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                                                                  EXHIBIT 10.126

                               SERVICING AGREEMENT


         This SERVICING AGREEMENT, dated as of February 4, 2000, is by and
between NATIONAL AUTO FINANCE COMPANY, INC., a Delaware corporation, as Servicer
("Servicer" or "NAFI"), and NUVELL CREDIT CORPORATION, a Delaware corporation
("Owner"), as owner of certain retail installment sales contracts related to the
sale of automobiles and/or light trucks (collectively, "Automobiles"), which
have been purchased by the Owner from NAFI.

         WHEREAS, Owner is engaged in the business of purchasing retail
installment sales contracts related to the sale of Automobiles from automobile
dealers and finance companies;

         WHEREAS, NAFI is engaged in the business of, among other things, making
and extending credit on Automobiles, purchasing retail installment sales
contracts from automobile dealers and servicing the contracts arising with
respect thereto;

         WHEREAS, NAFI, as the "Seller," and the Owner, as the "Purchaser," have
entered into that certain Contract Sale Agreement dated as of the date of this
Servicing Agreement, pursuant to which NAFI has agreed to sell, and the Owner
has agreed to purchase, "Eligible Program Contracts" purchased by NAFI from
automobile dealers; and

         WHEREAS, the Owner desires to engage NAFI to provide certain collection
and administration services with respect to the "Sold Program Contracts"
purchased by the Owner from NAFI pursuant to said Contract Sale Agreement.

         NOW, THEREFORE, in consideration of the premises, the mutual agreements
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties intending to be
legally bound, mutually agree with each other as follows:


                                    ARTICLE I
                                   DEFINITIONS

1.1      DEFINITIONS.

         "ADVERSE CLAIM" means a claim of ownership or any lien, security
interest, title retention, trust or other charge or encumbrance, either legal or
in equity, or other type of preferential arrangement having the effect of a lien
or security interest upon or with respect to the


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Sold Program Contracts or the Financed Vehicles other than in favor of the Owner
with respect to the Sale Agreement.

         "AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such specified Person. For the purposes 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" and "controlled" have meanings correlative to the
foregoing.

         "AGREEMENT" means this Servicing Agreement, including any exhibits or
schedules hereto and all amendments hereof and hereto.

         "AUTOMOBILE" means any new or used automobile or light-duty truck, the
purchase of which an Obligor financed pursuant to a Contract.

         "BUSINESS COMBINATION" means any one or more of the following events or
actions or any event or action with substantially similar effects:

                  (1) The sale, exchange, lease, transfer or other disposition
         to or with any Person and/or any of its Affiliates by the Servicer (in
         a single transaction or in a series of related transactions) of all or
         substantially all, or any substantial part, of its or their assets or
         businesses or a change in control of the Servicer;

                  (2) Any merger, consolidation or purchase and/or assumption
         ("P&A") of assets and/or liabilities of the Servicer into or with
         another Person and/or any of its Affiliates, where the Servicer is not
         the surviving entity in such merger or consolidation or a change in
         control of the Servicer; and

                  (3) The adoption of any plan or proposal of partial or
         complete liquidation, dissolution, spinoff, splitoff or splitup of the
         Servicer.

As used in this definition, a "series of related transactions" shall be deemed
to include a series of transactions with the same Person considered together
with all Affiliates of such Person.

         "BUSINESS DAY" means any day other than a Saturday or a Sunday, or
another day on which banks in the States of Arkansas, Florida or Tennessee are
required, or authorized by law, to close.

         "CERTIFICATE OF TITLE" means the actual motor vehicle title in question
or the application therefor pending issuance of the actual title; alternatively,
in those certain states whose law requires or contemplates that the original of
the actual motor vehicle title be possessed by the Obligor, then, in lieu of the
actual title, "Certificate of Title" shall mean such duplicate titles,



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certificates or other documents as are permitted, required and/or contemplated
to be possessed by the secured party under such state's laws and/or procedures
or applications therefor pending issuance of the appropriate document.

         "CLOSING DATE" means the first date on which the Owner shall purchase
Sold Program Contracts from NAFI pursuant to the Sale Agreement.

         "COLLECTIONS ACCOUNT" means a separate interest-bearing account
established in the name of the Owner at a federally-insured depository
institution (the Lockbox Bank), into which shall be deposited all payments of
principal and interest made by Obligors on the Contracts and all proceeds
received with respect to the Financed Vehicles and other collateral securing the
Contracts.

         "CONTRACT FILE" means, as to each Contract, (a) a copy of the executed
original of the Contract, (b) the original credit application fully executed by
each Obligor, (c) the credit information and reports relating to the Obligor
(including verifications of income, employment and residence), (d) a copy of the
original Certificate of Title (or application therefor), or other legal evidence
of title, (e) evidence of the insurance policies required to be obtained by the
Servicer from the Obligor pursuant to Section 6.6 of this Agreement, (f) all
applicable service contracts and credit life or credit accident and disability
insurance policies and agreements, (g) the odometer statement fully completed
and signed or other evidence of mileage of the Financed Vehicle, (h) all
applicable assignments relating to the Contract, and (i) any and all other
documents and records that Servicer shall receive, create or keep on file or in
computer media, in accordance with its customary procedures, relating to the
origination, administration, collection and servicing of such Contract or the
related Obligor or Financed Vehicle.

         "CONTRACTS" means Sold Program Contracts that are serviced by the
Servicer pursuant to this Agreement.

         "DEALER" means a franchise automobile dealer, an independent automobile
dealer described in the Sale Agreement, or an Affiliate of any such automobile
dealer.

         "DEBOARD" means, whether with respect to an individual Contract, group
of Contracts or all Contracts being serviced pursuant to this Agreement,
deactivation of all electronic records related to such Contracts on the
Servicer's System.

         "DEBOARDING DATE" means the date specified by the Owner in the
Deboarding Notice, by which date all Contracts so designated by the Owner are to
be Deboarded, or with respect to Contracts that are subject to a Total Reduction
Event, the date on which such Contracts are required to be Deboarded pursuant to
Section 6.10(a) of this Agreement.

         "DEBOARDING NOTICE" means the written notice provided by the Owner to
the Servicer stating that the Servicer must Deboard the Contracts so designated
in the notice or in a schedule accompanying such notice.



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         "DEBOARDING PROCESS" means the process defined in Section 6.10(b) of
this Agreement.

         "DEBT" of a party means (a) indebtedness for borrowed money, (b)
obligations evidenced by bonds, debentures, notes or other similar instruments,
(c) obligations to pay the deferred purchase price of property or services, (d)
obligations as lessee under leases which have been or should be, in accordance
with generally accepted accounting principles, recorded as capital leases, (e)
obligations secured by any lien or security interest granted by a party, even
though such party has not assumed or become liable for the payment of such
obligations, (f) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire or
otherwise to ensure a creditor against loss in respect of indebtedness or
obligations of others of the kinds referred to in clause (a) through (e) above,
and (g) liabilities in respect of unfunded vested benefits under plans covered
by the ERISA, as amended, and regulations promulgated thereunder.

         "DEFAULT RATIO" means, as of any date of determination and for any
portfolio of Contracts for which such is being determined, a fraction (a) the
numerator of which is equal to the aggregate unpaid principal balance of all
Defaulted Contracts included in such portfolio, and (b) the denominator of which
is equal to the aggregate original principal balance of all Contracts included
in such portfolio.

         "DEFAULTED CONTRACT" means a Contract (i) for which all or any part of
any Scheduled Payment is due and unpaid for one hundred twenty (120) days or
more after the due date of such Scheduled Payment; (ii) for which, the Financed
Vehicle securing such Contract is subject to surrender or repossession; (iii)
which has been liquidated by Servicer through the sale of the Financed Vehicle;
(iv) the Obligor of which is in default of any of the contractual requirements
(not including the installment payment requirements and obligations) of such
Contract, including, but not limited to, the requirement to provide insurance to
cover the Financed Vehicle; (v) neither the Obligor nor the Financed Vehicle can
be located by the Servicer, after using reasonable efforts to learn the
whereabouts of the Obligor and the Financed Vehicle; or (vi) the Obligor of
which is known by Owner or Servicer to have died or is a party to a proceeding
under any bankruptcy, insolvency or other debtor relief laws, other than as a
creditor or claimant.

         "DEFICIENCY BALANCE RECEIVABLE" means a Contract for which the Servicer
has determined a deficiency balance, or which is classified as a Deficiency
Balance Receivable pursuant to the request of the Owner, and which shall be
collected by the Servicer pursuant to Section 6.15 of this Agreement.

         "DELINQUENCY RATIO" means, as of any date of determination and for any
portfolio of Contracts for which such is being determined, a fraction (a) the
numerator of which is equal to the aggregate unpaid principal balance of all
Contracts included in such portfolio, not including Defaulted Contracts, that
involve a Delinquent Obligor, and (b) the denominator of which is equal to




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the aggregate unpaid principal balance of all Contracts, not including Defaulted
Contracts, included in such portfolio.

         "DELINQUENT OBLIGOR" means with respect to any Contract, the Obligor of
such Contract that is delinquent at least thirty-one (31) days with respect to
any Scheduled Payment, or part thereof, such delinquency to be determined
without giving effect to (i) any payments made other than by the Obligor or (ii)
any grace period permitted by the related Contract.

         "ELECTRONIC CONTRACT INFORMATION" means, as to each Contract, the
applicant information provided by the applicant and retained on electronic
medium, all electronically transmitted documents and information provided by an
applicant to a Dealer, all of which may be retained and transmitted by
electronic means to Servicer, and the following information with respect to each
such Contract: (a) the original Amount Financed, (b) the unpaid principal
balance, (c) the amount of each monthly payment due from the Obligor, (d) the
APR (calculated in accordance with the Contract), (e) the Contract's origination
date, (f) the date on which in each month the Scheduled Payment is due, (g) the
Contract's original term in months, (h) the next payment due date, (i) the
number of days delinquent, if applicable, (j) the accrued and unpaid interest or
finance charge of such Contract, (k) Dealer participation, if any, paid or to be
paid to a Dealer, (l) the late payment fee and NSF fee applicable to such
Contract, (m) the effective Buy Rate applicable to such Contract, (n) the credit
quality and/or classification of such Contract, in accordance with NAFI's
Contract Finance Program Guidelines as defined in the Sale Agreement, (o) the
number of times the due date for any Scheduled Payment has been extended or
deferred by the Servicer, (p) the delinquency history of the Contract, (q) the
Servicer's collectors' comments relating to the Contract, (r) the collection
status of the Contract, established by the Servicer in accordance with the terms
of this Agreement, and (s) such other information as is generally maintained by
the Servicer pursuant to its Servicing Policies and Procedures or as may be
reasonably requested by Owner to be transmitted to Owner by Servicer with
respect to each such Contract.

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

         "EVENTS OF DEFAULT" means any event set forth in Article X of this
Servicing Agreement.

         "FINANCED VEHICLE" means, with respect to a Contract, the Automobile,
together with all accessions thereto, securing the related Obligor's
indebtedness under such Contract.

         "GOVERNMENTAL AUTHORITY" means the United States of America, any
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions thereof or pertaining thereto.

         "INDEMNIFIED PERSONS" means any Person entitled to indemnification by
NAFI or by Owner pursuant to this Servicing Agreement.

         "INITIAL PERIOD" has the meaning set forth in Section 11.1 of this
Servicing Agreement.




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         "INSURANCE POLICIES" means all comprehensive and collision, fire and
theft insurance policies maintained by the Obligors with respect to the Financed
Vehicles and any credit (including credit life and credit disability), warranty
or similar insurance maintained by the Obligors and benefitting the holder of
the Contracts.

         "INSURANCE PROCEEDS" means all amounts recovered pursuant to the
Insurance Policies with respect to any Contract, all of which shall be promptly
deposited by the Servicer into the Collections Account.

         "LAW" means with respect to any Person, property or matter, any
judgment, order, decree, writ, injunction, award, statute, rule, law,
regulation, published Government Authority or agency interpretation, ordinance,
code or other requirements applicable to such Person, property or matter.

         "LIQUIDATION PROCEEDS" means net cash amounts recovered in connection
with the liquidation of a Financed Vehicle after payment of the reasonable costs
incurred in connection with the repossession, sale and liquidation of the
Financed Vehicle, including, without limitation, taxes owed to state or other
Governmental Authorities, repossession charges, transportation fees and charges,
storage fees, refurbishing expenses and auction or sales fees.

         "LOCKBOX" means the lockbox established in the name of the Owner at the
Lockbox Bank, at which Obligors will be instructed by the Servicer to deliver
Scheduled Payments.

         "LOCKBOX BANK" means the federally-insured depository institution
jointly determined by the Servicer and the Owner that will be responsible for
receiving and processing Scheduled Payments delivered to the Lockbox and at
which the Collections Account will be maintained.

         "LOSS RATIO" means, as of any date of determination and for any
portfolio of Contracts for which such is being determined, a fraction (a) the
numerator of which is equal to the aggregate unpaid principal balance of all
Deficiency Balance Receivables included in such portfolio, and (b) the
denominator of which is equal to the aggregate original principal balance of all
Contracts included in such portfolio.

         "MATERIAL ADVERSE EFFECT" means, with respect to a Person or Contract,
an event, change or occurrence which, individually or together with any other
event, change or occurrence, has a material adverse effect on (i) the financial
position, business, or results of operations of such Person and its
Subsidiaries, taken as a whole; (ii) the ability of such Person to perform its
obligations under this Servicing Agreement or to consummate the other
transactions contemplated hereby; or (iii) the value, enforceability or
marketability of any Contract or any Financed Vehicle. The foregoing
notwithstanding, "Material Adverse Effect" shall not be deemed to include the
effect of compliance with the provisions of this Servicing Agreement on the
results of operations of the parties hereto.




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         "NONACCRUAL CONTRACT" means a Contract that for investor accounting
purposes is no longer deemed to accrue interest or a finance charge. A Contract
shall be classified as "Nonaccrual" by the Servicer pursuant to the nonaccrual
policy of the Owner, as such may be amended by the Owner from time to time.

         "OBLIGOR" means, with respect to any Contract, the Owner and
co-purchaser or guarantor of the related Financed Vehicle or any other Person
who owes or may be liable for payments under such Contract, whether as a
guarantor, endorser or otherwise.

         "OFFICER'S CERTIFICATE" means, with respect to any Person, a
certificate signed by the Chairman of the Board, the Chief Executive Officer,
the President, a Vice President, the Treasurer, the Secretary or any other duly
authorized officer of such Person.

         "OWNER" means the Person identified on the first page of this Agreement
as Owner of the Contracts to be serviced under this Servicing Agreement.

         "PERMIT" means any federal, state, local and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit or right to which any Person is a party or that is or may be
binding upon or inure to the benefit of any Person or its securities, assets or
business.

         "REPOSSESSION FEE" means with respect to any Contract and subject to
all applicable Laws for the jurisdiction where such Contract is located, a fee
payable to Servicer by Owner in the amount of Two Hundred Fifteen and 00/100
Dollars ($215.00) per successful repossession and liquidation of a Financed
Vehicle.

         "SALE AGREEMENT" means the Contract Sale Agreement executed by NAFI, as
"Seller," and Owner, as "Purchaser," of even date with this Agreement.

         "SCHEDULED PAYMENT" means with respect to any Contract, the amount
indicated in such Contract as required to be paid by the Obligor during each
calendar month by the due date specified in such Contract, after giving effect
to any rescheduling or reduction of payments in any insolvency, bankruptcy or
similar proceeding.

         "SCHEDULED TERMINATION DATE" means the date on which this Servicing
Agreement is scheduled to terminate, as set forth in Section 11.1 of this
Agreement.

         "SERVICER" means National Auto Finance Company, Inc., and its
successors and assigns.

         "SERVICER'S SYSTEM" means the Servicer's proprietary computer loan
servicing system, including, but not limited to, the hardware, software, the
source code for the software and all field and layout descriptions.


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         "SERVICING COMPENSATION" means the Servicing Fee, and the other amounts
to which Servicer is entitled pursuant to Article VII of this Agreement.

         "SERVICING EXPENSES" means any and all expenses incurred by Servicer in
performance of its obligations and duties pursuant to this Servicing Agreement
and which are reimbursable by Owner pursuant to Section 7.1(d) of this
Agreement.

         "SERVICING FEE" means with respect to each Contract that is not a
Deficiency Balance Receivable, an amount equal to Eighteen and 85/100 Dollars
($18.85) per Contract per calendar month or part of a calendar month for which
the Servicer shall provide services pursuant to this Agreement, payable monthly,
as adjusted from time to time as set forth in Section 7.1 of this Agreement.

         "SERVICING POLICIES AND PROCEDURES" means the Servicer's existing
standard servicing policies and procedures for nonprime automobile receivables,
a copy of which has been previously provided to the Owner, together with the
NAFI/Nuvell Credit Corporation Servicing Standards attached as Exhibit B to this
Servicing Agreement. If and to the extent that the Servicer's existing standard
servicing policies and procedures for nonprime automobile receivables conflict
with or are inconsistent with the NAFI/Nuvell Credit Corporation Servicing
Standards attached hereto as Exhibit B, then the NAFI/Nuvell Credit Corporation
Servicing Standards shall prevail. The Servicer's Servicing Policies and
Procedures may be amended by the Servicer from time to time as set forth in
Section 6.2(d) of this Agreement.

         "SOLD PROGRAM CONTRACT" means an "Eligible Program Contract," as
defined in the Sale Agreement, sold by NAFI to Owner pursuant to the Sale
Agreement.

         "SUBSIDIARY" means, as to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the Board of Directors or other Persons performing similar
functions are at the time directly or indirectly owned by such Person.

         "TERM" means the term of this Servicing Agreement, as set forth in
Section 11.1 of this Servicing Agreement.

         "TOTAL REDUCTION EVENT" means, as to any Contract, the earlier of: (a)
the date of payment or pre-payment in full by or on behalf of the related
Obligor of the outstanding balance of the Contract, together with any unpaid
finance charges and other amounts payable in respect thereof, or (b) the date on
which the Servicer, in accordance with its Servicing Policies and Procedures, or
the Owner determines that no further proceeds (including in connection with any
litigation for a deficiency judgment) are expected to be received with respect
to the Contract or that the Contract is uncollectible.


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         "UCC" means the Uniform Commercial Code as in effect in the state where
the Contract was originated.

         "VSI POLICY" means the Interstate Indemnity Company insurance policy,
or any replacement policy, which has been purchased by the Servicer for the
purpose of providing VSI insurance coverages for automobile receivables owned
and/or serviced by the Servicer.

1.2      USAGE OF TERMS.

         With respect to all terms in this 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 subsequent amendments thereto or changes
therein entered into in accordance with their respective terms and not
prohibited by this Agreement; references to Persons include their permitted
successors and assigns; and the term "including," means "including without
limitation." All section and article references shall be to sections and
articles in this Agreement. Any capitalized term herein that is not specifically
defined herein shall have the meaning ascribed to it set forth in the Sale
Agreement.


                                   ARTICLE II
                      CONDITIONS PRECEDENT TO EFFECTIVENESS
                             OF SERVICING AGREEMENT

2.1      CONDITIONS PRECEDENT TO OBLIGATIONS OF OWNER.

         The obligation of Owner to tender Sold Program Contracts to the
Servicer pursuant to this Servicing Agreement is subject to the conditions
precedent that Owner shall have satisfactorily completed its due diligence
review of the Servicer and its operations and that Owner shall have received the
following, in form and substance satisfactory to Owner, by the Closing Date, or
such other date as may be specified for the receipt of such document or
instrument by the Owner.

         (a) The articles of incorporation of the Servicer certified, as of a
date no more than ten (10) days prior to the Closing Date, by the Secretary of
State of Delaware;

         (b) A good standing certificate from the State of Delaware, dated no
later than ten (10) days prior to the Closing Date, and within twenty (20) days
after the Closing Date, from each state in which the Servicer is required to
qualify to do business as a foreign corporation, each of which shall be dated no
later than thirty (30) days prior to the actual delivery date;

         (c) A list of states in which the Servicer is qualified to engage in
business and, if necessary, has obtained a collection agency license or like or
similar license and a copy of each such collection agency license or other
authority to transact such business;




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         (d) A certificate of the Secretary or Assistant Secretary of the
Servicer (on which certificate the Owner may conclusively rely until such time
as it shall receive from the Servicer a revised certificate meeting the
requirements of this subsection) certifying as of the Closing Date: (i) the
names and true signatures of the officers authorized on its behalf to sign this
Servicing Agreement, (ii) a copy of the Servicer's articles of incorporation and
bylaws, and (iii) a copy of the resolutions of the board of directors of the
Servicer approving this Agreement and the transactions contemplated hereby;

         (e) An Officer's Certificate in the form of Exhibit E attached to the
Sale Agreement;

         (f) The favorable Opinion of Servicer's outside counsel satisfactory to
Owner, in substantially the form of Exhibit F attached to the Sale Agreement;

         (g) The Servicer's Servicing Policies and Procedures;

         (h) A list and detailed description of material pending and threatened
litigation to which the Servicer or any of its Affiliates or assets may be
subject;

         (i) The financial statements of Servicer required to be delivered by
the Servicer to the Owner pursuant to Section 3.1(a) of the Sale Agreement; and

         (j) Such other approvals, consents, opinions, documents and
instruments, as Owner may reasonably request.

Upon the receipt by the Owner of the items referred to in Paragraphs (a) through
(j) of this Section 2.1, the Owner shall notify the Servicer in writing that the
conditions precedent to the effectiveness of this Servicing Agreement have been
satisfied and that this Servicing Agreement is effective as of the date and time
specified in such notice.


                                   ARTICLE III
                 REPRESENTATIONS AND WARRANTIES OF THE SERVICER

3.1      GENERAL REPRESENTATIONS AND WARRANTIES OF SERVICER.

         The Servicer represents and warrants to Owner, as of the date hereof
and as of each day that this Agreement is in effect, as follows:

         (a) The Servicer is a corporation duly organized, validly existing and
in good standing under the laws of Delaware, is duly qualified to do business
and is in good standing in every jurisdiction in which the nature of its
business requires it to be so qualified and which failure to qualify could have
a Material Adverse Effect on Servicer.



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         (b) The Servicer has the power and authority to execute and deliver
this Servicing Agreement and to perform the transactions contemplated hereby.

         (c) The execution, delivery and performance by the Servicer of this
Servicing Agreement and the transactions contemplated hereby, (i) have been duly
authorized by all necessary action on the part of the Servicer, (ii) do not
contravene or cause the Servicer to be in default under (A) the Servicer's
articles of incorporation or bylaws, (B) any contractual restriction with
respect to any Debt of the Servicer or contained in any indenture, loan or
credit agreement, lease, mortgage, security agreement, bond, note or other
agreement or instrument binding on or affecting the Servicer or its property, or
(C) any law, rule, regulation, order, writ, judgment, award, injunction or
decree applicable to, binding on or affecting the Servicer or its property, and
(iii) do not result in or require the creation of any Adverse Claim.

         (d) This Servicing Agreement has been duly executed and delivered by
the Servicer.

         (e) No consent of, or other action by, and no notice to or filing with,
any Governmental Authority or any other party is required for the due execution,
delivery and performance by the Servicer of this Servicing Agreement or for the
perfection of or the exercise by Owner of any of its rights or remedies
hereunder, each of which has been obtained and complete copies of which have
been provided to Owner.

         (f) This Servicing Agreement constitutes the legal, valid and binding
obligation of the Servicer enforceable against the Servicer in accordance with
its terms, subject to bankruptcy laws and other similar laws of general
application affecting rights of creditors and subject to the application of the
rules of equity, including those respecting the availability of specific
performance.

         (g) To the best knowledge of Servicer, there is no pending or
threatened action, suit or proceeding against or affecting the Servicer, its
Affiliates, its officers or the property of the Servicer in any court or
tribunal, or before any arbitrator of any kind or before or by any Governmental
Authority (i) asserting the invalidity of this Servicing Agreement, (ii) seeking
to prevent the consummation of any of the transactions contemplated hereby,
(iii) seeking any determination or ruling that might materially and adversely
affect (A) the performance of this Servicing Agreement, or (B) the validity or
enforceability of this Servicing Agreement.

         (h) No injunction, writ, restraining order or other order of any
material nature adverse to the Servicer or the conduct of its business or which
is inconsistent with the due performance by the Servicer of its duties,
responsibilities and obligations contemplated by this Servicing Agreement has
been issued by a Governmental Authority.

         (i) No defaulted Debt exists under any instrument or agreement
evidencing, securing or providing for the issuance of Debt of the Servicer.




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         (j) The Servicer is solvent and will not become insolvent after giving
effect to the transactions contemplated by this Servicing Agreement; the
Servicer is paying its debts as they mature; the Servicer has not incurred debts
beyond its ability to pay as they mature; and the Servicer, after giving effect
to the transactions contemplated by this Servicing Agreement, will have adequate
assets to conduct its business in the foreseeable future.

         (k) The Servicer has and maintains all permits, licenses,
authorizations, registrations, approvals and consents of Governmental
Authorities (including, without limitation, collection agency licenses, if any)
necessary for (i) the activities and business of the Servicer as currently
conducted and as proposed to be conducted, (ii) the ownership, use, operation
and maintenance of its properties, facilities and assets and (iii) the
performance by the Servicer of its duties, responsibilities and obligations
under this Servicing Agreement.

         (l) The Servicer has filed on a timely basis all tax returns (federal,
state, and local) required to be filed and has paid or made adequate provisions
for the payment of all taxes, assessments and other governmental charges due
from the Servicer.

         (m) To the best knowledge of Servicer, each pension plan or profit
sharing plan to which the Servicer is a party has been fully funded in
accordance with the obligations of the Servicer set forth in such plan.

         (n) With respect to the Servicer, there has not occurred any event
which has or is reasonably likely to have a Material Adverse Effect on its
ability to perform its obligations under this Servicing Agreement.

         (o) The financial statements of the Servicer delivered to the Owner
pursuant to Section 2.1(i) of this Agreement fairly present the consolidated
financial condition, business and operations of the Servicer as of the dates
indicated in such financial statements and the consolidated results of
operations of the Servicer for the periods ended on such dates all in accordance
with generally accepted accounting principles consistently applied, and since
September 30, 1999, there has not occurred any material adverse change in any
such condition.

         (p) All information heretofore or hereafter furnished with respect to
the Servicer to Owner in connection with any matter contemplated by this
Agreement is and will be true and complete in all material respects and does not
and will not omit to state a material fact necessary to make the statements
contained therein not misleading.


                                   ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF OWNER

4.1      GENERAL REPRESENTATIONS AND WARRANTIES OF OWNER.

         Owner represents and warrants to the Servicer as of the date hereof and
as of each day that this Agreement is in effect, as follows:




                                      -12-
<PAGE>   13




         (a) The Owner is a corporation duly organized, validly existing and in
good standing under the laws of Delaware, is duly qualified to do business and
is in good standing in every jurisdiction in which the nature of its business
requires it to be so qualified and which failure to qualify could have a
Material Adverse Effect on Owner.

         (b) The Owner has the power and authority to execute and deliver this
Servicing Agreement and to perform the transactions contemplated hereby.

         (c) The execution, delivery and performance by the Owner of this
Servicing Agreement and the transactions contemplated hereby have been duly
authorized by all necessary action on the part of the Owner, and this Servicing
Agreement has been duly executed and delivered by the Owner.

         (d) No consent of, or other action by, and no notice to or filing with,
any Governmental Authority or any other party is required for the due execution,
delivery and performance by the Owner of this Servicing Agreement or for the
perfection of or the exercise by Servicer of any of its rights or remedies
hereunder, each of which has been obtained and complete copies of which have
been provided to Servicer.

         (e) This Servicing Agreement constitutes the legal, valid and binding
obligation of the Owner enforceable against the Owner in accordance with its
terms, subject to bankruptcy laws and other similar laws of general application
affecting rights of creditors and subject to the application of rules of equity,
including those respecting the availability of specific performance.

         (f) The execution, delivery and performance of this Servicing
Agreement, the consummation of the transactions contemplated hereby and the
fulfillment of the terms hereof will not conflict with, result in any breach of
or constitute (with or without notice or lapse of time) a default under the
articles of incorporation or bylaws of Owner, or conflict with or resulting in a
breach of any of the terms or provisions of, or constitute (with or without
notice or lapse of time) a default under, any indenture, agreement, mortgage,
deed of trust or other instrument to which Owner is a party or by which Owner is
bound or to which any of its properties are subject, or result in the creation
or imposition of any lien upon any of its properties pursuant to the terms of
any such indenture, agreement, mortgage, deed of trust or other instrument, or
constitute a violation of any law, order, rule or regulation applicable to Owner
or its properties of any Governmental Authority having jurisdiction over Owner
or any of its properties.

         (g) There are no proceedings or investigations pending, or, to Owner's
knowledge, threatened, before any Governmental Authority having jurisdiction
over Owner or any of its properties: (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, or (iii) seeking any determination or



                                      -13-
<PAGE>   14

ruling that might materially and adversely affect the performance by Owner of
its obligations under, or the validity or enforceability of, this Agreement.

                                    ARTICLE V
                    BREACH OF REPRESENTATIONS AND WARRANTIES

SECTION 5.1   BREACH OF REPRESENTATIONS AND WARRANTIES.

         It is understood and agreed that the representations and warranties set
forth in Article III and Article IV shall last until such time as this Servicing
Agreement is terminated. Upon discovery by Servicer or Owner, as the case may
be, of a breach of any of the foregoing representations or warranties, the
Person discovering such breach shall give prompt written notice to the other
party. The breaching party shall cure such breach in all material respects
within the time required by Section 10.1 of this Servicing Agreement, or with
the prior written consent of an officer of the non-breaching party, such longer
period as is specified in such consent.


                                   ARTICLE VI
                    ADMINISTRATION AND SERVICING OF CONTRACTS

SECTION 6.1   SERVICER'S EXCLUSIVE RIGHT TO ADMINISTER AND SERVICE CONTRACTS.

         Owner grants unto Servicer, pursuant to the terms and provisions of and
for the Term of this Servicing Agreement, the exclusive right to administer and
service all Sold Program Contracts for which the Servicer is qualified to
provide all of the services described in this Servicing Agreement and the
servicing of which by the Servicer will not result in any breach by the Servicer
of any covenant, obligation, representation or warranty set forth in this
Servicing Agreement.

SECTION 6.2   GENERAL DUTIES OF SERVICER.

         (a) Servicer shall service, administer and make collections on the
Contracts in accordance with all applicable Laws, with the applicable provisions
of the applicable Contracts and with reasonable care, using that degree of skill
and attention customary and usual for institutions which service nonprime
Automobile receivables similar to the Contracts and that Servicer exercises with
respect to similar Automobile receivables that it services for itself or others.

         (b) Servicer's duties shall include collection and posting of all
payments, responding to inquiries of Obligors or of Governmental Authorities
with respect to such Contracts, contacting Delinquent Obligors, sending payment
statements to Obligors, accounting for collections, and furnishing monthly and
annual statements to Owner in a mutually acceptable format with respect to
Contracts. Without limiting the generality of the foregoing, and subject to the
servicing standards set forth in this Servicing Agreement, Servicer is
authorized and empowered by Owner




                                      -14-
<PAGE>   15

to execute and deliver any and all instruments of satisfaction or cancellation,
or partial or full release or discharge, and all other comparable instruments
with respect to such Contracts or to the Financed Vehicles securing such
Contracts and/or the Certificates of Title with respect to such Financed
Vehicles. If Servicer shall commence a legal proceeding in its own name to
enforce a Contract, which Servicer shall do only with the prior consent of
Owner, Owner shall thereupon be deemed to have automatically assigned, solely
for the purpose of collection, such Contract to Servicer. Servicer shall prepare
and furnish, and Owner shall execute, any powers of attorney and other documents
reasonably necessary or appropriate to enable Servicer to carry out its
servicing and administrative duties hereunder.

         (c) Servicer may retain third parties, including agents and independent
contractors, pursuant to its Servicing Policies and Procedures to perform
certain of its duties and services under this Servicing Agreement without prior
written notice to Owner.

         (d) The Servicer may, upon giving reasonable prior notice to the Owner,
at its discretion, change its Servicing Policies and Procedures, not including
the NAFI/Nuvell Credit Corporation Servicing Standards attached hereto as
Exhibit B, which may be amended only upon agreement of both the Servicer and the
Owner; provided, however, any material amendment or change by the Servicer of
its Servicing Policies and Procedures with respect to the Contracts shall be
made only with the prior written consent of the Owner.

SECTION 6.3   COLLECTION AND ALLOCATION OF CONTRACT PAYMENTS, INSURANCE PROCEEDS
              AND LIQUIDATION PROCEEDS.

         (a) Consistent with the terms of this Servicing Agreement, Servicer
shall make reasonable efforts to timely collect all payments lawfully called for
under the terms and provisions of the Contracts as and when the same shall
become due, and shall follow such collection procedures as it follows with
respect to all comparable Automobile receivables that it services for itself.
Servicer, at its expense, shall notify each Obligor to make payments either in
person to the Servicer or by mail or other appropriate means to the Lockbox. All
payments received at the Lockbox shall be processed by the Lockbox Bank and
deposited in the Collections Account, unless a payment cannot be processed
because of a stop processing instruction given to the Lockbox Bank by the
Servicer, pursuant to is Servicing Policies and Procedures, or the Lockbox Bank
is unable to identify the account for which the payment was made. If the
Servicer receives any payment for a Contract directly, or when the Servicer
receives any Insurance Proceeds or Liquidation Proceeds, the Servicer shall
promptly, no later than one (1) Business Day after receipt thereof, deposit such
amounts into the Collections Account, and at all times the Servicer shall hold
such payments and proceeds in trust for the benefit of Owner, segregated from
the assets of Servicer. Servicer shall allocate Scheduled Payments, Insurance
Proceeds, Liquidation Proceeds and other collections with respect to the
Contracts between principal and interest in accordance with the terms of the
related Contracts and applicable Law.



                                      -15-
<PAGE>   16

         (b) Except as otherwise provided in this Servicing Agreement, Servicer
may grant due date extensions or payment deferments to an Obligor only in
accordance with its Servicing Policies and Procedures.

         (c) The Servicer shall determine when a Contract has been paid in full,
and the Servicer shall notify the Owner of all such determinations in the
monthly reports provided by the Servicer to the Owner pursuant to Section 6.7 of
this Servicing Agreement. If the Servicer requires possession of the original of
the Contract or the Certificate of Title in order to perform its duties and
obligations hereunder, prior to taking possession of such documents, the
Servicer will deliver to the Owner a trust receipt in a form approved by the
Owner. The Servicer agrees to promptly return any such documents, possession of
which the Servicer has taken in accordance with this Section 6.3(c), after its
need for possession thereof ceases.

         (d) The Servicer will refund to Obligors any overpayments of which the
Servicer is aware. All dishonored checks written by Obligors will be charged to
the Collections Account. Reconciliations for checks dishonored during a calendar
month will appear in the reports delivered by the Servicer to the Owner for such
calendar month. Whenever the Servicer receives an unidentified check or
unidentified remittance which the Servicer believes may relate to a Contract,
the Servicer will deposit the remittance in the Collections Account, and for a
period of thirty (30) days thereafter will use reasonable efforts to ascertain
the proper allocation of the amount. At the end of the 30-day period, the
Servicer shall request reimbursement of such amount from the Owner and shall
issue a refund check to the payor, or if such is not possible, the Servicer will
hold and maintain the reimbursement received from the Owner in accordance with
applicable escheat laws, if any such laws apply.

         (e) When an Obligor no longer has a legal interest in the Financed
Vehicle, and when an extended warranty contract, credit life or disability
policy or other service payable in a lump sum premium was financed, the Servicer
will apply for a refund of the premium in accordance with the terms of the
agreement for the given service. The Owner will provide the Servicer such
authorizations as may be required to perform such function. Any amounts received
by the Servicer shall be held in trust by the Servicer for the benefit of the
Owner and shall be deposited into the Collections Account within one (1)
Business Day after receipt by the Servicer and credited as proceeds on the
appropriate Contract.

SECTION 6.4   CERTIFICATES OF TITLE.

         (a) If the Servicer learns that a Contract has no evidence of an
original Certificate of Title, the Servicer shall notify the Owner in writing
and use reasonable efforts to follow up with the applicable Governmental
Authority to obtain receipt of such Certificate of Title. These efforts may
require that the Servicer reconstruct the chain of title in appropriate cases.
Upon receipt of any original Certificate of Title, the Servicer shall promptly
verify that the information contained on the Certificate of Title is correct,
that the appropriate Person is named as the lienholder and owner, as applicable,
of the Financed Vehicle covered thereby, and shall arrange for the



                                      -16-
<PAGE>   17

immediate delivery of the Certificate of Title to the Owner, at such address and
to such person's attention as designated by the Owner in writing to the
Servicer. The Servicer shall provide periodic reports, in such form as it may
reasonably select, to the Owner as to the status of the Servicer's efforts under
this Section 6.4(a).

         (b) The Servicer will, on behalf of the Owner, retitle a Financed
Vehicle which has been permanently moved or transported to a different state.

         (c) The Servicer will request the Owner to deliver to the Servicer the
Certificate of Title for a Financed Vehicle for which the Servicer intends to
release the lien thereon pursuant to Section 6.8 of this Agreement. The Servicer
shall be responsible for delivering the Certificate of Title to the appropriate
Person to accomplish the release of lien. At all times that a Certificate of
Title is in the possession of the Servicer, it shall be held in trust by the
Servicer for the benefit of the Owner.

SECTION 6.5   REALIZATION UPON DEFAULTED CONTRACTS.

         (a) Servicer shall use all commercially reasonable efforts consistent
with the servicing procedures set forth herein, to lawfully repossess or
otherwise convert the ownership of the Financed Vehicle securing any Contract as
to which Servicer shall have determined eventual payment in full is unlikely,
and where permitted by the express terms of the Contract and applicable Law.
Servicer shall commence efforts to repossess or otherwise convert the ownership
of a Financed Vehicle for any Defaulted Contract as determined by Servicer's
reasonable judgment after considering the current status of such Contract;
provided, however, that Servicer may elect not to commence such efforts within
such time period if, in good faith and reasonable judgment, it determines either
that such action would violate the terms of the related Contract, it would be
impracticable to do so or that the proceeds ultimately recoverable with respect
to such Contract would be increased by forbearance, in which case, such Contract
shall constitute a Defaulted Contract.

         (b) Servicer shall use all commercially reasonable efforts to timely
make all collections on Contracts, which may include reasonable efforts
consistent with the terms hereof and applicable Law to recover under any
recourse provisions from Dealers, originators or transferors, and selling the
Financed Vehicle at public or private sale. If Servicer determines in its
reasonable judgment that it should retain the services of an attorney to
exercise Owner's rights pursuant to such recourse provisions by commencing
litigation or taking such other action, Servicer shall so advise Owner in
writing of such recommended course of action, and if such recommended course of
action is agreed to by Owner, Owner will pay all reasonable attorney's fees,
court costs and related litigation expenses relating to such proceeding or
action. Upon obtaining such approval from the Owner, Servicer will select the
attorney(s) to commence litigation and/or take such other action necessary or
appropriate to protect the interests of Owner. Servicer shall sell all
repossessed Financed Vehicles at auction, unless it determines in its good faith
and reasonable judgment either that it would be impractical to do so or that the
proceeds ultimately recoverable with respect to such Contracts would be
increased by an alternative sale procedure. The foregoing



                                      -17-
<PAGE>   18

shall be subject to the provision that, in any case in which the Financed
Vehicle shall have suffered damage, Servicer shall not expend funds in
connection with the repair or the repossession of such Financed Vehicle unless
it shall determine in its good faith and reasonable discretion that such repair
and/or repossession will increase the net proceeds ultimately recoverable with
respect to such Contracts by an amount greater than the amount of such expenses.
All amounts received upon sale of a Financed Vehicle shall be remitted directly
by Servicer to the Collections Account within one (1) Business Day after receipt
by the Servicer.

         (c) If Servicer receives a notice that an Obligor has died or has filed
for relief under the United States Bankruptcy Code, Servicer shall notify Owner
of the death or file a proof of claim and notify Owner of the bankruptcy filing.
In the event that activities outside the scope of routine consumer bankruptcy
proceedings, and follow-up are necessary, Owner may, at its option, instruct
Servicer to retain counsel to represent Owner and Servicer in the Obligor's
bankruptcy at the expense of Owner. If Owner determines that Servicer should
retain the services of an attorney to represent the interests of the Owner,
Servicer will select the attorney, and Owner will pay all reasonable attorney's
fees and costs, including all filing fees, relating to such proceeding.

SECTION 6.6   PHYSICAL DAMAGE INSURANCE; OTHER INSURANCE.

         If proper insurance verification forms are not contained in a Contract
File, the Servicer will, for a period of ninety (90) days after making such
determination, take all reasonable steps to obtain a copy of the required
Insurance Policy. If evidence of the required Insurance Policy is not obtained
within this ninety (90)-day period, the Servicer will notify the Owner of this
deficiency in the monthly reports provided by the Servicer to the Owner. Upon
the Servicer's learning of any cancellation or reduction of insurance, the
Servicer will send a written notice to the Obligor in an attempt to secure or
verify the proper Insurance Policy. If the Servicer is unable to verify that the
Obligor has in place the proper Insurance Policy within the time required by the
Servicer's Servicing Policies and Procedures, then the Servicer may proceed to
repossess the Financed Vehicle.

SECTION 6.7   SERVICER'S RECORDKEEPING AND REPORTING REQUIREMENTS.

         (a) Servicer shall maintain borrower and investor accounting records
for each Contract, which records shall be updated at least every Business Day,
which records shall include the original principal balance of the Contract, the
amount of the original purchase discount, acquisition fee or purchase premium
applicable to the purchase of the Contract by the Owner, the amount of dealer
reserve, participation and/or dealer finance income paid or to be paid to a
dealer with respect to the Contract, the amount of dealer reserve, participation
and/or dealer finance income to be refunded by a dealer to the Owner with
respect to the Contract, the amount of each payment and other proceeds applied
to either principal, interest, the finance charge or other charges with respect
to the Contract, the date of receipt of each payment and other proceeds, the
interest rate or periodic finance charge applicable to the Contract, the amount
of interest or finance charge that has been accrued on the Contract but not paid
by the Obligor, the amount of unearned




                                      -18-
<PAGE>   19

interest or finance charge applicable to the Contract, the current outstanding
principal balance (for both borrower purposes and investor accounting purposes),
the amount of purchase discount and acquisition fee accretion and purchase
premium amortization applicable to the Contract, and such other Electronic
Contract Information required to be maintained by the Servicer. Servicer's
obligation to perform its servicing duties and maintain accurate records
hereunder is subject to and limited by the accuracy, completeness and
availability of the information Servicer receives initially and from time to
time from Owner.

         (b) The Servicer shall provide to Owner, within the time requested by
Owner, monthly, quarterly and/or annual reports with respect to the Contracts,
the Financed Vehicles and the cash accounts maintained by the Servicer with
respect to the Contracts and the Financed Vehicles, which shall include a
general Servicer's report, a bank reconciliation report for each cash account
maintained by the Servicer, a trial balance (for both borrower purposes and
investor accounting purposes), a delinquency report, a repossession report, a
legal and bankruptcy report, a Contract payoff report, a Contract chargeoff
report, a Defaulted Contract report, a Nonaccrual Contract report, an interest
earned past stop accrual report, a Contracts boarded by Servicer report, a
Contracts Deboarded by Servicer report, a Deficiency Balance Contracts
collection report, a Contract File exception report, a Contracts by state
report, an income by state report, and such other reports generally produced by
the Servicer for itself for similar type motor vehicle receivables owned or
serviced by the Servicer. All reports setting forth income, expense and
outstanding balance data with respect to the Contracts and the Financed Vehicles
shall be prepared in accordance with Generally Accepted Accounting Principles,
unless otherwise agreed by Owner.

         (c) In addition to the reports required to be provided pursuant to
subsections (a) and (b) above, Servicer will provide to Owner such monthly,
quarterly and annual reports and information as Owner may reasonably request and
which Servicer is reasonably capable of providing, which reports shall be in a
mutually agreeable format. At the request of Owner, Servicer will provide a copy
of any report which Servicer receives from any outside service vendor for which
Servicer is not required to pay a fee.

SECTION 6.8   ADDITIONAL COVENANTS OF SERVICER.

         Servicer shall not release the Financed Vehicle securing a Contract
from the security interest granted by such Contract in whole or in part except
in the event of payment in full by the Obligor thereunder or repossession, nor
shall Servicer take any action to impair the rights of Owner in such Contracts;
provided however, Servicer may release Owner's security interest in such
Financed Vehicle in its reasonable judgment if the balance owing on such
Contract is One Hundred and 00/100 Dollars ($100.00) or less.

SECTION 6.9   PURCHASE OF CONTRACTS UPON BREACH.

         Servicer or Owner shall inform the other party, in writing, upon the
discovery of any breach of this Article VI; provided, however, that the failure
to give such notice shall not affect



                                      -19-
<PAGE>   20

any obligation of either party hereunder. In the event of a breach by Servicer
and unless such breach shall have been cured by the last day of the calendar
month following the month in which such breach was discovered, Servicer shall
purchase any Contract materially and adversely affected by such breach or any
Contract relating to a breach the nature of which materially and adversely
affects the interest of Owner in such Contract. In consideration of the purchase
of such Contract, Servicer shall remit to Owner the amount for such Contract
which, under the terms of such Contract, would be required by the Obligor to
prepay in full such Contract, including the total principal balance and interest
up to, but excluding, the date of purchase. The sole and exclusive remedy of
Owner with respect to a breach of this Article shall be to require Servicer to
purchase Contracts pursuant to this Section; provided, however, that Servicer
shall indemnify Owner against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by Owner as a result of third-party claims arising
out of the events or facts giving rise to such breach.

SECTION 6.10  DEBOARDING OF CONTRACTS.

         (a) The Servicer shall Deboard any Contract that becomes subject to a
Total Reduction Event within thirty (30) days after the end of the calendar
month in which the Total Reduction Event occurs. In addition, the Owner may
deliver to the Servicer, not less than fifteen (15) days' prior to the requested
Deboarding Date, a Deboarding Notice requesting that the Servicer Deboard any or
all Deficiency Balance Receivables being serviced hereunder. In such event, the
Owner shall provide to the Servicer with the Deboarding Notice a schedule of the
Deficiency Balance Receivables it desires to be Deboarded.

         (b) Except as otherwise provided in this Section 6.10, upon receipt of
a Deboarding Notice, the Servicer shall take the steps necessary to transfer to
the Owner (or such other Person in accordance with the Owner's written
instructions) the serviced property related to each Contract identified on the
Deboarding Notice by the Deboarding Date, including the electronic records
(Electronic Contract Information) in such electronic form as may be reasonably
provided by the Servicer, and all money collected and held by the Servicer. The
Servicer shall continue to provide the services contemplated by this Agreement
up to the Deboarding Date on all such Contracts to be Deboarded. The Servicer
may, at its option, after completion of the Deboarding Process, retain the
electronic records related to such Contracts on the Servicer's System. Any
documents or moneys received by the Servicer on or after the Deboarding Date
shall be mailed (or, if so requested by the Owner, wire-transferred) to the
Owner within two (2) Business Days after receipt. The Servicer shall have no
obligation, on or after the Deboarding Date, to provide the services described
in this Article VI with respect to any Contract for which the Deboarding Process
has been completed, except as specifically set forth in Sections 6.9 and 6.11 of
this Agreement. In connection with any Deboarding of all Contracts pursuant to
this Section 6.10, the Servicer shall comply with Section 11.2 of this
Agreement.



                                      -20-
<PAGE>   21

SECTION 6.11  ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
              CONTRACTS.

         Servicer and Owner, and their respective representatives, shall be
permitted, following reasonable notice to the other and during regular business
hours, to inspect, audit and make copies of and abstracts from the other's
records regarding any Contracts or related Obligors.

SECTION 6.12  RIGHT OF OWNER TO AUDIT SERVICER'S OPERATION.

         Upon receipt of seven (7) days prior written notice, Servicer shall
permit Owner to audit Servicer's operations at Servicer's location. Such audit
shall be limited to a review of those items that relate to this Servicing
Agreement. Such audit shall be during Servicer's normal business hours. All of
Owner's costs for such audit shall be borne by Owner, unless the results of such
audit shall indicate that a Servicer Default has occurred, which at the time of
such audit was known by the Servicer and with respect to which the Owner has not
received notice, in which event the Servicer shall pay the Owner's costs of such
audit. In lieu of an audit at the Servicer's location, Owner may, from time to
time, request that information, documents or records required pursuant to such
audit be sent to Owner.

SECTION 6.13  CRIME INSURANCE; CONTINGENT DISASTER RELIEF PROTECTION; ERRORS AND
              OMISSIONS INSURANCE.

         (a) Servicer shall maintain, at its own expense, a crime insurance
policy or a bond with responsible companies on all officers, employees or other
Persons acting on behalf of Servicer in any capacity with regard to the
Contracts to handle funds, money, documents and papers relating to the
Contracts. Any such insurance shall protect and insure Servicer against losses
for dishonest acts of such Persons and shall be maintained in a form that would
meet the requirements of prudent institutional servicers of Automobile
receivables similar to the Contracts and in an amount of not less than
Twenty-Five Thousand Dollars ($25,000) per occurrence. In addition, the Servicer
will maintain at all times during the Term of this Agreement errors and
omissions insurance in a reasonable amount, as determined jointly by the
Servicer and the Owner. The Servicer shall provide the Owner, within ten (10)
days after receipt of a written request from the Owner, a certificate of
insurance reflecting the amount of coverages, deductible amounts and expiration
dates of the policies providing the aforementioned coverages. No provision of
this Section 6.13 requiring such insurance shall diminish or relieve Servicer
from its duties and obligations as set forth in this Servicing Agreement.

         (b) Servicer shall maintain, at its own expense, a computer disaster
recovery plan and computer disaster recovery procedures in forms consistent with
industry standards of prudent institutional receivables servicers. No provision
of this Section 6.13(b) requiring such a plan and such procedures shall diminish
or relieve Servicer from its duties and obligations as set forth in this
Servicing Agreement. Upon written request, Servicer shall cause to be delivered
to Owner a certification as to the existence of such a plan and such procedures.


                                      -21-
<PAGE>   22

         (c) Servicer shall maintain, at its own expense, backup data tapes of
all Electronic Contract Information, and Servicer shall deliver to the Owner
within two (2) Business Days after the end of each calendar month a backup data
tape containing all Electronic Contract Information for the Contracts as of the
last day of such month.

SECTION 6.14  POSSESSION OF CONTRACT FILES.

         Owner shall, upon the execution and delivery of this Servicing
Agreement, authorize the delivery to Servicer the original of the documents in
each Contract File, not including the original Certificate of Title or the
original retail installment sales contract, which will be held by the Owner.
Servicer shall hold the contents of each Contract File in trust for the benefit
of Owner. Servicer's possession of the Contract Files is for the sole purpose of
servicing the related Contracts. In the event of termination of this Agreement,
Servicer shall promptly return all Contract Files to Owner, or to such other
Person as Owner may direct, as soon as is practicable after such termination.

6.15     COLLECTION OF DEFICIENCY BALANCE RECEIVABLES.

         Upon liquidation of a Financed Vehicle, the Servicer will calculate the
Obligor's deficiency balance in accordance with the Contract and applicable Law,
taking into consideration all Liquidation Proceeds and Insurance Proceeds
received by the Servicer. Any such Deficiency Balance Receivable collected by
the Servicer shall be deposited in the Collections Account within one (1)
Business Day after received by the Servicer. The Servicer shall have the power
and authority to take all reasonable and customary steps necessary to collect a
Deficiency Balance Receivable (in conformity, at all times, with all applicable
Laws) and to do all things that the Owner could do to collect such amounts,
including, with the prior written consent of the Owner, the initiation of legal
proceedings against the Obligor.


                                   ARTICLE VII
                      FEES AND EXPENSES PAYABLE TO SERVICER

7.1      SERVICING COMPENSATION AND SERVICING EXPENSES.

         (a) As compensation for its services hereunder, Servicer shall be
entitled to charge Owner once each calendar month a Servicing Fee as of the last
day of each calendar month.

         (b) With respect to any Deficiency Balance Receivable, in lieu of the
Servicing Fee set forth in subparagraph (a) above, the Servicer shall receive a
Deficiency Balance Receivable collection fee equal to One Third (1/3) of the net
amount collected by the Servicer with respect to such Deficiency Balance
Receivable (gross amount collected less reasonable out-of-pocket expenses
incurred by the Servicer in connection with the collection of the Deficiency
Balance Receivable).

                                      -22-

<PAGE>   23



         (c) In addition, Servicer shall be entitled to receive and retain for
its own account, late charges, deferment/extension fees, assignment/transfer or
assumption fees, insufficient funds check charges (to the extent permitted by
the Contract and applicable state law and to the extent not charged by and
payable to other Persons), amortization schedule fees and optional insurance
with respect to Contracts. In addition, Servicer shall be entitled to a fee of
Thirty-Five Dollars ($35.00) for each proof of claim prepared and filed by the
Servicer on behalf of the Owner with respect to a Contract subject to a claim in
bankruptcy, and Servicer shall be entitled to a fee of Five Dollars ($5.00) for
each Contract, not including any Deficiency Balance Receivable, for which the
Deboarding Process has been completed in accordance with Section 6.10(b), unless
the Deboarding Process is required because of a Servicer Event of Default, in
which event the Servicer shall not be entitled to receive such fee for any of
the Contracts Deboarded by the Servicer (the fees payable to the Servicer
pursuant to Sections 7.1(b) and (c) together with the Servicing Fee are
hereinafter referred to as the "Servicing Compensation"). Servicer shall be
required to pay all expenses incurred by Servicer hereunder and shall not be
entitled to reimbursement therefor, except as expressly provided herein.

         (d) Without limiting the generality of the foregoing, Servicer shall be
entitled to be reimbursed from the Owner for certain Servicing Expenses,
consisting of reasonable fees and expenses of third parties incurred by Servicer
for (i) fees and expenses related to financing statements, continuation
statements and other documents and instruments necessary to maintain the
perfection and priority of the lien on a Financed Vehicle, (ii) the reasonable
fees and charges of legal counsel not salaried employees of Servicer, a
subservicer, or any Affiliate of either and others who shall have been retained
by Servicer subject to the limitations provided herein and in accordance with
the servicing standards set forth herein in connection with the enforcement,
collection, and foreclosure, of the related Contracts, (iii) fees and expenses
(including reasonable legal fees and expenses) incurred in prosecuting and
defending any litigation or adverse claims against such assets, to the extent
Servicer determines in its reasonable judgment that such advances will be
recoverable, and (iv) certain other third party fees and expenses described in
Exhibit A attached hereto.

         (e) Owner shall be required to pay a Repossession Fee and all
reasonable third party expenses incurred by Servicer in connection with the
repossession and disposition of a Financed Vehicle.

         (f) As soon as practicable after the last day of each calendar month,
Servicer shall tender to Owner an invoice for all Servicer Compensation computed
as of the last day of such month, plus any and all Servicing Expenses incurred
by or invoiced to Servicer during such calendar month, all of which shall be due
and payable by Owner within ten (10) days after receipt. Owner shall remit
payment of such invoice by electronic funds transfer to a depository account(s)
designated by Servicer.


                                      -23-
<PAGE>   24

                                  ARTICLE VIII
                                      OWNER

SECTION 8.1   LIABILITY OF OWNER.

         Owner shall be liable in accordance herewith only to the extent of the
obligations specifically imposed by this Servicing Agreement.

SECTION 8.2   INDEMNIFICATION OF OWNER.

         Servicer shall indemnify and hold harmless Owner and its respective
directors, officers, employees, agents, representatives and controlling Persons
(collectively, the "Indemnified Persons") with respect to, and from and against,
any and all claims, demands, actions, losses, damages, penalties, fines,
forfeitures, (including reasonable legal fees and charges), judgments, arbitral
awards and any other costs, fees, charges and expenses that Owner and the
Indemnified Persons may sustain in connection with any investigations,
proceedings or actions or that are in any way related to or arise out of the
Servicer's failure to perform its duties hereunder or service the Contracts in
compliance with the terms of this Servicing Agreement. Servicer shall
immediately notify Owner if a claim, demand or action (each a "Claim") is made,
asserted or threatened by a third party with respect to this Servicing Agreement
or any Contract, and to the extent such Claim relates to allegations which, if
true, would involve or would have arisen because of a failure of the Servicer to
perform its duties hereunder or service the Contracts in compliance with the
terms of this Servicing Agreement, Servicer shall assume (with the prior written
consent of Owner) the defense of any such Claim and pay (without reimbursement
hereunder) all charges, fees and expenses in connection therewith, including
reasonable counsel fees and charges, as incurred, and promptly pay, discharge
and satisfy any judgment, decree, awards, damages, penalties, fines,
forfeitures, and costs (including legal fees and charges) which may be entered
against Servicer or Owner in respect of such Claim. Servicer will not compromise
or settle any matters described in this Section 8.2 without the prior written
consent of Owner; provided, however, such consent is not required as long as all
other Indemnified Persons are released and held harmless with respect to all
matters by all Persons having any interest in such matters. Servicer may, in its
sole discretion, select counsel in defense of such claim which is reasonably
acceptable to Owner.


                                   ARTICLE IX
                                    SERVICER

SECTION 9.1   LIMITATION ON LIABILITY OF SERVICER AND OTHERS.

         Neither Servicer nor any of its directors, officers, employees, agents
or representatives shall be under any liability to the Owner or any third
parties for any action taken or not taken in good faith pursuant to this
Servicing Agreement; provided, however, this provision shall not




                                      -24-
<PAGE>   25


protect Servicer or any other such Person against any breach of warranties or
representations made herein, or against any specific liability imposed pursuant
hereto, or against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder or by reason of reckless disregard of obligations or duties
hereunder. Owner, Servicer and any director, officer, employee or agent of Owner
or Servicer, may rely in good faith on any document of any kind which, prima
facie, is properly executed and submitted by any appropriate Person respecting
any matters arising hereunder. Servicer shall not be under any obligation to
appear in, prosecute or defend any action, claim or other proceeding (other than
customary collection activities with respect to Defaulted Contracts) that in the
Servicer's opinion may involve expense or liability to the Servicer.

SECTION 9.2   MERGER OR CONSOLIDATION OF SERVICER.

         (a) Servicer will keep and maintain in full force and effect (i) its
existence, rights and franchises as a corporation, (ii) 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 this Servicing Agreement, the Contracts or the Contract Files,
(iii) all its Permits necessary to its services as Servicer hereunder, and (iv)
otherwise conduct its business so as to maintain as true and correct all of the
Servicer's representations, warranties and covenants hereunder.

         (b) Any Person resulting from any Business Combination where the
Servicer is a party, or any Person succeeding to the business of the Servicer,
shall be the successor of the Servicer hereunder and succeed to all of the
Servicer's duties, obligations and liabilities hereunder, subject to the Owner's
prior written consent, which consent shall not be unreasonably withheld;
provided, however, that the proposed successor or surviving Person to the
Servicer must, prior to the closing of any such Business Combination, deliver an
Officers' Certificate and other appropriate instruments in form and substance
acceptable to the Owner (i) establishing to the Owner's satisfaction the
qualification of the successor or surviving Person and making all the
representations and warranties of the Servicer, (ii) expressly assuming the due
and punctual performance of the Servicer's covenants, conditions and
obligations, and (iii) otherwise taking all actions and satisfying all
requirements of this Servicing Agreement.

SECTION 9.3   SUCCESSOR TO SERVICER.

         (a) Subject to the prior written consent of Owner, which consent shall
not be unreasonably withheld, Servicer may assign all or substantially all of
its rights and delegate all or substantially all of its duties and obligations
under this Servicing Agreement; provided that the Person accepting such
assignment or delegation shall be a Person which (i) is qualified to service
Contracts and (ii) is willing to service the Contracts and executes and delivers
to the Owner an agreement, in form and substance satisfactory to Owner, which
makes and affirms all the representations, warranties and covenants on behalf of
the proposed successor servicer contained herein and contains an express
assumption by such Person of the due and punctual performance



                                      -25-
<PAGE>   26

and observance of all covenants, conditions and obligations to be performed or
observed by the Servicer under this Servicing Agreement. In the case of any
permitted assignment and delegation hereunder, the Servicer shall be released
from future obligations under this Servicing Agreement only upon the completion
of all actions required to be taken under this Section 9.3; provided the
Servicer shall remain liable for all liabilities and obligations theretofore
incurred by it as Servicer hereunder and hereby indemnifies and agrees to hold
harmless and defend such successor servicer and its directors, officers,
employees, agents, representatives and controlling Persons from and against all
claims, demands, actions, losses, damages, penalties, fines, forfeitures,
judgments, arbitral awards and any other costs, fees, charges and expenses that
in any way relate to or arise out of the Servicer's performed services
hereunder.

         (b) Any successor servicer appointed as provided herein shall execute,
acknowledge and deliver to Owner and Servicer an instrument accepting such
appointment, and confirming the representations, warranties and covenants of the
Servicer as to itself as successor servicer and agreeing to perform all of the
duties and assuming all of the obligations of the Servicer provided herein, and
upon the Owner's written acceptance thereof, the successor servicer shall become
fully vested with all the rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer hereunder which are required to be performed or
shall first arise after the effective date of the appointment of such successor
servicer, with like effect as if originally named as the Servicer hereunder, and
shall become a party to this Servicing Agreement. Any termination or resignation
of the Servicer pursuant to this Servicing Agreement shall not affect or impair
any of the obligations and liabilities of such Servicer incurred or arising
prior to the successor servicer becoming Servicer hereunder, or any claims that
Owner may have against the Servicer arising before such successor servicer
effectively becomes the Servicer hereunder, all of which, together with the
indemnification provided in Section 9.3(a), shall survive and remain in full
force and effect any such termination and the appointment of a successor
servicer.

         (c) If the Servicer is terminated and a successor servicer is appointed
by Owner, Servicer shall promptly deliver to such successor servicer, all funds
in the Servicing Account and any other monies or assets otherwise held as a
result hereof for the benefit of the Owner or any Obligor, and any portion of
the Contract Files and related documents and statements held by the Servicer
hereunder, and Servicer shall account for all funds and shall execute and
deliver such documents, instruments and agreements, and do such other and
further things as may reasonably be required to more fully and definitely vest
and confirm in the successor servicer all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer, and in
furtherance thereof Servicer shall execute and deliver an instrument naming the
successor servicer as attorney-in-fact for the Servicer for purposes of acting
in such capacity hereunder.

SECTION 9.4   NOTICE OF BUSINESS COMBINATION; CHANGE IN CONTROL OF SERVICER.

         In the event a Business Combination involving the Servicer or a change
in control of the Servicer are proposed or any event occurs where it is
reasonably likely that a Business Combination involving, or a change in control
of, the Servicer may result, Servicer shall give



                                      -26-
<PAGE>   27

Owner written notice of such event as soon as practicable and in no event later
than the first public disclosure of such event, proposal, arrangement or
understanding.

SECTION 9.5   INDEMNIFICATION OF SERVICER.

         Owner shall indemnify and hold harmless Servicer and its directors,
officers, employees, agents, representatives and controlling Persons
(collectively, the "Indemnified Persons") against any and all claims, demands,
actions, losses, damages, penalties, fines, forfeitures, including reasonable
legal fees and charges, judgments, arbitral awards and any other costs, fees,
charges and expenses ("Claims") that the Servicer or the Indemnified Persons may
sustain as a result of third party claims, actions, investigations or
proceedings brought against the Servicer or the Indemnified Persons, which are
related to the Owner's acts or omissions hereunder or the breach of any of
Owner's representations, warranties and covenants hereunder, except for Claims
for which the Servicer is required to indemnify any Person pursuant to Section
8.2, or which result from an act or omission caused by Servicer or the failure
of Servicer to service and administer the Contracts in strict compliance with
the terms of this Servicing Agreement. Servicer shall give Owner prompt written
notice of any such Claim within three (3) Business Days of the Servicer's
receipt of notice thereof (or such longer reasonable time if the rights of the
Owner are not prejudiced thereby), and shall not settle or compromise such Claim
without the Owner's prior written consent. Owner may, in its sole discretion,
assume Servicer's defense of any such Claim with counsel reasonably acceptable
to Servicer.


                                    ARTICLE X
                                     DEFAULT

SECTION 10.1  EVENTS OF DEFAULT.

         The following events by Servicer or Owner shall be Events of Default
under this Servicing Agreement:

         (a) Any failure by Servicer to remit to Owner or to the Collections
Account any payment required to be made under the terms of this Servicing
Agreement, which continues unremedied for three (3) Business Days, unless such
failure is caused by the act or omission of an unrelated third party, in which
event an Event of Default shall be deemed to have occurred if the failure is not
cured within four (4) Business Days after the Servicer has notice of such
failure; or

         (b) Failure on the part of Servicer or Owner duly to observe or
perform, in any material respect any of the covenants, obligations or agreements
set forth in this Servicing Agreement, which failure is not cured within thirty
(30) days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to Servicer or Owner, as the case may
be, or, if such failure cannot reasonably be cured within thirty (30) days,


                                      -27-
<PAGE>   28

such party has not commenced and diligently pursued the cure of such failure
within thirty (30) days after the date of such notice; or

         (c) A decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against Servicer or Owner and such decree or
order shall have remained in force, undischarged or unstayed for a period of
forty-five (45) days; or

         (d) Servicer or Owner shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to Servicer or
Owner, as the case may be, or of or relating to all or substantially of
Servicer's or Owner's property, as the case may be; or

         (e) Servicer or Owner shall admit in writing its inability to pay its
Debts as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or

         (f) Any representation or warranty of Owner in this Servicing Agreement
is false, incorrect or misleading in any material respect, or if any
representation or warranty contained in any reports, documents, certificates or
other papers delivered to Servicer from time to time, is false, incorrect or
misleading in any material respect, and is not cured within thirty (30) days of
written notice thereof to Owner; or

         (g) Any representation or warranty of Servicer in this Servicing
Agreement is false, incorrect or misleading in any material respect, or if any
representation or warranty contained in any reports, documents, certificates or
other papers delivered to Owner from time to time is false, incorrect or
misleading in any material respect and is not cured within thirty (30) days of
written notice thereof to Servicer.

SECTION 10.2  NOTICE OF DEFAULT AND/OR TERMINATION.

         Upon the happening of an Event of Default as provided in Section 10.1
above, the non-defaulting party shall give written notice of such Event of
Default to the defaulting party. After the expiration of any applicable period
for curing such default, if the default is still not cured, then the
non-defaulting party may commence termination of all the rights and obligations
of both parties under this Servicing Agreement in accordance with Section 11.1
of this Agreement.



                                      -28-
<PAGE>   29

SECTION 10.3  WAIVER OF DEFAULT.

         Following an Event of Default, as provided in Section 10.1, the
non-defaulting party may, by written notice to the other party, waive such
Default and any attendant right of Termination. Upon any such waiver, such Event
of Default shall cease to exist, and shall deemed to have been remedied for
every purpose of this Servicing Agreement. No such waiver shall extend to any
subsequent or other Event of Default, or impair any right consequent thereon to
the extent expressly so waived.

                                   ARTICLE XI
                     TERMINATION OF THE SERVICING AGREEMENT

SECTION 11.1. TERM AND TERMINATION.

         This Servicing Agreement shall be effective commencing as of the date
hereof. The Term of this Servicing Agreement shall be for an initial period (the
"Initial Period") commencing on the date hereof and ending on the last day of
the third full calendar month following the "Closing Date," as such term is
defined in the Sale Agreement (such date, as such may be extended pursuant
hereto, is hereinafter referred to as the "Scheduled Termination Date"). The
Term of this Servicing Agreement shall be extended for an additional three (3)
calendar months, unless the Owner shall give written notice to the Servicer of
its desire to terminate this Agreement at least fifteen (15) days prior to a
Scheduled Termination Date. Notwithstanding the foregoing, the Term of this
Servicing Agreement shall be terminated upon the happening of any of the
following events: (a) the later of the collection by Servicer and transfer to
Owner of final payment or liquidation with respect to the last Contract and the
remittance of all funds due hereunder; (b) the mutual written consent of
Servicer and Owner; (c) Servicer or Owner has an uncured Default under Article X
hereof, and the non-defaulting party has given the defaulting party notice of
termination as provided in Article X, which Event of Default has not been waived
by the non-defaulting party pursuant to Section 10.3 hereof, or (d) the last day
of the calendar month in which the Sale Agreement shall be terminated, pursuant
to its terms or otherwise.

SECTION 11.2  SERVICER'S DUTIES ON TERMINATION.

         By not later than the effective date of any termination of this
Agreement, the Servicer shall effect the orderly, efficient and expeditious
transfer of servicing to the Owner (or such successor servicer as may be
designated in writing by the Owner to the Servicer), which shall include:

         (a) To the extent it has not already done so in accordance with the
provisions of this Article XI, pay or cause to be paid over to the Owner or its
designee all money collected and held by it relating to the Contracts,
including, but not limited to, any funds in its possession or in any account
held by or for its benefit;

         (b) Deliver to the Owner a full accounting, including a statement
showing the monthly payments collected by it since the most recent reports
delivered by the Servicer to the Owner, and


                                      -29-
<PAGE>   30

a statement of money held by it in trust, and final reports as of the date of
completion of the Deboarding Process for all of the Contracts, as required by
Section 6.7;

         (c) Deliver to the Owner (i) all Contract Files which are then in the
Servicer's possession, (ii) the electronic records (Electronic Contract
Information) relating to the Contracts, in such electronic form as may be
reasonably requested, and (iii) an administrative status report detailing the
location of each Financed Vehicle repossessed or otherwise held by the Servicer
on the Owner's behalf;

         (d) Complete the Deboarding Process for each and every Contract in
accordance with Section 6.10(b) of this Agreement;

         (e) Deliver to the Obligors a written notice, containing such
disclosures and in such form as are reasonably acceptable to the Owner,
notifying them of the existence of a new servicer for the Contracts; and

         (f) Provide its best efforts to correct, or assist the Owner in
correcting, any material errors, inaccuracies and omissions in the Electronic
Contract Information relating to the Contracts that is transferred to the Owner
as part of the Deboarding Process.


                                   ARTICLE XII
                 CONFIDENTIALITY; OWNER NOT TO SOLICIT OBLIGORS;
                   NO SOLICITATION OF OTHER PARTY'S EMPLOYEES

12.1     CONFIDENTIALITY COVENANT.

         Except to the extent required by applicable law and upon satisfaction
of the procedures set forth in this Section 12.1 or unless the parties hereto
shall mutually agree otherwise, the parties (including their directors,
officers, employees and counsel) agree to keep confidential the existence and
terms of this Servicing Agreement and all proprietary information relating to
each other's business, including, but not limited to, credit underwriting
criteria, products, customer lists, pricing policies, employment records and
policies, operational methods, marketing plans and strategies, product
development techniques and inventions and research programs, trade know-how,
trade secrets, specific software, algorithms, computer processing systems,
object and source codes, user manuals, systems documentation and other business
and financial affairs, and the parties agree not to disclose, deliver or
otherwise make available such materials or information to any third party (other
than their own directors, officers, employees, accountants and counsel who need
such information or materials). If a party is required by applicable law or
legal process to make disclosure to a third party of information or materials
required to be maintained as confidential pursuant to this Section 12.1, the
disclosing party shall give prior written notice to the other party (the
"Protected Party") of the information and materials it intends to disclose and
the reasons why the disclosing party believes it is required to disclose such
information and


                                      -30-
<PAGE>   31

materials. The Protected Party may either consent to such disclosure, object to
such disclosure or seek a protective order or appropriate remedy to prohibit or
limit such disclosure. In the event that the Protected Party objects to such
disclosure but fails to obtain a protective order or other remedy, the
disclosing party shall disclose only such information and materials as counsel
for the disclosing party determines is required to be made. Notwithstanding the
foregoing, no party shall make a public announcement regarding the existence of
this Agreement or the terms hereof without the prior consent of the other party,
and the parties will cooperate with each other in preparing the contents and
determining the manner of distribution of any such announcement.

12.2     OWNER NOT TO SOLICIT OBLIGORS.

         From and after each Sale Date, as defined in the Sale Agreement, as to
any Contract and for so long as such Contract is outstanding, neither Servicer
nor any officer or employee of Servicer shall knowingly solicit, and neither
Servicer nor its officers and employees shall encourage or recommend any agent
or representative of Servicer to solicit, any Obligor in respect of such
Contract, either singly or as part of a group, on behalf of Servicer or any
other entity in any manner that would encourage prepayment of such Contract,
except that Servicer may continue to make general solicitations to the public
and to any of Servicer's customers and may advertise, sell and provide all
financial services offered by Servicer.

12.3     NO SOLICITATION OF OTHER PARTY'S EMPLOYEES.

         During the term of this Servicing Agreement and for one year after its
termination, both Servicer and Owner agree not to solicit or cause to be
solicited the employment of any person who is employed by the other party.
Notwithstanding anything to the contrary in this section, the employment by
Servicer or Owner of officers and employees of the other party who contact the
hiring party on their own initiative without any direct solicitation or
encouragement from the hiring party or who are solicited by advertising or
notices in newspapers or periodicals of general circulation shall not constitute
a breach of this Section 12.3.


                                  ARTICLE XIII
                            MISCELLANEOUS PROVISIONS

13.1     NOTICES.

         All notices and other communications provided for hereunder shall,
unless otherwise stated herein, be in writing and mailed or telecommunicated, or
delivered as to each party hereto, at its address set forth under its name on
the signature page hereof or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall not be effective until received by the party to whom such
notice or communication is addressed.




                                      -31-
<PAGE>   32

13.2     NO WAIVER; REMEDIES.

         No failure on the part of Servicer or Owner to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any other remedies provided by law.

13.3     BINDING EFFECT; ASSIGNABILITY.

         This Servicing Agreement shall be binding upon and inure to the benefit
of Servicer and Owner, and their respective successors and permitted assigns.
The Servicer may not assign any of its rights and obligations hereunder or any
interest herein without the prior written consent of the Owner, which consent
should not be unreasonably withheld. Owner may assign all of its rights
hereunder to one or more Persons. This Servicing Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until its termination;
provided, that the obligations of both parties set forth in Article XII, the
rights and remedies granted to the Owner pursuant to Section 6.9, the
indemnification and payment provisions of Sections 8.2 and 9.5, and the
obligations of Servicer set forth in Section 11.2 shall be continuing and shall
survive any termination of this Servicing Agreement.

13.4     AMENDMENTS; CONSENTS AND WAIVERS; ENTIRE AGREEMENT.

         No modification, amendment or waiver of, or with respect to, any
provision of this Servicing Agreement, and all other agreements, instruments and
documents delivered hereto, and no consent to any departure by the Servicer or
by the Owner from any of the terms or conditions hereof shall be effective
unless it shall be in writing and signed by each of the parties hereto. Any
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No consent to or demand by Servicer or Owner in any
case shall, in itself, entitle such party to any other consent or further notice
or demand in similar or other circumstances. This Servicing Agreement and the
documents referred to herein embody the entire agreement of Servicer and Owner
with respect to servicing and administering the Contracts and supersede all
prior agreements and understandings relating to the subject hereof. This
Servicing Agreement and the Sale Agreement are independent and mutually
exclusive of each other.

13.5     SEVERABILITY.

         In case any provision in or obligation under this Servicing Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provision or obligations, or of
such provision or obligation, shall not in any way be affected or impaired
thereby in any other jurisdiction.



                                      -32-
<PAGE>   33

13.6     COSTS, FEES AND EXPENSES.

         If any legal proceeding is instituted by either party against the other
under this Servicing Agreement or in respect to any Contract, the non-prevailing
party shall also be required to pay the prevailing party's costs and expenses of
such litigation, including reasonable attorneys fees. Except as otherwise
provided in this Servicing Agreement, each party agrees to pay all costs, fees
and expenses which it has incurred in connection with or incidental to the
matters contained in this Servicing Agreement, including any fees and
disbursements to its accountants and counsel.

13.7     RIGHT OF OFFSET AND DEDUCTION.

         Any party (the "Offsetting Party") may offset and deduct from any
amount payable by the Offsetting Party to the other party (the "Debtor Party")
under this Agreement or the Sale Agreement any amount which is, at the time of
exercise of the right of offset and deduction, presently due and payable by the
Debtor Party to the Offsetting Party pursuant to this Agreement or the Sale
Agreement.

13.8     GOVERNING LAW.

         THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE OF
FLORIDA.

13.9     CONSENT TO JURISDICTION AND VENUE.

         Each of the Servicer and the Owner hereby irrevocably and
unconditionally submits, for itself and its property, to the non-exclusive
jurisdiction of any Arkansas state court, Florida state court, federal court of
the United States of America for the Eastern District of Arkansas, or federal
court of the United States of America for the Northern District of Florida, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement, or for recognition or enforcement of any
judgment, and the parties agree that all claims in respect of any such action or
proceeding may be heard and determined in such Arkansas or Florida state or, to
the extent permitted by law, federal court

13.10    EXECUTION IN COUNTERPARTS.

         This Servicing Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement



                                      -33-
<PAGE>   34




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

                                 NATIONAL AUTO FINANCE COMPANY, INC.


                                 By:
                                      ------------------------------------------
                                      William Magro
                                      President and Chief Operating Officer

                                 Address: National Auto Finance Company, Inc.
                                          10302 Deerwood Park Boulevard
                                          Suite 100
                                          Jacksonville, Florida 32255-0970
                                          Telephone:       904-996-2500
                                          Telecopy:        904-996-2539

                                 With a copy to:
                                          Stephen R. Veth, Esq.
                                          Vice President, Secretary and
                                          General Counsel
                                          Telephone:       904-486-1151
                                          Telecopy:        904-996-2557


                                 NUVELL CREDIT CORPORATION


                                 By:
                                      ------------------------------------------
                                      Tommy E. Pritchard
                                      President

                                 Address: 17500 Chenal Parkway, Suite 201
                                          Little Rock, Arkansas 72223-9131
                                          Telephone:       501-821-5200
                                          Telecopy:        501-821-5208

                                 With a copy to:
                                          Thomas N. Rose, Esq.
                                          Executive Vice President
                                          Telephone:       501-821-8105
                                          Telecopy:        501-821-5208




                                      -34-
<PAGE>   35




                                  EXHIBIT LIST


A        List of Third Party Fees and Expenses Reimbursable by the Owner to the
         Servicer

B        NAFI/Nuvell Credit Corporation Servicing Standards



                                      -35-
<PAGE>   36






                                    EXHIBIT A

List of Third Party Fees and Expenses Reimbursable by the Owner to the Servicer

         This Exhibit A lists fees and expenses paid by the Servicer to third
parties that must be reimbursed by the Owner to the Servicer pursuant to Section
7.1(d)(iv) of the Servicing Agreement.

         (1)      Vehicle appraisal fees
         (2)      Special investigation and skip tracing fees incurred by the
                  Servicer, not to exceed $100 for any one Contract without the
                  Owner's prior consent
         (3)      Reasonable fees and out-of-pocket expenses paid to
                  repossession agents
         (4)      Auction fees and expenses
         (5)      Reasonable fees and expenses incurred with respect to the
                  transfer of repossessed vehicles
         (6)      Vehicle storage fees and impound fees
         (7)      Fees paid to departments of motor vehicles to obtain duplicate
                  and repo titles
         (8)      Costs incurred to recondition repossessed vehicles, not to
                  exceed $675 for any one vehicle without the Owner's prior
                  consent
         (9)      Costs incurred to obtain new or duplicate keys for repossessed
                  vehicles
         (10)     Reasonable fees and expenses of outside counsel engaged by the
                  Servicer in accordance with the terms of the Servicing
                  Agreement
         (11)     Overnight courier expenses, except for overnight courier
                  expenses incurred to transmit items to and from the Lockbox
                  Bank or to and from the Owner
         (12)     Reasonable out-of-pocket costs and expenses incurred to ship
                  Contract Files to the Owner