<PAGE>

                                                                   EXHIBIT 10.33




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                               SALE AND SERVICING

                                    AGREEMENT

                                      AMONG

                             CPS WAREHOUSE TRUST, AS
                                   PURCHASER,

                      CONSUMER PORTFOLIO SERVICES, INC., AS
                               SELLER AND SERVICER

                    SYSTEMS & SERVICES TECHNOLOGIES, INC., AS
                                 BACKUP SERVICER

                                       AND

                        BANK ONE TRUST COMPANY, N.A., AS
                          STANDBY SERVICER AND TRUSTEE

                                   DATED AS OF
                                  MARCH 7, 2002

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<TABLE>
<CAPTION>

                                               TABLE OF CONTENTS
<S>                                                                                                    <C>
ARTICLE I         DEFINITIONS...........................................................................2

         SECTION 1.1.        Definitions................................................................2

         SECTION 1.2.        Other Definitional Provisions..............................................2

         SECTION 1.3.        Calculations...............................................................3

         SECTION 1.4.        Material Adverse Effect....................................................3

ARTICLE II        CONVEYANCE OF RECEIVABLES.............................................................4

         SECTION 2.1.        (a)     Conveyance of Receivables..........................................4

         SECTION 2.2.        Transfers Intended as Sales................................................7

         SECTION 2.3.        Further Encumbrance of Receivables and Other Conveyed Property.............8

ARTICLE III       THE RECEIVABLES.......................................................................8

         SECTION 3.1.        Representations and Warranties of Seller...................................8

         SECTION 3.2.        Repurchase upon Breach....................................................15

         SECTION 3.3.        Custody of Receivables Files..............................................15

         SECTION 3.4.        Acceptance of Receivable Files by Trustee.................................16

         SECTION 3.5.        Access to Receivable Files................................................17

ARTICLE IV        ADMINISTRATION AND SERVICING OF RECEIVABLES..........................................18

         SECTION 4.1.        Duties of the Servicer....................................................18

         SECTION 4.2.        Collection of Receivable Payments; Modifications of Receivables;
                             Lockbox Agreements........................................................19

         SECTION 4.3.        Realization Upon Receivables..............................................20

         SECTION 4.4.        Insurance.................................................................21

         SECTION 4.5.        Maintenance of Security Interests in Vehicles.............................21

         SECTION 4.6.        Additional Covenants of Servicer..........................................22

         SECTION 4.7.        Purchase of Receivables Upon Breach of Covenant...........................23

         SECTION 4.8.        Servicing Fee.............................................................23

         SECTION 4.9.        Servicer's Certificate....................................................23

         SECTION 4.10.       Annual Statement as to Compliance, Notice of Servicer Termination Event...24

         SECTION 4.11.       Independent Accountants' Reports..........................................24

         SECTION 4.12.       Accountants' Review of Receivable Files...................................25

         SECTION 4.13.       Access to Certain Documentation and Information Regarding Receivables.....26

         SECTION 4.14.       Verification of Servicer's Certificate....................................26

         SECTION 4.15.       Retention and Termination of Servicer.....................................27

         SECTION 4.16.       Fidelity Bond.............................................................28

         SECTION 4.17.       Lien Searches; Opinions as to Transfers and Security Interests............28

ARTICLE V         ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDER................................28

         SECTION 5.1.        Establishment of Pledged Accounts.........................................28


                                                     i
<PAGE>

                                               TABLE OF CONTENTS
                                                  (CONTINUED)

         SECTION 5.2.        [RESERVED]................................................................31

         SECTION 5.3.        Certain Reimbursements to the Servicer....................................31

         SECTION 5.4.        Application of Collections................................................31

         SECTION 5.5.        Reserve Account...........................................................31

         SECTION 5.6.        Additional Deposits.......................................................32

         SECTION 5.7.        Distributions.............................................................32

         SECTION 5.8.        Note Distribution Account.................................................34

         SECTION 5.9.        Statements to the Noteholder..............................................35

         SECTION 5.10.       Optional Deposits by the Insurer; Notice of Waivers.......................37

ARTICLE VI        THE NOTE POLICY......................................................................37

         SECTION 6.1.        Claims Under Note Policy..................................................37

         SECTION 6.2.        Preference Claims.........................................................38

         SECTION 6.3.        Surrender of Note Policy..................................................39

ARTICLE VII       THE PURCHASER........................................................................39

         SECTION 7.1.        Representations of Purchaser..............................................39

ARTICLE VIII      THE SELLER...........................................................................41

         SECTION 8.1.        Representations of Seller.................................................41

         SECTION 8.2.        Additional Covenants of the Seller........................................44

         SECTION 8.3.        Liability of Seller; Indemnities..........................................44

         SECTION 8.4.        Merger or Consolidation of, or Assumption of the Obligations of, Seller...45

         SECTION 8.5.        Limitation on Liability of Seller and Others..............................46

ARTICLE IX        THE SERVICER.........................................................................49

         SECTION 9.1.        Representations of Servicer...............................................49

         SECTION 9.2.        Liability of Servicer; Indemnities........................................51

         SECTION 9.3.        Merger or Consolidation of, or Assumption of the Obligations of,
                             the Servicer or Standby Servicer..........................................52

         SECTION 9.5.        Delegation of Duties......................................................54

         SECTION 9.6.        Servicer and Standby Servicer Not to Resign...............................54

         SECTION 9.7.        Reporting Requirements....................................................54

ARTICLE X         DEFAULT..............................................................................55

         SECTION 10.1.       Servicer Termination Events...............................................55

         SECTION 10.2.       Consequences of a Servicer Termination Event..............................56

         SECTION 10.3.       Appointment of Successor..................................................57

         SECTION 10.4.       Notification to Noteholders and the Agent.................................58

         SECTION 10.5.       Waiver of Past Defaults...................................................58

         SECTION 10.6.       Action Upon Certain Failures of the Servicer..............................59

                                                    ii
<PAGE>

                                               TABLE OF CONTENTS
                                                  (CONTINUED)

         SECTION 10.7.       Continued Errors..........................................................59

ARTICLE XI        MISCELLANEOUS PROVISIONS.............................................................59

         SECTION 11.1.       Amendment.................................................................59

         SECTION 11.2.       Protection of Title to Property...........................................60

         SECTION 11.3.       Notices...................................................................62

         SECTION 11.4.       Assignment................................................................63

         SECTION 11.5.       Limitations on Rights of Others...........................................63

         SECTION 11.6.       Severability..............................................................63

         SECTION 11.7.       Separate Counterparts.....................................................63

         SECTION 11.8.       Headings..................................................................63

         SECTION 11.9.       Governing Law.............................................................63

         SECTION 11.10.      Assignment to Trustee.....................................................64

         SECTION 11.11.      Nonpetition Covenants.....................................................64

         SECTION 11.12.      Limitation of Liability of Trustee........................................64

         SECTION 11.13.      Independence of the Servicer..............................................64

         SECTION 11.14.      No Joint Venture..........................................................65

         SECTION 11.15.      Insurer as Controlling Party..............................................65

         SECTION 11.16.      Special Supplemental Agreement............................................65

         SECTION 11.17.      Limited Recourse..........................................................65

         SECTION 11.18.      Acknowledgement of Roles..................................................66

         SECTION 11.19.      Termination...............................................................66
</TABLE>

                                                     iii
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                                TABLE OF CONTENTS
                                   (CONTINUED)

SCHEDULES
---------

Schedule A           -     Schedule of Receivables

Schedule B           -     Location for Delivery of Receivable Files

EXHIBITS
--------

Exhibit A            -     Form of Servicer's Certificate

Exhibit B            -     Form of Trust Receipt

Exhibit C            -     Form of Servicing Officer's Certificate

Exhibit D            -     Form of Monthly Servicer's Statement

Exhibit E            -     Form of Independent Accountant's Report

Exhibit F            -     Form of Assignment

Exhibit G            -     Form of Addition Notice



                                       iv
<PAGE>

         SALE AND SERVICING AGREEMENT (this "AGREEMENT") dated as of March 7,
2002, among CPS WAREHOUSE TRUST, a Delaware business trust (the "PURCHASER"),
CONSUMER PORTFOLIO SERVICES, INC., a California corporation (in its capacities
as Seller, the "SELLER" and as Servicer, the "SERVICER," respectively), SYSTEMS
& SERVICES TECHNOLOGIES, INC., a Delaware corporation ("SST"), as Backup
Servicer, and BANK ONE TRUST COMPANY, N.A., a national banking association, (in
its capacities as Standby Servicer, the "STANDBY SERVICER" and as Trustee, the
"TRUSTEE," respectively).

         WHEREAS, the Purchaser desires to purchase, from time to time, a
portfolio of receivables arising in connection with motor vehicle retail
installment sale contracts acquired by Consumer Portfolio Services, Inc., from
motor vehicle dealers and independent finance companies;

         WHEREAS, the Purchaser intends to finance such purchases by issuing the
Note, secured by the Receivables and the Other Conveyed Property, pursuant to
the Indenture (as defined below);

         WHEREAS, the Seller is willing to sell such Receivables and the Other
Conveyed Property to the Purchaser from time to time; and

         WHEREAS the Servicer is willing to service all such Receivables.

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

                                    ARTICLE I
                                    ---------

                                   DEFINITIONS
                                   -----------

         SECTION 1.1. DEFINITIONS. Capitalized terms used in this Agreement and
not otherwise defined in this Agreement, shall have the meanings set forth in
ANNEX A attached hereto.

         SECTION 1.2. OTHER DEFINITIONAL PROVISIONS.

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

         (b) Accounting terms used but not defined or partly defined in this
Agreement, in any instrument governed hereby or in any certificate or other
document made or delivered pursuant hereto, to the extent not defined, shall
have the respective meanings given to them under U.S. generally accepted
accounting principles as in effect on the date of this Agreement or any such
instrument, certificate or other document, as applicable. To the extent that the
definitions of accounting terms in this Agreement or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under U.S. generally accepted accounting principles, the definitions contained
in this Agreement or in any such instrument, certificate or other document shall
control.

         (c) The words "HEREOF," "HEREIN," "HEREUNDER" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.

         (d) Section, Schedule and Exhibit references contained in this
Agreement are references to Sections, Schedules and Exhibits in or to this
Agreement unless otherwise specified; and the term "INCLUDING" shall mean
"INCLUDING WITHOUT LIMITATION."

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

<PAGE>

         (f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as the same may from time to time be amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments and instruments associated therewith; all
references to a Person include its permitted successors and assigns.

         SECTION 1.3. CALCULATIONS. Other than as expressly set forth herein or
in any of the other Basic Documents, all calculations of the amount of the
Servicing Fee, the Standby Fee, Backup Servicing Fee, SST Servicing Fee, the
Owner Trustee Fee and the Trustee Fee shall be made on the basis of a 360-day
year consisting of twelve 30-day months. All calculations of the Unused Facility
Fee, the Ordinary Insurance Premium, the Default Insurance Premium and the
Noteholder's Monthly Interest Distributable Amount shall be made on the basis of
the actual number of days in the Accrual Period and 360 days in the calendar
year. All references to the Principal Balance of a Receivable as of the last day
of an Accrual Period shall refer to the close of business on such day.

         SECTION 1.4. MATERIAL ADVERSE EFFECT. Whenever a determination is to be
made under this Agreement as to whether a given event, action, course of conduct
or set of facts or circumstances could or would have a material adverse effect
on the Purchaser or the Noteholder (or any such similar or analogous
determination), such determination shall be made without taking into account the
insurance provided by the Note Policy. Whenever a determination is to be made
under this Agreement whether a breach of a representation, warranty or covenant
has or could have a material adverse effect on a Receivable or the interest
therein of the Purchaser, the Noteholder or the Insurer (or any similar or
analogous determination), such determination shall be made by the Controlling
Party in its sole discretion.

                                   ARTICLE II
                                   ----------

                            CONVEYANCE OF RECEIVABLES
                            -------------------------

         SECTION 2.1. i) CONVEYANCE OF RECEIVABLES. In consideration of the
Purchaser's delivery to or upon the order of the Seller on any Funding Date of
the Purchase Price therefor, the Seller does hereby sell, transfer, assign, set
over and otherwise convey to the Purchaser, without recourse (subject to the
obligations set forth herein) all right, title and interest of the Seller,
whether now existing or hereafter arising, in, to and under:

                  (i) the Receivables listed in the Schedule of Receivables from
         time to time;

                  (ii)all monies received under the Receivables on and after the
         related Cutoff Date and all Net Liquidation Proceeds received with
         respect to the Receivables after the related Cutoff Date;

                  (iii) the security interests in the Financed Vehicles granted
         by Obligors pursuant to the related Contracts and any other interest of
         the Seller in such Financed Vehicles, including, without limitation,
         the certificates of title or, with respect to such Receivables that
         finance a vehicle in the States listed in Annex B, other evidence of
         title issued by the applicable Department of Motor Vehicles or similar
         authority in such States, with respect to such Financed Vehicles;

                  (iv)any proceeds from claims on any Receivables Insurance
         Policies or certificates relating to the Financed Vehicles securing the
         Receivables or the Obligors thereunder;

                  (v) all proceeds from recourse against Dealers with respect to
the Receivables;

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

                                       3
<PAGE>

                  (vii) the Receivable File related to each Receivable and all
         other documents that the Seller keeps on file in accordance with its
         customary procedures relating to the Receivables for Obligors of the
         Financed Vehicles;

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

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

                  (x) all present and future claims, demands, causes and choses
         in action in respect of any or all of the foregoing and all payments on
         or under and all proceeds of every kind and nature whatsoever in
         respect of any or all of the foregoing, including all proceeds of the
         conversion, voluntary or involuntary, into cash or other liquid
         property, all cash proceeds, accounts, accounts receivable, notes,
         drafts, acceptances, chattel paper, checks, deposit accounts, insurance
         proceeds, condemnation awards, rights to payment of any and every kind
         and other forms of obligations and receivables, instruments and other
         property which at any time constitute all or part of or are included in
         the proceeds of any of the foregoing.

         (b) The Seller shall transfer to the Purchaser the Receivables and the
other property and rights related thereto described in PARAGRAPH (A) above only
upon the satisfaction of each of the conditions set forth below on or prior to
the related Funding Date. In addition to constituting conditions precedent to
any purchase hereunder and under each Assignment, the following shall also be
conditions precedent to any Advance on any Funding Date under the terms of the
Indenture:

                  (i) the Seller shall have provided the Trustee, the Agent and
         the Insurer with an Addition Notice substantially in the form of
         EXHIBIT H hereto (which shall include supplements to the Schedule of
         Receivables) not later than three Business Days prior to such Funding
         Date and shall have provided any information reasonably requested by
         any of the foregoing with respect to the Related Receivables;

                  (ii)the Seller shall, to the extent required by SECTION 4.2 of
         this Agreement, have deposited in the Collection Account all
         collections received after the Cutoff Date in respect of the Related
         Receivables to be purchased on such Funding Date;

                  (iii) as of each Funding Date, (A) the Seller shall not be
         insolvent and shall not become insolvent as a result of the transfer of
         Related Receivables on such Funding Date, (B) the Seller shall not
         intend to incur or believe that it shall incur debts that would be
         beyond its ability to pay as such debts mature, (C) such transfer shall
         not have been made with actual intent to hinder, delay or defraud any
         Person and (D) the assets of the Seller shall not constitute
         unreasonably small capital to carry out its business as then conducted;

                  (iv)the Facility Termination Date shall not have occurred;

                  (v) the Servicer shall have established a Lockbox Account
         acceptable to the Controlling Party;

                  (vi)each of the representations and warranties made by the
         Seller pursuant to SECTION 3.1 and the other Basic Documents with
         respect to the Related Receivables to be purchased on such Funding Date
         shall be true and correct as of the related Funding Date and the Seller
         shall have performed all obligations to be performed by it hereunder or
         in any Assignment on or prior to such Funding Date;

                                       4
<PAGE>

                  (vii) the Seller shall, at its own expense, on or prior to the
         Funding Date, indicate in its computer files that the Related
         Receivables to be purchased on such Funding Date have been sold to the
         Purchaser pursuant to this Agreement or an Assignment, as applicable;

                  (viii) the Seller shall have taken any action required to
         maintain (i) the first priority perfected ownership interest of the
         Purchaser in the Related Receivables and Other Conveyed Property and
         (ii) the first priority perfected security interest of the Trustee in
         the Collateral;

                  (ix)no selection procedures adverse to the interests of the
         Noteholder or the Insurer shall have been utilized in selecting the
         Related Receivables to be sold on such Funding Date;

                  (x) the addition of any such Related Receivables to be
         purchased on such Funding Date shall not result in a material adverse
         tax consequence to the Noteholder or the Purchaser;

                  (xi)as a result of the transfer of the Related Receivables to
         be sold on such Funding Date to the Purchaser, the then current rating
         of the Note (without giving consideration to the Note Policy) by each
         Rating Agency will not be withdrawn or downgraded PROVIDED, HOWEVER
         that the Seller shall not be required to obtain written confirmation
         from the Rating Agencies that such purchase will not result in a
         reduction or withdrawal of the then current Rating of the Note;

                  (xii) the Controlling Party, in its reasonable discretion
         shall not have disapproved the transfer of the Related Receivables to
         be sold on such Funding Date to the Purchaser and the Controlling Party
         shall have been reimbursed by the Seller for any fees and expenses
         incurred by the Controlling Party in connection with the granting of
         such approval;

                  (xiii) the Seller shall have delivered to the Insurer and the
         Trustee an Officers' Certificate confirming the satisfaction of each
         condition precedent specified in this PARAGRAPH (B);

                  (xiv) No Funding Termination Event, Insurance Agreement Event
         of Default, Servicer Termination Event, or any event that, with the
         giving of notice or the passage of time, would constitute a Funding
         Termination Event, Insurance Agreement Event of Default or Servicer
         Termination Event, shall have occurred and be continuing;

                  (xv)the Trustee shall have confirmed receipt of the related
         Receivable File for each Related Receivable included in the Borrowing
         Base calculation and shall have delivered a copy to the Insurer and the
         Agent of a Trust Receipt with respect to the Receivable Files related
         to the Related Receivables to be purchased on such Funding Date;

                  (xvi) the Seller shall have executed and delivered an
         Assignment in the form of EXHIBIT G;

                  (xvii) the Seller shall have filed or caused to be filed all
         necessary UCC-1 financing statements (or amendments thereto) necessary
         to maintain (in each case assuming for purposes of this clause (xvii)
         that such perfection may be achieved by making the appropriate filings,
         or taken any other steps necessary to maintain), (1) the first,
         priority, perfected ownership interest of Purchaser and (2) the first
         priority, perfected security interest of the Trustee, with respect to
         the Related Receivables and Other Conveyed Property and the Collateral,
         respectively to be transferred on such Funding Date;

                  (xviii) on or prior to such Funding Date, the Purchaser will
         purchase an interest rate cap with a strike rate equal to the Required
         Cap Rate in order to hedge against interest rate fluctuations such that
         the aggregate principal amount of all such interest rate caps (together
         with the notional amount of other Hedge Agreements) is equal to the
         then Invested Amount after taking into account the Advance to occur on
         such Funding Date. All costs associated with the entering into such


                                       5
<PAGE>

         Hedge Agreements will be paid for by the Purchaser. Each Hedge
         Agreement will conform to the standard rating agency rating criteria
         for hedge agreements related to securities whose ratings are "swap
         dependent." Each Hedge Counterparty shall have a short term debt rating
         of at least "A-1" and "P-1" by S&P and Moody's, respectively; and

                  (xix) on or prior to the Funding Date that is scheduled to
         occur on March 15, 2002, the Seller and the Purchaser shall deliver to
         the Insurer, the Agent, the Owner Trustee and the Trustee any item
         specified as a condition precedent or a condition to closing that has
         not been previously delivered.


         Unless waived by the Controlling Party in writing, the Seller covenants
that in the event any of the foregoing conditions precedent are not satisfied
with respect to any Related Receivable on the date required as specified above,
the Seller will immediately repurchase such Related Receivable from the
Purchaser, at a price equal to the Purchase Amount thereof, in the manner
specified in SECTION 3.2 and SECTION 4.7. Except with respect to (xv) above, the
Trustee may rely on the accuracy of the Officers' Certificate delivered pursuant
to ITEM (xiii) above without independent inquiry or verification.

         (c) PAYMENT OF PURCHASE PRICE. In consideration for the sale of the
Related Receivables and Other Conveyed Property described in SECTION 2.1(a) or
the related Assignment, the Purchaser shall, on each Funding Date on which
Related Receivables are transferred hereunder, pay to or upon the order of the
Seller the applicable Purchase Price in cash. On any Funding Date on which funds
are on deposit in the Principal Funding Account, the Purchaser may direct the
Trustee to withdraw therefrom an amount equal to the lesser of (i) the Purchase
Price to be paid to the Seller for Related Receivables and Other Conveyed
Property to be conveyed to the Purchaser and pledged to the Trustee on such
Funding Date (or a portion thereof) and (ii) the amount on deposit in the
Principal Funding Account, and, subject to the satisfaction of the conditions
set forth in SECTION 2.1(b) after giving effect to such withdrawal, pay such
amount to or upon the order of the Seller in consideration for the sale of the
Related Receivables and Other Conveyed Property on such Funding Date.

         SECTION 2.2. TRANSFERS INTENDED AS SALES. It is the intention of the
Seller that each transfer and assignment contemplated by this Agreement and each
Assignment shall constitute a sale of the Related Receivables and Other Conveyed
Property from the Seller to the Purchaser free and clear of all liens and rights
of others and it is intended that the beneficial interest in and title to the
Related Receivables and Other Conveyed Property shall not be part of the
Seller's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. In the event that, notwithstanding
the intent of the Seller, the transfer and assignment contemplated hereby or by
any Assignment is held not to be a sale, this Agreement and each Assignment
shall constitute a grant of a security interest in the property referred to in
SECTION 2.1 and each Assignment to the Purchaser which security interest has
been assigned to the Trustee, acting on behalf of the Noteholder and the
Insurer.

         SECTION 2.3. FURTHER ENCUMBRANCE OF RECEIVABLES AND OTHER CONVEYED
PROPERTY.

         (a) Immediately upon the conveyance to the Purchaser by the Seller of
the Related Receivables and any item of the related Other Conveyed Property
pursuant to SECTION 2.1 and the related Assignment, all right, title and
interest of the Seller in and to such Related Receivables and Other Conveyed
Property shall terminate, and all such right, title and interest shall vest in
the Purchaser.

         (b) Immediately upon the vesting of any Related Receivables and the
related Other Conveyed Property in the Purchaser, the Purchaser shall have the
sole right to pledge or otherwise encumber such Related Receivables and the
related Other Conveyed Property. Pursuant to the Indenture, the Purchaser shall
grant a security interest in the Collateral to secure the repayment of the Note.

         (c) The Trustee shall, at such time as (i) the Facility Termination
Date has occurred, (ii) there is no Note outstanding and (iii) all sums due to
the Insurer and to the Trustee pursuant to the Basic Documents have been paid,
release any remaining portion of the Receivables and the Other Conveyed Property
to the Purchaser.

                                       6
<PAGE>

                                   ARTICLE III
                                   -----------

                                 THE RECEIVABLES
                                 ---------------

         SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF SELLER. ii) The Seller
makes the following representations and warranties as to the Related Receivables
to the Insurer, the Purchaser and to the Trustee for the benefit of the
Noteholder on which the Purchaser relies in acquiring the Receivables, on which
the Insurer relies in issuing the Note Policy and on which the Noteholder has
relied in purchasing the Note and will rely in paying the Advance Amount to the
Purchaser. Such representations and warranties speak as of the Closing Date and
as of each Funding Date; PROVIDED that to the extent such representations and
warranties relate to the Related Receivables conveyed on any Funding Date, such
representations and warranties shall speak as of the related Funding Date, but
shall survive the sale, transfer and assignment of the Related Receivables to
the Purchaser and the pledge thereof by the Purchaser hereunder to the Trustee
pursuant to the Indenture.

                  (i) CHARACTERISTICS OF RECEIVABLES. Each Receivable (1) has
         been originated in the United States of America by a Dealer for the
         retail sale of a Financed Vehicle in the ordinary course of such
         Dealer's business, such Dealer had all necessary licenses and permits
         to originate such Receivables in the state where such Dealer was
         located, has been fully and properly executed by the parties thereto,
         has been purchased by the Seller in connection with the sale of
         Financed Vehicles by the Dealers and has been validly assigned by such
         Dealer to the Seller in accordance with its terms, (2) has created a
         valid, subsisting, and enforceable first priority perfected security
         interest in favor of the Seller in the Financed Vehicle, which security
         interest has been validly assigned by the Seller to the Purchaser and
         by the Purchaser to the Trustee, (3) contains customary and enforceable
         provisions such that the rights and remedies of the holder or assignee
         thereof shall be adequate for realization against the collateral of the
         benefits of the security including without limitation a right of
         repossession following a default, (4) provides for level monthly
         payments that fully amortize the Amount Financed over the original term
         (except for the last payment, which may be different from the level
         payment but in no event shall exceed three times such level payment)
         and yield interest at the Annual Percentage Rate, (5) if such
         Receivable is a Rule of 78's Receivable, provides for, in the event
         that such contract is prepaid, a prepayment that fully pays the
         Principal Balance and includes a full month's interest, in the month of
         prepayment, at the Annual Percentage Rate, (6) is a Rule of 78's
         Receivable or a Simple Interest Receivable, (7) was originated by a
         Dealer to an Obligor and was sold by the Dealer to the Seller without
         any fraud or misrepresentation on the part of such Dealer or the
         Obligor and (8) is denominated in U.S. dollars.

                  (ii) ADDITIONAL RECEIVABLES CHARACTERISTICS. As of the related
         Funding Date, as applicable:

                  (A) each Related Receivable has (1) an original term of 24 to
         72 months; (2) an original Amount Financed of at least $3,000 and not
         more than $35,000; and (3) had an APR of at least 10% and not more than
         27% (subject to applicable laws);

                  (B) each Related Receivable is not more than 30 days past due
         with respect to more than 10% of any Scheduled Receivable Payment as of
         the related Cutoff Date and is not due from a Delinquent Obligor;

                  (C) no Related Receivable has been extended beyond its
         original term, except in accordance with the Seller's Contract Purchase
         Guidelines regarding deferments or extensions;

                  (D) each Related Receivable satisfies in all material respects
         the Seller's Contract Purchase Guidelines as in effect on the Closing
         Date or as otherwise amended from time to time; provided, that such
         amendments do not have a material adverse effect on the Noteholder or
         the Insurer;

                                       7
<PAGE>

                  (E) the Seller's credit rating with respect to each related
         Obligor shall be no greater than 52; and

                  (F) no Financed Vehicle financed under the Related Receivables
         is on the Seller' vehicle exclusion list, as the same may be amended
         from time to time.

                  (iii) SCHEDULE OF RECEIVABLES. The information with respect to
         the Related Receivables set forth in SCHEDULE A to the related
         Assignment is true and correct in all material respects as of the close
         of business on the related Cutoff Date, and no selection procedures
         adverse to the Noteholder or the Insurer have been utilized in
         selecting the Related Receivables to be sold hereunder.

                  (iv) COMPLIANCE WITH LAW. Each Related Receivable, the sale of
         the Financed Vehicle and the sale of any physical damage, credit life
         and credit accident and health insurance and any extended warranties or
         service contracts complied at the time the Related Receivable was
         originated or made and at the execution of the applicable Assignment
         complies in all material respects with all requirements of applicable
         Federal, State, and local laws, and regulations thereunder including,
         without limitation, usury laws, the Federal Truth-in-Lending Act, the
         Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair
         Debt Collection Practices Act, the Federal Trade Commission Act, the
         Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations B
         and Z, the Soldiers' and Sailors' Civil Relief Act of 1940, the Texas
         Consumer Credit Code, the California Automobile Sales Finance Act and
         State adaptations of the National Consumer Act and of the Uniform
         Consumer Credit Code, and other consumer credit laws and equal credit
         opportunity and disclosure laws.

                  (v) NO GOVERNMENT OBLIGOR. None of the Related Receivables are
         due from the United States of America or any State or from any agency,
         department, or instrumentality of the United States of America or any
         State.

                  (vi) SECURITY INTEREST IN FINANCED VEHICLE. Immediately
         subsequent to the sale, assignment and transfer thereof to the
         Purchaser, each Related Receivable shall be secured by a validly
         perfected first priority security interest in the Financed Vehicle in
         favor of the Seller as secured party which has been validly assigned to
         the Purchaser, and such assigned security interest is prior to all
         other liens upon and security interests in such Financed Vehicle which
         now exist or may hereafter arise or be created (except, as to priority,
         for any tax liens or mechanics' liens which may arise after the related
         Funding Date as a result of an Obligor's failure to pay its
         obligations, as applicable).

                  (vii) RECEIVABLES IN FORCE. No Related Receivable has been
         satisfied, subordinated or rescinded, nor has any related Financed
         Vehicle been released from the lien granted by the related Receivable
         in whole or in part.

                  (viii) NO WAIVER. Except as permitted under SECTION 4.2 and
         CLAUSE (IX) below, no provision of a Related Receivable has been
         waived, altered or modified in any respect since its origination.

                  (ix) NO AMENDMENTS. Except as permitted under SECTION 4.2, no
         Related Receivable has been amended, except as such Related Receivable
         may have been amended to grant extensions which shall not have numbered
         more than (a) one extension of one calendar month in any calendar year
         or (b) three such extensions in the aggregate and in accordance with
         the Seller's Contract Purchase Guidelines.

                                       8
<PAGE>

                  (x) NO DEFENSES. No right of rescission, setoff, counterclaim
         or defense exists or has been asserted or threatened with respect to
         any Related Receivable. The operation of the terms of any Related
         Receivable or the exercise of any right thereunder will not render such
         Related Receivable unenforceable in whole or in part and such
         Receivable is not subject to any such right of rescission, setoff,
         counterclaim, or defense.

                  (xi) NO LIENS. As of the related Cutoff Date, (a) there are no
         liens or claims existing or which have been filed for work, labor,
         storage or materials relating to a Financed Vehicle financed under a
         Related Receivable that shall be liens prior to, or equal or coordinate
         with, the security interest in the Financed Vehicle granted by the
         Related Receivable and (b) there is no lien against the Financed
         Vehicle financed under a Related Receivable for delinquent taxes.

                  (xii) NO DEFAULT; REPOSSESSION. Except for payment
         delinquencies continuing for a period of not more than 30 days as of
         the related Cutoff Date, no default, breach, violation or event
         permitting acceleration under the terms of any Related Receivable has
         occurred; and no continuing condition that with notice or the lapse of
         time would constitute a default, breach, violation or event permitting
         acceleration under the terms of any Related Receivable has arisen; and
         the Seller shall not waive and has not waived any of the foregoing
         (except in a manner consistent with SECTION 4.2); and no Financed
         Vehicle financed under a Related Receivable shall have been
         repossessed.

                  (xiii) INSURANCE; OTHER. (A) Each Obligor under the Related
         Receivables has obtained an insurance policy covering the Financed
         Vehicle as of the execution of the Receivable insuring against loss and
         damage due to fire, theft, transportation, collision and other risks
         generally covered by comprehensive and collision coverage and the
         Seller and its successors and assigns are named the loss payee or an
         additional insured of such insurance policy, and each Related
         Receivable requires the Obligor to obtain and maintain such insurance
         naming the Seller and its successors and assigns as loss payee or an
         additional insured, (B) each Related Receivable that finances the cost
         of premiums for credit life and credit accident and health insurance is
         covered by an insurance policy or certificate of insurance naming the
         Seller as policyholder (creditor) under each such insurance policy and
         certificate of insurance and (C) as to each Related Receivable that
         finances the cost of an extended service contract, the respective
         Financed Vehicle which secures the Related Receivable is covered by an
         extended service contract.

                  (xiv) TITLE. It is the intention of the Seller that each
         transfer and assignment herein contemplated constitutes a sale of the
         Related Receivables and the related Other Conveyed Property from the
         Seller to the Purchaser and that the beneficial interest in and title
         to such Related Receivables and related Other Conveyed Property not be
         part of the Seller's estate in the event of the filing of a bankruptcy
         petition by or against the Seller under any bankruptcy law. No Related
         Receivable or related Other Conveyed Property has been sold,
         transferred, assigned, or pledged by the Seller to any Person other
         than the Purchaser and by the Purchaser to any Person other than the
         Trustee. Immediately prior to each transfer and assignment herein
         contemplated, the Seller had good and marketable title to each Related
         Receivable and related Other Conveyed Property and was the sole owner
         thereof, free and clear of all liens, claims, encumbrances, security
         interests, and rights of others, and, immediately upon the transfer
         thereof to the Purchaser and the concurrent pledge to the Trustee under
         the Indenture, the Trustee for the benefit of the Noteholder and the
         Insurer shall have a valid and enforceable security interest in the
         Collateral, free and clear of all liens, encumbrances, security
         interests, and rights of others, and such transfer has been perfected
         under the UCC.

                  (xv)LAWFUL ASSIGNMENT. No Related Receivable has been
         originated in, or is subject to the laws of, any jurisdiction under
         which the sale, transfer, and assignment of such Related Receivable
         under this Agreement or pursuant to transfers of the Note shall be
         unlawful, void, or voidable. The Seller has not entered into any
         agreement with any account debtor that prohibits, restricts or
         conditions the assignment of any portion of the Related Receivables.

                                       9
<PAGE>

                  (xvi) ALL FILINGS MADE. All filings (including, without
         limitation, UCC filings or other actions) necessary in any jurisdiction
         to give: (a) the Purchaser a first priority perfected ownership
         interest in the Receivables and the Other Conveyed Property and (b) the
         Trustee, for the benefit of the Noteholder and the Insurer, a first
         priority perfected security interest in the Collateral have been made,
         taken or performed.

                  (xvii) RECEIVABLE FILE; ONE ORIGINAL. The Seller has delivered
         to the Trustee, at the location specified in SCHEDULE B hereto, a
         complete Receivable File with respect to each Related Receivable, and
         the Trustee has delivered to the Purchaser, the Insurer and the Agent a
         copy of the Trust Receipt therefor. There is only one original executed
         copy of each Receivable.

                  (xviii) CHATTEL PAPER. Each Related Receivable constitutes
         "CHATTEL PAPER" under the UCC.

                  (xix) TITLE DOCUMENTS. (A) If the Related Receivable was
         originated in a State in which notation of a security interest on the
         title document of the related Financed Vehicle is required or permitted
         to perfect such security interest, the title document of the related
         Financed Vehicle for such Related Receivable shows, or if a new or
         replacement title document is being applied for with respect to such
         Financed Vehicle the title document (or, with respect to Related
         Receivables that finance a vehicle in the States listed in Annex B,
         other evidence of title issued by the applicable Department of Motor
         Vehicles or similar authority in such States) will be received within
         180 days and will show, the Seller named as the original secured party
         under the Related Receivable as the holder of a first priority security
         interest in such Financed Vehicle, and (B) if the Related Receivable
         was originated in a State in which the filing of a financing statement
         under the UCC is required to perfect a security interest in motor
         vehicles, such filings or recordings have been duly made and show the
         Seller named as the original secured party under the Related
         Receivable, and in either case, the Trustee has the same rights as such
         secured party has or would have (if such secured party were still the
         owner of the Receivable) against all parties claiming an interest in
         such Financed Vehicle. With respect to each Related Receivable for
         which the title document has not yet been returned from the Registrar
         of Titles, the Seller has received written evidence from the related
         Dealer that such title document showing the Seller as first lienholder
         has been applied for.

                  (xx) VALID AND BINDING OBLIGATION OF OBLIGOR. Each Related
         Receivable is the legal, valid and binding obligation in writing of the
         Obligor thereunder and is enforceable in accordance with its terms,
         except only as such enforcement may be limited by bankruptcy,
         insolvency or similar laws affecting the enforcement of creditors'
         rights generally, and all parties to such contract had full legal
         capacity to execute and deliver such contract and all other documents
         related thereto and to grant the security interest purported to be
         granted thereby. Each Related Receivable is not subject to any right of
         set-off by the Obligor.

                  (xxi) CHARACTERISTICS OF OBLIGORS. As of the date of each
         Obligor's application for the loan from which the Related Receivable
         arises, such Obligor (a) did not have any material past due credit
         obligations or any personal or real property repossessed or wages
         garnished within one year prior to the date of such application, unless
         such amounts have been repaid or discharged through bankruptcy, (b) was
         not the subject of any Federal, State or other bankruptcy, insolvency
         or similar proceeding pending on the date of application that is not
         discharged, (c) had not been the subject of more than one Federal,
         State or other bankruptcy, insolvency or similar proceeding, (d) was
         domiciled in the United States and (e) was not self-employed.

                  (xxii) POST-OFFICE BOX. On or prior to the next billing period
         after the related Cutoff Date, the Servicer will notify each Obligor to
         make payments with respect to its respective Related Receivables after
         the related Cutoff Date directly to the Post-Office Box, and will
         provide each Obligor with a monthly statement in order to enable such
         Obligor to make payments directly to the Post-Office Box.

                                       10
<PAGE>

                  (xxiii) CASUALTY. No Financed Vehicle financed under a Related
         Receivable has suffered a Casualty.

                  (xxiv) NO AGREEMENT TO LEND. The Obligor with respect to each
         Related Receivable does not have any option under the Receivable to
         borrow from any person any funds secured by the Financed Vehicle.

                  (xxv) OBLIGATION TO DEALERS OR OTHERS. The Purchaser and its
         assignees will assume no obligation to Dealers or other originators or
         holders of the Related Receivables (including, but not limited to under
         dealer reserves) as a result of its purchase of the Related
         Receivables.

                  (xxvi) NO IMPAIRMENT. Neither Seller nor the Purchaser has
         done anything to convey any right to any Person that would result in
         such Person having a right to payments due under any Related
         Receivables or otherwise to impair the rights of the Purchaser, the
         Trustee, the Noteholder or the Insurer in any Related Receivable or the
         proceeds thereof.

                  (xxvii) RECEIVABLES NOT ASSUMABLE. No Related Receivable is
         assumable by another Person in a manner which would release the Obligor
         thereof from such Obligor's obligations to the Purchaser or Seller with
         respect to such Related Receivable.

                  (xxviii) SERVICING. The servicing of each Related Receivable
         and the collection practices relating thereto have been lawful and in
         accordance with the standards set forth in this Agreement; and other
         than Seller and any Standby Servicer or Back-up Servicer pursuant to
         the Basic Documents, no other person has the right to service the
         Receivable.

                  (xxix) CREATION OF SECURITY INTEREST. This Agreement creates a
         valid and continuing security interest (as defined in the UCC) in the
         Trust Estate in favor of the Purchaser for the benefit of the
         Noteholder and the Insurer, which security interest is prior to all
         other Liens and is enforceable as such as against creditors of and
         purchasers from the Seller.

                  (xxx) PERFECTION OF SECURITY INTEREST IN TRUST ESTATE. The
         Seller has caused the filing of all appropriate financing statements in
         the proper filing office in the appropriate jurisdictions under
         applicable law in order to perfect the security interest in the Trust
         Estate granted to the Purchaser for the benefit of the Noteholder and
         the Insurer hereunder pursuant to SECTION 2.1 and the related
         Assignment.

                  (xxxi) NO OTHER SECURITY INTERESTS. Other than the security
         interest granted to the Purchaser for the benefit of the Noteholder and
         the Insurer pursuant to SECTION 2.1 and the related Assignment, the
         Seller has not pledged, assigned, sold, granted a security interest in,
         or otherwise conveyed any of the Trust Estate, other than such Security
         Interests as are released at or before the conveyance of the Trust
         Estate. The Seller has not authorized the filing of and is not aware of
         any financing statements filed against the Seller that include a
         description of collateral covering any portion of the Trust Estate
         other than any financing statement relating to the security interest
         granted to the Purchaser for the benefit of the Noteholder and the
         Insurer hereunder or that has been terminated or released as to the
         Trust Estate. The Seller is not aware of any judgment or tax lien
         filings against the Seller.

                  (xxxii) NOTATIONS ON CONTRACTS; FINANCING STATEMENT
         DISCLOSURE. The Servicer has in its possession copies of all Contracts
         that constitute or evidence the Receivables. The Contracts that
         constitute or evidence the Receivables do not have any marks or
         notations indicating that they have been pledged, assigned or otherwise
         conveyed to any Person other than the Purchaser and/or the Trustee for
         the benefit of the Noteholder and the Insurer. All financing statements
         filed or to be filed against the Seller in favor of the Purchaser in


                                       11
<PAGE>

         connection herewith describing the Trust Estate contain a statement to
         the following effect: "A purchase of or security interest in any
         collateral described in this financing statement will violate the
         rights of CPS Warehouse Trust, as secured party."

                  (xxxiii) STATE CONCENTRATION OPINIONS. If Eligible Receivables
         originated in any one state exceed 10% of the Aggregate Principal
         Balance of the Eligible Receivables, the Seller shall deliver to each
         Rating Agency, the Insurer and the Agent an Opinion of Counsel with
         respect to the security interest in the Financed Vehicles with respect
         to such state on or prior to the related Funding Date.

                  (xxxiv) RECEIVABLES ORIGINATED BY MERCURY FINANCE LLC.
         Receivables that have been acquired by Mercury Finance LLC will not be
         Eligible Receivables until the Rating Agency Condition is satisfied.

         SECTION 3.2. REPURCHASE UPON BREACH

                  The Seller, the Servicer, the Insurer or the Trustee, as the
case may be, shall inform the other parties to this Agreement promptly, in
writing, upon the discovery of any breach of the Seller's representations and
warranties made pursuant to SECTION 3.1 (without regard to any limitations
therein as to the Seller's knowledge). Unless the breach shall have been cured
by the last day of the next Accrual Period following the discovery thereof by
the Trustee or the Insurer or receipt by the Trustee and the Insurer of notice
from the Seller or the Servicer of such breach, the Seller shall repurchase any
Receivable if the value of such Receivable is materially and adversely affected
by the breach as of the last day of such next Accrual Period (or, at the
Seller's option, the last day of the first Accrual Period following the
discovery). In consideration of the purchase of any Receivable, the Seller shall
remit the Purchase Amount, in the manner specified in SECTION 5.6. The sole
remedy of the Purchaser, the Trustee, the Noteholder or the Insurer with respect
to a breach of representations and warranties pursuant to SECTION 3.1 shall be
to enforce the Seller's obligation to purchase such Receivables; PROVIDED,
HOWEVER, that the Seller shall indemnify the Trustee, the Standby Servicer, the
Insurer, the Purchaser, the Agent and the Noteholder against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of third party claims arising out of the events or facts giving rise to
such breach. Upon receipt of the Purchase Amount in respect of any Defective
Receivables and written instructions from the Servicer, the Trustee shall
release to the Seller or its designee the related Receivables File and shall
execute and deliver all reasonable instruments of transfer or assignment,
without recourse, as are prepared by the Seller and delivered to the Trustee and
necessary to vest in the Seller or such designee title to such Defective
Receivables including a Trustee's Certificate in the form of EXHIBIT E.

         SECTION 3.3. CUSTODY OF RECEIVABLES FILES.

         (a) In connection with each sale, transfer and assignment of
Receivables and related Other Conveyed Property to the Purchaser pursuant to
this Agreement and each Assignment, and each pledge thereof by the Purchaser to
the Trustee pursuant to the Indenture, the Trustee shall act as custodian of the
following documents or instruments in its possession which shall be delivered to
the Trustee on or before the Closing Date or the related Funding Date in
accordance with SECTION 3.4 (with respect to each Receivable) (excluding the
Funding Date that is to occur on March 15, 2002):

                  (i) The fully executed original of the Receivable (together
         with any agreements modifying the Receivable, including without
         limitation any extension agreements); and

                  (ii)The original certificate of title in the name of the
         Seller or such documents that the Seller shall keep on file, in
         accordance with its customary procedures, evidencing the security
         interest of the Seller in the Financed Vehicle or, if not yet received,
         a copy of the application therefor showing the Seller as secured party,
         or a dealer guarantee of title.

         (b) Upon payment in full of any Receivable, the Servicer will notify
the Trustee pursuant to a certificate of an officer of the Servicer in the form
of EXHIBIT C (which certificate shall include a statement to the effect that all
amounts received in connection with such payments which are required to be


                                       12
<PAGE>

deposited in the Collection Account pursuant to SECTION 4.2 have been so
deposited) and shall request delivery of the Receivable and Receivable File to
the Servicer.

         SECTION 3.4. ACCEPTANCE OF RECEIVABLE FILES BY TRUSTEE. In connection
with any Funding Date (excluding the first Funding Date that is to occur on
March 15, 2002), the Seller shall cause to be delivered to the Trustee the
Receivable Files for the Related Receivables to be purchased not less than four
Business Days prior to the related Funding Date. The Trustee shall within two
Business Days after receipt of such files, execute and deliver to the Insurer
and the Agent, a Trust Receipt for the Receivable Files received by the Trustee.
By its delivery of a Trust Receipt, the Trustee shall be deemed to have (a)
acknowledged receipt of the files (or the Receivables) which the Seller has
represented are and contain the Receivable Files for the Related Receivables
purchased by the Purchaser on the related Funding Date, (b) reviewed such files
or Receivables and (c) determined that it has received a file (or a Receivable)
for each Related Receivable identified in SCHEDULE A to the related Assignment.
The Trustee declares that it will hold and will continue to hold such files and
any amendments, replacements or supplements thereto and all Other Conveyed
Property as Trustee, custodian, agent and bailee in trust for the use and
benefit of each present and future Noteholder and the Insurer. The Trustee
agrees to review each file delivered to it no later than (x) 20 days if less
than 7,500 files and (y) 30 days if greater than 7,500 files after the related
Funding Date to determine whether such Receivable Files contain the documents
referred to in SECTION 3.3(A). If the Trustee has found or finds that a file for
a Receivable has not been received, or that a file is unrelated to the
Receivables identified in SCHEDULE A to the related Assignment or that any of
the documents referred to in SECTION 3.3(A)(I) or (II) are not contained in a
Receivable File, the Trustee shall inform the Purchaser, the Seller, the Agent
and the Insurer promptly, in writing, of the failure to receive a file with
respect to such Receivable (or the failure of any of the aforementioned
documents to be included in the Receivable File) or shall return to the
Purchaser, as the Seller's designee any file unrelated to a Receivable
identified in SCHEDULE A to the related Assignment (it being understood that the
Trustee's obligation to review the contents of any Receivable File shall be
limited as set forth in the preceding sentence). Unless such defect with respect
to such Receivable File shall have been cured by the last day of the next
Accrual Period following discovery thereof by the Trustee, the Trustee shall
cause the Seller to repurchase any such Receivable as of such last day. In
consideration of the purchase of the Receivable, the Seller shall remit the
Purchase Amount for such Receivable, in the manner specified in SECTION 5.6. The
sole remedy of the Trustee, the Purchaser, the Noteholder and the Insurer with
respect to a breach pursuant to this SECTION 3.4 shall be to require the Seller
to purchase the applicable Receivables pursuant to this SECTION 3.4; PROVIDED,
HOWEVER, that the Seller shall indemnify the Trustee, the Standby Servicer, the
Insurer, the Purchaser, the Agent and the Noteholder against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of third party claims arising out of the events or facts giving rise to
such breach. Upon receipt of the Purchase Amount for a Receivable and written
instructions from the Servicer, the Trustee shall release to the Seller or its
designee the related Receivable File and shall execute and deliver all
reasonable instruments of transfer or assignment, without recourse, as are
prepared by the Seller and delivered to the Trustee and are necessary to vest in
the Seller or such designee title to the Receivable including a Trustee's
Certificate in the form of EXHIBIT E. The Trustee shall make a list of
Receivables for which an application for a certificate of title but not an
original certificate of title or, with respect to Receivables that finance a
vehicle in the States listed in Annex B, other evidence of title issued by the
applicable Department of Motor Vehicles or similar authority in such States, is
included in the Receivable File as of the date of its review of the Receivable
Files and deliver a copy of such list to the Servicer, the Agent and the
Insurer. On the date which is 180 days following the related Funding Date, and
monthly thereafter, the Trustee shall inform the Seller and the other parties to
this Agreement and the Insurer of any Receivable for which the related
Receivable File on such date does not include an original certificate of title
or, with respect to Financed Vehicles in the States listed in Annex B, other
evidence of title issued by the applicable Department of Motor Vehicles or
similar authority in such States, and the Seller shall repurchase any such
Receivable as of the last Business Day of the Accrual Period in which the
expiration of such 180 days occurs. In consideration of the purchase of the
Receivable, the Seller shall remit the Purchase Amount for such Receivable, in
the manner specified in SECTION 5.6.

                                       13
<PAGE>

         SECTION 3.5. ACCESS TO RECEIVABLE FILES. The Trustee shall permit the
Servicer and the Controlling Party access to the Receivable Files at all
reasonable times during the Trustee's normal business hours. The Trustee shall,
within two Business Days of the request of the Servicer or the Controlling
Party, execute such documents and instruments as are prepared by the Servicer or
the Controlling Party and delivered to the Trustee, as the Servicer or the
Controlling Party deems necessary to permit the Servicer, in accordance with its
customary servicing procedures, to enforce the Receivable on behalf of the
Purchaser and any related insurance policies covering the Obligor, the
Receivable or Financed Vehicle so long as such execution in the Trustee's sole
discretion does not conflict with this Agreement or the Indenture and will not
cause it undue risk or liability. The Trustee shall not be obligated to release
any document from any Receivable File unless it receives a trust receipt signed
by a Servicing Officer in the form of EXHIBIT C hereto (the "SERVICER RECEIPT").
Such Servicer Receipt shall obligate the Servicer to return such document(s) to
the Trustee when the need therefor no longer exists unless the Receivable shall
be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer substantially in the form of EXHIBIT C hereto to the effect that all
amounts required to be deposited in the Collection Account with respect to such
Receivable have been so deposited, the Servicer Receipt shall be released by the
Trustee to the Servicer.

         SECTION 3.6. TRUSTEE TO OBTAIN FIDELITY INSURANCE. The Trustee shall
maintain a fidelity bond in the form and amount as is customary for entities
acting as a trustee of funds and documents in respect of consumer contracts on
behalf of institutional investors.

         SECTION 3.7. TRUSTEE TO MAINTAIN SECURE FACILITIES. The Trustee shall
maintain or cause to be maintained continuous custody of the Receivables Files
in secure and fire resistant facilities in accordance with customary standards
for such custody.

                                   ARTICLE IV
                                   ----------

                   ADMINISTRATION AND SERVICING OF RECEIVABLES
                   -------------------------------------------

         SECTION 4.1. DUTIES OF THE SERVICER. The Servicer, as agent for the
Purchaser, the Noteholder and the Insurer (to the extent provided herein) shall
manage, service, administer and make collections on the Receivables with
reasonable care, using that degree of skill and attention customary and usual
for institutions which service motor vehicle retail installment sale contracts
similar to the Receivables and, to the extent more exacting, that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. In performing such duties, the Servicer shall comply with
its current servicing policies and procedures, as such servicing policies and
procedures may be amended from time to time, so long as such amendments will not
materially adversely affect the interests of the Noteholder or the Insurer, and
notice of such amendments is given to the Insurer prior to the effectiveness
thereof. The Servicer's duties shall include collection and posting of all
payments, responding to inquiries of Obligors on such Receivables, investigating
delinquencies, sending payment statements to Obligors, reporting tax information
to Obligors, accounting for collections, furnishing monthly and annual
statements to the Trustee and the Insurer with respect to distributions. Without
limiting the generality of the foregoing, and subject to the servicing standards
set forth in this Agreement including, without limitation, the restrictions set
forth in SECTION 4.6, the Servicer is authorized and empowered by the Purchaser
to execute and deliver, on behalf of itself, the Purchaser or the Noteholder,
any and all instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to such
Receivables or to the Financed Vehicles securing such Receivables and/or the


                                       14
<PAGE>

certificates of title or, with respect to Financed Vehicles in the States listed
in Annex B, other evidence of title issued by the applicable Department of Motor
Vehicles or similar authority in such States with respect to such Financed
Vehicles. If the Servicer shall commence a legal proceeding to enforce a
Receivable, the Purchaser shall thereupon be deemed to have automatically
assigned, solely for the purpose of collection, such Receivable to the Servicer.
If in any enforcement suit or legal proceeding it shall be held that the
Servicer may not enforce a Receivable on the ground that it shall not be a real
party in interest or a holder entitled to enforce such Receivable, the Purchaser
shall, at the Servicer's expense and direction, take steps to enforce such
Receivable, including bringing suit in its name or the name of the Noteholder.
The Servicer shall prepare and furnish, and the Trustee shall execute, any
powers of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder.

         SECTION 4.2. COLLECTION OF RECEIVABLE PAYMENTS; MODIFICATIONS OF
RECEIVABLES; LOCKBOX AGREEMENTS.

         (a) Consistent with the standards, policies and procedures required by
this Agreement, the Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Receivables as and
when the same shall become due and shall follow such collection procedures as it
follows with respect to all comparable automotive receivables that it services
for itself or others; PROVIDED, HOWEVER, that promptly after the Closing Date
(or the related Funding Date, as applicable) the Servicer shall notify each
Obligor to make all payments with respect to the Receivables to the Post-Office
Box. The Servicer will provide each Obligor with a monthly statement in order to
notify such Obligors to make payments directly to the Post-Office Box. The
Servicer shall allocate collections between principal and interest in accordance
with the customary servicing procedures it follows with respect to all
comparable automotive receivables that it services for itself or others and in
accordance with the terms of this Agreement. Except as provided below, the
Servicer, for as long as the Seller is the Servicer, may in accordance with the
Seller's Contract Purchase Guidelines grant extensions on a Receivable;
PROVIDED, HOWEVER, that the Servicer may not grant more than one (1) extension
per calendar year with respect to a Receivable or grant an extension with
respect to a Receivable for more than one (1) calendar month or grant more than
three (3) extensions in the aggregate with respect to a Receivable without the
prior written consent of the Controlling Party. In no event shall the principal
balance of a Receivable be reduced, except in connection with a settlement in
the event the Receivable becomes a Defaulted Receivable. If the Servicer is not
the Seller, SST or the Standby Servicer, the Servicer may not make any extension
on a Receivable without the prior written consent of the Controlling Party. The
Servicer may in its discretion waive any prepayment charge, late payment charge
or any other similar fees that may be collected in the ordinary course of
servicing a Receivable. Notwithstanding anything to the contrary contained
herein, the Servicer shall not agree to any alteration of the interest rate on
any Receivable or of the amount of any Scheduled Receivable Payment on
Receivables, other than to the extent that such alteration is required by
applicable law.

         (b) The Servicer shall establish the Lockbox Account in the name of the
Purchaser for the benefit of the Trustee, acting on behalf of the Noteholder and
the Insurer. Pursuant to the Lockbox Agreement, the Trustee has authorized the
Servicer to direct dispositions of funds on deposit in the Lockbox Account to
the Collection Account (but not to any other account), and no other Person,
except the Lockbox Processor and the Trustee, has authority to direct
disposition of funds on deposit in the Lockbox Account. However, the Lockbox
Agreement shall provide that Lockbox Banks will comply with instructions
originated by the Trustee relating to the disposition of the funds in the
Lockbox Account without further consent by the Seller, the Servicer or the
Purchaser. The Trustee shall have no liability or responsibility with respect to
the Lockbox Processor's directions or activities as set forth in the preceding
sentence. The Lockbox Account shall be established pursuant to and maintained in
accordance with the Lockbox Agreement and shall be a demand deposit account
initially established and maintained with Bank One, N.A., or at the request of
the Controlling Party an Eligible Account satisfying CLAUSE (i) of the
definition thereof; PROVIDED, HOWEVER, that the Trustee shall give the Servicer
prior written notice of any change made at the request of the Controlling Party
in the location of the Lockbox Account. The Trustee shall establish and maintain
the Post-Office Box at a United States Post Office Branch in the name of the
Purchaser for the benefit of the Noteholder and the Insurer.

         (c) Notwithstanding any Lockbox Agreement, or any of the provisions of
this Agreement relating to the Lockbox Agreement, the Servicer shall remain
obligated and liable to the Purchaser, the Trustee, the Insurer and the
Noteholder for servicing and administering the Receivables and the Other
Conveyed Property in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue thereof.

                                       15
<PAGE>

         (d) In the event the Seller shall for any reason no longer be acting as
the Servicer hereunder, the Standby Servicer or a successor Servicer shall
thereupon assume all of the rights and obligations of the outgoing Servicer
under the Lockbox Agreement. In such event, the Standby Servicer or a successor
Servicer shall be deemed to have assumed all of the outgoing Servicer's interest
therein and to have replaced the outgoing Servicer as a party to the Lockbox
Agreement to the same extent as if such Lockbox Agreement had been assigned to
the Standby Servicer or a successor Servicer, except that the outgoing Servicer
shall not thereby be relieved of any liability or obligations on the part of the
outgoing Servicer to the Lockbox Bank under such Lockbox Agreement. The outgoing
Servicer shall, upon request of the Trustee, but at the expense of the outgoing
Servicer, deliver to the Standby Servicer or a successor Servicer all documents
and records relating to the Lockbox Agreement and an accounting of amounts
collected and held by the Lockbox Bank and otherwise use its best efforts to
effect the orderly and efficient assignment of any Lockbox Agreement to the
Standby Servicer or a successor Servicer. In the event that the Controlling
Party shall elect to change the identity of the Lockbox Bank, the Servicer, at
its expense, shall cause the Lockbox Bank to deliver, at the direction of the
Controlling Party, to the Trustee or a successor Lockbox Bank, all documents and
records relating to the Receivables and all amounts held (or thereafter
received) by the Lockbox Bank (together with an accounting of such amounts) and
shall otherwise use its best efforts to effect the orderly and efficient
transfer of the Lockbox arrangements.

         (e) On each Business Day, pursuant to the Lockbox Agreement, the
Lockbox Processor will transfer any payments from Obligors received in the
Post-Office Box to the Lockbox Account. The Servicer shall cause the Lockbox
Bank to transfer cleared funds from the Lockbox Account to the Collection
Account. In addition, the Servicer shall remit all payments by or on behalf of
the Obligors received by the Servicer with respect to the Receivables (other
than Purchased Receivables), and all Liquidation Proceeds no later than the
Business Day following receipt directly (without deposit into any intervening
account) into the Lockbox Account or the Collection Account. The Servicer shall
not commingle its assets and funds with those on deposit in the Lockbox Account.

         SECTION 4.3. REALIZATION UPON RECEIVABLES. On behalf of the Purchaser,
the Noteholder and the Insurer, the Servicer shall use its best efforts,
consistent with the servicing procedures set forth herein, to repossess or
otherwise convert the ownership of the Financed Vehicle securing any Receivable
as to which the Servicer shall have determined eventual payment in full is
unlikely. The Servicer shall commence efforts to repossess or otherwise convert
the ownership of a Financed Vehicle on or prior to the date that an Obligor has
failed to make more than 90% of a Scheduled Receivable Payment thereon in excess
of $10 for 120 days or more; PROVIDED, HOWEVER, that the Servicer may elect not
to commence such efforts within such time period if in its good faith judgment
it determines either that it would be impracticable to do so or that the
proceeds ultimately recoverable with respect to such Receivable would be
increased by forbearance. The Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable in its
servicing of automotive receivables, consistent with the standards of care set
forth in SECTION 4.2, which may include reasonable efforts to realize upon any
recourse to Dealers and selling the Financed Vehicle at public or private sale.
The foregoing shall be subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with the repair or the repossession of such Financed Vehicle
unless it shall determine in its discretion that such repair and/or repossession
will increase the proceeds ultimately recoverable with respect to such
Receivable by an amount greater than the amount of such expenses.

         SECTION 4.4. INSURANCE.

         (a) The Servicer, in accordance with the servicing procedures and
standards set forth herein, shall require that (i) each Obligor shall have
obtained insurance covering the Financed Vehicle, as of the date of the
execution of the Receivable, insuring against loss and damage due to fire,
theft, transportation, collision and other risks generally covered by
comprehensive and collision coverage and each Receivable requires the Obligor to
maintain such physical loss and damage insurance naming the Seller and its
successors and assigns as an additional insured, (ii) each Receivable that
finances the cost of premiums for credit life and credit accident and health
insurance is covered by an insurance policy or certificate naming the Seller as
policyholder (creditor) and (iii) as to each Receivable that finances the cost
of an extended service contract, the respective Financed Vehicle which secures
the Receivable is covered by an extended service contract (each, a "RECEIVABLES
INSURANCE POLICY").

                                       16
<PAGE>

         (b) To the extent applicable, the Servicer shall not take any action
which would result in noncoverage under any Receivables Insurance Policy which,
but for the actions of the Servicer, would have been covered thereunder. The
Servicer, on behalf of the Purchaser, shall take such reasonable action as shall
be necessary to permit recovery under each Receivables Insurance Policy. Any
amounts collected by the Servicer under any Receivables Insurance Policy shall
be deposited in the Collection Account pursuant to SECTION 5.6.

         SECTION 4.5. MAINTENANCE OF SECURITY INTERESTS IN VEHICLES.

         (a) Consistent with the policies and procedures required by this
Agreement, the Servicer shall take such steps on behalf of the Purchaser as are
necessary to maintain perfection of the security interest created by each
Receivable in the related Financed Vehicle, including but not limited to
obtaining the execution by the Obligors and the recording, registering, filing,
re-recording, re-registering and refiling of all security agreements, financing
statements and continuation statements or instruments as are necessary to
maintain the security interest granted by the Obligors under the respective
Receivables. The Trustee hereby authorizes the Servicer, and the Servicer
agrees, to take any and all steps necessary to re-perfect or continue the
perfection of such security interest on behalf of the Purchaser, the Noteholder
and the Insurer as necessary because of the relocation of a Financed Vehicle or
for any other reason. In the event that the assignment of a Receivable to the
Purchaser, and the pledge thereof by the Purchaser to the Trustee is
insufficient, without a notation on the related Financed Vehicle's certificate
of title, or without fulfilling any additional administrative requirements under
the laws of the state in which the Financed Vehicle is located, to perfect a
security interest in the related Financed Vehicle in favor of the Trustee, each
of the Trustee, the Noteholder, the Insurer and the Seller hereby agrees that
the Seller's designation as the secured party on the certificate of title is in
respect of the Seller's capacity as Servicer as agent of the Trustee for the
benefit of the Noteholder and the Insurer.

         (b) Upon the occurrence of an Insurance Agreement Event of Default, the
Insurer may (so long as it is the Controlling Party) instruct the Trustee and
the Servicer to take or cause to be taken, or, if the Insurer is not the
Controlling Party, upon the occurrence of a Servicer Termination Event, the
Trustee, and the Servicer shall take or cause to be taken such action as may, in
the opinion of counsel to the Trustee, which opinion shall not be an expense of
the Trustee, be necessary to perfect or re-perfect the security interests in the
Financed Vehicles securing the Receivables in the name of the Trustee on behalf
of the Noteholder and the Insurer by amending the title documents of such
Financed Vehicles or by such other reasonable means as may, in the opinion of
counsel to the Trustee, which opinion shall not be an expense of the Trustee, be
necessary or prudent. The Seller hereby agrees to pay all expenses related to
such perfection or re-perfection and to take all action necessary therefor. In
addition, prior to the occurrence of an Insurance Agreement Event of Default,
the Controlling Party may instruct the Trustee and the Servicer to take or cause
to be taken such action as may, in the opinion of counsel to the Controlling
Party, be necessary to perfect or re-perfect the security interest in the
Financed Vehicles underlying the Receivables in the name of the Trustee on
behalf of the Noteholder and the Insurer, including by amending the title
documents of such Financed Vehicles or by such other reasonable means as may, in
the opinion of counsel to the Controlling Party, be necessary or prudent;
PROVIDED, HOWEVER, that if the Controlling Party requests that the title
documents be amended prior to the occurrence of an Insurance Agreement Event of
Default, the out-of-pocket expenses of the Servicer or the Trustee in connection
with such action shall be reimbursed to the Servicer or the Trustee, as
applicable, by the Controlling Party.

         SECTION 4.6. ADDITIONAL COVENANTS OF SERVICER. The Servicer shall not
release the Financed Vehicle securing each Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by the Obligor thereunder or repossession or other liquidation of the
Financed Vehicle, nor shall the Servicer impair the rights of the Noteholder in
such Receivables, nor shall the Servicer amend or otherwise modify a Receivable,
except as permitted in accordance with SECTION 4.2. The Servicer shall obtain
and/or maintain all necessary licenses, approvals, authorizations, orders or
other actions of any person, corporation or other organization, or of any court,
governmental agency or body or official, required in connection with the
execution, delivery and performance of this Agreement and the other Basic
Documents.

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<PAGE>

         SECTION 4.7. PURCHASE OF RECEIVABLES UPON BREACH OF COVENANT. Upon
discovery by any of the Servicer, the Purchaser, the Insurer or the Trustee of a
breach of any of the covenants of the Servicer set forth in SECTION 4.2(a), 4.4,
4.5 or 4.6, the party discovering such breach shall give prompt written notice
to the others; PROVIDED, HOWEVER, that the failure to give any such notice shall
not affect any obligation of the Servicer under this SECTION 4.7. Unless the
breach shall have been cured by the last day of the next Accrual Period
following such discovery, the Servicer shall purchase any Receivable materially
and adversely affected by such breach. In consideration of the purchase of such
Receivable, the Servicer shall remit the Purchase Amount for such Receivable in
the manner specified in SECTION 5.6. The sole remedy of the Trustee, the
Purchaser, the Insurer or the Noteholder with respect to a breach of SECTION
4.2(a), 4.3, 4.4, 4.5 or 4.6 shall be to require the Servicer to repurchase
Receivables pursuant to this SECTION 4.7; PROVIDED, HOWEVER, that the Servicer
shall indemnify the Trustee, the Standby Servicer, the Insurer, the Purchaser,
the Agent and the Noteholder against all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel, which
may be asserted against or incurred by any of them as a result of third party
claims arising out of the events or facts giving rise to such breach.

         SECTION 4.8. SERVICING FEE. The "SERVICING FEE" for each Settlement
Date shall be equal to the product of one twelfth times the Servicing Fee
Percentage times the Aggregate Principal Balance of the Eligible Receivables as
of the first day of the related Accrual Period. The Servicing Fee shall also
include all late fees, prepayment charges including, in the case of a Rule of
78's Receivable that is prepaid in full, to the extent not required by law to be
remitted to the related Obligor, the difference between the Principal Balance of
such Rule of 78's Receivable (plus accrued interest to the date of prepayment)
and the principal balance of such Receivable computed according to the "Rule of
78's", and other administrative fees or similar charges allowed by applicable
law with respect to Receivables, collected (from whatever source) on the
Receivables. If the Standby Servicer becomes the successor Servicer, the
"Servicing Fee" payable to the Standby Servicer as successor Servicer shall be
determined in accordance with the Servicing and Lockbox Processing Assumption
Agreement.

         SECTION 4.9. SERVICER'S CERTIFICATE. No later than 9:00 am. Phoenix
time on each Determination Date, the Servicer shall deliver (facsimile delivery
being acceptable) to the Trustee, the Insurer, the Rating Agencies, the Agent
and the Purchaser, a Servicer's Certificate containing among other things, (i)
all information necessary to enable the Trustee to make any withdrawal and
deposit required by SECTION 5.5 and to make the distributions required by
SECTION 5.7, (ii) the total number of Receivable Files held (in whole or in
part) by the Servicer rather than the Trustee at the end of the applicable
Accrual Period, (iii) all information necessary for the Trustee to send
statements to the Noteholder and the Insurer pursuant to SECTION 5.8(b) and 5.9,
(iv) a listing of all Purchased Receivables purchased as of the related
Accounting Date, identifying the Receivables so purchased, (v) the calculation
of the Borrowing Base and (vi) all information necessary to enable the Standby
Servicer to verify the information specified in SECTION 4.14(b) and to complete
the accounting required by SECTION 5.9. Receivables purchased by the Servicer or
by the Seller from the Purchaser in accordance with this Agreement by the
related Accounting Date and each Receivable which became a Liquidated Receivable
or which was paid in full during the related Accrual Period shall be identified
by account number (as set forth in the Schedule of Receivables). In addition to
the information set forth in the preceding sentence, the Servicer's Certificate
shall also state whether to the knowledge of the Servicer, an Insurance
Agreement Event of Default, an Insurance Agreement Indenture Cross Default, a
Servicer Termination Event or a Funding Termination Event has occurred.

         SECTION 4.10. ANNUAL STATEMENT AS TO COMPLIANCE, NOTICE OF SERVICER
TERMINATION EVENT.

         (a) The Servicer shall deliver to the Purchaser, to the Trustee for
delivery to the Agent and the Noteholder, the Standby Servicer, the Insurer, and
each Rating Agency, on or before February 28 of each year beginning February 28,
2003, an Officer's Certificate, dated as of December 31 of the preceding year,
stating that (i) a review of the activities of the Servicer during the preceding
12-month period (or, in the case of the first such certificate, the period from
the initial Cutoff Date to December 31, 2002) and of its performance under this


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<PAGE>

Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such year (or, in the case of
the first such certificate, such shorter period), or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof.

         (b) The Servicer shall deliver to the Trustee, the Agent and the
Noteholder, the Standby Servicer, the Insurer and each Rating Agency, promptly
after having obtained knowledge thereof, but in no event later than two (2)
Business Days thereafter, written notice in an Officer's Certificate of any
event which with the giving of notice or lapse of time, or both, would become a
Servicer Termination Event under SECTION 10.1.

         SECTION 4.11. INDEPENDENT ACCOUNTANTS' REPORTS. (a) Unless SST or the
Standby Servicer is the Servicer, the Servicer shall cause a firm of nationally
recognized independent certified public accountants (the "INDEPENDENT
ACCOUNTANTS"), who may also render other services to the Servicer or to the
Purchaser, to deliver to the Trustee, the Standby Servicer, the Insurer, the
Agent, the Noteholder and each Rating Agency, on or before February 28 of each
year beginning February 28, 2003, a report dated as of December 31 of the
preceding year (the "ACCOUNTANTS' REPORT") and reviewing the Servicer's
activities during the preceding 12-month period (or, in the case of the first
such report, the period from the Cutoff Date with respect to Receivables
transferred to the Purchaser on the initial Funding Date to December 31, 2002),
addressed to the Board of Directors of the Servicer, to the Trustee, the Standby
Servicer and to the Insurer, to the effect that such firm has examined the
financial statements of the Servicer and issued its report therefor and that
such examination (1) was made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting records and
such other auditing procedures as such firm considered necessary in the
circumstances; (2) included tests relating to auto loans serviced for others in
accordance with the requirements of the Uniform Single Attestation Program for
Mortgage Bankers (the "PROGRAM"), to the extent the procedures in the Program
are applicable to the servicing obligations set forth in this Agreement; (3)
included an examination of the delinquency and loss statistics relating to the
Servicer's portfolio of automobile and light truck installment sale contracts;
and (4) except as described in the report, disclosed no exceptions or errors in
the records relating to automobile and light truck loans serviced for others
that, in the firm's opinion, paragraph four of the Program requires such firm to
report. The accountant's report shall further state that (1) a review in
accordance with agreed upon procedures was made of three randomly selected
Servicer Certificates; (2) except as disclosed in the report, no exceptions or
errors in the Servicer Certificates were found; and (3) the delinquency and loss
information relating to the Receivables and the stated amount of Liquidated
Receivables, if any, contained in the Servicer Certificates were found to be
accurate. In the event such firm requires the Trustee and/or the Standby
Servicer to agree to the procedures performed by such firm, the Servicer shall
direct the Trustee and/or the Standby Servicer, as applicable, in writing to so
agree; it being understood and agreed that the Trustee and/or the Standby
Servicer will deliver such letter of agreement in conclusive reliance upon the
direction of the Servicer, and neither the Trustee nor the Standby Servicer
makes any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.

         The Report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.

         (b) As soon as practical but not later than 30 days after the
Servicer's Certificate for the second Interest Period, a nationally recognized
firm of independent public accountants will perform certain agreed upon
procedures with respect to the accuracy of the Servicer's Certificates with
respect to the first two Interest Periods in relation to the Servicer's records
and files and the degree of the Servicer's compliance with respect to deadlines
for cash remittances to the Collection Account. If such review indicates a high
degree of accuracy in the Servicer's Certificate and a high degree of compliance
with respect to the remittance requirements, in each case in the reasonable
judgment of the Controlling Party, such firm will perform the same procedures on
a quarterly basis with respect to one Servicer's Certificate delivered during
the most recently ended quarter. If the review of the Servicer's Certificate for
the first two Interest Periods indicate a low degree of accuracy in the
reporting or adherence to such remittance requirements, such procedures will
continue at a frequency rate determined by the Controlling Party, until such
time as a high degree of accuracy has been obtained.

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<PAGE>

         SECTION 4.12. ACCOUNTANTS' REVIEW OF RECEIVABLE FILES. Commencing on
June 30, 2002 and on each September 30, December 31, March 31 and June 30, and
prior to the Final Scheduled Settlement Date (or such other dates as the
Controlling Party may determine in its sole and absolute discretion from time to
time by prior written notice to the Seller, the Servicer, the Purchaser, the
Agent and the Trustee), the Seller at its own expense shall cause Independent
Accountants acceptable to the Controlling Party to conduct a post-funding review
of the Seller's compliance with its stated underwriting policies and verify
certain characteristics of the Receivables as of each Funding Date. The
Independent Accountants shall within ten Business Days complete such physical
inspection and limited review and execute and deliver to Seller, the Servicer,
the Purchaser, the Trustee, the Insurer and the Agent an Independent
Accountant's Report with respect to such review substantially in the form of
EXHIBIT F hereto. If such review reveals, in the Controlling Party's reasonable
opinion, an unsatisfactory number of exceptions, the Controlling Party, in its
sole and absolute discretion, may require a full review of every Receivable File
by the Independent Accounts at the expense of the Seller. The Trustee must
receive no less than 5 Business Days' prior written notice of any review of the
Receivables Files under this SECTION 4.12. The Servicer shall be required to pay
any and all costs incurred by the Trustee in connection with any such review.

         SECTION 4.13. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to representatives of the Trustee, the
Standby Servicer, the Insurer and the Agent reasonable access to the
documentation regarding the Receivables. In each case, such access shall be
afforded without charge but only upon reasonable request and during normal
business hours. Nothing in this Section shall derogate from the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section.

         SECTION 4.14. VERIFICATION OF SERVICER'S CERTIFICATE.

         (a) Concurrently with the delivery by the Servicer of the Servicer's
Certificate each month, the Servicer will deliver to the Trustee, the Standby
Servicer and the Backup Servicer a computer diskette (or other electronic
transmission) in a format acceptable to the Trustee, the Standby Servicer and
the Backup Servicer containing information with respect to the Receivables as of
the close of business on the last day of the preceding Interest Period which
information is necessary for preparation of the Servicer's Certificate. The
Standby Servicer shall use such computer diskette (or other electronic
transmission) to verify certain information specified in SECTION 4.14(b)
contained in the Servicer's Certificate delivered by the Servicer, and the
Standby Servicer shall notify the Servicer and the Insurer of any discrepancies
on or before the second Business Day following the Determination Date. In the
event that the Standby Servicer reports any discrepancies, the Servicer and the
Standby Servicer shall attempt to reconcile such discrepancies by the related
Settlement Date, but in the absence of a reconciliation, the Servicer's
Certificate shall control for the purpose of calculations and distributions with
respect to the related Settlement Date. In the event that the Standby Servicer
and the Servicer are unable to reconcile discrepancies with respect to a
Servicer's Certificate by the related Settlement Date, the Standby Servicer
shall notify the Insurer and the Agent thereof in writing and the Servicer shall
cause a firm of independent certified public accountants, at the Servicer's
expense, to audit the Servicer's Certificate and, prior to the fifth day of the
following calendar month, reconcile the discrepancies. The effect, if any, of
such reconciliation shall be reflected in the Servicer's Certificate for such
next succeeding Determination Date. Other than the duties specifically set forth
in this Agreement, the Standby Servicer shall have no obligations hereunder,
including, without limitation, to supervise, verify, monitor or administer the
performance of the Servicer. The Standby Servicer shall have no liability for
any actions taken or omitted by the Servicer. The duties and obligations of the
Standby Servicer shall be determined solely by the express provisions of this
Agreement and no implied covenants or obligations shall be read into this
Agreement against the Standby Servicer.

         (b) The Standby Servicer shall review each Servicer's Certificate
delivered pursuant to SECTION 4.14(a) and shall:

                  (i) confirm that such Servicer's Certificate is complete on
         its face;

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<PAGE>

                  (ii)load the computer diskette (which shall be in a format
         acceptable to the Standby Servicer) received from the Servicer pursuant
         to SECTION 4.14(a) hereof, confirm that such computer diskette is in a
         readable form and calculate and confirm the Principal Balance of each
         Receivable for the most recent Settlement Date; and

                  (iii) confirm that Available Funds, the Noteholder's Principal
         Distributable Amount, the Noteholder's Interest Distributable Amount,
         the Standby Fee, the Servicing Fee, the Backup Servicing Fee, the
         Trustee Fee, the Owner Trustee Fee, the Premium in the Servicer's
         Certificate are accurate based solely on the recalculation of the
         Servicer's Certificate.

         SECTION 4.15. RETENTION AND TERMINATION OF SERVICER. As long as the
Seller acts as Servicer, the Servicer hereby covenants and agrees to act as such
under this Agreement for an initial term commencing on the Closing Date and
ending on June 30, 2002, which term may be extended by the Controlling Party for
successive quarterly terms ending on each successive September 30, December 31,
March 31 and June 30 (or, at the discretion of the Controlling Party exercised
pursuant to revocable written standing instructions from time to time to the
Servicer and the Trustee, for any specified number of terms greater than one),
until such time as the Note have been paid in full, and all amounts due to the
Insurer have been paid in full. Each such notice (including each notice pursuant
to standing instructions, which shall be deemed delivered at the end of
successive terms for so long as such instructions are in effect) (a "SERVICER
EXTENSION NOTICE") shall be delivered by the Controlling Party to the Trustee
and the Servicer. The Servicer hereby agrees that, upon its receipt of any such
Servicer Extension Notice, the Servicer shall become bound, for the duration of
the term covered by such Servicer Extension Notice, to continue as the Servicer
subject to and in accordance with the other provisions of this Agreement. Until
such time as an Insurer Default shall have occurred and be continuing, the
Trustee agrees that if as of the fifteenth day prior to the last day of any term
of the Servicer, the Trustee shall not have received any Servicer Extension
Notice from the Controlling Party, the Trustee shall, within five days
thereafter, give written notice of such non-receipt to the Controlling Party. If
the Controlling Party does not deliver a Servicer Extension Notice to the
Trustee and the Servicer on or prior to the last day of any term of the
Servicer, the Person then acting as Servicer shall, unless otherwise agreed to
in writing by the Controlling Party, cease to be the Servicer hereunder in
accordance with SECTION 10.3.

         SECTION 4.16. FIDELITY BOND. The Servicer shall maintain a fidelity
bond in such form and amount as is customary for entities acting as custodian of
funds and documents in respect of consumer contracts on behalf of institutional
investors.

         SECTION 4.17. LIEN SEARCHES; OPINIONS AS TO TRANSFERS AND SECURITY
INTERESTS. The Servicer shall, on the Closing Date and, thereafter annually on
or before each anniversary of the Closing Date, deliver (or cause to be
delivered) to the Trustee, the Insurer and the Agent an Opinion of Counsel, in
form and substance satisfactory to the Insurer, with respect to (a) the "true
sale" nature of the transfers of Receivables and, to the extent applicable,
related Other Conveyed Property hereunder and under each related Assignment, (b)
the "backup security interest" with respect to the transfers of Receivables and,
to the extent applicable, related Other Conveyed Property hereunder and under
each related Assignment, (c) the validity of the security interest in connection
with the pledge of Collateral to the Trustee under the Indenture on each Funding
Date and (d) the perfection and first priority of the transfers and pledges
referred to in CLAUSES (a)-(c) above. To the extent each such Opinion of Counsel
is in any manner reliant on UCC lien searches, each such UCC lien search shall
be dated no earlier than ten Business Days prior to the date of each such
related Opinion of Counsel, and shall be accompanied by officer's certificates
from the appropriate parties certifying that no filings subsequent to the date
of such lien searches have been made. Such Opinion of Counsel shall state, among
other things, that, in the opinion of such counsel, either (A) all financing
statements and continuation statements have been authorized and filed that are
necessary to perfect the interest of the Purchaser and the Trustee in the
Receivables, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (B) no such action shall
be necessary to preserve and protect such interest. The Opinion of Counsel
referred to in this SECTION 4.17 shall specify any action necessary (as of the
date of such opinion) to be taken to preserve and protect such interest.

                                       21
<PAGE>

                                    ARTICLE V
                                    ---------

                            ACCOUNTS; DISTRIBUTIONS;
                          STATEMENTS TO THE NOTEHOLDER
                          ----------------------------

         SECTION 5.1. ESTABLISHMENT OF PLEDGED ACCOUNTS.

         (a) The Trustee, on behalf of the Noteholder and the Insurer, shall
establish and maintain in its own name an Eligible Account (the "COLLECTION
ACCOUNT"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Trustee on behalf of the Noteholder and
the Insurer. The Collection Account shall initially be established with the
Trustee.

         (b) The Trustee, on behalf of the Noteholder and the Insurer, shall
establish and maintain in its own name an Eligible Account (the "NOTE
DISTRIBUTION ACCOUNT"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Trustee on behalf of the
Noteholder and the Insurer. The Note Distribution Account shall initially be
established with the Trustee.

         (c) The Trustee, on behalf of the Noteholder and the Insurer shall
establish and maintain in its own name an Eligible Account (the "PRINCIPAL
FUNDING ACCOUNT"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Trustee on behalf of the
Noteholder and the Insurer. The Principal Funding Account shall initially be
established with the Trustee.

         (d) The Trustee, on behalf of the Noteholder and the Insurer shall
establish and maintain in its own name an Eligible Account (the "RESERVE
ACCOUNT"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Trustee on behalf of the Noteholder and
the Insurer. The Reserve Account shall initially be established with the
Trustee.

         (e) Funds on deposit in the Collection Account, the Principal Funding
Account, the Reserve Account and the Note Distribution Account (collectively,
the "PLEDGED ACCOUNTS") shall be invested by the Trustee (or any custodian with
respect to funds on deposit in any such account) in Eligible Investments
selected in writing by the Servicer or, after the SST Assumption Date, by the
Controlling Party (pursuant to standing instructions or otherwise). All such
Eligible Investments shall be held by or on behalf of the Trustee for the
benefit of the Noteholder and the Insurer, as applicable. Other than as
permitted by the Rating Agencies and the Controlling Party, funds on deposit in
any Pledged Account shall be invested in Eligible Investments that will mature
so that such funds will be available at the close of business on the Business
Day immediately preceding the following Draw Date. Funds deposited in a Pledged
Account on the day immediately preceding a Settlement Date upon the maturity of
any Eligible Investments are not required to be invested overnight. All Eligible
Investments will be held to maturity.

         (f) All investment earnings of moneys deposited in the Pledged Accounts
shall be deposited (or caused to be deposited) by the Trustee in the Collection
Account for distribution pursuant to SECTION 5.7(a), and any loss resulting from
such investments shall be charged to such account. The Servicer will not direct
the Trustee to make any investment of any funds held in any of the Pledged
Accounts unless the security interest granted and perfected in such account will
continue to be perfected in such investment, in either case without any further
action by any Person, and, in connection with any direction to the Trustee to
make any such investment, if requested by the Trustee, the Servicer shall
deliver to the Trustee an Opinion of Counsel, acceptable to the Trustee, to such
effect.

         (g) The Trustee shall not in any way be held liable by reason of any
insufficiency in any of the Pledged Accounts resulting from any loss on any
Eligible Investment included therein except for losses attributable to the
Trustee's negligence or bad faith or its failure to make payments on such
Eligible Investments issued by the Trustee, in its commercial capacity as
principal obligor and not as trustee, in accordance with their terms.

                                       22
<PAGE>

         (h) If (i) the Servicer or the Controlling Party, as applicable, shall
have failed to give investment directions for any funds on deposit in the
Pledged Accounts to the Trustee by 1:00 p.m. Eastern Time (or such other time as
may be agreed by the Purchaser and Trustee) on any Business Day; or (ii) an
Event of Default shall have occurred and be continuing with respect to the Note
but the Note shall not have been declared due and payable, or, if the Note shall
have been declared due and payable following an Event of Default, amounts
collected or receivable from the Receivables and the Other Conveyed Property are
being applied as if there had not been such a declaration; then the Trustee
shall, to the fullest extent practicable, invest and reinvest funds in the
Pledged Accounts in an Eligible Investment described in PARAGRAPH (f) the
definition thereof.

         (i) The Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Pledged Accounts and in all proceeds
thereof (including all Investment Earnings on the Pledged Accounts) and all such
funds, investments, proceeds and income shall be part of the Other Conveyed
Property. Except as otherwise provided herein, the Pledged Accounts shall be
under the sole dominion and control of the Trustee for the benefit of the
Noteholder and the Insurer. If at any time any of the Pledged Accounts ceases to
be an Eligible Account, the Servicer with the consent of the Controlling Party
shall within five Business Days establish a new Pledged Account as an Eligible
Account and shall transfer any cash and/or any investments to such new Pledged
Account. The Servicer shall promptly notify the Rating Agencies, the Trustee and
the Insurer of any change in the location of any of the aforementioned accounts.
In connection with the foregoing, the Servicer agrees that, in the event that
any of the Pledged Accounts are not accounts with the Trustee, the Servicer
shall notify the Trustee and the Insurer in writing promptly upon any of such
Pledged Accounts ceasing to be an Eligible Account.

         (j) Notwithstanding anything to the contrary herein or in any other
document relating to a Trust Account, the "securities intermediary's
jurisdiction" (within the meaning of Section 8-110 of the UCC) or the "bank's
jurisdiction" (with the meaning of 9-304 of the UCC) as applicable, with respect
to each Pledged Account shall be the State of New York.

         (k) With respect to the Pledged Account Property, the Trustee agrees
that:

                  (i) any Pledged Account Property that is held in deposit
         accounts shall be held solely in an Eligible Account; and, except as
         otherwise provided herein, each such Eligible Account shall be subject
         to the exclusive custody and control of the Trustee and the Trustee
         shall have sole signature authority with respect thereto; and

                  (ii) any Pledged Account Property shall be delivered to the
         Trustee in accordance with the definition of "DELIVERY".

                  (iii) the Servicer shall have the power, revocable by the
         Controlling Party to instruct the Trustee to make withdrawals and
         payments from the Pledged Accounts for the purpose of permitting the
         Servicer and the Trustee to carry out their respective duties
         hereunder.

         SECTION 5.2. [RESERVED].

         SECTION 5.3. CERTAIN REIMBURSEMENTS TO THE SERVICER. The Servicer will
be entitled to be reimbursed from amounts on deposit in the Collection Account
with respect to an Accrual Period for amounts previously deposited in the
Collection Account but later determined by the Servicer to have resulted from
mistaken deposits or postings or checks returned for insufficient funds. The
amount to be reimbursed hereunder shall be paid to the Servicer on the related
Settlement Date pursuant to SECTION 5.7(a)(iii) upon certification by the
Servicer of such amounts and the provision of such information to the Trustee
and the Controlling Party as may be necessary in the opinion of the Controlling
Party to verify the accuracy of such certification; provided, however, that the
Servicer must provide such certification within three months of it becoming
aware of such mistaken deposit, posting or returned check. In the event that the
Controlling Party has not received evidence satisfactory to it of the Servicer's
entitlement to reimbursement pursuant to this Section, the Controlling Party
shall give the Trustee notice to such effect, following receipt of which the


                                       23
<PAGE>

Trustee shall not make a distribution to the Servicer in respect of such amount
pursuant to SECTION 5.7, or if prior thereto the Servicer has been reimbursed
pursuant to SECTION 5.7, the Trustee shall withhold such amounts from amounts
otherwise distributable to the Servicer on the next succeeding Settlement Date.

         SECTION 5.4. APPLICATION OF COLLECTIONS. All collections for each
Accrual Period shall be applied by the Servicer as follows:

         With respect to each Receivable (other than a Purchased Receivable),
payments by or on behalf of the Obligor shall be applied, in the case of a Rule
of 78's Receivable, first, to the Scheduled Receivable Payment of such Rule of
78's Receivable and, second, to any late fees accrued with respect to such Rule
of 78's Receivable and, in the case of a Simple Interest Receivable, to interest
and principal in accordance with the Simple Interest Method.

         SECTION 5.5. RESERVE ACCOUNT.

         (a) The Reserve Account will be held for the benefit of the Noteholder
and the Insurer. On or prior to the Closing Date, the Purchaser shall deposit or
cause to be deposited into the Reserve Account an amount equal to the Required
Reserve Account Amount. On each Funding Date, the Purchaser shall deposit a
portion of the related Advance into the Reserve Account until the amount on
deposit in the Reserve Account equals the Required Reserve Account Amount.

         (b) In the event that the Servicer's Certificate with respect to any
Determination Date shall state that the Available Funds with respect to the
related Settlement Date are insufficient to make the payments required to be
made on the related Settlement Date pursuant to SECTIONS 5.7(a)(ii) through
(viii) and (x) (such deficiency being a "DEFICIENCY CLAIM AMOUNT"), then on the
Deficiency Claim Date, the Trustee shall deliver to the Insurer, and the
Servicer, by hand delivery, telex or facsimile transmission, a written notice (a
"DEFICIENCY NOTICE") specifying the Deficiency Claim Amount for such Settlement
Date. Such Deficiency Notice shall direct the Trustee to remit such Deficiency
Claim Amount (to the extent of the funds available on deposit in the Reserve
Account) for deposit in the Collection Account on the related Settlement Date
and distribution pursuant to SECTIONS 5.7(a)(ii) through (viii) and (x), as
applicable.

         (c) Any Deficiency Notice shall be delivered by 10:00 a.m., New York
City time, on the Deficiency Claim Date. The amounts distributed to the Trustee
pursuant to a Deficiency Notice shall be deposited by the Trustee into the
Collection Account pursuant to SECTION 5.6.

         (d) Following the Facility Termination Date, if the Controlling Party
elects, all amounts, or any portion thereof, on deposit in the Reserve Account
will be deposited into the Collection Account for distribution pursuant to
Section 5.7.

         (e) On any Settlement Date on which, after all distributions required
to be made on such Settlement Date pursuant to Section 5.7(a) have been made,
the amount on deposit in the Reserve Account exceeds the Required Reserve
Account Amount, the Trustee shall withdraw such excess and distribute the same
to the Purchaser or its designee.

         SECTION 5.6. ADDITIONAL DEPOSITS.

         The Servicer or the Seller, as the case may be, shall deposit or cause
to be deposited in the Collection Account the aggregate Purchase Amount with
respect to Purchased Receivables together with any proceeds from any Receivables
Insurance Policies received by the Servicer with respect to Financed Vehicles.
All such deposits shall be made, in immediately available funds, on the Business
Day preceding the related Determination Date. On or before each Draw Date, the
Trustee shall remit to the Collection Account any amounts withdrawn from the
Reserve Account pursuant to SECTION 5.5.

                                       24
<PAGE>

         SECTION 5.7.          DISTRIBUTIONS.
                               -------------

         (a) On each Settlement Date, the Trustee (based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date) shall make the following distributions in the following order of priority
from amounts on deposit in the Collection Account:

                  (i) to the Noteholder, any payments from the Hedge
         Counterparty to the extent they are due and payable in an amount equal
         to the excess, if any, of the Note Interest Distributable Amount over
         Capped Monthly Interest;

                  (ii) to the Standby Servicer and the Trustee, from Available
         Funds and any amounts deposited in the Collection Account pursuant to
         SECTION 5.5(b) and SECTION 5.10(a), in respect of Standby Fees, Owner
         Trustee Fees and Trustee Fees, so long as the Standby Servicer is not
         the Servicer, the Standby Fee and all unpaid Standby Fees from prior
         Accrual Periods, the Owner Trustee Fee and all unpaid Owner Trustees
         Fees from prior Accrual Periods and the Trustee Fee and all unpaid
         Trustees Fees from prior Accrual Periods;

                  (iii) to the Backup Servicer, from Available Funds and any
         amounts deposited in the Collection Account pursuant to SECTION 5.5(B)
         and SECTION 5.10(A), in respect of Backup Servicing Fees, so long as
         SST is the Backup Servicer, the Backup Servicing Fee and all unpaid
         Backup Servicing Fees from prior Accrual Periods;

                  (iv) to the Servicer, from Available Funds and any amounts
         deposited in the Collection Account pursuant to SECTION 5.5(b) and
         SECTION 5.10(A), in respect of Servicing Fees, the Servicing Fee and
         all unpaid Servicing Fees from prior Accrual Periods and all
         reimbursements to which the Servicer is entitled pursuant to SECTION
         5.3;

                  (v) to the Note Distribution Account, from Available Funds and
         any amounts deposited in the Collection Account pursuant to SECTION
         5.5(b) and SECTION 5.10(a), the Capped Monthly Interest;

                  (vi) to the Insurer, from Available Funds and any amount
         deposited in the Collection Account pursuant to SECTION 5.5(b), so long
         as no Insurer Default shall have occurred and be continuing, the
         Ordinary Insurance Premium;

                  (vii) to the Insurer, from Available Funds and any amount
         deposited in the Collection Account pursuant to SECTION 5.5(b),
         reimbursement for payments made by the Insurer in respect of the
         Noteholder's Interest Distributable Amount and not previously
         reimbursed plus accrued interest thereon;

                  (viii) to the Note Distribution Account, from Available Funds
         and any amounts deposited in the Collection Account pursuant to SECTION
         5.5(b) and SECTION 5.10(a), the Noteholder's Principal Distributable
         Amount for such Settlement Date;

                  (ix) to the Note Distribution Account, from Available Funds
         and any amounts deposited in the Collection Account pursuant to Section
         5.5(d), the Additional Principal Payment Amount for such Settlement
         Date;

                  (x) to the Insurer, from Available Funds and any amount
         deposited in the Collection Account pursuant to SECTION 5.5(b),
         reimbursement for payments made by the Insurer in respect of the
         Noteholder's Principal Distributable Amount and not previously
         reimbursed plus accrued interest thereon;

                  (xi) so long as any amounts are outstanding on the Note, to
         the Trustee, for deposit in the Reserve Account, from Available Funds,
         an amount equal to the excess of (A) the Required Reserve Account
         Amount for such Settlement Date over (B) the amount on deposit in the
         Reserve Account;

                                       25
<PAGE>

                  (xii) to the Note Distribution Account, from Available Funds,
         the Noteholder's Interest Distributable Amount for such Settlement
         Date, to the extent not previously paid pursuant to SECTION 5.7(a)(i)
         and SECTION 5.7(a)(v) above;

                  (xiii) to the Insurer, from Available Funds, so long as no
         Insurer Default shall have occurred and be continuing, the Default
         Insurance Premium;

                  (xiv) to the Noteholder and the Insurer, from Available Funds
         PARI PASSU the Unused Facility Fee for such Settlement Date (with one
         half of such payable to the Noteholder and one half payable to the
         Insurer);

                  (xv) to the Insurer, from Available Funds any amounts owing to
         the Insurer under this Agreement and the Insurance Agreement and not
         paid and if an Insurer Default is continuing, the Insurance Premium (as
         defined in the Premium Letter), to the extent not previously paid;

                  (xvi) if any Person other than the Standby Servicer or the
         Backup Servicer becomes the successor Servicer, to such successor
         Servicer from Available Funds, its servicing fees in excess of the
         Servicing Fee and, to the extent not previously paid by the predecessor
         Servicer pursuant to this Agreement, reasonable transition expenses (up
         to a maximum of $50,000 for all such expenses) incurred in becoming the
         successor Servicer;

                  (xvii) to the Note Distribution Account, from Available Funds,
         any other amounts due to the Noteholder pursuant to the Basic
         Documents;

                  (xviii) to the Backup Servicer, from Available Funds, any
         amounts owing to the Backup Servicer under the Backup Servicing
         Agreement to the extent not previously paid pursuant to SECTION
         5.7(a)(ii); and

                  (xix) to the Certificateholders, the remaining Available
         Funds, if any, and any amounts released from the Reserve Account
         pursuant to SECTION 5.5(e).

         (b) On each Settlement Date, the Trustee shall (based solely on the
information contained in the Servicer's Certificate delivered with respect to
the related Determination Date, unless the Insurer shall have notified the
Trustee in writing of any errors or deficiencies with respect thereto)
distribute the Deficiency Claim Amount, if any, from the Reserve Account and the
Note Policy Claim Amount, if any, from the Collection Account, and deposit in
the Note Distribution Account any excess of the Scheduled Payments (as defined
in the Note Policy) due on such Settlement Date over the amount previously
deposited in the Note Distribution Account with respect to the related
Settlement Date, which amount shall be applied solely to the payment of amounts
then due and unpaid on the Note in accordance with the priorities set forth in
SECTION 5.8(a).

         (c) In the event that the Collection Account is maintained with an
institution other than the Trustee, the Servicer shall instruct and cause such
institution to make all deposits and distributions pursuant to SECTION 5.7(a)
and (b) on the related Settlement Date.

         SECTION 5.8. NOTE DISTRIBUTION ACCOUNT.

         (a) On each Settlement Date (based solely on the information contained
in the Servicer's Certificate), the Trustee shall distribute all amounts on
deposit in the Note Distribution Account to the Noteholder in respect of the
Note to the extent of amounts due and unpaid on the Note for principal and
interest in the following amounts and in the following order of priority:

                                       26
<PAGE>

                  (i) to the Noteholder, the Noteholder's Interest Distributable
         Amount; PROVIDED that if there are not sufficient funds in the Note
         Distribution Account to pay the entire amount then due on the Note, the
         amount in the Note Distribution Account shall be applied to the payment
         of such interest pro rata among the Holders of the Note;

                  (ii) to the Noteholder, the Noteholder's Principal
         Distributable Amount plus any Noteholder's Principal Carryover
         Shortfall, to pay principal of the Note until the outstanding principal
         amount of the Note has been reduced to zero; PROVIDED that if there are
         not sufficient funds in the Note Distribution Account to pay the
         aggregate outstanding principal amount of the Note, the amount in the
         Note Distribution Account shall be applied to the payment of such
         principal pro rata among the Holders of the Note;

                  (iii) to the Noteholder, the Additional Principal Payment
         Amount, PROVIDED that if there are not sufficient funds in the Note
         Distribution Account to pay the aggregate outstanding principal amount
         of the Note, the amount in the Note Distribution Account shall be
         applied to the payment of such principal pro rata among the Holders of
         the Note; and

                  (iv) to the Noteholder, any other amounts due pursuant to the
         Noteholder pursuant to the Basic Documents.

         (b) On each Settlement Date, the Trustee shall provide or make
available electronically (or, upon written request, by first class mail or
facsimile) send to the Noteholder, the Agent and the Insurer the statement or
statements provided to the Trustee by the Servicer pursuant to SECTION 5.9
hereof on such Settlement Date; PROVIDED HOWEVER, the Trustee shall have no
obligation to provide such information described in this SECTION 5.8(b) until it
has received the requisite information from the Servicer.

         SECTION 5.9. STATEMENTS TO THE NOTEHOLDER. iii) On or prior to each
Settlement Date (in accordance with SECTION 4.9), the Servicer shall provide to
the Trustee, the Insurer, the Agent, the Rating Agencies and the Noteholder of
record on the related Record Date a copy of the Servicer's Certificate setting
forth at least the following information as to the Note to the extent
applicable:

                  (i) the amount of such distribution allocable to principal of
         the Note;

                  (ii) the amount of such distribution allocable to interest on
         or with respect to the Note;

                  (iii) the amount, if any, of such distribution payable out of
         amounts withdrawn from the Reserve Account or pursuant to a claim on
         the Note Policy;

                  (iv) the Aggregate Principal Balance as of the close of
         business on the last day of the preceding Accrual Period;

                  (v) the aggregate outstanding principal amount of the Note;

                  (vi) the amount of the Servicing Fee paid to the Servicer with
         respect to the related Accrual Period, and the amount of any unpaid
         Servicing Fees and the change in such amount from the prior Settlement
         Date;

                  (vii) the amount of each of the Standby Fee, the Backup
         Servicing Fee, the Owner Trustee Fee and the Trustee Fee paid to the
         Standby Servicer, the Backup Servicer, the Owner Trustee and the
         Trustee as applicable, with respect to the related Accrual Period, and
         the amount of any unpaid Standby Fees, Backup Servicing Fees, the Owner
         Trustee Fees and Trustee Fees and the change in such amounts from the
         prior Settlement Date;

                                       27
<PAGE>

                  (viii) the Noteholder's Interest Carryover Shortfall and the
         Noteholder's Principal Carryover Shortfall, if any;

                  (ix) the number of Receivables and the aggregate gross amount
         scheduled to be paid thereon, including unearned finance and other
         charges, for which the related Obligors are delinquent in making
         Scheduled Receivable Payments for 31 to 60 days as of the last day of
         the related Accrual Period;

                  (x) the number of Receivables and the aggregate gross amount
         scheduled to be paid thereon, including unearned finance and other
         charges, for which the related Obligors are delinquent in making
         Scheduled Receivable Payments for 31 to 45 days as of the last day of
         the related Accrual Period;

                  (xi) the amount of the aggregate Realized Losses, if any, for
         the related Accrual Period;

                  (xii) the amount of payments, if any, made with respect to the
         related Settlement Date pursuant to SECTIONS 5.10(A)(I) or (II),
         respectively;

                  (xiii) the number of, and the aggregate Purchase Amounts for,
         Receivables, if any, that were repurchased during the related Interest
         Period and summary information as to losses and delinquencies with
         respect to the Receivables as of the end of the related Accrual Period;
         and

                  (xiv) the cumulative amount of Realized Losses from the
         initial Cutoff Date to the last day of the related Accrual Period.

Each amount set forth pursuant to PARAGRAPHS (I), (II), (III), (VI), (VII),
(VIII) and (XI) above shall be expressed as a dollar amount per $1,000 of the
aggregate outstanding principal amount of the Note as of the related Settlement
Date.

         (b) Within 60 days after the end of each calendar year, commencing
February 28, 2003 the Servicer shall deliver to the Trustee, and the Trustee
shall, provided it has received the necessary information from the Servicer,
promptly thereafter furnish to each Person who at any time during the preceding
calendar year was a Noteholder of record and received any payment thereon (a) a
report (prepared by the Servicer) as to the aggregate of the amounts reported
pursuant to subclauses (i), (ii), (vi) and (vii) of SECTION 5.9(A) for such
preceding calendar year or applicable portion thereof during which such person
was the Noteholder, and (b) such information as may be reasonably requested by
the Noteholder or required by the Code and regulations thereunder, to enable the
Holder to prepare its Federal and State income tax returns. The obligation of
the Trustee set forth in this paragraph shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the
Servicer to the Noteholder pursuant to any requirements of the Code.

         (c) The Trustee may make available to the Noteholder and the Insurer
via the Trustee's Internet Website, all statements described herein and, with
the consent or at the direction of the Seller, such other information regarding
the Note and/or the Receivables as the Trustee may have in its possession, but
only with the use of a password provided by the Trustee or its agent to such
Person upon receipt by the Trustee from such Person of a certification in the
form of Exhibit G; provided, however, that the Trustee or its agent shall
provide such password to the parties to this Agreement, the Insurer, the Agent
and each Rating Agency without requiring such certification. The Trustee will
make no representation or warranties as to the accuracy or completeness of such
documents and will assume no responsibility therefore. The Trustee's Internet
Website shall be initially located at WWW.ABSNET.NET or at such other address as
shall be specified by the Trustee from time to time in writing to the Noteholder
and the Insurer. In connection with providing access to the Trustee's Internet
Website, the Trustee may require registration and the acceptance of a
disclaimer. The Trustee shall not be liable for the dissemination of information
in accordance with this Agreement.

                                       28
<PAGE>

         SECTION 5.10. OPTIONAL DEPOSITS BY THE INSURER; NOTICE OF WAIVERS.
iv)The Insurer shall at any time have the option (but shall not be required,
except as provided in SECTION 6.1) to deliver amounts to the Trustee for deposit
into the Collection Account for any of the following purposes: (i) to provide
funds in respect of the payment of fees or expenses of any provider of services
to the Purchaser with respect to such Settlement Date, or (ii) to the extent
that without such amount a draw would be required to be made on the Note Policy.

         (a) If the Insurer hereby waives the satisfaction of any of the events
that might trigger an Insurance Agreement Event of Default, and so notifies the
Trustee in writing pursuant to SECTION 5.2(d) of the Insurance Agreement, the
Trustee shall notify Moody's, S&P and the Noteholder of such waiver.

                                   ARTICLE VI
                                   ----------

                                 THE NOTE POLICY
                                 ---------------


         SECTION 6.1. CLAIMS UNDER NOTE POLICY.

         (a) In the event that the Trustee has delivered a Deficiency Notice
with respect to any Determination Date pursuant to SECTION 5.5 hereof, the
Trustee shall on the related Draw Date determine whether the application of
funds in accordance with SECTION 5.7(a), together with any amounts deposited by
the Insurer pursuant to SECTION 5.10 and the application of any Deficiency Claim
Amount pursuant to SECTION 5.5 would result in a shortfall in amounts
distributable pursuant to SECTIONS 5.7(a)(iv) on any Settlement Date and
5.7(a)(vii) on any Settlement Date occurring on or after the Final Scheduled
Settlement Date (any such shortfall, a "NOTE POLICY CLAIM AMOUNT"). If the Note
Policy Claim Amount for such Settlement Date is greater than zero, the Trustee
shall furnish to the Insurer no later than 10:00 a.m. New York City time on the
related Draw Date a completed Payment Notice (as defined in CLAUSE (b) below) in
the amount of the Note Policy Claim Amount. Amounts paid by the Insurer pursuant
to a claim submitted under this SECTION 6.1 shall be deposited by the Trustee
into the Note Distribution Account for payment to the Noteholder on the related
Settlement Date.

         (b) Any notice delivered by the Trustee to the Insurer pursuant to
SECTION 6.1(A) shall specify the Note Policy Claim Amount claimed under the Note
Policy and shall constitute a "PAYMENT NOTICE" (as defined in the Note Policy)
under the Note Policy. In accordance with the provisions of the Note Policy, the
Insurer is required to pay to the Trustee the Note Policy Claim Amount properly
claimed thereunder by 2:00 p.m., New York City time, on the later of (i) the
next Business Day (as defined in the Note Policy) following receipt on a
Business Day of the Payment Notice, and (ii) the applicable Settlement Date. Any
payment made under the Note Policy by the Insurer shall be applied solely to the
payment of the Note, and for no other purpose.

         (c) The Trustee shall (i) receive as attorney-in-fact of the Noteholder
any Note Policy Claim Amount from the Insurer and (ii) deposit the same in the
Note Distribution Account for distribution to the Noteholder. Any and all Note
Policy Claim Amounts disbursed by the Trustee from claims made under the Note
Policy shall not be considered payment by the Purchaser or from the Reserve
Account with respect to the Note, and shall not discharge the obligations of the
Purchaser with respect thereto. The Insurer shall, to the extent it makes any
payment with respect to the Note, 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 Note by or on behalf of the
Insurer, the Trustee and the Noteholder shall assign to the Insurer all rights
to the payment of interest or principal with respect to the Note which are then
due for payment to the extent of all payments made by the Insurer, and the
Insurer may exercise any option, vote, right, power or the like with respect to
the Note to the extent that it has made payment pursuant to the Note Policy. To
evidence such subrogation, the Note Registrar (as defined in the Indenture)
shall note the Insurer's rights as subrogee upon the register of the Noteholder
upon receipt from the Insurer of proof of payment by the Insurer of any
Noteholder's Interest Distributable Amount or Noteholder's Principal
Distributable Amount. The foregoing subrogation shall in all cases be subject to
the rights of the Noteholder to receive all Scheduled Payments (as defined in
the Note Policy) in respect of the Note.

                                       29
<PAGE>

         (d) The Trustee shall keep a complete and accurate record of all funds
deposited by the Insurer into the Note Distribution Account and the allocation
of such funds to payment of interest on and principal paid in respect of any
Note. The Insurer shall have the right to inspect such records at reasonable
times upon one Business Day's prior notice to the Trustee.

         (e) The Trustee shall be entitled to enforce on behalf of the
Noteholder the obligations of the Insurer under the Note Policy. Notwithstanding
any other provision of this Agreement or any other Basic Document, the
Noteholder is not entitled to make any claims under the Note Policy or institute
proceedings directly against the Insurer.

         SECTION 6.2. PREFERENCE CLAIMS.

         (a) In the event that the Trustee has received a certified copy of an
order of the appropriate court that any Scheduled Payment (as defined in the
Note Policy) paid on the Note has been avoided in whole or in part as a
preference payment under applicable bankruptcy law, the Trustee shall so notify
the Insurer, shall comply with the provisions of the Note Policy to obtain
payment by the Insurer of such avoided payment, and shall, at the time it
provides notice to the Insurer, notify the Noteholder by mail that, in the event
that the Noteholder's payment is so recoverable, the Noteholder will be entitled
to payment pursuant to the terms of the Note Policy. The Trustee shall furnish
to the Insurer its records evidencing the payments of principal of and interest
on Note, if any, which have been made by the Trustee and subsequently recovered
from the Noteholder, and the dates on which such payments were made. Pursuant to
the terms of the Note Policy, the Insurer will make such payment on behalf of
the Noteholder to the Trustee on behalf of the applicable "Owner" as defined in
the Note Policy.

         (b) The Trustee shall promptly notify the Insurer of any proceeding or
the institution of any action (of which the 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 distribution made with respect to the Note. The Holder, by its purchase
of the Note, and the Trustee hereby agrees that so long as it is the Controlling
Party, the 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
Insurer, but subject to reimbursement as provided in the Insurance Agreement. In
addition, and without limitation of the foregoing, as set forth in SECTION
6.1(C), the Insurer shall be subrogated to, and the Noteholder and the Trustee
hereby delegate and assign, to the fullest extent permitted by law, the rights
of the Trustee and the Noteholder in the conduct of any proceeding with respect
to a Preference Claim, including, without limitation, all rights of any party to
an adversary proceeding action with respect to any court order issued in
connection with any such Preference Claim.

         SECTION 6.3. SURRENDER OF NOTE POLICY. The Trustee shall surrender the
Note Policy to the Insurer for cancellation upon the expiration of such policy
in accordance with the terms thereof.

                                   ARTICLE VII
                                   -----------

                                  THE PURCHASER
                                  -------------

         SECTION 7.1. REPRESENTATIONS OF PURCHASER. The Purchaser makes the
following representations on which the Insurer shall be deemed to have relied in
executing and delivering the Note Policy and the Noteholder shall be deemed to
have relied in purchasing the Note. The representations speak as of the
execution and delivery of this Agreement and as of each Funding Date, and shall
survive the sale of the Receivables to the Purchaser and the pledge thereof to
the Trustee pursuant to the Indenture.

         (a) ORGANIZATION AND GOOD STANDING. The Purchaser has been duly formed
and is validly existing as a business trust solely under the laws of the state
of Delaware and is in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is currently conducted,


                                       30
<PAGE>

and had at all relevant times, and now has, power, authority and legal right to
acquire, own and pledge the Receivables and the Other Conveyed Property pledged
to the Trustee.

         (b) DUE QUALIFICATION. The Purchaser is duly qualified to do business
as a foreign business trust in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such qualifications.

         (c) POWER AND AUTHORITY. The Purchaser has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it is
a party and to carry out its terms and their terms, respectively; the Purchaser
has full power and authority to pledge the Collateral to be pledged to the
Trustee by it pursuant to the Indenture and has duly authorized such pledge to
the Trustee by all necessary corporate action; and the execution, delivery and
performance of this Agreement and the Basic Documents to which the Purchaser is
a party have been duly authorized by the Purchaser by all necessary action.

         (d) VALID SALE, BINDING OBLIGATIONS. This Agreement effects a valid
sale of the Receivables and the Other Conveyed Property, enforceable against the
Seller and creditors of and purchasers from the Seller, and this Agreement and
the other Basic Documents to which the Purchaser is a party, when duly executed
and delivered, shall constitute legal, valid and binding obligations of the
Purchaser enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at law.

         (e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the other Basic Documents and the fulfillment of the terms of
this Agreement and the other Basic Documents shall not conflict with, result in
any breach of any of the terms and provisions of or constitute (with or without
notice, lapse of time or both) a default under the Trust Agreement of the
Purchaser, or any indenture, agreement, mortgage, deed of trust or other
instrument to which the Purchaser is a party or by which it is bound, or result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than the Basic Documents, or violate any law, order, rule or
regulation applicable to the Purchaser of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Purchaser or any of its properties.

         (f) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the Purchaser's knowledge, threatened against the Purchaser, before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Purchaser or its properties (A)
asserting the invalidity of this Agreement, the Note or any of the Basic
Documents, (B) seeking to prevent the issuance of the Note or the consummation
of any of the transactions contemplated by this Agreement or any of the Basic
Documents, (C) seeking any determination or ruling that might materially and
adversely affect the performance by the Purchaser of its obligations under, or
the validity or enforceability of, this Agreement or any of the Basic Documents,
or (D) relating to the Purchaser and which might adversely affect the federal or
state income, excise, franchise or similar tax attributes of the Note.

         (g) NO CONSENTS. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required for the
issuance or sale of the Note or the consummation of the other transactions
contemplated by this Agreement, except such as have been duly made or obtained
or as may be required by the Basic Documents.

         (h) TAX RETURNS. The Purchaser has filed all federal and state tax
returns which are required to be filed and paid all taxes, including any
assessments received by it, to the extent that such taxes have become due. Any
taxes, fees and other governmental charges payable by the Purchaser in
connection with consummation of the transactions contemplated by this Agreement
and the other Basic Documents to which the Purchaser is a party and the
fulfillment of the terms of this Agreement and the other Basic Documents to
which the Purchaser is a party have been paid or shall have been paid at or
prior to the Closing Date and as of each Funding Date.

                                       31
<PAGE>

         (i) CHIEF EXECUTIVE OFFICE. The chief executive office of the Purchaser
is at the Corporate Trust Office of the Owner Trustee.

                                  ARTICLE VIII
                                  ------------

                                   THE SELLER
                                   ----------

         SECTION 8.1. REPRESENTATIONS OF SELLER. The Seller makes the following
representations on which the Insurer shall be deemed to have relied in executing
and delivering the Note Policy and on which the Purchaser is deemed to have
relied in acquiring the Receivables and a which the Noteholder are deemed to
have relied in purchasing the Note. The representations speak as of the
execution and delivery of this Agreement, as of the Closing Date and as of each
Funding Date, and shall survive the sale of the Receivables to the Purchaser and
the pledge thereof by the Purchaser to the Trustee pursuant to the Indenture.

         (a) ORGANIZATION AND GOOD STANDING. The Seller has been duly organized
and is validly existing as a corporation solely under the laws of the State of
California and is in good standing under the laws of the State of California,
with power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is currently conducted,
and had at all relevant times, and now has, power, authority and legal right to
acquire, own and sell the Receivables and the Other Conveyed Property
transferred to the Purchaser and to perform its other obligations under this
Agreement or any other Basic Documents to which it is a party.

         (b) DUE QUALIFICATION. The Seller is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business (including the origination, sale and servicing of
the Receivables as required by this Agreement) shall require such
qualifications.

         (c) POWER AND AUTHORITY. The Seller has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it is
a party and to carry out its terms and their terms, respectively; the Seller has
full power and authority to sell and assign the Receivables and the Other
Conveyed Property to be sold and assigned to and deposited with the Purchaser by
it and has duly authorized such sale and assignment to the Purchaser by all
necessary corporate action; and the execution, delivery and performance of this
Agreement and the Basic Documents to which the Seller is a party have been duly
authorized by the Seller by all necessary corporate action.

         (d) VALID SALE, BINDING OBLIGATIONS. This Agreement effects a valid
sale, transfer and assignment of the Receivables and the Other Conveyed Property
to the Purchaser, enforceable against the Seller and creditors of and purchasers
from the Seller; and this Agreement and the Basic Documents to which the Seller
is a party, when duly executed and delivered, shall constitute legal, valid and
binding obligations of the Seller enforceable in accordance with their
respective terms, except as enforceability may be limited, by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.

         (e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the Basic Documents and the fulfillment of the terms of this
Agreement and the Basic Documents not conflict with, result in any breach of any
of the terms and provisions of or constitute (with or without notice, lapse of
time or both) a default under the certificate of incorporation or by-laws of the
Seller, or any indenture, agreement, mortgage, deed of trust or other instrument
to which the Seller is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than the Basic Documents, or violate any law, order, rule or
regulation applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or any of its properties.

                                       32
<PAGE>

         (f) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the Seller's knowledge, threatened against the Seller, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Seller or its properties (A)
asserting the invalidity of this Agreement, the Note or any of the Basic
Documents, (B) seeking to prevent the issuance of the Note or the consummation
of any of the transactions contemplated by this Agreement or any of the Basic
Documents, (C) seeking any determination or ruling that might materially and
adversely affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement or any of the Basic Documents, or
(D) relating to the Seller and which might adversely affect the federal or state
income, excise, franchise or similar tax attributes of the Note.

         (g) NO CONSENTS. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required for the
issuance or sale of the Note or the consummation of the other transactions
contemplated by this Agreement, except such as have been duly made or obtained.

         (h) FINANCIAL CONDITION. The Seller has a positive net worth and is
able to and does pay its liabilities as they mature. The Seller is not in
default under any obligation to pay money to any Person except for matters being
disputed in good faith which do not involve an obligation of the Seller on a
promissory note. The Seller will not use the proceeds from the transactions
contemplated by the Basic Documents to give any preference to any creditor or
class of creditors, and this transaction will not leave the Seller with
remaining assets which are unreasonably small compared to its ongoing
operations.

         (i) FRAUDULENT CONVEYANCE. The Seller is not selling the Receivables to
the Purchaser with any intent to hinder, delay or defraud any of its creditors;
the Seller will not be rendered insolvent as a result of the sale of the
Receivables to the Purchaser.

         (j) TAX RETURNS. The Seller has filed all material federal and state
tax returns which are required to be filed and paid all material taxes,
including any assessments received by it, to the extent that such taxes have
become due (other than taxes, the amount or validity of which are currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
Seller). Any taxes, fees and other governmental charges payable by the Seller in
connection with consummation of the transactions contemplated by this Agreement
and the other Basic Documents to which the Seller is a party and the fulfillment
of the terms of this Agreement and the other Basic Documents to which the Seller
is a party have been paid or shall have been paid as of each Funding Date.

         (k) CHIEF EXECUTIVE OFFICE. The chief executive office of the Seller is
at 16355 Laguna Canyon Road, Irvine, CA 92618 and its organizational number is
1682500.

         (l) CERTIFICATE, STATEMENTS AND REPORTS. The officer's certificates,
statements, reports and other documents prepared by Seller and furnished by
Seller to the Purchaser, the Insurer, the Trustee or the Agent pursuant to this
Agreement or any other Basic Document to which it is a party, and in connection
with the transactions contemplated hereby or thereby, when taken as a whole, do
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained herein or therein not
misleading.

         (m) LEGAL COUNSEL, ETC. Seller consulted with its own legal counsel and
independent accountants to the extent it deems necessary regarding the tax,
accounting and regulatory consequences of the transactions contemplated hereby,
Seller is not participating in such transactions in reliance on any
representations of any other party, their affiliates, or their counsel with
respect to tax, accounting and regulatory matters.

                                       33
<PAGE>

         SECTION 8.2. ADDITIONAL COVENANTS OF THE SELLER.

         (a) SALE. The Seller agrees to treat the conveyances hereunder for all
purposes (including without limitation tax and financial accounting purposes) as
sales on all relevant books, records, tax returns, financial statements and
other applicable documents.

         (b) NON-PETITION. In the event of any breach of a representation and
warranty made by the Purchaser hereunder, the Seller covenants and agrees that
it will not take any action to pursue any remedy that it may have hereunder, in
law, in equity or otherwise, until a year and a day have passed since the date
on which the Note issued by the Purchaser and all amounts due to the Insurer
under the Insurance Agreement have been paid in full. The Purchaser and the
Seller agree that damages will not be an adequate remedy for breach of this
covenant and that this covenant may be specifically enforced by the Purchaser,
by the Trustee on behalf of the Noteholder or by the Controlling Party.

         (c) CHANGES TO SELLER'S CONTRACT PURCHASE GUIDELINES. The Seller
covenants that it will not make any material changes to its Contract Purchase
Guidelines, or its classification of Obligors within such programs unless (i)
the Controlling Party and the Agent expressly consent in writing to such changes
and (ii) after giving effect to any such changes, the Rating Agency Condition is
satisfied.

         SECTION 8.3. LIABILITY OF SELLER; INDEMNITIES. Subject to the
limitation of remedies set forth in SECTION 3.2 hereof with respect to a breach
of any representations and warranties contained in SECTION 3.1 hereof, the
Seller shall indemnify the Purchaser, the Insurer, the Standby Servicer, the
Trustee, the Owner Trustee, the Noteholder, the Agent and their respective
officers, directors, agents and employees for any liability as a result of the
failure of a Receivable to be originated in compliance with all requirements of
law and for any breach of any of its representations, warranties or other
agreements contained herein.

         (a) The Seller shall defend, indemnify, and hold harmless the
Purchaser, the Insurer, the Standby Servicer, the Trustee, the Owner Trustee,
the Noteholder, the Agent and their respective officers, directors, agents and
employees from and against any and all costs, expenses, losses, damages, claims,
and liabilities, arising out of or resulting from the use, ownership, or
operation by the Seller, any Affiliate thereof or any of their respective agents
or subcontractors, of a Financed Vehicle.

         (b) The Seller shall indemnify, defend and hold harmless the Purchaser,
the Insurer, the Standby Servicer, the Trustee, the Owner Trustee, the
Noteholder, the Agent and their respective officers, directors, agents and
employees from and against any taxes that may at any time be asserted against
any such Person with respect to the transactions contemplated in this Agreement
and any of the Basic Documents (except any income taxes arising out of fees paid
to the Trustee, the Owner Trustee, the Standby Servicer and the Insurer and
except any taxes to which the Trustee may otherwise be subject), including
without limitation any sales, gross receipts, general corporation, tangible
personal property, privilege or license taxes (but, in the case of the
Purchaser, not including any taxes asserted with respect to federal or other
income taxes arising out of distributions on the Note) and costs and expenses in
defending against the same.

         (c) The Seller shall indemnify, defend and hold harmless the Purchaser,
the Trustee, the Owner Trustee, the Insurer, the Noteholder, the Agent and their
respective officers, directors, agents and employees from and against any loss,
liability or expense incurred by reason of (i) the Seller's willful misfeasance,
bad faith or negligence in the performance of its duties under this Agreement,
or by reason of reckless disregard of its obligations and duties under this
Agreement and/or (ii) the Seller's or the Purchaser's violation of Federal or
state securities laws in connection with the offering and sale of the Note.

         (d) The Seller shall indemnify, defend and hold harmless the Trustee,
the Owner Trustee, and the Standby Servicer and its officers, directors,
employees and agents from and against any and all costs, expenses, losses,
claims, damages and liabilities arising out of, or incurred in connection with
the acceptance or performance of the trusts and duties set forth herein and in
the Basic Documents except to the extent that such cost, expense, loss, claim,
damage or liability shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Trustee or the Owner Trustee.

                                       34
<PAGE>

         Indemnification under this Section shall survive the resignation or
removal of the Servicer or the Trustee and the termination of this Agreement or
the Indenture, as applicable, and shall include reasonable fees and expenses of
counsel and other expenses of litigation. If the Seller shall have made any
indemnity payments pursuant to this Section and the Person to or on behalf of
whom such payments are made thereafter shall collect any of such amounts from
others, such Person shall promptly repay such amounts to the Seller, without
interest.

         Notwithstanding any provision of this SECTION 8.3 or any other
provision of this Agreement, nothing herein shall be construed as to require the
Seller to provide any indemnification hereunder or under any other Basic
Document for any costs, expenses, losses, claims, damages or liabilities arising
out of, or incurred in connection with, credit losses with respect to the
Receivables.

         SECTION 8.4. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER. Seller shall not merge or consolidate with any other
person, convey, transfer or lease substantially all its assets as an entirety to
another Person, or permit any other Person to become the successor to Seller's
business unless, after the merger, consolidation, conveyance, transfer, lease or
succession, the successor or surviving entity shall be capable of fulfilling the
duties of Seller contained in this Agreement. Any corporation (i) into which
Seller may be merged or consolidated, (ii) resulting from any merger or
consolidation to which Seller shall be a party, (iii) which acquires by
conveyance, transfer, or lease substantially all of the assets of Seller, or
(iv) succeeding to the business of Seller, in any of the foregoing cases shall
execute an agreement of assumption to perform every obligation of Seller under
this Agreement and, whether or not such assumption agreement is executed, shall
be the successor to Seller under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties to this
Agreement, anything in this Agreement to the contrary notwithstanding; PROVIDED,
HOWEVER, that nothing contained herein shall be deemed to release Seller from
any obligation. Seller shall provide notice of any merger, consolidation or
succession pursuant to this Section to the Trustee, the Noteholder, the Insurer
and each Rating Agency. Notwithstanding the foregoing, Seller shall not merge or
consolidate with any other Person or permit any other Person to become a
successor to Seller's business, unless (x) immediately after giving effect to
such transaction, no representation or warranty made pursuant to SECTION 8.1
shall have been breached (for purposes hereof, such representations and
warranties shall be deemed made as of the date of the consummation of such
transaction) and no event that, after notice or lapse of time, or both, would
become an Insurance Agreement Event of Default or an Event of Default shall have
occurred and be continuing, (y) Seller shall have delivered to the Trustee, the
Rating Agencies, the Agent and the Insurer an Officer's Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, and (z) Seller shall have delivered to the
Trustee, the Rating Agencies, the Agent and the Controlling Party an Opinion of
Counsel, stating in the opinion of such counsel, either (A) all financing
statements and continuation statements and amendments thereto have been
authorized and filed that are necessary to preserve and protect the interest of
the Purchaser and the Trustee, respectively, in the Receivables and the Other
Conveyed Property and reciting the details of the filings or (B) no such action
shall be necessary to preserve and protect such interest.

         SECTION 8.5. LIMITATION ON LIABILITY OF SELLER AND OTHERS. The Seller
and any director or officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
under any Basic Document. The Seller shall not be under any obligation to appear
in, prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.

         SECTION 8.6. ADMINISTRATIVE DUTIES.

                                       35
<PAGE>

         (a) DUTIES WITH RESPECT TO THE INDENTURE. The Servicer shall perform
all its duties and the duties of the Issuer under the Indenture. In addition,
the Servicer shall consult with the Owner Trustee as the Servicer deems
appropriate regarding the duties of the Issuer under the Indenture. The Servicer
shall monitor the performance of the Issuer and shall advise the Owner Trustee
when action is necessary to comply with the Issuer's duties under the Indenture.
The Servicer shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture. In furtherance of
the foregoing, the Servicer shall take all necessary action that is the duty of
the Issuer to take pursuant to the Indenture.

         (b) DUTIES WITH RESPECT TO THE ISSUER.

                           (i) In addition to the duties of the Servicer set
         forth in this Agreement or any of the Basic Documents, the Servicer
         shall perform such calculations and shall prepare for execution by the
         Issuer or the Owner Trustee or shall cause the preparation by other
         appropriate Persons of all such documents, reports, filings,
         instruments, certificates and opinions as it shall be the duty of the
         Issuer or the Owner Trustee to prepare file or deliver pursuant to this
         Agreement or any of the Basic Documents or under state and federal tax
         and securities laws, and at the request of the Owner Trustee shall take
         all appropriate action that it is the duty of the Issuer to take
         pursuant to this Agreement or any of the Basic Documents, including,
         without limitation, pursuant to SECTIONS 2.6 and 2.10 of the Trust
         Agreement. The Servicer shall administer, perform or supervise the
         performance of such other activities in connection with the Receivables
         (including the Basic Documents) as are not covered by any of the
         foregoing provisions and as are expressly requested by the Issuer or
         the Owner Trustee and are reasonably within the capability of the
         Servicer.

                           (ii) Notwithstanding anything in this Agreement or
         any of the Basic Documents to the contrary, the Servicer shall be
         responsible for promptly notifying the Owner Trustee and the Trustee in
         the event that any withholding tax is imposed on the Issuer's payments
         (or allocations of income) to the Noteholder as contemplated this
         Agreement. Any such notice shall be in writing and specify the amount
         of any withholding tax required to be withheld by the Owner Trustee or
         the Trustee pursuant to such provision.

                           (iii) Notwithstanding anything in this Agreement or
         the Basic Documents to the contrary, the Servicer shall be responsible
         for performance or the duties of the Issuer or the Seller set forth in
         SECTION 5.1 of the Trust Agreement with respect to, among other things,
         accounting and reports to Noteholders and Certificateholders; provided,
         however, that once prepared by the Servicer, the Owner Trustee shall
         retain responsibility for the distribution of the Schedule K-1 as
         necessary to enable the Certificateholders to prepare its federal and
         state income tax returns.

                           (iv) The Servicer shall perform the duties of the
         Servicer specified in SECTION 10.2 of the Trust Agreement required to
         be performed in connection with the resignation or removal of the Owner
         Trustee, and any other duties expressly required to be performed by the
         Servicer under this Agreement or any of the Basic Documents.

                           (v) In carrying out the foregoing duties or any of
         its other obligations under this Agreement, the Servicer may enter into
         transactions with or otherwise deal with any of its Affiliates;
         provided, however, that the terms of any such transactions or dealings
         shall be in accordance with any directions received from the Issuer and
         shall be, in the Servicer's opinion, no less favorable to the Issuer in
         any material respect.

         (c) TAX MATTERS. The Servicer shall prepare and file, on behalf of the
Seller, all tax returns, tax elections, financial statements and such annual or
other reports of the issuer as are necessary for preparation of tax reports as
provided in Article V of the Trust Agreement, including without limitation forms
1099 and 1066. All tax returns will be signed by the Seller.

                                       36
<PAGE>

         (d) NON-MINISTERIAL MATTERS. With respect to matters that in the
reasonable judgment of the Servicer are non-ministerial, the Servicer shall not
take any action pursuant to this Article VIII unless within a reasonable time
before the taking of such action, the Servicer shall have notified the Owner
Trustee, the Trustee and the Controlling Party of the proposed action and the
Owner Trustee and, with respect to items (i), (ii), (iii) and (iv) below, the
Trustee or the Controlling Party shall not have withheld consent or provided an
alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include:

                           (i) the amendment of or any supplement to the
         Indenture;

                           (ii) the initiation of any claim or lawsuit by the
         Issuer and the compromise of any action, claim or lawsuit brought by or
         against the Issuer (other than in connection with the collection of the
         Receivables);

                           (iii) the amendment, change or modification of this
         Agreement or any of the Basic Documents;

                           (iv) the appointment of successor Note Registrars,
         successor Paying Agents and successor Trustees pursuant to the
         Indenture or the appointment of Successor Servicers or the consent to
         the assignment by the Trustee of its obligations under the Indenture;
         and

                           (v) the removal of the Trustee.

         (e) EXCEPTIONS. Notwithstanding anything to the contrary in this
Agreement except as expressly provided herein or in the other Basic Documents,
the Servicer, in its capacity as such hereunder, shall not be obligated to, and
shall not, (1) make any payments to the Noteholder or Certificateholders under
the Basic Documents, (2) sell the Trust Estate pursuant to SECTION 5.4 of the
Indenture, (3) take any other action that the Issuer directs the Servicer not to
take on its behalf or (4) in connection with its duties hereunder assume any
indemnification obligation of any other Persons.

         (f) LIMITATION OF STANDBY SERVICER'S OBLIGATIONS. Neither the Standby
Servicer nor the Backup Servicer shall be responsible for any obligations or
duties of the Servicer under SECTIONS 8.6, 8.7 or 8.8.

         SECTION 8.7. RECORDS. The Servicer shall maintain appropriate books of
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Issuer,
the Trustee and the Insurer at any time during normal business hours.

         SECTION 8.8. ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER. The
Servicer shall furnish to the Issuer from time to time such additional
information regarding the Receivables as the Issuer shall reasonably request.


                                   ARTICLE IX
                                   ----------

                                  THE SERVICER
                                  ------------

         SECTION 9.1. REPRESENTATIONS OF SERVICER. The Servicer makes the
following representations on which the Insurer shall be deemed to have relied in
executing and delivering the Note Policy and on which the Purchaser is deemed to
have relied in acquiring the Receivables and on which the Noteholder is deemed
to have relied in purchasing the Note. The representations speak as of the
execution and delivery of this Agreement and as of the Closing Date, in the case


                                       37
<PAGE>

of Receivables conveyed by the Closing Date, and as of the applicable Funding
Date, in the case of Receivables conveyed by such Funding Date, and shall
survive the sale of the Receivables to the Purchaser and the pledge thereof to
the Trustee pursuant to the Indenture.

         (a) ORGANIZATION AND GOOD STANDING. The Servicer has been duly
organized and is validly existing as a corporation and in good standing under
the laws of the State of California, with power, authority and legal right to
own its properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant times,
and shall have, power, authority and legal right to acquire, own and service the
Receivables.

         (b) DUE QUALIFICATION. The Servicer is duly qualified to do business as
a foreign corporation in good standing and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business (including the servicing of the Receivables as
required by this Agreement) requires or shall require such qualification except
where the failure to so qualify or obtain such licenses or consents could not
reasonably be expected to result in a material adverse effect with respect to it
or to the Receivables.

         (c) POWER AND AUTHORITY. The Servicer has the power and authority to
execute and deliver this Agreement and the Basic Documents to which it is a
party and to carry out its terms and their terms, respectively, and the
execution, delivery and performance of this Agreement and the Basic Documents to
which it is a party have been duly authorized by the Servicer by all necessary
corporate action.

         (d) BINDING OBLIGATION. This Agreement and the Basic Documents to which
the Servicer is a party shall constitute legal, valid and binding obligations of
the Servicer enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally and
by equitable limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at law.

         (e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the Basic Documents to which to the Servicer is a party, and
the fulfillment of the terms of this Agreement and the Basic Documents to which
the Servicer is a party, shall not conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without notice or lapse of
time) a default under, the articles of incorporation or bylaws of the Servicer,
or any indenture, agreement, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound or any of its properties
are subject, or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument, other than the Basic Documents, or violate
any law, order, rule or regulation applicable to the Servicer of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or any of its
properties.

         (f) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the Servicer's knowledge, threatened against the Servicer, before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Servicer or its properties (A)
asserting the invalidity of this Agreement or any of the Basic Documents, (B)
seeking to prevent the issuance of the Note or the consummation of any of the
transactions contemplated by this Agreement or any of the Basic Documents, or
(C) other than the Stanwich Case, seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this Agreement, the
Note or any of the Basic Documents or (D) relating to the Servicer and which
might adversely affect the federal or state income, excise, franchise or similar
tax attributes of the Note.

         (g) NO CONSENTS. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required for the
issuance or sale of the Note or the consummation of the other transactions
contemplated by this Agreement, except such as have been duly made or obtained.

                                       38
<PAGE>

         (h) TAXES. The Servicer has filed all material federal and state tax
returns which are required to be filed and paid all material taxes, including
any assessments received by it, to the extent that such taxes have become due
(other than taxes, the amount or validity of which are currently being contested
in good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Seller). Any taxes,
fees and other governmental charges payable by the Servicer in connection with
consummation of the transactions contemplated by this Agreement and the other
Basic Documents to which the Seller is a party and the fulfillment of the terms
of this Agreement and the other Basic Documents to which the Seller is a party
have been paid or shall have been paid as of each Funding Date.

         (i) CHIEF EXECUTIVE OFFICE. The Servicer hereby represents and warrants
to the Trustee that the Servicer's principal place of business and chief
executive office is Consumer Portfolio Services, 16355 Laguna Canyon Road,
Irvine, California 92618.

         SECTION 9.2. LIABILITY OF SERVICER; INDEMNITIES.

         (a) The Servicer (in its capacity as such) shall be liable hereunder
only to the extent of the obligations in this Agreement specifically undertaken
by the Servicer and the representations made by the Servicer.

                  (i) The Servicer shall defend, indemnify and hold harmless the
         Purchaser, the Trustee, the Owner Trustee, the Standby Servicer, the
         Insurer, the Noteholder, the Agent and their respective officers,
         directors, agents and employees from and against any and all costs,
         expenses, losses, damages, claims and liabilities, arising out of or
         resulting from the use, ownership, repossession or operation by the
         Servicer or any Affiliate or agent or sub-contractor thereof of any
         Financed Vehicle;

                  (ii)The Servicer, unless SST or the Standby Servicer is the
         Servicer, shall indemnify, defend and hold harmless the Purchaser, the
         Trustee, the Owner Trustee, the Standby Servicer, the Insurer, the
         Noteholder, the Agent and their respective officers, directors, agents
         and employees from and against any taxes that may at any time be
         asserted against any of such parties with respect to the transactions
         contemplated in this Agreement, including, without limitation, any
         sales, gross receipts, general corporation, tangible personal property,
         privilege or license taxes (but not including any federal or other
         income taxes, including franchise taxes asserted with respect to, and
         as of the date of, the sale of the Receivables and the Other Conveyed
         Property to the Purchaser, the pledge thereof to the Trustee or the
         issuance and original sale of the Note) and costs and expenses in
         defending against the same;

                  (iii) The Servicer shall indemnify, defend and hold harmless
         the Purchaser, the Trustee, the Owner Trustee, the Standby Servicer,
         the Insurer, the Noteholder, the Agent and their respective officers,
         directors, agents and employees from and against any and all costs,
         expenses, losses, claims, damages, and liabilities to the extent that
         such cost, expense, loss, claim, damage, or liability arose out of, or
         was imposed upon the Purchaser, the Trustee, the Owner Trustee, the
         Standby Servicer, the Insurer, the Agent or the Noteholder through the
         negligence, willful misfeasance or bad faith of the Servicer in the
         performance of its duties under this Agreement or by reason of reckless
         disregard of its obligations and duties under this Agreement or as a
         result of a breach of any representation, warranty or other agreement
         made by the Servicer in this Agreement (without regard to any exception
         relating to the Stanwich Case).

                  (iv)The Servicer shall indemnify, defend, and hold harmless
         the Trustee, the Owner Trustee and the Standby Servicer from and
         against all costs, expenses, losses, claims, damages, and liabilities
         arising out of or incurred in connection with the acceptance or
         performance of the trusts and duties herein contained, except to the
         extent that such cost, expense, loss, claim, damage or liability: (A)
         shall be due to the willful misfeasance, bad faith, or negligence
         (except for errors in judgment) of the Trustee, the Owner Trustee or
         the Standby Servicer, as applicable or (B) relates to any tax other
         than the taxes with respect to which the Servicer shall be required to
         indemnify the Trustee, the Owner Trustee or the Standby Servicer.

                                       39
<PAGE>

                  (v) The Servicer, shall defend, indemnify and hold harmless
         the Trustee, the Owner Trustee, the Standby Servicer, the Agent, the
         Insurer and the Noteholder against any and all costs, expenses, losses,
         damages, claims and liabilities arising out of or resulting from the
         Seller's involvement in, or the effect on any Receivable as a result
         of, the Stanwich Case and any other litigation arising out of or based
         on the same set of facts.

         (b) Notwithstanding the foregoing, the Servicer shall not be obligated
to defend, indemnify, and hold harmless the Noteholder for any losses, claims,
damages or liabilities incurred by the Noteholder arising out of claims,
complaints, actions and allegations relating to Section 406 of ERISA or Section
4975 of the Code as a result of the purchase or holding of Note by the
Noteholder with the assets of a plan subject to such provisions of ERISA or the
Code.

         (c) For purposes of this SECTION 9.2, in the event of the termination
of the rights and obligations of the Servicer (or any successor thereto pursuant
to SECTION 9.3) as Servicer pursuant to SECTION 10.1, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer pursuant to SECTION 10.2.
The provisions of this SECTION 9.2(c) shall in no way affect the survival
pursuant to SECTION 9.2(d) of the indemnification by the Servicer provided by
SECTION 9.2(a).

         (d) Indemnification under this SECTION 9.2 shall survive the
termination of this Agreement and any resignation or removal of the Seller or
any successor Servicer as Servicer and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Servicer shall have made
any indemnity payments pursuant to this Section and the recipient thereafter
collects any of such amounts from others, the recipient shall promptly repay
such amounts to the Servicer, without interest.

         SECTION 9.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER OR STANDBY SERVICER.

         (a) The Servicer shall not merge or consolidate with any other Person,
convey, transfer or lease all or substantially all of its assets as an entirety
to another Person, or permit any other Person to become the successor to the
Servicer's business unless, after the merger, consolidation, conveyance,
transfer, lease or succession, the successor or surviving entity shall be
capable of fulfilling the duties of the Servicer contained in this Agreement.
Any corporation (i) into which the Servicer may be merged or consolidated, (ii)
resulting from any merger or consolidation to which the Servicer shall be a
party, (iii) which acquires by conveyance, transfer, or lease substantially all
of the assets of the Servicer, or (iv) succeeding to the business of the
Servicer, in any of the foregoing cases shall execute an agreement of assumption
to perform every obligation of the Servicer under this Agreement and, whether or
not such assumption agreement is executed, shall be the successor to the
Servicer under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties to this Agreement, anything in
this Agreement to the contrary notwithstanding; PROVIDED, HOWEVER, that nothing
contained herein shall be deemed to release the Servicer from any obligation.
The Servicer shall provide notice of any merger, consolidation or succession
pursuant to this Section to the Trustee, the Noteholder, the Agent, the Insurer
and each Rating Agency. Notwithstanding the foregoing, the Servicer shall not
merge or consolidate with any other Person or permit any other Person to become
a successor to the Servicer's business, unless (x) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
SECTION 9.1 shall have been breached (for purposes hereof, such representations
and warranties shall be deemed made as of the date of the consummation of such
transaction) and no event that, after notice or lapse of time, or both, would
become an Insurance Agreement Event of Default or Event of Default shall have
occurred and be continuing, (y) the Servicer shall have delivered to the
Trustee, the Rating Agencies, the Noteholder and the Insurer an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,


                                       40
<PAGE>

merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and (z) the Servicer shall
have delivered to the Trustee, the Rating Agencies, the Noteholder and the
Insurer an Opinion of Counsel, stating in the opinion of such counsel, either
(A) all financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary to preserve and protect the
interest of the Purchaser and the Trustee, respectively, in the Receivables and
the Other Conveyed Property and reciting the details of the filings or (B) no
such action shall be necessary to preserve and protect such interest.

         (b) Any Person (i) into which the Standby Servicer (in its capacity as
Standby Servicer or successor Servicer) may be merged or consolidated, (ii)
resulting from any merger or consolidation to which the Standby Servicer shall
be a party, (iii) which acquires by conveyance, transfer or lease substantially
all of the assets of the Standby Servicer, or (iv) succeeding to the business of
the Standby Servicer, in any of the foregoing cases shall execute an agreement
of assumption to perform every obligation of the Standby Servicer under this
Agreement and, whether or not such assumption agreement is executed, shall be
the successor to the Standby Servicer under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties to
this Agreement, anything in this Agreement to the contrary notwithstanding;
PROVIDED, HOWEVER, that nothing contained herein shall be deemed to release the
Standby Servicer from any obligation.

         SECTION 9.4. [RESERVED]

         SECTION 9.5. DELEGATION OF DUTIES. The Servicer may at any time
delegate duties under this Agreement to sub-contractors who are in the business
of servicing automotive receivables with the prior written consent of the
Controlling Party; PROVIDED, HOWEVER, that no such delegation or sub-contracting
of duties by the Servicer shall relieve the Servicer of its responsibility with
respect to such duties.

         SECTION 9.6. SERVICER AND STANDBY SERVICER NOT TO RESIGN. Subject to
the provisions of SECTION 9.3, neither the Servicer nor the Standby Servicer
shall resign from the obligations and duties imposed on it by this Agreement as
Servicer or Standby Servicer except (i) upon a determination that by reason of a
change in legal requirements the performance of its duties under this Agreement
would cause it to be in violation of such legal requirements in a manner which
would have a material adverse effect on the Servicer or the Standby Servicer, as
the case may be, and the Controlling Party does not elect to waive the
obligations of the Servicer or the Standby Servicer, as the case may be, to
perform the duties which render it legally unable to act or to delegate those
duties to another Person or, (ii) in the case of the Standby Servicer, upon the
prior written consent of the Controlling Party. Any such determination
permitting the resignation of the Servicer or Standby Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered and acceptable to
the Trustee, the Owner Trustee, the Noteholder, the Agent and the Controlling
Party. No resignation of the Servicer shall become effective until the Standby
Servicer or an entity acceptable to the Controlling Party shall have assumed the
responsibilities and obligations of the Servicer. No resignation of the Standby
Servicer shall become effective until an entity acceptable to the Controlling
Party shall have assumed the responsibilities and obligations of the Standby
Servicer; PROVIDED, HOWEVER, that in the event a successor Standby Servicer is
not appointed within 60 days after the Standby Servicer has given notice of its
resignation and has provided the Opinion of Counsel required by this SECTION
9.6, the Standby Servicer may petition a court for its removal.

         SECTION 9.7. REPORTING REQUIREMENTS. (a) The Servicer shall furnish, or
cause to be furnished to the Agent and the Insurer:

                  (i) AUDIT REPORT. As soon as available and in any event within
         90 days after the end of each fiscal year of the Servicer, a copy of
         the consolidated balance sheet of the Servicer and its Affiliates as at
         the end of such fiscal year, together with the related statements of
         earnings, stockholders' equity and cash flows for such fiscal year,
         prepared in reasonable detail and in accordance with GAAP certified by
         independent certified public accountants of recognized national
         standing as shall be selected by the Servicer.

                  (ii)QUARTERLY STATEMENTS. As soon as available, but in any
         event within 45 days after the end of each fiscal quarter (except the
         fourth fiscal quarter) of the Servicer, copies of the unaudited
         consolidated balance sheet of the Servicer and its Affiliates as at the


                                       41
<PAGE>

         end of such fiscal quarter and the related unaudited statements of
         earnings, stockholders' equity and cash flows for the portion of the
         fiscal year through such fiscal quarter (and as to the statements of
         earnings for such fiscal quarter) in each case setting forth in
         comparative form the figures for the corresponding periods of the
         previous fiscal year, prepared in reasonable detail and in accordance
         with GAAP applied consistently throughout the periods reflected therein
         and certified by the chief financial or accounting officer of the
         Servicer as presenting fairly the financial condition and results of
         operations of the Servicer and its Affiliates (subject to normal
         year-end adjustments).

                                    ARTICLE X
                                    ---------

                                     DEFAULT
                                     -------

         SECTION 10.1. SERVICER TERMINATION EVENTS. For purposes of this
Agreement, each of the following shall constitute a "SERVICER TERMINATION
EVENT":

         (a) Any failure by the Servicer to deliver to the Trustee for
distribution to the Noteholder or deposit into any Pledged Account any proceeds
or payment required to be so delivered under the terms of this Agreement that
continues unremedied for a period of two Business Days (or one Business Day with
respect to payment of Purchase Amounts) after written notice is received by the
Servicer from the Trustee or the Insurer (unless an Insurer Default shall have
occurred and be continuing in which case by the Agent) or after discovery of
such failure by a Responsible Officer of the Servicer; or

         (b) Failure by the Servicer to deliver to the Trustee, the Agent, and
the Insurer (so long as an Insurer Default shall not have occurred and be
continuing), the Servicer's Certificate within three Business Days after the
date on which such Servicer's Certificate is required to be delivered, or
failure on the part of the Servicer to observe its covenants and agreements set
forth in SECTION 9.3(a); or

         (c) Failure on the part of the Servicer duly to observe or perform any
other covenants or agreements of the Servicer set forth in this Agreement, which
failure (i) materially and adversely affects the rights of the Noteholder
(determined without regard to the availability of funds under the Note Policy),
or of the Insurer (unless an Insurer Default shall have occurred and be
continuing), and (ii) continues unremedied for a period of 10 days after the
earlier of knowledge thereof by the Servicer or after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
(1) to the Servicer by the Trustee or the Controlling Party or (2) to the
Servicer, the Trustee and the Controlling Party by the Holders of the Note
evidencing not less than 25% of the Invested Amount of the Note; or

         (d) The occurrence of an Insolvency Event with respect to the Servicer
or the Seller (or, so long as the Seller is Servicer any of the Servicer's
Affiliates); PROVIDED, HOWEVER, that none of the events described in this CLAUSE
(d) shall constitute a Servicer Termination Event if it relates solely to an
Affiliate of the Servicer that is currently the subject of any such proceeding
or receivership described above; or

         (e) Any representation, warranty or statement of the Servicer made in
this Agreement (without regard to any exception relating to the Stanwich Case)
or any certificate, report or other writing delivered pursuant hereto shall
prove to be incorrect in any material respect as of the time when the same shall
have been made (excluding, however, any representation or warranty set forth in
this Agreement relating to the characteristics of the Receivables), and the
incorrectness of such representation, warranty or statement has a material
adverse effect on the Purchasers or the Noteholder and, within 10 days after the
earlier of knowledge thereof by the Servicer or after written notice thereof
shall have been given (1) to the Servicer by the Trustee or the Controlling
Party or (2) to the Servicer, the Trustee and the Controlling Party by the
Holders of the Note evidencing not less that 25% of the Invested Amount of the
Note the circumstances or condition in respect of which such representation,
warranty or statement was incorrect shall not have been eliminated or otherwise
cured; or

         (f) The Controlling Party shall not have delivered a Servicer Extension
Notice pursuant to SECTION 4.15; or

                                       42
<PAGE>

         (g) an Event of Default shall have occurred; or

         (h) A claim is made under the Note Policy.

         SECTION 10.2. CONSEQUENCES OF A SERVICER TERMINATION EVENT. If a
Servicer Termination Event shall occur and be continuing, the Controlling Party
by notice given in writing to the Servicer, or by non-extension of the term of
the Servicer as referred to in SECTION 4.15, may terminate all of the rights and
obligations of the Servicer under this Agreement. The outgoing Servicer shall be
entitled to its pro rata share of the Servicing Fee for the number of days in
the Accrual Period prior to the effective date of its termination. On or after
the receipt by the Servicer of such written notice or upon termination of the
term of the Servicer, all authority, power, obligations and responsibilities of
the Servicer under this Agreement, whether with respect to the Note or the
Receivables and Other Conveyed Property or otherwise, automatically shall pass
to, be vested in and become obligations and responsibilities of the Standby
Servicer (or such other successor Servicer appointed by the Controlling Party
under SECTION 10.3); PROVIDED, HOWEVER, that the successor Servicer shall have
no liability with respect to any obligation which was required to be performed
by the terminated Servicer prior to the date that the successor Servicer becomes
the Servicer or any claim of a third party based on any alleged action or
inaction of the terminated Servicer. The successor Servicer is authorized and
empowered by this Agreement to execute and deliver, on behalf of the terminated
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivables and the Other Conveyed
Property and related documents to show the Purchaser as lienholder or secured
party on the related Lien Certificates, or otherwise. The terminated Servicer
agrees to cooperate with the successor Servicer in effecting the termination of
the responsibilities and rights of the terminated Servicer under this Agreement,
including, without limitation, the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by the
terminated Servicer for deposit, or have been deposited by the terminated
Servicer, in the Collection Account or thereafter received with respect to the
Receivables and the delivery to the successor Servicer of all Receivable Files
that shall at the time be held by the terminated Servicer and a computer tape in
readable form as of the most recent Business Day containing all information
necessary to enable the successor Servicer to service the Receivables and the
Other Conveyed Property. All reasonable costs and expenses (including reasonable
attorneys' fees) incurred in connection with transferring any Receivable Files
to the successor Servicer and amending this Agreement to reflect such succession
as Servicer pursuant to this SECTION 10.2 shall be paid by the predecessor
Servicer upon presentation of reasonable documentation of such costs and
expenses. In addition, any successor Servicer shall be entitled to payment from
the immediate predecessor Servicer for reasonable transition expenses incurred
in connection with acting as successor Servicer, and to the extent not so paid,
such payment shall be made pursuant to SECTION 5.7 hereof. Upon receipt of
notice of the occurrence of a Servicer Termination Event, the Trustee shall give
notice thereof to the Rating Agencies and the Noteholder. If requested by the
Controlling Party, the successor Servicer shall terminate the Lockbox Agreement
and direct the Obligors to make all payments under the Receivables directly to
the successor Servicer (in which event the successor Servicer shall process such
payments in accordance with SECTION 4.2(e)), or to a lockbox established by the
successor Servicer at the direction of the Controlling Party, at the successor
Servicer's expense. The terminated Servicer shall grant the Trustee, the
successor Servicer and the Controlling Party reasonable access to the terminated
Servicer's premises at the terminated Servicer's expense.

         SECTION 10.3. APPOINTMENT OF SUCCESSOR.

         (a) On and after the time the Servicer receives a notice of termination
pursuant to SECTION 10.2, upon non-extension of the servicing term as referred
to in SECTION 4.15, or upon the resignation of the Servicer pursuant to SECTION
9.6, the predecessor Servicer shall continue to perform its functions as
Servicer under this Agreement, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
expiration and non-renewal of the term of the Servicer upon the expiration of


                                       43
<PAGE>

such term, and, in the case of resignation, until the later of (x) the date 45
days from the delivery to the Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of this
Agreement and (y) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel; PROVIDED, HOWEVER, that the Servicer shall not
be relieved of its duties, obligations and liabilities as Servicer until a
successor Servicer has assumed such duties, obligations and liabilities.
Notwithstanding the preceding sentence, if the Standby Servicer or any other
successor Servicer shall not have assumed the duties, obligations and
liabilities or Servicer within 45 days of the termination, non-extension or
resignation described in this SECTION 10.3, the Servicer may petition a court of
competent jurisdiction to appoint any Eligible Servicer as the successor to the
Servicer. Pending appointment as successor Servicer, Standby Servicer (or such
other Person as shall have been appointed by the Controlling Party) shall act as
successor Servicer unless it is legally unable to do so, in which event the
outgoing Servicer shall continue to act as Servicer until a successor has been
appointed and accepted such appointment. In the event of termination of the
Servicer, Bank One Trust Company, N.A., as the Standby Servicer shall assume the
obligations of Servicer hereunder on the date specified in such written notice
(the "ASSUMPTION DATE") pursuant to the Servicing and Lockbox Processing
Assumption Agreement or, in the event that the Controlling Party shall have
determined that a Person other than the Standby Servicer shall be the successor
Servicer in accordance with SECTION 10.2, on the date of the execution of a
written assumption agreement by such Person to serve as successor Servicer.
Notwithstanding the Standby Servicer's assumption of, and its agreement to
perform and observe, all duties, responsibilities and obligations of the Seller
as Servicer, or any successor Servicer, under this Agreement arising on and
after the Assumption Date, the Standby Servicer shall not be deemed to have
assumed or to become liable for, or otherwise have any liability for any duties,
responsibilities, obligations or liabilities of (i) the Seller or any other
Servicer arising on or before the Assumption Date, whether provided for by the
terms of this Agreement, arising by operation of law or otherwise, including,
without limitation, any liability for any duties, responsibilities, obligations
or liabilities of the Seller or any other Servicer arising on or before the
Assumption Date under SECTION 4.7 or 9.2 of this Agreement, regardless of when
the liability, duty, responsibility or obligation of the Seller or any other
Servicer therefor arose, whether provided by the terms of this Agreement,
arising by operation of law or otherwise, or (ii) under SECTION 9.2(a)(ii), (iv)
OR (v). Notwithstanding the above, if the Standby Servicer shall be legally
unable or unwilling to act as Servicer, and an Insurer Default shall have
occurred and be continuing, the Standby Servicer, the Trustee or a Note Majority
may petition a court of competent jurisdiction to appoint any Eligible Servicer
as the successor to the Servicer. Pending appointment pursuant to the preceding
sentence, the Standby Servicer shall act as successor Servicer unless it is
legally unable to do so, in which event the outgoing Servicer shall continue to
act as Servicer until a successor has been appointed and accepted such
appointment. Subject to SECTION 9.6, no provision of this Agreement shall be
construed as relieving the Standby Servicer of its obligation to succeed as
successor Servicer upon the termination of the Servicer pursuant to SECTION
10.2, the resignation of the Servicer pursuant to SECTION 9.6 or the
non-extension of the servicing term of the Servicer, as referred to in SECTION
4.15. If upon the termination of the Servicer pursuant to SECTION 10.2 or the
resignation of the Servicer pursuant to SECTION 9.6, the Controlling Party
appoints a successor Servicer other than the Standby Servicer, the Standby
Servicer shall not be relieved of its duties as Standby Servicer hereunder.

         (b) Any successor Servicer shall be entitled to such compensation
(whether payable out of the Collection Account or otherwise) as the Servicer
would have been entitled to under this Agreement if the Servicer had not
resigned or been terminated hereunder.

         SECTION 10.4. NOTIFICATION TO NOTEHOLDERS AND THE AGENT. Upon any
termination of, or appointment of a successor to, the Servicer, the Trustee
shall give prompt written notice thereof to the Noteholder, the Agent and to the
Rating Agencies.

         SECTION 10.5. WAIVER OF PAST DEFAULTS. The Controlling Party may, waive
in writing any default by the Servicer in the performance of its obligations
under this Agreement and the consequences thereof (except a default in making
any required deposits to or payments from any of the Pledged Accounts in
accordance with the terms of this Agreement). Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Termination Event
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto.

                                       44
<PAGE>

         SECTION 10.6. ACTION UPON CERTAIN FAILURES OF THE SERVICER. In the
event that the Trustee shall have knowledge of any failure of the Servicer
specified in SECTION 10.1 which would give rise to a right of termination under
such Section upon the Servicer's failure to remedy the same after notice, the
Trustee shall give notice thereof to the Servicer and the Insurer. For all
purposes of this Agreement (including, without limitation, SECTION 6.2(b) and
this SECTION 10.6), the Trustee shall not be deemed to have knowledge of any
failure of the Servicer as specified in SECTIONS 10.1(c) through (h) unless
notified thereof in writing by the Servicer, the Insurer or by the Noteholder.
The Trustee shall be under no duty or obligation to investigate or inquire as to
any potential failure of the Servicer specified in SECTION 10.1.

         SECTION 10.7. CONTINUED ERRORS. Notwithstanding anything contained
herein to the contrary, if the Standby Servicer becomes successor Servicer it is
authorized to accept and rely on all of the accounting, records (including
computer records) and work of the prior Servicer relating to the Receivables
(collectively, the "PREDECESSOR SERVICER WORK PRODUCT") without any audit or
other examination thereof, and the Standby Servicer as successor Servicer shall
have no duty, responsibility, obligation or liability for the acts and omissions
of the prior Servicer. If any error, inaccuracy, omission or incorrect or
non-standard practice or procedure (collectively, "ERRORS") exist in any
Predecessor Servicer Work Product and such Errors make it materially more
difficult to service or should cause or materially contribute to the Standby
Servicer as successor Servicer making or continuing any Errors (collectively,
"CONTINUED ERRORS"), the Standby Servicer as successor Servicer shall have no
duty or responsibility, for such Continued Errors; PROVIDED, HOWEVER, that the
Standby Servicer as successor Servicer agrees to use its best efforts to prevent
further Continued Errors. In the event that the Standby Servicer as successor
Servicer becomes aware of Errors or Continued Errors, the Standby Servicer as
successor Servicer shall, with the prior consent of the Controlling Party use
its best efforts to reconstruct and reconcile such data as is commercially
reasonable to correct such Errors and Continued Errors and to prevent future
Continued Errors. The Standby Servicer as successor Servicer shall be entitled
to recover its costs thereby expended in accordance with SECTION 5.7(a)(xvi)
hereof.

                                   ARTICLE XI
                                   ----------
                            MISCELLANEOUS PROVISIONS
                            ------------------------

         SECTION 11.1. AMENDMENT.

         (a) This Agreement may not be waived, amended or otherwise modified
except in a writing signed by the parties hereto, the Noteholder and the
Controlling Party; PROVIDED, HOWEVER, that if an Insurer Default has occurred
and is continuing, the Agreement may not be amended without the written consent
of the Insurer if such amendment would materially and adversely affect the
interests of the Insurer.

         (b) Promptly after the execution of any such amendment, waiver or
consent, the Trustee shall furnish written notification of the substance of such
amendment or consent to Rating Agencies.

         (c) Prior to the execution of any amendment, waiver or consent to this
Agreement the Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment, waiver or consent is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in SECTION 11.2(i)(i) has been delivered.

         (d) The Trustee may, but shall not be obligated to, enter into any such
amendment, waiver or consent which affects the Purchaser's or the Trustee's, as
applicable, own rights, duties or immunities under this Agreement or otherwise.

         (e) Upon the termination of the Seller as Servicer and the appointment
of the Backup Servicer as Servicer as Servicer hereunder, all amendments to the
terms of this Agreement specified in the Backup Servicing Agreement shall become
a part of this Agreement, as if this Agreement was amended to reflect such
changes in accordance with this SECTION 11.1.

                                       45
<PAGE>

         SECTION 11.2. PROTECTION OF TITLE TO PROPERTY.

         (a) The Seller, the Purchaser or Servicer or each of them shall
authorize, execute (if necessary) and file such financing statements and cause
to be authorized, executed (if necessary) and filed such continuation
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Purchaser and the
interests of the Trustee in the Receivables and in the proceeds thereof. The
Seller shall deliver (or cause to be delivered) to the Insurer and the Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.

         (b) None of the Seller, the Purchaser or the Servicer shall change its
name, identity, jurisdiction of organization, form of organization or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed in accordance with PARAGRAPH (A) above seriously
misleading within the meaning of Section 9-506(a) of the UCC, unless it shall
have given the Insurer and the Trustee at least thirty days' prior written
notice thereof and shall have promptly filed appropriate amendments to all
previously filed financing statements or continuation statements. Promptly upon
such filing, the Purchaser, the Seller or the Servicer, as the case may be,
shall deliver an Opinion of Counsel to the Trustee, the Agent and the Insurer,
in a form and substance reasonably satisfactory to the Controlling Party,
stating either (A) all financing statements and continuation statements have
been authorized, executed and filed that are necessary fully to preserve and
protect the interest of the Purchaser and the Trustee in the Receivables, and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (B) no such action shall be necessary to
preserve and protect such interest.

         (c) Each of the Seller, the Purchaser and the Servicer shall have an
obligation to give the Insurer, the Owner Trustee and the Trustee at least 60
days' prior written notice of any relocation of its principal executive office
or a change in its jurisdiction of organization if, as a result of such
relocation or change, the applicable provisions of the UCC would require the
filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment or new financing statement. The Servicer shall at all times be
organized under the laws of the United States (or any State thereof), maintain
each office from which it shall service Receivables, and its principal executive
office and jurisdiction of organization, within the United States of America.

         (d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.

         (e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Purchaser,
the Servicer's master computer records (including any backup archives) that
refer to a Receivable shall indicate clearly the interest of the Purchaser in
such Receivable and that such Receivable is owned by the Purchaser and pledged
to the Trustee. Indication of the Purchaser's and the Trustee's interest in a
Receivable shall be deleted from or modified on the Servicer's computer systems
when, and only when, the related Receivable shall have been paid in full or
repurchased.

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

         (g) The Servicer shall permit the Trustee, the Owner Trustee, the
Standby Servicer, the Controlling Party and the Noteholder and its respective
agents upon reasonable notice and at any time during normal business hours to
inspect, audit, and make copies of and abstracts from the Servicer's records
regarding any Receivable.

                                       46
<PAGE>

         (h) Upon request, the Servicer shall furnish to the Controlling Party
or to the Trustee, within five Business Days, a list of all Receivables (by
contract number and name of Obligor) then pledged to the Trustee, together with
a reconciliation of such list to the Schedule of Receivables and to each of the
Servicer's Certificates furnished before such request indicating removal of
Receivables from the lien of the Indenture.

         (i) the Servicer shall deliver to the Insurer, the Agent, the Owner
Trustee and the Trustee:

                  (i) promptly after the execution and delivery of this
         Agreement and, if required pursuant to SECTION 11.1, of each amendment,
         waiver, or consent, an Opinion of Counsel, in form and substance
         satisfactory to the Controlling Party and the Agent, stating that in
         the opinion of such counsel, either (A) all financing statements and
         continuation statements have been authorized, executed and filed that
         are necessary fully to preserve and protect the interest of the
         Purchaser and the Trustee and in Receivables, and reciting the details
         of such filings or referring to prior Opinion of Counsel in which such
         details are given, or (B) no such action shall be necessary to preserve
         and protect such interest; and

                  (ii) within 90 days after the beginning of each calendar year
         beginning with the first calendar year beginning more than three months
         after the Closing Date, an Opinion of Counsel, dated as of a date
         during such 90-day period, stating that, the opinion of such counsel,
         either (a) all financing statements and continuation statement have
         been authorized, executed and filed that are necessary fully to
         preserve and protect the interest of the Purchaser and the Trustee in
         the Receivables and the Other Conveyed Property, and reciting the
         details of such filings or referring to prior Opinions of Counsel in
         which such details are given, or (b) no such action shall be necessary
         to preserve and protect such interest.

         Each Opinion of Counsel referred to in clause (i) or (ii) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.

         SECTION 11.3. NOTICES. All demands, notices and communications upon or
to the Seller, the Backup Servicer, the Servicer, the Owner Trustee, the Trustee
or the Rating Agencies under this Agreement shall be in writing, via facsimile,
personally delivered, or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of the
Seller to Consumer Portfolio Services, Inc. 16355 Laguna Canyon Road, Irvine, CA
92618, Attention: Chief Financial Officer, Telecopy: (888) 577-7923, (b) in the
case of the Servicer to Consumer Portfolio Services, Inc., 16355 Laguna Canyon
Road, Irvine, CA 92618, Attention: Chief Financial Officer, Telecopy: (888)
577-7923, (c) in the case of the Purchaser, care of the Owner Trustee at the
Corporate Trust Office, (d) in the case of the Owner Trustee at the Corporate
Trust Office, (e) in the case of the Trustee at the Corporate Trust Office, (f)
in the case of the Insurer, to 250 Park Avenue, New York, New York 10177
Attention: Surveillance (Telecopy: (646) 658-5955); (g) in the case of Moody's,
to Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
New York, New York 10007, Telecopy: (212) 533-3850; (h) in the case of the
Backup Servicer, to SST at 4315 Pickett Road, St. Joseph, Missouri 64503,
Telecopy: (816) 671-2038; and (i) in the case of Standard & Poor's Ratings
Group, to Standard & Poor's, a Division of The McGraw Hill Companies, 55 Water
Street, New York, New York 10041, Attention: Asset Backed Surveillance
Department, Telecopy: (212) 438-2649. Any notice required or permitted to be
mailed to the Noteholder shall be given by first class mail, postage prepaid, at
the address of the Agent, as set forth in the Indenture. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Agent shall receive such notice.

         SECTION 11.4. ASSIGNMENT. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns. Notwithstanding anything to the contrary contained herein,
except as provided in SECTIONS 8.4 and 9.3 and as provided in the provisions of
this Agreement concerning the resignation of the Servicer, this Agreement may


                                       47
<PAGE>

not be assigned by the Purchaser, the Seller or the Servicer without the prior
written consent of the Trustee, the Standby Servicer and the Controlling Party.

         SECTION 11.5. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the parties hereto and for the benefit
of the Noteholder, the Owner Trustee and the Insurer, as third-party
beneficiaries. The Insurer and its successors and assigns shall be entitled to
rely upon and directly enforce such provisions of this Agreement. Except as
expressly stated otherwise, any right of the Insurer to direct, appoint, consent
to, approve of, or take any action under this Agreement, shall be a right
exercised by the Insurer in its sole and absolute discretion. The Insurer may
disclaim any of its rights and powers under this Agreement (but not its duties
and obligations under the Note Policy) upon delivery of a written notice to the
Purchaser and the Trustee. Nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Collateral or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.

         SECTION 11.6. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         SECTION 11.7. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

         SECTION 11.8. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

         SECTION 11.9. GOVERNING LAW. THIS AGREEMENT (OTHER THAN SECTIONS 2.1(A)
AND 2.2 HEREOF) SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS. SECTIONS 2.1(A) AND 2.2 OF THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES UNDER SUCH SECTION SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.

         SECTION 11.10. ASSIGNMENT TO TRUSTEE. The Seller hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by the Purchaser to the Trustee pursuant to the Indenture for the
benefit of the Noteholder of all right, title and interest of the Purchaser in,
to and under the Receivables and Other Coverage of Property and/or the
assignment of any or all of the Purchaser's rights and obligations hereunder to
the Trustee.

         SECTION 11.11. NONPETITION COVENANTS.

         Notwithstanding any prior termination of this Agreement, the Servicer
and the Seller shall not, prior to the date which is one year and one day after
the Final Scheduled Settlement Date, acquiesce, petition or otherwise invoke or
cause the Purchaser to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Purchaser under
any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Purchaser or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Purchaser.

                                       48
<PAGE>

         SECTION 11.12. LIMITATION OF LIABILITY OF TRUSTEE.

         (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed and delivered by Bank One Trust Company, N.A., not
in its individual capacity but solely as Trustee and Standby Servicer and in no
event shall Bank One Trust Company, N.A., have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Purchaser 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 Purchaser.

         (b) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Wilmington Trust Company in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any recourse shall be had solely to
the assets of the Issuer. For all purposes of this Agreement, in the performance
of its duties or obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and
VIII of the Trust Agreement.

         SECTION 11.13. INDEPENDENCE OF THE SERVICER. For all purposes of this
Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Purchaser, the Trustee and Standby Servicer
with respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by this Agreement, the
Servicer shall have no authority to act for or represent the Purchaser in any
way and shall not otherwise be deemed an agent of the Purchaser.

         SECTION 11.14. NO JOINT VENTURE. Nothing contained in this Agreement
(i) shall constitute the Servicer and the Purchaser as members of any
partnership, joint venture, association, syndicate, unincorporated business or
other separate entity, (ii) shall be construed to impose any liability as such
on any of them or (iii) shall be deemed to confer on any of them any express,
implied or apparent authority to incur any obligation or liability on behalf of
the others.

         SECTION 11.15. INSURER AS CONTROLLING PARTY. The Noteholder by purchase
of the Note held by it acknowledges that the Trustee, as partial consideration
for the issuance of the Note Policy, has agreed that the Insurer shall have
certain rights hereunder for so long as no Insurer Default shall have occurred
and be continuing. So long as no Insurer Default has occurred and is continuing,
except as otherwise specifically provided herein, whenever Noteholder action,
consent or approval is required under this Agreement, such action, consent or
approval shall be deemed to have been taken or given on behalf of, and shall be
binding upon, the Noteholder if the Insurer agrees to take such action or give
such consent or approval. Notwithstanding any other provision in this Agreement
or in any other Basic Document to the contrary, so long as an Insurer Default
has occurred and is continuing, any provision giving the Insurer the right to
direct, appoint or consent to, approve of, or take any action under this
Agreement shall be inoperative during the period of such Insurer Default and
such right shall instead vest in the Trustee acting, unless otherwise specified,
at the direction of a Note Majority. The Insurer may disclaim any of its rights
and powers under this Agreement (but not its duties and obligations under the
Note Policy) upon delivery of a written notice to the Trustee. The Insurer may
give or withhold any consent hereunder in its sole and absolute discretion.

         SECTION 11.16. SPECIAL SUPPLEMENTAL AGREEMENT. If any party to this
Agreement is unable to sign any amendment or supplement due to its dissolution,
winding up or comparable circumstances, then the consent of the Insurer shall be
sufficient to amend this Agreement without such party's signature.

         SECTION 11.17. LIMITED RECOURSE. Notwithstanding anything to the
contrary contained in this Agreement, the obligations of the Purchaser hereunder
are solely the corporate obligations of the Purchaser, and shall be payable by
the Purchaser, solely as provided herein. The Purchaser shall only be required
to pay (a) any fees, expenses, indemnities or other liabilities that it may
incur hereunder (i) from funds available pursuant to, and in accordance with,


                                       49
<PAGE>

the payment priorities set forth in SECTION 5.7(a) and (ii) only to the extent
the Purchaser receives additional funds for such purposes or to the extent it
has additional funds available (other than funds described in the preceding
clause (i)) that would be in excess of amounts that would be necessary to pay
the debt and other obligations of the Purchaser incurred in accordance with the
Purchaser's limited liability company agreement and all financing documents to
which the Purchaser is a party. In addition, no amount owing by the Purchaser
hereunder in excess of the liabilities that it is required to pay in accordance
with the preceding sentence shall constitute a "claim" (as defined in Section
101(5) of the Bankruptcy Code) against it. No recourse shall be had for the
payment of any amount owing hereunder or for the payment of any fee hereunder or
any other obligation of, or claim against, the Purchaser arising out of or based
upon any provision herein, against any member, employee, officer, agent,
director or authorized person of the Purchaser or any Affiliate thereof;
PROVIDED, HOWEVER, that the foregoing shall not relieve any such person or
entity of any liability they might otherwise have as a result of fraudulent
actions or omissions taken by them.

         SECTION 11.18. ACKNOWLEDGEMENT OF ROLES. The parties expressly
acknowledge and consent to Bank One Trust Company, N.A. acting in the multiple
capacities of Standby Servicer and Trustee. The parties agree that Bank One
Trust Company, N.A. in such multiple capacities shall not be subject to any
claim, defense or liability arising from its performance in any such capacity
based on conflict of interest principles, duty of loyalty principles or other
breach of fiduciary duties to the extent that any such conflict or breach arises
from the performance by Bank One Trust Company, N.A. of any other such capacity
or capacities in accordance with this Agreement or any other Basic Documents to
which it is a party.

         SECTION 11.19. TERMINATION. The respective obligations and
responsibilities of the Seller, the Issuer, the Servicer, the Standby Servicer,
the Backup Servicer and the Trustee created hereby shall terminate on the
Termination Date; PROVIDED, HOWEVER, in any case there shall be delivered to the
Trustee and the Insurer an Opinion of Counsel that all applicable preference
periods under federal, state and local bankruptcy, insolvency and similar laws
have expired with respect to the payments pursuant to this SECTION 11.19. The
Servicer shall promptly notify the Trustee, the Seller, the Issuer, each Rating
Agency and the Insurer of any prospective termination pursuant to this SECTION
11.19.

                                       50
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and the year first above written.

                                     CPS WAREHOUSE TRUST

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


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


                                     CONSUMER PORTFOLIO SERVICES, INC., as
                                     Seller


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


                                     CONSUMER PORTFOLIO SERVICES, INC., as
                                     Servicer


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


                                     BANK ONE TRUST COMPANY, N.A., not in its
                                     individual capacity, but solely as Standby
                                     Servicer and Trustee


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


                                     SYSTEMS & SERVICES TECHNOLOGIES, INC., as
                                     Backup Servicer


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


                                       51
<PAGE>

                                                                      SCHEDULE A


                             SCHEDULE OF RECEIVABLES


                         [TO BE PROVIDED BY THE SELLER]




<PAGE>


                                                                      SCHEDULE B


                    LOCATION FOR DELIVERY OF RECEIVABLE FILES


                                 [WITH TRUSTEE]


<PAGE>


                                                                       EXHIBIT A

                             SERVICER'S CERTIFICATE


                          [TO BE PROVIDED BY SERVICER]

<PAGE>


                                                                       EXHIBIT B


                                  TRUST RECEIPT
                           PURSUANT TO SECTION 3.4 OF
                        THE SALE AND SERVICING AGREEMENT



<PAGE>


                                                                       EXHIBIT C


                                SERVICER RECEIPT
                             PURSUANT TO SECTION 3.5
                       OF THE SALE AND SERVICING AGREEMENT




<PAGE>


                                                                       EXHIBIT D


                      FORM OF MONTHLY SERVICER'S STATEMENT





<PAGE>


                                                                       EXHIBIT E



                     FORM OF INDEPENDENT ACCOUNTANT'S REPORT




<PAGE>



                                                                       EXHIBIT F


                               FORM OF ASSIGNMENT






<PAGE>


                                                                       EXHIBIT G

                             FORM OF ADDITION NOTICE