribution
Date, or (ii) by check mailed to such Certificateholder at the address of such
Holder appearing in the Certificate Register, such Holder's Fractional Undivided
Interest of the Class A Distributable Amount in accordance with the Servicer's
Certificate.

         SECTION 4.7. [RESERVED]

         SECTION 4.8. STATEMENTS TO CERTIFICATEHOLDERS; TAX RETURNS. xiii) With
each distribution from the Certificate Account to the Certificateholders made on
a Distribution Date, the Servicer shall provide to the Certificate Insurer, the
Depositor, and to the Trustee, with a copy to each Rating Agency, for the
Trustee to forward to each Certificateholder of record a statement (prepared by
the Servicer) substantially in the form of Exhibit E hereto setting forth at
least the following information as to the Certificates to the extent applicable:

                           (i)      the amount of such distribution allocable to
         principal of the Class A Certificates;

                           (ii)     the amount of such distribution allocable to
         interest on the Class A Certificates;

                           (iii)    the number of Receivables, the weighted
         average APR of the Receivables, the weighted average maturity of the
         Receivables, the Pool Balance, the weighted average Monthly Dealer
         Participation Fee and the Class A Pool Factor as of the close of
         business on the last day of the preceding Collection Period;

                           (iv)     the Class A Certificate Balance as of the
         close of business on the last day of the preceding Collection Period,
         after giving effect to payments allocated to principal reported under
         clause (i) above;

                           (v)      the amount of the Monthly Dealer
         Participation Fee Distributable Amount paid to LBAC, the amount of the
         Servicing Fee paid to the Servicer and the amount of the Back-up
         Servicer Fee paid to the Back-up Servicer with respect to the related
         Collection Period, the sum of the Servicing Fee and the

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         Back-up Servicer Fee, the amount of any unpaid Servicing Fees and
         any unpaid Back-up Servicer Fees and the change in such amounts
         from the prior Distribution Date;

                           (vi)     the amount of the Class A Interest Carryover
         Shortfall, if applicable, on such Distribution Date and the Class A
         Principal Carryover Shortfall, if applicable, on such Distribution
         Date, and the change in such amounts from the prior Distribution Date;

                           (vii)    the amount paid, if any, to Class A
         Certificateholders from funds received under the Policy for such
         Distribution Date;

                           (viii)   the amount distributable to the Certificate
         Insurer on such Distribution Date;

                           (ix)     the aggregate amount in each of the Payahead
         Account and the Spread Account and the change in each such amount from
         the preceding Distribution Date;

                           (x)      the number of Receivables and the aggregate
         outstanding principal amount scheduled to be paid thereon, for which
         the related Obligors are delinquent in making Scheduled Payments
         between 30 and 59 consecutive days, 60 and 89 consecutive days, 90 and
         119 consecutive days and 120 consecutive days or more (in each case
         calculated on the basis of a 360-day year of twelve 30-day months), as
         of the last day of the related Collection Period, and the percentage of
         the aggregate principal amount which such delinquencies represent;

                           (xi)     the number and the aggregate Purchase Amount
         of Receivables that became Purchased Receivables during the related
         Collection Period and summary information as to losses and
         delinquencies with respect to the Receivables;

                           (xii)    the cumulative number and amount of
         Liquidated Receivables, the cumulative amount of any Liquidation
         Proceeds and Recoveries, since the Initial Cutoff Date to the last day
         of the related Collection Period, the number and amount of Liquidated
         Receivables for the related Collection Period and the amount of
         Recoveries in the related Collection Period;

                           (xiii)   the Average Delinquency Ratio, the
         Cumulative Default Rate and the Cumulative Loss Rate (as such terms are
         defined in the Spread Account Agreement) for such Distribution Date;

                           (xiv)    whether any Trigger Event has occurred as of
         such Determination Date;

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                           (xv)     whether any Trigger Event that may have
         occurred as of a prior Determination Date is Deemed Cured (as such term
         is defined in the Spread Account Agreement) or otherwise waived as of
         such Determination Date;

                           (xvi)    whether an Insurance Agreement Event of
         Default has occurred;

                           (xvii)   the number and amount of Cram Down Losses,
         the number and dollar amount of repossessions, the aging of
         repossession inventory with respect to Liquidated Receivables, the
         aging and repossession inventory with respect to Receivables which are
         not Liquidated Receivables and the dollar amount of Recoveries;

                           (xviii)  for Distribution Dates during the Funding
         Period and the Distribution Date immediately succeeding the Final
         Funding Period Distribution Date, the amount withdrawn from the
         Pre-Funding Account to purchase Subsequent Receivables during the
         related Collection Period and the remaining Pre-Funded Amount on
         deposit in the Pre-Funding Account;

                           (xix)    for Distribution Dates during the Funding
         Period and the Distribution Date immediately succeeding the Final
         Funding Period Distribution Date, the Negative Carry Amount in respect
         of the related Collection Period withdrawn from the Capitalized
         Interest Account and the amount remaining on deposit in the Capitalized
         Interest Account; and

                           (xx)     for the first Distribution Date that is on
         or immediately following the end of the Funding Period, the amount of
         the Pre-Funded Amount (if any) that has not been used to purchase
         Subsequent Receivables and is being distributed as a payment of
         principal to Offered Certificateholders.

Each amount set forth pursuant to subclauses (i), (ii), and (v) above shall be
expressed as a dollar amount per $1,000 of original principal balance of a
Certificate.

         (b)      No later than January 31 of each calendar year, commencing
January 31, 2000, the Servicer shall send to the Trustee, and the Trustee shall,
provided it has received the necessary information from the Servicer, promptly
thereafter furnish to each Person who at any time during the preceding calendar
year was a Certificateholder of record and received any payment thereon (a) a
report (prepared by the Servicer) as to the aggregate of amounts reported
pursuant to subclauses (i), (ii) and (v) of Section 4.8(a) for such preceding
calendar year or applicable portion thereof during which such person was a
Certificateholder, and (b) such information as may be reasonably requested by
the Certificateholders or required by the Internal Revenue Code and regulations
thereunder, to enable such Holders to prepare their Federal and State income tax
returns. The obligation of the Trustee set forth in this paragraph shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Servicer pursuant to any requirements of
the Code.

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<Page>

         (c)      The Servicer, at its own expense, shall cause a firm of
nationally recognized accountants to prepare any tax returns required to be
filed by the Trust, and the Trustee shall execute and file such returns if
requested to do so by the Servicer. The Trustee, upon request, will furnish the
Servicer with all such information known to the Trustee as may be reasonably
requested by the Servicer in connection with the preparation of all tax returns
of the Trust.

         SECTION 4.9. [RESERVED]

         SECTION 4.10. RELIANCE ON INFORMATION FROM THE SERVICER.
Notwithstanding anything to the contrary contained in this Agreement, all
distributions from any of the accounts described in this Article IV and any
transfer of amounts between such accounts shall be made by the Trustee in
reliance on information provided to the Trustee by the Servicer in writing,
whether by way of a Servicer's Certificate or otherwise.

         SECTION 4.11. OPTIONAL DEPOSITS BY THE CERTIFICATE INSURER. The
Certificate Insurer shall at any time, and from time to time, with respect to a
Distribution Date, have the option (but shall not be required, except as
provided in Section 4.6(d)) to deliver amounts to the Trustee for deposit into
the Collection Account for any of the following purposes: (i) to provide funds
in respect of the payment of fees or expenses of any provider of services to the
Trust with respect to such Distribution Date, (ii) to distribute as a component
of the Class A Principal Distributable Amount to the extent that the Class A
Certificate Balance as of the Determination Date preceding such Distribution
Date exceeds the Pool Balance as of such Determination Date, or (iii) to include
such amount as part of the Class A Distributable Amount for such Distribution
Date to the extent that without such amount a draw would be required to be made
on the Policy.

         SECTION 4.12. SPREAD ACCOUNT. The Depositor agrees, simultaneously with
the execution and delivery of this Agreement, to execute and deliver the Spread
Account Agreement and, pursuant to the terms thereof, to deposit $3,672,609.97
in the Spread Account on the Closing Date. In addition, on each Subsequent
Transfer Date, pursuant to the terms of the Spread Account Agreement, the
Depositor shall deposit the related Subsequent Spread Account Deposit in the
Spread Account. Although the Depositor as Excess Cash Flow Certificateholder,
has pledged the Spread Account to the Collateral Agent and the Certificate
Insurer pursuant to the Spread Account Agreement, the Spread Account shall not
under any circumstances be deemed to be a part of or otherwise includible in the
Trust or the Trust Assets.

         SECTION 4.13. POLICY. The Originator agrees, simultaneously with the
execution and delivery of this Agreement, to cause the Certificate Insurer to
issue the Policy for the benefit of the Class A Certificateholders in accordance
with the terms thereof.

         SECTION 4.14. WITHDRAWALS FROM SPREAD ACCOUNT. xiv) In the event that
the Servicer's Certificate with respect to any Determination Date shall state
that the

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amount of the Total Distribution Amount with respect to such Determination
Date is less than the sum of the amounts payable on the related Distribution
Date pursuant to clauses (i) through (iv) and subclause first of clause (v)
of Section 4.6(c) (such deficiency being a "Deficiency Claim Amount") then on
the Deficiency Claim Date immediately preceding such Distribution Date, the
Trustee shall deliver to the Collateral Agent, the Certificate Insurer, the
Fiscal Agent (as such term is defined in the Insurance Agreement), if any,
the Servicer, by hand delivery, telex or facsimile transmission, a written
notice (a "Deficiency Notice") specifying the Deficiency Claim Amount for
such Distribution Date. Such Deficiency Notice shall direct the Collateral
Agent to remit such Deficiency Claim Amount (to the extent of the funds
available to be distributed pursuant to the Spread Account Agreement) to the
Trustee for deposit in the Collection Account.

         (b)      Any Deficiency Notice shall be delivered by 10:00 a.m., New
York City time, on the related Deficiency Claim Date. The amounts distributed by
the Collateral Agent to the Trustee pursuant to a Deficiency Notice shall be
deposited by the Trustee into the Collection Account pursuant to Section 4.5.

         SECTION 4.15. CLAIMS UNDER POLICY. xv) In the event that the Trustee
has delivered a Deficiency Notice with respect to any Determination Date, the
Trustee shall determine on the related Draw Date whether the sum of (i) the
amount of Total Distribution Amount with respect to such Determination Date (as
stated in the Servicer's Certificate with respect to such Determination Date)
plus (ii) the amount of the Deficiency Claim Amount, if any, available to be
distributed pursuant to the Spread Account Agreement by the Collateral Agent to
the Trustee pursuant to a Deficiency Notice delivered with respect to such
Distribution Date (as stated in the certificate delivered on the immediately
preceding Deficiency Claim Date by the Collateral Agent pursuant to Section
3.03(a) of the Spread Account Agreement) would be insufficient, after giving
effect to the distributions required by Section 4.6(c)(i) and (ii), to pay the
Guaranteed Distributions for the related Distribution Date, then in such event
the Trustee shall furnish to the Certificate Insurer no later than 12:00 noon
New York City time on the related Draw Date a completed Notice of Claim in the
amount of the shortfall in amounts so available to pay the Guaranteed
Distributions with respect to such Distribution Date (the amount of any such
shortfall being hereinafter referred to as the "Policy Claim Amount"). Amounts
paid by the Certificate Insurer under the Policy shall be deposited by the
Trustee into the Policy Payments Account and thereafter into the Certificate
Account for payment to Class A Certificateholders on the related Distribution
Date (or promptly following payment on a later date as set forth in the Policy).

         (b)      Any notice delivered by the Trustee to the Certificate Insurer
pursuant to Section 4.15(a) shall specify the Policy Claim Amount claimed under
the Policy and shall constitute a "Notice of Claim" under the Policy. In
accordance with the provisions of the Policy, the Certificate Insurer is
required to pay to the Trustee the Policy Claim Amount properly claimed
thereunder by 12:00 noon, New York City time, on the later of (i) the second
Business Day (as defined in the Policy) following receipt on a Business Day (as
defined in the Policy) of the Notice of Claim, and (ii) the applicable
Distribution Date.

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Any payment made by the Certificate Insurer under the Policy shall be applied
solely to the payment of the Class A Certificates, and for no other purpose.

         (c)      The Trustee shall (i) receive as attorney-in-fact of each
Class A Certificateholder any Policy Claim Amount from the Certificate Insurer
and (ii) deposit the same in the Policy Payments Account for disbursement to the
Class A Certificateholders as set forth in clauses (iii) and (iv) of Section
4.6(c). Any and all Policy Claim Amounts disbursed by the Trustee from claims
made under the Policy shall not be considered payment by the Trust or from the
Spread Account with respect to such Class A Certificates, and shall not
discharge the obligations of the Trust with respect thereto. The Certificate
Insurer shall, to the extent it makes any payment with respect to the Class A
Certificates, become subrogated to the rights of the recipients of such payments
to the extent of such payments. Subject to and conditioned upon any payment with
respect to the Class A Certificates by or on behalf of the Certificate Insurer,
each Class A Certificateholder shall be deemed, without further action, to have
directed the Trustee to assign to the Certificate Insurer all rights to the
payment of interest or principal with respect to the Class A Certificates which
are then due for payment to the extent of all payments made by the Certificate
Insurer and the Certificate Insurer may exercise any option, vote, right, power
or the like with respect to the Class A Certificates to the extent that it has
made payment pursuant to the Policy. Notwithstanding the foregoing, the order of
priority of payments to be made pursuant to Section 4.6(c) shall not be modified
by this clause (c). To evidence such subrogation, the Certificate Registrar
shall note the Certificate Insurer's rights as subrogee upon the register of
Class A Certificateholders upon receipt from the Certificate Insurer of proof of
payment by the Certificate Insurer of any Class A Interest Distributable Amount
or Class A Principal Distributable Amount.

         (d)      The Trustee shall be entitled, but not obligated, to enforce
on behalf of the Class A Certificateholders the obligations of the Certificate
Insurer under the Policy. Notwithstanding any other provision of this Agreement,
the Class A Certificateholders are not entitled to institute proceedings
directly against the Certificate Insurer.

         SECTION 4.16. PREFERENCE CLAIMS; DIRECTION OF PROCEEDINGS. xvi) In the
event that the Trustee has received a certified copy of an order of the
appropriate court that any Guaranteed Distribution paid on a Class A Certificate
has been avoided in whole or in part as a preference payment under applicable
bankruptcy law, the Trustee shall so notify the Certificate Insurer, shall
comply with the provisions of the Policy to obtain payment by the Certificate
Insurer of such avoided payment, and shall, at the time it provides notice to
the Certificate Insurer, shall comply with the provisions of the Policy to
obtain payment by the Certificate Insurer, notify Holders of the Class A
Certificates by mail that, in the event that any Class A Certificateholder's
payment is so recoverable, such Class A Certificateholder will be entitled to
payment pursuant to the terms of the Policy. Pursuant to the terms of the
Policy, the Certificate Insurer will make such payment on behalf of the Class A
Certificateholder to the receiver, conservator, debtor-in-possession or trustee
in bankruptcy named in the Order (as defined in the Policy) and not to the
Trustee or any Class A Certificateholder directly (unless a Class A

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Certificateholder has previously paid such payment to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy, in which case the Certificate
Insurer will make such payment to the Trustee for distribution, in accordance
with the instructions to be provided by the Certificate Insurer, to such Class A
Certificateholder upon proof of such payment reasonably satisfactory to the
Certificate Insurer).

         (b)      Each Notice of Claim shall provide that the Trustee, on its
behalf and on behalf of the Class A Certificateholders, thereby appoints the
Certificate Insurer as agent and attorney-in-fact for the Trustee and each Class
A Certificateholder in any legal proceeding with respect to the Class A
Certificates. The Trustee shall promptly notify the Certificate Insurer of any
proceeding or the institution of any action (of which a Responsible Officer of
the Trustee has actual knowledge) seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership, rehabilitation
or similar law (a "Preference Claim") of any distribution made with respect to
the Class A Certificates. Each Holder of Class A Certificates, by its purchase
of Class A Certificates, and the Trustee hereby agree that so long as an Insurer
Default shall not have occurred and be continuing, the Certificate Insurer may
at any time during the continuation of any proceeding relating to a Preference
Claim direct all matters relating to such Preference Claim including, without
limitation, (i) the direction of any appeal of any order relating to any
Preference Claim and (ii) the posting of any surety, supersedeas or performance
bond pending any such appeal at the expense of the Certificate Insurer, but
subject to reimbursement as provided in the Insurance Agreement. In addition,
and without limitation of the foregoing, as set forth in Section 4.15(c), the
Certificate Insurer shall be subrogated to, and each Class A Certificateholder
and the Trustee hereby delegate and assign, to the fullest extent permitted by
law, the rights of the Trustee and each Class A Certificateholder in the conduct
of any proceeding with respect to a Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim.

         SECTION 4.17. SURRENDER OF POLICY. The Trustee shall surrender the
Policy to the Certificate Insurer for cancellation upon its expiration in
accordance with the terms thereof.

         SECTION 4.18. SIMPLE INTEREST ADVANCES. On each Determination Date, the
Servicer shall determine the amount, if any, of any Simple Interest Shortfall or
Simple Interest Excess for the related Collection Period. If the Servicer
determines that there is a Simple Interest Shortfall for such related Collection
Period, the Servicer shall make an advance (a "Simple Interest Advance") in the
amount of such Simple Interest Shortfall and deposit such Simple Interest
Advance into the Collection Account on or before the Business Day immediately
preceding the next succeeding Distribution Date. If, however, the Servicer
determines that there is a Simple Interest Excess for such Collection Period,
the Trustee shall withdraw the amount of such Simple Interest Excess from the
Collection Account on the next Distribution Date and pay the amount of such
Simple Interest Excess to the Servicer as additional servicing compensation.
Notwithstanding the immediately

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preceding sentence, to the extent that the aggregate amount of Simple
Interest Advances made by the Servicer with respect to all prior Collection
Periods does not exceed the aggregate amount of all Simple Interest Excesses
with respect to such prior Collection Periods, such excess shall be deposited
pursuant to Section 4.6(b) into the Spread Account and shall be treated as a
contribution to the Spread Account by the Servicer for the benefit of the
Holder of the Excess Cash Flow Certificate for federal income tax purposes.

         SECTION 4.19. PRE-FUNDING ACCOUNT.

         (a)      Pursuant to Section 4.1(b), the Trustee shall establish and
maintain the Pre-Funding Account as an Eligible Account in the name of the
Trustee on behalf of the Trust for the benefit of the Certificateholders and the
Certificate Insurer.

         (b)      On the Closing Date, the Depositor will deposit in the
Pre-Funding Account an amount equal to the Original Pre-Funded Amount from the
proceeds of the sale of the Class A Certificates. On each Subsequent Transfer
Date, the Servicer shall instruct the Trustee in writing to withdraw from the
Pre-Funding Account an amount equal to the Principal Balance of the Subsequent
Receivables (as of the related Subsequent Cutoff Date) sold to the Trust on such
Subsequent Transfer Date and pay such amount to or upon the order of the
Depositor upon satisfaction of the conditions set forth in this Agreement and in
the related Transfer Agreement with respect to such transfer.

         (c)      If (i) the Pre-Funded Amount has not been reduced to zero by
the close of business on the Final Funding Period Distribution Date or (ii) the
Pre-Funded Amount has been reduced to $100,000 or less as of any Distribution
Date during the Funding Period, in either case after giving effect to any
reductions in the Pre-Funded Amount on such Distribution Date pursuant to
Section 4.19(b), the Servicer shall instruct the Trustee to withdraw such
remaining portion of the Pre-Funded Amount from the Pre-Funding Account and
deposit it in the Certificate Account on such Distribution Date to be applied to
a partial prepayment of the Class A Certificates, in addition to the payment of
principal and interest that otherwise would be payable with respect to such
Class A Certificates on such Distribution Date.

         SECTION 4.20. CAPITALIZED INTEREST ACCOUNT.

         (a)      Pursuant to Section 4.1(b), the Capitalized Interest Account
shall be an Eligible Account established by the Trustee in the name of the
Trustee for the benefit of the Certificateholders and the Certificate Insurer
and maintained with the Collateral Agent. On the Closing Date, the Depositor
will deposit in the Capitalized Interest Account an amount equal to $179,000
(such amount, the "Capitalized Interest Account Deposit").

         (b)      In order to assure availability of the amounts maintained in
the Capitalized Interest Account, the Depositor, on behalf of itself, its
successors and assigns, hereby sells, conveys and transfers to the Collateral
Agent and its successors and assigns, the

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Capitalized Interest Account Deposit and all proceeds thereof, and hereby
pledges to the Collateral Agent and its successors and assigns, for the
benefit of the Trustee and the Certificate Insurer, all amounts deposited in
or credited to the Capitalized Interest Account from time to time under this
Agreement, all Eligible Investments made with amounts on deposit therein, all
earnings and distributions thereon and proceeds thereof, subject, however, to
the limitations set forth below, and solely for the purpose of securing and
providing for payment of distributions on the Certificates, in each case to
the extent provided in Section 4.6 (all the foregoing, subject to the
limitations set forth below, being the "Capitalized Interest Account
Property"), to have and to hold all the aforesaid property, rights and
privileges unto the Collateral Agent, its successors and assigns, for the
benefit of the Trustee and the Certificate Insurer, in trust for the uses and
purposes, and subject to the terms and provisions, set forth in this Section.
The Collateral Agent on behalf of the Trustee and the Certificate Insurer
hereby acknowledges such transfer and accepts the trusts hereunder and shall
hold and distribute the Capitalized Interest Account Property in accordance
with the terms and provisions of this Section.

                           (i)      Consistent with the limited purposes for
         which such trust is granted on each Distribution Date, the amounts on
         deposit in the Capitalized Interest Account shall be available for
         deposit to the Certificate Account pursuant to Section 4.6(a)(iv) for
         distribution as provided in Section 4.6(c). On the Final Funding Period
         Distribution Date, any remaining amounts in the Capitalized Interest
         Account will be paid directly to the Depositor. Upon any such
         distribution to the Depositor, the Class A Certificateholders will have
         no further rights in, or claims to, such amounts.

         (c)      Amounts held in the Capitalized Interest Account shall be
invested by the Collateral Agent in Eligible Investments which shall mature no
later than the Business Day immediately preceding the next Distribution Date in
accordance with written instructions from the Depositor and such investments
shall not be sold or disposed of prior to their maturity. All such investments
shall be deemed to be made at the direction of the Trustee and shall be made for
the benefit of the Trustee, and all income and gain realized thereon shall be
solely for the benefit of, and taxable to, the Depositor subject to the security
interest of the Trustee created under Section 4.20(b)(i). Realized losses, if
any, on investment of the Capitalized Interest Account Property shall be charged
first against undistributed investment earnings attributable to the Capitalized
Interest Account Property.

         The Trustee and the Depositor on behalf of itself, its successors and
assigns, agree that:

                           (i)      any Capitalized Interest Account Property
         that is held in deposit accounts shall be held solely in the name of
         the Collateral Agent. Each such deposit account shall be subject to the
         exclusive custody and control of the Collateral Agent, and the
         Collateral Agent shall have sole signature authority with respect
         thereto;

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                           (ii)     any Capitalized Interest Account Property
         that is a bankers acceptance or is commercial paper, negotiable
         certificates of deposit or another obligation that constitutes
         "instruments" within the meaning of Section 9-105(1)(i) of the UCC or
         that is a "certificated security" as defined in Section 8-102 of the
         UCC shall be delivered to the Collateral Agent in accordance with
         paragraph (a) or (b), as applicable, of the definition of "Delivery"
         and shall be held, pending maturity or disposition, solely by the
         Collateral Agent or its securities intermediary as described in such
         paragraphs (a) and (b), and in accordance with Section 9.115 of the
         Texas UCC;

                           (iii)    any Capitalized Interest Account Property
         that is a book-entry security held through the Federal Reserve System
         pursuant to Federal book-entry regulations shall be delivered in
         accordance with paragraph (c), as applicable, of the definition of
         "Delivery" and shall be maintained by the Collateral Agent, pending
         maturity or disposition, through continued book-entry registration of
         such Capitalized Interest Account Property as described in such
         paragraph, and additionally, shall be maintained in accordance with
         Section 9.115 of the Texas UCC; and

                           (iv)     any Capitalized Interest Account Property
         that is an uncertificated security as defined in Section 8-102(1)(b) of
         the UCC and that is not governed by clause (ii) above shall be
         delivered to the Collateral Agent in accordance with paragraph (d) of
         the definition of "Delivery" and shall be maintained by the Collateral
         Agent, pending maturity or disposition, through continued registration
         of the Collateral Agent's (or its nominee's) ownership of such
         security, and additionally, shall be maintained in accordance with
         Section 9.115 of the Texas UCC.

         Each of the Depositor, the Servicer, the Collateral Agent and the
Trustee agrees to take or cause to be taken such further actions, to execute,
deliver and file or cause to be executed, delivered and filed such further
documents and instruments (including, without limitation, any UCC financing
statements or this Agreement) as may be determined to be necessary to perfect
the interests created by this Section in favor of the Trustee or the Collateral
Agent and otherwise fully to effectuate the purposes, terms and conditions of
this Section. Except as heretofore provided with respect to investment, the
Collateral Agent shall not comply or agree to comply with any order from the
Depositor or any other Person except the Trustee with respect to the disposition
of the Capitalized Interest Account Property.

         The Depositor shall:

                           (i)      promptly execute, deliver and file any
         financing statements, amendments, continuation statements, assignments,
         certificates and other documents with respect to such interests and
         perform all such other acts as may be

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<Page>

         necessary in order to perfect or to maintain the perfection of the
         Collateral Agent's security interest in the Capitalized Interest
         Account Property; and

                           (ii)     make the necessary filings of financing
         statements or amendments thereto within ten business days after the
         occurrence of any of the following: (1) any change in its corporate
         name or any trade name; (2) any change in the location of its chief
         executive office or principal place of business; and (3) any merger or
         consolidation or other change in its identity or corporate structure
         and promptly notify the Trustee of any such filings.


                                    ARTICLE V

                                THE CERTIFICATES

         SECTION 5.1. THE CERTIFICATES. The Trustee shall, upon written order or
request signed in the name of the Depositor by one of its officers authorized to
do so and delivered to a Trustee Officer, execute on behalf of the Trust,
authenticate and deliver the Certificates to, or upon the order of, the
Depositor in the aggregate principal amount and denominations as set forth in
such written order or request. The Class A Certificates shall be issuable in
minimum denominations of one hundred thousand dollars ($100,000) and integral
multiples of one thousand dollars ($1,000) in excess thereof. The Class A
Certificates shall be issued in fully registered book-entry form. The
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of a Trustee Officer. Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trustee, shall be valid and
binding obligations of the Trust, notwithstanding that such individuals or any
of them shall have ceased to be so authorized prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
Certificates.

         SECTION 5.2. APPOINTMENT OF PAYING AGENT. The Trustee may act as or
appoint one or more paying agents (each, a "Paying Agent"). The Paying Agent
shall make distributions to Certificateholders from amounts delivered by the
Trustee to the Paying Agent from amounts on deposit in the Certificate Account
pursuant to Article IV. Either the Trustee or the Certificate Insurer may remove
the Paying Agent if such Person determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect. The Paying Agent shall initially be the Trustee. A
co-paying agent may be chosen by the Trustee. Any co-paying agent or any
successor Paying Agent shall be permitted to resign as Paying Agent, co-paying
agent or successor Paying Agent, as the case may be, upon 30 days' written
notice to the Trustee, the Depositor and the Certificate Insurer. In the event
that the Trustee, any co-paying agent or any successor Paying Agent shall no
longer be the Paying Agent, co-paying agent or successor Paying Agent, as the
case may be, the Trustee, with the Certificate Insurer's reasonable consent,
shall appoint a successor to act as Paying Agent

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or co-paying agent. The Trustee shall cause each Paying Agent and each
successor Paying Agent or any additional Paying Agent appointed by the
Trustee (other than the Trustee, which hereby agrees) to execute and deliver
to the Trustee an instrument in which such Paying Agent, successor Paying
Agent or additional Paying Agent shall agree with the Trustee that, as Paying
Agent, such Paying Agent, successor Paying Agent or additional Paying Agent
will hold all sums, if any, held by it for payment to the Certificateholders
in trust for the benefit of the Certificateholders entitled thereto in an
Eligible Account (which may be maintained with such Paying Agent) until such
sums shall be paid to such Certificateholders and shall promptly notify the
Trustee of any default in making such payment. The Paying Agent shall return
all unclaimed funds to the Trustee and upon removal of a Paying Agent shall
also return all funds in its possession to the Trustee. The provisions of
Sections 9.3 and 9.4 shall apply to each Paying Agent in its role as Paying
Agent. The fees of any Paying Agent or co-paying agent shall be paid by the
Trustee. Each Paying Agent and co-paying agent must be acceptable to the
Depositor.

         SECTION 5.3. AUTHENTICATING AGENT. xvii) The Trustee may appoint one or
more authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the Certificates in
connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Certificates (the "Authenticating Agent"). Whenever reference
is made in this Agreement to the authentication of Certificates by the Trustee
or the Trustee's certificate of authentication, such reference shall be deemed
to include authentication by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent must be acceptable to the Depositor and the
Certificate Insurer. The Trustee is hereby appointed as the initial
Authenticating Agent.

         (b)      Any institution succeeding to the corporate agency business of
an Authenticating Agent shall continue to be an Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such Authenticating Agent.

         (c)      Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Depositor. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving notice
of termination to such Authenticating Agent and to the Depositor. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
an Authenticating Agent shall cease to be acceptable to the Trustee or the
Depositor or the Certificate Insurer, the Trustee may appoint a successor
Authenticating Agent. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless acceptable to the Trustee, the Depositor and the Certificate Insurer.

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         (d)      The Trustee agrees to pay to each Authenticating Agent from
its own funds from time to time reasonable compensation for its services under
this Section 5.3.

         (e)      The provisions of Sections 9.3 and 9.4 shall be applicable to
any Authenticating Agent.

         (f)      Pursuant to an appointment made under this Section 5.3, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:

         This is one of the Certificates described in the Pooling and Servicing
Agreement.

                                        [                         ]
                                        as Authenticating Agent for the Trustee,


                                        By
                                             Authorized Signatory

         SECTION 5.4. AUTHENTICATION OF CERTIFICATES. The Trustee shall cause
the Certificates to be executed on behalf of the Trust, authenticated, and
delivered to or upon the written order of the Depositor, signed by its chairman
of the board, its president, or any vice president, without further corporate
action by the Depositor, in authorized denominations, pursuant to this
Agreement. No Certificate shall entitle its Holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A executed by the Trustee by manual or facsimile signature; such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates issued on
the Closing Date shall be dated the Closing Date. All Certificates issued upon
transfer or exchange thereafter shall be dated the date of their authentication.

         SECTION 5.5. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
xviii) The Certificate Registrar shall maintain a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Certificate
Register shall provide for the registration of Certificates and transfers and
exchanges of Certificates as provided in this Agreement. The Trustee is hereby
initially appointed Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as provided in this
Agreement. In the event that, subsequent to the Closing Date, the Trustee
notifies the Depositor that it is unable to act as Certificate Registrar, the
Depositor shall appoint another bank or trust company, having an office or
agency located in the Borough of Manhattan, The City of New York, agreeing to
act in accordance with the provisions of this Agreement applicable to it, and
otherwise acceptable to the Trustee, to act as successor Certificate Registrar
under this Agreement.

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<Page>

         No transfer of a Certificate shall be made unless (I)(a) such transfer
(i) is made pursuant to an effective registration statement under the Securities
Act and any applicable state securities laws or (ii) is exempt from the
registration requirements under the Securities Act and such state securities
laws or (b) the Certificate Registrar is notified by such transferee that, with
respect to the Class A Certificates, such Certificate will be registered in the
name of the Clearing Agency or its nominee and shall be held by such transferee
in book-entry form through the Clearing Agency, and (II) such transfer is to a
Person that satisfies the requirements of paragraph (a)(2)(i) or (a)(2)(ii) of
Rule 3a-7 as then in effect or any successor rule ("Rule 3a-7") under the
Investment Company Act. Each prospective purchaser of a Non-Registered
Certificate shall deliver a completed and duly executed Transferee's Certificate
(in the form of Exhibit F-1 for "qualified institutional buyers" or Exhibit F-2
for "accredited investors"), and each prospective purchaser of a Registered
Certificate shall deliver a completed and duly executed Transferee's Certificate
in the form of Exhibit F-3, to the Trustee and to the Depositor for inspection
prior to effecting any requested transfer; except that in the case of a transfer
of the Excess Cash Flow Certificate to a Bankruptcy Remote Entity or a business
trust as permitted under Section 5.5(d), such Transferee's Certificate shall be
delivered by the equity owner of, or owner of the beneficial ownership interest
in, such Bankruptcy Remote Entity or business trust and, in such case, the
Transferee's Certificate that is delivered shall pertain to such Person's
acquisition of such equity or beneficial ownership interest (and the form for
the appropriate Transferee's Certificate shall contain such modifications as the
Trustee may approve so that it pertains to the acquisition of such equity or
beneficial ownership interest, rather than to acquisition of Certificates) and
no such Transferee's Certificate need be delivered, in such case, in the name of
the Bankruptcy Remote Entity or business trust with respect to the transfer
thereto of the Excess Cash Flow Certificate. Each prospective transferor of a
Non-Registered Certificate not held in book-entry form (other than with respect
to the initial transfer of any such Certificate by Greenwich Capital Markets,
Inc. or any affiliate thereof as the initial transferee of the Depositor) shall
deliver a completed and duly executed transferor's Certificate in the form of
Exhibit F-4 to the Trustee for inspection prior to effecting any requested
transfer. The Depositor and the Trustee may rely conclusively upon the
information contained in any such Transferee's Certificate and transferor's
Certificate in the absence of knowledge to the contrary. In connection with any
transfer (other than the transfer of any Certificate that is or has become a
Registered Certificate on or before such transfer or any transfer of a
Certificate held in book-entry form), the Trustee may (except in the case of (x)
the initial transfer of any such Certificate by Greenwich Capital Markets, Inc.
or any affiliate thereof, as the initial transferee of the Depositor, (y) a
transfer to a "qualified institutional buyer" who delivers a Transferee's
Certificate in the form of Exhibit F-1 or (z) a transfer to an institutional
"accredited investor" who delivers a Transferee's Certificate in the form of
Exhibit F-2)) require an Opinion of Counsel to the effect that such transfer may
be effected without registration under the Securities Act, which Opinion of
Counsel, if so required, shall be addressed to the Depositor and the Trustee and
shall be secured at the expense of the Holder. The Trustee may rely upon the
representation of any Transferee made to the Trustee, and upon

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<Page>

such Opinion of Counsel, and shall be fully protected in so doing. Any
Certificate Owners shall be deemed to have agreed to these restrictions on
transfer.

         Under no circumstances may an institutional "accredited investor"
within Regulation D of the Securities Act take delivery in the form of a
beneficial interest in a book-entry Class A Certificate if such purchaser is not
a "qualified institutional buyer" as defined under Rule 144A under the
Securities Act.

         (b)      If an election is made to hold Certificates in book-entry
form, the Certificates shall be registered in the name of a nominee designated
by the Clearing Agency (and may be aggregated as to denominations with other
Certificates held by the Clearing Agency). With respect to Certificates held in
book-entry form:

                           (1)      the Certificate Registrar and the Trustee
         will be entitled to deal with the Clearing Agency for all purposes of
         this Agreement (including the payment of principal of and interest on
         the Certificates and the giving of instructions or directions
         hereunder) as the sole holder of the Certificates, and shall have no
         obligation to the Certificate Owners;

                           (2)      the rights of Certificate Owners will be
         exercised only through the Clearing Agency and will be limited to those
         established by law and agreements between such Certificate Owners and
         the Clearing Agency and/or the Clearing Agency Participants pursuant to
         the Depository Agreement;

                           (3)      whenever this Agreement requires or permits
         actions to be taken based upon instructions or directions of Holders of
         Certificates evidencing a specified percentage of the Class A
         Certificate Balance, the Clearing Agency will be deemed to represent
         such percentage only to the extent that it has received instructions to
         such effect from Certificate Owners and/or Clearing Agency Participants
         owning or representing, respectively, such required percentage of the
         beneficial interest in the Certificates and has delivered such
         instructions to the Trustee; and

                           (4)      without the consent of the Depositor and the
         Trustee, no such Certificate may be transferred by the Clearing Agency
         except to a successor Clearing Agency that agrees to hold such
         Certificate for the account of the Certificate Owners or except upon
         the election of the Certificate Owner thereof or a subsequent
         transferee to hold such Certificate in physical form.

         Neither the Trustee nor the Certificate Registrar shall have any
responsibility to monitor or restrict the transfer of beneficial ownership in
any Certificate an interest in which is transferable through the facilities of
the Clearing Agency.

         If (i)(A) the Depositor advises the Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Class A Certificates as described in the
Depository Agreement and (B) the Depositor is

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<Page>

unable to locate a qualified successor with respect to which (unless an
Insurer Default has occurred and is continuing) the Certificate Insurer has
provided its prior written consent, (ii) the Depositor at its option advises
the Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency, or (iii) after the occurrence of an Event of
Default, the Certificate Insurer (or, if an Insurer Default has occurred and
is continuing, Certificate Owners representing beneficial interests in Class
A Certificates aggregating not less than a majority of the Class A
Certificate Balance) advise the Trustee and the Clearing Agency through the
Clearing Agency Participants in writing that the continuation of a book-entry
system through the Clearing Agency with respect to such class is no longer in
the best interests of the related Certificate Owners, then the Trustee shall
notify all such Certificate Owners, through the Clearing Agency, and the
Certificate Insurer of the occurrence of any such event and of the
availability of definitive Certificates to such Certificate Owners requesting
the same. Upon surrender to the Trustee of the related Certificates by the
Clearing Agency accompanied by registration instructions from the Clearing
Agency, the Trustee shall issue definitive Certificates and deliver such
definitive Certificates in accordance with the instructions of the Clearing
Agency. None of the Depositor, the Certificate Registrar nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of definitive Certificates, the Trustee shall
recognize the Holders of the definitive Certificates as Certificateholders
hereunder. The Trustee shall not be liable if the Depositor is unable to
locate a qualified successor Clearing Agency.

         (c)      No transfer of the Excess Cash Flow Certificate shall be made
to any Person unless the Trustee and the Depositor have received (A) a
certificate (substantially in the form of Exhibit G) from such transferee to the
effect that such transferee (i) is not a Plan or a Person that is using the
assets of a Plan to acquire such Certificate or (ii) is an insurance company
investing assets of its general account and the exemptive relief provided by
Sections I and III of Department of Labor Prohibited Transaction Class Exemption
95-60, 60 Fed. Reg. 35925 (July 12, 1995) (the "Exemption") is available with
respect to the transferee's acquisition and holding of any such Certificate;
PROVIDED, HOWEVER, that the Trustee will not require such certificate in the
event that, as a result of a change of law or otherwise, counsel satisfactory to
the Trustee, the Servicer and the Depositor has rendered an opinion to the
effect that the purchase and holding of any such Certificate by a Plan or a
Person using the assets of a Plan will not constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code. The preparation and
delivery of the certificate and opinion referred to above shall not be an
expense of the Trust, the Trustee, the Servicer or the Depositor but shall be
borne by the transferor.

         (d)      No transfer, pledge or encumbrance of the Excess Cash Flow
Certificate shall be made to any Person unless such Person is a Rated Entity,
a Bankruptcy Remote Entity or a business trust established under Chapter 38
of Title 12 of the Delaware Code, 12 Del. C. Section 3801 et seq. that is a
Bankruptcy Remote Entity, or, in the case of the Excess Cash Flow
Certificate, GCFP; PROVIDED, HOWEVER, that in the event GCFP forecloses on
its security interest in the Excess Cash Flow Certificate, the Excess Cash
Flow Certificate

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<Page>

may be registered in the name of a Person that is not a Bankruptcy Remote
Entity for a period not to exceed two Business Days. Notice of any transfer
of the Excess Cash Flow Certificates shall be given by the transferor to
Moody's. In addition, no transfer of the Excess Cash Flow Certificate shall
be made unless the related transferor (i) has delivered to each of the
Trustee and the Certificate Insurer an Opinion of Counsel addressed to each
of the Trustee and the Certificate Insurer, in form and substance
satisfactory to each of the Trustee and the Certificate Insurer, stating that
such transfer will not (A) adversely affect the status of the Trust as a
grantor trust pursuant to subpart E, part I of the subchapter J of the Code
and (B) cause the Spread Account to be treated as taxable as a corporation
and (ii) has delivered to Moody's and the Certificate Insurer (A) notice of
the identity of the prospective transferee and (B) in the case of a
Bankruptcy Remote Entity, an Opinion of Counsel relating to non-consolidation
of the assets of such Bankruptcy Remote Entity with the assets of its parent
entity. For purposes of the preceding sentence, a transfer shall not include
a transfer to a party that is a member of the transferor's "Affiliate Group"
as that term is defined in Section 1501 of the Internal Revenue Code. The
Excess Cash Flow Certificate shall at all times be registered in the name of
a single holder.

         (e)      The Certificates, until such time, if at all, as they become
Registered Certificates, shall bear legends stating that they have not been
registered under the Securities Act and are subject to the restrictions on
transfer described in Section 5.5(a). The Excess Cash Flow Certificate shall
additionally bear a legend stating that it is subject to the restrictions on
transfer described in Section 5.5(c). By purchasing a Certificate, each
purchaser shall be deemed to have agreed to these restrictions on transfer.

         (f)      In order to preserve the exemption for resales and transfers
provided by Rule 144A under the Securities Act, the Depositor shall provide to
any Holder of a Non-Registered Certificate and any prospective purchaser
designated by such Holder, upon request of such Holder or such prospective
purchaser, such information required by Rule 144A as will enable the resale of
such Non-Registered Certificate to be made pursuant to Rule 144A. The Servicer
and the Trustee shall cooperate with the Depositor in providing the Depositor
such information regarding the Non-Registered Certificates, the Receivables and
other matters regarding the Trust as the Depositor shall reasonably request to
meet its obligations under the preceding sentence.

         (g)      Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office, the Trustee shall execute, authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same Class in authorized denominations of a like
aggregate principal amount.

         (h)      At the option of a Certificateholder, such Holder's
Certificates may be exchanged for other Certificates of the same Class in
authorized denominations of a like aggregate principal amount, upon surrender of
the Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange the Trustee on behalf of the Trust
shall execute, authenticate and deliver the Certificates that

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<Page>

the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing.

         (i)      No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

         (j)      All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee.

         SECTION 5.6. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss, or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar, the Trustee and the Certificate Insurer such
security or indemnity as may be required by them to save each of them harmless,
then in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, the Trustee on behalf of the Trust shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
denomination. In connection with the issuance of any new Certificate under this
Section 5.6, the Trustee and the Certificate Registrar may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section 5.6 shall constitute conclusive evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen, or destroyed
Certificate shall be found at any time.

         SECTION 5.7. PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.6 and for all other purposes whatsoever, and neither the
Trustee nor the Certificate Registrar shall be bound by any notice to the
contrary.

         SECTION 5.8. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
The Trustee shall furnish or cause to be furnished to the Servicer or the
Certificate Insurer, at the expense of the Trust, within 15 days after receipt
by the Trustee of a request therefor from the Servicer or the Certificate
Insurer, as the case may be, in writing, a list of the names and addresses of
the Certificateholders as of the most recent Record Date. If three or more Class
A Certificateholders or one or more Holders of Class A Certificates evidencing
not less than 25% of the Class A Certificate Balance apply in writing to the
Trustee, and such application states that the applicants desire to communicate
with other Certificateholders with respect to their rights under this

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Agreement or under the Certificates and such application shall be accompanied
by a copy of the communication that such applicants propose to transmit, then
the Trustee shall, within five Business Days after the receipt for such
application, afford such applicants access during normal business hours to
the current list of Certificateholders. Each Holder, by receiving and holding
a Certificate, shall be deemed to have agreed to hold none of the Servicer,
the Certificate Insurer or the Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.

         SECTION 5.9. MAINTENANCE OF OFFICE OR AGENCY. The Trustee shall
maintain in the Borough of Manhattan, The City of New York, an office or offices
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates and this Agreement may be served. The Trustee
initially designates its office located at Texas Commerce Trust Company, 55
Water Street, North Building, Room 234, Window 20, New York, New York 10041, as
its office for such purposes. The Trustee shall give prompt written notice to
the Servicer and to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.


                                   ARTICLE VI

                                  THE DEPOSITOR

         SECTION 6.1. REPRESENTATIONS OF DEPOSITOR. The Depositor makes the
following representations to the Originator, the Certificate Insurer and the
Trustee, on which the Certificate Insurer relied in executing and delivering the
Policy, on which the Trustee on behalf of itself and the Certificateholders
relied in accepting the Initial Receivables in trust and executing and
authenticating the Certificates and on which the Trustee on behalf of itself and
the Certificateholders shall rely in accepting any Subsequent Receivables in
trust. The representations speak as of the execution and delivery of this
Agreement in the case of the Initial Receivables, and as of the related
Subsequent Transfer Date in the case of the Subsequent Receivables, and in each
case shall survive the sale of the related Receivables to the Trustee.

                           (i)      ORGANIZATION AND GOOD STANDING. The
         Depositor has been duly organized and is validly existing as a
         corporation in good standing under the laws of the State of Delaware,
         with the corporate power and authority to conduct its business as such
         business is presently conducted and to execute, deliver and perform its
         obligations under this Agreement and the other Basic Documents to which
         it is a party.

                           (ii)     DUE QUALIFICATION. The Depositor is duly
         qualified to do business as a foreign corporation in good standing, and
         has obtained all necessary licenses and approvals in all jurisdictions
         required for the performance of its obligations under this Agreement
         and the other Basic Documents to which it is a

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         party other than where the failure to obtain such license or
         approval or qualification would not have a material adverse effect
         on the ability of the Depositor to perform such obligations or on
         any Receivable or on the interest therein of the Trust, the
         Certificateholders or the Certificate Insurer.

                           (iii)    POWER AND AUTHORITY. The Depositor has the
         corporate power and authority to execute and deliver this Agreement and
         the other Basic Documents to which it is a party and to carry out their
         respective terms; the Depositor has full corporate power and authority
         to sell and assign the property sold and assigned to and deposited with
         the Trustee as part of the Trust and has duly authorized such sale and
         assignment to the Trustee by all necessary corporate action; and the
         execution, delivery, and performance of this Agreement and the other
         Basic Documents to which it is a party have been duly authorized by the
         Depositor by all necessary corporate action.

                           (iv)     VALID SALE; BINDING OBLIGATION. This
         Agreement effects a valid sale, transfer and assignment of the
         Receivables and the other property conveyed to the Trust pursuant to
         Section 2.2, enforceable against creditors of and purchasers from the
         Depositor; and this Agreement and the other Basic Documents to which
         the Depositor is a party shall constitute legal, valid and binding
         obligations of the Depositor enforceable in accordance with their
         respective terms except as enforceability may be limited by bankruptcy,
         insolvency, reorganization or other similar laws affecting the
         enforcement of creditors' rights generally and by equitable limitations
         on the availability of specific remedies, regardless of whether such
         enforceability is considered in a proceeding in equity or at law.

                           (v)      NO VIOLATION. The execution, delivery and
         performance by the Depositor of this Agreement and the other Basic
         Documents to which the Depositor is a party and the consummation of the
         transactions contemplated hereby and thereby and the fulfillment of the
         terms hereof and thereof do not conflict with, result in any breach of
         any of the terms and provisions of, nor constitute (with or without
         notice or lapse of time) a default under, the certificate of
         incorporation or by-laws of the Depositor, or any material indenture,
         agreement, mortgage, deed of trust, or other instrument to which the
         Depositor is a party or by which it is bound or any of its properties
         are subject; nor result in the creation or imposition of any material
         lien upon any of its properties pursuant to the terms of any such
         indenture, agreement, mortgage, deed of trust, or other instrument
         (other than the Basic Documents and the Credit and Security Agreement);
         nor violate any law, order, rule, or regulation applicable to the
         Depositor of any court or of any Federal or State regulatory body,
         administrative agency, or other governmental instrumentality having
         jurisdiction over the Depositor or its properties.

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<Page>

                           (vi)     NO PROCEEDINGS. There are no proceedings or
         investigations pending, or to the Depositor's best knowledge,
         threatened, before any court, regulatory body, administrative agency,
         or other governmental instrumentality having jurisdiction over the
         Depositor or its properties: (A) asserting the invalidity of this
         Agreement or the other Basic Documents to which the Depositor is a
         party or the Certificates, (B) seeking to prevent the issuance of the
         Certificates or the consummation of any of the transactions
         contemplated by this Agreement or the other Basic Documents to which
         the Depositor is a party, (C) seeking any determination or ruling that
         might materially and adversely affect the performance by the Depositor
         of its obligations under, or the validity or enforceability of, this
         Agreement or the other Basic Documents to which the Depositor is a
         party or the Certificates, or (D) relating to the Depositor and which
         might adversely affect the Federal or State income, excise, franchise
         or similar tax attributes of the Certificates or (E) that could have a
         material adverse effect on the Receivables.

                           (vii)    NO CONSENTS. No consent, approval,
         authorization or order of or declaration or filing with any
         governmental authority is required to be obtained by the Depositor for
         the issuance or sale of the Certificates or the consummation of the
         other transactions contemplated by this Agreement and the other Basic
         Documents to which the Depositor is a party, except such as have been
         duly made or obtained or where the failure to obtain such consent,
         approval, authorization, order or declaration, or to make such filing,
         would not have a material adverse effect on the ability of the
         Depositor to perform its obligation under the Basic Documents to which
         it is a party and would not have a material adverse effect on any
         Receivable or the interest therein of the Trust, the Certificateholders
         or the Certificate Insurer.

                           (viii)   CHIEF EXECUTIVE OFFICE. The Depositor hereby
         represents and warrants to the Trustee that the Depositor's principal
         place of business and chief executive office is, and for the four
         months preceding the date of this Agreement, has been, located at: One
         Mack Centre Drive, Paramus, New Jersey 07652.

         SECTION 6.2. LIABILITY OF DEPOSITOR; INDEMNITIES. The Depositor shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor under this Agreement and the
representations made by the Depositor in this Agreement. The Depositor shall
indemnify, defend, and hold harmless the Originator, the Servicer, the Trustee,
the Custodian, the Back-up Servicer, the Collateral Agent and the Certificate
Insurer and each of their respective officers, employees and directors from and
against any loss, liability or expense incurred by reason of (a) the Depositor's
willful misfeasance, bad faith, or negligence in the performance of its duties
under this Agreement, or by reason of reckless disregard of its obligations and
duties under this Agreement or (b) the Depositor's violation of Federal or State
securities laws in connection with the sale of the Certificates.

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         Indemnification under this Section 6.2 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Depositor shall have made any indemnity payments to the Trustee, the
Custodian, the Collateral Agent or the Back-up Servicer pursuant to this Section
and the Trustee or the Back-up Servicer thereafter shall collect any of such
amounts from others, the Trustee, the Custodian, the Collateral Agent or the
Back-up Servicer shall repay such amounts to the Depositor, without interest.

         SECTION 6.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, DEPOSITOR. Any Person (a) into which the Depositor may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Depositor shall be a party, or (c) which may succeed to the properties and
assets of the Depositor substantially as a whole, which person in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Depositor under this Agreement, shall be the successor to the Depositor
hereunder without the execution or filing of any document or any further act by
any of the parties to this Agreement; PROVIDED, HOWEVER, as a condition to the
consummation of any of the transactions referred to in clauses (a), (b) or (c)
above, (i) immediately after giving effect to such transaction, (x) no
representation or warranty made pursuant to Section 6.1 would have been breached
(for purposes hereof, such representations and warranties shall speak as of the
date of the consummation of such transaction) and (y) no event that, after
notice or lapse of time, or both, would become an Event of Default shall have
happened and be continuing, (ii) the Depositor shall have delivered to the
Certificate Insurer and the Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, merger, or succession and such
agreement or assumption comply with this Section 6.3 and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, (iii) the Depositor shall have delivered to the
Certificate Insurer and the Trustee an Opinion of Counsel either (A) stating
that, in the opinion of such counsel, 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 Trustee in the
Receivables, and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interest, (iv) immediately after giving effect to such transaction,
no Insurance Agreement Event of Default and no event that, after notice or lapse
of time, or both, would become an Insurance Agreement Event of Default shall
have happened and be continuing, (v) the organizational documents of the Person
surviving or resulting from such transaction shall contain provisions similar to
those of the Depositor's certificate of incorporation in respect of the issuance
of debt, independent directors and bankruptcy remoteness and (vi) the Depositor
shall have received confirmation from each Rating Agency that the then current
rating of the Class A Certificates will not be downgraded as a result of such
merger, consolidation or succession. A copy of such confirmation shall be
provided to the Trustee. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clause
(i), (ii), (iii) or (iv) above shall be conditions to the consummation of the
transactions referred to in clause (a), (b) or (c) above.

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         SECTION 6.4. LIMITATION ON LIABILITY OF DEPOSITOR AND OTHERS. The
Depositor and any director or officer or employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor shall not be under any obligation to appear in,
prosecute, or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.

         SECTION 6.5. DEPOSITOR MAY OWN CERTIFICATES. The Depositor and any
Person controlling, controlled by, or under common control with the Depositor
may in its individual or any other capacity become the owner or pledgee of
Certificates with the same rights as it would have if it were not the Depositor
or an affiliate thereof, except as otherwise provided in the definition of
"Certificateholder" specified in Section 1.1 and in Section 1.6. Certificates so
owned by or pledged to the Depositor or such controlling or commonly controlled
Person shall have an equal and proportionate benefit under the provisions of
this Agreement, without preference, priority, or distinction as among all of the
Certificates except as otherwise provided herein or by the definition of
Certificateholder.


                                   ARTICLE VII

                                  THE SERVICER

         SECTION 7.1. REPRESENTATIONS OF SERVICER. The Servicer makes the
following representations to the Depositor, the Certificate Insurer, the
Trustee, the Collateral Agent and the Back-up Servicer, on which the Depositor
relies in executing and delivering this Agreement, on which the Certificate
Insurer relies in executing and delivering the Policy, on which the Trustee on
behalf of itself and the Certificateholders relies in accepting the Initial
Receivables in trust and executing and authenticating the Certificates and on
which the Trustee on behalf of itself and the Certificateholders shall rely in
accepting any Subsequent Receivables in trust. The representations speak as of
the execution and delivery of this Agreement in the case of the Initial
Receivables, and as of the related Subsequent Transfer Date in the case of the
Subsequent Receivables, and in each case shall survive the sale of the related
Receivables to the Trustee.

                           (i)      ORGANIZATION AND GOOD STANDING. The Servicer
         is duly organized and validly existing as a corporation in good
         standing under the laws of the State of Delaware, with the corporate
         power and authority to own its properties and to conduct its business
         as such properties shall be currently owned and such business is
         presently conducted, and had at all relevant times, and has, the
         corporate power, authority, and legal right to acquire, own, sell and
         service the Receivables and to hold the Receivable Files as custodian.

                           (ii)     DUE QUALIFICATION. The Servicer is duly
         qualified to do business as a foreign corporation in good standing, and
         has obtained all necessary

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         licenses and approvals in all jurisdictions in which the ownership
         or lease of property or the conduct of its business (including the
         servicing of the Receivables as required by this Agreement and the
         performance of its other obligations under this Agreement and the
         other Basic Documents to which it is a party) shall require such
         qualifications.

                           (iii)    POWER AND AUTHORITY. The Servicer has the
         power and authority to execute and deliver this Agreement and the other
         Basic Documents to which it is a party and to carry out their
         respective terms; and the execution, delivery, and performance of this
         Agreement and the other Basic Documents to which it is a party have
         been duly authorized by the Servicer by all necessary corporate action.

                           (iv)     BINDING OBLIGATION. This Agreement and the
         other Basic Documents to which it is a party constitute legal, valid
         and binding obligations of the Servicer enforceable in accordance with
         their respective terms except as enforceability may be limited by
         bankruptcy, insolvency, reorganization or other similar laws affecting
         the enforcement of creditors' rights generally and by equitable
         limitations on the availability of specific remedies, regardless of
         whether such enforceability is considered a proceeding in equity or at
         law.

                           (v)      NO VIOLATION. The execution, delivery and
         performance by the Servicer of this Agreement and the other Basic
         Documents to which the Servicer is a party and the consummation of the
         transactions contemplated hereby and thereby and the fulfillment of the
         terms hereof and thereof do not conflict with, result in any breach of
         any of the terms and provisions of, or constitute (with or without
         notice or lapse of time) a default under, the certificate of
         incorporation or by-laws of the Servicer, or any material indenture,
         agreement, mortgage, deed of trust, or other instrument to which the
         Servicer is a party or by which it is bound or any of its properties
         are subject; or result in the creation or imposition of any material
         lien upon any of its properties pursuant to the terms of any indenture,
         agreement, mortgage, deed of trust, or other instrument (other than
         this Agreement); or violate any law, order, rule, or regulation
         applicable to the Servicer of any court or of any Federal or State
         regulatory body, administrative agency, or other governmental
         instrumentality having jurisdiction over the Servicer or its
         properties.

                           (vi)     NO PROCEEDINGS. There are no proceedings or
         investigations pending, or to the Servicer's best knowledge,
         threatened, before any court, regulatory body, administrative agency,
         or other governmental instrumentality having jurisdiction over the
         Servicer or its properties: (A) asserting the invalidity of this
         Agreement or the other Basic Documents to which the Servicer is a party
         or the Certificates, (B) seeking to prevent the issuance of the
         Certificates or the consummation of any of the transactions
         contemplated by this Agreement or the Certificates or the other Basic
         Documents to which the Servicer is a party, (C)

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         seeking any determination or ruling that might materially and
         adversely affect the performance by the Servicer of its obligations
         under, or the validity or enforceability of, this Agreement or the
         Certificates or the other Basic Documents to which the Servicer is
         a party, (D) relating to the Servicer and which might adversely
         affect the Federal or State income, excise, franchise or similar
         tax attributes of the Certificates or (E) that could have a
         material adverse effect on the Receivables.

                           (vii)    NO CONSENTS. No consent, approval,
         authorization or order of or declaration or filing with any
         governmental authority is required for the issuance or sale of the
         Certificates or the consummation of the other transactions contemplated
         by this Agreement and the other Basic Documents to which the Servicer
         is a party, except such as have been duly made or obtained.

                           (viii)   TAXES. The Servicer has filed on a timely
         basis all tax returns required to be filed by it and paid all taxes, to
         the extent that such taxes have become due.

                           (ix)     CHIEF EXECUTIVE OFFICE. The Servicer hereby
         represents and warrants to the Trustee that the Servicer's principal
         place of business and chief executive office is, and for the four
         months preceding the date of this Agreement, has been, located at: One
         Mack Centre Drive, Paramus, New Jersey 07652.

         SECTION 7.2. INDEMNITIES OF SERVICER. xix) The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement and the representations made by
the Servicer herein.

                           (i)      The Servicer shall defend, indemnify, and
         hold harmless the Trustee, the Collateral Agent, the Back-up Servicer,
         the Custodian, the Trust, the Certificate Insurer, the
         Certificateholders and the Depositor, and their respective officers,
         directors, agents and employees from and against any and all costs,
         expenses, losses, damages, claims, and liabilities, arising out of or
         resulting from the use, ownership, or operation by the Servicer or any
         affiliate thereof of a Financed Vehicle.

                           (ii)     The Servicer shall indemnify, defend and
         hold harmless the Trustee, the Collateral Agent, the Back-up Servicer,
         the Custodian, the Trust, the Certificate Insurer and the Depositor,
         and their respective officers, directors, agents and employees from and
         against any taxes (other than net income, gross receipts, franchise or
         other similar taxes) that may at any time be asserted against the
         Trustee, the Collateral Agent, the Back-up Servicer, the Trust, the
         Certificate Insurer or the Depositor, with respect to the transactions
         contemplated herein, including, without limitation, any sales, general
         corporation, tangible personal property, privilege, or license taxes
         and costs and expenses in defending against the same.

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                           (iii)    The Servicer shall indemnify, defend, and
         hold harmless the Trustee, the Collateral Agent, the Custodian, the
         Back-up Servicer, the Custodian, the Depositor, the Certificate
         Insurer, the Trust and the Certificateholders, and their respective
         officers, directors, agents and employees from and against any and all
         costs, expenses, losses, claims, damages, and liabilities to the extent
         that such cost, expense, loss, claim, damage, or liability arose out
         of, or was imposed upon the Trustee, the Collateral Agent, the Back-up
         Servicer, the Depositor, the Trust or the Certificateholders, and their
         respective officers, directors, agents and employees through the
         negligence, willful misfeasance, or bad faith of the Servicer in the
         performance of its duties under this Agreement or by reason of reckless
         disregard of its obligations and duties under this Agreement.

                           (iv)     The Servicer shall indemnify, defend, and
         hold harmless the Trustee, the Collateral Agent, the Back-up Servicer,
         the Depositor, and the Custodian, and their respective officers,
         directors, agents and employees from and against all costs, expenses,
         losses, claims, damages, and liabilities arising out of or incurred in
         connection with the acceptance or performance of the trusts and duties
         herein contained, if any, except to the extent that such cost, expense,
         loss, claim, damage or liability: (a) shall be due to the willful
         misfeasance, bad faith, or negligence (except for errors in judgment)
         of the Trustee, the Collateral Agent, the Back-up Servicer or the
         Custodian, as applicable; (b) relates to any tax other than the taxes
         with respect to which the Servicer shall be required to indemnify the
         Trustee, the Collateral Agent, the Back-up Servicer or the Custodian;
         or (c) shall arise from the Trustee's breach of any of its
         representations or warranties set forth in Section 9.12.

                           (v)      Notwithstanding the foregoing, the Servicer
         shall not be obligated to defend, indemnify, and hold harmless any
         Certificateholder for any losses, claims, damages or liabilities
         incurred by any Certificateholders arising out of claims, complaints,
         actions and allegations relating to Section 406 of ERISA or Section
         4975 of the Code as a result of the purchase or holding of a
         Certificate by such Certificateholder with the assets of a plan subject
         to such provisions of ERISA or the Code or the servicing, management
         and operation of the Trust.

         (b)      For purposes of this Section, in the event of the termination
of the rights and obligations of a Servicer (or any successor thereto pursuant
to Section 7.3) as Servicer pursuant to Section 8.1, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer pursuant to Section 8.2.
The provisions of this Section 7.2(b) shall in no way affect the survival
pursuant to Section 7.2(c) of the indemnification by the outgoing Servicer
provided by Section 7.2(a).

         (c)      Indemnification under this Section 7.2 shall survive the
termination of this Agreement and any resignation or removal of LBAC as Servicer
and shall include

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reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section and
the recipient thereafter collects any of such amounts from others, the
recipient shall promptly repay such amounts to the Servicer, without interest.

         (d)      In no event shall the Servicer be liable under this Agreement
to any Person for the acts or omissions of any successor Servicer, nor shall any
successor Servicer be liable under this Agreement to any Person for any acts or
omissions of a predecessor Servicer.

         SECTION 7.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER OR BACK-UP SERVICER. xx) The Servicer shall not merge
or consolidate with any other Person, convey, transfer or lease substantially
all its assets as an entirety to another Person, or permit any other Person to
become the successor to the Servicer's business unless, after the merger,
consolidation, conveyance, transfer, lease or succession, the successor or
surviving entity shall be an Eligible Servicer and shall be capable of
fulfilling the duties of the Servicer contained in this Agreement and the other
Basic Documents to which the Servicer is a party. Any Person (a) into which the
Servicer may be merged or consolidated, (b) which may result from any merger or
consolidation to which the Servicer shall be a party, (c) which may succeed to
the properties and assets of the Servicer substantially as a whole, or (d) or
succeeding to the business of the Servicer shall execute an agreement of
assumption to perform every obligation of the Servicer hereunder, and whether or
not such assumption agreement is executed, shall be the successor to the
Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; PROVIDED, HOWEVER, that nothing contained herein
shall be deemed to release the Servicer from any obligation hereunder; PROVIDED,
FURTHER, HOWEVER, that (i) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Section 7.1 hereof or made by the
Servicer in the Purchase Agreement shall have been breached (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction), no Event of Default or Insurance Agreement
Event of Default, and no event which, after notice or lapse of time, or both,
would become an Event of Default or Insurance Agreement Event of Default shall
have occurred and be continuing, (ii) the Servicer shall have delivered to the
Trustee and the Certificate Insurer an Officer's Certificate and an Opinion of
Counsel in form and substance satisfactory to the Trustee and the Certificate
Insurer each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 7.3 and that all conditions
precedent provided for in this Agreement relating to such transaction have been
complied with, (iii) the Servicer shall have delivered to the Trustee and the
Certificate Insurer an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, 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 Trustee in the Receivables and reciting
the details of such filings, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such interest
and (iv) nothing herein shall be deemed to release the Servicer from any
obligation. The Servicer shall provide notice of any merger, consolidation or
succession pursuant to this

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Section 7.3(a) to the Trustee, the Back-up Servicer, the Collateral Agent,
the Certificate Insurer, the Certificateholders and each Rating Agency.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii) or
(iii) above shall be conditions to the consummation of the transactions
referred to in clause (a), (b) or (c) above.

         (b)      Any Person (a) into which the Back-up Servicer may be merged
or consolidated, (b) which may result from any merger or consolidation to which
the Back-up Servicer shall be a party, or (c) which may succeed to the
properties and assets of the Back-up Servicer substantially as a whole, or (d)
succeeding to the business of the Back-up Servicer, shall execute an agreement
of assumption to perform every obligation of the Back-up Servicer hereunder, and
whether or not such assumption agreement is executed, shall be the successor to
the Back-up Servicer under this Agreement without further act on the part of any
of the parties to this Agreement; PROVIDED, HOWEVER, that nothing herein shall
be deemed to release the Back-up Servicer from any obligation.

         SECTION 7.4. LIMITATION ON LIABILITY OF SERVICER AND OTHERS. Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust or the Certificateholders,
except as provided under this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement; PROVIDED, HOWEVER,
that this provision shall not protect the Servicer or any such person against
any liability that would otherwise be imposed by reason of a breach of this
Agreement or willful misfeasance, bad faith, or negligence in the performance of
duties or by reason of reckless disregard of obligations and duties under this
Agreement. The Servicer and any director or officer or employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising under this
Agreement.

         Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute, or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
this Agreement, and that in its opinion may involve it in any expense or
liability.

         SECTION 7.5. SERVICER AND BACK-UP SERVICER NOT TO RESIGN. Subject to
the provisions of Section 7.3, neither the Servicer nor the Back-up Servicer may
resign from the obligations and duties hereby imposed on it as Servicer or
Back-up Servicer, as the case may be, under this Agreement except upon
determination that by reason of a change in legal requirements the performance
of its duties under this Agreement would cause it to be in violation of such
legal requirements in a manner which would result in a material adverse effect
on the Servicer or Back-up Servicer, as the case may be, and the Certificate
Insurer does not elect to waive the obligations of the Servicer or Back-up
Servicer, as the case may be, to perform the duties which render it legally
unable to act or does not elect to delegate those duties to another Person.
Notice of any such determination permitting the resignation of the Servicer or
Back-up Servicer, as the case

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may be, shall be communicated to the Depositor, the Trustee, the Certificate
Insurer, and each Rating Agency at the earliest practicable time (and, if
such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination by the Servicer or
Back-up Servicer, as the case may be, shall be evidenced by an Opinion of
Counsel to such effect delivered to and satisfactory to the Depositor, the
Trustee and the Certificate Insurer concurrently with or promptly after such
notice. No such resignation of the Servicer shall become effective until a
successor servicer shall have assumed the responsibilities and obligations of
LBAC in accordance with Section 8.2 and the Servicing Assumption Agreement,
if applicable. No such resignation of the Back-up Servicer shall become
effective until an entity acceptable to the Certificate Insurer shall have
assumed the responsibilities and obligations of the Back-up Servicer;
PROVIDED, HOWEVER, that if no such entity shall have assumed such
responsibilities and obligations of the Back-up Servicer within 60 days of
the resignation of the Back-up Servicer, the Back-up Servicer may petition a
court of competent jurisdiction for the appointment of a successor to the
Back-up Servicer.

                                  ARTICLE VIII

                                     DEFAULT

         SECTION 8.1. EVENTS OF DEFAULT. If any one of the following events
("Events of Default") shall occur and be continuing:

                           (i)      Any failure by the Servicer or, for so long
         as LBAC is the Servicer, the Depositor, to deliver to the Trustee for
         distribution to Certificateholders or deposit in the Spread Account any
         proceeds or payment required to be so delivered under the terms of the
         Certificates, the Purchase Agreement, any Transfer Agreement and this
         Agreement (including deposits of Purchase Amounts) that shall continue
         unremedied for a period of two Business Days after written notice is
         received by the Servicer from the Trustee or the Certificate Insurer or
         after discovery of such failure by the Servicer (but in no event later
         than the five Business Days after the Servicer is required to make such
         delivery or deposit); or

                           (ii)     The certificate required by Section 3.9
         shall not have been delivered to the Trustee and the Certificate
         Insurer within one Business Day of the date such certificate is
         required to be delivered; the statement required by Section 3.10, or
         the report required by Section 3.11 shall not have been delivered
         within five (5) days after the date such certificates or statements or
         reports, as the case may be, are required to be delivered; or

                           (iii)    Failure on the part of the Servicer to
         observe its covenants and agreements set forth in Section 7.3 or, for
         so long as LBAC is the Servicer, failure on the part of the Depositor
         to observe its covenants and agreements set forth in Section 6.3; or

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                           (iv)     Failure on the part of LBAC, the Servicer
         or, for so long as LBAC is the Servicer, the Depositor, as the case may
         be, duly to observe or to perform in any material respect any other
         covenants or agreements of LBAC, the Servicer or the Depositor (as the
         case may be) set forth in the Certificates, the Purchase Agreement, any
         Transfer Agreement or in this Agreement, which failure shall continue
         unremedied for a period of 30 days after the date on which written
         notice of such failure requiring the same to be remedied, shall have
         been given (1) to LBAC, the Servicer or the Depositor (as the case may
         be), by the Certificate Insurer or the Trustee, or (2) to LBAC, the
         Servicer or the Depositor (as the case may be), and to the Trustee and
         the Certificate Insurer by the Holders of Class A Certificates
         evidencing not less than 25% of the Class A Certificate Balance; or

                           (v)      The entry of a decree or order for relief by
         a court or regulatory authority having jurisdiction in respect of LBAC
         or the Servicer (or, so long as LBAC is the Servicer, the Depositor, or
         any of the Servicer's other Affiliates, if the Servicer's ability to
         service the Receivables is adversely affected thereby) in an
         involuntary case under the federal bankruptcy laws, as now or hereafter
         in effect, or another present or future, federal or state, bankruptcy,
         insolvency or similar law, or appointing a receiver, liquidator,
         assignee, trustee, custodian, sequestrator or other similar official of
         LBAC, the Servicer (or the Depositor or any other Affiliate of LBAC, if
         applicable) or of any substantial part of their respective properties
         or ordering the winding up or liquidation of the affairs of LBAC or the
         Servicer (or the Depositor or any other Affiliate of LBAC, if
         applicable) or the commencement of an involuntary case under the
         federal or state bankruptcy, insolvency or similar laws, as now or
         hereafter in effect, or another present or future, federal or state
         bankruptcy, insolvency or similar law with respect to LBAC or the
         Servicer (or the Depositor or any other Affiliate of LBAC, if
         applicable) and such case is not dismissed within 60 days; or

                           (vi)     The commencement by LBAC or the Servicer
         (or, so long as LBAC is the Servicer, the Depositor or any of the
         Servicer's other Affiliates, if the Servicer's ability to service the
         Receivables is adversely affected thereby) of a voluntary case under
         the federal bankruptcy laws, as now or hereafter in effect, or any
         other present or future, federal or state, bankruptcy, insolvency or
         similar law, or the consent by LBAC or the Servicer (or the Depositor
         or any other Affiliate of LBAC, if applicable) to the appointment of or
         taking possession by a receiver, liquidator, assignee, trustee,
         custodian, sequestrator or other similar official of LBAC or the
         Servicer (or the Depositor or any other Affiliate of LBAC, if
         applicable) or of any substantial part of its property or the making by
         LBAC or the Servicer (or the Depositor or any other Affiliate of LBAC,
         if applicable) of an assignment for the benefit of creditors or the
         failure by LBAC or the Servicer (or the Depositor or any other
         Affiliate of LBAC, if applicable) generally to pay its debts as such
         debts become due or the taking of corporate action by LBAC or the
         Servicer (or the Depositor or any other Affiliate of LBAC, if
         applicable) in furtherance of any of the foregoing; or

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                           (vii)    Any representation, warranty or statement of
         LBAC or the Servicer or, for so long as LBAC is the Servicer, the
         Depositor, made in this Agreement and, with respect to LBAC and the
         Depositor, the Purchase Agreement, any Transfer Agreement or in each
         case any certificate, report or other writing delivered pursuant hereto
         shall prove to be incorrect as of the time when the same shall have
         been made (excluding, however, any representation or warranty set forth
         in Section 3.2(b) of the Purchase Agreement and/or any Transfer
         Agreement), and the incorrectness of such representation, warranty or
         statement has a material adverse effect on the Trust and, within 30
         days after written notice thereof shall have been given (1) to LBAC,
         the Servicer or the Depositor (as the case may be) by the Trustee or
         the Certificate Insurer or (2) to LBAC, the Servicer or the Depositor
         (as the case may be), and to the Trustee and the Certificate Insurer by
         the Holders of Class A Certificates evidencing not less than 25% of the
         Class A Certificate Balance, the circumstances or condition in respect
         of which such representation, warranty or statement was incorrect shall
         not have been eliminated or otherwise cured; or

                           (viii)   The occurrence of an Insurance Agreement
         Event of Default; or

                           (ix)     A claim is made under the Policy; or

                           (x)      So long as an Insurer Default shall not have
         occurred and be continuing, the Certificate Insurer shall not have
         delivered a Servicer Extension Notice pursuant to Section 3.13;

then, and in each and every case, so long as an Event of Default shall not have
been remedied; PROVIDED, (i) no Insurer Default shall have occurred and be
continuing, the Certificate Insurer in its sole and absolute discretion, or (ii)
if an Insurer Default shall have occurred and be continuing, then either the
Holders of Class A Certificates evidencing not less than 51% of the Class A
Certificate Balance, or the Trustee acting at the direction of such Holders, by
notice then given in writing to the Servicer (and to the Trustee if given by the
Certificate Insurer or by the Certificateholders) or by the Certificate
Insurer's failure to deliver a Servicer Extension Notice pursuant to Section
3.13, may terminate all of the rights and obligations of the Servicer under this
Agreement. The Servicer shall be entitled to its pro rata share of the Servicing
Fee for the number of days in the Collection Period prior to the effective date
of its termination. On or after the receipt by the Servicer of such written
notice, all authority and power of the Servicer under this Agreement, whether
with respect to the Certificates or the Receivables or otherwise, shall without
further action, pass to and be vested in (i) the Back-up Servicer or (ii) such
successor Servicer as may be appointed under Section 8.2; PROVIDED, HOWEVER,
that the successor Servicer shall have no liability with respect to any
obligation which was required to be performed by the predecessor Servicer prior
to the date the successor Servicer becomes the Servicer or any claim of a third
party (including a Certificateholder) based on any alleged action or inaction of
the predecessor Servicer as Servicer; and,

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without limitation, the Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer and the
Trustee in effecting the termination of the responsibilities and rights of
the predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held or should have been held by the predecessor Servicer for
deposit, or shall thereafter be received with respect to a Receivable and the
delivery to the successor Servicer of all files and records concerning the
Receivables and a computer tape in readable form containing all information
necessary to enable the successor Servicer to service the Receivables and the
other property of the Trust. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the Receivable
Files to the successor Servicer and amending this Agreement to reflect such
succession as Servicer pursuant to this Section 8.1 shall be paid by the
predecessor Servicer upon presentation of reasonable documentation of such
costs and expenses. In addition, any successor Servicer shall be entitled to
payment from the immediate predecessor Servicer for reasonable transition
expenses incurred in connection with acting as successor Servicer, and in
connection with system conversion costs, an aggregate amount not to exceed
for such conversion costs of $100,000, and to the extent not so paid, such
payment shall be made pursuant to Section 4.6(c) hereof. Upon receipt of
notice of the occurrence of an Event of Default, the Trustee shall give
notice thereof to the Rating Agencies and the Depositor. The predecessor
Servicer shall grant the Depositor, the Trustee, the Back-up Servicer and the
Certificate Insurer reasonable access to the predecessor Servicer's premises
at the predecessor Servicer's expense. If requested by the Certificate
Insurer, the Back-up Servicer or successor Servicer shall terminate any
arrangements relating to (i) the Lock-Box Account with the Lock-Box Bank,
(ii) the Lock-Box or (iii) the Lock-Box Agreement, and direct the Obligors to
make all payments under the Receivables directly to the Servicer at the
predecessor Servicer's expense (in which event the successor Servicer shall
process such payments directly, or, through a Lock-Box Account with a
Lock-Box Bank at the direction of the Certificate Insurer). The Trustee shall
send copies of all notices given pursuant to this Section 8.1 to the
Certificate Insurer so long as no Insurer Default shall have occurred and be
continuing, and to the Certificateholders if an Insurer Default shall have
occurred and be continuing.

         SECTION 8.2. APPOINTMENT OF SUCCESSOR. xxi) Upon the Servicer's receipt
of notice of termination pursuant to Section 8.1 or the Servicer's resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice, and, in the case of resignation, until the later of (x) the date 45 days
from the delivery to the Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of this

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Agreement and (y) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel. In the event of termination of the Servicer,
Chase Texas, as Back-up Servicer, shall assume the obligations of Servicer
hereunder on the date specified in such written notice (the "Assumption Date")
pursuant to the Servicing Assumption Agreement or, in the event that the
Certificate Insurer shall have determined that a Person other than the Back-up
Servicer shall be the successor Servicer in accordance with Section 8.2(c), on
the date of the execution of a written assumption agreement by such Person to
serve as successor Servicer. In the event of assumption of the duties of
Servicer by the Back-Up Servicer, the Back-Up Servicer shall be entitled to be
paid by the Servicer for the system conversion costs, an amount not to exceed
$100,000. In the event that such amount shall not have been timely paid by the
Servicer, such amount shall be paid under Section 4.6(c)(v) hereof; PROVIDED,
HOWEVER, the payment of such amount pursuant to Section 4.6(c)(v) shall not
relieve the Servicer of any obligation or liability to pay such amount.
Notwithstanding the Back-up Servicer's assumption of, and its agreement to
perform and observe, all duties, responsibilities and obligations of LBAC as
Servicer under this Agreement arising on and after the Assumption Date, the
Back-up Servicer shall not be deemed to have assumed or to become liable for, or
otherwise have any liability for, any duties, responsibilities, obligations or
liabilities of LBAC or any predecessor Servicer arising on or before the
Assumption Date, whether provided for by the terms of this Agreement, arising by
operation of law or otherwise, including, without limitation, any liability for,
any duties, responsibilities, obligations or liabilities of LBAC or any
predecessor Servicer arising on or before the Assumption Date under Sections 3.7
or 7.2 of this Agreement, regardless of when the liability, duty, responsibility
or obligation of LBAC or any predecessor Servicer therefor arose, whether
provided by the terms of this Agreement, arising by operation of law or
otherwise. In addition, if the Back-up Servicer shall be legally unable to act
as Servicer or shall have delivered a notice of resignation pursuant to Section
7.5 hereof and an Insurer Default shall have occurred and be continuing, the
Back-up Servicer, the Trustee or Class A Certificateholders holding Class A
Certificates evidencing not less than 66-2/3% of the Class A Certificate Balance
may petition a court of competent jurisdiction to appoint any successor to the
Servicer. Pending appointment pursuant to the preceding sentence, the Back-up
Servicer shall act as successor Servicer unless it is legally unable to do so,
in which event the predecessor Servicer shall continue to act as Servicer until
a successor has been appointed and accepted such appointment. In the event that
a successor Servicer has not been appointed at the time when the predecessor
Servicer has ceased to act as Servicer in accordance with this Section 8.2, then
the Certificate Insurer, in accordance with Section 8.2(c) shall appoint, or
petition a court of competent jurisdiction to appoint a successor to the
Servicer under this Agreement.

         (b)      Upon appointment, the successor Servicer shall be the
successor in all respects to the predecessor Servicer and shall be subject to
all the responsibilities, duties, and liabilities arising thereafter relating
thereto placed on the predecessor Servicer, and shall be entitled to the
Servicing Fee and all of the rights granted to the predecessor Servicer, by the
terms and provisions of this Agreement.

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         (c)      So long as no Insurer Default has occurred and is continuing,
the Certificate Insurer may exercise at any time its right to appoint as Back-up
Servicer or as successor Servicer a Person other than the Person serving as
Back-up Servicer at the time, and shall have no liability to the Trustee, LBAC,
the Depositor, the Person then serving as Back-up Servicer, any
Certificateholder or any other person if it does so. Subject to Section 7.5, no
provision of this Agreement shall be construed as relieving the Back-up Servicer
of its obligation to succeed as successor Servicer upon the termination of the
Servicer pursuant to Section 8.1 or resignation of the Servicer pursuant to
Section 7.5. If upon any such resignation or termination, the Certificate
Insurer appoints a successor Servicer other than the Back-up Servicer, the
Back-up Servicer shall not be relieved of its duties as Back-up Servicer
hereunder.

         SECTION 8.3. NOTIFICATION TO CERTIFICATEHOLDERS. Upon any termination
of, or appointment of a successor to, the Servicer pursuant to this Article
VIII, the Trustee shall give prompt written notice thereof to Certificateholders
at their respective addresses appearing in the Certificate Register and to each
of the Rating Agencies.

         SECTION 8.4. [RESERVED].

         SECTION 8.5. ACTION UPON CERTAIN FAILURES OF THE SERVICER. In the event
that a Responsible Officer of the Trustee shall have knowledge of any failure of
the Servicer specified in SECTION 8.1 which would give rise to a right of
termination under such Section upon the Servicer's failure to remedy the same
after notice, the Trustee shall give notice thereof to the Depositor, the
Servicer and the Certificate Insurer. For all purposes of this Agreement, the
Trustee shall not be deemed to have knowledge of any failure of the Servicer as
specified in SECTION 8.1 unless notified thereof in writing by the Depositor,
the Servicer, the Certificate Insurer or by a Certificateholder. The Trustee
shall be under no duty or obligation to investigate or inquire as to any
potential failure of the Servicer specified in SECTION 8.1.


                                   ARTICLE IX

                                   THE TRUSTEE

         SECTION 9.1. DUTIES OF TRUSTEE. The Trustee, both prior to the
occurrence of an Event of Default and after an Event of Default shall have been
cured or waived, shall undertake to perform such duties and only such duties as
are specifically set forth in this Agreement. If an Event of Default shall have
occurred and shall not have been cured or waived, the Trustee may, and at the
direction of the Certificate Insurer (or, if an Insurer Default shall have
occurred and is continuing, the Class A Certificateholder), shall exercise such
of the rights and powers vested in it by this Agreement and shall use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.

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         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that shall be specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.

         The Trustee shall take and maintain custody of the Schedule of
Receivables included as Schedule A to this Agreement and shall retain copies of
all Servicer's Certificates prepared hereunder.

         No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own bad faith; PROVIDED, HOWEVER, that:

                           (i)      Prior to the occurrence of an Event of
         Default and after the curing or waiving of all such Events of Default
         that may have occurred, the duties and obligations of the Trustee shall
         be determined solely by the express provisions of this Agreement, the
         Trustee shall not be liable except for the performance of such duties
         and obligations as shall be specifically set forth in this Agreement,
         no implied covenants or obligations shall be read into this Agreement
         against the Trustee and, in the absence of bad faith on the part of the
         Trustee, the Trustee may conclusively rely on the truth of the
         statements and the correctness of the opinions expressed in any
         certificates or opinions furnished to the Trustee and conforming to the
         requirements of this Agreement;

                           (ii)     The Trustee shall not be liable for an error
         of judgment made in good faith by a Trustee Officer, unless it shall be
         proved that the Trustee shall have been negligent in ascertaining the
         pertinent facts;

                           (iii)    The Trustee shall not be liable with respect
         to any action taken, suffered, or omitted to be taken in good faith in
         accordance with this Agreement or at the direction of the Certificate
         Insurer or, after an Insurer Default, the Holders of Class A
         Certificates evidencing not less than 25% of the Class A Certificate
         Balance, relating to the time, method, and place of conducting any
         proceeding for any remedy available to the Trustee, or exercising any
         trust or power conferred upon the Trustee, under this Agreement;

                           (iv)     The Trustee shall not be charged with
         knowledge of any Event of Default, unless a Trustee Officer assigned to
         the Trustee's Corporate Trust Office receives written notice of such
         Event of Default from the Servicer or the Depositor, as the case may
         be, the Certificate Insurer or, after an Insurer Default, the Holders
         of Class A Certificates evidencing not less than 25% of the Class A
         Certificate Balance (such notice shall constitute actual knowledge of
         an Event of Default by the Trustee); and

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                           (v)      The Trustee shall not be liable for any
         action taken, suffered or omitted by it in good faith and reasonably
         believed by it to be authorized or within the discretion or rights or
         powers conferred upon it by this Agreement.

         The Trustee may, but shall not be required to, expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, unless it
shall have been provided with indemnity against such risk or liability in form
and substance satisfactory to the Trustee, and none of the provisions contained
in this Agreement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer under this Agreement except during such time, if any, as the Trustee,
in its capacity as Back-up Servicer, shall be the successor to, and be vested
with the rights, duties, powers, and privileges of, the Servicer in accordance
with the terms of this Agreement.

         Except for actions expressly authorized by this Agreement, the Trustee
shall take no action reasonably likely to impair the security interests created
or existing under any Receivable or Financed Vehicle or to impair the value of
any Receivable or Financed Vehicle.

         All information obtained by the Trustee regarding the Obligors and the
Receivables, whether upon the exercise of its rights under this Agreement or
otherwise, shall be maintained by the Trustee in confidence and shall not be
disclosed to any other Person; PROVIDED that, nothing herein shall prevent the
Trustee from delivering copies of such information whether or not constituting
confidential information, and disclosing other information, whether or not
confidential information to (i) its directors, officers, employees, agents and
professional consultants to the extent necessary to carry on the Trustee's
business in the ordinary course, (ii) any Certificateholder or the Certificate
Insurer to the extent that such Certificateholder or the Certificate Insurer is
entitled to such information under this Agreement, but not otherwise (iii) any
governmental authority which specifically requests (or as to which applicable
regulations require) such information, (iv) any nationally recognized rating
agency in connection with the rating of the Certificates by such agency, (v) any
other Person to which such delivery or disclosure may be necessary or
appropriate, (a) in compliance with any applicable law, rule, regulation or
order, (b) in response to any subpoena or other legal process, (c) in connection
with any litigation to which the Trustee is a party, or (d) in order to protect
or enforce the rights of the Certificateholders and the Certificate Insurer
under the Trust established hereunder.

         SECTION 9.2. TRUSTEE'S CERTIFICATE. On or as soon as practicable after
each Distribution Date on which Receivables shall be assigned to LBAC or the
Servicer, as applicable, pursuant to this Agreement, based on amounts deposited
to the Collection Account, notices received pursuant to this Agreement and the
information contained in the Servicer's Certificate for the related Collection
Period, identifying the Receivables purchased by LBAC pursuant to Section 2.7 or
purchased by the Servicer pursuant to

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Section 3.7 or 10.2, the Trustee shall execute a Trustee's Certificate (in
the form of Exhibit D-1 or D-2, as applicable), and shall deliver such
Trustee's Certificate, accompanied by a copy of the Servicer's Certificate
for such Collection Period to LBAC or the Servicer, as the case may be. The
Trustee's Certificate submitted with respect to such Distribution Date shall
operate, as of such Distribution Date, as an assignment, without recourse,
representation, or warranty, to LBAC or the Servicer, as the case may be, of
all the Trustee's right, title, and interest in and to such repurchased
Receivable, and all security and documents relating thereto, such assignment
being an assignment outright and not for security.

         SECTION 9.3. CERTAIN MATTERS AFFECTING TRUSTEE. Except as otherwise
provided in the second paragraph of Section 9.1:

                           (i)      The Trustee may rely and shall be protected
         in acting or refraining from acting upon any resolution, Officer's
         Certificate, Servicer's Certificate, certificate of auditors, or any
         other certificate, statement, instrument, opinion, report, notice,
         request, consent, order, appraisal, bond, or other paper or document
         believed by it to be genuine and to have been signed or presented by
         the proper party or parties.

                           (ii)     The Trustee may consult with counsel, and
         any Opinion of Counsel shall be full and complete authorization and
         protection in respect of any action taken or suffered or omitted by it
         under this Agreement in good faith and in accordance with such Opinion
         of Counsel.

                           (iii)    The Trustee shall be under no obligation to
         exercise any of the rights or powers vested in it by this Agreement, or
         to institute, conduct, or defend any litigation under this Agreement or
         in relation to this Agreement, at the request, order or direction of
         any of the Certificateholders or the Certificate Insurer pursuant to
         the provisions of this Agreement, unless such Certificateholders or the
         Certificate Insurer shall have offered to the Trustee reasonable
         security or indemnity in form and substance reasonably satisfactory to
         the Trustee against the costs, expenses, and liabilities that may be
         incurred therein or thereby; nothing contained in this Agreement,
         however, shall relieve the Trustee of the obligations, upon the
         occurrence of an Event of Default (that shall not have been cured or
         waived), to exercise such of the rights and powers vested in it by this
         Agreement, and to use the same degree of care and skill in their
         exercise as a prudent man would exercise or use under the circumstances
         in the conduct of his own affairs.

                           (iv)     The Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, approval, bond, or other paper or document (other than
         for its duties pursuant to Section 2.7), unless requested in writing to
         do so by the Certificate Insurer, the Depositor or Holders of Class A

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         Certificates evidencing not less than 25% of the Class A Certificate
         Balance; PROVIDED, HOWEVER, that, if the payment within a reasonable
         time to the Trustee of the costs, expenses, or liabilities likely to be
         incurred by it in the making of such investigation shall be, in the
         opinion of the Trustee, not reasonably assured to the Trustee by the
         security afforded to it by the terms of this Agreement, the Trustee may
         require indemnity in form and substance satisfactory to it against such
         cost, expense, or liability as a condition to so proceeding. The
         reasonable expense of every such examination shall be paid by the
         Person making such request or, if paid by the Trustee, shall be
         reimbursed by the Person making such request upon demand.

                           (v)      The Trustee may execute any of the trusts or
         powers hereunder or perform any duties under this Agreement either
         directly or by or through agents or attorneys or a custodian. The
         Trustee shall not be responsible for any misconduct or negligence of
         any such agent or custodian appointed with due care by it hereunder, or
         of any agent or custodian of the Servicer in its capacity as Servicer
         or custodian or otherwise.

                           (vi)     Except as may be expressly required by
         Sections 2.7 and 10.1, subsequent to the sale of the Receivables by the
         Depositor to the Trust, the Trustee shall have no duty of independent
         inquiry, and the Trustee may rely upon the representations and
         warranties and covenants of the Depositor and the Servicer contained in
         this Agreement with respect to the Receivables and the Receivable
         Files.

                           (vii)    The Trustee may rely, as to factual matters
         relating to the Depositor or the Servicer, on an Officer's Certificate
         of the Depositor or Servicer, respectively.

                           (viii)   The Trustee shall not be required to take
         any action or refrain from taking any action under this Agreement, or
         any related documents referred to herein, nor shall any provision of
         this Agreement, or any such related document be deemed to impose a duty
         on the Trustee to take action, if the Trustee shall have been advised
         by counsel that such action is contrary to (i) the terms of this
         Agreement, (ii) any such related document or (iii) law.

         SECTION 9.4. TRUSTEE NOT LIABLE FOR CERTIFICATES OR RECEIVABLES. The
recitals contained herein and in the Certificates (other than the certificate of
authentication on the Certificates) shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Trustee assumes no
responsibility for the correctness thereof. The Trustee shall make no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the Certificates),
or of any Receivable or related document. The Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity, and
enforceability of any security interest in any Financed Vehicle or

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any Receivable, or the perfection and priority of such a security interest or
the maintenance of any such perfection and priority, or for or with respect
to the efficacy of the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition, location, and ownership of any Financed
Vehicle; the existence and enforceability of any physical damage insurance
thereon; except as required by Section 2.7, the existence, contents and
completeness of any Receivable or any Receivable Files or any computer or
other record thereof; the validity of the assignment of any Receivable to the
Trust or of any intervening assignment; except as required by Section 2.7,
the performance or enforcement of any Receivable; the compliance by the
Depositor or the Servicer with any warranty or representation made under this
Agreement or in any related document and the accuracy of any such warranty or
representation prior to the Trustee's receipt of notice or other actual
knowledge by a Responsible Officer of any noncompliance therewith or any
breach thereof; any investment of monies by or at the direction of the
Servicer or the Certificate Insurer or any loss resulting therefrom (it being
understood that the Trustee shall remain responsible for any Trust Property
that it may hold); the acts or omissions of the Depositor, the Servicer, or
any Obligor; any action of the Servicer taken in the name of the Trustee; or
any action by the Trustee taken at the instruction of the Servicer; PROVIDED,
HOWEVER, that the foregoing shall not relieve the Trustee of its obligation
to perform its duties under this Agreement. Except with respect to a claim
based on the failure of the Trustee to perform its duties under this
Agreement or based on the Trustee's negligence or willful misconduct, no
recourse shall be had for any claim based on any provision of this Agreement,
the Certificates, or any Receivable or assignment thereof against the Trustee
in its individual capacity, the Trustee shall not have any personal
obligation, liability, or duty whatsoever to any Certificateholder or any
other Person with respect to any such claim, and any such claim shall be
asserted solely against the Trust or any indemnitor who shall furnish
indemnity as provided in this Agreement. The Trustee shall not be accountable
for the use or application by the Depositor of any of the Certificates or of
the proceeds of such Certificates, or for the use or application of any funds
paid to the Servicer in respect of the Receivables. The Depositor hereby
certifies to the Trustee that the Rating Agencies rating the Class A
Certificates are Standard & Poor's and Moody's and that their addresses are
as set forth in Section 11.5. The Trustee may rely on the accuracy of such
certification until it receives from the Depositor an Officer's Certificate
superseding such certification.

         SECTION 9.5. TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
and may deal with the Depositor and the Servicer in banking transactions with
the same rights as it would have if it were not Trustee.

         SECTION 9.6. INDEMNITY OF TRUSTEE AND CUSTODIAN. The Servicer shall
indemnify the Trustee, the Custodian and each officer, director and employee of
the Trustee and the Custodian for, and hold each such Person harmless against,
any loss, liability, or expense incurred without willful misfeasance,
negligence, or bad faith on its part, arising out of or in connection with the
acceptance or administration of the Trust, or

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performance of duties as Custodian of the Legal Files including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties under this
Agreement. Additionally the Depositor, pursuant to Section 6.2, shall
indemnify the Trustee and the Custodian with respect to certain matters, the
Servicer, pursuant to Section 7.2, shall indemnify the Trustee and the
Custodian with respect to certain matters, and Certificateholders, pursuant
to Section 9.3 shall, upon the circumstances therein set forth, indemnify the
Trustee and the Custodian under certain circumstances. The provisions of this
Section 9.6 shall survive the termination of this Agreement or any
resignation or removal of LBAC as Servicer.

         SECTION 9.7. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee under
this Agreement shall at all times be organized and doing business under the laws
of the United States of America; authorized under such laws to exercise
corporate trust powers; having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities satisfactory to the Certificate Insurer; and having a rating, both
with respect to long-term and short-term unsecured obligations, of not less than
investment grade by each Rating Agency. If such corporation shall publish
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section 9.7, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section 9.7, the Trustee
shall resign immediately in the manner and with the effect specified in Section
9.8.

         SECTION 9.8. RESIGNATION OR REMOVAL OF TRUSTEE. The Trustee may at any
time resign and be discharged from the trusts hereby created by giving 30 days'
prior written notice thereof to the Servicer. Upon receiving such notice of
resignation, with the prior written consent of the Certificate Insurer and the
Holders of Class A Certificates evidencing not less than 66-2/3% of the Class A
Certificate Balance, the Servicer shall promptly appoint a successor Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Trustee. If no
successor Trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the Certificate
Insurer may appoint a successor Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Trustee. If no successor Trustee shall have been so
appointed and have accepted appointment within 60 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee. The Trustee may be
removed at any time by written demand of the Certificate Insurer delivered to
the Trustee and the Servicer.

         If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.7 and shall fail to resign after written
request therefor by the

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Servicer, or if at any time the Trustee shall be legally unable to act, or
shall be adjudged bankrupt or insolvent, or a receiver, conservator or
liquidator of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation,
then the Certificate Insurer shall (so long as no Insurer Default shall have
occurred and be continuing), or the Servicer may (if an Insurer Default shall
have occurred and be continuing) remove the Trustee. If the Certificate
Insurer or the Servicer shall remove the Trustee under the authority of the
immediately preceding sentence, the Servicer or the Certificate Insurer, as
the case may be, shall promptly appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor Trustee, and pay all
fees and expenses owed to the outgoing Trustee, provided that any successor
Trustee appointed by the Servicer shall be acceptable to the Certificate
Insurer.

         Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.8 shall
not become effective until acceptance of appointment by the successor Trustee
pursuant to Section 9.9 and payment of all fees and expenses owed to the
outgoing Trustee. The Servicer shall provide notice of such resignation or
removal of the Trustee to each of the Rating Agencies and the Depositor.

         If the Trustee and the Back-up Servicer shall be the same Person and
the rights and obligations of the Back-up Servicer shall have been terminated
pursuant to this Section 9.8, then the Certificate Insurer (or, if an Insurer
Default shall have occurred and be continuing, Holders of Class A Certificates
evidencing a majority of the Class A Certificate Balance outstanding) shall have
the option, by 60 days' prior notice in writing to the Servicer and the Trustee,
to remove the Trustee, and the Certificate Insurer shall not have any liability
to the Trustee, LBAC, the Depositor, the Servicer or any Certificateholder in
connection with such removal.

         SECTION 9.9. SUCCESSOR TRUSTEE. Any successor Trustee appointed
pursuant to SECTION 9.8 shall execute, acknowledge, and deliver to the
Depositor, the Servicer, the Certificate Insurer and to its predecessor Trustee
an instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties, and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Trustee. The predecessor Trustee shall upon payment of its fees and expenses
deliver to the successor Trustee all documents and statements and monies held by
it under this Agreement; and the Servicer, the Certificate Insurer and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties, and
obligations.

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         No successor Trustee shall accept appointment as provided in this
Section 9.9 unless at the time of such acceptance such successor Trustee shall
be eligible pursuant to Section 9.7.

         Upon acceptance of appointment by a successor Trustee pursuant to this
Section 9.9, the Servicer shall mail notice of the successor of such Trustee
under this Agreement to all Holders of Certificates at their addresses as shown
in the Certificate Register, the Depositor, and to the Rating Agencies. If the
Servicer shall fail to mail such notice within 10 days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Servicer.

         SECTION 9.10. MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 9.7, without the execution or
filing of any instrument or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; PROVIDED that the
Trustee shall mail notice of such merger or consolidation to the Rating
Agencies, the Depositor and the Certificate Insurer.

         SECTION 9.11. CO-TRUSTEE; SEPARATE TRUSTEE. Notwithstanding any other
provisions of this Agreement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust or any Financed
Vehicle may at the time be located, the Servicer, the Certificate Insurer
(provided an Insurer Default shall not have occurred and be continuing) and the
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more persons approved by the Trustee to act as
co-trustee, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust, and to vest in such Person, in such capacity
and for the benefit of the Certificateholders, such title to the Trust, or any
part thereof, and, subject to the other provisions of this Section 9.11, such
powers, duties, obligations, rights, and trusts as the Servicer, the Certificate
Insurer and the Trustee may consider necessary or desirable. If the Servicer and
the Certificate Insurer shall not have joined in such appointment within 15 days
after the receipt by it of a request so to do, or in the case an Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 9.7, except that the co-trustee or its parent shall
comply with the rating requirements set forth therein, and no notice of a
successor trustee pursuant to Section 9.9 and no notice to Certificateholders of
the appointment of any co-trustee or separate trustee shall be required pursuant
to Section 9.9.

         Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

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                           (i)      All rights, powers, duties, and obligations
         conferred or imposed upon the Trustee shall be conferred upon and
         exercised or performed by the Trustee and such separate trustee or
         co-trustee jointly (it being understood that such separate trustee or
         co-trustee is not authorized to act separately without the Trustee
         joining in such act), except to the extent that under any law of any
         jurisdiction in which any particular act or acts are to be performed
         (whether as Trustee under this Agreement or, in its capacity as Back-up
         Servicer, as successor to the Servicer under this Agreement), the
         Trustee shall be incompetent or unqualified to perform such act or
         acts, in which event such rights, powers, duties, and obligations
         (including the holding of title to the Trust or any portion thereof in
         any such jurisdiction) shall be exercised and performed singly by such
         separate trustee or co-trustee, but solely at the direction of the
         Trustee;

                           (ii)     No trustee under this Agreement shall be
         personally liable by reason of any act or omission of any other trustee
         under this Agreement; and

                           (iii)    Provided no Insurer Default shall have
         occurred and be continuing, the Certificate Insurer may, and, in the
         event an Insurer Default shall have occurred and be continuing, then,
         the Servicer and the Trustee acting jointly may, at any time accept the
         resignation of or remove any separate trustee or co-trustee.

         Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the other then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Each such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer.

         Any separate trustee or co-trustee may at any time appoint the Trustee,
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

         SECTION 9.12. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The Trustee
shall make the following representations and warranties on which the Depositor,
the Servicer, the Originator, the Certificate Insurer and Certificateholders
shall rely:

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                           (i)      The Trustee is a national banking
         association duly organized, validly existing, and in good standing
         under the laws of the United States of America and has the corporate
         power, authority and legal right, as Trustee and Back-up Servicer on
         behalf of the Trust, to acquire, own, sell and service the Receivables,
         and to hold the Legal Files as Custodian.

                           (ii)     The Trustee has full corporate power
         authority and legal right to execute, deliver, and perform this
         Agreement and shall have taken all necessary action to authorize the
         execution, delivery and performance by it of this Agreement.

                           (iii)    This Agreement shall have been duly executed
         and delivered by the Trustee and this Agreement constitutes a legal,
         valid and binding obligation of the Trustee enforceable in accordance
         with its terms, subject to (x) applicable bankruptcy, insolvency,
         reorganization, moratorium, and other similar laws affecting creditor's
         rights generally and (y) general principles of equity.

         SECTION 9.13. NO BANKRUPTCY PETITION. The Trustee covenants and agrees
that prior to the date which is one year and one day after the payment in full
of all securities issued by the Depositor or by a trust for which the Depositor
was the depositor it will not institute against, or join any other Person in
instituting against, the Depositor or the Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any Federal or State bankruptcy or similar law.

         SECTION 9.14. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as Trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.

         SECTION 9.15. RIGHTS OF CERTIFICATE INSURER TO DIRECT TRUSTEE. Subject
to clause (iii) of Section 9.3, unless an Insurer Default shall have occurred
and be continuing, the Certificate Insurer, after giving written notice to the
Trustee, shall have the right to direct the time, method and place at or by
which the Trustee conducts any proceeding for any remedy available to the
Trustee, or exercises any such trust or power conferred upon the Trustee;
PROVIDED, HOWEVER, that subject to Section 9.1, the Trustee shall have the right
to decline to follow any such direction of the Certificate Insurer if the
Trustee, being advised by counsel, determines that the action so directed may
not lawfully be taken, or if the Trustee in good faith shall, by a Responsible
Officer of the Trustee, determine that the proceedings so directed would be in
violation of any Basic Document or illegal or involve it in personal liability
against which its has not been

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provided indemnity in form and substance satisfactory to it or be unduly
prejudicial to the rights of Certificateholders; PROVIDED, that nothing in
this Agreement shall impair the right of the Trustee to take any action
deemed proper by the Trustee and which is not inconsistent with such
direction of the Certificate Insurer. Notwithstanding the foregoing, neither
the Trustee nor the Certificate Insurer has the right to liquidate the
Collateral under this Agreement or any other Basic Document.

                                    ARTICLE X

                                   TERMINATION

         SECTION 10.1. TERMINATION OF THE TRUST. The respective obligations and
responsibilities of LBAC, the Depositor, the Servicer, the Custodian and the
Trustee created hereby and the Trust created by this Agreement shall terminate
upon the payment to Certificateholders of all amounts required to be paid to
them pursuant to this Agreement, satisfaction of all Reimbursement Obligations,
and the expiration of any preference period related thereto and the disposition
of all property held as part of the Trust; PROVIDED, HOWEVER, in any case there
shall be delivered to the Trustee and the Certificate Insurer an Opinion of
Counsel that all applicable preference periods under federal, state and local
bankruptcy, insolvency and similar laws have expired with respect to the
payments pursuant to this Section 10.1; PROVIDED, FURTHER, HOWEVER, that in no
event shall the trust created by this Agreement continue beyond the expiration
of 21 years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States of America to the Court of St.
James, living on the date of this Agreement. The Servicer shall promptly notify
the Trustee, the Depositor, each Rating Agency and the Certificate Insurer of
any prospective termination pursuant to this Section 10.1.

         Notice of any termination, specifying the Distribution Date upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee by letter to Certificateholders mailed not earlier than the 15th day
and not later than the 25th day of the month next preceding the specified
Distribution Date stating (A) the Distribution Date upon which final payment of
the Certificates shall be made upon presentation and surrender of the
Certificates at the office of the Trustee therein designated, (B) the amount of
any such final payment, and (C) if applicable, that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Trustee
therein specified. The Trustee shall give such notice to the Depositor and the
Certificate Registrar (if other than the Trustee) at the time such notice is
given to Certificateholders. Upon presentation and surrender of the
Certificates, the Trustee shall cause to be distributed to Certificateholders
amounts distributable on such Distribution Date pursuant to Section 4.6.

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         In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates shall not have been
surrendered for cancellation, the Trustee shall take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to this Agreement or, if none, from LBAC. Notwithstanding the foregoing,
any funds remaining on deposit in the Certificate Account for the payment of the
Certificates and not applied but remaining unclaimed for two years after the
date upon which principal and interest on such Certificates shall have become
due and payable, shall, at the election of the Trustee or upon the written
request of LBAC and unless otherwise required by mandatory provisions of law, be
paid to the National Stroke Council by the Trustee, and the holder of any
Certificate and the Certificate Insurer, shall, unless otherwise required by
mandatory provisions of law, thereafter look only to the Depositor for any
payment which such Person may be entitled to collect, and all liability of the
Trustee with respect to such funds and all obligations (other than obligations
which by their express terms survive termination of the Trust) of the Trustee
under this Agreement shall thereupon cease.

         SECTION 10.2. OPTIONAL PURCHASE OF ALL RECEIVABLES. On the last day of
any Collection Period as of which the Pool Balance shall be less than or equal
to the Optional Purchase Percentage multiplied by the sum of the Original Pool
Balance and the aggregate Principal Balance of all Subsequent Receivables
conveyed to the Trust as of the related Subsequent Cutoff Dates, the Originator
or the Servicer shall have the option to purchase the corpus of the Trust (with
the consent of the Certificate Insurer, if such purchase would result in a claim
on the Policy or would result in any amount owing to the Certificate Insurer or
to the Holders of the Class A Certificates remaining unpaid); PROVIDED, HOWEVER,
that if both the Originator and the Servicer desire to effect such purchase, the
Originator shall have the preferential right to effect such purchase; PROVIDED,
FURTHER, that neither the Originator nor the Servicer may effect any such
purchase unless the Originator shall have received an Opinion of Counsel, and
shall have delivered it to the Trustee to the effect that such purchase would
not constitute a fraudulent conveyance. The Originator or the Servicer, as
applicable, shall notify each Rating Agency of such purchase. To exercise such
option the Originator or the Servicer (or the Certificate Insurer, if
applicable) shall deposit pursuant to Section 4.5 in the Collection Account an
amount equal to the aggregate Purchase Amount for the Receivables (including
defaulted Receivables), plus the appraised value of any other property held by
the Trust, such value to be determined by an appraiser mutually agreed upon by
the Originator or the Servicer, as applicable, the Certificate Insurer and the
Trustee, and shall succeed to all interests in and to the Trust. For purposes of
this Section, the Purchase Amount shall not be less than the amount necessary to
permit the full distribution of the Class A Certificate Balance, plus accrued
and unpaid interest thereon, as of such date of repurchase.

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                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

         SECTION 11.1. AMENDMENT. This Agreement may be amended from time to
time by the Depositor, the Servicer, and the Trustee with the consent of the
Certificate Insurer and with the consent (which consent of any Holder of a
Certificate given pursuant to this Section or pursuant to any other provision of
this Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Certificate and of any Certificate issued upon the transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Certificate) of the Holders of Class A
Certificates evidencing not less than 51% of the Class A Certificate Balance for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement, or of modifying in any manner the
rights of the Holders of Certificates; PROVIDED, HOWEVER, that no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, or change the allocation or priority of, collections of payments
on Receivables or distributions that shall be required to be made on any
Certificate or change the Class A Pass-Through Rate without the consent of each
Certificateholder affected thereby, (b) reduce the aforesaid percentage of the
Class A Certificate Balance required to consent to any such amendment, without
the consent of the Holders of all Class A Certificates then outstanding or
eliminate the right of the Excess Cash Flow Certificateholder to consent to any
change described in clause (a) affecting the Excess Cash Flow Certificateholder
without the consent of the Excess Cash Flow Certificateholder or (c) result in a
downgrade or withdrawal of the then current rating of the Class A Certificates
by either of the Rating Agencies without the consent of all the Class A
Certificateholders.

         The Trustee shall furnish prior notice of any such proposed amendment
to each Rating Agency and promptly after the execution of any such amendment or
consent, the Trustee shall furnish a copy of such amendment or consent to each
Certificateholder, each of the Rating Agencies and the Lock-Box Processor.

         Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement and
the Opinion of Counsel referred to in Section 11.2(i)(1). The Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Trustee's own rights, duties or immunities under this Agreement or otherwise.

         SECTION 11.2. PROTECTION OF TITLE TO TRUST. xxii) Each of the
Depositor, as to itself, and the Servicer, as to itself, shall execute and file
such financing statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain, and protect the interest of the Certificateholders,
the Trustee and the Certificate Insurer in its interest in the Receivables and
the other Trust Assets and in the proceeds thereof. Each of the

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Depositor, as to itself, and the Servicer, as to itself, shall deliver (or
cause to be delivered) to the Trustee and the Certificate Insurer
file-stamped copies of, or filing receipts for, any document filed as
provided above, as soon as available following such filing.

         (b)      Neither the Depositor nor the Servicer shall change its
name, identity, or corporate structure in any manner that would, could, or
might make any financing statement or continuation statement filed in
accordance with paragraph (a) above seriously misleading within the meaning
of Section 9-402(7) of the UCC, unless it shall have given the Trustee, the
Certificate Insurer and the other party at least thirty days' prior written
notice thereof, shall have promptly filed appropriate amendments to all
previously filed financing statements or continuation statements and shall
have delivered an Opinion of Counsel (A) stating that, in the opinion of such
counsel, all amendments to all previously filed financing statements and
continuation statements have been executed and filed that are necessary fully
to preserve and protect the interest of the Trustee in the Receivables and
the other Trust Assets, and reciting the details of such filings, or (B)
stating that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest.

         (c)      Each of the Depositor and the Servicer shall have an
obligation to give the Trustee, the Certificate Insurer and the other party at
least thirty days' prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable provisions
of the UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement, shall
promptly file any such amendment and shall deliver an Opinion of Counsel (A)
stating that, in the opinion of such counsel, all amendments to all previously
filed financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the
Trustee in the Receivables, and reciting the details of such filings, or (B)
stating that, in the opinion of such counsel, no such action shall be necessary
to preserve and protect such interest. The Servicer shall at all times maintain
each office from which it shall service Receivables, and its principal executive
office, within the United States of America.

         (d)      The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Certificate
Account and Payahead Account in respect of such Receivable.

         (e)      The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the
Trustee, the Servicer's master computer records (including any back-up archives)
that refer to a Receivable shall indicate clearly the interest of Long Beach
Acceptance Auto Grantor Trust 1998-2 in such Receivable and that such Receivable
is owned by the Trust. Indication of the Trust's

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ownership of a Receivable shall be deleted from or modified on the Servicer's
computer systems when, and only when, such Receivable shall have been paid in
full or repurchased.

         (f)      If at any time the Depositor or the Servicer shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
automotive receivables to any prospective purchaser, lender, or other
transferee, the Servicer shall give to such prospective purchaser, lender, or
other transferee computer tapes, records, or printouts (including any restored
from back-up archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold to and is
owned by the Trust.

         (g)      The Servicer shall, upon reasonable notice, permit the
Depositor, the Trustee, the Back-up Servicer and the Certificate Insurer and its
agents at any time during normal business hours to inspect, audit, and make
copies of and abstracts from the Servicer's records regarding any Receivable.

         (h)      Upon request, the Servicer shall furnish to the Depositor, the
Trustee, the Back-up Servicer or to the Certificate Insurer, within five
Business Days, a list of all Receivables (by contract number and name of
Obligor) then held as part of the Trust, together with a reconciliation of such
list to the Schedule of Receivables and to each of the Servicer's Certificates
furnished before such request indicating removal of Receivables from the Trust.

         (i)      The Servicer shall deliver to the Trustee and the Certificate
Insurer:

                           (1)      promptly after the execution and delivery of
         this Agreement and of each amendment hereto and after the execution and
         delivery of each amendment to any financing statement, an Opinion of
         Counsel either (A) stating that, in the opinion of such counsel, all
         financing statements and continuation statements have been executed and
         filed that are necessary fully to preserve and protect the interest of
         the Trustee in the Receivables, and reciting the details of such
         filings or referring to prior Opinions of Counsel in which such details
         are given, or (B) stating that, in the opinion of such counsel, no such
         action shall be necessary to preserve and protect such interest; and

                           (2)      within 90 days after the beginning of each
         calendar year beginning with the first calendar year beginning more
         than three months after the Initial Cutoff Date, an Opinion of Counsel,
         dated as of a date during such 90-day period either (A) stating that,
         in the opinion of such counsel, all financing statements and
         continuation statements have been executed and filed that are necessary
         fully to preserve and protect the interest of the Trustee in the
         Receivables, and reciting the details of such filings or referring to
         prior Opinions of Counsel in which such details are given or (B)
         stating that, in the opinion of such counsel, no such action shall be
         necessary to preserve and protect such interest.

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         Each Opinion of Counsel referred to in clause (i) (1) or (i) (2) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.

         (j)      For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.

         SECTION 11.3. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties to
this Agreement or any of them.

         No Certificateholder shall have any right to vote (except as
specifically provided herein including in Section 11.1) or in any manner
otherwise control the operation and management of the Trust, or the obligations
of the parties to this Agreement, nor shall anything in this Agreement set
forth, or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
person by reason of any action taken pursuant to any provision of this
Agreement.

         So long as no Insurer Default has occurred and is continuing, except as
otherwise specifically provided herein, whenever Class A Certificateholder
action, consent or approval is required under this Agreement, such action,
consent or approval shall be deemed to have been taken or given on behalf of,
and shall be binding upon, all Class A Certificateholders if the Certificate
Insurer agrees to take such action or give such consent or approval.

         If an Insurer Default shall have occurred and be continuing, no Class A
Certificateholder shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, and unless also the Holders of Class A
Certificates evidencing not less than 25% of the Class A Certificate Balance
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee under this Agreement and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses, and liabilities to be incurred therein or thereby and the
Trustee, for 30 days after its receipt of such notice, request, and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding and during such 30-day period no request or waiver inconsistent with
such written request has been given to the Trustee pursuant to this Section or
Section 8.4; no one or more Holders of Class A Certificates

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shall have any right in any manner whatever by virtue or by availing itself
or themselves of any provisions of this Agreement to affect, disturb, or
prejudice the rights of the Holders of any other of the Class A Certificates,
or to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right, under this Agreement except in the manner
provided in this Agreement and for the equal, ratable, and common benefit of
all Class A Certificateholders. For the protection and enforcement of the
provisions of this Section 11.3, each Class A Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity. Nothing in this Agreement shall be construed as giving the Class A
Certificateholders any direct right to make a claim on the Policy.

         SECTION 11.4. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS,
AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (EXCEPT
WITH REGARD TO THE UCC).

         SECTION 11.5. NOTICES. All demands, notices, and communications upon or
to the Depositor, the Servicer, the Trustee, the Certificate Insurer, Standard &
Poor's or Moody's under this Agreement shall be in writing, and delivered (i)
personally, (ii) by certified mail, return receipt requested, (iii) by Federal
Express or similar overnight courier service or (iv) by telecopy, and shall be
deemed to have been duly given upon receipt (a) in the case of the Depositor, at
the following address: One Mack Centre Drive, Paramus, New Jersey 07652
(Telecopy: (201) 262-6868), Attention: General Counsel, or at such other address
as shall be designated by the Depositor in a written notice to the Trustee, (b)
in the case of the Servicer, at the following address: One Mack Centre Drive,
Paramus, New Jersey 07652 (Telecopy: (201) 262-6868), Attention: General
Counsel, (c) in the case of the Trustee, at its principal Corporate Trust Office
(Telecopy: (713) 216-3571), (d) in the case of Standard & Poor's, at the
following address: 26 Broadway, 15th Floor, New York, New York 10004, Attention:
Asset Backed Surveillance Department, (e) in the case of Moody's, at the
following address: 99 Church Street, New York, New York 10007, Attention: ABS
Monitoring Department and (f) in the case of the Certificate Insurer, at the
following address: 350 Park Avenue, New York, New York 10022, Attention: Senior
Vice President, Surveillance, Re: Long Beach Acceptance Auto Grantor Trust
1998-2. Any notice required or permitted to be mailed to a Certificateholder
shall be given by Federal Express or similar overnight courier service, postage
prepaid, at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder shall receive such notice.

         The Trustee shall give prompt written notice to each of the Depositor,
the Rating Agencies and each Class A Certificateholder of (i) any amendments to
the Insurance Agreement or the Policy (upon receipt of written notice of any
such amendments from

                                       112
<Page>

LBAC or the Servicer), (ii) any change in the identity of the Paying Agent
and (iii) any failure to make payment under the Policy.

         SECTION 11.6. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.

         SECTION 11.7. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.3 and 8.3 and as provided in
the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Depositor or the Servicer without the
prior written consent of the Certificate Insurer, LBAC, the Trustee and the
Holders of Class A Certificates evidencing not less than 51% of the Class A
Certificate Balance.

         SECTION 11.8. CERTIFICATES NONASSESSABLE AND FULLY PAID.
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and upon
authentication thereof by the Trustee pursuant to Section 5.4 or 5.5,
Certificates shall be deemed fully paid.

         SECTION 11.9. NONPETITION COVENANT. None of the Depositor, the
Servicer, the Trustee, the Custodian, the Back-up Servicer or LBAC shall, prior
to the date which is one year and one day after the termination of this
Agreement with respect to the Trust or the Depositor, petition or otherwise
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Trust or the Depositor under any
Federal or State bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Trust or the Depositor or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Trust or the
Depositor.

         SECTION 11.10. THIRD PARTY BENEFICIARIES. Except as otherwise
specifically provided herein with respect to Certificateholders, the parties to
this Agreement hereby manifest their intent that no third party other than the
Certificate Insurer and the Custodian with respect to the indemnification
provisions set forth herein, shall be deemed a third party beneficiary of this
Agreement, and specifically that the Obligors are not third party beneficiaries
of this Agreement. The Certificate Insurer and its successors and assigns shall
be a third-party beneficiary to the provisions of this Agreement, and shall be
entitled to rely upon and directly enforce such provisions of this Agreement so
long as no Insurer Default shall have occurred and be continuing. Except as
expressly stated otherwise herein or in the Basic Documents, any right of the
Certificate Insurer to direct, appoint, consent to, approve of, or take any
action under this Agreement, shall be a right exercised by the Certificate
Insurer in its sole and absolute discretion. The Certificate

                                       113
<Page>

Insurer may disclaim any of its rights and powers under this Agreement (but
not its duties and obligations under the Policy) upon delivery of a written
notice to the Trustee.

         SECTION 11.11. CERTIFICATE INSURER AS CONTROLLING PARTY. Each
Certificateholder by purchase of the Certificates held by it acknowledges that
each such Certificateholder and the Trustee, as partial consideration of the
issuance of the Policy, have agreed that the Certificate Insurer shall have
certain rights hereunder for so long as no Insurer Default shall have occurred
and be continuing. So long as an Insurer Default has occurred and is continuing,
any provision giving the Certificate Insurer the right to direct, appoint or
consent to, approve of, or take any action under this Agreement shall be
inoperative during the period of such Insurer Default and such right shall
instead vest in the Trustee acting at the direction of the Holders of Class A
Certificates evidencing, unless otherwise specified, not less than 51% of the
Class A Certificate Balance. The Certificate Insurer may disclaim any of its
rights and powers under this Agreement (but not its duties and obligations under
the Policy) upon delivery of a written notice to the Trustee. The Certificate
Insurer may give or withhold any consent hereunder in its sole and absolute
discretion.

                                       114
<Page>

         IN WITNESS WHEREOF, the Depositor, the Originator, the Servicer, the
Trustee, the Back-up Servicer, the Custodian and the Collateral Agent have
caused this Pooling and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.

                                        LONG BEACH ACCEPTANCE RECEIVABLES CORP.,
                                        as Depositor


                                        By:____________________________________
                                           Name:
                                           Title:


                                        LONG BEACH ACCEPTANCE CORP.,
                                        as Originator and Servicer


                                        By:____________________________________
                                           Name:
                                           Title:


                                        CHASE BANK OF TEXAS, NATIONAL
                                        ASSOCIATION, as Trustee, Back-up
                                        Servicer, Custodian and Collateral Agent


                                        By:____________________________________
                                           Name:
                                           Title:

                                       115
<Page>

EXHIBIT A:                FORM OF CLASS A CERTIFICATE            SEE REVERSE FOR
                                                                 CERTAIN
                                                                 DEFINITIONS


[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE APPLICABLE SECURITIES LAWS OF ANY STATE.
ACCORDINGLY, TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET
FORTH IN SECTION 5.5(a) OF THE AGREEMENT. BY ITS ACCEPTANCE OF THIS CERTIFICATE
THE HOLDER OF THIS CERTIFICATE IS DEEMED TO REPRESENT TO THE DEPOSITOR AND THE
TRUSTEE [THAT IT IS AN INSTITUTIONAL INVESTOR THAT IS AN "ACCREDITED INVESTOR"
AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D PROMULGATED UNDER
THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") AND THAT IT IS
ACQUIRING THIS CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF
OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE
INSTITUTIONAL ACCREDITED INVESTORS UNLESS THE HOLDER IS A BANK ACTING IN ITS
FIDUCIARY CAPACITY) FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, THE PUBLIC DISTRIBUTION HEREOF] [THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS
ACQUIRING THIS CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF
OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED
INSTITUTIONAL BUYERS)].

NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE BY ANY PERSON
UNLESS EITHER (I) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO THE DEPOSITOR,
(II) [SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT EXECUTES A CERTIFICATE, SUBSTANTIALLY IN THE FORM

                                      A-1
<Page>

SPECIFIED IN THE AGREEMENT, TO THE EFFECT THAT IT IS AN INSTITUTIONAL
ACCREDITED INVESTOR ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF
OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE
INSTITUTIONAL ACCREDITED INVESTORS UNLESS THE HOLDER IS A BANK ACTING IN ITS
FIDUCIARY CAPACITY),] [SO LONG AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, SUCH SALE, PLEDGE OR OTHER
TRANSFER IS MADE TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES AFTER DUE
INQUIRY IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A),
ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL
BUYERS) TO WHOM NOTICE IS GIVEN THAT THE SALE, PLEDGE OR TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A,] OR (III) SUCH SALE, PLEDGE OR OTHER TRANSFER
IS OTHERWISE MADE IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, IN WHICH CASE (A) THE TRUSTEE SHALL REQUIRE THAT BOTH
THE PROSPECTIVE TRANSFEROR AND THE PROSPECTIVE TRANSFEREE CERTIFY TO THE
TRUSTEE AND THE DEPOSITOR IN WRITING THE FACTS SURROUNDING SUCH TRANSFER,
WHICH CERTIFICATION SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE AND THE DEPOSITOR, AND (B) THE TRUSTEE MAY REQUIRE A WRITTEN OPINION
OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF THE DEPOSITOR OR THE
TRUSTEE) SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE TO THE EFFECT THAT
SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT. NO SALE, PLEDGE OR OTHER
TRANSFER MAY BE MADE TO ANY ONE PERSON FOR CERTIFICATES WITH A FACE AMOUNT OF
LESS THAN $100,000 AND, IN THE CASE OF ANY PERSON ACTING ON BEHALF OF ONE OR
MORE THIRD PARTIES (OTHER THAN A BANK (AS DEFINED IN SECTION 3(A)(2) OF THE
SECURITIES ACT) ACTING IN ITS FIDUCIARY CAPACITY), FOR CERTIFICATES WITH A
FACE AMOUNT OF LESS THAN $100,000 FOR EACH SUCH THIRD PARTY.

LONG BEACH ACCEPTANCE AUTO GRANTOR TRUST 1998-2
5.87% ASSET BACKED CERTIFICATE
CLASS A

evidencing a beneficial ownership interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts secured
by new and used automobiles, vans, sport utility vehicles and light duty trucks
and sold to the Trust by Long Beach Acceptance Receivables Corp.

                                      A-2
<Page>

(This Certificate does not represent an interest in or obligation of Long Beach
Acceptance Receivables Corp., Long Beach Acceptance Corp., the Trustee or any of
their respective affiliates, except to the extent described below.)

NUMBER R-___________                                       CUSIP No. 542389 AG 6
$____________ (of                                          Final Scheduled
$110,000,000  issued)                                      Distribution Date:
                                                           August 19, 2005


         THIS CERTIFIES THAT _____________ is the registered owner of a
______________ Dollars ($_________) nonassessable, fully-paid, beneficial
ownership interest in the Long Beach Acceptance Auto Grantor Trust 1998-2 (the
"Trust") formed by Long Beach Acceptance Receivables Corp., a Delaware
corporation (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of November 1, 1998 (the "Agreement") among the
Depositor, Long Beach Acceptance Corp., as originator and as servicer (the
"Servicer") and Chase Bank of Texas, National Association, as trustee (the
"Trustee"), Custodian, Collateral Agent and Back-up Servicer, a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement. This Certificate is one of the duly
authorized Certificates designated as "5.87% Asset Backed Certificates, Class A"
(herein called the "Class A Certificates"). Also issued under the Agreement are
Certificates designated as "Excess Cash Flow Certificates" (the "Excess Cash
Flow Certificates"). The Class A Certificates and the Excess Cash Flow
Certificates are hereinafter collectively called the "Certificates". This Class
A Certificate is issued under and is subject to the terms, provisions, and
conditions of the Agreement, to which Agreement the Holder of this Class A
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The property of the Trust includes (i) a pool of retail installment
sale contracts for new and used automobiles, vans, sport utility vehicles and
light duty trucks (the "Receivables"), and with respect to Precomputed
Receivables, all monies received thereon after the close of business on October
31, 1998 (the "Initial Cutoff Date") in the case of the Initial Receivables, or
the related Subsequent Cutoff Date in the case of the Subsequent Receivables
(including in each case Scheduled Payments due or to become due thereon on and
after the Initial Cutoff Date in the case of the Initial Receivables, or the
related Subsequent Cutoff Date in the case of the Subsequent Receivables, and
Scheduled Payments due prior to the Initial Cutoff Date in the case of the
Initial Receivables, or the related Subsequent Cutoff Date in the case of the
Subsequent Receivables, but received on or after the Initial Cutoff Date in the
case of the Initial Receivables, or the related Subsequent Cutoff Date in the
case of the Subsequent Receivables), principal prepayments relating to such
Scheduled Payments due on or after the Initial Cutoff Date in the case of the
Initial Receivables, or the related Subsequent Cutoff Date in the case of the
Subsequent Receivables, but received by the Depositor or LBAC before the Initial
Cutoff Date in the case of the Initial Receivables, and any Payaheads received
with respect to payments due on the Initial Receivables on or after

                                      A-3
<Page>

the Initial Cutoff Date (which Payaheads shall be held in the Payahead
Account until the Collection Period in which such payments are actually due
with respect to the related Receivable, at which time such Payaheads shall be
applied as a component of the Total Distribution Amount), or the related
Subsequent Cutoff Date in the case of the Subsequent Receivables, and with
respect to Simple Interest Receivables, all monies received thereunder on and
after the Initial Cutoff Date in the case of the Initial Receivables, or the
related Subsequent Cutoff Date in the case of the Subsequent Receivables
(including in each case Scheduled Payments due before the Initial Cutoff Date
in the case of the Initial Receivables, or the related Subsequent Cutoff Date
in the case of the Subsequent Receivables, but received by the Depositor or
LBAC on or after the Initial Cutoff Date in the case of the Initial
Receivables, or the related Subsequent Cutoff Date in the case of the
Subsequent Receivables), security interests in the vehicles financed thereby,
proceeds from claims on certain insurance policies and certain other rights
under the Agreement, certain bank accounts and the proceeds thereof, all
right, title and interest of the Depositor in and to the Purchase Agreement,
all right, title and interest of the Depositor in and to certain refunds, the
Receivable Files related to each Receivable and the proceeds of any or all of
the foregoing; and (ii) a Financial Guaranty Insurance Policy issued for the
benefit of the Class A Certificateholders by Financial Security Assurance
Inc. (the "Policy").

         Under the Agreement, there will be distributed on the 19th day of each
month or, if such 19th day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on December 21, 1998, to the person in whose
name this Class A Certificate is registered at the close of business on the last
day of the calendar month immediately preceding the month in which such
Distribution Date occurs (the "Record Date"), such Class A Certificateholder's
percentage interest (determined by dividing the denominations of this Class A
Certificate by the aggregate original denomination of all Class A Certificates)
in the amounts distributed to Class A Certificateholders pursuant to the
Agreement.

         Full and complete payment of the Class A Distributable Amount on each
Distribution Date is unconditionally and irrevocably guaranteed pursuant to the
Policy.

         Distributions on this Class A Certificate will be made by the Trustee
by (i) wire transfer, in immediately available funds to the account of such
Class A Certificateholder at a bank or other entity having appropriate
facilities therefor, if such Class A Certificateholder is the Clearing Agency or
such Class A Certificateholder's Class A Certificates in the aggregate evidence
a denomination of at least $1,000,000, and, if such Class A Certificateholder
shall have provided to the Trustee appropriate instructions prior to such
Distribution Date, or (ii) by check mailed to the Class A Certificateholder of
record in the Certificate Register without the presentation or surrender of this
Class A Certificate or the making of any notation hereon. Except as otherwise
provided in the Agreement and notwithstanding the above, the final distribution
on this Class A Certificate will be made after due notice by the Trustee of the
pendency of such

                                      A-4
<Page>

distribution and only upon presentation and surrender of this Class A
Certificate at the office or agency maintained for that purpose by the
Trustee specified in such notice.

         Under the Agreement, the Trustee and Certificateholders agree that the
Certificate Insurer shall be subrogated to all of the rights to payment of the
Class A Certificateholders or in relation thereto to the extent that any payment
of principal or interest was made to such Class A Certificateholders with
payments made under the Policy by the Certificate Insurer.

         As provided in the Agreement, so long as no Insurer Default has
occurred and is continuing, with certain exceptions whenever Class A
Certificateholder action, consent or approval is required under the Agreement,
such action, consent or approval shall be deemed to have been taken or given on
behalf of, and shall be binding upon, all Class A Certificateholders if the
Certificate Insurer agrees to take such action or give such consent or approval.
If an Insurer Default shall have occurred and is continuing, no
Certificateholder shall have any right by virtue or by availing itself of any
provisions of the Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to the Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as provided in the Agreement and unless also the
Holders of Certificates evidencing not less than 51% of the sum of the Class A
Certificate Balance shall have made written request upon the trustee to
institute such action, suit or proceeding in its own name as trustee under the
Agreement. The rights of the Class A Certificateholders are subject to certain
limitations as set forth in Section 11.3 of the Agreement.

         Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Class A Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.

         IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its
individual capacity has caused this Class A Certificate to be duly executed.

                                        LONG BEACH ACCEPTANCE AUTO GRANTOR
                                           TRUST 1998-2

                                        By:   Chase Bank of Texas, National
                                              Association, not in its individual
                                              capacity but solely in its
                                              capacity as Trustee

                                        By: ___________________________________
                                             Authorized Signatory

                                      A-5
<Page>

Dated:  ________ __, 1998

               This is one of the Class A Certificates referred to
                       in the within-mentioned Agreement.

                                              Chase Bank of Texas, National
                                              Association, not in its individual
                                              capacity but solely in its
                                              capacity as Trustee

                                              By: _____________________________
                                                  Authorized Signatory

                                      A-6
<Page>

                            [REVERSE OF CERTIFICATE]


         The Certificates do not represent an obligation of, or an interest in,
the Depositor, LBAC, the Servicer, the Trustee or any affiliate of any of them.
The Class A Certificates are limited in right of payment to certain collections
and recoveries respecting the Receivables and claims made under the Policy, all
as more specifically set forth in the Agreement. A copy of the Agreement may be
examined during normal business hours at the principal office of the Depositor,
and at such other places, if any, designated by the Depositor, by any
Certificateholder upon request.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Servicer and the Trustee with the consent of the
Certificate Insurer and with the consent of the Holders of Certificates
evidencing not less than 51% of the Class A Certificate Balance. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and on all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent is made upon this Certificate.

         As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Trustee in its capacity as
Certificate Registrar or by any successor Certificate Registrar, in the Borough
of Manhattan, The City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee.

         The Class A Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $100,000 and integral multiples of
$1,000 in excess thereof. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the Holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Trustee may require payment of a sum sufficient to cover any tax or governmental
charges payable in connection therewith.

         The Trustee, the Certificate Registrar, and any agent of the Trustee or
the Authenticating Agent may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee, the
Certificate Registrar, nor any such agent shall be affected by any notice to the
contrary.

                                      A-7
<Page>

         The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement, the payment
of all Reimbursement Obligations, and the expiration of any preference period
with respect thereto and the disposition of all property held as part of the
Trust. The Originator or the Servicer of the Receivables may at its option
purchase the corpus of the Trust at a price specified in the Agreement, and such
purchase of the Receivables and other property of the Trust will effect early
retirement of the Certificates; however, such right of purchase is exercisable
only as of the last day of any Collection Period as of which the Pool Balance is
less than or equal to 10% of the sum of the original aggregate Principal Balance
of the Initial Receivables and the aggregate Principal Balance of all Subsequent
Receivables conveyed to the Trust as of the related Subsequent Cutoff Dates.

                                      A-8
<Page>

ASSIGNMENT


         FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE



_______________________________________________________________________________
(Please print or typewrite name and address, including postal zip code, of
assignee)



_______________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing


________________________________________________________________________________
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.

Dated:



                                                                              *
                                       ---------------------------------------




                                                                              *
                                       ---------------------------------------

*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever.

                                      A-9
<Page>

EXHIBIT B


                                   [RESERVED]

                                      B-1
<Page>

EXHIBIT C:                    FORM OF EXCESS CASH                SEE REVERSE FOR
                              FLOW CERTIFICATE                   CERTAIN
                                                                 DEFINITIONS


THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT AS DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE APPLICABLE SECURITIES LAWS OF ANY STATE.
ACCORDINGLY, TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET
FORTH IN SECTION 5.5(a) OF THE AGREEMENT. BY ITS ACCEPTANCE OF THIS CERTIFICATE
THE HOLDER OF THIS CERTIFICATE IS DEEMED TO REPRESENT TO THE DEPOSITOR AND THE
TRUSTEE (I) THAT IT IS AN INSTITUTIONAL INVESTOR THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
PROMULGATED UNDER THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR")
AND THAT IT IS ACQUIRING THIS CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE
ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE
INSTITUTIONAL ACCREDITED INVESTORS UNLESS THE HOLDER IS A BANK ACTING IN ITS
FIDUCIARY CAPACITY) FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, THE PUBLIC DISTRIBUTION HEREOF OR (II) THAT IT IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
AND IS ACQUIRING THIS CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT
OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE
QUALIFIED INSTITUTIONAL BUYERS).

NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE BY ANY PERSON
UNLESS EITHER (I) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO THE DEPOSITOR,
(II) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT EXECUTES A CERTIFICATE, SUBSTANTIALLY IN THE FORM SPECIFIED IN THE
AGREEMENT, TO THE EFFECT THAT IT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACTING
FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR
AGENT FOR OTHERS (WHICH OTHERS ALSO ARE INSTITUTIONAL ACCREDITED INVESTORS
UNLESS THE HOLDER IS A BANK ACTING IN ITS FIDUCIARY CAPACITY), (III) SO LONG AS
THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, SUCH SALE, PLEDGE OR

                                      C-1
<Page>

OTHER TRANSFER IS MADE TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES
AFTER DUE INQUIRY IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A), ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL
BUYERS) TO WHOM NOTICE IS GIVEN THAT THE SALE, PLEDGE OR TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, OR (IV) SUCH SALE, PLEDGE OR OTHER TRANSFER IS
OTHERWISE MADE IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, IN WHICH CASE (A) THE TRUSTEE SHALL REQUIRE THAT BOTH THE
PROSPECTIVE TRANSFEROR AND THE PROSPECTIVE TRANSFEREE CERTIFY TO THE TRUSTEE
AND THE DEPOSITOR IN WRITING THE FACTS SURROUNDING SUCH TRANSFER, WHICH
CERTIFICATION SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND
THE DEPOSITOR, AND (B) THE TRUSTEE MAY REQUIRE A WRITTEN OPINION OF COUNSEL
(WHICH SHALL NOT BE AT THE EXPENSE OF THE DEPOSITOR OR THE TRUSTEE)
SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE TO THE EFFECT THAT SUCH
TRANSFER WILL NOT VIOLATE THE SECURITIES ACT. NO SALE, PLEDGE OR OTHER
TRANSFER MAY BE MADE TO ANY ONE PERSON FOR CERTIFICATES WITH A FACE AMOUNT OF
LESS THAN $100,000 AND, IN THE CASE OF ANY PERSON ACTING ON BEHALF OF ONE OR
MORE THIRD PARTIES (OTHER THAN A BANK (AS DEFINED IN SECTION 3(A)(2) OF THE
SECURITIES ACT) ACTING IN ITS FIDUCIARY CAPACITY), FOR CERTIFICATES WITH A
FACE AMOUNT OF LESS THAN $100,000 FOR EACH SUCH THIRD PARTY.

THIS EXCESS CASH FLOW CERTIFICATE MAY NOT BE ACQUIRED BY OR WITH THE ASSETS OF
(I) AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO
THE PROVISIONS OF TITLE I OF ERISA, (II) A "PLAN" (AS DEFINED IN SECTION
4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")) THAT
IS SUBJECT TO SECTION 4975 OF THE CODE OR (III) ANY ENTITY WHOSE UNDERLYING
ASSETS INCLUDE ASSETS OF A PLAN DESCRIBED IN (I) OR (II) ABOVE BY REASON OF SUCH
PLAN'S INVESTMENT IN THE ENTITY (EACH, A "BENEFIT PLAN"), UNLESS THE PERSON
ACQUIRING THIS CERTIFICATE IS AN INSURANCE COMPANY INVESTING THE ASSETS OF ITS
GENERAL ACCOUNT AND THE EXEMPTIVE RELIEF PROVIDED BY SECTIONS I AND III OF
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, 60 FED. REG.
35925 (JULY 12, 1995) ("PTE 95-60") IS AVAILABLE WITH RESPECT TO THE PURCHASE
AND HOLDING OF THIS

                                      C-2
<Page>

CERTIFICATE. NO TRANSFER OF THIS CERTIFICATE SHALL BE PERMITTED TO BE MADE TO
ANY PERSON UNLESS THE TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEREE
TO THE EFFECT THAT EITHER (I) IT IS NOT A BENEFIT PLAN AND IS NOT USING THE
ASSETS OF A BENEFIT PLAN TO ACQUIRE THIS CERTIFICATE OR (II) IT IS AN
INSURANCE COMPANY INVESTING ASSETS OF ITS GENERAL ACCOUNT AND SECTIONS I AND
III OF PTE 95-60 APPLY TO THE TRANSFEREE'S ACQUISITION AND HOLDING OF THIS
CERTIFICATE.

THE HOLDER OF THIS EXCESS CASH FLOW CERTIFICATE REPRESENTS, BY VIRTUE OF ITS
ACCEPTANCE HEREOF, (I) THAT IT IS ACQUIRING THE EXCESS CASH FLOW CERTIFICATE FOR
ITS OWN BEHALF AND IS NOT ACTING AS AGENT OR CUSTODIAN FOR ANY OTHER PERSON OR
ENTITY IN CONNECTION WITH SUCH ACQUISITION, (II) IF THE HOLDER IS A PARTNERSHIP,
GRANTOR TRUST OR S CORPORATION FOR FEDERAL INCOME TAX PURPOSES (A "FLOW-THROUGH
ENTITY"), ANY EXCESS CASH FLOW CERTIFICATES OWNED BY SUCH FLOW-THROUGH ENTITY
WILL REPRESENT LESS THAN 50% OF THE VALUE OF ALL THE ASSETS OWNED BY SUCH
FLOW-THROUGH ENTITY AND NO SPECIAL ALLOCATION OF INCOME, GAIN, LOSS, DEDUCTION
OR CREDIT FROM SUCH EXCESS CASH FLOW CERTIFICATES WILL BE MADE AMONG THE
BENEFICIAL OWNERS OF SUCH FLOW-THROUGH ENTITY, AND (III) THE HOLDER IS A UNITED
STATES PERSON WITHIN THE MEANING OF THE CODE.

TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN
SECTION 5.5(c) OF THE AGREEMENT.

                 LONG BEACH ACCEPTANCE AUTO GRANTOR TRUST 1998-2
                          EXCESS CASH FLOW CERTIFICATE

evidencing a beneficial ownership interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts secured
by new and used automobiles, vans, sport utility vehicles and light duty trucks
and sold to the Trust by Long Beach Acceptance Receivables Corp.

(This Certificate does not represent an interest in or obligation of Long
Beach Acceptance Receivables Corp., Long Beach Acceptance Corp., the Trustee
or any of their respective affiliates, except to the extent described below.)

NUMBER R-___________

Percentage Interest:  100%

                                      C-3
<Page>

         THIS CERTIFIES THAT ______________________________ is the registered
owner of a 100% nonassessable, fully-paid, interest in the Excess Cash Flow
Certificate, which Excess Cash Flow Certificate represents a beneficial
ownership interest in the Long Beach Acceptance Auto Grantor Trust 1998-2 (the
"Trust") formed by Long Beach Acceptance Receivables Corp., a Delaware
corporation (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of November 1, 1998 (the "Agreement") among the
Depositor, Long Beach Acceptance Corp., as originator and as servicer (the
"Servicer") and Chase Bank of Texas, National Association, as trustee (the
"Trustee"), Custodian, Collateral Agent and Back-up Servicer, a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement. This Certificate is one of the duly
authorized Certificates designated as "Excess Cash Flow Certificates" (herein
called the "Excess Cash Flow Certificates"). Also issued under the Agreement are
Certificates designated as "5.87% Asset Backed Certificates, Class A" (the
"Class A Certificates"). The Class A Certificates and the Excess Cash Flow
Certificates are hereinafter collectively called the "Certificates." This Excess
Cash Flow Certificate is issued under and is subject to the terms, provisions,
and conditions of the Agreement, to which Agreement the Holder of this Excess
Cash Flow Certificate by virtue of the acceptance hereof assents and by which
such Holder is bound. The property of the Trust includes (i) a pool of retail
installment sale contracts for new and used automobiles, vans, sport utility
vehicles and light duty trucks (the "Receivables"), and with respect to
Precomputed Receivables, all monies received thereon after the close of business
on October 31, 1998 (the "Initial Cutoff Date") in the case of the Initial
Receivables, or the related Subsequent Cutoff Date in the case of the Subsequent
Receivables (including in each case Scheduled Payments due or to become due
thereon on and after the Initial Cutoff Date in the case of the Initial
Receivables, or the related Subsequent Cutoff Date in the case of the Subsequent
Receivables, and Scheduled Payments due prior to the Initial Cutoff Date in the
case of the Initial Receivables, or the related Subsequent Cutoff Date in the
case of the Subsequent Receivables, but received on or after the Initial Cutoff
Date in the case of the Initial Receivables, or the related Subsequent Cutoff
Date in the case of the Subsequent Receivables), principal prepayments relating
to such Scheduled Payments due on or after the Initial Cutoff Date in the case
of the Initial Receivables, or the related Subsequent Cutoff Date in the case of
the Subsequent Receivables, but received by the Depositor or LBAC before the
Initial Cutoff Date in the case of the Initial Receivables, or the related
Subsequent Cutoff Date in the case of the Subsequent Receivables, and any
Payaheads received with respect to payments due on the Receivables on or after
the Initial Cutoff Date in the case of the Initial Receivables, or the related
Subsequent Cutoff Date in the case of the Subsequent Receivables (which
Payaheads shall be held in the Payahead Account until the Collection Period in
which such payments are actually due with respect to the related Receivable, at
which time such Payaheads shall be applied as a component of the Total
Distribution Amount), and with respect to Simple Interest Receivables, all
monies received thereunder on and after the Initial Cutoff Date in the case of
the Initial Receivables, or the related Subsequent Cutoff Date in the case of
the Subsequent

                                      C-4
<Page>

Receivables (including in each case Scheduled Payments due before the Initial
Cutoff Date in the case of the Initial Receivables, or the related Subsequent
Cutoff Date in the case of the Subsequent Receivables, but received by the
Depositor or LBAC on or after the Initial Cutoff Date in the case of the
Initial Receivables, or the related Subsequent Cutoff Date in the case of the
Subsequent Receivables), security interests in the vehicles financed thereby,
proceeds from claims on certain insurance policies and certain other rights
under the Agreement, certain bank accounts and the proceeds thereof, all
right, title and interest of the Depositor in and to the Purchase Agreement,
all right, title and interest of the Depositor in and to certain refunds, the
Receivable Files related to each Receivable and the proceeds of any or all of
the foregoing; and (ii) a Financial Guaranty Insurance Policy issued for the
benefit of the Class A Certificateholders by Financial Security Assurance
Inc. (the "Policy").

         Under the Agreement, the rights of the Excess Cash Flow
Certificateholders to receive distributions and principal in respect of the
Excess Cash Flow Certificates on a Distribution Date are subordinated to the
payment of the amounts due to the Servicer, the Trustee, the Back-up Servicer,
the Collateral Agent, the Custodian, the Certificate Insurer, the Class A
Certificateholders and the Spread Account distributable pursuant to Sections
4.6(c)(i) through (vi) of the Agreement, except as otherwise set forth in the
Agreement.

         Under the Agreement, there will be distributed on the 19th day of each
month or, if such 19th day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on December 21, 1998, to the person in whose
name this Excess Cash Flow Certificate is registered at the close of business on
the last day of the calendar month immediately preceding the month in which such
Distribution Date occurs (the "Record Date"), such Excess Cash Flow
Certificateholder's percentage interest (set forth above) in the amounts
distributed to Excess Cash Flow Certificateholders pursuant to the Agreement.

         Any distributions on this Excess Cash Flow Certificate will be made by
the Trustee by (i) wire transfer, in immediately available funds to the account
of such Excess Cash Flow Certificateholder at a bank or other entity having
appropriate facilities therefor, if such Excess Cash Flow Certificateholder
shall have provided to the Trustee appropriate instructions prior to such
Distribution Date, or (ii) by check mailed to the Excess Cash Flow
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Excess Cash Flow Certificate or the making of any notation
hereon. Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution on this Excess Cash Flow Certificate will be made
after due notice by the Trustee of the pendency of such distribution and only
upon presentation and surrender of this Excess Cash Flow Certificate at the
office or agency maintained for that purpose by the Trustee specified in such
notice.

         Each Certificateholder by purchase of the Certificates held by it
acknowledges that the Trustee, as partial consideration of the issuance of the
Policy, has agreed that the

                                      C-5
<Page>

Certificate Insurer shall have certain rights hereunder for so long as no
Insurer Default shall have occurred and be continuing. So long as an Insurer
Default has occurred and is continuing, any provision giving the Certificate
Insurer the right to direct, appoint or consent to, approve of, or take any
action under the Agreement shall be inoperative during the period of such
Insurer Default and such right shall instead vest in the Trustee acting at
the direction of the Class A Certificateholders. The Certificate Insurer may
disclaim any of its rights and powers under the Agreement (but not its duties
and obligations under the Policy) upon delivery of a written notice to the
Trustee. The Certificate Insurer may give or withhold any consent hereunder
in its sole and absolute discretion.

         By acceptance of this Certificate, the Holder hereof acknowledges and
agrees that (i) it shall be bound by the terms and provisions of the Agreement,
a copy of which may be obtained from the Trustee upon request; (ii) no amounts
shall be received by such Holder, nor shall such Holder have any property rights
in or any right to receive any amounts unless and until such amounts are (a)
available for distribution to such Holder pursuant to Section 4.6(c) of the
Agreement or (b) are released pursuant to priority SEVENTH of Section 3.03(b) of
the Spread Account Agreement for distribution to such Holder pursuant to Section
4.6(c) of the Agreement; (iii) such Holder has no right to or interest in any
moneys at any time held pursuant to the Spread Account Agreement or the
Agreement prior to the release of such moneys as aforesaid, such moneys being
held in trust for the benefit of the Class A Certificateholders and the
Certificate Insurer, as their interests may appear prior to such release; (iv)
in the event that it is ever determined that any property held in the Spread
Account constitutes property of the Holder, then pursuant to Section 2.03 of the
Spread Account Agreement the Depositor as agent for such purpose for the Excess
Cash Flow Certificateholders has granted to the Collateral Agent for the benefit
of Financial Security and the Trustee on behalf of the Class A
Certificateholders a first priority perfected security interest in such amounts,
to be applied as set forth in Section 3.03(b) of the Spread Account Agreement;
and (v) the Holder hereof hereby appoints the Depositor as its agent to pledge a
first priority perfected security interest in the Spread Account and any amounts
held therein from time to time to the Collateral Agent for the benefit of the
Trustee and the Certificate Insurer pursuant to the Spread Account Agreement and
agrees to execute and deliver such instruments of conveyance, assignment, grant,
confirmation, etc., as well as any financing statements, in each case as the
Certificate Insurer shall consider reasonably necessary in order to perfect the
Collateral Agent's Security Interest in the Collateral (as such terms are
defined in the Spread Account Agreement).

         Reference is hereby made to the further provisions of this Excess Cash
Flow Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Excess Cash Flow Certificate shall not entitle the Holder hereof to any benefit
under the Agreement or be valid for any

                                      C-6
<Page>

purpose. No transfer of this Certificate may be made if the transfer would
cause there to be more than 100 holders of the Excess Cash Flow Certificate
and any purchasers of this Certificate that are partnerships or other
tax-transparent vehicles must certify either (i) the Excess Cash Flow
Certificate makes up less than 50% of their assets by value or (ii) the
number of equity holders in such vehicles.

                                      C-7
<Page>

         IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its
individual capacity has caused this Excess Cash Flow Certificate to be duly
executed.

                                       LONG BEACH ACCEPTANCE AUTO GRANTOR TRUST
                                       1998-2

                                       By: Chase Bank of Texas, National
                                           Association, not in its individual
                                           capacity but solely in its capacity
                                           as Trustee

                                       By:_____________________________________
                                                 Authorized Signatory

Dated:  ________ __, 1998

          This is one of the Excess Cash Flow Certificates referred to
                       in the within-mentioned Agreement.

                                       Chase Bank of Texas, National
                                       Association, not in its individual
                                       capacity but solely in its capacity
                                       as Trustee

                                       By:_____________________________________
                                                 Authorized Signatory

                                      C-8
<Page>

                            [REVERSE OF CERTIFICATE]


         The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Servicer, the Trustee or any affiliate of any of them. This
Excess Cash Flow Certificate is limited in right of payment to certain
collections and recoveries respecting the Receivables, all as more specifically
set forth in the Agreement. A copy of the Agreement may be examined during
normal business hours at the principal office of the Depositor, and at such
other places, if any, designated by the Depositor, by any Certificateholder upon
request.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Servicer and the Trustee with the consent of the
Certificate Insurer and with the consent of the Holders of Certificates
evidencing not less than 51% of the Class A Certificate Balance; PROVIDED that
the consent of each Excess Cash Flow Certificateholder is required to increase
or reduce in any manner the amount of, or accelerate or delay the timing of, or
change the allocation or priority of, collection of payments on Receivables if
such change would affect the Excess Cash Flow Certificateholder. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and on all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent is made upon this Certificate.

         As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Trustee in its capacity as
Certificate Registrar, or by any successor Certificate Registrar, in the Borough
of Manhattan, The City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee.

         The Excess Cash Flow Certificates are issuable only as registered
Certificates without coupons and shall be registered in the name of a single
Holder at all times. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the Holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Trustee may require payment of a sum sufficient to cover any tax or governmental
charges payable in connection therewith.

                                      C-9

<Page>

         The Trustee, the Certificate Registrar, and any agent of the Trustee or
the Authenticating Agent may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee, the
Certificate Registrar, nor any such agent shall be affected by any notice to the
contrary.

         The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement, the payment
of all Reimbursement Obligations, and the expiration of any preference period
with respect thereto and the disposition of all property held as part of the
Trust. The Originator or the Servicer of the Receivables may at its option
purchase the corpus of the Trust at a price specified in the Agreement, and such
purchase of the Receivables and other property of the Trust will effect early
retirement of the Certificates; however, such right of purchase is exercisable
only as of the last day of any Collection Period as of which the Pool Balance is
less than or equal to 10% of the sum of the original aggregate Principal Balance
of the Initial Receivables and the aggregate Principal Balance of all Subsequent
Receivables conveyed to the Trust as of the related Subsequent Cutoff Dates.

                                     C-10

<Page>

                                   ASSIGNMENT


         FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE



--------------------------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)



--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing


__________________________________________ Attorney to transfer said Certificate
on the books of the Certificate Registrar, with full power of substitution in
the premises.


Dated:


                                                          *
                          ---------------------------------


                                                          *
                          ---------------------------------


*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever.

                                     C-11

<Page>

                                                                     Exhibit D-1


                              Trustee's Certificate
                             pursuant to Section 2.7
                          of the Pooling and Servicing
                                    Agreement


         Chase Bank of Texas, National Association, as trustee (the "Trustee")
of Long Beach Acceptance Auto Grantor Trust 1998-2 created pursuant to the
Pooling and Servicing Agreement (the "Agreement"), dated as of November 1, 1998
among Long Beach Acceptance Receivables Corp. (the "Depositor"), Long Beach
Acceptance Corp. ("LBAC"), as originator and as servicer and the Trustee, does
hereby sell, transfer, assign, and otherwise convey to LBAC, without recourse,
representation, or warranty, all of the Trustee's right, title, and interest in
and to all of the Receivables (as defined in the Agreement) identified in the
attached Servicer's Certificate as "Purchased Receivables," which are to be
repurchased by LBAC pursuant to Section 2.7 of the Agreement, and all security
and documents relating thereto.

         IN WITNESS WHEREOF I have hereunto set my hand this ____ day of
__________________, 199___.



                                                   -----------------------------

                                     D-1-1

<Page>

                                                                     Exhibit D-2


                              Trustee's Certificate
                         pursuant to Section 3.7 or 10.2
                          of the Pooling and Servicing
                                    Agreement


         Chase Bank of Texas, National Association, as trustee (the "Trustee")
of Long Beach Acceptance Auto Grantor Trust 1998-2 created pursuant to the
Pooling and Servicing Agreement (the "Agreement"), dated as of November 1, 1998
among Long Beach Acceptance Receivables Corp., Long Beach Acceptance Corp., as
originator and as Servicer (the "Servicer") and the Trustee, does hereby sell,
transfer, assign, and otherwise convey to the Servicer, without recourse,
representation, or warranty, all of the Trustee's right, title, and interest in
and to all of the Receivables (as defined in the Agreement) identified in the
attached Servicer's Certificate as "Purchased Receivables," which are to be
purchased by the Servicer pursuant to Section 3.7 or 10.2 of the Agreement, and
all security and documents relating thereto.

         IN WITNESS WHEREOF I have hereunto set my hand this ____ day of
__________________, 199___.



                                                   -----------------------------

                                     D-1-2

<Page>

                                                                     EXHIBIT E-1


                       MONTHLY CERTIFICATEHOLDER STATEMENT
                 LONG BEACH ACCEPTANCE AUTO GRANTOR TRUST 1998-2
                     5.87% CLASS A ASSET-BACKED CERTIFICATES







                                     E-1-1

<Page>

                                                                     EXHIBIT E-2


                         Form of Loan Master File Layout







                                     E-2-1

<Page>

                                                                     EXHIBIT F-1


                    [FORM OF "QUALIFIED INSTITUTIONAL BUYER"
                            TRANSFEREE'S CERTIFICATE]


                                     [date]


Long Beach Acceptance Receivables Corp.
One Mack Centre Drive
Paramus, New Jersey  07652


Chase Bank of Texas, National Association
600 Travis Street, 9th Floor
Houston, Texas  77002
Attention:  Global Trust Services - Long Beach
            Acceptance Auto Grantor Trust 1998-2

                 Re:     Long Beach Acceptance Auto Grantor Trust 1998-2
                         Asset Backed Certificates
                         -----------------------------------------------

Dear Sirs:

         In connection with the proposed purchase by the buyer listed below (the
"Buyer") of Certificates (the "Certificates") issued pursuant to the Pooling and
Servicing Agreement dated as of November 1, 1998 (the "Pooling and Servicing
Agreement") among Long Beach Acceptance Receivables Corp., as depositor (the
"Depositor"), Long Beach Acceptance Corp., as Originator and Servicer, and Chase
Bank of Texas, National Association, as trustee (the "Trustee"), Custodian,
Collateral Agent and Back-up Servicer relating to Long Beach Acceptance Auto
Grantor Trust 1998-2 Asset Backed Certificates (the "Certificates"), the Buyer
advises you as follows: (i) the Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act of 1933, as amended
(the "1933 Act") and is acquiring beneficial ownership of the Certificates for
its own account or for the account of not more than __ persons, each of which is
a "qualified institutional buyer"; and (ii) the Buyer satisfies the requirements
of paragraph (a)(2)(ii) of Rule 3a-7 under the Investment Company Act of 1940,
as amended (the "1940 Act"). In addition to the foregoing, you may rely on the
information provided in Annex 1 or 2, as applicable, attached hereto and
incorporated herein.

         The Buyer understands that the Certificates have not been registered
under the 1933 Act or the securities laws of any state. The Buyer acknowledges
that it has independently conducted such investigation and evaluation of the
merits and the risks involved in an investment in the Certificates and has
received such information (whether from the Depositor, the Servicer, the
transferor from which it proposes to purchase

                                     F-1-1

<Page>

Certificates, or from any other source) as the Buyer has deemed necessary and
advisable in order to make its investment decision. The Buyer has had any
questions arising from such investigation and evaluation answered by the
Depositor to the satisfaction of the Buyer. The Buyer is a sophisticated
institutional investor, having such knowledge and experience in financial and
business matters generally, and with respect to asset-backed securities and
investments in "non-prime" automobile loans specifically, that it is capable
of independently evaluating the merits and risks of investment in the
Certificates. In the normal course of its business, the Buyer invests in or
purchases securities similar to the Certificates. The Buyer is aware that it
may be required to bear the economic risk of an investment in the
Certificates for an indefinite period of time, and it is able to bear such
risk for an indefinite period.

                                     Very truly yours,

                                     [BUYER]


                                     By:
                                        --------------------------------------
                                        Name:
                                        Title:
                                        Taxpayer ID:
                                                    --------------------------
                                        Name in which
                                        Certificate is
                                        to be Registered:
                                                         ---------------------
                                        Address for Notices:
                                                            ------------------

                                                            ------------------

                                                            ------------------


                                        Payment Instructions:








                                     F-1-2

<Page>

                                                          ANNEX 1 TO EXHIBIT F-1

         QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

         [For Buyers Other Than Registered Investment Companies]

         The undersigned hereby certifies as follows to the parties listed in
the "Qualified Institutional Buyer" Transferee's Certificate to which this
certification relates with respect to the Rule 144A Securities described
therein:

         (a)      As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

         (b)      In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $_____________(1) in securities (except for
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Buyer satisfies the criteria in the category marked below.

                  ___ CORPORATION, ETC. The Buyer is a corporation (other than a
                  bank, savings and loan association or similar institution),
                  Massachusetts or similar business trust, partnership, or
                  charitable organization described in Section 501(c)(3) of the
                  Internal Revenue Code of 1986, as amended.

                  ___ BANK. The Buyer (a) is a national bank or banking
                  institution organized under the laws of any State, territory
                  or the District of Columbia, the business of which is
                  substantially confined to banking and is supervised by the
                  State or territorial banking commission or similar official or
                  is a foreign bank or equivalent institution, and (b) has an
                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, a copy of which is
                  attached hereto.

                  ___ SAVINGS AND LOAN. The Buyer (a) is a savings and loan
                  association, building and loan association, cooperative bank,
                  homestead association or similar institution, which is
                  supervised and examined by a State or Federal authority having
                  supervision over any such institutions or is a foreign savings
                  and loan association or equivalent institution and (b) has an

--------
(1) Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.

                                     F-1-3

<Page>

                  audited net worth of at least $25,000,000 as demonstrated in
                  its latest annual financial statements, a copy of which is
                  attached hereto.

                  ___ BROKER-DEALER. The Buyer is a dealer registered pursuant
                  to Section 15 of the Securities Exchange Act of 1934.

                  __ INSURANCE COMPANY. The Buyer is an insurance company whose
                  primary and predominant business activity is the writing of
                  insurance or the reinsuring of risks underwritten by insurance
                  companies and which is subject to supervision by the insurance
                  commissioner or a similar official or agency of a State,
                  territory or the District of Columbia.

                  ___ STATE OR LOCAL PLAN. The Buyer is a plan established and
                  maintained by a State, its political subdivisions, or any
                  agency or instrumentality of the State or its political
                  subdivisions, for the benefit of its employees.

                  __ ERISA PLAN. The Buyer is an employee benefit plan within
                  the meaning of Title I of the Employee Retirement Income
                  Security Act of 1974.

                  __ INVESTMENT ADVISOR. The Buyer is an investment advisor
                  registered under the Investment Advisers Act of 1940.

                  __ SMALL BUSINESS INVESTMENT COMPANY. Buyer is a small
                  business investment company licensed by the U.S. Small
                  Business Administration under Section 301(c) or (d) of the
                  Small Business Investment Act of 1958.

                  __ BUSINESS DEVELOPMENT COMPANY. Buyer is a business
                  development company as defined in Section 202(a)(22) of the
                  Investment Advisors Act of 1940.

                  __ TRUST FUND. The Buyer is a trust fund whose trustee is a
                  bank or trust company and whose participants are exclusively
                  State or Local Plans or ERISA Plans as defined above, and no
                  participant of the Buyer is an individual retirement account
                  or an H.R. 10 (Keogh) plan.

         (c)      The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.

         (d)      For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding

                                     F-1-4

<Page>

paragraph, except (i) where the Buyer reports its securities holdings in its
financial statements on the basis of their market value, and (ii) no current
information with respect to the cost of those securities has been published.
If clause (ii) in the preceding sentence applies, the securities may be
valued at market. Further, in determining such aggregate amount, the Buyer
may have included securities owned by subsidiaries of the Buyer, but only if
such subsidiaries are consolidated with the Buyer in its financial statements
prepared in accordance with generally accepted accounting principles and if
the investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934.

         (e)      The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.

         (f)      Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of Rule 144A Securities will constitute a reaffirmation of
this certification as of the date of such purchase. In addition, if the Buyer is
a Bank or Savings and Loan as provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.


                                       ---------------------------------------
                                       Print Name of Buyer

                                       By:
                                          ------------------------------------
                                          Name:
                                          Title:

                                       Date:
                                            ----------------------------------


                                     F-1-5

<Page>

                                                          ANNEX 2 TO EXHIBIT F-1

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

              [For Buyers that are Registered Investment Companies]

         The undersigned hereby certifies as follows to the parties listed in
the "Qualified Institutional Buyer" Transferee's Certificate to which this
certification relates with respect to the Rule 144A Securities described
therein:

         (a)      As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.

         (b)      In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.

                  ___The Buyer owned $________________ in securities (other than
                  the excluded securities referred to below) as of the end of
                  the Buyer's most recent fiscal year (such amount being
                  calculated in accordance with Rule 144A).

                  ___The Buyer is part of a Family of Investment Companies which
                  owned in the aggregate $__________ in securities (other than
                  the excluded securities referred to below) as of the end of
                  the Buyer's most recent fiscal year (such amount being
                  calculated in accordance with Rule 144A).

         (c)      The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

                                     F-1-6

<Page>

         (d)      The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.

         (e)      The Buyer is familiar with Rule 144A and understands that the
parties listed in the Qualified Institutional Buyer Transferee's Certificate to
which this certification relates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be in
reliance on Rule 144A. In addition, the Buyer will only purchase for the Buyer's
own account.

         (f)      Until the date of purchase of the Rule 144A Securities, the
undersigned will notify each of the parties to which this certification is made
of any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.

                                                --------------------------------
                                                 Print Name of Buyer or Adviser

                                                By:
                                                   -----------------------------
                                                   Name:
                                                   Title:
                                                IF AN ADVISER:

                                                --------------------------------
                                                Print Name of Buyer

                                                Date:
                                                     ---------------------------

                                     F-1-7

<Page>

                                                                     EXHIBIT F-2

            [FORM OF "ACCREDITED INVESTOR" TRANSFEREE'S CERTIFICATE]

                                     [date]

Long Beach Acceptance Receivables Corp.
One Mack Centre Drive
Paramus, New Jersey  07652

Chase Bank of Texas, National Association
600 Travis Street, 9th Floor
Houston, Texas  77002
Attention:  Global Trust Services - Long Beach
  Acceptance Auto Grantor Trust 1998-2

              Re:     Long Beach Acceptance Auto Grantor Trust 1998-2
                      Asset Backed Certificates
                      -----------------------------------------------

Dear Sirs:

         In connection with the proposed purchase by the buyer listed below (the
"Buyer") of Certificates (the "Certificates") issued pursuant to the Pooling and
Servicing Agreement dated as of November 1, 1998 (the "Pooling and Servicing
Agreement") among Long Beach Acceptance Receivables Corp., as depositor (the
"Depositor"), Long Beach Acceptance Corp., as Originator and Servicer and Chase
Bank of Texas, National Association, as trustee (the "Trustee"), Custodian,
Collateral Agent and Back-up Servicer, relating to Long Beach Acceptance Auto
Grantor Trust 1998-2 Asset Backed Certificates (the "Certificates"), the Buyer
confirms that:

                  (a)      The Buyer understands that the Certificates have not
         been registered under the Securities Act of 1933, as amended (the "1933
         Act"), and may not be sold except as permitted in the following
         sentence. The Buyer agrees, on its own behalf and on behalf of any
         accounts for which it is acting as hereinafter stated, that such
         Certificates may be resold, pledged or transferred only: (i) so long as
         such Certificates are eligible for resale pursuant to Rule 144A under
         the 1933 Act ("Rule 144A"), to a person who the Buyer reasonably
         believes is a "qualified institutional buyer" as defined in Rule 144A
         (a "QIB") that purchases for its own account or for the account of a
         QIB, to whom notice is given that the resale, pledge or transfer is
         being made in reliance on Rule 144A, (ii) pursuant to an exemption from
         registration under the 1933 Act provided by Rule 144 (if applicable)
         under the 1933 Act or (iii) to an institution that is an "Accredited
         Investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the 1933
         Act (an "Accredited Investor") that is acquiring the Certificates for
         investment purposes and not for distribution, in each case in
         accordance with any applicable securities laws of any state of the
         United States, and the Buyer will notify any

                                     F-2-1

<Page>

         purchaser of the Certificates from it of the above resale restrictions.
         The Buyer further understands that in connection with any transfer of
         the Certificates to an Accredited Investor by it that the Depositor or
         Trustee may request, and if so requested the Buyer will furnish, such
         certificates and other information as they may reasonably require to
         confirm any such transfer with the foregoing restrictions.

                  (b)      The Buyer is an institutional investor which is an
         Accredited Investor or, if the Certificates are to be purchased for one
         or more institutional accounts ("investor accounts") for which it is
         acting as fiduciary or agent (except if it is a bank as defined in
         Section 3(a)(2) of the 1933 Act, or a savings and loan association or
         other institution as described in Section 3(a)(5)(A) of the 1933 Act,
         whether acting in its individual or in a fiduciary capacity), each such
         investor account is an institutional investor and an Accredited
         Investor on a like basis. In the normal course of its business, the
         Buyer invests in or purchases securities similar to the Certificates.

                  (c)      The Buyer satisfies the requirements of paragraph
         (a)(2)(i) of Rule 3a-7 of the Investment Company Act of 1940.

                  (d)      The Buyer acknowledges that it has independently
         conducted such investigation and evaluation of the merits and the risks
         involved in an investment in the Certificates and has received such
         information (whether from the Depositor, the Servicer, the transferor
         from which it proposes to purchase Certificates, or from any other
         source) as the Buyer has deemed necessary and advisable in order to
         make its investment decision. The Buyer has had any questions arising
         from such investigation and evaluation answered by the Depositor to the
         satisfaction of the Buyer. The Buyer is a sophisticated institutional
         investor, having such knowledge and experience in financial and
         business matters generally, and with respect to asset-backed securities
         and investments in "non-prime" automobile loans specifically, that it
         is capable of independently evaluating the merits and risks of
         investment in the Certificates. In the normal course of its business,
         the Buyer invests in or purchases securities similar to the
         Certificates. The Buyer is aware that it (or any investor account) may
         be required to bear the economic risk of an investment in the
         Certificates for an indefinite period of time, and it (or such account)
         is able to bear such risk for an indefinite period.

                                       Very truly yours,

                                       [BUYER]


                                       By:
                                           ------------------------------------
                                           Name:
                                           Title:

                                     F-2-2

<Page>

                                                                     EXHIBIT F-3

           [FORM OF "REGISTERED CERTIFICATE" TRANSFEREE'S CERTIFICATE]

                                      Date:

Long Beach Acceptance Receivables Corp.
One Mack Centre Drive
Paramus, New Jersey  07652

Chase Bank of Texas, National Association
600 Travis Street, 9th Floor
Houston, Texas  77002
Attention:     Global Trust Services - Long Beach
               Acceptance Auto Grantor Trust 1998-2

               Re:     Long Beach Acceptance Auto Grantor Trust 1998-2
                       Asset Backed Certificates
                       -----------------------------------------------
Dear Sirs:

         In connection with the proposed purchase by the buyer listed below (the
"Buyer") of Certificates (the "Certificates") issued pursuant to the Pooling and
Servicing Agreement dated as of November 1, 1998 (the "Pooling and Servicing
Agreement") among Long Beach Acceptance Receivables Corp., as depositor (the
"Depositor"), Long Beach Acceptance Corp., as Originator and Servicer and Chase
Bank of Texas, National Association, as trustee (the "Trustee"), relating to
Long Beach Acceptance Auto Grantor Trust 1998-2 Asset Backed Certificates (the
"Certificates"), the Buyer confirms that it satisfies the requirements set forth
in paragraph (a)(2) of Rule 3a-7 of the Investment Company Act of 1940, as
amended.


                                       Very truly yours,

                                       [BUYER]

                                       By:
                                          -------------------------------------
                                             Name:
                                             Title:
                                             Taxpayer ID:
                                                         ----------------------
                                             Name in which
                                             Certificate is
                                             to be Registered:
                                                              -----------------
                                             Address for Notices:
                                                                 --------------


                                                                 --------------


                                                                 --------------
                                       Payment Instructions:

                                     F-3-1

<Page>

                                                                     EXHIBIT F-4

                       [FORM OF TRANSFEROR'S CERTIFICATE]

                                                 Date:

Long Beach Acceptance Receivables Corp.
One Mack Centre Drive
Paramus, New Jersey  07652

Chase Bank of Texas, National Association
600 Travis Street, 9th Floor
Houston, Texas  77002
Attention:     Global Trust Services - Long Beach
               Acceptance Auto Grantor Trust 1998-2

               Re:     Long Beach Acceptance Auto Grantor Trust 1998-2
                       Asset Backed Certificates
                       -----------------------------------------------

Ladies and Gentlemen:

         In connection with the disposition by the transferor listed below (the
"Transferor") of Certificates (the "Certificates") issued pursuant to the
Pooling and Servicing Agreement dated as of November 1, 1998 (the "Pooling and
Servicing Agreement") among Long Beach Acceptance Receivables Corp., as
depositor (the "Depositor"), Long Beach Acceptance Corp., as Originator and
Servicer and Chase Bank of Texas, National Association, as trustee (the
"Trustee"), relating to Long Beach Acceptance Auto Grantor Trust 1998-2 Asset
Backed Certificates (the "Certificates"), the Transferor certifies that:

                  (a)      the Transferor understands that the Certificates have
                  not been registered under the Securities Act of 1933, as
                  amended (the "1933 Act"), and are being disposed of by the
                  Transferor in a transaction that is exempt from the
                  registration requirements of the 1933 Act; and

                  (b)      the Transferor has not offered or sold any
                  Certificates to, or solicited offers to buy any Certificates
                  from, any person, or otherwise approached or negotiated with
                  any person with respect thereto, in a manner that would be
                  deemed, or taken any other action which would result in, a
                  violation of Section 5 of the 1933 Act.

                                                   Very truly yours,

                                                   -------------------------
                                                      Name of Transferor

                                                   By:
                                                      -------------------------

                                     F-4-1

<Page>

                                                   Name:
                                                        -----------------------
                                                   Title:
                                                         ----------------------




                                     F-4-2
<Page>

                                                                       EXHIBIT G

                      [Form of ERISA Representation Letter]

                                                              [date]

Long Beach Acceptance Receivables Corp.
One Mack Centre Drive
Paramus, New Jersey  07652

Chase Bank of Texas, National Association
600 Travis Street, 9th Floor
Houston, Texas  77002
Attention:     Global Trust Services - Long Beach
               Acceptance Auto Grantor Trust 1998-2

               Re:     Long Beach Acceptance Auto Grantor Trust 1998-2
                       Asset Backed Certificates
                          -------------------------
Ladies and Gentlemen:

[NAME OF OFFICER] ______________________ hereby certifies that:

         1.       That he [she] is [Title of Officer] __________________ of
[Name of Transferee] _________________________________________ (the
"Transferee"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of ____________] [the United States], on behalf of
which he [she] makes this affidavit.

         2.       The Transferee (i) is not, and on ________________ [insert
date of transfer of Certificate to Transferee] will not be, and on such date
will not be investing the funds of, (a) an "employee benefit plan" (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) that is subject to the provisions of Title I of ERISA, (b) a
"plan" (as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986,
as amended (the "Code")) that is subject to Section 4975 of the Code or (c) an
entity whose underlying assets are deemed to be assets of a plan described in
(a) or (b) above by reason of such plan's investment in the entity (each, a
"Benefit Plan") or (ii) is an insurance company investing assets of its general
account and the exemptive relief provided by Sections I and III of Department of
Labor Prohibited Transaction Class Exemption 95-60, 60 Fed. Reg. 35925 (July 12,
1995) (the "Exemption") is available with respect to the transferee's
acquisition and holding of such Certificate.

         3.       The Transferee hereby acknowledges that under the terms of the
Pooling and Servicing Agreement (the "Agreement") among Long Beach Acceptance
Receivables Corp., as depositor (the "Depositor"), Long Beach Acceptance Corp.,
as Originator and

                                      G-1
<Page>

servicer (the "Servicer") and Chase Bank of Texas, National Association, as
Trustee, Back-up Servicer and Custodian and Collateral Agent (the "Trustee")
dated as of November 1, 1998 no transfer of any Certificate (as defined in
the Agreement) shall be permitted to be made to any person unless the Trustee
has received a certificate from such transferee to the effect that such
transferee (A) is not a Benefit Plan and is not using the assets of any such
Benefit Plan to acquire any such Excess Cash Flow Certificate or (B) is an
insurance company investing assets of its general account and Sections I and
III of the Exemption apply to the transferee's acquisition and holding of
such Excess Cash Flow Certificate; PROVIDED, HOWEVER, that the Trustee will
not require such certificate in the event that, as a result of change of law
or otherwise, counsel satisfactory to the Trustee, the Servicer and the
Depositor has rendered an opinion to the effect that the purchase and holding
of any such Excess Cash Flow Certificate by a Benefit Plan or a person using
the assets of a Benefit Plan will not constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code.

         [4.      The Certificates shall be registered in the name of
______________________________________________ as nominee for the Transferee.]

         IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] _______________ __________________, this ____ day of
_________, 199_.



--------------------------------
                                       [name of Transferee]

                                       By:
                                           ------------------------------------
                                           Name:
                                           Title:

                                      G-2
<Page>

         The undersigned hereby acknowledges that it is holding and will hold
the Certificates at the exclusive direction of and as nominee of the Investor
named above.

-----------------------------------
[name of nominee]

By:
    -----------------------------------
    Name:
    Title:

                                      G-3
<Page>

                                                                       EXHIBIT H

                          Form of Depository Agreement





                                      H-1
<Page>

                                                                       EXHIBIT I

                         PAYMENT APPLICATION PROCEDURES

The following procedures will be followed when funds in excess of the Scheduled
Payment have been received:

o  At the Lock-Box-

         Regardless of loan type, funds received at the Lock-Box will be applied
to accounts as normal monthly installments, paying interest and principal and,
when 95% of a full payment has been received, advancing the date next due.
However, if funds received at the Lock-Box are in excess of three monthly
installments, the Lock-Box will forward the item to LBAC for In-House
processing.

o  In-House-

         Regardless of loan type, funds received directly at LBAC from the
customer or forwarded from the Lock-Box, which are less than $1,000.00, will be
processed as monthly installments, paying interest and principal and, when 95%
of a full payment has been received, advancing the date next due.

         Funds which total $1,000.00 or more will require further information
before processing. Procedures will vary according to loan type.

o  Daily Simple Interest-

         Funds received which total $1,000.00 or more for this loan type will be
handled in the following manner:

         Funds will first be applied to outstanding installments in order to
bring the loan current, then to late charges and miscellaneous fees. Any
remaining excess funds will be applied to reduce the outstanding principal
amount without advancing the date next due.

         Any refunded portion of extended warranty protection plan costs or of
physical damage, credit life or disability insurance premiums in the Amount
Financed (otherwise referred to as Rebates), will be applied to the customer
accounts as a principal reduction without advancing the due date.

         All funds, including principal, interest, late charges, miscellaneous
fees and Rebates which have been applied to the customer accounts, will be
passed through to the appropriate Collection account(s) within 48 hours of
posting. Those same funds, including funds which have advanced the due date
beyond the current month, will be passed through to the Investor(s) with their
monthly distribution for the current collection period.

o  Precomputed Actuarial and Rule of 78s-

         Funds received which total $1,000.00 or more for these loan types will
be handled in the following manner:

                                      I-1
<Page>

         Funds will first be applied to outstanding installments in order to
bring the loan current, then to late charges and miscellaneous fees. Any
remaining excess funds will be categorized as follows:

         Payahead Funds: Funds which have advanced the date next due and will be
passed through to the Investor(s) when they become Scheduled Payments due.

         Payable Funds: Funds which have not advanced the date next due as these
funds were not intended to be used as Scheduled Payments (for example, Rebates).

         All funds received will be passed through to the appropriate Collection
account(s) within 48 hours of posting. On the distribution date, all actually
collected Scheduled Payments due will be passed through to the Investor(s) for
the current collection period.

         Excess funds received from or on behalf of the obligor will be held in
the Collection account or in an account designated as the Payahead/Payable
account until such time that they become due. Funds received to specifically
reduce the outstanding principal balance or any Rebate received will not be
considered due to the Investor(s) until such time that the loan closes out of
this pool.

o  All customers, regardless of loan type-

         Monthly, customers will receive statements showing the effect of the
excess funds to their loan balances. The statements will reflect $0.00 due for
the current monthly installment if their date next due was advanced until such
time that a current monthly installment is due.

o  Precomputed Actuarial and Rule of 78s-

LBAC will, upon request, supply the investor with an analysis of funds paid in
advance.

                                      I-2
<Page>

                                                                       EXHIBIT J


                            PAYMENT DEFERMENT POLICY

o        LBAC may grant a payment deferment provided that the deferment does not
         exceed 1 month (2 months if 12 or more payments have been made and if
         the deferment is granted in writing by the President, an Executive Vice
         President or the California Regional Manager).

o        Not more than 1 deferment may be granted during any 12-month period.

o        The aggregate of all deferment periods during the term of a Receivable
         may not exceed the lesser of 8 months or 50% of the weighted average
         life of the original term of the Receivable.

o        At least 6 payments must be made before a deferment may be granted.

o        A request for a deferment must be made in writing, stating the reason
         for the request.

o        The deferment must bring the account current, so that after the
         deferment is processed no payment is then due.

o        Except as otherwise set forth in this policy, deferments must be
         granted in writing by the Collection Manager or someone of equal or
         higher rank.

o        A deferment fee will be collected for each deferment if allowed by
         applicable law and may be waived only by the President, an Executive
         Vice President or the California Regional Manager; PROVIDED, HOWEVER,
         that no deferment will be granted unless the Servicer believes in good
         faith that the account probably would default in the reasonably
         foreseeable future if a deferment is not approved.

o        Deferments which do not meet the above criteria may be granted in
         writing on an exception basis (e.g., when required by law) by the
         President, an Executive Vice President or the California Regional
         Manager.

o        Not more than 8 payment deferments may be granted with respect to any
         Receivable over the life of such Receivable (including both before and
         after the related Cut-Off Date).

o        As of January 1, 1999 and the first day of each calendar quarter
         thereafter, the aggregate number of Receivables the terms of which have
         been extended during the preceding calendar quarter shall not exceed 4%
         of the number of Receivables at the beginning of the preceding calendar
         quarter.

                                      J-1
<Page>

o        No deferment may extend the date for final payment of a Receivable
         beyond the last day of the record Collection Period preceding the Final
         Scheduled Distribution Date.

                             DUE DATE CHANGE POLICY

o        LBAC may grant a due date change, PROVIDED that the new due date is
         within 29 days of the current due date.

o        Not more than 2 due date changes may be granted over the term of a
         Receivable.

o        If 2 due date changes are granted, the total number of days by which
         the maturity date is extended may not exceed 29.

o        A request for a due date change must be made in writing, stating the
         reason for the request.

o        The account must be current at the time the request is received.

o        Due date changes must be granted in writing by the Collection Manager
         or someone of equal or higher rank.

o        No due date change may be granted if the aggregate of all delinquent
         periods and the requested due date change would exceed the lesser of 8
         months or 50% of the original term of the Receivable.

                                      J-2
<Page>

                                                                       EXHIBIT K

                             DOCUMENTATION CHECKLIST


CUSTOMER:
         ----------------------------------------------------------------------

ACCOUNT NUMBER:
               ----------------------------------------------------------------

This funding package contains the following initialed items:

<Table>
      <S>    <C>                                               <C>
         1.   Installment contract with proper
              signatures and Dealer endorsements                 1.
                                                                   -----

         2.   Copy of signed credit application                  2.
                                                                   -----

         3.   References as described in the Program Guidelines  3.
                                                                   -----

         4.   Proof of income as described in the
              Program Guidelines                                 4.
                                                                   -----

         5.   Copy of driver's license for all
              licensed signors                                   5.
                                                                   -----

         6.   Title information (application and copy of
              existing title, receipt of registration, or
              title copy already received) with lien
              notation thereon, or Dealer Title Guaranty         6.
                                                                   -----

         7.   Invoice or copy of computer screen
              printout showing NADA value, NADA
              book page, Kelley printout or Kelley
              Blue Book page                                     7.
                                                                   -----

         8.   In the case of a used Financed
              Vehicle, odometer statement (if not
              on title info)                                     8.
                                                                   -----

         9.   Signed agreement to provide
              insurance and verification paper
              or other evidence of verification of
              insurance coverage                                 9.
                                                                   -----

         10.  Notice to cosignor, if required                   10.
                                                                   -----

         11.  Service contract or warranty papers               11.
                                                                   -----

                                      K-1
<Page>

         12.  Life, accident, health and GAP
              insurance policy copies, as
              applicable                                        12.
                                                                   -----

         13.  Signed purchase order from dealer to
              customer                                          13.
                                                                   -----
</Table>

                                      K-2
<Page>

                                                                       EXHIBIT L

                  [Form of Request for Transfer of Possession]

                                                              ___________, 19__

Chase Bank of Texas, National Association,
  as Custodian
700 North Pearl Street, 18th Floor
Dallas, Texas 75201

Attention:  __________
Telephone: ___________
Telecopy: ____________

Ladies and Gentlemen:

         Reference is made to the Pooling and Servicing Agreement dated as of
November 1, 1998 (the "Pooling and Servicing Agreement"), among LONG BEACH
ACCEPTANCE RECEIVABLES CORP., a Delaware corporation, as depositor, LONG BEACH
ACCEPTANCE CORP., a Delaware corporation, as originator and servicer, and CHASE
BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking association, as trustee,
back-up servicer and custodian (the "Custodian"). Capitalized terms used but not
defined in this letter have the meanings set forth in the Pooling and Servicing
Agreement.

         The Servicer hereby requests that the Custodian transfer possession of
the Legal Files, or such portion of the Legal Files as is identified herein,
relating to the Receivables listed in Annex A hereto to [the Servicer]
[________________ as subservicer (the "Subservicer") for the Servicer] [for
purposes of collection or presentation, renewal or registration of transfer
(unless the related Receivables' Owner objects to this request to the Custodian
(i) by 5:00 PM on the same Business Day this request is made if it is made by
1:00 PM, or (ii) by 11:00 AM on the next Business Day if this request is made
after 1:00 PM] [for purposes of correcting deficiencies in the Legal Files], the
possession of which is transferred pursuant to this request will be transferred
subject to a Custodial Letter duly executed by [the Servicer] [the Subservicer]
and a Transfer Notice duly executed by the Custodian. [The portion of the Legal
Files requested for transfer of possession hereunder is ___________.]

                                               Very truly yours,

                                               LONG BEACH ACCEPTANCE CORP.

                                               By: ___________________________
                                               Name: _________________________
                                               Title: __________________________

                                      L-1
<Page>

                                                                       EXHIBIT M

                           [Form of Custodial Letter]

                                                              ___________, 19__

Chase Bank of Texas, National Association,
  as Custodian
700 North Pearl Street, 18th Floor
Dallas, Texas 75201

Attention:  __________
Telephone: ___________
Telecopy: ____________

Ladies and Gentlemen:

         Reference is made to the Pooling and Servicing Agreement dated as of
November 1, 1998 (the "Pooling and Servicing Agreement"), among LONG BEACH
ACCEPTANCE RECEIVABLES CORP., a Delaware corporation, as depositor, LONG BEACH
ACCEPTANCE CORP., a Delaware corporation, as originator and servicer, and CHASE
BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking association, as trustee
(the "Trustee"), back-up servicer and custodian (the "Custodian"). Capitalized
terms used but not defined in this letter have the meanings set forth in the
Pooling and Servicing Agreement.

         [The Servicer] [_____________________, as Subservicer (the
"Subservicer") for the Servicer] acknowledges that the Trust is owner of all
Receivables (and their proceeds). The Agreement provides that the Servicer, or
the Subservicer, may request from time to time that possession of all or a
portion of the Legal Files delivered to and held by the Custodian pursuant to
the Pooling and Servicing Agreement be transferred to [the Servicer] [the
Subservicer] [for purposes of collection, or presentation, renewal or
registration of transfer] [for purposes of correcting deficiencies in the Legal
Files]. Subject to the terms of the Pooling and Servicing Agreement, the
Custodian is authorized to so transfer possession of such Legal Files, or
portion thereof, such transfer of possession to be accomplished pursuant to a
Transfer Notice substantially in the form of Annex A to this Custodial Letter.

[The Servicer] [The Subservicer] hereby agrees as follows:

         (a)      [The Servicer] [The Subservicer] acknowledges that the
possession of any such Legal Files will be so transferred subject to this
Custodial Letter and that they are and will continue to be the sole property of
the Trust.

         (b)      [The Servicer] [The Subservicer] agrees that such Legal Files
will be returned to the Custodian immediately upon notice by the Custodian or
the Trustee that sixty (60) days have elapsed from the date of such transfer;
PROVIDED, that instead of sixty

                                      M-1
<Page>

(60) days, the time limit applicable to any certificate of title is one
hundred twenty (120) days.

         (c)      The Legal Files will not be used for any purpose other than
that for which [the Servicer] [the Subservicer] hereby requests such transfer
of possession.

         (d)      At all times while the Legal Files are in
[the Servicer's][the Subservicer's] possession, [the Servicer]
[the Subservicer] will hold the Legal Files IN TRUST for the Trust, the
Trustee and the Certificate Insurer.

         (e)      [The Servicer] [The Subservicer] will include this
Custodial Letter and each Transfer Notice in its business records.

         (f)      [The Servicer] [The Subservicer] will not deliver the Legal
Files to any person other than the Custodian except with the prior written
consent of the Trustee.

         This Custodial Letter shall be governed by and construed in
accordance with the laws of the State of Texas.


                                                LONG BEACH ACCEPTANCE CORP.

                                                By:
                                                    --------------------------
                                                Name:
                                                      ------------------------
                                                Title:
                                                       ------------------------

                                                [SUBSERVICER'S NAME]

                                                By:
                                                    --------------------------
                                                Name:
                                                      ------------------------
                                                Title:
                                                       ------------------------

                                      M-2
<Page>

                                         EXHIBIT M - ANNEX A to Custodial Letter

                            [Form of Transfer Notice]



[Long Beach Acceptance Corp.
One Mack Centre Drive
Paramus, New Jersey 07652
Telecopy: (201) 262-6868]

[Subservicer (the "Subservicer")
Address
Address
Telecopy:_______________________]

Ladies and Gentlemen:

         Reference is made to the Pooling and Servicing Agreement dated as of
November 1, 1998 (the "Pooling and Servicing Agreement"), among LONG BEACH
ACCEPTANCE RECEIVABLES CORP., a Delaware corporation, LONG BEACH ACCEPTANCE
CORP., a Delaware corporation, and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a
national banking association, as trustee, back-up servicer and custodian.
Capitalized terms used but not defined in this letter have the meanings set
forth in the Pooling and Servicing Agreement.

         The possession of the Legal Files relating to the Receivables listed in
Annex A is transferred to you IN TRUST for the Trust, the Trustee and the
Certificate Insurer, subject to the terms and provisions of the Pooling and
Servicing Agreement, and subject to the Custodial Letter you executed pursuant
to Section 2.8(c) of the Pooling and Servicing Agreement.

                                                   Very truly yours,

                                                   CHASE BANK OF TEXAS, NATIONAL
                                                   ASSOCIATION

                                                   By:
                                                       ------------------------
                                                   Name:
                                                         ----------------------
                                                   Title:
                                                          ---------------------

                                      M-3
<Page>

                                          EXHIBIT M - ANNEX A to Transfer Notice

<Table>
<Caption>
Receivable               Amount of                     Name of
  Number                Receivable               Receivable Borrower
----------              ----------               -------------------
<S>                   <C>                      <C>






</Table>


                                      M-4

<Page>

                                                                       EXHIBIT N

                           FORM OF TRANSFER AGREEMENT

         TRANSFER NO. __________ OF SUBSEQUENT RECEIVABLES, dated as of
         ___________, 199_, among LONG BEACH ACCEPTANCE AUTO GRANTOR TRUST
         1998-2 (the "Trust"), LONG BEACH ACCEPTANCE CORP., a Delaware
         corporation ("LBAC" or the "Originator"), LONG BEACH ACCEPTANCE
         RECEIVABLES CORP., a Delaware corporation (the "Depositor"), and CHASE
         BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking association, as
         trustee (in such capacity, the "Trustee"), back-up servicer, custodian
         and collateral agent pursuant to the Pooling and Servicing Agreement
         referred to below.

                              W I T N E S S E T H:

         WHEREAS, LBAC, the Depositor and the Trustee are parties to the Pooling
and Servicing Agreement, dated as of November 1, 1998 (the "Pooling and
Servicing Agreement");

         WHEREAS, LBAC, the Depositor and Ameriquest Mortgage Company are
parties to the Purchase Agreement, dated as of November 1, 1998 (the "Purchase
Agreement");

         WHEREAS, pursuant to the Purchase Agreement LBAC desires to convey
certain Subsequent Receivables to the Depositor and pursuant to the Pooling and
Servicing Agreement and this Agreement the Depositor desires to convey such
Subsequent Receivables to the Trust; and

         WHEREAS, the Trustee is willing to accept such conveyance subject to
the terms and conditions hereof.

         NOW, THEREFORE, the Trustee, the Depositor and LBAC hereby agree as
follows:

         Section 1. DEFINED TERMS. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Pooling and
Servicing Agreement.

         "Agreement" means this Transfer Agreement and all amendments hereof and
supplements hereto.

         "Subsequent Cutoff Date" means, with respect to the Subsequent
Receivables conveyed hereby, the close of business of the last day of the
calendar month immediately preceding the Subsequent Transfer Date, which date is
_________, 199_.

                                      N-1
<Page>

         "Subsequent Receivables" means the Receivables identified on the
supplement to the Schedule of Receivables attached as Schedule A hereto.

         "Subsequent Receivables Purchase Price" means $__________.

         "Subsequent Spread Account Deposit" means $__________.

         "Subsequent Transfer Date" means, with respect to the Subsequent
Receivables conveyed hereby, ___________, 199_.

         "Subsequent Transferred Property" shall have the meaning specified in
Section 2.3(a) of the Purchase Agreement.

         Section 2. SCHEDULE OF SUBSEQUENT RECEIVABLES. Annexed hereto as
Schedule A is a supplement to the Schedule of Receivables listing the Subsequent
Receivables to be conveyed by the Depositor to the Trust pursuant to this
Agreement and the Pooling and Servicing Agreement on the Subsequent Transfer
Date.

         Section 3. CONVEYANCE OF SUBSEQUENT RECEIVABLES. Subject to the
conditions set forth in Section 5 hereof, in consideration of the payment of the
Subsequent Receivables Purchase Price to or upon the written order of the
Depositor, the Depositor does hereby sell, transfer, assign, set over and
otherwise convey to the Trustee, in trust for the benefit of the
Certificateholders, without recourse, all right, title and interest of the
Depositor in and to:

                           (1)      the Subsequent Receivables listed in
         Schedule A hereto and (A) with respect to any such Subsequent
         Receivables that are Precomputed Receivables, all monies received
         thereon on and after the Subsequent Cutoff Date (including Scheduled
         Payments due or to become due thereon on and after the Subsequent
         Cutoff Date and Scheduled Payments due prior to the Subsequent Cutoff
         Date but received on or after the Subsequent Cutoff Date), principal
         prepayments relating to Scheduled Payments due on or after the
         Subsequent Cutoff Date but received by the Depositor or LBAC before the
         Subsequent Cutoff Date, and any Payaheads received with respect to
         payments due on the Subsequent Receivables on or after the related
         Subsequent Cutoff Date (which Payaheads shall be held in the Payahead
         Account until the Collection Period in which such payments are actually
         due with respect to the related Receivable, at which time such
         Payaheads shall be applied as a component of the Total Distribution
         Amount), (B) with respect to any such Subsequent Receivables that are
         Simple Interest Receivables, all monies received thereunder on and
         after the Subsequent Cutoff Date (including Scheduled Payments due
         before the Subsequent Cutoff Date but received by the Depositor or LBAC
         on or after the Subsequent Cutoff Date) and (C) all Liquidation
         Proceeds and Recoveries received with respect to such Subsequent
         Receivables;

                                      N-2
<Page>

                           (2)      the security interests in the Financed
         Vehicles granted by Obligors pursuant to the Subsequent Receivables and
         any other interest of the Depositor in such Financed Vehicles,
         including, without limitation, the certificates of title and any other
         evidence of ownership with respect to such Financed Vehicles;

                           (3)      any proceeds from claims on any physical
         damage, credit life and credit accident and health insurance policies
         or certificates or the VSI Policy, if any, relating to the related
         Financed Vehicles or the related Obligors, including any rebates and
         premiums;

                           (4)      property (including the right to receive
         future Liquidation Proceeds) that secures a Subsequent Receivable and
         that has been acquired by or on behalf of the Trust pursuant to the
         liquidation of such Subsequent Receivable;

                           (5)      this Agreement, the Purchase Agreement and
         the Guaranty, including, without limitation, a direct right to cause
         LBAC to purchase Subsequent Receivables from the Trust upon the
         occurrence of a breach of any of the representations and warranties
         contained in Section 3.2 of the Purchase Agreement, or Section 4 of
         this Agreement or the failure of LBAC to timely comply with its
         obligations pursuant to Section 5.5 of the Purchase Agreement or this
         Agreement;

                           (6)      refunds for the costs of extended service
         contracts with respect to the related Financed Vehicles, refunds of
         unearned premiums with respect to credit life and credit accident and
         health insurance policies or certificates covering a related Obligor or
         Financed Vehicle or his or her obligations with respect to a related
         Financed Vehicle and any recourse to Dealers for any of the foregoing;

                           (7)      the Legal Files and the Receivable Files
         related to each such Subsequent Receivable and any and all other
         documents that LBAC keeps on file in accordance with its customary
         procedures relating to such Subsequent Receivables, the Obligors or the
         Financed Vehicles;

                           (8)      all amounts and property from time to time
         held in or credited to the Lock-Box Account, to the extent such amounts
         and property relate to the Subsequent Receivables;

                           (9)      any proceeds from recourse against the
         Dealers (other than any Chargeback Obligations), including, without
         limitation, any Dealer Title Guaranties with respect to such Subsequent
         Receivables, with respect to the sale of such Subsequent Receivables;
         and

                           (10)     the proceeds of any and all of the
         foregoing.

                                      N-3
<Page>

         Section 4. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR. The
Originator makes the following representations and warranties as to the
Subsequent Receivables and the other Transferred Property relating thereto on
which the Depositor relies in accepting the Subsequent Receivables and the other
Transferred Property relating thereto and on which the Certificate Insurer will
rely in issuing the Policy. Such representations and warranties speak as of the
execution and delivery of this Agreement, but shall survive the sale, transfer,
and assignment of the Subsequent Receivables and the other Transferred Property
relating thereto to the Depositor and the subsequent assignment and transfer
pursuant to the Pooling and Servicing Agreement:

                  (1)      ORIGINATION DATE. Each Subsequent Receivable has an
         Origination Date on or after ______________, 199_.

                  (2)      PRINCIPAL BALANCE/NUMBER OF CONTRACTS. As of the
         Subsequent Cutoff Date, the total aggregate Principal Balance of the
         Subsequent Receivables was $_______________. The Subsequent Receivables
         are evidenced by _______ retail installment sale contracts.

                  (3)      MATURITY OF SUBSEQUENT RECEIVABLES. Each Subsequent
         Receivable has an original term to maturity of not less than 12 months
         and not more than [72] months; the weighted average original term to
         maturity of the Subsequent Receivables is [___] months as of the
         Subsequent Cutoff Date; the remaining term to maturity of each
         Subsequent Receivable was __ months or less as of the Subsequent Cutoff
         Date; the weighted average remaining term to maturity of the Subsequent
         Receivables was [___] months as of the Subsequent Cutoff Date.

                  (4)      CHARACTERISTICS OF SUBSEQUENT RECEIVABLES. (A) Each
         Subsequent Receivable (1) has been originated in the United States of
         America by a Dealer for the retail sale of a Financed Vehicle in the
         ordinary course of such Dealer's business, such Dealer had all
         necessary licenses and permits to originate such Subsequent Receivables
         in the State where such Dealer was located, has been fully and properly
         executed by the parties thereto and has been purchased by LBAC from
         such Dealer under an existing Dealer Agreement with LBAC, in connection
         with the sale of Financed Vehicles by the Dealers, and was validly
         assigned by such Dealer to LBAC in accordance with its terms, (2) has
         created a valid, subsisting, and enforceable first priority security
         interest in favor of LBAC in the Financed Vehicle, which security
         interest is assignable and has been validly assigned by LBAC to the
         Depositor, which in turn has been validly assigned by the Depositor to
         the Trustee pursuant to the Pooling and Servicing Agreement, (3)
         contains customary and enforceable provisions such that the rights and
         remedies of the holder or assignee thereof shall be adequate for
         realization against the collateral of the benefits of the security, (4)
         provides for level monthly payments that fully amortize the Amount
         Financed over the original term (except for the first or last payment,
         which may be minimally different from the level payment)

                                      N-4
<Page>

         and yield interest at the Annual Percentage Rate, (5) has an Annual
         Percentage Rate of not less than ____%, (6) in the case of a
         Subsequent Receivable that is a Precomputed Receivable, in the
         event that such Subsequent Receivable is prepaid, provides for a
         prepayment that fully pays the Principal Balance and includes,
         unless prohibited by applicable law, a full month's interest, in
         the month of prepayment, at the Annual Percentage Rate, (7) is a
         Precomputed Receivable or a Simple Interest Receivable, and (8) was
         originated by a Dealer to an Obligor and was sold by the Dealer to
         LBAC without any fraud or misrepresentation on the part of such
         Dealer or on the part of the Obligor; and (B) approximately [ ]% of
         the aggregate Principal Balance of the Subsequent Receivables,
         constituting [ ]% of the number of contracts, as of the Subsequent
         Cutoff Date, represents financing of used automobiles, vans, sport
         utility vehicles or light duty trucks; the remainder of the
         Subsequent Receivables represent financing of new automobiles,
         vans, sport utility vehicles or light duty trucks; approximately [ ]
         % of the aggregate Principal Balance of the Subsequent Receivables
         as of the Subsequent Cutoff Date were originated under the LBAC
         class I program; approximately [ ]% of the aggregate Principal
         Balance of the Subsequent Receivables as of the Subsequent Cutoff
         Date were originated under the LBAC class IIA program;
         approximately [ ]% of the aggregate Principal Balance of the
         Subsequent Receivables as of the Subsequent Cutoff Date were
         originated under the LBAC Class IIB program; approximately [ ]% of
         the aggregate Principal Balance of the Subsequent Receivables as of
         the Subsequent Cutoff Date were originated under the LBAC class III
         program; the remainder of the Subsequent Receivables as of the
         Subsequent Cutoff Date were originated under the LBAC limited
         credit program; no Subsequent Receivable shall have a payment that
         is more than 29 days overdue (calculated on the basis of a 360-day
         year of twelve 30-day months) as of the Subsequent Cutoff Date; [ ]
         % of the Subsequent Receivables are Precomputed Receivables and [ ]
         % of the Subsequent Receivables are Simple Interest Receivables;
         each Subsequent Receivable shall have a final scheduled payment due
         no later than _____________, 200__; each Subsequent Receivable has
         an original term to maturity of at least 12 months and not more
         than __ months and a remaining term to maturity of not less than __
         months nor greater than __ months; and each Subsequent Receivable
         was originated on or before the Subsequent Cutoff Date.

                  (5)      SCHEDULED PAYMENTS. Each Subsequent Receivable had an
         original Principal Balance of not less than $______ nor more than
         $__________, has an outstanding Principal Balance as of the Subsequent
         Cutoff Date of not less than $_______ and not more than $__________ and
         has a first Scheduled Payment due, in the case of Precomputed
         Receivables, or a scheduled due date, in the case of Simple Interest
         Receivables, on or prior to ____________, 199_.

                  (6)      NO BANKRUPTCIES. No Obligor was bankrupt at the time
         of origination of the related Subsequent Receivable and no Obligor on
         any Subsequent Receivable as of the Subsequent Cutoff Date was noted in
         the related

                                      N-5
<Page>

         Receivable File as having filed for bankruptcy since origination of
         the Subsequent Receivable.

                  (7)      ORIGINATION OF SUBSEQUENT RECEIVABLES. Based on the
         location of the Dealers and the Principal Balances as of the Subsequent
         Cutoff Date, approximately [ ]% of the Subsequent Receivables were
         originated in California, approximately [ ]% of the Subsequent
         Receivables were originated in Illinois and the remaining [ ]% of the
         Subsequent Receivables were originated in other States.

                  (8)      LOCKBOX. Prior to the Subsequent Transfer Date, the
         Depositor will notify each Obligor to make payments with respect to its
         respective Subsequent Receivable after the Subsequent Cutoff Date
         directly to the Lockbox, and will provide each Obligor with a monthly
         statement in order to enable such Obligor to make payments directly to
         the Lockbox.

                  (9)      LOCATION OF LEGAL FILES; ONE ORIGINAL. A complete
         Legal File with respect to each Subsequent Receivable has been or prior
         to the Subsequent Transfer Date will be delivered to the Custodian at
         the location listed in Schedule B to the Pooling and Servicing
         Agreement. There is only one original executed copy of each Subsequent
         Receivable.

                  (10)     SCHEDULE OF SUBSEQUENT RECEIVABLES; SELECTION
         PROCEDURES. The information with respect to the Subsequent Receivables
         set forth in the Schedule A to this Agreement is true and correct in
         all material respects as of the close of business on the Subsequent
         Cutoff Date and the Subsequent Transfer Date, and no selection
         procedures adverse to the Trust, the Certificateholders or to the
         Certificate Insurer have been utilized in selecting the Subsequent
         Receivables. The computer tape or other listing regarding the
         Subsequent Receivables made available to the Depositor and its assigns
         is true and correct as of the Subsequent Cutoff Date and the Subsequent
         Transfer Date in all respects. By the Subsequent Transfer Date, LBAC
         will have caused the portions of LBAC's servicing records relating to
         the Subsequent Receivables to be clearly and unambiguously marked to
         show that the Subsequent Receivables constitute part of the Trust
         Assets and are owned by the Trust in accordance with the terms of the
         Pooling and Servicing Agreement.

                  (11)     COMPLIANCE WITH LAW. Each Subsequent Receivable, the
         sale of the Financed Vehicle and the sale of any physical damage,
         credit life and credit accident and health insurance and any extended
         service contracts complied at the time the related Subsequent
         Receivable was originated or made and at the execution of this
         Agreement complies in all material respects with all requirements of
         applicable Federal, State and local laws, and regulations thereunder
         including, without limitation, usury laws, the Federal Truth-in-Lending
         Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act,
         the Fair

                                      N-6
<Page>

         Debt Collection Practices Act, the Federal Trade Commission Act,
         the Magnuson-Moss Warranty Act, the Federal Reserve Board's
         Regulations B and Z (including amendments to the Federal Reserve's
         Official Staff Commentary to Regulation Z effective October 1, 1998
         concerning negative equity loans), the Soldiers' and Sailors' Civil
         Relief Act of 1940, as amended, the California Automobile Sales
         Finance Act, the Texas Credit Code, and state adaptations of the
         National Consumer Act and of the Uniform Consumer Credit Code, and
         other consumer credit laws and equal credit opportunity and
         disclosure laws.

                  (12)     BINDING OBLIGATION. Each Subsequent Receivable
         represents the genuine, legal, valid and binding payment obligation in
         writing of the Obligor, enforceable by the holder thereof in accordance
         with its terms and all parties to each Subsequent Receivable had full
         legal capacity to execute and deliver such Subsequent Receivable and
         all other documents related thereto and to grant the security interest
         purported to be granted thereby.

                  (13)     NO GOVERNMENT, CORPORATE OR FLEET OBLIGOR. None of
         the Subsequent Receivables are due from the United States of America or
         any State or from any agency, department, or instrumentality of the
         United States of America or any State. All of the Subsequent
         Receivables are due from Obligors who are natural persons or, if any
         Obligor is not a natural person, (a) such entity is an obligor with
         respect to five or fewer Financed Vehicles and (b) the related
         Subsequent Receivable or Subsequent Receivables have the benefit of the
         personal guaranty of a natural person or persons. No Subsequent
         Receivable has been included in a "fleet" sale (i.e., a sale to any
         single Obligor of more than five Financed Vehicles).

                  (14)     SECURITY INTEREST IN FINANCED VEHICLE. Immediately
         prior to the sale, assignment, and transfer thereof, each Subsequent
         Receivable shall be secured by a validly perfected first priority
         security interest in the Financed Vehicle in favor of LBAC as secured
         party, and such security interest is prior to all other liens upon and
         security interests in such Financed Vehicle which now exist or may
         hereafter arise or be created (except, as to priority, for any tax
         liens or mechanics' liens which may arise after the Subsequent Transfer
         Date), and either (i) all necessary and appropriate actions have been
         taken that would result in the valid perfection of a first priority
         security interest in the Financed Vehicle in favor of LBAC as secured
         party, and the Lien Certificate for each Financed Vehicle shows, or if
         a new or replacement Lien Certificate is being applied for a new or
         replacement Lien Certificate will be received within 150 days of the
         Subsequent Transfer Date and will show LBAC named as the original
         secured party under any such Subsequent Receivable and the holder of a
         first priority security interest in such Financed Vehicle, or (ii) a
         Dealer Title Guaranty has been obtained with respect to such Financed
         Vehicle. With respect to each Subsequent Receivable for which the Lien
         Certificate has not yet been submitted to, or returned from, the
         Registrar of Titles, LBAC has received either (i) written

                                      N-7
<Page>

         evidence from the related Dealer that such Lien Certificate showing
         LBAC as the first lienholder has been applied for or (ii) a Dealer
         Title Guaranty with respect to such Financed Vehicle. Immediately
         after the sale, transfer and assignment thereof to the Trust, each
         Subsequent Receivable will be secured by an enforceable first
         priority security interest in the Financed Vehicle in favor of the
         Trust as secured party, which security interest is prior to all
         other liens upon and security interests in such Financed Vehicle
         which now exist or may hereafter arise or be created (except, as to
         priority, for any lien for taxes, labor or materials affecting a
         Financed Vehicle arising subsequent to the Subsequent Transfer
         Date).

                  (15)     SUBSEQUENT RECEIVABLES IN FORCE. No Subsequent
         Receivable has been satisfied, subordinated or rescinded, nor has any
         Financed Vehicle been released from the lien granted by the related
         Subsequent Receivable in whole or in part. No provisions of any
         Subsequent Receivable have been waived, altered or modified in any
         respect since its origination, except by instruments or documents
         identified in the related Legal File on the Subsequent Transfer Date.
         No Subsequent Receivable has been modified as a result of application
         of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended.

                  (16)     NO WAIVER. No provision of a Subsequent Receivable
         has been waived.

                  (17)     NO AMENDMENTS. No Subsequent Receivable has been
         amended except to the extent reflected in the related Legal File on the
         Subsequent Transfer Date.

                  (18)     NO DEFENSES. As of the Subsequent Transfer Date, no
         right of rescission, setoff, counterclaim or defense exists or has been
         asserted or threatened with respect to any Subsequent Receivable. The
         operation of the terms of any Subsequent Receivable or the exercise of
         any right thereunder will not render such Subsequent Receivable
         unenforceable in whole or in part or subject to any such right of
         rescission, setoff, counterclaim, or defense.

                  (19)     NO LIENS. As of the Subsequent Transfer Date, there
         are no liens or claims existing or which have been filed for work,
         labor, storage, materials or taxes relating to a Financed Vehicle that
         shall be liens prior to, or equal or coordinate with, the security
         interest in the Financed Vehicle granted by the Subsequent Receivable.

                  (20)     NO DEFAULT; REPOSSESSION. Except for payment
         delinquencies continuing for a period of not more than twenty-nine days
         (calculated on the basis of a 360-day year of twelve 30-day months), as
         of the Subsequent Cutoff Date, no default, breach, violation or event
         permitting acceleration under the terms of any Subsequent Receivable
         has occurred and not been cured; and no continuing condition that with
         notice or the lapse of time would constitute a default, breach,

                                      N-8
<Page>

         violation, or event permitting acceleration under the terms of any
         Subsequent Receivable has arisen; and LBAC shall not waive and has
         not waived any of the foregoing; and no Financed Vehicle shall have
         been repossessed as of the Subsequent Cutoff Date.

                  (21)     INSURANCE; OTHER. (A) Each Obligor has obtained
         insurance covering the Financed Vehicle as of the execution of the
         Subsequent Receivable insuring against loss and damage due to fire,
         theft, transportation, collision and other risks generally covered by
         comprehensive and collision coverage which is in an amount at least
         equal to the lesser of (x) its maximum insurable value or (y) the
         principal amount due from the Obligor under the related Subsequent
         Receivable and names LBAC and its successors and assigns as loss payee
         and each Subsequent Receivable requires the Obligor to obtain and
         maintain such insurance naming LBAC and its successors and assigns as
         an additional insured, (B) each Subsequent Receivable that finances the
         cost of premiums for credit life and credit accident or health
         insurance is covered by an insurance policy and certificate of
         insurance naming LBAC as policyholder (creditor) under each such
         insurance policy and certificate of insurance and (C) as to each
         Subsequent Receivable that finances the cost of an extended service
         contract, the respective Financed Vehicle which secures the Subsequent
         Receivable is covered by an extended service contract.

                  (22)     TITLE. It is the intention of LBAC that the transfer
         and assignment of the Subsequent Receivables contemplated in the
         Purchase Agreement constitute a sale of the Subsequent Receivables from
         LBAC to the Depositor and that the beneficial interest in and title to
         such Subsequent Receivables not be part of the debtor's estate in the
         event of the filing of a bankruptcy petition by or against LBAC under
         any bankruptcy law. No Subsequent Receivable has been sold,
         transferred, assigned, or pledged by LBAC to any Person other than the
         Depositor or by the Depositor to any Person other than the Trustee
         except with respect to any such pledge that has been released on or
         prior to the Subsequent Transfer Date. Immediately prior to the
         transfer and assignment of the Subsequent Receivables contemplated in
         the Purchase Agreement, LBAC had good and marketable title to each
         Subsequent Receivable, and was the sole owner thereof, free and clear
         of all Liens, claims, encumbrances, security interests, and rights of
         others and, immediately upon the transfer thereof, the Depositor shall
         have good and marketable title to each such Subsequent Receivable, and
         will be the sole owner thereof, free and clear of all Liens,
         encumbrances, security interests, and rights of others, and each such
         transfer has been perfected under the UCC. Immediately prior to the
         transfer and assignment by the Depositor to the Trust contemplated by
         this Agreement and the Pooling and Servicing Agreement, the Depositor
         shall have good and marketable title to each Subsequent Receivable,
         and shall be the sole owner thereof, free and clear of all Liens,
         claims, encumbrances, security interests, and rights of others and,
         immediately upon the transfer thereof pursuant to this Agreement and
         the Pooling and Servicing


                                      N-9
<Page>

         Agreement, the Trust shall have good and marketable title to each
         such Subsequent Receivable, and will be the sole owner thereof,
         free and clear of all Liens, encumbrances, security interests and
         rights of others, and each such transfer has been perfected under
         the UCC. Without limiting the generality of the foregoing, no
         Dealer has any right, title or interest in respect of any
         Subsequent Receivable. Neither the Depositor nor LBAC has taken any
         action to convey any right to any Person that would result in such
         Person having a right to payments received under any insurance
         policies related to the Subsequent Receivables or the Financed
         Vehicles or the related Dealer Agreements or to payments due under
         such Subsequent Receivables.

                  (23)     LAWFUL ASSIGNMENT. No Subsequent Receivable has been
         originated in, or is subject to the laws of, any jurisdiction under
         which the sale, transfer, and assignment of such Subsequent Receivable
         under the Purchase Agreement, this Agreement or the Pooling and
         Servicing Agreement shall be unlawful, void, or voidable. LBAC has not
         entered into any agreement with any account debtor that prohibits,
         restricts or conditions the assignment of any portion of the Subsequent
         Receivables.

                  (24)     ALL FILINGS MADE. All filings (including, without
         limitation, UCC filings) necessary in any jurisdiction to give the
         Trustee a first priority perfected ownership interest in the Subsequent
         Receivables and the proceeds thereof and the other Transferred Property
         (other than the Financed Vehicles) have been made.

                  (25)     CHATTEL PAPER. Each Subsequent Receivable constitutes
         "chattel paper" under the UCC.

                  (26)     VALID AND BINDING OBLIGATION OF OBLIGOR. Each
         Subsequent Receivable is the legal, valid and binding obligation of the
         Obligor thereunder and is enforceable in accordance with its terms,
         except only as such enforcement may be limited by bankruptcy,
         insolvency or similar laws affecting the enforcement of creditors'
         rights generally, and all parties to such contract had full legal
         capacity to execute and deliver such contract and all other documents
         related thereto and to grant the security interest purported to be
         granted thereby.

                  (27)     TAX LIENS. As of the Subsequent Transfer Date, there
         is no lien against the related Financed Vehicle for delinquent taxes.

                  (28)     TITLE DOCUMENTS. (A) If the Subsequent Receivable was
         originated in a State in which notation of security interest on the
         title document of the related Financed Vehicle is required or permitted
         to perfect such security interest, the title document for such
         Subsequent Receivable shows, or if a new or replacement title document
         is being applied for with respect to such Financed Vehicle, the title
         document will be received within 180 days following the Subsequent
         Transfer Date and will show, LBAC named as the original secured party
         under the related

                                      N-10
<Page>

         Subsequent Receivable as the holder of a first priority security
         interest in such Financed Vehicle and (B) if the Subsequent
         Receivable was originated in a State in which the filing of a
         financing statement under the UCC is required to perfect a security
         interest in motor vehicles, such filings or recordings have been
         duly made and show LBAC named as the original secured party under
         the related Subsequent Receivable, and in either case, the Trustee
         has the same rights as such secured party has or would have (if
         such secured party were still the owner of the Subsequent
         Receivable) against all parties claiming an interest in such
         Financed Vehicle. With respect to each Subsequent Receivable for
         which the relevant Dealer is temporarily unable to furnish either
         an original Lien Certificate or satisfactory evidence that the
         appropriate lien has been recorded on the related certificate of
         title or documentation has been submitted to the appropriate state
         motor vehicle authority to record such lien on such certificate of
         title, LBAC has received the related Dealer Title Guaranty.

                  (29)     CASUALTY. As of the Subsequent Cutoff Date, no
         Financed Vehicle related to a Subsequent Receivable has suffered a
         Casualty.

                  (30)     OBLIGATION TO DEALERS OR OTHERS. The Depositor and
         its assignees will assume no obligation to Dealers or other originators
         or holders of the Subsequent Receivables (including, but not limited to
         under dealer reserves) as a result of its purchase of the Subsequent
         Receivables.

                  (31)     FULL AMOUNT FINANCED ADVANCED. The full Amount
         Financed of each Subsequent Receivable has been advanced to or on
         behalf of each Obligor, and there are no requirements for future
         advances thereunder. The Obligor with respect to the Subsequent
         Receivable does not have any option under the Subsequent Receivable to
         borrow from any person additional funds secured by the Financed
         Vehicle.

                  (32)     NO IMPAIRMENT. Neither LBAC nor the Depositor has
         done anything to convey any right to any Person that would result in
         such Person having a right to payments due under the Subsequent
         Receivables or otherwise to impair the rights of the Trust, the
         Certificateholders or the Certificate Insurer in any Subsequent
         Receivable or the proceeds thereof.

                  (33)     SUBSEQUENT RECEIVABLES NOT ASSUMABLE. No Subsequent
         Receivable is assumable by another Person in a manner which would
         release the Obligor thereof from such Obligor's obligations to the
         Depositor or LBAC with respect to such Subsequent Receivable.

                  (34)     SERVICING. The servicing of each Subsequent
         Receivable and the collection practices relating thereto have been
         lawful and in accordance with the standards set forth in the Pooling
         and Servicing Agreement; other than LBAC and

                                      N-11
<Page>

         any Back-up Servicer arrangement that has been entered into, no
         other person has the right to service the Subsequent Receivable.

                  (35)     ILLINOIS SUBSEQUENT RECEIVABLES. (a) LBAC does not
         own a substantial interest in the business of a Dealer within the
         meaning of Illinois Sales Finance Agency Act Rules and Regulations,
         Section 160.230(l) and (b) with respect to each Subsequent Receivable
         originated in the State of Illinois, (i) the printed or typed portion
         of the related Form of Subsequent Receivable complies with the
         requirements of 815 ILCS 375/3(b) and (ii) LBAC has not, and for so
         long as such Subsequent Receivable is outstanding shall not, place or
         cause to be placed on the related Financed Vehicle any collateral
         protection insurance in violation of 815 ILCS 180/10.

                  (36)     CALIFORNIA SUBSEQUENT RECEIVABLES. Each Subsequent
         Receivable originated in the State of California has been, and at all
         times during the term of the Pooling and Servicing Agreement will be,
         serviced by the Servicer in compliance with Cal. Civil Code Section
         2981, et seq.

                  (37)     TEXAS SUBSEQUENT RECEIVABLES. No required or
         requested insurance has been sold or procured by LBAC in respect of any
         Subsequent Receivable originated in the State of Texas, other than any
         such insurance the premiums for which have been fixed or approved by
         the State Board of Insurance of the State of Texas.

         Section 5. CONDITIONS PRECEDENT. The obligation of the Trust to acquire
the Subsequent Receivables hereunder is subject to the satisfaction, on or prior
to the Subsequent Transfer Date, of the following conditions precedent:

                  (a)      REPRESENTATIONS AND WARRANTIES. (i) Each of the
         representations and warranties made by LBAC in Section 3.2 of the
         Purchase Agreement and Section 4 of this Agreement and (ii) each of the
         representations and warranties made by the Depositor in Section 6.1 of
         the Pooling and Servicing Agreement and Section 3.1 of the Purchase
         Agreement, shall be true and correct as of the date of this Agreement
         and as of the Subsequent Transfer Date.

                  (b)      POOLING AND SERVICING AGREEMENT CONDITIONS. Each of
         the conditions set forth in Section 2.2(c) to the Pooling and Servicing
         Agreement shall have been satisfied.

                  (c)      PURCHASE AGREEMENT CONDITIONS. LBAC shall have
         complied with the requirements of Section 4.1 of the Purchase Agreement
         and shall have delivered all documents required to be delivered
         pursuant to Section 5.5 of the Purchase Agreement.

                                      N-12
<Page>

                  (d)      SECURITY INTEREST PERFECTION. In connection with the
         conveyance contemplated by this Agreement, the Depositor agrees to
         record and file, at its own expense, a financing statement with respect
         to the related Subsequent Receivables now existing and hereafter
         created for the sale of chattel paper (as defined in the UCC as in
         effect in the State of New Jersey) meeting the requirements of
         applicable state law in such manner as is sufficient to perfect the
         sale and assignment of such Subsequent Receivables to the Trust, and
         the proceeds thereof (and any continuation statements as are required
         by applicable state law), and to deliver a file-stamped copy of each
         such financing statement (or continuation statement) or other evidence
         of such filings (which may, for purposes of this Section, consist of
         telephone confirmation of such filing with the file stamped copy of
         each such filing to be provided to the Trustee in due course), as soon
         as is practicable after the Depositor's receipt thereof.

                  In connection with such conveyance, the Depositor further
         agrees, at its own expense, on or prior to the Subsequent Transfer Date
         (i) to annotate and indicate in its computer files that the Subsequent
         Receivables have been transferred to the Trust pursuant to the Pooling
         and Servicing Agreement and this Agreement and (ii) to deliver to the
         Trustee a computer file printed or microfiche list containing a true
         and complete list of all such Subsequent Receivables, identified by
         account number and by the Principal Balance of each Subsequent
         Receivable as of the Subsequent Cutoff Date.

                  (e)      ADDITIONAL INFORMATION. The Depositor shall have
         delivered or caused to be delivered to the Trustee on behalf of the
         Trust and the Certificate Insurer such information as was reasonably
         requested by the Trustee on behalf of the Trust or the Certificate
         Insurer to satisfy itself as to (i) the accuracy of the representations
         and warranties set forth in Section 4 of this Agreement and Section 6.1
         of the Pooling and Servicing Agreement and (ii) the satisfaction of the
         conditions set forth in this Section.

                  (f)      DEPOSITS TO ACCOUNTS. On or prior to the Subsequent
         Transfer Date, the Depositor shall deposit or cause to be deposited:

                           (1)      the Subsequent Spread Account Deposit into
                  the Spread Account; and

                           (2)      $__________, which represents all monies
                  received pursuant to Section 3(1)(A) and (B), into the
                  Collection Account.

         Section 6. RATIFICATION OF AGREEMENT. As supplemented by this
Agreement, the Pooling and Servicing Agreement is in all respects ratified and
confirmed and the Pooling and Servicing Agreement as so supplemented by this
Agreement shall be read, taken and construed as one and the same instrument.

                                      N-13
<Page>

         Section 7. THIRD PARTY BENEFICIARIES. Except as otherwise specifically
provided herein with respect to Certificateholders, the parties to this
Agreement hereby manifest their intent that no third party other than the
Certificate Insurer shall be deemed a third party beneficiary of this Agreement,
and specifically that the Obligors are not third party beneficiaries of this
Agreement. The Certificate Insurer and its successors and assigns shall be a
third-party beneficiary to the provisions of this Agreement, and shall be
entitled to rely upon and directly enforce the provisions of this Agreement so
long as no Insurer Default shall have occurred and be continuing. Except as
expressly stated otherwise herein or in the Basic Documents, any right of the
Certificate Insurer to direct, appoint, consent to, approve of, or take any
action under this Agreement, shall be a right exercised by the Certificate
Insurer in its sole and absolute discretion. The Certificate Insurer may
disclaim any of its rights and powers under this Agreement (but not its duties
and obligations under the Policy) upon delivery of a written notice to the
Trustee.

         Section 8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS,
AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (EXCEPT
WITH REGARD TO THE UCC).

         Section 9. AMENDMENTS. This Agreement may be amended from time to time
by a written amendment duly executed and delivered by the Trust, LBAC, the
Depositor and the Trustee with the prior written consent of the Certificate
Insurer.

                                      N-14
<Page>

         IN WITNESS WHEREOF, the Trustee, LBAC and the Depositor have caused
this Agreement to be duly executed and delivered by their respective duly
authorized officers as of the day and the year first above written.

                                      LONG BEACH ACCEPTANCE CORP.

                                      By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                      LONG BEACH ACCEPTANCE
                                      RECEIVABLES CORP.

                                      By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                      CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:
                                           -------------------------------------
                                           Name:  Leah Foshee
                                           Title: Vice President

                                      N-15
<Page>

                                   Schedule A

                             Schedule of Receivables



                                       A-1
<Page>

                                   Schedule B

                          Location of Receivable Files

                              One Mack Centre Drive
                              Paramus, New Jersey 07652

                             Location of Legal Files

                              700 North Pearl Street
                              18th Floor
                              Dallas, Texas  75201

                              Attention:     Loan Document
                                             Custody - Long Beach Acceptance
                                             Auto Grantor Trust 1998-2

                                  - or -

                              801 West Greens Road
                              Suite 200
                              Houston, Texas 77067

                              Attention:     Loan Document
                                             Custody - Long Beach Acceptance
                                             Auto Grantor Trust 1998-2

                                      B-1
<Page>

                                   Schedule C

                              Delivery Requirements

         The Trustee shall have sole control over each such investment and the
income thereon, and any certificate or other instrument evidencing any such
investment, if any shall, except for clearing corporation securities, be
delivered directly to the Trustee or its agent, together with each document of
transfer, if any, necessary to transfer title to such investment to the Trustee
in a manner that complies with this Agreement and the requirements of the
definition of Eligible Investments.


                                      C-1
<Page>

                                                   DB DRAFT OF SEPTEMBER 2, 1999

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                 AMENDMENT NO. 1

                        Dated as of {1} SEPTEMBER __, 1999

                                       to

                         POOLING AND SERVICING AGREEMENT

                          Dated as of November 1, 1998

                                      among

                     LONG BEACH ACCEPTANCE RECEIVABLES CORP.
                                   Depositor,

                           LONG BEACH ACCEPTANCE CORP.
                             Originator and Servicer

                                       and

                    CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
            Trustee, Back-up Servicer, Custodian and Collateral Agent


                                  $110,000,000
             5.87% Long Beach Acceptance Auto Grantor Trust 1998-2,
                              Class A Certificates

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<Page>

         AMENDMENT NO.1, dated as of {2} SEPTEMBER __, 1999 (the
"AMENDMENT"), to the POOLING AND SERVICING AGREEMENT, dated as of November 1,
1998 (as amended as of the date hereof, the "POOLING AND SERVICING
AGREEMENT"), among Long Beach Acceptance Receivables Corp., a Delaware
corporation, as depositor (the "DEPOSITOR"), Long Beach Acceptance Corp., a
Delaware corporation, as originator of the receivables ("LBAC"), and as
servicer (in such capacity, the "SERVICER"), and Chase Bank of Texas,
National Association, a national banking association, as trustee, back-up
servicer, custodian and collateral agent (the "TRUSTEE", "BACK-UP SERVICER",
"CUSTODIAN", and "COLLATERAL AGENT", respectively).

                               W I T N E S S E T H

         WHEREAS, the Depositor, LBAC, the Servicer, the Trustee, the Back-up
Servicer, the Custodian and the Collateral Agent entered into the Pooling and
Servicing Agreement;

         WHEREAS, the parties to the Pooling and Servicing Agreement desire to
amend certain provisions of the Pooling and Servicing Agreement as set forth in
this Amendment;

         WHEREAS, Section 11.1 of the Pooling and Servicing Agreement permits
the amendment thereof by the Depositor, the Servicer and the Trustee with the
consent of the Certificate Insurer and of the Holders of Class A Certificates
evidencing not less than 66-2/3% of the Class A Certificate Balance and, with
respect to any amendment that shall have any of the effects set forth in clause
(a) of Section 11.1, with the consent of each of the Certificateholders affected
thereby; and

         WHEREAS, Section 11.3 of the Pooling and Servicing Agreement provides
that, so long as no Insurer Default has occurred and is continuing, Class A
Certificateholder consent shall be deemed to be given on behalf of all Class A
Certificateholders if the Certificate Insurer agrees to give such consent.

         NOW, THEREFORE, in consideration of the recitals set forth above, and
for other good and valuable consideration, the adequacy, receipt and sufficiency
of which are hereby acknowledged by the parties hereto, the parties hereto
hereby agree as follows:

         SECTION 1. DEFINED TERMS.

         For purposes of this Amendment, unless the context clearly requires
otherwise, all capitalized terms which are used but not otherwise defined herein
shall have the respective meanings ascribed to such terms in the Pooling and
Servicing Agreement.

                                       1

<Page>

         SECTION 2. THE AMENDMENT.

                  (a)      The definition of "Purchase Amount" is hereby amended
         and restated in its entirety to read as follows:

                           "PURCHASE AMOUNT" means, with respect to a
                  Receivable, the amount, as of the close of business on the
                  last day of a Collection Period, required to prepay in full
                  such Receivable (after giving effect to the application of any
                  Payaheads, Liquidation Proceeds and Recoveries collected in
                  respect of such Receivable on or prior to the last day of such
                  Collection Period) under the terms thereof including accrued
                  and unpaid interest thereon to the end of the month of
                  purchase. The Purchase Amount relating to any Receivable that
                  became a Liquidated Receivable during any Collection Period
                  preceding the month of purchase shall be treated as Recoveries
                  in respect of such Receivable.

                  (b)      Section 4.4 is hereby amended by adding the following
         sentence to the end of Section 4.4:

                  The Payahead Balance, if any, with respect to each Receivable
                  that became a Purchased Receivable during a particular
                  Collection Period shall be transferred from the Payahead
                  Account to the COLLECTION Account on the Business Day
                  immediately preceding the Determination Date immediately
                  following the end of such Collection Period.

                  (c)      Exhibit I is hereby amended and restated in its
         entirety to read as follows:

                         PAYMENT APPLICATION PROCEDURES

LOCKBOX

Regardless of loan type, negotiable, unrestricted and identifiable remittances
received at the Lockbox are applied first to outstanding delinquent
installments, paying interest and principal. If after application to outstanding
delinquent installments at least 95% of a full payment remains, the excess is
applied to future installments, advancing the next due date. If after
application to outstanding delinquent installments less than 95% of a full
payment remains, the excess is applied to unpaid late charges and miscellaneous
fees. If after application to unpaid late charges and miscellaneous fees any
excess remains, the excess is applied to future installments.

                                       2

<Page>

Single remittances totaling three times the regular monthly installment or
$2,500, whichever is less, are considered exception payments and returned to the
Servicer for review and manual application in-house.

Non-negotiable or restricted remittances of any amount are returned to the
Servicer for review and manual application in-house.

Unidentified remittances of less than $2,500 are deposited as unapplied suspense
and photocopies of the remittance are forwarded to the Servicer for further
research and manual application in-house.

WESTERN UNION

Regardless of loan type, Western Union electronic direct-deposit Quick Collect
payments are applied first to outstanding delinquent installments, paying
interest and principal. If after application to outstanding delinquent
installments at least 95% of a full payment remains, the excess is applied to
future installments, advancing the next due date. If after application to
outstanding delinquent installments less than 95% of a full payment remains, the
excess is applied to unpaid late charges and miscellaneous fees. If after
application to unpaid late charges and miscellaneous fees any excess remains,
the excess is applied to future installments.

IN-HOUSE

Regardless of loan type, funds received directly at the Servicer from the
customer or forwarded from the Lockbox will be applied first to outstanding
delinquent installments, paying interest and principal, unless indicated
otherwise by an authorized servicing representative of the Servicer. If after
application to outstanding delinquent installments at least 95% of a full
payment remains, the excess is applied to future installments, advancing the
next due date. If after application to outstanding delinquent installments less
than 95% of a full payment remains, the excess is applied to unpaid late charges
and miscellaneous fees. If after application to unpaid late charges and
miscellaneous fees any excess remains, the excess is applied to future
installments.

If so indicated by an authorized servicing representative of the Servicer, funds
received directly at the Servicer from the customer may from time to time be
applied to the customer accounts as fees collected in the course of servicing as
permitted by the Payment Deferment and Due Date Change Policies.

Any refunded portion of extended warranty protection plan costs or of physical
damage, credit life or disability insurance premiums included in the Amount
Financed (otherwise referred to as Rebates), will be applied to the customer
accounts as a principal reduction without advancing the due date.

Any settlement proceeds received as the result of an insured total loss claim
will be applied to the customer accounts as a principal reduction without
advancing the due date,

                                       3

<Page>

or in the event that such settlement proceeds are sufficient to fully satisfy
the outstanding receivable balance, such proceeds will be applied as a payoff
to the customer accounts.

DAILY SIMPLE INTEREST LOAN TYPES

All funds, including principal, interest, late charges, miscellaneous fees,
Rebates and proceeds which have been applied to the customer accounts, will be
passed through to the appropriate collection account(s) within 48 hours of
posting. Those same funds, including funds which have advanced the due date
beyond the current month, will be passed through to the Certificateholders with
their monthly distribution for the current collection period.

PRECOMPUTED ACTUARIAL AND RULE OF {4} 78s LOAN TYPES

All funds, including principal, interest, late charges, miscellaneous fees,
Rebates and proceeds which have been applied to the customer accounts, will be
passed through to the appropriate collection account(s) within 48 hours of
posting. After application to Scheduled Payments due, late charges and
miscellaneous fees, any remaining excess funds will be categorized as follows:

Payahead Funds: Funds applied to the customer accounts that have advanced the
date next due and that will be passed through to the Certificateholders when
they become Scheduled Payments due.

Payable Funds: Funds applied to the customer accounts that have not advanced the
date next due, such as Rebates or proceeds, which were not intended to be
applied as Scheduled Payments due.

Payahead and Payable Funds received from or on behalf of the obligor will be
held in the Collection Account or the Payahead Account until such time that they
become due.

On the distribution date, all actually collected Scheduled Payments due and any
Payahead or Payable Funds applied to customer accounts that have been closed or
charged off in the current month will be passed through to the
Certificateholders for the current collection period. The Servicer will, upon
request, supply the Certificateholders with an analysis of funds paid in
advance.

INVOICING

All customers, regardless of loan type, will receive monthly statements showing
the effect of the excess funds to the scheduled payments due. The statements
will reflect $0.00 due for the current monthly installment if the date next due
was advanced, until such time that a current monthly installment is due.

                  (d)      EXHIBIT J IS HEREBY AMENDED AND RESTATED IN ITS
         ENTIRETY TO READ AS FOLLOWS:

                                       4

<Page>

                            PAYMENT DEFERMENT POLICY

O        LBAC MAY GRANT A PAYMENT DEFERMENT PROVIDED THAT THE DEFERMENT PERIOD
         DOES NOT EXCEED 1 MONTH (2 MONTHS IF 12 OR MORE PAYMENTS HAVE BEEN MADE
         AND IF THE DEFERMENT IS GRANTED IN WRITING BY THE PRESIDENT, OR AN
         EXECUTIVE VICE PRESIDENT, OR THE NATIONAL COLLECTIONS MANAGER, OR A
         REGIONAL MANAGER).

O        NOT MORE THAN 1 DEFERMENT EVENT (WHICH MAY CONSIST OF A 2 MONTH
         DEFERMENT ACCORDING TO THE EXCEPTIONS INCLUDED IN THE POLICY) MAY BE
         GRANTED DURING ANY 12-MONTH PERIOD.

O        THE AGGREGATE OF ALL DEFERMENT PERIODS DURING THE TERM OF A RECEIVABLE
         MAY NOT EXCEED THE LESSER OF 8 MONTHS OR 50% OF THE WEIGHTED AVERAGE
         LIFE OF THE ORIGINAL TERM OF THE RECEIVABLE (INCLUDING DEFERMENTS
         GRANTED BOTH BEFORE AND AFTER THE RELATED CUT-OFF DATE).

O        AT LEAST 6 PAYMENTS MUST BE MADE BEFORE A DEFERMENT MAY BE GRANTED.

O        A REQUEST FOR A DEFERMENT MUST BE MADE IN WRITING.

O        THE DEFERMENT MUST BRING THE ACCOUNT CURRENT, SO THAT AFTER THE
         DEFERMENT IS PROCESSED NO PAYMENT IS THEN DUE.

O        EXCEPT AS OTHERWISE SET FORTH IN THIS POLICY, DEFERMENTS MUST BE
         GRANTED IN WRITING BY THE COLLECTION MANAGER OR SOMEONE OF EQUAL OR
         HIGHER RANK.

O        A DEFERMENT FEE WILL BE COLLECTED FOR EACH DEFERMENT IF ALLOWED BY
         APPLICABLE LAW AND MAY BE WAIVED OR DEFERRED ONLY BY THE PRESIDENT, OR
         AN EXECUTIVE VICE PRESIDENT, OR THE NATIONAL COLLECTIONS MANAGER, OR A
         REGIONAL MANAGER; PROVIDED, HOWEVER, THAT NO DEFERMENT WILL BE GRANTED
         UNLESS THE SERVICER BELIEVES IN GOOD FAITH THAT THE ACCOUNT PROBABLY
         WOULD DEFAULT IN THE REASONABLY FORESEEABLE FUTURE IF A DEFERMENT IS
         NOT APPROVED.

O        DEFERMENTS WHICH DO NOT MEET THE ABOVE CRITERIA MAY BE GRANTED IN
         WRITING ON AN EXCEPTION BASIS (e.g., WHEN REQUIRED BY LAW) BY THE
         PRESIDENT, OR AN EXECUTIVE VICE PRESIDENT, OR THE NATIONAL COLLECTIONS
         MANAGER, OR A REGIONAL MANAGER.

O        AS OF JANUARY 1, 2000, AND THE FIRST DAY OF EACH CALENDAR QUARTER
         THEREAFTER, THE AGGREGATE NUMBER OF RECEIVABLES THE TERMS OF WHICH HAVE
         BEEN EXTENDED DURING THE PRECEDING CALENDAR QUARTER SHALL NOT EXCEED 4%
         OF THE NUMBER OF RECEIVABLES AT THE BEGINNING OF THE PRECEDING CALENDAR
         QUARTER.

O        NO DEFERMENT MAY EXTEND THE DATE FOR FINAL PAYMENT OF A RECEIVABLE
         BEYOND THE LAST DAY OF THE RECORD COLLECTION PERIOD PRECEDING THE FINAL
         SCHEDULED DISTRIBUTION DATE.

                                       5

<Page>

                             DUE DATE CHANGE POLICY

O        LBAC MAY GRANT A DUE DATE CHANGE, PROVIDED THAT THE NEW DUE DATE IS
         WITHIN 29 DAYS OF THE CURRENT DUE DATE.

O        NOT MORE THAN 2 DUE DATE CHANGES MAY BE GRANTED OVER THE TERM OF A
         RECEIVABLE.

O        IF 2 DUE DATE CHANGES ARE GRANTED, THE TOTAL NUMBER OF DAYS BY WHICH
         THE MATURITY DATE IS EXTENDED MAY NOT EXCEED 29.

O        A REQUEST FOR A DUE DATE CHANGE MUST BE MADE IN WRITING.

O        THE ACCOUNT MUST BE CURRENT AT THE TIME THE REQUEST IS RECEIVED.

O        DUE DATE CHANGES MUST BE GRANTED IN WRITING BY THE COLLECTION MANAGER
         OR SOMEONE OF EQUAL OR HIGHER RANK.

O        NO DUE DATE CHANGE MAY BE GRANTED IF THE AGGREGATE OF ALL DEFERMENT
         PERIODS AND THE REQUESTED DUE DATE CHANGE WOULD EXCEED THE LESSER OF 8
         MONTHS OR 50% OF THE ORIGINAL TERM OF THE RECEIVABLE.

         SECTION 3. EFFECT OF AMENDMENT.

         This Amendment to the Pooling and Servicing Agreement shall be
effective and the Pooling and Servicing Agreement shall be deemed to be modified
and amended in accordance herewith upon the later to occur of (a) the receipt by
the Certificate Insurer of counterparts hereof executed and delivered on behalf
of each of the parties hereto and the Excess Cash Flow Certificateholders and
the execution by the Certificate Insurer of a counterpart hereof pursuant to
Sections 11.1 and 11.3 of the Pooling and Servicing Agreement and (b) the
receipt by each of the Rating Agencies of prior written notice with respect to
this Amendment and by the Certificate Insurer of a copy of such notice. This
Amendment, once effective, shall be effective as of the date first set forth
above. The respective rights, limitations, obligations, duties, liabilities and
immunities of the Depositor, the Servicer, LBAC, the Trustee, the Back-up
Servicer, the Custodian, the Collateral Agent, the Certificate Insurer and the
Certificateholders shall hereafter be determined, exercised and enforced subject
in all respects to such modifications and amendments, and all the terms and
conditions of this Amendment shall be and be deemed to be part of the terms and
conditions of the Pooling and Servicing Agreement for any and all purposes. The
Pooling and Servicing Agreement, as amended hereby, is hereby ratified and
confirmed in all respects.

         SECTION 4. GOVERNING LAW.

         THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER
THIS

                                       6

<Page>

AMENDMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES (EXCEPT WITH REGARD TO THE UCC).

         SECTION 5. SEVERABILITY OF PROVISIONS.

         If any one or more of the covenants, agreements, provisions or terms of
this Amendment shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Amendment and shall
in no way affect the validity or enforceability of the other provisions of this
Amendment or of the Certificates or the rights of the Holders thereof.

         SECTION 6. BINDING EFFECT.

         The provisions of this Amendment shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Trustee and the related
Holders of Certificates.

         SECTION 7. THIRD PARTY BENEFICIARIES.

         The parties to this Amendment hereby manifest their intent that no
third party other than the Certificate Insurer shall be deemed a third party
beneficiary of this Amendment, and specifically that the Obligors are not third
party beneficiaries of this Amendment. The Certificate Insurer and its
successors and assigns shall be a third-party beneficiary to the provisions of
this Amendment, and shall be entitled to rely upon and directly enforce such
provisions of this Amendment so long as no Insurer Default shall have occurred
and be continuing. Except as expressly stated otherwise herein or in the Basic
Documents, any right of the Certificate Insurer to direct, appoint, consent to,
approve of, or take any action under this Amendment, shall be a right exercised
by the Certificate Insurer in its sole and absolute discretion. The Certificate
Insurer may disclaim any of its rights and powers under this Amendment (but not
its duties and obligations under the Policy) upon delivery of a written notice
to the Trustee.

         SECTION 8. SECTION HEADINGS.

         The section headings herein are for convenience of reference only, and
shall not limit or otherwise affect the meaning hereof.

         SECTION 9. COUNTERPARTS.

         This Amendment may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.

                                       7

<Page>

         IN WITNESS WHEREOF, the Depositor, the Originator, the Servicer, the
Trustee, the Back-up Servicer, the Custodian and the Collateral Agent have
caused this Amendment to be duly executed by their respective officers as of the
day and year first above written.

                                       LONG BEACH ACCEPTANCE RECEIVABLES CORP.,
                                       as Depositor


                                       By:
                                          --------------------------------------
                                          Name:
                                          Title:


                                       LONG BEACH ACCEPTANCE CORP., as
                                       Originator and Servicer


                                       By:
                                          --------------------------------------
                                          Name:
                                          Title:


                                       CHASE BANK OF TEXAS, NATIONAL
                                       ASSOCIATION, as Trustee, Back-up
                                       Servicer, Custodian and Collateral Agent


                                       By:
                                          --------------------------------------
                                          Name:
                                          Title:


Financial Security Assurance Inc., as Certificate Insurer,
hereby consents to the foregoing Amendment pursuant to
Sections 11.1 and 11.3 of the Pooling and Servicing
Agreement.

FINANCIAL SECURITY ASSURANCE INC.


By:
   -----------------------------------------
Name:
Title:


<Page>

Long Beach Acceptance Receivables Corp., as sole Excess Cash
Flow Certificateholder, hereby consents to the foregoing
Amendment.

LONG BEACH ACCEPTANCE RECEIVABLES CORP.

By:
   -----------------------------------------
Name:
Title: