<PAGE>

                                                                 Exhibit 10.19

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                          SALE AND SERVICING AGREEMENT

                                      among

               LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2000-2

                                     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 December 1, 2000


==============================================================================



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                                TABLE OF CONTENTS
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<CAPTION>

                                                                                                                 Page
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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.....................................................................2

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

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

ARTICLE III THE RECEIVABLES.......................................................................................5

     SECTION 3.1.     Representations and Warranties of Transferor................................................5
     SECTION 3.2.     Repurchase upon Breach of Representations and Warranties of the Transferor..................5
     SECTION 3.3.     Delivery of Legal Files and Receivable Files................................................6
     SECTION 3.4.     Acceptance of Legal Files by Custodian......................................................6
     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.....................8
     SECTION 3.6.     Covenants of the Custodian..................................................................9
     SECTION 3.7.     Issuer's Certificate.......................................................................11

ARTICLE IV ADMINISTRATION AND SERVICING OF RECEIVABLES...........................................................11

     SECTION 4.1.     Duties of the Servicer.....................................................................11
     SECTION 4.2.     Collection and Allocation of Receivable Payments...........................................12
     SECTION 4.3.     Realization upon Receivables...............................................................13
     SECTION 4.4.     Physical Damage Insurance; Other Insurance.................................................14
     SECTION 4.5.     Maintenance of Security Interests in Financed Vehicles.....................................14
     SECTION 4.6.     Additional Covenants of Servicer...........................................................15
     SECTION 4.7.     Purchase of Receivables Upon Breach........................................................16
     SECTION 4.8.     Servicing Fee..............................................................................16
     SECTION 4.9.     Servicer's Certificate.....................................................................17
     SECTION 4.10.    Annual Statement as to Compliance; Notice of Default.......................................17
     SECTION 4.11.    Annual Independent Certified Public Accountant's Report....................................18
     SECTION 4.12.    Servicer Expenses..........................................................................18
     SECTION 4.13.    Retention and Termination of Servicer......................................................18

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     SECTION 4.14.    Access to Certain Documentation and Information Regarding Receivables......................19
     SECTION 4.15.    Verification of Servicer's Certificate.....................................................19
     SECTION 4.16.    Fidelity Bond..............................................................................20
     SECTION 4.17.    Delegation of Duties.......................................................................20
     SECTION 4.18.    Delivery of Back-up Tapes of Back-up Servicer..............................................21

ARTICLE V ACCOUNTS; PAYMENTS; STATEMENTS TO NOTEHOLDERS..........................................................22

     SECTION 5.1.     Accounts; Lock-Box Account.................................................................22
     SECTION 5.2.     Collections................................................................................24
     SECTION 5.3.     Application of Collections.................................................................24
     SECTION 5.4.     Intentionally Omitted......................................................................24
     SECTION 5.5.     Additional Deposits........................................................................24
     SECTION 5.6.     Payments; Policy Claims....................................................................24
     SECTION 5.7.     Statements to Noteholders; Tax Returns.....................................................28
     SECTION 5.8.     Reliance on Information from the Servicer..................................................30
     SECTION 5.9.     Optional Deposits by the Note Insurer......................................................30
     SECTION 5.10.    Spread Account.............................................................................31
     SECTION 5.11.    Withdrawals from Spread Account............................................................31
     SECTION 5.12.    Simple Interest............................................................................31
     SECTION 5.13.    Securities Accounts........................................................................32

ARTICLE VI THE NOTE POLICY.......................................................................................32

     SECTION 6.1.     Note Policy................................................................................32
     SECTION 6.2.     Claims Under Note Policy...................................................................32
     SECTION 6.3.     Preference Claims; Direction of Proceedings................................................33
     SECTION 6.4.     Surrender of Note Policy...................................................................34

ARTICLE VII THE TRANSFEROR.......................................................................................34

     SECTION 7.1.     Representations of the Transferor..........................................................34
     SECTION 7.2.     Liability of the Transferor................................................................36
     SECTION 7.3.     Merger or Consolidation of, or Assumption of the Obligations of, the Transferor............36
     SECTION 7.4.     Limitation on Liability of the Transferor and Others.......................................37
     SECTION 7.5.     Transferor May Own Notes...................................................................37

ARTICLE VIII THE SERVICER........................................................................................37

     SECTION 8.1.     Representations of Servicer................................................................37
     SECTION 8.2.     Indemnities of Servicer....................................................................39
     SECTION 8.3.     Merger or Consolidation of, or Assumption of the Obligations of, Servicer or
                             Back-up Servicer....................................................................41
     SECTION 8.4.     Limitation on Liability of Servicer and Others.............................................43
     SECTION 8.5.     Servicer and Back-up Servicer Not to Resign................................................43
</TABLE>

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<TABLE>
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ARTICLE IX SERVICER TERMINATION EVENTS...........................................................................44

     SECTION 9.1.     Servicer Termination Events................................................................44
     SECTION 9.2.     Appointment of Successor...................................................................47
     SECTION 9.3.     Notification to Noteholders................................................................48
     SECTION 9.4.     Action Upon Certain Failures of the Servicer...............................................48

ARTICLE X THE TRUST COLLATERAL AGENT AND THE CUSTODIAN...........................................................49

     SECTION 10.1.    Duties of the Trust Collateral Agent and the Custodian.....................................49
     SECTION 10.2.    Trust Collateral Agent to Act for the Noteholders and Note Insurer.........................52
     SECTION 10.3.    Certain Matters Affecting the Trust Collateral Agent and the Custodian.....................52
     SECTION 10.4.    Trust Collateral Agent, Back-up Servicer and Custodian Not Liable for Notes or
                        Receivables..............................................................................53
     SECTION 10.5.    Trust Collateral Agent, Back-up Servicer and Custodian May Own Notes.......................54
     SECTION 10.6.    Indemnity of Trust Collateral Agent, Back-up Servicer and Custodian........................55
     SECTION 10.7.    Eligibility Requirements for Trust Collateral Agent and the Custodian......................55
     SECTION 10.8.    Resignation or Removal of Trust Collateral Agent or Custodian..............................55
     SECTION 10.9.    Successor Trust Collateral Agent or Custodian..............................................57
     SECTION 10.10.   Merger or Consolidation of Trust Collateral Agent or Custodian.............................57
     SECTION 10.11.   Co-Trustee; Separate Trustee...............................................................57
     SECTION 10.12.   Representations and Warranties of Trust Collateral Agent and the Custodian.................59
     SECTION 10.13.   Rights of Note Insurer to Direct Trust Collateral Agent....................................59

ARTICLE XI TERMINATION...........................................................................................60

     SECTION 11.1.    Termination................................................................................60

ARTICLE XII ADMINISTRATIVE DUTIES OF THE SERVICER................................................................60

     SECTION 12.1.    Administrative Duties......................................................................60
     SECTION 12.2.    Records....................................................................................62
     SECTION 12.3.    Additional Information to be Furnished to the Issuer.......................................62
     SECTION 12.4.    No Additional Compensation.................................................................62

ARTICLE XIII MISCELLANEOUS PROVISIONS............................................................................62

     SECTION 13.1.    Amendment..................................................................................62
     SECTION 13.2.    Protection of Title........................................................................63
     SECTION 13.3.    Limitation on Rights of Noteholders........................................................65
     SECTION 13.4.    Governing Law..............................................................................66
     SECTION 13.5.    Notices....................................................................................67
     SECTION 13.6.    Severability of Provisions.................................................................67
     SECTION 13.7.    Assignment to Indenture Trustee............................................................67

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     SECTION 13.8.    Limitation of Liability of Owner Trustee, Custodian and Trust Collateral Agent........68
     SECTION 13.9.    Independence of the Servicer..........................................................68
     SECTION 13.10.   No Joint Venture......................................................................68
     SECTION 13.11.   Nonpetition Covenant..................................................................68
     SECTION 13.12.   Third Party Beneficiaries.............................................................69
     SECTION 13.13.   Consent to Jurisdiction...............................................................69
     SECTION 13.14.   Headings..............................................................................70
     SECTION 13.15.   Trial by Jury Waived..................................................................70
     SECTION 13.16.   Entire Agreement......................................................................70
     SECTION 13.17.   Effect of Policy Expiration Date......................................................70


                                     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

                                    SCHEDULES

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

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                                       iv
<PAGE>




        SALE AND SERVICING AGREEMENT ("Agreement"), dated as of December 1,
2000, among LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2000-2, 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; 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 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.


                                       1
<PAGE>

         (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 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 Note 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.


                                       2
<PAGE>


                                   ARTICLE II
                            CONVEYANCE OF RECEIVABLES

         SECTION 2.1. CONVEYANCE OF 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 Receivables listed in Schedule A hereto, all monies
         received on the Receivables after the Cutoff Date and, with respect to
         any Receivables which are Precomputed Receivables, the related Payahead
         Amount, and all Liquidation Proceeds and Recoveries received with
         respect to such Receivables;

                  (ii) the security interests in the related Financed Vehicles
         granted by the related Obligors pursuant to the 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 Receivable and that has been
         acquired by or on behalf of the Issuer pursuant to the liquidation of
         such Receivable;

                  (v) the Purchase Agreement and the Guarantee including,
         without limitation, a direct right to cause LBAC to purchase
         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 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
         Receivable and any and all other documents that LBAC keeps on file in
         accordance with its customary procedures relating to the Receivables,
         the related Obligors or the related Financed Vehicles;


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<PAGE>

                  (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 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 Receivables; and

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

         SECTION 2.2. TRANSFER INTENDED AS SALE; PRECAUTIONARY SECURITY
INTEREST. The conveyance to the Issuer of the property set forth in Section 2.1
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, the 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 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 2.3. 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 or from the
failure of LBAC to comply with its obligations pursuant to Section 5.5 of the
Purchase Agreement. The provisions of this Section 2.3 are intended to grant the
Issuer a direct right against LBAC to demand performance under the terms of the
Purchase Agreement.

         SECTION 2.4. 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 2.5. 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, 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



                                       4
<PAGE>


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 Note 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 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 Note Policy, the Indenture Trustee
is 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 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



                                       5
<PAGE>


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 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, 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 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, 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.

         (b) On or prior to the Closing Date, 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 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 Receivables. The Custodian shall hold the Legal Files
subject to the terms and conditions of



                                       6
<PAGE>


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 Receivables and hereby acknowledges
that it has determined that it has received a file for each Receivable
identified in Schedule A to this Agreement. The Custodian declares that it holds
and will continue to hold such files, 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 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 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 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, 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, 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




                                       7
<PAGE>


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
use its best efforts to hold in confidence all Confidential Information in
accordance with its then customary procedures; PROVIDED that nothing herein
shall prevent any 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 or (d) in order to protect or enforce such
Person's investment in any Note.

         (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,



                                       8
<PAGE>


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.

         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



                                       9
<PAGE>


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;

                  (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




                                       10
<PAGE>


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 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




                                       11
<PAGE>

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 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 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,



                                       12
<PAGE>


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.

         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.

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

                  (ii) 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.


                                       13
<PAGE>

         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 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)



                                       14
<PAGE>


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), 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 Note Policy: (i)
the Servicer shall not release the Financed Vehicle



                                       15
<PAGE>


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.

         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



                                       16
<PAGE>


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, 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.



                                       17
<PAGE>


         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 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 March 31, 2001 which term
shall be extendible by the Note Insurer for successive quarterly terms ending on
each successive June 30, September 30, December 31, and March 31 (or, pursuant
to revocable written standing instructions from time to time to the Servicer and
the 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




                                       18
<PAGE>



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 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



                                       19
<PAGE>



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 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 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




                                       20
<PAGE>



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 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, 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 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 June 2001 (with respect to the
period from and including the 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



                                       21
<PAGE>


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


                                    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 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



                                       22
<PAGE>


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, and
the Policy Payments Account in the name of the Issuer for the benefit of the
Noteholders. The Collection Account, the Note 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 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 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). 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.





                                       23
<PAGE>


         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 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, and (iii) 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 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



                                       24
<PAGE>


funds transferred from the Collection Account with respect to such Collection
Period pursuant to Section 5.1(c).

         (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 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;

                  (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
         and the Class A-3 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



                                       25
<PAGE>


         made pursuant to clauses (i) and (ii) above), an amount equal to the
         Class A-1 Note Interest, Class A-2 Note Interest and the Class A-3 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 or Class
         A-3 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 or
         the Class A-3 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 and the Class
         A-3 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) 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 and
         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 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




                                       26
<PAGE>


                  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.

         (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



                                       27
<PAGE>

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, or the
Class A-3 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 and the Class A-3 Notes,
         respectively;

                      (ii) the amount of the payment allocable to interest on
         the Class A-1 Notes, the Class A-2 Notes and the Class A-3 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
         and the Class A-3 Pool Factor as of the close of business on the last
         day of the preceding Collection Period;



                                       28
<PAGE>

                      (iv) the Class A-1 Note Balance, the Class A-2 Note
         Balance and the Class A-3 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, 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;

                      (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;



                                       29
<PAGE>

                      (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; and

                      (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.

                  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



                                       30
<PAGE>


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 Note 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.
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



                                       31
<PAGE>



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.

         SECTION 5.13. 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. The Trust
Collateral Agent acknowledges and agrees that (a) each item of property (whether
investment property, financial asset, security, instrument or cash) credited to
the Class B Reserve Account shall be treated as a "financial asset" within the
meaning of Section 8-102(a)(9) of the New York UCC and (b) if at any time the
Trust Collateral Agent shall receive any order from the Indenture Trustee
directing transfer or redemption of any financial asset relating to the Class B
Reserve Account, the Trust Collateral Agent shall comply with such entitlement
order without further consent by LBAC or any other person.


                                   ARTICLE VI
                                 THE NOTE POLICY

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

         SECTION 6.2. CLAIMS UNDER NOTE 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 Note 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 Note Policy).


                                       32
<PAGE>

         (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 Note Policy and shall constitute a "Notice of Claim" under the Note
Policy. In accordance with the provisions of the Note 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 Note Policy) following receipt on
a Business Day (as defined in the Note Policy) of the Notice of Claim, and (ii)
the applicable Payment Date. Any payment made by the Note Insurer under the Note
Policy shall be applied solely to the payment of the Notes, and for no other
purpose.

         (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 Note
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 Note
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 Note 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 Note 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 Note
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 Note Policy.
Pursuant to the terms of the Note Policy, the Note Insurer will make such
payment on behalf of the Noteholder to the receiver, conservator,
debtor-in-possession or trustee



                                       33
<PAGE>


in bankruptcy named in the Order (as defined in the Note 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 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 NOTE POLICY. The Trust Collateral Agent shall
surrender the Note 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 Note 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 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



                                       34
<PAGE>



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 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 Receivables and the other property conveyed
to the Issuer pursuant to Section 2.1, 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 Kunert Case, 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



                                       35
<PAGE>



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 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 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 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)



                                       36
<PAGE>



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 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 Note Policy and on which the Issuer is
deemed to have relied in acquiring the



                                       37
<PAGE>



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 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.


                                       38
<PAGE>

                  (vi) NO PROCEEDINGS. Except for the Kunert Case, 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




                                       39
<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




                                       40
<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 Kunert Case.

                  (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.


                                       41
<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,



                                       42
<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



                                       43
<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 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 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, federal or state, bankruptcy,
         insolvency or similar law, or appointing a receiver,



                                       44
<PAGE>


         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 or in each case any certificate, report or other
         writing delivered pursuant hereto shall prove to be incorrect as of the
         time when the same shall have been made (excluding, however, any
         representation or warranty set forth in Section 3.2(b) of the Purchase
         Agreement), and 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 Note Policy; or



                                       45
<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





                                       46
<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



                                       47
<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.




                                       48
<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;


                                       49
<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 Custodian, as applicable, in confidence and shall not
be disclosed to any other Person; PROVIDED that, nothing herein shall



                                       50
<PAGE>


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 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, 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 Custodian is a party or (d) in order to protect or enforce
the rights of the Noteholders and the Note Insurer under the Issuer established
hereunder.

         (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 Note Policy in trust, and will hold any proceeds of any claim on the
Note 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 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.


                                       51
<PAGE>


         (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 Note 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 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),



                                       52
<PAGE>

         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.

         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




                                       53
<PAGE>


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 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.



                                       54
<PAGE>


         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 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



                                       55
<PAGE>


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 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.


                                       56
<PAGE>


         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 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




                                       57
<PAGE>


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 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




                                       58
<PAGE>


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 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.



                                       59
<PAGE>



                                  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.


                                   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.




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         (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:

                  (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



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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 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



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<PAGE>


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 better to assure, convey
         and confirm unto the property conveyed pursuant hereto;

                  (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 which may be inconsistent with any other provision
         herein or to make any other provisions with respect to matters or
         questions arising under this 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, 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
Section 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

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<PAGE>


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.

         (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 2000-2 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.


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<PAGE>


         (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

                           (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.



                                       65
<PAGE>

         (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 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 Note 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).



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<PAGE>


         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 2000-2. Any notice required or
permitted to be mailed to a Noteholder shall be given by Federal Express or
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 Note 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 Note
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.



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<PAGE>


         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.

         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.



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<PAGE>



         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 Note 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 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
Note Policy has expired in



                                       69
<PAGE>


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 (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.



                                       70
<PAGE>


         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 2000-2, 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


                                  DEFINED TERMS








                                     Annex A
<Page>

                                                               Execution Version


                             ANNEX A - DEFINED TERMS


                  "ACCOUNTS" means the Collection Account, the Note Account, the
Policy Payments 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.

                  "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.

                  "ANNUAL PERCENTAGE RATE" or "APR" of a Receivable means the
annual rate of finance charges stated in the Receivable. If after the Closing
Date, the annual rate with respect to such Receivable as of the Closing Date, 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 the assignment dated as of December 1, 2000
by LBAC to the Transferor substantially in the form of Exhibit A to the Purchase
Agreement, pursuant to which the Receivables are conveyed to the Trust.


                                   Annex A - 1
<Page>

                  "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 collections 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) (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; 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.

                  "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, the Purchase Agreement, the Assignment, the Spread Account Agreement,
the Trust Agreement, the


                                   Annex A - 2
<Page>

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 the 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.

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

                  "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 December 2001.

                  "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).


                                   Annex A - 3
<Page>

         "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 6.75% per annum.

         "CLASS A-1 NOTE" means any one of the 6.75% Long Beach Acceptance
Receivables Trust 2000-2, 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.

         "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
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 June
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

                                   Annex A - 4



<Page>




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 6.76% per annum.

         "CLASS A-2 NOTE" means any one of the 6.76% Long Beach Acceptance
Receivables Trust 2000-2, Class A-2 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-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
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
August 2007.

         "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.


                                   Annex A - 5


<Page>




         "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 6.91% per annum.

         "CLASS A-3 NOTE" means any one of the 6.91% Long Beach Acceptance
Receivables Trust 2000-2, 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
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.

         "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 December 13, 2000.



                                   Annex A - 6


<Page>




         "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.

         "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.

         "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 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), (ii) which subsequently
becomes publicly known through no act or omission by such Person, or (iii) which
otherwise becomes known to such Person other than through disclosure by LBAC or
the Transferor.

         "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

                                   Annex A - 7

<Page>

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 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 December 13, 2000, 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 close of business on November 30, 2000.

         "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

                                   Annex A-8



<Page>



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.

         "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

                                   Annex A-9



<Page>




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

         (b)      by physical deliver 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
many 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


                                  Annex A-10

<Page>


         (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
     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.

         "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,

                                  Annex A - 11



<Page>



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:

         (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.

                                  Annex A - 12



<Page>




         "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 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.

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

         "GCFP" means Greenwich Capital Financial Products, Inc.

         "GCFP RELEASE" means the security interest release executed as of
December 1, 2000 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 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

                                  Annex A - 13

<Page>

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 December 1, 2000, 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 December 1, 2000, 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 December 1, 2000, 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 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

                                  Annex A - 14



<Page>




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 CLASS A-1 NOTE BALANCE" means $18,750,000.

         "INITIAL CLASS A-2 NOTE BALANCE" means $53,500,000.

         "INITIAL CLASS A-3 NOTE BALANCE" means $52,750,000.

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

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

         "INSURANCE AGREEMENT" means the Insurance and Indemnity Agreement,
dated as of December 1, 2000, among LBAC, 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.

         "INSURANCE 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.


                                  Annex A - 15


<Page>




         "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 and the
Class A-3 Interest Payment Amount.

         "ISSUER" or "TRUST" means the Long Beach Acceptance Auto Receivables
Trust 2000-2, 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.

         "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.


                                  Annex A - 16
<Page>

         "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 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 Servicer shall
direct each Obligor under each Receivable to forward all payments in respect of
such Receivable.

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


                                  Annex A - 17
<Page>

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.

         "MEMORANDUM" means the Private Placement Memorandum dated December 13,
2000 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.

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

         "NOTE" means a Class A-1 Note, Class A-2 Note or Class A-3 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 and the Class A-3 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.


                                  Annex A - 18
<Page>

         "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;

         (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 and (iii) with respect to the Class A-3
Notes, the Class A-3 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 December 13, 2000, 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
and (iii) with respect to the Class A-3 Notes, the Class A-3 Note Rate.

         "NOTE REGISTER" and "NOTE REGISTRAR" mean, respectively, the register
maintained and the registrar 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


                                  Annex A - 19
<Page>

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 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
acceptable 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 $125,000,000.

        "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 Cutoff Date in excess
of the aggregate Scheduled

                                Annex A-20


<Page>

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 January 16, 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. 51022-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.

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


                                Annex A-21


<Page>

        "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 Cutoff Date, 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 and the Class A-3 Final Scheduled Payment Date,
the sum of the following amounts (without duplication):

                (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;


                                Annex A-22


<Page>


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

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

     (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; and

     (iv) with respect to the Class A-3 Final Scheduled Payment Date, an
amount equal to the then outstanding Class A-3 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
December 1, 2000 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.

     "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.

                                  Annex A-23


<Page>


     "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 each
of the Rating Agencies shall have notified the Transferor, the Servicer, the
Note Insurer, the Trust Collateral Agent, the 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.

     "RECEIVABLES PURCHASE PRICE" means $125,000,000.

     "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 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 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.

                                  Annex A-24


<Page>


     "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 December 1, 2000, 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.

     "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 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, 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 2000-2 SUPPLEMENT" means the Series 2000-2 Supplement to Spread
Account Agreement, dated as of December 1, 2000, by and among the Note
Insurer, the

                                  Annex A-25



<Page>

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
December 1, 2000, 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.

         "SERVICING FEE RATE" means, with respect to any Payment Date, 2.45%
per annum; PROVIDED, HOWEVER, that if the Back-up Servicer or another entity
becomes the successor Servicer, the "Servicing Fee Rate" shall be equal to a
rate not to exceed the Successor Servicing Fee Rate. 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 of (i) the Weighted
Average Note Rate and (ii) the Servicing Fee Rate with respect to such
Receivable as 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.


                                 Annex A-26

<Page>

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

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

         "SPREAD ACCOUNT" means the 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 2000-2 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 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.

         "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 Note
Policy and the return of the Note 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.

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

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


                                 Annex A-27
<Page>

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

         "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 December 1, 2000, between the Transferor and the Owner Trustee,
as the same may be amended or supplemented from time to time.

         "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.

         "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 NJ issued by BALBOA
Life and Casualty, (ii) the vendor's single interest physical damage
insurance policy No. LS 700 9-0254 issued by Old Republic Minnehoma Insurance
Company, (iii) the vendor's single interest physical damage 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 cancelled 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 and
the Class A-3 Note Rate (weighted based on the outstanding Class A-1 Note
Balance, the outstanding Class A-2 Note Balance and the outstanding Class A-3
Note Balance as of such Determination Date).


                                 Annex A-28
<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 December 1, 2000, 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 2000-2, 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 December 1, 2000, 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 2000-2, 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 2000-2
                       6.75% ASSET-BACKED NOTES, CLASS A-1
                       6.76% ASSET-BACKED NOTES, CLASS A-2
                       6.91% ASSET-BACKED NOTES, CLASS A-3














                                      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 Cut-Off Date).

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

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

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

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

o        A deferment fee will be collected for each deferment if allowed by
         applicable law and may be waived or deferred only by the President, or
         an Executive Vice President, or the National Collections Manager, or a
         Regional Manager; PROVIDED, HOWEVER, that no deferment will be granted
         unless the Servicer believes in good faith that the account probably
         would default in the reasonably foreseeable future if a deferment is
         not approved.

o        Deferments which do not meet the above criteria may be granted in
         writing on an exception basis (e.g., when required by law) by the
         President, or an Executive Vice President, or the National Collections
         Manager, or a Regional Manager.

o        As of April 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-3 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:

<TABLE>
<CAPTION>

<S>                                                                         <C>
  1.   Installment contract with proper signatures and Dealer endorsements  1.__________________
  2.   Copy of signed credit application                                    2.__________________
  3.   References as described in the Program Guidelines                    3.__________________
  4.   Proof of income as described in the Program Guidelines               4.__________________
  5.   Copy of driver's license for all licensed signors                    5.__________________
  6.   Title information  (application and copy of existing title, receipt
       of  registration,   or  title  copy  already  received)  with  lien
       notation thereon, or Dealer Title Guaranty                           6.__________________
  7.   Invoice or copy of computer  screen  printout  showing  NADA value,
       NADA book page, Kelley printout or Kelley Blue Book page             7.__________________
  8.   In the case of a used Financed Vehicle,  odometer statement (if not
       on title info)                                                       8.__________________
  9.   Signed  agreement to provide  insurance and  verification  paper or
       other evidence of verification of insurance coverage                 9.__________________
  10.  Notice to cosignor, if required                                      10._________________
  11.  Service contract or warranty papers                                  11._________________
  12.  Life,  accident,   health  and  GAP  insurance  policy  copies,  as
       applicable                                                           12._________________
  13.  Signed purchase order from dealer to customer                        13._________________
</TABLE>



                                       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 December 1,
2000 (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 2000-2, 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 December 1,
2000 (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 2000-2, 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 December 1,
2000 (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 2000-2, 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>




                                                                     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 2000-2
















                                  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 C-1