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                                                                 Exhibit 10.21

                                                           [EXECUTION VERSION]

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                          SALE AND SERVICING AGREEMENT

                                      among

               LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2001-A

                                     Issuer

                     LONG BEACH ACCEPTANCE RECEIVABLES CORP.

                                   Transferor

                           LONG BEACH ACCEPTANCE CORP.

                             Originator and Servicer

                                       and

                            THE CHASE MANHATTAN BANK

             Back-up Servicer, Custodian and Trust Collateral Agent

                            Dated as of June 1, 2001


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                                                 TABLE OF CONTENTS
<TABLE>
<CAPTION>


                                                                                                               Page
<S>                  <C>                                                                                        <C>

ARTICLE I             DEFINITIONS.................................................................................1

     SECTION 1.1.     Definitions.................................................................................1
     SECTION 1.2.     Other Definitional Provisions...............................................................1
     SECTION 1.3.     Calculations................................................................................2
     SECTION 1.4.     Action by or Consent of Noteholders.........................................................2
     SECTION 1.5.     Material Adverse Effect.....................................................................3

ARTICLE II            CONVEYANCE OF RECEIVABLES...................................................................3

     SECTION 2.1.     Conveyance of Initial Receivables...........................................................3
     SECTION 2.2.     Conveyance of Subsequent Receivables........................................................4
     SECTION 2.3.     Transfer Intended as Sale; Precautionary Security Interest..................................9
     SECTION 2.4.     Assignment by Transferor....................................................................9
     SECTION 2.5.     The Legal Files Are Not "Financial Assets".................................................10
     SECTION 2.6.     Further Encumbrance of Trust Assets........................................................10

ARTICLE III           THE RECEIVABLES............................................................................10

     SECTION 3.1.     Representations and Warranties of Transferor...............................................10
     SECTION 3.2.     Repurchase upon Breach of Representations and Warranties of the Transferor.................11
     SECTION 3.3.     Delivery of Legal Files and Receivable Files...............................................11
     SECTION 3.4.     Acceptance of Legal Files by Custodian.....................................................12
     SECTION 3.5.     Access to Receivable Files and Legal Files; Servicer's Duties with Respect to
                             Receivable Files; Custodian's Duties with Respect to Legal Files....................13
     SECTION 3.6.     Covenants of the Custodian.................................................................15
     SECTION 3.7.     Issuer's Certificate.......................................................................16

ARTICLE IV            ADMINISTRATION AND SERVICING OF RECEIVABLES................................................17

     SECTION 4.1.     Duties of the Servicer.....................................................................17
     SECTION 4.2.     Collection and Allocation of Receivable Payments...........................................18
     SECTION 4.3.     Realization upon Receivables...............................................................19
     SECTION 4.4.     Physical Damage Insurance; Other Insurance.................................................20
     SECTION 4.5.     Maintenance of Security Interests in Financed Vehicles.....................................20
     SECTION 4.6.     Additional Covenants of Servicer...........................................................21
     SECTION 4.7.     Purchase of Receivables Upon Breach........................................................22
     SECTION 4.8.     Servicing Fee..............................................................................22
     SECTION 4.9.     Servicer's Certificate.....................................................................23
     SECTION 4.10.    Annual Statement as to Compliance; Notice of Default.......................................23
     SECTION 4.11.    Annual Independent Certified Public Accountant's Report....................................24
     SECTION 4.12.    Servicer Expenses..........................................................................24
     SECTION 4.13.    Retention and Termination of Servicer......................................................24

                                        i

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     SECTION 4.14.    Access to Certain Documentation and Information Regarding Receivables......................25
     SECTION 4.15.    Verification of Servicer's Certificate.....................................................25
     SECTION 4.16.    Fidelity Bond..............................................................................27
     SECTION 4.17.    Delegation of Duties.......................................................................27
     SECTION 4.18.    Delivery of Back-up Tapes of Back-up Servicer..............................................28
     SECTION 4.19.    Confidential Information...................................................................28

ARTICLE V             ACCOUNTS; PAYMENTS; STATEMENTS TO NOTEHOLDERS..............................................29

     SECTION 5.1.     Accounts; Lock-Box Account.................................................................29
     SECTION 5.2.     Collections................................................................................31
     SECTION 5.3.     Application of Collections.................................................................31
     SECTION 5.4.     Intentionally Omitted......................................................................31
     SECTION 5.5.     Additional Deposits........................................................................31
     SECTION 5.6.     Payments; Policy Claims....................................................................32
     SECTION 5.7.     Statements to Noteholders; Tax Returns.....................................................36
     SECTION 5.8.     Reliance on Information from the Servicer..................................................39
     SECTION 5.9.     Optional Deposits by the Note Insurer......................................................39
     SECTION 5.10.    Spread Account.............................................................................39
     SECTION 5.11.    Withdrawals from Spread Account............................................................39
     SECTION 5.12.    Simple Interest............................................................................40
     SECTION 5.13.    Pre-Funding Account........................................................................41
     SECTION 5.14.    Capitalized Interest Account...............................................................41
     SECTION 5.15.    Securities Accounts........................................................................42

ARTICLE VI            THE POLICY.................................................................................42

     SECTION 6.1.     Policy 42
     SECTION 6.2.     Claims Under Policy........................................................................42
     SECTION 6.3.     Preference Claims; Direction of Proceedings................................................43
     SECTION 6.4.     Surrender of Policy........................................................................44

ARTICLE VII           THE TRANSFEROR.............................................................................44

     SECTION 7.1.     Representations of the Transferor..........................................................44
     SECTION 7.2.     Liability of the Transferor................................................................46
     SECTION 7.3.     Merger or Consolidation of, or Assumption of the Obligations of, the Transferor............46
     SECTION 7.4.     Limitation on Liability of the Transferor and Others.......................................47
     SECTION 7.5.     Transferor May Own Notes...................................................................47

ARTICLE VIII          THE SERVICER...............................................................................48

     SECTION 8.1.     Representations of Servicer................................................................48
     SECTION 8.2.     Indemnities of Servicer....................................................................50
     SECTION 8.3.     Merger or Consolidation of, or Assumption of the Obligations of, Servicer or
                             Back-up Servicer....................................................................52
     SECTION 8.4.     Limitation on Liability of Servicer and Others.............................................53

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     SECTION 8.5.     Servicer and Back-up Servicer Not to Resign................................................53

ARTICLE IX            SERVICER TERMINATION EVENTS................................................................54

     SECTION 9.1.     Servicer Termination Events................................................................54
     SECTION 9.2.     Appointment of Successor...................................................................57
     SECTION 9.3.     Notification to Noteholders................................................................58
     SECTION 9.4.     Action Upon Certain Failures of the Servicer...............................................59

ARTICLE X             THE TRUST COLLATERAL AGENT AND THE CUSTODIAN...............................................59

     SECTION 10.1.    Duties of the Trust Collateral Agent and the Custodian.....................................59
     SECTION 10.2.    Trust Collateral Agent to Act for the Noteholders and Note Insurer.........................62
     SECTION 10.3.    Certain Matters Affecting the Trust Collateral Agent and the Custodian.....................62
     SECTION 10.4.    Trust Collateral Agent, Back-up Servicer and Custodian Not Liable for Notes or
                        Receivables..............................................................................64
     SECTION 10.5.    Trust Collateral Agent, Back-up Servicer and Custodian May Own Notes.......................65
     SECTION 10.6.    Indemnity of Trust Collateral Agent, Back-up Servicer and Custodian........................65
     SECTION 10.7.    Eligibility Requirements for Trust Collateral Agent and the Custodian......................65
     SECTION 10.8.    Resignation or Removal of Trust Collateral Agent or Custodian..............................66
     SECTION 10.9.    Successor Trust Collateral Agent or Custodian..............................................67
     SECTION 10.10.   Merger or Consolidation of Trust Collateral Agent or Custodian.............................68
     SECTION 10.11.   Co-Trustee; Separate Trustee...............................................................68
     SECTION 10.12.   Representations and Warranties of Trust Collateral Agent and the Custodian.................70
     SECTION 10.13.   Rights of Note Insurer to Direct Trust Collateral Agent....................................70

ARTICLE XI            TERMINATION................................................................................71

     SECTION 11.1.    Termination................................................................................71

ARTICLE XII           ADMINISTRATIVE DUTIES OF THE SERVICER......................................................71

     SECTION 12.1.    Administrative Duties......................................................................71
     SECTION 12.2.    Records....................................................................................73
     SECTION 12.3.    Additional Information to be Furnished to the Issuer.......................................73
     SECTION 12.4.    No Additional Compensation.................................................................73

ARTICLE XIII          MISCELLANEOUS PROVISIONS...................................................................73

     SECTION 13.1.    Amendment..................................................................................73
     SECTION 13.2.    Protection of Title........................................................................74
     SECTION 13.3.    Limitation on Rights of Noteholders........................................................76
     SECTION 13.4.    Governing Law..............................................................................77
     SECTION 13.5.    Notices....................................................................................78
     SECTION 13.6.    Severability of Provisions.................................................................78

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     SECTION 13.7.    Assignment to Indenture Trustee............................................................78
     SECTION 13.8.    Limitation of Liability of Owner Trustee, Custodian and Trust Collateral Agent.............79
     SECTION 13.9.    Independence of the Servicer...............................................................79
     SECTION 13.10.   No Joint Venture...........................................................................79
     SECTION 13.11.   Nonpetition Covenant.......................................................................79
     SECTION 13.12.   Third Party Beneficiaries..................................................................80
     SECTION 13.13.   Consent to Jurisdiction....................................................................80
     SECTION 13.14.   Headings...................................................................................81
     SECTION 13.15.   Trial by Jury Waived.......................................................................81
     SECTION 13.16.   Entire Agreement...........................................................................81
     SECTION 13.17.   Effect of Policy Expiration Date...........................................................81


                                                      ANNEXES

Annex         A       Defined Terms

                                                     EXHIBITS

Exhibit       A-1     Form of Issuer's Certificate
Exhibit       A-2     Form of Issuer's Certificate
Exhibit       B-1     Form of Servicer's Certificate
Exhibit       B-2     Form of Loan Master File Layout
Exhibit       C       Intentionally Omitted
Exhibit       D       Payment Deferment and Due Date Change Policies
Exhibit       E       Documentation Checklist
Exhibit       F       Form of Request for Transfer of Possession
Exhibit       G       Form of Custodial Letter
Exhibit       H       Form of Transfer Agreement

                                                     SCHEDULES

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

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<PAGE>

         SALE AND SERVICING AGREEMENT ("Agreement"), dated as of June 1, 2001,
among LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2001-A, a Delaware business
trust, as issuer (the "Issuer"), LONG BEACH ACCEPTANCE RECEIVABLES CORP., a
Delaware corporation, as transferor (the "Transferor"), LONG BEACH ACCEPTANCE
CORP., a Delaware corporation, as originator of the receivables ("LBAC") and as
servicer (in such capacity, the "Servicer") and THE CHASE MANHATTAN BANK, a New
York banking corporation, as back-up servicer, custodian and trust collateral
agent, ("Back-up Servicer", "Custodian" and "Trust Collateral Agent",
respectively).

         WHEREAS the Issuer desires to acquire a portfolio of receivables
arising in connection with motor vehicle retail installment sale contracts
acquired by LBAC through motor vehicle dealers;

         WHEREAS the Transferor has purchased such receivables from LBAC and is
willing to convey such receivables to the Issuer;

         WHEREAS the Issuer desires to acquire, from time to time, additional
receivables arising in connection with motor vehicle retail installment sale
contracts to be acquired by LBAC through motor vehicle dealers;

         WHEREAS the Transferor has agreed to purchase, from time to time, such
additional receivables from LBAC and is willing to convey such receivables to
the Issuer; and

         WHEREAS the Servicer is willing to service all such receivables.

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

                                   ARTICLE I
                                  DEFINITIONS

         SECTION 1.1. DEFINITIONS. Whenever used in this Agreement, capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
Annex A attached hereto.

         SECTION 1.2. OTHER DEFINITIONAL PROVISIONS.


    (a) All terms defined in this Agreement (including Annex A hereto) shall
have the defined meanings when used in any instrument governed hereby and in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.

    (b) As used in this Agreement, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Agreement (including Annex A hereto) or in
any such instrument, certificate or other document, and accounting terms partly
defined in this Agreement (including Annex A hereto) or in any such instrument,
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting principles
as in

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effect on the date of this Agreement or any such instrument, certificate or
other document, as applicable. To the extent that the definitions of accounting
terms in this Agreement (including Annex A hereto) or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement (including Annex A hereto) or in any such instrument, certificate
or other document shall control.

    (c) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation."

    (d) 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 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."

    (e) Any agreement, instrument or statute defined or referred to herein or in
any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.

         SECTION 1.3. CALCULATIONS. All calculations of the amount of the
Servicing Fee, the Back-up Servicer Fee, Custodian Fee and the Indenture 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 1.4. ACTION BY OR CONSENT OF NOTEHOLDERS. Whenever any
provision of this Agreement refers to action to be taken, or consented to, by
Noteholders, such provision shall be deemed to refer to Noteholders of record as
of the Record Date immediately preceding the date on which such action is to be
taken, or consent given, by Noteholders. Solely for the purposes of any action
to be taken or consented to by Noteholders, any Note registered in the name of
the Transferor, 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 Indenture Trustee or the Trust Collateral Agent is entitled to rely upon any
such action or consent, only Notes which the Indenture Trustee or the Trust
Collateral Agent actually knows to be so owned shall be so disregarded.

         SECTION 1.5. 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

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or circumstances could or would have a material adverse effect on the Issuer or
Noteholders (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 Issuer, the Noteholders or
the Note Insurer (or any similar or analogous determination), such determination
shall be made by the Controlling Party in its sole discretion.

                                   ARTICLE II
                            CONVEYANCE OF RECEIVABLES

         SECTION 2.1. CONVEYANCE OF INITIAL RECEIVABLES.

         In consideration of the Issuer's delivery of the Certificate to or upon
the order of the Transferor on the Closing Date and the net proceeds from the
sale of the Notes and the other amounts to be distributed from time to time to,
or upon the order of, the Transferor in accordance with the terms of this
Agreement, the Transferor does hereby transfer, assign, set over and otherwise
convey to the Issuer, without recourse, all right, title and interest of the
Transferor in and to:

         (i) the Initial Receivables listed in Schedule A hereto, all monies
    received on the Initial Receivables after the Initial Cutoff Date and, with
    respect to any Initial Receivables which are Precomputed Receivables, the
    related Payahead Amount, and 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 Transferor 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 an Initial Receivable and that has been acquired by
    or on behalf of the Issuer pursuant to the liquidation of such Initial
    Receivable;

         (v) the Purchase Agreement and the Guarantee including, without
    limitation, a direct right to cause LBAC to purchase Initial Receivables
    from the Issuer upon the occurrence of a breach of any of the
    representations and warranties contained in Section 3.2(b) of the Purchase
    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

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<PAGE>

    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 Lock-Box Account, to the extent such amounts and property relate to
    the Initial Receivables;

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

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

         SECTION 2.2. CONVEYANCE OF SUBSEQUENT RECEIVABLES.


    (a) Subject to the conditions set forth in Section 2.2(b) and in the related
Transfer Agreement, in consideration of the Issuer's delivery to or upon the
order of the Transferor of the purchase price for the Subsequent Receivables,
in each case as described below and set forth in the related Transfer
Agreement, the Transferor shall on each Subsequent Transfer Date sell,
transfer, assign, set over and otherwise convey to the Issuer, without
recourse, all right, title and interest of the Transferor in and to:

         (i) the Subsequent Receivables listed in Schedule A to the related
    Transfer Agreement, all monies received on such Subsequent Receivables after
    the applicable Subsequent Cutoff Date and, with respect to any such
    Subsequent Receivables which are Precomputed Receivables, the related
    Payahead Amount, and 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 Transferor 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 Issuer pursuant to the liquidation of such Subsequent
    Receivable;

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<PAGE>

         (v) each Transfer Agreement, the Purchase Agreement and the Guarantee,
    including, without limitation, a direct right to cause LBAC to purchase
    Subsequent Receivables from the Issuer upon the occurrence of a breach of
    any of the representations and warranties contained in 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 the related 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 Issuer 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 5.13(b). Such purchase price shall equal the
aggregate Principal Balance of such Subsequent Receivables as of the related
Subsequent Cutoff Date.

     (b) The Transferor shall transfer to the Issuer the Subsequent Receivables
and the other property and rights related thereto described in Section 2.2(a)
only upon the prior written consent of the Note 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 Transferor shall have provided the Indenture Trustee, the Trust
    Collateral Agent, the Note 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 Indenture Trustee, the Trust
    Collateral Agent and the Note Insurer with an electronic transmission of the
    information on the related Subsequent Receivables set forth in such Addition
    Notice in a format acceptable to each of the Indenture Trustee, the Trust
    Collateral Agent and the Note Insurer no later than such fifth Business Day
    prior to the related Subsequent Transfer Date;

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<PAGE>

         (ii) the Originator shall have delivered to the Transferor, a written
    Subsequent Assignment, which shall include a list of the Subsequent
    Receivables so transferred attached thereto as Schedule A, and a copy
    thereof to the Note Insurer;

         (iii) the Transferor, the Originator, the Trust and the Trust
    Collateral Agent shall have executed a written Transfer Agreement, which
    shall include a list of the Subsequent Receivables so transferred attached
    thereto as Schedule A, and a copy thereof shall have been delivered to the
    Note Insurer;

         (iv) the Transferor 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;

         (v) the Transferor shall have deposited or caused to be deposited the
    related Subsequent Spread Account Deposit into the Spread Account pursuant
    to Section 5.10;

         (vi) as of each Subsequent Transfer Date, neither the Servicer nor the
    Transferor will be insolvent nor will either of them be made insolvent by
    the related transfer nor is any of them aware of any pending insolvency;

         (vii) the Funding Period shall not have terminated;

         (viii) the Transferor shall have delivered to the Indenture Trustee,
    the Trust Collateral Agent, the Note Insurer and each Rating Agency an
    Officer's Certificate confirming the satisfaction of each condition
    precedent specified in this Section 2.2(b) and in Section 5 of the related
    Transfer Agreement and certifying that:

              (A) such conveyance of Subsequent Receivables by the Transferor to
         the Trust on the related Subsequent Transfer Date 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 Transferor has been,
         is or will become, on or after the related Subsequent Transfer Date,
         indebted;

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

              (C) the Transferor is not insolvent on the related Subsequent
         Transfer Date and will not become insolvent as a result of the
         conveyance of the Subsequent Receivables by the Transferor to the
         Issuer on the related Subsequent Transfer Date pursuant to the related
         Transfer Agreement;

              (D) the Transferor 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 Transferor after such business or
         transaction would be an unreasonably small amount of capital; and

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<PAGE>

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

         (ix) the Originator shall have delivered to the Indenture Trustee, the
    Trust Collateral Agent, the Note Insurer and each Rating Agency an Officer's
    Certificate confirming the satisfaction of each condition precedent
    specified in this Section 2.2(b) and in Section 5 of the related Transfer
    Agreement and certifying that:

              (A) that such sale of Subsequent Receivables by the Originator to
         the Transferor on the related Subsequent Transfer Date 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 related Subsequent Transfer Date,
         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 Transferor on the related Subsequent Transfer
         Date pursuant to the Purchase Agreement and the related Subsequent
         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 Transferor on the
         related Subsequent Transfer Date pursuant to the Purchase Agreement and
         the related Subsequent 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 Transferor shall have delivered to each Rating Agency, the Note
    Insurer, the Indenture Trustee and the Trust Collateral Agent 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 Note Insurer, the Indenture Trustee and the Trust
    Collateral Agent on the Closing Date regarding true sale, non-consolidation,
    perfection, and other such matters satisfactory in form and substance to
    each of the Note Insurer, the Indenture Trustee and the Trust Collateral
    Agent in its sole discretion;

         (xi) the Transferor shall have taken all action required to maintain
    the first priority perfected security interest (as defined in the UCC) of
    the Issuer in the Trust Assets;

                                       7
<PAGE>

         (xii) no selection procedures believed by the Transferor or the
    Originator to be adverse to the interests of the Noteholders or the Note
    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 Notes; provided that written confirmation of such ratings shall not be
    required from the Rating Agencies;

         (xiv) the Transferor shall have provided the Indenture Trustee and the
    Trust Collateral Agent with a supplement to the Schedule of Receivables
    setting forth the Subsequent Receivables to be transferred on such
    Subsequent Transfer Date;

         (xv) the Transferor shall have caused a firm of independent accountants
    to deliver to the Indenture Trustee, the Trust Collateral Agent and the Note
    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 62 months and the weighted average original term for the
         Receivables will be no more than 65 months;

              (2) each Receivable will have a minimum APR of 7.5%;

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

              (4) no more than 45% of the Receivables will be originated in
         California;

              (5) the weighted average APR for the Receivables will be greater
         than or equal to 17.25%;

              (6) not less than 3% of the aggregate Principal Balance of the
         Receivables will be Class I Receivables, not less than 27% of the
         aggregate Principal Balance of the Receivables will be Class IIA
         Receivables, not less than 41% of the aggregate Principal Balance of
         the Receivables will be Class IIB Receivables, no more than 21% of the
         aggregate Principal Balance of the Receivables will be Class III
         Receivables and not more than 1% of the aggregate Principal Balance of
         the Receivables will be Class IV Receivables; and

              (7) not more than 82% of the aggregate Principal Balance of the
         Receivables will represent loans to finance the purchase of used
         Financed Vehicles;

         (xvi) the Transferor shall satisfy the document delivery requirements
    for such Subsequent Receivables as specified in Section 3.3;

                                       8
<PAGE>

         (xvii) the representations and warranties made by the Transferor and
    the Servicer in Sections 7.1 and 8.1, 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(b) of the
    Purchase Agreement shall be true and correct as of such Subsequent Transfer
    Date;

         (xviii) on or before such Subsequent Transfer Date, the Transferor
    shall have provided any information reasonably requested by the Rating
    Agencies, the Note Insurer, the Indenture Trustee or the Trust Collateral
    Agent with respect to any Subsequent Receivables;

         (xix) the Custodian shall acknowledge receipt of files which the
    Transferor 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 Subsequent Receivable identified in the supplement to
    the Schedule of Receivables attached as Schedule A to the related Transfer
    Agreement; and

         (xx) the Servicer shall deliver the loan master file and history
    information and the information required to be set forth in the form
    attached hereto as Exhibit B-2 as specified in Section 4.18.



         SECTION 2.3. TRANSFER INTENDED AS SALE; PRECAUTIONARY SECURITY
INTEREST. Each conveyance to the Issuer of the property set forth in Section 2.1
and Section 2.2 above is intended as a sale (for certain non-tax purposes) free
and clear of all Liens, and it is intended that the property of the Issuer shall
not be part of the Transferor's estate in the event of the filing of a
bankruptcy petition by or against the Transferor under any bankruptcy law. In
the event, however, that notwithstanding the intent of LBAC, the Transferor and
the Issuer, any transfer under this Agreement is held not to be a sale, this
Agreement shall constitute a security agreement under the UCC (as defined in the
UCC as in effect in the State of New York) and applicable law, and the
Transferor hereby grants a security interest to the Issuer in, to and under the
property described in Section 2.1 and Section 2.2 above and all proceeds
thereof, for the benefit of the Noteholders and the Note Insurer as their
interests may appear herein, for the purpose of securing the payment and
performance of the Notes and the repayment of amounts owed to the Issuer from
the Transferor.

         SECTION 2.4. ASSIGNMENT BY TRANSFEROR. The Transferor does hereby
transfer, assign and otherwise convey unto the Issuer, for the benefit of the
Noteholders and the Note 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 and Section 4 of
each Transfer 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

                                       9
<PAGE>

Section 2.4 are intended to grant the Issuer a direct right against LBAC to
demand performance under the terms of the Purchase Agreement.

         SECTION 2.5. 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 ss. 8.102(a)(9) of the Texas Business &
Commerce Code (the "Texas UCC").

         SECTION 2.6. FURTHER ENCUMBRANCE OF TRUST ASSETS.


    (a) Immediately upon the conveyance to the Issuer by the Transferor of any
item of the Trust Assets pursuant to Section 2.1 and Section 2.2, all right,
title and interest of the Transferor in and to such item of Trust Assets shall
terminate, and all such right, title and interest shall vest in the Issuer, in
accordance with the Trust Agreement and Sections 3802 and 3805 of the Business
Trust Statute (as defined in the Trust Agreement).

    (b) Immediately upon the vesting of the Trust Assets in the Issuer, the
Issuer shall have the sole right to pledge or otherwise encumber, such Trust
Assets. Pursuant to the Indenture, the Issuer shall grant a security interest in
the Trust Assets to the Indenture Trustee to secure the repayment of the Notes.
The Certificate shall represent the beneficial ownership interest in the Trust
Assets, and the Noteholders shall be entitled to receive payments with respect
thereto as set forth herein and pursuant to the Indenture.

    (c) Following the payment in full of the Notes and the release and discharge
of the Indenture, all covenants of the Issuer under Article III of the Indenture
shall, until payment in full of the Certificate, remain as covenants of the
Issuer for the benefit of the Certificateholder, enforceable by the
Certificateholder to the same extent as such covenants were enforceable by the
Noteholders prior to the discharge of the Indenture. Any rights of the Indenture
Trustee under Article III of the Indenture, following the discharge of the
Indenture, shall vest in the Certificateholder.

    (d) The Trust Collateral Agent shall, at such time as there are no Notes or
Certificates outstanding, the Policy has expired in accordance with its terms
and all sums due to (i) the Note Insurer hereunder or pursuant to the Insurance
Agreement, (ii) the Indenture Trustee pursuant to the Indenture and (iii) the
Trust Collateral Agent pursuant to this Agreement, have been paid, release any
remaining portion of the Trust Assets to the Transferor.

                                  ARTICLE III
                                THE RECEIVABLES

         SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. The
Transferor hereby makes each of the representations and warranties made by LBAC
in Section 3.2(b) of the Purchase Agreement and Section 4 of each Transfer
Agreement with respect to the Receivables to the same extent as if such
representations and warranties were fully set forth herein. With respect to such
representations and warranties, the Issuer is deemed to have relied on such
representations and warranties in acquiring the Receivables, the Note Insurer
shall be deemed to have relied on such representations and warranties in issuing
the Policy, the Indenture Trustee is

                                       10
<PAGE>

deemed to have relied on such representations and warranties in issuing the
Notes, the Noteholders are deemed to have relied on such representations and
warranties in purchasing the Notes and the Owner Trustee is deemed to have
relied on such representations and warranties in issuing the Certificate. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date in the case of the Initial Receivables, and
as of the related Subsequent Transfer Date in the case of the Subsequent
Receivables, but shall survive the transfer and assignment of the Receivables to
the Issuer and the subsequent pledge thereof to the Indenture Trustee pursuant
to the Indenture.

         SECTION 3.2. REPURCHASE UPON BREACH OF REPRESENTATIONS AND WARRANTIES
OF THE TRANSFEROR.

    (a) The Transferor, the Servicer, the Note Insurer, the Custodian, the Trust
Collateral Agent or the Issuer, as the case may be, shall inform the other
parties to this Agreement promptly, by notice in writing, upon the discovery of
any breach of the Transferor's representations and warranties made pursuant to
Section 3.1. As of the last day of the second Collection Period following the
discovery by the Transferor or receipt by the Transferor of notice of such
breach, unless such breach is cured by such date, the Transferor shall have an
obligation to repurchase any Receivable in which the interests of the
Noteholders or the Note Insurer are materially and adversely affected by any
such breach as of such date. In consideration of and simultaneously with the
repurchase of the Receivable, the Transferor shall remit, or cause LBAC to
remit, to the Collection Account the Purchase Amount in the manner specified in
Section 5.5 and the Issuer shall execute such assignments and other documents
reasonably requested by such person in order to effect such repurchase. The sole
remedies of the Issuer, the Trust Collateral Agent, the Indenture Trustee or the
Noteholders with respect to a breach of representations and warranties pursuant
to Section 3.1 shall be (i) the repurchase of Receivables pursuant to this
Section, subject to the conditions contained herein, or (ii) to enforce the
obligation of LBAC to the Transferor to repurchase such Receivables or to
indemnify for any such breach pursuant to the Purchase Agreement. Neither the
Owner Trustee, the Custodian, the Trust Collateral Agent nor the Indenture
Trustee shall have a duty to conduct any affirmative investigation as to the
occurrence of any conditions requiring the repurchase of any Receivable pursuant
to this Section.

    (b) Pursuant to Section 2.1 and Section 2.2, the Transferor conveys to the
Issuer all of the Transferor's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under the Purchase Agreement
including the Transferor's rights under the Purchase Agreement and the delivery
requirements, representations and warranties and the cure or repurchase and
indemnity obligations of LBAC thereunder. The Transferor hereby represents and
warrants to the Issuer that such assignment is valid, enforceable and effective
to permit the Issuer to enforce such obligations of LBAC and the Transferor
under the Purchase Agreement.

         SECTION 3.3. DELIVERY OF LEGAL FILES AND RECEIVABLE FILES.

    (a) 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
Transferor 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.

                                       11
<PAGE>

    (b) 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
Transferor shall transfer and deliver to the Servicer with respect to each
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 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 3.4. ACCEPTANCE OF LEGAL FILES BY CUSTODIAN. The Custodian
acknowledges receipt of files which the Transferor 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 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 hereby acknowledges that it has determined that it has
received a file for each Initial Receivable identified in Schedule A to this
Agreement. The Custodian declares that it holds and will continue to hold such
files, any Receivable Files relating to Subsequent Receivables and, in each
case, any amendments, replacements or supplements thereto and all other Trust
Assets as custodian, agent and bailee for the Trust Collateral Agent in trust
for the use and benefit of all present and future Noteholders. The Custodian
shall review each Legal File delivered to it no later than the Closing Date or
the related Subsequent Transfer Date, as applicable to determine whether such
Legal Files contain the documents referred to in the definition of the term
"Legal File" and shall certify on the Closing Date or the related Subsequent
Transfer Date, as applicable to such effect. In addition, in the case of any
Legal File which does not contain either an original Lien Certificate, an
application for a certificate of title 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 Trust Collateral Agent (if at such time the Trust Collateral
Agent is not also the Custodian hereunder), LBAC, the Transferor, the Back-up
Servicer and the Note Insurer promptly, in writing, of the failure to receive a
Legal File with

                                       12
<PAGE>

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 5.5. The sole remedy of the Indenture Trustee, the Trust Collateral
Agent, the Issuer or the Noteholders with respect to a breach pursuant to this
Section 3.4 shall be to require LBAC to purchase the Receivables pursuant to
this Section 3.4. Upon receipt of the Purchase Amount and written instructions
from the Servicer, the Trust Collateral Agent 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 Trust Collateral Agent and are
necessary to vest in LBAC or such designee the Issuer'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
Trust Collateral Agent and the Note Insurer. On the date which is 90 days
following the Closing Date, or the related Subsequent Transfer Date, as the case
may be, or, if such date is not a Business Day, on the next succeeding Business
Day, the Custodian shall inform LBAC and the other parties to this Agreement and
the Note Insurer of any Receivable for which the related Legal File on such date
does not include a Lien Certificate, and LBAC shall repurchase any 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 5.5. The Transferor shall have no obligation to
repurchase any Receivable upon a breach pursuant to this Section 3.4. The
Transferor shall have no liability for any action taken or omitted to be taken
by LBAC pursuant to this Section 3.4.

         SECTION 3.5. ACCESS TO RECEIVABLE FILES AND LEGAL FILES; SERVICER'S
DUTIES WITH RESPECT TO RECEIVABLE FILES; CUSTODIAN'S DUTIES WITH RESPECT TO
LEGAL FILES.

    (a) The Servicer and the Custodian shall, upon reasonable notice, permit the
Originator, the Trust Collateral Agent, the Transferor, the Issuer and the Note
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, as the case may be. In addition, the Servicer
and the Custodian shall provide such access to any Noteholder 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 Noteholders 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 Noteholder shall
be deemed to have agreed by its acceptance of a Note to hold in confidence all
Confidential Information in accordance with the Federal Financial Privacy Law
and, to the extent more

                                       13
<PAGE>

exacting, its then customary procedures; PROVIDED that nothing herein shall
prevent any Noteholder 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 Notes, (iii) any prospective
institutional investor transferee in connection with the contemplated transfer
of a Note 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 Notes 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 Noteholder is a party, (d) in order to enforce such Person's
investment in any Note or (e) otherwise, in accordance with the Federal
Financial Privacy Law; PROVIDED, that, prior to any such disclosure, such
Noteholder shall inform each such party that receives Confidential Information
of the foregoing requirements and shall use its commercially reasonable best
efforts to cause such party to comply with such requirements.

    (b) Upon instruction from the Trust Collateral Agent, the Servicer shall
release any Receivable Files to the Trust Collateral Agent, the Trust Collateral
Agent's agent or the Trust Collateral Agent's designee, as the case may be, at
such place or places as the Trust Collateral Agent may designate, as soon as
practicable; PROVIDED, HOWEVER, that such Receivable Files may be, at the
discretion of the Servicer, in the form of electronic files or reproduced copies
of such electronic files. The Servicer shall not be responsible for the
safekeeping of such Receivable Files following such release to the Trust
Collateral Agent unless and until such Receivable Files are returned to the
Servicer.

    (c) The Custodian shall, within two Business Days of the request of the
Servicer, the Trust Collateral Agent or the Note Insurer, execute such documents
and instruments as are prepared by the Servicer, the Trust Collateral Agent or
the Note Insurer and delivered to the Custodian, as the Servicer, the Trust
Collateral Agent or the Note Insurer deems necessary to permit the Servicer, in
accordance with its customary servicing procedures, to enforce the Receivable on
behalf of the Issuer 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 F 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 G 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 Issuer, the Indenture Trustee, the Trust Collateral Agent and the
Note Insurer.

                                       14
<PAGE>

         SECTION 3.6. 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, except as
provided in Section 10.8(e) hereof), 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 Issuer and shall make disposition thereof only
in accordance with the provisions of this Agreement. The Custodian shall
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 Issuer, the Trust Collateral
Agent, the Servicer and the Note Insurer that to the knowledge of its
Responsible Officers, as of the related date on which the Custodian makes the
certification required under Section 3.4 with respect to the Legal Files, it
holds no adverse interest, by way of security or otherwise, in any Receivable.

    (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.

    (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 Custodian. The 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 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 Issuer, the Transferor 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;

                                       15
<PAGE>

         (ii) shall not be under any 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 Noteholders or the Note Insurer
    pursuant to the provisions of this Agreement, unless such Noteholders or the
    Note Insurer shall have offered to the Custodian reasonable security or
    indemnity in form and substance reasonably satisfactory to the Custodian,
    against the costs, expenses and liabilities that may be incurred therein or
    thereby;

         (iii) 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, and shall have no responsibility
    for determining the accuracy thereof (except pursuant to Section 10.3(iv));
    and

         (iv) 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.

    (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 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 Issuer. 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.

         SECTION 3.7. ISSUER'S CERTIFICATE. Within five Business Days after each
Payment 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 3.4 or
purchased by the Servicer pursuant to Section 4.7, the Issuer shall execute an
Issuer's Certificate (in the form of Exhibit A-1 or A-2, as applicable), and
shall deliver such Issuer'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, with a copy to the Note Insurer. The

                                       16
<PAGE>

Issuer's Certificate submitted with respect to such Payment Date shall operate,
as of such Payment Date, as an assignment, without recourse, representation or
warranty, to LBAC or the Servicer, as the case may be, of all the Issuer'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.

                                   ARTICLE IV
                   ADMINISTRATION AND SERVICING OF RECEIVABLES

         SECTION 4.1. DUTIES OF THE SERVICER. The Servicer, as agent for the
Issuer (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 Trust Collateral Agent, the Indenture Trustee, the
Back-up Servicer and the Note Insurer with respect to payments 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
Trust Collateral Agent to execute and deliver, on behalf of itself, the Issuer,
the Noteholders or any of them, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other 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 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 (i) pursuant to an
order from a court of competent jurisdiction, (ii) in accordance with its
customary procedures or (iii) in accordance with Section 4.2. If the Servicer
shall commence a legal proceeding to enforce a Receivable, the Issuer 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 Trust Collateral Agent 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 Noteholders. The Servicer shall prepare and
furnish and the Trust Collateral Agent 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 4.2. COLLECTION AND ALLOCATION OF RECEIVABLE PAYMENTS.
Consistent with the standards, policies and procedures required by this
Agreement, the Servicer shall make

                                       17
<PAGE>

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 Receivable Payments on any Receivable other
than (a) in accordance with the Payment Deferment and Due Date Change Policies,
(b) in connection with a Deficient Liquidated Receivable, (c) with the prior
written consent of the Note Insurer, with respect to any other Liquidated
Receivable or (d) as otherwise required by applicable law. Notwithstanding
anything contained herein to the contrary, the Servicer may, at its option,
repurchase up to 25 Receivables in a manner consistent with Section 5.5 hereof
and any such repurchased Receivable (an "Optional Repurchase Receivable") shall
not be deemed to be a Defaulted Receivable or a Liquidated Receivable. The
Servicer shall not modify the Payment Deferment and Due Date Change Policies
without the prior written consent of the Note Insurer. 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 Note 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 Receivable 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 Note 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 Note Insurer, any other Liquidated Receivable)
or the interest therein of the Issuer, the Noteholders or the Note Insurer other
than a modification in accordance with the Payment Deferment and Due Date Change
Policies.

         On each Business Day, the Servicer shall prepare and transmit to the
Trust Collateral Agent and the Back-up Servicer in a form acceptable to the
Trust Collateral Agent 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.


                                       18
<PAGE>

         SECTION 4.3. REALIZATION UPON RECEIVABLES.

     (a) On behalf of the Issuer, the Noteholders and the Note 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
Receivable 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 necessary or
advisable in its servicing of automotive receivables, consistent with the
standards of care set forth in Section 4.1, 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) The Servicer agrees that within 45 days from the Closing Date or the
related Subsequent Transfer Date, as applicable, 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.

     (c) 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 4.4. PHYSICAL DAMAGE INSURANCE; OTHER INSURANCE.

     (a) 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 Note Insurer allowing the Servicer to no longer maintain any of
such polices. The Servicer, in accordance with the servicing procedures and
standards set



                                       19
<PAGE>


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 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 4.4(a) which, but for the actions of the Servicer, would have been
covered thereunder. The Servicer, on behalf of the Trust Collateral Agent, 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 5.2. In the event of the cancellation or non-renewal
of the insurance referred to in Section 4.4(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 4.5. 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 Trust
Collateral Agent 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 Issuer 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
Note Insurer may (so long as a Note Insurer Default shall not have occurred and
be continuing) instruct the Trust Collateral Agent and the Servicer to take or
cause to be taken, or, if a Note Insurer Default shall have occurred and be
continuing, upon the occurrence of a Servicer Termination Event, either the
Trust Collateral Agent or the Trust Collateral Agent acting at the direction of
the Majorityholders 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
Note Insurer (or, if a Note Insurer Default shall have occurred and be
continuing, the Trust Collateral Agent), which opinion shall not be an expense
of the Note Insurer or the Trust Collateral Agent (as applicable),


                                       20
<PAGE>

be necessary to perfect or reperfect the security interests in the Financed
Vehicles securing the Receivables in the name of the Trust Collateral Agent on
behalf of the Issuer by amending the title documents of such Financed Vehicles
to reflect the security interest of the Trust Collateral Agent in the related
Financed Vehicles or by such other reasonable means as may, in the opinion of
counsel to the Note Insurer or the Trust Collateral Agent (as applicable), which
opinion shall not be an expense of the Note Insurer or the Trust Collateral
Agent, 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 Agreement Event
of Default, the Note Insurer may (unless a Note Insurer Default shall have
occurred and be continuing) instruct the Trust Collateral Agent and the Servicer
to take or cause to be taken such action as may, in the opinion of counsel to
the Note Insurer, be necessary to perfect or reperfect the security interest in
the Financed Vehicles securing the Receivables in the name of the Trust
Collateral Agent on behalf of the Issuer, including by amending the title
documents of such Financed Vehicles to reflect the security interest of the
Trust Collateral Agent in the related Financed Vehicle or by such other
reasonable means as may, in the opinion of counsel to the Note Insurer, be
necessary or prudent; PROVIDED, HOWEVER, that if the Note Insurer requests
(unless a Note 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 Trust
Collateral Agent in connection with such action shall be reimbursed to the
Servicer or the Trust Collateral Agent, as applicable, by the Note Insurer.

         In addition to the foregoing, in the event any of the Servicer
Termination Events described in Section 9.1(iii) or (iv) shall have occurred, or
in the event LBAC shall have been removed or replaced as Servicer pursuant to
Section 8.3, Section 8.5, or otherwise pursuant to Section 9.1, 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 Trust Collateral
Agent in the Financed Vehicle at the expense of LBAC.

         The Servicer hereby makes, constitutes and appoints the Trust
Collateral Agent 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 Trust Collateral Agent as lienholder or secured party on the related Lien
Certificates relating to a Financed Vehicle.

         SECTION 4.6. ADDITIONAL COVENANTS OF SERVICER. The Servicer hereby
makes the following covenants to the other parties hereto and the Note Insurer
on which the Trust Collateral Agent shall rely in accepting the Receivables in
trust and on which the Note 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 Noteholders, the Issuer or the Note Insurer in such Receivables,
(iii) the Servicer shall not modify a Receivable, except in accordance with
Section 4.2, 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.


                                       21
<PAGE>



         SECTION 4.7. PURCHASE OF RECEIVABLES UPON BREACH. The Servicer, the
Transferor, the Issuer, the Custodian or the Trust Collateral Agent shall inform
the other parties hereto and the Note Insurer promptly, in writing, upon the
discovery by the Servicer, the Transferor, the Issuer or a Responsible Officer
of the Trust Collateral Agent or the Custodian, as the case may be, of any
breach of the provisions of Section 4.2 relating to modifications of the
Receivables, or any breach of Sections 4.4, 4.5 or 4.6; 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 Issuer, the Noteholders or the Note Insurer. In consideration of the
purchase of such Receivable, the Servicer shall remit the Purchase Amount in the
manner specified in Section 5.5. 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 Trust Collateral Agent, the Issuer, the Note
Insurer or the Noteholders with respect to a breach of the provisions of Section
4.2 relating to modifications of the Receivables or any breach of Sections 4.4,
4.5 or 4.6 shall be to require the Servicer to repurchase Receivables pursuant
to this Section 4.7; PROVIDED, HOWEVER, that the Servicer shall indemnify the
Trust Collateral Agent, the Indenture Trustee, the Collateral Agent, the Back-up
Servicer, the Custodian, the Transferor, the Note Insurer, the Issuer and the
Noteholders 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 Transferor
shall have no obligation to repurchase the Receivables upon a breach of the
provisions of Section 4.2 relating to modifications of the Receivables, or any
breach of Sections 4.4, 4.5 or 4.6. The Transferor shall have no liability for
actions taken or omitted to be taken by the Servicer pursuant to this Section
4.7.

         SECTION 4.8. SERVICING FEE. The Servicing Fee for the initial Payment
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 Payment 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 Precomputed Receivable that is prepaid in full, to
the extent not required by law to be remitted to the related Obligor, the
difference between the amounts received upon prepayment in full of such
Precomputed Receivable and the then outstanding Principal Balance of such
Precomputed Receivable and accrued interest thereon (calculated pursuant to the
Simple Interest Method) and other administrative fees or similar charges allowed
by applicable law with respect to Receivables, collected (from whatever source)
on the Receivables.

         SECTION 4.9. SERVICER'S CERTIFICATE.

     (a) By 10:00 a.m., New York City time, on each Determination Date, the
Servicer shall deliver to the Issuer, the Trust Collateral Agent, the Indenture
Trustee, the Back-up Servicer, the Collateral Agent, the Transferor, the Note
Insurer, GCFP and the Rating Agencies,


                                       22
<PAGE>


a Servicer's Certificate containing all information necessary to make the
payments pursuant to Section 5.6 (including, if required, withdrawals from the
Spread Account), for the Collection Period preceding the date of such Servicer's
Certificate and all information necessary for the Trust Collateral Agent to send
statements to Noteholders and the Note Insurer pursuant to Section 5.7.
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 4.9(a), the Servicer
shall include in the copy of the Servicer's Certificate delivered to the Note
Insurer (i) the Average Delinquency Ratio, the Cumulative Default Rate, and the
Cumulative Loss Rate (as such terms are defined in the Spread Account
Agreement), (ii) whether any Trigger Event (as such term is defined in the
Spread Account Agreement) has occurred as of such Determination Date, (iii)
whether any Trigger Event that may have occurred as of a prior Determination
Date is Deemed Cured (as defined in the Spread Account Agreement) as of such
Determination Date 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 4.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.

     (a) The Servicer shall deliver to the Issuer, the Trust Collateral Agent,
the Indenture Trustee, the Back-up Servicer, the Collateral Agent, the
Transferor, the Issuer and the Note Insurer, on or before March 31 of each year
beginning March 31, 2002, 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, specifying each such
default known to such officer and the nature and status thereof. The Trust
Collateral Agent shall send a copy of such certificate to the Rating Agencies.

     (b) The Servicer shall deliver to the Issuer, the Trust Collateral Agent,
the Indenture Trustee, the Back-up Servicer, the Collateral Agent, the
Transferor, the Issuer, the Note Insurer and the Rating Agencies, promptly after
having obtained knowledge thereof, but in no event later than two (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 a Servicer Termination Event under Section 9.1.

         SECTION 4.11. 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
Transferor, to deliver to the Issuer, the Trust Collateral Agent, the Indenture
Trustee, the Back-up Servicer, the Collateral Agent, the Issuer, the
Noteholders, the Note Insurer and each Rating Agency on or before April 30 of
each year beginning April 30, 2002, 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 Trust Collateral Agent, the Back-up Servicer, the


                                       23
<PAGE>


Collateral Agent, the Issuer, the Transferor and the Note 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 4.12. SERVICER EXPENSES. 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 payments and reports to Noteholders, the Trust
Collateral Agent and the Note Insurer and all other fees and expenses of the
Issuer including taxes levied or assessed against the Issuer, and claims against
the Issuer in respect of indemnification not expressly stated under this
agreement to be for the account of the Issuer).

         SECTION 4.13. 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 September 30, 2001 which term
shall be extendible by the Note Insurer for successive quarterly terms ending on
each successive December 31, March 31, June 30 and September 30 (or, pursuant to
revocable written standing instructions from time to time to the Servicer and
the Trust Collateral Agent, for any specified number of terms greater than one),
until the termination of the Issuer. 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 Note Insurer to the Trust
Collateral Agent 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 a Note Insurer Default shall have occurred
and be continuing, the Trust Collateral Agent agrees that if as of the fifteenth
day prior to the last day of any term of the Servicer, the Trust Collateral
Agent shall not have received any Servicer Extension Notice from the Note
Insurer, the Trust Collateral Agent will, within five



                                       24
<PAGE>


days thereafter, give written notice of such non-receipt to the Note Insurer,
the Back-up Servicer (or any alternate successor servicer appointed by the Note
Insurer pursuant to Section 8.5) 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 4.14. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to representatives of the Indenture
Trustee, the Trust Collateral Agent, the Collateral Agent, the Back-up Servicer,
the Transferor, the Issuer and the Note Insurer reasonable access to
documentation and computer systems and information regarding the Receivables and
shall provide such access to Noteholders in such cases where the Noteholders 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 4.14 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 4.14 as a result of
such obligation shall not constitute a breach of this Section 4.14.

         SECTION 4.15. VERIFICATION OF SERVICER'S CERTIFICATE.

     (a) On or before the fifth Business Day of each month, the Servicer will
deliver to the Trust Collateral Agent and the Back-up Servicer a computer
diskette (or other electronic transmission) in a format acceptable to the Trust
Collateral Agent 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 the information specified in Section
4.15(b)(iii) contained in the Servicer's Certificate delivered by the Servicer,
and the Back-up Servicer shall certify to the Note Insurer that it has verified
the Servicer's Certificate in accordance with this Section 4.15 and shall notify
the Servicer, the Note Insurer and the Trust Collateral Agent 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
payments with respect to the related Payment 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 Payment Date, (i) the Back-up Servicer
will notify the Note Insurer and the Trust Collateral Agent, 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 Note Insurer (unless a Note 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 Note Insurer for the purpose of reconciling such
discrepancies. Other than the duties specifically set forth in this


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<PAGE>


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 4.15(a) and shall, based upon the information provided from
the Servicer under Section 4.15(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
     4.15(a) hereof, confirm that such computer diskette is in a readable form
     and calculate the Principal Balance of each Receivable based on the
     Principal Balance of such Receivable as of the preceding Payment Date (as
     set forth in such Servicer's Certificate) and the current principal payment
     for such Receivable (as set forth in such Servicer's Certificate) and
     compare such calculation to that set forth in the Servicer's Certificate
     (and give notice of any discrepancy to the Note Insurer); and

         (iii) recalculate the Available Funds, the Payment Amount, the
     Principal Payment Amount, the Class A-1 Interest Payment Amount, the Class
     A-2 Interest Payment Amount, the Class A-3 Interest Payment Amount, the
     Class A-4 Interest Payment Amount, the Back-up Servicer Fee, the Servicing
     Fee, the Indenture Trustee Fee, the Custodian Fee, the amount on deposit in
     the Spread Account and the Premium in the Servicer's Certificate based
     solely on the balances and calculations specifically set forth in the
     Servicer's Certificate, compare such calculations to those set forth in the
     Servicer's Certificate. To the extent of any discrepancy, the Back-up
     Servicer shall give notice thereof to the Note Insurer. The Back-up
     Servicer's obligation shall be limited to the mathematical recalculation of
     the amounts set forth in this Section 4.15(b)(iii) based on the Servicer's
     Certificate.

         SECTION 4.16. 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 4.17. 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
Controlling Party; 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 a Servicer
Termination Event), the Back-up Servicer, its designee or any successor Servicer
shall 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




                                       26
<PAGE>

related subservicer or subservicers within ten (10) Business Days of the
termination of the Servicer as servicer of the Receivables; PROVIDED, HOWEVER,
that the Back-up Servicer may elect to terminate a subservicing agreement with
the prior written consent of the Note Insurer, so long as no Note Insurer
Default is then continuing. If the Back-up Servicer does not elect to assume any
subservicing agreement, any and all costs of termination shall be at the
predecessor Servicer's expense. 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 Note 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 Trust Collateral Agent, 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 4.18. DELIVERY OF BACK-UP TAPES OF BACK-UP SERVICER.

     (a) 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 4.15(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 B-2 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 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 4.15(a) and on or prior to the Closing
Date and each Subsequent Transfer Date pursuant to Section 4.18(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 December
2001 (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 B-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 Note 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-


                                       27
<PAGE>


up Servicer to the Note Insurer simultaneously with its delivery of such notice
to the Servicer.

         SECTION 4.19. CONFIDENTIAL INFORMATION.(a) The Back-up Servicer, each
subservicer and any successor Servicer shall hold in confidence all Confidential
Information in accordance with the Federal Financial Privacy Law and, to the
extent more exacting, its then customary procedures; PROVIDED that nothing
herein shall prevent the Back-up Servicer, any subservicer or any successor
Servicer 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 to the extent necessary
to carry on the Back-up Servicer's, such subservicer's or such successor
Servicer's business, as applicable, in the ordinary course, (ii) any Noteholder
or the Note Insurer to the extent that such Noteholder or the Note Insurer is
entitled to such information under this Agreement or any other Basic Document,
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 Notes
by such agency, or (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 Back-up Servicer, such
subservicer or such successor Servicer, as applicable, is a party, (d) in order
to enforce the rights of the Noteholders, the Certificateholder and the Note
Insurer hereunder or under any other Basic Document, or (e) otherwise, in
accordance with the Federal Financial Privacy Law; PROVIDED, that, prior to any
such disclosure, the Back-up Servicer, such subservicer or such successor
Servicer, as applicable, shall inform each such party (other than any
Noteholder, the Note Insurer or any other party to the Basic Documents) that
receives Confidential Information of the foregoing requirements and shall use
its commercially reasonable best efforts to cause such party to comply with such
requirements.

                                   ARTICLE V
                               ACCOUNTS; PAYMENTS;
                            STATEMENTS TO NOTEHOLDERS

         SECTION 5.1. ACCOUNTS; LOCK-BOX ACCOUNT.

     (a) The Servicer has established the Lock-Box Account as three Eligible
Accounts, one established with Chase Manhattan entitled "Long Beach Acceptance
Corp., Chase Manhattan, Agent Account--Auto Loan Programs," account number
00100916395, one established with Bank of America National Trust and Savings
Association entitled "Long Beach Acceptance Corp., Chase Manhattan, Agent
Account--Auto Loan Programs," account number 1457202900, and one established
with Chase Manhattan entitled "Long Beach Acceptance Corp., Chase Manhattan,
Agent Account -- Auto Loan Programs," account number 507944194; PROVIDED, that
the Servicer, with the prior written consent of the Note 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 Trust Collateral Agent or the Servicer,
has


                                       28
<PAGE>


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 Trust Collateral Agent 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
Manhattan or, at the request of the Note 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 Trust Collateral Agent and the Noteholders 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
Manhattan, as agent for the beneficial owners of funds in the Lock-Box Account
at such time (including the Issuer), and Chase Manhattan 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 Trust Collateral Agent, 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 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
Controlling Party to the Trust Collateral Agent 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 Trust Collateral Agent shall
establish, with itself, the Collection Account and the Note Account in the name
of the Issuer for the benefit of the Noteholders and the Note Insurer, the
Pre-Funding Account in the name of the Issuer for the benefit of the Noteholders
and the Note Insurer, the Capitalized Interest Account in the name of the Issuer
for the benefit of the Noteholders and the Note Insurer, and the Policy Payments
Account in the name of the Issuer for the benefit of the Noteholders. The
Collection Account, the Note Account, the Pre-Funding Account, the Capitalized
Interest Account and the Policy Payments Account shall be Eligible Accounts
initially established with the Trust Collateral Agent; PROVIDED, HOWEVER, if any
of such accounts shall cease to be an Eligible Account, the Servicer, with the
consent of the Note Insurer (so long as no Note Insurer Default has occurred


                                       29
<PAGE>


and is continuing), within five (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
Transferor 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 Capitalized Interest Account shall be invested by the Trust Collateral
Agent at the written direction of the Transferor in Eligible Investments in the
name of the Trust Collateral Agent on behalf of the Issuer and shall mature no
later than one Business Day immediately preceding the Payment Date next
succeeding the date of such investment. In no event shall the Trust Collateral
Agent be liable for any insufficiency in the Collection Account resulting from
any investment loss in any Eligible Account. 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 Note Account and the Policy
Payments Account shall not be invested. The amount of earnings on investments of
funds in the Collection Account during the Collection Period related to each
Payment Date shall be deposited into the Note Account on each Payment Date, and
shall be available for payment pursuant to Section 5.6(c). The amount of
earnings on investments of funds in the Pre-Funding Account during the
Collection Period related to each Payment Date shall be deposited in the Note
Account on each Payment Date in an amount not to exceed the Pre-Funding Interest
Amount, and such amount shall be available for distribution pursuant to Section
5.6(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 Trust Collateral Agent to the Transferor on the Final Funding
Period Payment Date to the extent not otherwise paid to Noteholders as a
component of the Pre-Funding Interest Amount on such Payment Date. The amount of
earnings on investments of funds in the Capitalized Interest Account during each
Collection Period shall be deposited into the Capitalized Interest Account on
the Payment Date relating to such Collection Period prior to making any transfer
from the Capitalized Interest Account to the Note Account pursuant to Section
5.6(a)(iii). For purposes of this paragraph, the Trust Collateral Agent will
take delivery of the Eligible Investments in accordance with Schedule C.

     (c) The Trust Collateral Agent, pursuant to the Servicer's written
instruction, shall on or prior to each Payment Date (and prior to the transfer
from the Collection Account to the Note Account described in Section 5.6(a)(i))
transfer from the Collection Account to the Servicer, as additional servicing
compensation, the amount, if any, required to be paid to the Servicer pursuant
to Section 5.12.

         SECTION 5.2. 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


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<PAGE>


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

         With respect to each Receivable (other than a Purchased Receivable),
payments actually received from or on behalf of the Obligor shall be applied
hereunder, first, to interest and principal in accordance with the Simple
Interest Method to the extent necessary to bring such 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.
Notwithstanding anything herein to the contrary, no amount applied as interest
accrued on any Precomputed Receivable for any single Collection Period will
exceed 30 days' interest accrued thereon assuming a 360-day year of twelve
30-day months.

         SECTION 5.4. INTENTIONALLY OMITTED.

         SECTION 5.5. 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 Trust Collateral Agent shall deposit in the Collection Account all
amounts to be paid under Section 11.1, (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 Trust Collateral Agent shall transfer the
remaining Pre-Funded Amount on deposit in the Pre-Funding Account to the Note
Account pursuant to Section 5.13(c) and (iv) on or before each Draw Date, the
Trust Collateral Agent shall transfer to the Collection Account any amounts
transferred to the Trust Collateral Agent by the Collateral Agent from the
Spread Account.

         SECTION 5.6. PAYMENTS; POLICY CLAIMS.

     (a) The Trust Collateral Agent (based solely on the information set forth
in the Servicer's Certificate for the related Payment Date upon which the Trust
Collateral Agent may conclusively rely) shall transfer:

         (i) on each Payment Date, from the Collection Account to the Note
     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 5.1(b), for the related Collection Period over all
     funds transferred from the Collection Account with respect to such
     Collection Period pursuant to Section 5.1(c);


                                       31
<PAGE>


         (ii) on each Payment Date during the Funding Period and on the Final
     Funding Period Payment Date, from the Pre-Funding Account to the Note
     Account, in immediately available funds, earnings on investments of funds
     in the Pre-Funding Account for the related Collection Period pursuant to
     Section 5.1(b);

         (iii) on each Payment Date occurring in July, August and September
     2001, from the Capitalized Interest Account to the Note Account, an amount
     equal to the Negative Carry Amount for the related Collection Period, if
     any; and

         (iv) on each Payment Date occurring in July and August 2001, from the
     Capitalized Interest Account to the Transferor, an amount equal to the
     excess, if any, of (x) the amount remaining on deposit in the Capitalized
     Interest Account after giving effect to the withdrawal, if any, on such
     Payment Date pursuant to Section 5.6(a)(iii) above, over (y) the
     Capitalized Interest Requirement for such Payment Date.

     (b) Prior to each Payment Date, the Servicer shall on the related
Determination Date calculate the Available Funds, the Principal Payment Amount,
the Class A-1 Payment Amount, the Class A-1 Interest Payment Amount, the Class
A-2 Payment Amount, the Class A-2 Interest Payment Amount, the Class A-3 Payment
Amount, the Class A-3 Interest Payment Amount, the Class A-4 Payment Amount, the
Class A-4 Interest Payment Amount, the Monthly Dealer Participation Fee Payment
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
5.12 and, based on the Available Funds and the other amounts available for
payment on such Payment Date, determine the amount payable to the Noteholders.

     (c) On each Payment Date, the Trust Collateral Agent shall (x) distribute
all amounts delivered by the Note Insurer to the Trust Collateral Agent for
deposit into the Collection Account pursuant to Section 5.9 for payment in the
amounts and priority as directed by the Note Insurer, and (y) (based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 4.9 upon which the Trust Collateral Agent
may conclusively rely) subject to subsection (e) hereof, make the following
payments from the Available Funds withdrawn from the Note Account and from the
other sources described below in the following order of priority:

         (i) FIRST, to LBAC, from the Available Funds, the Monthly Dealer
     Participation Fee Payment Amount and all unpaid Monthly Dealer
     Participation Fee Payment Amounts from prior Collection Periods, and
     SECOND, to the Servicer, from the Available Funds (as such Available Funds
     have been reduced by payments made pursuant to subclause FIRST of this
     clause (i)), the Servicing Fee and all unpaid Servicing Fees from prior
     Collection Periods and, if the Available Funds are 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 Payment Date, if any, to the extent such Deficiency
     Claim Amount is received by the Trust Collateral Agent from the Collateral
     Agent;



                                       32
<PAGE>

         (ii) to the Indenture Trustee, the Custodian and the Back-up Servicer
     from the Available Funds (as such Available Funds have been reduced by
     payments made pursuant to clause (i) above), the Indenture Trustee Fee, the
     Custodian Fee and the Back-up Servicer Fee, respectively, and all unpaid
     Indenture Trustee Fees, Custodian Fees and Back-up Servicer Fees from prior
     Collection Periods and, if the Available Funds are insufficient to pay such
     amounts, the Indenture Trustee, the Custodian and the Back-up Servicer will
     receive such deficiency from the remaining portion of the Deficiency Claim
     Amount with respect to such Payment Date, if any, to the extent such
     Deficiency Claim Amount is received by the Trust Collateral Agent from the
     Collateral Agent, after application thereof pursuant to clause (i) above;

         (iii) to the Class A-1 Noteholders, the Class A-2 Noteholders, the
     Class A-3 Noteholders and the Class A-4 Noteholders, PRO RATA based on the
     Note Interest due on each such class of Notes, from the Available Funds
     (as such Available Funds have been reduced by payments made pursuant to
     clauses (i) and (ii) above), an amount equal to the Class A-1 Note
     Interest, Class A-2 Note Interest, the Class A-3 Note Interest and the
     Class A-4 Note Interest, respectively, with respect to such Payment Date
     (plus (without duplication) interest on any outstanding Class A-1 Interest
     Carryover Shortfall, Class A-2 Interest Carryover Shortfall, Class A-3
     Interest Carryover Shortfall or Class A-4 Interest Carryover Shortfall, if
     any, to the extent permitted by applicable law, at the Class A-1 Note Rate,
     the Class A-2 Note Rate, the Class A-3 Note Rate or the Class A-4 Note
     Rate, as applicable, for the related Accrual Period (calculated (i) with
     respect to the Class A-1 Notes, on the basis of the actual number of days
     elapsed during such Accrual Period based on a 360 day year and (ii) with
     respect to the Class A-2 Notes, the Class A-3 Notes and the Class A-4
     Notes, on the basis of a 360-day year consisting of twelve 30-day months))
     and, if the Available Funds are insufficient to pay such amounts, the
     Noteholders 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 Payment Date, if any, to the
     extent such Deficiency Claim Amount is received by the Trust Collateral
     Agent 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 Payment Date, if any, received by the Trust Collateral
     Agent from the Note Insurer;

         (iv) from the Available Funds (as such Available Funds have been
     reduced by payments made pursuant to clauses (i) through (iii) above), and,
     if such Payment Date is the Final Funding Period Payment Date, from the
     Mandatory Special Redemption, if any, FIRST, to the Class A-1 Noteholders,
     until the Class A-1 Note Balance has been reduced to zero, an amount equal
     to the sum of the Principal Payment Amount with respect to such Payment
     Date and any Principal Carryover Shortfall as of the close of business on
     the preceding Payment Date, SECOND, to the Class A-2 Noteholders, after the
     Class A-1 Note Balance has been reduced to zero, an amount equal to the sum
     of the remaining Principal Payment Amount with respect to such Payment
     Date, if any, and the remaining Principal Carryover Shortfall, if any, as
     of the close of business on the preceding Payment Date, THIRD, to the Class
     A-3 Noteholders, after the Class A-1 Note Balance and the Class A-2 Note
     Balance have been reduced to zero, an amount equal to the sum of the
     remaining Principal Payment Amount, if any, with respect to such Payment
     Date and the remaining


                                       33
<PAGE>


     Principal Carryover Shortfall, if any, as of the close of business on the
     preceding Payment Date, and FOURTH, to the Class A-4 Noteholders, after the
     Class A-1 Note Balance, the Class A-2 Note Balance and the Class A-3 Note
     Balance have been reduced to zero, an amount equal to the sum of the
     remaining Principal Payment Amount, if any, with respect to such Payment
     Date and the remaining Principal Carryover Shortfall, if any, as of the
     close of business on the preceding Payment Date and, if the Available Funds
     are insufficient to pay such amounts, the Noteholders 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 Payment Date, if any, after application thereof pursuant to clauses
     (i) through (iii) above, plus (B) the remaining portion of the Policy Claim
     Amount with respect to such Payment Date, if any, after application thereof
     pursuant to clause (iii) above;

         (v) FIRST, to the Note Insurer, from the Available Funds (as such
     Available Funds have been reduced by payments made pursuant to clauses (i)
     through (iv) above), an amount equal to the Reimbursement Obligations and,
     if the Available Funds are insufficient to pay such Reimbursement
     Obligations, the Note Insurer shall receive such deficiency from the
     remaining portion of the Deficiency Claim Amount with respect to such
     Payment Date, if any, to the extent received by the Trust Collateral Agent
     from the Collateral Agent, after application thereof pursuant to clauses
     (i) through (iv) above, SECOND, to the Trust Collateral Agent, the
     Indenture Trustee, the Back-up Servicer and the Custodian, as applicable,
     from the Available Funds (as such Available Funds have been reduced by
     payments made pursuant to clauses (i) through (iv) above and subclause
     FIRST of this clause (v)), all reasonable out-of-pocket expenses of the
     Trust Collateral Agent, the Indenture 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 9.2(a), to the extent not paid by the
     Servicer, and all unpaid reasonable out-of-pocket expenses of the Trust
     Collateral Agent, the Indenture 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 Trust
     Collateral Agent, the Indenture 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 Available Funds (as such Available Funds have
     been reduced by payments made 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 9.2(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, for deposit in the Spread Account, the
     remaining Available Funds (as such Available Funds have been reduced by
     payments pursuant to clauses (i) through (v) above ), if any, for
     application in accordance with provisions of the Spread Account Agreement.


                                       34
<PAGE>


     (d) In addition, on each Payment Date, after giving effect to the payments
specified in clauses (i) through (vi) above, the Trust Collateral Agent shall
(based on the information contained in the Servicer's Certificate delivered on
the related Determination Date pursuant to Section 4.9 upon which the Trust
Collateral Agent may conclusively rely) shall pay to the Certificateholder the
amount, if any, to be released to the Certificateholder pursuant to the terms of
the Spread Account Agreement.

     (e) Each Noteholder, by its acceptance of its Note, will be deemed to have
consented to the provisions of Sections 5.6(c) and 5.6(d) relating to the
priority of payments, 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 Noteholder until such amounts have been distributed to such Noteholder
pursuant to such provisions; PROVIDED, that the foregoing shall not restrict the
right of any Noteholder, upon compliance with the provisions hereof from seeking
to compel the performance of the provisions hereof by the parties hereto. Each
Noteholder, by its acceptance of its Note, 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.

     (f) In furtherance of and not in limitation of the foregoing, the
Certificateholder by acceptance of the 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 5.6(d) above for payment to the Certificateholder. 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 Transferor and the Certificateholder hereby grant to
the Collateral Agent and to the Trust Collateral Agent, 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
Certificateholder, by acceptance of its Certificate, hereby appoints the
Transferor as its agent to pledge a first priority perfected security interest
in the Spread Account, and any property held therein from time to time to the
Collateral Agent for the benefit of the Trust Collateral Agent and the Note
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 Note Insurer shall
consider reasonably necessary in order to perfect the Collateral Agent's
Security Interest in the Collateral (as such terms are defined in the Spread
Account Agreement).

     (g) Subject to Section 11.1 respecting the final payment upon retirement of
each Note, the Servicer shall on each Payment Date instruct the Trust Collateral
Agent to distribute to each Noteholder 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 Noteholder is the Clearing Agency or such Holder's Notes in the aggregate
evidence an original Note Balance of at least $1,000,000, and if such Noteholder
shall have provided to the Trust Collateral Agent appropriate instructions prior
to the Record Date for such Payment Date, or (ii) by check mailed to such
Noteholder at the address of such Holder appearing in the Note Register, such
Holder's PRO RATA share (based on the outstanding Note Balance) of the Class A-1
Payment Amount, the Class A-2 Payment Amount, the Class A-3


                                       35
<PAGE>


Payment Amount or the Class A-4 Payment Amount, as applicable, to be paid to
such Class of Notes in accordance with the Servicer's Certificate.

         SECTION 5.7. STATEMENTS TO NOTEHOLDERS; TAX RETURNS.

    (a) With each payment from the Note Account to the Noteholders made on
a Payment Date, the Servicer shall provide to the Note Insurer, the Transferor,
the Indenture Trustee, each Rating Agency and the Trust Collateral Agent (the
Trust Collateral Agent to forward to each Noteholder of record) the Servicer's
Certificate substantially in the form of Exhibit B-1 hereto, setting forth,
among at least the following information as to the Notes, to the extent
applicable:

         (i) the amount of the payment allocable to principal of the Class A-1
     Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes,
     respectively;

         (ii) the amount of the payment allocable to interest on the Class A-1
     Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes,
     respectively;

         (iii) the number of Receivables, the weighted average APR of the
     Receivables, the weighted average maturity of the Receivables, the Pool
     Balance, the Class A-1 Pool Factor, the Class A-2 Pool Factor, the Class
     A-3 Pool Factor and the Class A-4 Pool Factor as of the close of business
     on the last day of the preceding Collection Period;

         (iv) the Class A-1 Note Balance, the Class A-2 Note Balance, the Class
     A-3 Note Balance and the Class A-4 Note 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 Payment 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 amount of any unpaid
     Servicing Fees and any unpaid Back-up Servicer Fees and the change in such
     amounts from the prior Payment Date;

         (vi) the amount of the Class A-1 Interest Carryover Shortfall, if
     applicable, the Class A-2 Interest Carryover Shortfall, if applicable, the
     Class A-3 Interest Carryover Shortfall, if applicable, the Class A-4
     Interest Carryover Shortfall, if applicable, and the Principal Carryover
     Shortfall, if applicable, on such Payment Date and the change in such
     amounts from the prior Payment Date;

         (vii) the amount paid, if any, to the Noteholders under the Policy for
     such Payment Date;

         (viii) the amount paid to the Note Insurer on such Payment Date;

         (ix) the amount in the Spread Account;



                                       36
<PAGE>


         (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 Receivable Payments between 30 and 59 days,
     60 and 89 days, 90 and 119 days and 120 days or more (in each case
     calculated on the basis of a 360-day year consisting of twelve 30-day
     months), and the percentage of the aggregate principal amount which such
     delinquencies represent;

         (xi) the number and the aggregate Purchase Amount of Receivables
     repurchased by the Originator or purchased by the Servicer during the
     related Collection Period;

         (xii) the cumulative number and amount of Liquidated Receivables, the
     cumulative amount of any Liquidation Proceeds and Recoveries, since the
     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 Payment Date;

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

         (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 and the dollar
     amount of Recoveries;

         (xviii) for Payment Dates during the Funding Period and on the Final
     Funding Period Payment 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 Payment Dates during the Funding Period and on the Final
     Funding Period Payment Date, the Negative Carry Amount in respect of the
     related Collection Period withdrawn from the Capitalized Interest Account,
     the amount in excess of the Capitalized Interest Requirement, if any,
     withdrawn from the Capitalized Interest Account and the amount remaining on
     deposit in the Capitalized Interest Account; and

         (xx) for the Final Funding Period Payment Date, 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
     Noteholders.



                                       37
<PAGE>

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

     (b) No later than January 31 of each calendar year, commencing January 31,
2002, the Servicer shall send to the Indenture Trustee and the Trust Collateral
Agent, and the Trust Collateral Agent 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 Noteholder 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), (v)
and (vi) of Section 5.7(a) for such preceding calendar year or applicable
portion thereof during which such person was a Noteholder, and (b) such
information as may be reasonably requested by the Noteholders or required by the
Code and regulations thereunder, to enable such Holders to prepare their Federal
and State income tax returns. The obligation of the Trust Collateral Agent 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.

     (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
Issuer, and the Issuer shall execute and file such returns if requested to do so
by the Servicer. The Trust Collateral Agent, upon request, will furnish the
Servicer with all such information actually known to the Trust Collateral Agent
as may be reasonably requested by the Servicer in connection with the
preparation of all tax returns of the Issuer.

         SECTION 5.8. RELIANCE ON INFORMATION FROM THE SERVICER. Notwithstanding
anything to the contrary contained in this Agreement, all payments from any of
the accounts described in this Article V and any transfer of amounts between
such accounts shall be made by the Trust Collateral Agent based on the
information provided to the Trust Collateral Agent by the Servicer in writing,
whether by way of a Servicer's Certificate or otherwise (upon which the Trust
Collateral Agent may conclusively rely).

         SECTION 5.9. OPTIONAL DEPOSITS BY THE NOTE INSURER. The Note Insurer
shall at any time, and from time to time, with respect to a Payment Date, have
the option to deliver amounts to the Trust Collateral Agent 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
Issuer with respect to such Payment Date, (ii) to distribute as a component of
the Principal Payment Amount to the extent that the Note Balance as of the
Determination Date preceding such Payment Date exceeds the Pool Balance as of
such Determination Date or (iii) to include such amount as part of the Payment
Amount for such Payment Date to the extent that without such amount a draw would
be required to be made on the Policy.

         SECTION 5.10. SPREAD ACCOUNT. The Transferor 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 the
Initial Spread Account Deposit in the Spread Account on the Closing Date. In
addition, on each Subsequent Transfer Date,


                                       38
<PAGE>


pursuant to the terms of the Spread Account Agreement, the Transferor shall
deposit the related Subsequent Spread Account Deposit in the Spread Account.
Although the Transferor as Certificateholder, has pledged the Spread Account to
the Collateral Agent, 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 Issuer or the Trust Assets.

         SECTION 5.11. WITHDRAWALS FROM SPREAD ACCOUNT.

     (a) In the event that the Servicer's Certificate with respect to any
Determination Date shall state that the amount of the Available Funds with
respect to such Determination Date are less than the sum of the amounts payable
on the related Payment Date pursuant to clauses (i) through (iv) and subclause
FIRST of clause (v) of Section 5.6(c) (such deficiency being a "Deficiency Claim
Amount") then on the Deficiency Claim Date immediately preceding such Payment
Date, the Trust Collateral Agent shall deliver to the Collateral Agent, the Note
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 Payment 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 Trust Collateral
Agent for deposit in the Collection Account.

         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 Trust Collateral Agent pursuant to a Deficiency Notice
shall be deposited by the Trust Collateral Agent into the Collection Account
pursuant to Section 5.5.

         SECTION 5.12. SIMPLE INTEREST. 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 Payment Date. If, however, the Servicer determines that there is
a Simple Interest Excess for such Collection Period, the Trust Collateral Agent
shall withdraw the amount of such Simple Interest Excess from the Collection
Account on the next Payment Date and pay the amount of such Simple Interest
Excess to the Servicer as additional servicing compensation. Notwithstanding the
immediately 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 5.6(b) into the Spread Account and shall be
treated as a contribution to the Spread Account by the Servicer for the benefit
of the Certificateholder for federal income tax purposes. All references in this
Section 5.12 to the Servicer shall be deemed to refer to the Servicer only so
long as LBAC is acting in such capacity hereunder.


                                       39
<PAGE>


         SECTION 5.13. PRE-FUNDING ACCOUNT.

     (a) Pursuant to Section 5.1(b), the Trust Collateral Agent shall establish
and maintain the Pre-Funding Account as an Eligible Account in the name of the
Trust for the benefit of the Noteholders and the Note Insurer.

     (b) On the Closing Date, the Transferor will deposit in the Pre-Funding
Account an amount equal to the Original Pre-Funded Amount from the proceeds of
the sale of the Notes. On each Subsequent Transfer Date, the Servicer shall
instruct the Trust Collateral Agent 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) conveyed to the Trust on such
Subsequent Transfer Date and pay such amount to or upon the order of the
Transferor 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 Payment Date or (ii) the Pre-Funded
Amount has been reduced to $100,000 or less during the Funding Period, in either
case after giving effect to any reductions in the Pre-Funded Amount on the Final
Funding Period Payment Date pursuant to Section 5.13(b), the Servicer shall
instruct the Trust Collateral Agent in writing to withdraw such remaining
portion of the Pre-Funded Amount from the Pre-Funding Account and deposit it in
the Note Account on such Payment Date to be applied as a partial redemption of
the Notes, in addition to the payment of principal and interest that otherwise
would be payable with respect to such Notes on such Payment Date.

         SECTION 5.14. CAPITALIZED INTEREST ACCOUNT.

     (a) Pursuant to Section 5.1(b), the Capitalized Interest Account shall be
an Eligible Account established and maintained by the Trust Collateral Agent in
the name of the Trust for the benefit of the Noteholders and the Note Insurer.
On the Closing Date, the Transferor will deposit in the Capitalized Interest
Account an amount equal to $368,360.06 (such amount, the "Capitalized Interest
Account Deposit").

     (b) On each Payment Date occurring during the Funding Period and on the
Final Funding Period Payment Date, the amounts on deposit in the Capitalized
Interest Account shall be available for deposit to the Note Account pursuant to
Section 5.6(a)(iii) for distribution as provided in Section 5.6(c). On each
Payment Date occurring during the Funding Period, the amount on deposit in the
Capitalized Interest Account in excess of the Capitalized Interest Requirement
for such Payment Date shall be distributed to the Transferor. On the Final
Funding Period Payment Date, any remaining amounts in the Capitalized Interest
Account, after giving effect to the transfer specified in Section 5.6(a)(iii) on
such Payment Date, will be paid directly to the Transferor. Upon any
distribution to the Transferor of amounts on deposit in the Capitalized Interest
Account in accordance with the two preceding sentences, the Noteholders and the
Certificateholder will have no further rights in, or claims to, such amounts.

     (c) Amounts held in the Capitalized Interest Account shall be invested by
the Trust Collateral Agent in Eligible Investments which shall mature no later
than the Business Day


                                       40
<PAGE>


immediately preceding the next Payment Date in accordance
with written instructions from the Transferor and such investments shall not be
sold or disposed of prior to their maturity.

         SECTION 5.15. SECURITIES ACCOUNTS. The Trust Collateral Agent
acknowledges that any account held by it hereunder is a "securities account" as
defined in the Uniform Commercial Code as in effect in New York (the "NEW YORK
UCC"), and that it shall be acting as a "securities intermediary" of the
Indenture Trustee with respect to each such account held by it.

                                   ARTICLE VI
                                   THE POLICY

         SECTION 6.1. POLICY. The Originator agrees, simultaneously with the
execution and delivery of this Agreement, to cause the Note Insurer to issue the
Policy for the benefit of the Noteholders in accordance with the terms thereof.

         SECTION 6.2. CLAIMS UNDER POLICY.

     (a) In the event that the Trust Collateral Agent has delivered a Deficiency
Notice with respect to any Determination Date, the Trust Collateral Agent shall
determine on the related Draw Date whether the sum of (i) the amount of
Available Funds 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 Trust
Collateral Agent pursuant to a Deficiency Notice delivered with respect to such
Payment 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 payments required by Section 5.6(c)(i) and (ii), to pay the
Scheduled Payments for the related Payment Date, then in such event the Trust
Collateral Agent shall furnish to the Note 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 Scheduled Payments
with respect to such Payment Date (the amount of any such shortfall being
hereinafter referred to as the "Policy Claim Amount"). Amounts paid by the Note
Insurer under the Policy shall be deposited by the Trust Collateral Agent into
the Policy Payments Account and thereafter into the Note Account for payment to
Noteholders on the related Payment Date (or promptly following payment on a
later date as set forth in the Policy).

     (b) Any notice delivered by the Trust Collateral Agent to the Note Insurer
pursuant to Section 6.2(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 Note Insurer is required to
pay to the Trust Collateral Agent 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 Payment
Date. Any payment made by the Note Insurer under the Policy shall be applied
solely to the payment of the Notes, and for no other purpose.



                                       41
<PAGE>

     (c) The Trust Collateral Agent shall (i) receive as attorney-in-fact of
each Noteholder any Policy Claim Amount from the Note Insurer and (ii) deposit
the same in the Policy Payments Account for disbursement to the Noteholders as
set forth in clauses (iii) and (iv) of Section 5.6(c). Any and all Policy Claim
Amounts disbursed by the Trust Collateral Agent from claims made under the
Policy shall not be considered payment by the Issuer or from the Spread Account
with respect to such Notes, and shall not discharge the obligations of the
Issuer with respect thereto. The Note Insurer shall, to the extent it makes any
payment with respect to the Notes, 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 Notes by or on behalf of the
Note Insurer, each Noteholder shall be deemed, without further action, to have
directed the Trust Collateral Agent to assign to the Note Insurer all rights to
the payment of interest or principal with respect to the Notes which are then
due for payment to the extent of all payments made by the Note Insurer and the
Note Insurer may exercise any option, vote, right, power or the like with
respect to the Notes 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 5.6(c) shall not be modified by this clause (c). To
evidence such subrogation, the Note Registrar shall note the Note Insurer's
rights as subrogee upon the register of Noteholders upon receipt from the Note
Insurer of proof of payment by the Note Insurer of any Interest Payment Amount
or Principal Payment Amount.

     (d) The Trust Collateral Agent shall be entitled, but not obligated, to
enforce on behalf of the Noteholders the obligations of the Note Insurer under
the Policy. Notwithstanding any other provision of this Agreement, the
Noteholders are not entitled to institute proceedings directly against the Note
Insurer.

        SECTION 6.3. PREFERENCE CLAIMS; DIRECTION OF PROCEEDINGS.


     (a) In the event that the Trust Collateral Agent has received a certified
copy of an order of the appropriate court that any Scheduled Payment paid on a
Note has been avoided in whole or in part as a preference payment under
applicable bankruptcy law, the Trust Collateral Agent shall so notify the Note
Insurer, shall comply with the provisions of the Policy to obtain payment by the
Note Insurer of such avoided payment, and shall, at the time it provides notice
to the Note Insurer, comply with the provisions of the Policy to obtain payment
by the Note Insurer, notify Holders of the Notes by mail that, in the event that
any Noteholder's payment is so recoverable, such Noteholder will be entitled to
payment pursuant to the terms of the Policy. Pursuant to the terms of the
Policy, the Note Insurer will make such payment on behalf of the Noteholder to
the receiver, conservator, debtor-in-possession or trustee in bankruptcy named
in the Order (as defined in the Policy) and not to the Trust Collateral Agent or
any Noteholder directly (unless a Noteholder has previously paid such payment to
the receiver, conservator, debtor-in-possession or trustee in bankruptcy, in
which case the Note Insurer will make such payment to the Trust Collateral Agent
for payment, in accordance with the instructions to be provided by the Note
Insurer, to such Noteholder upon proof of such payment reasonably satisfactory
to the Note Insurer).

     (b) Each Notice of Claim shall provide that the Trust Collateral Agent, on
its behalf and on behalf of the Noteholders, thereby appoints the Note Insurer
as agent and attorney-in-fact for the Trust Collateral Agent and each Noteholder
in any legal proceeding with respect to the


                                       42
<PAGE>


Notes. The Trust Collateral Agent shall promptly notify the Note Insurer of any
proceeding or the institution of any action (of which a Responsible Officer of
the Trust Collateral Agent has actual knowledge) seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law (a "Preference Claim") of any payment made with
respect to the Notes. Each Holder of Notes, by its purchase of Notes, and the
Trust Collateral Agent hereby agree that so long as a Note Insurer Default shall
not have occurred and be continuing, the Note 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 Note Insurer, but subject to reimbursement as
provided in the Insurance Agreement. In addition, and without limitation of the
foregoing, as set forth in Section 6.2(c), the Note Insurer shall be subrogated
to, and each Noteholder and the Trust Collateral Agent hereby delegate and
assign, to the fullest extent permitted by law, the rights of the Trust
Collateral Agent and each Noteholder 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 6.4. SURRENDER OF POLICY. The Trust Collateral Agent shall
surrender the Policy to the Note Insurer for cancellation upon its expiration in
accordance with the terms thereof.

                                  ARTICLE VII
                                 THE TRANSFEROR

         SECTION 7.1. REPRESENTATIONS OF THE TRANSFEROR. The Transferor makes
the following representations on which the Note Insurer shall be deemed to have
relied in executing and delivering the Policy and on which the Issuer is deemed
to have relied in acquiring the Receivables and on which the Indenture Trustee,
the Owner Trustee, the Collateral Agent, Trust Collateral Agent and Back-up
Servicer may rely. The representations speak as of the execution and delivery of
this Agreement and as of the Closing Date, in the case of Initial Receivables,
and as of the applicable Subsequent Transfer Date, in the case of Subsequent
Receivables, and shall survive the conveyance of the Receivables to the Issuer
and the subsequent pledge thereof to the Indenture Trustee pursuant to the
Indenture.

     (a) ORGANIZATION AND GOOD STANDING. The Transferor 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.

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


                                       43
<PAGE>

to perform such obligations or on any Receivable or on the interest therein of
the Issuer, the Noteholders or the Note Insurer.

     (c) POWER AND AUTHORITY. The Transferor 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 Transferor has
full corporate power and authority to sell and assign the property sold and
assigned to and deposited with the Issuer and has duly authorized such sale and
assignment to the Issuer 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 Transferor by all necessary
corporate action.

     (d) VALID SALE; BINDING OBLIGATION. This Agreement effects a valid sale,
transfer and assignment of the Initial Receivables and the other property
conveyed to the Issuer pursuant to Section 2.1, and upon execution of the
related Transfer Agreement and satisfaction of the conditions set forth in
Section 2.2(b) hereof and in such Transfer Agreement, this Agreement, and the
related Transfer Agreement will effect a valid sale, transfer and assignment of
the related Subsequent Receivables and the other related property to be conveyed
to the Issuer pursuant to Section 2.2 and the related Subsequent Transfer Date,
in each case, enforceable against creditors of and purchasers from the
Transferor; and this Agreement and the other Basic Documents to which the
Transferor is a party shall constitute legal, valid and binding obligations of
the Transferor 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.

     (e) NO VIOLATION. The execution, delivery and performance by the Transferor
of this Agreement and the other Basic Documents to which the Transferor 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 Transferor, or any material indenture,
agreement, mortgage, deed of trust, or other instrument to which the Transferor
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 Transferor of any court or of any Federal or State regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over the Transferor or its properties.

     (f) NO PROCEEDINGS. Except for the Disclosed Cases, there are no
proceedings or investigations pending, or to the Transferor's best knowledge,
threatened, before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Transferor or its
properties: (A) asserting the invalidity of this Agreement or the other Basic
Documents to which the Transferor is a party or the Notes, (B) seeking to
prevent the issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or the other Basic Documents to which the
Transferor is a party, (C) seeking any determination or ruling that might
materially and adversely affect the performance by the


                                       44
<PAGE>


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

     (g) NO CONSENTS. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required to be obtained
by the Transferor for the issuance or sale of the Notes or the consummation of
the other transactions contemplated by this Agreement and the other Basic
Documents to which the Transferor 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 Transferor 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 Issuer,
the Noteholders or the Note Insurer.

     (h) CHIEF EXECUTIVE OFFICE. The Transferor hereby represents and warrants
to the Trust Collateral Agent that the Transferor'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.

     (i) TRANSFEROR'S INTENTION. The Initial Receivables and other Transferred
Property are being transferred, and the Subsequent Receivables and other
Subsequent Transferred Property will be transferred, with the intention of
removing them from the Transferor's estate pursuant to Section 541 of the United
States Bankruptcy Code, as the same may be amended from time to time.

         SECTION 7.2. LIABILITY OF THE TRANSFEROR. The Transferor shall be
liable only to the extent of the obligations specifically undertaken by the
Transferor under this Agreement and the representations made by the Transferor
in this Agreement.

         SECTION 7.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE TRANSFEROR. Any Person (a) into which the Transferor may be
merged or consolidated, (b) which may result from any merger or consolidation to
which the Transferor shall be a party or (c) which may succeed to the properties
and assets of the Transferor substantially as a whole, which person in any of
the foregoing cases executes an agreement of assumption to perform every
obligation of the Transferor under this Agreement, shall be the successor to the
Transferor 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 7.1 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 a Servicer Termination
Event shall have happened and be continuing, (ii) the Transferor shall have
delivered to the Note Insurer, the Indenture Trustee, the Trust Collateral Agent
and the Issuer an Officer's Certificate and an Opinion of Counsel each stating
that such consolidation, merger, or succession and such agreement or assumption
comply with



                                       45
<PAGE>

this Section 7.3 and that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with, (iii) the
Transferor shall have delivered to the Note Insurer, the Indenture Trustee, the
Trust Collateral Agent and the Issuer 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 Issuer 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 Transferor's certificate of incorporation in respect of the
issuance of debt, independent directors and bankruptcy remoteness and (vi) the
Transferor shall have received confirmation from each Rating Agency that the
then current rating of the Notes will not be downgraded as a result of such
merger, consolidation or succession. A copy of such confirmation shall be
provided to the Trust Collateral Agent. 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.

         SECTION 7.4. LIMITATION ON LIABILITY OF THE TRANSFEROR AND OTHERS. The
Transferor and any director or officer or employee or agent of the Transferor
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 Transferor 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 7.5. TRANSFEROR MAY OWN NOTES. The Transferor and any Person
controlling, controlled by, or under common control with the Transferor may in
its individual or any other capacity become the owner or pledgee of Notes with
the same rights as it would have if it were not the Transferor or an affiliate
thereof, except as otherwise provided in the definition of "Noteholder" set
forth in Annex A hereto and as specified in Section 1.4. Notes so owned by or
pledged to the Transferor 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
Notes except as otherwise provided herein or by the definition of Noteholder.

                                  ARTICLE VIII
                                  THE SERVICER

         SECTION 8.1. REPRESENTATIONS OF SERVICER. The Servicer makes the
following representations on which the Note Insurer shall be deemed to have
relied in executing and delivering the Policy and on which the Issuer is deemed
to have relied in acquiring the Receivables and on which the Indenture Trustee
is deemed to have relied on in accepting the pledge of the Receivables. The
representations speak as of the execution and delivery of this Agreement and as
of the Closing Date, in the case of the Initial Receivables, and as of the


                                       46
<PAGE>



applicable Subsequent Transfer Date, in the case of the Subsequent Receivables,
and shall survive the conveyance of the Receivables to the Issuer and the
subsequent pledge thereof to the Indenture Trustee pursuant to the Indenture.

         (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
     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.


                                       47
<PAGE>


         (vi) NO PROCEEDINGS. Except for the Disclosed Cases, 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, the Notes or the
     Certificate, (B) seeking to prevent the issuance of the Notes or the
     Certificate or the consummation of any of the transactions contemplated by
     this Agreement, the Notes, the Certificate, or the other Basic Documents to
     which the Servicer is a party, (C) 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, the Notes, the Certificate 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 Notes or the Certificate 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 Servicer for the issuance or sale of the Notes 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 Trust Collateral Agent 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 8.2. INDEMNITIES OF SERVICER.

     (a) 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
     Indenture Trustee, the Trust Collateral Agent, the Owner Trustee, the
     Collateral Agent, the Back-up Servicer, the Custodian, the Issuer, the
     Certificateholder, the Note Insurer, the Noteholders and the Transferor,
     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
     Indenture Trustee, the Trust Collateral Agent, the Owner Trustee, the
     Collateral Agent, the Back-up Servicer, the Custodian, the Issuer, the Note
     Insurer and the Transferor, and their respective officers, directors,
     agents and employees from and against any taxes (other


                                       48
<PAGE>


     than net income, gross receipts, franchise or other similar taxes) that may
     at any time be asserted against the Indenture Trustee, the Trust Collateral
     Agent, the Owner Trustee, the Collateral Agent, the Back-up Servicer, the
     Custodian, the Issuer, the Note Insurer or the Transferor, 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.

         (iii) The Servicer shall indemnify, defend and hold harmless the
     Indenture Trustee, the Trust Collateral Agent, the Owner Trustee, the
     Collateral Agent, the Custodian, the Back-up Servicer, the Transferor, the
     Note Insurer, the Issuer, the Certificateholder and the Noteholders, 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 Indenture Trustee, the Trust Collateral Agent,
     the Owner Trustee, the Collateral Agent, the Back-up Servicer, the
     Custodian, the Issuer, the Transferor, the Note Insurer, the Issuer or the
     Noteholders, 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 any other Basic
     Document to which it is a party or by reason of reckless disregard of its
     obligations and duties under this Agreement or any other Basic Document to
     which it is a party.

         (iv) The Servicer shall indemnify, defend and hold harmless the
     Indenture Trustee, the Trust Collateral Agent, the Owner Trustee, the
     Collateral Agent, the Back-up Servicer, the Transferor, the Issuer, the
     Custodian, the Note Insurer 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 contained herein or in
     any other Basic Document to which it is a party, 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 of the
     Indenture Trustee, the Trust Collateral Agent, the Owner Trustee, the
     Collateral Agent, the Back-up Servicer, the Transferor, the Issuer, the
     Custodian or the Note Insurer, as applicable; (b) relates to any tax other
     than the taxes with respect to which the Servicer shall be required to
     indemnify the Indenture Trustee, the Trust Collateral Agent, the Owner
     Trustee, the Collateral Agent, the Back-up Servicer, the Transferor, the
     Issuer, the Custodian or the Note Insurer; or (c) shall arise from the
     Trust Collateral Agent's breach of any of its representations or warranties
     set forth in Section 10.12.

         (v) The Servicer shall indemnify the Owner Trustee and WTC (as defined
     in the Trust Agreement) and its officers, directors, successors, assigns,
     agents and servants (collectively, the "Indemnified Parties") from and
     against, any and all liabilities, obligations, losses, damages, taxes,
     claims, actions and suits, and any and all reasonable costs, expenses and
     disbursements (including reasonable legal fees and expenses) of any kind
     and nature whatsoever (collectively, "Expenses") which may at any time be
     imposed on, incurred by, or asserted against the Owner Trustee, WTC or any
     Indemnified Party in any way relating to or arising out of this Agreement,
     the Basic Documents, the Owner Trust Estate (as defined in the Trust
     Agreement), the administration of the Owner Trust


                                       49
<PAGE>


     Estate or the action or inaction of the Owner Trustee under the Trust
     Agreement, except only that the Servicer shall not be liable for or
     required to indemnify the Owner Trustee from and against Expenses arising
     or resulting from any of the matters described in the third sentence of
     Section 6.1 of the Trust Agreement. The indemnities contained in this
     Section shall survive the resignation or termination of the Owner Trustee
     or the termination of the Trust Agreement. In any event of any claim,
     action or proceeding for which indemnity will be sought pursuant to this
     Section, the Owner Trustee's choice of legal counsel shall be subject to
     the approval of the Transferor which approval shall not be unreasonably
     withheld.

         (vi) LBAC, as Servicer, shall defend, indemnify and hold harmless the
     Transferor, the Note Insurer, the Indenture Trustee, the Back-up Servicer,
     the Collateral Agent, the Trust Collateral Agent, the Custodian, the Owner
     Trustee, the Issuer, the Certificateholder and the Noteholders against any
     and all costs, expenses, losses, damages, claims and liabilities arising
     out of or resulting from LBAC's, the Trust's, AMC's or LBARC's involvement
     in, or the effect on any Receivable as a result of, the Disclosed Cases.

         (vii) Notwithstanding the foregoing, the Servicer shall not be
     obligated to defend, indemnify, and hold harmless any Noteholder for any
     losses, claims, damages or liabilities incurred by any Noteholders 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 Note by such Noteholder with the assets of a plan subject to such
     provisions of ERISA or the Code or the servicing, management and operation
     of the Issuer.

     (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 8.3) as Servicer pursuant to Section 9.1, 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 9.2.
The provisions of this Section 8.2(b) shall in no way affect the survival
pursuant to Section 8.2(c) of the indemnification by the outgoing Servicer
provided by Section 8.2(a).

     (c) Indemnification under this Section 8.2 shall survive the termination of
this Agreement and any resignation or removal of LBAC as Servicer and shall
include reasonable fees and expenses of counsel and expenses of litigation. If
the Servicer shall have made any indemnity payments pursuant to this Section 8.2
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 8.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER OR BACK-UP SERVICER.


                                       50
<PAGE>


     (a) 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 8.1 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 Servicer Termination Event or Insurance
Agreement Event of Default, and no event which, after notice or lapse of time,
or both, would become a Servicer Termination Event or Insurance Agreement Event
of Default shall have occurred and be continuing, (ii) the Servicer shall have
delivered to the Indenture Trustee, the Trust Collateral Agent and the Note
Insurer an Officer's Certificate and an Opinion of Counsel in form and substance
satisfactory to the Indenture Trustee, the Trust Collateral Agent and the Note
Insurer each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 8.3 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 Indenture Trustee,
the Trust Collateral Agent and the Note 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 Issuer 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 Section 8.3(a) to the Indenture
Trustee, the Trust Collateral Agent, the Issuer, the Back-up Servicer, the
Collateral Agent, the Note Insurer, the Noteholders 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, (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,


                                       51
<PAGE>


HOWEVER, that nothing herein shall be deemed to release the Back-up Servicer
from any obligation.

        SECTION 8.4. LIMITATION ON LIABILITY OF SERVICER AND OTHERS.

     (a) Neither the Servicer nor any of the directors or officers or employees
or agents of the Servicer shall be under any liability to the Indenture Trustee,
the Trust Collateral Agent, the Owner Trustee, the Collateral Agent, the Back-up
Servicer, the Custodian, the Issuer, the Note Insurer, the Transferor or the
Noteholders, 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.

     (b) 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 8.5. SERVICER AND BACK-UP SERVICER NOT TO RESIGN. Subject to the
provisions of Section 8.3, 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 Note 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 may be, shall be communicated to the Transferor, the Indenture Trustee,
the Trust Collateral Agent, the Issuer, the Note 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 Transferor, the Indenture Trustee, the Trust Collateral Agent, the Issuer
and the Note 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 9.2 and the Servicing Assumption Agreement, if applicable. No such
resignation of the Back-up Servicer shall become effective until an entity
acceptable to the Note 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 120 days of the resignation of the


                                       52
<PAGE>


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 IX
                           SERVICER TERMINATION EVENTS

     SECTION 9.1. SERVICER TERMINATION EVENTS. If any one of the following
events ("Servicer Termination Events") shall occur and be continuing:

         (i) Any failure by the Servicer or, for so long as LBAC is the
     Servicer, the Transferor, to deliver to the Trust Collateral Agent for
     payment to Noteholders or deposit in the Spread Account any proceeds or
     payment required to be so delivered under the terms of the Notes, the
     Purchase Agreement, any Transfer Agreement or 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 Trust Collateral Agent or the Note 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 Servicer's Certificate required by Section 4.9 shall not have
     been delivered to the Trust Collateral Agent and the Note Insurer within
     one Business Day of the date such Servicer's Certificate is required to be
     delivered; or the statement required by Section 4.10 or the report required
     by Section 4.11 shall not have been delivered within five (5) days after
     the date such statement or report, as the case may be, is required to be
     delivered; or

         (iii) Failure on the part of the Servicer to observe its covenants and
     agreements set forth in Section 8.3 or, for so long as LBAC is the
     Servicer, failure on the part of the Transferor to observe its covenants
     and agreements set forth in Section 7.3; or

         (iv) Failure on the part of LBAC, the Servicer or, for so long as LBAC
     is the Servicer, the Transferor, 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 Transferor (as the case may be) set forth in the Notes,
     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 Transferor (as the
     case may be), by the Note Insurer or the Trust Collateral Agent, or (2) to
     LBAC, the Servicer or the Transferor (as the case may be), and to the Trust
     Collateral Agent and the Note Insurer by the Noteholders evidencing not
     less than 25% of the Note 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 Transferor, 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,


                                       53
<PAGE>


     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 Transferor 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 Transferor 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 Transferor 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 Transferor 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 Transferor 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 Transferor 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 Transferor 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 Transferor 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 Transferor or
     any other Affiliate of LBAC, if applicable) in furtherance of any of the
     foregoing; or


         (vii) Any representation, warranty or statement of LBAC or the Servicer
     or, for so long as LBAC is the Servicer, the Transferor, made in this
     Agreement and, with respect to LBAC and the Transferor, 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 or Section 4 of the Transfer Agreement), and the incorrectness of
     such representation, warranty or statement has a material adverse effect on
     the Issuer and, within 30 days after written notice thereof shall have been
     given (1) to LBAC, the Servicer or the Transferor (as the case may be) by
     the Trust Collateral Agent or the Note Insurer or (2) to LBAC, the Servicer
     or the Transferor (as the case may be), and to the Trust Collateral Agent
     and the Note Insurer by the Noteholders evidencing not less than 25% of the
     Note 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


                                       54
<PAGE>


         (x) So long as a Note Insurer Default shall not have occurred and be
     continuing, the Note Insurer shall not have delivered a Servicer Extension
     Notice pursuant to Section 4.13;

then, and in each and every case, so long as a Servicer Termination Event shall
not have been remedied; PROVIDED, (i) no Note Insurer Default shall have
occurred and be continuing, the Note Insurer in its sole and absolute
discretion, or (ii) if a Note Insurer Default shall have occurred and be
continuing, then either the Trust Collateral Agent or the Trust Collateral Agent
acting at the direction of the Majorityholders, by notice then given in writing
to the Servicer (and to the Trust Collateral Agent if given by the Note Insurer
or by the Noteholders) or by the Note Insurer's failure to deliver a Servicer
Extension Notice pursuant to Section 4.13, 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 Notes 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 9.2; 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 Noteholder) based on any
alleged action or inaction of the predecessor Servicer as Servicer; and, without
limitation, the Trust Collateral Agent 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 Trust
Collateral Agent 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 Issuer. 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 9.1 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 5.6(c)(v) hereof. Upon receipt of notice of the occurrence of a Servicer
Termination Event, the Trust Collateral Agent shall give notice thereof to the
Rating Agencies, the Issuer and the Transferor. The predecessor Servicer shall
grant the Transferor, the Trust Collateral Agent, the Back-up Servicer and the
Note Insurer reasonable access to the predecessor Servicer's premises, computer
files, personnel, records and equipment at the predecessor Servicer's expense.
If requested by the Note Insurer, the Back-up Servicer or successor Servicer


                                       55
<PAGE>


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 Note Insurer). The Trust Collateral Agent shall
send copies of all notices given pursuant to this Section 9.1 to the Note
Insurer so long as no Note Insurer Default shall have occurred and be
continuing, and to the Noteholders if a Note Insurer Default shall have occurred
and be continuing.

         SECTION 9.2. APPOINTMENT OF SUCCESSOR.


     (a) Upon the Servicer's receipt of notice of termination pursuant to
Section 9.1 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
Trust Collateral Agent of written notice of such resignation (or written
confirmation of such notice) in accordance with the terms of this 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, the 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 Note Insurer shall have determined that a
Person other than the Back-up Servicer shall be the successor Servicer in
accordance with Section 9.2(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
5.6(c)(v) hereof; PROVIDED, HOWEVER, the payment of such amount pursuant to
Section 5.6(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, the Transferor 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, the Transferor or any predecessor Servicer
arising on or before the Assumption Date under Sections 4.7 or 8.2 of this
Agreement, regardless of when the liability, duty, responsibility or obligation
of LBAC, the Transferor 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
8.5 hereof and a Note Insurer Default shall have occurred and be continuing, the
Back-up Servicer, the Trust Collateral Agent or the Noteholders evidencing not
less than 66-2/3% of the Note Balance may petition a court of competent
jurisdiction to appoint any successor to the Servicer. Pending


                                       56
<PAGE>


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 9.2, then the Note
Insurer, in accordance with Section 9.2(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.

     (c) So long as no Note Insurer Default has occurred and is continuing, the
Note 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 Trust Collateral Agent,
the Issuer, LBAC, the Transferor, the Person then serving as Back-up Servicer,
any Noteholder or any other person if it does so. Subject to Section 8.5, 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 9.1 or resignation of the Servicer pursuant to
Section 8.5. If upon any such resignation or termination, the Note 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 9.3. NOTIFICATION TO NOTEHOLDERS. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article IX, the
Trust Collateral Agent shall give prompt written notice thereof to Noteholders
at their respective addresses appearing in the Note Register and to each of the
Rating Agencies.

         SECTION 9.4. ACTION UPON CERTAIN FAILURES OF THE SERVICER. In the event
that a Responsible Officer of the Trust Collateral Agent shall have knowledge of
any failure of the Servicer specified in Section 9.1 which would give rise to a
right of termination under such Section upon the Servicer's failure to remedy
the same after notice, the Trust Collateral Agent shall give notice thereof to
the Transferor, the Servicer and the Note Insurer. For all purposes of this
Agreement, the Trust Collateral Agent shall not be deemed to have knowledge of
any failure of the Servicer as specified in Section 9.1 unless notified thereof
in writing by the Transferor, the Servicer, the Note Insurer or by a Noteholder.
The Trust Collateral Agent shall be under no duty or obligation to investigate
or inquire as to any potential failure of the Servicer specified in Section 9.1.


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<PAGE>


                                   ARTICLE X
                  THE TRUST COLLATERAL AGENT AND THE CUSTODIAN

         SECTION 10.1. DUTIES OF THE TRUST COLLATERAL AGENT AND THE CUSTODIAN.


     (a) The Trust Collateral Agent and the Custodian, 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 Trust Collateral Agent and
the Custodian may, and at the direction of the Note Insurer (or, if a Note
Insurer Default shall have occurred and is continuing, the Majorityholders),
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
person would exercise or use under the circumstances in the conduct of its own
affairs.

     (b) The Trust Collateral Agent and the Custodian, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trust Collateral Agent and the Custodian 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; PROVIDED, HOWEVER, that, neither the Trust
Collateral Agent nor the Custodian shall be responsible for the accuracy or
content of any such resolution, certificate, statement, opinion, report,
document, order or other instrument. If any such instrument is found not to
conform in any material respect to the requirements of this Agreement, the Trust
Collateral Agent or the Custodian, as applicable, shall notify the Note Insurer
and the Noteholders of such instrument in the event that the Trust Collateral
Agent or the Custodian, after so requesting, does not receive a satisfactorily
corrected instrument.

     (c) The Trust Collateral Agent 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.

     (d) No provision of this Agreement shall be construed to relieve the Trust
Collateral Agent or the Custodian 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 Trust Collateral Agent and the Custodian shall be
     determined solely by the express provisions of this Agreement, neither the
     Trust Collateral Agent nor the Custodian shall 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 Trust Collateral Agent or the Custodian
     and, in the absence of bad faith on the part of the Trust Collateral Agent
     or the Custodian, the Trust Collateral Agent and the Custodian, as
     applicable, may conclusively rely on the truth of the statements and the
     correctness of the opinions expressed in any certificates or opinions
     furnished to the Trust Collateral Agent or the Custodian and conforming to
     the requirements of this Agreement;



                                       58
<PAGE>

         (ii) Neither the Trust Collateral Agent nor the Custodian shall be
     liable for an error of judgment made in good faith by a Responsible Officer
     or officer of the Custodian, respectively, unless it shall be proved that
     the Trust Collateral Agent or the Custodian, respectively shall have been
     negligent in ascertaining the pertinent facts;

         (iii) Neither the Trust Collateral Agent nor the Custodian shall 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
     Note Insurer or, after a Note Insurer Default, the Noteholders evidencing
     not less than 25% of the Note Balance, relating to the time, method, and
     place of conducting any proceeding for any remedy available to the Trust
     Collateral Agent or the Custodian, or exercising any trust or power
     conferred upon the Trust Collateral Agent or the Custodian, as applicable,
     under this Agreement;

         (iv) Neither the Trust Collateral Agent nor the Custodian shall be
     charged with knowledge of any Servicer Termination Event or Event of
     Default, unless a Responsible Officer assigned to the Trust Collateral
     Agent's Corporate Trust Office or an officer of the Custodian receives
     written notice of such Servicer Termination Event or Event of Default from
     the Servicer, the Transferor, the Note Insurer or, after a Note Insurer
     Default, the Noteholders evidencing not less than 25% of the Note Balance
     (such notice shall constitute actual knowledge of a Servicer Termination
     Event or Event of Default by the Trust Collateral Agent); and

         (v) Neither the Trust Collateral Agent nor the Custodian shall 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.

     (e) The Trust Collateral Agent and the Custodian 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 Trust
Collateral Agent or Custodian, as applicable, and none of the provisions
contained in this Agreement shall in any event require the Trust Collateral
Agent or Custodian 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 Trust Collateral Agent, 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.

     (f) Except for actions expressly authorized by this Agreement, neither the
Trust Collateral Agent nor the Custodian shall take 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.

     (g) All information obtained by the Trust Collateral Agent or the Custodian
regarding the Obligors and the Receivables, whether upon the exercise of its
rights under this Agreement or otherwise, shall be maintained by the Trust
Collateral Agent or the Custodian, as applicable, in confidence and shall not be
disclosed to any other Person, all in accordance with the Federal


                                       59
<PAGE>

Financial Privacy Law; PROVIDED that, nothing herein shall prevent the
Trust Collateral Agent or Custodian 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 Trust Collateral Agent's or the Custodian's business in the
ordinary course, (ii) any Noteholder or the Note Insurer to the extent that such
Noteholder or the Note Insurer is entitled to such information under this
Agreement or any other Basic Document, 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 Notes by such agency, or (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 Trust Collateral Agent or the Custodian is a party, (d) in order to
enforce the rights of the Noteholders and the Note Insurer hereunder or under
any other Basic Document, or (e) otherwise, in accordance with the Federal
Financial Privacy Law; PROVIDED, that, prior to any such disclosure, the Trust
Collateral Agent or the Custodian, as applicable, shall inform each such party
(other than any Noteholder, the Note Insurer or any other party to the Basic
Documents) that receives Confidential Information of the foregoing requirements
and shall use its commercially reasonable best efforts to cause such party to
comply with such requirements.

     (h) Money held in trust by the Trust Collateral Agent or the Custodian need
not be segregated from other funds except to the extent required by law or the
terms of this Agreement or the Indenture.

     (i) Every provision of this Agreement relating to the conduct or affecting
the liability of or affording protection to the Trust Collateral Agent or the
Custodian shall be subject to the provisions of this Section 10.1.

     (j) The Trust Collateral Agent and the Custodian each shall, and each
hereby agrees that it will, perform all of the obligations and duties required
of it under the Sale and Servicing Agreement.

     (k) The Trust Collateral Agent shall, and hereby agrees that it will, hold
the Policy in trust, and will hold any proceeds of any claim on the Policy in
trust, solely for the use and benefit of the Noteholders.

     (l) Without limiting the generality of this Section 10.1, the Trust
Collateral Agent and the Custodian each shall have no duty (i) to see to any
recording, filing or depositing of this Agreement or any agreement referred to
herein or any financing statement evidencing a security interest in the Financed
Vehicles, or to see to the maintenance of any such recording or filing or
depositing or to any recording, refiling or redepositing of any thereof, (ii) to
see to any insurance of the Financed Vehicles or Obligors or to effect or
maintain any such insurance, (iii) to see to the payment or discharge of any
tax, assessment or other governmental charge or any Lien or encumbrance of any
kind owing with respect to, assessed or levied against any part of the Pledged
Property, (iv) to confirm or verify the contents of any reports or certificates
delivered to the Trust Collateral Agent or the Servicer pursuant to this
Agreement or the Trust Agreement believed by the Trust Collateral Agent or the
Custodian, as applicable, to be genuine and to have


                                       60
<PAGE>

been signed or presented by the proper party or parties, or (v) to inspect the
Financed Vehicles at any time or ascertain or inquire as to the performance of
observance of any of the Issuer's, the Transferor's or the Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as servicer and as custodian of the Receivable Files under the Sale
and Servicing Agreement.

     (m) In no event shall The Chase Manhattan Bank, in any of its capacities
hereunder, be deemed to have assumed any duties of the Owner Trustee under the
Delaware Business Trust Statute, common law, or the Trust Agreement.

     (n) Neither the Trust Collateral Agent nor the Custodian shall be required
to give any bond or surety in respect of the powers granted to it under this
Agreement.

         SECTION 10.2. TRUST COLLATERAL AGENT TO ACT FOR THE NOTEHOLDERS AND
NOTE INSURER. Prior to the payment in full of the Notes and the Reimbursement
Obligations and the expiration of the term of the Policy, the Trust Collateral
Agent shall act solely for the benefit of the Noteholders and the Note Insurer,
as their interests may appear herein.

         SECTION 10.3. CERTAIN MATTERS AFFECTING THE TRUST COLLATERAL AGENT AND
THE CUSTODIAN. Except as otherwise provided in the second paragraph of Section
10.1:

         (i) The Trust Collateral Agent and the Custodian 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 Trust Collateral Agent and the Custodian may consult with
     counsel, and any written advice or 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 written advice or Opinion of Counsel.

         (iii) Neither the Trust Collateral Agent nor the Custodian shall be
     under any 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 Noteholders or the Note Insurer pursuant to the
     provisions of this Agreement, unless such Noteholders or the Note Insurer
     shall have offered to the Trust Collateral Agent or the Custodian, as
     applicable, reasonable security or indemnity in form and substance
     reasonably satisfactory to the Trust Collateral Agent or the Custodian, as
     applicable, against the costs, expenses and liabilities that may be
     incurred therein or thereby. Nothing contained in this Agreement, however,
     shall relieve the Trust Collateral Agent or the Custodian of the
     obligations, upon the occurrence of a Servicer Termination Event or Event
     of Default (that shall not have been cured or waived), to exercise such of
     the rights and powers vested in it by this


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<PAGE>

     Agreement, and to use the same degree of care and skill in their exercise
     as a prudent person would exercise or use under the circumstances in the
     conduct of its own affairs.

         (iv) Neither the Trust Collateral Agent nor the Custodian shall 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 the duties of the Custodian pursuant to Section 3.4), unless
     requested in writing to do so by the Note Insurer (if no Note Insurer
     Default shall have occurred or be continuing), the Transferor or the
     Noteholders evidencing not less than 25% of the Note Balance; PROVIDED,
     HOWEVER, that, if the payment within a reasonable time to the Trust
     Collateral Agent or the Custodian 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 Trust Collateral Agent or the Custodian, not
     reasonably assured to the Trust Collateral Agent or the Custodian by the
     security afforded to it by the terms of this Agreement, the Trust
     Collateral Agent or the Custodian, as applicable, 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 Trust Collateral Agent or the Custodian, shall be reimbursed by
     the Person making such request upon demand.

         (v) The Trust Collateral Agent and the Custodian 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. Neither the Trust
     Collateral Agent nor the Custodian shall be responsible for any misconduct
     or negligence of any such agent appointed with due care by it hereunder, or
     of any agent of the Servicer in its capacity as Servicer or custodian or
     otherwise.

         (vi) Except as may be expressly required by Sections 3.4, subsequent to
     the sale of the Receivables by the Transferor to the Issuer, neither the
     Trust Collateral Agent nor the Custodian shall have any duty of independent
     inquiry, and the Trust Collateral Agent and the Custodian may rely upon the
     representations and warranties and covenants of the Transferor and the
     Servicer contained in this Agreement with respect to the Receivables and
     the Receivable Files.

         (vii) The Trust Collateral Agent and the Custodian may rely, as to
     factual matters relating to the Transferor or the Servicer, on an Officer's
     Certificate of the Transferor or Servicer, respectively.

         (viii) Neither the Trust Collateral Agent nor the Custodian shall 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 Trust Collateral Agent or the Custodian to take
     action, if the Trust Collateral Agent or the Custodian 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.


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         SECTION 10.4. TRUST COLLATERAL AGENT, BACK-UP SERVICER AND CUSTODIAN
NOT LIABLE FOR NOTES OR RECEIVABLES. The recitals contained herein shall be
taken as the statements of the Issuer, the Transferor or the Servicer, as the
case may be, and neither the Trust Collateral Agent, the Back-up Servicer nor
the Custodian assumes any responsibility for the correctness thereof. Neither
the Trust Collateral Agent, the Back-up Servicer nor the Custodian shall make
any representations as to the validity or sufficiency of this Agreement or of
the Notes, or of any Receivable or related document. Neither the Trust
Collateral Agent, the Back-up Servicer nor the Custodian shall at any 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 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 Issuer or its ability to generate the payments to be distributed
to Noteholders 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 3.4, 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 Issuer or of any intervening
assignment; except as required by Section 3.4, the performance or enforcement of
any Receivable; the compliance by the Transferor 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 Trust
Collateral Agent's, the Back-up Servicer's or Custodian'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 Note Insurer or any loss resulting therefrom (it being
understood that the Trust Collateral Agent, the Back-up Servicer and the
Custodian shall each remain responsible for any Trust Assets that it may hold);
the acts or omissions of the Issuer, the Transferor, the Servicer, or any
Obligor; any action of the Servicer taken in the name of the Trust Collateral
Agent or the Custodian; or any action by the Trust Collateral Agent or the
Custodian taken at the instruction of the Servicer; PROVIDED, HOWEVER, that the
foregoing shall not relieve either the Trust Collateral Agent, the Back-up
Servicer or the Custodian of its obligation to perform its duties under this
Agreement. Except with respect to a claim based on the failure of the Trust
Collateral Agent, the Back-up Servicer or the Custodian to perform its duties
under this Agreement or based on the Trust Collateral Agent's, the Back-up
Servicer's or the Custodian's negligence or willful misconduct, no recourse
shall be had for any claim based on any provision of this Agreement, the Notes,
or any Receivable or assignment thereof against the Trust Collateral Agent, the
Back-up Servicer or Custodian in their respective individual capacities, neither
the Trust Collateral Agent, the Back-up Servicer nor the Custodian shall have
any personal obligation, liability, or duty whatsoever to any Noteholder or any
other Person with respect to any such claim, and any such claim shall be
asserted solely against the Issuer or any indemnitor who shall furnish indemnity
as provided in this Agreement. Neither the Trust Collateral Agent, the Back-up
Servicer nor the Custodian shall be accountable for the use or application by
the Issuer of any of the Notes or of the proceeds of such Notes, or for the use
or application of any funds paid to the Servicer in respect of the Receivables.
The Issuer hereby certifies to the Trust Collateral Agent, the Back-up Servicer
and the Custodian that the Rating Agencies rating the Notes are Standard &
Poor's and Moody's and that their addresses are as set forth in Section 13.5.
The Trust Collateral Agent, the Back-up Servicer and the Custodian may rely on
the accuracy of such certification until it receives from the Issuer an
Officer's Certificate


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superseding such certification. All references above to the Back-up Servicer
shall be deemed to refer to the Back-up Servicer only so long as it is acting
in such capacity hereunder.

         SECTION 10.5. TRUST COLLATERAL AGENT, BACK-UP SERVICER AND CUSTODIAN
MAY OWN NOTES. The Trust Collateral Agent, the Back-up Servicer and the
Custodian in their respective individual or any other capacities may become the
owner or pledgee of Notes and may deal with the Transferor and the Servicer in
banking transactions with the same rights as it would have if it were not Trust
Collateral Agent, Back-up Servicer or Custodian, as applicable.

         SECTION 10.6. INDEMNITY OF TRUST COLLATERAL AGENT, BACK-UP SERVICER AND
CUSTODIAN. The Servicer shall indemnify the Trust Collateral Agent, the Back-up
Servicer, the Custodian and each officer, director and employee of the Trust
Collateral Agent, the Back-up Servicer 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 this Agreement, the
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.
The provisions of this Section 10.6 shall survive the termination of this
Agreement or any resignation or removal of LBAC as Servicer.

         SECTION 10.7. ELIGIBILITY REQUIREMENTS FOR TRUST COLLATERAL AGENT AND
THE CUSTODIAN. The Trust Collateral Agent and the Custodian under this Agreement
shall at all times be organized and doing business under the laws of the United
States of America, with respect to the Trust Collateral Agent or the laws of the
State of New York, with respect to the Custodian; 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 Note 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 10.7, 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 Trust Collateral Agent
or the Custodian shall cease to be eligible in accordance with the provisions of
this Section 10.7, the Trust Collateral Agent or the Custodian shall resign
immediately in the manner and with the effect specified in Section 10.8.

         SECTION 10.8. RESIGNATION OR REMOVAL OF TRUST COLLATERAL AGENT OR
CUSTODIAN.

     (a) The Trust Collateral Agent and the Custodian may at any time resign and
be discharged from the trusts hereby created by giving 30 days' prior written
notice thereof to the Servicer. To the extent that the Trust Collateral Agent
and the Custodian resign hereunder, the Indenture Trustee shall also resign
under the Indenture and the Collateral Agent shall resign under the Spread
Account Agreement. Upon receiving such notice of resignation, with the prior
written consent of the Note Insurer (or, if a Note Insurer Default shall have
occurred or is continuing, the Noteholders evidencing not less than 25% of the
Note Balance), the Servicer shall promptly appoint a successor Trust Collateral
Agent or Custodian, as applicable, by written


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instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Trust Collateral Agent or Custodian, as applicable, and one copy to
the successor Trust Collateral Agent or successor Custodian. If no successor
Trust Collateral Agent or successor Custodian shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the Note Insurer may appoint a successor Trust Collateral Agent or
Custodian, as applicable, by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trust Collateral Agent or
Custodian and one copy to the successor Trust Collateral Agent or Custodian. If
no successor Trust Collateral Agent or Custodian shall have been so appointed
and have accepted appointment within 60 days after the giving of such notice of
resignation, the resigning Trust Collateral Agent or Custodian may petition any
court of competent jurisdiction for the appointment of a successor Trust
Collateral Agent or Custodian, as applicable. The Trust Collateral Agent or the
Custodian may be removed at any time by written demand of the Note Insurer
delivered to the Trust Collateral Agent or the Custodian, as applicable, and the
Servicer.

     (b) If at any time (i) the Trust Collateral Agent or the Custodian shall
cease to be eligible in accordance with the provisions of Section 10.7 and shall
fail to resign after written request therefor by the Servicer, (ii) the Trust
Collateral Agent or the Custodian, as applicable, shall be legally unable to
act, (iii) the Trust Collateral Agent and the Indenture Trustee shall be the
same Person and the Indenture Trustee shall have resigned or been removed
pursuant to Section 6.8 of the Indenture, or (iv) the Trust Collateral Agent or
the Custodian shall be adjudged bankrupt or insolvent, or a receiver,
conservator or liquidator of the Trust Collateral Agent, the Custodian or of any
of their respective property shall be appointed, or any public officer shall
take charge or control of the Trust Collateral Agent or Custodian or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Note Insurer shall (so long as no Note Insurer Default
shall have occurred and be continuing), or the Servicer may (if a Note Insurer
Default shall have occurred and be continuing) remove the Trust Collateral Agent
or Custodian. If the Note Insurer or the Servicer shall remove the Trust
Collateral Agent or Custodian under the authority of the immediately preceding
sentence, the Servicer or the Note Insurer, as the case may be, shall promptly
appoint a successor Trust Collateral Agent or Custodian, as applicable, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trust Collateral Agent or Custodian so removed and one copy to
the successor Trust Collateral Agent or successor Custodian, and pay all fees
and expenses owed to the outgoing Trustee, provided that any successor Trust
Collateral Agent or any successor Custodian appointed by the Servicer shall be
acceptable to the Note Insurer.

     (c) Any resignation or removal of the Trust Collateral Agent or the
Custodian and appointment of a successor Trust Collateral Agent or Custodian
pursuant to any of the provisions of this Section 10.8 shall not become
effective until acceptance of appointment by the successor Trust Collateral
Agent or Custodian, as applicable, pursuant to Section 10.9 and payment of all
fees and expenses owed to the outgoing Trustee. The Servicer shall provide
notice of such resignation or removal of the Trust Collateral Agent or Custodian
to each of the Rating Agencies and the Transferor.

     (d) If the Trust Collateral Agent 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 10.8, then the Note Insurer (or, if a
Note Insurer Default shall have occurred and be


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continuing, the Majorityholders) shall have the option, by 60 days' prior notice
in writing to the Servicer and the Trust Collateral Agent, to remove the Trust
Collateral Agent, and the Note Insurer shall not have any liability to the Trust
Collateral Agent, LBAC, the Transferor, the Servicer, the Issuer or any
Noteholder in connection with such removal.

     (e) At any time following the Closing Date the Servicer may assume the
duties of Custodian under this Agreement; provided, that (i) the Note Insurer
provides its prior written consent to the Trust Collateral Agent (which consent
shall be granted or withheld by the Note Insurer in its sole discretion) and
(ii) the Rating Agency Condition has been satisfied.

         SECTION 10.9. SUCCESSOR TRUST COLLATERAL AGENT OR CUSTODIAN. Any
successor Trust Collateral Agent or Custodian appointed pursuant to Section 10.8
shall execute, acknowledge and deliver to the Transferor, the Servicer, the Note
Insurer and to its predecessor Trust Collateral Agent or predecessor Custodian,
as applicable, an instrument accepting such appointment under this Agreement,
and thereupon the resignation or removal of the predecessor Trust Collateral
Agent or predecessor Custodian shall become effective and such successor Trust
Collateral Agent or successor Custodian, 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 Trust Collateral Agent or Custodian. The predecessor Trust
Collateral Agent or predecessor Custodian shall upon payment of its fees and
expenses deliver to the successor Trust Collateral Agent or successor Custodian
all documents and statements and monies held by it under this Agreement; and the
Servicer, the Note Insurer and the predecessor Trust Collateral Agent or
predecessor Custodian 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 Trust Collateral Agent or successor Custodian all
such rights, powers, duties, and obligations.

         No successor Trust Collateral Agent or successor Custodian shall accept
appointment as provided in this Section 10.9 unless at the time of such
acceptance such successor Trust Collateral Agent or successor Custodian shall be
eligible pursuant to Section 10.7.

         Upon acceptance of appointment by a successor Trust Collateral Agent or
successor Custodian pursuant to this Section 10.9, the Servicer shall mail
notice of the successor of such Trust Collateral Agent or Custodian under this
Agreement to all Holders of Notes at their addresses as shown in the Note
Register, the Transferor, and to the Rating Agencies. If the Servicer shall fail
to mail such notice within ten (10) days after acceptance of appointment by the
successor Trust Collateral Agent, the successor Trust Collateral Agent or
successor Custodian shall cause such notice to be mailed at the expense of the
Servicer.

         SECTION 10.10. MERGER OR CONSOLIDATION OF TRUST COLLATERAL AGENT OR
CUSTODIAN. Any corporation into which the Trust Collateral Agent or the
Custodian 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 Trust Collateral Agent or the Custodian shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trust Collateral Agent or the Custodian, shall be the successor of the Trust
Collateral Agent or Custodian, as applicable, hereunder, provided such
corporation shall be eligible


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pursuant to Section 10.7, 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.

         SECTION 10.11. CO-TRUSTEE; SEPARATE TRUSTEE.

    (a) 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 Issuer or any Financed Vehicle may at the time be located, the
Servicer, the Note Insurer (provided a Note Insurer Default shall not have
occurred and be continuing) and the Trust Collateral Agent acting jointly shall
have the power and shall execute and deliver all instruments to appoint one or
more persons approved by the Trust Collateral Agent to act as co-trustee,
jointly with the Trust Collateral Agent, or separate trustee or separate
trustees, of all or any part of the Issuer, and to vest in such Person, in such
capacity and for the benefit of the Noteholders, such title to the Issuer, or
any part thereof, and, subject to the other provisions of this Section 10.11,
such powers, duties, obligations, rights, and trusts as the Servicer, the Note
Insurer and the Trust Collateral Agent may consider necessary or desirable. If
the Servicer and the Note Insurer shall not have joined in such appointment
within fifteen (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 Trust
Collateral Agent 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 Trust Collateral Agent pursuant to
Section 10.7, except that the co-trustee or its parent shall comply with the
rating requirements set forth therein, and no notice of a successor Trust
Collateral Agent pursuant to Section 10.9 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 10.9.

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

         (i) All rights, powers, duties, and obligations conferred or imposed
    upon the Trust Collateral Agent shall be conferred upon and exercised or
    performed by the Trust Collateral Agent 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 Trust Collateral
    Agent 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 Trust Collateral Agent under this Agreement or, in its capacity
    as Back-up Servicer, as successor to the Servicer under this Agreement), the
    Trust Collateral Agent 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 Issuer 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 Trust Collateral
    Agent;

         (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 Note Insurer Default shall have occurred and be
    continuing, the Note Insurer may, and, in the event a Note Insurer Default
    shall have occurred and be


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    continuing, then, the Servicer and the Trust Collateral Agent acting
    jointly may, at any time accept the resignation of or remove any separate
    trustee or co-trustee.

     (c) Any notice, request or other writing given to the Trust Collateral
Agent 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 X. 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 Trust Collateral Agent 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 Trust Collateral Agent. Each such
instrument shall be filed with the Trust Collateral Agent and a copy thereof
given to the Servicer.

     (d) Any separate trustee or co-trustee may at any time appoint the Trust
Collateral Agent, 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 Trust Collateral Agent, to the extent permitted by law, without
the appointment of a new or successor Trust Collateral Agent.

         SECTION 10.12. REPRESENTATIONS AND WARRANTIES OF TRUST COLLATERAL AGENT
AND THE CUSTODIAN. The Custodian and the Trust Collateral Agent shall make the
following representations and warranties with respect to itself on which the
Transferor, the Servicer, the Originator, the Issuer, the Note Insurer and
Noteholders shall rely:

         (i) The Custodian and the Trust Collateral Agent are a New York banking
    corporation, duly organized, validly existing, and in good standing under
    the laws of the State of New York and have the corporate power, authority
    and legal right to hold the Legal Files.

         (ii) The Custodian and the Trust Collateral Agent have 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 has been duly executed and delivered by the Trust
    Collateral Agent and the Custodian and constitutes a legal, valid and
    binding obligation of the Trust Collateral Agent and the Custodian,
    enforceable in accordance with its terms, subject to (x) applicable
    bankruptcy, insolvency, reorganization, moratorium and other similar laws
    affection creditor's rights generally and (y) general principals of equity.

         SECTION 10.13. RIGHTS OF NOTE INSURER TO DIRECT TRUST COLLATERAL AGENT.
Subject to clause (iii) of Section 10.3, unless a Note Insurer Default shall
have occurred and be continuing, the Note Insurer, after giving written notice
to the Trust Collateral Agent, shall have the right to direct the time, method
and place at or by which the Trust Collateral Agent conducts


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any proceeding for any remedy available to the Trust Collateral Agent, or
exercises any such trust or power conferred upon the Trust Collateral Agent;
PROVIDED, HOWEVER, that subject to Section 10.1, the Trust Collateral Agent
shall have the right to decline to follow any such direction of the Note Insurer
if the Trust Collateral Agent, being advised by counsel, determines that the
action so directed may not lawfully be taken, or if the Trust Collateral Agent
in good faith shall, by a Responsible Officer of the Trust Collateral Agent,
determine that the proceedings so directed would be in violation of any Basic
Document or involve it in personal liability against which its has not been
provided indemnity in form and substance satisfactory to it or be unduly
prejudicial to the rights of Noteholders; PROVIDED, that nothing in this
Agreement shall impair the right of the Trust Collateral Agent to take any
action deemed proper by the Trust Collateral Agent and which is not inconsistent
with such direction of the Note Insurer.

                                   ARTICLE XI
                                   TERMINATION

         SECTION 11.1. TERMINATION.

     (a) The respective obligations and responsibilities of LBAC, the
Transferor, the Issuer, the Servicer, the Custodian and the Trust Collateral
Agent created hereby shall terminate upon the payment to Noteholders and the
Certificateholder of all amounts required to be paid to them pursuant to this
Agreement, the Indenture and the Trust 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 Assets;
PROVIDED, HOWEVER, in any case there shall be delivered to the Trust Collateral
Agent and the Note 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 11.1. The
Servicer shall promptly notify the Trust Collateral Agent, the Transferor, the
Issuer, each Rating Agency and the Note Insurer of any prospective termination
pursuant to this Section 11.1.

     (b) Upon any sale of the assets of the Issuer pursuant to Section 8.1 of
the Trust Agreement, the Servicer shall instruct the Trust Collateral Agent to
deposit the proceeds from such sale after all payments and reserves therefrom
(including the expenses of such sale) have been made (the "Insolvency Proceeds")
in the Collection Account.

     (c) Notice of any termination of the Issuer shall be given by the Servicer
to the Owner Trustee, the Trust Collateral Agent, the Collateral Agent, the
Back-up Servicer, the Indenture Trustee, the Note Insurer and the Rating
Agencies as soon as practicable after the Servicer has received notice thereof.

     (d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder.


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                                   ARTICLE XII
                      ADMINISTRATIVE DUTIES OF THE SERVICER

         SECTION 12.1. ADMINISTRATIVE DUTIES.


     (a) DUTIES WITH RESPECT TO THE INDENTURE. The Servicer shall take all
necessary action that is the duty of the Issuer to take pursuant to the
Indenture, pursuant to Sections 2.9 (with respect to the notice provisions
contained therein), 3.4, 3.5, 3.6, 3.7, 3.9, 3.10, 3.17, 8.3, 9.1, 9.2, 9.3,
11.1 and 11.13 of the Indenture (in each case, excluding any duty to make
payments to the Noteholders and the Note Insurer). In addition, the Servicer
shall consult with the Owner Trustee as the Servicer deems appropriate regarding
the duties of the Issuer under the Indenture. The Servicer shall monitor the
performance of the Issuer and shall advise the Owner Trustee when action is
necessary to comply with the Issuer's duties under the Indenture. The Servicer
shall prepare for execution by the Issuer or shall cause the preparation by
other appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer to prepare, file
or deliver pursuant to the Indenture.

     (b) DUTIES WITH RESPECT TO THE ISSUER.


         (i) In addition to the duties of the Servicer set forth in this
     Agreement or any of the Basic Documents, the Servicer shall perform such
     calculations and shall prepare for execution by the Issuer or the Owner
     Trustee or shall cause the preparation by other appropriate Persons of all
     such documents, reports, filings, instruments, certificates and opinions as
     it shall be the duty of the Issuer or the Owner Trustee to prepare, file or
     deliver pursuant to this Agreement or any of the Basic Documents or under
     state and federal tax and securities laws, and at the request of the Owner
     Trustee shall take all appropriate action that it is the duty of the Issuer
     to take pursuant to this Agreement. In accordance with the directions of
     the Issuer or the Owner Trustee, the Servicer shall administer, perform or
     supervise the performance of such other activities in connection with the
     Trust Assets (including the Basic Documents) as are not covered by any of
     the foregoing provisions and as are expressly requested by the Issuer or
     the Owner Trustee and are reasonably within the capability of the Servicer.

         (ii) In carrying out the foregoing duties or any of its other
     obligations under this Agreement, the Servicer may enter into transactions
     with or otherwise deal with any of its Affiliates; PROVIDED, HOWEVER, that
     the terms of any such transactions or dealings shall be in accordance with
     any directions received from the Issuer and shall be, in the Servicer's
     opinion, no less favorable to the Issuer in any material respect.

     (c) NON-MINISTERIAL MATTERS. With respect to matters that in the reasonable
judgment of the Servicer are non-ministerial, the Servicer shall not take any
action pursuant to this Article XII unless within a reasonable time before the
taking of such action, the Servicer shall have notified the Owner Trustee , the
Note Insurer and the Trust Collateral Agent of the proposed action and the Owner
Trustee and, with respect to items (i), (ii), (iii) and (iv) below, the Trust
Collateral Agent shall not have withheld consent or provided an alternative
direction. For the purpose of the preceding sentence, "non-ministerial matters"
shall include:


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         (i) the amendment of or any supplement to the Indenture;

         (ii) the initiation of any claim or lawsuit by the Issuer and the
     compromise of any action, claim or lawsuit brought by or against the Issuer
     (other than in connection with the collection of the Receivables);

         (iii) the amendment, change or modification of this Agreement or any of
     the Basic Documents;

         (iv) the appointment of successor Note Registrars, successor Note
     Paying Agents and successor Indenture Trustees pursuant to the Indenture or
     the appointment of Successor Servicers or the consent to the assignment by
     the Note Registrar, Paying Agent or Trustee of its obligations under the
     Indenture; and

         (v) the removal of the Trust Collateral Agent or the Indenture Trustee.

     (d) EXCEPTIONS. Notwithstanding anything to the contrary in this Agreement,
except as expressly provided herein or in the other Basic Documents, the
Servicer, in its capacity hereunder, shall not be obligated to, and shall not,
(1) make any payments to the Noteholders under the Basic Documents, (2) sell the
Pledged Property pursuant to Section 5.5 of the Indenture, (3) take any other
action that the Issuer directs the Servicer not to take on its behalf or (4) in
connection with its duties hereunder assume any indemnification obligation of
any other Person.

         SECTION 12.2. RECORDS. The Servicer shall maintain appropriate books of
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Issuer at
any time during normal business hours.

         SECTION 12.3. ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER. The
Servicer shall furnish to the Issuer from time to time such additional
information regarding the Trust Assets as the Issuer shall reasonably request.

         SECTION 12.4. NO ADDITIONAL COMPENSATION. The Servicing Fee payable to
the Servicer pursuant to Section 5.6(c)(i) and the Simple Interest Excess, if
any, payable to the Servicer, so long as LBAC is the Servicer, pursuant to
Section 5.12 shall be the only amounts payable to the Servicer for its services
hereunder.

                                  ARTICLE XIII
                            MISCELLANEOUS PROVISIONS

         SECTION 13.1. AMENDMENT.

     (a) This Agreement may be amended from time to time by the Issuer, the
Transferor, the Originator, the Servicer, the Trust Collateral Agent, the
Back-up Servicer and the Custodian and, (i) so long as no Note Insurer Default
has occurred and is continuing or the Policy Expiration Date has not occurred,
with the prior written consent of the Note Insurer and, (ii) if a


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<PAGE>


Note Insurer Default has occurred and is continuing or the Policy Expiration
Date has occurred with the consent of the Majorityholders, which consent given
pursuant to this Section or pursuant to any other provision of this Agreement
shall be conclusive and binding on all Holders and on all future Holders of
Notes and of any Notes issued upon the transfer thereof or in exchange thereof
or in lieu thereof whether or not notation of such consent is made upon the
Notes, 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 Notes; PROVIDED, HOWEVER, that, in the case
of either clause (i) or (ii) above, 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
payments that shall be required to be made on any Note or the Certificate or
change the applicable Note Rate without the consent of each Noteholder and
Certificateholder affected thereby, (b) reduce the aforesaid percentage of the
Note Balance required to consent to any such amendment, without the consent of
the Holders of all Notes then outstanding or eliminate the right of the
Noteholder or the Certificateholder to consent to any change described in clause
(a) affecting the Noteholder or the Certificateholder without the consent of the
Noteholder or the Certificateholder, as applicable, or (c) result in a downgrade
or withdrawal of the then current rating of the Notes by either of the Rating
Agencies without the consent of all the Noteholders; PROVIDED, FURTHER that in
the case of clause (ii) above, this Agreement may be amended from time to time
by the Issuer, the Transferor, the Originator, the Servicer, the Trust
Collateral Agent, the Back-up Servicer and the Custodian, for any of the
following purposes:

                  (x) to correct or amplify the description of any property at
         any time conveyed to the Issuer hereunder or any Transfer Agreement, or
         better to assure, convey and confirm unto the property conveyed
         pursuant hereto or any Transfer Agreement;

                  (y) to add to the covenants of the Transferor, the Originator
         or the Servicer, for the benefit of the Holders of the Notes and the
         Note Insurer; or

                  (z) to cure any ambiguity, to correct or supplement any
         provision herein or in any Transfer Agreement which may be inconsistent
         with any other provision herein or in any Transfer Agreement or to make
         any other provisions with respect to matters or questions arising under
         this Agreement or in any Transfer Agreement; PROVIDED that such action
         pursuant to this subclause (z) shall not adversely affect in any
         material respect the interests of the Holders of the Notes, as
         evidenced by satisfaction of the Rating Agency Condition with respect
         to such amendment.

     (b) The Trust Collateral Agent 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 Trust Collateral Agent shall furnish a copy of
such amendment and/or consent, if applicable, to each Noteholder, each of the
Rating Agencies and the Lock-Box Processor.

     (c) Prior to the execution of any amendment to this Agreement, the Trust
Collateral Agent 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 13.2(i)(1).
The Trust Collateral Agent may, but shall not be obligated to,


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<PAGE>


enter into any such amendment which affects the Trust Collateral Agent's own
rights, duties or immunities under this Agreement or otherwise.

         SECTION 13.2. PROTECTION OF TITLE.

     (a) Each of the Transferor, 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
Indenture Trustee on behalf of the Noteholders, the Trust Collateral Agent and
the Note Insurer in its interest in the Receivables and the other Trust Assets
and in the proceeds thereof. Each of the Transferor, as to itself, and the
Servicer, as to itself, shall deliver (or cause to be delivered) to the Trust
Collateral Agent, the Owner Trustee and the Note 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 Transferor 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 ss. 9-402(7) of the UCC,
unless it shall have given the Trust Collateral Agent, the Owner Trustee, the
Note 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 Trust Collateral Agent 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 Transferor and the Servicer shall have an obligation to
give the Trust Collateral Agent, the Owner Trustee, the Note Insurer and the
other party at least thirty days' prior written notice of any relocation of its
principal executive office or change in its state of incorporation if, as a
result of such relocation or change, 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 Trust Collateral
Agent 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.


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<PAGE>


     (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 Collection Account in respect of such
Receivable.

     (e) The Servicer shall maintain its computer systems so that, from and
after the time of conveyance under this Agreement of the Receivables to the
Issuer, 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 Receivables Trust 2001-A in such Receivable and that such
Receivable is owned by the Issuer. Indication of the Issuer's 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 Transferor 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 conveyed to and is owned by
the Issuer.

     (g) The Servicer shall, upon reasonable notice, permit the Transferor, the
Trust Collateral Agent, the Back-up Servicer, the Owner Trustee and the Note
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 Transferor, the Trust
Collateral Agent, the Back-up Servicer, the Owner Trustee or to the Note
Insurer, within five Business Days, a list of all Receivables (by contract
number and name of Obligor) then held as part of the Issuer, 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 Issuer.

     (i) The Servicer shall deliver to the Trust Collateral Agent, the Owner
Trustee and the Note 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 Trust Collateral Agent 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


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<PAGE>


         (2) within 90 days after the beginning of each calendar year beginning
     with the first calendar year beginning more than three months after the
     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
     Trust Collateral Agent 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.

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 13.3. LIMITATION ON RIGHTS OF NOTEHOLDERS.


     (a) The death or incapacity of any Noteholder shall not operate to
terminate this Agreement or the Issuer, nor entitle such Noteholder'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
Issuer, nor otherwise affect the rights, obligations and liabilities of the
parties to this Agreement or any of them.

     (b) No Noteholder shall have any right to vote (except as specifically
provided herein including in Section 13.1) or in any manner otherwise control
the operation and management of the Issuer, or the obligations of the parties to
this Agreement, nor shall anything in this Agreement set forth, or contained in
the terms of the Notes, be construed so as to constitute the Noteholders from
time to time as partners or members of an association; nor shall any Noteholder
be under any liability to any third person by reason of any action taken
pursuant to any provision of this Agreement.

     (c) So long as no Note Insurer Default has occurred and is continuing,
except as otherwise specifically provided herein, whenever Noteholder 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 Noteholders if the Note Insurer agrees to take such action or
give such consent or approval.

     (d) If a Note Insurer Default shall have occurred and be continuing, no
Noteholder 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 Trust Collateral Agent a written
notice of default and of the continuance thereof, and unless also the
Noteholders evidencing not less than 25% of the Note Balance shall have made
written request upon the Trust


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<PAGE>


Collateral Agent to institute such action, suit or proceeding in its own name as
Trustee under this Agreement and shall have offered to the Trust Collateral
Agent such reasonable indemnity as it may require against the costs, expenses,
and liabilities to be incurred therein or thereby and the Trust Collateral
Agent, 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 Trust Collateral Agent pursuant to
this Section or Section 8.4; no one or more Holders of Notes 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 Notes, 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 Noteholders. For the protection and
enforcement of the provisions of this Section 13.3, each Noteholder and the
Trust Collateral Agent 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
Noteholders any direct right to make a claim on the Policy.

         SECTION 13.4. 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 13.5. NOTICES.

     (a) All demands, notices and communications upon or to the Issuer, the
Transferor, the Servicer, the Trust Collateral Agent, the Note 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 Issuer, in
care of the Owner Trustee at the following address: Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration (Telecopy: (302) 651-8882), (b) in the case of the Transferor, 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 Transferor in a written notice to the Trust
Collateral Agent, (c) 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, (d) in the case of the Trust Collateral Agent, at
the Corporate Trust Office (Telecopy: (212) 946-3916), (e) in the case of the
Custodian, at the Corporate Trust Office (Telecopy: (212) 946-3916), (f) in the
case of Standard & Poor's, at the following address: 44 Water Street, 40th
Floor, New York, New York 10041, Attention: Asset Backed Surveillance
Department, (g) in the case of Moody's, at the following address: 99 Church
Street, New York, New York 10007, Attention: ABS Monitoring Department and (h)
in the case of the Note Insurer, at the following address: 350 Park Avenue, New
York, New York 10022, Attention: Senior Vice President, Transaction Oversight,
Re: Long Beach Acceptance Auto Receivables Trust 2001-A. Any notice required or
permitted to be mailed to a Noteholder shall be given by Federal Express or



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similar overnight courier service, postage prepaid, at the address of such
Holder as shown in the Note 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 Noteholder shall receive such notice.

     (b) The Trust Collateral Agent shall give prompt written notice to each of
the Transferor, the Rating Agencies and each Noteholder of (i) any amendments to
the Insurance Agreement or the Policy (upon receipt of written notice of any
such amendments from LBAC or the Servicer), (ii) any change in the identity of
the Note Paying Agent and (iii) any failure to make payment under the Policy.

         SECTION 13.6. 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 Notes or
the rights of the Holders thereof.

         SECTION 13.7. ASSIGNMENT TO INDENTURE TRUSTEE. The Transferor hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders and the Note Insurer of all right,
title and interest of the Issuer in, to and under the Receivables and/or the
assignment of any or all of the Issuer's rights and obligations hereunder to the
Indenture Trustee.

         SECTION 13.8. LIMITATION OF LIABILITY OF OWNER TRUSTEE, CUSTODIAN AND
TRUST COLLATERAL AGENT.

     (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Wilmington Trust Company in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee, have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements of the Issuer delivered pursuant hereto, as to all of which recourse
shall be had solely to the assets of the Issuer. For all purposes of this
Agreement, in the performance of its duties or obligations hereunder or in the
performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of the Trust Agreement.

     (b) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed and delivered by Chase Manhattan, not in its
individual capacity but solely as Back-up Servicer, Custodian and Trust
Collateral Agent and in no event shall Chase Manhattan have any liability for
the representations, warranties, covenants, agreements or other obligations of
the Issuer hereunder or in any of the certificates, notices or agreements of the
Issuer delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer.



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<PAGE>


         SECTION 13.9. INDEPENDENCE OF THE SERVICER. For all purposes of this
Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Issuer, the Trust Collateral Agent, the
Back-up Servicer or the Owner Trustee with respect to the manner in which it
accomplishes the performance of its obligations hereunder. Unless expressly
authorized by this Agreement, the Servicer shall have no authority to act for or
represent the Issuer or the Owner Trustee in any way and shall not otherwise be
deemed an agent of the Issuer or the Owner Trustee.

         SECTION 13.10. NO JOINT VENTURE. Nothing contained in this Agreement
(i) shall constitute the Servicer and either of the Issuer or the Owner Trustee
as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.

         SECTION 13.11. NONPETITION COVENANT. None of the Transferor, the
Servicer, the Trust Collateral Agent, 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 Issuer or the Transferor,
petition or otherwise invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Issuer or the
Transferor 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 Issuer or the Transferor or any substantial part
of its property, or ordering the winding up or liquidation of the affairs of the
Issuer or the Transferor.

         SECTION 13.12. THIRD PARTY BENEFICIARIES. Except as otherwise
specifically provided herein with respect to Noteholders and the
Certificateholder, the parties to this Agreement hereby manifest their intent
that no third party other than the Note Insurer, the Owner Trustee 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 Note 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 Note Insurer Default
shall have occurred and be continuing. Except as expressly stated otherwise
herein or in the Basic Documents, any right of the Note Insurer to direct,
appoint, consent to, approve of or take any action under this Agreement, shall
be a right exercised by the Note Insurer in its sole and absolute discretion.
The Note 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 Trust Collateral Agent.

         SECTION 13.13. CONSENT TO JURISDICTION.

     (a) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE OF NEW
YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK, AND ANY APPELLATE COURT FROM
ANY THEREOF, IN



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

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

     (c) Each of LBAC and the Transferor hereby agree that until such time at
the Notes and the Reimbursement Obligations have been paid in full and the
Policy has expired in accordance with its terms, each of LBAC and the Transferor
shall have appointed, with prior written notice to the Note Insurer, an agent
registered with the Secretary of State of the State of New York, with an office
in the County of New York in the State of New York, as its true and lawful
attorney and duly authorized agent for acceptance of service of legal process
(which as of the date hereof is National Registered Agents, Inc., whose address
is 105 Chambers Street, New York, New York 10007). Each of LBAC and the
Transferor agrees that service of such process upon such Person shall constitute
personal service of such process upon it.

         SECTION 13.14. HEADINGS. The headings of articles and sections and the
table of contents contained in this Agreement are provided for convenience only.
They form no part of this Agreement and shall not affect its construction or
interpretation. Unless otherwise indicated, all references to articles and
sections in this Agreement refer to the corresponding articles and sections of
this Agreement.

         SECTION 13.15. TRIAL BY JURY WAIVED. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION
WITH ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTION. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND


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<PAGE>



(B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THE TRANSACTION
DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THIS WAIVER.

         SECTION 13.16. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement between the parties with respect to the subject matter hereof, and
this Agreement supersedes and replaces any agreement or understanding that may
have existed between the parties prior to the date hereof in respect of such
subject matter.

         SECTION 13.17. EFFECT OF POLICY EXPIRATION DATE. Notwithstanding
anything to the contrary set forth herein, all references to any right of the
Note Insurer to direct, appoint, consent to, accept, approve of, take or omit to
take any action under this Agreement or any other Basic Document shall be
inapplicable at all times after the Policy Expiration Date, and (i) if such
reference provides for another party or parties to take or omit to take any such
action following a Note Insurer Default, such party or parties shall also be
entitled to take or omit to take such action following a the Policy Expiration
Date and (ii) if such reference does not provide for another party or parties to
take or omit to take any such action following a Note Insurer Default, then the
Indenture Trustee acting at the direction of the Majorityholders shall have the
right to take or omit to take any such action following the Policy Expiration
Date. In addition, any other provision of this Agreement or any other Basic
Document which is operative based in whole or in part on whether a Note Insurer
Default has or has not occurred shall, at all times on or after the Policy
Expiration Date, be deemed to refer to whether or not the Policy Expiration Date
has occurred.


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

                                          LONG BEACH ACCEPTANCE
                                          RECEIVABLES CORP., as Transferor


                                          By: __________________________________
                                             Name:
                                             Title:


                                          LONG BEACH ACCEPTANCE CORP.,
                                          as Originator and Servicer


                                          By: __________________________________
                                             Name:
                                             Title:


                                          THE CHASE MANHATTAN BANK,
                                          as Back-up Servicer, Custodian and
                                          Trust Collateral Agent


                                          By: __________________________________
                                             Name:
                                             Title:


                                          LONG BEACH ACCEPTANCE AUTO
                                          RECEIVABLES TRUST 2001-A, as Issuer


                                          By:  Wilmington Trust Company, not in
                                               its individual capacity, but
                                               solely as Owner Trustee


                                          By: __________________________________
                                             Name:
                                             Title:



                         [Sale and Servicing Agreement]

<Page>

                                                                  ANNEX A

                           ANNEX A -- DEFINED TERMS

     "ACCOUNTS" means the Collection Account, the Note Account, the Policy
Payments Account, the Pre-Funding Account, the Capitalized Interest Account
and the Spread Account.

     "ACCRUAL PERIOD" means, with respect to any Payment Date, the period
from and including the immediately preceding Payment Date (or, with respect
to the initial Payment Date, the Closing Date) to but excluding such current
Payment Date.

     "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 the Sale and Servicing Agreement and a
Transfer Agreement, a written notice which shall be given to the Trust
Collateral Agent, the Note Insurer (in addition to such notice, the Trust
Collateral Agent and the Note Insurer shall both receive an electronic
transmission, in a format acceptable to the Trust Collateral Agent and the
Note Insurer, of the designated Subsequent Receivables to be conveyed to the
Trust) and each Rating Agency pursuant to Section 2.2(b) of the Sale and
Servicing Agreement not later than five Business Days prior to the related
Subsequent Transfer Date, of the Transferor's designation of Subsequent
Receivables to be conveyed to the Trust and the aggregate Principal Balance
of such Subsequent Receivables as of the related Subsequent Cutoff Date.

     "ADJUSTED APR" means the APR reduced by the annualized rate
corresponding to any Monthly Dealer Participation Fee.

     "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 Manhattan, LBAC, GCFP and other Program Parties as defined
therein, as 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 Manhattan, as agent thereunder, the Trust
Collateral Agent and LBAC, dated as of the Closing Date.

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

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


                                 Annex A - 1
<Page>

     "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.

     "ASSIGNMENT" means each of the Initial Assignment and each Subsequent
Assignment.

     "ASSUMPTION DATE" has the meaning set forth in Section 9.2 of the Sale
and Servicing Agreement.

     "AUTHORIZED OFFICER" means, with respect to the Issuer, any officer or
agent of the Servicer, as applicable, who is authorized to act for the Issuer
in accordance with Section 12.1 of the Sale and Servicing Agreement, in
matters relating to the Issuer and who is identified on the list of
Authorized Officers delivered by the Servicer to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter).

     "AVAILABLE FUNDS" shall mean, for each Payment Date, the sum of the
following amounts (without duplication) with respect to the related
Collection Period: (i) all collection on Receivables (including amounts
received in connection with extensions, rebates or adjustments on Receivables
granted by the Servicer pursuant to Section 4.2 of the Sale and Servicing
Agreement) and with respect to each Collection Period during the Funding
Period, the related Payahead Amount, if any; (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) the amount of any Simple Interest Advance
deposited to the Collection Account by the Servicer with respect to such
Collection Period; and (vi) any earnings on investments of funds in the
Collection Account and, to the extent necessary to cover the Pre-Funding
Interest Amount, the Pre-Funding Account; and (vii) the Negative Carry
Amount, if any, for such Payment Date to the extent it is deposited to the
Note Account pursuant to Section 5.6(a)(iii) of the Sale and Servicing
Agreement; provided that the Available Funds with respect to any Payment Date
shall not include any Simple Interest Excess remitted to the Servicer or
deposited in the Spread Account.

     "BACK-UP SERVICER" means Chase Manhattan, 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
9.2(c) of the Sale and Servicing Agreement.

     "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 4.8 of the Sale and Servicing Agreement, based on the Back-up
Servicer Fee Rate rather than the Servicing Fee Rate.


                                 Annex A - 2
<Page>

     "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 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 the Sale and Servicing Agreement, the Indenture,
each Transfer Agreement, the Purchase Agreement, each Assignment, the Spread
Account Agreement, the Trust Agreement, the Notes, the Certificate, the
Servicer Termination Side Letter, the Insurance Agreement, the
Indemnification Agreement, the Guarantee, the Note Purchase Agreement, the
Premium Letter, the Lock-Box Agreement, the Agency Agreement, the Servicing
Assumption Agreement, the Stock Pledge Agreement and each GCFP 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, the State of Delaware or
the city in which the Corporate Trust Office of the Trust Collateral Agent
or the Owner Trustee is relocated subject to prior written notice with
respect to such address to the Trust Collateral Agent, the Servicer and the
Note Insurer or any other location of any successor Servicer, successor Trust
Collateral Agent or successor Owner Trustee 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 5.1(b) of the Sale and
Servicing Agreement.

     "CAPITALIZED INTEREST REQUIREMENT" means (i) with respect to the July
2001 Payment Date, an amount equal to two month's interest on the Pre-Funded
Amount as of the last day of the immediately preceding Collection Period at a
rate equal to the sum of (a) the Weighted Average Note Rate, PLUS (b) the
Indenture Trustee Fee Rate, PLUS (c) the Custodian Fee Rate, PLUS (d) the
rate at which the Premium for the Policy is calculated, MINUS (e) 2.5%, and
(ii) with respect to the August 2001 Payment Date, an amount equal to one
month's interest on the Pre-Funded Amount as of the last day of the
immediately preceding Collection Period at a rate equal to the sum of (a) the
Weighted Average Note Rate, PLUS (b) the Indenture Trustee Fee Rate, PLUS (c)
the Custodian Fee Rate, PLUS (d) the rate at which the Premium for the Policy
is calculated, MINUS (e) 2.5%.

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


                                 Annex A - 3
<Page>

     "CERTIFICATE" means the trust certificate issued by the Issuer pursuant
to the Trust Agreement.

     "CERTIFICATEHOLDER" means the registered holder of the Certificate as
set forth in the certificate register maintained by the Owner Trustee
pursuant to the Trust Agreement.

     "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 MANHATTAN" means The Chase Manhattan Bank, a New York banking
corporation, and its successors in interest.

     "CLASS A-1 FINAL SCHEDULED PAYMENT DATE" means the Payment Date in July
2002.

     "CLASS A-1 INTEREST CARRYOVER SHORTFALL" means, as of the close of
business on any Payment Date, the excess of the Class A-1 Interest Payment
Amount for such Payment Date and (without duplication) any outstanding Class
A-1 Interest Carryover Shortfall from the preceding Payment Date, plus
interest on such outstanding Class A-1 Interest Carryover Shortfall, to the
extent permitted by applicable law, at the Class A-1 Note Rate for the
related Accrual Period (based on the actual number of days elapsed during
such Accrual Period based on a 360 day year), over the amount of interest
actually paid to the holders of the Class A-1 Notes on such current Payment
Date.

     "CLASS A-1 INTEREST PAYMENT AMOUNT" means, for any Payment Date, an
amount equal to the product of (x) a fraction, the numerator of which is the
actual number of days elapsed during the related Accrual Period and the
denominator of which is 360, (y) the Class A-1 Note Rate and (z) the Class
A-1 Note Balance as of such Payment Date (without giving effect to any
payments to be made on such Payment Date).

     "CLASS A-1 NOTE BALANCE" means initially, the Initial Class A-1 Note
Balance and, thereafter, the Initial Class A-1 Note Balance, reduced by all
amounts previously distributed to Class A-1 Noteholders and allocable to
principal.

     "CLASS A-1 NOTE INTEREST" means, for any Payment Date, the sum of the
Class A-1 Interest Payment Amount for such Payment Date and the Class A-1
Interest Carryover Shortfall, if any, as of the immediately preceding Payment
Date.

     "CLASS A-1 NOTE RATE" means 4.010% per annum.

     "CLASS A-1 NOTE" means any one of the 4.010% Long Beach Acceptance Auto
Receivables Trust 2001-A, Class A-1 Notes, executed by the Owner Trustee on
behalf of the Issuer and authenticated by the Indenture Trustee in
substantially the form set forth in Exhibit A-1 attached to the Indenture.


                                 Annex A - 4
<Page>

     "CLASS A-1 NOTEHOLDER" means the Person in whose name a Class A-1 Note
is registered on the Note Register.

     "CLASS A-1 PAYMENT AMOUNT" with respect to a Payment Date will be an
amount equal to the sum of the Class A-1 Principal Payment Amount and the
Class A-1 Interest Payment Amount.

     "CLASS A-1 POOL FACTOR" means, with respect to any Payment Date, an
eight-digit decimal figure equal to the Class A-1 Note Balance as of the
close of business on the last day of the related Collection Period divided by
the Initial Class A-1 Note Balance. The Class A-1 Pool Factor will be
1.0000000 as of the Closing Date; thereafter, the Class A-1 Pool Factor will
decline to reflect reductions in the Class A-1 Note Balance.

     "CLASS A-1 PRINCIPAL PAYMENT AMOUNT" means, for any Payment Date, the
Principal Payment Amount, if any, due and payable to the Class A-1 Noteholders
with respect to such Payment Date in accordance with the priorities set forth
in Section 5.6(c)(iv) of the Sale and Servicing Agreement.

     "CLASS A-2 FINAL SCHEDULED PAYMENT DATE" means the Payment Date in
September 2004.

     "CLASS A-2 INTEREST CARRYOVER SHORTFALL" means, as of the close of
business on any Payment Date, the excess of the Class A-2 Interest Payment
Amount for such Payment Date and (without duplication) any outstanding Class
A-2 Interest Carryover Shortfall (calculated on the basis of a 360-day year
consisting of twelve 30-day months) from the preceding Payment Date, plus
thirty (30) days of interest on such outstanding Class A-2 Interest Carryover
Shortfall, to the extent permitted by applicable law, at the Class A-2 Note
Rate for the related Accrual Period, over the amount of interest actually
paid to the holders of the Class A-2 Notes on such current Payment Date.

     "CLASS A-2 INTEREST PAYMENT AMOUNT" means, for any Payment Date, an
amount equal to the product of (x) 1/12, (y) the Class A-2 Note Rate and (z)
the Class A-2 Note Balance as of such Payment Date (without giving effect to
any payments to be made on such Payment Date).

     "CLASS A-2 NOTE BALANCE" means initially, the Initial Class A-2 Note
Balance and, thereafter, the Initial Class A-2 Note Balance, reduced by all
amounts previously distributed to Class A-2 Noteholders and allocable to
principal.

     "CLASS A-2 NOTE INTEREST" means, for any Payment Date, the sum of the
Class A-2 Interest Payment Amount for such Payment Date and the Class A-2
Interest Carryover Shortfall, if any, as of the immediately preceding Payment
Date.

     "CLASS A-2 NOTE RATE" means 4.430% per annum.

     "CLASS A-2 NOTE" means any one of the 4.430% Long Beach Acceptance Auto
Receivables Trust 2001-A, Class A-2 Notes, executed by the Owner Trustee on
behalf of the


                                 Annex A - 5
<Page>

Issuer and authenticated by the Indenture Trustee in substantially the form
set forth in Exhibit A-2 attached to the Indenture.

     "CLASS A-2 NOTEHOLDER" means the Person in whose name a Class A-2 Note
is registered on the Note Register.

     "CLASS A-2 PAYMENT AMOUNT" with respect to a Payment Date will be an
amount equal to the sum of the Class A-2 Principal Payment Amount and the
Class A-2 Interest Payment Amount.

     "CLASS A-2 POOL FACTOR" means, with respect to any Payment Date, an
eight-digit decimal figure equal to the Class A-2 Note Balance as of the
close of business on the last day of the related Collection Period divided by
the Initial Class A-2 Note Balance. The Class A-2 Pool Factor will be
1.0000000 as of the Closing Date; thereafter, the Class A-2 Pool Factor will
decline to reflect reductions in the Class A-2 Note Balance.

     "CLASS A-2 PRINCIPAL PAYMENT AMOUNT" means, for any Payment Date, the
Principal Payment Amount, if any, due and payable to the Class A-2
Noteholders with respect to such Payment Date in accordance with the
priorities set forth in Section 5.6(c)(iv) of the Sale and Servicing
Agreement.

     "CLASS A-3 FINAL SCHEDULED PAYMENT DATE" means the Payment Date in March
2006.

     "CLASS A-3 INTEREST CARRYOVER SHORTFALL" means, as of the close of
business on any Payment Date, the excess of the Class A-3 Interest Payment
Amount for such Payment Date and (without duplication) any outstanding Class
A-3 Interest Carryover Shortfall from the preceding Payment Date, plus thirty
(30) days of interest on such outstanding Class A-3 Interest Carryover
Shortfall (calculated on the basis of a 360-day year consisting of twelve
30-day months), to the extent permitted by applicable law, at the Class A-3
Note Rate for the related Accrual Period, over the amount of interest
actually paid to the holders of the Class A-3 Notes on such current Payment
Date.

     "CLASS A-3 INTEREST PAYMENT AMOUNT" means, for any Payment Date, an
amount equal to the product of (x) 1/12, (y) the Class A-3 Note Rate and (z)
the Class A-3 Note Balance as of such Payment Date (without giving effect to
any payments to be made on such Payment Date).

     "CLASS A-3 NOTE BALANCE" means initially, the Initial Class A-3 Note
Balance and, thereafter, the Initial Class A-3 Note Balance, reduced by all
amounts previously distributed to Class A-3 Noteholders and allocable to
principal.

     "CLASS A-3 NOTE INTEREST" means, for any Payment Date, the sum of the
Class A-3 Interest Payment Amount for such Payment Date and the Class A-3
Interest Carryover Shortfall, if any, as of the immediately preceding Payment
Date.

     "CLASS A-3 NOTE RATE" means 5.198% per annum.


                                 Annex A - 6
<Page>

     "CLASS A-3 NOTE" means any one of the 5.198% Long Beach Acceptance Auto
Receivables Trust 2001-A, Class A-3 Notes, executed by the Owner Trustee on
behalf of the Issuer and authenticated by the Indenture Trustee in
substantially the form set forth in Exhibit A-3 attached to the Indenture.

     "CLASS A-3 NOTEHOLDER" means the Person in whose name a Class A-3 Note
is registered on the Note Register.

     "CLASS A-3 PAYMENT AMOUNT" with respect to a Payment Date will be an
amount equal to the sum of the Class A-3 Principal Payment Amount and the
Class A-3 Interest Payment Amount.

     "CLASS A-3 POOL FACTOR" means, with respect to any Payment Date, an
eight-digit decimal figure equal to the Class A-3 Note Balance as of the
close of business on the last day of the related Collection Period divided
by the Initial Class A-3 Note Balance. The Class A-3 Pool Factor will be
1.0000000 as of the Closing Date; thereafter, the Class A-3 Pool Factor will
decline to reflect reductions in the Class A-3 Note Balance.

     "CLASS A-3 PRINCIPAL PAYMENT AMOUNT" means, for any Payment Date, the
Principal Payment Amount, if any, due and payable to the Class A-3
Noteholders with respect to such Payment Date in accordance with the
priorities set forth in Section 5.6(c)(iv) of the Sale and Servicing
Agreement.

     "CLASS A-4 FINAL SCHEDULED PAYMENT DATE" means the Payment Date in
October 2008.

     "CLASS A-4 INTEREST CARRYOVER SHORTFALL" means, as of the close of
business on any Payment Date, the excess of the Class A-4 Interest Payment
Amount for such Payment Date and (without duplication) any outstanding Class
A-4 Interest Carryover Shortfall from the preceding Payment Date, plus thirty
(30) days of interest on such outstanding Class A-4 Interest Carryover
Shortfall (calculated on the basis of a 360-day year consisting of twelve
30-day months), to the extent permitted by applicable law, at the Class A-4
Note Rate for the related Accrual Period, over the amount of interest
actually paid to the holders of the Class A-4 Notes on such current Payment
Date.

     "CLASS A-4 INTEREST PAYMENT AMOUNT" means, for any Payment Date, an
amount equal to the product of (x) 1/12, (y) the Class A-4 Note Rate and (z)
the Class A-4 Note Balance as of such Payment Date (without giving effect to
any payments to be made on such Payment Date).

     "CLASS A-4 NOTE BALANCE" means initially, the Initial Class A-4 Note
Balance and, thereafter, the Initial Class A-4 Note Balance, reduced by all
amounts previously distributed to Class A-4 Noteholders and allocable to
principal.

     "CLASS A-4 NOTE INTEREST" means, for any Payment Date, the sum of the
Class A-4 Interest Payment Amount for such Payment Date and the Class A-4
Interest Carryover Shortfall, if any, as of the immediately preceding Payment
Date.

                                 Annex A - 7
<Page>

     "CLASS A-4 NOTE RATE" means 5.804% per annum.

     "CLASS A-4 NOTE" means any one of the 5.804% Long Beach Acceptance Auto
Receivables Trust 2001-A, Class A-4 Notes, executed by the Owner Trustee on
behalf of the Issuer and authenticated by the Indenture Trustee in
substantially the form set forth in Exhibit A-4 attached to the Indenture.

     "CLASS A-4 NOTEHOLDER" means the Person in whose name a Class A-4 Note
is registered on the Note Register.

     "CLASS A-4 PAYMENT AMOUNT" with respect to a Payment Date will be an
amount equal to the sum of the Class A-4 Principal Payment Amount and the
Class A-4 Interest Payment Amount.

     "CLASS A-4 POOL FACTOR" means, with respect to any Payment Date, an
eight-digit decimal figure equal to the Class A-4 Note Balance as of the
close of business on the last day of the related Collection Period divided by
the Initial Class A-4 Note Balance. The Class A-4 Pool Factor will be
1.0000000 as of the Closing Date; thereafter, the Class A-4 Pool Factor will
decline to reflect reductions in the Class A-4 Note Balance.

     "CLASS A-4 PRINCIPAL PAYMENT AMOUNT" means, for any Payment Date, the
Principal Payment Amount, if any, due and payable to the Class A-4
Noteholders with respect to such Payment Date in accordance with the
priorities set forth in Section 5.6(c)(iv) of the Sale and Servicing
Agreement.

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

     "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 June 13, 2001.

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

     "COLLATERAL AGENT" means the Collateral Agent named in the Spread
Account Agreement and any successor thereto pursuant to the terms of the
Spread Account Agreement.

     "COLLECTION ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 5.1(b) of the Sale and Servicing Agreement.

     "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.


                                 Annex A-8
<Page>

     "COLLECTION PERIOD" means each calendar month during the term of the
Sale and Servicing 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 and (2) all payments. The term "related
Collection Period" shall mean the Collection Period ended on the last day of
the month preceding a date of determination.

     "COLLINS CASE" means Collins v. Long Beach Acceptance Corp., Case No.
834941-5, filed on January 11, 2001 in California Superior Court, Alameda
County.

     "CONFIDENTIAL INFORMATION" means, in relation to any Person, any written
information delivered or made available by or on behalf of LBAC or the
Transferor to such Person in connection with or pursuant to the Sale and
Servicing Agreement or any other Basic Document or the transactions
contemplated thereby 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 the Sale and
Servicing Agreement or any other Basic Document), (ii) which subsequently
becomes publicly known through no act or omission by such Person, or (iii)
which otherwise becomes known to such Person on a non-confidential basis from
a source other than through disclosure by LBAC or the Transferor; provided,
that such source is not known by such Person to be prohibited from
transmitting the information to such Person by a contractual or other
obligation.

     "CONTROLLING PARTY" means the Note Insurer, so long as no Note Insurer
Default shall have occurred and be continuing or the Policy Expiration Date
has not occurred, and the Indenture Trustee, at the direction of the
Majorityholders, for so long as a Note Insurer Default shall have occurred
and be continuing or the Policy Expiration Date has occurred.

     "CORPORATE TRUST OFFICE" means (i) with respect to the Indenture
Trustee, the Trust Collateral Agent and the Collateral Agent, the principal
office of the Trust Collateral Agent at which its corporate trust business
shall be administered, which office at the Closing Date is located at 450 West
33rd Street, 14th Floor New York, New York 10001, Attention: Capital Markets
Fiduciary Services; and (ii) with respect to the Owner Trustee, the principal
corporate trust office of the Owner Trustee, which as of the Closing Date is
Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration.

     "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 Receivable
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
Receivable 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 Receivable Payments as so


                                 Annex A-9
<Page>

modified or restructured. A Cram Down Loss will be deemed to have occurred on
the date of issuance of such order.

     "CREDIT AND SECURITY AGREEMENT" means the Credit and Security Agreement,
dated as of June 13, 2001, by and among GCFP, as lender, the Transferor, as
borrower, and LBAC, as guarantor, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.

     "CUSTODIAL LETTER" shall have the meaning assigned to such term in
Section 3.5(c) of the Sale and Servicing Agreement.

     "CUSTODIAN" means, initially, The Chase Manhattan Bank, a New York
banking corporation and its successors-in-interest, acting in its capacity as
such under the Sale and Servicing Agreement, and thereafter, in the event
that The Chase Manhattan Bank is replaced in accordance with Section 10.8(e)
of the Sale and Servicing Agreement, the Servicer.

     "CUSTODIAN FEE" means, with respect to any Payment Date, the greater of
(A) the product of (i) one-twelfth of the Custodian Fee Rate and (ii) the
Pool Balance as of the last day of the immediately preceding Collection
Period and (B) $1000.

     "CUSTODIAN FEE RATE" means 0.022% per annum.

     "CUTOFF DATE" means the Initial Cutoff Date or the Subsequent Cutoff
Date, as applicable.

     "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 Transferor.

     "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 a schedule of Dealers delivered to the
Custodian for which the Dealer Title Guaranty, if applicable, is a separate
document in the Dealer file or, 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 signed where required by the
Dealer in the appropriate spaces, and with all blanks properly filled in and
otherwise correctly prepared.

     "DEFAULT" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.


                                 Annex A-10
<Page>

     "DEFAULTED RECEIVABLE" means, with respect to any Payment 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 Receivable Payment by its due date and such failure continues for
90 days (calculated based on a 360-day year consisting 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; PROVIDED, HOWEVER, that Defaulted
Receivable shall not include any Optional Repurchase Receivable.

     "DEFICIENCY CLAIM AMOUNT" shall have the meaning specified in Section
5.11(a) of the Sale and Servicing Agreement.

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

     "DEFICIENCY NOTICE" shall have the meaning specified in Section 5.11(a)
of the Sale and Servicing Agreement.

     "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.

     "DEFINITIVE NOTE" means a definitive, fully registered Note issued
pursuant to the Indenture.

     "DELIVERY" means, with respect to any Eligible Investments, the
perfection and priority of a security interest in which is governed by the
law of a jurisdiction which has adopted the 1994 Revision to Article 8 of the
UCC;

          1.  With respect to 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 Trust Collateral Agent by physical
     delivery to the Trust Collateral Agent, indorsed to, or registered in
     the name of, the Trust 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 Eligible Investments to the Trust Collateral Agent free and clear
     of any adverse claims, consistent with changes in applicable law or
     regulations or the interpretation thereof.

          2.  With respect to a "certificated security" (as defined in
     Section 8-102(a)(4) of the UCC), transfer thereof:

          (a)  by physical delivery of such certificated security to the
               Trust Collateral Agent, provided that if the certificated
               security is in registered form, it


                                 Annex A-11
<Page>

               shall be indorsed to, or registered in the name of, the Trust
               Collateral Agent or indorsed in blank; or

          (b)  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 Trust
               Collateral Agent if the certificated security has been
               specially endorsed to the Trust Collateral Agent by an
               effective endorsement.

          3.  With respect to 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 Trust Collateral Agent of the purchase by the securities intermediary
     on behalf of the Trust Collateral Agent of such book-entry security; 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 Trust Collateral Agent and indicating that such securities
     intermediary holds such book-entry security solely as agent for the
     Trust Collateral Agent; and such additional or alternative procedures as
     may hereafter become appropriate to effect complete transfer of
     ownership of any such Eligible Investments to the Trust Collateral Agent
     free of any adverse claims, consistent with changes in applicable law or
     regulations or the interpretation thereof;

          4.  With respect to any item of Eligible Investments that is an
     "uncertificated security" (as defined in Section 8-102(a)(18) of the
     UCC) and that is not governed by clause (3) above, transfer thereof:

          (a)  (x) by registration to the Trust Collateral Agent as the
               registered owner thereof, on the books and records of the
               issuer thereof; or (y) by another Person (not a securities
               intermediary) who either becomes the registered owner of the
               uncertificated security on behalf of the Trust Collateral
               Agent, or having become the registered owner acknowledges that
               it holds for the Trust Collateral Agent; or

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

          5.  With respect to 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 be the Trust Collateral Agent's
     "securities account" (as defined in Section 8-501(a) of the UCC), (B)
     receives a


                                 Annex A-12
<Page>

     financial asset (as so defined) from the Trust Collateral Agent or
     acquires a financial asset for the Trust Collateral Agent, and in either
     case, accepts it for credit to the Trust Collateral Agent's securities
     account (as so defined), (C) becomes obligated under other law,
     regulation or rule to credit a financial asset to the Trust 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 Trust 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 Trust 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.

In each case of Delivery contemplated pursuant to paragraphs 1 through 5
above, the Trust Collateral Agent shall make appropriate notations on its
records, and shall cause same to be made of the records of its nominees,
indicating that such Eligible Investments are held in trust pursuant to and
as provided in the Sale and Servicing Agreement.

     "DEPOSITORY AGREEMENT" means the agreement entered into among the
Issuer, the Indenture Trustee, and The Depository Trust Company, as the
initial Clearing Agency, in connection with the issuance of the Notes,
substantially in the form of Exhibit B attached to the Indenture.

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

     "DISCLOSED CASES" means, collectively, the Collins Case, the Kunert Case
and the New Kunert Case.

     "DOCUMENTATION CHECKLIST" means the form attached to the Sale and
Servicing Agreement as Exhibit E.

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

     "ELIGIBLE ACCOUNT" means (i) a segregated trust account that is
maintained with a depository institution acceptable to the Controlling Party,
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 acceptable to the
Controlling Party. In either case, such depository institution or trust
company shall have been approved by the Controlling Party, 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, with respect to which the Trust Collateral Agent has taken Delivery,
which evidence:


                                 Annex A-13
\<Page>

     (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-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 Note Insurer, money market
mutual funds registered under the Investment Company Act 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 Note Insurer and
the Rating Agencies, as evidenced by the Note Insurer's prior written consent
to that effect, as may from time to time be confirmed in writing to the Trust
Collateral Agent by the Note Insurer, and only upon notification to each of
Moody's and Standard & Poor's.

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

     "ELIGIBLE SERVICER" means LBAC, the Back-up 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

                                 Annex A-14

<Page>

maintain the confidentiality of the software which the Servicer uses in
connection with performing its duties and responsibilities under the Sale and
Servicing Agreement or otherwise has available software which is adequate to
perform its duties and responsibilities under the Sale and Servicing
Agreement.

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

     "EVENT OF DEFAULT" means an event specified in Section 5.1 of the
Indenture.

     "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 consisting of twelve 30-day months) of Simple
Interest Receivables which were neither 30 days or more delinquent
(calculated based on a 360-day year consisting of twelve 30-day months) nor
Defaulted Receivables as of the first day of the current Collection Period,
weighted on the 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
consisting of twelve 30-day months) nor Defaulted Receivables, as of the
close of business on the last day of the immediately preceding Collection
Period.

     "FEDERAL FINANCIAL PRIVACY LAW" means Subtitle A of Title V of the
Gramm-Leach-Bliley Financial Services Modernization Act, 15 U.S.C. Sections
6801-6809, and all applicable regulations in effect from time to time.

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

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

     "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 the
Indenture occurs or (iii) the close of business on August 31, 2001.

     "GCFP" means Greenwich Capital Financial Products, Inc.

     "GCFP RELEASE" means the security interest release, dated as of June 1,
2001, by GCFP in favor of LBAC and any additional GCFP Release, dated as of
the related Subsequent Cutoff Date, by GCFP in favor of LBAC.

     "GRANT" means mortgage, pledge, bargain, warrant, alienate, remise,
release, convey, assign, transfer, create, grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Pledged Property or of any other
agreement or instrument shall include all rights, powers and options (but
none of

                                 Annex A-15

<Page>

the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Pledged Property and all
other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights
and options, to bring proceedings in the name of the granting party or
otherwise and generally to do and receive anything that the granting party is
or may be entitled to do or receive thereunder or with respect thereto.

     "GREENWICH" means Greenwich Capital Markets, Inc., a Delaware
corporation.

     "GREENWICH INFORMATION" means the information contained in the section
entitled "Placement of the Notes" (other than any information contained
therein relating to LBAC's use of proceeds) in the Memorandum.

     "GUARANTEE" means the Guarantee, dated as of June 1, 2001, by AMC in
favor of the Back-up Servicer, the Custodian, the Trust Collateral Agent (in
its capacity as such and for the benefit of the Noteholders), and the Note
Insurer, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof.

     "INDEBTEDNESS" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the
deferred purchase price of property or services (including trade obligations);
(b) obligations of such Person as lessee under leases which should have been
or should be, in accordance with generally accepted accounting principles,
recorded as capital leases; (c) current liabilities of such Person in respect
of unfunded vested benefits under plans covered by Title IV of ERISA; (d)
obligations issued for or liabilities incurred on the account of such Person;
(e) obligations or liabilities of such Person arising under acceptance
facilities; (f) obligations of such Person under any guarantees,
endorsements (other than for collection or deposit in the ordinary course of
business) and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person or otherwise to assure a
creditor against loss; (g) obligations of such Person secured by any lien on
property or assets of such Person, whether or not the obligations have been
assumed by such Person; or (h) obligations of such Person under any interest
rate or currency exchange agreement.

     "INDEMNIFICATION AGREEMENT" means the Indemnification Agreement, dated
as of June 1, 2001, among Greenwich Capital Markets, Inc. as the initial
purchaser of the Notes, the Transferor and the Note Insurer, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.

     "INDENTURE" means the Indenture, dated as of June 1, 2001; between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.

     "INDENTURE TRUSTEE" means The Chase Manhattan Bank, a New York banking
corporation, not in its individual capacity but as indenture trustee under
the Indenture, or any successor Indenture Trustee under the Indenture.

     "INDENTURE TRUSTEE FEE" means the monthly fee payable on each Payment
Date to the Indenture Trustee, Trust Collateral Agent and Collateral Agent
for services rendered during

                                 Annex A-16

<Page>

the preceding Collection Period in an amount equal to the greater of (A) the
product of (i) one-twelfth of the Indenture Trustee Fee Rate and (ii) the
Note Balance as of the last day of the second preceding Collection Period and
(B) $250; PROVIDED, HOWEVER, that with respect to the initial Payment Date,
the Indenture Trustee Fee will equal the product of one-twelfth of the
Indenture Trustee Fee Rate and the Initial Note Balance.

     "INDENTURE TRUSTEE FEE RATE" means 0.004% per annum.

     "INDEPENDENT" means, when used with respect to any specified Person,
that the person (a) is in fact independent of the Issuer, any other obligor
upon the Notes, the Transferor and any Affiliate of any of the foregoing
persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the
Transferor or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Transferor or any
Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar
functions.

     "INDEPENDENT CERTIFICATE" means a certificate or opinion to be delivered
to the Trust Collateral Agent under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 4.11 of the
Sale and Servicing Agreement, prepared by an Independent appraiser or other
expert appointed by an Issuer Order and approved by the Trust Collateral
Agent in the exercise of reasonable care, and such opinion or certificate
shall state that the signer has read the definition of "Independent" in Annex
A to the Sale and Servicing Agreement and that the signer is Independent
within the meaning thereof.

     "INITIAL ASSIGNMENT" means the assignment dated as of June 1, 2001 by
LBAC to the Transferor substantially in the form of Exhibit A to the Purchase
Agreement, pursuant to which the Initial Receivables are conveyed to the
Trust.

     "INITIAL CLASS A-1 NOTE BALANCE" means $39,100,000.

     "INITIAL CLASS A-2 NOTE BALANCE" means $77,750,000.

     "INITIAL CLASS A-3 NOTE BALANCE" means $67,500,000.

     "INITIAL CLASS A-4 NOTE BALANCE" means $45,650,000.

     "INITIAL CUTOFF DATE" means the close of business on May 31, 2001.

     "INITIAL NOTE BALANCE" means the sum of the Initial Class A-1 Note
Balance, the Initial Class A-2 Note Balance, the Initial Class A-3 Note
Balance and the Initial Class A-4 Note Balance.

     "INITIAL RECEIVABLES" means the Receivables initially transferred by
LBAC to the Transferor pursuant to the Purchase Agreement and by the
Transferor to the Issuer pursuant to the Sale and Servicing Agreement on the
Closing Date, which Receivables are listed on the Schedule of Receivables.


                                 Annex A - 17

<Page>

     "INITIAL RECEIVABLES PURCHASE PRICE" means $170,000,000 (the Principal
Balance of the Initial Receivables as of the Initial Cutoff Date).

     "INITIAL SPREAD ACCOUNT DEPOSIT" shall have the meaning set forth in the
Spread Account Agreement.

     "INITIAL TRANSFERRED PROPERTY" shall have the meaning specified in
Section 2.1(a) of the Purchase Agreement.

     "INITIAL TRUST ASSETS" means all money, instruments, rights and other
property transferred by the Transferor to the Trust set forth in items (i)
through (x) in Section 2.1 of the Sale and Servicing Agreement, including all
proceeds thereof.

     "INSURANCE AGREEMENT" means the Insurance and Indemnity Agreement, dated
as of June 1, 2001, among LBCA, the Transferor, the Issuer and the Note
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.

     "INSURANCE AGREEMENT INDENTURE CROSS DEFAULT" has the meaning specified
therefor in the Insurance Agreement.

     "INSURER INFORMATION" means any information contained in the section
entitled "The Note Insurer" in the Memorandum and the financial statements of
the Note Insurer attached to the Memorandum.

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

     "INTEREST PAYMENT AMOUNT" means, for any Payment Date, the sum of the
Class A-1 Interest Payment Amount, the Class A-2 Interest Payment Amount, the
Class A-3 Interest Payment Amount and the Class A-4 Interest Payment Amount.

     "ISSUER" or "TRUST" means the Long Beach Acceptance Auto Receivables
Trust 2001-A, a Delaware business trust, created pursuant to the Trust
Agreement.

     "ISSUER ORDER" and "ISSUER REQUEST" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.

     "ISSUER'S CERTIFICATE" means a certificate completed and executed for
the Issuer by an Authorized Officer, substantially in the form of, in the
case of an assignment to LBAC, Exhibit A-1 to the Sale and Servicing
Agreement, and in the case of an assignment to the Servicer, Exhibit A-2 to
the Sale and Servicing Agreement.


                                 Annex A - 18

<Page>

     "KUNERT CASE" means Kunert v. Johnson Ford, Case No. BC229917, filed May
12, 2000 in California Superior Court, Los Angeles County.

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

     "LBAC INFORMATION" means (1) any information contained in or
incorporated by reference in the Memorandum other than the Greenwich
Information or the Insurer Information, (2) the Rule 144A Information, (3)
any information contained in or incorporated by reference in any amendment or
supplement to the Memorandum other than the Greenwich Information or the
Insurer Information and (4) any other information provided by LBAC or the
Transferor to Greenwich and/or by Greenwich to investors, in each case as to
which LBAC or the Transferor certifies in writing constitutes "LBAC
Information."

     "LEGAL FILES" means, with respect to each Receivable, the following
documents held by the Custodian pursuant to Section 3.4 of the Sale and
Servicing Agreement: 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-signer, evidence
of verification of physical damage insurance coverage and the original of
each credit application fully executed by the related Obligor in respect of
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 term "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 Receivable Payment by its due date and such failure continues
for 60 days (calculated based on a 360-day year consisting 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


                                 Annex A - 19

<Page>

a Scheduled Receivable Payment by its due date and such failure continues for
150 or more consecutive days (calculated based on a 360-day year consisting
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;
PROVIDED, HOWEVER, that Liquidated Receivable shall not include any Optional
Repurchase 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 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 5.1 of the Sale and Servicing Agreement, into which the Service 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 5.1(a) of the Sale
and Servicing Agreement.

     "LOCK-BOX AGREEMENT" means the Tri-Party Remittance Processing
Agreement, dated as of March 31, 1997, among the Servicer, the Lock-Box
Processor and Chase Manhattan, 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 Note Insurer, among the Servicer, the Lock-Box Processor
and the Indenture Trustee.

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

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

     "MAJORITYHOLDERS" means, as of any date of determination, Noteholders,
holding in the aggregate more than 50% of the outstanding Note Balance.

     "MANDATORY SPECIAL REDEMPTION" means the portion, if any, of the
Pre-Funded Amount remaining on deposit in the Pre-Funding Account after
giving effect to the acquisition by the Transferor and the conveyance  to the
Trust of all Subsequent Receivables during the Funding Period, including any
such acquisition and conveyance on the date on which the Funding Period ends.

                                  Annex A - 20


<Page>

     "MEMORANDUM" means the Private Placement Memorandum dated June 13, 2001
relating to the Notes.

     "MONTHLY DEALER PARTICIPATION FEE" means, with respect to any Payment
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 PAYMENT AMOUNT" means, with respect to
any Payment 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.

     "NEGATIVE CARRY AMOUNT" means, with respect to any Payment 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 Trust Collateral
Agent for such Collection Period from investment of the Pre-Funded Amount.

     "NEW KUNERT CASE" means Kunert v. Long Beach Acceptance Corp., Case No.
BC246485, filed on March 8, 2001 in California Superior Court, Los Angeles
County.

     "NON-REGISTERED NOTE" means a Note other than a Registered Note.

     "NOTE" means a Class A-1 Note, Class A-2 Note, Class A-3 Note or Class
A-4 Note, as the case may be.

     "NOTE ACCOUNT" means the account designated as such, established and
maintained pursuant to Section 5.1(b) of the Sale and Servicing Agreement.

     "NOTE BALANCE" means, with respect to any Payment Date, the sum of the
Class A-1 Note Balance, the Class A-2 Note Balance, the Class A-3 Note
Balance and the Class A-4 Note Balance.

     "NOTE 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.

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

     (i)    the Note Insurer fails to make a payment required under the
Policy;

                                  Annex A - 21
<Page>

     (ii)   the Note 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 Note 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 Note Insurer (or the taking of possession
of all or any material portion of the property of the Note Insurer).

     "NOTE INTEREST" means, for any Payment Date, (i) with respect to the
Class A-1 Notes, the Class A-1 Note Interest, (ii) with respect to the Class
A-2 Notes, the Class A-2 Note Interest, (iii) with respect to the Class A-3
Notes, the Class A-3 Note Interest and (iv) with respect to the Class A-4
Notes, the Class A-4 Note Interest.

     "NOTE OWNER" means, with respect to any Note registered in the name of
the Clearing Agency or its nominee, the Person who is the beneficial owner of
such Note, as reflected on the books of the Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).

     "NOTE PAYING AGENT" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Issuer to make the
payments on the Notes on behalf of the Issuer.

     "NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement relating to
the Notes, dated June 13, 2001, 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.

     "NOTE RATE" means (i) with respect to the Class A-1 Notes, the Class A-1
Note Rate, (ii) with respect to the Class A-2 Notes, the Class A-2 Note Rate,
(iii) with respect to the Class A-3 Notes, the Class A-3 Note Rate and (iv)
with respect to the Class A-4 Notes, the Class A-4 Note Rate.

     "NOTE REGISTER" and "NOTE REGISTRAR" mean, respectively; the register
maintained and the registrant appointed pursuant to Section 2.4 of the
Indenture.

     "NOTEHOLDER" or "HOLDER" means the Person in whose name a Note shall be
registered in the Note Register, except that so long as any Notes are
outstanding, solely for the purposes of giving any consent, waiver, request
or demand pursuant to the Indenture or the Sale and Servicing Agreement, any
interest evidenced by any Note registered in the name of the Transferor,
LBAC, the Servicer or any of their respective Affiliates, shall not be taken
into


                                  Annex A - 22
<Page>

account in determining whether the requisite percentage necessary to effect
any such consent, waiver, request or demand shall have been obtained.

     "NOTICE OF CLAIM" means written or telecopied notice from the Trust
Collateral Agent to the Note Insurer, substantially in the form of Exhibit A
to the Policy.

     "OBLIGOR" means, with respect to a Receivable, 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 (i) with respect to LBAC, the Transferor
or the Servicer, 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 Transferor or the Servicer, as appropriate, and (ii) with respect to
the Issuer, a certificate signed by an Authorized Officer of the Issuer.

     "OPINION OF COUNSEL" means a written opinion of counsel who may but need
not be counsel to the Transferor or the Servicer, which counsel shall be
acceptable to the Indenture Trustee and the Note Insurer, or the Owner
Trustee and the Note Insurer, as applicable, and which opinion shall be
acceptance to the Indenture Trustee and the Note Insurer or the Owner Trustee
and the Note Insurer, as applicable, in form and substance. Such Opinion of
Counsel shall not be at the expense of the Indenture Trustee, the Trust
Collateral Agent, the Note Insurer or the Owner Trustee.

     "OPTIONAL REPURCHASED RECEIVABLE" means any Receivable repurchased by
the Servicer pursuant to Section 4.2 of the Sale and Servicing Agreement (up
to the limits specified therein).

     "ORIGINAL POOL BALANCE" means $170,000,000.

     "ORIGINAL PRE-FUNDED AMOUNT" means $60,000,000.

     "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.

     "OWNER TRUST ESTATE" has the meaning assigned to such term in the Trust
Agreement.

     "OWNER TRUSTEE" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement, its successors-in-interest or any successor Owner
Trustee under the Trust Agreement.

     "PAYAHEAD AMOUNT" means, with respect to Precomputed Receivables,
payments remitted by the related Obligors prior to the Initial Cutoff Date,
with respect to the Initial Receivables, and prior to the related Subsequent
Cutoff Date, with respect to the Subsequent

                                  Annex A - 23


<Page>

Receivables, in each case, in excess of the aggregate Scheduled Receivable
Payments, Servicer expenses and late fees, if any, with respect to such
Precomputed Receivables, retained by the Servicer in accordance with its
payment application procedures.

     "PAYMENT DATE" means, for each Collection Period, the 13th day of the
following month, or if the 13th day is not a Business Day, the next
following Business Day, commencing July 13, 2001.

     "PAYMENT DEFERMENT AND DUE DATE CHANGE POLICIES"  means the Payment
Deferment Policy and the Due Date Change Policy attached to the Sale and
Servicing Agreement as Exhibit D, as such policies may be amended from time
to time, with the prior written consent of the Note Insurer.

     "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.

     "PLEDGED PROPERTY" has the meaning specified in the Granting Clause of
the Indenture.

     "POLICY" means the financial guaranty insurance policy No. 51109-N
issued by the Note Insurer for the benefit of the Holders of the Notes issued
pursuant to the Insurance Agreement, including any endorsements thereto.

     "POLICY CLAIM AMOUNT" shall have the meaning set forth in Section 6.2(a)
of the Sale and Servicing Agreement.

     "POLICY EXPIRATION DATE" means the date on which the Notes have been
paid in full and all outstanding Reimbursement Obligations and other amounts
due to the Note Insurer have been paid in full and the Term Of This Policy
(as defined in the Policy) has expired.

     "POLICY PAYMENTS ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 5.1(b) of the Sale and
Servicing Agreement.

     "POOL BALANCE" means, as of the close of business on the last day of a
Collection Period, 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.

                                  Annex A - 24


<Page>

     "PREFERENCE CLAIM" shall have the meaning set forth in Section 6.3(b) of
the Sale and Servicing Agreement.

     "PRE-FUNDED AMOUNT" means, with respect to (i) the first Payment Date,
the Original Pre-Funded Amount, and (ii) any Payment 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 5.1(b) of the Sale and Servicing Agreement.

     "PRE-FUNDING INTEREST AMOUNT" means, with respect to any Payment Date
relating to the Funding Period, an amount equal to one month's interest on
the Pre-Funded Amount as of the last day of the related Collection Period at
a rate equal to the sum of (a) the Weighted Average Note Rate, (b) the
Indenture Trustee Fee Rate, (c) the Custodian Fee Rate, and (d) the rate at
which the Premium for the Policy is calculated.

    "PREMIUM" shall have the meaning set forth in the Insurance Agreement.

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

     "PRINCIPAL BALANCE" means, with respect to a Receivable, as of the close
of business on the last day of a Collection Period, the Amount Financed minus
the sum of the following amounts (without duplication): (i) in the case of
Precomputed Receivables, that portion of all Scheduled Receivable Payments on
each such Receivable actually received on or prior to such day allocable to
principal (A) prior to the Initial Cutoff Date or the Subsequent Cutoff Date,
as applicable, using the actuarial or constant yield method and (B)
thereafter, using the Simple Interest Method, PROVIDED, HOWEVER, that no
amount applied as interest accrued on any such Precomputed Receivable for any
single Collection Period will exceed 30 days' interest accrued thereon
assuming a 360-day year consisting of twelve 30-day months; (ii) in the case
of Simple Interest Receivables, that portion of all Scheduled Receivable
Payments on such Receivable actually received on or prior to such day
allocable to principal using the Simple Interest Method; (iii) any payment of
the Purchase Amount 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.

     "PRINCIPAL CARRYOVER SHORTFALL" means, as of the close of business on
any Payment Date, the excess of the Principal Payment Amount and (without
duplication) any outstanding Principal Carryover Shortfall from the preceding
Payment Date, over the amount of principal actually paid to the holders of
the Notes on such current Payment Date.

     "PRINCIPAL PAYMENT AMOUNT" means, (i) with respect to any Payment Date
other than the Class A-1 Final Scheduled Payment Date, the Class A-2 Final
Scheduled Payment Date, the Class A-3 Final Scheduled Payment Date and the
Class A-4 Final Scheduled Payment Date, the sum of the following amounts
(without duplication):

                                  Annex A - 25




<Page>


               (a) the principal portion, allocated pursuant to Section 5.3
          of the Sale and Servicing Agreement, of all Scheduled Receivable
          Payments due during the related Collection Period and all prior
          Collection Periods and received during the related Collection
          Period on Precomputed Receivables, excluding Recoveries, and all
          payments of principal received on Simple Interest Receivables
          during such Collection Period (excluding Recoveries);

               (b) 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;

               (c) the portion of the Purchase Amount allocable to principal
          of each Receivable that was repurchased by the Originator or
          purchased by the Servicer in each case as of the last day of the
          related Collection Period and, at the option of the Note Insurer,
          the Principal Balance of each Receivable that was required to be
          but was not so purchased or repurchased;

               (d) the principal balance of each Liquidated Receivable that
          first became a Liquidated Receivable during the related Collection
          Period;

               (e) the aggregate amount of Cram Down Losses with respect to
          the Receivables that have occurred during the related Collection
          Period; and

               (f) if such Payment Date is the Final Period Payment Date, any
          Mandatory Special Redemption;

     (ii)  with respect to the Class A-1 Final Scheduled Payment Date, an
amount equal to the greater of (a) the amount calculated in clause (i) above
and (b) the then outstanding Class A-1 Note Balance;

     (iii) with respect to the Class A-2 Final Scheduled Payment Date, an
amount equal to the greater of (a) the amount calculated in clause (i) above
and (b) the then outstanding Class A-2 Note Balance;

     (iv) with respect to the Class A-3 Final Scheduled Payment Date, an
amount equal to the greater of (a) the amount calculated in clause (i) above
and (b) the then outstanding Class A-3 Note Balance; and

     (v) with respect to the Class A-4 Final Scheduled Payment Date, an
amount equal to the then outstanding Class A-4 Note Balance.

     "PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.

     "PURCHASE AGREEMENT" means the Purchase Agreement, dated as of June 1,
2001, between the Transferor 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 Transferor from LBAC.

                                  Annex A-26


<Page>

     "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
Sections 4.2 and 4.7 of the Sale and Servicing Agreement or by LBAC pursuant
to Section 3.4 of the Sale and Servicing Agreement.

     "RATED ENTITY" means a Person whose long-term unsecured debt
obligations (at the time of the transfer of the Certificate pursuant to
Section 3.7 of the Trust Agreement) 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 Note Insurer,
notice of which designation shall be given to the Trust Collateral Agent, the
Indenture Trustee and the Servicer.

     "RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency shall have been given ten (10) days' (or such shorter period as
shall be acceptable to each Rating Agency) prior notice thereof and that teach
of the Rating Agencies shall have notified the Transferor, the Servicer, the
Note Insurer, the Trust Collateral Agent, and Indenture Trustee, the Owner
Trustee and the Issuer in writing that such action will not result in a
reduction or withdrawal of the then current rating of the Notes.

     "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 3.3(b) of
the Sale and Servicing Agreement.

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

                                  Annex A-27


<Page>

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.

     "REDEMPTION DATE" means in the case of a redemption of the Notes
pursuant to Section 10.1(a) of the Indenture, the Payment Date specified by
the Certificateholder pursuant to Section 10.1(a).

     "REDEMPTION PRICE" means the outstanding Note Balance as of the
Redemption Date, plus all accrued and unpaid interest thereon as of such
Redemption Date.

     "REGISTERED NOTE" means a Note 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 Payment Date,
any amounts due to the Note Insurer under the terms of the Sale and
Servicing Agreement, the Insurance Agreement or the Premium Letter and with
respect to which the Note Insurer has not been previously paid whether or not
LBAC is obligated to pay such amounts.

     "REPURCHASE EVENT" shall have the meaning specified in Section 6.2 of
the Purchase Agreement.

     "REQUISITE AMOUNT" shall have the meaning specified in the Spread
Account Agreement.

     "RESPONSIBLE OFFICER" means, as to the Trust Collateral Agent, the
Indenture Trustee, the Custodian and the Back-up Servicer or at such time as
Chase Manhattan is the Servicer, an officer in Capital Markets Fiduciary
Services of the Indenture Trustee having direct responsibility for the
administration of the Basic Documents to which such entities are a party.

     "RULE 144A INFORMATION" means any information provided to any holder or
prospective purchaser of Notes pursuant to Section 2.4(d) of the Indenture.

     "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.

     "SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement,
dated as of June 1, 2001, among the Issuer, the Transferor, the Servicer,
Chase Manhattan, as Back-up Servicer, Trust Collateral Agent and Custodian,
as the same may be amended or supplemented from time to time.

                                  Annex A-28





<Page>

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

     "SCHEDULED RECEIVABLE 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 4.2 of the
Sale and Servicing Agreement, the Scheduled Receivable Payment with respect
to such Collection Period shall refer to the Obligor's payment obligation
with respect to such Collection Period as so modified.

     "SCHEDULED PAYMENTS" shall have the meaning assigned to such term in the
Policy.

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

     "SERIES 2001-A SUPPLEMENT" means the Series 2001-A Supplement to Spread
Account Agreement, dated as of June 1, 2001, by and among the Note Insurer,
the Transferor, the Trust Collateral Agent and the Collateral Agent, as the
same may be amended, supplemented or otherwise modified in accordance with
the terms thereof.

     "SERVICER" means LBAC as the servicer of the Receivables and each
successor to LBAC (in the same capacity) pursuant to Section 8.3(a) or 9.2 of
the Sale and Servicing Agreement, other than with respect to representations
of the Servicer under Section 8.1 of the Sale and Servicing Agreement.

     "SERVICER EXTENSION NOTICE" shall have the meaning set forth in Section
4.13 of the Sale and Servicing Agreement.

     "SERVICER TERMINATION EVENT" means an event specified in Section 9.1 of
the Sale and Servicing Agreement.

     "SERVICER TERMINATION SIDE LETTER" means the letter from the Note
Insurer to the Servicer, the Issuer and the Indenture Trustee dated as of
June 1, 2001, 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 4.9 of the Sale and Servicing Agreement.

     "SERVICING FEE" means the fee payable to the Servicer for services
rendered during the respective Collection Period, determined pursuant to
Section 4.8 of the Sale and Servicing Agreement.

                                  Annex A - 29


<Page>

     "SERVICING FEE RATE" means, with respect to any Payment Date, 2.45% per
annum; PROVIDED, HOWEVER, that if the Back-up Servicer of another entity
becomes the successor Servicer, the "Servicing Fee Rate" shall be equal to a
rate not to exceed the Successor Servicing Fee Rate. Notwithstanding the
foregoing, so long as LBAC is the Servicer and with respect to any Receivable
as of any Determination Date, in the event that the sum (i) the Weighted
Average Note Rate and (ii) the Servicing Fee Rate of such Determination Date,
exceeds the adjusted APR on such Receivable, the 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 Servicing Fee Rate be less
than zero.

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

     "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.

     "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) the 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, as amended and restated as of December 1, 2000,
among the Transferor, the Note Insurer, Chase Manhattan, as Trustee, and the
Collateral Agent, as supplemented by the Series 2001-A Supplement, in each
case, 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.

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

     "STOCK PLEDGE AGREEMENT" means the Stock Pledge and Collateral Agency
Agreement, dated as of March 1, 1997, among LBAC, the Note Insurer and Chase
Manhattan, as

                                  Annex A - 30


<Page>

trust collateral agent and collateral agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.

     "SUBSEQUENT ASSIGNMENT" means each assignment dated as of the related
Subsequent Cutoff Date by LBAC to the Transferor substantially in the form of
Exhibit B to the Purchase Agreement, pursuant to which Subsequent Receivables
are conveyed to the Trust.

     "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 LBAC to
the Transferor pursuant to a Subsequent Assignment and by the Transferor to
the Trust pursuant to a Transfer Agreement, in each case on the related
Subsequent Transfer Date, which Receivables will be listed on Schedule A to
the related Subsequent Assignment and Transfer Agreement and will be treated
as incorporated by reference in the Schedule of Receivables pursuant to the
related Subsequent Assignment and Transfer Agreement.

     "SUBSEQUENT RECEIVABLES PURCHASE PRICE" shall have the meaning set forth
in 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.

     "SUBSEQUENT TRANSFERRED PROPERTY" shall have the meaning specified in
Section 2.3(a) of the Purchase Agreement.

     "SUBSEQUENT TRUST ASSETS" means all money, instruments, rights and other
property transferred by the Transferor to the Trust set forth in items (i)
through (x) of Section 2.2(a) of the Sale and Servicing Agreement, including
all proceeds thereof.

     "SUCCESSOR SERVICING FEE RATE" means, with respect to any Payment Date,
2.45% per annum.

     "TERMINATION DATE" means the latest of (i) the expiration of the Policy
and the return of the Policy to the Note Insurer for cancellation, (ii) the
date on which the Note Insurer shall have received payment and performance by
the Issuer of its obligations under the Indenture and under the Basic
Documents and (iii) the date on which the Indenture Trustee shall have
received payment and performance by the Issuer of its obligations under the
Indenture and under the Basic Documents.

     "TEXAS UCC" shall have the meaning set forth in Section 2.4 of the Sale
and Servicing Agreement.

                                  Annex A - 31


<Page>

     "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 (ii)
a Dealer Title Guaranty, if any.

     "TRANSFER AGREEMENT" means each Transfer Agreement, substantially in
the form of Exhibit H to the Sale and Servicing Agreement, dated as of the
related Subsequent Transfer Date, among the Transferor, the Originator and
the Trust Collateral Agent, 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.

     "TRANSFEROR" means Long Beach Acceptance Receivables Corp., a Delaware
corporation, its successors and assigns.

     "TRANSFERRED PROPERTY" means the Initial Transferred Property or the
Subsequent Transferred Property, as applicable.

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

     "TRUST AGREEMENT" means the Amended and Restated Trust Agreement, dated
as of June 1, 2001, between the Transferor and the Owner Trustee, as the same
may be amended or supplemented from time to time.

     "TRUST ASSETS" means collectively, the Initial Trust Assets and the
Subsequent Trust Assets.

     "TRUST COLLATERAL AGENT" means the Person acting as Trust Collateral
Agent under the Sale and Servicing Agreement, its successor-in-interest, and
any successor Trust Collateral Agent thereunder.

     "TRUST OFFICER" means, (i) in the case of the Trust Collateral Agent,
any vice president, any assistant vice president, any assistant secretary,
any assistant treasurer, any trust officer, or any other officer of the Trust
Collateral Agent 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, and (ii) in the case of the Owner Trustee, any officer in the
Corporate Trust Office of the Owner Trustee or any agent of the Owner Trustee
under a power of attorney with direct responsibility for the administration
of all or any part of this Indenture or any of the Basic Documents on Behalf
of the Owner Trustee.

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

     "VSI POLICY" means, as of the Closing Date, (i) the vendor's single
interest physical damage insurance policy No. 1-5529-1344 NI 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 Minnehoma Insurance
Company, (iii) the vendor's single interest physical damage

                                Annex A-32

<Page>

insurance policy No. CIM2187817 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 Trust Collateral Agent is an additional named insured; provided, that in
the reasonable discretion of the Servicer any of the aforementioned policies
may be canceled and replaced with a substitute insurance policy, or, with the
prior written consent of the Note Insurer, the Servicer may self-insure
against the risk previously covered by the cancelled policy.

     "WEIGHTED AVERAGE NOTE RATE" means, as of any Determination Date, the
weighted average of the Class A-1 Note Rate, the Class A-2 Note Rate, the
Class A-3 Note Rate and the Class A-4 Note Rate (weighted based on the
outstanding Class A-1 Note Balance, the outstanding Class A-2 Note Balance,
the outstanding Class A-3 Note Balance and the outstanding Class A-4 Note
Balance as of such Determination Date).


                                Annex A-33

<PAGE>



                                                                  EXHIBIT A-1

                              Issuer's Certificate
                             pursuant to Section 3.4
                            of the Sale and Servicing
                                    Agreement

Reference is made to the Sale and Servicing Agreement (the "Agreement"), dated
as of June 1, 2001, among Long Beach Acceptance Receivables Corp., Long Beach
Acceptance Corp., as originator and as servicer, The Chase Manhattan Bank, as
trust collateral agent, custodian and back-up servicer and Long Beach Acceptance
Auto Receivables Trust 2001-A, as issuer (the "Issuer"). The Issuer does hereby
sell, transfer, assign, and otherwise convey to LBAC, without recourse,
representation, or warranty, all of the Issuer'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 3.4 of the Agreement, and all security
and documents relating thereto.

IN WITNESS WHEREOF I have hereunto set my hand this __ day of ___________, ___.

                   ___________________________________________________________



                                      A-1-1



<PAGE>






                                                                 EXHIBIT A-2

                              Issuer's Certificate
                             pursuant to Section 4.7
                            of the Sale and Servicing
                                    Agreement

Reference is made to the Sale and Servicing Agreement (the "Agreement"), dated
as of June 1, 2001, among Long Beach Acceptance Receivables Corp., Long Beach
Acceptance Corp., as originator and as servicer, The Chase Manhattan Bank, as
trust collateral agent, custodian and back-up servicer and Long Beach Acceptance
Auto Receivables Trust 2001-A, as issuer (the "Issuer"). The Issuer does hereby
sell, transfer, assign, and otherwise convey to the Servicer, without recourse,
representation, or warranty, all of the Issuer'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 4.7 of the Agreement, and all
security and documents relating thereto.

IN WITNESS WHEREOF I have hereunto set my hand this __ day of __________, ____.

                              ________________________________________________



                                      A-2-1
<PAGE>




                                                                   EXHIBIT B-1

                             SERVICER'S CERTIFICATE
               LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2001-A
                      4.010% ASSET-BACKED NOTES, CLASS A-1
                      4.430% ASSET-BACKED NOTES, CLASS A-2
                      5.198% ASSET-BACKED NOTES, CLASS A-3
                      5.804% ASSET-BACKED NOTES, CLASS A-4



                                     B-1-1


<PAGE>





                                                                   EXHIBIT B-2

                         Form of Loan Master File Layout







                                      B-2-1

<PAGE>




                                                                   EXHIBIT C

                              INTENTIONALLY OMITTED








                                      C-1


<PAGE>





                                                                     EXHIBIT D

                            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 Cutoff Date).

o        At least 6 payments must be made before a deferment may be granted.

o        A request for a deferment must be made in writing.

o        The deferment must bring the account current, so that after the
         deferment is processed no payment is then due.

o        Except as otherwise set forth in this policy, deferments must be
         granted in writing by the Collection Manager or someone of equal or
         higher rank.

o        A deferment fee will be collected for each deferment if allowed by
         applicable law and may be waived or deferred only by the President, or
         an Executive Vice President, or the National Collections Manager, or a
         Regional Manager; PROVIDED, HOWEVER, that no deferment will be granted
         unless 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 October 1, 2001, and the first day of each calendar quarter
         thereafter, the aggregate number of Receivables the terms of which have
         been extended during the preceding calendar quarter shall not exceed 4%
         of the number of Receivables at the beginning of the preceding calendar
         quarter.

o        No deferment may extend the date for final payment of a Receivable
         beyond the last day of the record Collection Period preceding the Class
         A-4 Final Scheduled Payment Date.


                                      D-1
<PAGE>



                             DUE DATE CHANGE POLICY

o        LBAC may grant a due date change, PROVIDED that the new due date is
         within 20 days of the current due date.

o        Not more than 2 due date changes may be granted over the term of a
         Receivable.

o        If 2 due date changes are granted, the total number of days by which
         the maturity date is extended may not exceed 20.

o        A request for a due date change must be made in writing.

o        The account must be current at the time the request is received.

o        Due date changes must be granted in writing by the Collection Manager
         or someone of equal or higher rank.

o        No due date change may be granted if the aggregate of all deferment
         periods and the requested due date change would exceed the lesser of 8
         months or 50% of the original term of the Receivable.


                                      D-2


<PAGE>




                                                                     EXHIBIT E

                             DOCUMENTATION CHECKLIST

CUSTOMER:
         --------------------------------------------------------------------

ACCOUNT NUMBER:
               --------------------------------------------------------------

This funding package contains the following initialed items:

        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._________________

        12.      Life, accident, health and GAP
                 insurance policy copies, as applicable 12._________________

        13.      Signed purchase order from dealer to
                 customer                               13._________________


                                       E-1
<PAGE>




                                                                     EXHIBIT F

                  [Form of Request for Transfer of Possession]

                                ___________, 20__


The Chase Manhattan Bank
450 West 33rd St., 14th Floor
New York, NY 10001
Attention:  Capital Markets Fiduciary Services

Attention:  __________
Telephone:  ___________
Telecopy:  ____________

Ladies and Gentlemen:

Reference is made to the Sale and Servicing Agreement, dated as of June 1, 2001
(the "Sale and Servicing Agreement"), among LONG BEACH ACCEPTANCE RECEIVABLES
CORP., a Delaware corporation, as transferor, LONG BEACH ACCEPTANCE CORP., a
Delaware corporation, as originator and servicer, LONG BEACH ACCEPTANCE AUTO
RECEIVABLES TRUST 2001-A, a Delaware business trust, as issuer (the "Issuer"),
THE CHASE MANHATTAN BANK, a New York banking corporation, as trust collateral
agent, back-up servicer and custodian (in such capacity, the "Custodian").
Capitalized terms used but not defined in this letter have the meanings set
forth in the Sale 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:_____________________________


                                      F-1

<PAGE>



                                                                  EXHIBIT G

                           [Form of Custodial Letter]

                                ___________, 20__


The Chase Manhattan Bank
450 West 33rd St., 14th Floor
New York, NY 10001
Attention:  Capital Markets Fiduciary Services

Attention:  __________
Telephone:  ___________
Telecopy:  ____________

Ladies and Gentlemen:

Reference is made to the Sale and Servicing Agreement, dated as of June 1, 2001
(the "Sale and Servicing Agreement"), among LONG BEACH ACCEPTANCE RECEIVABLES
CORP., a Delaware corporation, as transferor, LONG BEACH ACCEPTANCE CORP., a
Delaware corporation, as originator and servicer, LONG BEACH ACCEPTANCE AUTO
RECEIVABLES TRUST 2001-A, a Delaware business trust, as issuer (the "Issuer"),
THE CHASE MANHATTAN BANK, a New York banking corporation, as trust collateral
agent, custodian and back-up servicer. Capitalized terms used but not defined in
this letter have the meanings set forth in the Sale and Servicing Agreement.

[The Servicer] [_____________________, as Subservicer (the "Subservicer") for
the Servicer] acknowledges that the Issuer 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 Sale 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 Sale
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 Issuer.

(b) [The Servicer] [The Subservicer] agrees that such Legal Files will be
returned to the Custodian immediately upon notice by the Custodian or the Trust
Collateral Agent that sixty (60) days have elapsed from the date of such
transfer; PROVIDED, that instead of sixty (60) days, the time limit applicable
to any certificate of title is one hundred twenty (120) days.


                                      G-1

<PAGE>


(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 Indenture Trustee, the Issuer, the Noteholders and the
Note 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
Trust Collateral Agent.

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:____________________________


                                   G-2

<PAGE>



                                       EXHIBIT G - 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 Sale and Servicing Agreement, dated as of June 1, 2001
(the "Sale and Servicing Agreement"), among LONG BEACH ACCEPTANCE RECEIVABLES
CORP., a Delaware corporation, as transferor, LONG BEACH ACCEPTANCE CORP., a
Delaware corporation, as originator and servicer, LONG BEACH ACCEPTANCE AUTO
RECEIVABLES TRUST 2001-A, a Delaware business trust, as issuer (the "Issuer"),
THE CHASE MANHATTAN BANK, a New York banking corporation, as trust collateral
agent, back-up servicer and custodian. Capitalized terms used but not defined in
this letter have the meanings set forth in the Sale 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 Issuer, the Indenture Trustee, the Note
Holders and the Note Insurer, subject to the terms and provisions of the Sale
and Servicing Agreement, and subject to the Custodial Letter you executed
pursuant to Section 3.5(c) of the Sale and Servicing Agreement.

                                            Very truly yours,

                                            THE CHASE MANHATTAN BANK


                                            By: ______________________________

                                            Name: ____________________________

                                            Title:____________________________



                                      G-3


<PAGE>




                                        EXHIBIT G - ANNEX A to Transfer Notice


         Receivable                 Amount of                   Name of
          Number                   Receivable            Receivable Borrower
------------------------------------------------------------------------------







                                       G-4

<PAGE>




                                                                    EXHIBIT H


                           FORM OF TRANSFER AGREEMENT

         TRANSFER NO. __________ OF SUBSEQUENT RECEIVABLES, dated as of
___________, 2001, among LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2001-A, a
Delaware business trust (the "Issuer" or the "Trust"), LONG BEACH ACCEPTANCE
CORP., a Delaware corporation ("LBAC" or the "Originator"), LONG BEACH
ACCEPTANCE RECEIVABLES CORP., a Delaware corporation (the "Transferor"), and THE
CHASE MANHATTAN BANK, a New York banking corporation, as trust collateral agent
(in such capacity, the "Trust Collateral Agent"), back-up servicer and custodian
pursuant to the Sale and Servicing Agreement referred to below.

                              W I T N E S S E T H:

         WHEREAS, LBAC, the Transferor, the Issuer and the Trust Collateral
Agent are parties to the Sale and Servicing Agreement, dated as of June 1, 2001
(the "Sale and Servicing Agreement");

         WHEREAS, LBAC and the Transferor are parties to the Purchase Agreement,
dated as of June 1, 2001 (the "Purchase Agreement");

         WHEREAS, pursuant to the Purchase Agreement and the Subsequent
Assignment, LBAC desires to convey certain Subsequent Receivables to the
Transferor and pursuant to the Sale and Servicing Agreement and this Agreement
the Transferor desires to convey such Subsequent Receivables to the Issuer; and

         WHEREAS, the Issuer is willing to accept such conveyance subject to the
terms and conditions hereof.

         NOW, THEREFORE, the Issuer, the Transferor, the Trust Collateral Agent
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 Sale 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
_______________.

         "Subsequent Receivables" means the Receivables identified on the
supplement to the Schedule of Receivables attached as Schedule A hereto.

         "Subsequent Receivables Purchase Price" means $__________.


                                      G-5

<PAGE>

         "Subsequent Spread Account Deposit" means $__________.

         "Subsequent Transfer Date" means, with respect to the Subsequent
Receivables conveyed hereby, _________________.

         "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 Transferor to the Issuer pursuant to this Agreement and the
Sale 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 Transferor, the
Transferor does hereby sell, transfer, assign, set over and otherwise convey to
the Issuer, in trust for the benefit of the Noteholders and the Note Insurer,
without recourse, all right, title and interest of the Transferor in and to:

         (1) the Subsequent Receivables listed in Schedule A hereto, all monies
received on such Subsequent Receivables after the Subsequent Cutoff Date and,
with respect to any Subsequent Receivables which are Precomputed Receivables,
the related Payahead Amount, and all Liquidation Proceeds and Recoveries
received with respect to such Subsequent Receivables;

         (2) the security interests in the Financed Vehicles granted by the
related Obligors pursuant to the Subsequent Receivables and any other interest
of the Transferor 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 Guarantee,
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 4 of this Agreement or
the failure of LBAC to timely comply with its obligations pursuant to Section
5.5 of the Purchase 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 a related

                                       G-6

<PAGE>


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 Subsequent
Receivable and any and all other documents that LBAC keeps on file in accordance
with its customary procedures relating to the Subsequent Receivables, the
related Obligors or the related 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 the Subsequent Receivables, with respect to the sale
of the Subsequent Receivables; and

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

         The Transferor represents and warrants that the Subsequent Receivables
and other Transferred Property are being transferred with the intention of
removing them from the Transferor's estate pursuant to Section 541 of the
Bankruptcy Code, as the same may be amended from time to time.

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
Transferor relies in accepting the Subsequent Receivables and the other
Transferred Property relating thereto and on which the Note 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 Transferor and the subsequent assignment and transfer
pursuant to the Sale and Servicing Agreement:

         (1) ORIGINATION DATE. Each Subsequent Receivable has an Origination
Date on or after __________________.

         (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 [__] months and not more than [__]
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


                                       G-7

<PAGE>

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 Transferor, which in turn has been validly pledged by
the Transferor to the Trust pursuant to the Sale and Servicing Agreement, which
in turn has been validly assigned by the Issuer to the Indenture Trustee
pursuant to the Indenture, (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) 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; approximately [ ]% of the aggregate Principal Balance of the
Subsequent Receivables as of the Subsequent Cutoff Date were originated under
the LBAC Class IV 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__; 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

                                      G-8

<PAGE>

a scheduled due date, in the case of Simple Interest Receivables, on or prior
to ____________, ____.

         (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 Receivable File as
having filed for bankruptcy since origination of the Subsequent Receivable and
neither discharged, dismissed nor reaffirmed.

         (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
and the remaining [ ]% of the Subsequent Receivables were originated in other
States.

         (8) LOCKBOX. Prior to the Subsequent Transfer Date, the Transferor 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 Sale 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 Noteholders or to the Note
Insurer have been utilized in selecting the Subsequent Receivables. The computer
tape or other listing regarding the Subsequent Receivables made available to the
Transferor 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 Sale 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 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


                                      G-9

<PAGE>

Sales Finance Act, 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 lien for taxes, labor or materials or any
other non-consensual lien affecting a Financed Vehicle arising subsequent to
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 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 the lien of the Indenture and for any lien for
taxes, labor or materials or any other non-consensual lien 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

                                      G-10

<PAGE>

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. Except for the Disclosed Cases, 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, 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.

                                      G-11

<PAGE>

         (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 Transferor 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
Transferor or by the Transferor to any Person other than the Trust 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 Transferor
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 other than the Lien of the Indenture,
and each such transfer has been perfected under the UCC. Immediately prior to
the transfer and assignment by the Transferor to the Trust contemplated by this
Agreement and the Sale and Servicing Agreement, the Transferor 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 other than the Lien of the Indenture and, immediately upon
the transfer thereof pursuant to this Agreement and the Sale and Servicing
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 other than the Lien
of the Indenture, 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 Transferor 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 Sale 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 Indenture 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

                                      G-12

<PAGE>



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 a 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 150 days following the
Subsequent Transfer Date and will show, LBAC named as the secured party under
the related 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 Trust 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 Transferor 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 Transferor 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 Noteholders or the Note Insurer in any Subsequent
Receivable or the proceeds thereof.

                                      G-13

<PAGE>


         (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 Transferor 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 Sale and Servicing Agreement; other than LBAC and
any Back-up Servicer arrangement that has been entered into, no other person has
the right to service any 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 Sale and Servicing Agreement will be, serviced by the Servicer in
compliance with Cal. Civil Codess.2981, et seq.

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 Transferor in Section 3.1 of the Sale 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) SALE AND SERVICING AGREEMENT CONDITIONS. Each of the conditions set
     forth in Section 2.2(b) to the Sale 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.

         (d) SECURITY INTEREST PERFECTION. In connection with the conveyance
     contemplated by this Agreement, the Transferor agrees to record and file,
     at its own expense, a financing statement with respect to the 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

                                      G-14

<PAGE>



     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 Trust Collateral Agent in due course), as
     soon as is practicable after the Transferor's receipt thereof.

         In connection with such conveyance, the Transferor 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 Sale and Servicing
     Agreement and this Agreement and (ii) to deliver to the Trust Collateral
     Agent 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 Transferor shall have delivered or
     caused to be delivered to the Trust Collateral Agent on behalf of the
     Noteholders and the Note Insurer such information as was reasonably
     requested by the Trust on behalf of the Noteholders or the Note Insurer to
     satisfy itself as to (i) the accuracy of the representations and warranties
     set forth in Section 4 of this Agreement and Section 7.1 of the Sale 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 Transferor 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) (other than Liquidation Proceeds and Recoveries), into the
         Collection Account.

SECTION 6. RATIFICATION OF AGREEMENT. As supplemented by this Agreement, the
Sale and Servicing Agreement is in all respects ratified and confirmed and the
Sale and Servicing Agreement as so supplemented by this Agreement shall be read,
taken and construed as one and the same instrument.

SECTION 7. THIRD PARTY BENEFICIARIES. Except as otherwise specifically provided
herein with respect to Noteholders, the parties to this Agreement hereby
manifest their intent that no third party other than the Note 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 Note 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 Note Insurer Default
shall have occurred and be continuing. Except as expressly stated otherwise
herein or in the Basic Documents, any right of the Note Insurer to direct,
appoint, consent to, approve of, or take any action under this Agreement, shall
be a right exercised by the Note Insurer in its sole and absolute discretion.
The Note Insurer may disclaim


                                      G-15

<PAGE>

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 Trust
Collateral Agent.

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 Issuer, LBAC, the
Transferor and the Trust Collateral Agent with the prior written consent of the
Note Insurer.


                                      G-16
<PAGE>



                  IN WITNESS WHEREOF, the Issuer, LBAC, the Transferor and the
Trust Collateral Agent 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 AUTO RECEIVABLES
                                        TRUST 2001-A, as Issuer

                                        By:  Wilmington Trust Company, not in
                                        its individual capacity, but solely as
                                        Owner Trustee


                                      By: ___________________________________
                                          Name:
                                          Title:


                                      LONG BEACH ACCEPTANCE CORP.


                                      By: ___________________________________
                                          Name:
                                          Title:


                                      LONG BEACH ACCEPTANCE
                                      RECEIVABLES CORP.


                                      By: ___________________________________
                                          Name:
                                          Title:


                                      THE CHASE MANHATTAN BANK,
                                        as Trust Collateral Agent.


                                      By: ___________________________________
                                          Name:
                                          Title:


                                      G-17

<PAGE>





                                                                 SCHEDULE A

                             SCHEDULE OF RECEIVABLES





                                  Schedule A-1

<PAGE>



                                                                    SCHEDULE B

Location of Receivable Files

One Mack Centre Drive
Paramus, New Jersey 07652

Location of Legal Files

1111 Fannin
12th Floor
Houston, Texas 77002
Attention:     Loan Document
               Custody - Long Beach Acceptance
               Auto Receivables Trust 2001-A




                                  Schedule B-1

<PAGE>





                                                                    SCHEDULE C

                              Delivery Requirements

The Trust Collateral Agent 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 Trust Collateral Agent or its agent, together with
each document of transfer, if any, necessary to transfer title to such
investment to the Trust Collateral Agent in a manner that complies with this
Agreement and the requirements of the definition of Eligible Investments.





                                  Schedule A-1