Document:

Exhibit 4.1

                                                                  Execution Copy

               LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2006-B

                $100,000,000 5.37% Asset-Backed Notes, Class A-1
                $137,000,000 5.34% Asset-Backed Notes, Class A-2
                $147,000,000 5.17% Asset-Backed Notes, Class A-3
                $116,000,000 5.18% Asset-Backed Notes, Class A-4

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

                                    INDENTURE

                          Dated as of September 1, 2006

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

                      DEUTSCHE BANK TRUST COMPANY AMERICAS

                                Indenture Trustee

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

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I Definitions..........................................................3

     SECTION 1.1.   Definitions................................................3
     SECTION 1.2.   Incorporation by Reference of Trust Indenture Act..........3
     SECTION 1.3.   Rules of Construction......................................3

ARTICLE II The Notes...........................................................4

     SECTION 2.1.    Form......................................................4
     SECTION 2.2.    Execution, Authentication and Delivery....................4
     SECTION 2.3.    Temporary Notes...........................................5
     SECTION 2.4.    Registration; Registration of Transfer and Exchange.......5
     SECTION 2.5.    Mutilated, Destroyed, Lost or Stolen Notes................7
     SECTION 2.6.    Persons Deemed Owners.....................................8
     SECTION 2.7.    Access to List of Noteholders' Names and Addresses........8
     SECTION 2.8.    Maintenance of Office or Agency...........................9
     SECTION 2.9.    Payment of Principal and Interest; Defaulted Interest.....9
     SECTION 2.10.   Cancellation.............................................10

ARTICLE III Covenants.........................................................10

     SECTION 3.1.    Payment of Principal and Interest........................10
     SECTION 3.2.    Maintenance of Office or Agency..........................10
     SECTION 3.3.    Money for Payments to be Held in Trust...................10
     SECTION 3.4.    Existence................................................12
     SECTION 3.5.    Protection of Pledged Property...........................12
     SECTION 3.6.    Opinions as to Pledged Property..........................13
     SECTION 3.7.    Performance of Obligations; Servicing of Receivables.....13
     SECTION 3.8.    Negative Covenants.......................................14
     SECTION 3.9.    Annual Statement as to Compliance........................15
     SECTION 3.10.   Issuer May Consolidate, Etc. Only on Certain Terms.......15
     SECTION 3.11.   Successor or Transferee..................................17
     SECTION 3.12.   No Other Business........................................18
     SECTION 3.13.   No Borrowing.............................................18
     SECTION 3.14.   Servicer's Obligations...................................18
     SECTION 3.15.   Guarantees, Loans, Advances and Other Liabilities........18
     SECTION 3.16.   Capital Expenditures.....................................18
     SECTION 3.17.   Compliance with Laws.....................................18
     SECTION 3.18.   Restricted Payments......................................18
     SECTION 3.19.   Notice of Events of Default..............................19
     SECTION 3.20.   Further Instruments and Acts.............................19
     SECTION 3.21.   Income Tax Characterization..............................19

ARTICLE IV Satisfaction and Discharge.........................................19

     SECTION 4.1.    Satisfaction and Discharge of Indenture..................19

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     SECTION 4.2.    Application of Trust Money...............................20
     SECTION 4.3.    Repayment of Moneys Held by Note Paying Agent............20

ARTICLE V Remedies............................................................21

     SECTION 5.1.    Events of Default........................................21
     SECTION 5.2.    Rights Upon Event of Default.............................22
     SECTION 5.3.    Collection of Indebtedness and Suits for
                     Enforcement by Indenture Trustee.........................23
     SECTION 5.4.    Remedies.................................................25
     SECTION 5.5.    Optional Preservation of the Pledged Property............26
     SECTION 5.6.    Priorities...............................................27
     SECTION 5.7.    Limitation of Suits......................................28
     SECTION 5.8.    Unconditional Rights of Noteholders To Receive
                     Principal and Interest...................................29
     SECTION 5.9.    Restoration of Rights and Remedies.......................29
     SECTION 5.10.   Rights and Remedies Cumulative...........................29
     SECTION 5.11.   Delay or Omission Not a Waiver...........................29
     SECTION 5.12.   Control by Noteholders...................................30
     SECTION 5.13.   Waiver of Past Defaults..................................30
     SECTION 5.14.   Undertaking for Costs....................................30
     SECTION 5.15.   Waiver of Stay or Extension Laws.........................31
     SECTION 5.16.   Action on Notes..........................................31
     SECTION 5.17.   Performance and Enforcement of Certain Obligations.......31
     SECTION 5.18.   Subrogation..............................................32
     SECTION 5.19.   Preference Claims; Direction of Proceedings..............32

ARTICLE VI The Indenture Trustee..............................................33

     SECTION 6.1.    Duties of Indenture Trustee..............................33
     SECTION 6.2.    Rights of Indenture Trustee..............................36
     SECTION 6.3.    Individual Rights of Indenture Trustee...................37
     SECTION 6.4.    Indenture Trustee's Disclaimer...........................37
     SECTION 6.5.    Notice of Defaults.......................................38
     SECTION 6.6.    Reports by Indenture Trustee to Holders..................38
     SECTION 6.7.    Compensation and Indemnity...............................38
     SECTION 6.8.    Replacement of Indenture Trustee.........................39
     SECTION 6.9.    Successor Indenture Trustee by Merger....................41
     SECTION 6.10.   Appointment of Co-Trustee or Separate Trustee............41
     SECTION 6.11.   Eligibility..............................................42
     SECTION 6.12.   Preferential Collection of Claims Against Issuer.........43
     SECTION 6.13.   Representations and Warranties of the
                     Indenture Trustee........................................43
     SECTION 6.14.   Valid and Binding Indenture..............................43
     SECTION 6.15.   Waiver of Setoffs........................................43
     SECTION 6.16.   Control by the Controlling Party.........................43

                                       ii
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ARTICLE VII Noteholders' Lists and Communications.............................44

     SECTION 7.1.    Issuer To Furnish To Indenture Trustee Names
                     and Addresses of Noteholders.............................44
     SECTION 7.2.    Preservation of Information; Communications
                     to Noteholders...........................................44
     SECTION 7.3.    Reports by Issuer........................................44
     SECTION 7.4.    Reports by Indenture Trustee.............................45

ARTICLE VIII Collection of Money;  Releases...................................45

     SECTION 8.1.    Collection of Money......................................45
     SECTION 8.2.    Release of Pledged Property..............................45
     SECTION 8.3.    Opinion of Counsel.......................................46

ARTICLE IX Supplemental Indentures............................................46

     SECTION 9.1.    Supplemental Indentures Without Consent of Noteholders...46
     SECTION 9.2.    Supplemental Indentures with Consent of Noteholders......47
     SECTION 9.3.    Execution of Supplemental Indentures.....................49
     SECTION 9.4.    Effect of Supplemental Indenture.........................49
     SECTION 9.5.    Conformity With Trust Indenture Act......................49
     SECTION 9.6.    Reference in Notes to Supplemental Indentures............49

ARTICLE X Redemption of Notes.................................................49

     SECTION 10.1.   Redemption...............................................49
     SECTION 10.2.   Form of Redemption Notice................................50
     SECTION 10.3.   Notes Payable on Redemption Date.........................50

ARTICLE XI Miscellaneous......................................................51

     SECTION 11.1.   Compliance Certificates and Opinions, etc................51
     SECTION 11.2.   Form of Documents Delivered to Indenture Trustee.........52
     SECTION 11.3.   Acts of Noteholders......................................53
     SECTION 11.4.   Notices, etc., to Indenture Trustee, Issuer,
                     the Demand Note Provider and Rating Agencies.............54
     SECTION 11.5.   Notices to Noteholders; Waiver...........................55
     SECTION 11.6.   Conflict with Trust Indenture Act........................55
     SECTION 11.7.   Effect of Headings and Table of Contents.................56
     SECTION 11.8.   Successors and Assigns...................................56
     SECTION 11.9.   Separability.............................................56
     SECTION 11.10.  Benefits of Indenture....................................56
     SECTION 11.11.  Legal Holidays...........................................56
     SECTION 11.12.  GOVERNING LAW............................................56
     SECTION 11.13.  Counterparts.............................................56
     SECTION 11.14.  Recording of Indenture...................................56
     SECTION 11.15.  Trust Obligation.........................................57
     SECTION 11.16.  No Petition..............................................58
     SECTION 11.17.  Inspection...............................................58

                                       iii
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     SECTION 11.18.  Rights of Note Insurer as Controlling Party..............58
     SECTION 11.19.  Effect of Policy Expiration Date.........................58
     SECTION 11.20.  Termination of Demand Note and/or
                     Demand Note Guarantee....................................59

                                       iv

<PAGE>

                              ANNEXES AND EXHIBITS

Annex     A     Defined Terms

Exhibit   A-1   Form of Class A-1 Note
Exhibit   A-2   Form of Class A-2 Note
Exhibit   A-3   Form of Class A-3 Note
Exhibit   A-4   Form of Class A-4 Note
Exhibit   B     Form of Depository Agreement
Exhibit   C     Form of Certificate as to ERISA Matters

                                        v
<PAGE>

               Long Beach Acceptance Auto Receivables Trust 2006-B

                  Reconciliation and Tie between the Indenture
                      dated as of September 1, 2006 and the
                     Trust Indenture Act of 1939, as amended

                 RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
                   ACT OF 1939 AND INDENTURE PROVISIONS(1) *

       Trust Indenture Act Section                  Indenture Section
       ---------------------------                  -----------------
              ss. 310(a)(1)                             ss. 6.11
                 (a)(2)                                   6.11
                 (a)(3)                                   6.10
                 (a)(4)                              Not Applicable
                   (b)                                    6.11
                   (c)                               Not Applicable
                 311(a)                                   6.12
                   (b)                                    6.12
                 312(a)                                    7.1
                   (b)                                     7.2
                   (c)                                     7.2
                 313(a)                                    7.4
                   (b)                                     7.4
                   (c)                                  7.3, 7.4
                   (d)                                     7.3
                314(a)(4)                                  3.9
                   (b)                               Not Applicable
                   (c)                                     8.2
                   (d)                                     8.2
                   (e)                                    11.1
                 315(a)                                    6.1
                   (b)                                     6.5
                   (c)                                     6.1
                   (d)                                     6.1
                   (e)                                    5.14
         316(a) (last sentence)                      Not Applicable
                (a)(1)(A)                                  5.3
                (a)(1)(B)                                 5.13
                317(a)(1)                                  5.4
                 (a)(2)                                  5.3(e)
                   (b)                                     3.3

----------
      (1) This  reconciliation and tie shall not, for any purpose,  be deemed to
be part of the within indenture.

                                       vi
<PAGE>

                 318(a)                              Not Applicable
                   (b)                               Not Applicable
                   (c)                               Not Applicable

                                       vii
<PAGE>

            INDENTURE  dated  as  of  September  1,  2006,  between  LONG  BEACH
ACCEPTANCE  AUTO  RECEIVABLES  TRUST  2006-B,  a Delaware  statutory  trust (the
"Issuer"),  and  DEUTSCHE  BANK  TRUST  COMPANY  AMERICAS,  a New  York  banking
corporation, as indenture trustee (the "Indenture Trustee").

            Each party  agrees as follows for the benefit of the other party and
for  the  equal  and  ratable  benefit  of the  Holders  of the  Issuer's  5.37%
Asset-Backed  Notes,  Class A-1,  5.34%  Asset-Backed  Notes,  Class A-2,  5.17%
Asset-Backed   Notes,  Class  A-3  and  5.18%  Asset-Backed   Notes,  Class  A-4
(collectively the "Class A Notes" or the "Notes").

            As security  for the payment  and  performance  by the Issuer of its
obligations  under this Indenture and the Notes, the Issuer has agreed to assign
the Pledged  Property (as defined below) as collateral to the Indenture  Trustee
for the benefit of the Noteholders.

            Financial  Security  Assurance,  Inc. (the "Note Insurer"),  for the
benefit  of the Class A  Noteholders,  has  issued  and  delivered  a  financial
guaranty  insurance  policy,  dated the  Closing  Date (with  endorsements,  the
"Policy"),  pursuant to which the Note Insurer guarantees Scheduled Payments, as
defined in the Insurance Agreement.

            As an  inducement  to the Note  Insurer  to issue  and  deliver  the
Policy,  the  Issuer  and the Note  Insurer  have  executed  and  delivered  the
Insurance  and  Indemnity  Agreement,  dated as of September 1, 2006 (as amended
from time to time,  the  "Insurance  Agreement"),  among the Note  Insurer,  the
Issuer, Long Beach Acceptance Corp., a Delaware  corporation,  ("LBAC") and Long
Beach Acceptance  Receivables Corp., a Delaware corporation,  as transferor (the
"Transferor").

            As an additional inducement to the Note Insurer to issue the Policy,
and as security for the performance by the Issuer of its obligations  under this
Indenture and as security for the  performance by the Issuer of its  obligations
under this  Indenture and under the Demand Note, the Issuer has agreed to assign
the Pledged  Property (as defined below) as collateral to the Indenture  Trustee
for the  benefit of the  Noteholders,  the  Demand  Note  Provider  and the Note
Insurer, as their respective interests may appear.

<PAGE>

                                 GRANTING CLAUSE

            The Issuer hereby Grants to the Indenture Trustee for the benefit of
the  Noteholders,  the Note  Insurer  and the Demand  Note  Provider  all of the
Issuer's  right,  title  and  interest  in and to the  following  property  (the
"Pledged Property") now owned or hereafter acquired:

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

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

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

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

(v)   the Purchase Agreement, each Transfer Agreement and the Sale and Servicing
      Agreement,  including a direct right to cause LBAC to purchase Receivables
      from  the  Trust  upon  the   occurrence   of  a  breach  of  any  of  the
      representations  and  warranties  contained  in  Section  3.03(b)  of  the
      Purchase Agreement or 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 Financed Vehicle or his or her
      obligations  with  respect to such  Financed  Vehicle and any  recourse to
      Dealers for any of the foregoing;

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

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

                                       2
<PAGE>

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

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

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

The foregoing Grant is made in trust to the Indenture Trustee for the benefit of
the  Noteholders,  the Note Insurer and the Demand Note Provider.  The Indenture
Trustee hereby acknowledges such Grant,  accepts the trusts under this Indenture
in accordance  with the  provisions of this  Indenture and agrees to perform its
duties required in this Indenture to the end that the interests of such parties,
recognizing the priorities of their  respective  interests may be adequately and
effectively protected.

                                   ARTICLE I

                                   Definitions

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

            SECTION 1.2.  Incorporation  by Reference  of Trust  Indenture  Act.
Whenever  this  Indenture  refers to a provision of the Trust  Indenture  Act of
1939, as amended (the "TIA"), such provision is incorporated by reference in and
made a part of this  Indenture.  The following TIA terms used in this  Indenture
have the following meanings:

            "Commission" means the Securities and Exchange Commission.

            "indenture securities" means the Notes.

            "indenture security holder" means a Noteholder.

            "indenture to be qualified" means this Indenture.

            "indenture  trustee" or "institutional  trustee" means the Indenture
Trustee.

            "obligor" on the indenture securities means the Issuer.

            All other TIA terms used in this  Indenture  that are defined by the
TIA,  defined by TIA reference to another  statute or defined by Commission rule
have the meaning assigned to them by such definitions.

            SECTION 1.3.  Rules of  Construction.  Unless the context  otherwise
requires:

            (i) a term has the meaning assigned to it;

                                       3
<PAGE>

            (ii) an  accounting  term  not  otherwise  defined  has the  meaning
      assigned to it in accordance with generally accepted accounting principles
      as in effect from time to time;

            (iii) "or" is not exclusive;

            (iv) "including" means including without limitation; and

            (v) words in the singular include the plural and words in the plural
      include the singular.

                                   ARTICLE II

                                    The Notes

            SECTION 2.1.  Form.  The Class A-1 Notes,  the Class A-2 Notes,  the
Class A-3 Notes and the Class A-4 Notes shall be in substantially  the forms set
forth in Exhibits A-1,  A-2, A-3 and A-4,  respectively,  with such  appropriate
insertions,  omissions,  substitutions  and other  variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification  and  such  legends  or  endorsements   placed  thereon  as  may,
consistently  herewith,  be determined by the officers  executing such Notes, as
evidenced by their  execution of the Notes.  Any portion of the text of any Note
may be set forth on the reverse thereof,  with an appropriate  reference thereto
on the face of the Note.

            The Definitive Notes shall be typewritten,  printed, lithographed or
engraved or produced by any  combination of these methods (with or without steel
engraved  borders),  all as determined by the officers  executing such Notes, as
evidenced by their execution of such Notes.

            Each Note shall be dated the date of its  authentication.  The terms
of the Notes set forth in Exhibits A-1, A-2, A-3 and A-4, respectively, are part
of the terms of this Indenture.

            SECTION 2.2. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by an authorized representative of the Owner
Trustee. The signature of any such authorized representative on the Notes may be
manual or facsimile.

            Notes bearing the manual or facsimile  signature of individuals  who
were at any time authorized  representatives of the Owner Trustee shall bind the
Issuer, notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the  authentication  and delivery of such Notes or did not
hold such offices at the date of such Notes.

            The  Indenture  Trustee  shall,  upon  receipt of the Policy and the
Issuer Order, authenticate and deliver (i) Class A-1 Notes for original issue in
an aggregate principal amount of $100,000,000, (ii) Class A-2 Notes for original
issue in an aggregate  principal amount of  $137,000,000,  (iii) Class A-3 Notes
for original issue in an aggregate  principal  amount of  $147,000,000  and (iv)
Class  A-4  Notes  for  original  issue  in an  aggregate  principal  amount  of
$116,000,000.  The Notes  outstanding  at any time may not exceed  such  amounts
except as provided in Section 2.5.

                                       4
<PAGE>

            The Notes shall be issuable as registered  Notes.  The Class A Notes
will be  issuable  in minimum  denominations  of one  hundred  thousand  dollars
($100,000)  and integral  multiples of one thousand  dollars  ($1,000) in excess
thereof.

            No Note shall be entitled to any benefit under this  Indenture or be
valid or  obligatory  for any  purpose,  unless  there  appears  on such  Note a
certificate  of  authentication  substantially  in the form  provided for herein
executed by the Indenture Trustee by the manual or facsimile signature of one of
its  authorized  signatories,  and  such  certificate  upon  any  Note  shall be
conclusive  evidence,  and the only  evidence,  that  such  Note  has been  duly
authenticated and delivered hereunder.

            SECTION 2.3. Temporary Notes.  Pending the preparation of Definitive
Notes,  the  Issuer may  execute  and,  upon  receipt  of an Issuer  Order,  the
Indenture  Trustee shall  authenticate  and deliver,  temporary  Notes which are
printed, lithographed,  typewritten,  mimeographed or otherwise produced, of the
tenor of the  Definitive  Notes in lieu of which  they are  issued and with such
variations  not  inconsistent  with the terms of this  Indenture as the officers
executing  such Notes may  determine,  as evidenced  by their  execution of such
Notes.

            If  temporary  Notes are issued,  the Issuer  will cause  Definitive
Notes to be  prepared  without  unreasonable  delay.  After the  preparation  of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon  surrender of the temporary  Notes at the office or agency of the Issuer to
be maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for  cancellation of any one or more temporary Notes, the Issuer shall
execute and the  Indenture  Trustee shall  authenticate  and deliver in exchange
therefor  a  like   principal   amount  of   Definitive   Notes  of   authorized
denominations.  Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.

            SECTION 2.4.  Registration;  Registration  of Transfer and Exchange.
(a) The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such  reasonable  regulations as it may  prescribe,  the Issuer shall
provide for the  registration  of Notes and the  registration  of transfers  and
exchanges of Notes.  The  Indenture  Trustee shall be "Note  Registrar"  for the
purpose of  registering  Notes and  transfers  and  exchanges of Notes as herein
provided. Upon any resignation of any Note Registrar,  the Issuer shall promptly
appoint a successor or, if it elects not to make such an appointment, assume the
duties of Note Registrar.

            If a Person  other than the  Indenture  Trustee is  appointed by the
Issuer as Note  Registrar,  the Issuer will give the  Indenture  Trustee  prompt
written  notice of the  appointment  of such Note Registrar and of the location,
and any change in the location, of the Note Register,  and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain  copies  thereof,  and the  Indenture  Trustee  shall  have the  right to
conclusively rely upon a certificate executed on behalf of the Note Registrar by
an authorized signatory thereof as to the names and addresses of the Noteholders
of the Notes and the principal amounts and number of such Notes.

            No  transfer  of a Note  shall  be made  to any  Person  unless  the
Indenture  Trustee  has  received a  certificate  (substantially  in the form of
Exhibit C hereto) from such transferee to the effect that such transferee (a) is
not a Plan and is not acting on behalf of or investing the

                                       5
<PAGE>

assets of a Plan or (b)  either a  Department  of Labor  prohibited  transaction
class exemption or the statutory  exemption provided under Section 408(b)(17) of
ERISA  and  Section   4975(d)(20)  of  the  Code  applies  to  the  transferee's
acquisition and continued  holding of such Note. The preparation and delivery of
the  certificate  referred  to above  shall not be an expense  of the  Indenture
Trustee or the Transferor but shall be borne by the transferee.  Each transferee
of a beneficial  ownership interest in a book-entry Note shall be deemed to make
one of the  foregoing  representations  and shall not be required to deliver the
certificate referred to above.

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

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

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

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

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

      If (i)(A) the Issuer  advises the  Indenture  Trustee in writing  that the
Clearing  Agency  is no  longer  willing  or  able  to  properly  discharge  its
responsibilities  with  respect  to the  Notes as  described  in the  Depository
Agreement  and (B) the  Issuer is unable to locate a  qualified  successor  with
respect to which (unless a Note Insurer  Default has occurred and is continuing)
the Note Insurer has provided its prior written consent,  (ii) the Issuer at its
option advises the Indenture  Trustee in writing that it elects to terminate the
book-entry  system through the Clearing Agency, or (iii) after the occurrence of
an Event of  Default,  the Note  Insurer  (or,  if a Note  Insurer  Default  has
occurred and is continuing,  the  Majorityholders)  advise the Indenture Trustee
and the Clearing Agency through the Clearing Agency Participants in writing that
the continuation of a book-entry system through the Clearing Agency with respect
to such class is no longer in the best  interests  of the related  Note  Owners,
then the Indenture Trustee shall notify all

                                       6
<PAGE>

such Note  Owners,  through the  Clearing  Agency,  and the Note  Insurer of the
occurrence of any such event and of the availability of Definitive Notes to such
Note Owners  requesting the same. Upon surrender to the Indenture Trustee of the
related Notes by the Clearing Agency  accompanied by  registration  instructions
from the Clearing  Agency,  the Issuer shall issue  definitive Notes and deliver
such  definitive  Notes in  accordance  with the  instructions  of the  Clearing
Agency.  None of the Issuer,  the Note Registrar nor the Indenture Trustee shall
be liable for any delay in delivery of such  instructions  and may  conclusively
rely on, and shall be  protected  in relying  on,  such  instructions.  Upon the
issuance of Definitive  Notes, the Indenture Trustee shall recognize the Holders
of the Definitive Notes as Noteholders  hereunder.  The Indenture  Trustee shall
not be liable if the  Transferor  is  unable  to  locate a  qualified  successor
Clearing Agency.

            (c) Upon surrender for  registration  of transfer of any Note at its
applicable  Corporate Trust Office,  the Indenture Trustee shall have the Issuer
execute,  and the Indenture Trustee shall authenticate and deliver,  in the name
of the designated transferee or transferees, one or more new Notes in authorized
denominations of a like aggregate principal amount.

            (d) At the  option  of a  Noteholder,  such  Holder's  Notes  may be
exchanged  for  other  Notes in  authorized  denominations  of a like  aggregate
principal amount, upon surrender of the Notes to be exchanged at any such office
or agency.  Whenever any Notes are so  surrendered  for exchange,  the Indenture
Trustee  shall  have  the  Issuer  execute,  and  the  Indenture  Trustee  shall
authenticate  and deliver the Notes that the  Noteholder  making the exchange is
entitled to receive.  Every Note presented or surrendered  for  registration  of
transfer or exchange shall be accompanied by a written instrument of transfer in
form  satisfactory to the Issuer,  the Indenture  Trustee and the Note Registrar
duly executed by the Holder thereof or his attorney duly authorized in writing.

            (e) All Notes issued upon any  registration  of transfer or exchange
of Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

            (f) No  service  charge  shall  be  made  to a  Noteholder  for  any
registration  of  transfer  or exchange  of Notes,  but the Note  Registrar  may
require  payment  of a sum  sufficient  to cover  any tax or other  governmental
charge that may be imposed in connection  with any  registration  of transfer or
exchange of Notes.

            (g) The preceding  provisions of this Section  notwithstanding,  the
Issuer shall not be required to make, and the Note Registrar  shall not register
transfers  or exchanges of Notes  selected for  redemption  or of any Note for a
period of 15 days  preceding  the due date for any payment  with  respect to the
Note.

            SECTION 2.5. Mutilated,  Destroyed, Lost or Stolen Notes. If (a) any
mutilated  Note  shall  be  surrendered  to the Note  Registrar,  or if the Note
Registrar shall receive evidence to its  satisfaction of the destruction,  loss,
or theft of any Note and (b) there shall be delivered to the Note Registrar, the
Indenture  Trustee and the Note  Insurer  such  security or  indemnity as may be
required  by them to save each of them  harmless,  then in the absence of notice
that such Note shall have been  acquired  by a bona fide  purchaser,  the Issuer
shall execute,

                                       7
<PAGE>

and the Indenture Trustee shall authenticate and deliver,  in exchange for or in
lieu of any such mutilated,  destroyed,  lost or stolen Note, a new Note of like
tenor and  denomination.  In connection  with the issuance of any new Note under
this Section 2.5, the Indenture  Trustee and the Note  Registrar may require the
payment of a sum sufficient to cover any tax or other  governmental  charge that
may be imposed in connection  therewith.  Any duplicate Note issued  pursuant to
this Section 2.5 shall  constitute valid  obligations of the Issuer,  evidencing
the same  debt  and  entitled  to the same  benefits  of this  Indenture,  as if
originally  issued,  whether or not the lost, stolen, or destroyed Note shall be
found at any time.

            SECTION 2.6.  Persons Deemed Owners.  Prior to due  presentment  for
registration  of transfer of any Note, the Issuer,  the Indenture  Trustee,  the
Note Insurer and any agent of Issuer, the Indenture Trustee and the Note Insurer
may treat the  Person in whose  name any Note is  registered  (as of the  Record
Date) as the  owner of such  Note  for the  purpose  of  receiving  payments  of
principal  of and  interest,  if any,  on such Note and for all  other  purposes
whatsoever,  whether or not such Note be overdue,  and none of the  Issuer,  the
Note Insurer, the Indenture Trustee nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.

            SECTION 2.7. Access to List of Noteholders' Names and Addresses. The
Indenture  Trustee shall furnish or cause to be furnished to the Servicer or the
Note Insurer, at the expense of the Issuer,  within 15 days after receipt by the
Indenture  Trustee of a request  therefor from the Servicer or the Note Insurer,
as the case  may be,  in  writing,  a list of the  names  and  addresses  of the
Noteholders  as of the  most  recent  Record  Date.  If  three  or more  Class A
Noteholders,  or one or more Class A Noteholders evidencing not less than 25% of
the Class A Note Balance  apply in writing to the  Indenture  Trustee,  and such
application  states  that  the  applicants  desire  to  communicate  with  other
Noteholders with respect to their rights under this Indenture or under the Notes
and such application  shall be accompanied by a copy of the  communication  that
such applicants  propose to transmit,  then the Indenture Trustee shall,  within
five  Business  Days  after  the  receipt  for  such  application,  afford  such
applicants   access  during  normal  business  hours  to  the  current  list  of
Noteholders.  Each Holder,  by receiving and holding a Note,  shall be deemed to
have agreed to hold none of the Issuer, the Servicer, the Note Insurer, the Note
Registrar or the Indenture  Trustee  accountable  by reason of the disclosure of
its name and address,  regardless of the source from which such  information was
derived.

                                       8
<PAGE>

            SECTION 2.8.  Maintenance of Office or Agency. The Indenture Trustee
shall  maintain  in  Nashville,  Tennessee,  an office or  offices  or agency or
agencies where Notes may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Indenture Trustee in respect of the
Notes  and  this  Indenture  may be  served.  The  Indenture  Trustee  initially
designates  its office  located (i) if by mail at DB Services  Tennessee,  Inc.,
Corporate  Trust &  Agency  Services,  Bond  Transfer  Unit,  P.O.  Box  291207,
Nashville,  TN  37229-1207  and  (ii)  if  by  overnight  courier,  DB  Services
Tennessee,  Inc.,  Corporate  Trust & Agency  Services,  Bond Transfer Unit, 648
Grassmere Park Road, Nashville,  TN 37211, as its office for such purposes.  The
Indenture  Trustee  shall  give  prompt  written  notice  to the  Issuer  and to
Noteholders  of any  change in the  location  of the Note  Register  or any such
office or agency.

            SECTION 2.9. Payment of Principal and Interest; Defaulted Interest.

            (a) The Notes shall accrue  interest as provided in the forms of the
Notes  set forth in  Exhibits  A-1,  A-2,  A-3 and A-4,  respectively,  and such
interest  shall be due and payable on each Payment Date,  as specified  therein.
Any installment of interest or principal,  if any,  payable on any Note which is
punctually  paid or duly  provided for by the Issuer on the  applicable  Payment
Date  shall be paid as set  forth  in  Section  5.6 of the  Sale  and  Servicing
Agreement.

            (b) The principal of each Note shall be payable in  installments  on
each  Payment  Date as provided in the forms of the Notes.  Notwithstanding  the
foregoing,  the entire  unpaid Note  Balance of each Class of Notes shall be due
and payable,  if not  previously  paid, on the date on which an Event of Default
shall have occurred and be continuing, if the Controlling Party has declared the
Notes to be immediately  due and payable in the manner  provided in Section 5.2.
In such an event,  all  principal  payments on each Class of Notes shall be made
pro rata to the  Noteholders of each such Class entitled  thereto.  Upon written
notice from the Issuer,  the Indenture  Trustee shall notify the Person in whose
name a Note is registered at the close of business on the Record Date  preceding
the  Payment  Date on which the Issuer  expects  that the final  installment  of
principal of and interest on such Note will be paid. Such notice shall be mailed
or transmitted  by facsimile  prior to such final Payment Date and shall specify
that such final installment will be payable only upon presentation and surrender
of such Note and shall  specify the place where such Note may be  presented  and
surrendered  for  payment  of  such  installment.  Notices  in  connection  with
redemptions of Notes shall be mailed to Noteholders as provided in Section 10.2.

            (c) If the Issuer  defaults  in a payment of  interest on the Notes,
and such default is waived by the  Controlling  Party,  the Issuer shall pay the
Class  A-1  Interest  Carryover  Shortfall,  the Class  A-2  Interest  Carryover
Shortfall,  the Class A-3 Interest Carryover Shortfall or the Class A-4 Interest
Carryover  Shortfall  to  the  related  Noteholders,   as  applicable,   on  the
immediately following Payment Date.

            (d)  Promptly  following  the date on  which  all  principal  of and
interest  on the Class A Notes has been paid in full and the Class A Notes  have
been surrendered to the Indenture  Trustee,  the Indenture Trustee shall, if the
Note  Insurer  has paid any  amount in  respect  of the Class A Notes  under the
Policy  or  otherwise  which  has  not  been  reimbursed  to  it,  deliver  such
surrendered Class A Notes to the Note Insurer.

                                       9
<PAGE>

            SECTION 2.10.  Cancellation.  Subject to Section  2.9(d),  all Notes
surrendered for payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other than the Indenture  Trustee,  be delivered to
the Indenture Trustee and shall be promptly  canceled by the Indenture  Trustee.
Subject to Section  2.9(d),  the Issuer may at any time deliver to the Indenture
Trustee  for  cancellation  any Notes  previously  authenticated  and  delivered
hereunder which the Issuer may have acquired in any manner  whatsoever,  and all
Notes so delivered shall be promptly canceled by the Indenture Trustee. No Notes
shall be  authenticated  in lieu of or in  exchange  for any Notes  canceled  as
provided in this  Section,  except as  expressly  permitted  by this  Indenture.
Subject to Section 2.9(d),  all canceled Notes may be held or disposed of by the
Indenture  Trustee in accordance with its standard  retention or disposal policy
as in effect at the time  unless the  Issuer  shall  timely  direct by an Issuer
Order that such Notes be destroyed or returned to it;  provided  that such Notes
have not been  previously  disposed  of by the  Indenture  Trustee  prior to its
receipt of such Issuer Order.

                                   ARTICLE III

                                    Covenants

            SECTION 3.1. Payment of Principal and Interest. The Issuer will duly
and punctually pay the principal of and interest on the Notes in accordance with
the terms of the Notes and this Indenture.  Without limiting the foregoing,  the
Issuer will cause to be  distributed on each Payment Date all amounts on deposit
in the Note  Account  deposited  therein  pursuant  to the  Sale  and  Servicing
Agreement  (a)  for the  benefit  of the  Class  A-1  Notes,  to the  Class  A-1
Noteholders,  (b) for the  benefit  of the  Class  A-2  Notes,  to the Class A-2
Noteholders,  (c) for the  benefit  of the  Class  A-3  Notes,  to the Class A-3
Noteholders  and (d) for the  benefit of the Class A-4  Notes,  to the Class A-4
Noteholders.  Amounts  properly  withheld  under the Code by any  Person  from a
payment to any Noteholder of interest  and/or  principal  shall be considered as
having  been paid by the  Issuer to such  Noteholder  for all  purposes  of this
Indenture.

            SECTION  3.2.  Maintenance  of Office or  Agency.  The  Issuer  will
maintain  in  Nashville,  Tennessee,  an  office or  agency  where  Notes may be
surrendered  for  registration  of transfer or exchange,  and where  notices and
demands to or upon the Issuer in respect of the Notes and this  Indenture may be
served.  The Issuer hereby initially  appoints the Indenture Trustee to serve as
its agent for the foregoing purposes. The Issuer will give prompt written notice
to the Indenture Trustee of the location,  and of any change in the location, of
any such office or agency.  If at any time the Issuer shall fail to maintain any
such office or agency or shall fail to furnish the  Indenture  Trustee  with the
address thereof,  such surrenders,  notices and demands may be made or served at
the  applicable  Corporate  Trust  Office,  and the Issuer  hereby  appoints the
Indenture  Trustee  as its agent to receive  all such  surrenders,  notices  and
demands.

            SECTION 3.3.  Money for  Payments to be Held in Trust.  On or before
each Payment Date and  Redemption  Date, the Issuer shall deposit or cause to be
deposited  in the Note  Account from the  Collection  Account an  aggregate  sum
sufficient to pay the amounts then becoming due under the Notes,  such sum to be
held in trust for the  benefit of the Persons  entitled  thereto and (unless the
Note Paying Agent is the Indenture  Trustee) shall promptly notify the Indenture
Trustee of its action or failure so to act.

                                       10
<PAGE>

            The  Issuer  will  cause  each  Note  Paying  Agent  other  than the
Indenture  Trustee to execute and deliver to the Indenture  Trustee and the Note
Insurer an  instrument  in which such Note  Paying  Agent  shall  agree with the
Indenture  Trustee (and if the Indenture  Trustee acts as Note Paying Agent,  it
hereby so agrees),  subject to the  provisions of this  Section,  that such Note
Paying Agent will:

            (i) hold all sums held by it for the  payment  of  amounts  due with
      respect  to the Notes in trust for the  benefit  of the  Persons  entitled
      thereto  until  such  sums  shall  be paid to such  Persons  or  otherwise
      disposed of as herein provided and pay such sums to such Persons as herein
      provided;

            (ii) give the Indenture  Trustee notice of any default by the Issuer
      (or any other  obligor upon the Notes) of which a  Responsible  Officer of
      the  Indenture  Trustee has actual  knowledge in the making of any payment
      required to be made with respect to the Notes;

            (iii) at any time during the  continuance of any such default,  upon
      the  written  request  of  the  Indenture  Trustee,  forthwith  pay to the
      Indenture Trustee all sums so held in trust by such Note Paying Agent;

            (iv) immediately  resign as a Note Paying Agent and forthwith pay to
      the Indenture  Trustee all sums held by it in trust for the payment of the
      Notes if at any time it ceases to meet the standards required to be met by
      a Note Paying Agent at the time of its appointment; and

            (v) comply  with all  requirements  of the Code with  respect to the
      withholding  from any payments  made by it on any Notes of any  applicable
      withholding  taxes  imposed  thereon  and with  respect to any  applicable
      reporting requirements in connection therewith.

            The  Issuer  may at any  time,  for the  purpose  of  obtaining  the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order,  direct any Note Paying  Agent to pay to the  Indenture  Trustee all sums
held in trust by such Note Paying  Agent,  such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such Note
Paying Agent;  and upon such a payment by any Note Paying Agent to the Indenture
Trustee,  such Note Paying  Agent shall be released  from all further  liability
with respect to such money.

            Subject to applicable laws with respect to the escheat of funds, any
money held by the  Indenture  Trustee or any Note Paying  Agent in trust for the
payment of any amount due with respect to any Note and  remaining  unclaimed for
two years after such amount has become due and payable shall be discharged  from
such trust and be paid to the Issuer on Issuer  Request  with the consent of the
Note  Insurer  (unless  a  Note  Insurer  Default  shall  have  occurred  and be
continuing)  and shall be deposited by the Indenture  Trustee in the  Collection
Account;  and the Holder of such Note shall thereafter,  as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the extent of
the amounts so paid to the Issuer),  and all liability of the Indenture  Trustee
or such Note  Paying  Agent with  respect to such trust  money  shall  thereupon
cease; provided, however, that if such money or any portion thereof had been

                                       11
<PAGE>

previously  deposited by the Note Insurer or the Trust Collateral Agent with the
Indenture Trustee for the payment of principal or interest on the Class A Notes,
to the extent any amounts are owing to the Note  Insurer,  such amounts shall be
paid  promptly to the Note Insurer  upon the  Indenture  Trustee's  receipt of a
written request by the Note Insurer to such effect; and provided,  further, that
the Indenture  Trustee or such Note Paying Agent,  before being required to make
any such  repayment,  shall at the expense of the Issuer  cause to be  published
once, in a newspaper published in the English language, customarily published on
each Business Day and of general  circulation in New York, New York, notice that
such money remains  unclaimed and that,  after a date specified  therein,  which
shall not be less than thirty (30) days from the date of such  publication,  any
unclaimed balance of such money then remaining will be repaid to the Issuer. The
Indenture Trustee shall also adopt and employ, at the expense of the Issuer, any
other  reasonable  means of  notification of such repayment  (including  mailing
notice of such  repayment  to Holders  whose Notes have been called but have not
been  surrendered for redemption or whose right to or interest in moneys due and
payable  but not  claimed is  determinable  from the  records  of the  Indenture
Trustee or of any Note Paying Agent, at the last address of record for each such
Holder).

            SECTION  3.4.  Existence.  Except  as  otherwise  permitted  by  the
provisions of Section 3.10,  the Issuer will keep in full effect its  existence,
rights  and  franchises  as a  statutory  trust  under  the laws of the State of
Delaware  (unless it becomes,  or any successor  Issuer hereunder is or becomes,
organized  under the laws of any other state or of the United States of America,
in which case the Issuer  will keep in full  effect  its  existence,  rights and
franchises  under  the laws of such  other  jurisdiction)  and will  obtain  and
preserve its  qualification  to do business in each  jurisdiction  in which such
qualification   is  or  shall  be   necessary   to  protect  the   validity  and
enforceability of this Indenture, the Notes, the Pledged Property and each other
instrument or agreement included in the Trust Assets.

            SECTION 3.5. Protection of Pledged Property.  The Issuer intends the
security  interest  Granted pursuant to this Indenture in favor of the Indenture
Trustee for the benefit of the Note Insurer and the  Noteholders  to be prior to
all other liens in respect of the Trust  Assets,  and the Issuer  shall take all
actions necessary to obtain and maintain, in favor of the Indenture Trustee, for
the benefit of the Note Insurer and the Noteholders, a first lien on and a first
priority,  perfected security interest in the Pledged Property.  The Issuer will
from time to time prepare (or shall cause to be  prepared),  execute and deliver
all such  supplements and amendments  hereto and all such financing  statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:

            (i) provide further assurance with respect to the Grant and/or Grant
      more  effectively  all or any portion of the Pledged  Property or maintain
      the Pledged Property free and clear of all prior liens;

            (ii)  maintain or preserve the lien and security  interest  (and the
      priority thereof) in favor of the Indenture Trustee for the benefit of the
      Noteholders  and the Note Insurer  created by this  Indenture or carry out
      more effectively the purposes hereof;

            (iii)  perfect,  publish  notice of or protect  the  validity of any
      Grant made or to be made by this Indenture;

                                       12
<PAGE>

            (iv) enforce any of the Pledged Property;

            (v) preserve and defend title to the Pledged Property and the rights
      of the Indenture  Trustee in such Pledged  Property  against the claims of
      all persons and parties; and

            (vi) pay all  taxes  or  assessments  levied  or  assessed  upon the
      Pledged Property when due.

The   Issuer   hereby   designates   the   Indenture   Trustee   its  agent  and
attorney-in-fact to execute any financing statement,  continuation  statement or
other  instrument  required by the  Indenture  Trustee  pursuant to this Section
(provided such designation shall not be construed as an obligation).

            SECTION 3.6. Opinions as to Pledged Property.

            (a) On the Closing  Date,  the Issuer shall furnish to the Indenture
Trustee and the Note Insurer an Opinion of Counsel  either  stating that, in the
opinion  of such  counsel,  such  action  has been  taken  with  respect  to the
recording and filing of this Indenture,  any indentures supplemental hereto, and
any other requisite  documents,  and with respect to the execution and filing of
any  financing  statements  and  continuation  statements,  as are  necessary to
perfect and make  effective  the first  priority  lien and security  interest in
favor of the Indenture Trustee,  for the benefit of the Noteholders and the Note
Insurer,  created by this Indenture and reciting the details of such action,  or
stating  that,  in the opinion of such  counsel,  no such action is necessary to
make such lien and security interest effective.

            (b) Within  120 days  after the  beginning  of each  calendar  year,
beginning  with the calendar year  beginning  January 1, 2007,  the Issuer shall
furnish  to the  Indenture  Trustee  and the Note  Insurer an Opinion of Counsel
either stating that, in the opinion of such counsel,  such action has been taken
with  respect  to the  recording,  filing,  re-recording  and  refiling  of this
Indenture,  any indentures supplemental hereto and any other requisite documents
and with respect to the  execution and filing of any  financing  statements  and
continuation  statements  as are  necessary  to maintain  the lien and  security
interest  created by this  Indenture  and reciting the details of such action or
stating  that in the  opinion of such  counsel no such  action is  necessary  to
maintain  such lien and security  interest.  Such Opinion of Counsel  shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures  supplemental  hereto  and  any  other  requisite  documents  and the
execution and filing of any financing  statements  and  continuation  statements
that will, in the opinion of such counsel,  be required to maintain the lien and
security  interest of this Indenture until January 30 in the following  calendar
year.

            SECTION 3.7.  Performance of Obligations;  Servicing of Receivables.
(a) The Issuer  will not take any action  and will use its best  efforts  not to
permit any action to be taken by others  that would  release any Person from any
of such  Person's  material  covenants or  obligations  under any  instrument or
agreement  included  in  the  Pledged  Property  or  that  would  result  in the
amendment, hypothecation,  subordination, termination or discharge of, or impair
the validity or  effectiveness  of, any such instrument or agreement,  except as
ordered  by any  bankruptcy  or other  court or as  expressly  provided  in this
Indenture, the Basic Documents or such other instrument or agreement.

                                       13
<PAGE>

            (b) The Issuer may contract  with other  Persons  acceptable  to the
Note  Insurer (so long as no Note  Insurer  Default  shall have  occurred and be
continuing) to assist it in performing its duties under this Indenture,  and any
performance of such duties by a Person  identified to the Indenture  Trustee and
the Note Insurer in an Officer's Certificate of the Issuer shall be deemed to be
action  taken by the  Issuer.  Initially,  the  Issuer has  contracted  with the
Servicer to assist the Issuer in performing its duties under this Indenture.

            (c) The  Issuer  will  punctually  perform  and  observe  all of its
obligations and agreements contained in this Indenture,  the Basic Documents and
in the instruments and agreements  included in the Pledged  Property,  including
preparing  (or causing to prepared)  and filing (or causing to be filed) all UCC
financing  statements and  continuation  statements  required to be filed by the
terms of this Indenture and the Sale and Servicing  Agreement in accordance with
and within the time periods provided for herein and therein. Except as otherwise
expressly  provided  therein,   the  Issuer  shall  not  waive,  amend,  modify,
supplement or terminate any Basic Document or any provision  thereof without the
consent of the  Indenture  Trustee  or the Note  Insurer  (or if a Note  Insurer
Default has occurred and is continuing, the Majorityholders).

            (d) If a responsible  officer of the Owner Trustee shall have actual
knowledge of the occurrence of a Servicer  Termination  Event under the Sale and
Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee, the
Note Insurer and the Rating  Agencies  thereof in accordance  with Section 11.4,
and shall  specify in such  notice the action,  if any,  the Issuer is taking in
respect of such default.  If a Servicer  Termination  Event shall arise from the
failure of the  Servicer to perform any of its duties or  obligations  under the
Sale and Servicing  Agreement with respect to the Receivables,  the Issuer shall
take all reasonable steps available to it to remedy such failure.

            (e) The Issuer agrees that it will not waive timely  performance  or
observance by the Servicer or the  Transferor of their  respective  duties under
the Basic  Documents (x) without the prior consent of the Note Insurer (unless a
Note Insurer Default shall have occurred and be continuing) or (y) if the effect
thereof would adversely affect the Holders of the Notes.

            SECTION  3.8.  Negative   Covenants.   So  long  as  any  Notes  are
outstanding, the Issuer shall not:

            (i) except as  expressly  permitted  by this  Indenture or the Basic
      Documents,  sell,  transfer,  exchange or otherwise  dispose of any of the
      properties  or assets  of the  Issuer,  including  those  included  in the
      Pledged Property, unless directed to do so by the Controlling Party;

            (ii) claim any credit on, or make any  deduction  from the principal
      or interest  payable in respect of, the Notes (other than amounts properly
      withheld  from such  payments  under the Code) or assert any claim against
      any  present or former  Noteholder  by reason of the  payment of the taxes
      levied or assessed upon any part of the Pledged Property;

            (iii) (A) permit the validity or  effectiveness of this Indenture to
      be impaired,  or permit the lien in favor of the Indenture Trustee created
      by this Indenture to be amended, hypothecated, subordinated, terminated or
      discharged, or permit any Person to

                                       14
<PAGE>

      be released  from any covenants or  obligations  with respect to the Notes
      under this  Indenture  except as may be expressly  permitted  hereby,  (B)
      permit any lien, charge,  excise,  claim,  security interest,  mortgage or
      other encumbrance (other than the lien of this Indenture) to be created on
      or extend to or otherwise arise upon or burden the Pledged Property or any
      part thereof or any interest  therein or the proceeds  thereof (other than
      tax liens,  mechanics'  liens and other liens that arise by  operation  of
      law, in each case on a Financed  Vehicle and arising solely as a result of
      an action or omission of the related Obligor), (C) permit the lien of this
      Indenture  not to  constitute  a valid  first  priority  (other  than with
      respect to any such tax,  mechanics' or other lien)  security  interest in
      the  Pledged  Property  or (D)  amend,  modify or fail to comply  with the
      provisions of the Basic Documents without the prior written consent of the
      Controlling Party;

            (iv) engage in any  business or activity  other than as permitted by
      the Trust Agreement;

            (v) incur or assume any  indebtedness or guarantee any  indebtedness
      of any Person,  except for such indebtedness  incurred pursuant to Section
      3.10; or

            (vi)  dissolve  or  liquidate  in  whole  or in  part  or  merge  or
      consolidate  with any other Person,  other than in compliance with Section
      3.10.

            SECTION  3.9.  Annual  Statement as to  Compliance.  The Issuer will
deliver to the Indenture Trustee and the Note Insurer, within 120 days after the
end of each  fiscal  year of the Issuer  (commencing  with the fiscal year ended
December 31, 2006), and otherwise in compliance with the requirements of Section
314(a)(4) of the TIA, an Officer's  Certificate  stating,  as to the  Authorized
Officer signing such Officer's Certificate, that:

            (i) a review of the activities of the Issuer during such year and of
      performance  under this  Indenture  has been made  under  such  Authorized
      Officer's supervision; and

            (ii) to the best of such Authorized  Officer's  knowledge,  based on
      such review,  the Issuer has complied  with all  conditions  and covenants
      under this Indenture throughout such year, or, if there has been a default
      in the compliance of any such condition or covenant,  specifying each such
      default  known  to such  Authorized  Officer  and the  nature  and  status
      thereof.

            SECTION 3.10.  Issuer May  Consolidate,  Etc. Only on Certain Terms.
(a) The Issuer  shall not  consolidate  or merge with or into any other  Person,
unless:

            (i) the  Person (if other than the  Issuer)  formed by or  surviving
      such  consolidation  or merger  shall be a Person  organized  and existing
      under  the laws of the  United  States of  America  or any state and shall
      expressly  assume,  by an  indenture  supplemental  hereto,  executed  and
      delivered to the Indenture Trustee,  in form satisfactory to the Indenture
      Trustee and the Note  Insurer (so long as no Note  Insurer  Default  shall
      have  occurred and be  continuing),  the due and  punctual  payment of the
      principal of and interest on all Notes and the  performance  or observance
      of every  agreement  and  covenant  of this  Indenture  on the part of the
      Issuer to be performed or observed, all as provided herein;

                                       15
<PAGE>

            (ii) immediately after giving effect to such transaction, no Default
      or Event of Default shall have occurred and be continuing;

            (iii) the Rating Agency  Condition  shall have been  satisfied  with
      respect to such transaction;

            (iv) the Issuer shall have received an Opinion of Counsel (and shall
      have  delivered  copies  thereof  to the  Indenture  Trustee  and the Note
      Insurer (so long as no Note  Insurer  Default  shall have  occurred and be
      continuing))  to the  effect  that  such  transaction  will not  cause for
      federal  income  tax  purposes  (i)  the  Notes  to  fail  to  qualify  as
      indebtedness,  or (ii) the  Issuer to be  treated  as an  association,  or
      publicly traded partnership, taxable as a corporation;

            (v) any action as is  necessary  to maintain  the lien and  security
      interest created by this Indenture shall have been taken;

            (vi) the Issuer shall have  delivered to the  Indenture  Trustee and
      the Note Insurer an Officer's  Certificate  and an Opinion of Counsel each
      stating that such consolidation or merger and such supplemental  indenture
      comply with this  Article  III and that all  conditions  precedent  herein
      provided  for  relating  to  such  transaction  have  been  complied  with
      (including any filing required by the Exchange Act); and

            (vii) so long as no Note Insurer  Default shall have occurred and be
      continuing,  the Issuer  shall have given the Note  Insurer and the Demand
      Note  Provider  written  notice of such  conveyance  or  transfer at least
      twenty (20)  Business  Days prior to the  consummation  of such action and
      shall have received the prior written approval of the Note Insurer of such
      conveyance  or  transfer  and the  Issuer or the Person (if other than the
      Issuer)  formed by or  surviving  such  conveyance  or transfer  has a net
      worth,  immediately after such conveyance or transfer, that is (a) greater
      than zero and (b) not less than the net  worth of the  Issuer  immediately
      prior to giving effect to such conveyance or transfer.

            (b) The Issuer shall not convey or transfer all or substantially all
of its properties or assets,  including those included in the Pledged  Property,
to any Person, unless:

            (i)  the  Person  that   acquires  by  conveyance  or  transfer  the
      properties and assets of the Issuer the conveyance or transfer of which is
      hereby  restricted  shall  (A) be a  United  States  citizen  or a  Person
      organized  and existing  under the laws of the United States of America or
      any state,  (B) expressly  assume,  by an indenture  supplemental  hereto,
      executed and delivered to the Indenture  Trustee,  in form satisfactory to
      the  Indenture  Trustee and the Note  Insurer (so long as no Note  Insurer
      Default  shall have  occurred  and be  continuing),  the due and  punctual
      payment of the principal of and interest on all Notes and the  performance
      or observance of every  agreement and covenant of this  Indenture and each
      of the  Basic  Documents  on the part of the  Issuer  to be  performed  or
      observed,  all as provided  herein,  (C) expressly  agree by means of such
      supplemental  indenture that all right,  title and interest so conveyed or
      transferred  shall be subject and  subordinate to the rights of Holders of
      the  Notes,  and  (D)  unless  otherwise  provided  in  such  supplemental
      indenture, expressly agree to indemnify, defend and hold

                                       16
<PAGE>

      harmless  the  Issuer  against  and from any loss,  liability  or  expense
      arising under or related to this Indenture and the Notes;

            (ii) immediately after giving effect to such transaction, no Default
      or Event of Default shall have occurred and be continuing;

            (iii) the Rating Agency  Condition  shall have been  satisfied  with
      respect to such transaction;

            (iv) the Issuer shall have received an Opinion of Counsel (and shall
      have  delivered  copies  thereof  to the  Indenture  Trustee  and the Note
      Insurer (so long as no Note  Insurer  Default  shall have  occurred and be
      continuing))  to the  effect  that  such  transaction  will not  cause for
      federal  income  tax  purposes  (i)  the  Notes  to  fail  to  qualify  as
      indebtedness,  or (ii) the  Issuer to be  treated  as an  association,  or
      publicly traded partnership, taxable as a corporation;

            (v) any action as is  necessary  to maintain  the lien and  security
      interest created by this Indenture shall have been taken;

            (vi) the Issuer shall have  delivered to the  Indenture  Trustee and
      the Note Insurer an Officers'  Certificate  and an Opinion of Counsel each
      stating that such conveyance or transfer and such  supplemental  indenture
      comply with this  Article  III and that all  conditions  precedent  herein
      provided for relating to such transaction have been complied with; and

            (vii) so long as no Note Insurer  Default shall have occurred and be
      continuing,  the Issuer  shall have given the Note  Insurer and the Demand
      Note  Provider  written  notice of such  conveyance  or  transfer at least
      twenty (20)  Business  Days prior to the  consummation  of such action and
      shall have received the prior written approval of the Note Insurer of such
      consolidation  or merger  and the  Issuer or the Person (if other than the
      Issuer)  formed by or  surviving  such  consolidation  or merger has a net
      worth, immediately after such consolidation or merger, that is (a) greater
      than zero and (b) not less than the net  worth of the  Issuer  immediately
      prior to giving effect to such consolidation or merger.

            SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such  consolidation or merger (if other than the Issuer) shall succeed
to, and be  substituted  for,  and may  exercise  every  right and power of, the
Issuer  under this  Indenture  with the same  effect as if such  Person had been
named as the Issuer herein.

            (b) Upon a conveyance  or transfer of all the assets and  properties
of the  Issuer  pursuant  to  Section  3.10  (b),  Long  Beach  Acceptance  Auto
Receivables  Trust 2006-B will be released from every  covenant and agreement of
this  Indenture  to be  observed  or  performed  on the part of the Issuer  with
respect to the Notes  immediately  upon the  delivery  of written  notice to the
Indenture  Trustee  stating that Long Beach  Acceptance Auto  Receivables  Trust
2006-B is to be so released.

                                       17
<PAGE>

            SECTION 3.12. No Other Business.  The Issuer shall not engage in any
business  other than  financing,  purchasing,  owning,  selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic Documents
and activities  incidental  thereto.  After the Funding Period, the Issuer shall
not fund the acquisition of any additional Receivables.

            SECTION  3.13.  No  Borrowing.  The Issuer  shall not issue,  incur,
assume,  guarantee or otherwise become liable,  directly or indirectly,  for any
Indebtedness  except for (i) the Notes, (ii) obligations owing from time to time
to  the  Note  Insurer  under  the  Insurance  Agreement  and  (iii)  any  other
Indebtedness permitted by or arising under the Basic Documents.  The proceeds of
the Notes shall be used  exclusively  to fund the  Issuer's  acquisition  of the
Receivables and the other assets specified in the Sale and Servicing  Agreement,
to fund the  Pre-Funding  Account and the Spread Account and to pay the Issuer's
organizational, transactional and start-up expenses.

            SECTION  3.14.  Servicer's  Obligations.  The Issuer shall cause the
Servicer  to  comply  with  Sections  4.9,  4.10,  4.11  and 5.7 of the Sale and
Servicing Agreement.

            SECTION 3.15.  Guarantees,  Loans,  Advances and Other  Liabilities.
Except as  contemplated  by the Sale and Servicing  Agreement or this Indenture,
the  Issuer  shall  not make any loan or  advance  or credit  to,  or  guarantee
(directly  or  indirectly  or by an  instrument  having the  effect of  assuring
another's  payment or performance on any obligation or capability of so doing or
otherwise),  endorse  or  otherwise  become  contingently  liable,  directly  or
indirectly, in connection with the obligations,  stocks or dividends of, or own,
purchase,  repurchase  or acquire  (or agree  contingently  to do so) any stock,
obligations,  assets or  securities  of, or any other  interest  in, or make any
capital contribution to, any other Person.

            SECTION 3.16.  Capital  Expenditures.  The Issuer shall not make any
expenditure  (by long-term or operating  lease or otherwise)  for capital assets
(either realty or personalty).

            SECTION 3.17. Compliance with Laws. The Issuer shall comply with the
requirements  of all  applicable  laws,  the  non-compliance  with which  would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its  obligations  under the Notes,  this  Indenture or any
Basic Document.

            SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any payment (by reduction of capital or
otherwise),  whether in cash, property,  securities or a combination thereof, to
the  Owner  Trustee  or any  owner of a  beneficial  interest  in the  Issuer or
otherwise with respect to any ownership or equity  interest or security in or of
the  Issuer or to the  Servicer,  (ii)  redeem,  purchase,  retire or  otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside  or  otherwise  segregate  any  amounts  for any such  purpose;  provided,
however,  that the  Issuer  may  make,  or cause  to be  made,  payments  to the
Servicer,  the Owner Trustee,  the Trust Collateral Agent, the Back-up Servicer,
the Custodian,  the Collateral Agent, the Indenture  Trustee,  the Note Insurer,
the  Noteholders,  the  Demand  Note  Provider  and  the  Certificateholders  as
permitted by, and to the extent funds are available for such purpose,  under the
Sale and Servicing  Agreement,  the Spread Account Agreement or Trust Agreement.
The Issuer will not, directly or indirectly, make

                                       18
<PAGE>

payments to or payments from the Collection  Account  except in accordance  with
this Indenture and the Basic Documents.

            SECTION  3.19.  Notice  of  Events of  Default.  Upon a  responsible
officer  of the Owner  Trustee  having  actual  knowledge  or receipt of written
notice  thereof,  the Issuer  agrees to give the  Indenture  Trustee,  the Trust
Collateral Agent, the Note Insurer and the Rating Agencies prompt written notice
of each Event of Default  hereunder and each default on the part of the Servicer
or the Transferor of its obligations under the Sale and Servicing Agreement.

            SECTION  3.20.  Further  Instruments  and Acts.  Upon request of the
Indenture Trustee or the Note Insurer,  the Issuer will execute and deliver such
further  instruments and do such further acts as may be reasonably  necessary or
proper to carry out more effectively the purpose of this Indenture.

            SECTION 3.21. Income Tax  Characterization.  For purposes of federal
income,  state and local income and franchise  and any other income  taxes,  the
Issuer will  treat,  and each  Noteholder  by its  acceptance  of a Note will be
deemed to have agreed to treat,  the Notes as indebtedness  and hereby instructs
the Indenture  Trustee to treat the Notes as indebtedness for all applicable tax
reporting purposes.

                                   ARTICLE IV

                           Satisfaction and Discharge

            SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further  effect with  respect to the Notes except as to (i)
rights of registration of transfer and exchange of the Notes,  (ii) substitution
of mutilated,  destroyed,  lost or stolen Notes,  (iii) rights of Noteholders to
receive payments of principal thereof and interest  thereon,  (iv) Sections 3.3,
3.4, 3.5, 3.8, 3.10, 3.12, 3.13, 3.20 and 3.21, (v) the rights,  obligations and
immunities  of the  Indenture  Trustee  hereunder  (including  the rights of the
Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee
under Section 4.2) and (vi) the rights of  Noteholders as  beneficiaries  hereof
with respect to the property so deposited with the Indenture  Trustee payable to
all or any of them, and the Indenture  Trustee,  on demand of and at the expense
of the Issuer, shall execute proper instruments  acknowledging  satisfaction and
discharge of this Indenture with respect to the Notes, when:

                  (A) either

                  (1) all Notes  theretofore  authenticated and delivered (other
            than (i) Notes  that have been  destroyed,  lost or stolen  and that
            have been replaced or paid as provided in Section 2.5 and (ii) Notes
            for whose payment money has  theretofore  been deposited in trust or
            segregated and held in trust by the Issuer and thereafter  repaid to
            the Issuer or  discharged  from such  trust,  as provided in Section
            3.3) have been delivered to the Indenture  Trustee for cancellation,
            and the Policy has expired and been returned to the Note Insurer for
            cancellation; or

                  (2) all  Notes  not  theretofore  delivered  to the  Indenture
            Trustee for cancellation

                                       19
<PAGE>

                  (i) have become due and payable,

                  (ii)  will  become  due and  payable  on the  Class  A-1 Final
            Scheduled  Payment Date, the Class A-2 Final Scheduled Payment Date,
            the Class A-3 Final  Scheduled  Payment  Date or the Class A-4 Final
            Scheduled Payment Date, as applicable, within one year, or

                  (iii) are to be called  for  redemption  within one year under
            arrangements satisfactory to the Indenture Trustee for the giving of
            notice of redemption by the  Indenture  Trustee in the name,  and at
            the expense, of the Issuer,

            and the  Issuer,  in the  case of (i),  (ii)  or  (iii)  above,  has
            irrevocably deposited or caused to be irrevocably deposited with the
            Indenture  Trustee  cash or  direct  obligations  of or  obligations
            guaranteed by the United States of America  (which will mature prior
            to the date such amounts are payable), in trust for such purpose, in
            an amount sufficient to pay and discharge the entire indebtedness on
            such Notes not  theretofore  delivered to the Indenture  Trustee for
            cancellation when due on the Class A-1 Final Scheduled Payment Date,
            the Class  A-2 Final  Scheduled  Payment  Date,  the Class A-3 Final
            Scheduled  Payment  Date or the Class A-4  Final  Scheduled  Payment
            Date, as applicable, or the Redemption Date (if the Notes shall have
            been called for redemption pursuant to Section 10.1(a)), as the case
            may be;

                  (B)  the  Issuer  has  paid  or  caused  to be  paid  all  its
            obligations to the Note Insurer,  the  Noteholders,  the Demand Note
            Provider and the Indenture Trustee; and

                  (C) the Issuer has  delivered to the  Indenture  Trustee,  the
            Demand Note  Provider and the Note Insurer an Officer's  Certificate
            and  an  Opinion  of  Counsel  and,  if  required  by  the  TIA,  an
            Independent Certificate from a firm of certified public accountants,
            each meeting the applicable requirements of Section 11.1(a) and each
            stating that all conditions  precedent  herein provided for relating
            to the  satisfaction  and  discharge  of this  Indenture  have  been
            complied with.

            SECTION 4.2.  Application of Trust Money.  All moneys deposited with
the Indenture  Trustee pursuant to Section 4.1 hereof shall be held in trust and
applied  by it,  in  accordance  with  the  provisions  of the  Notes  and  this
Indenture,  to the payment, either directly or through any Note Paying Agent, as
the Indenture  Trustee may determine,  to the Holders of the particular Notes or
Certificate  for the  payment  or  redemption  of which  such  moneys  have been
deposited with the Indenture Trustee,  of all sums due and to become due thereon
for principal and  interest;  but such moneys need not be segregated  from other
funds  except  to the  extent  required  herein  or in the  Sale  and  Servicing
Agreement or required by law.

            SECTION  4.3.  Repayment  of Moneys  Held by Note Paying  Agent.  In
connection with the satisfaction and discharge of this Indenture with respect to
the  Notes,  all  moneys  then  held by any Note  Paying  Agent  other  than the
Indenture  Trustee under the  provisions of this  Indenture with respect to such
Notes shall, upon demand of the Issuer, be paid

                                       20
<PAGE>

to the  Indenture  Trustee to be held and applied  according  to Section 3.3 and
thereupon  such Note Paying Agent shall be released  from all further  liability
with respect to such moneys.

                                    ARTICLE V

                                    Remedies

            SECTION 5.1.  Events of Default.  "Event of Default",  wherever used
herein,  means any one of the  following  events  (whatever  the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

            (i)  default  in the  payment  of any  Note  Interest  when the same
      becomes due and payable,  and such default shall  continue for a period of
      five (5) days (solely for purposes of this clause,  a payment on the Class
      A Notes funded by the Note Insurer,  funded from amounts on deposit in the
      Spread Account pursuant to the Spread Account Agreement or funded from the
      proceeds  of a draw on the  Demand  Note,  shall be deemed to be a payment
      made by the Issuer); or

            (ii) default in the payment of the Principal  Payment Amount, on the
      Class A-1 Final  Scheduled  Payment  Date,  the Class A-2 Final  Scheduled
      Payment Date, the Class A-3 Final Scheduled  Payment Date or the Class A-4
      Final  Scheduled  Payment Date, as the case may be (solely for purposes of
      this clause,  a payment on the Class A Notes  funded by the Note  Insurer,
      funded  from  amounts on deposit in the  Spread  Account  pursuant  to the
      Spread  Account  Agreement  or funded  from the  proceeds of a draw on the
      Demand Note, shall be deemed to be a payment made by the Issuer); or

            (iii) so long as a Note Insurer  Default shall not have occurred and
      be continuing,  an Insurance  Agreement Indenture Cross Default shall have
      occurred; provided, however, that the occurrence of an Insurance Agreement
      Indenture  Cross  Default  may not form the  basis of an Event of  Default
      unless the Note Insurer  shall,  upon prior  written  notice to the Rating
      Agencies,  have delivered to the Issuer and the Indenture  Trustee and not
      rescinded  a  written  notice  specifying  that such  Insurance  Agreement
      Indenture  Cross  Default  constitutes  an Event  of  Default  under  this
      Indenture; or

            (iv) so long as a Note Insurer  Default  shall not have occurred and
      be continuing,  a default in the observance or performance of any covenant
      or agreement of the Issuer made in this  Indenture  (other than a covenant
      or  agreement,  a default in the  observance  or  performance  of which is
      elsewhere in this Section  specifically dealt with), or any representation
      or warranty of the Issuer made in this Indenture or in any  certificate or
      other writing delivered under or in connection with this Indenture proving
      to have been incorrect in any material respect when made, and such default
      continuing or not being cured,  or the  circumstances  or  conditions  for
      which the  representation  or  warranty  was  incorrect  not  having  been
      eliminated  or otherwise  cured for a period of thirty (30) days after the
      date on which written  notice of such default or incorrect  representation
      or warranty,  requiring the same to be remedied,  shall have been given to
      the Issuer and the  Indenture  Trustee by the Note  Insurer  (or if a Note
      Insurer Default has occurred and is

                                       21
<PAGE>

      continuing, by the Noteholders evidencing not less than 25% of the Class A
      Note Balance); or

            (v) so long as a Note  Insurer  Default  shall have  occurred and be
      continuing,  the filing of a decree or order for relief by a court  having
      jurisdiction  in the premises in respect of the Issuer or any  substantial
      part of the Pledged  Property in an involuntary  case under any applicable
      federal  or  state  bankruptcy,  insolvency  or other  similar  law now or
      hereafter  in effect,  or  appointing  a receiver,  liquidator,  assignee,
      custodian,  trustee, sequestrator or similar official of the Issuer or for
      any substantial part of the Pledged  Property,  or ordering the winding-up
      or  liquidation  of the Issuer's  affairs,  and such decree or order shall
      remain unstayed and in effect for a period of sixty (60) consecutive days;
      or

            (vi) so long as a Note Insurer  Default  shall have  occurred and be
      continuing,  the  commencement by the Issuer of a voluntary case under any
      applicable  federal or state  bankruptcy,  insolvency or other similar law
      now or hereafter  in effect,  or the consent by the Issuer to the entry of
      an order for  relief in an  involuntary  case  under any such law,  or the
      consent  by the  Issuer  to the  appointment  or  taking  possession  by a
      receiver,  liquidator,   assignee,  custodian,  trustee,  sequestrator  or
      similar  official of the Issuer or for any substantial part of the Pledged
      Property,  or the making by the Issuer of any general  assignment  for the
      benefit of  creditors,  or the failure by the Issuer  generally to pay its
      debts as such debts  become  due, or the taking of action by the Issuer in
      furtherance of any of the foregoing.

            SECTION  5.2.  Rights Upon Event of Default.  (a) If a Note  Insurer
Default shall not have occurred and be continuing  and an Event of Default shall
have  occurred and be  continuing,  the Notes shall become  immediately  due and
payable at par, together with accrued interest  thereon.  If an Event of Default
shall have occurred and be continuing, the Controlling Party may exercise any of
the remedies  specified in Section 5.4(a).  In the event of any  acceleration of
any Class A Notes by operation of this Section 5.2, the Indenture  Trustee shall
continue to be entitled to make claims under the Policy pursuant to the Sale and
Servicing Agreement for Scheduled Payments on the Class A Notes.  Payments under
the Policy  following  acceleration of any Class A Notes shall be applied by the
Indenture Trustee:

            FIRST:  to Class A  Noteholders  for  amounts  due and unpaid on the
      Class A Notes for interest, ratably, without preference or priority of any
      kind,  according  to the  amounts due and payable on the Class A Notes for
      interest; and

            SECOND:  to Class A  Noteholders  for  amounts due and unpaid on the
      Class A Notes for principal,  ratably,  without  preference or priority of
      any kind,  according  to the  amounts due and payable on the Class A Notes
      for principal.

            (b) In the event any Class A Notes are  accelerated  due to an Event
of Default, the Note Insurer shall have the right (in addition to its obligation
to pay Scheduled  Payments on the Class A Notes in accordance  with the Policy),
but not the  obligation,  to make  payments  under the  Policy or  otherwise  of
interest and  principal  due on such Class A Notes,  in whole or in part, on any
date or dates  following  such  acceleration  as the Note  Insurer,  in its sole
discretion, shall elect.

                                       22
<PAGE>

            (c) If a Note Insurer  Default shall have occurred and be continuing
and an Event of Default  shall have  occurred and be  continuing,  the Indenture
Trustee  in  its  discretion   may,  or  if  so  requested  in  writing  by  the
Majorityholders  shall,  declare by written  notice to the Issuer that the Notes
become,  whereupon  they shall  become,  immediately  due and payable at par, in
accordance  with the priorities set forth in Section 5.6,  together with accrued
interest thereon.

            (d) If a Note Insurer Default shall have occurred and be continuing,
then at any time after such  declaration  of  acceleration  of maturity has been
made and  before a  judgment  or decree  for  payment  of the money due has been
obtained by the Indenture  Trustee as  hereinafter  in this Article V; provided,
the Majorityholders,  by written notice to the Issuer and the Indenture Trustee,
may rescind and annul such declaration and its consequences if:

            (i) the Issuer has paid or deposited  with the  Indenture  Trustee a
      sum sufficient to pay:

                  (A) all payments of principal of and interest on all Notes and
            all other  amounts  that  would then be due  hereunder  or upon such
            Notes if the Event of Default giving rise to such  acceleration  had
            not occurred; and

                  (B)  all  sums  paid  or  advanced  by the  Indenture  Trustee
            hereunder and the reasonable compensation,  expenses,  disbursements
            and  advances of the  Indenture  Trustee and its agents and counsel;
            and

            (ii)  all  Events  of  Default,  other  than the  nonpayment  of the
      principal  of the Notes that has  become due solely by such  acceleration,
      have been cured or waived as provided in Section 5.13.

            No such rescission shall affect any subsequent default or impair any
right consequent thereto.

            SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture  Trustee.  (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same  becomes due and payable,  and
such default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable,  the Issuer will pay to the Indenture Trustee,
for the  benefit  of the  Holders of the Notes,  the whole  amount  then due and
payable on such Notes for principal and interest, with interest upon the overdue
principal,  and, to the extent payment at such rate of interest shall be legally
enforceable,  upon overdue installments of interest, at the applicable Note Rate
and in addition  thereto such further amount as shall be sufficient to cover the
costs  and  expenses  of  collection,  including  the  reasonable  compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents and
counsel.

            (b)  Each of the  Indenture  Trustee  and the  Note  Insurer  hereby
irrevocably and  unconditionally  appoints the Controlling Party as the true and
lawful  attorney-in-fact  of the  Indenture  Trustee  or the  Note  Insurer,  as
applicable, for so long as neither the Indenture Trustee nor the Note Insurer is
the Controlling Party, with full power of substitution,  to execute, acknowledge
and deliver any notice, document, certificate, paper, pleading or instrument and
to do in the name of the  Controlling  Party as well as in the  name,  place and
stead of the Indenture  Trustee and the Note Insurer such acts, things and deeds
for or on behalf of and in the name of

                                       23
<PAGE>

either the Indenture Trustee or the Note Insurer under this Indenture (including
specifically  under Section 5.4) and under the Basic  Documents which either the
Indenture  Trustee  and the Note  Insurer  could  or  might  do or which  may be
necessary,  desirable or convenient in such Controlling  Party's sole discretion
to effect the purposes contemplated hereunder and under the Basic Documents and,
without  limitation,  following the occurrence of an Event of Default,  exercise
full right,  power and authority to take, or defer from taking, any and all acts
with respect to the  administration,  maintenance  or disposition of the Pledged
Property.

            (c) If an Event of Default occurs and is  continuing,  the Indenture
Trustee may in its discretion but with the consent of the Note Insurer,  so long
as no Note Insurer  Default is then  continuing,  and shall, at the direction of
the Controlling Party,  proceed to protect and enforce its rights and the rights
of the Noteholders by such appropriate  Proceedings as the Indenture  Trustee or
the  Controlling  Party  shall deem  effective  to protect  and enforce any such
rights,  whether for the  specific  enforcement  of any covenant or agreement in
this  Indenture or in aid of the  exercise of any power  granted  herein,  or to
enforce  any other  proper  remedy  or legal or  equitable  right  vested in the
Indenture Trustee by this Indenture or by law.

            (d) Intentionally Omitted.

            (e) In case there  shall be  pending,  relative to the Issuer or any
other  obligor  upon the Notes or any Person  having or  claiming  an  ownership
interest in the Trust  Assets,  proceedings  under Title 11 of the United States
Code or any other applicable  federal or State  bankruptcy,  insolvency or other
similar  law,  or in case a  receiver,  assignee  or  trustee in  bankruptcy  or
reorganization,  liquidator,  sequestrator  or similar  official shall have been
appointed  for or taken  possession  of the Issuer or its property or such other
obligor  or  Person,  or in case of any other  comparable  judicial  proceedings
relative to the Issuer or other  obligor upon the Notes,  or to the creditors or
property  of  the  Issuer  or  such  other  obligor,   the  Indenture   Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein  expressed or by declaration or otherwise and irrespective of whether
the Indenture  Trustee shall have made any demand  pursuant to the provisions of
this  Section,  shall  be  entitled  and  empowered,  by  intervention  in  such
proceedings or otherwise:

            (i) to file and  prove a claim or  claims  for the  whole  amount of
      principal  and  interest  owing and  unpaid in respect of the Notes and to
      file such other  papers or  documents  as may be necessary or advisable in
      order to have the claims of the Indenture Trustee (including any claim for
      reasonable  compensation  to the  Indenture  Trustee and each  predecessor
      Indenture Trustee, and their respective agents, attorneys and counsel, and
      for  reimbursement  of all  expenses  and  liabilities  incurred,  and all
      advances  made, by the Indenture  Trustee and each  predecessor  Indenture
      Trustee,  except  as  a  result  of  negligence,   bad  faith  or  willful
      misconduct) and of the Noteholders allowed in such proceedings;

            (ii) unless prohibited by applicable law and regulations, to vote on
      behalf of the Noteholders in any election of a trustee,  a standby trustee
      or person performing similar functions in any such proceedings;

                                       24
<PAGE>

            (iii) to collect and receive any moneys or other property payable or
      deliverable on any such claims and to distribute all amounts received with
      respect to the claims of the Noteholders  and of the Indenture  Trustee on
      their behalf; and

            (iv) to file such proofs of claim and other  papers or  documents as
      may be necessary or advisable in order to have the claims of the Indenture
      Trustee or the Noteholders allowed in any judicial proceedings relative to
      the Issuer, its creditors and its property;

and any trustee,  receiver,  liquidator,  custodian or other similar official in
any such  proceeding is hereby  authorized by each of such  Noteholders  to make
payments to the Indenture Trustee,  and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders,  to pay to
the Indenture  Trustee such amounts as shall be  sufficient to cover  reasonable
compensation to the Indenture  Trustee,  each predecessor  Indenture Trustee and
their  respective  agents,  attorneys  and counsel,  and all other  expenses and
liabilities  incurred,  and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.

            (f)  Nothing  herein  contained  shall be  deemed to  authorize  the
Indenture  Trustee to  authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization,  arrangement, adjustment or
composition  affecting  the Notes or the  rights  of any  Holder  thereof  or to
authorize  the  Indenture  Trustee  to  vote  in  respect  of the  claim  of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar person.

            (g)  All  rights  of  action  and of  asserting  claims  under  this
Indenture,  the Spread Account Agreement,  any other Basic Document or under any
of the Notes, may be enforced by the Indenture Trustee without the possession of
any of the Notes or the  production  thereof  in any trial or other  proceedings
relative thereto, and any such action or proceedings instituted by the Indenture
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment, subject to the payment of the expenses,  disbursements and
compensation of the Indenture  Trustee,  each predecessor  Indenture Trustee and
their respective  agents and attorneys,  shall be for the ratable benefit of the
Holders of the Notes.

            (h) In any  proceedings  brought by the Indenture  Trustee (and also
any proceedings involving the interpretation of any provision of this Indenture,
the Spread Account Agreement or any other Basic Document), the Indenture Trustee
shall be held to  represent  all the  Holders of the Notes,  and it shall not be
necessary to make any Noteholder a party to any such proceedings.

            SECTION  5.4.  Remedies.  (a) If an  Event  of  Default  shall  have
occurred  and be  continuing,  the  Controlling  Party may do one or more of the
following (subject to Section 5.5):

            (i)  institute  Proceedings  in its own  name and as  trustee  of an
      express trust for the  collection of all amounts then payable on the Notes
      or under this  Indenture with respect  thereto,  whether by declaration or
      otherwise,  enforce any judgment obtained, and collect from the Issuer and
      any other obligor upon such Notes moneys adjudged due;

                                       25
<PAGE>

            (ii)  institute  Proceedings  from time to time for the  complete or
      partial  foreclosure  of  this  Indenture  with  respect  to  the  Pledged
      Property;

            (iii)  exercise  any  remedies of a secured  party under the UCC and
      take any other  appropriate  action to protect  and enforce the rights and
      remedies of the Indenture Trustee, the Note Insurer and the Holders of the
      Notes; and

            (iv)  direct  the  Trust  Collateral  Agent  to  sell  or  otherwise
      liquidate  the  Pledged  Property  or any  portion  thereof  or  rights or
      interest  therein,  at one or more  public or  private  sales  called  and
      conducted in any manner permitted by law; provided, however, that:

                  (A) if the Indenture  Trustee is the  Controlling  Party,  the
            Indenture Trustee may not, nor direct the Trust Collateral Agent to,
            sell or otherwise  liquidate the Pledged Property following an Event
            of Default unless:

                        (I) such Event of Default  is of the type  described  in
                  Section 5.1(i) or (ii), or

                        (II) either

                              (x) 100% of the Noteholders consent thereto,

                              (y) the proceeds of such sale or  liquidation  are
                        sufficient to discharge in full all amounts then due and
                        unpaid upon such Notes for principal and interest, or

                              (z) the  Indenture  Trustee  determines  that  the
                        Trust  Assets will not  continue  to provide  sufficient
                        funds for the payment of  principal  of and  interest on
                        the Notes as they would have become due if the Notes had
                        not been  declared  due and payable,  and the  Indenture
                        Trustee  provides  prior  written  notice to the  Rating
                        Agencies  and  obtains the consent of Holders of 66-2/3%
                        of the outstanding Class A Note Balance.

            In determining  such  sufficiency or  insufficiency  with respect to
clause  (y) and (z),  the  Indenture  Trustee  may,  but need  not,  obtain  and
conclusively  rely upon an  opinion  of an  Independent  investment  banking  or
accounting  firm of  national  reputation,  which  opinion  shall  not be at the
expense of the Indenture  Trustee,  and shall be paid out of the proceeds of the
sale of the pledged property,  as to the feasibility of such proposed action and
as to the sufficiency of the Pledged Property for such purpose.

            SECTION 5.5. Optional  Preservation of the Pledged Property.  If the
Indenture  Trustee is the Controlling  Party and if the Notes have been declared
to be due and payable  under  Section 5.2 following an Event of Default and such
declaration  and its  consequences  have not been  rescinded and  annulled,  the
Indenture  Trustee may, but need not, elect to direct the Trust Collateral Agent
to maintain possession of the Pledged Property.  It is the desire of the parties
hereto and the Noteholders  that there be at all times  sufficient funds for the
payment of  principal of and interest on the Notes,  and the  Indenture  Trustee
shall take such desire into account when

                                       26
<PAGE>

determining  whether or not to direct  the Trust  Collateral  Agent to  maintain
possession of the Pledged Property.  In determining  whether to direct the Trust
Collateral Agent to maintain  possession of the Pledged Property,  the Indenture
Trustee may, but need not,  obtain and  conclusively  rely upon an opinion of an
Independent investment banking or accounting firm of national reputation,  which
opinion shall not be at the expense of the  Indenture  Trustee and shall be paid
out of the  proceeds  of the Pledged  Property,  as to the  feasibility  of such
proposed  action and as to the  sufficiency  of the  Pledged  Property  for such
purpose.

            SECTION 5.6. Priorities.

            (a) If the Indenture Trustee collects any money or property pursuant
to this Article V  (excluding  any  payments  made under the Policy),  or if the
Trust  Collateral Agent delivers any money or property in respect of liquidation
of the Pledged  Property to the Indenture  Trustee  pursuant to Section 5.4(iv),
such money or property, as applicable, shall be applied by the Indenture Trustee
on the related Payment Date in the following order of priority:

            First:  amounts due and owing and required to be  distributed to the
      Servicer (provided there is no Servicer  Termination Event), the Indenture
      Trustee,  the Trust Collateral  Agent, the Collateral Agent, the Custodian
      and the Back-up  Servicer,  respectively,  pursuant to priorities  (i) and
      (ii) and subclause  first of priority  (ix) of Section  5.6(c) of the Sale
      and Servicing Agreement (subject to the dollar-amount  limits, if any, set
      forth in such  Sections) and not previously  distributed,  in the order of
      such priorities and without preference or priority of any kind within such
      priorities;

            Second: to the Class A-1 Noteholders, the Class A-2 Noteholders, the
      Class A-3  Noteholders  and the Class A-4  Noteholders for amounts due and
      unpaid on the Class A-1 Notes,  the Class A-2  Notes,  the Class A-3 Notes
      and the Class  A-4 Notes for  interest,  ratably,  without  preference  or
      priority  of any kind,  according  to the  amounts  due and payable on the
      Class A-1 Notes,  the Class A-2  Notes,  the Class A-3 Notes and the Class
      A-4 Notes for interest;

            Third: to the Class A-1 Noteholders,  the Class A-2 Noteholders, the
      Class A-3  Noteholders  and the Class A-4  Noteholders for amounts due and
      unpaid on the Class A Notes,  the Class A-2 Notes, the Class A-3 Notes and
      the Class A-4 Notes for principal, pro rata (based on the then outstanding
      Class A-1 Note Balance, Class A-2 Note Balance, Class A-3 Note Balance and
      Class A-4 Note Balance), without preference of any kind;

            Fourth:  amounts due and owing and required to be distributed to the
      Note Insurer  pursuant to priorities (v) and (vi) of Section 5.6(c) of the
      Sale and Servicing Agreement and not previously distributed;

            Fifth: to the Demand Note Provider or the Demand Note Guarantor,  as
      applicable,  amounts due and owing and required to be  distributed  to the
      Demand Note Provider or the Demand Note Guarantor, as applicable, pursuant
      to priorities (vii) and (viii) of Section 5.6(c) of the Sale and Servicing
      Agreement and not previously distributed;

            Sixth:  pro rata,  to the Trust  Collateral  Agent,  the  Collateral
      Agent, the Custodian,  the Back-up  Servicer,  and the Indenture  Trustee,
      amounts due and owing and

                                       27
<PAGE>

      required to be distributed pursuant to subclause first of priority (ix) of
      Section 5.6(c) of the Sale and Servicing  Agreement  (notwithstanding  any
      dollar-amount  limits  set  forth  in  such  Section  5.6(c)(ix))  and not
      previously  distributed (but only to the extent not paid pursuant to First
      above) and to the Back-up Servicer,  amounts due and owing and required to
      be distributed  to the Back-up  Servicer  pursuant to subclause  second of
      priority (ix) of Section  5.6(c) of the Sale and  Servicing  Agreement and
      not previously distributed;

            Seventh:  to the Collateral Agent, for deposit in the Spread Account
      until  the  amount  on  deposit  in the  Spread  Account  is  equal to the
      Requisite Amount, any amounts remaining after application  pursuant to the
      priorities above, for application in accordance with the provisions of the
      Spread Account Agreement;

            Eighth:  to the  Demand  Note  Provider,  amounts  due and owing and
      required  to be  distributed  to the  Demand  Note  Provider  pursuant  to
      priority (xii) of Section  5.6(c) of the Sale and Servicing  Agreement and
      not previously distributed; and

            Ninth: to the Class R Certificateholder, any remaining amounts after
      application pursuant to the priorities above and any amounts released from
      the Spread Account pursuant to the Spread Account Agreement.

            (b) The Indenture Trustee may fix a record date and payment date for
any payment to  Noteholders or the  Certificateholders  pursuant to this Section
5.6. At least 15 days  before  such  record  date the Issuer  shall mail to each
Noteholder  and the Indenture  Trustee a notice that states the record date, the
payment date and the amount to be paid.

            SECTION 5.7. Limitation of Suits.

            No  Class A  Noteholder  shall  have  any  right  to  institute  any
proceeding,  judicial or otherwise,  with respect to this Indenture,  or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:

            (i) such Holder has previously given written notice to the Indenture
      Trustee of a continuing Event of Default;

            (ii) the  Class A  Noteholders  evidencing  not less than 25% of the
      Class A Note Balance have made written request to the Indenture Trustee to
      institute  such  proceeding in respect of such Event of Default in its own
      name as Indenture Trustee hereunder;

            (iii) such Holder or Holders have offered to the  Indenture  Trustee
      indemnity  reasonably  satisfactory to it against the costs,  expenses and
      liabilities to be incurred in complying with such request;

            (iv) the Indenture  Trustee for sixty (60) days after its receipt of
      such notice,  request and offer of indemnity has failed to institute  such
      proceedings;

            (v) no direction  inconsistent  with such  written  request has been
      given  to  the  Indenture   Trustee  during  such  60-day  period  by  the
      Majorityholders; and

            (vi) a Note Insurer Default shall have occurred and be continuing.

                                       28
<PAGE>

            It is understood and intended that no one or more Noteholders  shall
have any right in any  manner  whatever  by virtue  of, or by  availing  of, any
provision of this  Indenture to affect,  disturb or prejudice  the rights of any
other  Noteholders or to obtain or to seek to obtain priority or preference over
any other  Noteholders or to enforce any right under this  Indenture,  except in
the manner herein provided.

            In the event the  Indenture  Trustee shall  receive  conflicting  or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing less than a majority of the outstanding  Class A Note Balance,  the
Indenture  Trustee shall take direction from the group  representing the greater
percentage of the outstanding Class A Note Balance,  and if the groups represent
equal  interests,  the Indenture  Trustee,  in its sole discretion may determine
what action,  if any, shall be taken,  notwithstanding  any other  provisions of
this Indenture.

            SECTION  5.8.   Unconditional   Rights  of  Noteholders  To  Receive
Principal and Interest.  Subject to the provisions of this Indenture, the Holder
of any Note  shall have the  right,  which is  absolute  and  unconditional,  to
receive  payment of the  principal of and  interest,  if any, on such Note on or
after  the  respective  due  dates  thereof  expressed  in such  Note or in this
Indenture (or, in the case of redemption,  on or after the Redemption  Date), to
the extent that funds are available for distribution to each such Holder on such
due dates,  and the Controlling  Party may institute suit for the enforcement of
any such  payment,  and such right shall not be impaired  without the consent of
such Holder.

            SECTION 5.9. Restoration of Rights and Remedies.  If the Controlling
Party or any  Noteholder  has  instituted any proceeding to enforce any right or
remedy  under  this  Indenture  and such  proceeding  has been  discontinued  or
abandoned  for any  reason or has been  determined  adversely  to the  Indenture
Trustee  or to such  Noteholder,  then and in every  such case the  Issuer,  the
Indenture  Trustee and the Noteholders  shall,  subject to any  determination in
such  Proceeding,  be  restored  severally  and  respectively  to  their  former
positions  hereunder,  and  thereafter  all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such proceeding had been
instituted.

            SECTION  5.10.  Rights and Remedies  Cumulative.  No right or remedy
herein conferred upon or reserved to the Controlling Party or to the Noteholders
is intended to be  exclusive  of any other right or remedy,  and every right and
remedy shall,  to the extent  permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or  otherwise.  The  assertion or employment of any right or remedy
hereunder,  or  otherwise,   shall  not  prevent  the  concurrent  assertion  or
employment of any other appropriate right or remedy.

            SECTION 5.11.  Delay or Omission Not a Waiver.  No delay or omission
of the Indenture  Trustee,  the  Controlling  Party or any Holder of any Note to
exercise any right or remedy accruing upon any Default or Event of Default shall
impair any such right or remedy or  constitute  a waiver of any such  Default or
Event of Default or an  acquiescence  therein.  Every right and remedy  given by
this Article V or by law to the  Indenture  Trustee,  the Note Insurer or to the
Noteholders  may be exercised  from time to time,  and as often as may be deemed
expedient, by the Indenture Trustee, the Note Insurer or by the Noteholders,  as
the case may be.

                                       29
<PAGE>

            SECTION 5.12.  Control by Noteholders.  If the Indenture  Trustee is
the Controlling Party,  Majorityholders shall have the right to direct the time,
method and place of conducting any  Proceeding  for any remedy  available to the
Indenture  Trustee  with respect to the Notes or  exercising  any trust or power
conferred on the Indenture Trustee; provided that:

            (i) such direction  shall not be in conflict with any rule of law or
      with this Indenture;

            (ii) if the  conditions set forth in Section 5.5 have been satisfied
      and the Indenture  Trustee elects to retain the Pledged Property  pursuant
      to  such  Section,   then  any  direction  to  the  Indenture  Trustee  by
      Noteholders representing less than 100% of the outstanding Note Balance of
      the Notes to sell or liquidate the Pledged  Property  shall be of no force
      and effect; and

            (iii) the Indenture  Trustee may take any other action deemed proper
      by the Indenture Trustee that is not inconsistent with such direction;

provided,  however,  that, subject to Article VI, the Indenture Trustee need not
take any  action  that it  determines  might  involve it in  liability  or might
materially adversely affect the rights of any Noteholders not consenting to such
action.

            SECTION 5.13.  Waiver of Past Defaults.  Prior to the declaration of
the  acceleration  of the  maturity of the Notes as provided in Section 5.4, the
Note  Insurer  (provided  no Note  Insurer  Default  shall have  occurred and be
continuing)  or  the  Majorityholders  (if a Note  Insurer  Default  shall  have
occurred and be continuing),  may waive any past Default or Event of Default and
its consequences  except a Default (a) in payment of principal of or interest on
any of the Notes or (b) in respect  of a  covenant  or  provision  hereof  which
cannot be modified or amended without the consent of the Holder of each Note. In
the case of any such waiver,  the Issuer,  the Indenture Trustee and the Holders
of the Notes shall be restored to their former  positions and rights  hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereto.

            Upon any such  waiver,  such  Default  shall  cease to exist  and be
deemed to have been  cured and not to have  occurred,  and any Event of  Default
arising  therefrom  shall be deemed to have been cured and not to have occurred,
for every  purpose of this  Indenture;  but no such waiver  shall  extend to any
subsequent or other  Default or Event of Default or impair any right  consequent
thereto.

            SECTION 5.14.  Undertaking for Costs.  All parties to this Indenture
agree, and each Holder of any Note by such Holder's  acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture,  or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture  Trustee,  the  filing  by any  party  litigant  in  such  suit  of an
undertaking  to pay the  costs of such  suit,  and that  such  court  may in its
discretion  assess  reasonable  costs,  including  reasonable  attorneys'  fees,
against  any party  litigant  in such suit,  having due regard to the merits and
good  faith of the  claims or  defenses  made by such  party  litigant;  but the
provisions  of this Section  shall not apply to (a) any suit  instituted  by the
Indenture  Trustee,  (b) any suit  instituted by any  Noteholders,  or groups of
Noteholders, in each

                                       30
<PAGE>

case holding in the aggregate more than 10% of the  outstanding  Note Balance of
each of the Class A Notes or (c) any suit  instituted by any  Noteholder for the
enforcement  of the payment of  principal of or interest on any Note on or after
the  respective  due dates  expressed in such Note and in this Indenture (or, in
the case of redemption, on or after the Redemption Date).

            SECTION 5.15. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent  that it may  lawfully do so) that it will not at any time insist
upon,  or plead or in any  manner  whatsoever,  claim  or take  the  benefit  or
advantage  of, any stay or extension  law wherever  enacted,  now or at any time
hereafter in force,  that may affect the  covenants or the  performance  of this
Indenture;  and the  Issuer (to the extent  that it may  lawfully  do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder,  delay or impede the  execution of any power herein  granted to
the  Indenture  Trustee,  but will suffer and permit the execution of every such
power as though no such law had been enacted.

            SECTION 5.16. Action on Notes. The Indenture Trustee's right to seek
and recover  judgment on the Notes or under this Indenture shall not be affected
by the  seeking,  obtaining  or  application  of any other  relief under or with
respect to this Indenture.  Neither the lien of this Indenture nor any rights or
remedies of the Indenture  Trustee or the  Noteholders  shall be impaired by the
recovery of any judgment by the Indenture  Trustee  against the Issuer or by the
levy of any  execution  under such  judgment  upon any  portion  of the  Pledged
Property or upon any of the assets of the Issuer.

            SECTION 5.17.  Performance and  Enforcement of Certain  Obligations.
(a)  Promptly  following a request from the  Indenture  Trustee upon the written
direction  of the  Servicer  to do so and at the  Issuer's  expense,  the Issuer
agrees to take all such lawful  action as the  Indenture  Trustee may request to
compel or secure  the  performance  and  observance  by the  Transferor  and the
Servicer, as applicable,  of each of their obligations to the Issuer under or in
connection  with the Sale and Servicing  Agreement in accordance  with the terms
thereof,  and to exercise any and all rights,  remedies,  powers and  privileges
lawfully  available  to the  Issuer  under  or in  connection  with the Sale and
Servicing  Agreement to the extent and in the manner  directed by the  Indenture
Trustee,  including  the  transmission  of notices of default on the part of the
Transferor  or  the  Servicer   thereunder  and  the  institution  of  legal  or
administrative  actions or  proceedings  to compel or secure  performance by the
Transferor  or the  Servicer  of each of their  obligations  under  the Sale and
Servicing Agreement.

            (b) If the  Indenture  Trustee  is the  Controlling  Party and if an
Event of Default has occurred and is continuing, the Indenture Trustee may, and,
at the  written  direction  of the  Holders of 66-2/3% of the  outstanding  Note
Balance of the Class A Notes shall,  subject to Article VI, exercise all rights,
remedies,  powers, privileges and claims of the Issuer against the Transferor or
the  Servicer  under or in  connection  with the Sale and  Servicing  Agreement,
including the right or power to take any action to compel or secure  performance
or observance by the Transferor or the Servicer of each of their  obligations to
the Issuer  thereunder  and to give any  consent,  request,  notice,  direction,
approval,  extension or waiver under the Sale and Servicing  Agreement,  and any
right of the Issuer to take such action shall be suspended.

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<PAGE>

            SECTION 5.18. Subrogation.

            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 Indenture  Trustee 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 with respect
to  the  Class  A  Notes   whether   pursuant   to  the  Policy  or   otherwise.
Notwithstanding  the  foregoing,  the order of  priority  of payments to be made
pursuant  to Section  5.6(c) of the Sale and  Servicing  Agreement  shall not be
modified by this clause. 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 or other payment.

            SECTION 5.19. Preference Claims; Direction of Proceedings.

            (a) In the event that the Indenture Trustee 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  Indenture  Trustee  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,  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 Indenture Trustee or any Class A Noteholder  directly
(unless  such  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  Indenture  Trustee  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  Indenture  Trustee,
on its behalf and on behalf of the Class A  Noteholders,  thereby  appoints  the
Note Insurer as agent and  attorney-in-fact  for the Indenture  Trustee and each
Class A Noteholder  in any legal  proceeding  with respect to the Class A Notes.
The Indenture  Trustee shall promptly  notify the Note Insurer of any proceeding
or the  institution  of any  action  (of  which  a  Responsible  Officer  of the
Indenture Trustee has actual knowledge)  seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency,  receivership,  rehabilitation
or similar law (a  "Preference  Claim") of any payment  made with respect to the
Class A Notes.  Each Holder of Class A Notes,  by its purchase of Class A Notes,
and the Indenture  Trustee  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 (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

                                       32
<PAGE>

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,  the Note Insurer shall be subrogated to, and each
Class A Noteholder and the Indenture  Trustee hereby delegate and assign, to the
fullest  extent  permitted by law, the rights of the Indenture  Trustee 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.

                                   ARTICLE VI

                              The Indenture Trustee

            SECTION 6.1. Duties of Indenture Trustee. (a) The Indenture Trustee,
both  prior  to the  occurrence  of an Event of  Default  and  after an Event of
Default shall have been cured or waived,  shall undertake to perform such duties
and only such  duties as are  specifically  set forth in this  Indenture.  If an
Event of Default  shall have  occurred  and shall not have been cured or waived,
the  Indenture  Trustee may, and at the  direction of the Note Insurer (or, if a
Note   Insurer   Default   shall   have   occurred   and  is   continuing,   the
Majorityholders),  shall  exercise such of the rights and powers vested in it by
this  Indenture  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  Indenture  Trustee,   upon  receipt  of  all  resolutions,
certificates,   statements,   opinions,  reports,  documents,  orders  or  other
instruments  furnished  to the  Indenture  Trustee  that  shall be  specifically
required to be  furnished  pursuant to any  provision of this  Indenture,  shall
examine them to  determine  whether  they  conform to the  requirements  of this
Indenture;   provided,   however,  that  the  Indenture  Trustee  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 Indenture,  the Indenture  Trustee shall notify the Note Insurer and the
Noteholders of such instrument in the event that the Indenture Trustee, after so
requesting, does not receive a satisfactorily corrected instrument.

            (c) The  Indenture  Trustee  shall take and maintain  custody of the
Schedule of  Receivables  as Schedule A to the Sale and Servicing  Agreement and
each  Schedule of  Receivables  attached  as Schedule A to the related  Transfer
Agreement and shall retain copies of all Servicer's  Certificates prepared under
the Sale and Servicing Agreement.

            (d) No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own negligent
failure to act, or its own bad faith; provided, however, that:

            (i) Prior to the  occurrence  of an Event of  Default  and after the
      curing or waiving of all such  Events of Default  that may have  occurred,
      the duties and  obligations  of the Indenture  Trustee shall be determined
      solely by the express provisions of this Indenture,  the Indenture Trustee
      shall  not be  liable  except  for  the  performance  of such  duties  and
      obligations  as shall be  specifically  set  forth in this  Indenture,  no
      implied

                                       33
<PAGE>

      covenants or  obligations  shall be read into this  Indenture  against the
      Indenture  Trustee  and,  in the  absence  of bad faith on the part of the
      Indenture  Trustee,  the Indenture  Trustee may  conclusively  rely on the
      truth of the statements and the  correctness of the opinions  expressed in
      any  certificates  or  opinions  furnished  to the  Indenture  Trustee and
      conforming to the requirements of this Indenture;

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

            (iii) The Indenture  Trustee shall not be liable with respect to any
      action taken, suffered, or omitted to be taken in good faith in accordance
      with this  Indenture  or at the  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,  relating to the time,  method,  and place of
      conducting  any  proceeding  for any  remedy  available  to the  Indenture
      Trustee,  or exercising  any trust or power  conferred  upon the Indenture
      Trustee, under this Indenture;

            (iv) The Indenture  Trustee  shall not be charged with  knowledge of
      any  Event of  Default,  unless a  Responsible  Officer  of the  Indenture
      Trustee receives written notice of such Event of Default from the Servicer
      or the  Transferor,  as the case may be, the Note Insurer or, after a Note
      Insurer Default,  the Class A Noteholders  evidencing not less than 25% of
      the Class A Note Balance (such notice shall constitute actual knowledge of
      an Event of Default by the Indenture Trustee); and

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

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

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

            (g) All information  obtained by the Indenture Trustee regarding the
Obligors and the Receivables, whether upon the exercise of its rights under this
Indenture  or  otherwise,  shall  be  maintained  by the  Indenture  Trustee  in
confidence and shall not be disclosed to any

                                       34
<PAGE>

other Person, all in accordance with the Federal Financial Privacy Law; provided
that,  nothing herein shall prevent the Indenture Trustee from delivering copies
of such information whether or not constituting  Confidential  Information,  and
disclosing other information,  whether or not Confidential  Information,  to (i)
its directors,  officers,  employees, agents and professional consultants to the
extent  necessary to carry on the Indenture  Trustee's  business in the ordinary
course,  (ii) any  Noteholder  or the  Note  Insurer  to the  extent  that  such
Noteholder  or the Note  Insurer  is  entitled  to such  information  under this
Indenture,   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
Indenture  Trustee  is a party,  (d) in  order  to  enforce  the  rights  of the
Noteholders and the Note Insurer under the Trust established  hereunder,  or (e)
otherwise, in accordance with the Federal Financial Privacy Law; provided, that,
prior to any such disclosure, the Indenture Trustee shall inform each such party
(other  than any  Noteholder,  the Note  Insurer or any other party to the Basic
Documents) that receives Confidential  Information of the foregoing requirements
and shall use its  commercially  reasonable  best efforts to cause such party to
comply with such requirements.

            (h)  Money  held in  trust  by the  Indenture  Trustee  need  not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing Agreement.

            (i) Every  provision  of this  Indenture  relating to the conduct or
affecting  the liability of or affording  protection  to the  Indenture  Trustee
shall be subject to the provisions of this Section 6.1 and the provisions of the
TIA.

            (j) The  Indenture  Trustee  shall,  and hereby agrees that it will,
perform  all of the  obligations  and duties  required  of it under the Sale and
Servicing Agreement.

            (k) The  Indenture  Trustee  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 Class A Noteholders.

            (l)  Without  limiting  the  generality  of this  Section  6.1,  the
Indenture  Trustee  shall  have no duty (i) to see to any  recording,  filing or
depositing  of  this  Indenture  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
Indenture Trustee pursuant to this Indenture or the Sale and Servicing Agreement
reasonably  believed  by the  Indenture  Trustee 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

                                       35
<PAGE>

representations,   warranties  or  covenants  or  the   Servicer's   duties  and
obligations as Servicer and as custodian of the Receivable  Files under the Sale
and Servicing Agreement.

            (m) In no  event  shall  Deutsche  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 Indenture  Trustee shall not be required to give any bond or
surety in respect of the powers granted to it under this Indenture.

            SECTION  6.2.  Rights of  Indenture  Trustee.  Except  as  otherwise
provided in Section 6.1(b):

            (i) The Indenture  Trustee may rely and shall be protected in acting
      or  refraining  from acting upon any  resolution,  Officer's  Certificate,
      Servicer's  Certificate,  certificate of auditors, or any other Opinion of
      Counsel,  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 Indenture Trustee 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  Indenture  in good faith and in  accordance  with such written
      advice or Opinion of Counsel.

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

            (iv)  The  Indenture   Trustee  shall  not  be  bound  to  make  any
      investigation  into  the  facts  or  matters  stated  in  any  resolution,
      certificate,  statement,  instrument,  opinion,  report, notice,  request,
      consent,  order,  approval,  bond,  or  other  paper or  document,  unless
      requested  in writing  to do so by the Note  Insurer  (if no Note  Insurer
      Default shall have occurred or be continuing),  the Issuer or by the Class
      A  Noteholders  evidencing  not less than 25% of the Class A Note Balance;
      provided,  however,  that, if the payment within a reasonable  time to the
      Indenture  Trustee of the costs,  expenses,  or  liabilities  likely to be
      incurred  by it in the  making  of such  investigation  shall  be,  in the
      opinion of the Indenture Trustee,  not assured to the Indenture Trustee by
      the security afforded to it by the terms of

                                       36
<PAGE>

      this Indenture,  the Indenture  Trustee may require  indemnity in form and
      substance satisfactory to it against such cost, expense, or liability as a
      condition  to  so  proceeding.   The  reasonable  expense  of  every  such
      examination shall be paid by the Person making such request or, if paid by
      the  Indenture  Trustee,  shall be  reimbursed  by the Person  making such
      request upon demand.

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

            (vi)  The  Indenture  Trustee  shall  have no  duty  of  independent
      inquiry,  and the Indenture Trustee may rely upon the  representations and
      warranties and covenants of the  Transferor and the Servicer  contained in
      the Basic  Documents  with respect to the  Receivables  and the Receivable
      Files.

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

            SECTION 6.3.  Individual Rights of Indenture Trustee.  The Indenture
Trustee in its  individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates  with the same
rights it would have if it were not  Indenture  Trustee.  Any Note Paying Agent,
Note  Registrar,  co-registrar or co-Note Paying Agent may do the same with like
rights.

            SECTION 6.4. Indenture Trustee's Disclaimer.  The recitals contained
herein shall be taken as the statements of the Issuer and the Indenture  Trustee
does not assume any  responsibility for the correctness  thereof.  The Indenture
Trustee shall not make any  representations as to the validity or sufficiency of
this  Indenture,  the  Notes,  or of any  Receivable  or related  document.  The
Indenture Trustee shall not at any time have any responsibility or liability for
or with respect to the validity or adequacy of this Indenture,  the Trust Assets
or the Notes;  it shall not be accountable  for the Issuer's use of the proceeds
from the Notes;  and it shall not be responsible for any statement of the Issuer
in the Indenture or in any document  issued in  connection  with the sale of the
Notes or in the Notes;  provided,  however, that the foregoing shall not relieve
the  Indenture  Trustee  of its  obligation  to perform  its  duties  under this
Indenture.  Except with respect to a claim based on the failure of the Indenture
Trustee to perform its duties  under this  Indenture  or based on the  Indenture
Trustee's  negligence or willful  misconduct,  no recourse  shall be had for any
claim based on any provision of this Indenture,  the Notes, or any

                                       37
<PAGE>

Receivable or assignment thereof against the Indenture Trustee in its individual
capacity,  the  Indenture  Trustee  shall  not  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
Indenture.  The  Indenture  Trustee  shall  not 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.

            SECTION  6.5.  Notice  of  Defaults.  If an  Event of  Default  or a
Servicing Termination Event under the Sale and Servicing Agreement occurs and is
continuing  and if it is either  known by, or  written  notice of the  existence
thereof has been delivered to, a Responsible  Officer of the Indenture  Trustee,
the  Indenture  Trustee  shall  mail to each  Noteholder  notice of the Event of
Default  or  Servicer  Termination  Event  within  ninety  (90) days  after such
knowledge  or  notice  occurs.  Except in the case of a Default  in  payment  of
principal  of or  interest  on any  Note  (including  payments  pursuant  to the
mandatory  redemption  provisions  of such  Note),  the  Indenture  Trustee  may
withhold  the  notice  if and so  long  as a  committee  of two or  more  of its
Responsible  Officers in good faith determines that withholding the notice is in
the interests of Noteholders.

            SECTION 6.6. Reports by Indenture Trustee to Holders.  The Indenture
Trustee shall deliver to each Noteholder  such  information as may be reasonably
required to enable  such  Holder to prepare  its  federal  and state  income tax
returns.

            SECTION 6.7.  Compensation  and  Indemnity.  (a) Pursuant to Section
5.6(c)  of the  Sale  and  Servicing  Agreement,  the  Issuer  shall  pay to the
Indenture  Trustee and the Back-up  Servicer from time to time  compensation for
their services.  The Indenture  Trustee,  in its capacities as Indenture Trustee
and Trust Collateral Agent and as Back-up Servicer, shall be entitled to receive
the Indenture  Trustee's Fee and the Back-up  Servicer's Fee,  respectively,  on
each Payment Date. The Indenture Trustee's  compensation shall not be limited by
any law on  compensation  of a trustee of an express trust.  Pursuant to Section
5.6(c) of the Sale and  Servicing  Agreement,  the Issuer  shall  reimburse  the
Indenture   Trustee  and  the  Trust   Collateral   Agent  for  all   reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation  for its services.  Such expenses shall include the
reasonable   compensation  and  expenses  and  disbursements  of  the  Indenture
Trustee's,  the  Back-up  Servicer's,  the  Collateral  Agent's  and  the  Trust
Collateral Agent's agents,  counsel,  accountants and experts.  The Issuer shall
cause the Servicer to indemnify  the  Indenture  Trustee,  the Trust  Collateral
Agent, the Back-up Servicer, the Collateral Agent and their respective officers,
directors,  employees and agents against any and all loss,  liability or expense
(including  attorneys' fees and expenses) incurred by each of them in connection
with the acceptance or the  administration  of this trust and the performance of
its  duties  under  the  Basic  Documents.  The  Indenture  Trustee,  the  Trust
Collateral  Agent, the Collateral Agent or the Back-up Servicer shall notify the
Issuer and the Servicer  promptly of any claim for which it may seek  indemnity.
Failure by the Indenture Trustee, the Back-up Servicer,  the Collateral Agent or
the Trust  Collateral  Agent to so notify the Issuer and the Servicer  shall not
relieve  the  Issuer  of  its  obligations  hereunder  or  the  Servicer  of its
obligations  under Article XII of the Sale and Servicing  Agreement.  The Issuer
shall cause the Servicer to defend any such claim, the Indenture Trustee,  Trust
Collateral Agent, the Collateral Agent or the Back-up Servicer may have separate
counsel and the Issuer  shall cause the Servicer to pay the fees and expenses of
such

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<PAGE>

counsel.  Neither  the Issuer nor the  Servicer  need  reimburse  any expense or
indemnify  against any loss,  liability  or expense  incurred  by the  Indenture
Trustee,  the Back-up  Servicer,  the Collateral Agent or Trust Collateral Agent
through the Indenture Trustee's, the Back-up Servicer's,  the Collateral Agent's
or Trust Collateral Agent's own willful misconduct, negligence or bad faith.

            (b) The Issuer's payment obligations  pursuant to this Section shall
survive the discharge of this Indenture or the earlier resignation or removal of
the Indenture Trustee. When the Indenture Trustee, the Trust Collateral Agent or
the Back-up Servicer incurs expenses after the occurrence of a Default specified
in Section 5.1(v) and (vi) with respect to the Issuer, the expenses are intended
to  constitute  expenses of  administration  under Title 11 of the United States
Code or any other applicable federal or state bankruptcy,  insolvency or similar
law.  Notwithstanding  anything  else set forth in this  Indenture  or the Basic
Documents,  the Indenture Trustee agrees that the obligations of the Issuer (but
not the  Servicer)  to the  Indenture  Trustee  hereunder  and  under  the Basic
Documents shall be recourse to the Pledged Property only and specifically  shall
not be recourse to the assets of any  Certificateholder  or any  Noteholder.  In
addition,  the  Indenture  Trustee  agrees that its recourse to the Issuer,  the
Pledged Property, the Transferor and amounts held pursuant of the Spread Account
Agreement  shall be limited to the right to receive the payments  referred to in
Section 5.6(c) and (d) of the Sale and Servicing Agreement.

            SECTION 6.8. Replacement of Indenture Trustee. The Indenture Trustee
may resign at any time by so notifying the Issuer and the Note  Insurer.  To the
extent that the Indenture Trustee resigns hereunder,  the Trust Collateral Agent
shall resign under the Sale and  Servicing  Agreement and the  Collateral  Agent
shall  resign  under the Spread  Account  Agreement.  The Issuer may and, at the
request of the Note Insurer  (unless a Note Insurer  Default shall have occurred
and be continuing) shall, remove the Indenture Trustee, if:

            (i) the Indenture Trustee fails to comply with Section 6.11;

            (ii) a court having  jurisdiction  in the premises in respect of the
      Indenture  Trustee in an involuntary  case or proceeding  under federal or
      state banking or bankruptcy laws, as now or hereafter constituted,  or any
      other applicable federal or state bankruptcy,  insolvency or other similar
      law, shall have entered a decree or order granting  relief or appointing a
      receiver,   liquidator,   assignee,   custodian,   trustee,   conservator,
      sequestrator  (or similar  official) for the Indenture  Trustee or for any
      substantial  part of the  Indenture  Trustee's  property,  or ordering the
      winding-up or liquidation of the Indenture Trustee's affairs;

            (iii) 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 is  commenced  with respect to the
      Indenture Trustee and such case is not dismissed within sixty (60) days;

            (iv) the  Indenture  Trustee  commences a  voluntary  case under any
      federal  or  state  banking  or  bankruptcy  laws,  as  now  or  hereafter
      constituted,   or  any  other  applicable  federal  or  state  bankruptcy,
      insolvency  or other  similar  law, or consents to the  appointment  of or
      taking possession by a receiver, liquidator, assignee, custodian, trustee,

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<PAGE>

      conservator,  sequestrator  (or other similar  official) for the Indenture
      Trustee or for any substantial part of the Indenture  Trustee's  property,
      or makes any assignment for the benefit of creditors or fails generally to
      pay its debts as such debts  become due or takes any  corporate  action in
      furtherance of any of the foregoing;

            (v) the Trust  Collateral  Agent resigns or is removed in accordance
      with Section 10.8 of the Sale and Servicing Agreement;

            (vi) the Collateral  Agent resigns or is removed in accordance  with
      the Spread Account Agreement;

            (vii) the Back-up Servicer is removed in accordance with Section 8.5
      of the Sale and Servicing Agreement; or

            (viii) the Indenture Trustee otherwise becomes incapable of acting.

            If the  Indenture  Trustee  resigns  or is  removed  or if a vacancy
exists in the office of the  Indenture  Trustee  for any reason  (the  Indenture
Trustee  in such  event  being  referred  to  herein as the  retiring  Indenture
Trustee),  the Issuer shall promptly appoint a successor  Indenture  Trustee and
Trust Collateral Agent acceptable to the Note Insurer (so long as a Note Insurer
Default  shall not have  occurred  and be  continuing).  If the Issuer  fails to
appoint  such a successor  Indenture  Trustee and Trust  Collateral  Agent,  the
Controlling Party may appoint a successor Indenture Trustee and Trust Collateral
Agent.

            A successor  Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring  Indenture  Trustee,  the Note Insurer (provided
that no Note Insurer  Default shall have occurred and be continuing)  and to the
Issuer.  Thereupon the resignation or removal of the retiring  Indenture Trustee
shall become effective,  and the successor  Indenture Trustee shall have all the
rights, powers and duties of the retiring Indenture Trustee under this Indenture
subject to satisfaction of the Rating Agency Condition.  The successor Indenture
Trustee  shall mail a notice of its  succession  to  Noteholders.  The  retiring
Indenture  Trustee shall promptly  transfer all property held by it as Indenture
Trustee to the successor Indenture Trustee.

            If a successor  Indenture  Trustee does not take office within sixty
(60) days  after the  retiring  Indenture  Trustee  resigns or is  removed,  the
retiring Indenture  Trustee,  the Issuer or the Note Insurer (so long as no Note
Insurer  Default has occurred and is  continuing) or the  Majorityholders  (if a
Note Insurer  Default has occurred and is continuing)  may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.

            If the  Indenture  Trustee  fails to comply with Section  6.11,  any
Noteholder may petition any court of competent  jurisdiction  for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.

            Any resignation or removal of the Indenture  Trustee and appointment
of a  successor  Indenture  Trustee  pursuant to any of the  provisions  of this
Section  shall not become  effective  until  acceptance  of  appointment  by the
successor Indenture Trustee pursuant to this Section and payment of all fees and
expenses owed to the retiring Indenture Trustee.

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<PAGE>

            Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section,  the Issuer's obligations under Section 6.7 shall continue for the
benefit of the retiring Indenture Trustee.

            SECTION 6.9. Successor Indenture Trustee by Merger. If the Indenture
Trustee  consolidates  with,  merges  or  converts  into,  or  transfers  all or
substantially all its corporate trust business or assets to, another corporation
or banking  association,  the  resulting,  surviving or  transferee  corporation
without any further act shall be the successor Indenture Trustee.  The Indenture
Trustee  shall  provide  the Rating  Agencies  with  written  notice of any such
transaction and shall mail notice of such merger or  consolidation to the Rating
Agencies.

            In  case  at the  time  such  successor  or  successors  by  merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor  Indenture Trustee,  and deliver such Notes
so authenticated;  and in case at that time any of the Notes shall not have been
authenticated,  any successor to the  Indenture  Trustee may  authenticate  such
Notes  either  in the name of any  predecessor  hereunder  or in the name of the
successor  to the  Indenture  Trustee;  and in all such cases such  certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.

            SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.

            (a) Notwithstanding  any other provisions of this Indenture,  at any
time, for the purpose of meeting any legal  requirement of any  jurisdiction  in
which any part of the Trust may at the time be located,  the  Indenture  Trustee
with the consent of the Note  Insurer (so long as a Note Insurer  Default  shall
not have  occurred and be  continuing)  shall have the power and may execute and
deliver all instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Trust,  and to vest in such  Person or  Persons,  in such  capacity  and for the
benefit of the  Noteholders,  such title to the Trust, or any part hereof,  and,
subject  to  the  other  provisions  of  this  Section,  such  powers,   duties,
obligations,  rights and trusts as the Indenture Trustee may consider  necessary
or desirable.  No co-trustee or separate trustee  hereunder shall be required to
meet the terms of  eligibility  as a successor  Indenture  Trustee under Section
6.11 and no  notice to  Noteholders  of the  appointment  of any  co-trustee  or
separate trustee shall be required under Section 6.8 hereof.

            (b) Every  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  Indenture  Trustee  shall  be  conferred  or  imposed  upon and
      exercised or performed by the Indenture  Trustee and such separate trustee
      or co-trustee  jointly (it being  understood that such separate trustee or
      co-trustee  is not  authorized  to act  separately  without the  Indenture
      Trustee  joining in such act),  except to the extent that under any law of
      any  jurisdiction  in which any particular act or acts are to be performed
      the Indenture  Trustee shall be incompetent or unqualified to perform such
      act or acts, in which event such rights,  powers,  duties and  obligations
      (including the holding of title to the Trust or any

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<PAGE>

      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 Indenture Trustee;

            (ii) no trustee  hereunder  shall be personally  liable by reason of
      any act or  omission of any other  trustee  hereunder,  including  acts or
      omissions of predecessor or successor Indenture Trustees; and

            (iii) the Indenture  Trustee 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  Indenture
Trustee shall be deemed to have been given to each of the 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 Indenture and
the conditions of this Article VI. 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
Indenture Trustee or separately,  as may be provided therein, subject to all the
provisions of this  Indenture,  specifically  including  every provision of this
Indenture  relating to the conduct of,  affecting the liability of, or affording
protection to, the Indenture Trustee.  Every such instrument shall be filed with
the Indenture Trustee.

            (d) Any separate  trustee or co-trustee  may at any time  constitute
the  Indenture  Trustee,  its  agent or  attorney-in-fact  with  full  power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Indenture on its behalf and in its name. If any separate trustee
or co-trustee shall die, dissolve, become insolvent, 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  Indenture  Trustee,  to the extent
permitted  by law,  without  the  appointment  of a new or  successor  Indenture
Trustee.

            (e) Any and all  amounts  relating  to the fees and  expenses of the
co-trustee or separate trustee will be borne by the Pledged Property.

            SECTION 6.11. Eligibility.  The Indenture Trustee shall at all times
satisfy the  requirements  of Section  310(a) of the TIA. The Indenture  Trustee
under this  Indenture  shall at all times be organized and doing  business under
the laws of the United States of America or any state 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  6.11,  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
Indenture  Trustee shall cease to be eligible in accordance  with the provisions
of this Section 6.11,  the Indenture  Trustee  shall resign  immediately  in the
manner and with the effect specified in Section 6.8. The Indenture Trustee shall
comply  with  Section  310(b)  of the  TIA,  including  the  optional  provision
permitted  by the second  sentence of Section  310(b)(9)  of the TIA;  provided,
however, that there shall be excluded from the operation of

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<PAGE>

Section  310(b)(1)  of the TIA any  indenture  or  indentures  under which other
securities of the Issuer are outstanding if the  requirements for such exclusion
set forth in 310(b)(1) of the TIA are met.

            SECTION 6.12.  Preferential Collection of Claims Against Issuer. The
Indenture  Trustee  shall comply with Section  311(a) of the TIA,  excluding any
creditor  relationship  listed in Section  311(b) of the TIA. A Trustee  who has
resigned  or been  removed  shall be  subject  to TIA ss.  311(a) to the  extent
indicated

            SECTION  6.13.  Representations  and  Warranties  of  the  Indenture
Trustee.  The Indenture  Trustee  represents  and warrants to the Issuer and the
Note Insurer as follows:

            (a) Due  Organization.  The Indenture  Trustee is a New York banking
corporation  in good  standing  under the laws of the United  States and is duly
authorized  and  licensed  under  applicable  law to  conduct  its  business  as
presently conducted.

            (b) Corporate Power. The Indenture  Trustee has all requisite right,
power and authority to execute and deliver this  Indenture and to perform all of
its duties as Indenture Trustee hereunder.

            (c) Due  Authorization.  The execution and delivery by the Indenture
Trustee of this Indenture and the other Basic  Documents to which it is a party,
and the  performance  by the  Indenture  Trustee  of its  duties  hereunder  and
thereunder, have been duly authorized by all necessary corporate proceedings and
no further  approvals or filings,  including  any  governmental  approvals,  are
required for the valid execution and delivery by the Indenture  Trustee,  or the
performance  by the Indenture  Trustee,  of this  Indenture and such other Basic
Documents.

            SECTION 6.14. Valid and Binding Indenture. The Indenture Trustee has
duly executed and  delivered  this  Indenture  and each other Basic  Document to
which it is a party,  and each of this  Indenture  and  each  such  other  Basic
Document  constitutes the legal,  valid and binding  obligation of the Indenture
Trustee, enforceable against the Indenture Trustee in accordance with its terms,
except as (i) such  enforceability  may be  limited by  bankruptcy,  insolvency,
reorganization  and similar laws  relating to or affecting  the  enforcement  of
creditors' rights generally and (ii) the availability of equitable  remedies may
be limited by equitable principles of general applicability.

            SECTION  6.15.  Waiver of  Setoffs.  The  Indenture  Trustee  hereby
expressly  waives any and all rights of setoff  that the  Indenture  Trustee may
otherwise at any time have under  applicable law with respect to any Account and
agrees  that  amounts  in the  Accounts  shall at all times be held and  applied
solely in accordance with the provisions hereof.

            SECTION  6.16.  Control  by the  Controlling  Party.  The  Indenture
Trustee shall comply with notices and  instructions  given by the Issuer only if
accompanied by the written consent of the Controlling Party,  except that if any
Event of Default shall have occurred and be  continuing,  the Indenture  Trustee
shall act upon and comply with notices and instructions given by the Controlling
Party alone in the place and stead of the Issuer.

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<PAGE>

                                  ARTICLE VII

                      Noteholders' Lists and Communications

            SECTION  7.1.  Issuer To  Furnish  To  Indenture  Trustee  Names and
Addresses  of  Noteholders.  The Issuer will furnish or cause to be furnished to
the Indenture  Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months  after the last Record  Date, a list,  in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the  Noteholders  as of such  Record  Date,  (b) at such  other  times as the
Indenture Trustee may request in writing,  within thirty (30) days after receipt
by the Issuer of any such  request,  a list of similar  form and content as of a
date not more than 10 days prior to the time such list is  furnished;  provided,
however,  that so long as the Indenture  Trustee is the Note Registrar,  no such
list shall be required to be furnished.  If  definitive  Notes have been issued,
the Indenture  Trustee or, if the Indenture  Trustee is not the Note  Registrar,
the Issuer  shall  furnish to the Note  Insurer in writing on an annual basis on
each June 30 and at such other  times as the Note  Insurer may request a copy of
the list.

            SECTION  7.2.   Preservation  of  Information;   Communications   to
Noteholders.

            (a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable,  the names and addresses of the Noteholders contained in
the most recent list  furnished to the Indenture  Trustee as provided in Section
7.1 and the names and addresses of Noteholders received by the Indenture Trustee
in its capacity as Note  Registrar.  The Indenture  Trustee may destroy any list
furnished  to it as provided in such  Section 7.1 upon  receipt of a new list so
furnished.

            (b) Noteholders may  communicate,  pursuant to Section 312(b) of the
TIA, with other Noteholders with respect to their rights under this Indenture or
under the Notes.

            (c) The Issuer,  the Indenture  Trustee and the Note Registrar shall
have the protection of Section 312(c) of the TIA.

            SECTION 7.3. Reports by Issuer.

            (a) The Issuer shall:

            (i) file with the Indenture Trustee, within 15 days after the Issuer
      is  required  to file the same with the  Commission,  copies of the annual
      reports and of the information,  documents and other reports (or copies of
      such portions of any of the foregoing as the  Commission  may from time to
      time by rules and regulations  prescribe) which the Issuer may be required
      to file  with  the  Commission  pursuant  to  Section  13 or  15(d) of the
      Exchange Act;

            (ii)  file  with  the  Indenture   Trustee  and  the  Commission  in
      accordance with rules and regulations  prescribed from time to time by the
      Commission such additional information, documents and reports with respect
      to  compliance  by the Issuer with the  conditions  and  covenants of this
      Indenture  as may be  required  from  time  to  time  by  such  rules  and
      regulations; and

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<PAGE>

            (iii) supply to the  Indenture  Trustee (and the  Indenture  Trustee
      shall  transmit by mail to all Class A  Noteholders  described  in Section
      313(c)  of the TIA)  such  summaries  of any  information,  documents  and
      reports  required  to be filed by the Issuer  pursuant  to clauses (i) and
      (ii) of this  Section  7.3(a) as may be required by rules and  regulations
      prescribed from time to time by the Commission.

            (b) Unless the Issuer otherwise  determines,  the fiscal year of the
Issuer shall end on December 31 of each year.

            SECTION 7.4.  Reports by Indenture  Trustee.  If required by Section
313(a) of the TIA,  within 60 days after the end of each year,  commencing  with
the year ended December 31, 2006, the Indenture Trustee shall mail to each Class
A Noteholder as required by Section  313(c) of the TIA a brief report dated a of
such date that  complies with Section  313(a) of the TIA. The Indenture  Trustee
shall also comply with Section 313(b) of the TIA.

            A copy  of  each  report  at the  time  of its  mailing  to  Class A
Noteholders shall be filed by the Indenture Trustee with the Commission and each
stock exchange,  if any, on which the Class A Notes are listed. The Issuer shall
notify  the  Indenture  Trustee  if and when the Class A Notes are listed on any
stock exchange.

                                  ARTICLE VIII

                          Collection of Money; Releases

            SECTION 8.1.  Collection  of Money.  Except as  otherwise  expressly
provided  herein,  the Indenture  Trustee may demand payment or delivery of, and
shall receive and collect,  directly and without  intervention  or assistance of
any fiscal agent or other intermediary,  all money and other property payable to
or receivable by the Indenture  Trustee  pursuant to this Indenture and the Sale
and  Servicing  Agreement.  The  Indenture  Trustee  shall  apply all such money
received by it, or cause the Trust  Collateral Agent to apply all money received
by it, as  provided  in this  Indenture  and the Sale and  Servicing  Agreement.
Except as  otherwise  expressly  provided in this  Indenture  or in the Sale and
Servicing  Agreement,  if any  default  occurs in the  making of any  payment or
performance  under  any  agreement  or  instrument  that is part of the  Pledged
Property,  the Indenture  Trustee may take such action as may be  appropriate to
enforce such payment or  performance,  including the institution and prosecution
of appropriate  proceedings.  Any such action shall be without  prejudice to any
right to claim a Default or Event of Default under this  Indenture and any right
to proceed thereafter as provided in Article V.

            SECTION 8.2. Release of Pledged  Property.(a) Subject to the payment
of its fees and  expenses  and  other  amounts  pursuant  to  Section  6.7,  the
Indenture  Trustee may, and when required by the  provisions  of this  Indenture
shall,  execute instruments to release property from the lien of this Indenture,
in a  manner  and  under  circumstances  that  are  not  inconsistent  with  the
provisions of this  Indenture.  No party relying upon an instrument  executed by
the  Indenture  Trustee  as  provided  in this  Article  VIII  shall be bound to
ascertain the Indenture  Trustee's  authority,  inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.

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<PAGE>

            (b) The Indenture  Trustee shall, at such time as there are no Notes
outstanding,  all amounts  owing to the Note Insurer  under the Basic  Documents
have been paid and all sums due the  Indenture  Trustee  pursuant to Section 6.7
have been paid, release the Pledged Property from the lien of this Indenture and
release to the Issuer or any other  Person  entitled  thereto  any funds then on
deposit in the Accounts.  The Indenture  Trustee shall release property from the
lien of this  Indenture  pursuant to this Section 8.2(b) only upon receipt of an
Issuer Request accompanied by an Officer's Certificate and an Opinion of Counsel
and (if required by the TIA) Independent Certificates in accordance with Section
314(c) and Section 314(d)(1) of the TIA.

            SECTION 8.3. Opinion of Counsel. The Indenture Trustee shall receive
at least seven  days'  notice  when  requested  by the Issuer to take any action
pursuant to Section 8.2(a),  accompanied by copies of any instruments  involved,
and the Indenture  Trustee shall also require as a condition to such action,  an
Opinion of Counsel in form and substance  satisfactory to the Indenture Trustee,
stating the legal effect of any such  action,  outlining  the steps  required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been  complied  with and such  action will not  materially  and
adversely impair the security for the Notes or the rights of the Holders thereof
in contravention of the provisions of this Indenture;  provided,  however,  that
such  Opinion of Counsel  shall not be  required to express an opinion as to the
fair value of the Pledged Property. Counsel rendering any such opinion may rely,
without  independent  investigation,   on  the  accuracy  and  validity  of  any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.

                                   ARTICLE IX

                             Supplemental Indentures

            SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.
Without  the  consent  of the  Holders  of any Notes but with the prior  written
consent of the Note Insurer  (unless a Note Insurer  Default shall have occurred
and be continuing) and with prior notice to the Demand Note Provider, the Demand
Note  Guarantor  and the Rating  Agencies by the  Issuer,  as  evidenced  to the
Indenture Trustee,  the Issuer and the Indenture Trustee,  when authorized by an
Issuer  Order,  at any time and from time to time,  may  enter  into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution  thereof),  in form satisfactory to the
Indenture Trustee, for any of the following purposes:

            (i) to correct or amplify  the  description  of any  property at any
      time subject to the lien of this  Indenture,  or better to assure,  convey
      and confirm unto the Indenture Trustee any property subject or required to
      be subjected to the lien of this  Indenture,  or to subject to the lien of
      this Indenture additional property;

            (ii) to evidence the  succession,  in compliance with the applicable
      provisions  hereof, of another person to the Issuer, and the assumption by
      any such  successor of the covenants of the Issuer herein and in the Notes
      contained;

            (iii) to add to the covenants of the Issuer,  for the benefit of the
      Holders of the Notes, or to surrender any right or power herein  conferred
      upon the Issuer;

                                       46
<PAGE>

            (iv) to convey, transfer, assign, mortgage or pledge any property to
      or with the Indenture Trustee;

            (v) to cure any  ambiguity,  to correct or supplement  any provision
      herein or in any supplemental indenture which may be inconsistent with any
      other  provision  herein or in any  supplemental  indenture or to make any
      other  provisions with respect to matters or questions  arising under this
      Indenture  or in any  supplemental  indenture;  provided  that such action
      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 supplemental indenture; or

            (vi) to evidence and provide for the  acceptance of the  appointment
      hereunder by a successor  Indenture  Trustee with respect to the Notes and
      to add to or change any of the  provisions  of this  Indenture as shall be
      necessary to facilitate the administration of the trusts hereunder by more
      than one trustee, pursuant to the requirements of Article VI.

            (vii)  to  modify,  eliminate  or  add  to the  provisions  of  this
      Indenture to such extent as shall be necessary to effect the qualification
      of this  Indenture  under the TIA or under  any  similar  federal  statute
      hereafter  enacted and to add to this Indenture  such other  provisions as
      may be expressly required by the TIA.

            The  Indenture  shall not be amended or  modified  without the prior
written  consent of the Demand Note  Provider or the Demand Note  Guarantor,  as
applicable (to the extent that the Demand Note or the Demand Note Guarantee,  as
applicable, remains outstanding) if the result of such amendment or modification
is (a) to reduce or change the  priority of payments  payable to the Demand Note
Provider  or the Demand  Note  Guarantor;  (b) to  accelerate  or  postpone  the
scheduled date of any payment  payable to the Demand Note Provider or the Demand
Note  Guarantor;  or (c) to modify any of the definitions in the Basic Documents
which would have the effect of any of the foregoing.

            The Indenture  Trustee is hereby authorized to join in the execution
of  any  such  supplemental  indenture  and  to  make  any  further  appropriate
agreements and stipulations that may be therein contained.

            SECTION 9.2.  Supplemental  Indentures  with Consent of Noteholders.
The Issuer and the Indenture  Trustee,  when authorized by an Issuer Order, also
may, with prior notice to the Demand Note  Provider,  the Demand Note  Guarantor
and the Rating Agencies, with the prior written consent of the Note Insurer (or,
if a Note  Insurer  Default  shall have  occurred  and be  continuing,  with the
consent  of  the  Majorityholders),   enter  into  an  indenture  or  indentures
supplemental  hereto for the purpose of adding any provisions to, or changing in
any  manner or  eliminating  any of the  provisions  of,  this  Indenture  or of
modifying  in any  manner  the  rights of the  Holders  of the Notes  under this
Indenture;  provided,  however,  that, subject to the express rights of the Note
Insurer under the Basic Documents, no such supplemental indenture shall, without
the  consent of the Holder of each  outstanding  Note  affected  thereby and the
Demand  Note  Provider  and/or the Demand  Note  Guarantor,  as  applicable,  if
affected thereby:

            (i) change the date of payment of any  installment  of principal of,
      interest on or other amounts with respect to any Note,  the Demand Note or
      the Demand Note

                                       47
<PAGE>

      Guarantee,  or reduce the principal  amount thereof,  the Note Rate or the
      Redemption  Price with respect to the Notes,  change the provision of this
      Indenture  relating to the  application of collections on, or the proceeds
      of the sale of,  the  Pledged  Property  to  payment  of  principal  of or
      interest on the Notes,  or change any place of payment where,  or the coin
      or currency in which, any Note or the interest thereon is payable;

            (ii) impair the right to institute  suit for the  enforcement of the
      provisions of this Indenture  requiring the application of funds available
      therefor,  as provided in Article V, to the payment of any such amount due
      on the Notes or to the Demand Note  Provider or the Demand Note  Guarantor
      on or  after  the  respective  due  dates  thereof  (or,  in the  case  of
      redemption, on or after the Redemption Date);

            (iii) reduce the percentage of the  outstanding  Note Balance of the
      Notes,  the  consent  of the  Holders  of which is  required  for any such
      supplemental indenture, or the consent of the Holders of which is required
      for any waiver of compliance with certain  provisions of this Indenture or
      certain  defaults  hereunder and their  consequences  provided for in this
      Indenture;

            (iv) reduce the  percentage of the  outstanding  Note Balance of the
      Notes  required  to direct the  Indenture  Trustee to direct the Issuer to
      sell or liquidate the Pledged Property pursuant to Section 5.4;

            (v) modify any  provision  of this  Section  except to increase  any
      percentage   specified  herein  or  to  provide  that  certain  additional
      provisions of this Indenture or the Basic Documents  cannot be modified or
      waived without the consent of the Holder of each Outstanding Note affected
      thereby;

            (vi) modify any of the  provisions of this  Indenture in such manner
      as to affect the  calculation  of the amount of any payment of interest or
      principal  due on any Note or to the Demand  Note  Provider  or the Demand
      Note Guarantor on any Payment Date  (including  the  calculation of any of
      the individual  components of such calculation) or to affect the rights of
      the  Noteholders  to the  benefit  of any  provisions  for  the  mandatory
      redemption of the Notes contained herein; or

            (vii)  permit  the  creation  of any lien  ranking  prior to or on a
      parity  with the lien of this  Indenture  with  respect to any part of the
      Pledged Property or, except as otherwise  permitted or contemplated herein
      or in any of the Basic Documents,  terminate the lien of this Indenture on
      any property at any time subject hereto or deprive the Holder of any Note,
      the Demand  Note  Provider or the Demand Note  Guarantor  of the  security
      provided by the lien of this Indenture.

            It shall not be  necessary  for any Act of  Noteholders  under  this
Section to approve the particular form of any proposed  supplemental  indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

            Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental  indenture  pursuant to this Section,  the Indenture Trustee
shall mail to the Holders of the Notes to which such  amendment or  supplemental
indenture  relates a notice setting forth in general terms the substance of such
supplemental  indenture.  Any  failure  of the  Indenture

                                       48
<PAGE>

Trustee to mail such notice, or any defect therein,  shall not, however,  in any
way impair or affect the validity of any such supplemental indenture.

            SECTION 9.3. Execution of Supplemental Indentures.  In executing, or
permitting  the  additional  trusts  created  by,  any  supplemental   indenture
permitted by this Article IX or the amendments or  modifications  thereby of the
trusts  created by this  Indenture,  the Indenture  Trustee shall be entitled to
receive,  and shall be fully  protected in relying  upon,  an Opinion of Counsel
stating that the  execution of such  supplemental  indenture  is  authorized  or
permitted  by this  Indenture.  The  Indenture  Trustee  may,  but  shall not be
obligated  to,  enter into any such  supplemental  indenture  that  affects  the
Indenture  Trustee's own rights,  duties,  liabilities or immunities  under this
Indenture or otherwise.

            SECTION 9.4. Effect of Supplemental Indenture. Upon the execution of
any supplemental  indenture  pursuant to the provisions  hereof,  this Indenture
shall be and be deemed to be modified and amended in accordance  therewith  with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations,  duties, liabilities and immunities under this Indenture of
the Indenture Trustee,  the Issuer and the Holders of the Notes shall thereafter
be determined,  exercised and enforced hereunder subject in all respects to such
modifications  and  amendments,  and all the  terms and  conditions  of any such
supplemental  indenture  shall  be and be  deemed  to be part of the  terms  and
conditions of this Indenture for any and all purposes.

            SECTION 9.5. Conformity With Trust Indenture Act. Every amendment of
this  Indenture  and every  supplemental  indenture  executed  pursuant  to this
Article  IX shall  conform to the  requirements  of the TIA as then in effect so
long as this Indenture shall then be qualified under the TIA.

            SECTION 9.6.  Reference in Notes to Supplemental  Indentures.  Notes
authenticated  and delivered after the execution of any  supplemental  indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a  notation  in form  approved  by the  Indenture  Trustee as to any matter
provided  for in such  supplemental  indenture.  If the Issuer or the  Indenture
Trustee shall so determine,  new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental  indenture may
be prepared and executed by the Issuer and  authenticated  and  delivered by the
Indenture Trustee in exchange for Outstanding Notes.

                                   ARTICLE X

                               Redemption of Notes

            SECTION 10.1. Redemption. (a) The Notes are subject to redemption in
whole,  but not in part,  by the Class R  Certificateholder  on any Payment Date
occurring  on or after the date on which the  outstanding  Pool  Balance is less
than or equal to 10% of the sum of the  Original  Pool Balance plus the Original
Pre-Funded Amount, at a price equal to the Redemption Price. If the Notes are to
be redeemed pursuant to this Section 10.1(a), the Class R Certificateholder will
be required to furnish  notice of such  election  to the  Indenture  Trustee not
later than the end of the  Collection  Period for the related  Payment  Date and
deposit with the Indenture  Trustee in the Note Account the Redemption  Price of
the  Notes to be  redeemed,  any

                                       49
<PAGE>

amounts owed to the Note Insurer under the Insurance Agreement, any amounts owed
to the  Demand  Note  Provider  and/or  the  Demand  Note  Guarantor,  the Trust
Collateral  Agent and the Backup  Servicer,  as  applicable,  under the Sale and
Servicing  Agreement  and all amounts owed to the  Indenture  Trustee under this
Indenture;  whereupon all such Notes shall be due and payable on the  Redemption
Date upon the furnishing of a notice  complying with Section 10.2 to each Holder
of Notes.  The  Indenture  Trustee shall furnish the Note Insurer and the Rating
Agencies notice of such redemption.

            (b) In the event that on the Final Funding  Period  Payment Date the
remaining  Pre-Funded  Amount  after  giving  effect  to  the  purchase  by  the
Transferor and the conveyance to the Trust of all Subsequent  Receivables during
the Funding  Period,  including any such purchase on the last day of the Funding
Period,  is greater  than zero,  the Class A Notes will be redeemed  pursuant to
Section  5.6(c)(iv) of the Sale and Servicing  Agreement,  in an amount equal to
the Mandatory Special Redemption.

            SECTION 10.2. Form of Redemption Notice.  Notice of redemption under
Section  10.1(a)  shall be given by the  Indenture  Trustee by  facsimile  or by
first-class mail, postage prepaid, transmitted or mailed prior to the applicable
Redemption  Date to each  Holder of Notes,  as of the close of  business  on the
Record Date preceding the applicable  Redemption  Date, at such Holder's address
appearing in the Note Register.

            All notices of redemption shall state:

            (i) the Redemption Date;

            (ii) the Redemption Price;

            (iii) that the Record Date otherwise  applicable to such  Redemption
      Date  is not  applicable  and  that  payments  shall  be  made  only  upon
      presentation  and  surrender  of such Notes and the place where such Notes
      are to be surrendered for payment of the Redemption  Price (which shall be
      the office or agency of the Issuer to be maintained as provided in Section
      3.2); and

            (iv)  that  interest  on the  Notes  shall  cease to  accrue  on the
      Redemption Date.

            Notice of  redemption  of the Notes shall be given by the  Indenture
Trustee in the name and at the expense of the Issuer.  Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.

            SECTION  10.3.  Notes Payable on  Redemption  Date.  The Notes to be
redeemed shall,  following  notice of redemption as required by Section 10.2, on
the Redemption  Date become due and payable at the Redemption  Price and (unless
the Class R  Certificateholder  shall  default in the payment of the  Redemption
Price) no interest shall accrue on the Redemption Price for any period after the
date to which accrued  interest is calculated  for purposes of  calculating  the
Redemption Price.

                                       50
<PAGE>

                                   ARTICLE XI

                                  Miscellaneous

            SECTION 11.1.  Compliance  Certificates and Opinions,  etc. (a) Upon
any  application  or request by the Issuer to the Indenture  Trustee to take any
action under any  provision of this  Indenture,  the Issuer shall furnish to the
Indenture Trustee and to the Note Insurer (i) an Officer's  Certificate  stating
that all conditions  precedent,  if any, provided for in this Indenture relating
to the  proposed  action  have been  complied  with,  (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such  conditions  precedent,  if
any, have been complied with,  except that, in the case of any such  application
or request as to which the furnishing of such documents is specifically required
by any provision of this Indenture, no additional certificate or opinion need be
furnished and (iii) (if required by the TIA) an Independent  Certificate  from a
firm of certified public accountants.

            Every  certificate  or opinion  with  respect to  compliance  with a
condition or covenant provided for in this Indenture shall include:

            (i) a statement that each  signatory of such  certificate or opinion
      has read or has  caused  to be read such  covenant  or  condition  and the
      definitions herein relating thereto;

            (ii) a brief statement as to the nature and scope of the examination
      or investigation  upon which the statements or opinions  contained in such
      certificate or opinion are based;

            (iii) a statement that, in the opinion of each such signatory,  such
      signatory has made such  examination or  investigation  as is necessary to
      enable such signatory to express an informed  opinion as to whether or not
      such covenant or condition has been complied with; and

            (iv)  a  statement  as to  whether,  in the  opinion  of  each  such
      signatory such condition or covenant has been complied with.

            (b) Prior to the deposit of any Pledged  Property or other  property
or securities  with the  Indenture  Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer  shall,  in  addition  to any  obligation  imposed in Section  11.1(a) or
elsewhere  in this  Indenture,  furnish to the  Indenture  Trustee  and the Note
Insurer an  Officer's  Certificate  certifying  or stating  the  opinion of each
person  signing such  certificate  as to the fair value  (within 90 days of such
deposit) to the Issuer of the Pledged  Property or other  property or securities
to be so deposited.

            (i)  Whenever  the Issuer is  required  to furnish to the  Indenture
      Trustee  and the Note  Insurer  an  Officer's  Certificate  certifying  or
      stating the opinion of any signer  thereof as to the matters  described in
      clause (i) above,  the Issuer shall also deliver to the Indenture  Trustee
      and the Note Insurer an Independent Certificate as to the same matters, if
      the fair value to the Issuer of the  securities  to be so deposited and of
      all other such securities made the basis of any such withdrawal or release
      since the commencement of the then-current  fiscal year of the Issuer,  as
      set forth in the certificates  delivered  pursuant

                                       51
<PAGE>

      to  clause  (i)  above  and  this  clause  (ii),  is  10% or  more  of the
      outstanding  Note Balance of the Notes, but such a certificate need not be
      furnished with respect to any  securities so deposited,  if the fair value
      thereof to the Issuer as set forth in the related Officer's Certificate is
      less than $25,000 or less than 1% of the  outstanding  Note Balance of the
      Notes.

            (ii)  Other  than  with  respect  to the  release  of any  Purchased
      Receivables or Liquidated Receivables or any Receivable that has been paid
      in full by or on behalf of the related  Obligor,  whenever any property or
      securities are to be released from the lien of this Indenture,  the Issuer
      shall  also  furnish  to the  Indenture  Trustee  and the Note  Insurer an
      Officer's  Certificate  certifying  or stating  the opinion of each person
      signing such  certificate as to the fair value (within ninety (90) days of
      such  release) of the property or  securities  proposed to be released and
      stating that in the opinion of such person the  proposed  release will not
      impair  the  security  under  this  Indenture  in   contravention  of  the
      provisions hereof.

            (iii)  Whenever  the Issuer is required to furnish to the  Indenture
      Trustee  and the Note  Insurer  an  Officer's  Certificate  certifying  or
      stating the opinion of any signer  thereof as to the matters  described in
      clause (iii) above, the Issuer shall also furnish to the Indenture Trustee
      and the Note Insurer an Independent  Certificate as to the same matters if
      the fair value of the  property or  securities  and of all other  property
      other than Purchased Receivables and Defaulted Receivables,  or securities
      released from the lien of this  Indenture  since the  commencement  of the
      then current calendar year, as set forth in the  certificates  required by
      clause  (iii)  above  and  this  clause  (iv),  equals  10% or more of the
      outstanding  Note Balance of the Notes,  but such  certificate need not be
      furnished in the case of any release of property or securities if the fair
      value thereof as set forth in the related  Officer's  Certificate  is less
      than $25,000 or less than 1% of the then  outstanding  Note Balance of the
      Notes.

            (iv)  Notwithstanding  Section  8.2 or any other  provision  of this
      Section, the Issuer may (A) collect,  liquidate, sell or otherwise dispose
      of  Receivables  as and to the extent  permitted  or required by the Basic
      Documents  and (B) make cash  payments  out of the  Accounts as and to the
      extent permitted or required by the Basic Documents.

            SECTION 11.2. Form of Documents  Delivered to Indenture Trustee.  In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified  Person,  it is not necessary that all such matters be
certified  by, or covered by the opinion of, only one such Person,  or that they
be so certified or covered by only one document, but one such Person may certify
or give an  opinion  with  respect  to some  matters  and one or more other such
Persons as to other matters,  and any such Person may certify or give an opinion
as to such matters in one or several documents.

            Any  certificate  or opinion of an Authorized  Officer of the Issuer
may be based,  insofar as it relates to legal  matters,  upon a  certificate  or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of  reasonable  care should know,  that the  certificate  or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters,  upon
a certificate  or

                                       52
<PAGE>

opinion of, or representations  by, an officer or officers of the Servicer,  the
Transferor  or the Issuer,  stating  that the  information  with respect to such
factual  matters is in the  possession  of the Servicer,  the  Transferor or the
Issuer,  unless such counsel knows, or in the exercise of reasonable care should
know,  that the certificate or opinion or  representations  with respect to such
matters are erroneous.

            Where any Person is  required  to make,  give or execute two or more
applications,  requests, consents,  certificates,  statements, opinions or other
instruments  under this Indenture,  they may, but need not, be consolidated  and
form one instrument.

            Whenever in this  Indenture,  in connection  with any application or
certificate or report to the Indenture  Trustee,  it is provided that the Issuer
shall  deliver any document as a condition of the granting of such  application,
or as evidence of the Issuer's  compliance with any term hereof,  it is intended
that the truth and accuracy,  at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and  opinions  stated in such  document  shall in such case be  conditions
precedent to the right of the Issuer to have such application  granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,  be
construed  to affect the  Indenture  Trustee's  right to rely upon the truth and
accuracy of any statement or opinion  contained in any such document as provided
in Article VI.

            SECTION  11.3.  Acts  of  Noteholders.   (a)  Any  request,  demand,
authorization,  direction,  notice,  consent, waiver or other action provided by
this  Indenture  to be  given or taken by  Noteholders  may be  embodied  in and
evidenced by one or more  instruments of  substantially  similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee,  and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such  instrument or of a writing  appointing  any such agent
shall be  sufficient  for any purpose of this  Indenture and (subject to Section
6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section.

            (b) The fact and date of the  execution  by any  person  of any such
instrument  or writing may be proved in any  customary  manner of the  Indenture
Trustee.

            (c) The ownership of Notes shall be proved by the Note Register.

            (d) Any request, demand, authorization,  direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued  upon the  registration  thereof or in exchange  therefor or in lieu
thereof,  in respect of  anything  done,  omitted or  suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon,  whether or not notation of
such action is made upon such Note.

                                       53
<PAGE>

            SECTION 11.4.  Notices,  etc.,  to Indenture  Trustee,  Issuer,  the
Demand Note Provider and Rating Agencies.  Any request,  demand,  authorization,
direction,  notice, consent, waiver,  instruction or Act of Noteholders or other
documents  provided or  permitted by this  Indenture  to be made upon,  given or
furnished to or filed with:

            (a) The Indenture Trustee by any Noteholder,  the Note Insurer,  the
Demand Note  Provider or by the Issuer  shall be  sufficient  for every  purpose
hereunder if  personally  delivered,  delivered  by overnight  courier or mailed
certified mail,  return receipt  requested and shall be deemed to have been duly
given upon receipt to the Indenture  Trustee at its applicable  Corporate  Trust
Office, or

            (b) The Issuer by the Indenture  Trustee or by any Noteholder  shall
be sufficient for every purpose hereunder if personally delivered,  delivered by
overnight  courier or mailed certified mail,  return receipt requested and shall
deemed to have been duly given upon  receipt to the Issuer  addressed  to:  Long
Beach  Acceptance Auto  Receivables  Trust 2006-B,  in care of Wilmington  Trust
Company, 1100 North Market Street, Wilmington,  Delaware 19890-0001,  Attention:
Corporate  Trust  Administration  (Telecopy:  (302)  651-8882),  or at any other
address previously  furnished in writing to the Indenture Trustee by Issuer. The
Issuer shall promptly transmit any notice received by it from the Noteholders to
the Indenture Trustee.

            (c) The Note  Insurer or the Demand  Note  Provider by the Issuer or
the  Indenture  Trustee  shall be  sufficient  for any purpose  hereunder  if in
writing and mailed by  registered  mail or  personally  delivered  or telexed or
telecopied to the recipient as follows:

To the Note Insurer:             Financial Security Assurance Inc.
                                 31 West 52nd Street
                                 New York, New York 10019
                                 Attention: Transaction Oversight
                                 Re: Long Beach Acceptance Auto Receivables
                                     Trust 2006-B
                                 Telex No.: (212) 688-3101
                                 Confirmation: (212) 826-0100
                                 Telecopy Nos.: (212) 339-3518 or (212) 339-3529

                                 (in each case in which notice or other
                                 communication to the Note Insurer refers to an
                                 Event of Default, a claim on the Policy or with
                                 respect to which failure on the part of the
                                 Note Insurer to respond shall be deemed to
                                 constitute consent or acceptance, then a copy
                                 of such notice or other communication should
                                 also be sent to the attention of the General
                                 Counsel and the Head-Financial Guaranty Group
                                 "URGENT MATERIAL ENCLOSED").

To the Demand Note Provider:     CITIGROUP GLOBAL MARKETS REALTY CORP.
                                 390 Greenwich Street, 4th Floor
                                 New York, New York 10013
                                 Attention: Chief Financial Officer - Principal

                                       54
<PAGE>

                                 Finance
                                 Facsimile: (212) 723-8855

            Notices  required to be given to the Rating  Agencies by the Issuer,
the  Indenture  Trustee or the Owner  Trustee  shall be in  writing,  personally
delivered, delivered by overnight courier, mailed certified mail, return receipt
requested or, in the case of S&P, delivered electronically to (i) in the case of
Moody's,  at the following address:  Moody's Investors Service,  Inc., 99 Church
Street,  New York,  New York 10004 and (ii) in the case of S&P,  with respect to
any information not available in electronic  format,  at the following  address:
Standard & Poor's Ratings Services,  55 Water Street,  41st Floor, New York, New
York  10041,  Attention  of ABS  Surveillance  Group  and  with  respect  to any
information available in electronic format shall be delivered  electronically to
Servicer_reports@sandp.com;  or as to  each  of the  foregoing,  at  such  other
address as shall be designated by written notice to the other parties.

            SECTION 11.5. Notices to Noteholders;  Waiver.  Where this Indenture
provides  for  notice  to  Noteholders,  of any  event,  such  notice  shall  be
sufficiently  given (unless  otherwise herein expressly  provided) if in writing
and mailed,  first-class,  postage prepaid to each Noteholder,  affected by such
event,  at his  address as it appears on the Note  Register  or the  Certificate
Register,  as the case may be, not later than the latest  date,  and not earlier
than the earliest date,  prescribed  for the giving of such notice.  In any case
where notice to Noteholders  is given by mail,  neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Noteholder shall
affect the sufficiency of such notice with respect to other Noteholders, and any
notice  that is mailed in the  manner  herein  provided  shall  conclusively  be
presumed to have been duly given.

            Where this Indenture provides for notice in any manner,  such notice
may be waived in writing by any Person  entitled to receive such notice,  either
before or after the  event,  and such  waiver  shall be the  equivalent  of such
notice.  Waivers  of notice by  Noteholders  shall be filed  with the  Indenture
Trustee but such filing  shall not be a condition  precedent  to the validity of
any action taken in reliance upon such a waiver.

            In case,  by reason of the  suspension  of regular mail service as a
result of a strike,  work stoppage or similar activity,  it shall be impractical
to mail  notice of any event to  Noteholders  when such notice is required to be
given  pursuant to any  provision of this  Indenture,  then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.

            Where this  Indenture  provides  for notice to the Rating  Agencies,
failure to give such  notice  shall not affect any other  rights or  obligations
created hereunder,  and shall not under any circumstance constitute a Default or
Event of Default.

            SECTION 11.6.  Conflict with Trust  Indenture  Act. If any provision
hereof  limits,  qualifies or conflicts  with another  provision  hereof that is
required to be included in this  Indenture by any of the  provisions of the TIA,
such required provision shall control.

                                       55
<PAGE>

            The  provisions of TIA ss.ss.  310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein unless
expressly  excluded by this  Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

            SECTION 11.7. Effect of Headings and Table of Contents.  The Article
and Section  headings herein and the Table of Contents are for convenience  only
and shall not affect the construction hereof.

            SECTION 11.8.  Successors and Assigns.  All covenants and agreements
in this  Indenture  and the Notes by the Issuer  shall bind its  successors  and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this  Indenture  shall  bind  its  successors,  co-trustees  and  agents  of the
Indenture Trustee.

            SECTION 11.9. Separability.  In case any provision in this Indenture
or in the Notes  shall be  invalid,  illegal  or  unenforceable,  the  validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

            SECTION 11.10.  Benefits of Indenture.  Each of the Note Insurer and
the Demand Note Provider and their  respective  successors  and assigns shall be
third-party  beneficiaries  to the  provisions of this  Indenture,  and shall be
entitled to rely upon and directly to enforce such  provisions of this Indenture
so long as no Note Insurer  Default or Demand Note Event,  as applicable,  shall
have  occurred  and be  continuing.  Nothing in this  Indenture or in the Notes,
express or implied,  shall give to any Person, other than the parties hereto and
their successors  hereunder,  and the Noteholders,  the Demand Note Provider and
any other  party  secured  hereunder,  and any other  person  with an  ownership
interest  in any part of the  Pledged  Property,  any  benefit  or any  legal or
equitable right, remedy or claim under this Indenture.  Each of the Note Insurer
and the Demand Note  Provider  may  disclaim  any of its  respective  rights and
powers under this  Indenture (in which case the  Indenture  Trustee may exercise
such right or power  hereunder),  but not its duties and  obligations  under the
Policy, upon delivery of a written notice to the Indenture Trustee.

            SECTION 11.11.  Legal Holidays.  In any case where the date on which
any payment is due shall not be a Business Day, then  (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next  succeeding  Business  Day with the same  force  and
effect as if made on the date an which  nominally  due,  and no  interest  shall
accrue for the period from and after any such nominal date.

            SECTION 11.12.  GOVERNING LAW. THIS INDENTURE  SHALL BE CONSTRUED IN
ACCORDANCE  WITH, AND THIS INDENTURE AND ALL MATTERS  ARISING OUT OF OR RELATING
IN ANY WAY TO THIS INDENTURE  SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW
YORK.

            SECTION 11.13.  Counterparts.  This Indenture may be executed in any
number  of  counterparts,  each of which so  executed  shall be  deemed to be an
original,  but all such counterparts  shall together  constitute but one and the
same instrument.

            SECTION 11.14. Recording of Indenture.  If this Indenture is subject
to recording in any appropriate public recording  offices,  such recording is to
be  effected  by the

                                       56
<PAGE>

Issuer and at its  expense  accompanied  by an Opinion of Counsel  (which may be
counsel to the Indenture Trustee or any other counsel  reasonably  acceptable to
the Indenture Trustee and the Note Insurer) to the effect that such recording is
necessary  either for the  protection  of the  Noteholders  or any other  person
secured  hereunder or for the  enforcement of any right or remedy granted to the
Indenture Trustee or the Trust Collateral Agent under this Indenture or the Sale
and  Servicing  Agreement,  or the  Collateral  Agent  under the Spread  Account
Agreement.

            SECTION 11.15. Trust Obligation.

            (a) No recourse may be taken,  directly or indirectly,  with respect
to the  obligations  of the Issuer,  the  Transferor,  the  Servicer,  the Owner
Trustee,  the Trust  Collateral  Agent or the Indenture  Trustee on the Notes or
under this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) the Issuer, the Transferor, the Servicer, the
Indenture  Trustee,  the  Trust  Collateral  Agent or the Owner  Trustee  in its
individual  capacity,  (ii) any owner of a beneficial  interest in the Issuer or
(iii) any partner, owner,  beneficiary,  agent, officer,  director,  employee or
agent  of the  Transferor,  the  Servicer,  the  Indenture  Trustee,  the  Trust
Collateral Agent or the Owner Trustee in its individual capacity,  any holder of
a beneficial  interest in the Issuer,  the Transferor,  the Servicer,  the Owner
Trustee, the Trust Collateral Agent or the Indenture Trustee or of any successor
or assign of the  Transferor,  the Servicer,  the Indenture  Trustee,  the Trust
Collateral Agent or the Owner Trustee in its individual capacity, except in each
case as any such Person may have expressly  agreed (it being understood that the
Indenture Trustee, the Trust Collateral Agent and the Owner Trustee have no such
obligations  in their  individual  capacity)  and except that any such  partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid  consideration  for stock,  unpaid capital  contribution  or
failure to pay any installment or call owing to such entity. For all purposes of
this  Indenture,  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) It is expressly understood and agreed by the parties hereto that
(a) this  Agreement  is executed  and  delivered  by WTC,  not  individually  or
personally  but solely as Owner  Trustee of the  Issuer in the  exercise  of the
powers   and   authority   conferred   and   vested  in  it,  (b)  each  of  the
representations,  undertakings  and  agreements  herein  made on the part of the
Issuer is made and intended not as personal  representations,  undertakings  and
agreements  by WTC but is made and intended for the purpose for binding only the
Issuer,  (c)  nothing  herein  contained  shall be  construed  as  creating  any
liability on WTC,  individually  or personally,  to perform any covenant  either
expressed  or  implied  contained  herein,  all such  liability,  if any,  being
expressly waived by the parties hereto and by any Person claiming by, through or
under the parties hereto and (d) under no circumstances  shall WTC be personally
liable  for the  payment of any  indebtedness  or  expenses  of the Issuer or be
liable for the breach or failure of any obligation, representation,  warranty or
covenant  made or  undertaken  by the Issuer  under this  Agreement or any other
related document.

            (c) Notwithstanding  anything contained herein to the contrary, this
Agreement  has  been  executed  and  delivered  by  Deutsche  Bank,  not  in its
individual  capacity  but  solely as  Indenture  Trustee  and in no event  shall
Deutsche Bank have any liability for the representations, warranties, covenants,
agreements  or  other  obligations  of  the  Issuer  hereunder  or

                                       57
<PAGE>

in any of the certificates,  notices or agreements delivered pursuant hereto, as
to all of which recourse shall be had solely to the assets of the Issuer.

            SECTION 11.16. No Petition.  The Indenture Trustee, by entering into
this Indenture,  and each Noteholder,  by accepting a Note,  hereby covenant and
agree  that  they  will not prior to the date that is one year and one day after
the payment in full of all outstanding Notes institute against the Transferor or
the Issuer, or join in any institution  against the Transferor or the Issuer of,
any   bankruptcy,   reorganization,   arrangement,   insolvency  or  liquidation
proceedings,  or other  proceedings  under any  United  States  federal or State
bankruptcy or similar law in  connection  with any  obligations  relating to the
Notes, this Indenture or any of the Basic Documents.

            SECTION  11.17.  Inspection.  The Issuer  agrees that, on reasonable
prior notice,  it will permit any  representative of the Indenture Trustee or of
the Note Insurer,  during the Issuer's normal business hours, to examine all the
books of account,  records,  reports,  and other  papers of the Issuer,  to make
copies and extracts therefrom,  to cause such books to be audited by independent
certified public accountants,  and to discuss the Issuer's affairs, finances and
accounts with the Issuer's officers, employees, and independent certified public
accountants,  all at such  reasonable  times  and as often as may be  reasonably
requested.  Notwithstanding anything herein to the contrary, the foregoing shall
not be construed to prohibit (i) disclosure of any and all  information  that is
or becomes  publicly  known,  (ii)  disclosure of any and all information (A) if
required to do so by any applicable statute, law, rule or regulation, (B) to any
government agency or regulatory body having or claiming authority to regulate or
oversee  any  respects  of the  Indenture  Trustee's  business  or  that  of its
affiliates,  (C) pursuant to any subpoena, civil investigative demand or similar
demand or request of any court, regulatory authority,  arbitrator or arbitration
to which the Indenture Trustee or an affiliate or an officer, director, employer
or  shareholder  thereof is a party,  (D) in any  preliminary  or final offering
circular, registration statement or contract or other document pertaining to the
transactions  contemplated by the Indenture  approved in advance by the Servicer
or the Issuer or (E) to any independent or internal auditor,  agent, employee or
attorney of the Indenture Trustee having a need to know the same,  provided that
the Indenture  Trustee advises such recipient of the confidential  nature of the
information  being disclosed,  or (iii) any other  disclosure  authorized by the
Servicer or the Issuer.

            SECTION 11.18.  Rights of Note Insurer as Controlling Party. 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 Indenture,  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.  If a Note Insurer  Default has  occurred  and is  continuing,  any
provision, including this Section 11.18, which gives the Note Insurer any rights
as Controlling Party shall be inoperative during the period of such Note Insurer
Default and such rights shall  instead vest in the Indenture  Trustee  acting at
the direction of the Majorityholders.

            SECTION 11.19.  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  Indenture  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

                                       58
<PAGE>

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 direction of the  Majorityholders  shall have the right to take or
omit to take such action following the Policy Expiration Date. In addition,  any
other provision of this Indenture 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.

            SECTION  11.20.  Termination  of  Demand  Note  and/or  Demand  Note
Guarantee.  All rights to notice or consent of the Demand  Note  Provider or the
Demand Note  Guarantor,  as applicable,  under this Indenture  shall cease to be
effective  upon  payment in full of all amounts due and owing to the Demand Note
Provider and the Demand Note  Guarantor  under the Sale and Servicing  Agreement
and termination of the Demand Note or Demand Note Guarantee,  as applicable,  in
accordance with their respective terms. Neither the Demand Note Provider nor the
Demand Note Guarantor shall have any right to vote, consent,  instruct,  demand,
authorize, direct, waive, modify or to give instructions to any Person except as
set forth in Section 9.1 and 9.2 hereof.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]

                                       59
<PAGE>

            IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective  officers,  hereunto duly
authorized, all as of the day and year first above written.

                                 LONG BEACH ACCEPTANCE AUTO RECEIVABLES
                                 TRUST 2006-B

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

                                 By: ___________________________________________
                                 Name:
                                 Title:

                                 DEUTSCHE BANK TRUST COMPANY AMERICAS, not in
                                 its individual capacity but solely as Indenture
                                 Trustee

                                 By: ___________________________________________
                                 Name:
                                 Title:

                                 By: ___________________________________________
                                 Name:
                                 Title:

                         Signature Page to the Indenture

<PAGE>

                                                                         ANNEX A

                                  DEFINED TERMS

<PAGE>

                                                                     EXHIBIT A-1

REGISTERED                                                          $100,000,000
No. RA--1--1

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                           CUSIP NO. 54238N AA 8

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

NO TRANSFER OF THIS NOTE SHALL BE PERMITTED TO BE MADE TO ANY PERSON  UNLESS THE
INDENTURE  TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEREE TO THE EFFECT
THAT  EITHER  (I)  THE  TRANSFEREE  IS NOT AND IS NOT  ACTING  ON  BEHALF  OF OR
INVESTING  THE ASSETS OF (A) AN "EMPLOYEE  BENEFIT  PLAN" (AS DEFINED IN SECTION
3(3)  OF THE  EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT OF  1974,  AS  AMENDED
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA OR (B) A "PLAN"
(AS DEFINED IN SECTION  4975(e)(1)  OF THE  INTERNAL  REVENUE  CODE OF 1986,  AS
AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (II) EITHER
A DEPARTMENT OF LABOR  PROHIBITED  TRANSACTION  CLASS EXEMPTION OR THE STATUTORY
EXEMPTION PROVIDED UNDER SECTION 408(b)(17) OF ERISA AND SECTION  4975(d)(20) OF
THE CODE APPLIES TO THE TRANSFEREE'S  ACQUISITION AND CONTINUED  HOLDING OF THIS
NOTE. EACH  TRANSFEREE OF A BENEFICIAL  INTEREST IN THIS NOTE SHALL BE DEEMED TO
MAKE ONE OF THE FOREGOING REPRESENTATIONS.

THE  PRINCIPAL  OF THIS NOTE IS PAYABLE  IN  INSTALLMENTS  AS SET FORTH  HEREIN.
ACCORDINGLY,  THE OUTSTANDING  PRINCIPAL  AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

               LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2006-B
                       5.37% ASSET-BACKED NOTE, CLASS A-1

            Long Beach  Acceptance Auto  Receivables  Trust 2006-B,  a statutory
trust  organized  and existing  under the laws of the State of Delaware  (herein
referred to as the "Issuer"), for value received, hereby promises to pay to CEDE
& CO. or registered  assigns,  the principal sum of ONE HUNDRED  MILLION DOLLARS
payable on each  Payment  Date from

<PAGE>

the sources and on the terms and  conditions  set forth herein and as more fully
set forth in the Indenture;  provided, however, that the entire unpaid principal
amount of this  Class A-1 Note  shall be due and  payable  on the  October  2007
Payment Date (the "Class A-1 Final Scheduled Payment Date"). The Issuer will pay
interest  on this Note at the rate per annum shown  above on each  Payment  Date
until the principal of this Note is paid or made available for payment. Interest
on this Note will  accrue  for each  Payment  Date from and  including  the most
recent  Payment  Date on which  interest  has been  paid to but  excluding  such
Payment Date or, if no interest has yet been paid, from and including  September
28, 2006 (the "Interest Period").  Interest on this Note will be computed on the
basis of a 360-day  year and the actual  number of days  elapsed in the interest
accrual period. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.

            The  principal of and interest on this Note are payable in such coin
or currency  of the United  States of America as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with respect to this Note shall be applied  first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

            The Class A-1 Notes are  entitled  to the  benefits  of a  financial
guaranty insurance policy (the "Policy") issued by Financial Security Assurance,
Inc.   (the  "Note   Insurer"),   pursuant   to  which  the  Note   Insurer  has
unconditionally guaranteed payment to the Class A-1 Noteholders of (i) the Class
A-1 Interest  Payment Amount with respect to each Payment Date, (ii) the amount,
if any, by which the outstanding Class A Note Balance (after taking into account
payments of principal on such Payment  Date) exceeds the sum of the Pool Balance
as of the last day of the related Collection Period and the remaining Pre-Funded
Amount,  if any,  with  respect  to such  Payment  Date and (iii) the  Principal
Payment Amount with respect to the Class A-1 Final  Scheduled  Payment Date, all
as more fully set forth in the Indenture and the Sale and Servicing Agreement.

            Reference is made to the further  provisions  of this Note set forth
on the reverse  hereof,  which  shall have the same  effect as though  fully set
forth on the face of this Note.

            Unless the certificate of authentication hereon has been executed by
the Indenture  Trustee whose name appears below by manual  signature,  this Note
shall not be  entitled  to any benefit  under the  Indenture  referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                     A-1-2
<PAGE>

            IN WITNESS  WHEREOF,  the Issuer has caused  this  instrument  to be
signed,  manually or in facsimile,  by its Authorized Officer as of the date set
forth below.

Date: September 28, 2006

                                 LONG BEACH ACCEPTANCE AUTO RECEIVABLES
                                 TRUST 2006-B

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

                                 By: ___________________________________________
                                 Name:
                                 Title:

                                     A-1-3
<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

            This is one of the Notes  designated  above and  referred  to in the
within-mentioned Indenture.

Date: September 28, 2006         DEUTSCHE BANK TRUST COMPANY AMERICAS, not in
                                 its individual capacity but solely as Indenture
                                 Trustee

                                 By: ___________________________________________
                                                Authorized Signatory

                                     A-1-4
<PAGE>

                                [REVERSE OF NOTE]

            This Note is one of a duly authorized  issue of Notes of the Issuer,
designated as its 5.37% Asset-Backed  Notes, Class A-1 (herein called the "Class
A-1  Notes"),  issued  under an  Indenture  dated as of  September 1, 2006 (such
indenture,  as  supplemented  or  amended,  is herein  called the  "Indenture"),
between  the Issuer and  Deutsche  Bank Trust  Company  Americas,  as  Indenture
Trustee (the "Indenture  Trustee",  which term includes any successor  Indenture
Trustee under the Indenture) to which Indenture and all indentures  supplemental
thereto  reference is hereby made for a statement of the  respective  rights and
obligations  thereunder of the Issuer,  the Indenture Trustee and the Holders of
the Notes. The 5.34% Asset-Backed Notes, Class A-2 (the "Class A-2 Notes"),  the
5.17%  Asset-Backed  Notes,  Class A-3 (the  "Class  A-3  Notes")  and the 5.18%
Asset-Backed Notes, Class A-4 (the "Class A-4 Notes" and together with the Class
A-1 Notes,  the Class A-2 Notes and the Class A-3 Notes,  the "Notes") have also
been  issued  under the  Indenture.  The Notes are  subject  to all terms of the
Indenture and the Sale and Servicing Agreement. All terms used in this Note that
are  defined  in the  Indenture,  as  supplemented  or  amended,  shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented or
amended.

            The  Notes  are and  will be  equally  and  ratably  secured  by the
collateral pledged as security therefor as provided in the Indenture.

            Principal  of the Class A-1 Notes will be  payable  on each  Payment
Date in an  amount  described  on the face  hereof.  "Payment  Date"  means  the
fifteenth  day of each month,  or, if any such date is not a Business  Day,  the
next Business Day,  commencing  October 16, 2006. The term "Payment Date," shall
be deemed to include the Class A-1 Final  Scheduled  Payment Date, the Class A-2
Final Scheduled Payment Date, the Class A-3 Final Scheduled Payment Date and the
Class A-4 Final Scheduled Payment Date.

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

            The Notes shall be issuable in minimum  denominations of one hundred
thousand  dollars  ($100,000)  and integral  multiples  of one thousand  dollars
($1,000) in excess thereof.  As provided in the Agreement and subject to certain
limitations  set  forth  therein,  Notes  are  exchangeable  for  new  Notes  of
authorized  denominations   evidencing  the  same  aggregate  denomination,   as
requested by the Holder  surrendering  the same. No service  charge will be made
for any such registration of transfer or exchange, but the Indenture Trustee may
require  payment of a sum  sufficient to cover any tax or  governmental  charges
payable in connection therewith.

                                     A-1-5
<PAGE>

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

            The  obligations  and  responsibilities  created  by  the  Sale  and
Servicing Agreement,  the Indenture and the Trust Agreement shall terminate upon
the payment to Noteholders  of all amounts  required to be paid to them pursuant
to the  Indenture  and the Sale and  Servicing  Agreement,  the  payment  of all
Reimbursement  Obligations,  and the  expiration of any  preference  period with
respect  thereto and the  disposition of all property held as part of the Trust.
The Class R  Certificateholder  may redeem the Notes on any  Payment  Date on or
after the  outstanding  Pool  Balance is less than or equal to 10% of the sum of
the  Original  Pool  Balance  plus the  Original  Pre-Funded  Amount  at a price
specified in the Indenture.

            The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Note Rate to the extent lawful.

            Each  Noteholder  or Note Owner,  by acceptance of a Note or, in the
case of a Note Owner, a beneficial  interest in a Note covenants and agrees that
no  recourse  may  be  taken,  directly  or  indirectly,  with  respect  to  the
obligations of the Issuer, the Owner Trustee, Trust Collateral Agent, Collateral
Agent,  Back-up  Servicer,  Custodian or the  Indenture  Trustee on the Notes or
under the Indenture or any certificate or other writing  delivered in connection
therewith, against (i) the Issuer, the Transferor, the Servicer, the Originator,
the  Indenture  Trustee,  Trust  Collateral  Agent,  Collateral  Agent,  Back-up
Servicer,  Custodian or the Owner Trustee in its individual  capacity,  (ii) any
owner of a  beneficial  interest  in the  Issuer  or (iii) any  partner,  owner,
beneficiary,  agent,  officer,  director  or  employee  of the  Transferor,  the
Servicer,  the  Originator,  the  Indenture  Trustee,  Trust  Collateral  Agent,
Collateral  Agent,  Back-up  Servicer,  Custodian  or the Owner  Trustee  in its
individual  capacity,  any holder of a  beneficial  interest in the Issuer,  the
Transferor,  the Servicer,  the Originator,  the Owner Trustee, Trust Collateral
Agent, Collateral Agent, Back-up Servicer, Custodian or the Indenture Trustee or
of any successor or assign of the Transferor,  the Servicer, the Originator, the
Indenture Trustee,  Trust Collateral Agent,  Collateral Agent, Back-up Servicer,
Custodian or the Owner Trustee in its  individual  capacity,  except as any such
Person  may have  expressly  agreed  (it  being  understood  that the  Indenture
Trustee, Trust Collateral Agent,  Collateral Agent, Back-up Servicer,  Custodian
and the Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent  provided by  applicable  law,  for any unpaid  consideration  for stock,
unpaid capital  contribution  or failure to pay any installment or call owing to
such entity.

            Each  Noteholder  or Note Owner,  by acceptance of a Note or, in the
case of a Note Owner,  a beneficial  interest in a Note  covenants and agrees to
treat the Notes as indebtedness for purposes of federal income,  state and local
income and franchise and any other income taxes.

            The Indenture permits, with certain exceptions therein provided, the
amendment  thereof and the  modification  of the rights and  obligations  of the
Transferor and the rights of the Noteholders  under the Indenture at any time by
the Issuer and the  Indenture  Trustee with the consent of the Note Insurer but,
in certain  circumstances,  without  the  consent of the  Holders of

                                     A-1-6
<PAGE>

Notes.  The  Indenture  also  contains  provisions  permitting  the  Noteholders
representing specified percentages of the outstanding Note Balance of the Notes,
on behalf of the  Holders of all the Notes,  to waive  compliance  by the Issuer
with certain  provisions of the  Indenture  and certain past defaults  under the
Indenture  and their  consequences.  Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.

            The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

            The  Issuer  is   permitted   by  the   Indenture,   under   certain
circumstances,  to merge or consolidate,  subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.

            This Note, the Sale and Servicing  Agreement and the Indenture shall
be  construed  in  accordance  with the laws of the State of New  York,  without
reference to its conflict of law  provisions,  and the  obligations,  rights and
remedies  of the  parties  hereunder  and  thereunder  shall  be  determined  in
accordance with such laws.

            No  reference  herein to the  Indenture  or any of the  other  Basic
Documents  and no provision of this Note or of the Indenture or any of the other
Basic  Documents  shall alter or impair the  obligation of the Issuer,  which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

            Anything herein to the contrary notwithstanding, except as expressly
provided in the  Indenture  or the Basic  Documents,  neither  Wilmington  Trust
Company in its individual  capacity,  any owner of a beneficial  interest in the
Issuer, nor any of their respective partners,  beneficiaries,  agents, officers,
directors,  employees or successors  or assigns shall be personally  liable for,
nor shall  recourse be had to any of them for,  the payment of  principal  of or
interest on, or  performance  of, or omission to perform,  any of the covenants,
obligations  or  indemnifications  contained in this Note or the  Indenture,  it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Issuer for the sole  purposes of binding the  interests of
the  Issuer  in the  assets  of the  Issuer.  The  Holder  of  this  Note by the
acceptance  hereof agrees that except as expressly  provided in the Indenture or
the Basic Documents, in the case of an Event of Default under the Indenture, the
Holder shall have no claim against any of the foregoing for any deficiency, loss
or claim therefrom;  provided,  however,  that nothing contained herein shall be
taken to prevent recourse to, and enforcement  against, the assets of the Issuer
for any and all  liabilities,  obligations  and  undertakings  contained  in the
Indenture or in this Note.

                                     A-1-7
<PAGE>

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

            FOR VALUE  RECEIVED,  the  undersigned  hereby  sells,  assigns  and
transfers unto ________________________________
                (name and address of assignee)

the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.

Dated _____________________________ (2)     ____________________________________
                                                     Signature Guaranteed:

___________________________________

----------
      (2) NOTE: The signature to this  assignment  must correspond with the name
of the  registered  owner as it appears on the face of the within  Note in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-1-8
<PAGE>

                                                                     EXHIBIT A-2

REGISTERED                                                      $137,000,000
No. RA--2--1

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                           CUSIP NO. 54238N AB 6

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

NO TRANSFER OF THIS NOTE SHALL BE PERMITTED TO BE MADE TO ANY PERSON  UNLESS THE
INDENTURE  TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEREE TO THE EFFECT
THAT  EITHER  (I)  THE  TRANSFEREE  IS NOT AND IS NOT  ACTING  ON  BEHALF  OF OR
INVESTING  THE ASSETS OF (A) AN "EMPLOYEE  BENEFIT  PLAN" (AS DEFINED IN SECTION
3(3)  OF THE  EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT OF  1974,  AS  AMENDED
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA OR (B) A "PLAN"
(AS DEFINED IN SECTION  4975(e)(1)  OF THE  INTERNAL  REVENUE  CODE OF 1986,  AS
AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (II) EITHER
A DEPARTMENT OF LABOR  PROHIBITED  TRANSACTION  CLASS EXEMPTION OR THE STATUTORY
EXEMPTION PROVIDED UNDER SECTION 408(b)(17) OF ERISA AND SECTION  4975(d)(20) OF
THE CODE OR THE STATUTORY  EXEMPTION  PROVIDED UNDER SECTION 408(b)(17) OF ERISA
AND SECTION 4975(d)(20) OF THE CODE APPLIES TO THE TRANSFEREE'S  ACQUISITION AND
CONTINUED HOLDING OF THIS NOTE. EACH TRANSFEREE OF A BENEFICIAL INTEREST IN THIS
NOTE SHALL BE DEEMED TO MAKE ONE OF THE FOREGOING REPRESENTATIONS.

THE  PRINCIPAL  OF THIS NOTE IS PAYABLE  IN  INSTALLMENTS  AS SET FORTH  HEREIN.
ACCORDINGLY,  THE OUTSTANDING  PRINCIPAL  AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

              LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2006-B
                       5.34% ASSET-BACKED NOTE, CLASS A-2

            Long Beach  Acceptance Auto  Receivables  Trust 2006-B,  a statutory
trust  organized  and existing  under the laws of the State of Delaware  (herein
referred to as the "Issuer"), for value received, hereby promises to pay to CEDE
& CO. or  registered  assigns,  the

<PAGE>

principal  sum of ONE  HUNDRED  THIRTY-SEVEN  MILLION  DOLLARS  payable  on each
Payment Date from the sources and on the terms and  conditions  set forth herein
and as more fully set forth in the Indenture; provided, however, that the entire
unpaid  principal  amount of this Class A-2 Note shall be due and payable on the
November 2009 Payment Date (the "Class A-2 Final Scheduled  Payment Date").  The
Issuer will pay  interest on this Note at the rate per annum shown above on each
Payment  Date until the  principal  of this Note is paid or made  available  for
payment.  Interest  on this  Note will  accrue  for each  Payment  Date from and
including  the most recent  Payment Date on which  interest has been paid to but
excluding  such  Payment  Date or, if no  interest  has yet been paid,  from and
including September 28, 2006 (the "Interest Period"). Interest on this Note will
be computed on the basis of a 360-day  year  consisting  of twelve 30 day months
(or with respect to the first  Payment  Date,  17 days).  Such  principal of and
interest  on this Note  shall be paid in the  manner  specified  on the  reverse
hereof. Except as otherwise set forth in the Indenture,  the rights of the Class
A-2  Noteholders  to receive  payments of  principal  on each  Payment  Date are
subordinated to the rights of the Class A-1  Noteholders to receive  payments in
respect of principal, if any, due on such Payment Date.

            The  principal of and interest on this Note are payable in such coin
or currency  of the United  States of America as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with respect to this Note shall be applied  first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

            The Class A-2 Notes are  entitled  to the  benefits  of a  financial
guaranty insurance policy (the "Policy") issued by Financial Security Assurance,
Inc.   (the  "Note   Insurer"),   pursuant   to  which  the  Note   Insurer  has
unconditionally guaranteed payment to the Class A-2 Noteholders of (i) the Class
A-2 Interest  Payment Amount with respect to each Payment Date, (ii) the amount,
if any, by which the outstanding Class A Note Balance (after taking into account
payments of principal on such Payment  Date) exceeds the sum of the Pool Balance
as of the last day of the related Collection Period and the remaining Pre-Funded
Amount,  if any,  with  respect  to such  Payment  Date and (iii) the  Principal
Payment Amount with respect to the Class A-2 Final  Scheduled  Payment Date, all
as more fully set forth in the Indenture and the Sale and Servicing Agreement.

            Reference is made to the further  provisions  of this Note set forth
on the reverse  hereof,  which  shall have the same  effect as though  fully set
forth on the face of this Note.

            Unless the certificate of authentication hereon has been executed by
the Indenture  Trustee whose name appears below by manual  signature,  this Note
shall not be  entitled  to any benefit  under the  Indenture  referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                     A-2-2
<PAGE>

            IN WITNESS  WHEREOF,  the Issuer has caused  this  instrument  to be
signed,  manually or in facsimile,  by its Authorized Officer as of the date set
forth below.

Date: September 28, 2006

                                 LONG BEACH ACCEPTANCE AUTO RECEIVABLES
                                 TRUST 2006-B

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

                                 By: ___________________________________________
                                 Name:
                                 Title:

                                     A-2-3
<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

            This is one of the Notes  designated  above and  referred  to in the
within-mentioned Indenture.

Date: September 28, 2006         DEUTSCHE BANK TRUST COMPANY AMERICAS, not in
                                 its individual capacity but solely as Indenture
                                 Trustee

                                 By: ___________________________________________
                                                Authorized Signatory

                                     A-2-4
<PAGE>

                                [REVERSE OF NOTE]

            This Note is one of a duly authorized  issue of Notes of the Issuer,
designated as its 5.34% Asset-Backed  Notes, Class A-2 (herein called the "Class
A-2  Notes"),  issued  under an  Indenture  dated as of  September 1, 2006 (such
indenture,  as  supplemented  or  amended,  is herein  called the  "Indenture"),
between  the Issuer and  Deutsche  Bank Trust  Company  Americas,  as  Indenture
Trustee (the "Indenture  Trustee",  which term includes any successor  Indenture
Trustee under the Indenture) to which Indenture and all indentures  supplemental
thereto  reference is hereby made for a statement of the  respective  rights and
obligations  thereunder of the Issuer,  the Indenture Trustee and the Holders of
the Notes. The 5.37% Asset-Backed Notes, Class A-1 (the "Class A-1 Notes"),  the
5.17%  Asset-Backed  Notes,  Class A-3 (the  "Class  A-3  Notes")  and the 5.18%
Asset-Backed Notes, Class A-4 (the "Class A-4 Notes" and together with the Class
A-1 Notes,  the Class A-2 Notes and the Class A-3 Notes,  the "Notes") have also
been  issued  under the  Indenture.  The Notes are  subject  to all terms of the
Indenture and the Sale and Servicing Agreement. All terms used in this Note that
are  defined  in the  Indenture,  as  supplemented  or  amended,  shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented or
amended.

            The  Notes  are and  will be  equally  and  ratably  secured  by the
collateral pledged as security therefor as provided in the Indenture.

            Principal  of the Class A-2 Notes will be  payable  on each  Payment
Date in an  amount  described  on the face  hereof.  "Payment  Date"  means  the
fifteenth  day of each month,  or, if any such date is not a Business  Day,  the
next Business Day,  commencing  October 16, 2006. The term "Payment Date," shall
be deemed to include the Class A-1 Final  Scheduled  Payment Date, the Class A-2
Final Scheduled Payment Date, the Class A-3 Final Scheduled Payment Date and the
Class A-4 Final Scheduled Payment Date.

            As provided in the Indenture and subject to certain  limitations set
forth  therein,  the transfer of this Note is  registrable  in the Note Register
upon  surrender  of this Note for  registration  of  transfer  at the offices or
agencies  maintained by the Indenture  Trustee in its capacity as Note Registrar
or by any successor Note Registrar, in Nashville, Tennessee

            ,  accompanied   by  a  written   instrument  of  transfer  in  form
satisfactory  to the Indenture  Trustee and the Note  Registrar duly executed by
the Holder hereof or such  Holder's  attorney  duly  authorized in writing,  and
thereupon one or more new Notes of authorized  denominations evidencing the same
aggregate debt of the Trust will be issued to the designated transferee.

            The Notes shall be issuable in minimum  denominations of one hundred
thousand  dollars  ($100,000)  and integral  multiples  of one thousand  dollars
($1,000) in excess thereof.  As provided in the Agreement and subject to certain
limitations  set  forth  therein,  Notes  are  exchangeable  for  new  Notes  of
authorized  denominations   evidencing  the  same  aggregate  denomination,   as
requested by the Holder  surrendering  the same. No service  charge will be made
for any such registration of transfer or exchange, but the Indenture Trustee may
require  payment of a sum  sufficient to cover any tax or  governmental  charges
payable in connection therewith.

                                     A-2-5
<PAGE>

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

            The  obligations  and  responsibilities  created  by  the  Sale  and
Servicing Agreement,  the Indenture and the Trust Agreement shall terminate upon
the payment to Noteholders  of all amounts  required to be paid to them pursuant
to the  Indenture  and the Sale and  Servicing  Agreement,  the  payment  of all
Reimbursement  Obligations,  and the  expiration of any  preference  period with
respect  thereto and the  disposition of all property held as part of the Trust.
The Class R  Certificateholder  may redeem the Notes on any  Payment  Date on or
after the  outstanding  Pool  Balance is less than or equal to 10% of the sum of
the  Original  Pool  Balance  plus the  Original  Pre-Funded  Amount  at a price
specified in the Indenture.

            The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Note Rate to the extent lawful.

            Each  Noteholder  or Note Owner,  by acceptance of a Note or, in the
case of a Note Owner, a beneficial  interest in a Note covenants and agrees that
no  recourse  may  be  taken,  directly  or  indirectly,  with  respect  to  the
obligations of the Issuer, the Owner Trustee, Trust Collateral Agent, Collateral
Agent,  Back-up  Servicer,  Custodian or the  Indenture  Trustee on the Notes or
under the Indenture or any certificate or other writing  delivered in connection
therewith, against (i) the Issuer, the Transferor, the Servicer, the Originator,
the  Indenture  Trustee,  Trust  Collateral  Agent,  Collateral  Agent,  Back-up
Servicer,  Custodian or the Owner Trustee in its individual  capacity,  (ii) any
owner of a  beneficial  interest  in the  Issuer  or (iii) any  partner,  owner,
beneficiary,  agent,  officer,  director  or  employee  of the  Transferor,  the
Servicer,  the  Originator,  the  Indenture  Trustee,  Trust  Collateral  Agent,
Collateral  Agent,  Back-up  Servicer,  Custodian  or the Owner  Trustee  in its
individual  capacity,  any holder of a  beneficial  interest in the Issuer,  the
Transferor,  the Servicer,  the Originator,  the Owner Trustee, Trust Collateral
Agent, Collateral Agent, Back-up Servicer, Custodian or the Indenture Trustee or
of any successor or assign of the Transferor,  the Servicer, the Originator, the
Indenture Trustee,  Trust Collateral Agent,  Collateral Agent, Back-up Servicer,
Custodian or the Owner Trustee in its  individual  capacity,  except as any such
Person  may have  expressly  agreed  (it  being  understood  that the  Indenture
Trustee, Trust Collateral Agent,  Collateral Agent, Back-up Servicer,  Custodian
and the Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent  provided by  applicable  law,  for any unpaid  consideration  for stock,
unpaid capital  contribution  or failure to pay any installment or call owing to
such entity.

            Each  Noteholder  or Note Owner,  by acceptance of a Note or, in the
case of a Note Owner,  a beneficial  interest in a Note  covenants and agrees to
treat the Notes as indebtedness for purposes of federal income,  state and local
income and franchise and any other income taxes.

            The Indenture permits, with certain exceptions therein provided, the
amendment  thereof and the  modification  of the rights and  obligations  of the
Transferor and the rights of the Noteholders  under the Indenture at any time by
the Issuer and the  Indenture  Trustee with the consent of the Note Insurer but,
in certain  circumstances,  without  the  consent of the  Holders of

                                     A-2-6
<PAGE>

Notes.  The  Indenture  also  contains  provisions  permitting  the  Noteholders
representing specified percentages of the outstanding Note Balance of the Notes,
on behalf of the  Holders of all the Notes,  to waive  compliance  by the Issuer
with certain  provisions of the  Indenture  and certain past defaults  under the
Indenture  and their  consequences.  Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.

            The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

            The  Issuer  is   permitted   by  the   Indenture,   under   certain
circumstances,  to merge or consolidate,  subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.

            This Note, the Sale and Servicing  Agreement and the Indenture shall
be  construed  in  accordance  with the laws of the State of New  York,  without
reference to its conflict of law  provisions,  and the  obligations,  rights and
remedies  of the  parties  hereunder  and  thereunder  shall  be  determined  in
accordance with such laws.

            No  reference  herein to the  Indenture  or any of the  other  Basic
Documents  and no provision of this Note or of the Indenture or any of the other
Basic  Documents  shall alter or impair the  obligation of the Issuer,  which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

            Anything herein to the contrary notwithstanding, except as expressly
provided in the  Indenture  or the Basic  Documents,  neither  Wilmington  Trust
Company in its individual  capacity,  any owner of a beneficial  interest in the
Issuer, nor any of their respective partners,  beneficiaries,  agents, officers,
directors,  employees or successors  or assigns shall be personally  liable for,
nor shall  recourse be had to any of them for,  the payment of  principal  of or
interest on, or  performance  of, or omission to perform,  any of the covenants,
obligations  or  indemnifications  contained in this Note or the  Indenture,  it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Issuer for the sole  purposes of binding the  interests of
the  Issuer  in the  assets  of the  Issuer.  The  Holder  of  this  Note by the
acceptance  hereof agrees that except as expressly  provided in the Indenture or
the Basic Documents, in the case of an Event of Default under the Indenture, the
Holder shall have no claim against any of the foregoing for any deficiency, loss
or claim therefrom;  provided,  however,  that nothing contained herein shall be
taken to prevent recourse to, and enforcement  against, the assets of the Issuer
for any and all  liabilities,  obligations  and  undertakings  contained  in the
Indenture or in this Note.

                                     A-2-7
<PAGE>

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

            FOR VALUE  RECEIVED,  the  undersigned  hereby  sells,  assigns  and
transfers unto ________________________________
                (name and address of assignee)

the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.

Dated _____________________________ (3)     ____________________________________
                                                     Signature Guaranteed:

___________________________________

----------
      (3) NOTE: The signature to this  assignment  must correspond with the name
of the  registered  owner as it appears on the face of the within  Note in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-2-8
<PAGE>

                                                                     EXHIBIT A-3

REGISTERED                                                      $147,000,000
No. RA--3--1

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                           CUSIP NO. 54238N AC 4

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

NO TRANSFER OF THIS NOTE SHALL BE PERMITTED TO BE MADE TO ANY PERSON  UNLESS THE
INDENTURE  TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEREE TO THE EFFECT
THAT  EITHER  (I)  THE  TRANSFEREE  IS NOT AND IS NOT  ACTING  ON  BEHALF  OF OR
INVESTING  THE ASSETS OF (A) AN "EMPLOYEE  BENEFIT  PLAN" (AS DEFINED IN SECTION
3(3)  OF THE  EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT OF  1974,  AS  AMENDED
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA OR (B) A "PLAN"
(AS DEFINED IN SECTION  4975(e)(1)  OF THE  INTERNAL  REVENUE  CODE OF 1986,  AS
AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (II) EITHER
A DEPARTMENT OF LABOR  PROHIBITED  TRANSACTION  CLASS EXEMPTION OR THE STATUTORY
EXEMPTION PROVIDED UNDER SECTION 408(b)(17) OF ERISA AND SECTION  4975(d)(20) OF
THE CODE APPLIES TO THE TRANSFEREE'S  ACQUISITION AND CONTINUED  HOLDING OF THIS
NOTE. EACH  TRANSFEREE OF A BENEFICIAL  INTEREST IN THIS NOTE SHALL BE DEEMED TO
MAKE ONE OF THE FOREGOING REPRESENTATIONS.

THE  PRINCIPAL  OF THIS NOTE IS PAYABLE  IN  INSTALLMENTS  AS SET FORTH  HEREIN.
ACCORDINGLY,  THE OUTSTANDING  PRINCIPAL  AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

               LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2006-B
                       5.17% ASSET-BACKED NOTE, CLASS A-3

            Long Beach  Acceptance Auto  Receivables  Trust 2006-B,  a statutory
trust  organized  and existing  under the laws of the State of Delaware  (herein
referred to as the "Issuer"), for value received, hereby promises to pay to CEDE
& CO. or  registered  assigns,  the  principal  sum of ONE  HUNDRED  FORTY-SEVEN
MILLION  DOLLARS  payable on each

<PAGE>

Payment Date from the sources and on the terms and  conditions  set forth herein
and as more fully set forth in the Indenture; provided, however, that the entire
unpaid  principal  amount of this Class A-3 Note shall be due and payable on the
August 2011 Payment Date (the "Class A-3 Final  Scheduled  Payment  Date").  The
Issuer will pay  interest on this Note at the rate per annum shown above on each
Payment  Date until the  principal  of this Note is paid or made  available  for
payment.  Interest  on this  Note will  accrue  for each  Payment  Date from and
including  the most recent  Payment Date on which  interest has been paid to but
excluding  such  Payment  Date or, if no  interest  has yet been paid,  from and
including September 28, 2006 (the "Interest Period"). Interest on this Note will
be computed on the basis of a 360-day  year  consisting  of twelve 30 day months
(or with respect to the first  Payment  Date,  17 days).  Such  principal of and
interest  on this Note  shall be paid in the  manner  specified  on the  reverse
hereof. Except as otherwise set forth in the Indenture,  the rights of the Class
A-3  Noteholders  to receive  payments of  principal  on each  Payment  Date are
subordinated  to the  rights  of the  Class  A-1  Noteholders  and the Class A-2
Noteholders  to receive  payments in respect of  principal,  if any, due on such
Payment Date.

            The  principal of and interest on this Note are payable in such coin
or currency  of the United  States of America as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with respect to this Note shall be applied  first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

            The Class A-3 Notes are  entitled  to the  benefits  of a  financial
guaranty insurance policy (the "Policy") issued by Financial Security Assurance,
Inc.   (the  "Note   Insurer"),   pursuant   to  which  the  Note   Insurer  has
unconditionally guaranteed payment to the Class A-3 Noteholders of (i) the Class
A-3 Interest  Payment Amount with respect to each Payment Date, (ii) the amount,
if any, by which the outstanding Class A Note Balance (after taking into account
payments of principal on such Payment  Date) exceeds the sum of the Pool Balance
as of the last day of the related Collection Period and the remaining Pre-Funded
Amount,  if any,  with  respect  to such  Payment  Date and (iii) the  Principal
Payment Amount with respect to the Class A-3 Final  Scheduled  Payment Date, all
as more fully set forth in the Indenture and the Sale and Servicing Agreement.

            Reference is made to the further  provisions  of this Note set forth
on the reverse  hereof,  which  shall have the same  effect as though  fully set
forth on the face of this Note.

            Unless the certificate of authentication hereon has been executed by
the Indenture  Trustee whose name appears below by manual  signature,  this Note
shall not be  entitled  to any benefit  under the  Indenture  referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                     A-3-2
<PAGE>

            IN WITNESS  WHEREOF,  the Issuer has caused  this  instrument  to be
signed,  manually or in facsimile,  by its Authorized Officer as of the date set
forth below.

Date: September 28, 2006

                                 LONG BEACH ACCEPTANCE AUTO RECEIVABLES
                                 TRUST 2006-B

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

                                 By: ___________________________________________
                                 Name:
                                 Title:

                                     A-3-3
<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

            This is one of the Notes  designated  above and  referred  to in the
within-mentioned Indenture.

Date: September 28, 2006         DEUTSCHE BANK TRUST COMPANY AMERICAS, not in
                                 its individual capacity but solely as Indenture
                                 Trustee

                                 By: ___________________________________________
                                                Authorized Signatory

                                     A-3-4
<PAGE>

                                [REVERSE OF NOTE]

            This Note is one of a duly authorized  issue of Notes of the Issuer,
designated as its 5.17% Asset-Backed  Notes, Class A-3 (herein called the "Class
A-3  Notes"),  issued  under an  Indenture  dated as of  September 1, 2006 (such
indenture,  as  supplemented  or  amended,  is herein  called the  "Indenture"),
between  the Issuer and  Deutsche  Bank Trust  Company  Americas,  as  Indenture
Trustee (the "Indenture  Trustee",  which term includes any successor  Indenture
Trustee under the Indenture) to which Indenture and all indentures  supplemental
thereto  reference is hereby made for a statement of the  respective  rights and
obligations  thereunder of the Issuer,  the Indenture Trustee and the Holders of
the Notes.  The 5.37%  Asset-Backed  Notes,  Class A-1 (the "Class A-1  Notes"),
5.34%  Asset-Backed  Notes,  Class A-2 (the  "Class  A-2  Notes")  and the 5.18%
Asset-Backed Notes, Class A-4 (the "Class A-4 Notes" and together with the Class
A-1 Notes,  the Class A-2 Notes and the Class A-3 Notes,  the "Notes") have also
been  issued  under the  Indenture.  The Notes are  subject  to all terms of the
Indenture and the Sale and Servicing Agreement. All terms used in this Note that
are  defined  in the  Indenture,  as  supplemented  or  amended,  shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented or
amended.

            The  Notes  are and  will be  equally  and  ratably  secured  by the
collateral pledged as security therefor as provided in the Indenture.

            Principal  of the Class A-3 Notes will be  payable  on each  Payment
Date in an  amount  described  on the face  hereof.  "Payment  Date"  means  the
fifteenth  day of each month,  or, if any such date is not a Business  Day,  the
next Business Day,  commencing  October 16, 2006. The term "Payment Date," shall
be deemed to include the Class A-1 Final  Scheduled  Payment Date, the Class A-2
Final Scheduled Payment Date, the Class A-3 Final Scheduled Payment Date and the
Class A-4 Final Scheduled Payment Date.

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

            The Notes shall be issuable in minimum  denominations of one hundred
thousand  dollars  ($100,000)  and integral  multiples  of one thousand  dollars
($1,000) in excess thereof.  As provided in the Agreement and subject to certain
limitations  set  forth  therein,  Notes  are  exchangeable  for  new  Notes  of
authorized  denominations   evidencing  the  same  aggregate  denomination,   as
requested by the Holder  surrendering  the same. No service  charge will be made
for any such registration of transfer or exchange, but the Indenture Trustee may
require  payment of a sum  sufficient to cover any tax or  governmental  charges
payable in connection therewith.

                                     A-3-5
<PAGE>

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

            The  obligations  and  responsibilities  created  by  the  Sale  and
Servicing Agreement,  the Indenture and the Trust Agreement shall terminate upon
the payment to Noteholders  of all amounts  required to be paid to them pursuant
to the  Indenture  and the Sale and  Servicing  Agreement,  the  payment  of all
Reimbursement  Obligations,  and the  expiration of any  preference  period with
respect  thereto and the  disposition of all property held as part of the Trust.
The Class R  Certificateholder  may redeem the Notes on any  Payment  Date on or
after the  outstanding  Pool  Balance is less than or equal to 10% of the sum of
the  Original  Pool  Balance  plus the  Original  Pre-Funded  Amount  at a price
specified in the Indenture.

            The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Note Rate to the extent lawful.

            Each  Noteholder  or Note Owner,  by acceptance of a Note or, in the
case of a Note Owner, a beneficial  interest in a Note covenants and agrees that
no  recourse  may  be  taken,  directly  or  indirectly,  with  respect  to  the
obligations of the Issuer, the Owner Trustee, Trust Collateral Agent, Collateral
Agent,  Back-up  Servicer,  Custodian or the  Indenture  Trustee on the Notes or
under the Indenture or any certificate or other writing  delivered in connection
therewith, against (i) the Issuer, the Transferor, the Servicer, the Originator,
the  Indenture  Trustee,  Trust  Collateral  Agent,  Collateral  Agent,  Back-up
Servicer,  Custodian or the Owner Trustee in its individual  capacity,  (ii) any
owner of a  beneficial  interest  in the  Issuer  or (iii) any  partner,  owner,
beneficiary,  agent,  officer,  director  or  employee  of the  Transferor,  the
Servicer,  the  Originator,  the  Indenture  Trustee,  Trust  Collateral  Agent,
Collateral  Agent,  Back-up  Servicer,  Custodian  or the Owner  Trustee  in its
individual  capacity,  any holder of a  beneficial  interest in the Issuer,  the
Transferor,  the Servicer,  the Originator,  the Owner Trustee, Trust Collateral
Agent, Collateral Agent, Back-up Servicer, Custodian or the Indenture Trustee or
of any successor or assign of the Transferor,  the Servicer, the Originator, the
Indenture Trustee,  Trust Collateral Agent,  Collateral Agent, Back-up Servicer,
Custodian or the Owner Trustee in its  individual  capacity,  except as any such
Person  may have  expressly  agreed  (it  being  understood  that the  Indenture
Trustee, Trust Collateral Agent,  Collateral Agent, Back-up Servicer,  Custodian
and the Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent  provided by  applicable  law,  for any unpaid  consideration  for stock,
unpaid capital  contribution  or failure to pay any installment or call owing to
such entity.

            Each  Noteholder  or Note Owner,  by acceptance of a Note or, in the
case of a Note Owner,  a beneficial  interest in a Note  covenants and agrees to
treat the Notes as indebtedness for purposes of federal income,  state and local
income and franchise and any other income taxes.

            The Indenture permits, with certain exceptions therein provided, the
amendment  thereof and the  modification  of the rights and  obligations  of the
Transferor and the rights of the Noteholders  under the Indenture at any time by
the Issuer and the  Indenture  Trustee with the consent of the Note Insurer but,
in certain  circumstances,  without  the  consent of the  Holders of

                                     A-3-6
<PAGE>

Notes.  The  Indenture  also  contains  provisions  permitting  the  Noteholders
representing specified percentages of the outstanding Note Balance of the Notes,
on behalf of the  Holders of all the Notes,  to waive  compliance  by the Issuer
with certain  provisions of the  Indenture  and certain past defaults  under the
Indenture  and their  consequences.  Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.

            The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

            The  Issuer  is   permitted   by  the   Indenture,   under   certain
circumstances,  to merge or consolidate,  subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.

            This Note, the Sale and Servicing  Agreement and the Indenture shall
be  construed  in  accordance  with the laws of the State of New  York,  without
reference to its conflict of law  provisions,  and the  obligations,  rights and
remedies  of the  parties  hereunder  and  thereunder  shall  be  determined  in
accordance with such laws.

            No  reference  herein to the  Indenture  or any of the  other  Basic
Documents  and no provision of this Note or of the Indenture or any of the other
Basic  Documents  shall alter or impair the  obligation of the Issuer,  which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

            Anything herein to the contrary notwithstanding, except as expressly
provided in the  Indenture  or the Basic  Documents,  neither  Wilmington  Trust
Company in its individual  capacity,  any owner of a beneficial  interest in the
Issuer, nor any of their respective partners,  beneficiaries,  agents, officers,
directors,  employees or successors  or assigns shall be personally  liable for,
nor shall  recourse be had to any of them for,  the payment of  principal  of or
interest on, or  performance  of, or omission to perform,  any of the covenants,
obligations  or  indemnifications  contained in this Note or the  Indenture,  it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Issuer for the sole  purposes of binding the  interests of
the  Issuer  in the  assets  of the  Issuer.  The  Holder  of  this  Note by the
acceptance  hereof agrees that except as expressly  provided in the Indenture or
the Basic Documents, in the case of an Event of Default under the Indenture, the
Holder shall have no claim against any of the foregoing for any deficiency, loss
or claim therefrom;  provided,  however,  that nothing contained herein shall be
taken to prevent recourse to, and enforcement  against, the assets of the Issuer
for any and all  liabilities,  obligations  and  undertakings  contained  in the
Indenture or in this Note.

                                     A-3-7
<PAGE>

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

            FOR VALUE  RECEIVED,  the  undersigned  hereby  sells,  assigns  and
transfers unto ________________________________
                (name and address of assignee)

the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.

Dated _____________________________ (4)     ____________________________________
                                                     Signature Guaranteed:

___________________________________

----------
      (4) NOTE: The signature to this  assignment  must correspond with the name
of the  registered  owner as it appears on the face of the within  Note in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-3-8
<PAGE>

                                                                     EXHIBIT A-4

REGISTERED                                                      $116,000,000
No. RA--4--1

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                           CUSIP NO. 54238N AD 2

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

NO TRANSFER OF THIS NOTE SHALL BE PERMITTED TO BE MADE TO ANY PERSON  UNLESS THE
INDENTURE  TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEREE TO THE EFFECT
THAT  EITHER  (I)  THE  TRANSFEREE  IS NOT AND IS NOT  ACTING  ON  BEHALF  OF OR
INVESTING  THE ASSETS OF (A) AN "EMPLOYEE  BENEFIT  PLAN" (AS DEFINED IN SECTION
3(3)  OF THE  EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT OF  1974,  AS  AMENDED
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA OR (B) A "PLAN"
(AS DEFINED IN SECTION  4975(e)(1)  OF THE  INTERNAL  REVENUE  CODE OF 1986,  AS
AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (II) EITHER
A DEPARTMENT OF LABOR  PROHIBITED  TRANSACTION  CLASS EXEMPTION OR THE STATUTORY
EXEMPTION PROVIDED UNDER SECTION 408(b)(17) OF ERISA AND SECTION  4975(d)(20) OF
THE CODE APPLIES TO THE TRANSFEREE'S  ACQUISITION AND CONTINUED  HOLDING OF THIS
NOTE. EACH  TRANSFEREE OF A BENEFICIAL  INTEREST IN THIS NOTE SHALL BE DEEMED TO
MAKE ONE OF THE FOREGOING REPRESENTATIONS.

THE  PRINCIPAL  OF THIS NOTE IS PAYABLE  IN  INSTALLMENTS  AS SET FORTH  HEREIN.
ACCORDINGLY,  THE OUTSTANDING  PRINCIPAL  AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

               LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2006-B
                       5.18% ASSET-BACKED NOTE, CLASS A-4

            Long Beach  Acceptance Auto  Receivables  Trust 2006-B,  a statutory
trust  organized  and existing  under the laws of the State of Delaware  (herein
referred to as the "Issuer"), for value received, hereby promises to pay to CEDE
& CO. or registered  assigns,  the principal sum of ONE HUNDRED  SIXTEEN MILLION
DOLLARS  payable  on each  Payment

<PAGE>

Date from the sources and on the terms and  conditions  set forth  herein and as
more fully set forth in the Indenture; provided, however, that the entire unpaid
principal  amount  of this  Class  A-4  Note  shall  be due and  payable  on the
September 2013 Payment Date (the "Class A-4 Final Scheduled Payment Date").  The
Issuer will pay  interest on this Note at the rate per annum shown above on each
Payment  Date until the  principal  of this Note is paid or made  available  for
payment.  Interest  on this  Note will  accrue  for each  Payment  Date from and
including  the most recent  Payment Date on which  interest has been paid to but
excluding  such  Payment  Date or, if no  interest  has yet been paid,  from and
including September 28, 2006 (the "Interest Period"). Interest on this Note will
be computed on the basis of a 360-day  year  consisting  of twelve 30 day months
(or with respect to the first  Payment  Date,  17 days).  Such  principal of and
interest  on this Note  shall be paid in the  manner  specified  on the  reverse
hereof. Except as otherwise set forth in the Indenture,  the rights of the Class
A-4  Noteholders  to receive  payments of  principal  on each  Payment  Date are
subordinated  to  the  rights  of the  Class  A-1  Noteholders,  the  Class  A-2
Noteholders  and the Class A-3  Noteholders  to receive  payments  in respect of
principal, if any, due on such Payment Date.

            The  principal of and interest on this Note are payable in such coin
or currency  of the United  States of America as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with respect to this Note shall be applied  first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

            The Class A-4 Notes are  entitled  to the  benefits  of a  financial
guaranty insurance policy (the "Policy") issued by Financial Security Assurance,
Inc.   (the  "Note   Insurer"),   pursuant   to  which  the  Note   Insurer  has
unconditionally guaranteed payment to the Class A-4 Noteholders of (i) the Class
A-4 Interest  Payment Amount with respect to each Payment Date, (ii) the amount,
if any, by which the outstanding Class A Note Balance (after taking into account
payments of principal on such Payment  Date) exceeds the sum of the Pool Balance
as of the last day of the related Collection Period and the remaining Pre-Funded
Amount,  if any,  with  respect  to such  Payment  Date and (iii) the  Principal
Payment Amount with respect to the Class A-4 Final  Scheduled  Payment Date, all
as more fully set forth in the Indenture and the Sale and Servicing Agreement.

            Reference is made to the further  provisions  of this Note set forth
on the reverse  hereof,  which  shall have the same  effect as though  fully set
forth on the face of this Note.

            Unless the certificate of authentication hereon has been executed by
the Indenture  Trustee whose name appears below by manual  signature,  this Note
shall not be  entitled  to any benefit  under the  Indenture  referred to on the
reverse hereof, or be valid or obligatory for any purpose.

                                     A-4-2
<PAGE>

            IN WITNESS  WHEREOF,  the Issuer has caused  this  instrument  to be
signed,  manually or in facsimile,  by its Authorized Officer as of the date set
forth below.

Date: September 28, 2006

                                 LONG BEACH ACCEPTANCE AUTO RECEIVABLES
                                 TRUST 2006-B

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

                                 By: ___________________________________________
                                 Name:
                                 Title:

                                     A-4-3
<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

            This is one of the Notes  designated  above and  referred  to in the
within-mentioned Indenture.

Date: September 28, 2006         DEUTSCHE BANK TRUST COMPANY AMERICAS, not in
                                 its individual capacity but solely as Indenture
                                 Trustee

                                 By: ___________________________________________
                                                Authorized Signatory

                                     A-4-4
<PAGE>

                                [REVERSE OF NOTE]

            This Note is one of a duly authorized  issue of Notes of the Issuer,
designated as its 5.18% Asset-Backed  Notes, Class A-4 (herein called the "Class
A-4  Notes"),  issued  under an  Indenture  dated as of  September 1, 2006 (such
indenture,  as  supplemented  or  amended,  is herein  called the  "Indenture"),
between  the Issuer and  Deutsche  Bank Trust  Company  Americas,  as  Indenture
Trustee (the "Indenture  Trustee",  which term includes any successor  Indenture
Trustee under the Indenture) to which Indenture and all indentures  supplemental
thereto  reference is hereby made for a statement of the  respective  rights and
obligations  thereunder of the Issuer,  the Indenture Trustee and the Holders of
the Notes.  The 5.37%  Asset-Backed  Notes,  Class A-1 (the "Class A-1  Notes"),
5.34%  Asset-Backed  Notes,  Class A-2 (the  "Class A-2  Notes"),  and the 5.17%
Asset-Backed Notes, Class A-3 (the "Class A-3 Notes" and together with the Class
A-1 Notes,  the Class A-2 Notes and the Class A-4 Notes,  the "Notes") have also
been  issued  under the  Indenture.  The Notes are  subject  to all terms of the
Indenture and the Sale and Servicing Agreement. All terms used in this Note that
are  defined  in the  Indenture,  as  supplemented  or  amended,  shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented or
amended.

            The  Notes  are and  will be  equally  and  ratably  secured  by the
collateral pledged as security therefor as provided in the Indenture.

            Principal  of the Class A-4 Notes will be  payable  on each  Payment
Date in an  amount  described  on the face  hereof.  "Payment  Date"  means  the
fifteenth  day of each month,  or, if any such date is not a Business  Day,  the
next Business Day,  commencing  October 16, 2006. The term "Payment Date," shall
be deemed to include the Class A-1 Final  Scheduled  Payment Date, the Class A-2
Final Scheduled Payment Date, the Class A-3 Final Scheduled Payment Date and the
Class A-4 Final Scheduled Payment Date.

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

            The Notes shall be issuable in minimum  denominations of one hundred
thousand  dollars  ($100,000)  and integral  multiples  of one thousand  dollars
($1,000) in excess thereof.  As provided in the Agreement and subject to certain
limitations  set  forth  therein,  Notes  are  exchangeable  for  new  Notes  of
authorized  denominations   evidencing  the  same  aggregate  denomination,   as
requested by the Holder  surrendering  the same. No service  charge will be made
for any such registration of transfer or exchange, but the Indenture Trustee may
require  payment of a sum  sufficient to cover any tax or  governmental  charges
payable in connection therewith.

                                     A-4-5
<PAGE>

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

            The  obligations  and  responsibilities  created  by  the  Sale  and
Servicing Agreement,  the Indenture and the Trust Agreement shall terminate upon
the payment to Noteholders  of all amounts  required to be paid to them pursuant
to the  Indenture  and the Sale and  Servicing  Agreement,  the  payment  of all
Reimbursement  Obligations,  and the  expiration of any  preference  period with
respect  thereto and the  disposition of all property held as part of the Trust.
The Class R  Certificateholder  may redeem the Notes on any  Payment  Date on or
after the  outstanding  Pool  Balance is less than or equal to 10% of the sum of
the  Original  Pool  Balance  plus the  Original  Pre-Funded  Amount  at a price
specified in the Indenture.

            The Issuer shall pay interest on overdue installments of interest at
the Class A-4 Note Rate to the extent lawful.

            Each  Noteholder  or Note Owner,  by acceptance of a Note or, in the
case of a Note Owner, a beneficial  interest in a Note covenants and agrees that
no  recourse  may  be  taken,  directly  or  indirectly,  with  respect  to  the
obligations of the Issuer, the Owner Trustee, Trust Collateral Agent, Collateral
Agent,  Back-up  Servicer,  Custodian or the  Indenture  Trustee on the Notes or
under the Indenture or any certificate or other writing  delivered in connection
therewith, against (i) the Issuer, the Transferor, the Servicer, the Originator,
the  Indenture  Trustee,  Trust  Collateral  Agent,  Collateral  Agent,  Back-up
Servicer,  Custodian or the Owner Trustee in its individual  capacity,  (ii) any
owner of a  beneficial  interest  in the  Issuer  or (iii) any  partner,  owner,
beneficiary,  agent,  officer,  director  or  employee  of the  Transferor,  the
Servicer,  the  Originator,  the  Indenture  Trustee,  Trust  Collateral  Agent,
Collateral  Agent,  Back-up  Servicer,  Custodian  or the Owner  Trustee  in its
individual  capacity,  any holder of a  beneficial  interest in the Issuer,  the
Transferor,  the Servicer,  the Originator,  the Owner Trustee, Trust Collateral
Agent, Collateral Agent, Back-up Servicer, Custodian or the Indenture Trustee or
of any successor or assign of the Transferor,  the Servicer, the Originator, the
Indenture Trustee,  Trust Collateral Agent,  Collateral Agent, Back-up Servicer,
Custodian or the Owner Trustee in its  individual  capacity,  except as any such
Person  may have  expressly  agreed  (it  being  understood  that the  Indenture
Trustee, Trust Collateral Agent,  Collateral Agent, Back-up Servicer,  Custodian
and the Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent  provided by  applicable  law,  for any unpaid  consideration  for stock,
unpaid capital  contribution  or failure to pay any installment or call owing to
such entity.

            Each  Noteholder  or Note Owner,  by acceptance of a Note or, in the
case of a Note Owner,  a beneficial  interest in a Note  covenants and agrees to
treat the Notes as indebtedness for purposes of federal income,  state and local
income and franchise and any other income taxes.

            The Indenture permits, with certain exceptions therein provided, the
amendment  thereof and the  modification  of the rights and  obligations  of the
Transferor and the rights of the Noteholders  under the Indenture at any time by
the Issuer and the  Indenture  Trustee with the consent of the Note Insurer but,
in certain  circumstances,  without  the  consent of the  Holders of

                                     A-4-6
<PAGE>

Notes.  The  Indenture  also  contains  provisions  permitting  the  Noteholders
representing specified percentages of the outstanding Note Balance of the Notes,
on behalf of the  Holders of all the Notes,  to waive  compliance  by the Issuer
with certain  provisions of the  Indenture  and certain past defaults  under the
Indenture  and their  consequences.  Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.

            The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.

            The  Issuer  is   permitted   by  the   Indenture,   under   certain
circumstances,  to merge or consolidate,  subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.

            This Note, the Sale and Servicing  Agreement and the Indenture shall
be  construed  in  accordance  with the laws of the State of New  York,  without
reference to its conflict of law  provisions,  and the  obligations,  rights and
remedies  of the  parties  hereunder  and  thereunder  shall  be  determined  in
accordance with such laws.

            No  reference  herein to the  Indenture  or any of the  other  Basic
Documents  and no provision of this Note or of the Indenture or any of the other
Basic  Documents  shall alter or impair the  obligation of the Issuer,  which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.

            Anything herein to the contrary notwithstanding, except as expressly
provided in the  Indenture  or the Basic  Documents,  neither  Wilmington  Trust
Company in its individual  capacity,  any owner of a beneficial  interest in the
Issuer, nor any of their respective partners,  beneficiaries,  agents, officers,
directors,  employees or successors  or assigns shall be personally  liable for,
nor shall  recourse be had to any of them for,  the payment of  principal  of or
interest on, or  performance  of, or omission to perform,  any of the covenants,
obligations  or  indemnifications  contained in this Note or the  Indenture,  it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Issuer for the sole  purposes of binding the  interests of
the  Issuer  in the  assets  of the  Issuer.  The  Holder  of  this  Note by the
acceptance  hereof agrees that except as expressly  provided in the Indenture or
the Basic Documents, in the case of an Event of Default under the Indenture, the
Holder shall have no claim against any of the foregoing for any deficiency, loss
or claim therefrom;  provided,  however,  that nothing contained herein shall be
taken to prevent recourse to, and enforcement  against, the assets of the Issuer
for any and all  liabilities,  obligations  and  undertakings  contained  in the
Indenture or in this Note.

                                     A-4-7
<PAGE>

                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

            FOR VALUE  RECEIVED,  the  undersigned  hereby  sells,  assigns  and
transfers unto ________________________________
                (name and address of assignee)

the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.

Dated _____________________________ (5)     ____________________________________
                                                     Signature Guaranteed:

___________________________________

----------
      (5) NOTE: The signature to this  assignment  must correspond with the name
of the  registered  owner as it appears on the face of the within  Note in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-4-8
<PAGE>

                                                                       EXHIBIT B

                          FORM OF DEPOSITORY AGREEMENT

             Please See Tab 79 for the DTC Letter of Representations

<PAGE>

                                                                       EXHIBIT C

                    [FORM OF CERTIFICATE AS TO ERISA MATTERS]

                                     [date]

Long Beach Acceptance Auto Receivables Trust 2006-B
c/o Wilmington Trust Company, as Owner Trustee
1100 North Market Street
Wilmington, Delaware  19890-0001
Attention: Corporate Trust Administration

DEUTSCHE BANK TRUST COMPANY AMERICAS
60 Wall Street
New York, New York 10005
Attention: Long Beach Acceptance Auto
           Receivables Trust 2006-B

       Re: Long Beach Acceptance Auto Receivables Trust 2006-B
           Asset-Backed Notes, Class [A-1][A-2][A-3][A-4]

Ladies and Gentlemen:

            [NAME OF OFFICER] ____________________ hereby certifies that:

            1. That he [she] is [Title of Officer]  ________________ of [Name of
Transferee]   ______________________________________   (the   "Transferee"),   a
[savings  institution]  [corporation] duly organized and existing under the laws
of [the State of  ________]  [the  United  States],  on behalf of which he [she]
makes this affidavit.

            2. The  Transferee  (i) is not,  and is not  acting  on behalf of or
investing  the assets of, (a) an  employee  benefit  plan (as defined in Section
3(3)  of the  Employee  Retirement  Income  Security  Act of  1974,  as  amended
("ERISA"))  that is subject to the  provisions of Title I of ERISA or (b) a plan
(as defined in Section  4975(e)(1)  of the  Internal  Revenue  Code of 1986,  as
amended  (the  "Code")  that is  subject to Section  4975 of the Code  (each,  a
"Benefit  Plan") or (ii) is entitled to  exemptive  relief  pursuant to either a
Department  of Labor  prohibited  transaction  class  exemption or the statutory
exemption provided under Section 408(b)(17) of ERISA and Section  4975(d)(20) of
the Code with respect to the Transferee's  acquisition and continued  holding of
such Class [A-1][A-2][A-3][A-4] Notes.

            3. The Transferee  hereby  acknowledges  that under the terms of the
Indenture,  dated as of September 1, 2006 (the "Indenture"),  between Long Beach
Acceptance Auto Receivables  Trust 2006-B (the "Issuer") and DEUTSCHE BANK TRUST
COMPANY AMERICAS, as indenture trustee (the "Indenture Trustee"), no

<PAGE>

transfer of any Class  [A-1][A-2][A-3][A-4]  Note (as defined in the  Indenture)
shall be permitted  to be made to any person  unless the  Indenture  Trustee has
received a certificate  from such  transferee to the effect that such transferee
(A) is not a Benefit Plan and is not acting on behalf of or investing the assets
of any such  Benefit  Plan or (B) is entitled to  exemptive  relief  pursuant to
either a  Department  of Labor  prohibited  transaction  class  exemption or the
statutory  exemption  provided  under  Section  408(b)(17)  of ERISA and Section
4975(d)(20)  of the Code  with  respect  to such  transferee's  acquisition  and
continued holding of such Note.

            4. The Class  [A-1][A-2][A-3][A-4]  Notes shall be registered in the
name of _________________ ___________________ [as nominee for the Transferee.]

            IN WITNESS WHEREOF,  the Transferee has caused this instrument to be
executed on its behalf,  pursuant to authority of its Board of Directors, by its
[Title  of   Officer]   ______________   _______________,   this  _____  day  of
___________, _____.

                    ___________________________
                    [name of Transferee]

                 By: _______________________
                     Name:
                     Title:

            The undersigned hereby acknowledges that it is holding and will hold
the  Class  [A-1][A-2][A-3][A-4]  Notes  at the  exclusive  direction  of and as
nominee of the Investor named above.

_____________________________________
[name of nominee]

By: __________________________________
    Name:
    Title:

                                      C-2Exhibit 4.2

                                                                  EXECUTION COPY

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

                      AMENDED AND RESTATED TRUST AGREEMENT

                                     between

                     LONG BEACH ACCEPTANCE RECEIVABLES CORP.

                                       and

                            WILMINGTON TRUST COMPANY

                                  Owner Trustee

                          Dated as of September 5, 2006

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

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

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

     SECTION 1.1.     Capitalized Terms........................................1
     SECTION 1.2.     Other Definitional Provisions............................2

ARTICLE II. ORGANIZATION.......................................................3

     SECTION 2.1.     Name.....................................................3
     SECTION 2.2.     Office...................................................3
     SECTION 2.3.     Purposes and Powers......................................3
     SECTION 2.4.     Appointment of Owner Trustee.............................7
     SECTION 2.5.     Initial Capital Contribution to the Trust................7
     SECTION 2.6.     Declaration of Trust.....................................7
     SECTION 2.7.     Title to Owner Trust Estate..............................7
     SECTION 2.8.     Situs of Trust...........................................7
     SECTION 2.9.     Representations and Warranties of the Transferor.........7
     SECTION 2.10.    Covenants of the Certificateholder.......................9
     SECTION 2.11.    Federal Income Tax Treatment of the Trust...............10
     SECTION 2.12.    Derivatives Contracts...................................10

ARTICLE III. CERTIFICATE AND TRANSFER OF INTEREST.............................12

     SECTION 3.1.     Initial Ownership.......................................12
     SECTION 3.2.     The Certificate.........................................12
     SECTION 3.3.     Authentication of Certificate...........................12
     SECTION 3.4.     Registration of Certificate.............................12
     SECTION 3.5.     Mutilated, Destroyed, Lost or Stolen Certificate........13
     SECTION 3.6.     Persons Deemed Certificateholders.......................14
     SECTION 3.7.     Transfer of the Class R Certificate.....................14
     SECTION 3.8.     Disposition In Whole But Not In Part....................16

ARTICLE IV. VOTING RIGHTS AND OTHER ACTIONS...................................16

     SECTION 4.1.     Prior Notice to Certificateholder with Respect
                      to Certain Matters......................................16
     SECTION 4.2.     Action by Certificateholder with Respect to
                      Certain Matters.........................................17
     SECTION 4.3.     Restrictions on Certificateholder's Power...............17
     SECTION 4.4.     Rights of Note Insurer..................................17

ARTICLE V. AUTHORITY AND DUTIES OF OWNER TRUSTEE..............................18

     SECTION 5.1.     General Authority.......................................18
     SECTION 5.2.     General Duties..........................................18
     SECTION 5.3.     Action upon Instruction.................................19
     SECTION 5.4.     No Duties Except as Specified in this Agreement
                      or in Instructions......................................20
     SECTION 5.5.     No Action Except under Specified Documents
                      or Instructions.........................................20

                                       i

<PAGE>

                                                                            Page
                                                                            ----

     SECTION 5.6.     Restrictions............................................20

ARTICLE VI. CONCERNING THE OWNER TRUSTEE......................................20

     SECTION 6.1.     Acceptance of Trusts and Duties.........................20
     SECTION 6.2.     Furnishing of Documents.................................22
     SECTION 6.3.     Representations and Warranties..........................22
     SECTION 6.4.     Reliance; Advice of Counsel.............................23
     SECTION 6.5.     Not Acting in Individual Capacity.......................23
     SECTION 6.6.     Owner Trustee Not Liable for Certificate
                      or Receivables..........................................23
     SECTION 6.7.     Owner Trustee May Own Notes.............................24
     SECTION 6.8.     Payments from Owner Trust Estate........................24
     SECTION 6.9.     Doing Business in Other Jurisdictions...................24

ARTICLE VII. COMPENSATION OF OWNER TRUSTEE....................................25

     SECTION 7.1.     Owner Trustee's Fees and Expenses.......................25
     SECTION 7.2.     Indemnification.........................................25
     SECTION 7.3.     Payments to the Owner Trustee...........................25
     SECTION 7.4.     Non-recourse Obligations................................25

ARTICLE VIII. TERMINATION OF TRUST AGREEMENT..................................25

     SECTION 8.1.     Termination of Trust Agreement..........................25

ARTICLE IX. SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES............26

     SECTION 9.1.     Eligibility Requirements for Owner Trustee..............26
     SECTION 9.2.     Resignation or Removal of Owner Trustee.................27
     SECTION 9.3.     Successor Owner Trustee.................................27
     SECTION 9.4.     Merger or Consolidation of Owner Trustee................28
     SECTION 9.5.     Appointment of Co-Indenture Trustee or
                      Separate Indenture Trustee..............................28

ARTICLE X. MISCELLANEOUS......................................................30

     SECTION 10.1.    Supplements and Amendments..............................30
     SECTION 10.2.    No Legal Title to Owner Trust Estate in
                      Certificateholder.......................................31
     SECTION 10.3.    Limitations on Rights of Others.........................31
     SECTION 10.4.    Notices.................................................31
     SECTION 10.5.    Severability............................................33
     SECTION 10.6.    Separate Counterparts...................................33
     SECTION 10.7.    Assignments.............................................33
     SECTION 10.8.    No Recourse.............................................33
     SECTION 10.9.    Headings................................................33
     SECTION 10.10.   GOVERNING LAW...........................................33
     SECTION 10.11.   Servicer................................................34

                                       ii

<PAGE>

                                                                            Page
                                                                            ----

     SECTION 10.12.   Limitation on Liability.................................34
     SECTION 10.13.   No Petition.............................................34
     SECTION 10.14.   Bankruptcy Matters......................................34
     SECTION 10.15.   Effect of Policy Expiration Date........................34
     SECTION 10.16.   Termination of Demand Note and/or Demand
                      Note Guarantee..........................................35

EXHIBITS

EXHIBIT A    -    Form of Certificate of Trust

EXHIBIT B    -    Form of Class R Certificate

EXHIBIT C    -    Form of Transferee's Certificate for Qualified Institutional
                  Buyers

EXHIBIT D    -    Form of Transferee's Certificate for Institutional Accredited
                  Investors

EXHIBIT E    -    Form of Transferor's Certificate

EXHIBIT F    -    Form of ERISA Certificate

EXHIBIT G    -    Form of Flow Through Entity Certificate

                                       iii

<PAGE>

            AMENDED AND RESTATED TRUST  AGREEMENT  dated as of September 5, 2006
between LONG BEACH  ACCEPTANCE  RECEIVABLES  CORP., a Delaware  corporation (the
"Transferor"),  and Wilmington Trust Company,  a Delaware  banking  corporation,
acting hereunder not in its individual  capacity but solely as Owner Trustee (in
such capacity, the "Owner Trustee").

            WHEREAS,  the  Transferor  and the Owner Trustee have entered into a
Trust Agreement dated as of September 5, 2006 (the "Original Trust  Agreement");
and

            WHEREAS,  the  Transferor  and the Owner  Trustee  wish to amend and
restate the Original Trust Agreement by entering into this Agreement.

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

                                   ARTICLE I.

                                   Definitions

            SECTION 1.1.  Capitalized Terms. For all purposes of this Agreement,
the  following  terms shall have the meanings set forth below,  terms defined in
the singular shall include the plural:

            "Agreement" shall mean this Amended and Restated Trust Agreement, as
the same may be further amended and supplemented from time to time.

            "Certificate" shall mean the Class R Certificate.

            "Certificate  of Trust" shall mean the  Certificate  of Trust in the
form of Exhibit A to be filed for the Trust  pursuant to Section  3810(a) of the
Statutory Trust Act.

            "Certificate  Register" and  "Certificate  Registrar" shall mean the
register mentioned and the registrar appointed pursuant to Section 3.4.

            "Certificateholder,"  "Class R Certificateholder"  or "Holder" shall
mean the person in whose name a Certificate  is  registered  on the  Certificate
Register.

            "Class  R  Certificate"  means a trust  certificate  evidencing  the
entire beneficial interest in the Trust,  substantially in the form of Exhibit B
attached hereto.

            "Derivative Contract" means any ISDA Master Agreement, together with
the  related  Schedule  and  Confirmation,  entered  into  by  the  Trust  and a
Derivative Counterparty in accordance with Section 2.12.

            "Derivative  Counterparty"  means any  counterparty  to a Derivative
Contract as provided in Section 2.12.

            "Instructing  Party" shall have the meaning assigned to such term in
Section 5.3.

<PAGE>

            "Master Loan Agreement" means the Master Loan Agreement, dated as of
October 30, 2003, among LBARC-WI, as borrower, LBAC and CGMRC, as lender, as the
same may be amended,  supplemented  or otherwise  modified  from time to time in
accordance with the terms thereof.

            "Non-Registered  Trust Certificate" means a Certificate other than a
Registered Trust Certificate.

            "Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the  property  and  rights  assigned  to the Trust  pursuant  to
Article II of the Sale and  Servicing  Agreement  and pursuant to each  Transfer
Agreement,  all funds on deposit from time to time in  Collection  Account,  the
Pre-Funding Account or the Note Account and all other property of the Trust from
time to time,  including any rights of the Owner Trustee and the Trust  pursuant
to the Sale and Servicing Agreement and the Spread Account Agreement.

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

            "Secretary  of State"  means the  Secretary of State of the State of
Delaware.

            "Statutory  Trust  Act"  shall  mean  Chapter  38 of Title 12 of the
Delaware  Code,  12 Del.  Code ss. 3801 et. seq. as the same may be amended from
time to time.

            "Transferee's  Certificate"  means  a  certificate  in the  form  of
Exhibits C or D hereto.

            "Transferor's  Certificate"  means  a  certificate  in the  form  of
Exhibit E hereto.

            "Treasury  Regulations"  means  regulations,  including  proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions  of  proposed  or  temporary   regulations  shall  include  analogous
provisions  of  final   Treasury   Regulations  or  other   successor   Treasury
Regulations.

            "Trust" means the trust established by this Agreement.

            "WTC"  means   Wilmington   Trust   Company,   a  Delaware   banking
corporation, in its individual capacity.

            SECTION 1.2. Other Definitional Provisions.

            (a) Capitalized  terms used herein and not otherwise  defined herein
have  the  meanings  assigned  to them  in  Annex A to the  Sale  and  Servicing
Agreement.

            (b) All terms  defined  in this  Agreement  shall  have the  defined
meanings  when  used in any  certificate  or other  document  made or  delivered
pursuant hereto unless otherwise defined therein.

                                       2
<PAGE>

            (c) As  used in  this  Agreement  and in any  certificate  or  other
document  made or delivered  pursuant  hereto or thereto,  accounting  terms not
defined in this  Agreement or in any such  certificate  or other  document,  and
accounting  terms partly defined in this Agreement or in any such 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 certificate or other document, as applicable.
To the extent that the  definitions of accounting  terms in this Agreement or in
any such  certificate  or other document are  inconsistent  with the meanings of
such terms under  generally  accepted  accounting  principles,  the  definitions
contained in this  Agreement or in any such  certificate or other document shall
control.

            (d) 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  and  Exhibit
references  contained in this  Agreement are references to Sections and Exhibits
in or to this Agreement  unless  otherwise  specified;  and the term "including"
shall mean "including without limitation."

            (e) The  definitions  contained in this  Agreement are applicable to
the singular as well as the plural  forms of such terms and to the  masculine as
well as to the feminine and neuter genders of such terms.

                                  ARTICLE II.

                                  Organization

            SECTION  2.1.  Name.  There is hereby  formed a trust to be known as
"Long Beach Acceptance Auto  Receivables  Trust 2006-B," in which name the Owner
Trustee may conduct the business of the Trust,  make and execute  contracts  and
other  instruments  on  behalf of the Trust and sue and be sued on behalf of the
Trust.

            SECTION 2.2.  Office.  The principal  office of the Trust,  and such
additional offices as the Class R Certificateholder may direct the Owner Trustee
to  establish,  shall be located at such place or places  inside or outside  the
State of Delaware as the Class R  Certificateholder  may  unanimously  designate
from time to time. The Class R Certificateholder hereby designates the office of
the Owner Trustee at 1100 North Market Street, Wilmington,  Delaware 19890-0001,
Attention: Corporate Trust Administration as the principal office of the Trust.

            SECTION 2.3. Purposes and Powers.  The Trust and the parties to this
Agreement shall be subject to the following  provisions  regarding the purposes,
powers and procedures of the Trust:

            (a) The  purpose of the Trust is to engage  solely in the  following
activities:

            (i) to acquire the Owner Trust Estate  pursuant to Article II of the
      Sale and Servicing Agreement and each Transfer Agreement, as applicable;

                                       3
<PAGE>

            (ii) to issue the Notes  pursuant to the  Indenture  and the Class R
      Certificate pursuant to this Agreement, to sell and exchange the Notes and
      to transfer the Class R Certificate  to the Transferor and to pay interest
      on and principal of the Notes and distributions on the Certificate;

            (iii)  with  the  proceeds  of the  sale of the  Notes,  to fund the
      Pre-Funding  Account and to pay the balance to the Transferor  pursuant to
      the Sale and Servicing Agreement;

            (iv) to assign,  grant,  transfer,  pledge,  mortgage and convey the
      Pledged  Property to the Indenture  Trustee  pursuant to the Indenture for
      the  benefit of the Note  Insurer,  the  Noteholders  and the Demand  Note
      Provider  and to hold,  manage  and  distribute  to the  Certificateholder
      pursuant to the terms of the Sale and Servicing  Agreement,  each Transfer
      Agreement  and the Spread  Account  Agreement  any  portion of the Pledged
      Property released from the Lien of the Indenture;

            (v)  at  the  direction  of  the   Transferor  and  subject  to  the
      requirements  set forth in Section 2.12 hereof,  to enter into  Derivative
      Contracts for the benefit of the Class R Certificateholder;

            (vi) to enter  into and  perform  its  obligations  under  the Basic
      Documents to which it is a party;

            (vii)  to  engage  in  those  activities,  including  entering  into
      agreements,  that are necessary,  suitable or convenient to accomplish the
      foregoing or are incidental thereto or connected therewith; and

            (viii) subject to compliance with the Basic Documents,  to engage in
      such other  activities as may be required in connection with  conservation
      of  the  Owner  Trust  Estate  and  the  making  of  distributions  to the
      Certificateholder and the Noteholders.

The Trust is hereby authorized to engage in the foregoing activities.  The Trust
shall not engage in any activity other than in connection  with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.

            (b) The Trust's only assets shall be the Owner Trust  Estate.  Other
than the Notes,  the Trust  shall not secure  any  indebtedness  with any of the
Owner Trust Estate.

            (c) Other  than with  respect  to the  transfer  to the Trust of the
Trust  Assets,  the  Trust  shall  not  do any of  the  following:  acquire  any
obligations  of,  make  loans or  advances  to,  borrow  funds  from,  assume or
guarantee the obligations or liabilities of, have its obligations or liabilities
guaranteed by, or hold itself out as responsible  for the debts and  obligations
of the Owner  Trustee,  the  Certificateholder,  LBAC,  LBARC-WI,  the Indenture
Trustee or any other person or entity.

            (d) The Owner Trustee shall not manage,  control, use, sell, dispose
of or  otherwise  deal  with  any  part of the  Owner  Trust  Estate  except  in
accordance  with the specific

                                       4
<PAGE>

limitations  set forth in this Agreement and the other Basic  Documents to which
the Trust is a party.

            (e) The Trust  shall,  in all  dealings  with the  public,  identify
itself under the name of the Trust and as a separate  and  distinct  entity from
any other Person or entity.  All transactions  and agreements  between the Trust
and  third  parties  shall be  conducted  in the name of the  Trust as an entity
separate and  independent  from the Owner Trustee,  the Indenture  Trustee,  the
Transferor, LBAC and the Certificateholder.

            (f) All  transactions  and agreements  between the Trust, on the one
hand,  and any of WTC,  the Owner  Trustee,  the  Indenture  Trustee,  the Trust
Collateral   Agent,   the  Custodian,   the   Transferor,   LBAC,  the  Class  R
Certificateholder, on the other hand, shall reflect the separate legal existence
of each entity and will be formally documented in writing. The pricing and other
material  terms  of all  such  transactions  and  agreements  shall  be on terms
substantially  similar to those that would be available on an arm's-length basis
with unaffiliated third parties.

            (g) The Trust shall not  commingle  its funds and other  assets with
those of any other Person or business  entity and shall  maintain its assets and
liabilities  in such a manner  that it  shall  not be  costly  or  difficult  to
segregate,  ascertain or identify its  individual  assets and  liabilities  from
those of any other  person or  entity.  The Owner  Trustee  shall hold the Owner
Trust Estate on behalf of the Trust.

            (h) The Trust  shall pay its  liabilities  and losses as they become
due from the Owner Trust Estate, provided, however, that none of the Owner Trust
Estate shall be used to pay the liabilities  (including  liability in respect of
guaranties) and losses of WTC, the Transferor,  LBAC, the Indenture Trustee, the
Trust Collateral  Agent, the Custodian or the  Certificateholder.  The Trust has
been structured to maintain capital in an amount  reasonably  sufficient to meet
the anticipated needs of the Trust.

            (i) The Trust  shall not  share  any of the same  officers  or other
employees with the Servicer,  the Transferor,  LBAC, the Indenture Trustee,  the
Trust Collateral Agent, the Custodian or the Certificateholder.

            (j) The Trust shall not, jointly with the Servicer,  the Transferor,
LBAC, the Indenture  Trustee,  the Trust Collateral  Agent, the Custodian or the
Certificateholder  contract or do business with vendors or service  providers or
share overhead expenses.

            (k) The  Trust  shall  maintain  its own bank  accounts,  books  and
records and annual  financial  statements  prepared in accordance with generally
accepted accounting  principles,  separate from those of WTC, the Owner Trustee,
the  Indenture  Trustee,   the  Trust  Collateral  Agent,  the  Custodian,   the
Transferor, LBAC, LBARC-WI and the Certificateholder. The foregoing will reflect
that the assets and liabilities of and all  transactions  and transfers of funds
involving the Trust shall be separate from those of each such other entity,  and
the Trust  shall pay or bear the cost of the  preparation  of its own  financial
statements  and  shall  not  pay or bear  the  cost  of the  preparation  of the
financial  statements of any such other entity.  Neither the accounting  records
nor the  financial

                                       5
<PAGE>

statements  of the Trust will  indicate that the Owner Trust Estate is available
to pay creditors of WTC, the Indenture Trustee,  the Trust Collateral Agent, the
Custodian, the Transferor,  LBAC, LBARC-WI or the Certificateholder or any other
person or entity.

            (l) The  Owner  Trustee  shall  not have the  power  to  commence  a
voluntary  proceeding  in  bankruptcy  relating  to the Trust  without the prior
approval of the  Certificateholder  and the  Transferor  and the delivery to the
Owner  Trustee  by  each  of  the  Certificateholder  and  the  Transferor  of a
certificate  stating  that such  entity  reasonably  believes  that the Trust is
insolvent.

            (m) Each of the  Owner  Trustee  and the  Transferor  covenants  and
agrees that it will not at any time institute against the Certificateholder,  or
join  in any  institution  against  the  Certificateholder  of  any  bankruptcy,
reorganization,  arrangement,  insolvency  or  liquidation  proceeding  or other
proceeding  under any United  States of America  federal or state  bankruptcy or
similar law in connection  with any  obligations  relating to the Certificate or
this  Agreement.  The Owner Trustee and the Transferor each covenants and agrees
that it will not, in any capacity,  seek the  substantive  consolidation  of the
assets of the Trust with the Certificateholder.

            (n)  The  Class R  Certificate  cannot  be  transferred  other  than
pursuant to Section 3.7.

            (o)  The  Owner  Trustee  may,  pursuant  to  Section  5.2  of  this
Agreement,  delegate  certain  administrative  duties  relating  to the Trust to
specified  entities  (other than the Class R  Certificateholder),  which will be
authorized to prepare on behalf of the Trust all  documents,  reports,  filings,
instruments,  certificates  and opinions as it shall be the duty of the Trust to
prepare, file and deliver.  However, the Owner Trustee may not delegate any such
administrative  duties  to the  Class  R  Certificateholder,  and  the  Class  R
Certificateholder may not perform any of the Trust's duties or obligations.

            (p)  The   Class  R   Certificate   shall   entitle   the   Class  R
Certificateholder  only to the benefits and  distributions  as are expressly set
forth in this Agreement.

            (q) The Trust and this  Agreement  may not be revoked or  terminated
except in  accordance  with Section 8.1 of this  Agreement and in no event shall
the Certificateholder have the ability to terminate the Trust unilaterally.

            (r) The Trust shall not  consensually  merge or consolidate with any
of  WTC,   the  Owner   Trustee,   the   Transferor,   LBAC,   LBARC-WI  or  the
Certificateholder.

            (s) Neither the Transferor nor the  Certificateholder  shall request
or instruct the Owner  Trustee to take or refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the Owner
Trustee under this  Agreement or contrary to the limited  purposes of the Trust,
and the Owner  Trustee  shall be under no  obligation  to  comply  with any such
request or instruction if given.

                                       6
<PAGE>

            SECTION 2.4.  Appointment  of Owner Trustee.  The Transferor  hereby
appoints  the Owner  Trustee as trustee  of the Trust  effective  as of the date
hereof, to have all the rights, powers and duties set forth herein.

            SECTION  2.5.  Initial  Capital   Contribution  to  the  Trust.  The
Transferor hereby sells, assigns, transfers,  conveys and sets over to the Owner
Trustee,  as of the  date  hereof,  the  sum of $1.  The  Owner  Trustee  hereby
acknowledges receipt in trust from the Transferor, as of the date hereof, of the
foregoing  contribution,  which shall  constitute  the  initial  property of the
Trust. The Transferor shall pay organizational expenses of the Trust as they may
arise.

            SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares
that it will  hold  the  Owner  Trust  Estate  for  the use and  benefit  of the
Certificateholder  in trust upon and subject to the conditions set forth herein,
subject to the  obligations  of the Trust under the Basic  Documents.  It is the
intention  of the parties  hereto that the Trust  constitute  a statutory  trust
under the Statutory  Trust Act and that this Agreement  constitute the governing
instrument of such statutory trust.  Effective as of the date hereof,  the Owner
Trustee  shall have all  rights,  powers and duties set forth  herein and to the
extent not  inconsistent  herewith,  in the Statutory  Trust Act with respect to
accomplishing  the  purposes  of the  Trust.  The Owner  Trustee  shall file the
Certificate of Trust with the Secretary of State.

            The Certificateholder  shall not have any personal liability for any
liability or obligation of the Trust.

            SECTION 2.7. Title to Owner Trust Estate

            (a) Legal title to all the Owner Trust Estate shall be vested at all
      times in the Trust as a separate legal entity except where  applicable law
      in any  jurisdiction  requires title to any part of the Owner Trust Estate
      to be vested in a trustee or trustees, in which case title shall be deemed
      to be vested in the Owner Trustee, a co-trustee and/or a separate trustee,
      as the case may be.

            (b) The Certificateholder  shall not have legal title to any part of
      the Owner Trust Estate. The Class R Certificateholder shall be entitled to
      receive  distributions  with respect to its undivided  ownership  interest
      therein only in accordance  with the Sale and Servicing  Agreement and the
      Spread Account Agreement.  No transfer,  by operation of law or otherwise,
      of any right,  title or interest by the Class R  Certificateholder  of its
      ownership  interest in the Owner Trust Estate  shall  operate to terminate
      this  Agreement or the trusts  hereunder or entitle any  transferee  to an
      accounting  or to the  transfer  to it of  legal  title to any part of the
      Owner Trust Estate.

            SECTION 2.8. Situs of Trust.  The Trust shall be administered in the
State of Delaware.

            SECTION 2.9.  Representations and Warranties of the Transferor.  The
Transferor makes the following representations and warranties on which the Owner
Trustee  relies  in  accepting  the  Trust  Assets  in  trust  and  issuing  the
Certificate and upon which the Note Insurer relies in issuing the Policy:

                                       7
<PAGE>

            (a) Organization and Good Standing. The Transferor is duly organized
      and validly existing as a Delaware corporation with power and authority to
      own its  properties  and to conduct its  business as such  properties  are
      currently  owned and such business is presently  conducted and is proposed
      to be  conducted  pursuant to this  Agreement  and the 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  in which  the
      ownership  or lease of its  property,  the conduct of its business and the
      performance  of  its  obligations  under  this  Agreement  and  the  Basic
      Documents to which it is a party requires such qualification.

            (c) Power; Authority; Execution;  Enforceability. The Transferor has
      the corporate  power and  authority to execute and deliver this  Agreement
      and to carry out its terms; the Transferor has full power and authority to
      sell and assign the property to be conveyed and assigned to and  deposited
      with the Trust and the Transferor has duly  authorized such conveyance and
      assignment and deposit to the Trust 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 has been duly  authorized  by the
      Transferor by all necessary  corporate  action.  The  Transferor  has duly
      executed  this  Agreement  and the other Basic  Documents to which it is a
      party,  and this Agreement and the other Basic  Documents to which it is a
      party  constitute  the  legal,  valid  and  binding   obligations  of  the
      Transferor,  enforceable  against the Transferor in accordance  with their
      terms.

            (d)  No  Consent  Required.   No  consent,   license,   approval  or
      authorization or registration or declaration  with, any Person or with any
      governmental authority, bureau or agency is required to be obtained by the
      Transferor in connection  with the  execution,  delivery or performance of
      this Agreement and the Basic Documents to which the Transferor is a party,
      except for such as have been obtained, effected or made.

            (e) No Violation. The consummation of the transactions  contemplated
      by this Agreement and the other Basic Documents 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 Transferor, or any indenture, agreement or other instrument
      to which the Transferor is a party or by which it is bound;  nor result in
      the creation or imposition of any Lien upon any of its properties pursuant
      to the terms of any such indenture,  agreement or other instrument  (other
      than pursuant to the Basic Documents); nor violate any law or, to the best
      of the Transferor's knowledge, any 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 its  knowledge  threatened  against  it before  any court,
      regulatory body,  administrative  agency or other tribunal or governmental
      instrumentality   having

                                       8
<PAGE>

      jurisdiction  over it or its  properties  (A) asserting the  invalidity of
      this Agreement or any of the Basic  Documents to which the Transferor is a
      party, (B) seeking to prevent the issuance of the Certificate or the Notes
      or  the  consummation  of any of the  transactions  contemplated  by  this
      Agreement  or any of the  Basic  Documents  to which the  Transferor  is a
      party,  (C) seeking any  determination or ruling that might materially and
      adversely affect its performance of its obligations under, or the validity
      or  enforceability  of, this  Agreement  or any of the Basic  Documents to
      which the  Transferor is a party,  or (D) seeking to adversely  affect the
      federal income tax or other federal,  state or local tax attributes of the
      Notes or the Certificate.

            (g) No Liens.  Upon the conveyance,  assignment or other transfer of
      any of the Trust  Assets by the  Transferor  to the Trust  pursuant to the
      Sale and Servicing Agreement and each Transfer  Agreement,  the Transferor
      will have  conveyed to the Trust good  title,  free and clear of any lien,
      encumbrance  or other  interests  of  others  (including  any claim of any
      creditor of the Transferor or any of its Affiliates) of any nature and the
      Trust will have the right to Grant and deliver the Pledged Property to the
      Indenture  Trustee in accordance with the Indenture and upon the Grant and
      delivery of the Pledged Property by the Trust to the Indenture  Trustee in
      the manner  contemplated  by the Indenture,  and assuming the validity and
      binding effect of the Indenture,  the Indenture Trustee will have obtained
      a valid first priority security interest therein, prior to all liens.

            (h)  Records.  Immediately  upon the sale or other  delivery  of any
      Trust Assets to the Trust pursuant to the Sale and Servicing Agreement and
      each  Transfer  Agreement,   the  Transferor  will  make  any  appropriate
      notations  on its  records to  indicate  that the Trust  Assets  have been
      transferred  to the Trust  pursuant to the Sale and  Servicing  Agreement,
      each  Transfer  Agreement  and,  to  the  extent  it  constitutes  Pledged
      Property, has been pledged by the Trust to the Indenture Trustee to secure
      payment of the Notes.

            (i) No Bankruptcy Petition.  The Transferor has no present intent to
      cause a voluntary bankruptcy of the Trust.

            (j)  Separate  Entity.  The  Transferor  will hold itself out to the
      public under its own name as a separate  and  distinct  entity and conduct
      its business so as not to mislead  others as to the identity of the entity
      under which those others are concerned. Without limiting the generality of
      the foregoing, all oral and written communications, including all letters,
      invoices,  contracts,  statements and applications  will be made solely in
      the name of the Trust if they are made on  behalf of the Trust and  solely
      in  the  name  of the  Transferor  if  they  are  made  on  behalf  of the
      Transferor.

            (k)  Financial  Statements.  The  Transferor  will  disclose  in all
      financial statements that the assets of the Trust are not available to the
      Transferor's creditors.

            SECTION   2.10.    Covenants   of   the    Certificateholder.    The
Certificateholder, by its acceptance of a Certificate, agrees:

            (a) to be bound by the terms and  conditions of the  Certificate  of
      which the  Certificateholder is the beneficial owner and of this Agreement
      and the other Basic

                                       9
<PAGE>

      Documents,  including any supplements or amendments hereto and thereto and
      to perform the obligations of a Certificateholder  as set forth therein or
      herein, in all respects as if it were a signatory hereto. This undertaking
      is made for the  benefit  of the  Trust,  the Owner  Trustee  and the Note
      Insurer;

            (b) until one year and one day after the  completion  of the  events
      specified in Section 8.1(d), not to, for any reason, institute proceedings
      for the Trust to be adjudicated a bankrupt or insolvent, or consent to the
      institution of bankruptcy or insolvency  proceedings against the Trust, or
      file a petition  seeking or consenting to  reorganization  or relief under
      any applicable federal or state law relating to bankruptcy,  or consent to
      the appointment of a receiver, liquidator, assignee, trustee, sequestrator
      (or other  similar  official)  of the Trust or a  substantial  part of its
      property,  or cause or  permit  the Trust to make any  assignment  for the
      benefit of its  creditors,  or admit in writing its  inability  to pay its
      debts  generally as they become due, or declare or effect a moratorium  on
      its debt or take any action in furtherance of any such action; and

            (c)  to  execute  and  deliver  such   instruments   of  conveyance,
      assignment,  grant, confirmation,  as well as any financing statements, in
      each case,  as the Note Insurer  shall  consider  reasonably  necessary in
      order to perfect the  security  interests of the  Collateral  Agent in the
      collateral pledged under the Spread Account Agreement.

            SECTION 2.11. Federal Income Tax Treatment of the Trust.

            (a) For so long as the Trust has a single  owner for federal  income
      tax purposes, it will, pursuant to Treasury Regulations  promulgated under
      section 7701 of the Code, be  disregarded  as an entity  distinct from the
      Certificateholder  for all federal income tax purposes.  Accordingly,  for
      federal income tax purposes,  the Certificateholder will be treated as (i)
      owning all assets owned by the Trust, (ii) having incurred all liabilities
      incurred by the Trust,  and (iii) all  transactions  between the Trust and
      the Certificateholder will be disregarded.

            (b) Neither the Owner Trustee nor any Certificateholder  will, under
      any  circumstances,  and at any time, make an election on IRS Form 8832 or
      otherwise,   to  classify  the  Trust  as  an  association  taxable  as  a
      corporation for federal, state or any other applicable tax purpose.

            (c) In the event  that the Trust has two or more  equity  owners for
      federal  income tax purposes,  the Trust will be treated as a partnership.
      At any such  time  that the  Trust  has two or more  equity  owners,  this
      Agreement  will be amended,  in accordance  with Section 10.1 herein,  and
      appropriate provisions will be added so as to provide for treatment of the
      Trust as a partnership. In no event, however, will the Trust engage in any
      activity  which would cause the Trust to become an association or publicly
      traded  partnership,  taxable  as a  corporation  for  federal  income tax
      purposes.

            SECTION  2.12.  Derivatives  Contracts(a).  (a)  The  Trust,  at the
direction of the Transferor,  shall execute and deliver Derivative  Contracts in
such form as the Transferor  shall  approve,  as evidenced  conclusively  by the
Trust's  execution  thereof,  such  Derivative  Contracts  being  solely for the
benefit of the Class R Certificateholder; provided, however, that

                                       10
<PAGE>

neither the  execution  and  delivery of any such  Derivative  Contract  nor the
consummation of any  transaction  contemplated  thereunder  shall give rise to a
non-exempt  prohibited   transaction  described  in  Section  406  of  ERISA  or
4975(c)(1) of the Code. Any such  Derivative  Contract shall  constitute a fully
prepaid agreement. Any acquisition of a Derivative Contract shall be accompanied
by (i) an Opinion of Counsel  provided by, and at the expense of, the Transferor
to the effect that the existence of the  Derivative  Contract will not cause the
Trust to be  characterized  as an association or a publicly  traded  partnership
taxable as a corporation for federal income tax purposes; (ii) the prior written
consent of the Note Insurer to the acquisition of such Derivative Contract, such
consent not to be unreasonably withheld; provided that such consent shall not be
deemed to be unreasonably  withheld if the proposed Derivative Contract does not
satisfy  the  requirements  set forth in clauses  (b) and (c)  below;  and (iii)
confirmation from the Rating Agencies that the then-current  rating of the Notes
will not be qualified,  reduced or withdrawn (without regard to the Policy) as a
result of the acquisition of such Derivative Contract.  Prior to the acquisition
of any Derivative Contracts by the Trust, the Trust at the direction and expense
of the  Transferor,  shall  establish  and  maintain in its own name an Eligible
Account (the "Derivative  Contract Collection  Account"),  bearing a designation
clearly  indicating that the funds deposited therein are held for the benefit of
the Trust on behalf of the Class R Certificateholder.  All collections, proceeds
and  other  amounts  in  respect  of the  Derivative  Contracts  payable  by the
Derivative   Counterparty  shall  be  deposited  into  the  Derivative  Contract
Collection  Account for  distribution  to the Class R  Certificateholder  on the
Distribution Date following receipt thereof by the Trust.

            (b) No Derivative  Contract shall provide for any payment obligation
      on the part of the Trust.  Each  Derivative  Contract  must (i)  contain a
      non-petition  covenant  provision from the Derivative  Counterparty,  (ii)
      limit  payment  dates  thereunder  to  Payment  Dates and (iii)  contain a
      provision limiting any cash payments due to the Derivative Counterparty on
      any day under such Derivative Contract solely to funds available therefore
      in the  Collection  Account to make  payments to the Holder of the Class R
      Certificates on such Payment Date.

            (c) Each Derivative Contract must (i) provide for the direct payment
      of any  amounts  by the  Derivative  Counterparty  thereunder  to the Note
      Account at least one Business Day prior to the related  Payment Date, (ii)
      provide that in the event of the  occurrence of an Event of Default,  such
      Derivative  Contract  shall  terminate  upon the  direction  of a majority
      Percentage Interest of the Class R Certificateholders,  (iii) prohibit the
      Derivative  Counterparty from "setting-off" or "netting" other obligations
      of the Trust and its  Affiliates  against such  Derivative  Counterparty's
      payment  obligations   thereunder  and  (iv)  satisfy  the  Rating  Agency
      Condition.

                                       11
<PAGE>

                                  ARTICLE III.

                      Certificate and Transfer of Interest

            SECTION 3.1. Initial  Ownership.  Upon the formation of the Trust by
the  contribution  by the  Transferor  pursuant  to  Section  2.5 and  until the
issuance of the Certificate the Transferor  shall be the sole beneficiary of the
Trust.

            SECTION 3.2. The Certificate.  The Certificate  shall be executed on
behalf of the Trust by manual or facsimile signature of an authorized officer of
the Owner Trustee. A Certificate  bearing the manual or facsimile  signatures of
individuals who were, at the time when such signatures  shall have been affixed,
authorized to sign on behalf of the Trust,  shall be validly issued and entitled
to the benefit of this Agreement,  notwithstanding  that such individuals or any
of them shall have ceased to be so authorized  prior to the  authentication  and
delivery  of such  Certificate  or did not  hold  such  offices  at the  date of
authentication  and delivery of such Certificate.  A transferee of a Certificate
shall  become a  Certificateholder,  and shall be  entitled  to the  rights  and
subject  to  the  obligations  of  a  Certificateholder   hereunder,   upon  due
registration of such Certificate in such  transferee's  name pursuant to Section
3.4.

            SECTION 3.3.  Authentication  of Certificate.  Concurrently with the
conveyance of the  Receivables  to the Trust  pursuant to the Sale and Servicing
Agreement,  the Owner Trustee shall cause the Class R Certificate to be executed
on behalf of the Trust, authenticated and delivered to or upon the written order
of the  Transferor,  signed by its chairman of the board,  its  president or any
vice  president,  its  treasurer  or any  assistant  treasurer  without  further
corporate  action by the  Transferor,  in authorized  denominations.  No Class R
Certificate  shall  entitle its holder to any benefit under this  Agreement,  or
shall be valid for any  purpose,  unless  there  shall  appear  on such  Class R
Certificate a certificate of authentication  substantially in the form set forth
in  Exhibit  B,  executed  by the Owner  Trustee  or WTC as the Owner  Trustee's
authentication agent, by manual signature;  such authentication shall constitute
conclusive  evidence  that  such  Class  R  Certificate  shall  have  been  duly
authenticated  and delivered  hereunder.  The Class R Certificate shall be dated
the date of its authentication.

            SECTION 3.4. Registration of Certificate

            (a) The Certificate Registrar shall keep or cause to be kept, at the
      office or  agency  maintained  pursuant  to  Section  2.2,  a  Certificate
      Register  in  which,  subject  to such  reasonable  regulations  as it may
      prescribe,  the Owner Trustee shall  provide for the  registration  of the
      Certificate  and of transfers and exchanges of the  Certificate  as herein
      provided. WTC shall be the initial Certificate Registrar.

            (b) The  Certificate  Registrar  shall provide the Trust  Collateral
      Agent with the name and  address of the  Certificateholder  on the Closing
      Date. Upon any transfer of a Certificate,  the Certificate Registrar shall
      notify  the  Trust  Collateral  Agent  of  the  name  and  address  of the
      transferee in writing, by facsimile, on the day of such transfer.

            (c) Upon surrender for  registration of transfer of a Certificate at
      the office or agency maintained pursuant to Section 2.2, the Owner Trustee
      shall  execute,  authenticate  and  deliver  (or  shall  cause  WTC as its
      authenticating  agent to  authenticate  and

                                       12
<PAGE>

      deliver),  in the name of the  designated  transferee,  a new  Certificate
      dated  the  date  of   authentication   by  the  Owner   Trustee   or  any
      authenticating agent.

            (d) A  Certificate  presented or  surrendered  for  registration  of
      transfer or  exchange  shall be  accompanied  by a written  instrument  of
      transfer in form  satisfactory  to the Owner  Trustee and the  Certificate
      Registrar  duly  executed by the  Certificateholder  or his attorney  duly
      authorized  in writing,  with such  signature  guaranteed  by an "eligible
      guarantor   institution"  meeting  the  requirements  of  the  Certificate
      Registrar,  which requirements  include membership or participation in the
      Securities  Transfer  Agent's  Medallion  Program  ("STAMP") or such other
      "signature  guarantee  program" as may be  determined  by the  Certificate
      Registrar in addition to, or in substitution for, STAMP, all in accordance
      with the Exchange Act. Each  Certificate  surrendered for  registration of
      transfer or exchange shall be canceled and subsequently disposed of by the
      Owner Trustee in accordance with its customary practice.

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

            (f) In  furtherance  of  and in  limitation  of the  foregoing,  the
      Certificateholder,   by  acceptance  of  its   Certificate,   specifically
      acknowledges that it has no right to or interest in any monies or Eligible
      Investments at any time held in the Spread Account prior to the release of
      such  monies  pursuant  to  Section  5.6(d)  of  the  Sale  and  Servicing
      Agreement,  such monies being held in trust for the benefit of the Class A
      Noteholders and the Note Insurer.  Notwithstanding  the foregoing,  in the
      event that it is ever determined that provisions of the Sale and Servicing
      Agreement  and  the  Spread  Account  Agreement  shall  be  considered  to
      constitute   a   security   agreement   and   the   Transferor   and   the
      Certificateholder  hereby grant to the Collateral Agent for the benefit of
      the Class A Noteholders  and the Note Insurer a first  priority  perfected
      security  interest in such amounts,  to be applied as set forth in Section
      3.03 of the  Spread  Account  Agreement  and  Section  5.6 of the Sale and
      Servicing  Agreement.  In  addition,  the  Class R  Certificateholder,  by
      acceptance of its Certificate, hereby appoints the Transferor as its agent
      to pledge a first  priority  perfected  security  interest  in the  Spread
      Account,  and any amounts held therein from time to time to the Collateral
      Agent pursuant to the Spread  Account  Agreement and agrees to execute and
      deliver   such   instruments   of   conveyance,   assignment,   grant  and
      confirmation,  as well as 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).

            SECTION 3.5. Mutilated,  Destroyed,  Lost or Stolen Certificate.  If
(a) any mutilated Certificate shall be surrendered to the Certificate Registrar,
or if the Certificate  Registrar shall receive  evidence to its  satisfaction of
the  destruction,  loss or  theft  of any  Certificate  and (b)  there  shall be
delivered to the  Certificate  Registrar,  the Owner  Trustee and (unless a Note
Insurer  Default shall have occurred and be continuing)  the Note Insurer,  such
security or indemnity as may be required by them to save each of them  harmless,
then in the

                                       13
<PAGE>

absence of notice that such Certificate  shall have been acquired by a bona fide
purchaser,  the Owner Trustee on behalf of the Trust shall execute and the Owner
Trustee, or WTC, as the Owner Trustee's authenticating agent, shall authenticate
and deliver, in exchange for or in lieu of any such mutilated,  destroyed,  lost
or stolen Certificate,  a new Certificate of like class, tenor and denomination.
In connection with the issuance of any new Certificate  under this Section,  the
Owner  Trustee or the  Certificate  Registrar  may  require the payment of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
connection therewith.  Any duplicate Certificate issued pursuant to this Section
shall constitute  conclusive  evidence of an ownership interest in the Trust, as
if originally issued,  whether or not the lost, stolen or destroyed  Certificate
shall be found at any time.

            SECTION  3.6.  Persons  Deemed  Certificateholders.  Every Person by
virtue of becoming a  Certificateholder  in accordance with this Agreement shall
be deemed to be bound by the terms of this Agreement.  Prior to due presentation
of  a  Certificate  for  registration  of  transfer,   the  Owner  Trustee,  the
Certificate  Registrar and the Note Insurer and any agent of the Owner  Trustee,
the  Certificate  Registrar and the Note Insurer,  may treat the person in whose
name any  Certificate  shall be  registered in the  Certificate  Register as the
owner of such Certificate for the purpose of receiving distributions pursuant to
the Sale and Servicing  Agreement and the Spread  Account  Agreement and for all
other  purposes  whatsoever,  and none of the  Owner  Trustee,  the  Certificate
Registrar  or the  Note  Insurer  nor  any  agent  of  the  Owner  Trustee,  the
Certificate  Registrar or the Note  Insurer  shall be bound by any notice to the
contrary.

            SECTION 3.7. Transfer of the Class R Certificate.

            (a) No  transfer  of a  Certificate  shall be made  unless  (I) such
      transfer (x) is made pursuant to an effective registration statement under
      the  Securities  Act and any applicable  state  securities  laws or (y) is
      exempt from the  registration  requirements  under the  Securities Act and
      such state  securities  laws and (II) such  transfer  is to a Person  that
      satisfies the  requirements  of paragraph  (a)(2)(i) or (a)(2)(ii) of Rule
      3a-7 as then in effect  or any  successor  rule  ("Rule  3a-7")  under the
      Investment Company Act.

            (b) Each prospective  purchaser of a Non-Registered  Certificate not
      held in book-entry  form (other than with respect to the initial  transfer
      of the Certificate by the  Transferor)  shall deliver a completed and duly
      executed  Transferee's  Certificate  (in the form of  Exhibit C hereto for
      "qualified institutional buyers" as defined in Rule 144A of the Securities
      Act  ("Rule  144A") or  Exhibit D hereto  for  "accredited  investors"  as
      defined in Rule  501(a)(1),  (2), (3) or (7) of  Regulation D  promulgated
      under the  Securities  Act) to the Owner Trustee and to the Transferor for
      inspection  prior to effecting any requested  transfer.  Each  prospective
      seller of a  Non-Registered  Certificate  (other than with  respect to the
      initial transfer of any such Certificate by the Transferor)  shall deliver
      a completed and duly  executed  Transferor's  Certificate  (in the form of
      Exhibit E hereto) to the Owner Trustee for  inspection  prior to effecting
      any  requested  transfer.   The  Transferor  and  the  Owner  Trustee  may
      conclusively rely upon the information  contained in any such Transferee's
      Certificate or Transferor's Certificate in the absence of actual knowledge
      to the contrary.

            (c) In connection  with any transfer,  the Owner Trustee may (except
      in the case of (x) the  initial  transfer of any such  Certificate  by the
      Transferor,  (y) a  transfer  to a  "qualified

                                       14
<PAGE>

      institutional  buyer" who delivers a Transferee's  Certificate in the form
      of Exhibit C hereto,  or (z) a transfer  to a  "accredited  investor"  who
      delivers  a  Transferee's  Certificate  in the form of  Exhibit  D hereto)
      require an opinion of counsel  satisfactory  to the Owner  Trustee and the
      Transferor  to the  effect  that such  transfer  may be  effected  without
      registration  under the Securities  Act,  which opinion of counsel,  if so
      required,  shall be addressed to the  Transferor and the Owner Trustee and
      shall be secured at the expense of the holder of a Certificate.  The Owner
      Trustee may  conclusively  rely upon the  representation  of any purchaser
      made to the Owner Trustee,  and upon such opinion of counsel, and shall be
      fully protected in so doing.

            (d) No transfer of a Certificate  shall be made to any Person unless
      the Owner Trustee has received a certificate (substantially in the form of
      Exhibit F hereto) from such  transferee to the effect that such transferee
      is not a Plan, and is not acting on behalf of or investing the assets of a
      Plan. The preparation  and delivery of the  certificate  referred to above
      shall not be an expense of the Trust,  the Owner Trustee or the Transferor
      but shall be borne by the  transferee.  Each  transferee  of a  beneficial
      ownership  interest  in  a  book-entry  Certificate  shall  be  deemed  to
      represent  that  it is  not a  Plan  and is not  acting  on  behalf  of or
      investing the assets of a Plan.

            (e) No transfer of a Certificate  shall be made to any Person unless
      the  Owner   Trustee   and   Transferor   have   received  a   certificate
      (substantially  in the form of Exhibit G hereto) from such  transferee  to
      the effect that (i) such transferee is acquiring such  certificate for its
      own behalf and is not acting as agent or custodian for any other Person or
      entity in connection  with such  acquisition,  (ii) if the transferee is a
      partnership,  grantor  trust  or S  corporation  for  federal  income  tax
      purposes (a "Flow Through  Entity"),  any certificate (and interest in the
      Trust in the  aggregate)  owned by such Flow Through Entity will represent
      less than 50% of the value of the assets owned by such Flow Through Entity
      and no special allocation of income,  gain, loss, deduction or credit from
      such  certificate  will be made among the  beneficial  owners of such Flow
      Through Entity,  and (iii) the transferee is a United States Person within
      the meaning of the Code.

            (f) No transfer,  pledge or  encumbrance  of the Class R Certificate
      shall be made to any Person  unless (A) such Person is a Rated  Entity,  a
      Bankruptcy Remote Entity or a statutory trust established under Chapter 38
      of Title 12 of the Delaware  Code,  12 Del. C. ss. 3801 et seq.  that is a
      Bankruptcy  Remote Entity, or (B) such pledge is made to CGMRC pursuant to
      the Master  Loan  Agreement;  provided,  however,  that in the event CGMRC
      forecloses on its security interest in the Class R Certificate,  the Class
      R  Certificate  may be  registered  in the name of a Person  that is not a
      Bankruptcy Remote Entity for a period not to exceed two (2) Business Days.
      The  Certificate  shall at all times be registered in the name of a single
      holder.

            (g) The Certificate shall bear a legend stating that it has not been
      registered under the Securities Act and are subject to the restrictions on
      transfer  described  herein.  By purchasing a Certificate,  each purchaser
      shall be deemed to have agreed to these restrictions on transfer.

            (h) In order to preserve  the  exemption  for resales and  transfers
      provided by Rule 144A,  the  Transferor  shall  provide to any Holder of a
      Non-Registered  Certificate  and

                                       15
<PAGE>

      any prospective  purchaser designated by such Holder, upon request of such
      Holder or such prospective  purchaser,  such information  required by Rule
      144A as will enable the resale of such  Non-Registered  Certificate  to be
      made pursuant to Rule 144A.  The Owner Trustee  shall  cooperate  with the
      Transferor  in providing the  Transferor  such  information  regarding the
      Non-Registered  Certificate,  the Trust Assets and other matters regarding
      the  Trust  as  the  Transferor  shall  reasonably  request  to  meet  its
      obligations under the preceding sentence.

            (i) Notwithstanding any provision of this Agreement to the contrary,
      any transfer of  Certificates  that causes the total number of  beneficial
      owners of Certificates to exceed  ninety-nine  (99) shall be null and void
      and the  Certificate  Register  shall be amended to  reflect  such  voided
      transfer.

            SECTION  3.8.  Disposition  In Whole  But Not In Part.  The  Class R
Certificate may be transferred in whole but not in part. Any attempted  transfer
of the Certificate that would divide the beneficial ownership in the Trust shall
be void.

                                  ARTICLE IV.

                         Voting Rights and Other Actions

            SECTION  4.1.  Prior  Notice to  Certificateholder  with  Respect to
Certain Matters.  With respect to the following matters, the Owner Trustee shall
not take  action  unless at least  thirty  (30) days  before  the taking of such
action, the Owner Trustee shall have notified the Certificateholder and the Note
Insurer in writing of the proposed  action and the  Certificateholder  shall not
have  notified  the Owner  Trustee in  writing  prior to the 30th day after such
notice is given that the  Certificateholder  has  withheld  consent or  provided
alternative direction:

            (a)  the  election  by  the  Trust  to  file  an  amendment  to  the
      Certificate  of Trust (unless such amendment is required to be filed under
      the Statutory  Trust Act or unless such amendment would not materially and
      adversely affect the interests of the Certificateholder);

            (b) the  amendment of the Indenture by a  supplemental  indenture in
      circumstances where the consent of any Noteholder is required;

            (c) the  amendment of the Indenture by a  supplemental  indenture in
      circumstances where the consent of any Noteholder is not required and such
      amendment    materially    adversely   affects   the   interest   of   the
      Certificateholder; or

            (d)  except  pursuant  to  Section  13.1 of the Sale  and  Servicing
      Agreement, the amendment, change or modification of the Sale and Servicing
      Agreement,  except  to  cure  any  ambiguity  or  defect  or to  amend  or
      supplement any provision in a manner that would not  materially  adversely
      affect the interests of the Certificateholder.

            The Owner Trustee shall notify the  Certificateholder  in writing of
any appointment of a successor Note Registrar or Trust  Collateral  Agent within
five Business Days after receipt of notice thereof.

                                       16
<PAGE>

            SECTION  4.2.  Action by  Certificateholder  with Respect to Certain
Matters.  The Owner Trustee shall not have the power,  except upon the direction
of the  Controlling  Party  or,  after  the  Class  A  Notes  and  Reimbursement
Obligations  have  been  paid and  full  and the  expiration  of the  Policy  in
accordance with its terms,  the  Certificateholder  in accordance with the Basic
Documents,  to (a) remove the Servicer  under the Sale and  Servicing  Agreement
pursuant to Section 9.1 thereof or (b) except as expressly provided in the Basic
Documents,  sell the  Receivables  after the  termination of the Indenture.  The
Owner Trustee shall take the actions referred to in the preceding  sentence only
upon   written   instructions   signed   by  the   Controlling   Party   or  the
Certificateholder,   as  applicable  and  the   furnishing  of   indemnification
satisfactory  to the Owner  Trustee  by the  Certificateholder.  To the  fullest
extent  permitted by applicable  law, the Owner Trustee shall not have the power
to, and shall not,  commence any  proceeding  or other actions  contemplated  by
Section 2.10 (b).

            SECTION 4.3. Restrictions on Certificateholder's Power.

            (a) The Certificateholder shall not direct the Owner Trustee to take
      or refrain  from  taking any action if such  action or  inaction  would be
      contrary to any  obligation  of the Trust or the Owner  Trustee under this
      Agreement  or any of the Basic  Documents  or would be contrary to Section
      2.3 nor shall the Owner Trustee be obligated to follow any such direction,
      if given.

            (b) The  Certificateholder  shall not 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 or any Basic Document,  unless the Certificateholder is the
      Instructing Party pursuant to Section 5.3 and unless the Certificateholder
      previously  shall  have  given to the Owner  Trustee  a written  notice of
      default and of the continuance thereof, as provided in this Agreement, and
      also unless the Certificateholder shall have made written request upon the
      Owner Trustee to institute such action, suit or proceeding in its own name
      as Owner Trustee under this  Agreement and shall have offered to the Owner
      Trustee such  reasonable  indemnity  as it may require  against the costs,
      expenses and liabilities to be incurred therein or thereby,  and the Owner
      Trustee,  for thirty (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
      Owner Trustee  pursuant to and in compliance  with this Section or Section
      5.3. For the protection and enforcement of the provisions of this Section,
      the  Certificateholder  and the Owner  Trustee  shall be  entitled to such
      relief as can be given either at law or in equity.

            SECTION 4.4. Rights of Note Insurer. Notwithstanding anything to the
contrary in the Basic  Documents,  without the prior written consent of the Note
Insurer  (so  long  as no  Note  Insurer  Default  shall  have  occurred  and be
continuing),  the Owner Trustee shall not (i) remove the Servicer, (ii) initiate
any claim,  suit or  proceeding by the Trust or  compromise  any claim,  suit or
proceeding  brought by or  against  the  Trust,  other than with  respect to the
enforcement  of any  Receivable  or any  rights of the Trust  thereunder,  (iii)
authorize  the  merger  or  consolidation  of the  Trust  with or into any other
statutory  trust or other entity (other than in accordance  with Section 3.10 of
the Indenture) or (iv) amend the Certificate of Trust (except as may be required
by the Statutory Trust Act).

                                       17
<PAGE>

                                   ARTICLE V.

                      Authority and Duties of Owner Trustee

            SECTION 5.1. General Authority.

            (a) The Owner  Trustee is  authorized  and  directed  to execute and
      deliver  the  Basic  Documents  to which the Trust is named as a party and
      each  certificate  or  other  document   attached  as  an  exhibit  to  or
      contemplated by the Basic Documents to which the Trust is named as a party
      and any amendment  thereto,  in each case, in such form as the  Transferor
      shall approve as evidenced  conclusively by the Owner Trustee's  execution
      thereof,  and on behalf of the Trust,  to direct the Indenture  Trustee to
      authenticate  and deliver the Class A-1 Notes in the  aggregate  principal
      amount of  $100,000,000,  the Class A-2 Notes in the  aggregate  principal
      amount of  $137,000,000,  the Class A-3 Notes in the  aggregate  principal
      amount of $147,000,000 and the Class A-4 Notes in the aggregate  principal
      amount of $116,000,000. In addition to the foregoing, the Owner Trustee is
      authorized,  but shall not be obligated,  to take all actions  required of
      the Trust  pursuant to the Basic  Documents.  The Owner Trustee is further
      authorized from time to time to take such action as the Instructing  Party
      recommends  with respect to the Basic Documents so long as such activities
      are consistent with the terms of the Basic Documents.

            (b)  The  Owner  Trustee  shall  sign on  behalf  of the  Trust  any
      applicable  tax returns of the Trust,  unless  applicable  law  requires a
      Certificateholder to sign such documents.

            SECTION 5.2.  General  Duties(a). It  shall be the duty of the Owner
Trustee:

            (i)  to  discharge   (or  cause  to  be   discharged)   all  of  its
      responsibilities pursuant to the terms of this Agreement and to administer
      the Trust in the interest of the  Certificateholder,  subject to the Basic
      Documents and in accordance with the provisions of this Agreement; and

            (ii) to  execute  on  behalf of the  Trust  any  license,  approval,
      authorization  or  registration  required by any  governmental  authority,
      bureau or agency,  as notified by the Servicer and  presented to the Owner
      Trustee in final  execution  form,  with  respect to which the  failure to
      maintain any such license,  approval,  authorization or registration would
      have  an  adverse  effect  on  the  validity  and  enforceability  of  the
      Indenture, the Certificate, the Notes or the Owner Trust Estate.

            Notwithstanding the foregoing,  the Owner Trustee shall be deemed to
have  discharged its duties and  responsibilities  hereunder and under the Basic
Documents  to the  extent  the  Servicer  has  agreed in the Sale and  Servicing
Agreement to perform any act or to discharge  any duty of the Trust or the Owner
Trustee  hereunder or under any Basic Document,  and the Owner Trustee shall not
be  liable  for  the  default  or  failure  of the  Servicer  to  carry  out its
obligations under the Sale and Servicing Agreement.

                                       18
<PAGE>

            SECTION 5.3. Action upon Instruction.

            (a)  Subject  to  Article  IV and the  terms of the  Spread  Account
      Agreement,  the Note Insurer (so long as a Note Insurer  Default shall not
      have occurred and be continuing) or the Class R  Certificateholder)  (if a
      Note  Insurer  Default  shall  have  occurred  and  be  continuing)   (the
      "Instructing  Party") shall have the exclusive right to direct the actions
      of the Owner  Trustee  in the  management  of the  Trust,  so long as such
      instructions are not inconsistent  with the express terms set forth herein
      or in any Basic  Document.  The  Instructing  Party shall not instruct the
      Owner Trustee in a manner  inconsistent  with this  Agreement or the Basic
      Documents.

            (b) The Owner  Trustee  shall  not be  required  to take any  action
      hereunder  or under any Basic  Document  if the Owner  Trustee  shall have
      reasonably  determined,  or shall have been advised by counsel,  that such
      action is likely to result in liability  on the part of the Owner  Trustee
      or is  contrary  to the  terms  hereof  or of  any  Basic  Document  or is
      otherwise contrary to law.

            (c)  Whenever  the  Owner  Trustee  is  unable  to  decide   between
      alternative  courses of action  permitted or required by the terms of this
      Agreement or any Basic  Document,  the Owner Trustee  shall  promptly give
      notice (in such form as shall be appropriate  under the  circumstances) to
      the Instructing Party requesting instruction as to the course of action to
      be  adopted,  and to the  extent the Owner  Trustee  acts in good faith in
      accordance with any written instruction of the Instructing Party received,
      the Owner  Trustee  shall not be liable on account  of such  action to any
      Person.  If  the  Owner  Trustee  shall  not  have  received   appropriate
      instruction  within ten days of such notice (or within such shorter period
      of time as reasonably  may be specified in such notice or may be necessary
      under the  circumstances)  it may,  but shall be under no duty to, take or
      refrain from taking such action,  not inconsistent  with this Agreement or
      the Basic  Documents,  as it shall deem to be in the best interests of the
      Certificateholder,  and shall  have no  liability  to any  Person for such
      action or inaction.

            (d)  In the  event  that  the  Owner  Trustee  is  unsure  as to the
      application  of any provision of this  Agreement or any Basic  Document or
      any such provision is ambiguous as to its  application,  or is, or appears
      to be, in conflict with any other  applicable  provision,  or in the event
      that this Agreement  permits any  determination by the Owner Trustee or is
      silent or is  incomplete as to the course of action that the Owner Trustee
      is required to take with respect to a particular  set of facts,  the Owner
      Trustee  may give notice (in such form as shall be  appropriate  under the
      circumstances) to the Instructing Party requesting instruction and, to the
      extent that the Owner  Trustee acts or refrains  from acting in good faith
      in accordance with any such instruction received,  the Owner Trustee shall
      not be liable,  on account of such action or inaction,  to any Person.  If
      the Owner Trustee shall not have received  appropriate  instruction within
      10  days  of  such  notice  (or  within  such  shorter  period  of time as
      reasonably  may be specified in such notice or may be necessary  under the
      circumstances) it may, but shall be under no duty to, take or refrain from
      taking such  action,  not  inconsistent  with this  Agreement or the Basic
      Documents,  as  it  shall  deem  to  be  in  the  best  interests  of  the
      Certificateholder,  and shall  have no  liability  to any  Person for such
      action or inaction.

                                       19
<PAGE>

            SECTION 5.4. No Duties  Except as Specified in this  Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any  payment  with  respect  to,  register,  record,  sell,  dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this  Agreement  or in any  document or written  instruction  received by the
Owner  Trustee  pursuant to Section  5.3; and no implied  duties or  obligations
shall be read  into  this  Agreement  or any Basic  Document  against  the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or  continuation  statement  in any  public  office at any time or to  otherwise
perfect or maintain the  perfection of any security  interest or lien granted to
it  hereunder  or to prepare or file any  Commission  filing for the Trust or to
record this Agreement or any Basic  Document.  WTC  nevertheless  agrees that it
will, at its own cost and expense,  promptly take all action as may be necessary
to  discharge  any Liens on any part of the Owner Trust  Estate that result from
actions by, or claims against,  WTC and that are not related to the ownership or
the administration of the Owner Trust Estate.

            SECTION  5.5.  No  Action  Except  under   Specified   Documents  or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or  otherwise  deal  with any  part of the  Owner  Trust  Estate  except  (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement,  (ii) in accordance with the Basic Documents
and (iii) in accordance with any document or instruction  delivered to the Owner
Trustee pursuant to Section 5.3.

            SECTION  5.6.  Restrictions.  The Owner  Trustee  shall not take any
action  (a) that is  inconsistent  with the  purposes  of the Trust set forth in
Section 2.3 or (b) that,  to the actual  knowledge of the Owner  Trustee,  would
result in the Trust's  becoming  taxable as a corporation for federal income tax
purposes.  The  Instructing  Party  shall not direct  the Owner  Trustee to take
action that would violate the provisions of this Section.

                                  ARTICLE VI.

                          Concerning the Owner Trustee

            SECTION  6.1.  Acceptance  of Trusts and Duties.  The Owner  Trustee
accepts the trusts  hereby  created  and agrees to perform its duties  hereunder
with respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all moneys actually  received by it constituting
part of the Owner Trust  Estate upon the terms of the Basic  Documents  and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder or
under any Basic Document under any circumstances, except (i) for its own willful
misconduct,  bad faith or negligence,  (ii) in the case of the inaccuracy of any
representation or warranty  contained in Section 6.3 expressly made by the Owner
Trustee,  (iii) for  liabilities  arising  from the  failure  of WTC to  perform
obligations  expressly  undertaken  by it in the last  sentence  of Section  5.4
hereof,  (iv) for any  investments  issued by the Owner Trustee or any branch or
Affiliate  thereof in its  commercial  capacity or (v) for taxes,  fees or other
charges  on,  based on or measured  by, any fees,  commissions  or  compensation
received by the Owner Trustee. In particular,  but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):

                                       20
<PAGE>

            (a) the Owner  Trustee shall not be liable for any error of judgment
      made in good faith by a Responsible Officer of the Owner Trustee;

            (b) the Owner Trustee shall not be liable with respect to any action
      taken or omitted to be taken by it in accordance with the  instructions of
      the Instructing Party, the Servicer or the Certificateholder;

            (c) no  provision  of this  Agreement  or any Basic  Document  shall
      require the Owner  Trustee to expend or risk funds or otherwise  incur any
      financial  liability  in the  performance  of any of its  rights or powers
      hereunder  or under any Basic  Document  if the Owner  Trustee  shall have
      reasonable  grounds for believing that repayment of such funds or adequate
      indemnity  against  such risk or liability  is not  reasonably  assured or
      provided to it;

            (d) under no  circumstances  shall the Owner  Trustee  be liable for
      indebtedness  evidenced  by or arising  under any of the Basic  Documents,
      including the principal of and interest on the Notes;

            (e) the Owner Trustee shall not be responsible  for or in respect of
      the validity or  sufficiency  of this  Agreement or for the due  execution
      hereof  by  the  Transferor  or  for  the  form,  character,  genuineness,
      sufficiency,  value or validity of any of the Owner Trust Estate or for or
      in respect of the validity or  sufficiency of the Basic  Documents,  other
      than the  certificate of  authentication  on a Certificate,  and the Owner
      Trustee  shall  in no  event  assume  or  incur  any  liability,  duty  or
      obligation to the Note Insurer, Indenture Trustee, Trust Collateral Agent,
      the Collateral  Agent, any Noteholder or to the  Certificateholder,  other
      than as expressly provided for herein and in the Basic Documents;

            (f) the  Owner  Trustee  shall  not be  liable  for the  default  or
      misconduct  of  the  Note  Insurer,   the  Indenture  Trustee,  the  Trust
      Collateral  Agent or the  Servicer  under  any of the Basic  Documents  or
      otherwise  and the Owner  Trustee shall have no obligation or liability to
      perform the  obligations  under this Agreement or the Basic Documents that
      are required to be performed by the Indenture  Trustee under the Indenture
      or the Trust Collateral Agent or the Servicer under the Sale and Servicing
      Agreement;

            (g) the Owner  Trustee  shall be under no obligation to exercise any
      of the rights or powers vested in it by this  Agreement,  or to institute,
      conduct or defend any  litigation  under this Agreement or otherwise or in
      relation to this Agreement or any Basic Document, at the request, order or
      direction of the Instructing Party or the  Certificateholder,  unless such
      Instructing  Party  or the  Certificateholder  has  offered  to the  Owner
      Trustee  security or indemnity  reasonably  satisfactory to it against the
      costs,  expenses and liabilities that may be incurred by the Owner Trustee
      therein  or  thereby.  The  right of the  Owner  Trustee  to  perform  any
      discretionary  act  enumerated in this  Agreement or in any Basic Document
      shall  not be  construed  as a duty,  and the Owner  Trustee  shall not be
      answerable for other than its negligence,  bad faith or willful misconduct
      in the performance of any such act;

            (h) with respect to the Note Insurer or Instructing Party, the Owner
      Trustee  undertakes  to perform or observe only such of the  covenants and
      obligations  of the  Owner  Trustee  as are  expressly  set  forth in this
      Agreement,  and no implied  covenants or  obligations

                                       21
<PAGE>

      with respect to the Note Insurer or  Instructing  Party shall be read into
      this Agreement or the other Basic Documents against the Owner Trustee. The
      Owner Trustee  shall not be deemed to owe any  fiduciary  duty to the Note
      Insurer or Instructing  Party,  and shall not be liable to any such person
      for the failure of the Trust to perform its  obligations  to such  persons
      other than in  accordance  with  Section  10.12 of this  Agreement  in the
      performance of its express obligations under this Agreement; and

            (i) notwithstanding  anything to the contrary herein or in any other
      document,  the Owner Trustee shall not be required to execute,  deliver or
      certify on behalf of the Trust, the Servicer,  the Transferor or any other
      Person any filings, certificates, affidavits or other instruments required
      by  the  SEC  or   required   under  the   Sarbanes-Oxley   Act  of  2002.
      Notwithstanding any Person's right to instruct the Owner Trustee,  neither
      the Owner  Trustee  nor any agent,  employee,  director  or officer of the
      Owner Trustee shall have any  obligation  to execute any  certificates  or
      other  documents   required  by  the  SEC  or  required  pursuant  to  the
      Sarbanes-Oxley  Act of  2002  or the  rules  and  regulations  promulgated
      thereunder, and the refusal to comply with any such instructions shall not
      constitute a default or breach under this  Agreement or any other document
      in connection herewith.

            SECTION  6.2.  Furnishing  of  Documents.  The Owner  Trustee  shall
furnish to the  Certificateholder  promptly  upon  receipt of a written  request
therefor,  duplicates  or copies of all  reports,  notices,  requests,  demands,
certificates,  financial  statements and any other instruments  furnished to the
Owner Trustee under the Basic Documents.

            SECTION 6.3.  Representations and Warranties.  The Owner Trustee and
WTC hereby represent and warrant to the Transferor,  the  Certificateholder  and
the Note Insurer (which shall have relied on such representations and warranties
in issuing the Policy), that:

            (a) It is a Delaware banking corporation, duly organized and validly
      existing in good  standing  under the laws of the State of Delaware and it
      holds all grants, authorizations,  consents, orders and approvals from all
      governmental authorities necessary under the laws of the State of Delaware
      to carry on its  true  business  as now  conducted.  It has all  requisite
      corporate  power  and  authority  to  execute,  deliver  and  perform  its
      obligations under this Agreement.

            (b) It has taken all  corporate  action  necessary to authorize  the
      execution and delivery by it of this Agreement, and this Agreement will be
      executed and  delivered by one of its officers who is duly  authorized  to
      execute and deliver this Agreement on its behalf.

            (c) Neither the execution nor the delivery by it of this  Agreement,
      nor the  consummation by it of the  transactions  contemplated  hereby nor
      compliance  by it  with  any  of  the  terms  or  provisions  hereof  will
      contravene  any  Delaware  state  or  federal  law,  governmental  rule or
      regulation  governing  the banking or trust powers of the Owner Trustee or
      any judgment or order binding on it, or  constitute  any default under its
      charter  documents  or  by-laws  or  any  indenture,  mortgage,  contract,
      agreement  or  instrument  to which  it is a party or by which  any of its
      properties  may be bound,  or result in the creation or  imposition of any
      lien,  charge or encumbrance on the Trust Assets resulting

                                       22
<PAGE>

      from  actions by or claims  against  the Owner  Trustee in its  individual
      capacity except as expressly contemplated by this Agreement or Indenture.

            (d) No consent, approval, authorization or order of, or filing with,
      any  court or  regulatory,  supervisory  or  government  agency or body is
      required by the Owner  Trustee under  Delaware law in connection  with the
      execution, delivery and performance by the Owner Trustee of this Agreement
      or the consummation by the Owner Trustee of the transactions  contemplated
      hereby  (except  for the  filing  of the  Certificate  of  Trust  with the
      Secretary of State).

            (e) The Owner  Trustee  has no present  intent to cause a  voluntary
      bankruptcy of the Trust.

            SECTION 6.4. Reliance; Advice of Counsel.

            (a) The Owner  Trustee  shall incur no liability to anyone in acting
      upon any signature,  instrument,  notice,  resolution,  request,  consent,
      order,  certificate,  report,  opinion,  bond or other  document  or paper
      believed by it to be genuine and believed by it to be signed by the proper
      party or  parties.  The Owner  Trustee  may accept a  certified  copy of a
      resolution  of the  board  of  directors  or other  governing  body of any
      corporate party as conclusive  evidence that such resolution has been duly
      adopted by such body and that the same is in full force and effect.  As to
      any  fact or  matter  the  method  of the  determination  of  which is not
      specifically  prescribed  herein,  the Owner  Trustee may for all purposes
      hereof  rely  on a  certificate,  signed  by the  president  or  any  vice
      president or by the treasurer,  secretary or other authorized  officers of
      the relevant party, as to such fact or matter,  and such certificate shall
      constitute  full  protection  to the Owner Trustee for any action taken or
      omitted to be taken by it in good faith in reliance thereon.

            (b) In the exercise or administration of the trusts hereunder and in
      the performance of its duties and obligations  under this Agreement or the
      Basic  Documents,  the Owner  Trustee (i) may act  directly or through its
      agents or attorneys  pursuant to agreements entered into with any of them,
      and the Owner Trustee shall not be liable for the conduct or misconduct of
      such  agents or  attorneys  if such  agents or  attorneys  shall have been
      selected by the Owner Trustee with  reasonable  care, and (ii) may consult
      with counsel,  accountants  and other skilled  persons to be selected with
      reasonable  care and employed by it. The Owner Trustee shall not be liable
      for anything  done,  suffered or omitted in good faith by it in accordance
      with the written  opinion or advice of any such  counsel,  accountants  or
      other such  persons and  according  to such  opinion not  contrary to this
      Agreement or any Basic Document.

            SECTION 6.5. Not Acting in Individual  Capacity.  Except as provided
in Article II and this Article VI, in accepting  the trusts  hereby  created WTC
acts solely as Owner Trustee  hereunder and not in its  individual  capacity and
all  Persons  having  any  claim  against  the  Owner  Trustee  by reason of the
transactions  contemplated  by this  Agreement or any Basic  Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.

            SECTION  6.6.   Owner   Trustee  Not  Liable  for   Certificate   or
Receivables.  The recitals  contained herein and in the Certificate  (other than
the signature  and  countersignature  of

                                       23
<PAGE>

the Owner Trustee on the  Certificate)  shall be taken as the  statements of the
Transferor and the Owner Trustee assumes no  responsibility  for the correctness
thereof.  The Owner  Trustee  makes no  representations  as to the  validity  or
sufficiency  of this  Agreement,  of any Basic  Document  or of the  Certificate
(other  than the  signature  and  countersignature  of the Owner  Trustee on the
Certificate) or the Notes, or of any Receivable or related documents.  The Owner
Trustee  shall  at no time  have any  responsibility  or  liability  for or with
respect to the legality,  validity and enforceability of any Receivable,  or the
perfection  and priority of any security  interest  created by any Receivable in
any Financed Vehicle or the maintenance of any such perfection and priority,  or
for or with respect to the  sufficiency of the Owner Trust Estate or its ability
to generate the payments to be distributed to the  Certificateholder  under this
Agreement or the  Noteholders  under the  Indenture,  including:  the existence,
condition   and   ownership  of  any  Financed   Vehicle;   the   existence  and
enforceability  of any  insurance  thereon;  the  existence  and contents of any
Receivable  on any  computer  or  other  record  thereof;  the  validity  of the
assignment of any Receivable to the Trust or of any intervening assignment;  the
completeness  of  any   Receivable;   the  performance  or  enforcement  of  any
Receivable;  the compliance by the Transferor,  the Servicer or any other Person
with any  warranty  or  representation  made under any Basic  Document or in any
related document or the accuracy of any such warranty or  representation  or any
action  of the  Servicer  or any  subservicer  taken  in the  name of the  Owner
Trustee.

            SECTION 6.7.  Owner Trustee May Own Notes.  The Owner Trustee in its
individual  capacity  may  become the owner or pledgee of the Notes and may deal
with the  Certificateholder,  the  Transferor,  the  Indenture  Trustee  and the
Servicer  in banking  transactions  with the same  rights as it would have if it
were not Owner Trustee.

            SECTION 6.8.  Payments from Owner Trust  Estate.  All payments to be
made by the Owner Trustee under this Agreement or any of the Basic  Documents to
which  the  Trust or the Owner  Trustee  is a party  shall be made only from the
income and  proceeds of the Owner  Trust  Estate and only to the extent that the
Owner Trust shall have  received  income or proceeds from the Owner Trust Estate
to make such payments in accordance with the terms hereof. WTC, or any successor
thereto, in its individual capacity, shall not be liable for any amounts payable
under this  Agreement  or any of the Basic  Documents  to which the Trust or the
Owner Trustee is a party.

            SECTION 6.9. Doing Business in Other Jurisdictions.  Notwithstanding
anything contained to the contrary,  neither WTC or any successor  thereto,  nor
the Owner Trustee shall be required to take any action in any jurisdiction other
than in the State of Delaware if the taking of such action will,  even after the
appointment of a co-trustee or separate  trustee in accordance  with Section 9.5
hereof,  (i) require the consent or approval or authorization or order of or the
giving of notice to, or the registration  with or the taking of any other action
in  respect  of,  any  state or other  governmental  authority  or agency of any
jurisdiction  other than the State of  Delaware;  (ii) result in any fee, tax or
other  governmental  charge  under  the laws of the State of  Delaware  becoming
payable  by WTC  (or  any  successor  thereto);  or  (iii)  subject  WTC (or any
successor  thereto) to personal  jurisdiction in any jurisdiction other than the
State of  Delaware  for  causes of action  arising  from acts  unrelated  to the
consummation of the transactions by WTC (or any successor  thereto) or the Owner
Trustee, as the case may be, contemplated hereby.

                                       24
<PAGE>

                                  ARTICLE VII.

                          Compensation of Owner Trustee

            SECTION 7.1. Owner  Trustee's  Fees and Expenses.  The Owner Trustee
shall receive as compensation for its services  hereunder such fees as have been
separately  agreed  upon  before  the date  hereof  between  LBAC and the  Owner
Trustee,  and the Owner  Trustee  shall be entitled to be reimbursed by LBAC for
its other reasonable expenses hereunder,  including the reasonable compensation,
expenses and disbursements of such agents, representatives,  experts and counsel
as the Owner Trustee may employ in connection  with the exercise and performance
of its rights and its duties hereunder and under the Basic Documents.

            SECTION 7.2. Indemnification.  Each of the Owner Trustee and WTC and
its  officers,  directors,  successors,  assigns,  agents and servants  shall be
indemnified by the Servicer in and to the extent set forth in Section  8.2(a)(v)
of the Sale and Servicing Agreement.

            SECTION 7.3. Payments to the Owner Trustee.  Any amounts paid to the
Owner  Trustee  pursuant to this Article VII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.

            SECTION 7.4. Non-recourse  Obligations.  Notwithstanding anything in
this Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and  specifically  shall not be
recourse to the assets of the Certificateholder.

                                 ARTICLE VIII.

                         Termination of Trust Agreement

            SECTION 8.1. Termination of Trust Agreement.

            (a) This Agreement  shall  terminate and the Trust shall wind up and
      dissolve  and be of no further  force or effect upon the latest of (i) the
      maturity or other  liquidation  of the last  Receivable and the subsequent
      distribution of amounts in respect of such  Receivables as provided in the
      Basic Documents,  (ii) the payment to the Certificateholder of all amounts
      required  to be paid to it  pursuant  to this  Agreement  and the Sale and
      Servicing  Agreement  and the  payment to the Note  Insurer of all amounts
      payable  or  reimbursable  to  it  pursuant  to  the  Sale  and  Servicing
      Agreement,  (iii) the  expiration  of the  Policy in  accordance  with its
      terms;  or (iv) payment to the Note  Insurer in full of all  Reimbursement
      Obligations;  provided,  however, that the rights to indemnification under
      Section 7.2 and the rights under Section 7.1 shall survive the termination
      of the Trust. The Servicer shall promptly notify the Owner Trustee and the
      Note Insurer of any prospective  termination pursuant to this Section. The
      bankruptcy,   liquidation,   dissolution,   death  or  incapacity  of  the
      Certificateholder,  shall not (x) operate to terminate  this  Agreement or
      the Trust, nor (y) entitle the  Certificateholder's  legal representatives
      or heirs to claim an accounting or to take any action or proceeding in any
      court

                                       25
<PAGE>

      for a  partition  or  winding  up of all or any part of the Trust or Owner
      Trust  Estate  nor  (z)  otherwise  affect  the  rights,  obligations  and
      liabilities of the parties hereto.

            (b)  Neither  the  Transferor  nor the  Certificateholder  shall  be
      entitled to revoke or terminate the Trust.

            (c) Notice of any  termination of the Trust,  specifying the Payment
      Date upon which the  Certificateholder  shall surrender the Certificate to
      the Trust  Collateral  Agent for  payment  of the final  distribution  and
      cancellation,  shall  be given  by the  Owner  Trustee  by  letter  to the
      Certificateholder mailed within five Business Days of receipt of notice of
      such  termination  from the Servicer given pursuant to Section  10.1(c) of
      the Sale and  Servicing  Agreement,  stating (i) the Payment  Date upon or
      with respect to which final payment of the Certificate  shall be made upon
      presentation  and surrender of the  Certificate at the office of the Trust
      Collateral  Agent  therein  designated,  (ii) the amount of any such final
      payment,  (iii) that the Record Date otherwise  applicable to such Payment
      Date is not  applicable,  payments being made only upon  presentation  and
      surrender of the Certificate at the office of the Trust  Collateral  Agent
      therein   specified  and  (iv)  interest  will  cease  to  accrue  on  the
      Certificate.  The  Owner  Trustee  shall  give  such  notice  to the Trust
      Collateral   Agent   at  the   time   such   notice   is   given   to  the
      Certificateholder. Upon presentation and surrender of the Certificate, the
      Trust   Collateral   Agent   shall   cause  to  be   distributed   to  the
      Certificateholder  amounts  distributable on such Payment Date pursuant to
      Section 5.6 of the Sale and Servicing Agreement.

            In the event  that the  Certificateholder  shall not  surrender  its
Certificate for  cancellation  within six months after the date specified in the
above mentioned  written notice,  the Trust Collateral Agent shall give a second
written  notice  to the  Certificateholder  to  surrender  its  Certificate  for
cancellation and receive the final distribution with respect thereto.  If within
one year after the second notice the Certificate shall not have been surrendered
for cancellation,  the Trust Collateral Agent may take appropriate steps, or may
appoint an agent to take  appropriate  steps,  to contact the  Certificateholder
concerning surrender of the Certificate,  and the cost thereof shall be paid out
of the funds and other assets that shall remain subject to this  Agreement.  Any
funds  remaining  in the  Trust  after  exhaustion  of such  remedies  shall  be
distributed,  subject to applicable  escheat laws, by the Trust Collateral Agent
to the Transferor.

            (d) Upon the winding up of the Trust and its dissolution,  the Owner
      Trustee  shall cause the  Certificate  of Trust to be canceled by filing a
      certificate of cancellation with the Secretary of State in accordance with
      the provisions of Section 3810 of the Statutory Trust Act.

                                  ARTICLE IX.

             Successor Owner Trustees and Additional Owner Trustees

            SECTION 9.1.  Eligibility  Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation or national banking  association (i)
satisfying  the provisions of Section  3807(a) of the Statutory  Trust Act; (ii)
authorized to exercise  corporate trust powers;  (iii) having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
Federal or State  authorities;  and (iv)  acceptable  to the Note

                                       26
<PAGE>

Insurer in its sole discretion, so long as a Note Insurer Default shall not have
occurred and be continuing. If such entity 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,  the
combined  capital and surplus of such entity  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 Owner  Trustee shall cease to be eligible in
accordance  with the provisions of this Section,  the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 9.2.

            SECTION  9.2.  Resignation  or Removal of Owner  Trustee.  The Owner
Trustee may at any time resign and be discharged  from the trusts hereby created
by  giving  sixty  days'  written   notice  thereof  to  the   Transferor,   the
Certificateholder, the Note Insurer and the Servicer. Upon receiving such notice
of  resignation,  the Class R  Certificateholder  shall,  with the prior written
consent of the Note  Insurer,  promptly  appoint a  successor  Owner  Trustee by
written  instrument,  in  duplicate,  one  copy of  which  instrument  shall  be
delivered to the resigning  Owner  Trustee and one copy to the  successor  Owner
Trustee, provided that the Class R Certificateholder shall have received written
confirmation from each of the Rating Agencies that the proposed appointment will
not result in an increased  capital  charge to the Note Insurer by either of the
Rating Agencies.  If no successor Owner Trustee shall have been so appointed and
have  accepted  appointment  within  thirty  (30) days  after the giving of such
notice of  resignation,  the  resigning  Owner  Trustee or the Note  Insurer may
petition any court of competent  jurisdiction for the appointment of a successor
Owner Trustee.

            If at any time the  Owner  Trustee  shall  cease to be  eligible  in
accordance  with the  provisions  of Section 9.1 and shall fail to resign  after
written request therefor by the Class R Certificateholder, or if at any time the
Owner Trustee shall be legally  unable to act, or shall be adjudged  bankrupt or
insolvent,  or a  receiver  of the Owner  Trustee  or of its  property  shall be
appointed,  or any  public  officer  shall  take  charge or control of the Owner
Trustee  or of its  property  or  affairs  for the  purpose  of  rehabilitation,
conservation or liquidation, then the Class R Certificateholder with the consent
of the Note Insurer (so long as a Note Insurer  Default  shall not have occurred
and  be   continuing)   may   remove   the  Owner   Trustee.   If  the  Class  R
Certificateholder  shall  remove the Owner  Trustee  under the  authority of the
immediately  preceding sentence,  the Class R Certificateholder  shall, with the
prior written  consent of the Note Insurer,  promptly  appoint a successor Owner
Trustee by written instrument,  in duplicate, one copy of which instrument shall
be  delivered  to the outgoing  Owner  Trustee so removed,  one copy to the Note
Insurer and one copy to the successor Owner Trustee and payment of all fees owed
to the outgoing Owner Trustee.

            Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee  pursuant to any of the provisions of this Section shall
not become  effective  until  acceptance of appointment  by the successor  Owner
Trustee pursuant to Section 9.3 and payment of all fees and expenses owed to the
outgoing Owner Trustee.  The Class R  Certificateholder  shall provide notice of
such resignation or removal of the Owner Trustee to each of the Rating Agencies.

            SECTION 9.3.  Successor  Owner Trustee.  Any successor Owner Trustee
appointed pursuant to Section 9.2 shall execute,  acknowledge and deliver to the
Transferor,  the

                                       27
<PAGE>

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

            No successor  Owner Trustee shall accept  appointment as provided in
this Section unless at the time of such  acceptance such successor Owner Trustee
shall be eligible pursuant to Section 9.1.

            Upon acceptance of appointment by a successor Owner Trustee pursuant
to this  Section,  (i) the Servicer  shall mail notice of the  successor of such
Owner Trustee to the  Certificateholder,  the Indenture Trustee, the Noteholders
and the Rating  Agencies  and (ii) the  successor  Owner  Trustee  shall file an
amendment to the  Certificate  of Trust with the secretary of State  identifying
its name and  principal  place of  business  in the  State of  Delaware.  If the
Servicer shall fail to mail such notice within ten (10) days after acceptance of
appointment by the successor  Owner Trustee,  the successor  Owner Trustee shall
cause such notice to be mailed at the expense of the Servicer.

            SECTION  9.4.  Merger  or  Consolidation   of  Owner  Trustee.   Any
corporation  into which the Owner  Trustee  may be merged or  converted  or with
which it may be  consolidated,  or any  corporation  resulting  from any merger,
conversion or  consolidation to which the Owner Trustee shall be a party, or any
corporation  succeeding  to all or  substantially  all  of the  corporate  trust
business  of the Owner  Trustee,  shall be the  successor  of the Owner  Trustee
hereunder,  provided such corporation shall be eligible pursuant to Section 9.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto,  anything herein to the contrary  notwithstanding;
provided  further that the Owner Trustee (i) shall mail notice of such merger or
consolidation  to the Rating  Agencies  and (ii) shall file an  amendment to the
Certificate of Trust as required under Section 9.3, above.

            SECTION  9.5.   Appointment  of  Co-Indenture  Trustee  or  Separate
Indenture Trustee.  Notwithstanding  any other provisions of this Agreement,  at
any time, for the purpose of meeting any legal  requirements of any jurisdiction
in which any part of the Owner Trust Estate or any  Financed  Vehicle may at the
time be located,  the Servicer and the Owner Trustee  acting  jointly shall have
the power and shall execute and deliver all  instruments  to appoint one or more
Persons approved by the Owner Trustee and the Note Insurer to act as co-trustee,
jointly with the Owner Trustee, or separate trustee or separate trustees, of all
or any part of the  Owner  Trust  Estate,  and to vest in such  Person,  in such
capacity,  such title to the Trust,  or any part  thereof,  and,  subject to the
other provisions of this Section, such powers, duties,  obligations,  rights and
trusts  as the  Servicer  and  the  Owner  Trustee  may  consider  necessary  or
desirable.  If the Servicer shall not have joined in such appointment  within 15
days after the receipt by it of a request so to

                                       28
<PAGE>

do, the Owner Trustee subject, unless a Note Insurer Default shall have occurred
and be continuing, to the approval of the Note Insurer (which approval shall not
be  unreasonably  withheld)  shall have the power to make such  appointment.  No
co-trustee or separate  trustee under this  Agreement  shall be required to meet
the terms of eligibility as a successor  trustee  pursuant to Section 9.1 and no
notice  of the  appointment  of any  co-trustee  or  separate  trustee  shall be
required pursuant to Section 9.3.

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

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

            (iii) the Servicer and the Owner Trustee  acting  jointly may at any
      time  accept  the  resignation  of  or  remove  any  separate  trustee  or
      co-trustee.

            Any  notice,  request or other  writing  given to the Owner  Trustee
shall be deemed to have been  given to each of the 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.  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 Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this  Agreement,  specifically  including  every  provision of this Agreement
relating to the conduct of, affecting the liability of, or affording  protection
to,  the Owner  Trustee.  Each  such  instrument  shall be filed  with the Owner
Trustee and a copy thereof given to the Servicer and the Note Insurer.

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

                                       29
<PAGE>

                                   ARTICLE X.

                                  Miscellaneous

            SECTION 10.1. Supplements and Amendments.

            (a) This  Agreement may be amended by the  Transferor  and the Owner
      Trustee,  with the prior written consent of the Note Insurer (so long as a
      Note Insurer  Default shall not have occurred and be continuing)  and with
      prior  written  notice  to the  Demand  Note  Provider,  the  Demand  Note
      Guarantor  and the  Rating  Agencies,  without  the  consent of any of the
      Noteholders  or the  Certificateholder  (so  long  as the  Certificate  is
      outstanding),  (i) to cure any  ambiguity  or defect  or (ii) to  correct,
      supplement or modify any provisions in this Agreement;  provided, however,
      that such action shall not, as  evidenced  by an Opinion of Counsel  which
      may be based upon a certificate  of the  Servicer,  delivered to the Owner
      Trustee, the Rating Agencies and the Note Insurer, adversely affect in any
      material  respect  the  interests  of  any  Noteholder,  the  Demand  Note
      Provider, the Demand Note Guarantor or the Certificateholder.

            (b) This  Agreement may also be amended from time to time,  with the
      prior  written  consent  of the Note  Insurer  (so long as a Note  Insurer
      Default shall not have occurred and be  continuing)  by the Transferor and
      the Owner Trustee,  with prior written notice to the Demand Note Provider,
      the Demand  Note  Guarantor  and the Rating  Agencies,  to the extent such
      amendment materially and adversely affects the interest of the Demand Note
      Provider or the Demand Note  Guarantor,  with the prior written consent of
      such Person, to the extent such amendment materially and adversely affects
      the interests of the Class A Noteholders,  with the consent of the Class A
      Noteholders  evidencing not less than 50% of the outstanding  Class A Note
      Balance and, the consent of the Class R  Certificateholder  (which consent
      of the  Class  R  Certificateholder  given  pursuant  to this  Section  or
      pursuant to any other  provision of this Agreement shall be conclusive and
      binding  on  such  Class  R  Certificateholder  and  any  future  Class  R
      Certificateholder) 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   Noteholders   or  the
      Certificateholder;  provided, however, that, subject to the express rights
      of the Note Insurer under the Basic Documents, no such amendment shall (a)
      increase or reduce in any manner the amount of, or accelerate or delay the
      timing of,  collections of payments on Receivables or  distributions  that
      shall be  required to be made for the  benefit of the  Noteholders  or the
      Certificateholder  or (b) reduce the  aforesaid  percentage of the Class A
      Note  Balance  or the  Certificateholder  required  to consent to any such
      amendment,  without the consent of the  Noteholders of all the outstanding
      Class A Notes or the Class R Certificateholder, as the case may be.

            Promptly after the execution of any such  amendment or consent,  the
Owner  Trustee  shall  furnish  written  notification  of the  substance of such
amendment or consent to the Certificateholder, the Indenture Trustee, the Demand
Note Provider, the Demand Note Guarantor and each of the Rating Agencies.

            It shall not be necessary  for the consent of  Certificateholder  or
the  Noteholders  pursuant to this Section to approve the particular form of any
proposed amendment or consent,  but it shall be sufficient if such consent shall
approve the substance  thereof.  The manner of

                                       30
<PAGE>

obtaining  such  consents  (and  any  other  consents  of the  Certificateholder
provided for in this Agreement or in any other Basic Document) and of evidencing
the  authorization of the execution  thereof by the  Certificateholder  shall be
subject to such  reasonable  requirements  as the Owner  Trustee may  prescribe.
Promptly after the execution of any amendment to the  Certificate of Trust,  the
Owner  Trustee  shall cause the filing of such  amendment  with the Secretary of
State.

            Prior to the  execution of any  amendment  to this  Agreement or the
Certificate  of Trust,  the Owner Trustee and the Note Insurer 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 that all
conditions  precedent to the execution and delivery of such  amendment have been
satisfied.  The Owner Trustee may, but shall not be obligated to, enter into any
such  amendment  which  affects  the  Owner  Trustee's  own  rights,  duties  or
immunities under this Agreement or otherwise.

            SECTION   10.2.   No  Legal   Title  to  Owner   Trust   Estate   in
Certificateholder.  The Certificateholder shall not have legal title to any part
of the Owner Trust Estate.  The  Certificateholder  shall be entitled to receive
distributions  in  accordance  with this  Agreement  and the Sale and  Servicing
Agreement. No transfer, by operation of law or otherwise, of any right, title or
interest of the  Certificateholder to and in its ownership interest in the Owner
Trust Estate shall operate to terminate this  Agreement or the trusts  hereunder
or entitle any  transferee  to an  accounting  or to the transfer to it of legal
title to any part of the Owner Trust Estate.

            SECTION 10.3.  Limitations  on Rights of Others.  The  provisions of
this Agreement are solely for the benefit of the Owner Trustee,  the Transferor,
the  Certificateholder,  the  Servicer  and,  to the extent  expressly  provided
herein,  the Note Insurer,  the Indenture Trustee,  the Noteholders,  the Demand
Note  Provider  and the Demand Note  Guarantor,  and nothing in this  Agreement,
whether  express or implied,  shall be construed to give to any other Person any
legal or equitable right,  remedy or claim in the Owner Trust Estate or under or
in  respect  of  this  Agreement  or any  covenants,  conditions  or  provisions
contained herein.

            SECTION 10.4. Notices.

            (a) Unless otherwise  expressly  specified or permitted by the terms
      hereof,  all notices  shall be in writing  and shall be deemed  given upon
      receipt  personally  delivered,   sent  by  facsimile  transmission  (with
      appropriate  confirmation)  delivered by overnight courier or mailed first
      class mail or certified mail, in each case return receipt  requested,  and
      shall be deemed to have been duly given upon receipt:

            (i)   if to the Owner Trustee, addressed to:

                  Wilmington Trust Company
                  1100 North Market Street
                  Wilmington, Delaware 19890-0001
                  Attention: Corporate Trust Administration
                  (Telecopy Number: (302) 651-8882)

                                       31
<PAGE>

            (ii)  if to the Transferor, addressed to:

                  Long Beach Acceptance Receivables Corp.
                  One Mack Centre Drive
                  Paramus, New Jersey 07652
                  Attention: General Counsel
                  (Telecopy Number: (201) 262-6868)

            (iii) if to the Note Insurer, addressed to

                  Financial Security Assurance Inc.
                  31 West 52nd Street
                  New York, New York 10019)
                  Attention: Transaction Oversight
                  Re: Long Beach Acceptance Auto Receivables Trust 2006-B
                  Telex No.: (212) 688-3101
                  Confirmation: (212) 826-0100
                  Telecopy Nos.: (212) 339-3518, (212) 339-3529

                  (in each case in which notice or other communication to
                  Financial Security refers to an Event of Default, a claim on
                  the Policy or with respect to which failure on the part of
                  Financial Security to respond shall be deemed to constitute
                  consent or acceptance, then a copy of such notice or other
                  communication should also be sent to the attention of the
                  General Counsel and the Head-Financial Guaranty Group "URGENT
                  MATERIAL ENCLOSED").

            (iv)  if to the Demand Note Provider, addressed to:

                  Citigroup Global Markets Realty Corp.
                  388 Greenwich Street, 38th Floor
                  New York, New York 10013
                  Attention: Treasurer
                  Telecopy No.: (212) 723-8855

            (v)   if to the Demand Note Guarantor, addressed to:

                  Citigroup Global Markets Holdings Inc.
                  388 Greenwich Street, 38th Floor
                  New York, New York 10013
                  Attention: Treasurer
                  Telecopy No.: (212) 723-8855

                                       32
<PAGE>

            (vi)  in the case of the Rating Agencies, addressed to:

                  Moody's Investors Service, Inc.
                  99 Church Street
                  New York, New York 10007
                  Attention: ABS Monitoring Department

                  and

                  Standard & Poor's Ratings Services
                  55 Water Street, 40th Floor
                  New York, New York 10041
                  Attention: Asset Backed Surveillance Department

            (b) Any  notice  required  or  permitted  to be  given  to a Class R
      Certificateholder  shall be given by first-class mail, postage prepaid, at
      the address of the Class R Certificateholder in the register maintained by
      the Owner Trustee. Any notice so mailed within the time prescribed in this
      Agreement shall be conclusively  presumed to have been duly given, whether
      or not the Class R Certificateholder receives such notice.

            SECTION 10.5. Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

            SECTION 10.6. Separate Counterparts.  This Agreement may be executed
by the parties hereto in separate  counterparts,  each of which when so executed
and delivered  shall be an original,  but all such  counterparts  shall together
constitute but one and the same instrument.

            SECTION 10.7. Assignments. This Agreement shall inure to the benefit
of and be binding upon the parties  hereto and their  respective  successors and
permitted assigns.

            SECTION  10.8.  No  Recourse.   The  Class  R  Certificateholder  by
accepting  a Class R  Certificate  acknowledges  that such  Class R  Certificate
represents  a  beneficial  interest  in the  Trust  only and does not  represent
interests in or obligations of the Transferor,  the Servicer, the Owner Trustee,
the Indenture Trustee, the Note Insurer or any Affiliate thereof and no recourse
may be had against such parties or their assets,  except as may be expressly set
forth or contemplated  in this  Agreement,  the Class R Certificate or the Basic
Documents.

            SECTION  10.9.  Headings.  The headings of the various  Articles and
Sections  herein are for  convenience  of reference only and shall not define or
limit any of the terms or provisions hereof.

            SECTION 10.10.  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

                                       33
<PAGE>

GOVERNED  BY,  THE  LAWS OF THE  STATE OF  DELAWARE,  WITHOUT  REFERENCE  TO ITS
CONFLICT OF LAW PROVISIONS.

            SECTION 10.11.  Servicer.  The Servicer is authorized to prepare, or
cause to be  prepared,  execute  and  deliver  on  behalf  of the Trust all such
documents, reports, filings, instruments,  certificates and opinions as it shall
be the duty of the Trust or Owner Trustee to prepare,  file or deliver  pursuant
to the Basic Documents.  Upon written  request,  the Owner Trustee shall execute
and deliver to the Servicer a limited power of attorney  appointing the Servicer
the Trust's  agent and  attorney-in-fact  to prepare,  or cause to be  prepared,
execute  and  deliver  all  such  documents,   reports,  filings,   instruments,
certificates and opinions.

            SECTION  10.12.  Limitation on  Liability.  With respect to the Note
Insurer,  the Owner  Trustee  undertakes  to perform or observe only such of the
covenants  and  obligations  of the Owner  Trustee as are expressly set forth in
this Agreement, and no implied covenants or obligations with respect to the Note
Insurer shall be read into this Agreement or the other Basic  Documents  against
the Owner  Trustee.  The Owner  Trustee shall not be deemed to owe any fiduciary
duty to the Note  Insurer,  and shall not be liable to any such  person  for the
failure of the Trust to perform its  obligations to such persons other than as a
result of the gross negligence or willful misconduct of the Owner Trustee in the
performance of its express obligations under this Agreement.

            SECTION 10.13. No Petition. The Owner Trustee (not in its individual
capacity but solely as Owner  Trustee),  by entering  into this  Agreement,  the
Certificateholder,  by accepting its Certificate,  and the Indenture Trustee and
each Noteholder by accepting the benefits of this Agreement, hereby covenant and
agree that they will not at any time institute  against the Transferor,  or join
in any institution  against the Transferor of, any  bankruptcy,  reorganization,
arrangement,  insolvency or liquidation proceedings,  or other proceedings under
any United States federal or state  bankruptcy or similar law in connection with
any obligations  relating to the Certificate,  the Notes,  this Agreement or any
other Basic Documents.

            SECTION 10.14.  Bankruptcy  Matters. To the fullest extent permitted
by law,  no  Certificateholder  nor any party to this  Agreement  shall take any
action to cause the Trust to  dissolve  in whole or in part or file a  voluntary
petition  or  otherwise  initiate  proceedings  to have  the  Trust  adjudicated
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings  against the Trust as debtor under any  applicable  federal or state
law relating to bankruptcy, insolvency or other relief for debts with respect to
the Trust;  or seek or  consent to the  appointment  of any  trustee,  receiver,
conservator,  assignee,  sequestrator,  custodian,  liquidator (or other similar
official) of the Trust or of all or any  substantial  part of the properties and
assets of the Trust,  or cause the Trust to make any general  assignment for the
benefit or  creditors of the Trust or take any action in  furtherance  of any of
the above actions  unless the  Certificateholder  (and the Indenture  Trustee so
long as the Notes remain outstanding) shall have provided their written consent.

            SECTION 10.15.  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 if  such

                                       34
<PAGE>

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 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.

            SECTION  10.16.  Termination  of  Demand  Note  and/or  Demand  Note
Guarantee.  All rights to notice,  consent or waiver of the Demand Note Provider
or the Demand Note Guarantor, as applicable, under this Agreement shall cease to
be  effective  upon  payment in full of all  amounts due and owing to the Demand
Note  Provider  and the  Demand  Note  Guarantor  under  the Sale and  Servicing
Agreement  and  termination  of the Demand  Note or Demand  Note  Guarantee,  as
applicable, in accordance with its terms.

                                       35
<PAGE>

            IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this Trust
Agreement  to be duly  executed  by  their  respective  officers  hereunto  duly
authorized as of the day and year first above written.

                                         WILMINGTON TRUST COMPANY, as Owner
                                            Trustee

                                         By: ___________________________________
                                             Name:
                                             Title:

                                         LONG BEACH ACCEPTANCE RECEIVABLES CORP.

                                         By: ___________________________________
                                             Name:
                                             Title:

                                [Trust Agreement]

<PAGE>

                                                                       EXHIBIT A

                         [FORM OF CERTIFICATE OF TRUST]

                              CERTIFICATE OF TRUST
                                       OF
               LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2006-B

            This  Certificate of Trust of LONG BEACH ACCEPTANCE AUTO RECEIVABLES
TRUST 2006-B (the "Trust") is being duly executed and filed by the  undersigned,
as trustee,  to form a statutory trust under the Statutory Trust Act (12 Del. C.
ss.3801 et seq.) (the "Act").

            1. Name. The name of the statutory trust formed hereby is LONG BEACH
ACCEPTANCE AUTO RECEIVABLES TRUST 2006-B.

            2. Owner  Trustee.  The name and business  address of the trustee of
the Trust in the State of  Delaware  is  Wilmington  Trust  Company,  1100 North
Market Street,  Wilmington,  Delaware  19890-0001,  Attention:  Corporate  Trust
Administration.

            3. Effective Date. This  Certificate of Trust will be effective upon
filing.

            IN WITNESS WHEREOF,  the undersigned,  being the sole trustee of the
Trust, has executed this Certificate of Trust in accordance with Section 3811(a)
of the Act.

                                         WILMINGTON TRUST COMPANY, as Owner
                                            Trustee

                                         By: ___________________________________
                                             Name:
                                             Title:

<PAGE>

                                                                       EXHIBIT B

                          [FORM OF CLASS R CERTIFICATE]

THIS  CLASS R  CERTIFICATE  HAS NOT BEEN AND WILL NOT BE  REGISTERED  UNDER  THE
SECURITIES  ACT OF 1933, AS AMENDED,  OR THE APPLICABLE  SECURITIES  LAWS OF ANY
STATE.  ACCORDINGLY,  ANY  TRANSFER  OF THIS CLASS R  CERTIFICATE  IS SUBJECT TO
CERTAIN  RESTRICTIONS  SET FORTH IN SECTION 3.7 OF THE TRUST  AGREEMENT.  BY ITS
ACCEPTANCE OF THIS CLASS R CERTIFICATE THE HOLDER OF THIS CLASS R CERTIFICATE IS
DEEMED TO REPRESENT TO THE  TRANSFEROR  AND THE OWNER  TRUSTEE (I) THAT IT IS AN
INSTITUTIONAL  INVESTOR  THAT IS AN  "ACCREDITED  INVESTOR"  AS  DEFINED IN RULE
501(A)(1),  (2), (3) OR (7) OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT
(AN "INSTITUTIONAL  ACCREDITED  INVESTOR") AND THAT IT IS ACQUIRING THIS CLASS R
CERTIFICATE  FOR ITS OWN  ACCOUNT  (AND NOT FOR THE  ACCOUNT  OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS  (WHICH OTHERS ALSO ARE  INSTITUTIONAL  ACCREDITED
INVESTORS  UNLESS THE HOLDER IS A BANK  ACTING IN ITS  FIDUCIARY  CAPACITY)  FOR
INVESTMENT AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION  WITH, THE
PUBLIC DISTRIBUTION HEREOF OR (II) THAT IT IS A "QUALIFIED  INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE  SECURITIES  ACT AND IS ACQUIRING THIS CLASS R
CERTIFICATE  FOR ITS OWN  ACCOUNT  (AND NOT FOR THE  ACCOUNT  OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS  (WHICH  OTHERS ALSO ARE  QUALIFIED  INSTITUTIONAL
BUYERS).

NO SALE, PLEDGE OR OTHER TRANSFER OF THIS CLASS R CERTIFICATE MAY BE MADE BY ANY
PERSON  UNLESS  EITHER (I) SUCH SALE,  PLEDGE OR OTHER  TRANSFER  IS MADE TO THE
TRANSFEROR, (II) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO AN INSTITUTIONAL
ACCREDITED  INVESTOR  THAT  EXECUTES A  CERTIFICATE,  SUBSTANTIALLY  IN THE FORM
SPECIFIED  IN THE TRUST  AGREEMENT,  TO THE EFFECT  THAT IT IS AN  INSTITUTIONAL
ACCREDITED  INVESTOR  ACTING  FOR ITS OWN  ACCOUNT  (AND NOT FOR THE  ACCOUNT OF
OTHERS)  OR  AS  A  FIDUCIARY  OR  AGENT  FOR  OTHERS  (WHICH  OTHERS  ALSO  ARE
INSTITUTIONAL  ACCREDITED  INVESTORS  UNLESS THE HOLDER IS A BANK  ACTING IN ITS
FIDUCIARY  CAPACITY),  (III) SO LONG AS THIS CLASS R CERTIFICATE IS ELIGIBLE FOR
RESALE  PURSUANT TO RULE 144A UNDER THE  SECURITIES  ACT,  SUCH SALE,  PLEDGE OR
OTHER TRANSFER IS MADE TO A PERSON WHO THE TRANSFEROR  REASONABLY BELIEVES AFTER
DUE  INQUIRY IS A  "QUALIFIED  INSTITUTIONAL  BUYER" (AS  DEFINED IN RULE 144A),
ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY
OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE  QUALIFIED  INSTITUTIONAL  BUYERS) TO
WHOM NOTICE IS GIVEN THAT THE SALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE
ON RULE 144A, OR (IV) SUCH SALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A
TRANSACTION EXEMPT FROM THE REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT, IN
WHICH  CASE (A) THE  OWNER  TRUSTEE  SHALL  REQUIRE  THAT  BOTH THE  PROSPECTIVE
TRANSFEROR AND THE PROSPECTIVE  TRANSFEREE  CERTIFY TO THE OWNER

<PAGE>

TRUSTEE AND THE TRANSFEROR IN WRITING THE FACTS SURROUNDING SUCH TRANSFER, WHICH
CERTIFICATION  SHALL BE IN FORM AND SUBSTANCE  SATISFACTORY TO THE OWNER TRUSTEE
AND THE  TRANSFEROR,  AND (B) THE OWNER TRUSTEE MAY REQUIRE A WRITTEN OPINION OF
COUNSEL  (WHICH SHALL NOT BE AT THE EXPENSE OF THE TRUST,  THE TRANSFEROR OR THE
OWNER  TRUSTEE)  SATISFACTORY  TO THE  TRANSFEROR  AND THE OWNER  TRUSTEE TO THE
EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES  ACT. NO SALE,  PLEDGE
OR OTHER  TRANSFER MAY BE MADE TO ANY ONE PERSON FOR CLASS R CERTIFICATE  WITH A
FACE  AMOUNT OF LESS THAN  $100,000  AND,  IN THE CASE OF ANY  PERSON  ACTING ON
BEHALF OF ONE OR MORE THIRD  PARTIES  (OTHER  THAN A BANK (AS DEFINED IN SECTION
3(A)(2) OF THE SECURITIES  ACT) ACTING IN ITS FIDUCIARY  CAPACITY),  FOR CLASS R
CERTIFICATE WITH A FACE AMOUNT OF LESS THAN $100,000 FOR EACH SUCH THIRD PARTY.

NO TRANSFER OF THIS CLASS R  CERTIFICATE  SHALL BE  PERMITTED  TO BE MADE TO ANY
PERSON UNLESS THE OWNER TRUSTEE HAS RECEIVED A CERTIFICATE  FROM SUCH TRANSFEREE
TO THE EFFECT  THAT SUCH  TRANSFEREE  IS NOT (A) AN  EMPLOYEE  BENEFIT  PLAN (AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE  RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED  ("ERISA"))  THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA OR
(B) A PLAN (AS DEFINED IN SECTION  4975(e)(1)  OF THE  INTERNAL  REVENUE CODE OF
1986,  AS AMENDED  (THE  "CODE"))  THAT IS  SUBJECT TO SECTION  4975 OF THE CODE
(EACH, A "BENEFIT PLAN"), AND IS NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS
OF A BENEFIT PLAN.  EACH TRANSFEREE OF A BENEFICIAL  OWNERSHIP  INTEREST IN THIS
CLASS R CERTIFICATE  SHALL BE DEEMED TO REPRESENT  THAT IT IS NOT A BENEFIT PLAN
AND IS NOT ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A BENEFIT PLAN.

NO TRANSFER OR SALE OF THIS CLASS R CERTIFICATE SHALL BE PERMITTED TO BE MADE IF
THE TRANSFER OR SALE  INCREASES  THE NUMBER OF  CERTIFICATEHOLDERS  TO MORE THAN
NINETY-NINE (99).

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

                                     B-1-2
<PAGE>

TRANSFER  OF THIS CLASS R  CERTIFICATE  IS SUBJECT TO CERTAIN  RESTRICTIONS  SET
FORTH IN SECTION 3.7 OF THE AGREEMENT.

                                     B-1-3
<PAGE>

               LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2006-B

                   UNDER AMENDED AND RESTATED TRUST AGREEMENT

                          DATED AS OF SEPTEMBER 5, 2006

Certificate Number:

            WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its
individual capacity but solely as trustee (the "Owner Trustee") under an Amended
and Restated Trust Agreement,  dated as of September 5, 2006, between Long Beach
Acceptance  Receivables Corp., a Delaware corporation (the "Transferor") and the
Owner  Trustee  (the  "Trust  Agreement"),  hereby  certifies  that  LONG  BEACH
ACCEPTANCE  RECEIVABLES  CORP.  is  the  Holder  of  this  Class  R  Certificate
representing  the entire  beneficial  interest in the Long Beach Acceptance Auto
Receivables  Trust (the "Trust")  created by the Trust  Agreement.  This Class R
Certificate  is issued  pursuant to and is entitled to the benefits of the Trust
Agreement,  and the Class R Certificateholder  by acceptance hereof agrees to be
bound by the terms of the Trust Agreement. Reference is hereby made to the Trust
Agreement  for a  statement  of  the  rights  and  obligations  of the  Class  R
Certificateholder  hereof.  The Owner  Trustee may treat the person shown on the
register  maintained by the Owner Trustee pursuant to the Trust Agreement as the
absolute Class R Certificateholder hereof for all purposes.

            Capitalized  terms used herein without  definition have the meanings
ascribed to them in or by reference to the Trust Agreement.

            The Class R  Certificateholder  hereof,  by its  acceptance  of this
Class R  Certificate,  warrants and  represents  to, and agrees with,  the Owner
Trustee that it shall not transfer this Class R Certificate except in accordance
with the Trust Agreement.

            The  Class  R  Certificateholder,  by  acceptance  of  its  Class  R
Certificate,  specifically  acknowledges  that it has no right to or interest in
any monies at any time held pursuant to the Spread  Account  Agreement  prior to
the  release of such monies  pursuant  to Section 5.6 of the Sale and  Servicing
Agreement,  such  monies  being  held in trust  for the  benefit  of the Class A
Noteholders and the Note Insurer.  Notwithstanding  the foregoing,  in the event
that it is ever determined  that provisions of the Sale and Servicing  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 for the benefit of the Class A  Noteholders  and the Note
Insurer a first  priority  perfected  security  interest in such amounts,  to be
applied  as set  forth in  Section  3.03 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 amounts held
therein from time to time to the Collateral Agent pursuant to the Spread Account
Agreement  and agrees to execute and deliver  such  instruments  of  conveyance,
assignment,  grant and confirmation,  as well as 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).

                                     B-1-4
<PAGE>

            This  Class R  Certificate  and the  Trust  Agreement  shall  in all
respects be governed by, and construed in accordance with, the laws of the State
of Delaware, without regard to conflict-of-law principles.

                                     B-1-5
<PAGE>

            IN WITNESS WHEREOF, the Trust, pursuant to the Trust Agreement,  has
caused this Class R Certificate to be issued as of the date hereof.

                                         LONG BEACH ACCEPTANCE AUTO RECEIVABLES
                                         TRUST 2006-B

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

                                         By: ___________________________________
                                             Name:
                                             Title:

Dated: September 28, 2006

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

                                         WILMINGTON TRUST COMPANY, not in its
                                         individual capacity but solely as Owner
                                         Trustee

                                         By:  Wilmington Trust Company,
                                              Authenticating Agent

                                         By: ___________________________________
                                             Name:
                                             Title:

Dated: September 28, 2006

                                     B-1-6
<PAGE>

                                   ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

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

________________________________________________________________________________
the within Class R Certificate,  and all rights  thereunder,  hereby irrevocably
constituting and appointing

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

Dated:

                                           ____________________________________*

                                           ____________________________________*

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

                                     B-1-7
<PAGE>

                                                                       EXHIBIT C

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

                                     [Date]

Wilmington Trust Company
1100 North Market Street
Wilmington, DE 19890-0001
Attn: Corporate Trust Administration

Long Beach Acceptance Receivables Corp.
One Mack Centre Drive
Paramus, NJ  07652
Attn: President

            Re:   Long Beach Acceptance Auto Receivables Trust 2006-B

Ladies and Gentlemen:

            In connection  with the proposed  purchase by the buyer listed below
(the "Buyer") of the Class R Certificate  (as defined below) issued  pursuant to
the Amended and  Restated  Trust  Agreement,  dated as of September 5, 2006 (the
"Trust  Agreement"),   between  Long  Beach  Acceptance  Receivables  Corp.,  as
Transferor  (the  "Transferor")  and Wilmington  Trust Company,  as trustee (the
"Owner  Trustee"),  relating to Long Beach  Acceptance  Auto  Receivables  Trust
2006-B (the "Class R  Certificate"),  the Buyer advises you as follows:  (i) the
Buyer is a "qualified  institutional buyer" as that term is defined in Rule 144A
under the  Securities  Act of 1933, as amended (the "1933 Act") and is acquiring
beneficial  ownership of the Class R Certificate  for its own account or for the
account of not more than _ persons, each of which is a "qualified  institutional
buyer"; and (ii) the Buyer satisfies the requirements of paragraph (a)(2)(ii) of
Rule 3a-7 under the Investment Company Act of 1940, as amended (the "1940 Act").
In addition to the foregoing,  you may rely on the information provided in Annex
1 or 2, as applicable, attached hereto and incorporated herein.

            The  Buyer  understands  that the Class R  Certificate  has not been
registered  under the 1933 Act or the  securities  laws of any state.  The Buyer
acknowledges  that  it  has  independently   conducted  such  investigation  and
evaluation of the merits and the risks  involved in an investment in the Class R
Certificate and has received such information (whether from the Transferor,  the
Owner  Trustee,  the  transferor  from which it proposes to purchase the Class R
Certificate,  or from any other  source) as the Buyer has deemed  necessary  and
advisable  in order to make  its  investment  decision.  The  Buyer  has had any
questions  arising  from  such  investigation  and  evaluation  answered  by the
Transferor  to the  satisfaction  of the  Buyer.  The  Buyer is a  sophisticated
institutional  investor,  having such  knowledge and experience in

<PAGE>

financial  and business  matters  generally,  and with  respect to  asset-backed
securities and investments in "non-prime" automobile loans specifically, that it
is capable of independently evaluating the merits and risks of investment in the
Class R Certificate.  In the normal course of its business, the Buyer invests in
or purchases  securities similar to the Class R Certificate.  The Buyer is aware
that it may be required to bear the economic  risk of an investment in the Class
R Certificate for an indefinite period of time, and it is able to bear such risk
for an indefinite period.

                                         Very truly yours,

                                         [BUYER]

                                         By: ___________________________________
                                         Name:
                                         Title:

                                         Taxpayer ID: __________________________

                                         Name in which Class R Certificate is
                                         to be Registered:

                                         _______________________________________
                                         Address for Notices:

                                         _______________________________________
                                         Payment Instructions:

                                      C-2
<PAGE>

                                                            ANNEX 1 TO EXHIBIT C

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

             [For Buyers Other Than Registered Investment Companies]

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

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

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

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

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

|_| Savings and Loan. The Buyer (a) is a savings and loan association,  building
and  loan  association,  cooperative  bank,  homestead  association  or  similar
institution,  which is supervised  and examined by a State or Federal  authority
having  supervision over any such  institutions or is a foreign savings and loan
association  or  equivalent  institution  and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial  statements,  a
copy of which is attached hereto.

|_|  Broker-dealer.  The Buyer is a dealer registered  pursuant to Section 15 of
the Securities Exchange Act of 1934.

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

                                      C-3
<PAGE>

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

|_| State or Local Plan.  The Buyer is a plan  established  and  maintained by a
State, its political subdivisions, or any agency or instrumentality of the State
or its political subdivisions, for the benefit of its employees.

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

|_| Investment Advisor.  The Buyer is an investment advisor registered under the
Investment Advisers Act of 1940.

|_| Small Business  Investment  Company.  Buyer is a small  business  investment
company licensed by the U.S. Small Business  Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958.

|_| Business  Development  Company.  Buyer is a business  development company as
defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

|_| Trust  Fund.  The Buyer is a trust  fund  whose  trustee  is a bank or trust
company and whose  participants  are  exclusively  State or Local Plans or ERISA
Plans as  defined  above,  and no  participant  of the  Buyer  is an  individual
retirement account or an H.R. 10 (Keogh) plan.

            3.  The term  "securities"  as used  herein  does  not  include  (i)
securities of issuers that are affiliated  with the Buyer,  (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer,  (iii) bank  deposit  notes and  certificates  of  deposit,  (iv) loan
participations,  (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.

            4. For purposes of  determining  the aggregate  amount of securities
owned and/or invested on a discretionary  basis by the Buyer, the Buyer used the
cost of such  securities to the Buyer and did not include any of the  securities
referred to in the preceding  paragraph,  except (i) where the Buyer reports its
securities  holdings in its  financial  statements  on the basis of their market
value,  and  (ii) no  current  information  with  respect  to the  cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market.  Further,  in determining such aggregate
amount,  the Buyer may have included  securities  owned by  subsidiaries  of the
Buyer,  but only if such  subsidiaries  are  consolidated  with the Buyer in its
financial  statements  prepared in accordance with generally accepted accounting
principles  and if the  investments of such  subsidiaries  are managed under the
Buyer's direction.  However, such securities were not included if the Buyer is a
majority-owned,  consolidated  subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.

            5. The Buyer  acknowledges  that it is  familiar  with Rule 144A and
understands  that the  seller to it and  other  parties  related  to the Class R
Certificate  are relying and

                                      C-4
<PAGE>

will continue to rely on the statements made herein because one or more sales to
the Buyer may be in reliance on Rule 144A.

            6. Until the date of purchase of the Rule 144A Securities, the Buyer
will  notify  each of the  parties  to which this  certification  is made of any
changes in the information and conclusions  herein.  Until such notice is given,
the Buyer's  purchase of Rule 144A Securities will constitute a reaffirmation of
this certification as of the date of such purchase. In addition, if the Buyer is
a Bank or Savings  and Loan as  provided  above,  the Buyer  agrees that it will
furnish to such parties updated annual financial  statements promptly after they
become available.

                                         _______________________________________
                                         Print Name of Buyer

                                         By: ___________________________________
                                         Name:
                                         Title:

                                         Date:

                                      C-5
<PAGE>

                                                            ANNEX 2 TO EXHIBIT C

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

              [For Buyers that are Registered Investment Companies]

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

            1. As indicated  below,  the  undersigned  is the  President,  Chief
Financial  Officer or Senior Vice  President  of the Buyer or, if the Buyer is a
"qualified  institutional  buyer" as that term is defined in Rule 144A under the
Securities  Act of 1933  ("Rule  144A")  because  Buyer is part of a  Family  of
Investment Companies (as defined below), is such an officer of the Adviser.

            2. In connection with purchases by Buyer,  the Buyer is a "qualified
institutional  buyer" as  defined in SEC Rule 144A  because  (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least  $100,000,000 in securities  (other than the excluded  securities
referred to below) as of the end of the Buyer's  most recent  fiscal  year.  For
purposes  of  determining  the  amount of  securities  owned by the Buyer or the
Buyer's Family of Investment  Companies,  the cost of such  securities was used,
except (i) where the Buyer or the Buyer's Family of Investment Companies reports
its securities holdings in its financial statements on the basis of their market
value,  and  (ii) no  current  information  with  respect  to the  cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market.

            |_| The  Buyer  owned  $__________  in  securities  (other  than the
            excluded  securities referred to below) as of the end of the Buyer's
            most recent fiscal year (such amount being  calculated in accordance
            with Rule 144A).

            |_| The  Buyer is part of a Family  of  Investment  Companies  which
            owned in the aggregate  $__________  in  securities  (other than the
            excluded  securities referred to below) as of the end of the Buyer's
            most recent fiscal year (such amount being  calculated in accordance
            with Rule 144A).

            3. The term "Family of  Investment  Companies"  as used herein means
two or more  registered  investment  companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned  subsidiaries  of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

            4.  The term  "securities"  as used  herein  does  not  include  (i)
securities  of  issuers  that are  affiliated  with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of  deposit,  (iii)  loan  participations,   (iv)  repurchase  agreements,   (v)
securities  owned but  subject  to a  repurchase  agreement  and (vi)  currency,
interest rate and commodity swaps.

                                      C-6
<PAGE>

            5. The Buyer is  familiar  with Rule 144A and  understands  that the
parties listed in the Qualified Institutional Buyer Transferee's  Certificate to
which this  certification  relates are relying and will  continue to rely on the
statements  made  herein  because  one or more  sales  to the  Buyer  will be in
reliance on Rule 144A. In addition, the Buyer will only purchase for the Buyer's
own account.

            6.  Until  the date of  purchase  of the Rule 144A  Securities,  the
undersigned will notify each of the parties to which this  certification is made
of any changes in the information and conclusions  herein.  Until such notice is
given,   the  Buyer's  purchase  of  Rule  144A  Securities  will  constitute  a
reaffirmation  of this  certification  by the undersigned as of the date of such
purchase.

                                         _______________________________________
                                         Print Name of Buyer or Adviser

                                         By: ___________________________________
                                         Name:
                                         Title:

                                         IF AN ADVISER:

                                         _______________________________________
                                         Print Name of Buyer

                                         Date:

                                      C-7
<PAGE>

                                                                       EXHIBIT D

            [FORM OF "ACCREDITED INVESTOR" TRANSFEREE'S CERTIFICATE]

                                     [Date]

Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn: Corporate Trust Administration

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

            Re:    Long Beach Acceptance Auto Receivables Trust 2006-B

Dear Sirs:

            In connection  with the proposed  purchase by the buyer listed below
(the "Buyer") of the Class R Certificate  (as defined below) issued  pursuant to
the Amended and  Restated  Trust  Agreement,  dated as of September 5, 2006 (the
"Trust  Agreement"),   between  Long  Beach  Acceptance  Receivables  Corp.,  as
Transferor (the  "Transferor"),  and Wilmington  Trust Company,  as trustee (the
"Owner  Trustee"),  relating to Long Beach  Acceptance  Auto  Receivables  Trust
2006-B (the "Class R Certificate"), the Buyer confirms that:

            1. The Buyer  understands  that the Class R Certificate has not been
registered  under the Securities  Act of 1933, as amended (the "1933 Act"),  and
may not be sold except as permitted in the following sentence. The Buyer agrees,
on its own  behalf  and on  behalf  of any  accounts  for  which it is acting as
hereinafter  stated,  that such Class R  Certificate  may be resold,  pledged or
transferred only: (i) so long as such Class R Certificate is eligible for resale
pursuant  to Rule 144A  under the 1933 Act  ("Rule  144A"),  to a person who the
Buyer  reasonably  believes is a "qualified  institutional  buyer" as defined in
Rule 144A (a "QIB") that  purchases  for its own account or for the account of a
QIB, to whom  notice is given that the resale,  pledge or transfer is being made
in reliance on Rule 144A, (ii) pursuant to an exemption from registration  under
the 1933 Act provided by Rule 144 (if applicable) under the 1933 Act or (iii) to
an institution  that is an "Accredited  Investor" as defined in Rule  501(a)(1),
(2), (3) or (7) under the 1933 Act (an "Accredited  Investor") that is acquiring
the Class R Certificate  for investment  purposes and not for  distribution,  in
each case in accordance with any applicable  securities laws of any state of the
United  States,  and  the  Buyer  will  notify  any  purchaser  of the  Class  R
Certificate  from  it of  the  above  resale  restrictions.  The  Buyer  further
understands  that in connection  with any transfer of the Class R Certificate to
an Accredited  Investor by it that the  Transferor or Owner Trustee may request,
and if so  requested  the  Buyer  will  furnish,  such  certificates  and  other
information as they may reasonably require to confirm any such transfer with the
foregoing restrictions.

<PAGE>

            2. The Buyer is an  institutional  investor  which is an  Accredited
Investor  or,  if the Class R  Certificate  is to be  purchased  for one or more
institutional accounts ("investor accounts") for which it is acting as fiduciary
or agent (except if it is a bank as defined in Section  3(a)(2) of the 1933 Act,
or a savings and loan  association or other  institution as described in Section
3(a)(5)(A) of the 1933 Act,  whether  acting in its individual or in a fiduciary
capacity),  each such  investor  account  is an  institutional  investor  and an
Accredited  Investor on a like basis. In the normal course of its business,  the
Buyer invests in or purchases securities similar to the Class R Certificate.

            3. The Buyer satisfies the  requirements  of paragraph  (a)(2)(i) of
Rule 3a-7 of the Investment Company Act of 1940, as amended.

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

                                         Very truly yours,

                                         [BUYER]

                                         By: ___________________________________
                                         Name:
                                         Title:

                                      D-2
<PAGE>

                                                                       EXHIBIT E

                       [FORM OF TRANSFEROR'S CERTIFICATE]

                                     [Date]

Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn: Corporate Trust Administration

            Re:    Long Beach Acceptance Auto Receivables Trust 2006-B

Ladies and Gentlemen:

            In connection  with the  disposition by the transferor  listed below
(the "Transferor") of the Class R Certificate (as defined below) issued pursuant
to the Amended and Restated Trust Agreement,  dated as of September 5, 2006 (the
"Trust  Agreement")   between  Long  Beach  Acceptance   Receivables  Corp.,  as
Transferor (the  "Transferor"),  and Wilmington  Trust Company,  as trustee (the
"Owner  Trustee"),  relating to Long Beach  Acceptance  Auto  Receivables  Trust
2006-B (the "Class R Certificate"), the Transferor certifies that:

            (a) the Transferor  understands that the Class R Certificate has not
been  registered  under the Securities Act of 1933, as amended (the "1933 Act"),
and are being disposed of by the Transferor in a transaction that is exempt from
the registration requirements of the 1933 Act; and

            (b) the  Transferor  has not offered or sold the Class R Certificate
to, or solicited  offers to buy the Class R  Certificate  from,  any person,  or
otherwise  approached or negotiated with any person with respect  thereto,  in a
manner that would be deemed,  or taken any other action which would result in, a
violation of Section 5 of the 1933 Act.

                                         Very truly yours,

                                         [NAME OF TRANSFEROR]

                                         By: ___________________________________
                                         Name:
                                         Title:

<PAGE>

                                                                       EXHIBIT F

                           [FORM OF ERISA CERTIFICATE]

                                     [Date]

Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn: Corporate Trust Administration

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

            Re:    Long Beach Acceptance Auto Receivables Trust 2006-B

Ladies and Gentlemen:

[NAME OF OFFICER] hereby certifies that:

      1. That he [she] is [Title of  Officer]  ____________________  of [Name of
Transferee]  ___________________________________________  (the "Transferee"),  a
[savings  institution]  [corporation] duly organized and existing under the laws
of [the State of  ________]  [the  United  States],  on behalf of which he [she]
makes this affidavit.

      2. The  Transferee  (1) is not,  and on  _______________  [insert  date of
transfer of Class R  Certificate  to  Transferee]  will not be, and on such date
will not be  acting on behalf of or  investing  the  assets of (a) an  "employee
benefit  plan" (as defined in Section  3(3) of the  Employee  Retirement  Income
Security Act of 1974, as amended ("ERISA")) that is subject to the provisions of
Title I of  ERISA or (b) a "plan"  (as  defined  in  Section  4975(e)(1)  of the
Internal  Revenue  Code of 1986,  as amended  (the  "Code"))  that is subject to
Section 4975 of the Code (each, a "Plan").

      3. In connection with the proposed purchase by the Transferee of the Class
R Certificate  issued pursuant to the Trust Agreement (the "Agreement")  between
Long Beach Acceptance  Receivables Corp., as Transferor (the "Transferor"),  and
Wilmington  Trust  Company,  as  trustee  (the  "Owner  Trustee"),  dated  as of
September 5, 2006, the Transferee  hereby  acknowledges  that under the terms of
the  Agreement  no  transfer  of any  Class R  Certificate  (as  defined  in the
Agreement)  shall be permitted to be made to any person unless the Owner Trustee
has  received  a  certificate  from  such  transferee  to the  effect  that such
transferee  is not a Plan and is not acting on behalf of or investing the assets
of a Plan.

      [4.  The  Class  R  Certificate   shall  be  registered  in  the  name  of
_______________________ as nominee for the Transferee.]

<PAGE>

      IN WITNESS  WHEREOF,  the  Transferee  has caused  this  instrument  to be
executed on its behalf,  pursuant to authority of its Board of Directors, by its
[Title of Officer] _______________, this__ day of ____________.

                                         [NAME OF TRANSFEREE]

                                         By: ___________________________________
                                             Name:
                                             Title:

The undersigned hereby acknowledges
that it is holding and will hold the
Class R Certificate at the exclusive
direction of and as nominee of the
Investor named above.

[NAME OF NOMINEE]

By: _____________________________________
    Name:
    Title:

                                      F-2
<PAGE>

                                                                       EXHIBIT G

                    [FORM OF FLOW THROUGH ENTITY CERTIFICATE]

                                     [Date]

Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-0001
Attn: Corporate Trust Administration

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

            Re:    Long Beach Acceptance Auto Receivables Trust 2006-B

Ladies and Gentlemen:

[NAME OF OFFICER] hereby certifies that:

      1.  That  he  [she]  is  [Title  of  Officer]  ____________  of  [Name  of
Transferee]   _______________________________  (the  "Transferee"),  a  [savings
institution]  [corporation]  duly  organized and existing under the laws of [the
State of  ____________]  [the United States],  on behalf of which he [she] makes
this affidavit.

      2. The  Transferee  (a) is acquiring the Class R  Certificate  (as defined
below) for its own behalf and is not acting as agent or custodian  for any other
person or entity in connection with such acquisition, (b) if the Transferee is a
partnership,  grantor trust or S corporation  for federal income tax purposes (a
"Flow  Through  Entity"),  any Class R  Certificate  owned by such Flow  Through
Entity will represent less than 50% of the value of all the assets owned by such
Flow Through Entity and no special allocation of income,  gain, loss,  deduction
or credit from such Class R Certificate will be made among the beneficial owners
of such Flow Through  Entity,  and (c) the  Transferee is a United States person
within the meaning of the Internal Revenue Code of 1986, as amended.

      3. The Transferee hereby  acknowledges that under the terms of the Amended
and Restated Trust  Agreement (the  "Agreement")  between Long Beach  Acceptance
Receivables  Corp.,  as Transferor  (the  "Transferor"),  and  Wilmington  Trust
Company,  as trustee  (the "Owner  Trustee"),  dated as of  September 5, 2006 no
transfer  of any Class R  Certificate  (as  defined in the  Agreement)  shall be
permitted  to be made to any person  unless  the Owner  Trustee  has  received a
certificate  from such  transferee  to the effect  that such  transferee  (a) is
acquiring the Class R Certificate  for its own behalf and is not acting as agent
or custodian for any other person or entity in connection with such acquisition,
(b) if the  transferee is a  partnership,  grantor  trust or S  corporation  for
federal income tax

<PAGE>

purposes (a "Flow Through  Entity"),  any Class R Certificate owned by such Flow
Through Entity will represent less than 50% of the value of all the assets owned
by such Flow Through  Entity and no special  allocation of income,  gain,  loss,
deduction  or  credit  from  such  Class R  Certificate  will be made  among the
beneficial  owners of such Flow  Through  Entity,  and (c) the  transferee  is a
United States person within the meaning of the Internal  Revenue Code of 1986 as
amended.

      [4. The Class R Certificate  shall be registered in the name of as nominee
for the Transferee.]

      IN WITNESS  WHEREOF,  the  Transferee  has caused  this  instrument  to be
executed on its behalf,  pursuant to authority of its Board of Directors, by its
[Title of Officer) _____________________________, this ___ day of ___________.

                                         [NAME OF TRANSFEREE]

                                         By: ___________________________________
                                         Name:
                                         Title:

The undersigned hereby acknowledges that it is holding and will hold the Class R
Certificate  at the exclusive  direction of and as nominee of the Investor named
above.

[NAME OF NOMINEE]

By: _____________________________________
Name:
Title:

                                      G-2

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