Execution
        Copy

       

      
        

        

      

    

    SALE
      AND
      SERVICING AGREEMENT

     

    among

     

    LONG
      BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2007-A

     

    Issuer

     

    LONG
      BEACH ACCEPTANCE RECEIVABLES CORP. 

     

    Transferor

     

    LONG
      BEACH ACCEPTANCE CORP.

     

    Originator,
      Servicer and Custodian

     

    and

     

    WELLS
      FARGO BANK, NATIONAL ASSOCIATION

     

    Back-up
      Servicer and Trust Collateral Agent

     

    Dated
      as
      of March 1, 2007

     

    
      

      

    

    
      
        
          
          

        

        
          
          

          
            

          

        

         

      

    

    


    TABLE
      OF
      CONTENTS

     

    
      
        	 	 	
                 Page

              
	
                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 or the Class C
                  Certificateholder

              	 	
                2

              
	
                SECTION
                  1.5.

              	 	
                Material
                  Adverse Effect

              	 	
                3

              
	 	 	 
	
                ARTICLE
                  II CONVEYANCE OF RECEIVABLES

              	 	
                3

              
	 	 	 	 	 
	
                SECTION
                  2.1.

              	 	
                Conveyance
                  of Initial Receivables.

              	 	
                3

              
	
                SECTION
                  2.2.

              	 	
                Conveyance
                  of Subsequent Receivables

              	 	
                4

              
	
                SECTION
                  2.3.

              	 	
                Transfer
                  Intended as Sale; Precautionary Security Interest.

              	 	
                9

              
	
                SECTION
                  2.4.

              	 	
                Assignment
                  by Transferor

              	 	
                9

              
	
                SECTION
                  2.5.

              	 	
                Further
                  Encumbrance of Trust Assets

              	 	
                10

              
	 	 	 
	
                ARTICLE
                  III THE RECEIVABLES

              	 	
                
                  10

                

              
	 	 	 	 	 
	
                SECTION
                  3.1.

              	 	
                Representations
                  and Warranties of Transferor

              	 	
                10

              
	
                SECTION
                  3.2.

              	 	
                Repurchase
                  upon Breach of Representations and Warranties of the
                  Transferor

              	 	
                11

              
	
                SECTION
                  3.3.

              	 	
                Custody
                  of Legal Files and Receivable Files

              	 	
                11

              
	
                SECTION
                  3.4.

              	 	
                Legal
                  File Deficiencies

              	 	
                12

              
	
                SECTION
                  3.5.

              	 	
                Access
                  to Receivable Files; Servicer's Duties with Respect to Receivable
                  Files

              	 	
                13

              
	
                SECTION
                  3.6.

              	 	
                Issuer’s
                  Certificate

              	 	
                14

              
	 	 	 
	
                ARTICLE
                  IV ADMINISTRATION AND SERVICING OF RECEIVABLES

              	 	
                14

              
	 	 	 	 	 
	
                SECTION
                  4.1.

              	 	
                Duties
                  of the Servicer

              	 	
                14

              
	
                SECTION
                  4.2.

              	 	
                Collection
                  and Allocation of Receivable Payments

              	 	
                15

              
	
                SECTION
                  4.3.

              	 	
                Realization
                  upon Receivables

              	 	
                16

              
	
                SECTION
                  4.4.

              	 	
                Physical
                  Damage Insurance; Other Insurance

              	 	
                17

              
	
                SECTION
                  4.5.

              	 	
                Maintenance
                  of Security Interests in Financed Vehicles

              	 	
                18

              
	
                SECTION
                  4.6.

              	 	
                Additional
                  Covenants of Servicer

              	 	
                19

              
	
                SECTION
                  4.7.

              	 	
                Purchase
                  of Receivables Upon Breach

              	 	
                19

              
	
                SECTION
                  4.8.

              	 	
                Servicing
                  Fee

              	 	
                20

              
	
                SECTION
                  4.9.

              	 	
                Servicer's
                  Certificate

              	 	
                20

              
	
                SECTION
                  4.10.

              	 	
                Annual
                  Statement as to Compliance; Notice of Default

              	 	
                21

              
	
                SECTION
                  4.11.

              	 	
                Annual
                  Independent Certified Public Accountant's Report

              	 	
                22

              
	
                SECTION
                  4.12.

              	 	
                Servicer
                  Expenses

              	 	
                22

              
	
                SECTION
                  4.13.

              	 	
                Retention
                  and Termination of Servicer

              	 	
                23

              
	
                SECTION
                  4.14.

              	 	
                Access
                  to Certain Documentation and Information Regarding
                  Receivables

              	 	
                23

              


      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                SECTION
                  4.15.

              	 	
                Verification
                  of Servicer's Certificate

              	 	
                23

              
	
                SECTION
                  4.16.

              	 	
                Fidelity
                  Bond

              	 	
                25

              
	
                SECTION
                  4.17.

              	 	
                Delegation
                  of Duties

              	 	
                25

              
	
                SECTION
                  4.18.

              	 	
                Delivery
                  of Back-up Tapes of Back-up Servicer

              	 	
                26

              
	
                SECTION
                  4.19.

              	 	
                Confidential
                  Information

              	 	
                26

              
	 	 	 
	
                ARTICLE
                  V ACCOUNTS; PAYMENTS; STATEMENTS TO NOTEHOLDERS

              	 	
                27

              
	 	 	 	 	 
	
                SECTION
                  5.1.

              	 	
                Accounts;
                  Lock-Box Account

              	 	
                27

              
	
                SECTION
                  5.2.

              	 	
                Collections

              	 	
                29

              
	
                SECTION
                  5.3.

              	 	
                Application
                  of Collections

              	 	
                29

              
	
                SECTION
                  5.4.

              	 	
                Intentionally
                  Omitted.

              	 	
                29

              
	
                SECTION
                  5.5.

              	 	
                Additional
                  Deposits

              	 	
                29

              
	
                SECTION
                  5.6.

              	 	
                Payments;
                  Policy Claims

              	 	
                30

              
	
                SECTION
                  5.7.

              	 	
                Statements
                  to Noteholders and the Class C Certificateholder; Tax
                  Returns

              	 	
                35

              
	
                SECTION
                  5.8.

              	 	
                Reliance
                  on Information from the Servicer

              	 	
                38

              
	
                SECTION
                  5.9.

              	 	
                Optional
                  Deposits by the Note Insurer

              	 	
                38

              
	
                SECTION
                  5.10.

              	 	
                Spread
                  Account

              	 	
                38

              
	
                SECTION
                  5.11.

              	 	
                Withdrawals
                  from Supplemental Enhancement Account and Spread Account

              	 	
                39

              
	
                SECTION
                  5.12.

              	 	
                Supplemental
                  Enhancement Account

              	 	
                39

              
	
                SECTION
                  5.13.

              	 	
                Pre-Funding
                  Account

              	 	
                40

              
	
                SECTION
                  5.14.

              	 	
                Securities
                  Accounts

              	 	
                40

              
	 	 	 
	
                ARTICLE
                  VI THE POLICY

              	 	
                41

              
	 	 	 	 	 
	
                SECTION
                  6.1.

              	 	
                Policy

              	 	
                41

              
	
                SECTION
                  6.2.

              	 	
                Claims
                  Under Policy

              	 	
                41

              
	
                SECTION
                  6.3.

              	 	
                Preference
                  Claims; Direction of Proceedings

              	 	
                42

              
	
                SECTION
                  6.4.

              	 	
                Surrender
                  of Policy

              	 	
                43

              
	 	 	 
	
                ARTICLE
                  VII THE TRANSFEROR

              	 	
                43

              
	 	 	 	 	 
	
                SECTION
                  7.1.

              	 	
                Representations
                  of the Transferor

              	 	
                43

              
	
                SECTION
                  7.2.

              	 	
                Liability
                  of the Transferor

              	 	
                45

              
	
                SECTION
                  7.3.

              	 	
                Merger
                  or Consolidation of, or Assumption of the Obligations of, the
                  Transferor

              	 	
                45

              
	
                SECTION
                  7.4.

              	 	
                Limitation
                  on Liability of the Transferor and Others

              	 	
                46

              
	
                SECTION
                  7.5.

              	 	
                Transferor
                  May Own Notes

              	 	
                46

              
	 	 	 
	
                ARTICLE
                  VIII THE SERVICER

              	 	
                46

              
	 	 	 	 	 
	
                SECTION
                  8.1.

              	 	
                Representations
                  of Servicer

              	 	
                46

              
	
                SECTION
                  8.2.

              	 	
                Indemnities
                  of Servicer

              	 	
                48

              
	
                SECTION
                  8.3.

              	 	
                Merger
                  or Consolidation of, or Assumption of the Obligations of, Servicer
                  or
                  Back-up Servicer

              	 	
                50

              
	
                SECTION
                  8.4.

              	 	
                Limitation
                  on Liability of Servicer and Others

              	 	
                51

              
	
                SECTION
                  8.5.

              	 	
                Servicer
                  and Back-up Servicer Not to Resign

              	 	
                52

              


      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  IX SERVICER TERMINATION EVENTS

              	 	
                52

              
	 	 	 	 	 
	
                SECTION
                  9.1.

              	 	
                Servicer
                  Termination Events

              	 	
                52

              
	
                SECTION
                  9.2.

              	 	
                Appointment
                  of Successor

              	 	
                56

              
	
                SECTION
                  9.3.

              	 	
                Notification
                  to Noteholders and the Class C Certificateholder

              	 	
                58

              
	
                SECTION
                  9.4.

              	 	
                Action
                  Upon Certain Failures of the Servicer

              	 	
                58

              
	 	 	 
	
                ARTICLE
                  X THE TRUST COLLATERAL AGENT

              	 	
                58

              
	 	 	 	 	 
	
                SECTION
                  10.1.

              	 	
                Duties
                  of the Trust Collateral Agent

              	 	
                58

              
	
                SECTION
                  10.2.

              	 	
                Trust
                  Collateral Agent to Act for the Class A Noteholders, the Class
                  C
                  Certificateholder and Note Insurer

              	 	
                61

              
	
                SECTION
                  10.3.

              	 	
                Certain
                  Matters Affecting the Trust Collateral Agent

              	 	
                61

              
	
                SECTION
                  10.4.

              	 	
                Trust
                  Collateral Agent and Back-up Servicer Not Liable for Notes or
                  Receivables

              	 	
                63

              
	
                SECTION
                  10.5.

              	 	
                Trust
                  Collateral Agent and Back-up Servicer May Own Notes

              	 	
                64

              
	
                SECTION
                  10.6.

              	 	
                Indemnity
                  of Trust Collateral Agent and Back-up Servicer

              	 	
                64

              
	
                SECTION
                  10.7.

              	 	
                Eligibility
                  Requirements for Trust Collateral Agent

              	 	
                64

              
	
                SECTION
                  10.8.

              	 	
                Resignation
                  or Removal of Trust Collateral Agent

              	 	
                64

              
	
                SECTION
                  10.9.

              	 	
                Successor
                  Trust Collateral Agent

              	 	
                66

              
	
                SECTION
                  10.10.

              	 	
                Merger
                  or Consolidation of Trust Collateral Agent

              	 	
                66

              
	
                SECTION
                  10.11.

              	 	
                Co-Trustee;
                  Separate Trustee.

              	 	
                66

              
	
                SECTION
                  10.12.

              	 	
                Representations
                  and Warranties of Trust Collateral Agent

              	 	
                68

              
	
                SECTION
                  10.13.

              	 	
                Rights
                  of Note Insurer to Direct Trust Collateral Agent

              	 	
                68

              
	 	 	 
	
                ARTICLE
                  XI TERMINATION

              	 	
                69

              
	 	 	 	 	 
	
                SECTION
                  11.1.

              	 	
                Termination

              	 	
                69

              
	 	 	 
	
                ARTICLE
                  XII ADMINISTRATIVE DUTIES OF THE SERVICER

              	 	
                69

              
	 	 	 	 	 
	
                SECTION
                  12.1.

              	 	
                Administrative
                  Duties

              	 	
                69

              
	
                SECTION
                  12.2.

              	 	
                Records

              	 	
                71

              
	
                SECTION
                  12.3.

              	 	
                Additional
                  Information to be Furnished to the Issuer

              	 	
                71

              
	
                SECTION
                  12.4.

              	 	
                No
                  Additional Compensation

              	 	
                71

              
	 	 	 
	
                ARTICLE
                  XIII MISCELLANEOUS PROVISIONS

              	 	
                71

              
	 	 	 	 	 
	
                SECTION
                  13.1.

              	 	
                Amendment

              	 	
                71

              
	
                SECTION
                  13.2.

              	 	
                Protection
                  of Title

              	 	
                73

              
	
                SECTION
                  13.3.

              	 	
                Limitation
                  on Rights of Noteholders and the Class C Certificateholder

              	 	
                75

              
	
                SECTION
                  13.4.

              	 	
                Governing
                  Law

              	 	
                76

              
	
                SECTION
                  13.5.

              	 	
                Notices

              	 	
                76

              
	
                SECTION
                  13.6.

              	 	
                Severability
                  of Provisions

              	 	
                77

              
	
                SECTION
                  13.7.

              	 	
                Assignment
                  to Indenture Trustee

              	 	
                77

              
	
                SECTION
                  13.8.

              	 	
                Limitation
                  of Liability of Owner Trustee, Back-up Servicer and Trust Collateral
                  Agent

              	 	
                77

              
	
                SECTION
                  13.9.

              	 	
                Independence
                  of the Servicer

              	 	
                77

              
	
                SECTION
                  13.10.

              	 	
                No
                  Joint Venture

              	 	
                78

              


      

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        	
                SECTION
                  13.11.

              	 	
                Nonpetition
                  Covenant

              	 	
                78

              
	
                SECTION
                  13.12.

              	 	
                Third
                  Party Beneficiaries

              	 	
                78

              
	
                SECTION
                  13.13.

              	 	
                Consent
                  to Jurisdiction.

              	 	
                78

              
	
                SECTION
                  13.14.

              	 	
                Headings

              	 	
                79

              
	
                SECTION
                  13.15.

              	 	
                Trial
                  by Jury Waived

              	 	
                79

              
	
                SECTION
                  13.16.

              	 	
                Entire
                  Agreement

              	 	
                80

              
	
                SECTION
                  13.17.

              	 	
                Effect
                  of Policy Expiration Date

              	 	
                80

              


      

    

     

    
      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 Transfer Agreement

              
	
                SCHEDULES

              
	
                Schedule

              	 	
                A

              	 	
                Schedule
                  of Receivables

              
	
                Schedule

              	 	
                B

              	 	
                Location
                  of Receivable Files; Location of Legal Files

              
	
                Schedule

              	 	
                C

              	 	
                Delivery
                  Requirements

              


      

    

    
       

      
        
          
            
            

          

          
            iv

            
              

            

          

           

        

      

       

    

    
      SALE
        AND
        SERVICING AGREEMENT ("Agreement"), dated as of March 1, 2007, among LONG
        BEACH
        ACCEPTANCE AUTO RECEIVABLES TRUST 2007-A, a Delaware statutory 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"), as servicer (in such
        capacity, the "Servicer") and as custodian (in such capacity, the "Custodian")
        and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association,
        as
        back-up servicer and trust collateral agent, (the "Back-up Servicer" and
        the
        "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 Long Beach
        Acceptance Receivables Corp. Warehouse I (collectively, the "Sellers") and
        is
        willing to convey such receivables to the Issuer; 

       

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

       

      WHEREAS
        the Transferor has agreed to purchase, from time to time, such additional
        receivables from the Sellers 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

          
            

          

        

        
          
          

        

      

       

      (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
        in
        accordance with the terms thereof 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 or the Class C Certificateholder.
        Whenever any provision of this Agreement refers to action to be taken, or
        consented to, by Noteholders or the Class C Certificateholder, such provision
        shall be deemed to refer to Noteholders or the Class C Certificateholder
        of
        record as of the Record Date immediately preceding the date on which such
        action
        is to be taken, or consent given, by Noteholders or the Class C
        Certificateholder. Solely for the purposes of any action to be taken or
        consented to by Noteholders or the Class C Certificateholder, 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.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      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 Policy. Whenever a
        determination is to be made under this Agreement whether a breach of a
        representation, warranty or covenant has or could have a material adverse
        effect
        on a Receivable or the interest therein of the Issuer, the Noteholders or
        the
        Note Insurer (or any similar or analogous determination), such determination
        shall be made by the Controlling Party in its sole discretion.

       

      ARTICLE
        II

      CONVEYANCE
        OF RECEIVABLES

       

      SECTION
        2.1.   Conveyance
        of Initial Receivables.

       

      In
        consideration of the Issuer's delivery of the Class R 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, to and under:

       

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

       

      (ii) the
        security interests in the related Financed Vehicles granted by the related
        Obligors pursuant to the Initial Receivables and any other interest of the
        Transferor in such Financed Vehicles, including the certificates of title
        and
        any other evidence of ownership with respect to such Financed
        Vehicles;

       

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

       

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

       

      (v) the
        Purchase Agreement including a direct right to cause LBAC to purchase Initial
        Receivables from the Issuer upon the occurrence of a breach of any of the
        representations and warranties contained in Section 3.03(b) of the Purchase
        Agreement or the failure of LBAC to timely comply with its obligations pursuant
        to Section 5.05 of the Purchase Agreement;

       

      
        
          
          

        

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

       

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

       

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

       

      (ix) any
        proceeds from recourse against Dealers (other than any Chargeback Obligations),
        including any Dealer Title Guaranties with respect to the Initial Receivables,
        with respect to the sale of the Initial Receivables; and

       

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

       

      SECTION
        2.2.   Conveyance
        of Subsequent Receivables.
        

       

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

       

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

       

      (ii) the
        security interests in the related Financed Vehicles granted by the related
        Obligors pursuant to such Subsequent Receivables and any other interest of
        the
        Transferor in such Financed Vehicles, including 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;

       

      
        
          
          

        

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

       

      (v) each
        Transfer Agreement and the Purchase Agreement, including a direct right to
        cause
        LBAC to purchase Subsequent Receivables from the Issuer upon the occurrence
        of a
        breach of any of the representations and warranties contained in Section
        4 of
        the related Transfer Agreement, or the failure of LBAC to timely comply with
        its
        obligations pursuant to Section 5.05 of the Purchase Agreement;

       

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

       

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

       

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

       

      (ix) any
        proceeds from recourse against Dealers (other than any Chargeback Obligations),
        including any Dealer Title Guaranties with respect to such Subsequent
        Receivables, with respect to the sale of such Subsequent Receivables;
        and

       

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

       

      The
        purchase price to be paid by the Issuer on each Subsequent Transfer Date
        for the
        Subsequent Receivables so sold shall be set forth in the related Transfer
        Agreement and shall be paid from monies released from the Pre-Funding Account
        pursuant to Section 5.13(b). Such purchase price shall equal the aggregate
        Principal Balance of such Subsequent Receivables as of the related Subsequent
        Cutoff Date.

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

      (vi) as
        of
        each Subsequent Transfer Date, none of the Sellers, the Servicer and the
        Transferor will be insolvent nor will either of them be made insolvent by
        the
        related transfer nor shall any of them be aware of any pending
        insolvency;

       

      (vii) the
        Funding Period shall not have terminated;

       

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

       

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

       

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

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

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

       

      (xii) no
        selection procedures believed by the Transferor or either Seller to be adverse
        to the interests of the Noteholders or the Note Insurer shall have been utilized
        in selecting the Subsequent Receivables;

       

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

       

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

       

      (xv) the
        Transferor shall have caused a firm of independent accountants to deliver
        to the
        Indenture Trustee, the Trust Collateral Agent and the Note Insurer written
        confirmation that the Receivables, including the related Subsequent Receivables,
        meet the following criteria, as of the related Subsequent Cut-off
        Date:

       

      (1)
         the
        weighted average remaining term of the Receivables will be no more than 67
        months and the weighted average original term for the Receivables will be
        no
        more than 69 months;

       

      (2)
         each
        Receivable will have a minimum APR of 3.0%;

       

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

       

      (4)
         no
        more
        than 44%, 13% or 13% of the Receivables will be originated in California,
        Arizona or Florida, respectively;

       

      (5)
         the
        weighted average APR for the Receivables will be greater than or equal to
        12.23%;

       

      (6)
         not
        less
        than 15.10% of the aggregate Principal Balance of the Receivables will be
        Premium Receivables, not less than 19.74% of the aggregate Principal Balance
        of
        the Receivables will be Elite Receivables, not less than 17.86% of the aggregate
        Principal Balance of the Receivables will be Superior Receivables, not less
        than
        18.90% of the aggregate Principal Balance of the Receivables will be Preferred
        Receivables and not more than 19.86% of the aggregate Principal Balance of
        the
        Receivables will be Classic Receivables; and

       

      (7)
         not
        more
        than 63% of the aggregate Principal Balance of the Receivables will represent
        loans to finance the purchase of used Financed Vehicles;

       

      
        
          
          

        

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

       

      (xvii) the
        representations and warranties made by the Transferor and the Servicer in
        Sections 7.1 and 8.1, respectively, shall be true and correct on and as of
        such
        Subsequent Transfer Date and the representations and warranties made by the
        Originator with respect to each such Subsequent Receivable being transferred
        to
        the Trust on such Subsequent Transfer Date in Section 4 of the related Transfer
        Agreement shall be true and correct as of such Subsequent Transfer
        Date;

       

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

       

      (xix) the
        Custodian shall confirm that it is in possession of a Legal File for each
        Subsequent Receivable identified in the supplement to the Schedule of
        Receivables attached as Schedule A to the related Transfer Agreement;
        and

       

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

       

      SECTION
        2.3.   Transfer
        Intended as Sale; Precautionary Security Interest. Each
        conveyance to the Issuer of the property set forth in Section 2.1 and Section
        2.2 above is intended as a sale (for certain non-tax purposes) free and clear
        of
        all Liens, and it is intended that the property of the Issuer shall not be
        part
        of the Transferor's estate in the event of the filing of a bankruptcy petition
        by or against the Transferor under any bankruptcy law. In the event, however,
        that notwithstanding the intent of LBAC, the Transferor and the Issuer, any
        transfer under this Agreement and/or under any Transfer Agreement is held
        not to
        be a sale, this Agreement and/or under any Transfer Agreement shall constitute
        a
        security agreement under the UCC (as defined in the UCC as in effect in the
        State of New York) and applicable law, and the Transferor hereby grants a
        security interest to the Issuer in, to and under the property described in
        Section 2.1 and Section 2.2 above and all proceeds thereof, for the benefit
        of
        the Noteholders and the Note Insurer as their interests may appear herein,
        for
        the purpose of securing the payment and performance of the Notes and the
        Certificates and the repayment of amounts owed to the Issuer from the
        Transferor. The Transferor hereby authorizes the Issuer or its agents to
        file
        such financing statements and continuation statements as the Issuer may deem
        advisable in connection with the security interest granted by the Transferor
        pursuant to the preceding sentence.

       

      SECTION
        2.4.   Assignment
        by Transferor. The
        Transferor does hereby transfer, assign and otherwise convey unto the Issuer,
        for the benefit of the Noteholders, the Certificateholders 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
        3.03
        of the Purchase Agreement and Section 4 of each Transfer Agreement or from
        the
        failure of LBAC to comply with its obligations pursuant to Section 5.05 of
        the
        Purchase Agreement. The provisions of this Section 2.4 are intended to grant
        the
        Issuer a direct right against LBAC to demand performance under the terms
        of the
        Purchase Agreement.

       

      
        
          
          

        

        
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      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 or Section 2.2, all right, title and interest
        of
        the Transferor in and to such item of Trust Assets shall terminate, and all
        such
        right, title and interest shall vest in the Issuer, in accordance with the
        Trust
        Agreement and Sections 3802 and 3805 of the Statutory Trust Act (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 its obligations under the Notes and the Class
        C
        Certificate and the payment of all amounts due and owing to the Note Insurer.
        The Class R Certificate shall represent the beneficial ownership interest
        in the
        Trust Assets, and the Noteholders and the Class C Certificateholder 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 all amounts due and owing to the Note
        Insurer 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
        each
        Certificate, remain as covenants of the Issuer for the benefit of the
        Certificateholders, enforceable by each 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
        Certificateholders.

       

      (d)
         The
        Trust
        Collateral Agent shall, at such time as there are no Notes or Certificates
        outstanding, the Policy has expired in accordance with its terms and all
        sums
        due to (i) the Note Insurer hereunder or pursuant to the Insurance Agreement,
        (ii) the Indenture Trustee pursuant to the Indenture, (iii) the Trust Collateral
        Agent pursuant to this Agreement and (iv) the Class C Certificateholder pursuant
        to the Trust 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 3.03(b) of the Purchase Agreement and Section 4 of each Transfer
        Agreement with respect to the Receivables to the same extent as if such
        representations and warranties were fully set forth herein. With respect
        to such
        representations and warranties, the Issuer shall be deemed to have relied
        on
        such representations and warranties in acquiring the Receivables, the Note
        Insurer is deemed to have relied on such representations and warranties in
        issuing the 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,
        the Class C Certificateholder is deemed to have relied on such representations
        and warranties in purchasing the Class C Certificate and the Owner Trustee
        is
        deemed to have relied on such representations and warranties in entering
        into
        the Trust Agreement. Such representations and warranties speak as of the
        execution and delivery of this Agreement and as of the Closing Date in the
        case
        of the Initial Receivables, and as of the related Subsequent Transfer Date
        in
        the case of the Subsequent Receivables, but shall survive the transfer and
        assignment of the Receivables to the Issuer and the subsequent pledge thereof
        to
        the Indenture Trustee pursuant to the Indenture.

       

      
        
          
          

        

        
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      SECTION
        3.2.   Repurchase
        upon Breach of Representations and Warranties of the
        Transferor.

       

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

       

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

       

      SECTION
        3.3.   Custody
        of Legal Files and Receivable Files. 
        In
        connection with the sale, transfer and assignment of the Receivables and
        the
        other Transferred Assets to the Trust pursuant to Section 2.1 and Section
        2.2 of
        this Agreement and simultaneously with the execution and delivery of this
        Agreement, the Custodian shall enter into the Custodial Agreement with the
        Indenture Trustee, the Note Insurer and the Issuer, dated as of March 1,
        2007,
        pursuant to which the Custodian shall agree to act as custodian for the
        Indenture Trustee, on behalf of the Noteholders, the Class C Certificateholder
        and the Note Insurer, of the following documents or instruments in its
        possession on or before the Closing Date (with respect to each Initial
        Receivable) or the third Business Day immediately preceding the related
        Subsequent Transfer Date (with respect to each Subsequent Receivable), as
        applicable:

       

      
        
          
          

        

        
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      (i) a
        copy of
        the fully executed original of the Receivable; and

       

      (ii) a
        copy of
        the Lien Certificate or Title Package, as applicable.

       

      provided,
        however
        that the
        Receivable Files shall contain a copy of those documents the original of
        which
        constitutes a part of the Legal File.

       

      SECTION
        3.4.   Legal
        File Deficiencies.
        The
        Custodian shall hold the Legal Files subject to the terms and conditions
        of the
        Custodial Agreement. If the Custodian finds during its review of the Legal
        Files
        required by the Custodial Agreement 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, 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 Custodial Agreement).
        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. On the date which is 90 days
        following the Closing Date (with respect to the Initial Receivables) or the
        related Subsequent Transfer Date (with respect to the Subsequent Receivables),
        as applicable, 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 (with respect to the Initial
        Receivables) or the related Subsequent Transfer Date (with respect to the
        Subsequent Receivables), as applicable, occurs, if the related Legal File
        does
        not include a Lien Certificate as of the close of business on such 150th
        day. In
        consideration of the purchase of such Receivable, LBAC shall remit the Purchase
        Amount in the manner specified in Section 5.5. The Transferor shall have
        no
        obligation to repurchase any Receivable upon a breach pursuant to this Section
        3.4. The Transferor shall have no liability for any action taken or omitted
        to
        be taken by LBAC pursuant to this Section 3.4.

       

      
        
          
          

        

        
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      SECTION
        3.5.   Access
        to Receivable Files; Servicer's Duties with Respect to Receivable
        Files.

       

      (a)
         The
        Servicer shall, upon reasonable notice, permit the Originator, the Trust
        Collateral Agent, the Transferor, the Issuer and the Note Insurer access
        to the
        Receivable Files at all reasonable times, upon reasonable notice and during
        the
        Servicer's normal business hours. In addition, the Servicer shall provide
        such
        access to any Noteholder or the Class C Certificateholder upon reasonable
        notice
        at all reasonable times during the Servicer's normal business hours in cases
        where the Noteholders or the Class C Certificateholder shall be required
        by
        applicable statutes or regulations to review such documentation; provided,
        however,
        that the
        Servicer shall be entitled to rely upon an Opinion of Counsel as to such
        fact.
        In each case, such access shall be afforded without charge but only upon
        reasonable request. Each Noteholder shall be deemed to have agreed by its
        acceptance of a Note to hold in confidence all Confidential Information in
        accordance with the Federal Financial Privacy Law and, to the extent more
        exacting, its then customary procedures; provided
        that
        nothing herein shall prevent any Noteholder from delivering copies of any
        financial statements and other documents whether or not constituting
        Confidential Information, and disclosing other information, whether or not
        Confidential Information, to (i) its directors, officers, employees, agents
        and
        professional consultants, (ii) any other institutional investor that holds
        Notes, (iii) any prospective institutional investor transferee in connection
        with the contemplated transfer of a Note or any part thereof or participation
        therein who is subject to confidentiality arrangements at least substantially
        similar hereto, (iv) any governmental authority, (v) the National Association
        of
        Insurance Commissioners or any similar organization, (vi) any nationally
        recognized rating agency in connection with the rating of the Notes by such
        agency or (vii) any other Person to which such delivery or disclosure may
        be
        necessary or appropriate (a) in compliance with any applicable law, rule,
        regulation or order, (b) in response to any subpoena or other legal process,
        (c)
        in connection with any litigation to which such Noteholder is a party, (d)
        in
        order to enforce such Person's investment in any Note or (e) otherwise, in
        accordance with the Federal Financial Privacy Law; provided,
        that,
        prior to any such disclosure, such Noteholder shall inform each such party that
        receives Confidential Information of the foregoing requirements and shall
        use
        its commercially reasonable best efforts to cause such party to comply with
        such
        requirements.

       

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

       

      
        
          
          

        

        
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      SECTION
        3.6.   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 and the Class
        C
        Certificateholder. 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, the Class C Certificateholder
        or any of them, any and all instruments of satisfaction or cancellation,
        or
        partial or full release or discharge, and all other comparable instruments,
        with
        respect to such Receivables or to the Financed Vehicles securing such
        Receivables and/or the certificates of title or other evidence of ownership
        with
        respect to such Financed Vehicles; provided,
        however,
        that
        notwithstanding the foregoing, the Servicer shall not release an Obligor
        from
        payment of any unpaid amount under any Receivable or waive the right to collect
        the unpaid balance of any Receivable from the Obligor, except (i) pursuant
        to an
        order from a court of competent jurisdiction, (ii) in accordance with its
        customary procedures or (iii) in accordance with Section 4.2. If the Servicer
        shall commence a legal proceeding to enforce a Receivable, the Issuer shall
        thereupon be deemed to have automatically assigned, solely for the purpose
        of
        collection, such Receivable to the Servicer. If in any enforcement suit or
        legal
        proceeding it shall be held that the Servicer may not enforce a Receivable
        on
        the ground that it shall not be a real party in interest or a holder entitled
        to
        enforce such Receivable, the Trust Collateral Agent shall, at the Servicer's
        expense and written direction, take steps to enforce such Receivable, including
        bringing suit in its name or the name of the Noteholders or the Class C
        Certificateholder. 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.

       

      
        
          
          

        

        
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      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, in the case
        of the
        Initial Receivables, and prior to the related Subsequent Transfer Date, in
        the
        case of the Subsequent Receivables, to make all payments with respect to
        the
        Receivables to the Lock-Box and shall make reasonable efforts to cause Obligors
        to make all such payments to such Lock-Box. The Servicer will provide each
        Obligor with a monthly statement in order to notify such Obligors to make
        payments directly to the Lock-Box. The Servicer shall allocate collections
        between principal and interest in accordance with the customary servicing
        procedures it follows with respect to all comparable automotive receivables
        that
        it services for itself or others and in accordance with the terms of this
        Agreement. The Servicer, for so long as LBAC is the Servicer, may grant
        extensions, rebates or adjustments on a Receivable in accordance with the
        customary servicing procedures it follows with respect to all comparable
        automotive receivables that it services for itself which shall not modify
        the
        original due date of the Scheduled Receivable Payments on any Receivable
        other
        than (a) in accordance with the Payment Deferment and Due Date Change Policies,
        (b) in connection with a Deficient Liquidated Receivable, (c) with the prior
        written consent of the Note Insurer, with respect to any other Liquidated
        Receivable or (d) as otherwise required by applicable law. Notwithstanding
        anything contained herein to the contrary, the Servicer may, at its option,
        repurchase up to 25 Receivables and shall remit the Purchase Amount, in the
        manner specified in Section 5.5 hereof and any such repurchased Receivable
        (an
        "Optional Repurchase Receivable") shall not be deemed to be a Defaulted
        Receivable or a Liquidated Receivable. The Servicer shall not modify the
        Payment
        Deferment and Due Date Change Policies without the prior written consent
        of the
        Note Insurer. The Servicer shall notify Moody's of any modification to the
        Payment Deferment and Due Date Change Policies. If the Servicer is not LBAC,
        the
        Servicer may not make any extension on a Receivable without the prior written
        consent of the Note Insurer. The Servicer may in its discretion waive any
        late
        payment charge or any other fees that may be collected in the ordinary course
        of
        servicing a Receivable if it would forgo collection of such amount in accordance
        with its customary procedures. Notwithstanding anything to the contrary
        contained herein, the Servicer (i) shall not agree to any alteration of the
        interest rate on any Receivable or of the amount of any Scheduled Receivable
        Payment on any Receivable, except (a) as otherwise required by applicable
        law,
        (b) with respect to a Deficient Liquidated Receivable and (c) with the prior
        written consent of the Note Insurer, with respect to any other Liquidated
        Receivable, and (ii) shall not agree to any modification that would result
        in a
        material adverse effect on a Receivable (other than a Deficient Liquidated
        Receivable and, with the prior written consent of the Note Insurer, any other
        Liquidated Receivable) or the interest therein of the Issuer, the Noteholders,
        the Class C Certificateholder or the Note Insurer other than a modification
        in
        accordance with the Payment Deferment and Due Date Change Policies.

       

      
        
          
          

        

        
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      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, the Class C Certificateholder and the Note
        Insurer, the Servicer shall use its best efforts, consistent with the servicing
        procedures set forth herein, to repossess or otherwise convert the ownership
        of
        the Financed Vehicle securing any Receivable as to which the Servicer shall
        have
        determined eventual payment in full is unlikely. The Servicer shall commence
        efforts to repossess or otherwise convert the ownership of a Financed Vehicle
        on
        or prior to the date that an Obligor has not paid at least 95% of a Scheduled
        Receivable Payment thereon for 120 consecutive days or more; provided,
        however,
        that the
        Servicer may elect not to commence such efforts within such time period if
        in
        its good faith judgment it determines either that it would be impracticable
        to
        do so or that the proceeds ultimately recoverable with respect to such
        Receivable would be increased by forbearance. The Servicer shall follow such
        customary and usual practices and procedures as it shall deem necessary or
        advisable in its servicing of automotive receivables, consistent with the
        standards of care set forth in Section 4.1, which may include reasonable
        efforts
        to realize upon any recourse to Dealers and selling the Financed Vehicle
        at
        public or private sale. The foregoing shall be subject to the provision that,
        in
        any case in which the Financed Vehicle shall have suffered damage, the Servicer
        shall not expend funds in connection with the repair or the repossession
        of such
        Financed Vehicle unless it shall determine in its discretion that such repair
        and/or repossession will increase the proceeds ultimately recoverable with
        respect to such Receivable by an amount greater than the amount of such
        expenses. All Liquidation Proceeds and Recoveries received shall be remitted
        directly by the Servicer to the Collection Account, without deposit into
        any
        intervening account as soon as practicable, but in no event later than the
        second Business Day after receipt thereof.

       

      (b)
         The
        Servicer agrees that within 45 days from the Closing Date or the related
        Subsequent Transfer Date, as applicable, it shall make such filings and effect
        such notices as are necessary under Section 9-324(b) and 9-324 (c) of the
        New
        York UCC (or comparable section of the UCC of any applicable state) to preserve
        the Trust’s interest (or security interest, as the case may be) in any
        repossessed Financed Vehicles delivered for sale to Dealers.

       

      (c)
         Consistent
        with the standards, policies and procedures required by this Agreement, the
        Servicer may use its best efforts to locate a third party purchaser that
        is not
        affiliated with the Servicer, the Transferor or the Issuer to purchase from
        the
        Issuer any Receivable that has become more than 60 days delinquent, and shall
        have the right to direct the Issuer to sell any such Receivable to the
        third-party purchaser; provided,
        that
        the Note Insurer shall have the right of first refusal to purchase such
        Receivables; provided further,
        that no
        more than 20% of the initial number of Initial Receivables and the Subsequent
        Receivables in the pool may be sold by the Issuer pursuant to this Section
        4.3(c) in the aggregate; provided further,
        that
        the Servicer may elect not to direct the Issuer to sell a Receivable that
        has
        become more than 60 days delinquent if in its good faith judgment the Servicer
        determines that the proceeds ultimately recoverable with respect to such
        Receivable would be increased by forbearance. In selecting Receivables to
        be
        sold to a third party purchaser pursuant to this Section 4.3(c), the Servicer
        shall use commercially reasonable efforts to locate purchasers for the most
        delinquent Receivables first. In any event, the Servicer shall not use any
        procedure in selecting Receivables to be sold to third party purchasers which
        is
        materially adverse to the interest of the Noteholders, the Class C
        Certificateholder or the Note Insurer. The Issuer shall sell each Sold
        Receivable for the greatest market price possible; provided,
        however,
        that
        aggregate Sale Amounts received by the Issuer for all Receivables sold to
        a
        single third-party purchaser on a single date must be at least equal to the
        sum
        of the Minimum Sale Prices for all such Receivables. The Servicer shall remit
        or
        cause the third-party purchaser to remit all sale proceeds from the sale
        of
        Receivables directly to the Collection Account without deposit into any
        intervening account as soon as practicable, but in no event later than the
        Business Day after receipt thereof.

       

      
        
          
          

        

        
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      (d)
         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 paragraph (b) 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 9-324(b) and 9-324 (c) of the New York UCC (or comparable section
        of the applicable UCC) to preserve the Trust’s ownership interest (or security
        interest, as the case may be) in any such repossessed Financed
        Vehicle.

       

      SECTION
        4.4.   Physical
        Damage Insurance; Other Insurance.

       

      (a)
         The
        Servicer shall continue to maintain the VSI Policy or another collateral
        protection insurance policy providing physical damage insurance coverage
        to at
        least the same extent as the VSI Policy with respect to all Financed Vehicles,
        unless the Servicer shall have received the prior written consent of the
        Note
        Insurer allowing the Servicer to no longer maintain any of such policies.
        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.

       

      
        
          
          

        

        
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      (b)
         To
        the
        extent applicable, the Servicer shall not take any action which would result
        in
        noncoverage under any of the insurance policies referred to in Section 4.4(a)
        which, but for the actions of the Servicer, would have been covered thereunder.
        The Servicer, on behalf of the Trust Collateral Agent, shall take such
        reasonable action as shall be necessary to permit recovery under any of the
        foregoing insurance policies. Any amounts collected by the Servicer under
        any of
        the foregoing insurance policies shall be deposited in the Collection Account
        pursuant to Section 5.2. In the event of the cancellation or non-renewal
        of the
        insurance referred to in Section 4.4(a)(i) above with respect to any Financed
        Vehicle, the Servicer will endeavor, in accordance with its customary servicing
        standards and procedures, to cause the related Obligor to obtain a replacement
        insurance policy. In no event shall the Servicer be required to force place
        insurance on a Financed Vehicle.

       

      SECTION
        4.5.   Maintenance
        of Security Interests in Financed Vehicles.

       

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

       

      (b)
         Upon
        the
        occurrence of an Insurance Agreement Event of Default, the Note Insurer may
        (so
        long as a Note Insurer Default shall not have occurred and be continuing)
        instruct in writing 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 written
        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 in writing 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 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.

       

      
        
          
          

        

        
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      In
        addition to the foregoing, in the event any of the Servicer Termination Events
        described in Section 9.1(iii) or (iv) shall have occurred, or in the event
        LBAC
        shall have been removed or replaced as Servicer pursuant to Section 8.3,
        Section
        8.5, or otherwise pursuant to Section 9.1, then LBAC and/or the Servicer
        shall
        immediately cause each Lien Certificate for a Financed Vehicle to be marked
        to
        reflect the security interest of the Trust Collateral Agent in the Financed
        Vehicle at the expense of LBAC.

       

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

       

      SECTION
        4.6.   Additional
        Covenants of Servicer.
        The
        Servicer hereby makes the following covenants to the other parties hereto
        and
        the Note Insurer on which the Trust Collateral Agent shall rely in accepting
        the
        Receivables in trust and on which the Note Insurer shall rely in issuing
        the
        Policy: (i) the Servicer shall not release the Financed Vehicle securing
        any
        Receivable from the security interest granted by such Receivable in whole
        or in
        part except in the event of payment in full by the Obligor thereunder or
        repossession or other liquidation of such Financed Vehicle, (ii) the Servicer
        shall not impair the rights of the Noteholders or the Class C Certificateholder,
        the Issuer or the Note Insurer in such Receivables, (iii) the Servicer shall
        not
        modify a Receivable, except in accordance with Section 4.2, (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 and (v) the Servicer shall
        not
        modify any Receivable in accordance with the Payment Deferment and Due Date
        Change Policies if, as a result of such modification, there would be negative
        amortization of such Receivable.

       

      SECTION
        4.7.   Purchase
        of Receivables Upon Breach.
        The
        Servicer, the Transferor, the Issuer 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. The sole remedy of the Trust Collateral
        Agent,
        the Issuer, the Note Insurer, the Class C Certificateholder 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, the Class C Certificateholder 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.

       

      
        
          
          

        

        
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      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 plus,
        without duplication, the aggregate Principal Balance of any Subsequent
        Receivables (as of the related Subsequent Cutoff Date) purchased prior to
        the
        first Payment Date multiplied by the number of days during the related
        Collection Period that such Subsequent Receivables were owned by the Issuer
        divided by 360. 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 plus, without
        duplication, the aggregate Principal Balance of any Subsequent Receivables
        purchased since the immediately preceding Payment Date multiplied by the
        number
        of days during the related Collection Period that such Subsequent Receivables
        were owned by the Issuer divided by 360. The Servicing Fee shall in addition
        include all late fees, deferment fees, prepayment charges including, in the
        case
        of a Precomputed Receivable that is prepaid in full, to the extent not required
        by law to be remitted to the related Obligor, the difference between the
        amounts
        received upon prepayment in full of such Precomputed Receivable and the then
        outstanding Principal Balance of such Precomputed Receivable and accrued
        interest thereon (calculated pursuant to the Simple Interest Method) and
        other
        administrative fees or similar charges allowed by applicable law with respect
        to
        Receivables, collected (from whatever source) on the
        Receivables.


       

      SECTION
        4.9.   Servicer's
        Certificate.

       

      (a)
         By
        10:00
        a.m., New York City time, on each Determination Date, the Servicer shall
        deliver
        to the Issuer, the Trust Collateral Agent, the Indenture Trustee, the Back-up
        Servicer, the Collateral Agent, the Transferor, the Note Insurer, GCFP and
        the
        Rating Agencies, a Servicer's Certificate containing all information necessary
        to make the payments pursuant to Section 5.6 (including, (i) if required,
        the
        amount of withdrawals from the Spread Account and the Supplemental Enhancement
        Account and (ii) the remaining Pre-Funded Amount, if any), 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,
        the
        Class C Certificateholder 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).

       

      
        
          
          

        

        
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      (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, (iv) whether to the knowledge of the Servicer an Insurance
        Agreement Event of Default has occurred, (v) the number and percentage of
        Receivables modified in accordance with the Loss Mitigation Program and the
        General Payment Deferment Policy as set forth on Exhibit D hereto and (vi)
        the
        Average Delinquency Ratio, the Cumulative Default Rate, and the Cumulative
        Loss
        Rate (as such terms are defined in the Spread Account Agreement), with respect
        to such modified Receivables. 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)
         To
        the
        extent required by Section 1123 of Regulation AB, the Servicer shall deliver
        to
        the Issuer, the Trust Collateral Agent, the Indenture Trustee, the Back-up
        Servicer, the Collateral Agent, the Transferor and the Note Insurer, on or
        before March 31 of each year beginning March 31, 2008, 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 in all material respects all its obligations
        under this Agreement throughout such year, or, if there has been a failure
        to
        fulfill any such obligation in any material respect, identifying each such
        failure known to such officer and the nature and status of such failure.
        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
        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.

       

      (c)
         The
        Servicer will deliver to the Issuer, on or before March 31 of each year
        beginning on March 31, 2008, a report regarding the Servicer's assessment
        of
        compliance with the Servicing Criteria during the immediately preceding calendar
        year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
        1122 of Regulation AB.

       

      
        
          
          

        

        
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      SECTION
        4.11.   Annual
        Independent Certified Public Accountant's Report.
        

       

      (a)
         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 Noteholders, the
        Note
        Insurer and each Rating Agency on or before March 31 of each year beginning
        March 31, 2008, 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, providing such information
        as is required under Item 1122(b) of Regulation AB.

       

      (b)
         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 Trust Collateral Agent, the Back-up Servicer,
        the
        Collateral Agent, the Issuer, the Transferor and the Note Insurer, on or
        before
        March 31 of each year beginning March 31, 2008, a report dated as of December
        31
        of the preceding calendar year, to the effect that such firm has audited
        the
        consolidated financial statements of AmeriCredit and issued its report therefor
        and that such audit (i) 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; (ii) included tests relating to automotive loans serviced
        for
        others in accordance with the Servicing Criteria; (iii) 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 (iv) 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.

       

      The
        Servicer shall file, or cause to be filed, the reports furnished pursuant
        to
        Section 4.10 and this Section 4.11 as exhibits to the Issuer's annual report
        on
        Form 10-K.

       

      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 and the Class C Certificateholder, 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).

       

      
        
          
          

        

        
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      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 June 30, 2007
        which
        term shall be extendible by the Note Insurer for successive quarterly terms
        ending on each successive September 30, December 31, March 31 and June 30,
        (or,
        pursuant to revocable written standing instructions from time to time to
        the
        Servicer and the Trust Collateral Agent, for any specified number of terms
        greater than one), until the termination of the Issuer. Each such notice
        (including each notice pursuant to standing instructions, which shall be
        deemed
        delivered at the end of successive quarterly terms for so long as such
        instructions are in effect) (a "Servicer Extension Notice") shall be delivered
        by the Note Insurer to the Trust Collateral Agent and the Servicer. The Servicer
        hereby agrees that, as of the date hereof and upon its receipt of any such
        Servicer Extension Notice, the Servicer shall become bound, for the initial
        term
        beginning on the date hereof and for the duration of the term covered by
        such
        Servicer Extension Notice, to continue as the Servicer subject to and in
        accordance with the other provisions of this Agreement. Until such time as
        a
        Note Insurer Default shall have occurred and be continuing, the Trust Collateral
        Agent agrees that if as of the fifteenth day prior to the last day of any
        term
        of the Servicer, the Trust Collateral Agent shall not have received any Servicer
        Extension Notice from the Note Insurer, the Trust Collateral Agent will,
        within
        five 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. Following a Note Insurer Default, this
        Section
        4.13 shall no longer apply and the Servicer shall be deemed to be retained
        for
        the term of this Agreement, unless otherwise removed pursuant to Article
        9.

       

      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 or the Class C Certificateholder, as the case may be, in such
        cases where the Noteholders or the Class C Certificateholder is required
        by
        applicable law or regulation to review such documentation. In each case,
        such
        access shall be afforded without charge but only upon reasonable request
        and
        during normal business hours. Nothing in this Section 4.14 shall derogate
        from
        the obligation of the Servicer to observe any applicable law prohibiting
        disclosure of information regarding the Obligors, and the failure of the
        Servicer to provide access as provided in this Section 4.14 as a result of
        such
        obligation shall not constitute a breach of this Section 4.14.

       

      SECTION
        4.15.   Verification
        of Servicer's Certificate.

       

      (a)
         On
        or
        before the fifth Business Day of each month, the Servicer will deliver to
        the
        Trust Collateral Agent and the Back-up Servicer a computer diskette (or other
        electronic transmission) in a format acceptable to the Trust Collateral Agent
        and the Back-up Servicer containing such information with respect to the
        Receivables as of the close of business on the last day of the preceding
        Collection Period as is necessary for preparation of the Servicer's Certificate.
        The Back-up Servicer shall use such computer diskette (or other electronic
        transmission) to verify the information specified in Section 4.15(b)(iii)
        contained in the Servicer's Certificate delivered by the Servicer, and the
        Back-up Servicer shall certify to the Note Insurer that it has verified the
        Servicer's Certificate in accordance with this Section 4.15 and shall notify
        the
        Servicer, the Note Insurer and the Trust Collateral Agent of any discrepancies,
        in each case, on or before the related Deficiency Claim Date. In the event
        that
        the Back-up Servicer reports any discrepancies, the Servicer and the Back-up
        Servicer shall attempt to reconcile such discrepancies prior to the related
        Deficiency Claim Date, but in the absence of a reconciliation, the Servicer's
        Certificate shall control for the purpose of calculations and payments with
        respect to the related Payment Date. In the event that the Back-up Servicer
        and
        the Servicer are unable to reconcile discrepancies with respect to a Servicer's
        Certificate by the related Payment Date, (i) the Back-up Servicer will notify
        the Note Insurer and the Trust Collateral Agent, and (ii) the Servicer shall
        cause a firm of independent certified public accountants, at the Servicer's
        expense, to audit the Servicer's Certificate and, prior to the fifth calendar
        day of the following month, reconcile the discrepancies. The effect, if any,
        of
        such reconciliation shall be reflected in the Servicer's Certificate for
        such
        next succeeding Determination Date. In addition, the Servicer shall, if so
        requested by the Note Insurer (unless a Note Insurer Default shall have occurred
        and be continuing) deliver to the Back-up Servicer (i) within five (5) Business
        Days of demand therefor a computer tape containing as of the close of business
        on the date of demand all of the data maintained by the Servicer in computer
        format in connection with servicing the Receivables and (ii) within fifteen
        (15)
        Business Days of demand therefor a copy of such other information as is
        reasonably requested by the Note Insurer for the purpose of reconciling such
        discrepancies. Other than the duties specifically set forth in this 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.

       

      
        
          
          

        

        
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      (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 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 Principal Payment Amount, the Pre-Funding Amount,
        the
        Class A-1 Interest Payment Amount, the Class A-2 Interest Payment Amount,
        the
        Class A-3 Interest Payment Amount, the Class A-4 Interest Payment Amount,
        the
        Class C Interest Payment Amount, the Class C Principal Deficiency Amount,
        the
        Class C Interest Carryover Shortfall, if any, the Class C Supplemental Interest
        Payment Amount, if any, the Back-up Servicer Fee, the Servicing Fee, the
        Indenture Trustee Fee, the Custodian Fee, the amount on deposit in the Spread
        Account, the amount on deposit in the Supplemental Enhancement 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.

       

      
        
          
          

        

        
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      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 any Affiliate
        of AmeriCredit or to sub-contractors who are in the business of servicing
        automotive receivables with the prior written consent of the Controlling
        Party;
provided,
        however,
        that no
        such delegation or sub-contracting of duties by the Servicer shall relieve
        the
        Servicer of its responsibility with respect to such duties. In the event
        the
        Servicer shall for any reason no longer be the servicer of the Receivables
        (including by reason of a Servicer Termination Event), the Back-up Servicer,
        its
        designee or any successor Servicer shall assume all of the rights and
        obligations of the predecessor Servicer under one or more subservicing
        agreements that may have been entered into by the predecessor Servicer by
        giving
        notice of such assumption to the 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. 

       

      
        
          
          

        

        
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      SECTION
        4.18.   Delivery
        of Back-up Tapes of Back-up Servicer.

       

      (a)
         In
        addition to the information to be delivered by the Servicer to the Back-up
        Servicer on or before the fifth Business Day of each month pursuant to Section
        4.15(a), the Servicer shall deliver to the Back-up Servicer, or its designated
        agent, a computer diskette (or other electronic transmission), in a format
        acceptable to the Back-up Servicer or its designated agent, as the case may
        be,
        with the loan master file and history information in the form attached hereto
        as
        Exhibit B-2 on or prior to the Closing Date in the case of the Initial
        Receivables, and on or prior to the related Subsequent Transfer Date in the
        case
        of Subsequent Receivables, which loan master file and history information
        shall
        be sufficiently detailed to enable the Back-up Servicer to maintain records
        sufficient to assume the role of successor Servicer pursuant to this
        Agreement.

       

      (b)
         In
        addition to the information required to be delivered by the Servicer to the
        Back-up Servicer or its designated agent on or before the fifth Business
        Day of
        each month pursuant to Section 4.15(a) and on or prior to the Closing Date
        and
        each Subsequent Transfer Date pursuant to Section 4.18(a), the Servicer shall
        deliver the loan master file and history information to the Back-up Servicer
        or
        its designated agent on the Determination Date occurring in June 2007 (with
        respect to the period from and including the Initial Cutoff Date to the last
        day
        of the related Collection Period) and on the Determination Date occurring
        every
        six months thereafter in the form attached hereto as Exhibit B-2 in writing
        and
        on a computer diskette (or other electronic transmission) in a format acceptable
        to the Back-up Servicer or its designated agent, as the case may be, and
        as at
        such other times as may be requested by the Note Insurer or the Back-up Servicer
        upon prior written notice to the Servicer, provided that the Back-up Servicer
        shall deliver a copy of any such notice by the Back-up Servicer to the Note
        Insurer simultaneously with its delivery of such notice to the
        Servicer.

       

      SECTION
        4.19.   Confidential
        Information. The
        Back-up Servicer, each subservicer and any successor Servicer shall hold
        in
        confidence all Confidential Information in accordance with the Federal Financial
        Privacy Law and, to the extent more exacting, its then customary procedures,
        and
        each represents and warrants that it has in place, and will continue to
        maintain, sufficient systems and procedures to do so; provided
        that
        nothing herein shall prevent the Back-up Servicer, any subservicer or any
        successor Servicer from delivering copies of any financial statements and
        other
        documents whether or not constituting Confidential Information, and disclosing
        other information, whether or not Confidential Information, to (i) its
        directors, officers, employees, agents and professional consultants to the
        extent necessary to carry on the Back-up Servicer’s, such subservicer’s or such
        successor Servicer’s business, as applicable, in the ordinary course, (ii) any
        Noteholder, Certificateholder or the Note Insurer to the extent that such
        Noteholder, Certificateholder or the Note Insurer is entitled to such
        information under this Agreement or any other Basic Document, but not otherwise,
        (iii) any governmental authority which specifically requests (or as to which
        applicable regulations require) such information, (iv) any nationally recognized
        rating agency in connection with the rating of the Notes by such agency,
        or (v)
        any other Person to which such delivery or disclosure may be necessary or
        appropriate (a) in compliance with any applicable law, rule, regulation or
        order, (b) in response to any subpoena or other legal process, (c) in connection
        with any litigation to which the Back-up Servicer, such subservicer or such
        successor Servicer, as applicable, is a party, (d) in order to enforce the
        rights of the Noteholders, each Certificateholder and the Note Insurer hereunder
        or under any other Basic Document, or (e) otherwise, in accordance with the
        Federal Financial Privacy Law; provided,
        that,
        prior to any such disclosure, the Back-up Servicer, such subservicer or such
        successor Servicer, as applicable, shall inform each such party (other than
        any
        Noteholder, Certificateholder, the Note Insurer or any other party to the
        Basic
        Documents) that receives Confidential Information of the foregoing requirements
        and shall use its commercially reasonable best efforts to cause such party
        to
        comply with such requirements. 

       

      
        
          
          

        

        
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      ARTICLE
        V

      ACCOUNTS;
        PAYMENTS;

      STATEMENTS
        TO NOTEHOLDERS

       

      SECTION
        5.1.   Accounts;
        Lock-Box Account.

       

      (a)
         The
        Servicer has established the Lock-Box Account as two Eligible Accounts, one
        established with Bank of America National Trust and Savings Association entitled
        "Long Beach Acceptance Corp., JPMorgan Chase, Agent Account--Auto Loan
        Programs," account number 1457202900, and one established with JPMorgan Chase
        entitled "Long Beach Acceptance Corp., JPMorgan Chase, Agent Account -- Auto
        Loan Programs," account number 530097095; 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 into which Obligors will be directed
        to
        make payments due under Receivables and which shall at all times be an Eligible
        Account, initially established and maintained with JPMorgan Chase 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, the Noteholders and the Class C Certificateholder 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 with respect
        to
        the Receivables or, upon the occurrence and continuance of a Servicer
        Termination Event, the Note Insurer may direct the Indenture Trustee in writing
        to terminate the Lock-Box Agreement with respect to the Receivables, and,
        in any
        such case, funds on deposit in the Lock-Box Account shall be distributed
        by
        JPMorgan Chase, as agent for the beneficial owners of funds in the Lock-Box
        Account at such time (including the Issuer), and JPMorgan Chase shall deposit
        any such funds relating to the Receivables to such other account as shall
        be
        identified by the Back-up Servicer or successor Servicer for deposit therein;
        provided,
        however,
        that the
        outgoing Servicer shall not thereby be relieved of any liability or obligations
        on the part of the outgoing Servicer to the Lock-Box Bank under such Lock-Box
        Agreement. The outgoing Servicer shall, upon request of the Trust Collateral
        Agent, but at the expense of the outgoing Servicer, deliver to the successor
        Servicer all documents and records relating to the Lock-Box Agreement and
        an
        accounting of amounts collected and held in the Lock-Box Account or held
        by the
        Lock-Box Processor in respect of the Receivables and otherwise use its best
        efforts to effect the orderly and efficient transfer of any Lock-Box Agreement
        to the successor Servicer. In the event that the Lock-Box Account fails at
        any
        time to qualify as an Eligible Account, the Servicer, at its expense, shall
        cause the Lock-Box Bank to deliver, at the direction of the Controlling Party
        to
        the Trust Collateral Agent or a successor Lock-Box Bank, all documents and
        records relating to the Receivables and all amounts held (or thereafter
        received) on deposit in the Lock Box Account or held by the Lock-Box Processor
        in respect of the Receivables (together with an accounting of such amounts)
        and
        shall otherwise use its best efforts to effect the orderly and efficient
        transfer of the lock-box arrangements, and the Servicer shall promptly notify
        the Obligors to make payments to any new Lock-Box.

       

      
        
          
          

        

        
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      (b)
         In
        addition to the Lock-Box Account, the Trust Collateral Agent shall establish,
        with itself, (i) the Collection Account and the Note Account, in the name
        of the
        Issuer for the benefit of the Indenture Trustee, the Trust Collateral Agent,
        the
        Noteholders and the Insurer, the Pre-Funding Account in the name of the Issuer
        for the benefit of the Noteholders, the Class C Certificateholder and the
        Note
        Insurer, (ii) the Policy Payments Account in the name of the Issuer for the
        benefit of the Noteholders and (iii) the Supplemental Enhancement Account
        in the
        name of the Issuer for the benefit of the Noteholders and the Class C
        Certificateholder. The Collection Account, the Note Account, the Pre-Funding
        Account, the Policy Payments Account and the Supplemental Enhancement 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, the Supplemental Enhancement Account
        and
        the Pre-Funding Account shall be invested by the Trust Collateral Agent at
        the
        written direction of the Transferor (or, in the case of the Supplemental
        Enhancement Account, at the direction of the Class C Certificateholder) 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, or if such investment
        direction is given, such funds shall be retained uninvested. In no event
        shall
        the Trust Collateral Agent be liable for any insufficiency in the Collection
        Account and the Supplemental Enhancement Account resulting from any investment
        loss in any Eligible Account. Such written direction shall certify that any
        such
        investment is authorized by this Section. No investment may be sold prior
        to its
        maturity. Amounts in the Note Account and the Policy Payments Account shall
        not
        be invested. The amount of earnings on investments of funds in the Collection
        Account during the Collection Period related to each Payment Date shall be
        deposited into the Note Account on each Payment Date, and shall be available
        for
        payment pursuant to Section 5.6(c). The amount of earnings on investments
        of
        funds in the Supplemental Enhancement Account during the Collection Period
        related to each Payment Date shall be paid to the Class C Certificateholder
        as
        the Supplemental Enhancement Account Investment Earnings Amount on each Payment
        Date, pursuant to Section 5.6(c)(vii) hereof. For purposes of this paragraph,
        the Trust Collateral Agent will take delivery of the Eligible Investments
        in
        accordance with Schedule C.

       

      
        
          
          

        

        
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      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, (iii) on
        the
        Determination Date immediately succeeding the date on which the Funding Period
        ends (or, if the Funding Period ends on or after the Determination Date
        immediately preceding the Final Funding Period Payment Date, on the date
        on
        which the Funding Period ends), the Trust Collateral Agent shall transfer
        the
        remaining Pre-Funded Amount on deposit in the Pre-Funding Account to the
        Note
        Account pursuant to Section 5.13(c), (iv) on or before each Draw Date, the
        Trust
        Collateral Agent shall, pursuant to the Servicer's written instructions,
        transfer to the Collection Account any amounts to be withdrawn from the
        Supplemental Enhancement Account in accordance with Section 5.12 and (v)
        on the
        Closing Date, LBAC shall deposit or cause to be deposited to the Collection
        Account the September Principal Collections Amount.

       

      
        
          
          

        

        
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      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 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;

       

      (b)
         Prior
        to
        each Payment Date, the Servicer shall on the related Determination Date
        calculate the Available Funds, the Principal Payment Amount, the Class A-1
        Payment Amount, the Class A-1 Interest Payment Amount, the Class A-2 Payment
        Amount, the Class A-2 Interest Payment Amount, the Class A-3 Payment Amount,
        the
        Class A-3 Interest Payment Amount, the Class A-4 Payment Amount, the Class
        A-4
        Interest Payment Amount, the Class C Interest Payment Amount, the Class C
        Principal Deficiency Amount, the Supplemental Enhancement Account Investment
        Earnings Amount, the Class C Interest Carryover Shortfall, if any, the Class
        C
        Supplemental Interest Payment Amount, if any, the Monthly Dealer Participation
        Fee Payment Amount, and, based on the Available Funds and the other amounts
        available for payment on such Payment Date, determine the amount payable
        to the
        Noteholders, the Class C Certificateholder and the Class R
        Certificateholder.

       

      (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
        distributions 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, 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, the Supplemental Servicing Fee and all unpaid Servicing Fees and
        Supplemental Servicing Fees from prior Collection Periods and, if the Available
        Funds are insufficient to pay such Servicing Fees and Supplemental 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,
        in
        the following order of priority, first, from amounts on deposit in the Spread
        Account, to the extent received by the Trust Collateral Agent from the
        Collateral Agent, and second, from amounts on deposit in the Supplemental
        Enhancement Account, to the extent withdrawn by the Trust Collateral Agent
        and
        deposited into the Collection Account;

       

      
        
          
          

        

        
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      (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, in the following order of priority, first, from amounts on
        deposit
        in the Spread Account, to the extent received by the Trust Collateral Agent
        from
        the Collateral Agent, and second, from amounts on deposit in the Supplemental
        Enhancement Account, to the extent withdrawn by the Trust Collateral Agent
        and
        deposited into the Collection Account, after application thereof pursuant
        to
        clause (i) above;

       

      (iii) to
        the
        Class A-1 Noteholders, the Class A-2 Noteholders, the Class A-3 Noteholders
        and
        the Class A-4 Noteholders, pro rata
        based on
        the interest due on each such class of Notes, from the Available Funds (as
        such
        Available Funds have been reduced by payments made pursuant to clauses (i)
        and
        (ii) above), an amount equal to the Class A-1 Note Interest, the Class A-2
        Note
        Interest, the Class A-3 Note Interest and the Class A-4 Note Interest
        (calculated (i) with respect to the Class A-1 Notes on each Payment Date,
        on the
        basis of the actual number of days elapsed during such Accrual Period based
        on a
        360 day year, or with respect to the first Payment Date, 30 days and (ii)
        with
        respect to the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes
        on
        each Payment Date, on the basis of a 360-day year consisting of twelve 30-day
        months, with respect to such Payment Date (plus (without duplication) interest
        on any outstanding Class A-1 Interest Carryover Shortfall, Class A-2 Interest
        Carryover Shortfall, Class A-3 Interest Carryover Shortfall or Class A-4
        Interest Carryover Shortfall, if any, to the extent permitted by applicable
        law,
        at the Class A-1 Note Rate, the Class A-2 Note Rate, the Class A-3 Note Rate
        or
        the Class A-4 Note Rate, as applicable, for the related Accrual Period
        (calculated (i) with respect to the Class A-1 Notes on each Payment Date,
        on the
        basis of the actual number of days elapsed during such Accrual Period based
        on a
        360 day year (or, with respect to the first Payment Date, 30 days) and (ii)
        with
        respect to the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes
        on
        each Payment Date, 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
        Class A 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, in the
        following order of priority, first, from amounts on deposit in the Spread
        Account, to the extent received by the Trust Collateral Agent from the
        Collateral Agent, and second, from amounts on deposit in the Supplemental
        Enhancement Account, to the extent withdrawn by the Trust Collateral Agent
        and
        deposited into the Collection Account, 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;

       

      
        
          
          

        

        
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      (iv) from
        the
        Available Funds (as such Available Funds have been reduced by payments made
        pursuant to clauses (i) through (iii) above) and, if such Payment Date is
        the
        Final Funding Period Payment Date, from the Mandatory Special Redemption,
        if
        any, first,
        to the
        Class A-1 Noteholders, until the Class A-1 Note Balance has been reduced
        to
        zero, an amount equal to the Principal Payment Amount with respect to such
        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 remaining Principal Payment Amount with respect
        to
        such Payment Date, if any, third,
        to the
        Class A-3 Noteholders, after the Class A-2 Note Balance has been reduced
        to
        zero, an amount equal to the remaining Principal Payment Amount with respect
        to
        such Payment Date, if any, and fourth,
        to the
        Class A-4 Noteholders, after the Class A-3 Note Balance has been reduced
        to
        zero, an amount equal to the remaining Principal Payment Amount with respect
        to
        such Payment Date, if any, and, if the Available Funds are insufficient to
        pay
        such amounts, the Class A 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, in the following order of priority, first, from amounts on deposit in
        the
        Spread Account, to the extent received by the Trust Collateral Agent from
        the
        Collateral Agent, and second, from amounts on deposit in the Supplemental
        Enhancement Account, to the extent withdrawn by the Trust Collateral Agent
        and
        deposited into the Collection Account 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) 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 (other than any accrued and unpaid
        Premium) 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, in the following order of priority, first, from amounts on deposit in
        the
        Spread Account to the extent received by the Trust Collateral Agent from
        the
        Collateral Agent, and second, from amounts on deposit in the Supplemental
        Enhancement Account, to the extent withdrawn by the Trust Collateral Agent
        and
        deposited into the Collection Account, after application thereof pursuant
        to
        clauses (i) through (iv) above;

       

      (vi) to
        the
        Note Insurer, from the Available Funds (as such Available Funds have been
        reduced by payments made pursuant to clauses (i) through (v) above), any
        accrued
        and unpaid Premium and, if the Available Funds are insufficient the Note
        Insurer
        shall receive such deficiency from the remaining portion of the Deficiency
        Claim
        Amount with respect to such Payment Date, if any, in the following order
        of
        priority, first, from amounts on deposit in the Spread Account to the extent
        received by the Trust Collateral Agent from the Collateral Agent, and second,
        from amounts on deposit in the Supplemental Enhancement Account, to the extent
        withdrawn by the Trust Collateral Agent and deposited into the Collection
        Account, after application thereof pursuant to clauses (i) through (v)
        above;

       

      
        
          
          

        

        
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      (vii) 
        to the
        Class C Certificateholder (a) from the Available Funds (as such Available
        Funds
        have been reduced by payments made pursuant to clauses (i) through (vi) above),
        an amount equal to the Class C Interest Payment Amount and (b) from the
        Supplemental Enhancement Account, the Supplemental Enhancement Account
        Investment Earnings Amount;

       

      (viii) to
        the
        Collateral Agent, for deposit in the Supplemental Enhancement Account, from
        the
        Available Funds (as such Available Funds have been reduced by payments made
        pursuant to clauses (i) through (vii) above) reimbursement for any previous
        unreimbursed withdrawals from such account (other than (x) Supplemental
        Enhancement Account Investment Earnings Amounts distributed to the Class
        C
        Certificateholder pursuant to clause (vii) above on such Payment Date or
        prior
        Payment Dates and (y) Supplemental Enhancement Account Release Amounts
        distributed to the Class C Certificateholder pursuant to clause (xi) below
        on
        prior Payment Dates);

       

      (ix) first,
        to the
        Trust Collateral Agent, the Indenture Trustee, the Back-up Servicer and the
        Custodian, as applicable, from the Available Funds (as such Available Funds
        have
        been reduced by payments made pursuant to clauses (i) through (viii) above)
        all
        reasonable out-of-pocket expenses of the Trust Collateral Agent, the Indenture
        Trustee, the Back-up Servicer and the Custodian (including, but not limited
        to,
        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, but not limited
        to,
        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 first
        of
        clause (ix) shall be limited to a combined aggregate amount of $50,000 per
        annum, and second
        to the
        Back-up Servicer, from the Available Funds (as such Available Funds have
        been
        reduced by payments made pursuant to clauses (i) through (viii) above and
        subclause first
        of this
        clause (ix)), 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;

       

      (x) 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 (ix) above), if any; and

       

      (xi) to
        the
        Class C Certificateholder, from the Supplemental Enhancement  Account
        Release Amount, until the Class C Certificate Balance is reduced to zero
        and
        (without duplication) any Class C Principal Deficiency Amount has been paid
        in
        full.

       

      (d)
         In
        addition, on each Payment Date, after giving effect to the payments specified in
        clauses (i) through (x) of Section 5.6(c), the Trust Collateral Agent (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 make the following payments, from the Spread
        Account Release Amount, if any, in the following order of priority:

       

      
        
          
            
            

          

          
            33

            
              

            

          

          
            
            

          

           

        

      

      (i)  first,
        to the
        Class A-1 Noteholders, until the Class A-1 Note Balance has been reduced
        to
        zero, second,
        to the
        Class A-2 Noteholders, after the Class A-1 Note Balance has been reduced
        to
        zero, third,
        to the
        Class A-3 Noteholders, after the Class A-2 Note Balance has been reduced
        to
        zero, and fourth,
        to the
        Class A-4 Noteholders, after the Class A-3 Note Balance has been reduced
        to
        zero, in reduction of the Class A-1 Note Balance, the Class A-2 Note Balance,
        the Class A-3 Note Balance and the Class A-4 Note Balance, as applicable,
        until
        the Overcollateralization Amount is equal to the Required Overcollateralization
        Target;

       

      (ii) to
        the
        Class C Certificateholder, from the remaining Spread Account Release Amount
        (as
        such Spread Account Release Amount has been reduced by payments pursuant
        to
        clause (i) above), the Class C Interest Carryover Shortfall and any Class
        C
        Supplemental Interest; 

       

      (iii) if
        the
        Total Enhancement Amount exceeds the Required Total Enhancement Amount after
        the
        distributions pursuant to Sections 5.6(c)(i) through (xi) have been made
        first,
        to the Class C Certificateholder, from any remaining amounts, any amounts
        due
        and unpaid on the Class C Certificate, and second, to the Class R
        Certificateholder.

       

      (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.

       

      In
        furtherance of and not in limitation of the foregoing, each Certificateholder
        by
        acceptance of its 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 Sections 5.6(c),
        5.6(d)
        and 5.12 (in the case of the Class C Certificateholder) above for payment
        to
        such Certificateholder. Each Certificateholder, by its acceptance of its
        Certificate, further specifically acknowledges that it has no right to or
        interest in any moneys at any time held in the Supplemental Enhancement Account
        or the Spread Account prior to the release of such moneys as aforesaid, such
        moneys being held in trust for the benefit of the Class A Noteholders and
        the
        Note Insurer as their interests may appear (other than any Supplemental
        Enhancement Account Investment Earnings Amounts, which are being held in
        trust
        for the exclusive benefit of the Class C Certificateholder) prior to such
        release.

       

      
        
          
          

        

        
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      (f)
         Notwithstanding
        the foregoing, in the event that it is ever determined that any property
        held in
        the Spread Account constitutes 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 Class R
        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 Class R Certificateholder, by acceptance
        of
        its Class R Certificate, hereby appoints the Transferor as its agent to pledge
        a
        first priority perfected security interest in the Spread Account, and any
        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 in
        writing 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 (i) the Principal Payment Amount
        plus
        (ii) the Class A-1 Interest Payment Amount, the Class A-2 Interest Payment
        Amount, the Class A-3 Interest Payment Amount and the Class A-4 Interest
        Payment
        Amount, as applicable, to be paid to such Class of Notes in accordance with
        the
        Servicer's Certificate.

       

      SECTION
        5.7.   Statements
        to Noteholders and the Class C Certificateholder; Tax Returns.

       

      (a)
         With
        each
        payment from the Note Account to the Noteholders and Class C Certificateholder
        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 make available to each Noteholder and
        the
        Class C Certificateholder of record on
        its
        website at www.CTSLink.com
        or through such other means as the Trust Collateral Agent believes will make
        the
        distribution more convenient and/or accessible with the consent of the Note
        Insurer (such consent not to be unreasonably withheld) and the Trust Collateral
        Agent shall provide timely and adequate notification to all Noteholders and
        the
        Class C Certificateholder regarding any such changes)
        the
        Servicer's Certificate substantially in the form of Exhibit B-1 hereto, setting
        forth, at least the following information as to the Notes and the Class C
        Certificate, to the extent applicable:

       

      (i) the
        amount of the payment allocable to principal of the Class A-1 Notes, the
        Class
        A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, respectively, and
        in the
        aggregate with respect to all classes of Notes;

       

      
        
          
          

        

        
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      (ii) the
        amount of the payment, if any, allocable from the Supplemental Enhancement
        Account to principal of the Class C Certificate, including any Class C Principal
        Deficiency Amounts;

       

      (iii) the
        amount of the payment allocable to interest on the Class A-1 Notes, the Class
        A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, respectively, and
        in the
        aggregate with respect to each class of Notes;

       

      (iv) the
        amount of the payment allocable to interest and any Supplemental Enhancement
        Account Investment Earnings Amounts on the Class C Certificate;

       

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

       

      (vi) the
        Class
        A-1 Note Balance, the Class A-2 Note Balance, the Class A-3 Note Balance,
        the
        Class A-4 Note Balance, the Note Balance, the Class C Certificate Balance
        and
        the outstanding Class C Principal Deficiency Amount, if any, 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) or clause (ii)
        above;

       

      (vii) 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;

       

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

       

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

       

      (x) the
        amount paid to the Note Insurer on such Payment Date in respect of Premium
        and
        Reimbursement Obligations;

       

      (xi) the
        amount in the Spread Account;

       

      (xii) the
        amount in the Supplemental Enhancement Account; 

       

      (xiii) 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;

       

      
        
          
          

        

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

       

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

       

      (xvi) 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;

       

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

       

      (xviii) 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;

       

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

       

      (xx) 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; 

       

      (xxi) for
        Payment Dates occurring prior to the end of the Funding Period and on the
        Final
        Funding Period Payment Date, the amount withdrawn from the Pre-Funding Account
        to purchase Subsequent Receivables during the related Collection Period and
        the
        remaining Pre-Funded Amount on deposit in the Pre-Funding Account;
        and

       

      (xxii) for
        the
        Final Funding Period Payment Date, the amount of any Mandatory Special
        Redemption distributed as a payment of principal to Noteholders on such Payment
        Date.

       

      Each
        amount set forth pursuant to subclauses (i), (ii), (iii), (iv), (vii) and
        (viii)
        above shall be expressed in the aggregate and as a dollar amount per $1,000
        of
        original principal balance of a Note or Certificate, as applicable.

       

      (b)
         No
        later
        than January 31 of each calendar year, commencing January 31, 2008, 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 the Class C Certificateholder
        and 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), (iii), (iv), (vii) and (viii) of Section 5.7(a) for such preceding
        calendar year or applicable portion thereof during which such person was
        a
        Noteholder or a Class C Certificateholder, and (b) such information as may
        be
        reasonably requested by the Noteholders or the Class C Certificateholder
        or as
        may be required by the Code and regulations thereunder, to enable such Holder
        to
        prepare its 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.

       

      
        
          
          

        

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

       

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

       

      SECTION
        5.9.   Optional
        Deposits by the Note Insurer.
        The
        Note Insurer shall at any time, and from time to time, with respect to a
        Payment
        Date, have the option to deliver amounts to the Trust Collateral Agent for
        deposit into the Collection Account for any of the following purposes: (i)
        to
        provide funds in respect of the payment of fees or expenses of any provider
        of
        services to the Issuer with respect to such Payment Date, (ii) to distribute
        as
        a component of the Principal Payment Amount to the extent that the Note Balance
        as of the Determination Date preceding such Payment Date exceeds the sum
        of the
        Pool Balance as of such Determination Date and the remaining Pre-Funded Amount
        or (iii) to include such amount as part of the Payment Amount for such Payment
        Date to the extent that without such amount a draw would be required to be
        made
        on the Policy.

       

      SECTION
        5.10.   Spread
        Account.
        The
        Transferor agrees, simultaneously with the execution and delivery of this
        Agreement, to execute and deliver the Spread Account Agreement and, pursuant
        to
        the terms thereof, to deposit the Initial Spread Account Deposit in the Spread
        Account on the Closing Date. In addition, on each Subsequent Transfer Date,
        pursuant to the terms of the Spread Account Agreement, the Transferor shall
        deposit the related Subsequent Spread Account Deposit in the Spread Account.
        Although the Transferor as Class R 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.

       

      
        
          
          

        

        
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      SECTION
        5.11.   Withdrawals
        from Supplemental Enhancement Account and 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 (vi) 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 (i) 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 and (ii) if not sufficient, set forth the amount to be
        withdrawn by the Trust Collateral Agent from the Supplemental Enhancement
        Account pursuant to Section 5.12 hereof; provided,
        that no
        Deficiency Claim Amount shall be paid for any principal payable pursuant
        to
        clause (iv) of Section 5.6(c) unless the Overcollateralization Amount is
        less
        than zero or such Payment Date is a Final Scheduled Payment Date for any
        class
        of Class A Notes.

       

      Any
        Deficiency Notice shall be delivered by 12:00 p.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 and 5.12.

       

      SECTION
        5.12.   Supplemental
        Enhancement Account.
        In
        order to enhance the amounts available to make required payments to the Class
        A
        Noteholders and to make principal payments to the holder of the Class C
        Certificate, there shall be established and maintained with the Trust Collateral
        Agent an Eligible Account entitled, "Supplemental Enhancement Account--Long
        Beach Acceptance Auto Receivables Trust 2007-A", which will include the money
        and other property deposited and held therein pursuant to Section 5.6(c)(viii),
        and this Section 5.12.

       

      (a)
         On
        the
        Closing Date, the Transferor shall deposit the Supplemental Enhancement Account
        Deposit into the Supplemental Enhancement Account. 

       

      (b)
         The
        amounts on deposit in the Supplemental Enhancement Account shall be available
        for payment in accordance with and subject to Section 5.6(c) above and 5.12(c)
        below. Upon termination of this Agreement and the payment of all amounts
        due
        under this Agreement to the Class A Noteholders, any remaining amounts in
        the
        Supplemental Enhancement Account will be distributed to the Class C
        Certificateholder. Upon any such payment to the Class C Certificateholder,
        the
        Class A Noteholders shall not have any further rights in, or claims to, such
        amounts.

       

      (c)
         If
        on any
        Payment Date (based on the Servicer's Certificate delivered on the related
        Determination Date by the Servicer pursuant to Section 4.9, upon which the
        Trust
        Collateral Agent may conclusively rely) the Available Funds, together with
        amounts on deposit in the Spread Account, are insufficient to pay the full
        amount described in clauses (i) through (vi) of Section 5.6(c), the Trust
        Collateral Agent shall withdraw from the Supplemental Enhancement Account
        an
        amount equal to such insufficiency and deliver the amount so withdrawn to
        the
        Trust Collateral Agent for deposit in the Note Account for application in
        respect of such insufficiency; provided,
        that no
        Deficiency Claim Amount shall be paid for any principal payable pursuant
        to
        clause (iv) of Section 5.6(c) unless the Overcollateralization Amount is
        less
        than zero or such Payment Date is a Final Scheduled Payment Date for any
        class
        of Class A Notes. On
        any
        Payment Date (after making all distributions pursuant to Section 5.6(c)(i)
        through (x) on such Payment Date) on which the Total Enhancement Amount exceeds
        the Required Total Enhancement Amount, the Trust Collateral Agent shall withdraw
        the amount of such excess from the Supplemental Enhancement Account and
        distribute such amount to the Class C Certificateholder.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SECTION
        5.13.   Pre-Funding
        Account.


       

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

       

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

       

      (c)
         If
        (i)
        the Pre-Funded Amount has not been reduced to zero by the close of business
        on
        the last day of the Funding Period, after giving effect to any reductions
        in the
        Pre-Funded Amount on such last day of the Funding Period pursuant to Section
        5.13(b), the Servicer shall instruct the Trust Collateral Agent in writing
        to
        withdraw such remaining portion of the Pre-Funded Amount from the Pre-Funding
        Account and deposit it in the Note Account on the Final Funding Period Payment
        Date to be applied as a partial redemption of the Notes, in addition to the
        payment of principal and interest that otherwise would be payable with respect
        to such Notes on such Payment Date, in accordance with Section
        5.6(c)(iv).

       

      SECTION
        5.14.   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 parties hereto agree that
        the
        Supplemental Enhancement Account shall be governed by the laws of the State
        of
        New York, and regardless of any provision in any other agreement, the
        "securities intermediary's jurisdiction" (within the meaning of Section 8-110
        of
        the UCC) shall be the State of New York. 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 Supplemental
        Enhancement 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 entitlement order from the Indenture Trustee
        directing transfer or redemption of any financial asset relating to the
        Supplemental Enhancement Account, the Trust Collateral Agent shall comply
        with
        such entitlement order without further consent by LBAC or any other
        person.

       

      
        
          
          

        

        
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      ARTICLE
        VI

      THE
        POLICY

       

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

       

      SECTION
        6.2.   Claims
        Under Policy.

       

      (a)
         In
        the
        event that the Trust Collateral Agent has delivered a Deficiency Notice with
        respect to any Determination Date, the Trust Collateral Agent shall determine
        on
        the related Draw Date whether the sum of (i) the amount of Available Funds
        with
        respect to such Determination Date (as stated in the Servicer's Certificate
        with
        respect to such Determination Date) plus (ii) the amount of the Deficiency
        Claim
        Amount, if any, available to be distributed pursuant to the Spread Account
        Agreement by the Collateral Agent to the Trust Collateral Agent pursuant to a
        Deficiency Notice delivered with respect to such Payment Date (as stated
        in the
        certificate delivered on the immediately preceding Deficiency Claim Date
        by the
        Collateral Agent pursuant to Section 3.03(a) of the Spread Account Agreement)
        plus (iii) the amount of the remaining Deficiency Claim Amount, if any,
        available to be withdrawn from the Supplemental Enhancement Amount would
        be
        insufficient, after giving effect to the payments required by Section 5.6(c)(i)
        and (ii), to pay the Scheduled Payments for the related Payment Date, then
        in
        such event the Trust Collateral Agent shall furnish to the Note Insurer no
        later
        than 12:00 noon New York City time on the related Draw Date a completed Notice
        of Claim in the amount of the shortfall in amounts so available to pay the
        Scheduled Payments with respect to such Payment Date (the amount of any such
        shortfall being hereinafter referred to as the "Policy Claim Amount"). Amounts
        paid by the Note Insurer under the Policy shall be deposited by the Trust
        Collateral Agent into the Policy Payments Account and thereafter into the
        Note
        Account for payment to Class A Noteholders on the related Payment Date (or
        promptly following payment on a later date as set forth in the
        Policy).

       

      (b)
         Any
        notice delivered by the Trust Collateral Agent to the Note Insurer pursuant
        to
        Section 6.2(a) shall specify the Policy Claim Amount claimed under the Policy
        and shall constitute a "Notice of Claim" under the Policy. In accordance
        with
        the provisions of the Policy, the Note Insurer is required to pay to the
        Trust
        Collateral Agent the Policy Claim Amount properly claimed thereunder by 12:00
        noon, New York City time, on the later of (i) the third Business Day (as
        defined
        in the Policy) following receipt on a Business Day (as defined in the Policy)
        of
        the Notice of Claim, and (ii) the applicable Payment Date. Any payment made
        by
        the Note Insurer under the Policy shall be applied solely to the payment
        of the
        Class A Notes, and for no other purpose.

       

      (c)
         The
        Trust
        Collateral Agent shall (i) receive as attorney-in-fact of each Class A
        Noteholder any Policy Claim Amount from the Note Insurer and (ii) deposit
        the
        same in the Policy Payments Account for disbursement to the Noteholders as
        set
        forth in clauses (iii) and (iv) of Section 5.6(c). Any and all Policy Claim
        Amounts disbursed by the Trust Collateral Agent from claims made under the
        Policy shall not be considered payment by the Issuer or from the Spread Account
        with respect to such Class A 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 Class A 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 Class A Notes by or
        on
        behalf of the Note Insurer, each Class A 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 Class A 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 Class A Notes to the extent
        that it
        has made payment pursuant to the Policy. Notwithstanding the foregoing, the
        order of priority of payments to be made pursuant to Section 5.6(c) shall
        not be
        modified by this clause (c). To evidence such subrogation, the Note Registrar
        shall note the Note Insurer's rights as subrogee upon the register of Class
        A
        Noteholders upon receipt from the Note Insurer of proof of payment by the
        Note
        Insurer of any Scheduled Payment for that class.

       

      
        
          
          

        

        
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      (d)
         The
        Trust
        Collateral Agent shall be entitled, but not obligated, to enforce on behalf
        of
        the Class A Noteholders the obligations of the Note Insurer under the Policy.
        Notwithstanding any other provision of this Agreement, the Class A 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 Class A Note
        has
        been avoided in whole or in part as a preference payment under applicable
        bankruptcy law, the Trust Collateral Agent shall so notify the Note Insurer,
        shall comply with the provisions of the Policy to obtain payment by the Note
        Insurer of such avoided payment, and shall, at the time it provides notice
        to
        the Note Insurer, comply with the provisions of the Policy to obtain payment
        by
        the Note Insurer, notify Holders of the Class A Notes by mail that, in the
        event
        that any Class A Noteholder's payment is so recoverable, such Class A Noteholder
        will be entitled to payment pursuant to the terms of the Policy. Pursuant
        to the
        terms of the Policy, the Note Insurer will make such payment on behalf of
        the
        Class A Noteholder to the receiver, conservator, debtor-in-possession or
        trustee
        in bankruptcy named in the Order (as defined in the Policy) and not to the
        Trust
        Collateral Agent or any Class A Noteholder directly (unless a Class 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 Class A
        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 Class A Noteholders, thereby appoints the Note Insurer as
        agent
        and attorney-in-fact for the Trust Collateral Agent and each Class A Noteholder
        in any legal proceeding with respect to the Class A 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
        Class A Notes. Each Holder of Class A Notes, by its purchase of Class A 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 Class A 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 Class A 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.

       

      
        
          
          

        

        
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      SECTION
        6.4.   Surrender
        of Policy.
        The
        Trust Collateral Agent shall surrender the Policy to the Note Insurer for
        cancellation upon its expiration in accordance with the terms
        thereof.

       

      ARTICLE
        VII

      THE
        TRANSFEROR

       

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

       

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

       

      (b)
         Due
        Qualification.
        The
        Transferor is duly qualified to do business as a foreign corporation in good
        standing, and has obtained all necessary licenses and approvals in all
        jurisdictions required for the performance of its obligations under this
        Agreement and the other Basic Documents to which it is a party other than
        where
        the failure to obtain such license or approval or qualification would not
        have a
        material adverse effect on the ability of the Transferor to perform such
        obligations or on any Receivable or on the interest therein of the Issuer,
        the
        Noteholders or the Note Insurer.

       

      
        
          
          

        

        
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      (c)
         Power
        and Authority.
        The
        Transferor has the corporate power and authority to execute and deliver this
        Agreement and the other Basic Documents to which it is a party and to carry
        out
        their respective terms; the Transferor has full corporate power and authority
        to
        sell and assign the property sold and assigned to and deposited with the
        Issuer
        and has duly authorized such sale and assignment to the Issuer by all necessary
        corporate action; and the execution, delivery, and performance of this Agreement
        and the other Basic Documents to which it is a party have been duly authorized
        by the Transferor by all necessary corporate action.

       

      (d)
         Valid
        Sale; Binding Obligation.
        This
        Agreement effects a valid sale, transfer and assignment of the Initial
        Receivables and the other property conveyed to the Issuer pursuant to Section
        2.1, and upon execution of the related Transfer Agreement and satisfaction
        of
        the conditions set forth in Section 2.2(b) hereof and in such Transfer
        Agreement, this Agreement, and the related Transfer Agreement will effect
        a
        valid sale, transfer and assignment of the related Subsequent Receivables
        and
        the other related property to be conveyed to the Issuer pursuant to Section
        2.2
        on the related Subsequent Transfer Date, in each case, enforceable against
        creditors of and purchasers from the Transferor; and this Agreement and the
        other Basic Documents to which the Transferor is a party shall constitute
        legal,
        valid and binding obligations of the Transferor enforceable in accordance
        with
        their respective terms except as enforceability may be limited by bankruptcy,
        insolvency, reorganization or other similar laws affecting the enforcement
        of
        creditors' rights generally and by equitable limitations on the availability
        of
        specific remedies, regardless of whether such enforceability is considered
        in a
        proceeding in equity or at law.

       

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

       

      (f)
         No
        Proceedings.
        There
        are no proceedings or investigations pending, or to the Transferor's best
        knowledge, threatened, before any court, regulatory body, administrative
        agency,
        or other governmental instrumentality having jurisdiction over the Transferor
        or
        its properties: (A) asserting the invalidity of this Agreement or the other
        Basic Documents to which the Transferor is a party or the Notes or any
        Certificates, (B) seeking to prevent the issuance of the Notes or any
        Certificates 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 or any Certificates, (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 any Certificates or (E)
        that
        could have a material adverse effect on the Receivables.

       

      
        
          
          

        

        
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      (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 Certificates 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 obligations 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,
        the Class C Certificateholder or the Note Insurer.

       

      (h)
         Chief
        Executive Office.
        The
        Transferor hereby represents and warrants to the Trust Collateral Agent that
        the
        Transferor's principal place of business and chief executive office is, and
        for
        the four months preceding the date of this Agreement, has been, located at
        One
        Mack Centre Drive, Paramus, New Jersey 07652.

       

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

       

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

       

      SECTION
        7.3.   Merger
        or Consolidation of, or Assumption of the Obligations of, the
        Transferor.
        Any
        Person (a) into which the Transferor may be merged or consolidated, (b) which
        may result from any merger or consolidation to which the Transferor shall
        be a
        party or (c) which may succeed to the properties and assets of the Transferor
        substantially as a whole, which person in any of the foregoing cases executes
        an
        agreement of assumption to perform every obligation of the Transferor under
        this
        Agreement, shall be the successor to the Transferor hereunder without the
        execution or filing of any document or any further act by any of the parties
        to
        this Agreement; provided,
        however,
        as a
        condition to the consummation of any of the transactions referred to in clauses
        (a), (b) or (c) above, (i) immediately after giving effect to such transaction,
        (x) no representation or warranty made pursuant to Section 7.1 would have
        been
        breached (for purposes hereof, such representations and warranties shall
        speak
        as of the date of the consummation of such transaction) and (y) no event
        that,
        after notice or lapse of time, or both, would become a Servicer Termination
        Event shall have happened and be continuing, (ii) the Transferor shall have
        delivered to the Note Insurer, the Indenture Trustee, the Trust Collateral
        Agent
        and the Issuer an Officer's Certificate and an Opinion of Counsel each stating
        that such consolidation, merger, or succession and such agreement or assumption
        comply with 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 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.

       

      
        
          
          

        

        
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      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, in its capacity as Servicer and Custodian (each reference to
“Servicer” in this Section 8.1 includes the Servicer in its capacity as
        Custodian) makes the following representations on which the Note Insurer
        shall
        be deemed to have relied in executing and delivering the Policy and on which
        the
        Issuer is deemed to have relied in acquiring the Receivables and on which
        the
        Indenture Trustee is deemed to have relied on in accepting the pledge of
        the
        Receivables. The representations speak as of the execution and delivery of
        this
        Agreement and as of the Closing Date, in the case of the Initial Receivables,
        and as of the related Subsequent Transfer Date, in the case of the Subsequent
        Receivables, and shall survive the conveyance of the Receivables to the Issuer
        and the subsequent pledge thereof to the Indenture Trustee pursuant to the
        Indenture.

       

      
        
          
          

        

        
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      (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.

       

      
        
          
          

        

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

       

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

       

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

       

      (ix) Chief
        Executive Office.
        The
        Servicer hereby represents and warrants to the 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, each 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 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.

       

      
        
          
          

        

        
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      (iii) 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 Note Insurer, the Issuer, each 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 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
        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) 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.

       

      
        
          
          

        

        
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      (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.

       

      (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 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 written 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.

       

      
        
          
          

        

        
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      (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,
        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.

       

      
        
          
          

        

        
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      (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 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. 

       

       

      
        
          
            
            

          

          
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        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
        Certificateholders or deposit in the Spread Account or the Supplemental
        Enhancement Account any proceeds or payment required to be so delivered under
        the terms of the Notes, the Certificates, the Purchase Agreement, any Transfer
        Agreement or this Agreement (including deposits of Purchase Amounts) that
        shall
        continue unremedied for a period of two Business Days after written notice
        is
        received by the Servicer from the Trust Collateral Agent or the Note Insurer
        or
        after discovery of such failure by the Servicer (but in no event later than
        the
        five Business Days after the Servicer is required to make such delivery or
        deposit); or

       

      (ii) The
        Servicer's Certificate required by Section 4.9 shall not have been delivered
        to
        the Trust Collateral Agent and the Note Insurer within one Business Day of
        the
        date such Servicer's Certificate is required to be delivered; or the statement
        required by Section 4.10 or the report required by Section 4.11 shall not
        have
        been delivered within five (5) days after the date such statement or report,
        as
        the case may be, is required to be delivered; or

       

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

       

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

       

      
        
          
          

        

        
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      (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 any Transfer Agreement,
        or
        in each case any certificate, report or other writing delivered pursuant
        hereto
        shall prove to be incorrect as of the time when the same shall have been
        made
        (excluding, however, any representation or warranty set forth in Section
        3.03(b)
        of the Purchase Agreement or Section 4 of the related Transfer Agreement),
        and
        the incorrectness of such representation, warranty or statement has a material
        adverse effect on the Issuer and, within 30 days after written notice thereof
        shall have been given (1) to LBAC, the Servicer or the Transferor (as the
        case
        may be) by the Trust Collateral Agent or the Note Insurer or (2) to LBAC,
        the
        Servicer or the Transferor (as the case may be), and to the Trust Collateral
        Agent and the Note Insurer by the Class A Noteholders evidencing not less
        than
        25% of the Class A Note Balance or the Class C Certificateholder, the
        circumstances or condition in respect of which such representation, warranty
        or
        statement was incorrect shall not have been eliminated or otherwise cured;
        or

       

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

       

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

       

      (x) So
        long
        as 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; 

       

      
        
          
          

        

        
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      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 written 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 the Class C
        Certificateholder) 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,
        Certificates or the Receivables or otherwise, shall without further action,
        pass
        to and be vested in (i) the Back-up Servicer or (ii) such successor Servicer
        as
        may be appointed under Section 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. Notwithstanding anything contained in this Agreement
        to
        the contrary, Wells Fargo as successor Servicer is authorized to accept and
        rely
        on all of the accounting, records (including computer records) and work of
        the
        prior Servicer relating to the Notes (collectively, the “Predecessor Servicer
        Work Product”) without any audit or other examination thereof, and Wells Fargo
        shall have no duty, responsibility, obligation or liability for the acts
        and
        omissions of the prior Servicer. In the event that Wells Fargo becomes aware
        that any errors, inaccuracies, omissions or incorrect or non-standard practices
        or procedures (collectively, “Errors”) exist in any Predecessor Servicer Work
        Product and such Errors make it materially more difficult to service or could
        reasonably cause or materially contribute to Wells Fargo making or continuing
        any Errors (collectively, “Continued Errors”), Wells Fargo shall, with prior
        notice to and consent of the Note Insurer, use its best efforts to reconstruct
        and reconcile such data as are commercially reasonable to correct such Errors
        and Continued Errors and to prevent future Continued Errors. Wells Fargo
        shall
        be entitled to recover its costs thereby expended in accordance with Section
        5.6(c)(ix) hereof. 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)(ix) hereof. Upon receipt of written
        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 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 and the Class C Certificateholder if a Note Insurer Default shall
        have occurred and be continuing.

       

      
        
          
          

        

        
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      (b) In
        the
        event that the Custodian is acting as Servicer and the Servicer is terminated
        pursuant to this Section 9.1, the Custodian may also be terminated in accordance
        with the terms of the Custodial Agreement.

       

      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)(ix) hereof;
provided,
        however,
        the
        payment of such amount pursuant to Section 5.6(c)(ix) 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 Class A Noteholders evidencing not less than 66-2/3% of the Class A Note
        Balance or the Class C Certificateholder may petition a court of competent
        jurisdiction to appoint any successor to the Servicer. Pending appointment
        pursuant to the preceding sentence, the Back-up Servicer shall act as successor
        Servicer unless it is legally unable to do so, in which event the predecessor
        Servicer shall continue to act as Servicer until a successor has been appointed
        and accepted such appointment. In the event that a successor Servicer has
        not
        been appointed at the time when the predecessor Servicer has ceased to act
        as
        Servicer in accordance with this Section 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.

       

      
        
          
          

        

        
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      (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.

       

      
        
          
          

        

        
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    SECTION
      9.3.   Notification
      to Noteholders and the Class C Certificateholder. 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 and the Class C Certificateholder at their respective addresses
      appearing in the Note Register or the Certificate Register, as applicable,
      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 or a Class C Certificateholder. 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.

     

    ARTICLE
      X

    THE
      TRUST
      COLLATERAL AGENT

     

    SECTION
      10.1.   Duties
      of the Trust Collateral Agent.

     

    (a)
       The
      Trust
      Collateral Agent, 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 may, and at the written 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, upon receipt of all resolutions, certificates, statements,
      opinions, reports, documents, orders or other instruments furnished to the
      Trust
      Collateral Agent 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,
      the Trust Collateral Agent shall not 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 shall notify the Note Insurer and the Noteholders of such instrument
      in
      the event that the Trust Collateral Agent, 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.

     

    
      
        
        

      

      
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    (d)
       No
      provision of this Agreement shall be construed to relieve the Trust Collateral
      Agent 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 shall be determined solely by the express provisions
      of
      this Agreement, the Trust Collateral Agent shall not be liable except for the
      performance of such duties and obligations as shall be specifically set forth
      in
      this Agreement, no implied covenants or obligations shall be read into this
      Agreement against the Trust Collateral Agent and, in the absence of bad faith
      on
      the part of the Trust Collateral Agent, the Trust Collateral Agent, 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 and conforming to the requirements of this
      Agreement;

     

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

     

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

     

    (iv) The
      Trust
      Collateral Agent shall not be charged with knowledge of any Servicer Termination
      Event or Event of Default, unless a Responsible Officer assigned to the Trust
      Collateral Agent's applicable 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 Class A Noteholders evidencing not less than 25% of the
      Class A Note Balance and the Class C Certificateholder (such notice shall
      constitute actual knowledge of a Servicer Termination Event or Event of Default
      by the Trust Collateral Agent); and

     

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

     

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

     

    
      
        
        

      

      
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    (f)
       Except
      for actions expressly authorized by this Agreement, the Trust Collateral Agent
      shall not 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 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, in confidence
      and
      shall not be disclosed to any other Person, all in accordance with the Federal
      Financial Privacy Law; provided
      that,
      nothing herein shall prevent the Trust Collateral Agent 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 business in the
      ordinary course, (ii) any Noteholder, the Class C Certificateholder or the
      Note
      Insurer to the extent that such Noteholder, such Class C Certificateholder
      or
      the Note Insurer is entitled to such information under this Agreement or any
      other Basic Document, but not otherwise, (iii) any governmental authority which
      specifically requests (or as to which applicable regulations require) such
      information, (iv) any nationally recognized rating agency in connection with
      the
      rating of the Notes by such agency, or (v) any other Person to which such
      delivery or disclosure may be necessary or appropriate (a) in compliance with
      any applicable law, rule, regulation or order, (b) in response to any subpoena
      or other legal process, (c) in connection with any litigation to which the
      Trust
      Collateral Agent is a party, (d) in order to enforce the rights of the
      Noteholders, the Class C Certificateholder and the Note Insurer hereunder or
      under any other Basic Document, or (e) otherwise, in accordance with the Federal
      Financial Privacy Law; provided,
      that,
      prior to any such disclosure, the Trust Collateral Agent or the Custodian,
      as
      applicable, shall inform each such party (other than any Noteholder, the Class
      C
      Certificateholder, the Note Insurer or any other party to the Basic Documents)
      that receives Confidential Information of the foregoing requirements and shall
      use its commercially reasonable best efforts to cause such party to comply
      with
      such requirements.

     

    (h)
       Money
      held in trust by the Trust Collateral Agent 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 shall be subject to
      the
      provisions of this Section 10.1.

     

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

     

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

     

    
      
        
        

      

      
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    (l)
       Without
      limiting the generality of this Section 10.1, the Trust Collateral Agent 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 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 or 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 this Agreement.

     

    (m)
       In
      no
      event shall Wells Fargo Bank, in any of its capacities hereunder, be deemed
      to
      have assumed any duties of the Owner Trustee under the Delaware Statutory Trust
      Act, common law, or the Trust Agreement.

     

    (n)
       The
      Trust
      Collateral Agent shall not 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 Class A Noteholders, the Class C
      Certificateholder and Note Insurer. Prior
      to
      the payment in full of the Class A Notes and the Reimbursement Obligations
      and
      the expiration of the term of the Policy, the Trust Collateral Agent shall
      act
      solely for the benefit of the Class A Noteholders, the Class C Certificateholder
      and the Note Insurer, as their interests may appear herein.

     

    SECTION
      10.3.   Certain
      Matters Affecting the Trust Collateral Agent. Except
      as
      otherwise provided in the second paragraph of Section 10.1:

     

    (i) The
      Trust
      Collateral Agent 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 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) The
      Trust
      Collateral Agent 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 Trust Collateral Agent reasonable
      security or indemnity in form and substance reasonably satisfactory to the
      Trust
      Collateral Agent 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 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.

     

    
      
        
        

      

      
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    (iv) The
      Trust
      Collateral Agent shall not be bound to make any investigation into the facts
      or
      matters stated in any resolution, certificate, statement, instrument, opinion,
      report, notice, request, consent, order, approval, bond, or other paper or
      document 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
      Class A Noteholders evidencing not less than 25% of the Class A Note Balance
      and
      the Class C Certificateholder; provided,
      however,
      that, if
      the payment within a reasonable time to the Trust Collateral Agent 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, not
      reasonably assured to the Trust Collateral Agent by the security afforded to
      it
      by the terms of this Agreement, the Trust Collateral Agent 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, shall be reimbursed by the Person making such request
      upon demand.

     

    (v) The
      Trust
      Collateral Agent 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. The Trust Collateral Agent shall not 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 Section 3.4, subsequent to the sale of the
      Receivables by the Transferor to the Issuer, the Trust Collateral Agent shall
      not have any duty of independent inquiry, and the Trust Collateral Agent 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 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) The
      Trust
      Collateral Agent shall not be required to take any action or refrain from taking
      any action under this Agreement, or any related documents referred to herein,
      nor shall any provision of this Agreement, or any such related document be
      deemed to impose a duty on the Trust Collateral Agent to take action, if the
      Trust Collateral Agent 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) applicable law.

     

    
      
        
        

      

      
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    SECTION
      10.4.   Trust
      Collateral Agent and Back-up Servicer 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 nor the Back-up Servicer assumes any responsibility for the correctness
      thereof. Neither the Trust Collateral Agent nor the Back-up Servicer 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 nor the Back-up Servicer shall at any time have any
      responsibility or liability for or with respect to the legality, validity and
      enforceability of any security interest in any Financed Vehicle or any
      Receivable, or the perfection and priority of such a security interest or the
      maintenance of any such perfection and priority, or for or with respect to
      the
      efficacy of the Issuer or its ability to generate the payments to be distributed
      to Noteholders under this Agreement, including, without limitation: the
      existence, condition, location, and ownership of any Financed Vehicle; the
      existence and enforceability of any physical damage insurance thereon; except
      as
      required by Section 3.4, the existence, contents and completeness of any
      Receivable or any Receivable Files or any computer or other record thereof;
      the
      validity of the assignment of any Receivable to the Issuer or of any intervening
      assignment; except as required by Section 3.4, the performance or enforcement
      of
      any Receivable; the compliance by the Transferor or the Servicer with any
      warranty or representation made under this Agreement or in any related document
      and the accuracy of any such warranty or representation prior to the Trust
      Collateral Agent's or the Back-up Servicer's receipt of written 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 and the Back-up Servicer 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 any action by the Trust
      Collateral Agent taken at the instruction of the Servicer; provided,
      however,
      that the
      foregoing shall not relieve either the Trust Collateral Agent or the Back-up
      Servicer 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
      or
      the Back-up Servicer to perform its duties under this Agreement or based on
      the
      Trust Collateral Agent's or the Back-up Servicer'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 or the Back-up Servicer in their respective individual
      capacities, neither the Trust Collateral Agent nor the Back-up Servicer 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 nor the
      Back-up Servicer 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 and the Back-up Servicer
      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 and the Back-up Servicer 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.

     

    
      
        
        

      

      
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    SECTION
      10.5.   Trust
      Collateral Agent and Back-up Servicer May Own Notes.
      The
      Trust Collateral Agent and the Back-up Servicer 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 or Back-up
      Servicer, as applicable.

     

    SECTION
      10.6.   Indemnity
      of Trust Collateral Agent and Back-up Servicer.
      The
      Servicer shall indemnify the Trust Collateral Agent, the Back-up Servicer and
      each officer, director and employee of the Trust Collateral Agent and the
      Back-up Servicer 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, 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.
      The
      Trust Collateral Agent under this Agreement shall at all times be organized
      and
      doing business under the laws of the United States thereof; 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 shall cease to be eligible in accordance with the
      provisions of this Section 10.7, the Trust Collateral Agent 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.

     

    (a)
       The
      Trust
      Collateral Agent 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 resigns 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 (i) if a Note Insurer
      Default shall have occurred or is continuing, the Class A Noteholders evidencing
      not less than 25% of the Class A Note Balance or, if no Class A Notes are
      outstanding, the Class C Certificateholder, or (ii) if no Class A Notes are
      outstanding and the Policy Expiration Date has occurred, the Class C
      Certificateholder) the Servicer shall promptly appoint a successor Trust
      Collateral Agent by written instrument, in duplicate, one copy of which
      instrument shall be delivered to the resigning Trust Collateral Agent and one
      copy to the successor Trust Collateral Agent. If no successor Trust Collateral
      Agent shall have been so appointed and have accepted appointment within 30
      days
      after the giving of such notice of resignation, the Note Insurer (or (i) if
      a
      Note Insurer Default shall have occurred or is continuing, the Class A
      Noteholders evidencing not less than 25% of the Class A Note Balance or, if
      no
      Class A Notes are outstanding, the Class C Certificateholder, or (ii) if no
      Class A Notes are outstanding and the Policy Expiration Date has occurred,
      the
      Class C Certificateholder) may appoint a successor Trust Collateral Agent by
      written instrument, in duplicate, one copy of which instrument shall be
      delivered to the resigning Trust Collateral Agent and one copy to the successor
      Trust Collateral Agent. If no successor Trust Collateral Agent shall have been
      so appointed and have accepted appointment within 60 days after the giving
      of
      such notice of resignation, the resigning Trust Collateral Agent may petition
      any court of competent jurisdiction for the appointment of a successor Trust
      Collateral Agent. The Trust Collateral Agent may be removed at any time by
      written demand of the Note Insurer delivered to the Trust Collateral Agent
      and
      the Servicer.

     

    
      
        
        

      

      
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    (b)
       If
      at any
      time (i) the Trust Collateral Agent 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 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 shall be adjudged bankrupt or insolvent, or a receiver,
      conservator or liquidator of the Trust Collateral Agent or of any of its
      property shall be appointed, or any public officer shall take charge or control
      of the Trust Collateral Agent 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. If the Note Insurer or the Servicer shall
      remove the Trust Collateral Agent 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 by written instrument,
      in
      duplicate, one copy of which instrument shall be delivered to the Trust
      Collateral Agent so removed and one copy to the successor Trust Collateral
      Agent, and pay all fees and expenses owed to the outgoing Trust Collateral
      Agent, provided that any successor Trust Collateral Agent appointed by the
      Servicer shall be acceptable to the Note Insurer.

     

    (c)
       Any
      resignation or removal of the Trust Collateral Agent and appointment of a
      successor Trust Collateral Agent 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, pursuant to Section 10.9 and payment of all
      fees and expenses owed to the outgoing Trust Collateral Agent. The Servicer
      shall provide written notice of such resignation or removal of the Trust
      Collateral Agent 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, any Noteholder or the Class C
      Certificateholder in connection with such removal.

     

    
      
        
        

      

      
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    SECTION
      10.9.   Successor
      Trust Collateral Agent.
      Any
      successor Trust Collateral Agent 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 an instrument accepting
      such appointment under this Agreement, and thereupon the resignation or removal
      of the predecessor Trust Collateral Agent shall become effective and such
      successor Trust Collateral Agent, 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. The predecessor Trust Collateral Agent shall upon
      payment of its fees and expenses deliver to the successor Trust Collateral
      Agent
      all documents and statements and monies held by it under this Agreement; and
      the
      Servicer, the Note Insurer and the predecessor Trust Collateral Agent 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 all such rights, powers, duties, and
      obligations.

     

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

     

    Upon
      acceptance of appointment by a successor Trust Collateral Agent pursuant to
      this
      Section 10.9, the Servicer shall mail notice of the successor of such Trust
      Collateral Agent under this Agreement to all Holders of Notes at their addresses
      as shown in the Note Register, the Class C Certificateholder, 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 shall cause such notice
      to be mailed at the expense of the Servicer.

     

    SECTION
      10.10.   Merger
      or
      Consolidation of Trust Collateral Agent.
      Any
      corporation into which the Trust Collateral Agent 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 shall be a
      party, or any corporation succeeding to all or substantially all of the
      corporate trust business of the Trust Collateral Agent shall be the successor
      of
      the Trust Collateral Agent 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 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.

     

    
      
        
        

      

      
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    (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 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.

     

    
      
        
        

      

      
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    (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. 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, Noteholders and the Class C Certificateholder shall
      rely:

     

    (i) The
      Trust
      Collateral Agent is a national banking association, duly organized, validly
      existing, and in good standing under the laws of the United States and has
      the
      corporate power, authority and legal right to hold the Legal Files.


     

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

     

    (iii) This
      Agreement has been duly executed and delivered by the Trust Collateral Agent
      and
      constitutes a legal, valid and binding obligation of the Trust Collateral Agent,
      enforceable in accordance with its terms, subject to (x) applicable bankruptcy,
      insolvency, reorganization, moratorium and other similar laws affecting
      creditors' 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 in writing 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 it has not been provided indemnity in
      form and substance satisfactory to it or be unduly prejudicial to the rights
      of
      Noteholders or the Class C Certificateholder; 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. 

     

    
      
        
        

      

      
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    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 each 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 in writing 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)
       Written
      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, 3.19, 6.8,
      7.1, 7.3, 8.3, 9.1, 9.2, 9.3, 11.1 and 11.14 of the Indenture (in each case,
      excluding any duty to make payments to the Noteholders, the Class C
      Certificateholder 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,
      including, without limitation the Sarbanes-Oxley Act of 2002, 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.

     

    
      
        
        

      

      
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    (d)
       Exceptions.
      Notwithstanding anything to the contrary in this Agreement, except as expressly
      provided herein or in the other Basic Documents, the Servicer, in its capacity
      hereunder, shall not be obligated to, and shall not, (1) make any payments
      to
      the Noteholders or the Class C Certificateholder 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) shall be
      the
      only amount 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) unless a Note Insurer Default has occurred and is
      continuing or the Policy Expiration Date has 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
      or
      the Class C Certificate; 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 any
      Certificate or change the applicable Note Rate, the Class C Certificate Rate
      or
      the Class C Supplemental Interest 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 or the Class C Certificate then outstanding or
      eliminate the right of the Noteholder or the Certificateholder to consent to
      any
      change described in clause (a) affecting the Noteholder or the Certificateholder
      without the consent of the Noteholder or the Certificateholder, as applicable;
      or (c) result in a downgrade or withdrawal of the then current rating of the
      Notes by either of the Rating Agencies without the consent of all the
      Noteholders; provided,
      further
      that in
      the case of clause (ii) above, this Agreement may be amended from time to time
      by the Issuer, the Transferor, the Originator, the Servicer, the Trust
      Collateral Agent, the Back-up Servicer and the Custodian, with the prior written
      consent of the Note Insurer (unless a Note Insurer Default has occurred and
      is
      continuing or the Policy Expiration Date has occurred) for any of the following
      purposes:

     

    
       

      
        
          
          

        

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

     

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

     

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

     

    (b)
       This
      Agreement shall not be amended or modified without the prior written consent
      of
      the Class C Certificateholder (to the extent the Class C Certificate has not
      been paid in full) if the result of such amendment or modification is (a) to
      reduce or change the priority of payments payable to the Class C
      Certificateholder; (b) to accelerate or postpone the scheduled date of payment
      payable to the Class C Certificateholder; or (c) to modify any of the Basic
      Documents which would have the effect of any of the foregoing; or (d) to
amend
      any
      part of Article II or Sections 4.4, 4.5, 4.6, 5.12 or 5.14 hereof, unless,
      with
      respect to this clause (d), the Class C Certificateholder has received an
      opinion of counsel that such amendment will not have a material adverse affect
      on the Class C Certificateholder.

     

    (c)
       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.

     

    (d)
       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.

     

    
      
        
        

      

      
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    SECTION
      13.2.   Protection
      of Title.

     

    (a)
       Each
      of
      the Transferor, as to itself, and the Servicer, as to itself, shall file such
      financing statements and cause to be 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 Class C Certificateholder, 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 § 9-507(c) of the UCC, unless it shall have
      given the Trust Collateral Agent, the Owner Trustee, the Note Insurer and the
      other party at least thirty days' prior written notice thereof, shall have
      promptly filed appropriate amendments to all previously filed financing
      statements or continuation statements and shall have delivered an Opinion of
      Counsel (A) stating that, in the opinion of such counsel, all amendments to
      all
      previously filed financing statements and continuation statements have been
      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 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.

     

    
      
        
        

      

      
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    (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 2007-A in such Receivable and that such Receivable is owned
      by
      the Issuer. Indication of the Issuer's ownership of a Receivable shall be
      deleted from or modified on the Servicer's computer systems when, and only
      when,
      such Receivable shall have been paid in full or repurchased.

     

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

     

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

     

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

     

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

     

    (1)
       promptly
      after the execution and delivery of this Agreement and of each amendment hereto
      and after the execution and delivery of each amendment to any financing
      statement, an Opinion of Counsel either (A) stating that, in the opinion of
      such
      counsel, all financing statements and continuation statements have been 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 Initial Cutoff Date, an Opinion
      of Counsel, dated as of a date during such 90-day period either (A) stating
      that, in the opinion of such counsel, all financing statements and continuation
      statements have been 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.

     

    
      
        
        

      

      
        74

        
          

        

      

      
        
        

      

    

     

    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 and the Class C Certificateholder.

     

    (a)
       The
      death
      or incapacity of any Noteholder or Certificateholder shall not operate to
      terminate this Agreement or the Issuer, nor entitle such Noteholder's or such
      Certificateholder’s legal representatives or heirs to claim an accounting or to
      take any action or commence any proceeding in any court for a partition or
      winding up of the Issuer, nor otherwise affect the rights, obligations and
      liabilities of the parties to this Agreement or any of them.

     

    (b)
       No
      Noteholder shall have any right to vote (except as specifically provided herein
      including in Section 13.1) or in any manner otherwise control the operation
      and
      management of the Issuer, or the obligations of the parties to this Agreement,
      nor shall anything in this Agreement set forth, or contained in the terms of
      the
      Notes be construed so as to constitute the Noteholders from time to time as
      partners or members of an association; nor shall any Noteholder or the Class
      C
      Certificateholder 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 Class A Noteholders evidencing not less than 25%
      of
      the Class A Note Balance and the Class C Certificateholder 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 or the Class C Certificateholder 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, the Class
      C
      Certificateholder and the Trust Collateral Agent shall be entitled to such
      relief as can be given either at law or in equity. Nothing in this Agreement
      shall be construed as giving the Noteholders any direct right to make a claim
      on
      the Policy.

     

    
      
        
        

      

      
        75

        
          

        

      

      
        
        

      

    

     

    SECTION
      13.4.   Governing
      Law.
      THIS
      AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND THIS AGREEMENT AND ALL
      MATTERS ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT SHALL BE
      GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT
      OF
      LAWS PRINCIPLES (EXCEPT WITH REGARD TO THE UCC).

     

    SECTION
      13.5.   Notices.

     

    (a)
       All
      demands, notices, instructions, directions 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, (iv)
      by telecopy (with telephone confirmation) or (v) with respect to Standard &
Poor’s only, by electronic delivery, 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: 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
      or
      the Custodian, 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 applicable Corporate Trust Office
      (Telecopy: (612) 667-3464), (e) in the case of Standard & Poor's, with
      respect to all information available in electronic format, via electronic
      delivery to Servicer_reports@sandp.com and, with respect to any information
      not
      available in electronic format, at the following address: 55 Water Street,
      40th
      Floor, New York, New York 10041, Attention: Asset Backed Surveillance
      Department, (f) in the case of Moody's, at the following address: 99 Church
      Street, New York, New York 10007, Attention: ABS Monitoring Department, and
      (g)
      in the case of the Note Insurer, at the following address: at 31 West 52nd
      Street, New York, New York 10019, Attention: Transaction Oversight, Re: Long
      Beach Acceptance Auto Receivables Trust 2007-A. Any notice required or permitted
      to be mailed to a Noteholder or the Class C Certificateholder 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 or the Certificate
      Register, as applicable. 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 or the Class C Certificateholder shall receive such
      notice.

     

    
      
        
        

      

      
        76

        
          

        

      

      
        
        

      

    

     

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

     

    SECTION
      13.6.   Severability
      of Provisions.

     

    If
      any
      one or more of the covenants, agreements, provisions, or terms of this Agreement
      shall be for any reason whatsoever held invalid, then such covenants,
      agreements, provisions, or terms shall be deemed severable from the remaining
      covenants, agreements, provisions, or terms of this Agreement and shall in
      no
      way affect the validity or enforceability of the other provisions of this
      Agreement or of the Notes or the Class C Certificate or the rights of the
      Holders thereof.

     

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

     

    SECTION
      13.8.   Limitation
      of Liability of Owner Trustee, Back-up Servicer 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 Wells Fargo, not in its individual capacity but solely as Back-up
      Servicer and Trust Collateral Agent and in no event shall Wells Fargo 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.

     

    
      
        
        

      

      
        77

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    SECTION
      13.12.   Third
      Party Beneficiaries.
      Except
      as otherwise specifically provided herein with respect to Noteholders and the
      Certificateholders, the parties to this Agreement hereby manifest their intent
      that no third party other than the Note Insurer and the Owner Trustee with
      respect to the indemnification provisions set forth herein, shall be deemed
      a
      third party beneficiary of this Agreement, and specifically that the Obligors
      are not third party beneficiaries of this Agreement. The Note Insurer and its
      successors and assigns shall be a third-party beneficiary to the provisions
      of
      this Agreement, and shall be entitled to rely upon and directly enforce such
      provisions of this Agreement so long as no Note Insurer Default shall have
      occurred and be continuing. Except as expressly stated otherwise herein or
      in
      the Basic Documents, any right of the Note Insurer to direct, appoint, consent
      to, approve of or take any action under this Agreement, shall be a right
      exercised by the Note Insurer in its sole and absolute discretion. The Note
      Insurer may disclaim any of its rights and powers under this Agreement (but
      not
      its duties and obligations under the Policy) upon delivery of a written notice
      to the Trust Collateral Agent.

     

    SECTION
      13.13.   Consent
      to Jurisdiction.

     

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

     

    
      
        
        

      

      
        78

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

     

    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 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 written 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. 

     

    
      
        
          
          

        

        
          80

          
            

          

        

         

      

    

     

    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:  	/s/ Michael
              Butler
	 	
              

              Name:
                Michael Butler

              Title:
                Vice President and Treasurer

            


    

     

    
      	 	 	 
	 	
              LONG
                BEACH ACCEPTANCE CORP.,

              as
                Originator, Servicer and Custodian

            
	 
 	 
 	 
 
	 	 	 
	 	By:  	/s/ Michael
              Butler
	 	
              

              Name: Michael Butler
	 	
              Title:
                Vice President and Treasurer 

            


    

     

    
      	 	 	 
	 	
              WELLS
                FARGO BANK, NATIONAL ASSOCIATION

              as
                Back-up Servicer and Trust Collateral Agent

            
	 
 	 
 	 
 
	 	 	 
	 	By:  	/s/ Marianna
              C. Stershic
	 	
              

              Name:
                Marianna C. Stershic

            
	 	
              Title:
                Vice President

            


    

     

    
      	 	 	 
	 	LONG
              BEACH
              ACCEPTANCE AUTO RECEIVABLES TRUST 2007-A, as Issuer
	 	 	 
	 
 	 
By:	 
Wilmington
              Trust Company, not in its individual capacity, but solely as Owner
              Trustee
	 	 	 
	 	 	 
	 	By:  	/s/ Michele
              C. Harra
	 	
              

              Name:
                Michele C. Harra

            
	 	
              Title:
                Financial Services Officer

            


    

     

    [Sale
      and
      Servicing Agreement]

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    


    ANNEX
      A

    


    DEFINED
      TERMS


    
      
        
        

      

      
        Annex
          A

        
          

        

      

       

    


    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
      March
      1, 2007, among Long Beach Acceptance Receivables Corp., Long Beach Acceptance
      Corp., as originator, as servicer and as custodian, Wells Fargo Bank, National
      Association, as trust collateral agent and back-up servicer and Long Beach
      Acceptance Auto Receivables Trust 2007-A, as issuer (the "Issuer"). The Issuer
      does hereby sell, transfer, assign, and otherwise convey to LBAC, without
      recourse, representation, or warranty, all of the Issuer's right, title, and
      interest in and to all of the Receivables (as defined in the Agreement)
      identified in the attached Servicer's Certificate as "Purchased Receivables,"
      which are to be repurchased by LBAC pursuant to Section 3.4 of the Agreement,
      and all security and documents relating thereto.

     

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

            _________________________________________________________________

     

    
      
        
        

      

      
        A-1-1

        
          

        

      

       

    


    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
      March
      1, 2007, among Long Beach Acceptance Receivables Corp., Long Beach Acceptance
      Corp., as originator, as servicer and as custodian, Wells Fargo Bank, National
      Association, as trust collateral agent and back-up servicer and Long Beach
      Acceptance Auto Receivables Trust 2007-A, as issuer (the "Issuer"). The Issuer
      does hereby sell, transfer, assign, and otherwise convey to the Servicer,
      without recourse, representation, or warranty, all of the Issuer's right, title,
      and interest in and to all of the Receivables (as defined in the Agreement)
      identified in the attached Servicer's Certificate as "Purchased Receivables,"
      which are to be purchased by the Servicer pursuant to Section 4.7 of the
      Agreement, and all security and documents relating thereto.

     

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

    _________________________________________________________________

     

    
      
        
        

      

      
        A-2-1

        
          

        

      

       

    


    EXHIBIT
      B-1

     

    SERVICER'S
      CERTIFICATE

    LONG
      BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2007-A 

    5.335%
      ASSET-BACKED NOTES, CLASS A-1

    5.150%
      ASSET-BACKED NOTES, CLASS A-2

    4.972%
      ASSET-BACKED NOTES, CLASS A-3

    5.025%
      ASSET-BACKED NOTES, CLASS A-4

     

    
      
        
        

      

      
        B-1-1

        
          

        

      

       

    


    EXHIBIT
      B-2

     

    Form
      of
      Loan Master File Layout

     

    



    
      
        
        

      

      
        B-2-1

        
          

        

      

      
        
        

      

    


    EXHIBIT
      C

     

    Intentionally
      Omitted

     

    
      
        
        

      

      
        C-1

        
          

        

      

       

    


    EXHIBIT
      D

    
PAYMENT
      DEFERMENT POLICY

     

    A.
      Loss Mitigation Program

     

    This
      program, which involves temporary payment modifications, is intended to assist
      Obligors who are experiencing temporary financial hardships that would otherwise
      lead to voluntary surrenders of their vehicles and resulting losses to LBAC.
      In
      order to be eligible for this program, an Obligor must first have indicated
      an
      intent to surrender his or her vehicle. LBAC will determine individual Obligor
      eligibility for and the viability of this program as an effective loss
      mitigation option on a case-by-case basis. Any arrangement between an Obligor
      and LBAC for a temporary payment modification under this program must be
      approved by LBAC’s President or an Executive Vice President.

     

    
      	 	
              ·

            	
              LBAC
                may agree to a temporary payment modification, provided that the
                modified
                payment amount may not be less than 60% of the contractual payment
                amount.
                The contractual interest rate of the Receivable must remain unchanged.
                

            


    

     

    
      	 	
              ·

            	
              The
                total number of payments modified may not exceed 9 over the entire
                term of
                the Receivable.

            


    

     

    
      	 	
              ·

            	
              The
                terms of any payment modification must be set forth in a written
                modification agreement between the Obligor and LBAC, and the agreement
                must be included in the Legal File for the
                Receivable.

            


    

     

    
      	 	
              ·

            	
              The
                modification agreement must specify that contractual arrearages resulting
                from the payment modification will be satisfied by the Obligor either
                by
                making a balloon payment due on the maturity date of the Receivable
                or by
                making additional payments following the maturity date, resulting
                in a
                term extension, provided that any term extension may not exceed 6
                months
                beyond the current maturity date of the
                Receivable.

            


    

     

    
      	 	
              ·

            	
              Prior
                to allowing any payment modification under this program, LBAC must
                conduct
                a financial analysis of each candidate to determine whether there
                is a
                reasonable probability that the Obligor will satisfy the terms and
                conditions of the arrangement and that the Receivable will be viable
                at
                the expiration of the payment modification
                period.

            


    

     

    
      	 	
              ·

            	
              No
                deferments or due date adjustments may be granted during the modification
                period.

            


    

     

    
      	 	
              ·

            	
              Payment
                modification arrangements which do not meet the above criteria may
                be
                agreed to on an exception basis by LBAC’s President or an Executive Vice
                President.

            


    

     

    
      	 	
              ·

            	
              As
                of March 1, 2007, and the first day of each calendar month thereafter,
                the
                aggregate number of Receivables the terms of which are currently
                modified
                under this program may not exceed one - half of one percent (0.5%)
                of the
                number of Receivables transferred as of the Closing Date.
                

            


    

     

    
      
        
        

      

      
        D-1

        
          

        

      

      
        
        

      

    

     

    B.
      General Payment Deferment Policy

     

    In
      addition to its Loss Mitigation Program, LBAC may defer certain payments under
      the following conditions and circumstances.

     

    
      	
              ·

            	
              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, an Executive Vice
                President or a Regional Manager).

            


    

     

    
      	
              ·

            	
              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.

            


    

     

    
      	
              ·

            	
              The
                aggregate of all deferment periods during the term of a Receivable
                may not
                exceed the lesser of 8 months or 50% of the weighted average life
                of the
                original term of the Receivable (including deferments granted both
                before
                and after the related Cutoff Date).

            


    

     

    
      	
              ·

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

            


    

     

    
      	
              ·

            	
              A
                request for a deferment must be made in
                writing.

            


    

     

    
      	
              ·

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

            


    

     

    
      	
              ·

            	
              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.

            


    

     

    
      	
              ·

            	
              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.

            


    

     

    
      	
              ·

            	
              As
                of July 1, 2007, 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.

            


    

     

    
      	
              ·

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

            


    

     

    
      
        
        

      

      
        D-2

        
          

        

      

       

    


    DUE
      DATE CHANGE POLICY

     

    In
      addition to its Payment Deferment Policy, LBAC may grant due date changes under
      the following conditions and circumstances.

     

    
      	
              ·

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

            


    

     

    
      	
              ·

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

            


    

     

    
      	
              ·

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

            


    

     

    
      	
              ·

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

            


    

     

    
      	
              ·

            	
              The
                account must be current at the time the request is
                granted.

            


    

     

    
      	
              ·

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

            


    

     

    
      	
              ·

            	
              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-3

        
          

        

      

      
        
        

      

    



    EXHIBIT
      E

     

    Documentation
      Checklist

     

    CUSTOMER:__________________________________________________________________________________

     

    ACCOUNT
      NUMBER:___________________________________________________________________________

     

    This
      funding package contains the following initialed items:

    

      
        	 	
                1.

              	
                Installment
                  contract with proper authentications and Dealer
                  endorsements

              	 	
                1.
                  _________________

              
	 	 	 	 	 
	 	
                2.

              	
                Copy
                  of authenticated credit application

              	 	
                2.
                  _________________

              
	 	 	 	 	 
	 	
                3.

              	
                References
                  as described in the Program Guidelines

              	 	
                3.
                  _________________

              
	 	 	 	 	 
	 	
                4.

              	
                Proof
                  of income as described in the Program Guidelines

              	 	
                4.
                  _________________

              
	 	 	 	 	 
	 	
                5.

              	
                Title
                  information (application and copy of existing title, receipt of
                  registration, or title copy already received) with lien notation
                  thereon,
                  or Dealer Title Guaranty

              	 	
                5.
                  _________________

              
	 	 	 	 	 
	 	
                6.

              	
                Invoice
                  or copy of computer screen printout showing NADA value, NADA book
                  page,
                  Kelley printout or Kelley Blue Book page

              	 	
                6.
                  _________________

              
	 	 	 	 	 
	 	
                7.

              	
                In
                  the case of a used Financed Vehicle, odometer statement (if not
                  on title
                  info)

              	 	
                7.
                  _________________

              
	 	 	 	 	 
	 	
                8.

              	
                Agreement
                  to provide insurance and verification paper or other documentation
                  allowable under the definition of “Legal Files.”

              	 	
                8.
                  _________________

              
	 	 	 	 	 
	 	
                9.

              	
                Service
                  contract or warranty papers

              	 	
                10.
                  ________________

              
	 	 	 	 	 
	 	
                10.

              	
                Life,
                  accident, health and GAP insurance policy copies, as
                  applicable

              	 	
                11.
                  ________________

              
	 	 	 	 	 
	 	
                11.

              	
                Authenticated
                  purchase order from dealer to customer

              	 	
                12.
                  ________________

              


      

    

     

    
      
        
        

      

      
        E-1

        
          

        

      

      
        
        

      

    


    EXHIBIT
      F 

    FORM
      OF
      TRANSFER AGREEMENT

     

    TRANSFER
      NO. __________ OF SUBSEQUENT RECEIVABLES, dated as of ___________, 200_, among
      LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2007-A, a Delaware statutory trust
      (the "Issuer"), LONG BEACH ACCEPTANCE RECEIVABLES CORP., a Delaware corporation
      (the "Transferor"), LONG BEACH ACCEPTANCE CORP., a Delaware corporation ("LBAC"
      or the "Originator"), LONG BEACH ACCEPTANCE RECEIVABLES CORP. WAREHOUSE I
      ("LBARC-WI") and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
      association (the "Trust Collateral Agent), as back-up servicer and trust
      collateral agent pursuant to the Sale and Servicing Agreement referred to
      below.

     

    WITNESSETH:

     

    WHEREAS,
      LBAC, the Transferor, the Issuer and the Trust Collateral Agent are parties
      to
      the Sale and Servicing Agreement, dated as of March 1, 2007 (the "Sale and
      Servicing Agreement");

     

    WHEREAS,
      LBAC, LBARC-WI and the Transferor are parties to the Purchase Agreement, dated
      as of March 1, 2007 (the "Purchase Agreement");

     

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

     

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

     

    NOW,
      THEREFORE, the Issuer, the Transferor, the Trust Collateral Agent, LBARC-WI
      and
      LBAC hereby agree as follows:

     

    Section
      1. Defined
      Terms.
      Capitalized
      terms used herein that are not otherwise defined shall have the meanings
      ascribed thereto in the Sale and Servicing Agreement.

     

    "Agreement"
      means this Transfer Agreement and all amendments hereof and supplements
      hereto.

     

    "Subsequent
      Cutoff Date" means, with respect to each Subsequent Receivable conveyed hereby,
      the later of (i) the date of origination of such Subsequent Receivable or (ii)
      the close of business of the last day of the calendar month immediately
      preceding the Subsequent Transfer Date, which date is
      _______________.

     

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

     

    "Subsequent
      Receivables Purchase Price" means $__________.

     

    
      
        
        

      

      
        F-1

        
          

        

      

      
        
        

      

    

     

    "Subsequent
      Spread Account Deposit" means $__________.

     

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

     

    "Subsequent
      Transferred Property" shall have the meaning specified in Section 2.3(a) of
      the
      Purchase Agreement.

     

    Section
      2. Schedule
      of Subsequent Receivables.
      Annexed
      hereto as Schedule A is a supplement to the Schedule of Receivables listing
      the
      Subsequent Receivables to be conveyed by the Transferor to the Issuer pursuant
      to this Agreement and the Sale and Servicing Agreement on the Subsequent
      Transfer Date.

     

    Section
      3. Conveyance
      of Subsequent Receivables.
      Subject
      to the conditions set forth in Section 5 hereof, in consideration of the payment
      of the Subsequent Receivables Purchase Price to or upon the written order of
      the
      Transferor, the Transferor does hereby sell, transfer, assign, set over and
      otherwise convey to the Issuer, in trust for the benefit of the Noteholders
      and
      the Note Insurer, without recourse, all right, title and interest of the
      Transferor in and to:

     

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

     

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

     

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

     

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

     

    (5) this
      Agreement and the Purchase Agreement, including, without limitation, a direct
      right to cause LBAC to purchase Subsequent Receivables from the Trust upon
      the
      occurrence of a breach of any of the representations and warranties contained
      in
      Section 4 of this Agreement or the failure of LBAC to timely comply with its
      obligations pursuant to Section 5.5 of the Purchase Agreement;

     

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

     

    
      
        
        

      

      
        F-2

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

    Section
      4. Representations
      and Warranties of the Originator.
      The
      Originator makes the following representations and warranties as to the
      Subsequent Receivables and the other Transferred Property relating thereto
      on
      which the Transferor relies in accepting the Subsequent Receivables and the
      other Transferred Property relating thereto and on which the Note Insurer will
      rely in issuing the Policy. Such representations and warranties speak as of
      the
      execution and delivery of this Agreement, but shall survive the sale, transfer,
      and assignment of the Subsequent Receivables and the other Transferred Property
      relating thereto to the Transferor and the subsequent assignment and transfer
      pursuant to the Sale and Servicing Agreement:

     

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

     

    (2) Principal
      Balance/Number of Contracts.
      As of
      the Subsequent Cutoff Date, the total aggregate Principal Balance of the
      Subsequent Receivables was $_______________. The Subsequent Receivables are
      evidenced by _______ retail installment sale contracts.

     

    (3) Maturity
      of Subsequent Receivables.
      Each
      Subsequent Receivable has an original term to maturity of not less than [__]
      months and not more than [__] months; the weighted average original term to
      maturity of the Subsequent Receivables is [___] months as of the Subsequent
      Cutoff Date; the remaining term to maturity of each Subsequent Receivable was
      __
      months or less as of the Subsequent Cutoff Date; the weighted average remaining
      term to maturity of the Subsequent Receivables was [___] months as of the
      Subsequent Cutoff Date.

     

    
      
        
        

      

      
        F-3

        
          

        

      

      
        
        

      

    

     

    (4) Characteristics
      of Subsequent Receivables.
      (A)
      Each Subsequent Receivable (1) has been originated in the United States of
      America by a Dealer for the retail sale of a Financed Vehicle in the ordinary
      course of such Dealer's business, such Dealer had all necessary licenses and
      permits to originate such Subsequent Receivables in the State where such Dealer
      was located, has been fully and properly executed by the parties thereto and
      has
      been purchased by LBAC from such Dealer under an existing Dealer Agreement
      with
      LBAC, in connection with the sale of Financed Vehicles by the Dealers, and
      was
      validly assigned by such Dealer to LBAC in accordance with its terms,
      (2) has created a valid, subsisting and enforceable first priority security
      interest in favor of LBAC in the Financed Vehicle, which security interest
      is
      assignable and has been validly assigned by LBAC to the Transferor (or, in
      the
      case of the LBARC-WI Receivables, by LBAC to LBARC-WI and subsequently by
      LBARC-WI to the Transferor), which in turn has been validly pledged by the
      Transferor to the Trust pursuant to the Sale and Servicing Agreement, which
      in
      turn has been validly assigned by the Issuer to the Indenture Trustee pursuant
      to the Indenture, (3) contains customary and enforceable provisions such
      that the rights and remedies of the holder or assignee thereof shall be adequate
      for realization against the collateral of the benefits of the security,
      (4) provides for level monthly payments that fully amortize the Amount
      Financed over the original term (except for the first or last payment, which
      may
      be minimally different from the level payment) and yield interest at the Annual
      Percentage Rate, (5) has an Annual Percentage Rate of not less than ____%,
      (6) in the case of a Subsequent Receivable that is a Precomputed
      Receivable, in the event that such Subsequent Receivable is prepaid, provides
      for a prepayment that fully pays the Principal Balance and includes, unless
      prohibited by applicable law, a full month's interest, in the month of
      prepayment, at the Annual Percentage Rate, (7) is a Precomputed Receivable
      or a
      Simple Interest Receivable, and (8) was originated by a Dealer to an Obligor
      and
      was sold by the Dealer to LBAC without any fraud or misrepresentation on the
      part of such Dealer or on the part of the Obligor; and (B) approximately [
      ]% of
      the aggregate Principal Balance of the Subsequent Receivables, constituting
      [ ]%
      of the number of contracts, as of the Subsequent Cutoff Date, represents
      financing of used automobiles, vans, sport utility vehicles or light duty
      trucks; the remainder of the Subsequent Receivables represent financing of
      new
      automobiles, vans, sport utility vehicles or light duty trucks; approximately
      [
      ]% of the aggregate Principal Balance of the Subsequent Receivables as of the
      Subsequent Cutoff Date were originated under the LBAC Premium program;
      approximately [ ]% of the aggregate Principal Balance of the Subsequent
      Receivables as of the Subsequent Cutoff Date were originated under the LBAC
      Elite program; approximately [ ] of the aggregate Principal Balance of the
      Subsequent Receivables as of the Subsequent Cutoff Date were originated under
      the LBAC Superior program; approximately [ ]% of the aggregate Principal Balance
      of the Subsequent Receivables as of the Subsequent Cutoff Date were originated
      under the LBAC Preferred program; approximately [ ]% of the aggregate Principal
      Balance of the Subsequent Receivables as of the Subsequent Cutoff Date were
      originated under the LBAC Classic program; no Subsequent Receivable shall have
      a
      payment that is more than 29 days overdue (calculated on the basis of a 360-day
      year of twelve 30-day months) as of the Subsequent Cutoff Date; [ ]% of the
      Subsequent Receivables are Precomputed Receivables and [ ]% of the Subsequent
      Receivables are Simple Interest Receivables; each Subsequent Receivable shall
      have a final scheduled payment due no later than _____________, 200__; and
      each
      Subsequent Receivable was originated on or before the Subsequent Cutoff
      Date.

     

    (5) Scheduled
      Payments.
      Each
      Subsequent Receivable had an original Principal Balance of not less than $______
      nor more than $__________, has an outstanding Principal Balance as of the
      Subsequent Cutoff Date of not less than $_______ and not more than $__________
      and has a first Scheduled Payment due, in the case of Precomputed Receivables,
      or a scheduled due date, in the case of Simple Interest Receivables, on or
      prior
      to ____________, ____.

     

    
      
        
        

      

      
        F-4

        
          

        

      

      
        
        

      

    

     

    (6) No
      Bankruptcies.
      No
      Obligor was bankrupt at the time of origination of the related Subsequent
      Receivable and no Obligor on any Subsequent Receivable as of the Subsequent
      Cutoff Date was noted in the related Receivable File as having filed for
      bankruptcy since origination of the Subsequent Receivable and neither
      discharged, dismissed nor reaffirmed.

     

    (7) Origination
      of Subsequent Receivables.
      Based
      on the location of the Dealers and the Principal Balances as of the Subsequent
      Cutoff Date, approximately [ ]% of the Subsequent Receivables were originated
      in
      California and the remaining [ ]% of the Subsequent Receivables were originated
      in other States.

     

    (8) Lockbox.
      Prior
      to the Subsequent Transfer Date, the Transferor will notify each Obligor to
      make
      payments with respect to its respective Subsequent Receivable after the
      Subsequent Cutoff Date directly to the Lockbox, and will provide each Obligor
      with a monthly statement in order to enable such Obligor to make payments
      directly to the Lockbox.

     

    (9) Location
      of Legal Files; One Original.
      A
      complete Legal File with respect to each Subsequent Receivable is in the
      possession of the Custodian at the location listed in the Custodial Agreement.
      There is only one original executed copy of each Subsequent Receivable. The
      Custodian has stamped each Subsequent Receivable to state that "This contract
      has been sold or pledged to "Secured Party" identified on the attached allonge
      (deemed a part hereof). Do not accept delivery of this contract in violation
      of
      the rights of the "Secured Party. " The Custodian has attached an allonge to
      each Subsequent Receivable specifying the contract to which it relates by date,
      name of seller and name of customer and indicating that such contract is subject
      to a security interest in favor of the Indenture Trustee. The foregoing stamp,
      together with the allonge, is effective under the provisions of the UCC to
      give
      notice to third party purchasers, including "bona fide purchasers for value"
      that the Indenture Trustee has a security interest in such Subsequent Receivable
      and such third party's attempt to claim an interest in such Subsequent
      Receivable would violate the Indenture Trustee’s rights therein.

     

    (10) Schedule
      of Subsequent Receivables; Selection Procedures.
      The
      information with respect to the Subsequent Receivables set forth in the Schedule
      A to this Agreement is true and correct in all material respects as of the
      close
      of business on the Subsequent Cutoff Date and the Subsequent Transfer Date,
      and
      no selection procedures adverse to the Trust, the Noteholders or to the Note
      Insurer have been utilized in selecting the Subsequent Receivables. The computer
      tape or other listing regarding the Subsequent Receivables made available to
      the
      Transferor and its assigns is true and correct as of the Subsequent Cutoff
      Date
      and the Subsequent Transfer Date in all respects. By the Subsequent Transfer
      Date, LBAC will have caused the portions of LBAC's servicing records relating
      to
      the Subsequent Receivables to be clearly and unambiguously marked to show that
      the Subsequent Receivables constitute part of the Trust Assets and are owned
      by
      the Trust in accordance with the terms of the Sale and Servicing
      Agreement.

     

    
      
        
        

      

      
        F-5

        
          

        

      

      
        
        

      

    

     

    (11) Compliance
      with Law.
      Each
      Subsequent Receivable, the sale of the Financed Vehicle and the sale of any
      physical damage, credit life and credit accident and health insurance and any
      extended service contracts complied at the time the related Subsequent
      Receivable was originated or made and at the execution of this Agreement
      complies in all material respects with all requirements of applicable Federal,
      State and local laws, and regulations thereunder including, without limitation,
      usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity
      Act,
      the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
      Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal
      Reserve Board's Regulations B and Z (including amendments to the Federal
      Reserve's Official Staff Commentary to Regulation Z effective October 1, 1998
      concerning negative equity loans), the Servicemembers Civil Relief Act, the
      California Automobile Sales Finance Act, and state adaptations of the National
      Consumer Act and of the Uniform Consumer Credit Code, and all other applicable
      consumer credit laws and equal credit opportunity and disclosure
      laws.

     

    (12) Binding
      Obligation.
      Each
      Subsequent Receivable represents the genuine, legal, valid and binding payment
      obligation in writing of the Obligor, enforceable by the holder thereof in
      accordance with its terms, except only as such enforcement may be limited by
      bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
      rights generally and all parties to each Subsequent Receivable had full legal
      capacity to execute and deliver such Subsequent Receivable and all other
      documents related thereto and to grant the security interest purported to be
      granted thereby.

     

    (13) No
      Government, Corporate or Fleet Obligor.
      None of
      the Subsequent Receivables is due from the United States of America or any
      State
      or from any agency, department, or instrumentality of the United States of
      America or any State. All of the Subsequent Receivables are due from Obligors
      who are natural persons or, if any Obligor is not a natural person, (a) such
      entity is an obligor with respect to five or fewer Financed Vehicles and (b)
      the
      related Subsequent Receivable or Subsequent Receivables have the benefit of
      the
      personal guaranty of a natural person or persons. No Subsequent Receivable
      has
      been included in a "fleet" sale (i.e., a sale to any single Obligor of more
      than
      five Financed Vehicles).

     

    (14) Security
      Interest in Financed Vehicle.
      Immediately prior to the sale, assignment, and transfer thereof, each Subsequent
      Receivable shall be secured by a validly perfected first priority security
      interest in the Financed Vehicle in favor of LBAC as secured party, and such
      security interest is prior to all other liens upon and security interests in
      such Financed Vehicle which now exist or may hereafter arise or be created
      (except, as to priority, for any lien for taxes, labor or materials affecting
      such Financed Vehicle arising subsequent to the Subsequent Transfer Date),
      and
      either (i) all necessary and appropriate actions have been taken that would
      result in the valid perfection of a first priority security interest in the
      Financed Vehicle in favor of LBAC as secured party, and the Lien Certificate
      for
      each Financed Vehicle shows, or if a new or replacement Lien Certificate is
      being applied for such new or replacement Lien Certificate will be received
      within 150 days of the Subsequent Transfer Date and will show LBAC named as
      the
      original secured party under any such Subsequent Receivable and the holder
      of a
      first priority security interest in such Financed Vehicle, or (ii) a Dealer
      Title Guaranty has been obtained with respect to such Financed Vehicle. With
      respect to each Subsequent Receivable for which the Lien Certificate has not
      yet
      been submitted to, or returned from, the Registrar of Titles, LBAC has received
      either (i) written evidence from the related Dealer that such Lien Certificate
      showing LBAC as the first lienholder has been applied for or (ii) a Dealer
      Title
      Guaranty with respect to such Financed Vehicle. Immediately after the sale,
      transfer and assignment thereof to the Trust, each Subsequent Receivable will
      be
      secured by an enforceable first priority security interest in the Financed
      Vehicle in favor of the Trust as secured party, which security interest is
      prior
      to all other liens upon and security interests in such Financed Vehicle which
      now exist or may hereafter arise or be created (except, as to priority, for
      the
      lien of the Indenture and for any lien for taxes, labor or materials affecting
      such Financed Vehicle arising subsequent to the Subsequent Transfer
      Date).

     

    
      
        
        

      

      
        F-6

        
          

        

      

      
        
        

      

    

     

    (15) Subsequent
      Receivables in Force.
      No
      Subsequent Receivable has been satisfied, subordinated or rescinded, nor has
      any
      Financed Vehicle been released from the lien granted by the related Subsequent
      Receivable in whole or in part. No provisions of any Subsequent Receivable
      have
      been waived, altered, amended or modified in any respect since its origination,
      except by instruments or documents identified in the related Legal File on
      the
      Subsequent Transfer Date. 

     

    (16) No
      Waiver.
      No
      provision of a Subsequent Receivable has been waived.

     

    (17) No
      Amendments.
      No
      Subsequent Receivable has been amended except to the extent reflected in the
      related Legal File on the Subsequent Transfer Date.

     

    (18) Monthly
      Dealer Participation Fee Receivables.
      [None
      of the Subsequent Receivables are of Monthly Dealer Participation Fee
      Receivables].

     

    (19) No
      Defenses.
      As of
      the Subsequent Transfer Date, no right of rescission, setoff, counterclaim
      or
      defense exists or has been asserted or threatened with respect to any Subsequent
      Receivable. The operation of the terms of any Subsequent Receivable or the
      exercise of any right thereunder will not render such Subsequent Receivable
      unenforceable in whole or in part or subject to any such right of rescission,
      setoff, counterclaim or defense.

     

    (20) No
      Liens.
      As of
      the Subsequent Transfer Date, there are no liens or claims existing or which
      have been filed for work, labor, storage, materials or taxes relating to a
      Financed Vehicle that shall be liens prior to, or equal or coordinate with,
      the
      security interest in the Financed Vehicle granted by the Subsequent
      Receivable.

     

    (21) No
      Default; Repossession.
      Except
      for payment delinquencies continuing for a period of not more than twenty-nine
      days (calculated on the basis of a 360-day year of twelve 30-day months), as
      of
      the Subsequent Cutoff Date, no default, breach, violation or event permitting
      acceleration under the terms of any Subsequent Receivable has occurred and
      not
      been cured; and no continuing condition that with notice or the lapse of time
      would constitute a default, breach, violation, or event permitting acceleration
      under the terms of any Subsequent Receivable has arisen; and LBAC shall not
      waive and has not waived any of the foregoing; and no Financed Vehicle shall
      have been repossessed as of the Subsequent Cutoff Date.

     

    
      
        
        

      

      
        F-7

        
          

        

      

      
        
        

      

    

     

    
      (22) Insurance;
        Other.
        (A)
        Each Obligor has obtained insurance covering the Financed Vehicle as of the
        execution of the Subsequent Receivable insuring against loss and damage due
        to
        fire, theft, transportation, collision and other risks generally covered
        by
        comprehensive and collision coverage which is in an amount at least equal
        to the
        lesser of (x) its maximum insurable value or (y) the principal amount due
        from
        the Obligor under the related Subsequent Receivable and names LBAC and its
        successors and assigns as loss payee and each Subsequent Receivable requires
        the
        Obligor to obtain and maintain such insurance naming LBAC and its successors
        and
        assigns as an additional insured, (B) each Subsequent Receivable that finances
        the cost of premiums for credit life and credit accident or health insurance
        is
        covered by an insurance policy and certificate of insurance naming LBAC as
        policyholder (creditor) under each such insurance policy and certificate
        of
        insurance and (C) as to each Subsequent Receivable that finances the cost
        of an
        extended service contract, the respective Financed Vehicle which secures
        the
        Subsequent Receivable is covered by an extended service contract.

       

    

    (23) Title.
      It is
      the intention of each Seller that the transfer and assignment of the Subsequent
      Receivables contemplated in the Purchase Agreement constitute a sale of the
      Subsequent Receivables from such Seller to the Transferor and that the
      beneficial interest in and title to such Subsequent Receivables not be part
      of
      the debtor's estate in the event of the filing of a bankruptcy petition by
      or
      against LBAC or LBARC-WI, as applicable, under any bankruptcy law. No Subsequent
      Receivable has been sold, transferred, assigned, or pledged by LBAC or LBARC-WI,
      as applicable, to any Person other than the Transferor or by the Transferor
      to
      any Person other than the Trust except with respect to any such pledge that
      has
      been released on or prior to the Subsequent Transfer Date. Immediately prior
      to
      the transfer and assignment of the Subsequent Receivables contemplated in the
      Purchase Agreement, LBAC or LBARC-WI, as applicable, had good and marketable
      title to each Subsequent Receivable, and was the sole owner thereof, free and
      clear of all Liens, claims, encumbrances, security interests, and rights of
      others and, immediately upon the transfer thereof, the Transferor shall have
      good and marketable title to each such Subsequent Receivable, and will be the
      sole owner thereof, free and clear of all Liens, encumbrances, security
      interests, and rights of others other than the Lien of the Indenture, and each
      such transfer has been perfected under the UCC. Immediately prior to the
      transfer and assignment by the Transferor to the Trust contemplated by this
      Agreement and the Sale and Servicing Agreement, the Transferor shall have good
      and marketable title to each Subsequent Receivable, and shall be the sole owner
      thereof, free and clear of all Liens, claims, encumbrances, security interests,
      and rights of others other than the Lien of the Indenture and, immediately
      upon
      the transfer thereof pursuant to this Agreement and the Sale and Servicing
      Agreement, the Trust shall have good and marketable title to each such
      Subsequent Receivable, and will be the sole owner thereof, free and clear of
      all
      Liens, encumbrances, security interests and rights of others other than the
      Lien
      of the Indenture, and each such transfer has been perfected under the UCC.
      Immediately prior to the pledge by the Issuer to the Indenture Trustee
      contemplated by the Indenture, the Issuer shall have good and marketable title
      to each Subsequent Receivable, and shall be the sole owner thereof, free and
      clear of all Liens, claims, encumbrances, security interests, and rights of
      others and such pledge has been perfected under the UCC. Without limiting the
      generality of the foregoing, no Dealer has any right, title or interest in
      respect of any Subsequent Receivable. None of the Transferor, LBAC or LBARC-WI
      has taken any action to convey any right to any Person that would result in
      such
      Person having a right to payments received under any insurance policies related
      to the Subsequent Receivables or the Financed Vehicles or the related Dealer
      Agreements or to payments due under such Subsequent Receivables.

     

    
      
        
        

      

      
        F-8

        
          

        

      

      
        
        

      

    

     

    (24) Lawful
      Assignment.
      No
      Subsequent Receivable has been originated in, or is subject to the laws of,
      any
      jurisdiction under which the sale, transfer, and assignment of such Subsequent
      Receivable under the Purchase Agreement, this Agreement or the other Basic
      Documents shall be unlawful, void, voidable or shall render such Receivable
      unenforceable in any respect or subject to rescission. Neither Seller has
      entered into any agreement with any account debtor that prohibits, restricts
      or
      conditions the assignment of any portion of the Subsequent
      Receivables.

     

    (25) All
      Filings Made.
      All
      filings (including, without limitation, UCC filings) necessary in any
      jurisdiction to give the Indenture Trustee a first priority perfected security
      interest in the Subsequent Receivables and the proceeds thereof and the other
      Transferred Property (other than the Financed Vehicles) have been
      made.

     

    (26) Chattel
      Paper.
      Each
      Subsequent Receivable (A) constitutes "tangible chattel paper" under the UCC
      and
      (B) shall be maintained in its original "tangible" form, unless the Note Insurer
      has consented in writing to such chattel paper being maintained in another
      form
      or medium.

     

    (27) Valid
      and Binding Obligation of Obligor.
      Each
      Subsequent Receivable is the legal, valid and binding obligation of the Obligor
      thereunder and is enforceable in accordance with its terms, except only as
      such
      enforcement may be limited by bankruptcy, insolvency or similar laws affecting
      the enforcement of creditors' rights generally, and all parties to such contract
      had full legal capacity to execute and deliver such contract and all other
      documents related thereto and to grant the security interest purported to be
      granted thereby.

     

    (28) Tax
      Liens.
      As of
      the Subsequent Transfer Date, there is no lien or claims existing or which
      have
      been filed against the related Financed Vehicle for delinquent
      taxes.

     

    (29) Title
      Documents.
      (A) If
      a Subsequent Receivable was originated in a State in which notation of security
      interest on the title document of the related Financed Vehicle is required
      or
      permitted to perfect such security interest, the title document for such
      Subsequent Receivable shows, or if a new or replacement title document is being
      applied for with respect to such Financed Vehicle, the title document will
      be
      received within 150 days following the Subsequent Transfer Date and will show,
      LBAC named as the secured party under the related Subsequent Receivable as
      the
      holder of a first priority security interest in such Financed Vehicle and (B)
      if
      the Subsequent Receivable was originated in a State in which the filing of
      a
      financing statement under the UCC is required to perfect a security interest
      in
      motor vehicles, such filings or recordings have been duly made and show LBAC
      or
      LBARC-WI, as applicable, named as the secured party under the related Subsequent
      Receivable, and in either case, the Issuer has the same rights as such secured
      party has or would have (if such secured party were still the owner of the
      Subsequent Receivable) against all parties claiming an interest in such Financed
      Vehicle. With respect to each Subsequent Receivable for which the relevant
      Dealer is temporarily unable to furnish either an original Lien Certificate
      or
      satisfactory evidence that the appropriate lien has been recorded on the related
      certificate of title or documentation has been submitted to the appropriate
      state motor vehicle authority to record such lien on such certificate of title,
      LBAC has received the related Dealer Title Guaranty.

     

    
      
        
        

      

      
        F-9

        
          

        

      

      
        
        

      

    

     

    (30) Casualty.
      As of
      the Subsequent Cutoff Date, no Financed Vehicle related to a Subsequent
      Receivable has suffered a Casualty.

     

    (31) Obligation
      to Dealers or Others.
      The
      Transferor and its assignees will assume no obligation to Dealers or other
      originators or holders of the Subsequent Receivables (including, but not limited
      to under dealer reserves) as a result of its purchase of the Subsequent
      Receivables.

     

    (32) Full
      Amount Financed Advanced.
      The
      full Amount Financed of each Subsequent Receivable has been advanced to or
      on
      behalf of each Obligor, and there are no requirements for future advances
      thereunder. The Obligor with respect to the Subsequent Receivable does not
      have
      any option under the Subsequent Receivable to borrow from any person additional
      funds secured by the Financed Vehicle.

     

    (33) No
      Impairment.
      Neither
      of the Sellers nor the Transferor has done anything to convey any right to
      any
      Person that would result in such Person having a right to payments due under
      the
      Subsequent Receivables or otherwise to impair the rights of the Issuer, the
      Noteholders, the Certificateholder or the Note Insurer in any Subsequent
      Receivable or the proceeds thereof.

     

    (34) Subsequent
      Receivables Not Assumable.
      No
      Subsequent Receivable is assumable by another Person in a manner which would
      release the Obligor thereof from such Obligor's obligations to the Transferor,
      LBAC or LBARC-WI with respect to such Subsequent Receivable.

     

    (35) Servicing.
      The
      servicing of each Subsequent Receivable and the collection practices relating
      thereto have been lawful and in accordance with the standards set forth in
      the
      Sale and Servicing Agreement; other than LBAC and any Back-up Servicer
      arrangement that has been entered into, no other person has the right to service
      any Subsequent Receivable.

     

    (36) Illinois
      Subsequent Receivables.
      (a)
      Neither Seller owns a substantial interest in the business of a Dealer within
      the meaning of Illinois Sales Finance Agency Act Rules and Regulations, Section
      160.230(l) and (b) with respect to each Subsequent Receivable originated in
      the
      State of Illinois, (i) the printed or typed portion of the related Form of
      Subsequent Receivable complies with the requirements of 815 ILCS 375/3(b) and
      (ii) neither Seller has, and for so long as such Subsequent Receivable is
      outstanding shall, place or cause to be placed on the related Financed Vehicle
      any collateral protection insurance in violation of 815 ILCS
      180/10.

     

    (37) California
      Subsequent Receivables.
      Each
      Subsequent Receivable originated in the State of California has been, and at
      all
      times during the term of the Sale and Servicing Agreement will be, serviced
      by
      the Servicer in compliance with Cal. Civil Code § 2981, et seq. Each Subsequent
      Receivable originated in the State of California dated on or after July 1,
      2006
      will be originated in compliance with the California Car Buyer's Bill of Rights
      (2005 Cal. Stat. Chp. 128).

     

    
      
        
        

      

      
        F-10

        
          

        

      

      
        
        

      

    

     

    (38) No
      Negative Amortization.
      The
      Payment Deferment and Due Date Change Policies, as set forth on Exhibit D to
      the
      Sale and Servicing Agreement, will not result in the negative amortization
      of
      any Subsequent Receivables modified in accordance with such Payment Deferment
      and Due Date Change Policies.

     

    Section
      5. Conditions
      Precedent.
      The
      obligation of the Issuer to acquire the Subsequent Receivables hereunder is
      subject to the satisfaction, on or prior to the Subsequent Transfer Date, of
      the
      following conditions precedent:

     

    (a) Representations
      and Warranties.
      (i)
      Each of the representations and warranties made by LBAC in Section 3.2 of the
      Purchase Agreement and Section 4 of this Agreement and (ii) each of the
      representations and warranties made by the Transferor in Section 3.1 of the
      Sale
      and Servicing Agreement and Section 3.1 of the Purchase Agreement, shall be
      true
      and correct as of the date of this Agreement and as of the Subsequent Transfer
      Date.

     

    (b) Sale
      and Servicing Agreement Conditions.
      Each of
      the conditions set forth in Section 2.2(b) to the Sale and Servicing Agreement
      shall have been satisfied.

     

    (c) Purchase
      Agreement Conditions.
      LBAC
      shall have complied with the requirements of Section 4.1 of the Purchase
      Agreement and shall have delivered all documents required to be delivered
      pursuant to Section 5.5 of the Purchase Agreement.

     

    (d) Security
      Interest Perfection.
      In
      connection with the conveyance contemplated by this Agreement, the Transferor
      agrees to record and file, at its own expense, a financing statement with
      respect to the Subsequent Receivables now existing and hereafter created for
      the
      sale of chattel paper (as defined in the UCC as in effect in the State of New
      Jersey) meeting the requirements of applicable state law in such manner as
      is
      sufficient to perfect the sale and assignment of such Subsequent Receivables
      to
      the Issuer, and the proceeds thereof (and any continuation statements as are
      required by applicable state law), and to deliver a file-stamped copy of each
      such financing statement (or continuation statement) or other evidence of such
      filings (which may, for purposes of this Section, consist of telephone
      confirmation of such filing with the file stamped copy of each such filing
      to be
      provided to the Trust Collateral Agent in due course), as soon as is practicable
      after the Transferor's receipt thereof.

     

    In
      connection with such conveyance, the Transferor further agrees, at its own
      expense, on or prior to the Subsequent Transfer Date (i) to annotate and
      indicate in its computer files that the Subsequent Receivables have been
      transferred to the Issuer pursuant to the Sale and Servicing Agreement and
      this
      Agreement and (ii) to deliver to the Trust Collateral Agent a computer file
      printed or microfiche list containing a true and complete list of all such
      Subsequent Receivables, identified by account number and by the Principal
      Balance of each Subsequent Receivable as of the Subsequent Cutoff Date.


     

    
      
        
        

      

      
        F-11

        
          

        

      

      
        
        

      

    

     

    (e) Additional
      Information.
      The
      Transferor shall have delivered or caused to be delivered to the Trust
      Collateral Agent on behalf of the Noteholders and the Note Insurer such
      information as was reasonably requested by the Issuer on behalf of the
      Noteholders or the Note Insurer to satisfy itself as to (i) the accuracy of
      the
      representations and warranties set forth in Section 4 of this Agreement and
      Section 7.1 of the Sale and Servicing Agreement and (ii) the satisfaction of
      the
      conditions set forth in this Section.

     

    (f) Deposits
      to Accounts.
      On or
      prior to the Subsequent Transfer Date, the Transferor shall deposit or cause
      to
      be deposited:

     

    (1)
      the
      Subsequent Spread Account Deposit into the Spread Account; and

     

    (2)
      $__________, which represents all monies received pursuant to clause (1) of
      Section 3 hereof (other than Liquidation Proceeds and Recoveries), into the
      Collection Account.

     

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

     

    Section
      7. Third
      Party Beneficiaries.
      Except
      as
      otherwise specifically provided herein with respect to Noteholders, the parties
      to this Agreement hereby manifest their intent that no third party other than
      the Note Insurer shall be deemed a third party beneficiary of this Agreement,
      and specifically that the Obligors are not third party beneficiaries of this
      Agreement. The Note Insurer and its successors and assigns shall be a
      third-party beneficiary to the provisions of this Agreement, and shall be
      entitled to rely upon and directly enforce the provisions of this Agreement
      so
      long as no Note Insurer Default shall have occurred and be continuing. Except
      as
      expressly stated otherwise herein or in the Basic Documents, any right of the
      Note Insurer to direct, appoint, consent to, approve of, or take any action
      under this Agreement, shall be a right exercised by the Note Insurer in its
      sole
      and absolute discretion. The Note Insurer may disclaim any of its rights and
      powers under this Agreement (but not its duties and obligations under the
      Policy) upon delivery of a written notice to the Trust Collateral
      Agent.

     

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

     

    Section
      9. Amendments.
      This
      Agreement may be amended from time to time by a written amendment duly executed
      and delivered by the Issuer, LBAC, LBARC-WI, the Transferor and the Trust
      Collateral Agent with the prior written consent of the Note
      Insurer.

     


    
      
        
        

      

      
        F-12

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Issuer, LBAC, LBARC-WI, the Transferor and the Trust
      Collateral Agent have caused this Agreement to be duly executed and delivered
      by
      their respective duly authorized officers as of the day and the year first
      above
      written.

     

    
      	 	 
	 	LONG
              BEACH
              ACCEPTANCE AUTO RECEIVABLES TRUST 2007-A, as Issuer
	 	 	 
	 	
              By: 
                Wilmington Trust Company, not in its individual capacity, but solely
                as
                Owner Trustee

            


    

     

    
      	 	 	 
	 	
              LONG
                BEACH ACCEPTANCE CORP.

            
	 
 	 
 	 
 
	
            	
              By:

            	
            
	 	
              
                
Name:

            
	 	
              Title:

            


    

     

    
      	 	 	 
	 	
              LONG
                BEACH ACCEPTANCE RECEIVABLES
                CORP. WAREHOUSE I

            
	 
 	 
 	 
 
	
            	
              By:

            	
            
	 	
              

              Name:

            
	 	
              Title:

            



      	 	 	 
	 	
              LONG
                BEACH ACCEPTANCE RECEIVABLES CORP.

            
	 
 	 
 	 
 
	
            	
              By:

            	
            
	 	
              

              Name:

            
	 	
              Title:

            


    

    


    
      	 	 	 
	 	
              WELLS
                FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity
                but
                solely as
                Trust Collateral Agent.

            
	 
 	 
 	 
 
	
            	
              By:

            	
            
	 	
              

              Name:

            
	 	
              Title:

            


    

    


    [Signature
      Page to the Sale and Servicing Agreement]

     

    
      
        
        

      

      
        F-13

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      A

     

    SCHEDULE
      OF RECEIVABLES

     

    
      
        
        

      

      
        Schedule
          A-1

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      B

     

    Location
      of Receivable Files

     

    One
      Mack
      Centre Drive

    Paramus,
      New Jersey 07652

    


    Location
      of Legal Files

    


    One
      Mack
      Centre Drive

    Paramus,
      New Jersey 07652

     

    
      
        
        

      

      
        Schedule
          B-1

        
          

        

      

      
        
        

      

    

    
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