<PAGE>

                                                                    Exhibit 10.1

                                                                  EXECUTION COPY


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                              PURCHASE AGREEMENT


                                    between


                          M&I MARSHALL & ILSLEY BANK

                                      and

                   PREFERRED RECEIVABLES FUNDING CORPORATION

                                  as Sellers

                                      and

                          BOND SECURITIZATION, L.L.C.

                                 as Purchaser


                          Dated as of August 30, 2001


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<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>


<S>                                                                                                          <C>
ARTICLE I    DEFINITIONS...................................................................................   3

     SECTION 1.1.  Definitions.............................................................................   3
     SECTION 1.2.  Other Interpretive Provisions...........................................................   3

ARTICLE II   PURCHASE AND SALE OF RECEIVABLES..............................................................   4

     SECTION 2.1.  Purchase and Sale of Receivables........................................................   4
     SECTION 2.2.  Receivables Purchase Price..............................................................   5

ARTICLE III  REPRESENTATIONS AND WARRANTIES................................................................   5

     SECTION 3.1.  Representations and Warranties of Purchaser.............................................   5
     SECTION 3.3.  [Reserved]..............................................................................   8
     SECTION 3.4.  Representations and Warranties of PREFCO................................................   8

ARTICLE IV   COVENANTS OF SELLERS..........................................................................  10

     SECTION 4.1.  Protection of Title to Purchased Assets.................................................  10
     SECTION 4.2.  Liability of M&I Bank; Indemnities......................................................  11

ARTICLE V    MISCELLANEOUS PROVISIONS......................................................................  12

     SECTION 5.1.  Obligations of Sellers..................................................................  12
     SECTION 5.2.  [Reserved]..............................................................................  13
     SECTION 5.3.  Subsequent Transfer to Owner Trustee and Indenture Trustee..............................  13
     SECTION 5.4.  Amendment...............................................................................  13
     SECTION 5.5.  Waivers.................................................................................  14
     SECTION 5.6.  Notices.................................................................................  15
     SECTION 5.7.  Costs and Expenses......................................................................  15
     SECTION 5.8.  Representations to Survive..............................................................  15
     SECTION 5.9.  Governing Law...........................................................................  15
     SECTION 5.10. Counterparts............................................................................  15
     SECTION 5.11. Third Party Beneficiaries...............................................................  15
</TABLE>

EXHIBIT A      Location of Parties

SCHEDULE A     Perfection Representations, Warranties and Covenants

<PAGE>

                              PURCHASE AGREEMENT


     This PURCHASE AGREEMENT (as from time to time amended, supplemented or
otherwise modified and in effect, this "Agreement") dated as of August 30,
2001by and between M&I MARSHALL & ILSLEY BANK, a Wisconsin banking corporation
("M&I Bank"), PREFERRED RECEIVABLES FUNDING CORPORATION, a Delaware corporation
("PREFCO"; and together with M&I Bank, the "Sellers") and BOND SECURITIZATION,
L.L.C., a Delaware limited liability company (the "Purchaser").

     WHEREAS, in the regular course of its business, M&I Bank or its Affiliates
purchases Motor Vehicle Loans secured by new and used automobiles and light
trucks from motor vehicle dealers; and

     WHEREAS, M&I Bank has transferred certain interests in such Motor Vehicle
Loans to PREFCO pursuant to a financing arrangement; and

     WHEREAS, Purchaser desires to purchase from M&I Bank and PREFCO a portfolio
of Motor Vehicle Loans arising in connection with Motor Vehicle Loans purchased
by M&I Bank from Dealers and financed by PREFCO; and

     WHEREAS, M&I Bank or its Affiliates and PREFCO are willing to transfer
their interests in such Motor Vehicle Loans to Purchaser.

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


                                   ARTICLE I

                                  DEFINITIONS

     SECTION 1.1.  Definitions.  Capitalized terms are used in this Agreement as
defined in Appendix X to the Sale and Servicing Agreement among Bankers Trust
(Delaware), not in its individual capacity but solely as owner trustee of M&I
Auto Loan Trust 2001-1 (the "Owner Trustee"), Purchaser, as depositor, M&I Bank,
as servicer, and Bank One, National Association, as indenture trustee.

     SECTION 1.2.  Other Interpretive Provisions. For purposes of this
Agreement, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in this
Agreement to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles; (b) terms defined in
Article 9 of the UCC and not otherwise defined in this Agreement are used as
defined in that Article; (c) the words "hereof," "herein" and "hereunder" and
words of similar import
<PAGE>

refer to this Agreement as a whole and not to any particular provision of this
Agreement; (d) references to any Article, Section, Schedule or Exhibit are
references to Articles, Sections, Schedules and Exhibits in or to this Agreement
and references to any paragraph, subsection, clause or other subdivision within
any Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (e) the term "including" means
"including without limitation"; (f) except as otherwise expressly provided
herein, references to any law or regulation refer to that law or regulation as
amended from time to time and include any successor law or regulation; (g)
references to any Person include that Person's successors and assigns; and (h)
headings are for purposes of reference only and shall not otherwise affect the
meaning or interpretation of any provision hereof.


                                  ARTICLE II

                       PURCHASE AND SALE OF RECEIVABLES

     SECTION 2.1. Purchase and Sale of Receivables.

     Effective as of the Closing Date and immediately prior to the transactions
pursuant to the Indenture, the Sale and Servicing Agreement and the Trust
Agreement, each of M&I Bank and PREFCO do hereby sell, transfer, assign, set
over and otherwise convey to Purchaser, without recourse each of their
respective (subject to the obligations herein) (the "Purchased Assets"):

               (i)    right, title and interest in and to the Receivables, and
          all moneys received thereon after the Cutoff Date;

               (ii)   right, title and interest in the security interests in the
          Financed Vehicles granted by Obligors pursuant to the Receivables and
          any other interest in the Financed Vehicles and any other property
          that shall secure the Receivables;

               (iii)  interest in any proceeds with respect to the Receivables
          from claims on any Insurance Policies covering Financed Vehicles or
          the obligors;

               (iv)   rebates of premiums relating to Insurance Policies and
          rebates of other items such as extended warranties financed under the
          Receivables, in each case, to the extent Servicer would, in accordance
          with its customary practices, apply such amounts to the Principal
          Balance of the related Receivable;

               (v)    interest in any proceeds from (A) any Receivable
          repurchased by a Dealer, pursuant to a Dealer Agreement, as a result
          of a breach of representation or warranty in the related Dealer
          Agreement, (B) a default by an Obligor resulting in the repossession
          of the Financed Vehicle under the applicable Motor Vehicle Loan or (C)
          any Dealer Recourse or other rights relating to the Receivables under
          Dealer Agreements;

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               (vi)   right, title and interest in any instrument or document
          relating to the Receivables; and

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

     The sale, transfer, assignment, setting over and conveyance made hereunder
shall not constitute and is not intended to result in an assumption by Purchaser
of any obligation of M&I Bank or its Affiliates or PREFCO to the Obligors, the
Dealers or any other Person in connection with the Receivables and the other
assets and properties conveyed hereunder or any agreement, document or
instrument related thereto.

     It is the express intention of M&I Bank, PREFCO and Purchaser that (i) the
assignment and transfer herein contemplated constitute a sale of the Receivables
and the other Purchased Assets described above, conveying good title thereto
free an clear of any Liens, encumbrances, security interests or rights of other
Persons, from M&I Bank or PREFCO to Purchaser and (ii) the Receivables and the
other Purchased Assets described above not be a part of M&I Bank's estate or
PREFCO's estate in the event of a bankruptcy or insolvency of M&I Bank or
PREFCO, respectively. If, notwithstanding the intention of M&I Bank, PREFCO and
Purchaser, such conveyance is deemed to be a pledge in connection with a
financing or is otherwise deemed not to be a sale, M&I Bank and PREFCO hereby
grant, and the parties intend that M&I Bank and PREFCO shall have granted, to
Purchaser a first priority perfected security interest in all of M&I Bank's and
PREFCO's right, title and interest in the items of the Purchased Assets and all
proceeds of the foregoing, and that this Agreement shall constitute a security
agreement under applicable law and Purchaser shall have all of the rights and
remedies of a secured party and creditor under the UCC as in force in the
relevant jurisdictions.

     SECTION 2.2. Receivables Purchase Price. In consideration for the Purchased
Assets, Purchaser shall, on the Closing Date, pay to:

          (a)  to PREFCO, $347,000,000 in cash; and

          (b)  to M&I Bank, the Certificate.


                                  ARTICLE III

                        REPRESENTATIONS AND WARRANTIES

     SECTION 3.1. Representations and Warranties of Purchaser.  Purchaser hereby
makes the following representations and warranties upon which M&I Bank or its
Affiliates and PREFCO may rely. Such representations are made as of the
execution and delivery of this Agreement, but shall survive the sale, transfer
and assignment of the Receivables to Purchaser.

                                       3
<PAGE>

          (a)  Organization and Good Standing.  Purchaser has been duly
     organized and is validly existing as a limited liability company in good
     standing under the laws of the State of Delaware, and has full power and
     authority to execute and deliver this Agreement and to perform the terms
     and provisions hereof.

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

          (c)  No Consent Required. No approval, authorization, consent, license
     or other order or action of, or filing or registration with, any
     governmental authority, bureau or agency is required in connection with the
     execution, delivery or performance by Purchaser of this Agreement or the
     consummation of the transactions contemplated hereby.

          (d)  Binding Obligation.  This Agreement has been duly executed and
     delivered by Purchaser and this Agreement constitutes a legal, valid and
     binding obligation of Purchaser, enforceable against Purchaser in
     accordance with its terms, subject, as to enforceability, to applicable
     bankruptcy, insolvency, reorganization, conservatorship, receivership,
     liquidation and other similar laws affecting the enforcement of the rights
     of creditors generally and to equitable limitations on the availability of
     specific remedies.

          (e)  No Violation. The execution, delivery and performance by
     Purchaser of this Agreement and the consummation of the transactions
     contemplated hereby will not conflict with, result in any breach of the
     terms and provisions of, constitute (with or without notice or lapse of
     time) a material default under, or result in the creation or imposition of
     any Lien under any of its material properties pursuant to the terms of, (i)
     the limited liability company agreement of Purchaser, (ii) any material
     indenture, contract, lease, mortgage, deed of trust or other instrument or
     agreement to which Purchaser is a party or by which Purchaser is bound or
     to which any of its properties are subject, or (iii) any law, order, rule
     or regulation applicable to Purchaser of any federal or state regulatory
     body or any court, administrative agency or other governmental
     instrumentality having jurisdiction over Purchaser.

          (f)  No Proceedings. There are no proceedings or investigations
     pending, or, to the knowledge of Purchaser, threatened, before any court,
     regulatory body, administrative agency, or other tribunal or governmental
     instrumentality having jurisdiction over Purchaser or its properties: (i)
     asserting the invalidity of this Agreement or the transactions contemplated
     herein, (ii) seeking to prevent the consummation of any of the transactions
     contemplated by this Agreement, (iii) seeking any determination or ruling
     that might materially and adversely affect the performance by Purchaser of
     its obligations under, or the validity or enforceability of, this Agreement
     or the transactions

                                       4
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     contemplated herein, or (iv) that may materially and adversely affect this
     Agreement or the transactions contemplated hereby.

     SECTION 3.2. Representations and Warranties of M&I Bank.

     M&I Bank hereby makes the following representations and warranties upon
which Purchaser and PREFCO may rely.  Such representations are made as of the
execution and delivery of this Agreement, but shall survive the sale, transfer
and assignment of its interest in the Purchased Assets to Purchaser.

          (a)  Organization and Good Standing.  M&I Bank has been duly organized
     and is validly existing as a state banking corporation in good standing
     under the laws of the State of Wisconsin, with the power and authority to
     own its properties and to conduct its business as such properties are
     presently owned and such business is presently conducted and had at all
     relevant times, and has, power, authority and legal right to acquire, own
     and sell the Purchased Assets pursuant to Article II.

          (b)  Power and Authority.  M&I Bank has the power, authority and legal
     right to execute and deliver this Agreement and to carry out its terms and
     to sell and assign the Purchased Assets; and the execution, delivery and
     performance of this Agreement has been duly authorized by M&I Bank by all
     necessary corporate action.

          (c)  No Consent Required. No approval, authorization, consent, license
     or other order or action of, or filing or registration with, any
     governmental authority, bureau or agency is required in connection with the
     execution, delivery or performance by M&I of this Agreement or the
     consummation of the transactions contemplated hereby, other than the filing
     of UCC financing statements.

          (d)  Valid Sale; Binding Obligation.  M&I Bank intends this Agreement
     to effect a valid sale, transfer, and assignment of the Receivables and the
     other properties and rights included in the Purchased Assets conveyed by
     M&I Bank to Purchaser hereunder, enforceable against creditors of and
     purchasers from M&I Bank; and this Agreement constitutes a legal, valid and
     binding obligation of M&I Bank, enforceable against M&I Bank in accordance
     with its terms, subject, as to enforceability, to applicable bankruptcy,
     insolvency, reorganization, conservatorship, receivership, liquidation and
     other similar laws affecting enforcement of the rights of creditors
     generally and to equitable limitations on the availability of specific
     remedies.

          (e)  No Violation. The execution, delivery and performance by M&I Bank
     of this Agreement and the consummation of the transactions contemplated
     hereby will not conflict with, result in any material breach of any of the
     terms and provisions of, constitute (with or without notice or lapse of
     time) a material default under or result in the creation or imposition of
     any Lien upon any of its material properties pursuant to the terms of, (i)
     the articles of incorporation or bylaws of M&I Bank, (ii) any material

                                       5
<PAGE>

     indenture, contract, lease, mortgage, deed of trust or other instrument or
     agreement to which M&I Bank is a party or by which M&I Bank is bound, or
     (iii) any law, order, rule or regulation applicable to M&I Bank of any
     federal or state regulatory body or any court, administrative agency, or
     other governmental instrumentality having jurisdiction over M&I Bank.

          (f)  No Proceedings.  There are no proceedings or investigations
     pending, or, to the knowledge of M&I Bank, threatened, before any court,
     regulatory body, administrative agency, or other tribunal or governmental
     instrumentality having jurisdiction over M&I Bank or its properties: (i)
     asserting the invalidity of this Agreement or the transactions contemplated
     herein, (ii) seeking to prevent the consummation of any of the transactions
     contemplated by this Agreement, (iii) seeking any determination or ruling
     that might materially and adversely affect the performance by M&I Bank of
     its obligations under, or the validity or enforceability of, this Agreement
     or the transactions contemplated herein, or (iv) that may materially and
     adversely affect this Agreement or the transactions contemplated hereby.

          (g)  Chief Executive Office.  The chief executive office of M&I Bank
     is set forth in Exhibit A attached hereto.

          (h)  Official Record.  This Agreement and all other documents related
     hereto to which M&I Bank is a party have been approved by M&I Bank's or its
     Affiliates board of directors, loan committee or executive committee, which
     approval is reflected in the minutes of such board or committee and shall
     continuously from time to time of each such document's execution, be
     maintained as an official record of M&I Bank.

          (i)  Perfection Representations. The Perfection Representations shall
     be a part of this Agreement.

     SECTION 3.3. [Reserved].

     SECTION 3.4. Representations and Warranties of PREFCO.  PREFCO hereby makes
the following representations and warranties upon which Purchaser and M&I Bank
may rely.  Such representations are made as of the execution and delivery of
this Agreement, but shall survive the sale, transfer and assignment of its
interest in the Purchased Assets to Purchaser.

          (a)  Organization and Good Standing.  PREFCO has been duly organized
     and is validly existing as a corporation in good standing under the laws of
     Delaware, with the power and authority to own its properties and to conduct
     its business as such properties are presently owned and such business is
     presently conducted and had at all relevant times, and has, power,
     authority and legal right to acquire, own and sell the Purchased Assets
     pursuant to Article II.

                                       6
<PAGE>

          (b)  Power and Authority.  PREFCO has the power, authority and legal
     right to execute and deliver this Agreement and to carry out its terms and
     to sell and assign the Purchased Assets; and the execution, delivery and
     performance of this Agreement has been duly authorized by PREFCO by all
     necessary corporate action.

          (c)  No Consent Required. No approval, authorization, consent, license
     or other order or action of, or filing or registration with, any
     governmental authority, bureau or agency is required in connection with the
     execution, delivery or performance by PREFCO of this Agreement or the
     consummation of the transactions contemplated hereby, other than the filing
     of UCC financing statements.

          (d)  Valid Sale; Binding Obligation.  PREFCO intends this Agreement to
     effect a valid sale, transfer, and assignment of the Receivables and the
     other properties and rights included in the Purchased Assets conveyed by
     PREFCO to Purchaser hereunder, enforceable against creditors of and
     purchasers from PREFCO; and this Agreement constitutes a legal, valid and
     binding obligation of PREFCO, enforceable against PREFCO in accordance with
     its terms, subject, as to enforceability, to applicable bankruptcy,
     insolvency, reorganization, conservatorship, receivership, liquidation and
     other similar laws affecting enforcement of the rights of creditors
     generally and to equitable limitations on the availability of specific
     remedies.

          (e)  No Violation.  The execution, delivery and performance by PREFCO
     of this Agreement and the consummation of the transactions contemplated
     hereby will not conflict with, result in any material breach of any of the
     terms and provisions of, constitute (with or without notice or lapse of
     time) a material default under or result in the creation or imposition of
     any Lien upon any of its material properties pursuant to the terms of, (i)
     the certificate of incorporation or bylaws of PREFCO, (ii) any material
     indenture, contract, lease, mortgage, deed of trust or other instrument or
     agreement to which PREFCO is a party or by which PREFCO is bound, or (iii)
     any law, order, rule or regulation applicable to PREFCO of any federal or
     state regulatory body or any court, administrative agency, or other
     governmental instrumentality having jurisdiction over PREFCO.

          (f)  No Proceedings. There are no proceedings or investigations
     pending, or, to the knowledge of PREFCO, threatened, before any court,
     regulatory body, administrative agency, or other tribunal or governmental
     instrumentality having jurisdiction over PREFCO or its properties: (i)
     asserting the invalidity of this Agreement or the transactions contemplated
     herein, (ii) seeking to prevent the consummation of any of the transactions
     contemplated by this Agreement, (iii) seeking any determination or ruling
     that might materially and adversely affect the performance by PREFCO of its
     obligations under, or the validity or enforceability of, this Agreement or
     the transactions contemplated herein, or (iv) that may materially and
     adversely affect this Agreement or the transactions contemplated hereby.

                                       7
<PAGE>

          (g)  Chief Executive Office.  The chief executive office of PREFCO is
     set forth in Exhibit A attached hereto.


                                  ARTICLE IV

                             COVENANTS OF SELLERS

     The M&I Bank and PREFCO covenant and agree with Purchaser as follows:

     SECTION 4.1. Protection of Title to Purchased Assets. M&I Bank 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
Purchaser, Owner Trustee and Indenture Trustee in the Receivables and the
proceeds thereof. M&I Bank shall deliver (or cause to be delivered) to Purchaser
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.

     (b)  Neither M&I Bank nor PREFCO shall change its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of (S) 9-507 of the UCC, unless it shall
have given Purchaser, Owner Trustee and Indenture Trustee at least 30 days'
prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.

     (c)  Sellers shall give Purchaser, Owner Trustee and Indenture Trustee at
least 60 days' prior written notice of any relocation of its principal executive
office 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 and shall promptly file
any such amendment or new financing statement.

     (d)  M&I Bank or its Affiliates shall maintain its computer systems
relating to installment loan recordkeeping so that, from and after the time of
sale under this Agreement of its Receivables, M&I Bank's or its Affiliate's
master computer records (including any backup archives) that refer to a
Receivable shall indicate clearly the interest of Purchaser, Owner Trustee and
Indenture Trustee in such Receivable and that such Receivable has been sold to
Purchaser and by Purchaser to Owner Trustee and is owned by Owner Trustee and
has been pledged to Indenture Trustee pursuant to the Indenture. Indication of
Purchaser's, Owner Trustee's and Indenture Trustee's interest in a Receivable
shall be deleted from or modified on M&I Bank's or its Affiliate's computer
systems when, and only when, the related Receivable shall have been paid in full
or purchased by Servicer.

     (e)  If at any time M&I Bank or its Affiliates shall propose to sell, grant
a security interest in or otherwise transfer any interest in automotive
receivables to any prospective

                                       8
<PAGE>

purchaser, lender or other transferee, M&I Bank or its Affiliates shall give or
cause to be given to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold to Purchaser and then
sold by Purchaser to Owner Trustee and pledged to Indenture Trustee.

     (f)  M&I Bank shall, upon receipt by M&I Bank of reasonable prior notice,
permit Purchaser, Owner Trustee and Indenture Trustee, and their respective
agents at any time during normal business hours to inspect, audit and make
copies of and abstracts from M&I Bank's or its Affiliate's records regarding any
Receivable.

     (g)  Upon request at any time, Purchaser, Owner Trustee or Indenture
Trustee shall have reasonable grounds to believe that such request is necessary
in connection with the performance of their duties under this Agreement, M&I
Bank or its Affiliates shall furnish or cause to be furnished to Purchaser,
Owner Trustee and Indenture Trustee within 30 Business Days, a list of all
Receivables (by contract number and name of Obligor) conveyed to Purchaser
hereunder and then owned by Owner Trustee and pledged to Indenture Trustee,
together with a reconciliation of such list to the Schedule of Receivables and
to each of Servicer's Reports furnished before such request indicating removal
of Receivables from Owner Trustee.

     SECTION 4.2. Liability of M&I Bank; Indemnities. M&I Bank shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by M&I Bank or its Affiliates under this Agreement.

          (a)  M&I Bank shall indemnify, defend and hold harmless Purchaser,
     Owner Trustee (individually and in its capacity as such) and Indenture
     Trustee (individually and in its capacity as such) and their respective
     officers, directors, employees and agents from and against any taxes that
     may at any time be asserted against any such Person with respect to, and on
     the date of, the sale of the Receivables to Purchaser, including any sales,
     gross receipts, general corporation, tangible personal property, privilege
     or license taxes (but, not including any taxes asserted with respect to
     Federal or other income taxes arising out of this Agreement and the other
     Basic Documents) and costs and expenses in defending against the same.

          (b)  M&I Bank shall indemnify, defend and hold harmless Purchaser,
     Owner Trustee (individually and in its capacity as such), Indenture Trustee
     (individually and in its capacity as such), the Certificateholders, the
     Noteholders and the officers, directors, employees and agents of Purchaser,
     Owner Trustee and Indenture Trustee from and against any and all costs,
     expenses, losses, claims, damages and liabilities to the extent arising out
     of, or imposed upon such Person through or as a result of (i) M&I Bank's or
     its Affiliates willful misfeasance, bad faith or gross negligence in the
     performance of its duties under this Agreement or any other Basic Document,
     (ii) the failure of any Receivable conveyed by M&I Bank to Purchaser
     hereunder, or the sale of the related Financed Vehicle, to comply with all
     requirements of applicable law, (iii) any breach of


                                       9
<PAGE>

     any of M&I Bank's representations, warranties or covenants contained herein
     or in any other Basic Document; provided, however, any indemnification
     amounts owed pursuant to this Section 4.2 with respect of a Receivable
     shall give effect to and not be duplicative of the Purchase Amounts paid by
     M&I Bank pursuant to Section 3.2 of the Sale and Servicing Agreement, and
     (iv) the use, ownership or operation by M&I Bank or any of its Affiliates
     of a Financed Vehicle prior to the Cutoff Date.

Indemnification under this Section shall survive the termination of this
Agreement or any other Basic Document and the resignation or removal of Owner
Trustee or Indenture Trustee and shall include reasonable fees and expenses of
counsel and other expenses of litigation.  If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any Person in respect of which indemnity may be
sought pursuant to this Section, such Person (the "Indemnified Person") shall
promptly notify M&I Bank in writing, and M&I Bank, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others M&I Bank
designates in such proceeding and shall pay the reasonable fees and expenses of
such counsel related to such proceeding.  M&I Bank shall not be liable for any
settlement of any claim or proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
M&I Bank agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment.  M&I Bank shall not, without
the prior written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.  If M&I Bank shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter shall collect any of such amounts from others, such
Person shall promptly repay such amounts to M&I Bank, without interest.


                                   ARTICLE V

                           MISCELLANEOUS PROVISIONS

     SECTION 5.1. Obligations of Sellers. The obligations of Sellers under this
Agreement shall not be affected by reason of any invalidity, illegality or
irregularity of any Receivable.

     SECTION 5.2. [Reserved].

     SECTION 5.3.  Subsequent Transfer to Owner Trustee and Indenture Trustee.
Sellers acknowledge that:

            (a) Purchaser will, pursuant to the Sale and Servicing Agreement,
     sell the Receivables to Owner Trustee and assign its rights under this
     Agreement to Owner

                                      10
<PAGE>

     Trustee for the benefit of the Noteholders and the Certificateholders, and
     that the representations and warranties contained in this Agreement and the
     rights of Purchaser under [Section 3.4] hereof are intended to benefit
     Owner Trustee, the Noteholders and the Certificateholders. Sellers hereby
     consent to such sale and assignment.

            (b) Owner Trustee will, pursuant to the Indenture, pledge the
     Receivables and its rights under this Agreement to Indenture Trustee for
     the benefit of the Noteholders, and the representations and warranties
     contained in this Agreement and the rights of Purchaser under this
     Agreement are intended to benefit Indenture Trustee and the Noteholders.
     The Sellers hereby consent to such pledge.

     SECTION 5.4. Amendment. (a) This Agreement may be amended by M&I Bank,
PREFCO and Purchaser, with the consent of Owner Trustee and Indenture Trustee
(which consent may not be unreasonably withheld), but without the consent of any
of the Noteholders or the Certificateholders:

            (i)    to cure any ambiguity or defect, to correct or supplement any
     provisions in this Agreement or for the purpose of adding any provisions to
     or changing in any manner or eliminating any of the provisions in this
     Agreement; provided that such action shall not adversely affect in any
     material respect the interests of any Noteholder or Certificateholder;

            (ii)   (A) to add, modify or eliminate such provisions as may be
     necessary or advisable in order to enable all or a portion of M&I Auto Loan
     Trust 2001-1 to qualify as, and to permit an election to be made to cause
     all or a portion of M&I Auto Loan Trust 2001-1 to be treated as, a
     "financial asset securitization investment trust" under the Code, and (B)
     in connection with any such election, to modify or eliminate existing
     provisions set forth in this Agreement relating to the intended federal
     income tax treatment of the Notes or Certificates and the Trust in the
     absence of the election; it being a condition to any such amendment that
     the Rating Agency Condition shall have been met; and

            (iii)  to add, modify or eliminate such provisions as may be
     necessary or advisable in order to enable (a) the transfer to Owner Trustee
     of all or any portion of the Receivables to be recognized as a sale under
     GAAP by Purchaser to the Trust, (b) the Trust to avoid becoming a member of
     Purchaser's consolidated group under GAAP or (c) M&I Bank or Purchaser, or
     any of their Affiliates, to otherwise comply with or obtain more favorable
     treatment under any law or regulation or any accounting rule or principle;
     it being a condition to any such amendment that the Rating Agency condition
     shall have been met.

     (b)    This Agreement may also be amended from time to time by M&I Bank,
PREFCO and Purchaser, with the consent of Servicer, Owner Trustee and Indenture
Trustee, the consent of the Holders of Notes evidencing not less than a majority
of the Outstanding Amount of the Notes and the consent of the Holders of
Certificates evidencing not less than a majority of

                                      11
<PAGE>

the Certificate Percentage Interests for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement; provided 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 Receivables or distributions that shall be required to be made for
the benefit of the Noteholders or the Certificateholder or (ii) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Percentage Interests, the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes and
the Holders of all the outstanding Certificate of each class affected thereby.

     (c)    Prior to the execution of any such amendment or consent, Purchaser
shall furnish written notification of the substance of such amendment or consent
to each Rating Agency, Owner Trustee, and Indenture Trustee. Promptly after the
execution of any such amendment or consent, Purchaser shall furnish written
notification of the substance of such amendment or consent to each Noteholder,
Certificateholder, Owner Trustee and Indenture Trustee.

     (d)    It shall not be necessary for the consent of Certificateholder or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.

     (e)    Prior to the execution of any amendment to this Agreement, Owner
Trustee and Indenture Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied.  Owner Trustee
and Indenture Trustee may, but shall not be obligated to, enter into any such
amendment which affects Owner Trustee's or Indenture Trustee's, as applicable,
own rights, duties or immunities under this Agreement or otherwise.

     SECTION 5.5.  Waivers. No failure or delay on the part of Purchaser in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other or further exercise thereof or the exercise
of any other power, right or remedy.

     SECTION 5.6.  Notices. All demands, notices and communications pursuant to
this Agreement to either party shall be in writing, personally delivered, or
sent by telecopier, overnight mail or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt at the
address set forth in Exhibit A attached hereto or at such other address as may
be designated by it by notice to the other party.

     SECTION 5.7   Costs and Expenses. M&I Bank will pay all expenses incident
to the performance of its obligations under this Agreement and all expenses in
connection with the perfection as against third parties of Purchaser's right,
title and interest in and to the Receivables

                                      12
<PAGE>

and Purchaser agrees to pay expenses incident to the performance of its
obligations under this Agreement.

     SECTION 5.8.  Representations to Survive. The respective agreements,
representations, warranties and other statements by M&I Bank, PREFCO and
Purchaser set forth in or made pursuant to this Agreement shall remain in full
force and effect and will survive the Closing Date and any sale, transfer or
assignment of the Receivables by Purchaser.

     SECTION 5.9.  Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     SECTION 5.10. Counterparts. This Agreement may be executed in two or more
counterparts and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.

     SECTION 5.11. Third Party Beneficiaries. Each of Owner Trustee
(individually and in its capacity as such), Indenture Trustee (individually and
in its capacity as such) and the other Persons referred to in Section 4.2 is an
intended third party beneficiary of the indemnities of M&I Bank set forth in
Section 4.2 and the other provisions of this Agreement in favor of such Persons.
It is acknowledged and agreed that such indemnities and other provisions may be
enforced by or on behalf of such Persons against M&I Bank to the same extent as
if it were a party hereto.


                           [SIGNATURE PAGES FOLLOW]

                                      13
<PAGE>

     IN WITNESS WHEREOF, the parties hereby have caused this Purchase Agreement
to be executed by their respective officers thereunto duly authorized as of the
date and year first above written.


                                      M&I MARSHALL & ILSLEY BANK, as Seller


                                      By: /s/ Donald H. Wilson
                                         ----------------------------------
                                      Name:  Donald H. Wilson
                                      Title: Senior Vice President

                                      14
<PAGE>

                                      PREFERRED RECEIVABLES FUNDING
                                      CORPORATION, as Seller


                                      By: /s/ Mary L. Brady
                                         ----------------------------
                                      Name:  Mary L. Brady
                                      Title: Vice President

                                      15
<PAGE>

                                  BOND SECURITIZATION, L.L.C., as Purchaser


                                  By: /s/ James R. Pomposelli
                                     --------------------------------------
                                  Name:  James R. Pomposelli
                                  Title: President

                                      16
<PAGE>

                                                                       EXHIBIT A


                              LOCATION OF PARTIES


M&I MARSHALL & ILSLEY BANK

Address for Notice:

770 North Water Street NW5
Milwaukee, Wisconsin 53202
Attention: Doug Howe



PREFERRED RECEIVABLES FUNDING CORPORATION

Address for Notice:

1 Bank One Plaza
Chicago, Illinois 60670



BOND SECURITIZATION, L.L.C.

Address for Notice:

1 Bank One Plaza
Chicago, Illinois 60670
<PAGE>

                                                                      SCHEDULE A


             PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS


     In addition to the representations, warranties and covenants contained in
the Purchase Agreement, M&I Bank hereby represents, warrants, and covenants to
Purchaser as to itself as follows on the Closing Date and on each Payment Date
thereafter:

     1.   The Purchase Agreement creates a valid and continuing security
interest (as defined in UCC Section 9-102) in the Receivables in favor of
Depositor, which security interest is prior to all other Liens, and is
enforceable as such as against creditors of and purchasers from M&I Bank and
PREFCO .

     2.   The Receivables constitute "tangible chattel paper" within the meaning
of UCC Section 9-102.

     3.   M&I Bank has taken all steps necessary to perfect its security
interest against the Obligors in the property securing the Receivables that
constitute chattel paper.

     4.   M&I Bank owns and has good and marketable title to the Receivables
free and clear of any Lien, claim or encumbrance of any Person, excepting only
Liens for taxes, assessments or similar governmental charges or levies incurred
in the ordinary course of business that are not yet due and payable or as to
which any applicable grace period shall not have expired, or that are being
contested in good faith by proper proceedings and for which adequate reserves
have been established, but only so long as foreclosure with respect to such a
Lien is not imminent and the use and value of the property to which the Lien
attaches is not impaired during the pendency of such proceeding.

     5.   Servicer has caused or will have caused, within ten days after the
effective date of the Indenture, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the sale of the Receivables from M&I Bank and
PREFCO to Purchaser, the transfer and sale of the Receivables from Purchaser to
Owner Trustee, and the security interest in the Receivables granted to Indenture
Trustee under the Indenture.

     6.   With respect to Receivables that constitute tangible chattel paper,
such tangible chattel paper is in the possession of the Custodian and Indenture
Trustee has received a written acknowledgment from the Custodian that the
Custodian is holding such tangible chattel paper solely on behalf and for the
benefit of Indenture Trustee.

     7.   Servicer has not authorized the filing of, or is aware of, any
financing statements against either PREFCO, M&I Bank, Purchaser or Servicer that
include a description
<PAGE>

of collateral covering the Receivables, the Purchased Assets and proceeds
related thereto other than any financing statement (i) relating to the sale of
Receivables by M&I Bank or its Affiliates and PREFCO to Purchaser under the
Purchase Agreement, (ii) relating to the sale of Receivables by Purchaser to
Owner Trustee under the Sale and Servicing Agreement, (iii) relating to the
security interest granted to Indenture Trustee under the Indenture, or (iv) that
has been terminated.

     8.   Servicer is not aware of any judgment, ERISA or tax Lien filings
against either PREFCO, M&I Bank, Purchaser or Servicer.

     9.   None of the tangible chattel paper that constitute or evidence the
Receivables has any marks or notations indicating that they have been pledged,
assigned or otherwise conveyed to any Person other than Indenture Trustee.

     10.  Survival of Perfection Representations.  Notwithstanding any other
          --------------------------------------
provision of the Purchase Agreement, the Sale and Servicing Agreement, the
Indenture or any other Basic Document, the Perfection Representations contained
in this Schedule shall be continuing, and remain in full force and effect
(notwithstanding any replacement of Servicer or termination of Servicer's rights
to act as such), until such time as all obligations under the Purchase
Agreement, the Sale and Servicing Agreement and the Indenture have been finally
and fully paid and performed.

     11.  No Waiver.  The parties hereto: (i) shall not, without obtaining a
          ---------
confirmation of the then-current rating of the Notes, waive any of the
Perfection Representations; (ii) shall provide the Ratings Agencies with prompt
written notice of any breach of the Perfection Representations; and (iii) shall
not, without obtaining a confirmation of the then-current rating of the Notes
(as determined after any adjustment or withdrawal of the ratings following
notice of such breach), waive a breach of any of the Perfection Representations.