Document:

Exhibit 10-49

Subordination Agreement
(All Indebtedness and Liens)
--------------------------------------------------------------------------------

Spectrum Organic Products, Inc.__________("Borrower") is indebted to the
undersigned ("Creditor") in the principal sum of Two Hundred Sixty Five Thousand
and no/100 Dollars $265,000.00 evidenced by [ ] an open account [X] a promissory
note [ ]other (describe) ___________________________ which indebtedness is [X]
unsecured [ ]secured by _________________________________________ and Creditor
is or may become financially interested in Borrower and desires to aid Borrower
in obtaining or having continued financial accommodations, whether by way of
loan, commitment to loan, discounting of instruments, extensions of credit or
the obtaining of any other financial aid from Comerica Bank-California
("Bank").

In order to induce the Bank to extend or to continue to extend financial
accommodations to Borrower from time to time, whether by way of a loan,
commitment to loan, discounting of instruments, extension of credit or
otherwi.se and in consideration of any of these financial accommodations,
Creditor agrees as follows:

1.   Any and all obligations and liabilities of Borrower to Creditor, including,
     without limit, principal and interest payments, whether direct or indirect,
     absolute or contingent, joint or several, secured or unsecured, due or to
     become due, now existing or later arising and whatever the amount and
     however evidenced (the "Subordinated Indebtedness"), are subordinated in
     right of payment to any and all obligations and liabilities of Borrower to
     the Bank, including, without limit, principal and interest payments,
     whether direct or indirect, absolute or contingent, joint or several,
     secured or unsecured, due or to become due, now existing or later arising
     and however evidenced, together with all other sums due thereon and all
     costs of collecting the same (including, without limit, reasonable attorney
     fees) for which Borrower is liable (the "Senior Indebtedness").

2.   Creditor will not ask for, demand, sue for, take or receive (by way of
     voluntary payment, acceleration, set-off or counterclaim, foreclosure or
     other realization on security, dividends in bankruptcy or otherwise), or
     offer to make any discharge or release of, any of the Subordinated
     Indebtedness, and Creditor waives any such rights with respect to the
     Subordinated Indebtedness nor shall Creditor exercise any rights of
     subrogation or other similar rights with respect to the Senior
     Indebtedness.

3.   Creditor will not exercise any of Creditor's rights in any collateral now
     or later securing the Subordinated Indebtedness. All rights of Creditor in
     any collateral now or later securing the Subordinated Indebtedness are
     subordinated to all rights of the Bank now or later existing in any of the
     same collateral securing the Senior Indebtedness.

4.   Creditor authorizes and empowers the Bank to demand, enforce payment by
     legal proceedings, receive and give acquittances for the Subordinated
     Indebtedness and to exercise all rights of Creditor in any security (other
     than a deed of trust, mortgage or security interest covering real property
     or a principal dwelling) now or later held for the Subordinated
     Indebtedness. As collateral for the Senior Indebtedness, Creditor hereby
     pledges, assigns and grants to Bank a security interest in the Subordinated
     Indebtedness, any collateral or other security (other than a deed of trust,
     mortgage or security interest covering real property or a principal
     dwelling) for the Subordinated Indebtedness, and all claims or demands of
     Creditor in connection therewith, with full right on the part of the Bank
     in its own name or in the name of Creditor, to collect and enforce these
     claims or demands, by suit, proof of debt in bankruptcy, or in any other
     proceeding involving dissolution, insolvency, liquidation or an adjustment
     of the indebtedness of Borrower. The Bank has no obligation to the Creditor
     to take any steps with regard to these claims or demands, the Subordinated
     Indebtedness, or any collateral or other security for the Subordinated
     Indebtedness.

5.   Should any payment, distribution or security or proceeds from these be
     received by Creditor upon or with respect to the Subordinated Indebtedness
     prior to the satisfaction in full of the Senior Indebtedness, Creditor
     shall immediately deliver same to the Bank in the form received (except for
     endorsement or assignment by Creditor where required by the Bank), for
     application on the Senior Indebtedness (whether or not then due and in such
     order of maturity as Bank elects) and, until so delivered, the same shall
     be held in trust by Creditor as the property of the Bank.

<PAGE>

6.   Creditor represents and warrants that it has not made or permitted to be
     made and shall not make or permit any assignment, transfer, pledge, or
     disposition for collateral purposes or otherwise, of all or any part of the
     Subordinated Indebtedness or any collateral or other security for the
     Subordinated Indebtedness so long as this Agreement remains in effect.
     Creditor shall, on the date of this Agreement or promptly upon receipt it
     not yet delivered to Creditor, deliver to the Bank, endorsed if required by
     the Bank, all notes and other instruments evidencing any Subordinated
     Indebtedness. Creditor agrees to execute all financing statements deemed
     necessary by the Bank to perfect the Bank's rights and interests under this
     Agreement, The Bank is to have all the rights and remedies of a secured
     creditor under the California______ Uniform Commercial Code,
     as, amended from time to time, with respect to such interests, Creditor
     further makes, constitutes and appoints Bank its true and lawful
     attorney-in-fact with full power of substitution to take any action in
     furtherance of this Agreement, including, but not limited to, the signing
     of financing statements, endorsing of instruments, and the execution and
     delivery .of all documents and agreements necessary to obtain or accomplish
     any protection for or collection or disposition of any part of any
     collateral. Such appointment shall be deemed irrevocable and coupled with
     an interest.

7.   This Agreement constitutes a continuing agreement of subordination, even
     though at times Borrower is not indebted to the Bank, The Bank may
     continue, in reliance on this Agreement, without notice to Creditor, to
     lend monies, extend credit, modify, renew or make other financial
     accommodations, to or for the account of Borrower until the fifth (5th) day
     ("effective date") following written acknowledgment by an officer of the
     Bank that the Bank received written notice of revocation of this Agreement
     from Creditor. Any such notice of revocation shall not be effective as to
     any Senior Indebtedness existing at the effective date of revocation or any
     Senior Indebtedness created after that pursuant to any commitment or
     agreement of the Bank or pursuant to any Borrower loan (whether advances or
     readvances by the Bank after the effective date of revocation are optional
     or obligatory) existing at the effective date of revocation or any
     modifications or renewals of any Senior Indebtedness, whether in whole or
     in part. Possession by the Bank of any note or other evidence of
     indebtedness made, endorsed or guaranteed by Borrower shall be conclusive
     evidence (but not the only means of establishing) that Borrower is indebted
     to the Bank.

8.   Creditor shall indemnify the Bank against all claims, damages, costs, and
     expenses, including, without limit, reasonable attorneys' fees, incurred by
     the Bank in connection with any suit, claim or action against the Bank
     arising out of any modification or termination of a Borrower loan or any
     refusal by the Bank to extend additional credit relating to the revocation
     Of this Agreement.

9.   Creditor delivers this Agreement based solely on Creditors independent
     investigation of (or decision not to investigate) the financial condition
     of Borrower and is not relying on any information furnished by the Bank.
     Creditor assumes full responsibility for obtaining any further information
     concerning the Borrower's financial condition, the status of the Senior
     Indebtedness or any other matter which Creditor may deem necessary or
     appropriate now or later. Creditor waives any duty on the part of the Bank,
     and agrees that Creditor is not relying upon nor expecting the Bank to
     disclose to Creditor any fact now or later known by the Bank, whether
     relating to the operations or condition of Borrower, the existence,
     liabilities or financial condition of any guarantor of the Senior
     Indebtedness, the occurrence of any default with respect to the Senior
     Indebtedness, or otherwise, notwithstanding any effect such fact may have
     upon Creditor's risk or Creditor's rights against Borrower. Creditor
     knowingly accepts the full range of risk encompassed in this Agreement,
     which risk includes, without limit, the possibility that Borrower may incur
     Senior Indebtedness to the Bank after the financial condition of Borrower,
     or its ability to pay Borrower's debts as they mature, has deteriorated.
     Creditor acknowledges and agrees that the Banks rights under this Agreement
     are not conditioned upon pursuit by the Bank of any remedy the Bank may
     have against Borrower or any other person or any other security. The
     absence of Borrower's signature at the end of this Agreement shall in no
     way impair or affect the validity of this Agreement.

10.  The Bank, in its sole discretion, without notice to Creditor, may release,
     exchange, enforce and otherwise deal with any security now or later held by
     the Bank for payment of the Senior Indebtedness or release any party now or
     later liable for payment of the Senior Indebtedness without affecting in
     any manner the Bank's rights under this Agreement. Creditor acknowledges
     and agrees that the Bank has no obligation to acquire or perfect any lien
     on or security interest in any asset(s), whether realty or personalty, to
     secure payment of the Senior Indebtedness, and Creditor is not relying upon
     assets in which the Bank has or may have a lien or security interest for
     payment of the Senior Indebtedness.

<PAGE>

11.  Notwithstanding any prior revocation, termination, surrender, or discharge
     of this Agreement in whole or in part, the effectiveness of this Agreement
     shall automatically continue or be reinstated in the event that any
     payment received or credit given by the Bank in respect of the Senior
     Indebtedness is returned, disgorged, or rescinded, under any applicable
     state or federal law, including, without limitation, laws pertaining to
     bankruptcy or insolvency, in which case this Agreement, shall be
     enforceable against the Creditor as if the returned, disgorged, or
     rescinded payment or credit had not been received or given by the Bank, and
     whether or not the Bank relied upon this payment or credit or changed its
     position as a consequence of it. In the event of continuation or
     reinstatement of this Agreement, the Creditor agrees upon demand by the
     Bank to execute and deliver to the Bank those documents which the Bank
     determines are appropriate to further evidence (in the public records or
     otherwise) this continuation or reinstatement, although the failure of the
     Creditor to do so shall not affect in any way the reinstatement or
     continuation.

12.  Creditor waives any right to require the Bank to: (a) proceed against any
     person or property; (b) give notice of the terms, time and place of any
     public or private sale of personal property security held from Borrower or
     any other person, or otherwise comply with the provisions of Section 9-504
     of the California or other applicable Uniform Commercial Code; or (c)
     pursue any other remedy in the Banks power. Creditor waives notice of
     acceptance of this Agreement and presentment demand, protest, notice of
     protest, dishonor, notice of dishonor, notice of default, notice of intent
     to accelerate or demand payment of any Senior Indebtedness, any and all
     other notices to which the undersigned might otherwise be entitled, and
     diligence in collecting any Senior Indebtedness, and agrees that the Bank
     may, once or any number of times, modify the terms of any Senior
     Indebtedness, compromise, extend, increase, accelerate, renew or forbear to
     enforce payment of any or all Senior Indebtedness, or permit the Borrower
     to incur additional Senior Indebtedness, all without notice to Creditor and
     without affecting in any manner the unconditional obligations of Creditor
     under this Agreement.

13.  Creditor acknowledges that the Bank has the right to sell, assign,
     transfer, negotiate or grant participations or any interest in, any or all
     of the Senior Indebtedness and any related obligations including without
     limit this Agreement. In connection with the above, but without limiting
     its ability to make other disclosures to the full extent allowable, the
     Bank may disclose all documents and information which the Bank now or later
     has or acquires relating to Creditor and this Agreement, however obtained.
     Creditor further agrees that the Bank may disclose such documents and
     information to the Borrower. Creditor further agrees that the Bank may
     provide information relating to this Agreement or relating to the Creditor
     to the Bank's parent, affiliates. subsidiaries and service providers.

14.  No waiver or modification of any of its rights under this Agreement shall
     be effective unless the waiver or modification shall be in writing and
     signed by an authorized officer on behalf of the Bank. Each waiver or
     modification shall be a waiver or modification only with respect to the
     specific matter to which the waiver or modification relates and shall in no
     way impair the rights of the Bank or the obligations of Creditor to the
     Bank in any other respect.

15.  This Agreement shall bind and be for the benefit of Creditor and the Bank
     and their respective successors and assigns, and shall be construed
     according to the laws of the State of California without regard to conflict
     of laws principles. If this Agreement is executed by two or more persons,
     it shall bind each of them individually as well as jointly.

16.  The term "Borrower", as used in this Agreement, includes any person,
     corporation, partnership or other entity which succeeds to the interests or
     business of Borrower named above, and the terms "Senior Indebtedness" and
     "Subordinated Indebtedness" include indebtedness of any successor Borrower
     to the Bank and Creditor.

17.  Creditor agrees to reimburse the Bank upon demand for any and all costs and
     expense, (including, without limit, court costs, legal fees, and
     reasonable attorney fees whether inside or outside counsel is used, whether
     or not suit is instituted and, if instituted, whether at the trial or
     appellate level, in a bankruptcy, probate or administrative proceeding. or
     otherwise) incurred in enforcing any of the duties and obligations of
     Creditor under this Agreement.

<PAGE>

18.  Creditor waives any defense against the enforceability of this Agreement
     based upon or arising by reason of the application by Borrower of the
     proceeds of any Indebtedness for purposes other than the purposes
     represented by Borrower to the Bank or intended or understood by the Bank
     or Creditor. Creditor waives all rights to require the Bank to marshall the
     Collateral or any other property the Bank may at any time have as security
     for the Indebtedness and waives all right to require the Bank to first
     proceed against any guarantor or other person before proceeding against the
     Collateral.

19.  The relative priorities of the Bank and Creditor in the Collateral as set
     forth in this Agreement control irrespective of the time, method or order
     of attachment or perfection of the liens and security interests acquired by
     the parties in the Collateral and irrespective of the priorities as would
     otherwise be determined by reference to the Uniform Commercial Code or
     other applicable laws. Creditor shall not contest the validity, priority or
     perfection of the Bank's security interest in the Collateral (regardless of
     whether the Bank's security interest in the Collateral is valid or
     perfected). The priorities of any liens or security interests of the
     parties in any property of the Borrower other than the Collateral are not
     affected by this Agreement and shall be determined by reference to
     applicable law, The Bank's rights under this Agreement arc in addition to,
     and not in substitution of its rights under any other subordination
     agreement with Creditor.

20.  Special Provisions: [None if left blank.]

     Anything contained in this Agreement to the contrary notwithstanding, so
     long as Bank has received all payments required under the Senior
     Indebtedness and so long as no event of default has occurred or is
     continuing thereunder, then Borrower may pay to Creditor, and Creditor may
     accept and retain from Borrower, as and when each becomes due and payable,
     regularly scheduled payments of principal and interest on the Subordinated
     Indebtedness according to and in the respective amounts set forth in any
     documents, instruments or agreements entered into evidencing the
     Subordinated Indebtedness, provided, that such payments to Creditor shall
     not cause or result in any default or violation by Borrower of any
     affirmative or negative covenant, term, condition, or other provision of
     the Senior Indebtedness. In no event, however, shall Creditor at any time
     accept or retain any such payment more than 30 days prior to the due date
     therefor, nor otherwise accept or retain any payment on or against the
     Subordinated Indebtedness except as expressly provided in the documents,
     instruments or agreements entered into evidencing the Subordinated
     Indebtedness.

THE UNDERSIGNED AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS AGREEMENT.

IN WITNESS WHEREOF, Creditor has caused this Agreement to be executed as
of June 12, 2003.

/s/  Steven Reedy
--------------------------------
(CREDITOR)                                  CREDITOR'S ADDRESS

By:  /s/  Steven Reedy                      3103 Hillside Drive
   -----------------------------            -----------------------------------
SIGNATURE OF Steven Reedy                   STREET ADDRESS

ITS:                                        Burlingame, California 94010
    ----------------------------            -----------------------------------
    TITLE (if applicable)                   CITY             STATE       ZIP

By:
    ----------------------------
    SIGNATURE OF

ITS:
    ----------------------------
    TITLE (if applicable)

<PAGE>

                           BORROWER'S ACKNOWLEDGEMENT

Spectrum Organic Products, Inc. ______("Borrower"), accepts notice of
subordination created by this Agreement and agrees that it will take no action
inconsistent with this Agreement and that, except with the prior written
approval of Bank, no payment or distribution shall be made by Borrower on or
with respect to the Subordinated Indebtedness, so long as this Agreement remains
in effect. Borrower agrees that the Bank may, at its option, without notice and
without limiting Banks other rights, upon any breach by Creditor of, or
purported termination by the Creditor of, this Agreement, declare all Senior
Indebtedness to be immediately due and payable and/or terminate any commitments
of Bank to Borrower.

Spectrum Organic Products, Inc.

By:  /s/  Robert B. Fowles                  Its:     CFO
   -------------------------------          -----------------------------------

By:  /s/                                    Its:
   -------------------------------          -----------------------------------

By:  /s/                                    Its:
   -------------------------------          -----------------------------------

By:  /s/                                    Its:
   -------------------------------          -----------------------------------

BORROWER'S ADDRESS

5341 Old Redwood Highway         Petaluma        CA       USA         94954
--------------------------------------------------------------------------------
STREET ADDRESS                   CITY            STATE    COUNTRY     ZIP CODE

                                         DATED:   June 12, 2003
                                         ---------------------------------------<PAGE>

                                                                     EXHIBIT 4.1

<PAGE>

                                                             [Execution Version]

               LONG BEACH ACCEPTANCE AUTO RECEIVABLES TRUST 2003-C

                $170,000,000 1.70% Asset-Backed Notes, Class A-1
                $ 80,000,000 3.29% Asset-Backed Notes, Class A-2

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

                                    INDENTURE

                           Dated as of October 1, 2003

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

                               JPMorgan Chase Bank
                                Indenture Trustee

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

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

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

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

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

     SECTION 2.1.    Form......................................................4
     SECTION 2.2.    Execution, Authentication and Delivery....................4
     SECTION 2.3.    Temporary Notes...........................................5
     SECTION 2.4.    Registration; Registration of Transfer and Exchange.......5
     SECTION 2.5.    Mutilated, Destroyed, Lost or Stolen Notes................7
     SECTION 2.6.    Persons Deemed Owners.....................................8
     SECTION 2.7.    Access to List of Noteholders' Names and Addresses........8
     SECTION 2.8.    Maintenance of Office or Agency...........................8
     SECTION 2.9.    Payment of Principal and Interest; Defaulted Interest.....8
     SECTION 2.10.   Cancellation..............................................9
     SECTION 2.11.   Release of Pledged Property...............................9

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..........................12
     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...................................17
     SECTION 3.15.   Guarantees, Loans, Advances and Other Liabilities........17
     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..............................18

                                        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.............................21
     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......................................27
     SECTION 5.8.    Unconditional Rights of Noteholders To Receive
                         Principal and Interest...............................28
     SECTION 5.9.    Restoration of Rights and Remedies.......................28
     SECTION 5.10.   Rights and Remedies Cumulative...........................28
     SECTION 5.11.   Delay or Omission Not a Waiver...........................29
     SECTION 5.12.   Control by Noteholders...................................29
     SECTION 5.13.   Waiver of Past Defaults..................................29
     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.......30
     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...................36
     SECTION 6.4.    Indenture Trustee's Disclaimer...........................36
     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..............................................41
     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........................................42

                                       ii
<PAGE>

     SECTION 6.16.   Control by the Controlling Party.........................42

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........................................43
     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..............................44
     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......46
     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............48

ARTICLE X Redemption of Notes.................................................48

     SECTION 10.1.   Redemption...............................................48
     SECTION 10.2.   Form of Redemption Notice................................49
     SECTION 10.3.   Notes Payable on Redemption Date.........................49

ARTICLE XI Miscellaneous......................................................49

     SECTION 11.1.   Compliance Certificates and Opinions, etc................49
     SECTION 11.2.   Form of Documents Delivered to Indenture Trustee.........51
     SECTION 11.3.   Acts of Noteholders......................................52
     SECTION 11.4.   Notices, etc., to Indenture Trustee, Issuer and
                         Rating Agencies......................................52
     SECTION 11.5.   Notices to Noteholders; Waiver...........................53
     SECTION 11.6.   Conflict with Trust Indenture Act........................54
     SECTION 11.7.   Effect of Headings and Table of Contents.................54
     SECTION 11.8.   Successors and Assigns...................................54
     SECTION 11.9.   Separability.............................................54
     SECTION 11.10.  Benefits of Indenture....................................54
     SECTION 11.11.  Legal Holidays...........................................55
     SECTION 11.12.  GOVERNING LAW............................................55
     SECTION 11.13.  Counterparts.............................................55
     SECTION 11.14.  Recording of Indenture...................................55
     SECTION 11.15.  Trust Obligation.........................................55
     SECTION 11.16.  No Petition..............................................56

                                      iii
<PAGE>

     SECTION 11.17.  Inspection...............................................56
     SECTION 11.18.  Rights of Note Insurer as Controlling Party..............57
     SECTION 11.19.  Effect of Policy Expiration Date.........................57
     SECTION 11.20.  Termination of Demand Note and/or Demand Note
                         Guaranty.............................................57

                                       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  B      Form of Depository Agreement
Exhibit  C      Form of Certificate as to ERISA Matters

                                       v
<PAGE>

               Long Beach Acceptance Auto Receivables Trust 2003-C

                  Reconciliation and Tie between the Indenture
                       dated as of October 1, 2003 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 October 1, 2003, between LONG BEACH
ACCEPTANCE AUTO RECEIVABLES TRUST 2003-C, a Delaware statutory trust (the
"Issuer"), and JPMORGAN CHASE BANK, a New York banking corporation, as indenture
trustee (the "Indenture Trustee").

                  Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuer's 1.70%
Asset-Backed Notes, Class A-1 and 3.29% Asset-Backed Notes, Class A-2
(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 October 1, 2003 (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, the Issuer has agreed to assign the Pledged
Property (as defined below) as collateral to the Indenture Trustee for the
benefit of the Noteholders 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 Receivables listed in Schedule A hereto, all monies
                  received on the Receivables after the Cutoff Date and, with
                  respect to the Receivables which are Precomputed Receivables,
                  the related Payahead Amount, and all Liquidation Proceeds and
                  Recoveries received with respect to such Receivables;

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

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

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

         (v)      the Purchase Agreement and the Sale and Servicing Agreement,
                  including, without limitation, 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 the failure
                  of LBAC to timely comply with its obligations pursuant to
                  Section 5.05 of the Purchase Agreement;

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

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

         (viii)   all amounts and property from time to time held in or credited
                  to the Collection Account 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;

                                       2
<PAGE>

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

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

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

                                   ARTICLE I

                                   Definitions

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

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

                  "Commission" means the Securities and Exchange Commission.

                  "indenture securities" means the Notes.

                  "indenture security holder" means a Noteholder.

                  "indenture to be qualified" means this Indenture.

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

                  "obligor" on the indenture securities means the Issuer.

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

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

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

                  (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;

                                       3
<PAGE>

                  (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 and the Class A-2 Notes
shall be in substantially the forms set forth in Exhibits A-1 and A-2,
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 and A-2 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 $170,000,000 and (ii) Class A-2 Notes
for original issue in an aggregate principal amount of $80,000,000. 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.

                                       4
<PAGE>

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

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

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

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

                  No transfer of a Note shall be made to any Person unless the
Indenture Trustee has received a certificate (substantially in the form of
Exhibit C hereto) from such transferee to the effect that such transferee (a) is
not a Plan, and is not acting on behalf of or investing the assets of a Plan or
(b) is entitled to exemptive relief pursuant to a Department of Labor prohibited
transaction class exemption with respect to its acquisition and continued
holding of such Class A 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.

                                       5
<PAGE>

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

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

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

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

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

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

                                       6
<PAGE>

                  (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 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.

                                       7
<PAGE>

                  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 the Borough of Manhattan, the City of New York, 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 4 New York
Plaza, 6th Floor, New York, New York 10004, as its office for such purposes. The
Indenture Trustee shall give prompt written notice to the Issuer and to
Noteholders of any change in the location of the Note Register or any such
office or agency.

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

                  (a) The Notes shall accrue interest as provided in the forms
of the Notes set forth in Exhibits A-1 and A-2, 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.

                                       8
<PAGE>

                  (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 and the Class A-2 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.

                  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.

                                       9
<PAGE>

                                   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 and (b) for the benefit of the Class A-2
Notes, to the Class A-2 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:

                  (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;

                                       10
<PAGE>

                  (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 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, but not limited to, 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).

                                       11
<PAGE>

                  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.

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.

                                       12
<PAGE>

                  (b) Within 120 days after the beginning of each calendar year,
beginning with the calendar year beginning January 1, 2004, 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 agreements included in the Pledged Property, including,
but not limited to, 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).

                                       13
<PAGE>

                  (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 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

                                       14
<PAGE>

                  (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, 2003), 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 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

                                       15
<PAGE>

                  (vii) so long as no Note Insurer Default shall have occurred
         and be continuing, the Issuer shall have given the Note Insurer 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, the Notes;

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

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

                  (iv) the Issuer shall have received an Opinion of Counsel (and
         shall have delivered copies thereof to the Indenture Trustee and the
         Note Insurer (so long as no Note Insurer Default shall have occurred
         and be continuing)) to the effect that such transaction will not 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

                                       16
<PAGE>

                  (vii) so long as no Note Insurer Default shall have occurred
         and be continuing, the Issuer shall have given the Note Insurer 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 2003-C 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
2003-C 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 Closing Date, 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 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.

                                       17
<PAGE>

                  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 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 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.

                                       18
<PAGE>

                                   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 and the Class A-2 Final Scheduled
                  Payment Date, as applicable, within one year, or

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

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

                                       19
<PAGE>

                           (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):

                  (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 or the Class A-2 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

                                       20
<PAGE>

                  (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

                  (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.

                                       21
<PAGE>

                  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:

                  (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.

                                       22
<PAGE>

                  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 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:

                                       23
<PAGE>

                  (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 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.

                                       24
<PAGE>

                  (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:

                           (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.

                                       25
<PAGE>

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

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

                                       26
<PAGE>

                  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,
         without limitation 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.

                  (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;

                                       27
<PAGE>

                  (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 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.

                                       28
<PAGE>

                  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.

                  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.

                                       29
<PAGE>

                  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.

                  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.

                                       30
<PAGE>

                  SECTION 5.18. Subrogation.

                  The Note Insurer shall, to the extent it makes any payment
with respect to the Class A Notes, become subrogated to the rights of the
recipients of such payments to the extent of such payments. Subject to and
conditioned upon any payment with respect to the Class A Notes by or on behalf
of the Note Insurer, each Class A Noteholder shall be deemed, without further
action, to have directed the Indenture Trustee to assign to the Note Insurer all
rights to the payment of interest or principal with respect to the Class A Notes
which are then due for payment to the extent of all payments made by the Note
Insurer and the Note Insurer may exercise any option, vote, right, power or the
like with respect to the Class A Notes to the extent that it has made payment
with respect to the Class A Notes whether pursuant to the Policy or otherwise.
Notwithstanding the foregoing, the order of priority of payments to be made
pursuant to Section 5.6(c) of the Sale and Servicing Agreement shall not be
modified by this clause. To evidence such subrogation, the Note Registrar shall
note the Note Insurer's rights as subrogee upon the register of Class A
Noteholders upon receipt from the Note Insurer of proof of payment by the Note
Insurer of any Scheduled Payment or other payment.

                  SECTION 5.19. Preference Claims; Direction of Proceedings.

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

                  (b) Each Notice of Claim shall provide that the Indenture
Trustee, on its behalf and on behalf of the Class A Noteholders, thereby
appoints the Note Insurer as agent and attorney-in-fact for the Indenture
Trustee and each Class A Noteholder in any legal proceeding with respect to the
Class A Notes. The Indenture Trustee shall promptly notify the Note Insurer of
any proceeding or the institution of any action (of which a Responsible Officer
of the Indenture Trustee has actual knowledge) seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law (a "Preference Claim") of any payment made with
respect to the Class A Notes. Each Holder of Class A Notes, by its purchase of
Class A Notes, and the Indenture Trustee hereby agree that so long as a Note
Insurer Default shall not have occurred and be continuing, the Note Insurer may
at any time during the continuation of any proceeding relating to a Preference
Claim direct all matters relating to such Preference Claim including, without
limitation, (i) the direction of any appeal of any order relating to any
Preference Claim and (ii) the posting of any surety, supersedeas or performance
bond pending any such appeal at the expense of the Note Insurer, but subject to
reimbursement as provided in the Insurance Agreement. In addition, and without
limitation of the foregoing, 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.

                                       31
<PAGE>

                                   ARTICLE VI

                              The Indenture Trustee

                  SECTION 6.1. Duties of Indenture Trustee. (a) The Indenture
Trustee, both prior to the occurrence of an Event of Default and after an Event
of Default shall have been cured or waived, shall undertake to perform such
duties and only such duties as are specifically set forth in this Indenture. If
an Event of Default shall have occurred and shall not have been cured or waived,
the Indenture Trustee may, and at the direction of the Note Insurer (or, if a
Note Insurer Default shall have occurred and is continuing, the
Majorityholders), shall exercise such of the rights and powers vested in it by
this Indenture and shall use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of its own affairs.

                  (b) The Indenture Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Indenture Trustee that shall be specifically
required to be furnished pursuant to any provision of this Indenture, shall
examine them to determine whether they conform to the requirements of this
Indenture; provided, however, that the Indenture Trustee shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Indenture, the Indenture Trustee shall notify the Note Insurer and the
Noteholders of such instrument in the event that the Indenture Trustee, after so
requesting, does not receive a satisfactorily corrected instrument.

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

                  (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:

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<PAGE>

                  (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

                  (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.

                                       33
<PAGE>

                  (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.

                  (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
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.

                                       34
<PAGE>

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

                  (n) The Indenture Trustee shall not be required to give any
bond or surety in respect of the powers granted to it under this Indenture.

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

                  (i) The Indenture Trustee may rely and shall be protected in
         acting or refraining from acting upon any resolution, Officer's
         Certificate, Servicer's Certificate, certificate of auditors, or any
         other Opinion of Counsel, certificate, statement, instrument, opinion,
         report, notice, request, consent, order, appraisal, bond, or other
         paper or document believed by it to be genuine and to have been signed
         or presented by the proper party or parties.

                  (ii) The Indenture Trustee may consult with counsel, and any
         written advice or Opinion of Counsel shall be full and complete
         authorization and protection in respect of any action taken or suffered
         or omitted by it under this Indenture in good faith and in accordance
         with such written advice or Opinion of Counsel.

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

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

                                       35
<PAGE>

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

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

                  (vii) The Indenture Trustee may rely, as to factual matters
         relating to the Transferor or the Servicer, on an Officer's Certificate
         of the Transferor or Servicer, respectively.

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

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

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

                                       36
<PAGE>

                  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 from time to time compensation for its 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.

                                       37
<PAGE>

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

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

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

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

                  (iii) an involuntary case under the federal bankruptcy laws,
         as now or hereafter in effect, or another present or future federal or
         state bankruptcy, insolvency or similar law is commenced with respect
         to the Indenture Trustee and such case is not dismissed within sixty
         (60) days;

                                       38
<PAGE>

                  (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 Default shall have occurred and be
continuing) and to the Issuer. Thereupon the resignation or removal of the
retiring Indenture Trustee shall become effective, and the successor Indenture
Trustee shall have all the rights, powers and duties of the retiring Indenture
Trustee under this Indenture subject to satisfaction of the Rating Agency
Condition. The successor Indenture Trustee shall mail a notice of its succession
to Noteholders. The retiring Indenture Trustee shall promptly transfer all
property held by it as Indenture Trustee to the successor Indenture Trustee.

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

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

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

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<PAGE>

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

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

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

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

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

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

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

                                       40
<PAGE>

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

                  (iii) the Indenture Trustee may at any time accept the
         resignation of or remove any separate trustee or co-trustee.

                  (c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Indenture and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Every such instrument
shall be filed with the Indenture Trustee.

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

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

                  SECTION 6.11. Eligibility. The Indenture Trustee shall at all
times satisfy the requirements of Section 310(a) of the TIA. The Indenture
Trustee under this Indenture shall at all times be organized and doing business
under the laws of the United States of America or any state thereof; authorized
under such laws to exercise corporate trust powers; having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
Federal or State authorities satisfactory to the Note Insurer; and having a
rating, both with respect to long-term and short-term unsecured obligations, of
not less than investment grade by each Rating Agency. If such corporation shall
publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 6.11, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Indenture Trustee shall cease to be eligible in accordance with the provisions
of this Section 6.11, the Indenture Trustee shall resign immediately in the
manner and with the effect specified in Section 6.8. The Indenture Trustee shall
comply with Section 310(b) of the TIA, including the optional provision
permitted by the second sentence of Section 310(b)(9) of the TIA; provided,
however, that there shall be excluded from the operation of 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.

                                       41
<PAGE>

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

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

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

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

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

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

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

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

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                                   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. The Indenture Trustee or, if the
Indenture Trustee is not the Note Registrar, the Issuer shall furnish to the
Note Insurer in writing on an annual basis on each June 30 and at such other
times as the Note Insurer may request a copy of the list.

                  SECTION 7.2. Preservation of Information; Communications to
Noteholders.

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

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

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

                  SECTION 7.3. Reports by Issuer.

                  (a) The Issuer shall:

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

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

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<PAGE>

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

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

                  SECTION 7.4. Reports by Indenture Trustee. If required by
Section 313(a) of the TIA, within 60 days after the end of each year, commencing
with the year ended December 31, 2003, the Indenture Trustee shall mail to each
Class A Noteholder as required by Section 313(c) of the TIA a brief report dated
a of such date that complies with Section 313(a) of the TIA. The Indenture
Trustee shall also comply with Section 313(b) of the TIA.

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

                                  ARTICLE VIII

                          Collection of Money; Releases

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

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

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<PAGE>

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

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

                                   ARTICLE IX

                             Supplemental Indentures

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

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

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

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

                                       45
<PAGE>

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

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

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

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

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

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

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

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

                                       46
<PAGE>

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

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

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

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

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

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

                  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.

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<PAGE>

                  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.

                  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 Original Pool Balance, 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,
plus 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.

                                       48
<PAGE>

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

                  All notices of redemption shall state:

                  (i) the Redemption Date;

                  (ii) the Redemption Price;

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

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

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

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

                                   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.

                                       49
<PAGE>

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

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

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

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

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

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

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

                                       50
<PAGE>

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

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

                  (iv) Notwithstanding Section 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.

                                       51
<PAGE>

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

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

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

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

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

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

                  SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer 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

                                       52
<PAGE>

                  (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 2003-C, 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 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 2003-C
                               Telex No.:  (212) 688-3101
                               Confirmation:  (212) 826-0100
                               Telecopy Nos.:  (212) 339-3518 or (212) 339-3529

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

                  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.

                                       53
<PAGE>

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

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

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

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

                  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.

                                       54
<PAGE>

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

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

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

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

                                       55
<PAGE>

                  (b) It is expressly understood and agreed by the parties
hereto that (a) this Agreement is executed and delivered by WTC, not
individually or personally but solely as Owner Trustee of the Issuer in the
exercise of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by WTC but is made and intended for the purpose for binding only the
Issuer, (c) nothing herein contained shall be construed as creating any
liability on WTC, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person claiming by, through or
under the parties hereto and (d) under no circumstances shall WTC be personally
liable for the payment of any indebtedness or expenses of the Issuer or be
liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Issuer under this Agreement or any other
related document.

                  (c) Notwithstanding anything contained herein to the contrary,
this Agreement has been executed and delivered by JPMorgan Chase, not in its
individual capacity but solely as Indenture Trustee and in no event shall
JPMorgan Chase 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.

                                       56
<PAGE>

                  SECTION 11.18. Rights of Note Insurer as Controlling Party. So
long as no Note Insurer Default has occurred and is continuing, except as
otherwise specifically provided herein, whenever Noteholder action, consent or
approval is required under this Indenture, such action, consent or approval
shall be deemed to have been taken or given on behalf of, and shall be binding
upon, all Noteholders if the Note Insurer agrees to take such action or give
such consent or approval. If a Note Insurer Default has occurred and is
continuing, any provision, including this Section 11.18, which gives the Note
Insurer any rights as Controlling Party shall be inoperative during the period
of such Note Insurer Default and such rights shall instead vest in the Indenture
Trustee acting at the direction of the Majorityholders.

                  SECTION 11.19. Effect of Policy Expiration Date.
Notwithstanding anything to the contrary set forth herein, all references to any
right of the Note Insurer to direct, appoint, consent to, accept, approve of,
take or omit to take any action under this Indenture or any other Basic Document
shall be inapplicable at all times after the Policy Expiration Date, and (i) if
such reference provides for another party or parties to take or omit to take any
such action following a 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 its terms. Each of the Demand Note Provider and the Demand Note
Guarantor acknowledges that it shall not 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]

                                       57
<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 2003-C,

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

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

                                      JPMORGAN CHASE BANK, not in its individual
                                      capacity but solely as Indenture Trustee

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

<PAGE>

                                                                         ANNEX A

                                  DEFINED TERMS

<PAGE>

                                   EXHIBIT A-1

REGISTERED                                                      $170,000,000
No. RA--1--1
                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                           CUSIP NO. 542391 BK 2

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

NO TRANSFER OF THIS NOTE SHALL BE PERMITTED TO BE MADE TO ANY PERSON UNLESS THE
INDENTURE TRUSTEE HAS RECEIVED A CERTIFICATE FROM SUCH TRANSFEREE TO THE EFFECT
THAT EITHER (I) THE TRANSFEREE IS NOT AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF (A) AN "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION
3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA OR (B) A "PLAN"
(AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE")) THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (II) 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 2003-C
                       1.70% ASSET-BACKED NOTE, CLASS A-1

                  Long Beach Acceptance Auto Receivables Trust 2003-C, 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 AND
SEVENTY 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 shall be due and payable on the April 2008 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 October 30, 2003 (the "Interest
Period"). "). Interest will be computed on the basis of a 360-day year
consisting of twelve 30 day months. Such principal of and interest on this Note
shall be paid in the manner specified on the reverse hereof.

<PAGE>

                  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 Dates) exceeds the Pool Balance as of the
last day of the related Collection Period with respect to each 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:  October 30, 2003

                                      LONG BEACH ACCEPTANCE AUTO RECEIVABLES
                                      TRUST 2003-C

                                      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:  October 30, 2003               JPMorgan Chase Bank, 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 1.70% Asset-Backed Notes, Class A-1 (herein called the
"Class A-1 Notes"), issued under an Indenture dated as of October 1, 2003 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and JPMorgan Chase Bank, 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 3.29% Asset-Backed Notes, Class A-2 (the "Class A-2 Notes," and together
with the Class A-1 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 November 17, 2003. The term "Payment Date," shall
be deemed to include the Class A-1 Final Scheduled Payment Date and Class A-2
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.

                  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.

                                     A-1-5
<PAGE>

                  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 Original
Pool Balance 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 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.

                                     A-1-6
<PAGE>

                  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                                                      $80,000,000
No. RA--2--1
                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                           CUSIP NO. 542391 BL 0

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 2003-C
                       3.29% ASSET-BACKED NOTE, CLASS A-2

                  Long Beach Acceptance Auto Receivables Trust 2003-C, 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 EIGHTY MILLION DOLLARS
payable on each Payment Date from the sources and on the terms and conditions
set forth herein and as more fully set forth in the Indenture; provided,
however, that the entire unpaid principal amount of this Class A-2 Note shall be
due and payable on the April 2010 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 October 30, 2003 (the "Interest Period"). Interest will be
computed on the basis of a 360-day year consisting of twelve 30 day months. 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.

<PAGE>

                  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 Dates) exceeds the Pool Balance as of the
last day of the related Collection Period with respect to each 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:  October 30, 2003

                                      LONG BEACH ACCEPTANCE AUTO RECEIVABLES
                                      TRUST 2003-C

                                      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:  October 30, 2003               JPMorgan Chase Bank, 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 3.29% Asset-Backed Notes, Class A-2 (herein called the
"Class A-2 Notes"), issued under an Indenture dated as of October 1, 2003 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and JPMorgan Chase Bank, 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 1.70% Asset-Backed Notes, Class A-1 (the "Class A-1 Notes" and together with
the Class A-2 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 November 17, 2003. The term "Payment Date," shall
be deemed to include the Class A-1 Final Scheduled Payment Date and the Class
A-2 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.

                  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.

                                     A-2-5
<PAGE>

                  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 Original
Pool Balance 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 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.

                                     A-2-6
<PAGE>

                  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 B

                          FORM OF DEPOSITORY AGREEMENT

<PAGE>

                                                                       EXHIBIT C

                    [FORM OF CERTIFICATE AS TO ERISA MATTERS]

                                     [date]

Long Beach Acceptance Auto Receivables Trust 2003-C
c/o Wilmington Trust Company, as Owner Trustee
Rodney Square North
1100 North Market Street
Wilmington, Delaware  19890-0001
Attention:  Corporate Trust Administration

JPMORGAN CHASE BANK
4 New York Plaza, 6th Floor
New York, New York 10004
Attention:        Global Trust Services --
                  Long Beach Acceptance Auto
                  Receivables Trust 2003-C

         Re:      Long Beach Acceptance Auto Receivables Trust 2003-C
                  Asset-Backed Notes, Class [A-1][A-2]

Ladies and Gentlemen:

                  [NAME OF OFFICER] ____________________ hereby certifies that:

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

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

                  3. The Transferee hereby acknowledges that under the terms of
the Indenture, dated as of October 1, 2003 (the "Indenture"), between Long Beach
Acceptance Auto Receivables Trust 2003-C (the "Issuer") and JPMORGAN CHASE BANK,
as indenture trustee (the "Indenture Trustee"), no transfer of any Class
[A-1][A-2] Note (as defined in the Indenture) shall be permitted to be made to
any person unless the Indenture Trustee has received a certificate from such
transferee to the effect that such transferee (A) is not a Benefit Plan and is
not acting on behalf of or investing the assets of any such Benefit Plan or (B)
is entitled to exemptive relief pursuant to a Department of Labor prohibited
transaction class exemption with respect to such transferee's acquisition and
continued holding of such Note.

<PAGE>

                  4. The Class [A-1][A-2] 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] Notes at the
exclusive direction of and as nominee of
the Investor named above.

-------------------------------------
[name of nominee]

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

                                      C-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]