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                                                                     Exhibit 4.1

                    FORM OF POOLING AND SERVICING AGREEMENT


                      ONYX ACCEPTANCE FINANCIAL CORPORATION

                                     Seller


                           ONYX ACCEPTANCE CORPORATION

                                    Servicer


                                       and


                              BANKERS TRUST COMPANY

                                     Trustee




                         POOLING AND SERVICING AGREEMENT

                          Dated as of December 1, 1996


                      ONYX ACCEPTANCE GRANTOR TRUST, 1996-4
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                                TABLE OF CONTENTS

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ARTICLE I Definitions ................................................................      1
         SECTION 1.1.  Definitions ...................................................      1
         SECTION 1.2.  Usage of Terms ................................................     17
         SECTION 1.3.  Section References ............................................     17
         SECTION 1.4.  Calculations ..................................................     17
         SECTION 1.5.  Accounting Terms ..............................................     18

ARTICLE II Conveyance of the Contracts; Representation and Warranties of the Seller ..     18
         SECTION 2.1.  Sale and Assignment of Contracts ..............................     18
         SECTION 2.2.  Representations and Warranties ................................     22
         SECTION 2.3.  Repurchase of Certain Contracts ...............................     31
         SECTION 2.4.  Duties and Appointment of Custodian ...........................     32
         SECTION 2.5.  Duties of Servicer Relating to the Contracts ..................     33
         SECTION 2.6.  Instructions; Authority to Act ................................     35
         SECTION 2.7.  Indemnification ...............................................     35
         SECTION 2.8.  Effective Period and Termination ..............................     35
         SECTION 2.9.  Nonpetition Covenant ..........................................     36
         SECTION 2.10. Collecting Title Documents Not Delivered at the Closing Date
                       or Subsequent Closing Date ....................................     36

ARTICLE III Administration and Servicing of Contracts ................................     37
         SECTION 3.1.  Duties of Servicer ............................................     37
         SECTION 3.2.  Collection of Contract Payments ...............................     39
         SECTION 3.3.  Realization Upon Contracts ....................................     39
         SECTION 3.4.  Insurance .....................................................     39
         SECTION 3.5.  Maintenance of Security Interests in Financed Vehicles ........     39
         SECTION 3.6.  Covenants, Representations and Warranties of Servicer .........     40
         SECTION 3.7.  Purchase of Contracts Upon Breach of Covenant .................     41
         SECTION 3.8.  Servicing Compensation ........................................     42
         SECTION 3.9.  Reporting by the Servicer .....................................     42
         SECTION 3.10. Annual Statement as to Compliance .............................     45
         SECTION 3.11. Annual Independent Certified Public Accountant's Report .......     45
         SECTION 3.12. Access to Certain Documentation and Information Regarding
                       Contracts .....................................................     45
         SECTION 3.13. Fidelity Bond .................................................     46
         SECTION 3.14. Indemnification; Third Party Claims ...........................     46
         SECTION 3.15. Reports to Certificateholders and the Rating Agencies .........     46

ARTICLE IV Distributions; Statements to Certificateholders ...........................     47
         SECTION 4.1.  Accounts ......................................................     47
         SECTION 4.2.  Collections; Transfer to Payahead Account; Realization Upon
                       Surety Bond; Net Deposit ......................................     48
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         SECTION 4.3.  Distributions .................................................     49
         SECTION 4.4.  Remittance Of Repurchase Amount ...............................     50
         SECTION 4.5.  Statements to Certificateholders ..............................     50
         SECTION 4.6.  Yield Supplement Reserve Account ..............................     51
         SECTION 4.7.  Pre-Funding Account ...........................................     52

ARTICLE V The Certificates ...........................................................     53
         SECTION 5.1.  The Certificates ..............................................     53
         SECTION 5.2.  Execution, Authentication and Delivery of Certificates ........     53
         SECTION 5.3.  Registration of Transfer and Exchange of Certificates .........     53
         SECTION 5.4.  Mutilated, Destroyed, Lost or Stolen Certificates .............     54
         SECTION 5.5.  Persons Deemed Owners .........................................     54
         SECTION 5.6.  Access to List of Certificateholders' Names and Addresses .....     54
         SECTION 5.7.  Maintenance of Office or Agency ...............................     55
         SECTION 5.8.  Book-Entry Certificates .......................................     55
         SECTION 5.9.  Notices to Clearing Agency ....................................     56
         SECTION 5.10. Definitive Certificates .......................................     56
         SECTION 5.11. Appointment of Paying Agent ...................................     57
         SECTION 5.12. Authenticating Agent ..........................................     57
         SECTION 5.13. Actions of Certificateholders .................................     58

ARTICLE VI The Seller ................................................................     59
         SECTION 6.1.  Liability of Seller; Indemnities ..............................     59
         SECTION 6.2.  Merger or Consolidation of, or Assumption of the Obligations
                       of, Seller ....................................................     59
         SECTION 6.3.  Limitation on Liability of Seller and Others ..................     60
         SECTION 6.4.  Seller Not to Resign ..........................................     60
         SECTION 6.5.  Seller May Own Certificates ...................................     60

ARTICLE VII The Servicer .............................................................     60
         SECTION 7.1.  Liability of Servicer; Indemnities ............................     60
         SECTION 7.2.  Corporate Existence; Status as Servicer; Merger ...............     61
         SECTION 7.3.  Performance of Obligations ....................................     61
         SECTION 7.4.  The Servicer Not to Resign; Assignment ........................     62
         SECTION 7.5.  Limitation on Liability of Servicer and Others ................     62

ARTICLE VIII Default .................................................................     63
         SECTION 8.1.  Events of Default .............................................     63
         SECTION 8.2.  Notification to Certificateholders ............................     65
         SECTION 8.3.  Waiver of Past Defaults .......................................     65
         SECTION 8.4.  Insurer Direction of Insolvency Proceedings ...................     65

ARTICLE IX The Trustee ...............................................................     66
         SECTION 9.1.  No Power to Engage in Business or to Vary Investments .........     66
         SECTION 9.2.  Duties of Trustee .............................................     66
         SECTION 9.3.   Trustee's Assignment of Purchased Contracts ..................     68
</TABLE>


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         SECTION 9.4.   Certain Matters Affecting the Trustee ........................     69
         SECTION 9.5.   Trustee Not Liable for Certificates or Contracts .............     70
         SECTION 9.6.   Trustee May Own Certificates .................................     71
         SECTION 9.7.   Trustee's Fees and Expenses ..................................     71
         SECTION 9.8.   Indemnity of Trustee .........................................     71
         SECTION 9.9.   Eligibility Requirements for Trustee .........................     72
         SECTION 9.10.  Resignation or Removal of Trustee ............................     72
         SECTION 9.11.  Successor Trustee ............................................     72
         SECTION 9.12.  Merger or Consolidation of Trustee ...........................     73
         SECTION 9.13.  Appointment of Co-Trustee or Separate Trustee ................     73
         SECTION 9.14.  Representations and Warranties of Trustee ....................     75
         SECTION 9.15.  Tax Returns ..................................................     75
         SECTION 9.16.  Trustee May Enforce Claims Without Possession of
                        Certificates .................................................     75
         SECTION 9.17.  Suits for Enforcement ........................................     75
         SECTION 9.18.  Maintenance of Office or Agency ..............................     76

ARTICLE X Termination ................................................................     76
         SECTION 10.1.  Termination of the Trust .....................................     76
         SECTION 10.2.  Optional Purchase of All Contracts ...........................     77

ARTICLE XI Miscellaneous Provisions ..................................................     77
         SECTION 11.1.  Amendment ....................................................     77
         SECTION 11.2.  Protection of Title to Trust .................................     78
         SECTION 11.3.  Limitation on Rights of Certificateholders ...................     80
         SECTION 11.4.  Governing Law ................................................     81
         SECTION 11.5.  Notices ......................................................     81
         SECTION 11.6.  Severability of Provisions ...................................     81
         SECTION 11.7.  Assignment ...................................................     81
         SECTION 11.8.  Certificates Nonassessable and Fully Paid ....................     81
         SECTION 11.9.  Third Party Beneficiaries ....................................     82
         SECTION 11.10. Insurer Default or Insolvency ................................     82
         SECTION 11.11. Tax Matters ..................................................     82
</TABLE>


                                    EXHIBITS

         Exhibit A - Form of Appointment of Custodian 
         Exhibit B - Form of Certificate 
         Exhibit C - Form of Surety Bond 
         Exhibit D - Form of Yield Supplement Agreement 
         Exhibit E1 - Form of Transfer Certificate 
         Exhibit E2 - Form of Subsequent Closing Date Certificate

         Schedule I - Schedule of Contracts


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         This Pooling and Servicing Agreement, dated as of December 1, 1996, is
made with respect to the formation of the Onyx Acceptance Grantor Trust, 1996-4,
among Onyx Acceptance Financial Corporation, a Delaware corporation, as
originator of the Trust and Seller, Onyx Acceptance Corporation, a Delaware
corporation, as Servicer, and Bankers Trust Company, a New York banking
corporation, as Trustee.


                              W I T N E S S E T H:

         In consideration of the mutual agreements herein contained, and of
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:


                                    ARTICLE I

                                   Definitions

         SECTION 1.1. Definitions. Whenever used in the Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:

         "Accounts" have the meaning specified in Section 4.1.

         "Affiliate" of any specified Person means any other Person controlling
or controlled by or under common control with such specified Person. For the
purpose of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.

         "Aggregate Scheduled Balance" means with respect to the Cut-Off Date or
any Distribution Date with respect to the Contracts, the aggregate of the
Scheduled Balances of such Contracts as of the Cut-Off Date or the end of the
Collection Period immediately preceding such Distribution Date, respectively.

         "Aggregate Scheduled Balance Decline" means with respect to any
Distribution Date, the sum of (x) the amount by which the Aggregate Scheduled
Balances of the Contracts as of the beginning of the related Collection Period
exceeds the Aggregate Scheduled Balances such Contracts as of the end of the
related Collection Period (not including Subsequent Contracts transferred to the
Trust during the related Collection Period) and (y) the amount by which the
Aggregate Scheduled Balance of the Subsequent Contracts (as of their respective
Subsequent Transfer Dates) transferred to the Trust during the related
Collection Period exceeds the Aggregate Scheduled Balance of such Contracts as
of the end of the related Collection Period.

         "Agreement" means this Pooling and Servicing Agreement and all
supplements, modifications and amendments hereto.


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         "Amount Available" means with respect to any Distribution Date, the sum
of (i) the Collection Account Amount Available for such Distribution Date, and
(ii) the Policy Claim Amount actually received by the Trustee for such
Distribution Date.

         "Appointment of Custodian" means the letter agreement between the
Trustee and the Servicer substantially in the form attached hereto as Exhibit A.

         "APR" means the annual percentage rate used to determine the total
interest expected to be charged over the term of a Contract as of its inception,
as shown on such Contract.

         "Authenticating Agent" shall have the meaning specified in Section
5.12.

         "Bank" means the institution designated as such pursuant to the
Insurance Agreement, or a successor Person pursuant to the Insurance Agreement,
and thereafter "Bank" shall mean such successor Person.

         "Blanket Insurance Policy" means the Lender's Blanket Consumer Loan
Insurance Policy covering losses with respect to the Contracts, which policy has
been issued by United Financial Casualty Company and the Servicer's rights
therein with respect to the Contracts have been validly assigned to the Trustee
acting on behalf of the Trust.

         "Book-Entry Certificates" means beneficial interests in the
Certificates described in Section 5.8, the ownership and transfers of which
shall be made through book entries by a Clearing Agency as described in Section
5.8.

         "Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banking institutions or savings associations in
California or New York are authorized or required to be closed.

         "Certificate" means a certificate executed and authenticated by the
Trustee substantially in the form of Exhibit B hereto.

         "Certificate Distribution Amount" means, with respect to any
Distribution Date, the sum of the Interest Distribution for such Distribution
Date and the Principal Distribution for such Distribution Date, plus, but only
in the case of any Distribution Date in respect of which the Servicer purchases
the corpus of the Trust pursuant to Section 10.2, the amount of the
Pool/Pre-Funding Balance for such Distribution Date (after giving effect to the
Principal Distribution for such Distribution Date).

         "Certificate Owner" means, with respect to a Book-Entry Certificate,
the Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a direct or indirect Clearing
Agency Participant.

         "Certificate Register" and "Certificate Registrar" mean the register
maintained and the registrar appointed pursuant to Section 5.3.


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         "Certificateholder" or "Holder" means the Person in whose name the
respective Certificate shall be registered in the Certificate Register, except
that, solely for the purposes of giving any notices, consents or waivers
pursuant to this Agreement, the interest evidenced by any Certificate registered
in the name of the Seller or the Servicer, or any Person controlling, controlled
by, or under common control with the Seller or the Servicer, shall not be taken
into account in determining whether the requisite percentage necessary to effect
any such consent shall have been obtained.

         "Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The initial Clearing Agency shall be The Depository Trust Company.

         "Clearing Account" means Account No. 4159359173 in the name of the
Seller maintained at Wells Fargo Bank, N.A.

         "Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers of securities deposited with the Clearing
Agency.

         "Closing Date" means December __, 1996.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Collection Account" means the account established and maintained as
the Collection Account pursuant to Section 4.1.

         "Collection Account Amount Available" means, with respect to any
Distribution Date and the related Collection Period, the sum of (i) all payments
of Monthly P&I, all partial prepayments, all Full Prepayments, Net Liquidation
Proceeds and Net Insurance Proceeds, collected with respect to the Contracts
during such Collection Period, less partial prepayments of Rule of 78's
Contracts which are deposited in the Payahead Account pursuant to Section
4.2(a), (ii) amounts withdrawn from the Payahead Account pursuant to Section
4.1(b) and deposited in the Collection Account in such Collection Period, (iii)
the aggregate Repurchase Amount for Repurchased Contracts deposited in or
credited to the Collection Account pursuant to Section 4.4 on the day preceding
the Servicer Report Date next preceding such Distribution Date, (iv) the Yield
Supplement Amount with respect to such Collection Period, (v) the earnings
received by the Trustee during the related Collection Period from investment of
the Pre-Funded Amount on deposit in the Pre-Funding Account and deposited into
the Collection Account pursuant to Section 4.1(d); and (vi) on the Final Funding
Period Distribution Date only, the remaining portion of the Pre-Funded Amount
deposited pursuant to Section 4.7(c).

         "Collection Period" means, with respect to any Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs;
provided that for Liquidated Contracts the Collection Period will be the period
from but excluding the sixth Business Day preceding the immediately preceding
Distribution Date to and including the sixth Business Day preceding such
Distribution Date; provided, further, however, that with respect to the first


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Distribution Date the "Collection Period" for Liquidated Contracts shall be the
period from and including the beginning of the preceding calendar month to and
including the sixth Business Day preceding such first Distribution Date.

         "Contract" means each retail installment sales contract and security
agreement or installment loan agreement and security agreement and all proceeds
thereof and payments thereunder, which agreement has been executed by an Obligor
and pursuant to which such Obligor purchased or financed the Financed Vehicle
described therein, agreed to pay the deferred purchase price (i.e., the purchase
price net of any downpayment) or amount borrowed, together with interest, as
therein provided in connection with such purchase or loan, granted a security
interest in such Financed Vehicle, and undertook to perform certain other
obligations as specified in such contract. Each Contract shall have been (i)
either originated by Onyx or shall have been originated by a Dealer and assigned
to Onyx in accordance with the assignment provisions set forth therein, and (ii)
subsequently conveyed to the Trust pursuant to this Agreement. As used herein,
"Contracts" means both the Initial Contracts and all Subsequent Contracts.

         "Contract Documents" means, with respect to each Contract, (a) the
Contract and the original credit application fully executed by the Obligor
thereunder; (b) either (i) the original Title Document for the related Financed
Vehicle or a duplicate copy thereof issued or certified by the Registrar of
Titles which issued the original thereof (or, with respect to Financed Vehicles
registered in the State of California, evidence of the electronic Title
Document), together with evidence of perfection of the security interest in the
related Financed Vehicle granted by such Contract, as determined by the Servicer
to be permitted or required to perfect such security interest under the laws of
the applicable jurisdiction, or (ii) written evidence that the Title Document
for such Financed Vehicle showing Onyx as first lienholder has been applied for;
and (c) any agreement(s) modifying the Contract (including, without limitation,
any extension agreement(s)).

         "Contract Files" means the Contract Documents and all other papers and
computerized records customarily kept by the Servicer in connection with
servicing contracts and loans comparable to the Contracts.

         "Contract Number" means, with respect to any Contract included in the
Trust, the number assigned to such Contract by the Servicer, which number is set
forth in the related Schedule of Contracts.

         "Contract Rate" means (i) with respect to a Rule of 78's Contract, the
Recomputed Yield for such Contract used in accordance with the definition of the
term "Scheduled Balance" to derive the Scheduled Balances from time to time of
such Rule of 78's Contract, and (ii) with respect to a Simple Interest Contract,
the APR.

         "Corporate Trust Office" means the principal corporate trust office of
the Trustee at which at any particular time its corporate trust business shall
be administered, which office at the time of the execution of this Agreement is
located at Four Albany Street, New York, New York 10006, Attn.: Corporate Trust
and Agency Group, Structured Finance Team, or at such 


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<PAGE>   9
other address as the Trustee may designate from time to time by notice to the
Certificateholders, the Servicer and the Insurer.

         "Custodian" means initially, the Trustee, and thereafter any custodian
that may be appointed by the Trustee pursuant to Section 2.4(b).

         "Cut-Off Date" means the opening of business on December 1, 1996.

         "Dealer" means the seller of a Financed Vehicle, which seller
originated and assigned the related Contract.

         "Default" means any occurrence which with the giving of notice or the
lapse of time or both would become an Event of Default.

         "Defaulted Contract" means, with respect to any Collection Period, a
Contract (i) which is, at the end of such Collection Period, delinquent in an
aggregate amount equal to two monthly payments of Monthly P&I or (ii) with
respect to which the related Financed Vehicle has been repossessed or
repossession efforts have been commenced.

         "Deficiency Notice" means, with respect to any Distribution Date, the
notice for payment under the Surety Bond delivered by the Trustee to the Insurer
and Bank pursuant to Section 4.2(c).

         "Definitive Certificates" has the meaning set forth in Section 5.8.

         "Depository Agreement" shall mean the agreement among the Seller, the
Trustee and the initial Clearing Agency, in the form currently used by the
Clearing Agency.

         "Distribution Account" means the segregated trust account established
by the Trustee denominated "Distribution Account--GT 1996-4, Bankers Trust
Company, Trustee."

         "Distribution Date" means the 15th day of each month or if such date
shall not be a Business Day, the next succeeding Business Day.

         "Distribution Date Statement" has the meaning set forth in Section 3.9.

         "Due Date" means, as to any Contract, the date in each month upon which
an installment of Monthly P&I is due.

         "Eligible Account" means (i) a trust account that is either (a)
maintained by the Trustee, (b) maintained with a depository institution or trust
company the commercial paper or other short-term debt obligations of which have
credit ratings from Standard & Poor's at least equal to "A-1" and from Moody's
equal to "P-1," which account is fully insured up to applicable limits by the
Federal Deposit Insurance Corporation or (c) maintained with a depository
institution acceptable to the Insurer, as evidenced by a letter from the Insurer
to that effect or 


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<PAGE>   10
(ii) a general ledger account or deposit account at a depository institution
acceptable to the Insurer, as evidenced by a letter from the Insurer to that
effect.

         "Eligible Investments" means any one or more of the following
obligations or securities, all of which shall be denominated in United States
dollars:

         (a) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America or any
agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America
and, to the extent, at the time of investment, acceptable to the Insurer and
each rating agency rating the Certificates for securities having a rating
equivalent to the rating of the Certificates at the Closing Date, the direct
obligations of, or obligations fully guaranteed by, the Federal Home Loan
Mortgage Corporation and the Federal National Mortgage Association;

         (b) demand and time deposits in, certificates of deposit of, banker's
acceptances issued by, or federal funds sold by any depository institution or
trust company (including the Trustee) incorporated under the laws of the United
States of America or any State and subject to supervision and examination by
Federal and/or State banking authorities, so long as at the time of such
investment or contractual commitment providing for such investment either (i)
the long-term, unsecured debt obligations of such depository institution or
trust company have credit ratings from Standard & Poor's at least equal to "AA-"
and from Moody's at least equal to "Aa2" or (ii) such depository institution is
acceptable to the Insurer as evidenced by a letter from the Insurer to the
Trustee;

         (c) repurchase obligations with respect to (i) any security described
in clause (a) above or (ii) any other security issued or guaranteed as to timely
payment of principal and interest by an agency or instrumentality of the United
States of America, in either case entered into with a depository institution or
trust company (including the Trustee), acting as principal, whose obligations
having the same maturity as that of the repurchase agreement would be Eligible
Investments under clause (b) above;

         (d) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof which at the time of such investment or contractual commitment
providing for such investment have long-term, unsecured debt obligations rated
by Standard & Poor's "AA-" or better and by Moody's "Aa2" or better; provided,
however, that securities issued by any corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation and held
as part of the Trust to exceed 10% of the aggregate Outstanding Principal
Balances of the Contracts and all amounts of Eligible Investments held as part
of the Trust;

         (e) commercial paper given the highest rating by Standard & Poor's and
Moody's at the time of such investment;


                                       6
<PAGE>   11
         (f) investments in money market funds or money market mutual funds
having a rating from Standard & Poor's and Moody's in the highest investment
category granted thereby (including funds for which the Trustee or any of its
Affiliates is investment manager or advisor); and

         (g) such other obligations or securities acceptable to the Insurer, as
evidenced by a letter from the Insurer to the Trustee (which acceptability may
be revoked at any time by the Insurer).

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "Event of Default" means an event specified in Section 8.1.

         "Final Distribution Date" means __________ 15, 200_.

         "Final Funding Period Distribution Date" means the Distribution Date on
which the Certificates are partially prepaid pursuant to Section 4.7 of the
Agreement, which Distribution Date shall be (i) the Distribution Date
immediately succeeding the date on which the Funding Period ends, or (ii) the
Distribution Date on which the Funding Period ends if the Funding Period ends on
a Distribution Date.

         "Financed Vehicle" means, as to any Contract, an automobile or
light-duty truck, together with all accessions thereto, securing an Obligor's
indebtedness under such Contract.

         "Full Prepayment" means any of the following: (a) payment by or on
behalf of the Obligor of the total amount required by the terms of the Contract
to be paid thereunder, which amount shall be at least equal to (i) 100% of the
Scheduled Balance of a Contract (exclusive of any Contract referred to in clause
(ii), (iii) or (iv) of the definition of the term "Liquidated Contract"), (ii)
interest accrued thereon to the date of such payment at the APR; and (iii) any
overdue amounts; or (b) payment by the Seller to the Trustee of the Repurchase
Amount of a Contract in connection with the purchase of a Contract pursuant to
Sections 2.3 or payment by the Servicer or the Insurer of the Repurchase Amount
of a Contract in connection with the purchase of all Contracts pursuant to
Section 3.7 or Section 10.2.

         "Funding Period" means the period from the Closing Date until the
earliest to occur of (i) the date on which the remaining Pre-Funded Amount is
less than $20,000, (ii) the date on which an Event of Default occurs or (iii)
the close of business on March __, 1997.

         "Initial Contracts" means the Contracts initially transferred by the
Seller to the Trust pursuant to the Agreement on the Closing Date, which
Contracts are listed on the Schedule of Contracts.

         "Initial Financed Vehicle" means the Financed Vehicle securing the
related Initial Contract.


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<PAGE>   12
         "Initial Maximum Negative Carry Amount" means the maximum Negative
Carry Amount which could become owing during the Funding Period with respect to
the Original Pre-Funded Amount, assuming that no Subsequent Contracts are
conveyed to the Trust and that interest at a rate of [2.5]% per annum is earned
on the Original Pre-Funded Amount during the Funding Period.

         "Initial Yield Supplement Reserve Account Balance" means the amount of
funds deposited into the Yield Supplement Reserve Account by Onyx on the Closing
Date equal to the Initial Maximum Negative Carry Amount.

         "Insurance Agreement" means the Insurance and Reimbursement Agreement
dated as of December __, 1996, among the Seller, the Servicer, the Trustee and
the Insurer as amended, modified or restated from time to time.

         "Insurance Proceeds" means proceeds paid pursuant to the Blanket
Insurance Policy and amounts (exclusive of rebated premiums) paid by any insurer
under any other insurance policy related to a Financed Vehicle or a Contract.

         "Insurer" means Capital Markets Assurance Corporation or its successor
in interest.

         "Insurer Insolvency" means (i) the entry of a decree or order for
relief by a court or regulatory authority having jurisdiction in respect of the
Insurer in an involuntary case under the federal bankruptcy laws, as now or
hereafter in effect, or any other present or future federal or state bank
bankruptcy, insolvency, rehabilitation or similar law, or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Insurer or with respect to any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Insurer and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; or (ii) the commencement by the Insurer of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or any other
present or future federal or state bankruptcy, insolvency, rehabilitation or
similar law, or the consent by the Insurer to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Insurer or of any substantial part of its
property or the making by the Insurer of an assignment for the benefit of
creditors or the failure by the Insurer generally to pay its debts as such debts
become due or the taking of corporate action by the Insurer in furtherance of
any of the foregoing.

         "Interest Distribution" means, with respect to any Distribution Date
(referred to in this definition as the "current Distribution Date"), interest
equal to the product of one-twelfth of the Pass-Through Rate and the Pool
Balance as of the close of the preceding Collection Period (or, if the current
Distribution Date is the first Distribution Date, as of the Cut-Off Date) plus
the amount of interest previously due but not paid to Certificateholders, if
any.

         "Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind other than tax liens, mechanics' liens, and any liens
that attach to the respective Contract by operation of law.


                                       8
<PAGE>   13
         "Liquidated Contract" means a Contract which (i) has been the subject
of a Full Prepayment; or (ii) was a Defaulted Contract and with respect to which
Liquidation Proceeds constitute, in the Servicer's reasonable judgment, the
final amounts recoverable in respect of such Defaulted Contract, have been
realized and deposited in the Collection Account or the Payahead Account; or
(iii) has been paid in full on or after its Maturity Date; or (iv) has been a
Defaulted Contract for four or more Collection Periods and with respect to which
Liquidation Proceeds have not been deposited in the Collection Account or the
Payahead Account; provided, however, that in any event a Contract that is
delinquent in the amount of five monthly payments at the end of a Collection
Period is a Liquidated Contract. The Scheduled Balance of a Liquidated Contract
will equal zero.

         "Liquidation Expenses" means reasonable out-of-pocket expenses (not to
exceed Liquidation Proceeds), other than any overhead expenses, incurred by the
Servicer in connection with the realization of the full amounts due under any
Contract (including the attempted liquidation of a Contract which is brought
current and is no longer in default during such attempted liquidation) and the
sale of any property acquired in respect thereof which are not recoverable as
Insurance Proceeds.

         "Liquidation Proceeds" means amounts received by the Servicer (before
reimbursement for Liquidation Expenses) in connection with the realization of
the full amounts due and to become due under any Defaulted Contract and the sale
of any property acquired in respect thereof.

         "Maturity Date" means with respect to any Contract, the date on which
the last scheduled payment of such Contract shall be due and payable as such
date may be extended pursuant to Section 3.2.

         "Monthly P&I" means, with respect to any Contract, the amount of each
monthly installment payment of principal and interest payable to the Obligee of
such Contract in accordance with the terms thereof, exclusive of any charges
allocable to the financing of any insurance premium and charges which represent
late payment charges or extension fees.

         "Moody's" means Moody's Investors Service, Inc. and its successors in
interest.

         "Negative Carry Amount" means, with respect to any Collection Period,
an amount equal to the difference between (i) one month's interest on the
Pre-Funded Amount on deposit in the Pre-Funding Account as of the first day of
the related Collection Period at a rate equal to the Pass-Through Rate and (ii)
the earnings received by the Trustee on behalf of the Trust during such
Collection Period from investment of such Pre-Funded Amount.

         "Net Insurance Proceeds" means, with respect to any Contract, Insurance
Proceeds, net of any such amount applied to the repair of the related Financed
Vehicle, released to an Obligor in accordance with the normal servicing
procedures of the Servicer or representing expenses incurred by the Servicer and
recoverable hereunder.


                                       9
<PAGE>   14
         "Net Liquidation Proceeds" means the amount derived by subtracting from
the Liquidation Proceeds of a Contract the related Liquidation Expenses.

         "Obligee" means the Person to whom an Obligor is indebted under a
Contract.

         "Obligor" means the purchaser or the co-purchasers of the Financed
Vehicle or any other Person who owes payments under the Contract.

         "Officers' Certificate" means a Certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary of
any Person delivering such Certificate and delivered to the Person to whom such
Certificate is required to be delivered. In the case of an Officers' Certificate
of the Servicer, at least one of the signing officers must be a Servicing
Officer. Unless otherwise specified, any reference herein to an Officers'
Certificate shall be to an Officers' Certificate of the Servicer.

         "Onyx" means Onyx Acceptance Corporation and its successors in
interest.

         "Opinion of Counsel" means a written opinion of counsel (who may be
counsel to the Seller or the Servicer) acceptable to the Trustee and the
Insurer.

         "Original Pool Balance" means the Pool Balance as of the Cut-Off Date,
which is $_____________.

         "Original Pool/Pre-Funded Amount" means, as of the Cut-Off Date,
$_____________.

         "Original Pre-Funded Amount" means $___________.

         "Outstanding" means, with respect to a Contract and as of the time of
reference thereto, a Contract that has not reached its Maturity Date, has not
been fully prepaid, has not become a Liquidated Contract and has not been
repurchased pursuant to Sections 2.3, 3.7 or 10.2.

         "Outstanding Principal Balance" as of the Cut-Off Date or any
Subsequent Transfer Date means, (i) with respect to any Rule of 78's Contract,
the amount set forth as the Outstanding Principal Balance of such Contract on
the Schedule of Contracts, such amount being the total of all unpaid Monthly P&I
due as of the Cut-Off Date or the Subsequent Transfer Date, as applicable, minus
any unearned (or earned but unpaid) interest as of the Cut-Off Date or the
Subsequent Transfer Date, as applicable, computed in accordance with the Rule of
78's, and (ii) with respect to any Simple Interest Contract, the amount set
forth as the Outstanding Principal Balance of such Contract on the Schedule of
Contracts, such amount being the total of all principal payments due after the
Cut-Off Date or the Subsequent Transfer Date, as applicable.

         "Pass-Through Rate" means ____% per annum (computed on the basis of a
360-day year of twelve 30-day months payable monthly).


                                       10
<PAGE>   15
         "Payahead Account" means the account established and maintained as the
Payahead Account pursuant to Section 4.1.

         "Paying Agent" shall have the meaning specified in Section 5.11 and
shall initially be Bankers Trust Company.

         "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.

         "Policy Claim Amount" means, with respect to each Distribution Date,
the amount, if any, by which the Certificate Distribution Amount plus the
Servicing Fee for such Distribution Date exceeds the Collection Account Amount
Available for such Distribution Date.

         "Pool Balance" as of the date of determination means the Aggregate
Scheduled Balance of the Contracts, exclusive of all Contracts that are not
Outstanding at the end of the Collection Period ending immediately prior to such
date of determination.

         "Pool Factor" means a six-digit decimal figure equal to the Pool
Balance divided by the Original Pool/Pre-Funding Balance.

         "Pool/Pre-Funding Balance" means, as of any date, the sum of (i) the
Pool Balance and (ii) the amount on deposit in the Pre-Funding Account
(excluding any investment earnings).

         "Preference Claim" has the meaning set forth in Section 8.5.

         "Pre-Funded Amount" means, as of any date, the Original Pre-Funded
Amount as reduced by amounts released to the Seller in exchange for Subsequent
Contracts delivered to the Trustee on behalf of the Trust on each Subsequent
Transfer Date.

         "Pre-Funding Account" means the account designated as such and
established and maintained pursuant to Section 4.1(a).

         "Premium" shall have the meaning assigned thereto in the Insurance
Agreement.

         "Prepayment Amount" means, as of the Final Funding Period Distribution
Date, the Pre-Funded Amount after giving effect to all transfers of Subsequent
Contracts on or before such date.

         "Principal Distribution" means, with respect to any Distribution Date,
the Aggregate Scheduled Balance Decline during the related Collection Period and
in addition, with respect to the Final Funding Period Distribution Date, the
Prepayment Amount; provided that the Principal Distribution on the Final
Distribution Date will include the Aggregate Scheduled Balance of all Contracts
that are outstanding at the end of the Collection Period immediately prior to
the Final Distribution Date.


                                       11
<PAGE>   16
         "Purchase Agreement" means the Sale and Servicing Agreement dated as of
September 8, 1994 between Onyx Acceptance Corporation as seller and Onyx
Acceptance Financial Corporation as purchaser, and as such agreement may be
modified, supplemented or amended from time to time.

         "Rating Agencies" means Moody's Investors Service, Inc. and Standard &
Poor's Ratings Group.

         "Recomputed Actuarial Method" means a method of accounting pursuant to
which each payment of Monthly P&I due on a Rule of 78's Contract will be deemed
to consist of interest equal to the product of 1/12 of the Recomputed Yield for
such Contract and the Scheduled Balance of the Contract as of the preceding Due
Date for such Contract and of principal to the extent of the remainder of such
scheduled payment, which will cause the Outstanding Principal Balance as of the
Cut-Off Date or the Subsequent Transfer Date, as applicable, to be amortized in
full at the Recomputed Yield.

         "Recomputed Yield" for any Rule of 78's Contract means the per annum
rate determined as of the Cut-Off Date or the Subsequent Transfer Date, as
applicable, such that the net present value of the remaining scheduled payments
due on such Contract, discounted at such rate from the Due Date for each such
scheduled payment to the Due Date for such Contract immediately preceding the
Cut-Off Date or the Subsequent Transfer Date, as applicable, will equal the
Outstanding Principal Balance.

         "Record Date" means, with respect to any Distribution Date, the
Business Day prior to such Distribution Date, unless Definitive Certificates
have been issued, in which case Record Date shall mean the last day of the
immediately preceding calendar month.

         "Registrar of Titles" means the agency, department or office having the
responsibility for maintaining records of titles to motor vehicles and issuing
documents evidencing such titles in the jurisdiction in which a particular
Financed Vehicle is registered.

         "Repurchase Amount" means the amount, as of the date of purchase or
repurchase of any Contract, equal to the Scheduled Balance of such Contract as
of the Due Date in the Collection Period in which such purchase or repurchase
occurs plus interest on such Contract through the Due Date in the Collection
Period preceding the date in which such purchase or repurchase occurs, to the
extent not previously collected.

         "Repurchased Contract" means a Contract (i) purchased as of the
Business Day prior to the respective Servicer Report Date by the Servicer
pursuant to Section 3.7 or (ii) repurchased by the Seller pursuant to Section
2.3.

         "Responsible Officer" means any officer of the Trustee within the
Corporate Trust Office including any vice president, assistant vice president,
assistant treasurer, assistant secretary or any other officer of the Trustee
customarily performing functions similar to those performed by
any of the above designated officers with direct responsibility for the
administration of this 


                                       12
<PAGE>   17
Agreement, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.

         "Rule of 78's Contract" means a Contract as to which the portion of
payments allocable to earned interest and principal thereunder is determined
according to the "Rule of 78's." Under the "Rule of 78's," the amount of each
payment allocable to interest on a Contract is determined by multiplying the
total amount of add-on interest payable over the term of the Contract by a
fraction, the denominator of which is equal to the sum of a series of numbers
representing the total number of monthly payments due under the Contract and the
numerator of which is the number of payments remaining before giving effect to
the payment to which the fraction is being applied.

         "Schedule of Contracts" means the list of Initial Contracts, attached
hereto as Schedule I, and each list or lists of Subsequent Contracts delivered
to the Trustee on each Subsequent Transfer Date and identified on each related
Subsequent Closing Date Certificate, which are being sold to the Trust as part
of the Trust Estate, together with supplemental data regarding the Initial
Contracts or Subsequent Contracts calculated by Merrill Lynch & Co. and verified
by the Servicer. The Schedule of Contracts attached hereto as Schedule I sets
forth the Original Pool Balance, as well as the following information with
respect to each Initial Contract in columns, and any supplement to the Schedule
of Contracts for Subsequent Contracts will present the information in the same
format:

Contract Number ("ACCT NBR") 
Date of Origination ("ORG DT") 
Maturity Date ("MAT DT") 
Monthly P&I ("P&I") 
Original Principal Balance ("ORIG AMT") 
Outstanding Principal Balance ("PRIN BAL") 
Annual Percentage Rate ("APR")

In addition, the information contained in Schedule I shall also be contained on
a computer disk or tape (the "Disk") that shall be delivered by the Servicer to
the Trustee not later than the 5th Business Day following the Closing Date. The
Recomputed Yield and the Scheduled Balance of each Rule of 78's Contract for
each Due Date after the Cut-Off Date in the case of the Initial Contracts, and
each Due Date after the related Subsequent Transfer Date in the case of
Subsequent Contracts, computed in accordance with the definition of Scheduled
Balance set forth herein, as calculated by Merrill Lynch & Co. and verified by
the Servicer, shall supplement Schedule I and shall be a part of the Schedule of
Contracts and made available by the Servicer to the Trustee upon reasonable
request.

         "Scheduled Balance" means, with respect to any Simple Interest Contract
as of the CutOff Date or the Subsequent Transfer Date, as applicable, the amount
set forth as the "Original Principal Balance" of such Contract on the Schedule
of Contracts. "Scheduled Balance" means, with respect to any Simple Interest
Contract for the Due Date or any other date in each month, the Original
Principal Balance of such Contract reduced by the portion of Monthly P&I paid on
or prior to the date of calculation that is allocated to principal under the
Simple Interest Method.


                                       13
<PAGE>   18
"Scheduled Balance" means, with respect to any Rule of 78's Contract for the Due
Date in each month and as of the Cut-Off Date or the Subsequent Transfer Date,
as applicable, the amount set forth as the "Scheduled Balance" of such Contract
for the Due Date in such month or the Cut-Off Date on the Schedule of Contracts.
For a Rule of 78's Contract, each such amount shall be the present value
(determined as provided below) as of the Due Date for the applicable month of
all payments of Monthly P&I on the Contract due after such month (due during or
after the first Collection Period in the case of a Scheduled Balance at the
Cut-Off Date or Subsequent Transfer Date, as applicable). Such present value as
of any Distribution Date shall be determined by discounting, on a monthly basis,
each such scheduled payment of Monthly P&I from the Due Date for such payment
back to the Due Date for such Contract in the Collection Period related to such
Distribution Date, using the applicable discount rate specified below. Such
present value as of the Cut-Off Date or the Subsequent Transfer Date, as
applicable, shall be determined by discounting, on a monthly basis, each such
scheduled payment of Monthly P&I from the Due Date for such payment back to the
Cut-Off Date or Subsequent Transfer Date, using the applicable discount rate
specified below. The applicable discount rate shall be the Recomputed Yield for
that Contract. The Scheduled Balance of a Rule of 78's Contract that becomes a
Liquidated Contract or a Repurchased Contract is reduced to zero as of the close
of business on the Due Date for such Contract in the Collection Period in which
such Contract became a Liquidated Contract or a Repurchased Contract. The
principal balance of a Simple Interest Contract that becomes a Liquidated
Contract or a Repurchased Contract is reduced to zero as of the close of
business on the date the Contract becomes a Liquidated Contract or is
repurchased, as the case may be. As used herein, reference to the Scheduled
Balance of a Contract for a Distribution Date shall mean the Scheduled Balance
of such Contract as of close of business on the last day of the Collection
Period ending immediately prior to such Distribution Date, and reference to the
Scheduled Balance of a Contract in a month shall mean the Scheduled Balance of
such Contract as of the opening of business on the first day of such month.

         "Seller" means Onyx Acceptance Financial Corporation in its capacity as
the seller of the Contracts under this Agreement, and each successor to Onyx
Acceptance Financial Corporation (in the same capacity) pursuant to Section 6.2.

         "Servicer" means Onyx Acceptance Corporation in its capacity as the
servicer of the Contracts under Section 3.1, and, in each case upon such
succession in accordance herewith, each successor to Onyx Acceptance Corporation
in the same capacity pursuant to Section 7.2 and each successor servicer
pursuant to Section 8.2.

         "Servicer Report Date" means the fifth Business Day prior to the
related Distribution Date.

         "Servicing Fee" means, as to any Distribution Date, the fee payable to
the Servicer for services rendered during the Collection Period ending
immediately prior to such Distribution Date, which shall equal with respect to
each Contract, the product of (A) the Servicing Fee Percent and (B) the
Scheduled Balance of such Contract as of the close of the preceding Collection
Period. As additional compensation, the Servicer will be entitled to any late
fees and other administrative fees and expenses or similar charges collected
with respect to the Contracts. The Servicer or its designee will also receive as
servicing compensation all investment earnings


                                       14
<PAGE>   19
on funds credited to the Collection Account and the amount, if any, by which the
outstanding principal balance of a Rule of 78's Contract (calculated in
accordance with the Rule of 78's method) that is subject to a Full Prepayment
exceeds the Scheduled Balance of such Contract.

         "Servicing Fee Percent" means 1.00% per annum.

         "Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Contracts whose name
appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may be amended or supplemented from time to time.

         "Servicing Standards" means at any time the quality of the Servicer's
performance with respect to (i) compliance with the terms of the Agreement and
(ii) adequacy, measured in accordance with industry standards and current and
historical standards of the Servicer, in respect of the servicing of all
Contracts serviced by the Servicer, regardless of whether any such Contract is
owned by the Servicer or otherwise.

         "Simple Interest Contract" means a Contract as to which the portion of
payments allocable to earned interest and principal thereunder is determined
according to the Simple Interest Method. For such Contracts, interest accrued as
of the Due Date is paid first, and then the remaining payment is applied to the
unpaid principal balance. Accordingly, if an Obligor pays the fixed monthly
installment in advance of the Due Date, the portion of the payment allocable to
interest for the period since the preceding payment will be less than it would
be if the payment were made on the Due Date, and the portion of the payment
allocable to reduce the principal balance will be correspondingly greater.
Conversely, if an Obligor pays the fixed monthly installment after its Due Date,
the portion of the payment allocable to interest for the period since the
preceding payment will be greater than it would be if the payment were made on
the Due Date, and the portion of the payment allocable to reduce the principal
balance will be correspondingly smaller. When necessary, an adjustment will be
made at the maturity of the Contract to the scheduled final payment to reflect
the larger or smaller, as the case may be, allocations of payments to the amount
financed under the Contract as a result of early or late payments, as the case
may be.

         "Simple Interest Method" means the method for calculating interest on a
Contract whereby interest due is calculated each day based on the actual
principal balance of the Contract on that day.

         "Spread Account" means the account so denominated and provided for in
the Insurance Agreement.

         "Standard & Poor's" means Standard & Poor's Services, a division of The
McGraw Hill Companies, or its successor in interest.

         "Subsequent Closing Date" means the Business Day immediately preceding
(i) the first Distribution Date and (ii) each Distribution Date up to and
including the Final Funding Period Distribution Date.


                                       15
<PAGE>   20
         "Subsequent Closing Date Certificate" means the certificate of an
officer of the Seller delivered in connection with any Subsequent Closing Date,
substantially in the form attached hereto as Exhibit E-2.

         "Subsequent Contracts" means the Contracts which are transferred by the
Seller to the Trust on each Subsequent Transfer Date pursuant to this Agreement
and are identified on the schedule attached to each Transfer Certificate
delivered to the Trustee on each such Subsequent Transfer Date.

         "Subsequent Financed Vehicle" means the Financed Vehicle securing a
Subsequent Contract.

         "Successor Custodian" shall have the meaning as set forth in Section
2.4(b).

         "Surety Bond" means the principal/interest surety bond issued by the
Insurer to the Trustee, the form of which is attached hereto as Exhibit C.

         "Title Document" means, with respect to any Financed Vehicle, the
certificate of title for, or other evidence of ownership of, such Financed
Vehicle issued by the Registrar of Titles in the jurisdiction in which such
Financed Vehicle is registered. For Financed Vehicles registered in the State of
California, Title Document may consist of electronic evidence of ownership on
the Electronic Lien and Title system of the California Department of Motor
Vehicles.

         "Transfer Agent" shall have the meaning specified in Section 5.3 and
initially shall be Bankers Trust Company.

         "Transfer Certificate" means the certificate of an officer of the
Seller delivered in connection with the delivery of any Subsequent Contract on
any Subsequent Transfer Date, substantially in the form attached hereto as
Exhibit E-1.

         "Trust" means the Onyx Acceptance Grantor Trust, 1996-4 created by the
Agreement.

         "Trust Estate" has the meaning set forth in Section 2.1 hereof. The
Yield Supplement reserve Account, the Spread Account and the Payahead Account
and amounts on deposit therein and credited thereto shall not be part of the
Trust Estate.

         "Trustee" means Bankers Trust Company, a New York banking corporation,
until a successor Person shall have become the Trustee pursuant to the
applicable provisions of this Agreement, and thereafter "Trustee" shall mean
such successor Person.

         "UCC" means the Uniform Commercial Code as in effect, as applicable, in
California, Arizona, Hawaii, Nevada, Oregon or Washington, or if the context
requires, any other applicable state.


                                       16
<PAGE>   21
         "Yield Supplement Agent" means Bankers Trust Company, in its capacity
as agent for the Certificateholders and the Insurer with respect to the Yield
Supplement Reserve Account as set forth in Section 4.6. The form of the Yield
Supplement Agreement is attached hereto as Exhibit D.

         "Yield Supplement Agreement" means the Yield Supplement Agreement dated
as of the date hereof between Onyx Acceptance Financial Corporation and Onyx
Acceptance Corporation, as such agreement may be modified, supplemented or
amended from time to time.

         "Yield Supplement Amount" means, with respect to any Distribution Date,
the Negative Carry Amount with respect to such Collection Period.

         "Yield Supplement Release Amount" means, (a) with respect to any
Subsequent Closing Date, (i) the Initial Maximum Negative Carry Amount minus
(ii) the sum of (x) the aggregate Yield Supplement Release Amounts released on
all prior Subsequent Closing Dates and (y) the maximum Negative Carry Amount
which could become owing during the remainder of the Funding Period assuming
that no additional Subsequent Contracts are conveyed to the Trust and that the
Pre-Funded Amount as of such Subsequent Closing Date earns interest at a rate
equal to [2.5]% per annum and (b) with respect to the Final Funding Period
Distribution Date, any amount remaining on deposit in the Yield Supplement
Reserve Account relating to the Negative Carry Amount after the payment on the
Final Funding Period Distribution Date to the Certificateholders of the
Prepayment Amount.

         "Yield Supplement Reserve Account" means the account established as the
Yield Supplement Reserve Account by Onyx in the name of the Yield Supplement
Agent pursuant to Section 4.6(a).

         SECTION 1.2. Usage of Terms. With respect to all terms in the
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
amendments, modifications and supplements thereto or any changes therein entered
into in accordance with their respective terms and not prohibited by the
Agreement; references to Persons include their permitted successors and assigns;
and the term "including" means "including without limitation."

         SECTION 1.3. Section References. All section references, unless
otherwise indicated, shall be to Sections in this Agreement.

         SECTION 1.4. Calculations. Except as otherwise provided in this
Agreement, all interest rate and basis point calculations under this Agreement
will be made on the basis of a 360-day year and twelve thirty-day months and
will be carried out to at least three decimal places. Collections of interest on
Rule of 78's Contracts shall be calculated as if such Contracts were actuarial
contracts the scheduled principal balances of which are the Scheduled Balances
thereof.


                                       17
<PAGE>   22
         SECTION 1.5. Accounting Terms. All accounting terms used but not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in the United States.


                                   ARTICLE II

                          Conveyance of the Contracts;
                   Representation and Warranties of the Seller

         SECTION 2.1. Sale and Assignment of Contracts.

         (a) In consideration of the Trustee's delivery to, or upon the order
of, the Seller of authenticated certificates in an aggregate amount equal to the
Original Pool Balance, the Seller hereby sells, grants, transfers, conveys and
assigns to the Trustee on behalf of the Trust for the benefit of the
Certificateholders and the Insurer, without recourse (except as expressly
provided in Section 2.3 hereof) effective upon the Closing Date, all of its
right, title and interest in, to and under:

                  (i) the Initial Contracts listed in the Schedule of Contracts
         including, without limitation, all payments of Monthly P&I due on or
         after the Cut-Off Date, all Net Liquidation Proceeds and Net Insurance
         Proceeds with respect to any Initial Financed Vehicle to which an
         Initial Contract relates received on or after the Cut-Off Date and all
         other proceeds received in respect of such Contracts and any and all
         security interests in the Initial Financed Vehicles;

                  (ii) the Contract Documents relating to the Initial Contracts
         (except the Contract Documents for Initial Contracts which have been
         the subject of a Full Prepayment received on or after the Cut-Off Date
         but no later than one Business Day prior to the Closing Date, in lieu
         of which the Seller shall have deposited in or credited to the
         Collection Account on or prior to the Closing Date an amount equal to
         such Full Prepayment);

                  (iii) all amounts on deposit in the Collection Account,
         including all Eligible Investments credited thereto (but excluding
         investment earnings thereon);

                  (iv) the right of the Seller, as purchaser under the Purchase
         Agreement, to cause the seller thereunder to repurchase Initial
         Contracts listed in the Schedule of Contracts under certain
         circumstances;

                  (v) the security interest of the Seller in the Initial
         Financed Vehicles and the rights to receive proceeds from claims on
         certain insurance policies covering the Initial Financed Vehicles or
         the individual Obligors under each related Initial Contract;

                  (vi) the Seller's right to proceeds under the Blanket
         Insurance Policy;


                                       18
<PAGE>   23
                  (vii) all right, title and interest of the Seller under the
         Yield Supplement Agreement; and

                  (viii) all proceeds in any way delivered with respect to the
         foregoing, all rights to payments with respect to the foregoing and all
         rights to enforce the foregoing.

         (b) Subject to the conditions set forth in Section 2.1(c), in
consideration of the Trustee's delivery of authenticated certificates on the
Closing Date in an aggregate amount equal to the Pre-Funded Amount, the Seller
hereby sells, grants, transfers, conveys and assigns to the Trustee on behalf of
the Trust for the benefit of the Certificateholders and the Insurer, without
recourse (except as expressly provided in Section 2.3 hereof) effective upon
delivery to the Trustee on the related Subsequent Transfer Date against payment
therefor from the Pre-Funded Amount in accordance with Section 4.7(b), all of
its right, title and interests in, to and under:

                  (i) all Subsequent Contracts delivered to the Trustee
         including, without limitation, all payments of Monthly P&I due on or
         after the related Subsequent Transfer Date, all Net Liquidation
         Proceeds and Net Insurance Proceeds with respect to any Subsequent
         Financed Vehicle to which a Subsequent Contract relates received on or
         after the related Subsequent Transfer Date and all other proceeds
         received in respect of such Subsequent Contracts and any and all
         security interests in the Subsequent Financed Vehicles;

                  (ii) the Contract Documents relating to the Subsequent
         Contracts;

                  (iii) the right of the Seller, as purchaser under the Purchase
         Agreement, to cause Onyx as the seller thereunder to repurchase
         Subsequent Contracts listed on any Transfer Certificate under certain
         circumstances;

                  (iv) the security interest of the Seller in the Subsequent
         Financed Vehicles and the rights to receive proceeds from claims on
         certain insurance policies covering the Subsequent Financed Vehicles or
         the individual Obligors under each related Subsequent Contract; and

                  (v) all proceeds in any way delivered with respect to the
         foregoing, all rights to payments with respect to the foregoing and all
         rights to enforce the foregoing.

         The foregoing items of property listed in this paragraph, together with
the rights of the Trustee under the Surety Bond and the rights of the Trustee to
the Pre-Funded Amount, are the Trust Estate.

         It is the intention of the Seller and the Trustee that the assignment
and transfer herein contemplated constitute (and shall be construed for all
purposes as) a sale of the Trust Estate (other than the Surety Bond and the
Pre-Funded Amount), conveying good title thereto free and clear of any liens and
encumbrances, from the Seller to the Trust. However, in the event that such
conveyance is deemed to be a pledge to secure a loan (in spite of the express
intent of the parties hereto that this conveyance is to be treated as a true and
complete sale), the Seller hereby


                                       19
<PAGE>   24
grants to the Trustee on behalf of the Trust for the benefit of the
Certificateholders a first priority perfected security interest in all of the
Seller's right, title and interest in the Trust Estate whether now existing or
hereafter created (other than the Surety Bond and the Pre-Funded Amount), and
all proceeds of the foregoing to secure the loan deemed to be made in connection
with such pledge and, in such event, this Agreement shall constitute a security
agreement under applicable law.

         (c) The sale and assignment of the Subsequent Contracts and the other
property and rights related thereto described in Section 2.1(b) shall be subject
to the satisfaction of each of the following conditions as of the related
Subsequent Transfer Date, as applicable:

                  (i) the Seller shall have delivered to the Trustee the
         Subsequent Contracts together with a duly executed Transfer
         Certificate, substantially in the form of Exhibit E-1;

                  (ii) neither the Servicer nor the Seller was insolvent nor
         will either of them have been made insolvent by such transfer nor is
         either of them aware of any pending Seller or Servicer insolvency;

                  (iii) the addition of such Subsequent Contracts will not cause
         as of the related Subsequent Closing Date and has not caused as of the
         related Subsequent Transfer Date the tax consequences to the Trust or
         the Certificateholders to be other than as discussed in the prospectus
         for the Trust under the caption "Certain Tax Consequences" and in the
         tax opinion of counsel to the Seller delivered on the Closing Date, as
         confirmed in the legal opinion delivered on the immediately following
         Subsequent Closing Date dated the date of such Subsequent Closing Date
         pursuant to Section 2.1(h)(iv);

                  (iv) the Funding Period shall not have terminated;

                  (v) no selection procedures believed by the Seller or the
         Servicer to be adverse to the interests of the Certificateholders shall
         have been utilized in selecting the Subsequent Contracts;

                  (vi) the Seller and the Trustee shall not have been advised by
         either Rating Agency on or before the Business Day immediately
         preceding such Subsequent Transfer Date that the conveyance of the
         Subsequent Contracts would result in a qualification, modification or
         withdrawal of its then-current rating of the Certificates;

                  (vii) the weighted average APR of the Contracts (including the
         Subsequent Contracts) is not less than _____%; and

                  (viii) the weighted average remaining term of the Contracts
         (including the Subsequent Contracts) as of the Subsequent Transfer Date
         will not be greater than 72 months.


                                       20
<PAGE>   25
         (d) In connection with the sale of the Contracts pursuant to the
Purchase Agreement, Onyx has filed with the office of the Secretary of State of
the State of California UCC-1 financing statements naming Onyx as seller and
including the Initial Contracts and Subsequent Contracts in the description of
the assets being sold thereunder. In connection with the sale of the Initial
Contracts pursuant to this Agreement, the Seller has filed or caused to be filed
UCC-1 financing statements, executed by the Seller as seller, naming the Trust
as purchaser and describing the Contracts as the assets being sold by it to the
Trust, with the Office of the Secretary of State of the State of California. The
Seller shall have caused UCC-2 termination statements to have been filed with
the Office of Secretary of State of the State of California terminating any
outstanding security interests in the Initial Contracts. The Seller will deliver
the Subsequent Contracts to the Trustee on each Subsequent Transfer Date
together with the Transfer Certificate relating to such Subsequent Contracts. On
each Subsequent Closing Date, the Seller shall cause UCC-1 financing statements
to be filed with the California Secretary of State executed by the Seller as
seller and the Trustee, on behalf of the Trust, as purchaser and describing the
Subsequent Contracts delivered to the Trustee from and including the preceding
Subsequent Closing Date (or the Closing Date with respect to the first
Subsequent Closing Date) as the assets sold and shall have caused UCC-2
termination statements to have been filed with the office of the Secretary of
State of the State of California terminating any outstanding security interests
in such Subsequent Contracts and certificates from each secured creditor of the
Seller confirming that such creditor has no claim of a security interest in any
of such Subsequent Contracts. From time to time, the Servicer shall cause to be
taken such actions as are necessary to continue the perfection of the Trust's
ownership interest in the Contracts and to continue the first priority security
interest of the Trust in the Financed Vehicles and their proceeds (other than,
as to such priority, any statutory lien arising by operation of law after the
Closing Date or the Subsequent Transfer Date, as applicable, which is prior to
such interest), including, without limitation, the filing of financing
statements, amendments thereto or continuation statements and the making of
notations on records or documents of title.

         (e) If any change in the name, identity or corporate structure of Onyx,
the Seller or the relocation of the chief executive office of any of them would
make any financing or continuation statement or notice of lien filed under this
Agreement misleading within the meaning of applicable provisions of the UCC or
any title statute, the Servicer, within the time period required by applicable
law, shall file such financing statements or amendments as may be required to
preserve and protect the interests of the Trustee on behalf of the Trust and the
Certificateholders in the Contracts and in the related Financed Vehicles and
proceeds thereof. Promptly thereafter, and in any event within 30 days of such
change or relocation, the Servicer shall deliver to the Trustee an Opinion of
Counsel stating that, in the opinion of such counsel, all financing statements
or amendments necessary fully to preserve and protect the interests of the
Trustee and the Certificateholders in the Contracts and in the related Financed
Vehicles and proceeds thereof have been filed, and reciting the details of such
filings.

         (f) During the term of this Agreement, the Seller and Onyx shall each
maintain its chief executive office in one of the states of the United States.

         (g) The Servicer shall pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
Persons other than the Trustee, 


                                       21
<PAGE>   26
of the Trust's right, title and interest in and to the Contracts and in
connection with maintaining the first priority security interest in the related
Financed Vehicles and the proceeds of such Financed Vehicles.

         (h) On each Subsequent Closing Date, the Seller shall:

                  (i) file a UCC-1 financing statement with the Secretary of
         State of the State of California executed by the Seller as seller,
         naming the Trustee, on behalf of the Trust, as purchaser and describing
         the Subsequent Contracts delivered to the Trustee on or after the
         preceding Subsequent Closing Date (or the Closing Date, in the case of
         the first Subsequent Closing Date) as the assets sold by it to the
         Trust;

                  (ii) cause to be filed a UCC-2 termination statement with the
         office of the Secretary of State of the State of California terminating
         any outstanding security interests in the Subsequent Contracts subject
         to the UCC-1 financing statement described in clause (i), above and
         deliver a certificate from each secured creditor of the Seller
         confirming that such creditor has no claim of any security interest in
         any of such Subsequent Contracts;

                  (iii) deliver to each Rating Agency, the Insurer and the
         Trustee a Subsequent Closing Date Certificate; and

                  (iv) deliver to each Rating Agency, the Insurer and the
         Trustee an Opinion of Counsel with respect to the absence of negative
         tax consequences to the Trust, the characterization of the transfer of
         the Subsequent Contracts and the perfection of the Trustee's interest
         on behalf of the Trust therein.

         Failure to comply with any of the conditions set forth in this Section
2.1(h) on any Subsequent Closing Date shall be deemed to be a breach of a
representation and warranty with respect to each of the Subsequent Contracts to
which such failed conditions relate as of such Subsequent Closing Date.

         SECTION 2.2. Representations and Warranties. The Seller represents and
warrants to the Trustee and the Trust for the benefit of the Certificateholders
and the Insurer as follows:

         (a) As to the Seller, as of the Closing Date with respect to the
Initial Contracts and as of each Subsequent Transfer Date with respect to the
Subsequent Contracts delivered to the Trustee on such date:

                  (i) the Seller is duly organized and validly existing as a
         corporation organized and existing and in good standing under the laws
         of the State of Delaware, with power and authority to own its
         properties and to conduct its business and had at all relevant times,
         and has, power, authority, and legal right to originate or acquire and
         own the Contracts;


                                       22
<PAGE>   27
                  (ii) the Seller is duly qualified to do business as a foreign
         corporation in good standing, and shall have obtained all necessary
         licenses and approvals in all jurisdictions in which the ownership or
         lease of property or the conduct of its business requires such
         qualifications;

                  (iii) the Seller has the power and authority to execute and
         deliver this Agreement and to carry out its terms; the Seller has full
         power and authority to sell and assign the property to be sold and
         assigned to and deposited with the Trustee on behalf of the Trust as
         part of the Trust and has duly authorized such sale and assignment to
         the Trustee on behalf of the Trust by all necessary corporate action;
         and the execution, delivery, and performance of this Agreement has been
         duly authorized by the Seller by all necessary corporate action;

                  (iv) this Agreement constitutes (A) a valid sale, transfer,
         and assignment of the Contracts, enforceable against creditors of and
         purchasers from the Seller and (B) a legal, valid, and binding
         obligation of the Seller enforceable in accordance with its terms,
         except as such enforceability may be limited by bankruptcy, insolvency,
         reorganization, or other similar laws affecting the enforcement of
         creditors' rights in general and by general principles of equity,
         regardless of whether such enforceability shall be considered in a
         proceeding in equity or at law;

                  (v) the consummation of the transactions contemplated by this
         Agreement and the fulfillment of the terms hereof shall not conflict
         with, result in any breach of any of the terms and provisions of, nor
         constitute (with or without notice or lapse of time) a default under,
         the Certificate of Incorporation or Bylaws of the Seller, or any
         indenture, agreement, or other instrument to which the Seller is a
         party or by which it shall be bound; nor result in the creation or
         imposition of any Lien upon any of the properties of the Seller
         pursuant to the terms of any such indenture, agreement, or other
         instrument (other than this Agreement); nor violate any law or any
         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 its
         properties; and

                  (vi) to the Seller's best knowledge after due inquiry, there
         are no proceedings or investigations pending, or threatened, before any
         court, regulatory body, administrative agency, or other governmental
         instrumentality having jurisdiction over the Seller or its properties:
         (A) asserting the invalidity of this Agreement or the Certificates, (B)
         seeking to prevent the issuance of the Certificates or the consummation
         of any of the transactions contemplated by this Agreement, (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 the Certificates, or (D) naming
         the Seller which might adversely affect the federal income tax
         attributes of the Certificates.

         (b) As to each Initial Contract (except as noted below as being
applicable only to either Rule of 78's Contracts or Simple Interest Contracts):


                                       23
<PAGE>   28
                  (i) the information pertaining to such Initial Contract set
         forth in the related Schedule of Contracts was true and correct in all
         material respects at the Closing Date and the calculations of the
         Scheduled Balances appearing in such Schedule of Contracts for each
         such Initial Contract at the Cut-Off Date, and in the case of Rule of
         78's Contracts at each Distribution Date thereafter prior to the
         related Maturity Date, have been performed in accordance with this
         Agreement and are accurate;

                  (ii) as of the Closing Date, such Initial Contract was secured
         by a valid and enforceable first priority security interest in favor of
         Onyx in the related Initial Financed Vehicle, and such security
         interest has been duly perfected and 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 lien for
         unpaid taxes or unpaid storage or repair charges which may arise after
         the Closing Date); such security interest had been assigned by Onyx to
         the Seller pursuant to the Purchase Agreement and, as of the Closing
         Date, has been assigned by the Seller to the Trust pursuant to Section
         2.1(a)(i) hereof;

                  (iii) (A) if the related Initial Financed Vehicle was
         originated in a state in which notation of a security interest on the
         Title Document (or in the electronic title records, in the case of the
         State of California) is required or permitted to perfect such security
         interest, the Title Document for such Initial Financed Vehicle shows,
         or, if a new or replacement Title Document is being applied for with
         respect to such Initial Financed Vehicle, the Title Document will be
         received within 180 days of the Closing Date and will show Onyx named
         as the original secured party under the related Initial Contract as the
         holder of a first priority security interest in such Financed Vehicle,
         and (B) if the related Initial Financed Vehicle 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 Onyx named as the original
         secured party under the related Initial Contract, and in either case,
         the Trustee on behalf of the Trust has the same rights as such secured
         party has or would have (if such secured party were still the owner of
         such Initial Contract) against all parties claiming an interest in such
         Initial Financed Vehicle. With respect to each Contract for which the
         Title Document has not yet been returned from the Registrar of Titles
         (or evidenced in the electronic title records, in the case of the State
         of California), Onyx has written evidence that such Title Documents
         showing Onyx as first lienholder have been applied for;

                  (iv) as of the Closing Date, the Seller had good and
         marketable title to and was the sole owner of each Initial Contract to
         be transferred to the Trust pursuant to Section 2.1 free of liens,
         claims, encumbrances and rights of others and, upon transfer of such
         Contract to the Trustee pursuant to Section 2.1, the Trust will have
         good and marketable title to, will have a first priority perfected
         security interest in and will be the sole owner of such Contract free
         of liens, encumbrances and rights of others;

                  (v) as of the Cut-Off Date, the most recent scheduled payment
         on each such Initial Contract had been made or was not delinquent more
         than 30 days and, to the best


                                       24
<PAGE>   29
         of the Seller's knowledge, all payments on the Initial Contract were
         made by the related Obligor;

                  (vi) as of the Closing Date, there is no lien against the
         related Initial Financed Vehicle for delinquent taxes;

                  (vii) as of the Closing Date, there is no right of rescission,
         offset, defense or counterclaim to the obligation of the Obligors to
         pay the unpaid principal or interest due under such Initial Contract;
         the operation of the terms of such Initial Contract or the exercise of
         any right thereunder will not render such Initial Contract
         unenforceable in whole or in part or subject such Initial Contract to
         any right of rescission, offset, defense or counterclaim, and the
         Seller has no knowledge that such right of rescission, offset, defense
         or counterclaim has been asserted or threatened;

                  (viii) as of the Closing Date, to the best of the Seller's
         knowledge, there are no liens or claims which have been filed,
         including liens for work, labor, material or storage affecting the
         Initial related Financed Vehicle which are or may become a lien prior
         to or equal with the security interest granted by such Initial
         Contract;

                  (ix) such Initial Contract, and the sale of the Initial
         Financed Vehicle sold thereunder, complied, at the time it was made, in
         all material respects with all applicable federal, state and local laws
         (and regulations thereunder), including without limitation usury, equal
         credit opportunity, fair credit reporting, truth-in-lending or other
         similar laws, the Federal Trade Commission Act, and applicable state
         laws regulating retail installment sales contracts and loans in general
         and motor vehicle retail installment contracts and loans in particular;
         and the consummation of the transactions herein contemplated,
         including, without limitation, the transfer of ownership of the Initial
         Contracts to the Trustee and the receipt of interest by the
         Certificateholders, will not violate any applicable federal, state or
         local law;

                  (x) such Initial Contract is the legal, valid and binding
         obligation 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; each party to such Initial Contract had
         full legal capacity to execute and deliver such Initial Contract and
         all other documents related thereto and to grant the security interest
         purported to be granted thereby; the terms of such Initial Contract
         have not been waived, amended or modified in any respect, except by
         instruments that are part of the Contract Documents, and no such
         waiver, amendment or modification has caused such Initial Contract to
         fail to meet all of the representations, warranties and conditions, set
         forth herein with respect thereto;

                  (xi) such Initial Contract contains customary and enforceable
         provisions such as to render the rights and remedies of the holder or
         assignee thereof adequate for the practical realization against the
         collateral of the benefits of the security, subject, as to
         enforceability, to bankruptcy, insolvency, reorganization or similar
         laws affecting the enforcement of creditors' rights generally;


                                       25
<PAGE>   30
                  (xii) as of the Closing Date, there was no default, breach,
         violation or event permitting acceleration existing under such Initial
         Contract (except payment delinquencies permitted by subparagraph (v)
         above) and no event which, with notice and the expiration of any grace
         or cure period, would constitute such a default, breach, violation or
         event permitting acceleration under such Initial Contract, and the
         Seller has not waived any such default, breach, violation or event
         permitting acceleration except payment delinquencies permitted by
         subparagraph (v) above;

                  (xiii) at the Closing Date each related Initial Financed
         Vehicle will be covered by the Blanket Insurance Policy; each of Onyx
         and the Seller shall at all times comply with all of the provisions of
         such insurance policies applicable to it;

                  (xiv) at the Closing Date, (a) each Initial Contract for each
         Financed Vehicle will require that the related Obligor obtain and
         maintain in effect for the Initial Financed Vehicle a comprehensive and
         collision insurance policy (i) in an amount at least equal to the
         lesser of (x) its maximum insurable value or (y) the principal amount
         due from the Obligor under the related Initial Contract, (ii) naming
         Onyx as a loss payee and (iii) insuring against loss and damage due to
         fire, theft, transportation, collision and other risks generally
         covered by comprehensive and collision coverage and (b) the Servicer
         shall have put in place a vendor's single interest insurance policy
         providing coverage upon repossession of an Initial Financed Vehicle in
         an amount equal to the lesser of the actual cash value of such Initial
         Financed Vehicle, the cost of repair or replacement for such Initial
         Financed Vehicle and the unpaid balance of the related Contract. Each
         of Onyx and the Seller shall at all times comply with all of the
         provisions of such insurance policies applicable to it;

                  (xv) such Initial Contract was either originated by Onyx or
         acquired by Onyx from a Dealer with which it ordinarily does business,
         and no adverse selection procedures have been utilized in selecting
         such Initial Contract from all other similar contracts purchased or
         originated by Onyx;

                  (xvi) payments under such Initial Contract have been applied
         in accordance with the Rule of 78's or the Simple Interest Method, as
         provided in the applicable Contract, and are due monthly in
         substantially equal amounts through its Maturity Date sufficient to
         fully amortize the principal balance of such Initial Contract by its
         Maturity Date;

                  (xvii) there is only one original of such Initial Contract and
         such original, together with all other Contract Documents, is being
         held by the Trustee; provided, however, that upon the execution by the
         Trustee and the Servicer of a letter agreement revocably appointing the
         Servicer as agent of the Trustee to act as custodian of the Contract
         Documents in accordance with Section 2.4, such original Initial
         Contracts together with all other Contract Documents may be held by the
         Servicer. Each original Initial Contract has been segregated to show
         the Trust as owner thereof, unless the Insurer has waived the
         requirement for such segregation by notice in writing to the Trustee
         and the Servicer;


                                       26
<PAGE>   31
                  (xviii) as of the Closing Date, the Servicer has clearly
         marked its electronic records to indicate that such Initial Contract is
         owned by the Trust;

                  (xix) at the Cut-Off Date, no Initial Contract has a Maturity
         Date later than ___________, 200_;

                  (xx) at the date of origination of the Initial Contract, the
         original principal balance of such Initial Contract was not greater
         than the purchase price to the Obligor (including taxes, warranties,
         licenses and related charges) of the related Initial Financed Vehicle;

                  (xxi) as of the Cut-Off Date, the Seller has not received
         notice that any Obligor under such Initial Contract has filed for
         bankruptcy;

                  (xxii) the Obligor of such Initial Contract was located in
         either California, Arizona, Hawaii, Nevada, Oregon or Washington on the
         date of origination of such Contract;

                  (xxiii) the Recomputed Yield on such Initial Contract is at
         least equal to ____%;

                  (xxiv) such Initial Contract had an original maturity of not
         more than 72 months and such Initial Contract has a remaining maturity
         of 72 months or less;

                  (xxv) the first payment under such Initial Contract is due on
         or before January 15, 1997; and

                  (xxvi) such Initial Contract has a remaining principal balance
         of at least $500.

         (c) As to all of the Initial Contracts:

                  (i) the aggregate Outstanding Principal Balance payable by
         Obligors of the Initial Contracts as of the Cut-Off Date equals the
         Original Pool Balance; and

                  (ii) as of the Cut-Off Date, approximately _____% of the
         Outstanding Principal Balance of all Initial Contracts is attributable
         to loans to purchase new Financed Vehicles and approximately _____% of
         the Outstanding Principal Balance of all Initial Contracts is
         attributable to used Financed Vehicles.

         (d) As to each Subsequent Contract as of the Subsequent Transfer Date
on which such Subsequent Contract is delivered to the Trustee:

                  (i) the information pertaining to such Subsequent Contract set
         forth in the related Transfer Certificate was true and correct in all
         material respects;

                  (ii) immediately prior to its sale and assignment to the
         Trust, such Subsequent Contract was secured by a valid and enforceable
         first priority security interest in favor 


                                       27
<PAGE>   32
         of Onyx in the related Subsequent Financed Vehicle, and such security
         interest has been duly perfected and is prior to all other liens upon
         and security interests in such Subsequent Financed Vehicle which now
         exist or may hereafter arise or be created (except, as to priority, for
         any lien for unpaid taxes or unpaid storage or repair charges which may
         arise after the Subsequent Transfer Date); such security interest had
         been assigned by Onyx to the Seller pursuant to the Purchase Agreement
         and, as of the Subsequent Transfer Date, has been assigned by the
         Seller to the Trust pursuant to Section 2.1(b)(i) hereof;

                  (iii) (A) if the related Subsequent Financed Vehicle was
         originated in a state in which notation of a security interest on the
         Title Document (or in the electronic title records, in the case of the
         State of California) is required or permitted to perfect such security
         interest, the Title Document for such Subsequent Financed Vehicle
         shows, or, if a new or replacement Title Document is being applied for
         with respect to such Subsequent Financed Vehicle, the Title Document
         will be received within 180 days of the related Subsequent Transfer
         Date and will show Onyx named as the original secured party under the
         related Subsequent Contract as the holder of a first priority security
         interest in such Subsequent Financed Vehicle, and (B) if the related
         Subsequent Financed Vehicle 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 Onyx named as the original secured party under
         the related Subsequent Contract, and in either case, the Trustee on
         behalf of the Trust has the same rights as such secured party has or
         would have (if such secured party were still the owner of the
         Subsequent Contract) against all parties claiming an interest in such
         Subsequent Financed Vehicle. With respect to each Subsequent Contract
         for which the Title Document has not yet been returned from the
         Registrar of Titles (or evidenced in the electronic title records, in
         the case of the State of California), Onyx has received written
         evidence from the related Dealer that such Title Documents showing Onyx
         as first lienholder have been applied for;

                  (iv) immediately prior to the related Subsequent Transfer
         Date, the Seller had good and marketable title to and was the sole
         owner of such Subsequent Contract to be transferred to the Trust
         pursuant to Section 2.1 free of liens, claims, encumbrances and rights
         of others and, upon delivery of such Subsequent Contract to the
         Trustee, the Trust will have good and marketable title to, will have a
         first perfected security interest in and will be the sole owner of such
         Subsequent Contract free of liens, encumbrances and rights of others;

                  (v) the most recent scheduled payment on each such Subsequent
         Contract has been made or is not delinquent more than 30 days and, to
         the best of the Seller's knowledge, all payments on the Subsequent
         Contract have been made by the related Obligor;

                  (vi) there is no lien against the related Subsequent Financed
         Vehicle for delinquent taxes;


                                       28
<PAGE>   33
                  (vii) there is no right of rescission, offset, defense or
         counterclaim to the obligation of the Obligor to pay the unpaid
         principal or interest due under such Subsequent Contract; the operation
         of the terms of the related Subsequent Contract or the exercise of any
         right thereunder will not render such Subsequent Contract unenforceable
         in whole or in part or subject such Subsequent Contract to any right of
         rescission, offset, defense or counterclaim, and the Seller has no
         knowledge that such right of rescission, offset, defense or
         counterclaim has been asserted or threatened;

                  (viii) to the best of the Seller's knowledge, there are no
         liens or claims which have been filed, including liens for work, labor,
         material or storage, affecting the Subsequent Financed Vehicle which
         are or may become a lien prior to or equal with the security interest
         granted by such Subsequent Contract;

                  (ix) such Subsequent Contract, and the sale of the Subsequent
         Financed Vehicle sold thereunder, complied, at the time it was made, in
         all material respects with all applicable federal, state and local laws
         (and regulations thereunder), including without limitation usury, equal
         credit opportunity, fair credit reporting, truth-in-lending or other
         similar laws, the Federal Trade Commission Act, and applicable state
         laws regulating retail installment sales contracts and loans in general
         and motor vehicle retail installment contracts and loans in particular;
         and the consummation of the transactions herein contemplated,
         including, without limitation, the transfer of ownership of such
         Subsequent Contract to the Trustee and the receipt of interest by the
         Certificateholders, will not violate any applicable federal, state or
         local law;

                  (x) such Subsequent Contract is the legal, valid and binding
         obligation 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; each party to such Subsequent Contract had
         full legal capacity to execute and deliver such Subsequent Contract and
         all other documents related thereto and to grant the security interest
         purported to be granted thereby; the terms of such Subsequent Contract
         have not been waived, amended or modified in any respect, except by
         instruments that are part of the Contract Documents with respect to the
         Subsequent Contracts, and no such waiver, amendment or modification has
         caused such Subsequent Contract to fail to meet all of the
         representations, warranties and conditions set forth herein with
         respect thereto;

                  (xi) such Subsequent Contract contains customary and
         enforceable provisions so as to render the rights and remedies of the
         holder or assignee thereof adequate for the practical realization
         against the collateral of the benefits of the security, subject, as to
         enforceability, to bankruptcy, insolvency, reorganization or similar
         laws affecting the enforcement of creditors' rights generally;

                  (xii) there is no default, breach, violation or event
         permitting acceleration existing under such Subsequent Contract (except
         payment delinquencies permitted by subparagraph (v) above) and no event
         which, with notice and the expiration of any grace or cure period,
         would constitute such a default, breach, violation or event permitting


                                       29
<PAGE>   34

         acceleration under such Subsequent Contract, and the Seller has not
         waived any such default, breach, violation or event permitting
         acceleration except payment delinquencies permitted by subparagraph (v)
         above;

                  (xiii) such related Subsequent Financed Vehicle is covered by
         the Blanket Insurance Policy; each of Onyx and the Seller shall at all
         times comply with all of the provisions of such insurance policies
         applicable to it;

                  (xiv) (a) such Subsequent Contract requires the Obligor to
         obtain and maintain a comprehensive and collision insurance policy with
         respect to the related Subsequent Financed Vehicle (i) in an amount at
         least equal to the lesser of (y) its maximum insurable value or (z) the
         principal amount due from the Obligor under the related Subsequent
         Contract, (ii) naming Onyx as a loss payee and (iii) insuring against
         loss and damage due to fire, theft, transportation, collision and other
         risks generally covered by comprehensive and collision coverage and (b)
         the Servicer maintains a vendor's single interest insurance policy
         providing coverage upon repossession of a Subsequent Financed Vehicle
         in an amount equal to the lesser of the actual cash value of such
         Subsequent Financed Vehicle, the cost of repair or replacement for such
         Subsequent Financed Vehicle and the unpaid balance of the related
         Contract. Each of Onyx and the Seller shall at all times comply with
         all of the provisions of such insurance policies applicable to it;

                  (xv) such Subsequent Contract was either originated by Onyx or
         acquired by Onyx from a Dealer with which it ordinarily does business,
         and no adverse selection procedures have been utilized in selecting
         such Subsequent Contract from all other similar contracts purchased or
         originated by Onyx;

                  (xvi) payments under such Subsequent Contract have been
         applied in accordance with the Rule of 78's or the Simple Interest
         Method or originated by Onyx, as provided in the applicable Subsequent
         Contract and are due monthly in substantially equal amounts through its
         Maturity Date sufficient to fully amortize the principal balance of
         such Subsequent Contract by its Maturity Date;

                  (xvii) there is only one original of such Subsequent Contract
         and such original, together with all other Contract Documents with
         respect to the Subsequent Contracts, upon delivery to the Trustee on
         the related Subsequent Transfer Date is being held by the Trustee;
         provided, however, that upon the execution by the Trustee and the
         Servicer of a letter agreement revocably appointing the Servicer as
         agent of the Trustee to act as custodian of the Contract Documents in
         accordance with Section 2.4, such original Initial Contracts together
         with all other Contract Documents may be held by the Servicer. Each
         original Initial Contract has been segregated to show the Trust as
         owner thereof, unless the Insurer has waived the requirement for such
         segregation by notice in writing to the Trustee and the Servicer;

                  (xviii) the Servicer has clearly marked its electronic records
         to indicate that such Subsequent Contract is owned by the Trust;


                                       30
<PAGE>   35
                  (xix) as of each related Subsequent Transfer Date such
         Subsequent Contract does not have a Maturity Date later than _______,
         200_;

                  (xx) at the date of origination of the Subsequent Contract,
         the original principal balance of such Subsequent Contract was not
         greater than the purchase price to the Obligor (including taxes,
         warranties, licenses and related charges) of the related Subsequent
         Financed Vehicle;

                  (xxi) as of the Cut-Off Date, the Seller has not received
         notice that any Obligor under such Subsequent Contract has filed for
         bankruptcy;

                  (xxii) the Obligor of such Subsequent Contract was located in
         California, Arizona, Hawaii, Nevada, Washington or Oregon on the date
         of origination of such Contract;

                  (xxiii) no Subsequent Contract shall have an APR less than
         __%;

                  (xxiv) the Recomputed Yield on each Subsequent Contract on any
         Subsequent Closing Date shall not be less than ____%;

                  (xxv) such Subsequent Contract has an original maturity of 72
         months or less and such Subsequent Contract has a remaining maturity of
         72 months or less; and

                  (xxvi) such Subsequent Contract has a remaining principal
         balance of at least $500.

         (e) None of the foregoing representations and warranties shall be
construed as, and the Seller is specifically not making, any representations and
warranties regarding the collectibility of the Contracts or the future
performance of the Contracts.

         (f) The Seller has not prepared any financial statement which accounts
for the transfer of the Trust Estate (other than the Surety Bond [and the
Pre-Funded Amount]) hereunder to the Trust in any manner other than a sale of
the Trust Estate (other than the Surety Bond) by it to the Trust, and the Seller
has not in any other respect (including, but not limited to, for accounting and
tax reporting purposes) accounted for or treated the transfer of the Trust
Estate (other than the Surety Bond [and the Pre-Funded Amount]) hereunder in any
manner other than as a sale and absolute assignment to the Trust of the Seller's
full right, title and ownership interest in the Trust Estate (other than the
Surety Bond [and the Pre-Funded Amount]) to the Trust.

         SECTION 2.3. Repurchase of Certain Contracts. The representations and
warranties of the Seller set forth in Section 2.2 with respect to each Contract
and each of the conditions set forth in Section 2.1(c) and Section 2.1(h) with
respect to each transfer of Subsequent Contracts shall survive delivery of the
Contract Documents to the Trustee and shall continue until the termination of
this Agreement. Upon discovery by the Seller, the Servicer, the Insurer or a
Responsible Officer of the Trustee that any of such representations or
warranties was incorrect 


                                       31
<PAGE>   36
as of the time made or that any of the Contract Documents relating to any such
Contract has not been properly executed by the Obligor or contains a material
defect or has not been received by the Trustee (or the Servicer in its capacity
as custodian of the Trustee), such Person making such discovery shall give
prompt notice to the other such Persons. If any such defect, incorrectness or
omission materially and adversely affects the interest of the
Certificateholders, the Trustee or the Insurer, the Seller shall cure the defect
or eliminate or otherwise cure the circumstances or condition in respect of
which such representation or warranty was incorrect as of the time made;
provided that if the Seller is unable to do so by the last day of the Collection
Period following the Collection Period (or, if the Seller elects, the last day
of such Collection Period) during which the Seller becomes aware of or receives
written notice from the Trustee, the Insurer or the Servicer of such defect,
incorrectness or omission, it shall repurchase such Contract on the last day of
such Collection Period from the Trust at the Repurchase Amount in the manner set
forth in Section 4.4. Upon any such repurchase, the Trustee on behalf of the
Trust shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, as shall be necessary to vest in the Seller any
Contract purchased hereunder. The sole remedy of the Trustee, the Trust, or the
Certificateholders with respect to a breach of the Seller's representations and
warranties pursuant to Section 2.2 or non-compliance with Section 2.1(c) or
Section 2.1(h) shall be to require the Seller to repurchase Contracts pursuant
to this Section provided, however, that the Seller shall indemnify the Trustee,
its officers, directors, agents and employees, the Insurer, the Trust and the
Certificateholders 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 2.4. Duties and Appointment of Custodian.

         (a) Duties of Custodian. The Trustee, and any Custodian appointed
pursuant to Section 2.4(b), while acting as Custodian shall:

                  (i) segregate and maintain continuous custody of the Contract
         Documents in secure and fireproof facilities in accordance with
         customary standards for such custody;

                  (ii) with respect to the Contract Documents, (A) act
         exclusively as the Custodian for the benefit of the Certificateholders
         and for the Insurer and (B) hold all Contract Documents for the
         exclusive use (notwithstanding Sections 2.4(a)(iii) and 2.4(a)(iv)
         below) and for the benefit of the Certificateholders and the Insurer;

                  (iii) to the extent the Servicer directs the Custodian in
         writing, the Custodian shall deliver certain specified Contract
         Documents to the Servicer to enable the Servicer to service the
         Contracts pursuant to the Agreement. At such time as the Servicer
         returns such Contract Documents to the Custodian, the Servicer shall
         provide written notice of such return to the Custodian. The Custodian
         shall acknowledge receipt of the returned materials by signing the
         Servicer's notice and shall promptly send copies of such acknowledgment
         or receipt to the Servicer;


                                       32
<PAGE>   37
                  (iv) upon reasonable prior written notice, permit the Servicer
         and the Insurer to examine the Contract Documents in the possession, or
         under the control, of the Custodian; and

                  (v) at its own expense, maintain at all times while acting as
         Custodian, and keep in full force and effect (A) fidelity insurance,
         (B) theft of documents insurance, (C) fire insurance, and (d) forgery
         insurance. All such insurance shall be in amounts, with standard
         coverage and subject to deductibles, as are customary for similar
         insurance typically maintained by banks that act as custodian in
         similar transactions.

         (b) Appointment of Custodian. As of the Closing Date, the Trustee shall
be the Custodian of the Contract Files; provided, however, that upon the
execution by the Trustee of a letter agreement with the consent of the Insurer
(such consent not to be unreasonably withheld) substantially in the form of
Exhibit A attached hereto (the "Appointment of Custodian"), revocably appointing
the Servicer or such other entity acceptable to the Insurer as agent of the
Trustee to act as Custodian (the "Successor Custodian") of the Contract
Documents, such Successor Custodian shall be so appointed and shall from the
effective date of such Appointment of Custodian retain custody of the Contract
Documents and any and all other documents relating to a Contract or the related
Obligor or Financed Vehicle. As of the effective date of such Appointment of
Custodian, the Contract Documents and any and all other documents relating to a
Contract or the related Obligor or Financed Vehicle will be delivered to the
Successor Custodian in its capacity as agent of the Trustee acting as Custodian.

         If the Servicer is appointed Successor Custodian as of the date
specified in the Appointment of Custodian, the Servicer shall maintain the
Contract Documents held by it in a file area physically separate from the other
installment sales contracts owned or serviced by it or any of its Affiliates,
which area shall be clearly marked to indicate the Trust as the owner of, and
the Insurer as the holder of the security interest in, the Contract Documents;
except that if the Insurer has waived the requirement for such segregation by
notice in writing to the Trustee and the Servicer, such file area may contain
contract documents for other installment sales contracts serviced by the
Servicer.

         SECTION 2.5.       Duties of Servicer Relating to the Contracts.

         (a) Safekeeping. The Servicer, in its capacity as servicer, shall
maintain such accurate and complete accounts, records, and computer systems
pertaining to each Contract File as shall enable the Trustee to comply with this
Agreement. In performing its duties as servicer the Servicer shall act with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to the files relating to all comparable automobile
contracts that the Servicer services for itself or others. The Servicer shall:
(i) conduct, or cause to be conducted, periodic physical inspections of the
Contract Files (other than the Contract Documents, unless the Servicer is acting
as Custodian) held by it under this Agreement, and of the related accounts,
records, and computer systems; (ii) maintain the Contract Files in such a manner
as shall enable the Trustee and the Insurer to verify the accuracy of the
Servicer's record keeping; (iii) promptly report to the Trustee and the Insurer
any failure on its part to hold the Contract Files (other than the Contract
Documents, unless the Servicer is acting as Custodian)


                                       33
<PAGE>   38
and maintain its accounting, records, and computer systems as herein provided;
and (iv) promptly take appropriate action to remedy any such failure.

         (b) Maintenance of and Access to Records. The Servicer shall maintain
each Contract File (other than the Contract Documents, unless the Servicer is
acting as Custodian) at the address of the Servicer set forth in Section 11.5,
or at such other location as shall be specified to the Trustee and the Insurer
by 30 days' prior written notice. The Servicer shall permit the Trustee or the
Insurer or their duly authorized representatives, attorneys, or auditors to
inspect the Contract Files and the related accounts, records, and computer
systems maintained by the Servicer at such times as the Trustee or the Insurer
may request.

         (c) Release of Documents. If the Servicer is acting as Custodian
pursuant to Section 2.4, upon instruction from the Trustee (a copy of which
shall be furnished to the Insurer), the Servicer shall release any document in
the Contract Files to the Trustee, the Trustee's agent, or the Trustee's
designee, as the case may be, at such place or places as the Trustee may
designate, as soon as practicable.

         (d) Monthly Reports. On the Servicer Report Date of each month,
commencing with the month of the Closing Date, the Servicer shall deliver to the
Trustee and Insurer, a certificate of a Servicing Officer stating (i) the
Contract Number and outstanding principal balance of each Contract that has
become a Liquidated Contract since the Business Day immediately preceding the
date of the last certificate delivered pursuant to this Section 2.5(d) (or since
the Closing Date in the case of the first such certificate); (ii) that all
proceeds received in respect of such Contract have been deposited in or credited
to the Collection Account or Payahead Account as required by Section 4.2; (iii)
that, if such Contract has been the subject of a Full Prepayment pursuant to
clause (a) of the definition of the term "Full Prepayment" or is a Liquidated
Contract pursuant to clause (iii) of the definition of the term "Liquidated
Contract," all proceeds received in respect thereof have been deposited in or
credited to the Collection Account or Payahead Account in accordance with
Section 4.2; (iv) that, if such Contract has been the subject of a Full
Prepayment pursuant to clause (b) of the definition of the term "Full
Prepayment," the correct Repurchase Amount has been deposited in or credited to
the Collection Account in accordance with Sections 2.3 or 3.7; (v) that, if such
Contract is a Liquidated Contract pursuant to clause (ii) of the definition of
the term "Liquidated Contract," there have been deposited in or credited to the
Collection Account or Payahead Account the related Net Liquidation Proceeds in
accordance with Section 4.2; and (vi) that the Trustee is authorized to release
such Contract and the related Contract Documents as provided herein.

         (e) Schedule of Title Documents. The Servicer shall deliver to the
Trustee and the Insurer (i) within 60 days of the Closing Date, a schedule of
Title Documents which as of the Closing Date did not show the Servicer as first
lienholder and (ii) within 180 days of the Closing Date as to the Initial
Contracts and as of the related Subsequent Transfer Date with respect to the
Subsequent Contracts, a schedule of Title Documents which as of the date prior
to such delivery do not show the Servicer as first lienholder and as to which
the Seller is obligated to repurchase pursuant to the provisions hereof.


                                       34
<PAGE>   39
         (f) Electronic Marking of Contracts; Possession. The Servicer shall
cause the electronic record of the Contracts maintained by it to be clearly
marked to indicate that the Contracts have been sold to the Trust and shall not
in any way assert or claim an ownership interest in the Contracts. It is
intended that by the Servicer's and the Seller's agreement pursuant to Section
2.4, Section 2.5 hereof and the Appointment of Custodian, the Trustee on behalf
of the Trust shall be deemed to have possession of the Contract Documents for
purposes of Section 9-305 of the UCC of the State in which the Contract
Documents are located.

         SECTION 2.6. Instructions; Authority to Act. The Servicer shall be
deemed to have received proper instructions (a copy of which shall be furnished
to the Insurer) with respect to the Contract Files upon its receipt of written
instructions signed by a Responsible Officer of the Trustee.

         SECTION 2.7. Indemnification. The Servicer, as custodian, shall
indemnify the Trustee and its officers, directors, agents and employees, the
Insurer, the Trust and the Certificateholders for any and all liabilities,
obligations, losses, compensatory damages, payments, costs, or expenses of any
kind whatsoever (including the reasonable fees and expenses of counsel) that may
be imposed on, incurred, or asserted against the Trustee, the Insurer, the Trust
and the Certificateholders as the result of any act or omission in any way
relating to the maintenance and custody by the Servicer of the Contract Files,
or the failure of the Servicer to perform its duties and service the Contracts
in compliance with the terms of this Agreement; provided, however, that the
Servicer shall not be liable for any portion of any such amount resulting from
the willful misfeasance, bad faith, or gross negligence of the Trustee. The
Servicer shall also indemnify and hold harmless the Trust, the Trust Estate, the
Trustee and the Certificateholders against any taxes that may be asserted at any
time against any of them with respect to the Contracts, including any sales,
gross receipts, general corporation, personal property, privilege or license
taxes (but exclusive of federal or other income taxes arising out of payments on
the Contracts) and the costs and expenses in defending against such taxes. The
Servicer shall immediately notify the Trustee if a claim is made by a third
party with respect to the Contracts, shall assume, with the consent of the
Trustee, the defense of any such claim and shall pay all expenses in connection
therewith, including counsel fees, and shall promptly pay, discharge and satisfy
any judgment or decree which may be entered against it, the Trustee or the Trust
with respect to the Contracts.

         SECTION 2.8. Effective Period and Termination. The Trustee's
appointment as Custodian shall become effective as of the Closing Date and shall
continue in full force and effect until the earlier of (i) the execution of the
Appointment of Custodian, (ii) the removal of the Trustee pursuant to Section
9.10 or (iii) the Final Distribution Date. Following the execution of the
Appointment of Custodian, the Successor Custodian's appointment as Custodian
shall continue in full force and effect until terminated under this Section 2.8
or until the Final Distribution Date, whichever occurs first. If Onyx shall
resign as Servicer under Section 7.4 or if all of the rights and obligations of
the Servicer shall have been terminated under Section 8.1, the appointment of
the Servicer as Custodian may be terminated by the Trustee, the Insurer,
or by the Holders of Certificates evidencing in the aggregate at least 25% of 
the Pool/Pre-Funding Balance, in the same manner as the Trustee, the
Insurer, or such Holders may terminate the rights and obligations of the
Servicer under Section 8.1 (but no occurrence of an


                                       35
<PAGE>   40
Event of Default shall be a precondition to termination). As soon as practicable
after any termination of such appointment, the Custodian shall, at its own
expense, deliver or cause the delivery of the Contract Files to the Trustee or
the Trustee's agent at such place or places as the Trustee may reasonably
designate and shall cooperate in good faith to effect such delivery. The
foregoing notwithstanding, if the Servicer is acting as Custodian, the Servicer
shall, at the request of the Insurer, redeliver the Contract Documents to the
Trustee in the event that such redelivery is required by any Rating Agency to
consider the Certificates investment grade without consideration of the Surety
Bond.

         SECTION 2.9.       Nonpetition Covenant.

         (a) Neither the Seller nor the Servicer shall petition or otherwise
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Trust 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
Trust or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Trust.

         (b) The Servicer shall not, nor cause the Seller to, petition or
otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Seller 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 Seller or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Seller.

         SECTION 2.10. Collecting Title Documents Not Delivered at the Closing
Date or Subsequent Closing Date. In the case of any Initial Contract or
Subsequent Contract in respect of which, in place of a Title Document, the
Trustee received on the Closing Date or Subsequent Closing Date, as applicable,
written evidence from the Dealer selling the related Initial Financed Vehicle or
Subsequent Financed Vehicle, as applicable, or Onyx that the Title Document for
such Financed Vehicle showing Onyx as first lienholder has been applied for from
the Registrar of Titles, the Servicer shall use its best efforts to collect (or,
in the case of the State of California, to obtain evidence in the electronic
title records of) such Title Document from the Registrar of Titles as promptly
as possible. If such Title Document showing the Servicer as first lienholder is
not received (or, in the case of the State of California, verified in the
electronic title records) by the Servicer within 180 days after the Closing Date
with respect to the Initial Contracts or after each Subsequent Closing Date with
respect to the Subsequent Contracts covered thereby, as applicable, then the
representation and warranty in Section 2.2(b)(iii) as to such Initial Contracts
and in Section 2.2(d)(iii) as to such Subsequent Contracts, as applicable, in
respect of such Contract shall be deemed to have been incorrect in a manner that
materially and adversely affects the Certificateholders and the Seller shall be
obligated to repurchase such Initial Contract or Subsequent Contract in
accordance with Section 2.3.


                                       36
<PAGE>   41
                                   ARTICLE III

                    Administration and Servicing of Contracts

         SECTION 3.1. Duties of Servicer. The Servicer shall manage, service,
administer, and make collections on the Contracts. The Servicer agrees that its
servicing of the Contracts shall be carried out in accordance with reasonable
care and, to the extent more exacting, the procedures used by the Servicer in
respect of such contracts serviced by it for its own account; provided, however,
that, subject to Section 3.2 as to extensions, the Servicer shall not release or
waive the right to collect the unpaid balance of any Contract. The Servicer's
duties shall include collection and posting of all payments, responding to
inquiries of Obligors on the Contracts, investigating delinquencies, sending
payment coupons 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 and the preparation of U.S. Grantor Trust
Tax Returns (Form 1041) for the Trustee to sign and file on an annual basis,
based on a tax year for the Trust that is the calendar year and any other tax
forms required by any federal, state or local tax authority including with
respect to original issue discount, if any. The Servicer shall have, subject to
the terms hereof, full power and authority, acting alone, and subject only to
the specific requirements and prohibitions of this Agreement, to do any and all
things in connection with such managing, servicing, administration, and
collection that it may deem necessary or desirable; provided, however, that the
Servicer shall commence repossession efforts in respect of any Financed Vehicle
any payment on the related Contract of which is four or more months delinquent.
Without limiting the generality of the foregoing, but subject to the provisions
of this Agreement, the Servicer is authorized and empowered by the Trustee to
execute and deliver, on behalf of itself, the Trust, the Insurer, the
Certificateholders, or the Trustee or any of them, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other comparable instruments, with respect to the Contracts or to the Financed
Vehicles. The Trustee shall furnish the Servicer any documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder. The Servicer may engage agents and subservicers to fulfill its
duties hereunder; provided, however, that the Servicer shall remain at all times
personally liable for the acts (and failures to act) of such agents and
subservicers.

         On or prior to the Closing Date, the Servicer shall deliver to the
Insurer and the Trustee a list of Servicing Officers of the Servicer involved
in, or responsible for, the administration and servicing of the Contracts, which
list shall from time to time be updated by the Servicer on request of the
Trustee or the Insurer.

         On the Closing Date, the Servicer shall deposit in the Collection
Account (i) all installments of Monthly P&I due on or after the Cut-Off Date and
received by the Servicer at least two Business Days prior to the Closing Date;
(ii) the proceeds of each Full Prepayment of any Contract and all partial
prepayments on Simple Interest Contracts received by the Servicer after the
Cut-Off Date and at least two Business Days prior to the Closing Date; and (iii)
all Net Liquidation Proceeds and Net Insurance Proceeds realized in respect of a
Financed Vehicle at least two Business Days prior to the Closing Date.


                                       37
<PAGE>   42
         Subject to Section 4.2(a) respecting deposits in the Payahead Account,
the Servicer shall deposit in or credit to the Collection Account within two
Business Days of receipt all collections of Monthly P&I due after the Cut-Off
Date received by it on the Contracts together with the proceeds of all Full
Prepayments on all Contracts and all partial prepayments on Simple Interest
Contracts, and any accompanying interest. The Servicer shall likewise deposit in
the Collection Account within two Business Days of receipt all Net Liquidation
Proceeds and Net Insurance Proceeds. As of the last day of each Collection
Period, all amounts received in each Collection Period shall be applied by the
Servicer with respect to each Contract, first, to the Servicer as additional
servicing compensation any amounts due for late fees, extension fees or similar
charges, second to the payment of Monthly P&I, and third, in the case of Rule of
78's Contracts, to the Payahead Account. The foregoing requirements for deposit
in the Collection Account are exclusive, it being understood that collections in
the nature of late payment charges or extension fees may, but need not be
deposited in the Collection Account and may be retained by the Servicer as
additional servicing compensation.

         With respect to payments of Monthly P&I made by Obligors to the
Servicer's lock box, the Servicer shall direct the Person maintaining the lock
box to deposit the amount collected on the Contracts within one Business Day to
the Clearing Account. Such amounts shall be withdrawn from the Clearing Account
and deposited in the Collection Account no later than the next following
Business Day.

         In order to facilitate the servicing of the Contracts by the Servicer,
the Servicer shall retain, subject to and only to the extent permitted by the
provisions of this Agreement, all collections on the Contracts prior to the time
they are remitted or credited, in accordance with such provisions, to the
Collection Account or the Payahead Account, as the case may be. The Servicer
acknowledges that the unremitted collections on the Contracts are part of the
Trust Estate and the Servicer agrees to act as custodian and bailee of the
Trustee and the Insurer in holding such monies and collections. The Servicer
agrees, for the benefit of the Trustee, the Trust, the Certificateholders and
the Insurer, to act as such custodian and bailee, and to hold and deal with such
monies and such collections, as custodian and bailee for the Trustee and the
Insurer, in accordance with the provisions of this Agreement.

         The Servicer shall retain all data (including, without limitation,
computerized records) relating directly to or maintained in connection with the
servicing of the Contracts at the address of the Servicer set forth in Section
11.05, or, upon 15 days' notice to the Insurer and the Trustee, at such other
place where the servicing offices of the Servicer are located, and shall give
the Trustee and the Insurer access to all data at all reasonable times, and,
while an Event of Default shall be continuing, the Servicer shall, on demand of
the Trustee or the Insurer deliver or cause to be delivered to the Trustee and
the Insurer all data (including, without limitation, computerized records and,
to the extent transferable, related operating software) necessary for the
servicing of the Contracts and all monies collected by it and required to be
deposited in or credited to the Collection Account or the Payahead Account, as
the case may be.

         SECTION 3.2. Collection of Contract Payments. The Servicer shall use
its best efforts to collect all payments called for under the terms and
provisions of the Contracts as and when the same shall become due and shall use
its best efforts to cause each Obligor to make all


                                       38
<PAGE>   43
payments in respect of his or her Contract to the Servicer. Consistent with the
foregoing, the Servicer may in its discretion (i) waive any late payment charges
in connection with delinquent payments on a Contract or prepayment charges and
(ii) in order to work out a default or an impending default due to the financial
condition of an Obligor, grant up to three extensions of the Due Date of any
payment for periods of 30 days or less, such that the Maturity Date of no
Contract shall, under any circumstances, extend more than 90 days past the
originally scheduled date of the last payment on such Contract but in no event
beyond the Final Distribution Date. The Servicer shall not extend the Maturity
Date of a Contract except as provided in clause (ii) of the preceding sentence.
Except as explicitly permitted by this paragraph, the Servicer shall not change
any material term of a Contract, including but not limited to the interest rate,
the payment amounts or due dates, or the property securing such Contract.

         SECTION 3.3. Realization Upon Contracts. The Servicer shall use its
best efforts, consistent with the servicing standard specified in Section 3.1,
to repossess or otherwise convert the ownership of the Financed Vehicle securing
any Contract as to which no satisfactory arrangements can be made for collection
of delinquent payments. Such servicing procedures may include reasonable efforts
to realize upon any recourse to Dealers and selling the Financed Vehicle at
public or private sale. In connection with such repossession or other
conversion, the Servicer shall follow such practices and procedures as it shall
deem necessary or advisable and as shall be normal and usual for prudent holders
of retail installment sales contracts and as shall be in compliance with all
applicable laws, and, in connection with the repossession of any Financed
Vehicle or any contract in default, may commence and prosecute any proceedings
in respect of such Contract in its own name or, if the Servicer deems it
necessary, in the name of the Trust or on behalf of the Trust. The Servicer's
obligations under this Section are subject to the provision that, in the case of
damage to a Financed Vehicle from an uninsured cause, the Servicer shall not be
required to expend its own funds in repairing such motor vehicle unless it shall
determine (i) that such restoration will increase the proceeds of liquidation of
the related Contract, after reimbursement to itself for such expenses and (ii)
that such expenses will be recoverable by it either as Liquidation Expenses or
as expenses recoverable under an applicable insurance policy. The Servicer shall
be responsible for all other costs and expenses incurred by it in connection
with any action taken in respect of a Defaulted Contract; provided, however,
that it shall be entitled to reimbursement of such costs and expenses to the
extent they constitute Liquidation Expenses or expenses recoverable under an
applicable insurance policy. All Net Liquidation Proceeds and Net Insurance
Proceeds shall be deposited directly in or credited to the Collection Account
(without deposit in any intervening account) to the extent required by Section
4.2.

         SECTION 3.4. Insurance. The Servicer shall cause to be maintained the
Blanket Insurance Policy with the Trustee as the named payee thereunder with
respect to the Contracts.

         SECTION 3.5. Maintenance of Security Interests in Financed Vehicles.
The Servicer shall take such steps as are necessary to maintain continuous
perfection and priority of the security interest created by each Contract in the
related Financed Vehicle, including but not limited to, obtaining the execution
by the related Obligor and the recording, registering, filing, re-recording,
re-registering, and refiling of all security agreements, financing statements,
continuation statements or other instruments as are necessary to maintain the
security interest


                                       39
<PAGE>   44
granted by such Obligor under each respective Contract. The Trustee hereby
authorizes the Servicer to take such steps as are necessary to re-perfect such
security interest on behalf of the Trust in the event of the relocation of a
Financed Vehicle or for any other reason. In the event that the assignment of a
Contract to the Trust is insufficient, without a notation on the related
Financed Vehicle's certificate of title (or, in the case of the State of
California, the electronic title record), or without fulfilling any additional
administrative requirements under the laws of the state in which the Financed
Vehicle is located, to grant to the Trust a perfected security interest in the
related Financed Vehicle, the Servicer hereby agrees that the Servicer's listing
as the secured party on the certificate of title (or, in the case of the State
of California, the electronic title record) is deemed to be in its capacity as
agent of the Trust and further agrees to hold such certificate of title (or, in
the case of the State of California, the electronic title record) as the
Trustee's agent and custodian; provided that the Servicer shall not make, nor
shall the Trustee or Certificateholders have the right to require that the
Servicer make, any such notation on the related Financed Vehicles' certificate
of title (or, in the case of the State of California, the electronic title
record) or fulfill any such additional administrative requirement of the laws of
the state in which a Financed Vehicle is located.

         SECTION 3.6. Covenants, Representations and Warranties of Servicer. The
Servicer hereby makes the following covenants, representations and warranties on
which the Trustee shall rely accepting the Contracts in trust and authenticating
the Certificates.

         (a)      The Servicer covenants as to the Contracts:

                  (i) the Financed Vehicle securing each Contract shall not be
         released from the lien granted by the Contract in whole or in part,
         except as contemplated herein;

                  (ii) the Servicer shall not impair the rights of the Trust in
         the Contracts;

                  (iii) the Servicer shall not increase the number of payments
         under a Contract, nor increase the amount financed under a Contract,
         nor extend or forgive payments on a Contract, except as provided in
         Section 3.2; and

                  (iv) the Servicer may consent to the sale or transfer by an
         Obligor of any Financed Vehicle if the original Obligor under the
         related Contract remains liable under such Contract and the transferee
         assumes all of the Obligor's obligations thereunder.

         (b)      The Servicer represents and warrants as of the Closing Date:

                  (i) the Servicer (1) has been duly organized, is validly
         existing and in good standing as a corporation organized and existing
         under the laws of the State of Delaware, (2) has qualified to do
         business as a foreign corporation and is in good standing in each
         jurisdiction where the character of its properties or the nature of its
         activities makes such qualification necessary, and (3) has full power,
         authority and legal right to own its property, to carry on its business
         as presently conducted, and to enter into and perform its obligations
         under this Agreement;


                                       40
<PAGE>   45
                  (ii) the execution and delivery by the Servicer of this
         Agreement are within the corporate power of the Servicer and have been
         duly authorized by all necessary corporate action on the part of the
         Servicer. Neither the execution and delivery of this Agreement, nor the
         consummation of the transactions herein contemplated, nor compliance
         with the provisions hereof, will conflict with or result in a breach
         of, or constitute a default under, any of the provisions of any law,
         governmental rule, regulation, judgment, decree or order binding on the
         Servicer or its properties or the Certificate of Incorporation or
         Bylaws of the Servicer, or any of the provisions of any indenture,
         mortgage, contract or other instrument to which the Servicer is a party
         or by which it is bound or result in the creation or imposition of any
         lien, charge or encumbrance upon any of its property pursuant to the
         terms of any such indenture, mortgage, contract or other instrument;

                  (iii) other than consents that have been obtained prior to the
         Closing Date, the Servicer is not required to obtain the consent of any
         other party or any consent, license, approval or authorization, or
         registration or declaration with, any governmental authority, bureau or
         agency in connection with the execution, delivery, performance,
         validity or enforceability of this Agreement;

                  (iv) this Agreement has been duly executed and delivered by
         the Servicer and, assuming the due authorization, execution and
         delivery thereof by the Trustee, constitutes a legal, valid and binding
         obligation of the Servicer enforceable against the Servicer in
         accordance with its terms (subject to applicable bankruptcy and
         insolvency laws and other similar laws affecting the enforcement of
         creditors' rights generally);

                  (v) there are no actions, suits or proceedings pending or, to
         the knowledge of the Servicer, threatened against or affecting the
         Servicer, before or by any court, administrative agency, arbitrator or
         governmental body with respect to any of the transactions contemplated
         by this Agreement, or which will, if determined adversely to the
         Servicer, materially and adversely affect it or its business, assets,
         operations or condition, financial or otherwise, or adversely affect
         the Servicer's ability to perform its obligations under this Agreement.
         The Servicer is not in default with respect to any order of any court,
         administrative agency, arbitrator or governmental body so as to
         materially and adversely affect the transactions contemplated by the
         above-mentioned documents; and

                  (vi) the Servicer has obtained or made all necessary consents,
         approvals, waivers and notifications of creditors, lessors and other
         nongovernmental persons, in each case, in connection with the execution
         and delivery of this Agreement, and the consummation of all the
         transactions herein contemplated.

         SECTION 3.7. Purchase of Contracts Upon Breach of Covenant. The
Servicer or the Trustee shall inform the other party and the Insurer promptly,
in writing, upon the discovery of any breach of the representation and
warranties set forth in Section 3.6 and the covenants set forth in Section 3.5.
Unless the breach shall have been cured within 30 days following such discovery
or receipt of notice of such breach, the Servicer shall purchase any Contract
materially


                                       41
<PAGE>   46
and adversely affected by such breach from the Trust. As consideration for the
Contract, the Servicer shall remit the Repurchase Amount on the Business Day
preceding the Servicer Report Date next succeeding the end of such 30-day cure
period in the manner specified in Section 4.4. The sole remedy of the Trustee,
the Trust, or the Certificateholders with respect to a breach pursuant to
Section 3.5 (other than as specified therein) and Section 3.6 shall be to
require the Servicer to purchase Contracts pursuant to this Section 3.7;
provided, however, that the Servicer shall indemnify the Trustee and its
officers, directors, agents and employees, the Insurer, the Trust and the
Certificateholders against all costs, expenses, losses damages, claims and
labilities, 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.

         Any successor Servicer appointed pursuant to Section 8.2 shall not be
obligated to purchase Contracts pursuant to this Section 3.7 with respect to any
breaches by any prior Servicer.

         SECTION 3.8. Servicing Compensation. As compensation for the
performance of its obligations under this Agreement and subject to the terms of
this Section 3.8, the Servicer shall be entitled to receive on each Distribution
Date the Servicing Fee in respect of each Contract that was Outstanding at the
beginning of the Collection Period ending immediately prior to such Distribution
Date. As servicing compensation in addition to the Servicing Fee, the Servicer
shall be entitled (i) to retain all late payment charges, extension fees and
similar items paid in respect of Contracts, (ii) to receive, in respect of each
Rule of 78's Contract that is prepaid in full prior to its Maturity Date, the
amount by which the outstanding principal balance of such Contract (determined
in accordance with the Rule of 78's method) exceeds the Scheduled Balance of
such Contract at the time of such prepayment and (iii) to receive all investment
earnings on funds credited to the Collection Account; provided, however, that
the Servicer agrees that each amount payable to it pursuant to clause (ii) of
this Section 3.8 shall be deposited in the Spread Account and applied in
accordance with the Insurance Agreement. The Servicer shall pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement of such expenses except to the extent provided
in Section 3.3.

         SECTION 3.9. Reporting by the Servicer.

         (a) No later than 3:00 p.m. New York City time on each Servicer Report
Date, the Servicer shall transmit to the Trustee and the Insurer a statement
(the "Distribution Date Statement") setting forth with respect to the next
succeeding Distribution Date:

                  (i) the Interest Distribution for such Distribution Date;

                  (ii) the Principal Distribution for such Distribution Date;

                  (iii) the Certificate Distribution Amount for such
         Distribution Date;

                  (iv) the Premium payable to the Insurer and the amount to be
         deposited in the Spread Account;


                                       42
<PAGE>   47
                  (v) the aggregate Servicing Fee with respect to the Contracts
         for the related Collection Period;

                  (vi) the number of, and aggregate amount of monthly principal
         and interest payments due on, the Contracts which are delinquent as of
         the end of the related Collection Period presented on a 30-day, 60-day
         and 90-day basis;

                  (vii) the Collection Account Amount Available and the Policy
         Claim Amount, if any, for such Distribution Date;

                  (viii) during the Funding Period, the remaining Pre-Funded
         Amount on deposit in the Pre-Funding Account and the Negative Carry
         Amount, if any, for the related Collection Period;

                  (ix) for the first Distribution Date that is on or immediately
         following the end of the Funding Period, if any, the amount of the
         Pre-Funded Amount that has not been used to purchase Subsequent
         Contracts and is being distributed as a payment of principal to
         Certificateholders;

                  (x) the aggregate amount of Liquidation Proceeds received for
         Defaulted Contracts;

                  (xi) the net credit losses for the Collection Period;

                  (xii) the number and net outstanding balance of Contracts for
         which the Financed Vehicle has been repossessed;

                  (xiii) the Pool Balance; and

         (b) the amount of claims, if any, made on the Surety Bond.

Each such Distribution Date Statement shall be accompanied by an Officers'
Certificate of the Servicer, which Officers' Certificate shall state that the
computations reflected in such statement were made in conformity with the
requirements of this Agreement.

         (c) On each Servicer Report Date, the Servicer shall render to the
Trustee and the Insurer a report, in respect of the immediately preceding
Collection Period, setting forth the following:

                  (i) the aggregate amount, if any, paid by or due from it for
         the purchases of Contracts which the Seller or the Servicer has become
         obligated to repurchase or purchase pursuant to Sections 2.3 or 3.7;

                  (ii) the net amount of funds which have been deposited in or
         credited to the Collection Account or the Payahead Account in respect
         of such Collection Period (including amounts, if any, collected during
         the next preceding Collection Period and


                                       43
<PAGE>   48
         deposited in the Payahead Account pursuant to Section 4.1) after giving
         effect to all permitted deductions therefrom pursuant to Section 4.2;

                  (iii) with respect to each Contract that became a Liquidated
         Contract during the Collection Period, the following information:

                           (A) its Contract Number;

                           (B) the effective date as of which such Contract
                  became a Liquidated Contract;

                           (C) its Monthly P&I and Scheduled Balance as of the
                  prior Distribution Date (or as of the Closing Date in the case
                  of the first Distribution Date); and

                           (D) the amount of the Net Liquidation Proceeds or Net
                  Insurance Proceeds;

                  (iv) with respect to each Contract which was the subject of a
         Full Prepayment during such Collection Period, the following
         information:

                           (A) its Contract Number; and

                           (B) the date of such Full Prepayment;

                  (v) the Contract Numbers, Monthly P&I, Scheduled Balances and
         Maturity Dates of all Contracts which became Defaulted Contracts during
         such Collection Period;

                  (vi) the Yield Supplement Amount with respect to such
         Collection Period and the amount, if any, withdrawn from the Yield
         Supplement Reserve Account in payment thereof;

                  (vii) during the Funding Period, the remaining Pre-Funded
         Amount on deposit in the Pre-Funding Account and the Negative Carry
         Amount, if any, for the related Collection Period;

                  (viii) for the first Distribution Date that is on or
         immediately following the end of the Funding Period, if any, the amount
         of the Pre-Funded Amount that has not been used to purchase Subsequent
         Contracts and is being distributed as a payment of principal to
         Certificateholders;

                  (ix) any other information relating to the Contracts
         reasonably requested by the Trustee or the Insurer; and

                  (x) the amount of Net Liquidation Proceeds and Net Insurance
         Proceeds which have been deposited in or credited to the Collection
         Account in respect of the Collection Period ending immediately prior to
         such Servicer Report Date and the


                                       44
<PAGE>   49
         cumulative amount of Net Liquidation Proceeds and Net Insurance
         Proceeds deposited in or credited to the Collection Account during the
         preceding Collection Periods.

         SECTION 3.10. Annual Statement as to Compliance.

         (a) The Servicer shall deliver to the Trustee and the Insurer, on or
before March 15, 1998 and on or before March 15 of each fiscal year thereafter,
an Officers' Certificate of the Servicer stating that (i) a review of the
activities of the Servicer during the preceding fiscal year (since the Closing
Date in the case of the first of such Officers' Certificates required to be
delivered) and of its performance under the Agreement has been made under such
officers' supervision and (ii) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year and that no default under this Agreement has occurred and
is continuing, 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. A copy of such certificate and the report referred to in
Section 3.11 may be obtained by any Certificateholder by a request in writing to
the Trustee addressed to the Corporate Trust Office.

         (b) The Servicer shall deliver to the Trustee, the Insurer and each
Rating Agency promptly after having obtained knowledge thereof, but in no event
later than five Business Days thereafter, an Officer's Certificate specifying
any event which with the giving of notice or lapse of time, or both, would
become an Event of Default under Section 8.1.

         SECTION 3.11. Annual Independent Certified Public Accountant's Report.
On or before March 15, 1998 and on or before March 15 of each fiscal year
thereafter, the Servicer at its expense shall cause a firm of
nationally-recognized independent certified public accountants (who may also
render other services to the Servicer) to furnish a report to the Trustee and
the Insurer to the effect that (i) they have audited the balance sheet of the
Servicer as of the last day of said fiscal year and the related statements of
operations, retained earnings and cash flows for such fiscal year and have
issued an opinion thereon, specifying the date thereof, (ii) they have also
audited the reports delivered by the Servicer pursuant to Section 3.9(b) and
certain other documents and the records relating to the servicing of the
Contracts and the distributions on the Certificates under this Agreement, (iii)
their audit as described under clauses (i) and (ii) above was made in accordance
with generally accepted auditing standards and accordingly included such tests
of the accounting records and such other auditing procedures as they considered
necessary in the circumstances, and (iv) their audits described under clauses
(i) and (ii) above disclosed no exceptions which, in their opinion, were
material, relating to the servicing of such Contracts in accordance with this
Agreement and the making of distributions on the Certificates in accordance with
this Agreement, or, if any such exceptions were disclosed thereby, setting forth
those exceptions which, in their opinion, were material.

         SECTION 3.12. Access to Certain Documentation and Information Regarding
Contracts. If the Servicer is acting as Custodian, the Servicer shall provide to
the Certificateholders, the Trustee and the Insurer reasonable access to the
Contract Files. Access shall be afforded without charge, but only upon
reasonable request and during normal business hours at designated offices of the
Servicer. Nothing in this Section shall affect the obligation of the Servicer to


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<PAGE>   50
observe any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of the Servicer to provide access to information as a
result of such obligation shall not constitute a breach of this Section 3.12.

         SECTION 3.13. Fidelity Bond. The Servicer shall maintain a fidelity
bond in such form and amount as is customary for banks acting as custodian of
funds and documents in respect of mortgage loans or consumer contracts on behalf
of institutional investors.

         SECTION 3.14. Indemnification; Third Party Claims. The Servicer agrees
to indemnify and hold the Trust, the Trustee and its officers, directors, agents
and employees, and the Certificateholders harmless against any and all claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any reasonable other costs, fees and expenses that the Trustee or
the Certificateholders may sustain because of the failure of the Servicer to
perform its duties and service the Contracts in compliance with the terms of
this Agreement. The Servicer shall immediately notify the Trustee if a claim is
made by a third party with respect to the Contracts, shall assume, with the
consent of the Trustee, the defense of any such claim and shall pay all expenses
in connection therewith, including counsel fees, and shall promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Trustee or the Certificateholders.

         SECTION 3.15. Reports to Certificateholders and the Rating Agencies.

         (a) The Trustee at its own expense shall provide to each
Certificateholder a copy of each Distribution Date Statement described in
Section 3.9 concurrently with the delivery of the statement described in Section
4.5 below.

         (b) The Trustee shall provide to any Certificateholder who so requests
in writing (addressed to the Corporate Trust Office) a copy of the annual audit
statement described in Section 3.10, or the annual audit report described in
Section 3.11. The Trustee may require the Certificateholder to pay a reasonable
sum to cover the cost of the Trustee's complying with such request.

         (c) The Trustee shall forward to the Rating Agencies and the Insurer
the statement to Certificateholders described in Section 4.5 and any other
reports it may receive pursuant to this Agreement to (i) Standard & Poor's
Ratings Services, Asset-Backed Surveillance Group, 26 Broadway, Fifteenth Floor,
New York, New York 10004, (ii) Moody's Investors Service, Inc., ABS Monitoring
Dept., 99 Church Street, 4th Floor, New York, New York 10007, and (iii) the
address of the Insurer at the address set forth in the Insurance Agreement.


                                       46
<PAGE>   51
                                   ARTICLE IV

                 Distributions; Statements to Certificateholders

         SECTION 4.1.       Accounts.

         (a) Prior to the Closing Date, the Servicer shall open, at a depository
institution (which may be the Trustee), an account denominated "Collection
Account--GT 1996-4, Bankers Trust Company, Trustee" (the "Collection Account")
and an account denominated "Payahead Account--GT 1996-4, Bankers Trust Company,
as agent" (the "Payahead Account") for the benefit of the Trustee on behalf of
the Obligors and the Certificateholders, as their interests may appear, and an
account denominated "Pre-Funding Account--GT 1996-4, Bankers Trust Company,
Trustee" for the benefit of the Certificateholders (the "Pre-Funding Account,"
and, collectively, with the Collection Account and the Payahead Account, the
"Accounts"). The Accounts shall be Eligible Accounts. The Servicer shall give
the Trustee and the Insurer at least five Business Days' written notice of any
change in the location of any Account and any related account identification
information. All moneys deposited in or credited to, from time to time, the
Collection Account and Pre-Funding Account shall be part of the Trust and all
moneys deposited in or credited to, from time to time, the Collection Account
and Pre-Funding Account shall be invested by the Trustee in Eligible Investments
pursuant to Section 4.1(c) and 4.1(d), respectively.

         (b) If as of the last day of a Collection Period a payment in an amount
less than the scheduled payment of Monthly P&I has been made for a Rule of 78's
Contract with respect to which amounts have been deposited in or credited to the
Payahead Account in a preceding Collection Period in accordance with Sections
3.1 and 4.2(a), the Servicer shall withdraw from the Payahead Account and
deposit into the Collection Account by the fifth Business Day preceding the
Distribution Date immediately succeeding such Collection Period the amount of
such Monthly P&I, to the extent available from amounts deposited in or credited
to the Payahead Account with respect to such Contract. Amounts on deposit in the
Payahead Account shall be invested by Bankers Trust Company upon the written
direction of the Servicer in Eligible Investments which mature not later than
the fifth Business Day prior to the Distribution Date to which such amounts
relate, and any earnings on such Eligible Investments shall be payable to the
Servicer. The Payahead Account and all amounts on deposit therein or credited
thereto shall not be considered part of the Trust Estate.

         (c) All funds in the Collection Account shall be invested by the
Trustee in Eligible Investments. The Insurer shall direct the Trustee in writing
to invest funds in the Collection Account in Eligible Investments; provided that
in the absence of such directions from the Insurer, the Servicer may so direct
the Trustee. All such investments shall be in the name of the Trustee as trustee
of the Trust. All income or other gain from investment of monies deposited in or
credited to the Collection Account shall be paid by the Trustee to the Servicer
monthly, unless earlier requested by the Servicer. The maximum permissible
maturities of any such investments pursuant to this Section 4.1(c) on any date
shall not be later than the Servicer Report Date preceding the Distribution Date
next succeeding the date of such investment; provided, however, that such funds
may be invested by the Trustee in Eligible Investments of


                                       47
<PAGE>   52
the entity that is serving as Trustee (or an entity which meets the criteria in
clauses (b) or (c) of the definition of Eligible Account) that mature on the
Business Day prior to such Distribution Date. No such investment may be sold
prior to its maturity.

         (d) The Pre-Funded Amount shall be invested by the Trustee in Eligible
Investments at the written direction of the Insurer, provided, that if on any
date the Insurer has not provided instructions with respect to such investments
by 10:00 a.m. New York City time, the Trustee shall invest such funds in the
last Eligible Investment in which such funds were invested. All such investments
shall be in the name of the Trustee as trustee of the Trust. All income or other
gain from investment of the Pre-Funded Amount shall be deposited in or credited
to the Collection Account no later than the Servicer Report Date preceding any
Distribution Date during (or immediately following) the Funding Period. The
maximum permissible maturities of any such investments shall be not later than
the next Business Day. [Is more aggressive investing possible? ERISA
considerations?]

         SECTION 4.2. Collections; Transfer to Payahead Account; Realization
Upon Surety Bond; Net Deposit.

         (a) Subject to Section 4.4 below, the Servicer shall remit or credit
all payments on a daily basis, within two Business Days of receipt, by or on
behalf of the Obligors on the Contracts and all Net Liquidation Proceeds and Net
Insurance Proceeds to the Collection Account. The Servicer shall deposit the
Yield Supplement Amount with respect to each Collection Period to the Collection
Account no later than the immediately following Servicer Report Date provided,
that if the Servicer fails to make such deposit, the Yield Supplement Agent,
pursuant to Section 4.6(a)(ii), shall withdraw the Yield Supplement Amount from
the Yield Supplement Reserve Account on the Servicer Report Date and deposit
such amount into the Collection Account. Prior to the Servicer Report Date,
amounts with respect to Rule of 78's Contracts which had been deposited in or
credited to the Collection Account pursuant to the next preceding sentence
during the preceding Collection Period shall be deposited in or credited to the
Payahead Account (in accordance with the Distribution Date Statement) to the
extent that such amounts are installments of Monthly P&I which are due in a
Collection Period relating to a Distribution Date subsequent to the Distribution
Date immediately succeeding such Collection Period.

         (b) Based upon the report referenced in Section 3.9(b) delivered by the
Servicer to the Trustee on the Servicer Report Date, the Servicer shall
determine the Collection Account Amount Available, compare such amount to the
amounts required to be distributed pursuant to Section 4.3, and determine the
Policy Claim Amount, if any, which exists with respect to the related
Distribution Date.

         (c) The Trustee shall, no later than 12:00 p.m. New York time on the
third Business Day prior to each Distribution Date, make a claim under the
Surety Bond for the Policy Claim Amount, if any, for such Distribution Date by
delivering to the Insurer and the Bank, with a copy to the Servicer, by hand
delivery, telex or facsimile transmission, a Deficiency Notice specifying the
Policy Claim Amount. In making any such claim, the Trustee shall comply with all
the terms and conditions of the Surety Bond. The notice of such claim shall
direct the


                                       48
<PAGE>   53
Insurer and Bank to remit such Policy Claim Amount (no later than 11:00 a.m. on
the Business Day immediately preceding such Distribution Date) to the Trustee
for deposit in the Collection Account.

         (d) So long as Onyx is the Servicer, the Servicer may make deposits in
or credits to the Collection Account net of amounts to be paid to the Servicer
under this Agreement. Notwithstanding the foregoing, the Servicer shall maintain
the records and accounts for such deposits and credits on a gross basis.

         SECTION 4.3.       Distributions.

         (a) On the Business Day immediately preceding each Distribution Date,
the Trustee shall transfer, or cause to be transferred, to the Paying Agent for
deposit in the Distribution Account from the Amount Available in the Collection
Account, the amounts set forth in clauses (ii) and (iii) below, to the extent
that such amounts are available after giving effect to the amount to be
distributed on the Distribution Date set forth in clause (i).

         On each Distribution Date, the following amounts shall be distributed
from the Amount Available in the following order of priority in accordance with
the Distribution Date Statement:

                  (i) by the Trustee, from the Collection Account to the
         Servicer, the Servicing Fee to the extent of the Amount Available
         allocable to interest from any source under the Recomputed Actuarial
         Method in the case of Rule of 78's Contracts and under the Simple
         Interest Method in the case of Simple Interest Contracts;

                  (ii) by the Paying Agent from the Distribution Account, to the
         Certificateholders, the Interest Distribution to the extent of the
         Amount Available allocable to interest from any source on each Contract
         under the Recomputed Actuarial Method in the case of Rule of 78's
         Contracts and under the Simple Interest Method in the case of Simple
         Interest Contracts;

                  (iii) by the Paying Agent from the Distribution Account, to
         the Certificateholders, the Principal Distribution to the extent of the
         Amount Available allocable to principal from any source on each
         Contract under the Recomputed Actuarial Method in the case of Rule of
         78's Contracts and under the Simple Interest Method in the case of
         Simple Interest Contracts; and

                  (iv) by the Trustee from the Collection Account, to the
         Insurer, the Premium.

         Any amounts remaining in the Collection Account after giving effect to
the distributions set forth in items (i) through (iv) above shall be deposited
in the Spread Account and shall be held or distributed in accordance with the
provisions of the Insurance Agreement.

         All distributions to Certificateholders shall be made pro rata by check
mailed to each Certificateholder of record on the Record Date next preceding the
Distribution Date for such distribution; provided, that if so directed by the
Servicer in the case of Certificates registered


                                       49
<PAGE>   54
in the name of a Clearing Agency, such distribution shall be made by wire
transfer in immediately available funds.

         (b) On the Business Day preceding the Final Funding Period Distribution
Date, the Trustee shall remit the Prepayment Amount to the Collection Account
pursuant to Section 4.7.

         SECTION 4.4. Remittance Of Repurchase Amount. The Servicer or the
Seller, as the case may be, shall remit or credit to the Collection Account the
aggregate Repurchase Amount with respect to Repurchased Contracts on the
Business Day preceding the Servicer Report Date next succeeding the last day of
the related cure period specified in Sections 2.3 or 3.7, as the case may be.

         SECTION 4.5. Statements to Certificateholders. On each Distribution
Date, the Trustee shall include with each distribution to each Certificateholder
a statement, based on information set forth in the Distribution Date Statement
furnished pursuant to Section 3.9, setting forth for such Distribution Date the
following information:

         (a) the amount of such Certificateholder's distribution allocable to
principal, separately identifying the aggregate amount included therein of any
(i) Full Prepayments of principal on Rule of 78's Contracts, and (ii) Full
Prepayments and partial prepayments of principal on Simple Interest Contracts;

         (b) the amount of such Certificateholder's distribution allocable to
interest;

         (c) the Certificateholder's pro rata portion of expenses allocable to
the Servicing Fee paid to the Servicer and the Premium paid to the Insurer;

         (d) during the Funding Period, the Aggregate Scheduled Balance of
Subsequent Contracts transferred to the Trust during the preceding Collection
Period;

         (e) during the Funding Period, the remaining amount on deposit, if any,
in the Pre-Funding Account, after giving effect to (d) above;

         (f) for the first Distribution Date that is on or immediately following
the end of the Funding Period, if any, the amount of the Pre-Funded Amount that
has not been used to purchase Subsequent Contracts and is being distributed as a
payment of principal to Certificateholders; and

         (g) the Pool/Pre-Funding Balance and the Pool Factor as of the
Distribution Date (after giving effect to the distribution made on such
Distribution Date).

         In the case of the information furnished pursuant to clauses (a), (b)
and (c) above, the amounts shall be expressed as a dollar amount per Certificate
evidencing a $1,000 denomination.

         Within a reasonable period of time after the end of each calendar year
but not later than the latest date permitted by law, the Servicer shall prepare
and furnish to the Trustee and the


                                       50
<PAGE>   55
Paying Agent and the Paying Agent shall furnish, to each Person who on any
Record Date during such calendar year shall have been a Certificateholder, a
statement containing the sum of the amounts determined in clauses (a) through
(c) and such other information as is reasonably necessary for the preparation of
such Person's federal income tax return in respect of the Certificates, for such
calendar year or, in the event such Person shall have been a Certificateholder
during a portion of such calendar year, for the applicable portion of such year,
for the purposes of such Certificateholder's preparation of federal income tax
returns.

         SECTION 4.6.       Yield Supplement Reserve Account.

         (a) On or before the Closing Date, pursuant to the terms of the Yield
Supplement Agreement, Onyx shall establish and maintain a separate trust account
in the name of the Yield Supplement Agent, as agent for the Certificateholders
and the Insurer (the "Yield Supplement Reserve Account") to secure the payment
of any Yield Supplement Amounts required to be paid on any Servicer Report Date
pursuant to the Yield Supplement Agreement which Onyx has not paid as of the
Business Day prior to such Servicer Report Date and required to be paid on any
Subsequent Closing Date which Onyx has not paid as of such Subsequent Closing
Date. The Yield Supplement Reserve Account shall be established at a depository
institution (which may be the Trustee) and shall be an Eligible Account. On the
date of issuance of the Certificates, pursuant to the Yield Supplement
Agreement, Onyx shall deposit the Initial Yield Supplement Reserve Account
Balance into the Yield Supplement Reserve Account. The Yield Supplement Reserve
Account shall not be part of the Trust. Each of the Certificateholders on behalf
of itself and its successors and assigns (including, but not limited to any
future Certificateholder), and the Insurer hereby appoints the Yield Supplement
Agent, acting in its capacity as agent for the purposes of this Section 4.6 and
not as Trustee with respect to the Yield Supplement Reserve Account, as its
agent and the Yield Supplement Agent hereby accepts such appointment subject to
the terms and conditions hereof. In order to secure the obligations of Onyx and
the Seller under the Yield Supplement Agreement, Onyx and the Seller hereby
pledge and grant a security interest in and to the Yield Supplement Reserve
Account, all funds and investments on deposit therein or credited thereto and
all proceeds thereof to the Yield Supplement Agent and its successors and
assigns, subject, however, to the limitations set forth below:

                  (i) All or a portion of the Yield Supplement Reserve Account
         may be invested and reinvested in Eligible Investments in accordance
         with written instructions from Onyx. All such investments shall be made
         in the name of the Yield Supplement Agent and all income and gain
         realized thereon shall be solely for the benefit of Onyx and shall be
         payable by the Yield Supplement Agent to Onyx on each Servicer Report
         Date from time to time upon Onyx's written request to the Yield
         Supplement Agent;

                  (ii) If with respect to any Collection Period the Seller or
         Onyx shall have failed to make or cause to be made in full the
         remittance of the Yield Supplement Amount on the date required by the
         Yield Supplement Agreement, the Yield Supplement Agent on the Servicer
         Report Date, shall, upon the written direction of the Servicer or the
         Insurer, at the opening of business on the Servicer Report Date,
         withdraw from the Yield Supplement Reserve Account and deposit into the
         Collection Account, the amount of the shortfall between the amount of
         funds that are required to be remitted by the Seller


                                       51
<PAGE>   56
         or Onyx with respect to the Yield Supplement Agreement as set forth in
         the report delivered by the Servicer pursuant to Section 3.9(b) and the
         amount of funds actually so remitted;

                  (iii) On each Subsequent Closing Date, the aggregate
         Additional Yield Supplement Amounts (if any) with respect to the
         Subsequent Contracts conveyed to the Trust during the period from (and
         including) the preceding Subsequent Closing Date (or the initial
         Closing Date, in the case of the first Subsequent Closing Date) to (but
         excluding) such Subsequent Closing Date shall be deposited in the Yield
         Supplement Reserve Account;

                  (iv) On each Subsequent Closing Date, upon the satisfaction of
         the conditions set forth in Section 2.1(h), the Yield Supplement
         Release Amount with respect to such Subsequent Closing Date shall be
         released from the Yield Supplement Reserve Account and paid to Onyx;
         and

                  (v) Upon termination of this Agreement in accordance with
         Sections 10.1 and 10.2, any amounts on deposit in the Yield Supplement
         Reserve Account shall, upon written request of Onyx, be paid to Onyx.

         SECTION 4.7.       Pre-Funding Account.

         (a) Pursuant to Section 4.1, the Servicer shall establish the
Pre-Funding Account in the name of the Trustee for the benefit of the
Certificateholders.

         (b) On the Closing Date, the Seller shall deposit into the Pre-Funding
Account an amount equal to the Original Pre-Funded Amount from the proceeds of
the sale of the Certificates. Upon receipt of the Transfer Certificate and the
Contract Documents referenced therein by 10:00 a.m. California time on such
Subsequent Transfer Date, the Trustee shall withdraw from the Pre-Funding
Account an amount equal to the aggregate original principal balance of the
Subsequent Contracts (determined as of the related Subsequent Transfer Date)
that have been delivered to the Trustee and wire such amount by federal funds to
the Seller's account listed in the Transfer Certificate relating to such
Subsequent Transfer Date by 1:00 p.m. California time on the same day (or if
such Transfer Certificate and Contract Documents referenced therein are not
received by the Trustee by the 10:00 a.m. deadline, then by 1:00 p.m. California
time on the next Business Day).

         (c) If any amount remains on deposit in the Pre-Funding Account on
March __, 1997, such amount shall be invested at the written instruction of the
Servicer in a single Eligible Investment which matures on the Business Day
preceding the Final Funding Period Distribution Date; provided, that in the
event no such Eligible Investment is available, such amount shall not be
invested but shall be held in the Pre-Funding Account uninvested.

         (d) On the Business Day preceding the Final Funding Period Distribution
Date, the Servicer shall instruct the Trustee in writing to withdraw the
Prepayment Amount from the Pre-


                                       52
<PAGE>   57
Funding Account and deposit such amount in the Collection Account to be included
in the Collection Account Amount Available with respect to the Final Funding
Period Distribution Date.


                                    ARTICLE V

                                The Certificates

         SECTION 5.1. The Certificates. Unless otherwise specified in the
Agreement, the Certificates shall be substantially in the form set forth in
Exhibit B and shall be issued in denominations of $1,000 and integral multiples
thereof; provided, however, that one Certificate may be issued in a denomination
that includes any residual portion of the Original Pool/Pre- Funding Amount. The
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of a Responsible Officer of the Trustee. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be valid and binding obligations of the Trust, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of the issuance of such Certificates. No Certificate shall entitle its
holder to any benefit under the Agreement, or shall be valid for any purpose,
unless there shall appear on such Certificate a certificate of authentication
substantially in the form set forth in Exhibit B hereto executed by the Trustee
by manual signature; such authentication shall constitute conclusive evidence
that such Certificate shall have been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Upon issuance pursuant to the terms of the Agreement, the Certificates will be
entitled to the benefits of the Agreement.

         SECTION 5.2. Execution, Authentication and Delivery of Certificates. In
exchange for the Contracts and the other assets of the Trust as of the Closing
Date, simultaneously with the sale, assignment and transfer to the Trustee of
the Contracts, the delivery to the Trustee of the Contract Documents, the
constructive delivery to the Trust of the Contract Files other than the Contract
Documents and the delivery to the Trustee of the other components of the Trust
(other than the Subsequent Contracts and related property), the Trustee shall
deliver to, or upon the written order of, the Seller, Certificates duly executed
by the Trustee, on behalf of the Trust, and authenticated by the Trustee in
authorized denominations equaling in the aggregate the Original Pool/Pre-Funding
Amount, and evidencing the entire ownership of the Trust.

         SECTION 5.3. Registration of Transfer and Exchange of Certificates. The
Trustee shall cause to be kept at the office or agency to be maintained by a
transfer agent and certificate registrar (the "Transfer Agent" and "Certificate
Registrar") and maintain, pursuant to Section 5.7, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee shall be the initial
Transfer Agent and Certificate Registrar.

         Subject to the other provisions of this Section , upon surrender for
registration or transfer of any Certificate at the Corporate Trust Office, the
Trustee shall execute on behalf of the Trust,


                                       53
<PAGE>   58
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of a like
aggregate amount. At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of authorized denominations of a like aggregate
amount at the Corporate Trust Office.

         Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
Holder. Each Certificate surrendered for registration of transfer and exchange
shall be cancelled and subsequently destroyed by the Trustee.

         No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax of governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

         SECTION 5.4. Mutilated, Destroyed, Lost or Stolen Certificates. If (i)
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss, or theft of any Certificate and (ii) there shall be delivered
to the Certificate Registrar or the Trustee such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Certificate shall have been acquired by a bona fide purchaser, the
Trustee on behalf of the Trust shall execute and the Trustee shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like tenor and denomination. In
connection with the issuance of any new Certificate under this Section 5.4, the
Trustee and the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Certificate issued pursuant to this Section
5.4 shall constitute conclusive evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen, or destroyed Certificate
shall be found at any time.

         SECTION 5.5. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration or transfer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.3 and for all other purposes whatsoever, and neither the
Trustee nor the Certificate Registrar shall be bound by any notice to the
contrary.

         SECTION 5.6. Access to List of Certificateholders' Names and Addresses.
The Trustee shall furnish or cause to be furnished to the Servicer, within 15
days after receipt by the Trustee of a request therefor from the Servicer in
writing, a list of the names and addresses of the Certificateholders as of the
most recent Record Date. If three or more Certificateholders, or one or more
Holders of Certificates evidencing in the aggregate not less than 25% of the
Pool/Pre-Funding Balance (hereinafter referred to as "applicants"), apply in
writing to the Trustee, and such application states that the applicants desire
to communicate with other Certificateholders with respect to their rights under
the Agreement or under the Certificates and such application shall be
accompanied by a copy of the communication that such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such


                                       54
<PAGE>   59
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Each Certificateholder, by receiving and
holding a Certificate, shall be deemed to have agreed to hold neither the
Servicer nor the Trustee accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.

         SECTION 5.7. Maintenance of Office or Agency. The Trustee shall
maintain in the Borough of Manhattan, the City of New York, an office or offices
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates and the Agreement may be served. The Trustee
initially designated the Corporate Trust Office as specified in the Agreement as
its office for such purposes. The Trustee shall give prompt written notice to
the Servicer and to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.

         SECTION 5.8. Book-Entry Certificates. The Certificates (other than a
Certificate representing any residual portion of the Pool/Pre-Funding Balance),
upon original issuance, shall be issued in the form of typewritten Certificates
representing the Book-Entry Certificates, to be delivered to The Depository
Trust Company, the initial Clearing Agency, by the Seller or on its behalf. The
Certificates shall initially be registered on the Certificate Register in the
name of Cede & Co., the nominee of the initial Clearing Agency, and no
Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Certificates, except as provided in Section
5.10. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to Certificateholders pursuant to Section 5.10:

                  (i) the provisions of this Section 5.8 shall be in full force
         and effect;

                  (ii) the Seller, the Servicer, the Paying Agent, the Transfer
         Agent and Certificate Registrar and the Trustee may deal exclusively
         with the Clearing Agency for all purposes (including the making of
         distributions in respect of the Certificates and the taking of actions
         by the Certificateholders) as the authorized representative of the
         Clearing Agency Participants and the Certificate Owners;

                  (iii) to the extent that the provisions of this Section 5.8
         conflict with any other provisions of the Agreement, the provisions of
         this Section 5.8 shall control;

                  (iv) the rights of Certificate Owners shall be exercised only
         through the Clearing Agency (or to the extent Certificate Owners are
         not Clearing Agency Participants through the Clearing Agency
         Participants through which such Certificate Owners own Book-Entry
         Certificates) and shall be limited to those established by law and
         agreements between such Certificate Owners and the Clearing Agency
         and/or the Clearing Agency Participants and all references in the
         Agreement to actions by Certificateholders shall refer to actions taken
         by the Clearing Agency upon instructions from the Clearing Agency
         Participants, and all references in the Agreement to distributions,
         notices, reports and statements to Certificateholders shall refer to
         distributions, notices, reports and statements to the Clearing Agency
         or its nominee, as


                                       55
<PAGE>   60
         registered holder of the Certificates, as the case may be, for
         distribution to Certificate Owners in accordance with the procedures of
         the Clearing Agency; and

                  (v) pursuant to the Depository Agreement, the initial Clearing
         Agency will make book-entry transfers among the Clearing Agency
         Participants and receive and transmit distributions of principal and
         interest on the Certificates to the Clearing Agency Participants, for
         distribution by such Clearing Agency Participants to the Certificate
         Owners or their nominees.

         The Clearing Agency Participants shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Clearing Agency, and the Clearing Agency may be treated by the Trustee,
and its agents, employees, officers and directors, as the absolute owner of the
Certificates for all purposes whatsoever.

         SECTION 5.9. Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under the Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 5.10, the Trustee and the Paying Agent shall give all such
notices and communications specified herein to be given by it to
Certificateholders to the Clearing Agency.

         SECTION 5.10. Definitive Certificates. If (i)(A) the Seller advises the
Trustee in writing that the Clearing Agency is no longer willing or able
properly to discharge its responsibilities under the Depository Agreement, and
(B) the Trustee or the Seller is unable to locate a qualified successor or (ii)
after the occurrence of an Event of Default, Certificate Owners representing
beneficial interests aggregating more than 50% of the Pool/Pre-Funding Balance
advise the Clearing Agency and the Trustee (and the Clearing Agency shall notify
the Trustee in writing thereof) through the Clearing Agency Participants in
writing that the continuation of a book-entry system through the Clearing Agency
is no longer in the best interests of the Certificate Owners, the Trustee shall
notify the Clearing Agency of the occurrence of any event described in clauses
(i) and (ii) above and of the availability of Definitive Certificates to
Certificate Owners requesting the same. Upon surrender to the Transfer Agent and
Certificate Registrar by the Clearing Agency of Certificates registered in the
name of such Clearing Agency or its nominee, accompanied by re-registration
instructions from the Clearing Agency for registration of the Definitive
Certificates, the Trustee shall execute on behalf of the Trust, authenticate and
(if the Transfer Agent and Certificate Registrar is different than the Trustee,
then the Transfer Agent and Certificate Registrar shall) deliver Definitive
Certificates. The Servicer shall arrange for, and will bear all costs of, the
printing and issuance of such Definitive Certificates. None of the Seller, the
Servicer, the Transfer Agent and Certificate Registrar or the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on such instruction. Upon the issuance of
Definitive Certificates, all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Transfer Agent and Certificate Registrar, to the extent
applicable with respect to such Definitive Certificates and the Trustee, the
Paying Agent and the Transfer Agent and Certificate Registrar shall recognize
the Holders of the Definitive Certificates as Certificateholders hereunder.


                                       56
<PAGE>   61
         SECTION 5.11.      Appointment of Paying Agent.

         (a) The Paying Agent shall have the revocable power to withdraw funds
from the Collection Account and make distributions to the Certificateholders.
The Trustee may revoke such power and remove the Paying Agent, if the Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under the Agreement in any material respect or for other
good cause. The Paying Agent shall initially be Bankers Trust Company. Bankers
Trust Company shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Servicer and the Trustee. In the event that Bankers Trust Company
shall no longer be the Paying Agent, the Trustee shall appoint a successor to
act as Paying Agent, which shall be a bank or trust company.

         (b) The Trustee shall cause the Paying Agent (if other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums, if any,
held by it for payment to the Certificateholders, and the Trustee in trust for
the benefit of the Certificateholders or other party entitled thereto until such
sums shall be paid to such Certificateholders or other party entitled thereto
and shall agree, and if the Trustee is the Paying Agent it hereby agrees, that
it shall comply with all requirements of the Code regarding the withholding by
the Trustee of payments in respect of federal income taxes due from Certificate
Owners.

         (c) Bankers Trust Company in its capacity as initial Paying Agent
hereunder agrees that it (i) will hold all sums held by it hereunder for payment
to the Certificateholders, in trust for the benefit of the Certificateholders or
other party entitled thereto until such sums shall be paid to such
Certificateholders or other party entitled thereto and (ii) shall comply with
all requirements of the Code regarding the withholding by the Trustee of
payments in respect of federal income taxes due from Certificate Owners.

         SECTION 5.12.      Authenticating Agent.

         (a) The Trustee may appoint one or more authenticating agents (each an
"Authenticating Agent") with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the Certificates in
connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Certificates. Whenever reference is made in this Agreement to
the authentication of Certificates by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent. Any
authenticating agent appointed by the Trustee shall require the consent of the
Seller, which consent may not be unreasonably withheld.

         (b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.

         (c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and the Seller. The Trustee may at any time
terminate the agency of


                                       57
<PAGE>   62
an authenticating agent by giving notice of termination to such authenticating
agent and to the Seller. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time an authenticating agent shall cease
to be acceptable to the Trustee or the Seller, the Trustee promptly may appoint
a successor authenticating agent with the consent of the Seller. Any successor
authenticating agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an authenticating agent. Any successor
authenticating agent appointed by the Trustee shall require the consent of the
Seller, which consent may not be unreasonably withheld.

         (d) The Servicer shall pay the Authenticating Agent from time to time
reasonable compensation for its services under this Section 5.12.

         (e) Pursuant to an appointment made under this Section 5.12, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:

         This is one of the certificates referred to in the within mentioned
Agreement.

                                            _____________________________,
                                              as Trustee

                                            By:__________________________
                                               Authorized Signatory

                                                        or


                                              as Authenticating Agent
                                                for the Trustee,

                                            By:__________________________
                                               Authorized Signatory

         SECTION 5.13. Actions of Certificateholders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
the Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing; and
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
when required, to the Seller or the Servicer. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of the Agreement and conclusive in favor of the Trustee, the Seller and
the Servicer, if made in the manner provided in this Section 5.13.


                                       58
<PAGE>   63
                                   ARTICLE VI

                                   The Seller

         SECTION 6.1. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under the Agreement.

         The Seller shall indemnify, defend, and hold harmless the Trustee and
its officers, directors, agents and employees and the Trust from and against any
taxes that may at any time be asserted against the Trustee or the Trust with
respect to, and as of the date of, the sale of the Contracts to the Trustee or
the issuance and original sale of the Certificates, including any sales, gross
receipts, general corporation, tangible personal property, privilege, or license
taxes (but not, in case of the Trust, including any taxes asserted with respect
to ownership of the Contracts or federal or other income taxes arising out of
the transactions contemplated by the Agreement) and costs and expenses in
defending against the same.

         The Seller shall indemnify, defend, and hold harmless the Trustee and
its officers, directors, agents and employees from and against any loss,
liability or expense incurred by reason of the Seller's willful misfeasance, bad
faith, or negligence in the performance of its duties hereunder, or by reason of
reckless disregard of its obligations and duties hereunder.

         The Seller shall indemnify, defend and hold harmless the Trustee and
its officers, directors, agents and employees and the Trust 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: (i) shall be due to the willful misfeasance, bad
faith, or gross negligence of the Trustee; or (ii) shall arise from the
Trustee's breach of any of its representations or warranties set forth in
Section 9.14.

         Indemnification under this Section 6.1 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Seller shall have made any indemnity payments to the Trustee pursuant to
this Section and the Trustee thereafter shall collect any of such amounts from
others, the Trustee shall repay such amounts to the Seller, without interest.

         SECTION 6.2. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. The Seller shall not consolidate with or merge into any
other corporation or convey, transfer or lease substantially all of its assets
as an entirety to any Person unless the corporation formed by such consolidation
or into which the Seller has merged or the Person which acquires by conveyance,
transfer or lease substantially all the assets of the Seller as an entirety, can
lawfully perform the obligations of the Seller hereunder and executes and
delivers to the Insurer and the Trustee an agreement in form and substance
reasonably satisfactory to the Trustee and the Insurer, which contains an
assumption by such successor entity of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Seller under this Agreement.


                                       59
<PAGE>   64
         SECTION 6.3. 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 any document of any kind, prima facie properly executed and submitted
by any Person respecting any matters arising hereunder. 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 6.4. Seller Not to Resign. Subject to the provisions of Section
6.2, the Seller shall not resign from the obligations and duties hereby imposed
on it as Seller under this Agreement.

         SECTION 6.5. Seller May Own Certificates. The Seller and any Person
controlling, controlled by, or under common control with the Seller may in its
individual or any other capacity become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Seller or an affiliate
thereof, except as otherwise provided in the definition of "Certificateholder"
specified in Section 1.1. Certificates so owned by or pledged to the Seller or
such controlling or commonly controlled Person shall have an equal and
proportionate benefit under the provisions of the Agreement, without preference,
priority, or distinction as among all of the Certificates.


                                   ARTICLE VII

                                  The Servicer

         SECTION 7.1. Liability of Servicer; Indemnities. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under the Agreement.

         Such obligations shall include the following:

         (a) the Servicer shall defend, indemnify, and hold harmless the Trustee
and its officers, directors, agents and employees, the Trust, the Insurer and
the Certificateholders from and against any and all costs, expenses, losses,
damages, claims, and liabilities, arising out of or resulting from the use or
operation by the Servicer or any Affiliate thereof of a Financed Vehicle;

         (b) the Servicer shall indemnify, defend and hold harmless the Trustee
and its officers, directors, agents and employees, the Insurer and the Trust
from and against any taxes that may at any time be asserted against the Trustee
or the Trust with respect to the transactions contemplated herein, including,
without limitation, any sales, gross receipts, general corporation, tangible
personal property, privilege, or license taxes (but not including any taxes
asserted with respect to, and as of the date of, the sale of the Contracts to
the Trustee or the issuance and original sale of the Certificates, or asserted
with respect to ownership of the Contracts, or federal or other income taxes
arising out of distributions on the Certificates) and costs and expenses in
defending against the same;


                                       60
<PAGE>   65
         (c) the Servicer shall indemnify, defend and hold harmless the Trustee
and its officers, directors, agents and employees, the Trust, the Insurer and
the Certificateholders 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 Trustee, the
Trust, or the Certificateholders through, the negligence, willful misfeasance,
or bad faith of the Servicer in the performance of its duties under the
Agreement; and

         (d) the Servicer shall indemnify, defend, and hold harmless the Trustee
and the Insurer 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: (i) shall be due to the
willful misfeasance, bad faith, or negligence (except for errors in judgment) of
the Trustee or the Insurer; (ii) relates to any tax other than the taxes with
respect to which either the Seller or Servicer shall be required to indemnify
the Trustee; (iii) shall arise from the Trustee's breach of any of its
representations or warranties set forth in Section 9.13; or (iv) shall be one as
to which the Seller is required to indemnify the Trustee.

         Indemnification under this Section 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 7.2.       Corporate Existence; Status as Servicer; Merger.

         (a) The Servicer shall keep in full effect its existence, rights and
franchises as a corporation incorporated under the laws of the State of
Delaware, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the Contract
Documents and this Agreement.

         (b) The Servicer shall not consolidate with or merge into any other
corporation or convey, transfer or lease substantially all of its assets as an
entirety to any Person or engage in any corporate transaction pursuant to which
the surviving or successor entity is not Onyx Acceptance Corporation, unless (i)
such entity is at least rated investment grade by the Rating Agencies, (ii) the
Insurer shall have consented thereto in writing and (iii) such entity executes
and delivers to the Trustee and the Insurer an agreement in form and substance
reasonably satisfactory to the Trustee and the Insurer, which contains an
assumption by such successor entity of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Servicer under this Agreement.

         SECTION 7.3.       Performance of Obligations.

         (a) The Servicer shall punctually perform and observe all of its
obligations and agreements contained in this Agreement.


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         (b) The Servicer shall not take any action, or permit any action to be
taken by others, which would excuse any person from any of its covenants or
obligations under any of the Contract Documents or under any other instrument
included in the Trust Estate, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the Contract Documents or any such
instrument, except as expressly provided herein and therein.

         SECTION 7.4.       The Servicer Not to Resign; Assignment.

         (a) The Servicer shall not resign from the duties and obligations
hereby imposed on it except upon determination by its Board of Directors that by
reason of change in applicable legal requirements the continued performance by
the Servicer of its duties under this Agreement would cause it to be in
violation of such legal requirements in a manner which would result in a
material adverse effect on the Servicer or its financial condition, said
determination to be evidenced by a resolution of its Board of Directors to such
effect accompanied by an Opinion of Counsel, satisfactory to the Trustee, to
such effect (subject to Section 8.2 hereof). No such resignation shall become
effective unless and until (i) the Back-up Servicer assumes all of the
Servicer's obligations under this Agreement or (ii) a new servicer acceptable to
the Trustee with the consultation of the Insurer is willing to service the
Contracts, enters into a servicing agreement with the Trustee in form and
substance substantially similar to this Agreement and satisfactory to the
Trustee and the Insurer, and the rating agency or agencies that rated the
Certificates confirm that the selection of such new servicer will not result in
the reduction or withdrawal of the rating of the Certificates assigned to them
by such rating agency or, if the Certificates are rated by more than one rating
agency, each such rating agency. No such resignation by the Servicer shall
affect the obligation of the Servicer to repurchase any Contract pursuant to
Section 3.7.

         (b) Except as specifically permitted hereunder, the Servicer may not
assign this Agreement or any of its rights, powers, duties or obligations
hereunder, provided that the Servicer may assign this Agreement in connection
with a consolidation, merger, conveyance, transfer or lease made in compliance
with Section 7.2(b).

         (c) Except as provided in Sections 7.4(a) and (b), the duties and
obligations of the Servicer under this Agreement shall continue until this
Agreement shall have been terminated as provided in Section 10.1, and shall
survive the exercise by the Trustee or the Insurer of any right or remedy under
this Agreement, or the enforcement by the Trustee, any Certificateholder or the
Insurer of any provision of the Certificates, the Insurance Agreement or this
Agreement.

         (d) The resignation of the Servicer in accordance with this Section 7.4
shall not affect the rights of the Seller hereunder.

         SECTION 7.5. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust or the Certificateholders,
except as provided under this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement or for errors in
judgment; provided, however, that this provision shall not protect the Servicer
or any


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<PAGE>   67
such person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence (except errors in judgment) in the
performance of duties or by reason of reckless disregard of obligations and
duties under the Agreement. The Servicer and any director or officer or employee
or agent of the Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising under this Agreement.

         Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute, or defend any legal action that shall
not be incidental to its duties to service the Contracts in accordance with this
Agreement and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties to this Agreement and the interests of the
Certificateholders under this Agreement.


                                  ARTICLE VIII

                                     Default

         SECTION 8.1. Events of Default. If any one of the following events
("Events of Default") shall occur and be continuing:

         (a) any failure by the Servicer to deposit in or credit to the
Collection Account, the Payahead Account or the Yield Supplement Reserve Account
any amount required under this Agreement to be so deposited or credited or to
make the distribution required by Section 4.3 that shall continue unremedied for
a period of three Business Days after written notice from the Trustee or the
Insurer is received by the Servicer or discovery by an officer of the Servicer;
or

         (b) the Insurer or the Trustee shall not have received a report in
accordance with Section 3.9 by the fifth Business Day prior to the Distribution
Date with respect to which such report is due; or

         (c) failure on the part of the Seller or the Servicer duly to observe
or to perform in any material respect any other covenants or agreements of the
Seller or the Servicer, set forth in this Agreement, which failure shall (x)
materially and adversely affect the rights of Certificateholders, the Insurer or
the Trustee and (y) continue unremedied for a period of 30 days after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given (i) to the Seller or the Servicer, as the case may be, by
the Trustee or the Insurer, or (ii) to the Seller or the Servicer, as the case
may be, and to the Trustee by the Holders of Certificates evidencing in the
aggregate not less than 25% of the Pool/Pre-Funding Balance or by the Insurer;
or

         (d) the entry of a decree or order for relief by a court or regulatory
authority having jurisdiction in respect of the Servicer or the Seller in an
involuntary case under the federal bankruptcy laws, as now or hereafter in
effect, or another present or future, federal or state,


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bankruptcy, insolvency or similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Servicer or the Seller or of any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Servicer or the Seller and
the continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days or the commencement of an involuntary case under the
federal bankruptcy laws, as now or hereinafter in effect, or another present or
future federal or state bankruptcy, insolvency or similar law and such case is
not dismissed within 60 days; or

         (e) the commencement by the Servicer or the Seller of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or any other
present or future, federal or state, bankruptcy, insolvency or similar law, or
the consent by the Servicer to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Servicer or the Seller or of any substantial part of its
property or the making by the Servicer of an assignment for the benefit of
creditors or the failure by the Servicer or the Seller generally to pay its
debts as such debts become due or the taking of corporate action by the Servicer
or the Seller in furtherance of any of the foregoing;

         (f) any change of control of the Servicer in violation of the covenant
set forth in Section 7.2 hereof;

         (g) the Servicer shall have failed in the reasonable opinion of the
Insurer to service the Contracts in accordance with the Servicing Standards and
such failure shall have continued unremedied for 30 days after written notice of
such failure shall have been delivered to the Servicer by the Insurer; or

         (h) Any representation, warranty or statement of the Servicer or the
Seller made in this Agreement 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 to which Sections 2.2 or 3.6 shall be applicable so
long as the Servicer or the Seller shall be in compliance with Sections 2.3 or
3.7, as the case may be), and the incorrectness of such representation, warranty
or statement has a material adverse effect on the Trust and, within 30 days
after written notice thereof shall have been given to the Servicer or the Seller
by the Trustee or by the Holders of Certificates evidencing in the aggregate at
least 25% of the Pool/Pre-Funding Balance or by the Insurer, the circumstance or
condition in respect of which such representation, warranty or statement was
incorrect shall not have been eliminated or otherwise cured;

then and in each and every case, so long as an Event of Default shall not have
been remedied, either the Trustee, the Insurer or the Holders of Certificates
evidencing in the aggregate not less than 25% of the Pool/Pre-Funding Balance,
by notice then given in writing to the Servicer (and to the Trustee and the
Insurer if given by the Certificateholders) may terminate all of the rights and
obligations of the Servicer under this Agreement. Notwithstanding the foregoing,
in the event that the Insurer is in default under the Surety Bond or is subject
to any Insurer Insolvency, the Insurer shall not have the right to terminate or
cause the termination of the Servicer. On or after the receipt by the Servicer
of such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Certificates or the Contracts or
otherwise,


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<PAGE>   69
shall pass to and be vested in a back-up servicer (the "Back-up Servicer")
selected by the Insurer (unless it is in default under the Surety Bond or is
subject to any Insurer Insolvency); and, without limitation the Back-up Servicer
is hereby authorized and empowered to execute and deliver, on behalf of the
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 assignment of the Contracts and related documents, to
show the Back-up Servicer as a lienholder or secured party on Title Documents or
financing statements or otherwise. The Servicer shall cooperate with the Back-up
Servicer in effecting the termination of the responsibilities and rights of the
Servicer under this Agreement, including the transfer to the Back-up Servicer
for administration by it of all cash amounts that shall at the time be held by
the Servicer for deposit, shall have been deposited by the Servicer in the
Collection Account or Payahead Account, or shall thereafter be received with
respect to a Contract.

         SECTION 8.2. Notification to Certificateholders. Upon any termination
of, or appointment of a successor to, the Servicer pursuant to this Article
VIII, the Trustee shall give prompt written notice thereof to Certificateholders
at their respective addresses appearing in the Certificate Register.

         SECTION 8.3. Waiver of Past Defaults. The Holders of Certificates
evidencing not less than 51% of the Pool/Pre-Funding Balance (not including
Certificates held by the Seller, the Servicer or any of their respective
affiliates), with the written consent of the Insurer, may, on behalf of all
Certificateholders, waive any default by the Servicer in the performance of its
obligations hereunder and its consequences, except a default in the failure to
make any required deposits to or payments from the Collection Account in
accordance with this Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Event of Default 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 thereon except to the extent expressly so waived. The Servicer shall
give prompt written notice of any waiver to the Rating Agencies and the Trustee.

         SECTION 8.4. Insurer Direction of Insolvency Proceedings. The Trustee,
upon the actual knowledge of a Responsible Officer of the Trustee, shall
promptly notify the Insurer of (i) the commencement of any of the events or
proceedings (individually, an "Insolvency Proceeding") described in Sections
8.1(d) or 8.1(e) hereof or any such event or proceeding applicable to an Obligor
under a Contract and (ii) the making of any claim in connection with any
Insolvency Proceeding seeking the avoidance as a preferential transfer (a
"Preference Claim") of any payment of principal of, or interest on, any Contract
or any Certificate. Each Certificateholder, by its purchase of Certificates, and
the Trustee hereby agree that, so long as neither a default under the Surety
Bond nor an Insurer Insolvency has occurred and is continuing, the Insurer may
at any time during the continuation of an Insolvency Proceeding direct all
matters relating to such Insolvency Proceeding, including, without limitation,
(i) all matters relating to any Preference Claim, (ii) the direction of any
appeal of any order relating to any Preference Claim and (iii) the posting of
any surety, or performance bond pending any such appeal. The Insurer shall be
subrogated to the rights of the Trustee and each Certificateholder in the
conduct of any Insolvency Proceeding, including, without limitation, all


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rights of any party to an adversary proceeding action with respect to any court
order issued in connection with any such Insolvency Proceeding.


                                   ARTICLE IX

                                   The Trustee

         SECTION 9.1. No Power to Engage in Business or to Vary Investments.
Notwithstanding any provision or agreement to the contrary in this Agreement or
in any other agreement, the Trustee, acting on behalf of the Trust (but not
individually), shall not have any power to engage in any business, commercial or
other activity for profit, and the Trustee and the Servicer shall not have any
power to vary the Trust Estate, whether consisting of a Contract, an Eligible
Investment or any other amount (other than cash payments received with respect
to Contracts) in any account maintained for the benefit of the Trust or the
Certificateholders or Certificate Owners, by disposition of said property,
investment or amount and the reinvestment of the proceeds realized or by any
other action calculated to take advantage of any variation or change in the
market or in market conditions, for the purpose of improving the investment or
return of the Certificateholders or Certificate Owners.

         SECTION 9.2. Duties of Trustee. The Trustee, both prior to and after
the occurrence of an Event of Default, of which a Responsible Officer of the
Trustee has actual knowledge shall undertake to perform such duties and only
such duties as are specifically set forth in the Agreement. If an Event of
Default shall have occurred and shall not have been cured, the Trustee shall
exercise such of the rights and powers vested in it by the Agreement, and shall
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstance in the conduct of his own affairs.

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that shall be specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they comply
as to form to the requirements of this Agreement.

         No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act (other than errors in judgment), or its own willful misconduct; provided,
however, that:

         (a) prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default that may have occurred, the duties and
obligations of the Trustee shall be terminated solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as shall be specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely on the truth of the statements and the
correctness of the opinions expressed upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this Agreement;


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         (b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee shall have been negligent in
performing its duties in accordance with the terms of this Agreement; and

         (c) the Trustee shall not be liable with respect to any action taken,
suffered, or omitted to be taken by it in good faith in accordance with the
written direction of the Insurer or Holders of Certificates evidencing in the
aggregate not less than 25% of the Pool/Pre-Funding Balance relating to the
time, method, and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee, under
this Agreement.

         The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there shall be
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement.

         The Trustee shall not be charged with knowledge of an Event of Default
or a failure by the Servicer to comply with any of its obligations unless and
until such time as a Responsible Officer shall have actual knowledge or have
received written notice thereof from the Servicer, the Insurer or any Holder of
Certificates evidencing in the aggregate not less than 10% of the
Pool/Pre-Funding Balance.

         In the event the entity acting as Trustee hereunder is also acting as
Yield Supplement Agent or Back-up Servicer, the rights and protections afforded
to the Trustee pursuant to this Article IX shall also be afforded to such Yield
Supplement Agent and Back-up Servicer.

         Except for actions expressly authorized by the Agreement or, based upon
an Opinion of Counsel, in the best interests of Certificateholders, the Trustee
shall take no action reasonably likely to impair the security interest of the
Trust in any Contract or to impair the value of any Contract.

         The Trustee shall not be liable for the selection of Eligible
Investments or for any investment losses resulting from Eligible Investments.

         The Trustee shall have no duty to monitor the performance of the
Servicer, nor shall it have any liability in connection with the malfeasance or
nonfeasance by the Servicer. The Trustee shall have no liability in connection
with compliance of the Servicer or the Seller with statutory or regulatory
requirements related to the Contracts. The Trustee shall not make or be deemed
to have made any representations or warranties with respect to the Contracts or
the validity or sufficiency of any assignment of the Contracts to the Trust or
the Trustee.


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         All information obtained by the Trustee regarding the Obligors and the
Contracts, whether upon the exercise of its rights under the Agreement or
otherwise, shall be maintained by the Trustee in confidence, provided, however,
that the foregoing shall not be construed to prohibit (i) disclosure of any and
all information that is or becomes publicly known, or information obtained by
the Trustee from sources other than the Seller, Insurer, any Obligor or the
Servicer, (ii) disclosure of any and all information (A) if required to do so by
any applicable statute, law, rule or regulation, (B) to any government agency or
regulatory or self-regulatory body having or claiming authority to regulate or
oversee any aspects of the Trustee's business or that of its Affiliates, (C)
pursuant to any subpoena, civil investigative demand or similar demand or
request of any court, regulatory authority, arbitrator or arbitration to which
the Trustee or an Affiliate or an officer, director, employer or shareholder
thereof is a party, (D) in any preliminary or final offering circular,
registration statement or contract or other document pertaining to the
transactions contemplated by the Agreement approved in advance by the Seller or
(E) to any Affiliate, independent or internal auditor, agent, employee or
attorney of the Trustee having a need to know the same, provided that the
Trustee advises such recipient of the confidential nature of the information
being disclosed, (iii) any other disclosure authorized by the Seller or the
Servicer or (iv) disclosure to the other parties to the transactions
contemplated by the Agreement.

         In the event that the Paying Agent or the Transfer Agent and
Certificate Registrar shall fail to perform any obligation, duty or agreement in
the manner or on the day required to be performed by the Paying Agent or the
Transfer Agent and Certificate Registrar, as the case may be, under the
Agreement, the Trustee shall be obligated promptly upon a Responsible Officer
obtaining actual knowledge thereof to perform such obligation, duty or agreement
in the manner so required to the extent the information necessary to such
performance is reasonably available to the Trustee after the Trustee has made a
reasonable effort to obtain such information. The Trustee shall not be liable
for the acts or omissions of any Paying Agent, any Authenticating Agent or the
Transfer Agent and Certificate Registrar appointed hereunder with due care by
the Trustee hereunder.

         SECTION 9.3. Trustee's Assignment of Purchased Contracts. With respect
to all Contracts repurchased by the Seller pursuant to Section 2.3 or purchased
by the Servicer pursuant to Sections 3.7 or 10.2, the Trustee on behalf of the
Trust shall assign, without recourse, representation, or warranty to the Seller
or the Servicer, as the case may be, all the Trust's right, title, and interest
in and to such Contract, and all security and documents relating thereto. The
preparation of documents necessary to consummate such an assignment shall be the
responsibility of the Seller, the Servicer or the Insurer, as the case may be,
and not the responsibility of the Trustee. If in any enforcement suit or legal
proceeding it shall be held that the Servicer may not enforce a Contract on the
ground that it shall not be a real party in interest or a holder entitled to
enforce the Contract, the Trustee shall, at the Servicer's expense, take such
steps as directed in writing by the Servicer to enforce the Contract, including
bringing suit in the Trustee's name or the names of the Certificateholders,
provided that nothing in this Section 9.3 shall require the Trustee to qualify
to do business in a state in which it is not so qualified on the date of this
Agreement.


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         SECTION 9.4. Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 9.1:

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

         (b) the Trustee may consult with counsel and any Opinion of Counsel or
any advice of such Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it under
this Agreement in good faith and in accordance with such Opinion of Counsel or
advice. A copy of any such Opinion of Counsel shall be provided to the Seller,
the Servicer and the Insurer;

         (c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or in relation to this Agreement, at
the request, order or direction of any of the Certificateholders pursuant to the
provisions of this Agreement, unless such Certificateholders shall have offered
to the Trustee reasonable security or indemnity against the cost, expenses, and
liabilities that may be incurred therein or thereby. Nothing contained in this
Agreement, however, shall relieve the Trustee of the obligations, upon the
occurrence of an Event of Default (that shall not have been cured), to exercise
such of the rights and powers vested in it by this Agreement, and to use the
same degree of care and skill in their exercise as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs; provided that
the Trustee shall not be deemed to have knowledge of the occurrence of an Event
of Default unless and until such knowledge shall be (i) actual knowledge of a
Responsible Officer or (ii) received in writing by a Responsible Officer;

         (d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;

         (e) prior to the occurrence of an Event of Default and after the curing
of all Events of Default that may have occurred, the Trustee shall not be bound
to make any investigation into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
direction, order, approval, bond, note or other paper or document, unless
requested in writing to do so by the Insurer or Holders of Certificates
evidencing in the aggregate not less than 25% of the Pool/Pre-Funding Balance;
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses, or liabilities likely to be incurred by it in the making
of such investigation shall be, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such cost,
expense, or liability as a condition to so proceeding. The reasonable expense of
any and every such examination shall be paid by the Seller or, if paid by the
Trustee, shall be reimbursed by the Seller upon demand. Nothing in this clause
(e) shall affect the obligation of the Seller to observe any applicable law


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prohibiting disclosure of information regarding the Obligors; provided the
Trustee shall be entitled to make such further inquiry or investigation into
such facts or matters as it may reasonably see fit, and if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books and records of the Seller, personally or by agent or attorney,
at the sole cost and expense of the Seller;

         (f) the Trustee may execute any of the trust powers hereunder or
perform any duties under this Agreement either directly or by or through agents
or attorneys or a custodian or nominee and the Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of any
such agent, attorney, custodian or nominee appointed with due care by it
hereunder;

         (g) the Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Contracts for the purpose
of establishing the presence or absence of defects, the compliance by the Seller
with its representations and warranties or for any other purpose; and

         (h) in the event that the Trustee is also acting as Custodian, Paying
Agent or Transfer Agent and Certificate Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Article IX shall also be
afforded to such Custodian, Paying Agent, Transfer Agent and Certificate
Registrar.

         SECTION 9.5. Trustee Not Liable for Certificates or Contracts. The
Trustee shall make no representations as to the validity or sufficiency of this
Agreement or of the Certificates (other than its execution of Certificates on
behalf of the Trust and the certificate of authentication on the Certificates)
or of any Contract or related document. The Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity, and
enforceability of any security interest in any Financed Vehicle or any Contract,
or the perfection and priority of such a security interest or the maintenance of
any such perfection and priority, or for or with respect to the efficacy of the
Trust or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including: the existence, condition,
location, and ownership of any Financed Vehicle; the existence and
enforceability of any insurance policy thereon; the existence and contents of
any Contract or any computer or other record thereof; the validity of the
assignment of any Contract to the Trust or of any intervening assignment; the
completeness of any Contract; the performance or enforcement of any Contract;
the compliance by the Seller with any warranty or representation made under this
Agreement or in any related document and the accuracy of any such warranty or
representation prior to the Trustee's receipt of written notice of any
noncompliance therewith or any breach thereof; any investment of monies by the
Servicer or any loss resulting therefrom (it being understood that the Trustee
shall remain responsible for any Trust property that it may hold); the acts or
omissions of the Seller or any Obligor; an action of the Servicer taken in the
name of the Trustee; or any action by the Trustee taken at the instruction of
the Servicer; provided, however, that the foregoing shall not relieve the
Trustee of its obligation to perform its duties under this Agreement. Except
with respect to a claim based on the failure of the Trustee to perform its
duties under this Agreement or based on the Trustee's negligence or willful
misconduct in the performance of its duties hereunder, no recourse shall be had
for any claim based on any provision of this Agreement,


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the Certificates, or any Contract or assignment thereof against the Trustee in
its individual capacity. The Trustee shall not have any personal obligation,
liability, or duty whatsoever to any Certificateholder or any other Person with
respect to any such claim, and any such claim shall be asserted solely against
the Trust or any indemnitor who shall furnish indemnity as provided in this
Agreement. The Trustee shall not be accountable for the use or application by
the Seller of any of the Certificates or of the proceeds of such Certificates,
or for the use or application of any funds paid to the Seller in respect of the
Contracts.

         SECTION 9.6. Trustee May Own Certificates. The Trustee in its
individual or any other capacity, and any of its Affiliates, may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee, subject to the definition of the term "Certificateholder" in
Section 1.1.

         SECTION 9.7. Trustee's Fees and Expenses. The Servicer shall covenant
and agree to pay to the Trustee, and the Trustee shall be entitled to,
reasonable compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) for all services
rendered by it in the execution of the trusts created by this Agreement and in
the exercise and performance of any of the powers and duties under this
Agreement of the Trustee. Other than as included in the Trustee's compensation,
the Servicer shall pay or reimburse the Trustee upon its request for all
reasonable expenses (including, without limitation, expenses incurred in
connection with notices or other communications to Certificateholders),
disbursements, and advances (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ) incurred or made by the Trustee in accordance with this Agreement or
in defense of any action brought against it in connection with this Agreement
except any such expense, disbursement, or advance as may arise from its
negligence (other than errors in judgment) or bad faith or that is the
responsibility of Certificateholders under this Agreement. Additionally, the
Seller, pursuant to Section 6.1, and the Servicer, pursuant to Section 7.1,
respectively, shall have agreed to indemnify the Trustee with respect to certain
matters, and certain Certificateholders, pursuant to Section 9.4, shall have
agreed to indemnify the Trustee under certain circumstances. Notwithstanding the
failure of the Servicer to perform any of its obligations under this Section ,
the Trustee shall continue to perform its obligations under this Agreement. The
Servicer's covenant to pay the expenses, disbursements and advances provided for
above shall survive the termination of this Agreement.

         SECTION 9.8. Indemnity of Trustee. The Trustee and its officers,
directors, agents and employees, shall be indemnified by the Servicer and held
harmless against any loss, liability, or expense (other than any amount owing
pursuant to Section 9.7) arising out of or incurred in connection with the
acceptance or performance of the trusts and duties contained in the Agreement
including the costs and expenses of defending against any claim or liability in
connection with the exercise or performance of any of its powers and duties
hereunder to the extent that (i) the Trustee shall not have been indemnified for
such loss, liability, or expense by the Seller pursuant to Section 6.1, the
Servicer pursuant to Section 7.1, or the Certificateholders pursuant to Section
9.4; (ii) such loss, liability, or expense shall not have been incurred by
reason of the Trustee's willful misfeasance, bad faith, or negligence (except
for errors in judgment); and (iii) such loss, liability, or expense shall not
have been incurred by reason of the Trustee's breach of its representations and
warranties pursuant to Section 9.14.


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<PAGE>   76
         SECTION 9.9. Eligibility Requirements for Trustee. The Trustee under
this Agreement shall at all times be a depository institution or trust company
organized and doing business under the laws of any state or the United States of
America; authorized under such laws to exercise corporate trust powers; and
having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by federal or state authorities. If such depository
institution or trust company shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section 9.9, the combined
capital and surplus of such depository institution or trust company shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section 9.9, the Trustee
shall resign immediately in the manner and with the effect specified in Section
9.10.

         SECTION 9.10. Resignation or Removal of Trustee. The Trustee may at any
time resign and be discharged from the trusts hereby created by giving written
notice thereof to the Servicer. Upon receiving such notice of resignation, the
Servicer shall promptly appoint a successor Trustee acceptable to the Insurer by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Trustee. If no
successor Trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.

         If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.9 and shall fail to resign after written
request therefor by the Servicer with the written consent of the Insurer, or if
at any time the Trustee shall be legally unable to act, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation, or
liquidation, then the Servicer may, with the written consent of the Insurer,
remove the Trustee. If it shall remove the Trustee under the authority of the
immediately preceding sentence, the Servicer shall promptly appoint a successor
Trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor Trustee.

         If the Trustee is acting as Custodian, any resignation or removal of
the Trustee will result in the automatic termination of the Trustee's duties as
Custodian effective concurrently with such resignation or removal. Upon such
termination or removal, the Trustee shall, upon the request of the Servicer,
deliver the Contract Documents to the facilities of the successor Trustee.

         Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.10 shall
not become effective until acceptance of appointment by the successor Trustee
pursuant to Section 9.11.

         SECTION 9.11. Successor Trustee. Any successor Trustee appointed
pursuant to Section 9.10 shall execute, acknowledge, and deliver to the Servicer
and to its predecessor Trustee an instrument accepting such appointment under
this Agreement, and thereupon the resignation or removal of the predecessor
Trustee shall become effective and such successor


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<PAGE>   77
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties, and obligations of its predecessor under
this Agreement, with like effect as if originally named as Trustee. The
predecessor Trustee shall deliver to the successor Trustee all documents and
statements held by it under this Agreement, or copies thereof, at the expense of
the Servicer; and the Servicer and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Trustee all such
rights, powers, duties and obligations.

         No successor Trustee shall accept appointment as provided in this
Section 9.11 unless at the time of such acceptance such successor Trustee shall
be eligible pursuant to Section 9.9.

         Upon acceptance of appointment by a successor Trustee pursuant to this
Section 9.11, the Servicer shall mail notice of the successor of such Trustee
under this Agreement to all Holders of Certificates at their addresses as shown
in the Certificate Register. If the Servicer shall fail to mail such notice
within 10 days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Servicer.

         The respective obligations of the Seller and the Servicer described in
Sections 2.7, 3.14, 6.1, 7.1, 9.5, 9.7 and 9.8 shall survive the removal or
resignation of the Trustee as provided in this Agreement or the termination of
the Trust as provided in Section 10.1.

         No Trustee under this Agreement shall be liable for any action or
omission of any successor Trustee.

         SECTION 9.12. Merger or Consolidation of Trustee. Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to the business of the Trustee,
shall be the successor of the Trustee hereunder, provided such corporation shall
be eligible pursuant to Section 9.9, without the execution or filing of any
instrument or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.

         SECTION 9.13. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Financed Vehicle may at the time be located, the Servicer
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
to act as co-trustee, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person, in such
capacity and for the benefit of the Certificateholders, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 9.13,
such powers, duties, obligations, rights, and trusts as the Servicer and the
Trustee may consider necessary or desirable. If the Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a written
request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall


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<PAGE>   78
have the power to make such appointment. No co-trustee or separate trustee under
this Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 9.9 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 9.11.

         Each and every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:

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

                  (ii) no trustee under this Agreement shall be personally
         liable by reason of any act or omission of any other trustee under this
         Agreement; and

                  (iii) the Servicer and the Trustee acting jointly, or the
         Trustee acting alone may at any time accept the resignation of or
         remove any separate trustee or co-trustee.

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

         Any separate trustee or co-trustee may at any time, appoint the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. No such appointment shall affect the
obligations of the Trustee hereunder. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.


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<PAGE>   79
         SECTION 9.14. Representations and Warranties of Trustee. The Trustee
hereby makes the following representations and warranties on which the Seller
and Certificateholders shall rely:

         (a) the Trustee is a New York banking corporation duly organized,
validly existing, and in good standing under the laws of New York;

         (b) the Trustee has full power, authority and legal right to execute,
deliver, and perform the Agreement, and has taken all necessary action to
authorize the execution, delivery, and performance by it of the Agreement;

         (c) the execution and delivery of the Agreement and the performance by
the Trustee of its obligations under the Agreement does not violate any
provision of the Articles of Association or Bylaws of the Trustee; and

         (d) the Agreement has been duly authorized, executed and delivered by
the Trustee and shall constitute the legal, valid, and binding agreement of the
Trustee, enforceable in accordance with its terms except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to certain equitable defenses and to
the discretion of the court before which any proceeding thereof may be brought.

         SECTION 9.15. Tax Returns. The Servicer shall prepare or shall cause to
be prepared any tax returns required to be filed by the Trust and furnish to
Certificateholders all information required by the Code or the regulations
thereunder and shall remit such returns to the Trustee for signature at least
five days before such returns are due to be filed. The Trustee, upon request,
will furnish the Servicer with all such information known to the Trustee as may
be reasonably required in connection with the preparation of all tax returns of
the Trust, and shall, upon request, execute such returns. In no event shall the
Trustee in its individual capacity be liable for any liabilities, costs or
expenses of the Trust, the Certificateholders, the Seller or the Servicer
arising under any tax law or regulation, including, without limitation, federal,
state or local income or excise taxes or any other tax imposed on or measured by
income (or any interest or penalty with respect thereto or arising from any
failure to comply therewith).

         SECTION 9.16. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under the Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.

         SECTION 9.17. Suits for Enforcement. In case an Event of Default or
other default by the Servicer or the Seller hereunder shall occur and be
continuing, the Trustee, in its


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<PAGE>   80
discretion, may proceed to protect and enforce its rights and the rights of the
Certificateholders under the Agreement by a suit, action or proceeding in equity
or at law or otherwise whether for the specific performance of any covenant or
agreement contained in the Agreement or in aid of the execution of any power
granted in the Agreement or the enforcement of any other legal, equitable or
other remedy, as the Trustee, being advised by counsel, shall deem most
effectual to protect and enforce any of the rights of the Trustee or the
Certificateholders.

         SECTION 9.18. Maintenance of Office or Agency. The Trustee shall
maintain at its expense in New York, New York, an office or offices or agency or
agencies where notices and demands to or upon the Trustee in respect of the
Certificates and this Agreement may be served. The Trustee initially designates
the Corporate Trust Office as its office for such purposes. The Trustee will
give prompt written notice to the Servicer, the Paying Agent, the Transfer Agent
and Certificate Registrar, the Insurer and to Certificateholders of any change
in the location of such office or agency.


                                    ARTICLE X

                                   Termination

         SECTION 10.1. Termination of the Trust. The respective obligations and
responsibilities of the Seller, the Servicer and the Trustee created hereby and
the Trust created by this Agreement shall terminate upon the earlier of (i) the
maturity or other liquidation of the last Contract and the disposition of any
amounts received upon liquidation of any remaining Contracts in the Trust
(including the purchase of the Contracts by the Servicer pursuant to Section
10.2); (ii) (a) the payment to Certificateholders of all amounts required to be
paid to them pursuant to this Agreement and the disposition of all property held
as part of the Trust, (b) termination of the Surety Bond in accordance with its
terms and surrender of the Surety Bond to the Insurer for cancellation, (c) the
payment of all amounts owed to the Trustee under this Agreement and (d) the
payment of all amounts owed to the Insurer under the Insurance Agreement,
provided, however, that in no event shall the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the survivor of the
descendants, living on the date of this Agreement, of Joseph P. Kennedy,
formerly United States representative at the Court of St. James. The Servicer
shall promptly notify the Trustee and the Insurer of any respective termination
pursuant to this Section 10.1.

         Notice of any termination, specifying the Distribution Date upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee by letter to Certificateholders mailed not later than the 10th day
prior to the specified Distribution Date and not earlier than the 15th day of
the month prior to the month of the specified Distribution Date stating the
amount of any such final payment, and that the Record Date otherwise applicable
to such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee therein specified. The Trustee shall give such notice to the Certificate
Registrar at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Certificates, the Trustee shall cause


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to be distributed to Certificateholders amounts distributable on such
Distribution Date pursuant to Section 4.3.

         In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice, the Servicer shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates shall not have been
surrendered for cancellation, the Servicer may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to the Agreement. Any funds remaining in the Trust after exhaustion of
such remedies and after all payments to be made to the Trustee and the Insurer
shall be distributed by the Trustee to a charity designated by the Servicer.

         Notwithstanding any provision to the contrary, the Trustee shall retain
all of its rights and powers and obligations and duties under Section 8.5 in the
event of any Insolvency Proceeding and the Trustee shall be entitled to all the
protections, rights and immunities provided in Article IX in connection with any
such Insolvency Proceeding.

         SECTION 10.2. Optional Purchase of All Contracts. On each Distribution
Date as of which the Pool Factor (after giving effect to the Principal
Distribution for such Distribution Date) shall be less than .100000, the
Servicer shall have the option to purchase the corpus of the Trust at a price
equal to the Repurchase Amount plus all amounts due and owing to the Insurer
under the Insurance Agreement. To exercise such option, the Servicer shall pay
to the Trustee by deposit into the Collection Account: (1) for the benefit of
the Certificateholders, the Repurchase Amount of all Contracts that were
Outstanding at the beginning of the Collection Period ending immediately prior
to such Distribution Date, and (2) for the benefit of the Insurer, all amounts
due and owing to the Insurer pursuant to the Insurance Agreement. Such purchase
shall be deemed to have occurred on the last day of such Collection Period.


                                   ARTICLE XI

                            Miscellaneous Provisions

         SECTION 11.1. Amendment. This Agreement may be amended by the Seller,
the Servicer and the Trustee, collectively with the prior written consent of the
Insurer, but without the consent of any of the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions in the Agreement, or to add
any other provisions with respect to matters or questions arising under this
Agreement that shall not be inconsistent with the provisions of this Agreement;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder or the Insurer.

         This Agreement may also be amended from time to time by the Seller, the
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less


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<PAGE>   82
than 51% of the Pool/Pre-Funding Balance and the Insurer for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Agreement, or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Contracts or distributions that shall be
required to be made on any Certificate or (ii) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of the Holders of
all Certificates then outstanding.

         Promptly after the execution of any such amendment or consent pursuant
to the next preceding paragraph, the Trustee shall furnish written notification
of the substance of such amendment or consent to each Certificateholder.

         It shall not be necessary for the consent of Certificateholders
pursuant to this Section 11.1 to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.

         The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement or otherwise and any such amendment shall be unenforceable in its
entirety absent the execution of such amendment by the Trustee.

         SECTION 11.2.      Protection of Title to Trust.

         (a) The Servicer shall execute and file such financing statements and
cause to be executed 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 Certificateholders, the Insurer and the Trustee
under this Agreement in the Contracts and in the proceeds thereof. The Servicer
shall deliver (or cause to be delivered) to the Trustee file-stamped copies of,
or filing receipts for, any document filed as provided above, as soon as
available following such filing.

         (b) Neither the Seller nor the Servicer shall change its name,
identity, or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed by the Servicer in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Trustee and the
Insurer at least 60 days' prior written notice thereof.

         (c) The Seller and the Servicer shall give the Trustee and the Insurer
at least 60 days' prior written notice of any relocation of the principal
executive office of the Seller and the Servicer if, as a result of such
relocation, 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. The Servicer shall at all times maintain each office
from which it shall service Contracts, and its principal executive office,
within the United States of America.


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<PAGE>   83
         (d) The Servicer shall maintain or cause to be maintained accounts and
records as to each Contract accurately and in sufficient detail to permit (i)
the reader thereof to know at any time the status of such Contract, 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
Contract and the amounts from time to time deposited in or credited to the
Certificate Amount and Payahead Account in respect of such Contract.

         (e) The Servicer shall maintain or cause to be maintained its computer
systems so that, from and after the time of sale under the Agreement of the
Contracts to the Trust, the Servicer's master computer records (including any
back-up archives) that shall refer to a Contract indicate clearly that such
Contract is owned by the Trustee as trustee of the Trust. Indication of the
Trustee's ownership of a Contract shall be deleted from or modified on the
Servicer's computer systems when, and only when, the Contract shall have been
paid in full or repurchased or shall have become a Liquidated Contract.

         (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
retail installment sales contracts to any prospective purchaser, lender, or
other transferee, the Servicer shall give or cause to be given to such
prospective purchaser, lender, or other transferee computer tapes, records or
printouts (including any restored from back-up archives) that, if they shall
refer in any manner whatsoever to any Contract, shall indicate clearly that such
Contract has been sold and is owned by the Trust.

         (g) The Servicer shall permit the Trustee and the Insurer and its
agents at any time during normal business hours to inspect, audit, and make
copies of and abstracts from the Servicer's records regarding any Contract.

         (h) Upon request, the Servicer shall furnish to the Trustee and the
Insurer, within five Business Days, a list of all Contracts then held as part of
the Trust, together with a reconciliation of such list to the Schedule of
Contracts and to each of the Servicer's Certificates furnished before such
request indicating removal of Contracts from the Trust.

         (i)      The Servicer shall deliver to the Trustee and the Insurer:

                  (i) promptly after the execution and delivery of this
         Agreement and of each amendment hereto and on each Subsequent Closing
         Date, an Opinion of Counsel either (A) stating that, in the opinion of
         such Counsel, all financing statements and continuation statements have
         been executed and filed that are necessary fully to preserve and
         protect the interest of the Trustee and the Insurer in the Contracts,
         and reciting the details of such filings or referring to prior Opinions
         of Counsel in which such details are given or (B) stating that, in the
         opinion of such Counsel, 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 Cut-Off Date an Opinion of Counsel, dated as of a date during
         such 90-day period, either (A) stating that,


                                       79
<PAGE>   84
         in the opinion of such counsel, all financing statements and
         continuation statements have been executed and filed that are necessary
         fully to preserve and protect the interest of the Trustee in the
         Contracts, and reciting the details of such filings or referring to
         prior Opinions of Counsel in which such details are given or (B)
         stating that, in the opinion of such counsel, no such action shall be
         necessary to preserve and protect such interest.

         (j) The Seller shall, to the extent required by applicable law, cause
the Certificates to be registered with the Securities and Exchange Commission
pursuant to Section 12(b) or Section 12(g) of the Securities Exchange Act of
1934 within the time periods specified in such sections.

         (k) For the purpose of facilitating the execution of this Agreement and
for other purposes, this Agreement may be executed simultaneously in any number
of counterparts, each of which counterpart shall be deemed to be an original,
and all of which counterparts shall constitute but one and the same instrument.

         SECTION 11.3. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate the Agreement
or the Trust, nor entitle such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or commence any proceeding in
any court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations, and liabilities of the parties to the Agreement or any of
them.

         Except as expressly provided herein, no Certificateholder shall have
any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties to this Agreement,
nor shall anything in this Agreement set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken pursuant to any provision of this Agreement.

         No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates evidencing in the aggregate not less than 25%
of the Pool/Pre-Funding Balance with the consent of the Insurer shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee under this Agreement and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses,
and liabilities to be incurred therein or thereby, and the Trustee, for 30 days
after its receipt of such notice, request, and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; no one or
more Holders of Certificates shall have any right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb, or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holders, or to enforce any right, under this Agreement, except in the
manner in the Agreement provided in the Agreement and for the equal, ratable,
and common benefit of all


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<PAGE>   85
Certificateholders. For the protection and enforcement of the provisions of this
Section 11.3, each Certificateholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.

         SECTION 11.4. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA AND THE OBLIGATIONS, RIGHTS,
AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS EXCEPT THAT THE DUTIES OF THE TRUSTEE SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

         SECTION 11.5. Notices. All demands, notices, and communications under
the Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested, and shall be deemed to have been duly given upon
receipt (i) in the case of the Seller, at 8001 Irvine Center Drive, 5th Floor,
Irvine, CA 92618, Attention: President, facsimile 714-450-5530, (ii) in the case
of the Servicer, at 8001 Irvine Center Drive, 5th Floor, Irvine, California
92618, Attention: Regan E. Kelly, Executive Vice President, facsimile
714-450-5530, (iii) in the case of the Insurer, at 885 Third Avenue, New York,
New York 10022, Attention: Managing Director, Credit Enhancement, facsimile
(212) 755-5462, and (iv) in the case of the Trustee or the Back-up Servicer, at
the Corporate Trust Office. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Registrar. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder shall
receive such notice.

         SECTION 11.6. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.

         SECTION 11.7. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.2 and 7.2, neither the Seller
nor the Servicer may transfer or assign all, or a portion of, its rights,
obligations and duties under the Agreement unless such transfer or assignment
(i) (A) will not result in a reduction or withdrawal by Standard & Poor's or
Moody's of the rating then assigned to the Certificates and (B) the Trustee and
the Insurer have consented to such transfer or assignment, or (ii) the Insurer,
the Trustee and Holders of Certificates evidencing not less than 51% of the
Pool/Pre-Funding Balance consent thereto. Any transfer or assignment with
respect to the Servicer of all of its rights, obligations and duties will not
become effective until a successor Servicer has assumed the Servicer's rights,
duties and obligations under the Agreement. In the event of a transfer or
assignment pursuant to clause (ii) above, the Rating Agencies shall be provided
with notice of such transfer or assignment.

         SECTION 11.8. Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and,


                                       81
<PAGE>   86
upon authentication thereof by the Trustee pursuant to Section 5.2, Certificates
shall be deemed fully paid.

         SECTION 11.9. Third Party Beneficiaries. Except as otherwise
specifically provided herein with respect to the Certificateholders, the parties
to this Agreement hereby manifest their intent that no third party other than
the Insurer shall be deemed a third party beneficiary of this Agreement, and
specifically that the Obligors are not third party beneficiaries of this
Agreement.

         SECTION 11.10. Insurer Default or Insolvency. If a default under the
Surety Bond has occurred and is continuing or an Insurer Insolvency has
occurred, any provision giving the Insurer the right to direct, appoint or
consent to, approve of, or take any action (or waive any right to take action)
under this Agreement, shall be inoperative during the period of such default or
the period from and after such Insurer Insolvency and such consent or approval
shall be deemed to have been given for the purpose of such provisions; provided
that the consent of the Insurer shall be required at all times with respect to
any amendment of this Agreement pursuant to Section 11.1.

         SECTION 11.11. Tax Matters. The parties hereto intend that the Trust
shall be a grantor trust for federal and state income tax purposes and not as an
association taxable as a corporation. All provisions of this Agreement shall be
construed so as to effectuate such intent.

         This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.


                                       82
<PAGE>   87
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.

                         ONYX ACCEPTANCE FINANCIAL
                         CORPORATION,
                              as Seller


                         By:________________________________
                            Name:
                            Title:


                         ONYX ACCEPTANCE CORPORATION,
                            as Servicer


                         By:________________________________
                            Name:
                            Title:


                         BANKERS TRUST COMPANY,
                         not in its individual capacity but solely as Trustee


                         By:________________________________
                            Name:
                            Title:


                                       83
<PAGE>   88
                                    Exhibit A

                               Form of Appointment
                                  of Custodian

[Name and address of Custodian]




         Re:      Onyx Acceptance 1996-4 Grantor Trust
                  ___% Auto Receivable Pass-Through
                  Certificates, 1996-4

Dear Sirs:

         Reference is hereby made to the Pooling and Servicing Agreement (the
"Agreement") dated as of December 1, 1996 among Onyx Acceptance Corporation,
Bankers Trust Company, as Trustee and Back-up Servicer (the "Trustee"), Onyx
Acceptance Financial Corporation and you. Terms used herein which are defined in
the Agreement have the respective meanings set forth in the Agreement.

         The Trustee hereby revocably appoints you as the agent of the Trustee
to act as custodian, in accordance with the terms and provisions of the
Agreement, for the Contract Documents listed in Section 2.4 of the Agreement
relating to each Contract and the related Obligor and Financed Vehicle. Please
acknowledge your acceptance of such appointment and your agreement to act as
custodian in accordance with the terms and provisions of the Agreement by
signing below in the space indicated therefor.

         By accepting such appointment you acknowledge that the Trustee may
terminate such appointment at any time, with or without cause, by written notice
to you.

                                  Very truly yours,

                                  BANKERS TRUST COMPANY,
                                  not in its individual capacity but solely
                                  as Trustee


                                  By:________________________________
                                        Name:
                                        Title:


                                       A-1
<PAGE>   89
ACCEPTED AND AGREED:

ONYX ACCEPTANCE CORPORATION


By: __________________________
      Name:
      Title:


CONSENTED AND AGREED:

CAPITAL MARKETS ASSURANCE CORPORATION


By: __________________________
      Name:
      Title:


                                       A-2
<PAGE>   90
                                    EXHIBIT B         SEE REVERSE FOR CERTAIN
                                                      DEFINITIONS

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


                      ONYX ACCEPTANCE 1996-4 GRANTOR TRUST

            _____% AUTO LOAN PASS-THROUGH CERTIFICATE, SERIES 1996-4

evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of fixed rate Rule of 78's and Simple Interest
Method motor vehicle retail installment sale contracts secured by new and used
automobiles and light-duty trucks, sold to the Trust by Onyx Acceptance
Financial Corporation.

(This Certificate does not represent an interest in or obligation of Onyx
Acceptance Financial Corporation, Onyx Acceptance Corporation, or any of their
respective affiliates.)


Certificate No.              Final Distribution Date: ___________ 15, 200__
                                   CUSIP:  _____________________

                  THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
_________ dollar, nonassessable, fully paid, fractional undivided interest, in
the amount set forth above, in the Onyx Acceptance Grantor Trust, 1996-4 (the
"Trust") formed by Onyx Acceptance Financial Corporation (the "Seller"). The
Trust was created pursuant to a Pooling and Servicing Agreement dated as of
December 1, 1996 (the "Agreement") among the Seller, Onyx Acceptance
Corporation, as Servicer (the "Servicer"), and Bankers Trust Company, as Trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth below. This Certificate is one of the duly authorized "Certificates"
(herein called the "Certificates"). This Certificate is issued under and is
subject to the terms, provisions, and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. The property in the Trust includes:
(i) a pool of fixed rate Rule of 78's and Simple Interest Method motor vehicle
retail installment sales contracts (the "Initial Contracts") purchased from the
Seller and secured by new and used automobiles and light-duty trucks (the
"Initial Financed Vehicles"), (ii) certain documents


                                       B-1
<PAGE>   91
relating to the Initial Contracts, (iii) certain monies due thereunder on or
after the Cut-Off Date, (iv) security interests in the Initial Financed Vehicles
and the rights to receive proceeds from claims on certain insurance policies
covering the Initial Financed Vehicles or the individual Obligor under each
related Initial Contract and the Seller's right to proceeds under the Blanket
Insurance Policy, (v) all amounts on deposit in the Collection Account,
including all Eligible Investments credited thereto (but excluding investment
earnings thereon), (vi) the benefits under an irrevocable principal/interest
surety bond issued by Capital Markets Assurance Corporation (the "Insurer"),
(vii) certain rights of the Seller under the Purchase Agreement, (viii) all
right, title and interest of the Seller under the Yield Supplement Agreement,
dated as of December 1, 1996 between the Seller and Onyx, (ix) amounts on
deposit in a trust account established for the benefit of the Certificateholders
(the "Pre-Funding Account") and (x) all proceeds of the foregoing. From time to
time during the Funding Period, and as frequently as each Business Day (each
such day a "Subsequent Transfer Date"), the Trust will purchase from the Seller
with monies on deposit in the Pre-Funding Account, additional Rule of 78's
Contracts and Simple Interest Contracts (the "Subsequent Contracts"), secured by
new and used automobile and light-duty trucks (the "Subsequent Financed 
Vehicles"). As of each Subsequent Transfer Date, the Trust Estate will include
the Subsequent Contracts delivered to the Trustee on that date, certain
documents relating to the Subsequent Contracts, certain monies due under the
Subsequent Contracts after the related Subsequent Transfer Dates, security
interests in the Subsequent Financed Vehicles and the right to receive proceeds
from claims under certain insurance policies in respect of individual Subsequent
Financed Vehicles or the related Obligors.

                  Under the Agreement, there will be a monthly pro rata
distribution to the Certificateholders of record on the 15th day of each month
or, if such 15th day is not a Business Day, the next succeeding Business Day
(the "Distribution Date"), commencing on January 15, 1997, of such
Certificateholder's fractional undivided interest in all amounts allocable to
principal and interest from any applicable source described in the Agreement.
The monthly interest on each given Distribution Date shall be the product of
one-twelfth the Pass-Through Rate and the Pool/Pre-Funding Balance as of the end
of the immediately preceding Collection Period (or if the current Distribution
Date is the first Distribution Date as of the Closing Date) plus the amount of
interest previously due but not paid to Certificateholders, if any. The monthly
principal on each given Distribution Date shall be the sum of the Aggregate
Scheduled Balance Decline during the related Collection Period and, with respect
to the Final Funding Period Distribution Date, the Prepayment Amount. The
distribution is more fully described in the Agreement.

                  Distributions on this Certificate will be made by the Trustee
by check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon. Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
maintained for that purpose by the Trustee and Certificate Registrar in the
Borough of Manhattan, the City of New York.


                                       B-2
<PAGE>   92
                  Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

                  All capitalized terms used herein not otherwise defined shall
have the meaning assigned thereto in the Agreement.

                  Unless the authentication hereon shall have been executed by
an authorized officer of the Trustee or by an authenticating agent acting on
behalf of the Trustee, by manual signature, this certificate shall not entitle
the holder hereof to any benefit under the Agreement or be valid for any
purpose.

                  IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and
not in its individual capacity, has caused this Certificate to be duly executed.

                      ONYX ACCEPTANCE 1996-4 GRANTOR TRUST

                      BANKERS TRUST COMPANY, not in its individual capacity, but
                      solely as Trustee

                      By _____________________________________
                             Authorized Signatory

                  This is one of the Certificates referred to in the
within-mentioned Agreement.

                      BANKERS TRUST COMPANY, as Trustee


                      By _____________________________________
                              Authorized Signatory


                                       B-3
<PAGE>   93
                            [REVERSE OF CERTIFICATE]

                  The Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Trustee or any affiliate of any of
them. The Certificates are limited in right of payment to certain collections
and recoveries respecting the Contracts and payments under the Surety Bond, all
as more specifically set forth herein and in the Agreement. A copy of the
Agreement may be examined by any Certificateholder upon request during normal
business hours at the corporate administrative offices of the Seller currently
located at 8001 Irvine Center Drive, 5th Floor, Irvine, California 92618 and at
such other places, if any, designated by the Seller.

                  The Agreement permits, with certain exceptions therein
provided, the amendment and the modification of the rights and obligations of
the Seller and the Servicer and the rights of the Certificateholders under the
Agreement at any time by the Seller, the Servicer and the Trustee with the
consent of the Holders of Certificates evidencing in the aggregate not less than
51% of the Pool/Pre-Funding Balance and the Insurer provided, however, that no
such amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Contracts or
distributions that shall be required to be made on any Certificate or (b) reduce
the aforesaid percentage required to consent to any such amendment, without the
consent of the Holders of all Certificates then outstanding. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holder of any of the Certificates.

                  As provided in the Agreement, the transfer of this Certificate
is registrable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the offices or agencies maintained by the
Trustee in its capacity as Certificate Registrar, or by any successor
Certificate Registrar, in the Borough of Manhattan, the City of New York,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same aggregate interest
in the Trust will be issued to the designated transferee.

                  The Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof. As
provided in the Agreement, Certificates are exchangeable for new Certificates of
authorized denominations evidencing the same aggregate denomination, as
requested by the Holder surrendering the same.

                  No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge payable in connection therewith.

                  The Trustee, the Certificate Registrar, and any agent of the
Trustee or the Certificate Registrar may treat the person in whose name this
Certificate is registered as the


                                       B-4
<PAGE>   94
owner hereof for all purposes, and neither the Trustee, the Certificate
Registrar, nor any such agent shall be affected by any notice to the contrary.

                  The obligations and responsibilities created by the Agreement
and the Trust created thereby shall terminate upon the earlier of (i) the
maturity or other liquidation of the last Contract (including pursuant to the
Servicer's option to purchase the Contracts) and the disposition of any amounts
received upon liquidation of any remaining Contracts in the Trust and (ii) (a)
the payment to Certificateholders of all amounts required to be paid to them
pursuant to the Agreement and the disposition of all property held as part of
the Trust, (b) termination of the Surety Bond in accordance with its terms and
the surrender of the Surety Bond to the Insurer for cancellation, (c) the
payment of all amounts owed to the Trustee under the Agreement and (d) the
payment of all amounts owed to the Insurer under the Insurance Agreement. The
Servicer's exercise of its right to purchase all the Contracts and other
property of the Trust will effect early retirement of the Certificates; however,
such right of purchase is exercisable only as of a Distribution Date as of which
the Pool Factor was less then .100000.


                                       B-5
<PAGE>   95
                                    Exhibit C

                               Form of Surety Bond

                               DECEMBER ___, 1996


                                                    SURETY BOND NO. ____________


RE:                 ONYX ACCEPTANCE GRANTOR TRUST 1996-4      ______%
                    AUTO LOAN PASS - THROUGH CERTIFICATES, SERIES 1996-4
                    (THE "CERTIFICATES")

INSURED OBLIGATION: OBLIGATION OF ONYX ACCEPTANCE GRANTOR TRUST 1996-4 (THE
                    "TRUST") TO PAY PRINCIPAL AND INTEREST ON THE CERTIFICATES

BENEFICIARY:        BANKERS TRUST COMPANY, AS TRUSTEE OF THE TRUST (TOGETHER
                    WITH ANY SUCCESSOR TRUSTEE DULY APPOINTED AND QUALIFIED
                    UNDER THE POOLING AND SERVICING AGREEMENT AS DEFINED BELOW
                    (THE "TRUSTEE")

         CAPITAL MARKETS ASSURANCE CORPORATION ("CapMAC"), for consideration
received, hereby unconditionally and irrevocably guarantees to the Trustee,
subject only to the terms of this Principal/Interest Surety Bond (the "Surety
Bond"), payment of the Insured Obligation. CapMAC agrees to pay (a) to the
Trustee, in respect of each Distribution Date, an amount equal to the amount, if
any, by which the sum of (i) the Interest Distribution for such Distribution
Date, (ii) the Principal Distribution for such Distribution Date and (iii) the
Servicing Fee for such Distribution Date exceeds the Collection Account Amount
Available for such Distribution Date and (b) on behalf of the Trustee, an amount
equal to any Avoided Payment;

provided, however, that no payment (other than any payment made in respect of
Avoided Payments) under this Surety Bond with respect to any Distribution Date
shall exceed the Surety Bond Amount for such Distribution Date.

      Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Pooling and Servicing Agreement dated as of
December 1, 1996 among Onyx Acceptance Financial Corporation, as seller (the
"Seller"), Onyx Acceptance Corporation, as servicer (the "Servicer") and the
Trustee (the "Pooling and Servicing Agreement").

      As used herein the term "Certificate Balance" means the aggregate
principal balances of the Certificates then outstanding.


                                       C-1
<PAGE>   96
      As used herein the term "Insolvency Proceeding" means the commencement,
after the date hereof, of any bankruptcy, insolvency, readjustment of debt,
reorganization, marshalling of assets and liabilities or similar proceedings by
or against the Seller or Servicer, the commencement, after the date hereof, of
any proceedings by or against the Seller or Servicer for the winding up or
liquidation of its affairs, or the consent, after the date hereof, to the
appointment of a trustee, conservator, receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, reorganization, marshalling of assets and
liabilities or similar proceedings of or relating to the Seller or Servicer.

      As used herein the term "Servicing Fee" means, as to any Distribution
Date, the fee payable to the Servicer for services rendered during the
Collection Period ending immediately prior to such Distribution Date, which
shall equal with respect to each Contract, the product of (A) the Servicing Fee
Percent and (B) the Scheduled Balance of such Contract as of the close of the
preceding Collection Period.

      As used herein the term "Surety Bond Amount" means, the sum of (a) in the
case of the first Distribution Date, the initial Certificate Balance, or in the
case of any Distribution Date thereafter, the Certificate Balance on the
immediately preceding Distribution Date (after giving effect to the Principal
Distribution on such preceding Distribution Date), (b) the Interest Distribution
payable on such Distribution Date and (c) the Servicing Fee payable on such
Distribution Date.

      Payment of amounts hereunder shall be made in immediately available funds
on the later of (a) 11:00 a.m., New York City time, on the Business Day
immediately preceding a Distribution Date and (b) 11:00 a.m., New York City
time, on the Business Day next succeeding presentation to CapMAC (as hereinafter
provided) of a notice for payment in the form of Exhibit A hereto ("Notice for
Payment"), appropriately completed and executed by the Trustee. A Notice for
Payment under this Surety Bond may be presented to CapMAC on any Business Day
following the Servicer Report Date in respect of which the Notice for Payment is
being presented, by (a) delivery of the original Notice for Payment to CapMAC at
its address set forth below, or (b) facsimile transmission of the original
Notice for Payment to CapMAC at its facsimile number set forth below. If
presentation is made by facsimile transmission, the Trustee shall (i)
simultaneously confirm transmission by telephone to CapMAC at its telephone
number set forth below, and (ii) as soon as reasonably practicable, deliver the
original Notice for Payment to CapMAC at its address set forth below. Any Notice
for Payment received by CapMAC after 1:00 p.m., New York City time, on a
Business Day, or on any day that is not a Business Day, will be deemed to be
received by CapMAC at 9:00 a.m., New York City time, on the next succeeding
Business Day.

      Subject to the foregoing, if the payment of any amount with respect to the
Insured Obligation is voided (a "Preference Event") under any applicable
bankruptcy, insolvency, receivership or similar law in an Insolvency Proceeding,
and as a result of such Preference Event, any Certificateholder is required to
return such voided payment, or any portion of such voided payment, made in
respect of any Certificate (an "Avoided Payment"), CapMAC will pay an amount
equal to such Avoided Payment, irrevocably, absolutely and


                                       C-2
<PAGE>   97
unconditionally and without the assertion of any defenses to payment, including
fraud in inducement or fact or any other circumstances that would have the
effect of discharging a surety in law or in equity, upon payment of such
Certificateholder of such Avoided Payment and receipt by CapMAC from the Trustee
on behalf of such Certificateholder of (x) a certified copy of a final order of
a court exercising jurisdiction in such Insolvency Proceeding to the effect that
the Certificateholder is required to return any such payment or portion thereof
prior to the Termination Date of this Surety Bond because such payment was
voided under applicable law, with respect to which order the appeal period has
expired without an appeal having been filed (the "Final Order"), (y) an
assignment, substantially in the form attached hereto as Exhibit B, properly
completed and executed by such Certificateholder irrevocably assigning to CapMAC
all rights and claims of such Certificateholder relating to or arising under
such Avoided Payment, and (z) a Notice for Payment in the form of Exhibit A
hereto appropriately completed and executed by the Trustee.

      CapMAC shall make payments due in respect of Avoided Payments prior to
1:00 p.m. New York City time on the second Business Day following CapMAC's
receipt of the documents required under clauses (x) through (z) of the preceding
paragraph. Any such documents received by CapMAC after 3:00 p.m. New York City
time on any Business Day or on any day that is not a Business Day shall be
deemed to have been received by CapMAC prior to 3:00 p.m. on the next succeeding
Business Day. All payments made by CapMAC hereunder on account of any Avoided
Payment shall be made to the Trustee for the benefit of the Certificateholder
entitled to such payment.

      CapMAC hereby waives and agrees not to assert any and all rights to
require the Trustee to make demand on or to proceed against any person, party or
security prior to the Trustee demanding payment under this Surety Bond.

      No defenses, set-offs and counterclaims of any kind available to CapMAC so
as to deny payment of any amount due in respect of this Surety Bond will be
valid and CapMAC hereby waives and agrees not to assert any and all such
defenses, set-offs and counterclaims, including, without limitation, any such
rights acquired by subrogation, assignment or otherwise. Any rights of
subrogation acquired by CapMAC as a result of any payment made under this Surety
Bond shall, in all respects, be subordinate and junior in right of payment to
the prior indefeasible payment in full of all amounts due the Trustee on account
of payments due under the Certificates.

      This Surety Bond is neither transferable nor assignable, in whole or in
part, except to a successor trustee duly appointed and qualified under the
Pooling and Servicing Agreement. All notices, presentations, transmissions,
deliveries and communications made by the Trustee to CapMAC with respect to this
Surety Bond shall specifically refer to the number of this Surety Bond and shall
be made to CapMAC at:


                                       C-3
<PAGE>   98
                  Capital Markets Assurance Corporation
                  885 Third Avenue, 14th Floor
                  New York, N.Y. 10022
                  Attention: Managing Director, Credit Enhancement
                  Telephone: (212) 891-4271
                  Facsimile: (212) 755-5462

or such other address, telephone number or facsimile number as CapMAC may
designate to the Trustee in writing from time to time. Each such notice,
presentation, transmission, delivery and communication shall be effective only
upon actual receipt by CapMAC.

      The obligations of CapMAC under this Surety Bond are irrevocable, primary,
absolute and unconditional (except as expressly provided herein) and neither the
failure of the Trustee, the Seller, the Servicer or any other person to perform
any covenant or obligation in favor of CapMAC (or otherwise), nor the failure or
omission to make a demand permitted hereunder, nor the commencement of any
bankruptcy, debtor or other insolvency proceeding by or against the Trustee, the
Seller, the Servicer or any other person shall in any way affect or limit
CapMAC's obligations under this Surety Bond. If a successful action or
proceeding to enforce this Surety Bond is brought by the Trustee, the Trustee
shall be entitled to recover from CapMAC costs and expenses reasonably incurred,
including without limitation reasonable fees and expenses of counsel.

      There shall be no acceleration payment due under this Surety Bond unless
such acceleration is at the sole option of CapMAC.

      This Surety Bond and the obligations of CapMAC hereunder shall terminate
on the date (the "Termination Date") that is one year and one day following the
earlier of (a) the Final Distribution Date and (b) the date on which all amounts
required to be paid to the Certificateholders have been paid in full, provided,
that, if an Insolvency Proceeding is existing by or against the Seller or the
Servicer during such one year and one day period, then this Surety Bond and
CapMAC's obligations hereunder shall terminate on the date of the conclusion or
dismissal of such Insolvency Proceeding without continuing jurisdiction by the
court in such Insolvency Proceeding, provided, further that, and notwithstanding
anything herein to the contrary, this Surety Bond shall not terminate prior to
the date on which CapMAC has made all payments required to be made under the
terms of this Surety Bond in respect of such Avoided Payments.

      Upon any payment hereunder, in furtherance and not in limitation of
CapMAC's equitable right of subrogation and CapMAC's rights under the Insurance
Agreement, CapMAC will be subrogated to the rights of the Certificateholder in
respect of which such payment was made to receive any and all amounts due in
respect of the obligations in respect of which CapMAC has made a payment
hereunder.

      All payments made hereunder by CapMAC shall be made with CapMAC's own
funds. The payment by the Trust or CapMAC to the Trustee of any amount
guaranteed by the first paragraph of this Surety Bond, and the payment by CapMAC
of any Avoided Payment after


                                       C-4
<PAGE>   99
the occurrence of a Preference Event shall constitute "payments" for all
purposes under this Surety Bond. In no event shall any payment be made under
this Surety Bond on account of (a) the failure of the Trustee to deliver the
proceeds of any such payment to any Certificateholder or (b) the failure of any
such Certificateholder to claim any such proceeds from the Trustee.

      This Surety Bond is not covered by the property/casualty insurance fund
specified in Article Seventy-Six of the New York State insurance law.

      This Surety Bond sets forth in full the undertaking of CapMAC, and shall
not, except with the prior written consent of the Trustee or otherwise in
accordance with the express terms hereof, be modified, altered or affected by
any other agreement or instrument, including any modification or amendment
thereto and may not be canceled or revoked by CapMAC prior to the Termination
Date.

      This Surety Bond shall be returned to CapMAC by the Trustee on the
Termination Date.


      THIS SURETY BOND SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OR
THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.


IN WITNESS WHEREOF, CapMAC has caused this Surety Bond to be executed on the
date first written above.




                           CAPITAL MARKETS ASSURANCE CORPORATION



                           By__________________________________


                                       C-5
<PAGE>   100
                                    Exhibit D

                                  Form of Yield
                              Supplement Agreement



Dated as of
December 1, 1996



Onyx Acceptance Financial Corporation
8001 Irvine Center Drive, 5th Floor
Irvine, CA  92618



Gentlemen:

         We hereby confirm arrangements made as of the date hereof with you to
be effective upon (i) receipt by us of the enclosed copy of this letter
agreement (the "Yield Supplement Agreement"), executed by you, and (ii)
execution of the Pooling and Servicing Agreement referred to below and payment
of the purchase price specified thereunder. Capitalized terms used and not
otherwise defined herein shall have the meanings assigned to such terms in the
Pooling and Servicing Agreement dated as of December 1, 1996 (the "Pooling and
Servicing Agreement"), among Onyx Acceptance Corporation, as Servicer (the
"Servicer"), Onyx Acceptance Financial Corporation, as Seller (the "Seller") and
Bankers Trust Company, as Trustee.

         (a) On the Business Day preceding each Servicer Report Date we shall
notify the Seller of the Yield Supplement Amount for such Servicer Report Date.

         (b) In consideration for the Seller entering into the Pooling and
Servicing Agreement, we agree to make a payment of the Yield Supplement Amount
(as determined in accordance with the terms of the Pooling and Servicing
Agreement) to the Seller, or to the assignee of the Seller referred to in
Paragraph (i) hereof, on the Business Day prior to each Servicer Report Date.

         (c) All payments pursuant hereto shall be made by federal wire transfer
(same day) funds or in immediately available funds, to such account as the
Seller, or the assignee of the Seller referred to in Paragraph (i) hereof, may
designate in writing to Onyx, prior to the relevant Servicer Report Date.


                                       D-1
<PAGE>   101
         (d) In order to secure our obligations to pay the Yield Supplement
Amount on each Servicer Report Date, we hereby agree on the Closing Date, to
deposit the Initial Yield Supplement Reserve Account Balance into the Yield
Supplement Reserve Account.

         (e) On each Subsequent Closing Date, upon satisfaction of the
conditions specified in Section 2.1(h) of the Pooling and Servicing Agreement,
we shall be entitled to withdraw from the Yield Supplement Reserve Account the
Yield Supplement Release Amount with respect to such Subsequent Closing Date.

         (f) On the Final Funding Period Distribution Date, we shall be entitled
to withdraw from the Yield Supplement Reserve Account any remaining Yield
Supplement Release Amount relating to the Negative Carry Amount after the
payment on the Final Funding Period Distribution Date to the Certificateholders
of the Prepayment Amount.

         (g) On termination of the Pooling and Servicing Agreement pursuant to
Sections 10.1 and 10.2 thereof, we shall be entitled to withdraw from the Yield
Supplement Reserve Account all amounts on deposit therein.

         (h) Our agreements set forth in this Yield Supplement Agreement are our
primary obligations and such obligations are irrevocable, absolute and
unconditional, shall not be subject to any counterclaim, setoff or defense and
shall remain in full force and effect without regard to, and shall not be
released, discharged or in any way affected by, any circumstances or condition
whatsoever.

         (i) Pursuant to the Pooling and Servicing Agreement, the Seller will
sell, transfer, assign and convey its interest in this Yield Supplement
Agreement to the Onyx Acceptance Grantor Trust, 1996-4 (the "Trust"), and we
hereby acknowledge and consent to such sale, transfer, assignment and
conveyance. In addition, the Seller hereby agrees, for the benefit of the Trust,
that following such sale, transfer, assignment and conveyance, this Yield
Supplement Agreement shall not be amended, modified or terminated without the
consent of Bankers Trust Company, as trustee for the Trust, and Capital Markets
Assurance Corporation.

         (j) This Yield Supplement Agreement will be governed by and construed
in accordance with the internal laws of the State of California.

         (k) Except as otherwise provided herein, all notices pursuant to this
Yield Supplement Agreement shall be in writing and shall be effective upon
receipt thereof. All notices shall be directed as set forth below, or to such
other address or to the attention of such other person as the relevant party
shall have designated for such purpose in a written notice.


                                       D-2
<PAGE>   102
                  The Seller:

                  Onyx Acceptance Financial Corporation
                  8001 Irvine Center Drive - 5th Floor
                  Irvine, CA  92618
                  Attention:  Regan E. Kelly

                  The Servicer:

                  Onyx Acceptance Corporation
                  8001 Irvine Center Drive, 5th Floor
                  Irvine, CA  92618
                  Attention:  Don P. Duffy


                  (l) The Yield Supplement Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
all of which shall be deemed to be one and the same document.


                                       D-3
<PAGE>   103
         If the foregoing satisfactorily sets forth the terms and conditions of
our agreement, please indicate your acceptance thereof by signing in the space
provided below and returning to us the enclosed duplicate original of this
letter.

                                                     Very truly yours,

                                                     ONYX ACCEPTANCE CORPORATION



                                                     By:  ______________________
                                                          Name:
                                                          Title:


Agreed and accepted as of December 1, 1996.

ONYX ACCEPTANCE FINANCIAL CORPORATION



By:  _______________________________
     Name:
     Title:


                                       D-4
<PAGE>   104
                                   Exhibit E-1

                          FORM OF TRANSFER CERTIFICATE

                  Transfer Certificate, dated as of __________, 1996, delivered
pursuant to Section 2.1(c) of the Pooling and Servicing Agreement dated as of
December 1, 1996 (the "Agreement") among Onyx Acceptance Corporation, a Cali-
fornia corporation (the "Servicer"), Onyx Acceptance Financial Corporation, a
Delaware corporation (the "Seller"), and Bankers Trust Company, a New York
banking corporation, as trustee (the "Trustee"). Terms used in this Transfer
Certificate which are not defined herein have meanings assigned to such terms in
the Agreement.

                  I, ______________________________, the ____________________ of
the Seller, do hereby certify:

                  1. Attached hereto is a list of Subsequent Contracts set forth
by account number and Outstanding Principal Balance with an aggregate
Outstanding Principal Balance of $__________, all of which Contract Documents
relating thereto have been delivered to the Trustee as of the date hereof.

                  2. The aggregate Outstanding Principal Balance of all
Subsequent Contracts as of their respective Subsequent Transfer Dates delivered
to the Trustee pursuant to this Transfer Certificate and each Transfer
Certificate delivered up to the date hereof and after the Closing Date is
$_______________, which amount is less than or equal to the Original Pre-Funded
Amount.

                  3. Each of the conditions set forth in Section 2.1(c) of the
Agreement has been met as of this Subsequent Transfer Date.

                  4. The representations and warranties set forth in Section
2.2(a) and (d) of the Agreement with respect to the Seller and the Subsequent
Contracts delivered hereunder are true and correct as of this Subsequent
Transfer Date.

                  Please transfer immediately available funds by 4:00 p.m. New
York time today in the amount of $______________ to Seller in accordance with
the wire instructions below.


                                      E-1-1
<PAGE>   105
                  IN WITNESS WHEREOF, the undersigned has caused this Transfer
Certificate to be delivered to the Trustee as of the date first above written.

                                           ONYX ACCEPTANCE FINANCIAL
                                           CORPORATION

                                           By:______________________________
                                               Name:
                                               Office:

Wiring Instructions:

         Beneficiary:      OAFC
         Bank:             Wells Fargo Bank, N.A., Newport Beach, CA
         ABA#:             ______________
         Bank Acct.#:      ______________
         $ Amount:         ______________
         Notation:         Proceeds from 1996-4 Grantor Trust Pre-Funding
                           Account


                                      E-1-2
<PAGE>   106
                                   Exhibit E-2

                   FORM OF SUBSEQUENT CLOSING DATE CERTIFICATE

                  Subsequent Closing Date Certificate, dated as of __________,
1996, delivered pursuant to Section 2.1(h) of the Pooling and Servicing
Agreement dated as of December 1, 1996 (the "Agreement") among Onyx Acceptance
Corporation, a California corporation ("Servicer"), Onyx Acceptance Financial
Corporation, a Delaware corporation (the "Seller"), and Bankers Trust Company, a
New York banking corporation, as trustee (the "Trustee"). Terms used in this
Subsequent Closing Date Certificate which are not defined herein have meanings
assigned to such terms in the Agreement.

                  I, ____________________, the _______________ of the Seller, do
hereby certify:

                  1. All Contract Documents relating to each Subsequent Contract
have been delivered to the Trustee on or before the date hereof.

                  2. Attached hereto as Schedule I is a schedule setting forth
the Contract Number, date of origination, Maturity Date, Outstanding Principal
Balance and APR for each such Subsequent Contract, and additionally for Rule of
78's Contracts, the Scheduled Balance for each such contract on its respective
Due Dates and the Recomputed Yield. The Recomputed Yield and Scheduled Balance
for each such Rule of 78's Subsequent Contract was calculated in accordance with
the procedures set forth in the Agreement. Such Schedule I is a list of
Subsequent Contracts referred to in the definition of "Schedule of Contracts" in
the Agreement, and is deemed incorporated into and made a part thereof.

                  3. The aggregate Outstanding Principal Balance of all
Subsequent Contracts as of their respective Subsequent Transfer Dates delivered
to the Trustee pursuant to each Subsequent Transfer Certificate delivered on and
after the Closing Date up to the date hereof is $______________, which amount is
less than or equal to the Original Pre-Funded Amount.

                  4. The amount equal to the Additional Yield Supplement Amount
with respect to the Subsequent Contracts conveyed to the Trust and delivered to
the Trustee on each Subsequent Transfer Date has been deposited to the Yield
Supplement Reserve Account.

                  5. Each of the conditions set forth in Section 2.1(h) of the
Agreement has been met as of this Subsequent Closing Date and each of the
conditions set forth in Section 2.1(c) of the Agreement has been met as of each


                                      E-2-1
<PAGE>   107
Subsequent Transfer Date from and including the last Subsequent Closing Date (or
the Closing Date in the case of the first Subsequent Closing Date).

                  6. The representations and warranties set forth in Section
2.2(a) and (d) of the Agreement with respect to the Seller and the Subsequent
Contracts delivered hereunder are true and correct as of this Subsequent Closing
Date.

                  IN WITNESS WHEREOF, the undersigned has caused this Subsequent
Closing Date Certificate to be delivered to the Trustee as of the date first
above written.

                                       ONYX ACCEPTANCE FINANCIAL
                                       CORPORATION

                                       By:_________________________________
                                          Name:
                                          Office:


                                      E-2-2
<PAGE>   108
                                   Schedule I

                              Schedule of Contracts

                             (Subsequent Contracts)

                                   (attached)


                                      E-2-3
<PAGE>   109
                                   Schedule I

                              Schedule of Contracts

                               (Initial Contracts)

                                   (attached)