Document:

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                                                                   EXHIBIT 10.15

          CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
         SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

                                  CONFIDENTIAL
                         INTERACTIVE SERVICES AGREEMENT

      This Interactive Services Agreement (this "Agreement"), effective as of
September 12, 2003 (the "Effective Date"), is made and entered into by and
between America Online, Inc. ("AOL"), a Delaware corporation, with its principal
offices at 22000 AOL Way, Dulles, Virginia 20166, and SmartBargains.com, LP
("SmartBargains" or "SB"), a Delaware limited partnership, with offices at 10
Milk Street, Boston, Massachusetts 02108 (each a "Party" and collectively the
"Parties").

                                  INTRODUCTION

A.    SmartBargains operates a discount shopping interactive site at URL
      www.smartbargains.com (the "Generally Available Site").

B.    AOL desires that SmartBargains provide AOL Members with an AOL-branded
      discount shopping interactive site based on the Generally Available Site
      (the "Customized Site").

C.    This relationship is further described below and is subject to the terms
      and conditions set forth in this Agreement.

D.    Capitalized terms used but not defined in the body of the Agreement shall
      be as defined on Exhibit B attached hereto.

1. PROMOTION AND DISTRIBUTION; IMPRESSIONS.

      1.1.  DOTD COMMITMENT. Beginning on the Launch Date, AOL shall provide
            SmartBargains with at least [**] (or a prorated number [**]) (as the
            same may be increased pursuant to Section 1.2, the "DOTD
            Commitment"), which Placements shall link to the Customized Site.
            The DOTD Commitment shall be subject to the Makegood process set
            forth in Section 1.1(b) below. "DOTD Placement" shall mean an [**]
            promotion within [**] for a CS Product within the designated "Deal
            of the Day" areas of the Welcome Screens (the "DOTD Area") which
            DOTD Area shall, subject to Makegood process set forth in Section
            1.1(a) below, be of comparable size and prominence to the size and
            prominence of the AOL Deal of the Day portions of the AOL 9.0 Client
            Welcome Screens as of the Launch Date. The Parties acknowledge that
            notwithstanding the foregoing, nothing in this Agreement shall be
            construed to limit AOL's right to redesign any part of the AOL
            Network, including without limitation the AOL Service and the
            Welcome Screen; provided, however, that if any redesign of the
            Welcome Screen materially and adversely diminishes the size and
            prominence of the DOTD Area for the DOTD Placements (a "Material

                                 1 CONFIDENTIAL

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            Redesign"), then AOL shall provide SmartBargains with an amount of
            Makegood Inventory calculated in accordance with the Makegood
            Process set forth in Section 1.1(a) below. The Parties also
            acknowledge that as of the Effective Date (i) each AOL User using
            AOL version 8.0 or higher is able to select the version of the
            Welcome Screen that such AOL User sees upon login to the AOL
            Service, and (ii) not all versions of the Welcome Screen contain a
            DOTD Area. Accordingly, the fact that some AOL offers and AOL Users
            may select alternative versions of the AOL Client that do not have a
            DOTD Area shall not be deemed a Material Redesign under this
            Agreement. The Parties further acknowledge that the purpose of the
            Makegood Process is to provide SmartBargains with traffic to the
            Customized Site that reasonably approximates the loss in traffic
            from the Material Redesign, although the Parties acknowledge and
            agree that the delivery of the Makegood Inventory shall totally
            satisfy AOL's obligation hereunder regardless of whether
            SmartBargains receives more or less traffic to the Customized Site
            than SmartBargains may have anticipated receiving but for the
            Material Redesign. AOL shall be required to provide SmartBargains
            with a number of additional DOTD Placements calculated in accordance
            with the Makegood Process (the "Makegood Inventory") only if AOL has
            not given SmartBargains at least [**]) days notice prior to any
            Material Redesign. SmartBargains shall ensure that it has sufficient
            inventory of the CS Product(s) to be marketed within any DOTD
            Placement to satisfy AOL User demand for such CS Product(s), it
            being acknowledged that if any Featured Product (as defined in
            Exhibit A-1) does not link to a Sold-Out Product more than [**]
            percent ([**]%) of the time within any calendar day when such DOTD
            Placement is run during the Term such inventory will be deemed
            sufficient.

            (a)   Material Redesign Makegood Written Process: As used in this
                  Agreement, the date on which AOL provides SmartBargains with
                  notice of a pending Material Redesign shall be referred to
                  herein as the "Redesign Notice Date". In the event that AOL
                  makes a Material Redesign and the Redesign Notice Date occurs
                  [**]) days or more before the date of the Material Redesign
                  (the "Redesign Date"), then SmartBargains shall not be
                  entitled to receive any Makegood Inventory in connection with
                  such Material Redesign. In the event that AOL makes a Material
                  Redesign and the Redesign Notice Date occurs within [**] days
                  of the Redesign Date, then AOL shall provide SmartBargains
                  with an amount of Makegood Inventory equal to the product of
                  (A) the number of Makegood Days multiplied by (B) the Makegood
                  CT Reduction.

                  (i)   Makegood Days Calculation.

                        a.    the Makegood Days shall initially equal [**];

                        b.    For each DOTD Placement included within the DOTD
                              Commitment during the Primary Makegood Period, AOL
                              shall increase its Makegood Days by [**]; and

                        c.    For each DOTD Placement included within the DOTD
                              Commitment during the Secondary Makegood Period,
                              AOL shall increase its Makegood Days by [**].

                  (ii)  Makegood CT Reduction Calculation. The Makegood CT
                        Reduction shall equal the difference between

                        a.    The average number [**] from the [**] DOTD
                              Placements in effect immediately prior to the
                              Material Redesign less

                        b.    The average number [**] the [**] DOTD Placements
                              in effect immediately following such Material
                              Redesign.

                  (iii) Definitions.

                        a.    "Primary Makegood Period" shall mean the period
                              commencing on the Redesign Date and ending on the
                              [**] Day Date (but if the [**] Day Date precedes
                              the Redesign Date, there shall be no Primary
                              Makegood Period).

                        b.    "[**] Day Date" shall mean the date which is [**]
                              days after the Redesign Notice Date (or, if no
                              Redesign Notice is provided, [**] days after the
                              Redesign Date).

                        c.    "Secondary Makegood Period" shall mean the period
                              commencing on the later to occur of (i) the [**]
                              Day Date and the (ii) Redesign Date, and ending on
                              the date which is [**] days after the [**] Day
                              Date.

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                  (b)   Makegood for Shortfall of Delivery. In the event of a
                        shortfall in delivery of the DOTD Commitment, AOL shall
                        provide SmartBargains with advertising or promotional
                        inventory (including DOTD Placements, banners,
                        textlinks, emails and pop-ups) that AOL reasonably
                        believes will result in [**] ("Makegood Promotions"); it
                        being understood that if AOL has delivered all of the
                        Makegood Promotions in accordance with the terms of this
                        Agreement, AOL shall have no further liability to
                        SmartBargains as a result of the shortfall in delivery.
                        In the event that AOL is delivering DOTD Placements as a
                        makegood for placements missed from the DOTD Commitment,
                        the Parties agree that the following matrix will apply:

<TABLE>
<CAPTION>
February - September      October & January       November       December
<S>                       <C>                     <C>            <C>
    [**]                      [**]                 [**]            [**]

</TABLE>
                        Thus, if AOL fails to deliver a committed DOTD Placement
                        in January, it would require [**] DOTD Placements in
                        February ([**] factor for Jan divided by [**] factor for
                        February equals [**]) to be deemed fulfilled.
                        Conversely, if AOL failed to deliver [**] DOTD
                        Placements otherwise committed in October, AOL would
                        only be obligated to provide [**] DOTD Placements in
                        December ([**] multiplied by [**] [October factor]
                        equals [**] divided by [**] [December Factor] equals
                        [**] December DOTD slots owed).

                  (c)   Timing of Makegoods. AOL shall make commercially
                        reasonable efforts to deliver Makegood Inventory under
                        Section 1.1(a) and Makegood Placements under Section
                        1.1(b) within [**] days of the Material Redesign or
                        missed DOTD Placements, as the case may be.

            1.2.  INCREMENTAL DOTD PLACEMENTS. In addition to the DOTD
                  Commitment, AOL may, in its discretion, deliver additional
                  DOTD Placements ("Incremental DOTD Placements"). In the event
                  that it intends to provide SmartBargains with an Incremental
                  DOTD Placement, AOL will either give SmartBargains (i) [**]
                  days prior notice of such Incremental DOTD Placement (in which
                  case SmartBargains shall ensure that it has sufficient
                  inventory of the CS Product(s) to be marketed within such DOTD
                  Placement to satisfy AOL User demand for such CS Product(s)
                  (such sufficiency to be determined in accordance with Section
                  1.1 above) and such Incremental DOTD Placement will be added
                  to the DOTD Commitment for all purposes of Section 1.1 and
                  Section 1.2 above), or (ii) less than [**] days notice of such
                  Incremental DOTD Placement (in which case either (x)
                  SmartBargains shall give notice to AOL within [**] business
                  days that SmartBargains declines such opportunity, or
                  otherwise, (y) SmartBargains shall ensure that it has
                  sufficient inventory of the CS Product(s) to be marketed
                  within such Incremental DOTD Placement to satisfy AOL User
                  demand for such CS Product(s) (such sufficiency to be
                  determined in accordance with Section 1.1 above) and such
                  Incremental DOTD Placement will be added to the DOTD
                  Commitment for all purposes of Section 1.1 above and Section
                  1.2). The terms of this provision shall not be binding upon
                  either Party unless the offer by AOL or the declining of
                  acceptance by SmartBargains of Incremental DOTD Placements is
                  provided in writing (which may not be provided via email) and
                  in the case of AOL, is executed by both [**] (or their
                  successors). The Parties acknowledge that there may be
                  nonbinding

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                  communications (e.g. via email) relating to Incremental DOTD
                  Placements which nonetheless are not governed by this
                  provision (i.e., AOL may communicate availability of
                  placements which may be available to SmartBargains from time
                  to time).

            1.3.  INCREMENTAL PLACEMENTS. Nothing in Sections 1.1 or 1.2 shall
                  prevent AOL from offering, and SmartBargains from accepting,
                  incremental non-binding promotions to the Customized Site.
                  Moreover, AOL may promote the Customized Site through banners,
                  text links, emails and pop-ups in standard course unless
                  otherwise objected to by SmartBargains; provided that AOL
                  shall not be obligated to cease such promotions so long as AOL
                  reasonably believes that such promotions will not generate in
                  excess of [**]% of the [**] SmartBargains through the DOTD
                  Commitment.

            1.4.  COMPLIANCE WITH BBB ADVERTISING GUIDELINES. SmartBargains
                  shall ensure that (i) all offers, advertisements or other
                  Promo Content appearing within any of its Placements on the
                  AOL Network and (ii) all content within the Customized Site,
                  strictly comply with the then-current Better Business Bureau
                  Advertising Guidelines (the "BBB Guidelines"). The version of
                  the BBB Guidelines in effect as of the Effective Date is
                  attached hereto as Exhibit F. [**] the BBB Guidelines shall be
                  [**]. Without prejudice to any other remedy available to AOL
                  hereunder, SmartBargains shall immediately remove any Content
                  from the Placements or the Customized Site that AOL reasonably
                  believes may violate the BBB Guidelines.

            1.5   ADDITIONAL PROMOTION. In recognition of the expenses incurred
                  by SmartBargains in connection with the creation of the
                  Customized Site, the Parties amended that certain Interactive
                  Marketing Agreement between the Parties, dated as of June 1,
                  2000, as amended to date (the "Existing Agreement"), pursuant
                  to a Ninth Amendment to Interactive Marketing Agreement
                  effective as of June 30, 2003 (the "Ninth Amendment"), to (i)
                  extend the term of the Existing Agreement through September
                  30, 2003, and (ii) provide that AOL will not be entitled to
                  [**] under the Existing Agreement after the Ninth Amendment
                  Effective Date (as defined in the Ninth Amendment), until [**]
                  have surpassed [**] dollars ($[**]) in aggregate
                  (notwithstanding any provision of the Existing Agreement, the
                  Ninth Amendment or this Agreement to the contrary, the amount
                  [**] to AOL (and value to SmartBargains) as a result of its
                  agreement to this Section 1.5(ii) shall be deemed to be [**]
                  dollars ($[**])).

      2. PROGRAMMING AND CUSTOMIZED SITE

            2.1   PROGRAMMING. SmartBargains shall provide AOL with the
                  Customized Site consisting of the Content described on the
                  programming plan attached as Exhibit A-1 (the "Programming
                  Plan"). SmartBargains shall ensure that the Customized Site
                  complies with the technical operating standards set forth in
                  Exhibit A-2 ("Operating Standards"). SmartBargains shall
                  customize the Customized Site for AOL Members as follows:

                  (a)   Branding and Navigation. SmartBargains shall ensure that
                        the Customized Site displays AOL branding as set forth
                        on Exhibit A-3; provided that AOL may request up to [**]
                        of the Term subject to paying [**] percent ([**]%) of
                        SmartBargains' actual costs incurred in implementing
                        such change; such costs may be paid [**] in Section 3.1
                        for such costs to be paid by AOL.

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                  (b)   Advertising. Notwithstanding anything to the contrary in
                        this Agreement, SmartBargains shall ensure that the
                        Customized Site does not promote, advertise, market or
                        distribute products, services or Content of any other
                        Interactive Service. Neither party shall be entitled to
                        include any third party advertisements or links on the
                        Customized Site without the prior mutual agreement of
                        AOL and SmartBargains, except as required by any
                        integration of Marketplace Integration Software
                        Providers (as defined in Section 2.4) pursuant to
                        Section 2.4.

                  (c)   Domain Name. SmartBargains shall host all pages of the
                        Customized Site under a domain name co-branded with the
                        AOL Service (i.e., smartbargains.aol.com), or under such
                        other domain name as shall be necessary for AOL to
                        receive primary credit for the traffic to the Customized
                        Site from all third party measurement services; except
                        that images on the Customized Site may be served from
                        SmartBargains' subdomains or a content distribution
                        network such as Akamai. It is understood that
                        SmartBargains has no authority over the AOL domain and
                        relies completely on AOL to promptly create and modify
                        its DNS records. AOL will ensure that all host names,
                        subdomains, domains, certificates, addresses, security
                        settings and related entities are fully and properly
                        configured

                  (d)   Cul-de-sac Site. AOL shall have the right to approve any
                        hyperlinks from the Customized Site. The Parties intend
                        that the Customized Site will provide AOL Members the
                        opportunity to conduct transactions through the
                        Customized Site and then return such AOL Members back to
                        the AOL Network.

            2.2   PREPARATION OF CUSTOMIZED SITE. SmartBargains shall complete
                  the Customized Site and Content Preparation for external use
                  by September 15, 2003 ("Launch Date") which Customized Site
                  will be functional and available for internal testing by
                  September 8, 2003. For each day after the Launch Date that
                  SmartBargains fails to cause such completion of the Customized
                  Site, SmartBargains will pay to AOL [**] dollars ($[**]),
                  provided that in no event shall SmartBargains' liability under
                  this Section 2.2 exceed $[**] in the aggregate. Any features
                  or functionality not included in Exhibit A-1 must be mutually
                  agreed to by the Parties and may require additional payments
                  by AOL and may delay the Launch Date with no penalty to either
                  Party; provided that any discrepancies under this sentence
                  (e.g., clarifications of obligations vs. additional
                  obligations) shall be resolved pursuant to the dispute
                  resolution process in Section 1 of Exhibit D. In the event
                  SmartBargains has not completed Site and Content Preparation
                  within [**] days after the Launch Date, then in addition to
                  any other remedies available, AOL shall have the right to
                  terminate this Agreement by giving SmartBargains written
                  notice thereof. AOL will complete the items within the
                  timeframes listed in Exhibit [F] provided, however, that if
                  SmartBargains is unable to launch the Customized Site by the
                  Launch Date solely as a result of AOL's inability to carry out
                  its obligations on Exhibit [F] collectively, then for each day
                  that the Launch Date is delayed AOL will waive the $[**]
                  penalty and provide SmartBargains with an Incremental DOTD
                  Placement with [**] attached to it, provided that in no event
                  shall AOL be required to provide more than [**] Incremental
                  DOTD Placements pursuant to this sentence.

            2.3   CUSTOMER DATA. Subject to the last sentence of this Section
                  2.3, AOL shall own all data obtained by SmartBargains pursuant
                  to this Agreement. SmartBargains shall ensure that on the
                  first page of the Customized Site, a prominent notice to AOL
                  Users (the form and content to be provided by AOL) will notify
                  such AOL Users that its information will be owned by AOL. At
                  least [**] prior to the expiration of the Term, AOL and
                  SmartBargains will enter into negotiations [**] to be in
                  effect upon expiration of the Term. If by

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                  the end of the Term, AOL and SmartBargains have not mutually
                  agreed upon [**] and at any time thereafter SmartBargains
                  provides formal notice to AOL that it is breaking off
                  conversations regarding [**] (the "Break Off Notice"), then
                  AOL will enable SmartBargains to [**] as follows: commencing
                  within [**] days after the Break Off Notice AOL will for a
                  period of [**] [**]on SmartBargains [**], which will be [**]
                  than the [**] historically provided to SmartBargains, to [**]
                  for whom AOL has acquired the right [**].

            2.4   MARKETPLACE INTEGRATION SOFTWARE PROVIDERS. SmartBargains will
                  work with potential partners designated by AOL and agrees to
                  integrate a software solution offered by a Marketplace
                  Integration Software Providers into the Customized Site by
                  [**]. For purposes hereof, "Marketplace Integration Software
                  Providers" shall mean a software and services organization
                  which provides an electronic means for presenting and
                  processing inventory for large manufactures or retailers onto
                  Internet-based marketplaces, but does not take physical
                  possession or legal title of any inventory (e.g. Channel
                  Advisor, AuctionWorks). Such potential partners and
                  SmartBargains shall enter into mutually agreeable
                  confidentiality agreements regarding the protection of their
                  respective confidential and proprietary information.

      3. [**] REPORTS AND AUDIT RIGHTS

            3.1   [**]. SmartBargains shall pay AOL on a monthly basis, within
                  [**] days of the end of any month during the Term, an amount
                  [**]. "[**]" shall mean the aggregate amounts [**] of the
                  Customized Site in connection with the [**] of any [**]
                  through the Customized Site, excluding, in each case, (a)
                  [**], (b) [**], and (c) [**] (only if and to the extent that
                  such [**] reflect SmartBargains' [**]). Upon mutual agreement,
                  the Parties may agree to [**] in order to facilitate
                  incremental drop-ship relationships.

            3.2   REPORTS. No later than thirty (30) days after the end of each
                  month during the Term, SmartBargains will provide AOL with a
                  final monthly report ("Final [**] Report") containing for each
                  month the details about the [**] (including all calculations
                  used to determine the [**] amount, such as [**] both for each
                  DOTD Promotion and a summary of all other Promotions). AOL
                  shall be entitled to rely on each of the Final [**] Reports
                  for the sole purpose of determining [**], and SmartBargains
                  shall not modify any of these reports after submitting them to
                  AOL. The reports required under this section will comply with
                  the format requests from AOL and shall be auditable by AOL in
                  accordance with Section 3.3 of the Agreement. For the
                  avoidance of doubt, any cancellations or returns made after a
                  Final [**] Report is submitted to AOL [**].

            3.3   AUDIT RIGHTS. For the sole purpose of ensuring compliance with
                  this Agreement, AOL shall have the right to engage an
                  independent certified public accountant to conduct a
                  reasonable and necessary inspection of portions of the books
                  and records of SmartBargains which are relevant to
                  SmartBargains's performance pursuant to this Agreement. Any
                  such audit may be conducted after twenty (20) business days
                  prior written notice to SmartBargains. AOL shall bear the
                  expense of any audit conducted pursuant to this paragraph
                  unless such audit shows an error in AOL's favor amounting to a
                  deficiency to AOL in excess of five percent (5%) of the actual
                  amounts paid and/or payable to AOL hereunder, in which event
                  SmartBargains shall bear the reasonable expenses of the audit.
                  SmartBargains shall pay AOL the amount of any deficiency
                  discovered by AOL within thirty (30) days after receipt of
                  notice thereof from AOL. AOL shall not have the right to audit
                  more than one time in any six-month period.

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            3.4   NO CREDIT FOR EXISTING AGREEMENT. No promotions, sales or
                  revenue generated under this Agreement shall be deemed a
                  credit or otherwise be counted for any purpose under the
                  Existing Agreement as the same has or may be amended.

      4.    AOL TOOLS. SmartBargains shall use AOL's utilities and technologies
            ("AOL Tools"), subject to AOL's standard license agreements for such
            tools, as follows:

            4.1   NON-MERCHANDISING TOOLS ON CUSTOMIZED SITE . To the extent
                  SmartBargains uses any of the following tools or functionality
                  within the Customized Site, SmartBargains shall use the
                  comparable AOL Tools only: instant messaging and calendaring
                  (including "click-to-add event" functionality associated
                  therewith). Any registration process permitted hereunder shall
                  permit AOL Members to utilize AOL's screenname authentication
                  functionality and SmartBargains shall display such
                  functionality as prominently as any other method of
                  registration. In addition, the Customized Site shall not (i)
                  provide or promote any email service or aggregated
                  shopping/commerce features or functionality (e.g. an online
                  mall), or (ii) use or feature the tools or technology of any
                  Interactive Service other than AOL. AOL will use commercially
                  reasonable efforts to facilitate SmartBargains' use of these
                  non-merchandising tools, and any new tools developed by AOL
                  after the Effective Date will be added on a mutually agreeable
                  basis; if AOL agrees to [**] to integrate any [**],
                  SmartBargains agrees to provide such integration in a
                  reasonable time and subject to reasonable expense.

            4.2   MERCHANDISING TOOLS ON CUSTOMIZED SITE. SmartBargains will
                  conform its promotion and sale of CS Products through the
                  Customized Site to the then-existing technologies identified
                  by AOL which are optimized for the AOL Service. Specifically,
                  SmartBargains shall (a) participate in AOL Quick Checkout, and
                  (b) participate in AOL's "product search" tool technology
                  which allows AOL Members to run a customized search among
                  SmartBargains's detailed inventory data ("AOL Product
                  Search"). AOL will use commercially reasonable efforts to
                  facilitate SmartBargains' use of these merchandising tools,
                  and any new tools developed by AOL after the Effective Date
                  will be added on a mutually agreeable basis; if AOL agrees to
                  pay all actual costs incurred by SmartBargains to integrate
                  any new tools, SmartBargains agrees to provide such
                  integration in a reasonable time and subject to reasonable
                  expense.

      5. TERM, TERMINATION, PRESS RELEASES.

            5.1.  TERM. Unless earlier terminated as set forth herein, the
                  initial term of this Agreement shall commence on the Effective
                  Date and expire March 8, 2005 (the "Initial Term"). Each Party
                  shall have the [**] this Agreement [**], provided that AOL may
                  [**] and SmartBargains may [**].

            5.2   TERMINATION FOR BREACH. Either Party may terminate this
                  Agreement at any time in the event of a material breach by the
                  other Party which remains uncured after thirty (30) days
                  written notice thereof.

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            5.3   TERMINATION FOR BANKRUPTCY/INSOLVENCY. Either Party may
                  terminate this Agreement immediately following written notice
                  to the other Party if the other Party (i) ceases to do
                  business in the normal course, (ii) becomes or is declared
                  insolvent or bankrupt, (iii) is the subject of any proceeding
                  related to its liquidation or insolvency (whether voluntary or
                  involuntary) which is not dismissed within ninety (90)
                  calendar days or (iv) makes an assignment for the benefit of
                  creditors.

            5.4   TERMINATION FOR CHANGE OF CONTROL. AOL may terminate this
                  Agreement upon written notice to SmartBargains in the event of
                  any Change of Control of SmartBargains which results in
                  SmartBargains (i) controlling any substantial interest in, or
                  (ii) being controlled by, or being under common control with,
                  an Designated Entity. For purposes of this Agreement,
                  "Designated Entity| shall mean (i) any entity that offers,
                  directly or through any Affiliate, an Internet connectivity or
                  ISP service, or (ii) any of the following entities or any
                  Affiliate of such entities: [**].

      6. EXHIBITS AND STANDARD TERMS. All Exhibits attached hereto and are
      hereby made a part of this Agreement.

      IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the Effective Date.

 AMERICA ONLINE, INC.                          SMARTBARGAINS.COM LP

By: /s/Robert Hayes                            By: /s/Ben Fischman
    ---------------------------                   ------------------------------

Print Name: Robert Hayes                       Print Name:  Ben Fischman

Title: [illegible] E-Commerce                  Title: EVP Strategic Development

Date: 9/15/03                                  Date: 9/15/03

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                          EXHIBIT A-1: PROGRAMMING PLAN

A. GENERAL:

      1. VISION. An online store that offers members a wide variety of
categories with big brands, deeply discounted, new items. Exclusive offerings
will be made available only for AOL members.

      2. PRODUCT SUMMARY. The Liquidations destination is designed to be a fully
functional e-commerce platform that enables customers to purchase a wide variety
of goods from a wide variety of merchant sources - in a single transaction. The
Liquidations store will better serve AOL members looking for mature products in
the product lifecycle with deep discounted prices. Currently we only partially
serve these members and feel we can do a much better job moving forward.
Secondarily, we hope to help merchants liquidate late in lifecycle merchandise.

The Liquidations destination will offer goods available to members both through
"Liquidation Events" as well as through a fully functional eCommerce store that
will be available as a "Liquidation Destination".

      3. BENEFIT TO OUR AOL MEMBERS. Our members will have access to an
exclusive Liquidations destination with an enormous assortment of well-known
branded products at unparalleled values. They will be presented with new events
and limited opportunities daily, building a shopping experience with a sense of
excitement and urgency. They do not have to wait for an auction to end or bid on
a product, since the prices are fixed. They can purchase items from multiple
vendors and streamline their checkout process by leveraging an AOL Wallet.

      4. BENEFIT TO OUR SELLERS. Sellers will be able to quickly liquidate
excess inventory to a large audience of AOL members. By participating in the AOL
Outlet, sellers will have another sales channel that does not cannibalize their
full-line products and pricing. Their products will provide better returns by
reducing their mature product inventory in large volumes and shortening their
product life cycle.

B. PRODUCT REQUIREMENTS: As more specifically provided in this Exhibit A-1,
SmartBargains shall be responsible for all programming, creative development,
functionality and continuing operations on the Customized Site; as relevant, the
Customized Site must adhere to AOL Studio guidelines and changes must be
approved by AOL (process to be agreed upon by both Parties).

For purposes of Section 2.2, Launch Date shall be deemed when SmartBargains has
completed to the reasonable satisfaction of AOL all Features identified by an
AOL Priority of P0. All items designated with an AOL Priority of P1 shall be
completed no less than [**] days following the Launch Date.

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<TABLE>
<CAPTION>
ITEM #         FEATURE            PRIORITY        DESCRIPTION / NOTES
------         -------            --------        -------------------
<S>            <C>              <C>               <C>
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]                 [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
</TABLE>

                                       10
<PAGE>

<TABLE>
<S>            <C>              <C>     <C>          <C>
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]                 [**]
[**]           [**]                 [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]                 [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]                 [**]             [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
</TABLE>

                                       11
<PAGE>

<TABLE>
<S>            <C>              <C>     <C>          <C>
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]                 [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]                 [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]             [**]    [**]         [**]
[**]           [**]                 [**]             [**]
</TABLE>

                                       12
<PAGE>

Operational and Performance Requirements

<TABLE>
<CAPTION>
                                                  [**]
                                               SB will [**]
                                        SB will inform AOL as to the
ACTION PROMPTED BY MEMBER                     [**] Launch Date.
-------------------------              ------------------------------
<S>                                    <C>
         [**]                                  [**]
         [**]                                  [**]
         [**]                                  [**]
         [**]                                  [**]
         [**]                                  [**]
         [**]                                  [**]
</TABLE>

-     Site uptime: [**]%

-     Maintenance window: no more than [**] window, [**] a week. If SB requires
      more frequent or longer update periods, AOL shall agree to discuss in good
      faith to approve such changes to the maintenance window. Efforts will be
      made to conform to the AOL standard maintenance window [**].

                                       13
<PAGE>

APPENDICES

                 APPENDIX A - REPORTS PROVIDED BY SMARTBARGAINS

[**] REPORTS

[**] Reports, which will be available to AOL via the Internet. [**].

[**] SALES [**]

[**] SALES [**]

[**] SALES [**]

SALES [**]
SALES [**]

SALES [**]

SALES [**]
SALES AOL
OUTLETS
FLASH REPORT THRU 09/07/03
SUMMARY

<TABLE>
<CAPTION>
<S>                     <C>                                                 <C>                                         <C>
($000S EXCEPT                                                          [**                                        [*
 AVG ORDER SIZE &                            [**]                       ]                     [**]                *]        [**]
 AVG SELLING PRICE)     -----------------------------------------------     --------------------------------------       -----------
                                 [**]    [**]     [**]   [**]     [**]                [**]            [**]    [**]
                        [**]    [**]    [**]     [**]   [**]     [**]       [**]    [**]     [**]    [**]    [**]       [**]   [**]
</TABLE>

                                       14
<PAGE>

<TABLE>
<S>   <C>    <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>   <C>    <C>    <C>
SUN   09/01  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
MON   09/02  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
TUE   09/03  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
WED   09/04  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
THU   09/05  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
FRI   09/06  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
SAT   09/07  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
   WEEK 1    [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]

SUN   09/08  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
MON   09/09  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
TUE   09/10  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
WED   09/11  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
THU   09/12  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
FRI   09/13  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
SAT   09/14  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
   WEEK 2    [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]

SUN   09/15  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
MON   09/16  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
TUE   09/17  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
WED   09/18  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
THU   09/19  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
FRI   09/20  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
SAT   09/21  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
   WEEK 3    [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]

SUN   09/22  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
MON   09/23  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
TUE   09/24  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
WED   09/25  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
THU   09/26  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
FRI   09/27  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
SAT   09/28  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
   WEEK 4    [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
</TABLE>

                                       15
<PAGE>

<TABLE>
<S>          <C>   <C>   <C>   <C>   <C>   <C>    <C>   <C>  <C>   <C>    <C>    <C>    <C>
MTD ACTUALS  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]  [**]   [**]   [**]
</TABLE>

                                       16
<PAGE>

EMAIL REPORTING

BRAND DRIVEN PERFORMANCE

<TABLE>
<CAPTION>
BRAND    CLICKS    SALES
-----    ------    -----
<S>      <C>       <C>
[**]     [**]      $[**]
[**]     [**]      $[**]
[**]     [**]      $[**]
[**]     [**]      $[**]
[**]     [**]      $[**]
[**]     [**]      $[**]
[**]     [**]      $[**]
[**]     [**]      $[**]
[**]     [**]      $[**]
</TABLE>

                                       17
<PAGE>

TOP 50 SEARCH TERMS WEEK OF 8/4

<TABLE>
<CAPTION>
TOP 50 SEARCH TERMS      COUNT
-------------------      -----
<S>                      <C>
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
</TABLE>

                                       18
<PAGE>

<TABLE>
<S>                      <C>
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
[**]                     [**]
</TABLE>

                                       19
<PAGE>

APPENDIX B - MERCHANDISE PLAN

      SB will follow the assortment guidelines and provide documentation as
requested below:

            1. For Main Page:

                  a.    A Featured Product Calendar detailing products [**] in
                        advance.

                  b.    If there are changes to the Featured Product Calendar,
                        which will not exceed [**]% of scheduled Feature
                        Product, SB will provide [**] days advance written
                        notice of that change to AOL, unless AOL agrees to a
                        lesser period of time.

                  c.    The Featured Product will not come from any one
                        department [**]% of the time and in any one month, the
                        featured product must come from at least [**]different
                        departments, unless approved by AOL.

                  d.    In any given month the Featured Product must promote a
                        nationally advertised branded(1) product at least [**]%
                        of the time, unless approved by AOL.

            2. For each Department:

                  a.    Average of [**] products per Department.

                  b.    Featured Product for each Department which will refresh
                        [**].

                  c.    Target and Minimum Brand Mix: In Departments where
                        brands apply (e.g., Electronics, Men's Store, Women's
                        Accessories, Women's Apparel), [**]% of the listings
                        should be nationally advertised brands(1) and no one
                        brand should constitute more than [**]% of the listings,
                        unless approved by AOL.

            3. For each Category:

                  a.    Minimum of [**] products per Category, unless approved
                        by AOL.

                  b.    Featured Product for each Category on AOL Outlets will
                        be different from Featured Product on Smartbargains.com,
                        however the order of products listed on AOL Outlets will
                        be the same as Smartbargains.com.

                  c.    Product descriptions and copy on Category pages will not
                        be unique to AOL Outlets. SB agrees to make changes to
                        product descriptions and copy in reasonable time frame
                        when requested.

            4. Overall

                  a.    Ordering Rules: SB orders product listings on pages
                        based on product [**] or mutually agreed merchandising
                        rules (and without regard to [**]whatsoever); 3rd party
                        listings will not be discriminated against in listings
                        or otherwise.

                  b.    Discount Objectives ([**]% off MSRP or greater).

                  c.    Assortment Plan: [**] SB will present a written
                        Assortment plan, subject to AOL approval, which will
                        include promotions for the Main Page, as well as Key
                        Items or events occurring in the Departments/Categories
                        the following [**].

----------
(1) Brands that are advertised nationally in TV or print media, not regional.

                                 20 CONFIDENTIAL

<PAGE>

                        i.    In addition, SB will provide, a Main Page Featured
                              Product(s) Calendar detailing items, promotional
                              offer and quantity available for sale [**] in
                              advance.

                        ii.   SB will provide Department Page Featured Item
                              Calendar detailing items, promotional offer and
                              quantity available for sale [**] in advance.

                  d.    SB will present to AOL a written Exclusive Product Plan
                        indicating all products, prices, quantities that SB
                        intends to make available exclusively on AOL.

                        i.    Minimum of [**] exclusive products per department.

                        ii.   At a minimum AOL exclusive product assortment will
                              be refreshed [**]. On high volume departments AOL
                              exclusive product assortment will be refreshed
                              with greater frequency.

                                       21
<PAGE>

            APPENDIX C - CALL CENTER SUPPORT SERVICE LEVEL STANDARDS

The following Call Center Performance Standards shall be deemed to be in effect
until otherwise mutually agreed upon by the Parties.

<TABLE>
<CAPTION>
PERFORMANCE INDICATOR           SERVICE LEVEL AGREEMENT
---------------------           -----------------------
<S>                             <C>
[**]                              [**] PERCENT [**].
[**]                              WITHIN [**]
[**]                              [**]
[**]                              [**]
[**]                              LESS THAN [**]%
[**]                              WITHIN [**]
[**]                              [**] WITHIN [**]
[**]                              [**] WILL BE SENT TO AOL [**]
[**]                              [**] PRODUCT [**]
[**]                              SB AND AOL WILL AGREE [**]
</TABLE>

                                       22
<PAGE>

                   EXHIBIT A-2: TECHNICAL OPERATING STANDARDS

1. Customized Site Infrastructure. SmartBargains will be[**].

2. [Intentionally Blank]

3. Technical Problems. SmartBargains agrees [**].

4. Monitoring. SmartBargains will [**].

5. Telecommunications. [**].

6. Security. SmartBargains will [**]. SmartBargains will [**] [**].

7. Technical Performance.

   i. SmartBargains will [**]

   ii. [**] SmartBargains [**], SmartBargains shall [**].

   iii. SmartBargains will [**].

   iv. SmartBargains will [**].

   v. [**] SmartBargains will [**].

8. AOL Internet Services SmartBargains Support. [**] SmartBargains.

                                       23
<PAGE>
                             EXHIBIT B: DEFINITIONS

The following definitions shall apply to this Agreement:

ADVERTISEMENTS. Advertisements, promotions, links, pointers and similar services
or rights.

AOL AFFILIATE. Any distributor or franchisee of AOL, or an entity that, directly
or indirectly, controls, is controlled by, or is under common control with AOL,
including any entity in which AOL holds, directly or indirectly, at least a [**]
percent ([**]%) equity interest.

AOL FRAMES. The frame (and any other visible elements of client software)
appearing around the Customized Site when an AOL Member is viewing such site.

AOL LOOK AND FEEL. The elements of graphics, design, organization, presentation,
layout, user interface, navigation, trade dress and stylistic convention
(excluding the digital implementations thereof done by SmartBargains) which are
generally associated with interactive sites within any AOL Property, or any
other AOL interactive site or service.

AOL MEMBER(S). Any user of the AOL Network, including authorized users
(including any sub-accounts under an authorized master account) of the AOL
Service and/or the CompuServe Service.

AOL NETWORK. (i) The AOL Properties, and (ii) any other product, service or
property owned, operated, distributed or authorized to be distributed by or
through AOL or any AOL Affiliate worldwide (and including those properties
excluded within the definition of the AOL Properties). It is understood and
agreed that the rights of SmartBargains relate solely to the AOL Properties and
not generally to the AOL Network.

AOL PROMO. The creative materials provided by SmartBargains for display on the
AOL Network.

AOL SERVICE. The US version of the America Online-brand Service, subject to the
AOL Standard Service Exclusions.

AOL STANDARD SERVICE EXCLUSIONS. With respect to any AOL Property (or other AOL
interactive site or service), such site or service shall specifically exclude:
(a) all other AOL interactive sites (e.g., the "AOL Service" shall exclude,
e.g., AOL.com, Netscape, MovieFone.com, CompuServe.com, ICQ.com, etc.) or AOL
interactive services (e.g., the "AOL Service" shall exclude, e.g., the
CompuServe service, ICQ, AOL Instant Messenger, etc.); (b) any international
versions of such site or service (e.g., the "AOL Service" shall exclude, e.g.,
AOL Europe and AOL Japan), (c) any independent product, service or property,
which may be offered by, through or with the applicable AOL site or service
(e.g., "You've Got Pictures(TM)," "Shop@," "NetMail(TM)," "Love@AOL", "AOL
Hometown," "My News", "Netbusiness"), (d) any programming or Content area
offered by or through such site or service over which AOL does not exercise
complete operational control (including, without limitation, content areas
controlled by other parties and member-created content areas), (e) any yellow
pages, white pages, classifieds or other search, directory or review services or
Content offered by or through the U.S. version of the applicable site or
service, (f) any property, feature, product or service which AOL or its
affiliates may acquire subsequent to the Effective Date and (g) any other
version of the applicable site or service which is materially different from the
standard narrow-band U.S. version of the applicable site or service, by virtue
of its branding, distribution, functionality, Content or services (e.g., in the
case of Digital City, excluding, e.g., Digital City, Inc.'s "YourTown" branded
cities or any other similar "light" product offering), including, without
limitation, any private-label or co-branded version of the applicable site or
service or any version distributed through any broadband distribution platform
or through any platform or device other than a desktop personal computer (e.g.
with respect to "Netscape", excluding, e.g., any custom Netcenters built
specifically for third parties).

AOL TOOLS.  AOL's tools and functionalities.

CHANGE OF CONTROL. (a) The consummation of a reorganization, merger or
consolidation or sale or other disposition of substantially all of the assets of
a party or (b) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of more than 50% of either (i) the then outstanding
shares of common stock of such party; or (ii) the combined voting power of the
then outstanding voting securities of such party entitled to vote generally in
the election of directors.

CONFIDENTIAL INFORMATION. Any information relating to or disclosed in the course
of the Agreement, which is or should be reasonably understood to be confidential
or proprietary to the disclosing Party, including, but not limited to, the
material terms of this Agreement, information about AOL Members, AOL Purchasers
and SmartBargains customers (in their capacities as SmartBargains customers),
technical processes and formulas, source codes, product designs, sales, cost and
other unpublished financial information, product and business plans,
projections, and marketing data. "Confidential Information" will not include
information (a) the receiving Party can demonstrate was already lawfully known
to or independently developed by the receiving Party, (b) disclosed in published
materials, (c) generally known to the public, or (d) lawfully obtained from any
third party not in breach of any confidentiality obligation to the disclosing
Party.

CONTENT. Text, images, video, audio (including, without limitation, music used
in time relation with text, images, or video), and other data, products,
services, advertisements, promotions, URLs, keywords and other navigational
elements, links, pointers, technology and software, including any modifications,
upgrades, updates, enhancements and related documentation.

CS PRODUCTS. Products offered for sale or promoted on the Customized Site.

INTERACTIVE SERVICE. An entity offering one or more of the following: (i) online
or Internet connectivity services (e.g., an online service or Internet service
provider); (ii) an interactive site or service featuring a broad selection of
aggregated third party interactive content (or navigation thereto) covering a
broad range of subjects and targeted at a broad audience (e.g., a search and
directory service or portal); or (iii) communications software capable of
serving as the principal means through which a user creates, sends or receives
electronic mail or real time online messages.

KEYWORD(TM) SEARCH TERMS. (a) The Keyword(TM) online search terms made available
on the AOL Service, combining AOL's Keyword(TM) online search modifier with a
term or phrase specifically related to SmartBargains (and determined in
accordance with the terms of this Agreement) and (b) the Go Word online search
terms made available on the CompuServe Service, combining CompuServe's Go Word
online search modifier with a term or phrase specifically related to
SmartBargains (and determined in accordance with the terms of this Agreement).

                                       24
<PAGE>

LICENSED CONTENT. All Content offered through the Customized Site pursuant to
this Agreement or otherwise provided by or on behalf of SmartBargains or its
agents in connection herewith (e.g., offline promotional content or online
Content for distribution through the AOL Network).

PRESS RELEASE.  A press release or other public statement.

PRODUCT. Any product, good or service which SmartBargains (or others acting on
its behalf or as distributors) offers, sells, provides, distributes or licenses
to AOL Members directly or indirectly through (i) the Customized Site (including
through any Interactive Site linked thereto), (ii) any other electronic means
directed at AOL Members (e.g., e-mail offers) specifically authorized by this
Agreement, or (iii) an "offline" means (e.g., toll-free number) for receiving
orders related to specific offers within the Customized Site requiring
purchasers to reference a specific promotional identifier or tracking code,
including, without limitation, products sold through surcharged downloads (to
the extent expressly permitted hereunder).

PROMO CONTENT. Content provided by SmartBargains to AOL for inclusion within a
DOTD[**]Placement.

PROMOTIONAL MATERIALS. Any and all marketing, advertising, or other promotional
materials, excluding Press Releases, related to the Customized Site and/or
referencing the other Party and/or its trade names, trademarks, and service
marks.

SUBLICENSE. To grant a sublicense (i) of any of the rights granted to AOL
hereunder to AOL Affiliates, and (ii) to AOL Members to use the Licensed Content
in accordance with the applicable AOL Member end user license agreements.

WELCOME SCREENS. The first full page or screen of the AOL Service after an AOL
Users logs on to the AOL Network (specifically excluding any log-on "pop-up" or
other similar interim advertisement or promotion).

CONFIDENTIAL

                                       25
<PAGE>

                                    EXHIBIT C

                   STANDARD ONLINE COMMERCE TERMS & CONDITIONS

-     AOL Network Distribution. The Placements and any other promotions or
      advertisements purchased from or provided by AOL will link only to the
      Customized Site, will be used by SmartBargains solely for its own benefit
      and will not be resold, traded, exchanged, bartered, brokered or otherwise
      offered to any third party. SmartBargains will not authorize or permit any
      third party to distribute or promote the CS Products or any SmartBargains
      Interactive Site through the AOL Network absent AOL's prior written
      approval.

-     Provision of Other Content. In the event that AOL notifies SmartBargains
      that (A) as reasonably determined by AOL, any Content within the
      Customized Site violates AOL's then-standard Terms of Service (as set
      forth on the America Online(R) brand service at Keyword term "TOS"), for
      the AOL Service or any other AOL property through which the Customized
      Site is promoted, the terms of this Agreement or any other standard,
      written AOL policy (including, without limitation, AOL's policies on (i)
      kids and teens content, (ii) advertising, or (iii) games rating) or (B)
      AOL reasonably objects to the inclusion of any Content within the
      Customized Site (other than any specific items of Content which may be
      expressly identified in this Agreement), then SmartBargains will take
      commercially reasonable steps to block access by AOL Users to such Content
      using SmartBargains's then-available technology. In the event that
      SmartBargains cannot, through its commercially reasonable efforts, block
      access by AOL Users to the Content in question, then SmartBargains will
      provide AOL prompt written notice of such fact. AOL may then, at its
      option, restrict access from the AOL Network to the Content in question
      using technology available to AOL. SmartBargains will cooperate with AOL's
      reasonable requests to the extent AOL elects to implement any such access
      restrictions.

-     Contests. SmartBargains will take all steps necessary to ensure that any
      contests, sweepstakes or similar promotions conducted or promoted through
      the Customized Site (a "Contest") comply with all applicable federal,
      state and local laws and regulations.

4.    Disclaimers. Upon AOL's request, SmartBargains agrees to include within
      the Customized Site a product disclaimer (the specific form and substance
      to be mutually agreed upon by the Parties) indicating that all Content is
      provided solely by SmartBargains and not AOL, and any transactions are
      solely between SmartBargains and AOL Users purchasing CS Products from
      SmartBargains and AOL is not responsible for any loss, expense or damage
      arising out of the Content provided through the Customized Site.

5.    AOL Look and Feel. SmartBargains acknowledges and agrees that AOL will own
      all right, title and interest in and to AOL Look and Feel developed by or
      for AOL, subject to SmartBargains's ownership rights in any SmartBargains
      trademarks or copyrighted material within the Customized Site.
      SmartBargains acknowledges that AOL owns all right, title, and interest in
      and to the AOL Frame. Except for the AOL Look and Feel and AOL Frame as
      provided above, and the AOL Trademarks or as otherwise specifically set
      forth in this Agreement, SmartBargains shall have all right, title and
      interest in and to the Customized Site.

6.    Management of the Customized Site. SmartBargains will manage, review,
      delete, edit, create, update and otherwise manage all Content available on
      or through the Customized Site, in a timely and professional manner and in
      accordance with the terms of this Agreement. SmartBargains will use its
      commercially reasonable efforts to ensure that the Customized Site is
      current, accurate and well-organized at all times. SmartBargains warrants
      that the CS Products and other Licensed Content : (i) to its knowledge,
      will not infringe on or violate any copyright, trademark, U.S. patent or
      any other third party right, including without limitation, any music
      performance or other music-related rights; (ii) will not violate AOL's
      then-applicable Terms of Service for the AOL Service and any other AOL
      property through which the Customized Site will be promoted or any other
      standard, written AOL policy; and (iii) will not violate any applicable
      law or regulation, including those relating to contests, sweepstakes or
      similar promotions. Additionally, SmartBargains represents and warrants
      that to its knowledge it owns or has a valid license to all rights to any
      Licensed Content used in AOL "slideshow" or other formats embodying
      elements such as graphics, animation and sound, free and clear of all
      encumbrances and without violating the rights of any other person or
      entity. SmartBargains also warrants that a reasonable basis exists for all
      Product performance or comparison claims appearing through the Customized
      Site. SmartBargains shall not in any manner, including, without limitation
      in any Promotion, the Licensed Content or the Materials state or imply
      that AOL recommends or endorses SmartBargains or SmartBargains's Products
      (e.g., no statements that SmartBargains is an "official" or "preferred"
      provider of products or services for AOL). AOL will have no obligations
      with respect to the CS Products available on or through the Customized
      Site, including, but not limited to, any duty to review or monitor any
      such CS Products.

CONFIDENTIAL

                                       26
<PAGE>

7.    Duty to Inform. SmartBargains will promptly inform AOL of any information
      related to the Customized Site which SmartBargains believes could
      reasonably lead to a claim, demand, or liability of or against AOL and/or
      its affiliates by any third party.

8.    Production Work. In the event that SmartBargains requests AOL's production
      assistance in connection with (i) ongoing programming and maintenance
      related to the Customized Site, (ii) a redesign of or addition to the
      Customized Site (e.g., a change to an existing screen format or
      construction of a new custom form), (iii) production to modify work
      performed by a third party provider or (iv) any other type of production
      work, SmartBargains will work with AOL to develop a detailed production
      plan for the requested production assistance (the "Production Plan").
      Following receipt of the final Production Plan, AOL will notify
      SmartBargains of (i) AOL's availability to perform the requested
      production work, (ii) the proposed fee or fee structure for the requested
      production and maintenance work and (iii) the estimated development
      schedule for such work. To the extent the Parties reach agreement
      regarding implementation of the agreed-upon Production Plan, such
      agreement will be reflected in a separate work order signed by the
      Parties. To the extent SmartBargains elects to retain a third party
      provider to perform any such production work, work produced by such third
      party provider must generally conform to AOL's standards & practices (as
      provided on the America Online brand service at Keyword term
      "styleguide"). The specific production resources which AOL allocates to
      any production work by AOL to be performed on behalf of SmartBargains will
      be as determined by AOL in its sole discretion. With respect to any
      routine production, maintenance or related services which AOL reasonably
      determines are necessary for AOL to perform in order to support the proper
      functioning and integration of the Customized Site ("Routine Services"),
      SmartBargains will pay the then-standard fees charged by AOL for such
      Routine Services, so long as AOL provides reasonable advance notice of the
      performance of such services, where feasible.

9.    Overhead Accounts. To the extent AOL has granted SmartBargains any new
      overhead accounts on the AOL Service pursuant to this Agreement,
      SmartBargains will be responsible for the actions taken under or through
      such overhead accounts, which actions are subject to AOL's applicable
      Terms of Service and for any surcharges, including, without limitation,
      all premium charges, transaction charges, and any applicable communication
      surcharges incurred by any such overhead account issued to SmartBargains,
      but SmartBargains will not be liable for charges incurred by any such
      overhead account relating to AOL's standard monthly usage fees and
      standard hourly charges, which charges AOL will bear. Upon the termination
      of this Agreement, all such new overhead accounts, related screen names
      and any associated usage credits or similar rights, will automatically
      terminate. AOL will have no liability for loss of any data or content
      related to the proper termination of any such new overhead account.

10.   Merchant Certification Program. SmartBargains will participate in any
      generally applicable "Certified Merchant" program operated by AOL or its
      authorized agents or contractors. Such program may require merchant
      participants on an ongoing basis to meet certain reasonable, generally
      applicable standards relating to provision of electronic commerce through
      the AOL Network (including, as a minimum, use of 40-bit SSL encryption and
      if requested by AOL, 128-bit encryption) and may also require the payment
      of certain reasonable certification fees to the applicable entity
      operating the program. Each Certified Merchant in good standing will be
      entitled to place on its affiliated Interactive Site an AOL designed and
      approved button promoting the merchant's status as an AOL Certified
      Merchant.

11.   Search Terms. To the extent this Agreement sets forth any mechanism by
      which the Customized Site will be promoted in connection with specified
      search terms within any AOL product or service, SmartBargains hereby
      represents and warrants that SmartBargains has all consents,
      authorizations, approvals, licenses, permits or other rights necessary for
      SmartBargains to use such specified search terms. Notwithstanding the
      foregoing, AOL shall have the right to suspend the use of any search term
      if AOL has reason to believe continued use may subject AOL to liability or
      other adverse consequences.

12.   Kids and Teens Content. SmartBargains shall notify AOL in writing whenever
      it intends to distribute child designated content for the following age
      groups on or through the Customized Site: (i) Kids (children ages 12 and
      under), (ii) Young Teens (children ages 13-15), (iii) Mature Teens
      (children ages 16-17). All Content appearing on or through the Customized
      Site designated for the foregoing age groups shall comply at all time with
      AOL's standard, written policies for such groups, which policies shall be
      made available to SmartBargains upon request.

13.   Expert/Specialist Content. If any of the Licensed Content professes to
      provide expert, professional or other specialty advice or Content (such
      as, without limitation, medical or psychological, religious, financial,
      etc.), SmartBargains shall use its commercially reasonable efforts to
      ensure that all such Licensed Content is prepared or reviewed by licensed,
      insured and qualified practitioners/professionals in such field with
      expertise on the particular topic and such Licensed

CONFIDENTIAL

                                       27
<PAGE>

      Content complies with applicable standards of the applicable profession
      and all applicable laws and regulations. Upon request by AOL from time to
      time, SmartBargains shall provide AOL with evidence reasonably
      satisfactory to AOL of proper licensure and compliance with the foregoing
      sentence.

14.   Insurance. At all times during the Term, SmartBargains shall maintain an
      insurance policy or policies adequate in amount (e.g., an amount at least
      standard in SmartBargains's industry for a company of SmartBargains's
      size) to insure SmartBargains against liability associated with the sale
      of the SmartBargains Products and the offering of the Licensed Content.
      SmartBargains shall include AOL as a named insured party on such policy or
      policies. Upon AOL's request, SmartBargains shall provide AOL with a copy
      of such policy or policies. SmartBargains shall promptly notify AOL of any
      material change in such policy or policies.

CONFIDENTIAL

                                       28
<PAGE>

                                    EXHIBIT D

                        STANDARD LEGAL TERMS & CONDITIONS

1.    Dispute Resolution.

1.1   Management Committee. The Parties will act in good faith and use
      commercially reasonable efforts to promptly resolve any claim, dispute,
      controversy or disagreement (each a "Dispute") between the Parties or any
      of their respective subsidiaries, affiliates, successors and assigns under
      or related to this Agreement or any document executed pursuant to this
      Agreement or any of the transactions contemplated hereby. If the Parties
      cannot promptly resolve the Dispute , the Dispute will be submitted to the
      Management Committee for resolution. For ten (10) days following
      submission of the Dispute to the Management Committee, the Management
      Committee will have the exclusive right to resolve such Dispute; provided
      that the Management Committee will have the final and exclusive right to
      resolve Disputes arising from any provision of the Agreement which
      expressly or implicitly provides for the Parties to reach mutual agreement
      as to certain terms. If the Management Committee is unable to amicably
      resolve the Dispute during the ten-day period, then the Management
      Committee will consider in good faith the possibility of retaining a third
      party mediator to facilitate resolution of the Dispute. In the event the
      Management Committee elects not to retain a mediator, the dispute will be
      subject to the resolution mechanisms described below (subject to the
      proviso in the third sentence of this Section 1.1). "Management Committee"
      will mean a committee made up of a senior executive from each of the
      Parties for the purpose of resolving Disputes under this Section 1 and
      generally overseeing the relationship between the Parties contemplated by
      this Agreement. Neither Party will seek, nor will be entitled to seek,
      binding outside resolution of the Dispute unless and until the Parties
      have been unable amicably to resolve the Dispute as set forth in this
      Section 1.1 and then, only in compliance with the procedures set forth in
      the remainder of this Section 1.

1.2   Arbitration. Except for Disputes relating to issues of (i) proprietary
      rights, including but not limited to intellectual property and
      confidentiality, and (ii) any provision of the Agreement which expressly
      or implicitly provides for the Parties to reach mutual agreement as to
      certain terms (which will be resolved by the Parties solely and
      exclusively through amicable resolution as set forth in Section 1.1), any
      Dispute not resolved by amicable resolution as set forth in Section 1.1
      will be governed exclusively and finally by arbitration. Such arbitration
      will be conducted by the American Arbitration Association ("AAA") in
      Washington, D.C. and will be initiated and conducted in accordance with
      the Commercial Arbitration Rules ("Commercial Rules") of the AAA,
      including the AAA Supplementary Procedures for Large Complex Commercial
      Disputes ("Complex Procedures"), as such rules will be in effect on the
      date of delivery of a demand for arbitration ("Demand"), except to the
      extent that such rules are inconsistent with the provisions set forth
      herein. Notwithstanding the foregoing, the Parties may agree in good faith
      that the Complex Procedures will not apply in order to promote the
      efficient arbitration of Disputes where the nature of the Dispute,
      including without limitation the amount in controversy, does not justify
      the application of such procedures.

1.3   Selection of Arbitrators. The arbitration panel will consist of three
      arbitrators. Each Party will name an arbitrator within ten (10) days after
      the delivery of the Demand. The two arbitrators named by the Parties may
      have prior relationships with the naming Party, which in a judicial
      setting would be considered a conflict of interest. The third arbitrator,
      selected by the first two, should be a neutral participant, with no prior
      working relationship with either Party. If the two arbitrators are unable
      to select a third arbitrator within ten (10) days, a third neutral
      arbitrator will be appointed by the AAA from the panel of commercial
      arbitrators of any of the AAA Large and Complex Resolution Programs. If a
      vacancy in the arbitration panel occurs after the hearings have commenced,
      the remaining arbitrator or arbitrators may not continue with the hearing
      and determination of the controversy, unless the Parties agree otherwise.

1.4   Governing Law. The Federal Arbitration Act, 9 U.S.C. Secs. 1-16, and not
      state law, will govern the arbitrability of all Disputes. The arbitrators
      will allow such discovery as is appropriate to the purposes of arbitration
      in accomplishing a fair, speedy and cost-effective resolution of the
      Disputes. The arbitrators will reference the Federal Rules of Civil
      Procedure then in effect in setting the scope and timing of discovery. The
      Federal Rules of Evidence will apply in toto. The arbitrators may enter a
      default decision against any Party who fails to participate in the
      arbitration proceedings.

1.5   Arbitration Awards. The arbitrators will have the authority to award
      compensatory damages only. Any award by the arbitrators will be
      accompanied by a written opinion setting forth the findings of fact and
      conclusions of law relied upon in reaching the decision. The award
      rendered by the arbitrators will be final, binding and non-appealable, and
      judgment upon such award may be entered by any court of competent
      jurisdiction. The Parties agree that the existence, conduct and content of
      any arbitration will be kept confidential and no Party will disclose to
      any person any information about such arbitration, except as may be
      required by law or by any governmental authority or for financial
      reporting purposes in each Party's financial statements.

1.6   Fees. Each Party will pay the fees of its own attorneys, expenses of
      witnesses and all other expenses and costs in connection with the
      presentation of such Party's case (collectively, "Attorneys' Fees"). The
      remaining costs of the

<PAGE>

            arbitration, including without limitation, fees of the arbitrators,
            costs of records or transcripts and administrative fees
            (collectively, "Arbitration Costs") will be borne equally by the
            Parties. Notwithstanding the foregoing, the arbitrators may modify
            the allocation of Arbitration Costs and award Attorneys' Fees in
            those cases where fairness dictates a different allocation of
            Arbitration Costs between the Parties and an award of Attorneys'
            Fees to the prevailing Party as determined by the arbitrators.

1.7         Non Arbitratable Disputes. Any Dispute that is not subject to final
            resolution by the Management Committee or to arbitration under this
            Section 1 or by law (collectively, "Non-Arbitration Claims") will be
            brought in a court of competent jurisdiction in the Commonwealth of
            Virginia. Each Party irrevocably consents to the exclusive
            jurisdiction of the courts of the Commonwealth of Virginia and the
            federal courts situated in the Commonwealth of Virginia, over any
            and all Non-Arbitration Claims and any and all actions to enforce
            such claims or to recover damages or other relief in connection with
            such claims.

      2.1   Promotional Materials. Each Party will submit to the other Party,
            for its prior written approval, which will not be unreasonably
            withheld or delayed, any marketing, advertising, or other
            promotional materials (excluding Press Releases, which are governed
            by Section 2.2 below) related to (but not consisting of) the
            Customized Site and/or referencing the other Party and/or its trade
            names, trademarks, and service marks (the "Promotional Materials");
            provided, however, that either Party's use of screen shots of the
            Customized Site for promotional purposes will not require the
            approval of the other Party; and provided further, however, that,
            following the initial public announcement of the business
            relationship between the Parties in accordance with the approval and
            other requirements contained herein, either Party's subsequent
            factual reference to the existence of a business relationship
            between the Parties in Promotional Materials, will not require the
            approval of the other Party. Each Party will solicit and reasonably
            consider the views of the other Party in designing and implementing
            such Promotional Materials. Once approved, the Promotional Materials
            may be used by a Party and its affiliates for the purpose of
            promoting the Customized Site and the content contained therein and
            reused for such purpose until such approval is withdrawn with
            reasonable prior notice. In the event such approval is withdrawn,
            existing inventories of Promotional Materials may be depleted.

      2.2   Press Releases. Each Party shall submit to the other Party, for its
            prior written approval, which shall not be unreasonably withheld or
            delayed, any press release or similar public statement ("Press
            Release") regarding the transactions contemplated hereunder,
            provided that factual references by either party to the existence of
            a business relationship between the Parties shall not require
            approval of the other Party. Notwithstanding the foregoing, either
            Party may issue Press Releases and other disclosures as required by
            law without the consent of the other Party and in such event, the
            disclosing Party shall provide at least five (5) business days prior
            written notice of such disclosure (unless a disclosure is required
            by law to be made in a shorter period of time for causes outside the
            control of the disclosing Party (e.g., other than because of the
            disclosing Party's own delay), in which case the disclosing Party
            shall provide written notice as far in advance of the disclosure as
            is possible). The failure by one Party to obtain the prior written
            approval of the other Party prior to issuing a Press Release (except
            as required by law) shall be deemed a material breach of this
            Agreement (it being understood that a retraction/clarification
            distributed as widely through the same channels within forty eight
            hours of the distribution of the initial unauthorized Press Release,
            may be deemed a sufficient cure for such breach if such
            retraction/clarification reasonably alleviates the harm to the
            injured Party).

      3. License. SmartBargains hereby grants AOL a non-exclusive worldwide
      license to market, distribute, reproduce, display, perform, transmit and
      promote the Licensed Content (or any portion thereof) through such areas
      or features of the AOL Network as AOL deems appropriate and to sublicense
      such rights to AOL's affiliates. SmartBargains acknowledges and agrees
      that the foregoing license permits AOL to distribute portions of the
      Licensed Content in synchronism or timed relation with visual displays
      prepared by SmartBargains or AOL (e.g., as part of an AOL "slideshow"). In
      addition, AOL Users will have the right to access and use the Customized
      Site.

      4. Trademark License. In designing and implementing the AOL Promos, the
      Customized Site and the Promotional Materials, and subject to the other
      provisions contained herein, SmartBargains will be entitled to use the
      trade names, trademarks, and service marks of the AOL Properties; and AOL
      and its affiliates will be entitled to use the trade names, trademarks,
      and service marks of SmartBargains for which SmartBargains holds all
      United States rights necessary for use in connection with this Agreement
      (collectively, together with the AOL marks listed above, the "Marks");
      provided that each Party: (i) does not create a unitary composite mark
      involving a Mark of the other Party without the prior written approval of
      such other Party; (ii) displays symbols and notices clearly and
      sufficiently indicating the trademark status and ownership of the other
      Party's Marks in accordance with applicable trademark law and practice;
      and (iii) complies with all written guidelines provided to it by the other
      Party related to use of the other Party's Marks.

      5. Ownership of Trademarks. Each Party acknowledges the ownership right of
      the other Party in the Marks of the other Party and agrees that all use of
      the other Party's Marks will inure to the benefit, and be on behalf, of
      the other Party. Each Party

<PAGE>

      acknowledges that its utilization of the other Party's Marks will not
      create in it, nor will it represent it has, any right, title, or interest
      in or to such Marks other than the licenses expressly granted herein. Each
      Party agrees not to do anything contesting or impairing the trademark
      rights of the other Party.

      6. Quality Standards. Each Party agrees that the nature and quality of its
      products and services supplied in connection with the other Party's Marks
      will conform to quality standards set by the other Party. Each Party
      agrees to supply the other Party, upon request, with a reasonable number
      of samples of any Materials publicly disseminated by such Party which
      utilize the other Party's Marks. Each Party will comply with all
      applicable laws, regulations, and customs and obtain any required
      government approvals pertaining to use of the other Party's marks.

      7. Infringement Proceedings. Each Party agrees to promptly notify the
      other Party of any unauthorized use of the other Party's Marks of which it
      has actual knowledge. Each Party will have the sole right and discretion
      to bring proceedings alleging infringement of its Marks or unfair
      competition related thereto; provided, however, that each Party agrees to
      provide the other Party with its reasonable cooperation and assistance
      with respect to any such infringement proceedings.

      8. Representations and Warranties. Each Party represents and warrants to
      the other Party that: (i) such Party has the full corporate right, power
      and authority to enter into this Agreement and to perform the acts
      required of it hereunder; (ii) the execution of this Agreement by such
      Party, and the performance by such Party of its obligations and duties
      hereunder, do not and will not violate any agreement to which such Party
      is a party or by which it is otherwise bound; (iii) when executed and
      delivered by such Party, this Agreement will constitute the legal, valid
      and binding obligation of such Party, enforceable against such Party in
      accordance with its terms; and (iv) such Party acknowledges that the other
      Party makes no representations, warranties or agreements related to the
      subject matter hereof that are not expressly provided for in this
      Agreement. SmartBargains hereby represents and warrants that it possesses
      all authorizations, approvals, consents, licenses, permits, certificates
      or other rights and permissions necessary to sell the CS Products.

      9. Confidentiality. Each Party acknowledges that Confidential Information
      may be disclosed to the other Party during the course of this Agreement.
      Each Party agrees that such Confidential Information will only be used by
      it for the purposes permitted under this Agreement and that it will take
      reasonable steps, at least substantially equivalent to the steps it takes
      to protect its own proprietary information, during the term of this
      Agreement, and for a period of three years following expiration or
      termination of this Agreement, to prevent the duplication or disclosure of
      Confidential Information of the other Party, other than by or to its
      employees or agents. Notwithstanding the foregoing, either Party may issue
      a press release or other disclosure containing Confidential Information
      without the consent of the other Party, to the extent such disclosure is
      required by law, rule, regulation or government or court order. In such
      event, the disclosing Party will provide at least five (5) business days
      prior written notice of such proposed disclosure to the other Party,
      unless a disclosure is required by law to be made in a shorter period of
      time for causes outside the control of the disclosing Party (e.g., other
      than because of the disclosing Party's own delay), in which case the
      disclosing Party shall provide written notice as far in advance of the
      disclosure as is possible. Further, in the event such disclosure is
      required of either Party under the laws, rules or regulations of the
      Securities and Exchange Commission or any other applicable governing body,
      such Party will (i) redact mutually agreed-upon portions of this Agreement
      to the fullest extent permitted under applicable laws, rules and
      regulations and (ii) submit a request to the SEC or such governing body
      that such portions of this Agreement receive confidential treatment under
      the laws, rules and regulations of the Securities and Exchange Commission
      or otherwise be held in the strictest confidence to the fullest extent
      permitted under the laws, rules or regulations of any other applicable
      governing body.

      10. Limitation of Liability; Disclaimer; Indemnification.

            10.1 LIABILITY. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE
            TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL
            OR EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
            POSSIBILITY OF SUCH DAMAGES), ARISING FROM BREACH OF THE AGREEMENT,
            THE SALE OF CS PRODUCTS, THE USE OR INABILITY TO USE THE AOL
            NETWORK, ANY AOL PROPERTY(IES), OR THE CUSTOMIZED SITE, OR ARISING
            FROM ANY OTHER PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED
            TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS
            (COLLECTIVELY, "DISCLAIMED DAMAGES"); PROVIDED THAT EACH PARTY WILL
            REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT ANY DISCLAIMED
            DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE SUBJECT TO
            INDEMNIFICATION PURSUANT TO SECTION 10.3. EXCEPT AS PROVIDED IN
            SECTION 10.3, (I) LIABILITY ARISING UNDER THIS AGREEMENT WILL BE
            LIMITED TO DIRECT, OBJECTIVELY MEASURABLE DAMAGES, AND (II) THE
            MAXIMUM LIABILITY OF ONE PARTY TO THE OTHER PARTY FOR ANY CLAIMS
            ARISING IN CONNECTION WITH THIS AGREEMENT WILL NOT EXCEED $[**].

<PAGE>

            10.2 NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS
            AGREEMENT, NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY
            SPECIFICALLY DISCLAIMS ANY, REPRESENTATIONS OR WARRANTIES, EXPRESS
            OR IMPLIED, REGARDING THE AOL NETWORK, THE AOL PROPERTIES OR THE
            CUSTOMIZED SITE, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY
            OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING
            FROM COURSE OF DEALING OR COURSE OF PERFORMANCE. WITHOUT LIMITING
            THE GENERALITY OF THE FOREGOING, AOL AND SMARTBARGAINS EACH
            SPECIFICALLY DISCLAIMS ANY WARRANTY REGARDING THE PROFITABILITY OF
            THE CUSTOMIZED SITE.

            10.3 Indemnity. Either Party will defend, indemnify, save and hold
            harmless the other Party and the officers, directors, agents,
            affiliates, distributors, franchisees and employees of the other
            Party from any and all third party claims, demands, liabilities,
            costs or expenses, including reasonable attorneys' fees
            ("Liabilities"), resulting from the indemnifying Party's material
            breach or alleged material breach of any duty, representation, or
            warranty of this Agreement.

            10.4 Claims. If a Party entitled to indemnification hereunder (the
            "Indemnified Party") becomes aware of any matter it believes is
            indemnifiable hereunder involving any claim, action, suit,
            investigation, arbitration or other proceeding against the
            Indemnified Party by any third party (each an "Action"), the
            Indemnified Party will give the other Party (the "Indemnifying
            Party") prompt written notice of such Action. Such notice will (i)
            provide the basis on which indemnification is being asserted and
            (ii) be accompanied by copies of all relevant pleadings, demands,
            and other papers related to the Action and in the possession of the
            Indemnified Party. The Indemnifying Party will have a period of ten
            (10) days after delivery of such notice to respond. If the
            Indemnifying Party elects to defend the Action or does not respond
            within the requisite ten (10) day period, the Indemnifying Party
            will be obligated to defend the Action, at its own expense, and by
            counsel reasonably satisfactory to the Indemnified Party. The
            Indemnified Party will cooperate, at the expense of the Indemnifying
            Party, with the Indemnifying Party and its counsel in the defense
            and the Indemnified Party will have the right to participate fully,
            at its own expense, in the defense of such Action. If the
            Indemnifying Party responds within the required ten (10) day period
            and elects not to defend such Action, the Indemnified Party will be
            free, without prejudice to any of the Indemnified Party's rights
            hereunder, to compromise or defend (and control the defense of) such
            Action. In such case, the Indemnifying Party will cooperate, at its
            own expense, with the Indemnified Party and its counsel in the
            defense against such Action and the Indemnifying Party will have the
            right to participate fully, at its own expense, in the defense of
            such Action. Any compromise or settlement of an Action will require
            the prior written consent of both Parties hereunder, such consent
            not to be unreasonably withheld or delayed.

      11.   Acknowledgment. AOL and SmartBargains each acknowledges that the
            provisions of this Agreement were negotiated to reflect an informed,
            voluntary allocation between them of all risks (both known and
            unknown) associated with the transactions contemplated hereunder.
            The limitations and disclaimers related to warranties and liability
            contained in this Agreement are intended to limit the circumstances
            and extent of liability. The Parties agree that any principle of
            construction or rule of law that provides that an agreement shall be
            construed against the drafter of the agreement in the event of any
            inconsistency or ambiguity in such agreement shall not apply to the
            terms and conditions of this Agreement. The provisions of this
            Section 11 will be enforceable independent of and severable from any
            other enforceable or unenforceable provision of this Agreement.

      12.   Solicitation of AOL Users. During the term of the Agreement and for
            a [**] period thereafter, SmartBargains will not use the AOL Network
            (including, without limitation, the e-mail network contained
            therein) to solicit AOL Users on behalf of another Interactive
            Service. More generally, SmartBargains will not send unsolicited,
            commercial e-mail (i.e., "spam") or other online communications
            through or into AOL's products or services, absent a Prior Business
            Relationship. For purposes of this Agreement, a "Prior Business
            Relationship" will mean that the AOL User to whom commercial e-mail
            or other online communication is being sent has voluntarily either
            (i) engaged in a transaction with SmartBargains or (ii) provided
            information to SmartBargains through a contest, registration, or
            other communication, which included clear notice to the AOL User
            that the information provided could result in commercial e-mail or
            other online communication being sent to that AOL User by
            SmartBargains or its agents. Any commercial e-mail or other online
            communications to AOL Users which are otherwise permitted hereunder,
            will (a) include a prominent and easy means to "opt-out" of
            receiving any future commercial communications from SmartBargains,
            and (b) shall also be subject to AOL's then-standard restrictions on
            distribution of bulk e-mail (e.g., related to the time and manner in
            which such e-mail can be distributed through or into the AOL product
            or service in question).

      13.   AOL User Communications. To the extent that SmartBargains is
            permitted to communicate with AOL Users under this Agreement
            relating to the Customized Site or CS Products ordered through the
            Customized Site, in any such communications to AOL Users on or off
            the Customized Site (including, without limitation, e-mail
            solicitations), SmartBargains will not encourage AOL Users to take
            any action inconsistent with the scope and purpose of this
            Agreement, including without limitation, the following actions: (i)
            using an Interactive Site other than the Customized Site for the
            purchase of CS Products, (ii) using Content other than the Licensed
            Content; (iii) bookmarking of Interactive Sites; or (iv) changing
            the default home page on the AOL

<PAGE>

            browser. Additionally, with respect to such AOL User communications,
            in the event that SmartBargains encourages an AOL User to purchase
            CS Products through such communications, SmartBargains shall ensure
            that (a) the AOL Network is promoted as the primary means through
            which the AOL User can access the Customized Site and (b) any link
            to the Customized Site will link to a page which indicates to the
            AOL User that such user is in a site which is affiliated with the
            AOL Network.

      14.   Collection and Use of User Information. SmartBargains shall use its
            commercially reasonable efforts to ensure that its collection, use
            and disclosure of information obtained from AOL Users under this
            Agreement ("User Information") complies with (i) all applicable
            United States laws and regulations and (ii) AOL's standard privacy
            policies, available on the AOL Service at the keyword term "Privacy"
            (or, in the case of the Customized Site, SmartBargains's standard
            privacy policies so long as such policies are prominently published
            on the site and provide adequate notice, disclosure and choice to
            users regarding SmartBargains's collection, use and disclosure of
            user information). SmartBargains will not disclose User Information
            collected hereunder to any third party in a manner that identifies
            AOL Users as end users of an AOL product or service or use User
            Information collected under this Agreement to market another
            Interactive Service to AOL Users.

      15.   Excuse. Neither Party will be liable for, or be considered in breach
            of or default under this Agreement on account of, any delay or
            failure to perform as required by this Agreement as a result of any
            causes or conditions which are beyond such Party's reasonable
            control and which such Party is unable to overcome by the exercise
            of reasonable diligence.

      16.   Independent Contractors. The Parties to this Agreement are
            independent contractors. Neither Party is an agent, representative
            or employee of the other Party. Neither Party will have any right,
            power or authority to enter into any agreement for or on behalf of,
            or incur any obligation or liability of, or to otherwise bind, the
            other Party. This Agreement will not be interpreted or construed to
            create an association, agency, joint venture or partnership between
            the Parties or to impose any liability attributable to such a
            relationship upon either Party.

      17.   Notice. Any notice, approval, request, authorization, direction or
            other communication under this Agreement will be given in writing
            and will be deemed to have been delivered and given for all purposes
            (i) on the delivery date if delivered by electronic mail on the AOL
            Network (to screenname "AOLNotice@AOL.com" in the case of AOL) (with
            confirmation in the form of a return receipt if possible) or by
            confirmed facsimile; (ii) on the delivery date if delivered
            personally to the Party to whom the same is directed (with
            confirmation of delivery); (iii) one business day after deposit with
            a commercial overnight carrier, with written verification of
            receipt; or (iv) five business days after the mailing date, whether
            or not actually received, if sent by U.S. mail, return receipt
            requested, postage and charges prepaid, or any other means of rapid
            mail delivery for which a receipt is available. In the case of AOL,
            such notice will be provided to both the Senior Vice President for
            Business Affairs (fax no. 703-265-1206) and the Deputy General
            Counsel (fax no. 703-265-1105), each at the address of AOL set forth
            in the first paragraph of this Agreement. In the case of
            SmartBargains, such notice will be provided to the Chief Executive
            Officer (fax no. 617-422-6212), at the address for SmartBargains set
            forth in the first paragraph of this Agreement.

      18.   [Intentionally Blank]

      19.   No Waiver. The failure of either Party to insist upon or enforce
            strict performance by the other Party of any provision of this
            Agreement or to exercise any right under this Agreement will not be
            construed as a waiver or relinquishment to any extent of such
            Party's right to assert or rely upon any such provision or right in
            that or any other instance; rather, the same will be and remain in
            full force and effect.

      20.   Return of Information. Upon the expiration or termination of this
            Agreement, each Party will, upon the written request of the other
            Party, return or destroy (at the option of the Party receiving the
            request) all confidential information, documents, manuals and other
            materials specified by the other Party.

      21.   Survival. Sections ___________________[TBD] of the body of the
            Agreement, Sections 8 through 31 of this Exhibit, and any payment
            obligations accrued prior to termination or expiration, and any
            other provision which, by its nature or express terms should survive
            termination, will survive the completion, expiration, termination or
            cancellation of this Agreement.

      22.   Entire Agreement. This Agreement sets forth the entire agreement and
            supersedes any and all prior agreements of the Parties with respect
            to the transactions set forth herein. Neither Party will be bound
            by, and each Party specifically objects to, any term, condition or
            other provision which is different from or in addition to the
            provisions of this Agreement (whether or not it would materially
            alter this Agreement) and which is proffered by the other Party in
            any correspondence or other document, unless the Party to be bound
            thereby specifically agrees to such provision in writing.

      23.   Amendment. No change, amendment or modification of any provision of
            this Agreement will be valid unless set forth in a written
            instrument signed by the Party subject to enforcement of such
            amendment, and in the case of AOL, by an executive of at least Vice
            President level.

<PAGE>

      24.   Further Assurances. Each Party will take such action (including, but
            not limited to, the execution, acknowledgment and delivery of
            documents) as may reasonably be requested by any other Party for the
            implementation or continuing performance of this Agreement.

      25.   Assignment. SmartBargains will not assign this Agreement or any
            right, interest or benefit under this Agreement without the prior
            written consent of AOL (which consent may be withheld in AOL's sole
            discretion); provided that, subject to AOL's right to terminate this
            Agreement pursuant to Section 5.4 of the main body of the Agreement,
            any assignment by way of merger or consolidation or a transfer of
            substantially all of SmartBargains's assets, will not require such
            prior written consent. Subject to the foregoing, this Agreement will
            be fully binding upon, inure to the benefit of and be enforceable by
            the Parties hereto and their respective successors and assigns.

      26.   Construction; Severability. In the event that any provision of this
            Agreement conflicts with the law under which this Agreement is to be
            construed or if any such provision is held invalid by a court with
            jurisdiction over the Parties to this Agreement, (i) such provision
            will be deemed to be restated to reflect as nearly as possible the
            original intentions of the Parties in accordance with applicable
            law, and (ii) the remaining terms, provisions, covenants and
            restrictions of this Agreement will remain in full force and effect.

      27.   Remedies. Except where otherwise specified, the rights and remedies
            granted to a Party under this Agreement are cumulative and in
            addition to, and not in lieu of, any other rights or remedies which
            the Party may possess at law or in equity; provided that, in
            connection with any dispute hereunder, SmartBargains will be not
            entitled to offset any amounts that it claims to be due and payable
            from AOL against amounts otherwise payable by SmartBargains to AOL.

      28.   Applicable Law. Except as otherwise expressly provided herein, this
            Agreement will be interpreted, construed and enforced in all
            respects in accordance with the laws of the Commonwealth of Virginia
            except for its conflicts of laws principles.

      29.   Export Controls. Both Parties will adhere to all applicable laws,
            regulations and rules relating to the export of technical data and
            will not export or re-export any technical data, any products
            received from the other Party or the direct product of such
            technical data to any proscribed country listed in such applicable
            laws, regulations and rules unless properly authorized.

      30.   Headings. The captions and headings used in this Agreement are
            inserted for convenience only and will not affect the meaning or
            interpretation of this Agreement.

      31.   Counterparts; Facsimile. This Agreement may be executed in
            counterparts, each of which will be deemed an original and all of
            which together will constitute one and the same document. This
            Agreement, and written amendments hereto, may be executed by
            facsimile.

<PAGE>

                                    EXHIBIT E

                             AOL LAUNCH OBLIGATIONS

<TABLE>
<CAPTION>
Task                    Duration   Expected Start Date       Finish
-------------------     ---------  ------------------        ------
<S>                     <C>        <C>                       <C>
Wireframes Approved                                           [**]
[**]                                                          [**]
[**]                                                          [**]
[**]                                                          [**]
[**]                                                          [**]
[**]                                                          [**]
[**]                                                          [**]
[**]                                                          [**]
[**]                                                          [**]
[**]                                                          [**]
[**]                                                          [**]
[**]                                                          [**]
[**]                     2 Days            [**]               [**]
[**]                     2 Days            [**]               [**]
[**]                     7 Days            [**]
[**]                     1 Day             [**]               [**]
[**]                                                          [**]
[**]                     1 Day             [**]               [**]
[**]                     2 Days            [**]               [**]
[**]                     1 Day             [**]               [**]
[**]                     1 Day             [**]               [**]
[**]                     0 Days            [**]
</TABLE>

<PAGE>

                                    EXHIBIT F

                                 BBB GUIDELINES

                                [TO BE PROVIDED]<PAGE>

                                                                  Execution Copy

               LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2004-B

               $ 42,000,000     1.57625% Asset-Backed Notes,   Class A-1
               $100,000,000     2.65%    Asset-Backed Notes,   Class A-2
               $ 58,000,000     3.46%    Asset-Backed Notes,   Class A-3
               $ 50,000,000     4.05%    Asset-Backed Notes,   Class A-4

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

                                    INDENTURE

                            Dated as of July 1, 2004

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

                     WELLS FARGO BANK, NATIONAL ASSOCIATION
                                Indenture Trustee

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                         <C>                                                                                 <C>
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.................................................................4

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.......................................................8
     SECTION 2.9.           Payment of Principal and Interest; Defaulted Interest.................................8
     SECTION 2.10.          Cancellation..........................................................................9
     SECTION 2.11.          Release of Pledged Property..........................................................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....................................................................17
     SECTION 3.13.          No Borrowing.........................................................................17
     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..........................................................18
     SECTION 3.20.          Further Instruments and Acts.........................................................18
     SECTION 3.21.          Income Tax Characterization..........................................................19

                                       i

<PAGE>

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

     SECTION 4.1.           Satisfaction and Discharge of Indenture..............................................19
     SECTION 4.2.           Application of Trust Money...........................................................20
     SECTION 4.3.           Repayment of Moneys Held by Note Paying Agent........................................20

ARTICLE V Remedies 20

     SECTION 5.1.           Events of Default....................................................................20
     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...........................................................................26
     SECTION 5.7.           Limitation of Suits..................................................................28
     SECTION 5.8.           Unconditional Rights of Noteholders To Receive Principal and Interest................28
     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...............................................................29
     SECTION 5.13.          Waiver of Past Defaults..............................................................30
     SECTION 5.14.          Undertaking for Costs................................................................30
     SECTION 5.15.          Waiver of Stay or Extension Laws.....................................................30
     SECTION 5.16.          Action on Notes......................................................................30
     SECTION 5.17.          Performance and Enforcement of Certain Obligations...................................31
     SECTION 5.18.          Subrogation..........................................................................31
     SECTION 5.19.          Preference Claims; Direction of Proceedings..........................................31

ARTICLE VI The Indenture Trustee.................................................................................32

     SECTION 6.1.           Duties of Indenture Trustee..........................................................32
     SECTION 6.2.           Rights of Indenture Trustee..........................................................35
     SECTION 6.3.           Individual Rights of Indenture Trustee...............................................37
     SECTION 6.4.           Indenture Trustee's Disclaimer.......................................................37
     SECTION 6.5.           Notice of Defaults...................................................................37
     SECTION 6.6.           Reports by Indenture Trustee to Holders..............................................37
     SECTION 6.7.           Compensation and Indemnity...........................................................37
     SECTION 6.8.           Replacement of Indenture Trustee.....................................................38
     SECTION 6.9.           Successor Indenture Trustee by Merger................................................40
     SECTION 6.10.          Appointment of Co-Trustee or Separate Trustee........................................40
     SECTION 6.11.          Eligibility..........................................................................42
     SECTION 6.12.          Preferential Collection of Claims Against Issuer.....................................42
     SECTION 6.13.          Representations and Warranties of the Indenture Trustee..............................42
     SECTION 6.14.          Valid and Binding Indenture..........................................................42
     SECTION 6.15.          Waiver of Setoffs....................................................................43

                                       ii

<PAGE>

     SECTION 6.16.          Control by the Controlling Party.....................................................43

ARTICLE VII Noteholders' Lists and Communications................................................................43

     SECTION 7.1.           Issuer To Furnish To Indenture Trustee Names and Addresses of Noteholders............43
     SECTION 7.2.           Preservation of Information; Communications to Noteholders...........................43
     SECTION 7.3.           Reports by Issuer....................................................................44
     SECTION 7.4.           Reports by Indenture Trustee.........................................................44

ARTICLE VIII Collection of Money;  Releases......................................................................44

     SECTION 8.1.           Collection of Money..................................................................44
     SECTION 8.2.           Release of Pledged Property..........................................................45
     SECTION 8.3.           Opinion of Counsel...................................................................45

ARTICLE IX Supplemental Indentures...............................................................................45

     SECTION 9.1.           Supplemental Indentures Without Consent of Noteholders...............................45
     SECTION 9.2.           Supplemental Indentures with Consent of Noteholders..................................47
     SECTION 9.3.           Execution of Supplemental Indentures.................................................48
     SECTION 9.4.           Effect of Supplemental Indenture.....................................................48
     SECTION 9.5.           Conformity With Trust Indenture Act..................................................48
     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............................................................49
     SECTION 10.3.          Notes Payable on Redemption Date.....................................................50

ARTICLE XI Miscellaneous.........................................................................................50

     SECTION 11.1.          Compliance Certificates and Opinions, etc............................................50
     SECTION 11.2.          Form of Documents Delivered to Indenture Trustee.....................................52
     SECTION 11.3.          Acts of Noteholders..................................................................52
     SECTION 11.4.          Notices, etc., to Indenture Trustee, Issuer and Rating Agencies......................53
     SECTION 11.5.          Notices to Noteholders; Waiver.......................................................54
     SECTION 11.6.          Conflict with Trust Indenture Act....................................................55
     SECTION 11.7.          Effect of Headings and Table of Contents.............................................55
     SECTION 11.8.          Successors and Assigns...............................................................55
     SECTION 11.9.          Separability.........................................................................55
     SECTION 11.10.         Benefits of Indenture................................................................55
     SECTION 11.11.         Legal Holidays.......................................................................55
     SECTION 11.12.         GOVERNING LAW........................................................................56
     SECTION 11.13.         Counterparts.........................................................................56
     SECTION 11.14.         Recording of Indenture...............................................................56
     SECTION 11.15.         Trust Obligation.....................................................................56
     SECTION 11.16.         No Petition..........................................................................57

                                      iii

<PAGE>

     SECTION 11.17.         Inspection...........................................................................57
     SECTION 11.18.         Rights of Note Insurer as Controlling Party..........................................57
     SECTION 11.19.         Effect of Policy Expiration Date.....................................................58
     SECTION 11.20.         Termination of Demand Note and/or Demand Note Guaranty...............................58
</TABLE>

                                       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 2004-B

                  Reconciliation and Tie between the Indenture
                        dated as of July 1, 2004 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)                                   2.11, 8.2
               (d)                                   2.11, 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 July 1, 2004, between LONG BEACH
ACCEPTANCE AUTO RECEIVABLES TRUST 2004-B, a Delaware statutory trust (the
"Issuer"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, 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
1.57625% Asset-Backed Notes, Class A-1, 2.65% Asset-Backed Notes, Class A-2,
3.46% Asset-Backed Notes, Class A-3 and 4.05% 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 July 1, 2004 (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 Initial Cutoff Date or the related Subsequent Cutoff
                  Date, as applicable, 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;

                                       2
<PAGE>

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

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

                                       3
<PAGE>

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

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

                  (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 $42,000,000, (ii) Class A-2 Notes for
original issue in an aggregate principal amount of $100,000,000, (iii) Class A-3
Notes for original issue in an aggregate principal amount of $58,000,000 and
(iv) Class A-4 Notes for original issue in an aggregate principal amount of

                                       4
<PAGE>

$50,000,000. The Notes outstanding at any time may not exceed such amounts
except as provided in Section 2.5.

                  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.

                                       5
<PAGE>

                  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 assets of a Plan or
(b) a Department of Labor prohibited transaction class exemption 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

                                       6
<PAGE>

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 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
the 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

                                       7
<PAGE>

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, 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.

                  SECTION 2.8. Maintenance of Office or Agency. The Indenture
Trustee shall maintain in Minneapolis, Minnesota, 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 at Sixth and Marquette Avenue, MAC
N9311--161, Minneapolis, Minnesota 55479, 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.

                                       8
<PAGE>

                  (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 and 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.

                  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.

                                       9
<PAGE>

                  SECTION 2.11. Release of Pledged Property. The Indenture
Trustee shall, on or after the Termination Date, release and cause the Trust
Collateral Agent to release any remaining portion of the Pledged Property from
the lien created by this Indenture and deposit in the Collection Account any
funds then on deposit in any of the other Accounts. The Indenture Trustee shall
release property from the lien created by this Indenture pursuant to this
Section 2.11 only upon receipt of an Issuer Request and, if required by the TIA,
Independent Certificates in accordance with Section 314(c) and 314(d)(1) of the
TIA.

                                   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, the Trust Agreement 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 the Borough of Manhattan, the City of New York, 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 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.

                  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:

                                       10
<PAGE>

                  (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 it 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 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

                                       11
<PAGE>

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;

                  (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.

                                       12
<PAGE>

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.

                  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, 2005, 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.

                  (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

                                       13
<PAGE>

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 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

                                       14
<PAGE>

           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, 2004), 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;

                  (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

                                       15
<PAGE>

          Insurer Default shall have occurred and be continuing)) to the effect
          that such transaction will not have any material adverse tax
          consequence to the Trust, the Note Insurer, any Noteholder or any
          Certificateholder;

                  (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 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

                                       16
<PAGE>

          Insurer Default shall have occurred and be continuing)) to the effect
          that such transaction will not have any material adverse tax
          consequence to the Trust, the Note Insurer, any Noteholder or any
          Certificateholder;

                  (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 2004-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
2004-B is to be so released.

                  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-

                                       17
<PAGE>

Funding Account, the Capitalized Interest 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 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 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

                                       18
<PAGE>

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

                  (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 and 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,

                                       19
<PAGE>

          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 and 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 and the Indenture
          Trustee; and

                  (C) the Issuer has delivered to the Indenture Trustee 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 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):

                                       20
<PAGE>

                  (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 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

                                       21
<PAGE>

                  (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.

                  (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:

                                       22
<PAGE>

                  (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 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

                                       23
<PAGE>

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;

                  (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

                                       24
<PAGE>

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;

                  (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:

                                       25
<PAGE>

                  (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, 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 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, 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

                                       26
<PAGE>

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 Custodian and the Back-up Servicer,
          respectively, pursuant to priorities (i) and (ii) of Section 5.6(c) of
          the Sale and Servicing Agreement and not previously distributed, in
          the order of such priorities and without preference or priority of any
          kind within such priorities;

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

                  Sixth: to the Trust Collateral Agent, the Back-up Servicer,
          the Indenture Trustee and the Custodian, respectively, amounts due and
          owing and required to be distributed to such entities (including
          amounts due under Section 6.7) pursuant to 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.

                                       27
<PAGE>

                  (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.

                  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

                                       28
<PAGE>

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.

                  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.

                                       29
<PAGE>

                  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 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.

                                       30
<PAGE>

                  SECTION 5.17. Performance and Enforcement of Certain
Obligations. (a) Promptly following a request from the Indenture Trustee upon
the 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.

                  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

                                       31
<PAGE>

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 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

                                       32
<PAGE>

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 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

                                       33
<PAGE>

                  (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 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.

                                       34
<PAGE>

                  (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
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 Wells Fargo Bank, in any of its
capacities hereunder, be deemed to have assumed any duties of the Owner Trustee
under the Delaware Statutory Trust Act, common law, or the Trust Agreement.

                  (n) The 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.

                                       35
<PAGE>

                  (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 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

                                       36
<PAGE>

          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 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-

                                       37
<PAGE>

up Servicer from time to time compensation for their services. The Indenture
Trustee, in its capacities as Indenture Trustee, Trust Collateral Agent and
Back-up Servicer, shall be entitled to receive the Indenture Trustee's Fee and
the Back-up Servicer's Fee 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 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

                                       38
<PAGE>

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, 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

                                       39
<PAGE>

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.

                  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

                                       40
<PAGE>

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 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.

                                       41
<PAGE>

                  (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 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 national
banking association 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

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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.

                                  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.

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<PAGE>

                  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

                  (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, 2004, 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

                                       44
<PAGE>

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.

                  (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

                                       45
<PAGE>

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;

                  (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.

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<PAGE>

                  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 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

                                       47
<PAGE>

                  (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.

                  The Indenture Trustee may determine whether or not any Notes
would be affected by any supplemental indenture and any such determination shall
be conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be liable
for any such determination made in good faith.

                  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 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.

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<PAGE>

                  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 amounts owed to the Note
Insurer under the Insurance Agreement, any amounts owed to the Demand Note
Provider and/or the Demand Note Guarantor, 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

                                       49
<PAGE>

          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.

                                   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

                                       50
<PAGE>

                  (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 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.

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<PAGE>

                  (iv) Notwithstanding Section 2.11 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 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

                                       52
<PAGE>

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.

                  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 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 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 2004-B, in care of
Wilmington Trust Company, Rodney Square North, 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.
                        350 Park Avenue
                        New York, NY 10022
                        Attention:  Transaction Oversight
                        Re: Long Beach Acceptance Auto Receivables Trust 2004-B
                        Telex No.:  (212) 688-3101
                        Confirmation:  (212) 826-0100
                        Telecopy Nos.:  (212) 339-3518 or (212) 339-3529

                                       53
<PAGE>

                             (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: CIGPF I CORP.
                             390 Greenwich Street, 4th Floor
                             New York, New York 10013
                             Attention:  Chief Financial Officer - Principal
                             Finance and Ari Rosenberg
                             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 or mailed certified mail,
return receipt requested 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, at the following address: Standard & Poor's
Ratings Services, 55 Water Street, 40th Floor, New York, New York 10041,
Attention of Asset-Backed Surveillance Department; 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.

                                       54
<PAGE>

                  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.

                  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

                                       55
<PAGE>

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 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

                                       56
<PAGE>

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 Wells Fargo Bank, not in its
individual capacity but solely as Indenture Trustee and in no event shall Wells
Fargo Bank have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements 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

                                       57
<PAGE>

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 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 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 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 hereof.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]

                                       58
<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 2004-B,

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

                            By:
                               ------------------------------------------
                            Name:
                            Title:

                            WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its
                            individual capacity but solely as Indenture Trustee

                            By:
                               ------------------------------------------
                            Name:
                            Title:

<PAGE>

                                                                         ANNEX A

                                  DEFINED TERMS

<PAGE>

                                                                     EXHIBIT A-1

REGISTERED                                                 $42,000,000
No. RA--1--1
                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                           CUSIP NO. 542391 BP 1

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) A
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 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 2004-B
                      1.57625% ASSET-BACKED NOTE, CLASS A-1

                  Long Beach Acceptance Auto Receivables Trust 2004-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 FORTY-TWO 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-1
Note

<PAGE>

shall be due and payable on the July 2005 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 July 16, 2004 (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 (or, with respect to the first
Payment Date, 31 days). 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:  July 16, 2004

                             LONG BEACH ACCEPTANCE AUTO
                             RECEIVABLES TRUST 2004-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:  July 16, 2004           WELLS FARGO BANK, NATIONAL
                               ASSOCIATION, 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 1.57625% Asset-Backed Notes, Class A-1 (herein called
the "Class A-1 Notes"), issued under an Indenture dated as of July 1, 2004 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Wells Fargo Bank, National Association, 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 2.65% Asset-Backed Notes, Class A-2 (the "Class A-2 Notes"), the
3.46% Asset-Backed Notes, Class A-3 (the "Class A-3 Notes") and the 4.05%
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 August 16, 2004. 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 the Borough of Manhattan, The
City of New York, 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                                                 $100,000,000
No. RA--2--1

                       SEE REVERSE FOR CERTAIN DEFINITIONS
                                                         CUSIP NO. 542391 BQ 9

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) A
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 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 2004-B
                       2.65% ASSET-BACKED NOTE, CLASS A-2

                  Long Beach Acceptance Auto Receivables Trust 2004-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 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

<PAGE>

shall be due and payable on the February 2008 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 July 16, 2004 (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, 29 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:  July 16, 2004

                               LONG BEACH ACCEPTANCE AUTO
                               RECEIVABLES TRUST 2004-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:  July 16, 2004           WELLS FARGO BANK, NATIONAL
                               ASSOCIATION, 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 2.65% Asset-Backed Notes, Class A-2 (herein called the
"Class A-2 Notes"), issued under an Indenture dated as of July 1, 2004 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Wells Fargo Bank, National Association, 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 1.57625% Asset-Backed Notes, Class A-1 (the "Class A-1 Notes"),
the 3.46% Asset-Backed Notes, Class A-3 (the "Class A-3 Notes") and the 4.05%
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 August 16, 2004. 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 the Borough of Manhattan, The
City of New York, 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                                                           $58,000,000
No. RA--3--1
                    SEE REVERSE FOR CERTAIN DEFINITIONS
                                                       CUSIP NO. 542391 BR 7

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) A
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 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 2004-B
                       3.46% ASSET-BACKED NOTE, CLASS A-3

                  Long Beach Acceptance Auto Receivables Trust 2004-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 FIFTY EIGHT 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-3
Note

<PAGE>

shall be due and payable on the June 2009 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 July 16, 2004 (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, 29 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 and 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 remaining the 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:  July 16, 2004

                                    LONG BEACH ACCEPTANCE AUTO
                                    RECEIVABLES TRUST 2004-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:  July 16, 2004              WELLS FARGO BANK, NATIONAL ASSOCIATION,
                                  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 3.46% Asset-Backed Notes, Class A-3 (herein called the
"Class A-3 Notes"), issued under an Indenture dated as of July 1, 2004 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Wells Fargo Bank, National Association, 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 1.57625% Asset-Backed Notes, Class A-1 (the "Class A-1 Notes"),
2.65% Asset-Backed Notes, Class A-2 (the "Class A-2 Notes") and the 4.05%
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 August 16, 2004. 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 the Borough of Manhattan, The
City of New York, 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                                                    $50,000,000
No. RA--4--1
                       SEE REVERSE FOR CERTAIN DEFINITIONS
                                                          CUSIP NO. 542391 BS 5

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) A
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 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 2004-B
                       4.05% ASSET-BACKED NOTE, CLASS A-4

                  Long Beach Acceptance Auto Receivables Trust 2004-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 FIFTY 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-4 Note shall be
due

<PAGE>

and payable on the April 2011 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 July 16, 2004 (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, 29 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, Class A-2 and 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:  July 16, 2004

                                    LONG BEACH ACCEPTANCE AUTO RECEIVABLES
                                    TRUST 2004-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:  July 16, 2004            WELLS FARGO BANK, NATIONAL ASSOCIATION, 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 4.05% Asset-Backed Notes, Class A-4 (herein called the
"Class A-4 Notes"), issued under an Indenture dated as of July 1, 2004 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Wells Fargo Bank, National Association, 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 1.57625% Asset-Backed Notes, Class A-1 (the "Class A-1 Notes"),
2.65% Asset-Backed Notes, Class A-2 (the "Class A-2 Notes"), and the 3.46%
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 August 16, 2004. 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 the Borough of Manhattan, The
City of New York, 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

<PAGE>

                                                                       EXHIBIT C

                    [FORM OF CERTIFICATE AS TO ERISA MATTERS]

                                     [date]

Long Beach Acceptance Auto Receivables Trust 2004-B
c/o Wilmington Trust Company, as Owner Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware  19890-0001
Attention:  Corporate Trust Administration

WELLS FARGO BANK, NATIONAL ASSOCIATION
Sixth and Marquette Avenue, MAC N9311--161
Minneapolis, Minnesota 55479
Attention:    [____________]
              Long Beach Acceptance Auto
              Receivables Trust 2004-B

         Re:  Long Beach Acceptance Auto Receivables Trust 2004-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
"Plan") or (ii) a Department of Labor prohibited transaction class exemption
applies to the Transferee's acquisition and continued holding of the 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 July 1, 2004 (the "Indenture"), between Long Beach
Acceptance Auto Receivables Trust 2004-B (the "Issuer") and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as indenture trustee (the "Indenture Trustee"), no
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

<PAGE>

any person unless the Indenture Trustee has received a certificate from such
transferee to the effect that such transferee (A) is not a Plan and is not
acting on behalf of or investing the assets of any such Plan or (B) a Department
of Labor prohibited transaction class exemption applies to the 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:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]