<PAGE>   1
                                                                     EXHIBIT 4.6


                            INDEMNIFICATION AGREEMENT

                                      among

                       FINANCIAL SECURITY ASSURANCE INC.,

                            PEOPLEFIRST FINANCE, LLC

               MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

                            BARCLAYS CAPITAL INC. and

                           CREDIT SUISSE FIRST BOSTON




                          Dated as of December 1, 2000

                 $73,899,000 Class A-1 6.54% Asset Backed Notes

                 $200,000,000 Class A-2 6.37% Asset Backed Notes

                 $107,000,000 Class A-3 6.34% Asset Backed Notes

                 $144,101,000 Class A-4 6.43% Asset Backed Notes

<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                 Page

<S>          <C>                                                                 <C>
Section 1.   Definitions............................................................1

Section 2.   Representations, Warranties and Agreements of Financial Security.......3

Section 3.   Representations, Warranties and Agreements of the Underwriter..........6

Section 4.   Indemnification........................................................6

Section 5.   Indemnification Procedures.............................................7

Section 6.   Contribution...........................................................8

Section 7.   Third-Party Beneficiaries..............................................9

Section 8.   Miscellaneous..........................................................9
</TABLE>

EXHIBIT A - Opinion of Assistant General Counsel


<PAGE>   3
                            INDEMNIFICATION AGREEMENT

                  INDEMNIFICATION AGREEMENT dated as of December 1, 2000, among
FINANCIAL SECURITY ASSURANCE INC. ("Financial Security"), PEOPLEFIRST FINANCE,
LLC (the "Company"), MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
BARCLAYS CAPITAL INC. and CREDIT SUISSE FIRST BOSTON (collectively, the
"Underwriter").

         Section 1. Definitions. For purposes of this Agreement, the following
terms shall have the meanings provided below:

                  "Agreement" means this Indemnification Agreement, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.

                  "Commission" means the Securities and Exchange Commission.

                  "Company Party" means any of the Company, its parent,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.

                  "Depositor" means ML Asset Backed Corporation.

                  "Federal Securities Laws" means the Securities Act, the
Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment
Company Act of 1940, the Investment Advisers Act of 1940 and the Public Utility
Holding Company Act of 1935, each as amended from time to time, and the rules
and regulations in effect from time to time under such Acts.

                  "Financial Security Agreements" means this Agreement, the
Pledge Agreement, the Reserve Account Agreement and the Insurance Agreement.

                  "Financial Security Information" has the meaning provided in
Section 2(g) hereof.

                  "Financial Security Party" means any of Financial Security,
its parent, subsidiaries and affiliates, and any shareholder, director, officer,
employee, agent or "controlling person" (as such term is used in the Securities
Act) of any of the foregoing.

                  "Indemnified Party" means any party entitled to any
indemnification pursuant to Section 4 hereof.

                  "Indemnifying Party" means any party required to provide
indemnification pursuant to Section 4 hereof.


                                      -1-
<PAGE>   4


                  "Indenture" means the Indenture dated as of December 1, 2000
between the Trust and Wells Fargo Bank Minnesota, National Association, as
trustee, as the same may be amended and supplemented from time to time in
accordance with its terms.

                  "Insurance Agreement" means the Insurance and Indemnity
Agreement, dated as of December 1, 2000, among Financial Security, the Trust, PF
Funding II, LLC and the Company, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.

                  "Losses" means (a) any actual out-of-pocket damages incurred
by the party entitled to indemnification or contribution hereunder, (b) any
actual out-of-pocket costs or expenses incurred by such party, including
reasonable fees or expenses of its counsel and other expenses incurred in
connection with investigating or defending any claim, action or other proceeding
which entitle such party to be indemnified hereunder (subject to the limitations
set forth in Section 5 hereof), to the extent not paid, satisfied or reimbursed
from funds provided by any other Person other than an affiliate of such party
(provided that the foregoing shall not create or imply any obligation to pursue
recourse against any such other Person), plus (c) interest on the amount paid by
the party entitled to indemnification or contribution from the date of such
payment to the date of payment by the party who is obligated to indemnify or
contribute hereunder at the statutory rate applicable to judgments for breach of
contract.

                  "Note Policy" means the financial guaranty insurance policy
delivered by Financial Security with respect to the Securities.

                  "Offering Document" means the Prospectus and any other
material or documents delivered by the Underwriter or any Underwriter Party to
any Person in connection with the offer or sale of the Securities.

                  "Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated organization or other organization or entity
(whether governmental or private).

                  "Pledge Agreement" means the Pledge Agreement dated as of
November, 1, 1999 among the Company, Wells Fargo Bank Minnesota, National
Association f/k/a Norwest Bank Minnesota, National Association, as Collateral
Agent, and Financial Security.

                  "Prospectus" means, collectively, the Prospectus, dated
December 5, 2000, relating to the Securities, and the Prospectus Supplement.

                  "Prospectus Supplement" means the Prospectus Supplement dated
December 8, 2000 relating to the Securities.

                  "Rating Agencies" has the meaning provided in the last
paragraph of Section 2 hereof.


                                      -2-
<PAGE>   5


                  "Reserve Account Agreement" means the Master Reserve Account
Agreement dated as of November 1, 1999, among the PF Funding II, LLC, Financial
Security, the Collateral Agent and the Trustee specified therein, as
supplemented by the Series 2000-1 Supplement to Reserve Account Agreement, dated
June 1, 2000, among the same parties, the Series 2000-2 Supplement to Reserve
Account Agreement, dated December 1, 2000, among the same parties and as the
same may be further amended, supplemented or otherwise modified from time to
time in accordance with the terms thereof.

                   "Securities" means the Trust's $73,899,000 6.54% Asset Backed
Notes, Class A-1, $200,000,000 6.37% Asset Backed Notes, Class A-2, $107,000,000
6.34% Asset Backed Notes, Class A-3, and $144,101,000 6.43% Asset Backed Notes,
Class A-4 described in the Offering Document and issued pursuant to the
Indenture.

                  "Securities Act" means the Securities Act of 1933, as amended
from time to time, and any rule or regulation in effect from time to time under
such Act.

                  "Trust" means PeopleFirst.com Vehicle Receivables Owner Trust
2000-2.

                  "Underwriter Information" has the meaning provided in Section
3(c) hereof.

                  "Underwriter Party" means any of the Underwriter, their
parents, subsidiaries and affiliates and any shareholder, director, officer,
employee, or agent of the "controlling person" (as such item is used in the
Securities Act) of any of the foregoing.

                  "Underwriting Agreement" means the Underwriting Agreement
dated as of December 8, 2000 between the Company and Merrill Lynch, Pierce,
Fenner & Smith Incorporated as Representative on behalf of the several
underwriters with respect to the offer and sale of the Securities, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.

         Section 2. Representations, Warranties and Agreements of Financial
Security. Financial Security represents, warrants and agrees with the parties
hereto as follows:

                  (a) Organization, Etc. Financial Security is a stock insurance
         company duly organized, validly existing and authorized to transact
         financial guaranty insurance business under the laws of the State of
         New York.

                  (b) Authorization, Etc. The Note Policy and the Financial
         Security Agreements have been duly authorized, executed and delivered
         by Financial Security.

                  (c) Validity, Etc. The Note Policy and the Financial Security
         Agreements constitute valid and binding obligations of Financial
         Security, enforceable against Financial Security in accordance with
         their terms, subject, as


                                      -3-
<PAGE>   6


         to the enforcement of remedies, to bankruptcy, insolvency,
         reorganization, rehabilitation, moratorium and other similar laws
         affecting the enforceability of creditors' rights generally applicable
         in the event of the bankruptcy or insolvency of Financial Security and
         to the application of general principles of equity and subject, in the
         case of this Agreement, to principles of public policy limiting the
         right to enforce the indemnification provisions contained herein.

                  (d) Exemption From Registration. The Note Policy is exempt
         from registration under the Securities Act.

                  (e) No Conflicts. Neither the execution or delivery by
         Financial Security of the Note Policy or the Financial Security
         Agreements, nor the performance by Financial Security of its
         obligations thereunder, will conflict with any provision of the
         certificate of incorporation or the bylaws of Financial Security nor
         result in a breach of, or constitute a default under, any material
         agreement or other instrument to which Financial Security is a party or
         by which any of its property is bound nor violate any judgment, order
         or decree or any law regulation or rule applicable to Financial
         Security of any governmental or regulatory body, administrative agency,
         court or arbitrator having jurisdiction over Financial Security (except
         that, in the published opinion of the Securities and Exchange
         Commission, the indemnification provisions of this Agreement, insofar
         as they relate to indemnification for liabilities arising under the
         Securities Act, are against public policy as expressed in the
         Securities Act and are therefore unenforceable).

                  (f) Financial Information. The consolidated balance sheets of
         Financial Security as of December 31, 1999 and December 31, 1998 and
         the related consolidated statements of income, changes in shareholder's
         equity and cash flows for the fiscal years then ended and the interim
         consolidated balance sheet of Financial Security as of September 30,
         2000, and the related statements of income, changes in shareholder's
         equity and cash flows for the interim period then ended, furnished by
         Financial Security to the Underwriter, fairly present in all material
         respects the financial condition of Financial Security as of such dates
         and for such periods in accordance with generally accepted accounting
         principles consistently applied (subject as to interim statements to
         normal year-end adjustments) and since the date of the most current
         interim consolidated balance sheet referred to above there has been no
         change in the financial condition of Financial Security which would
         materially and adversely affect its ability to perform its obligations
         under the Note Policy.

                  (g) Financial Security Information. The information in the
         Prospectus Supplement set forth under the caption "The Insurer"(as
         revised from time to time in accordance with the provisions hereof, the
         "Financial Security Information") is limited and does not purport to
         provide the scope of disclosure required to be included in a prospectus
         with respect to a registrant in connection with the offer and sale of
         securities of such registrant registered under the Securities Act.


                                      -4-
<PAGE>   7


         Within such limited scope of disclosure, however, as of the date of the
         Prospectus Supplement and as of the date hereof, the Financial Security
         Information does not contain any untrue statement of a material fact,
         or omit to state a material fact necessary to make the statements
         contained therein, in the light of the circumstances under which they
         were made, not misleading.

                  (h) Additional Information. Financial Security will furnish to
         the Underwriter or the Company, upon request of the Underwriter or the
         Company, as the case may be, copies of Financial Security's most recent
         financial statements (annual or interim, as the case may be) which
         fairly present in all material respects the financial condition of
         Financial Security as of the dates and for the periods indicated, in
         accordance with generally accepted accounting principles consistently
         applied except as noted therein (subject, as to interim statements, to
         normal year-end adjustments). In addition, if the delivery of a
         Prospectus relating to the Securities is required at any time prior to
         the expiration of nine months after the time of issuance of the
         Prospectus in connection with the offering or sale of the Securities,
         the Company or the Underwriter will notify Financial Security of such
         requirement to deliver a Prospectus and Financial Security will
         promptly provide the Underwriter with any revisions to the Financial
         Security Information that are in the judgment of Financial Security
         necessary to prepare a supplement to the Prospectus.

                  (i) Opinion of Counsel. Financial Security will furnish to the
         Underwriter and the Company, on the closing date for the sale of the
         Securities an opinion of its Assistant General Counsel, to the effect
         set forth in Exhibit A attached hereto, dated such closing date and
         addressed to the Company and the Underwriter together with any related
         consents from its auditors.

                  (j) Consents and Reports of Independent Accountants. Financial
         Security will furnish to the Underwriter, the Depositor and the
         Company, upon request, as comfort from its independent accountants in
         respect of its financial condition, (i) at the expense of the Person
         specified in the Insurance Agreement, a copy of the Prospectus,
         including either a manually signed consent or a manually signed report
         of Financial Security's independent accountants and (ii) the quarterly
         review letter by Financial Security's independent accountants in
         respect of the most recent interim financial statements of Financial
         Security.

Nothing in this Agreement shall be construed as a representation or warranty by
Financial Security concerning the rating of its insurance financial strength by
Moody's Investors Service, Inc. or its insurer financial strength by Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, or any other
rating agency (collectively, the "Rating Agencies"). The Rating Agencies, in
assigning such ratings, take into account facts and assumptions not described in
the Prospectus and the facts and assumptions considered by the Rating Agencies,
and the ratings issued thereby, are subject to change over time.


                                      -5-
<PAGE>   8


         Section 3. Representations, Warranties and Agreements of the
Underwriter. The Underwriter represents, warrants and agrees with the parties
hereto as follows:

                  (a) Compliance With Laws. The Underwriter will comply in all
         material respects with all legal requirements in connection with offers
         and sales of the Securities and make such offers and sales in the
         manner provided in the Offering Document.

                  (b) Offering Document. The Underwriter will not use, or
         distribute to other broker-dealers for use, any Offering Document in
         connection with the offer and sale of the Securities unless such
         Offering Document includes such information as has been furnished by
         Financial Security for inclusion therein and the information therein
         concerning Financial Security has been approved by Financial Security
         in writing. Financial Security hereby consents to the information in
         respect of Financial Security included in the Prospectus Supplement.
         Each Offering Document will include the following statement:

         "The Note Policy is not covered by the property/casualty insurance
         security fund specified in Article 76 of the New York Insurance Law."

         Each Offering Document including financial information (other than
         financial information included in the Financial Security Information)
         with respect to Financial Security prepared in accordance with
         generally accepted accounting principles will include the following
         statement immediately preceding such financial information:

         "The New York State Insurance Department recognizes only statutory
         accounting practices for determining and reporting the financial
         condition and results of operations of an insurance company, for
         determining its solvency under the New York Insurance Law, and for
         determining whether its financial condition warrants the payment of a
         dividend to its stockholders. No consideration is given by the New York
         State Insurance Department to financial statements prepared in
         accordance with generally accepted accounting principles in making such
         determinations."

                  (c) Underwriter Information. All material provided by the
         Underwriter for inclusion in the Offering Document (as revised from
         time to time, the "Underwriter Information"), insofar as such
         information relates to the Underwriter is true and correct in all
         material respects. In respect of the Prospectus Supplement, the
         Underwriter Information is limited to the information identified in the
         Underwriting Agreement as "Underwriter Information."

         Section 4. Indemnification.

                  (a) Financial Security agrees, upon the terms and subject to
         the conditions provided herein, to indemnify, defend and hold harmless
         each


                                      -6-
<PAGE>   9


         Company Party, each Underwriter Party and the Depositor against (i) any
         and all Losses incurred by them with respect to the offer and sale of
         the Securities and resulting from Financial Security's breach of any of
         its representations, warranties or agreements set forth in Section 2
         hereof and (ii) any and all Losses to which any Company Party or
         Underwriter Party may become subject, under the Securities Act or
         otherwise, insofar as such Losses arise out of or result from an untrue
         statement of a material fact contained in any Offering Document or the
         omission to state therein a material fact required to be stated therein
         or necessary to make the statements therein not misleading, in each
         case to the extent, but only to the extent, that such untrue statement
         or omission was made in the Financial Security Information included
         therein in accordance with the provisions hereof.

                  (b) The Underwriter agrees, upon the terms and subject to the
         conditions provided herein, to indemnify, defend and hold harmless each
         Financial Security Party against (i) any and all Losses incurred by
         them with respect to the offer and sale of the Securities and resulting
         from the Underwriter's breach of any of its representations, warranties
         or agreements set forth in Section 3 hereof and (ii) any and all Losses
         to which any Financial Security Party may become subject, under the
         Securities Act or otherwise, insofar as such Losses arise out of or
         result from an untrue statement of a material fact contained in any
         Offering Document or the omission to state therein a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, in each case to the extent, but only to the
         extent, that such untrue statement or omission was made in the
         Underwriter Information included therein.

                  (c) Upon the incurrence of any Losses for which a party is
         entitled to indemnification hereunder, the Indemnifying Party shall
         reimburse the Indemnified Party promptly upon establishment by the
         Indemnified Party to the Indemnifying Party of the Losses incurred.

         Section 5. Indemnification Procedures. Except as provided below in
Section 6 with respect to contribution, the indemnification provided herein by
an Indemnifying Party shall be the exclusive remedy of any and all Indemnified
Parties for the breach of a representation, warranty or agreement hereunder by
an Indemnifying Party; provided, however, that each Indemnified Party shall be
entitled to pursue any other remedy at law or in equity for any such breach so
long as the damages sought to be recovered shall not exceed the Losses incurred
thereby resulting from such breach. In the event that any action or regulatory
proceeding shall be commenced or claim asserted which may entitle an Indemnified
Party to be indemnified under this Agreement, such party shall give the
Indemnifying Party written or telegraphic notice of such action or claim
reasonably promptly after receipt of written notice thereof. The Indemnifying
Party shall be entitled to participate in and, upon notice to the Indemnified
Party, assume the defense of any such action or claim in reasonable cooperation
with, and with the reasonable cooperation of, the Indemnified Party. The
Indemnified Party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof at the expense of the
Indemnified Party; provided, however, that the fees and expenses of such
separate


                                      -7-
<PAGE>   10


counsel shall be at the expense of the Indemnifying Party if (i) the
Indemnifying Party has agreed to pay such fees and expenses, (ii) the
Indemnifying Party shall have failed to assume the defense of such action or
proceeding and employ counsel satisfactory to the Indemnified Party in any such
action or proceeding or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both the Indemnified Party and the
Indemnifying Party, and the Indemnified Party shall have been advised by counsel
that (A) there may be one or more legal defenses available to it which are
different from or additional to those available to the Indemnifying Party and
(B) the representation of the Indemnifying Party and the Indemnified Party by
the same counsel would be inappropriate or contrary to prudent practice, in
which case, if the Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense of
such action or proceeding on behalf of such Indemnified Party, it being
understood, however, that the Indemnifying Party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys in addition to any local
counsel at any time for all the Company Parties, one such firm for all
Underwriter Parties and one such firm for all Financial Security Parties, as the
case may be, which firm shall be designated in writing by the Company in respect
of the Company Parties, by the Underwriter in respect of the Underwriter Parties
and by Financial Security in respect of the Financial Security Parties. The
Indemnifying Party shall not be liable for any settlement of any such claim or
action unless the Indemnifying Party shall have consented thereto or be in
default in its obligations hereunder. Any failure by an Indemnified Party to
comply with the provisions of this Section shall relieve the Indemnifying Party
of liability only if such failure is prejudicial to the position of the
Indemnifying Party and then only to the extent of such prejudice.

         Section 6. Contribution.

                  (a) To provide for just and equitable contribution if the
         indemnification provided by any Indemnifying Party is determined to be
         unavailable for any Indemnified Party (other than due to application of
         this Section), each Indemnifying Party shall contribute to the Losses
         arising from any breach of any of its representations, warranties or
         agreements contained in this Agreement on the basis of the relative
         fault of each of the parties as set forth in Section 6(b) below;
         provided, however, that an Indemnifying Party shall in no event be
         required to contribute to all Indemnified Parties an aggregate amount
         in excess of the Losses incurred by such Indemnified Parties resulting
         from the breach of representations, warranties or agreements contained
         in this Agreement.

                  (b) The relative fault of each Indemnifying Party, on the one
         hand, and of each Indemnified Party, on the other, shall be determined
         by reference to, among other things, whether the breach of, or alleged
         breach of, any representations, warranties or agreements contained in
         this Agreement relates to


                                      -8-
<PAGE>   11


         information supplied by, or action within the control of, the
         Indemnifying Party or the Indemnified Party and the parties' relative
         intent, knowledge, access to information and opportunity to correct or
         prevent such breach.

                  (c) The parties agree that Financial Security shall be solely
         responsible for the Financial Security Information and the Underwriter
         shall be solely responsible for the Underwriter Information and that
         the balance of each Offering Document shall be the responsibility of
         the Company.

                  (d) Notwithstanding anything in this Section 6 to the
         contrary, the Underwriter shall not be required to contribute an amount
         in excess of the amount by which the total underwriting discounts and
         commissions received by the Underwriter exceeds the amount of any
         damages that such Underwriter has otherwise been required to pay in
         respect of any breach by the Underwriter of its representations or
         warranties contained in Section 3 hereof.

                  (e) No Person guilty of fraudulent misrepresentation (within
         the meaning of Section 11(f) of the Securities Act) shall be entitled
         to contribution from any Person who was not guilty of such fraudulent
         misrepresentation.

                  (f) Upon the incurrence of any Losses entitled to contribution
         hereunder, the contributor shall reimburse the party entitled to
         contribution promptly upon establishment by the party entitled to
         contribution to the contributor of the Losses incurred.

         Section 7. Third-Party Beneficiaries. Except as otherwise provided in
this Agreement, no other Person shall have any right or obligation hereunder.
This Agreement shall also inure to the benefit of the Depositor. Without
limiting the generality of the foregoing, all covenants and agreements in this
Agreement which confer rights upon the Depositor shall be for the benefit of and
run directly to the Depositor and the Depositor shall be entitled to rely on and
enforce such covenants, subject, however, to the limitations on such rights
provided in this Agreement and the Basic Documents.

         Section 8. Miscellaneous.

                  (a) Notices. All notices and other communications provided for
         under this Agreement shall be delivered to the address set forth below
         or to such other address as shall be designated by the recipient in a
         written notice to the other party or parties hereto:

<TABLE>
<S>                                   <C>
         If to Financial Security:    Financial Security Assurance Inc.
                                      350 Park Avenue
                                      New York, NY 10022
                                      Attention: Senior Vice President -- Transaction Oversight
                                      Department (with a copy to the attention of the General
                                      Counsel)
</TABLE>


                                      -9-
<PAGE>   12


<TABLE>
<S>                                   <C>
                                      Re: PeopleFirst.com Vehicle
                                      Receivables Owner Trust, 2000-2,
                                      $73,899,000 Class A-1 6.54% Asset
                                      Backed Notes, $200,000,000 Class A-2
                                      6.37% Asset Backed Notes,
                                      $107,000,000 Class A-3 6.34% Asset
                                      Backed Notes and $144,101,000 Class
                                      A-4 6.43% Asset Backed Notes.

                                      Confirmation: (212) 826-0100
                                      Facsimile Nos.: (212) 339-3518,
                                      (212) 339-3529 (in each case in
                                      which notice or other communication
                                      to Financial Security refers to an
                                      Event of Default, a claim on the
                                      Note Policy or with respect to which
                                      failure on the part of Financial
                                      Security to respond shall be deemed
                                      to constitute consent or acceptance,
                                      then a copy of such notice or other
                                      communication should also be sent to
                                      the attention of each of the General
                                      Counsel and the Head-Financial
                                      Guaranty Group and shall be marked
                                      to indicate "URGENT MATERIAL
                                      ENCLOSED.")

         If to the Company:           PeopleFirst Finance, LLC
                                      401 West A Street, Suite 1000
                                      San Diego, CA  92101
                                      Attention: Randy Ellspermann, CFO
                                      Facsimile No: (619) 232-4565
                                      Confirm No: (619) 544-0815

         If to the Underwriter:       Merrill Lynch, Pierce, Fenner & Smith Incorporated
                                      4 World Financial Center
                                      North Tower
                                      New York, New York 10080

                                      Barclays Capital Inc.
                                      222 Broadway, 7th Floor
                                      New York, New York 10038

                                      Credit Suisse First Boston
                                      11 Madison Avenue
                                      New York, New York 10010-3629
</TABLE>

                  (b) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
         CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


                                      -10-
<PAGE>   13


                  (c) Assignments. This Agreement may not be assigned by any
         party without the express written consent of each other party. Any
         assignment made in violation of this Agreement shall be null and void.

                  (d) Amendments. Amendments of this Agreement shall be in
         writing signed by each party hereto.

                  (e) Survival, Etc. The indemnity and contribution agreements
         contained in this Agreement shall remain operative and in full force
         and effect, regardless of (i) any investigation made by or on behalf of
         any Indemnifying Party, (ii) the issuance of the Securities or (iii)
         any termination of this Agreement or the Note Policy. The
         indemnification provided in this Agreement will be in addition to any
         liability which the parties may otherwise have and shall in no way
         limit any obligations of the parties to the Underwriting Agreement or
         the Insurance Agreement.

                  (f) Counterparts. This Agreement may be executed in
         counterparts by the parties hereto, and all such counterparts shall
         constitute one and the same instrument.


                                      -11-
<PAGE>   14


                  IN WITNESS WHEREOF, the parties hereto have caused this
Indemnification Agreement to be duly executed and delivered as of the date first
above written.

                                             FINANCIAL SECURITY ASSURANCE INC.


                                             By:  /s/ Robin Ginsberg
                                                ------------------------------
                                                  Name:  Robin Ginsberg
                                                  Title: Director


                                             PEOPLEFIRST FINANCE, LLC


                                             By:  /s/ Justin Tisler
                                                ------------------------------
                                                  Name:  Justin Tisler
                                                  Title: Treasurer


                                             BARCLAYS CAPITAL INC.

                                             By:  /s/ Jamie Pratt
                                                ------------------------------
                                                  Name:  Jamie Pratt
                                                  Title: Associate Director


                                             MERRILL LYNCH PIERCE, FENNER
                                             & SMITH INCORPORATED


                                             By:  /s/ Robert Little
                                                ------------------------------
                                                  Name:  Robert Little
                                                  Title: Vice-President


                                             CREDIT SUISSE FIRST BOSTON


                                             By:  /s/ John L. McWilliams IV
                                                ------------------------------
                                                  Name:  John L. McWilliams IV
                                                  Title: Vice-President



<PAGE>   15


                                    EXHIBIT A

                      OPINION OF ASSISTANT GENERAL COUNSEL

                  Based upon the foregoing, I am of the opinion that:

         1. Financial Security is a stock insurance company duly organized,
validly existing and authorized to transact financial guaranty insurance
business under the laws of the State of New York.

         2. The Note Policy and the Financial Security Agreements have been duly
authorized, executed and delivered by Financial Security.

         3. The Note Policy and the Financial Security Agreements constitute
valid and binding obligations of Financial Security, enforceable against
Financial Security in accordance with their terms, subject, as to the
enforcement of remedies, to bankruptcy, insolvency, reorganization,
rehabilitation, moratorium and other similar laws affecting the enforceability
of creditors' rights generally applicable in the event of the bankruptcy or
insolvency of Financial Security and to the application of general principles of
equity and subject, in the case of the Indemnification Agreement, to principles
of public policy limiting the right to enforce the indemnification provisions
contained therein insofar as they relate to indemnification for liabilities
arising under applicable securities laws.

         4. The Note Policy is exempt from registration under the Securities Act
of 1933, as amended (the "Act").

         5. Neither the execution nor delivery by Financial Security of the Note
Policy or the Financial Security Agreements, nor the performance by Financial
Security of its obligations thereunder, will conflict with any provision of the
certificate of incorporation or the bylaws of Financial Security or, to the best
of my knowledge, result in a breach of, or constitute a default under, any
agreement or other instrument to which Financial Security is a party or by which
it or any of its property is bound or, to the best of my knowledge, violate any
judgment, order or decree applicable to Financial Security of any governmental
or regulatory body, administrative agency, court or arbitrator having
jurisdiction over Financial Security (except that in the published opinion of
the Securities and Exchange Commission the indemnification provisions of the
Indemnification Agreement, insofar as they relate to indemnification for
liabilities arising under the Act, are against public policy as expressed in the
Act and are therefore unenforceable).

         In addition, please be advised that I have reviewed the description of
Financial Security under the caption "The Insurer" in the Prospectus Supplement
dated December 8, 2000 (the "Offering Document") with respect to the Securities.
The information provided in the Offering Document with respect to Financial
Security is limited and does not purport to provide the scope of disclosure
required to be included in a prospectus with respect to a registrant under the
Act in connection with the public offer and sale of securities of such
registrant. Within such limited scope of disclosure, however, there has


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not come to my attention any information which would cause me to believe that
the description of Financial Security referred to above, as of the date of the
Prospectus Supplement, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(except that no opinion is rendered with respect to any financial statements or
other financial information contained or referred to therein).



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