<PAGE>   1
                                                                     EXHIBIT 4.7





                            INDEMNIFICATION AGREEMENT

                                      among

                              PEOPLEFIRST.COM INC.,

                            PEOPLEFIRST FINANCE, LLC,

                               PF FUNDING II, LLC,

                           ML ASSET BACKED CORPORATION

                                       and

               MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED


                          Dated as of December 8, 2000

             PeopleFirst.com Vehicle Receivables Owner Trust 2000-2

                 $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

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





<PAGE>   2
                                TABLE OF CONTENTS


                                                                            PAGE

Section 1.  Definitions.......................................................1
Section 2.  Indemnification by the Depositor of the PF Entities...............2
Section 3.  Indemnification by the PF Entities of the Depositor...............2
Section 4.  Indemnification by the PF Entities of the Underwriters............3
Section 5.  Indemnification by the Underwriters of the PF Entities............4
Section 6.  Settlement Without Consent if Failure to Reimburse................5
Section 7.  Indemnification Procedures........................................5
Section 8.  Contribution......................................................6
Section 9.  Miscellaneous.....................................................9










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<PAGE>   3
                            INDEMNIFICATION AGREEMENT

         INDEMNIFICATION AGREEMENT dated as of December 8, 2000 among
PEOPLEFIRST.COM INC. ("Parent"), PEOPLEFIRST FINANCE, LLC (the "Company"), PF
FUNDING II, LLC (the "Transferor"), ML ASSET BACKED CORPORATION (the
"Depositor") and MERRILL LYNCH, PIERCE FENNER & SMITH INCORPORATED as
representative of the underwriters (the "Representative").

         Section 1.  Definitions. (a)  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.

                  "Basic Documents" has the meaning assigned to such term in the
Sale and Servicing Agreement.

                  "Depositor Information" means the information in the
Prospectus which does not include the Underwriter Information, Seller
Information, Insurer Information or Derived Information.

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

                  "Preliminary Prospectus" means the Preliminary Prospectus
dated December 5, 2000, together with the Preliminary Prospectus Supplement
dated December 5, 2000 relating to the Securities.

                  "Prospectus" means collectively the Prospectus dated December
5, 2000, together with the Prospectus Supplement and the Preliminary Prospectus.

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

                  "Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of December 1, 2000 among the Trust, PF Funding II, LLC,
PeopleFirst Finance, LLC, the Depositor, and Wells Fargo Bank Minnesota,
National Association, as Backup Servicer and Indenture Trustee.

                  "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 Prospectus and issued pursuant to the Indenture.

<PAGE>   4


                  "Underwriting Agreement" means the Underwriting Agreement
dated as of December 8, 2000, among the Depositor and Merrill Lynch & Co., as
representative of the underwriters.

                  (b) Capitalized terms used herein and not otherwise defined
herein have the meanings assigned to them in the Underwriting Agreement.

         Section 2. Indemnification by the Depositor of the PF Entities. The
Depositor agrees to indemnify and hold harmless each PF Entity and each person,
if any, who controls any PF Entity within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, as follows:

                  (a) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, arising out of any untrue statement or
         alleged untrue statement of a material fact contained in the Depositor
         Information, or the omission or alleged omission therefrom of a
         material fact necessary in order to make the statements therein, in
         light of the circumstances under which they were made, not misleading;

                  (b) against any and all loss, claim, damage and expense
         whatsoever, as incurred, arising out of any untrue statement or alleged
         untrue statement of a material fact contained in the Computational
         Materials, ABS Term Sheets or Collateral Term Sheets, which is based
         upon the Depositor Information, distributed by any Underwriter;

                  (c) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, to the extent of the aggregate amount
         paid in settlement of any litigation, or any investigation or
         proceeding by any governmental agency or body, commenced or threatened,
         or of any claim whatsoever, based upon any such untrue statement or
         omission, or any such alleged untrue statement or omission; provided
         that (subject to Section 6) any such settlement is effected with the
         written consent of the Depositor; and

                  (d) against any and all expense whatsoever, as incurred
         (including the fees and disbursements of counsel chosen by the
         Underwriters), reasonably incurred in investigating, preparing or
         defending against any litigation, or any investigation or proceeding by
         any governmental agency or body, commenced or threatened, or any claim
         whatsoever, based upon any such untrue statement or omission, or any
         such alleged untrue statement or omission, to the extent that any such
         expense is not paid under clause (a) or (b) above.

         Section 3.  Indemnification by the PF Entities of the Depositor.

          The PF Entities severally agree to indemnify and hold harmless the
Depositor and each person, if any, who controls the Depositor within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, as
follows:



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<PAGE>   5

                  (a) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, arising out of any untrue statement or
         alleged untrue statement of a material fact contained in the Seller
         Information, or the omission or alleged omission therefrom of a
         material fact necessary in order to make the statements therein, in
         light of the circumstances under which they were made, not misleading;

                  (b) against any and all loss, claim, damage and expense
         whatsoever, as incurred, arising out of any untrue statement or alleged
         untrue statement of a material fact unless such untrue statement or
         alleged untrue statement of a material fact was made in reliance upon
         and in conformity with Derived Information provided by the Underwriters
         expressly for use in the Computational Materials, the ABS Term Sheets
         or the Collateral Term Sheets and the untrue statement or alleged
         untrue statement did not derive from an inaccuracy in the Seller
         Information used in the preparation of such Computational Materials,
         ABS Term Sheets or Collateral Term Sheets contained in the
         Computational Materials, ABS Term Sheets or Collateral Term Sheets
         distributed by any Underwriter or the omission or alleged omission
         therefrom of a material fact necessary in order to make the statement
         therein in light of the circumstances under which they were made not
         misleading;

                  (c) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, to the extent of the aggregate amount
         paid in settlement of any litigation, or any investigation or
         proceeding by any governmental agency or body, commenced or threatened,
         or of any claim whatsoever, based upon any such untrue statement or
         omission, or any such alleged untrue statement or omission; provided
         that (subject to Section 6) any such settlement is effected with the
         written consent of the PF Entities; and

                  (d) against any and all expense whatsoever, as incurred
         (including the fees and disbursements of counsel chosen by the
         Depositor), reasonably incurred in investigating, preparing or
         defending against any litigation, or any investigation or proceeding by
         any governmental agency or body, commenced or threatened, or any claim
         whatsoever, based upon any such untrue statement or omission, or any
         such alleged untrue statement or omission, to the extent that any such
         expense is not paid under clause (a) or (b) above;

                  provided, however that the indemnified parties pursuant to
                  this Section acknowledge that PF Funding II, LLC's obligations
                  pursuant to this Section will be limited to the Transferor
                  Property and on the exhaustion thereof all claims against PF
                  Funding II, LLC contemplated hereby shall be extinguished and;
                  provided, further that any such claims pursuant to this
                  Section shall be subordinated to the payment of the
                  Noteholders in full.

         Section 4.  Indemnification by the PF Entities of the Underwriters. The
PF Entities severally agree to indemnify and hold harmless the Underwriters and
each person, if any, who



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controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, as follows:

                  (a) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, arising out of any untrue statement or
         alleged untrue statement of a material fact contained in the Seller
         Information, or the omission or alleged omission therefrom of a
         material fact necessary in order to make the statements therein, in
         light of the circumstances under which they were made, not misleading;

                  (b) against any and all loss, claim, damage and expense
         whatsoever, as incurred, arising out of any untrue statement or alleged
         untrue statement of a material fact with respect to any Seller
         Information contained in the Computational Materials, ABS Term Sheets
         or Collateral Term Sheets distributed by any Underwriter;

                  (c) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, to the extent of the aggregate amount
         paid in settlement of any litigation, or any investigation or
         proceeding by any governmental agency or body, commenced or threatened,
         or of any claim whatsoever, based upon any such untrue statement or
         omission, or any such alleged untrue statement or omission; provided
         that (subject to Section 6) any such settlement is effected with the
         written consent of the PF Entities; and

                  (d) against any and all expense whatsoever, as incurred
         (including the fees and disbursements of counsel chosen by the
         Underwriters), reasonably incurred in investigating, preparing or
         defending against any litigation, or any investigation or proceeding by
         any governmental agency or body, commenced or threatened, or any claim
         whatsoever, based upon any such untrue statement or omission, or any
         such alleged untrue statement or omission, to the extent that any such
         expense is not paid under clause (a) or (b) above;

                  provided, however that the indemnified parties pursuant to
                  this Section acknowledge that PF Funding II, LLC's obligations
                  pursuant to this Section will be limited to the Transferor
                  Property and on the exhaustion thereof all claims against PF
                  Funding II, LLC contemplated hereby shall be extinguished and;
                  provided, further that any such claims pursuant to this
                  Section shall be subordinated to the payment of the
                  Noteholders in full.

         Section 5. Indemnification by the Underwriters of the PF Entities. The
Underwriters severally agree to indemnify and hold harmless the PF Entities and
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, as follows:

                  (a) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, arising out of any untrue statement or
         alleged untrue statement of a material fact


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<PAGE>   7


         contained in the Computational Materials, ABS Term Sheets or
         Collateral Term Sheets distributed by any Underwriter to the extent
         that such untrue statement or alleged untrue statement of a material
         fact was made in reliance upon and in conformity with Derived
         Information provided by such Underwriter expressly for use in the
         Computational Materials, ABS Term Sheets or Collateral Term Sheets and
         the untrue statement or alleged untrue statement did not derive from
         an inaccuracy in the Seller's Information used in preparation of such
         Computational Materials, ABS Term Sheets or Collateral Term Sheets;

                  (b) against any and all loss, liability, claim, damage and
         expense whatsoever, as incurred, to the extent of the aggregate amount
         paid in settlement of any litigation, or any investigation or
         proceeding by any governmental agency or body, commenced or threatened,
         or of any claim whatsoever, based upon any such untrue statement or
         omission, or any such alleged untrue statement or omission; provided
         that (subject to Section 6) any such settlement is effected with the
         written consent of the Underwriter; and

                  (c) against any and all expense whatsoever, as incurred
         (including the fees and disbursements of counsel chosen by the
         Underwriters), reasonably incurred in investigating, preparing or
         defending against any litigation, or any investigation or proceeding by
         any governmental agency or body, commenced or threatened, or any claim
         whatsoever, based upon any such untrue statement or omission, or any
         such alleged untrue statement or omission, to the extent that any such
         expense is not paid under clause (a) above


         Section 6. Settlement Without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel; such
indemnifying party agrees that it shall liable for any settlement of the nature
contemplated by Section 2(c), 3(c), 4(c) or 5(b), as applicable, effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and (ii)
such indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.

         Section 7. Indemnification Procedures. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Sections 2 and 5,
counsel to the indemnified parties shall be selected by the applicable PF Entity
in the case of parties indemnified pursuant to Section 3, counsel to the


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<PAGE>   8


indemnified parties shall be selected by the Depositor, and, in the case of
parties indemnified pursuant to Section 4, counsel to the indemnified parties
shall be selected by the Underwriter. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Agreement (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

         Section 8.  Contribution.

         (a) If the indemnification provided for in Section 2 or 3 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred (i) in such proportion as is appropriate to
reflect the relative benefits received by the Depositor on the one hand and the
PF Entities on the other hand from the offering of the Notes or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Depositor on the one
hand and of the on the PF Entities other hand in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or
expenses as well as any other relevant equitable considerations.

         The relative benefits received by the Depositor on the one hand and the
PF Entities on the other hand in connection with the offering of the Notes
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Notes (before
deducting expenses) received by the Depositor (which for purposes of this
paragraph is deemed to be .01% of the amount of the offered Notes) and the PF
Entities, bear to the aggregate initial offering price of the Notes.

         The relative fault of the Depositor on the one hand and the PF Entities
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Depositor or by the PF Entities and the parties' relative
intent,


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<PAGE>   9

knowledge, access to information and opportunity to correct or prevent such
statement or omission.

         The Depositor and the PF Entities agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by such
indemnified party and referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever, based upon any such untrue or alleged
untrue statement or omission or alleged omission.

         Notwithstanding the provisions of this Section, the Depositor shall not
be required to contribute any amount in excess of the amount of .01% of the
offered Notes which the Depositor has otherwise been required to pay by reason
of any such untrue or alleged untrue statement or omission or alleged omission.

         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.

         For purposes of this Section, each person, if any, who controls a PF
Entity within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as such PF Entity,
and each person, if any, who controls the Depositor within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Depositor.

         (b) If the indemnification provided for in Section 4 or 5 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred (i) in such proportion as is appropriate to
reflect the relevant benefits received by the applicable PF Entity on the one
hand and the Underwriter from the offering of the Notes or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relevant benefits referred
to in clause (i) above but also the relative fault of the PF Entity, as
applicable on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.

         The relative benefits received by any PF Entity on the one hand and the
Underwriters on the other hand in connection with the offering of the Notes
shall be deemed to be in the same


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respective proportions as the total net proceeds from the offering of the Notes
(before deducting expenses) received by any PF Entity and the total underwriting
discount and commission received by the Underwriters, bear to the aggregate
initial offering price of the Notes.

         The relative fault of the PF Entities on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the PF Entities or by the Underwriters' and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

         The PF Entities and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by such
indemnified party and referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever, based upon any such untrue or alleged
untrue statement or omission or alleged omission.

         Notwithstanding the provisions of this Section, the applicable PF
Entity shall not be required to contribute any amount in excess of the amount by
which the benefit received from the applicable PF Entity from the offering of
the Notes exceeds the amount of any damages which such PF Entity has otherwise
been required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.







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<PAGE>   11

         Notwithstanding the provisions of this Section, the Underwriters shall
not be required to contribute any amount in excess of the amount by which the
benefit received from the applicable Underwriter from the Underwriter's Discount
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.

         No person guilty or 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.

         For purposes of this Section, each person, if any, who controls a PF
Entity within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as a PF Entity; and
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Underwriter.

         Section 9.  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:


If to the PF Entities:     People First Finance LLC
                           401 West A Street
                           Suite 1000
                           San Diego, California 92101
                           Attention: Gary J. Miller

If to the Depositor:       ML Asset Backed Corporation
                           250 Vesey Street
                           World Financial Center
                           North Tower - 10th Floor
                           New York, New York 10281-1310
                           Attention: President

If to the
Representative:            Merrill Lynch, Pierce, Fenner & Smith Incorporated
                           250 Vesey Street
                           World Financial Center
                           North Tower - 10th Floor
                           New York, New York 10281-1310
                           Attention: Syndicate Department




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<PAGE>   12

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

         (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. 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
obligation of the parties to the Underwriting 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.






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<PAGE>   13


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

                                           PEOPLEFIRST.COM INC.



                                           By: /s/ W. R. Ellspermann
                                              ------------------------
                                              Name:  W. R. Ellspermann
                                              Title: Chief Financial Officer


                                           PEOPLEFIRST FINANCE, LLC



                                           By: /s/ W. R. Ellspermann
                                              ------------------------
                                              Name:  W. R. Ellspermann
                                              Title: Secretary and Chief
                                                     Financial Officer


                                           PF FUNDING II, LLC



                                           By: /s/ W. R. Ellspermann
                                              ------------------------
                                              Name:  W. R. Ellspermann
                                              Title: Secretary and Chief
                                                     Financial Officer


                                           ML ASSET BACKED CORPORATION


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



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<PAGE>   14



                                                     MERRILL LYNCH, PIERCE,
                                                     FENNER & SMITH INCORPORATED


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








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