Document:

<PAGE>

                                                                     Exhibit 4.2
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                                TRUST AGREEMENT

                                    between

                             PRUDENTIAL SECURITIES
                        SECURED FINANCING CORPORATION,

                                 as Depositor

                                      and

                           WILMINGTON TRUST COMPANY,

                                      as

                                 Owner Trustee

                           Dated as of June 1, 2000

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<PAGE>

                               Table of Contents
<TABLE>
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                                                                                                       Page
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<S>                                                                                                     <C>
ARTICLE I     DEFINITIONS............................................................................   1

     SECTION 1.1   Capitalized Terms.................................................................   1
     SECTION 1.2   Other Definitional Provisions.....................................................   3

ARTICLE II    ORGANIZATION...........................................................................   3

     SECTION 2.1   Name..............................................................................   3
     SECTION 2.2   Office............................................................................   4
     SECTION 2.3   Purposes and Powers...............................................................   4
     SECTION 2.4   Appointment of Owner Trustee......................................................   4
     SECTION 2.5   Initial Capital Contribution of Trust Estate......................................   4
     SECTION 2.6   Declaration of Trust..............................................................   5
     SECTION 2.7   Liability of the Transferor.......................................................   5
     SECTION 2.8   Title to Trust Property...........................................................   5
     SECTION 2.9   Situs of Trust....................................................................   5
     SECTION 2.10  Representations and Warranties of the Depositor...................................   5
     SECTION 2.11  Federal Income Taxes..............................................................   6
     SECTION 2.12  [Reserved]........................................................................   7
     SECTION 2.13  Covenants of the Holders..........................................................   7

ARTICLE III   TRUST CERTIFICATES AND TRANSFER OF INTERESTS...........................................   7

     SECTION 3.1   Initial Ownership.................................................................   8
     SECTION 3.2   The Trust Certificates............................................................   8
     SECTION 3.3   Authentication of Trust Certificates..............................................   8
     SECTION 3.4   Registration of Transfer and Exchange of Trust Certificates.......................   8
     SECTION 3.5   Mutilated, Destroyed, Lost or Stolen Trust Certificates...........................  10
     SECTION 3.6   Persons Deemed Certificateholders.................................................  10
     SECTION 3.7   Access to List of Certificateholders' Names and Addresses.........................  11
     SECTION 3.8   Maintenance of Office or Agency...................................................  11
     SECTION 3.9   Appointment of Certificate Paying Agent...........................................  11
     SECTION 3.10  [Reserved]........................................................................  12
     SECTION 3.11  [Reserved]........................................................................  12
     SECTION 3.12  [Reserved]........................................................................  12
     SECTION 3.13  ERISA Restrictions................................................................  12
     SECTION 3.14  [Reserved]........................................................................  12
     SECTION 3.15  [Reserved]........................................................................  12
     SECTION 3.16  [Reserved]........................................................................  12
     SECTION 3.17  Original Issuance.................................................................  12
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     SECTION 3.18  Actions of Certificateholders.....................................................  12

ARTICLE IV      ACTIONS BY OWNER TRUSTEE.............................................................  13

     SECTION 4.1   Prior Notice to Holders with Respect to Certain Matters...........................  13
     SECTION 4.2   Action by Certificateholders with Respect to Certain Matters .....................  13
     SECTION 4.3   Action by Certificateholders with Respect to Bankruptcy...........................  13
     SECTION 4.4   Restrictions on Certificateholders' Power.........................................  14
     SECTION 4.5   Majority Control..................................................................  14
     SECTION 4.6   Rights of Insurer.................................................................  15

ARTICLE V       APPLICATION OF TRUST FUNDS:  CERTAIN DUTIES..........................................  15

     SECTION 5.1   Establishment of Certificate Distribution Account.................................  15
     SECTION 5.2   Application of Funds in Certificate Distribution Account..........................  15
     SECTION 5.3   [Reserved]........................................................................  16
     SECTION 5.4   Method of Payment.................................................................  16
     SECTION 5.5   No Segregation of Monies; No Interest.............................................  17
     SECTION 5.6   Accounting and Reports to the Noteholders, Certificateholders, the Internal
                   Revenue Service and Others .......................................................  17
     SECTION 5.7   Signature on Returns; Tax Matters Partner.........................................  17

ARTICLE VI      AUTHORITY AND DUTIES OF OWNER TRUSTEE................................................  17

     SECTION 6.1   General Authority.................................................................  18
     SECTION 6.2   General Duties....................................................................  18
     SECTION 6.3   Action upon Instruction...........................................................  18
     SECTION 6.4   No Duties Except as Specified in this Agreement or in Instructions................  19
     SECTION 6.5   No Action Except under Specified Documents or Instructions........................  19
     SECTION 6.6   Restrictions......................................................................  19

ARTICLE VII     CONCERNING THE OWNER TRUSTEE.........................................................  19

     SECTION 7.1   Acceptance of Trusts and Duties...................................................  19
     SECTION 7.2   Furnishing of Documents...........................................................  20
     SECTION 7.3   Representations and Warranties....................................................  21
     SECTION 7.4   Reliance; Advice of Counsel.......................................................  21
     SECTION 7.5   Not Acting in Individual Capacity.................................................  22
     SECTION 7.6   Owner Trustee Not Liable for Trust Certificates or Receivables....................  22
     SECTION 7.7   Owner Trustee May Own Trust Certificates and Notes................................  22
     SECTION 7.8   Payments from Owner Trust Estate..................................................  22
     SECTION 7.9   Doing Business in Other Jurisdictions.............................................  22

ARTICLE VIII   COMPENSATION OF OWNER TRUSTEE.........................................................  23

     SECTION 8.1   Owner Trustee's Fees and Expenses.................................................  23
     SECTION 8.2   Indemnification...................................................................  23
</TABLE>
                                      ii
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     SECTION 8.3   Payments of Owner Trustee.........................................................  23
     SECTION 8.4   Non-recourse Obligations..........................................................  23

ARTICLE IX     TERMINATION OF TRUST AGREEMENT........................................................  23

     SECTION 9.1   Termination of Trust Agreement....................................................  23

ARTICLE X      SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES................................  24

     SECTION 10.1  Eligibility Requirements for Owner Trustee........................................  25
     SECTION 10.2  Resignation or Removal of Owner Trustee...........................................  25
     SECTION 10.3  Successor Owner Trustee...........................................................  25
     SECTION 10.4  Merger or Consolidation of Owner Trustee..........................................  26
     SECTION 10.5  Appointment of Co-Trustee or Separate Trustee.....................................  26

ARTICLE XI     MISCELLANEOUS.........................................................................  27

     SECTION 11.1  Supplements and Amendments........................................................  27
     SECTION 11.2  No Legal Title to Owner Trust Estate in Certificateholders........................  28
     SECTION 11.3  Limitations on Rights of Others...................................................  28
     SECTION 11.4  Notices...........................................................................  28
     SECTION 11.5  [Reserved]........................................................................  29
     SECTION 11.6  Severability......................................................................  29
     SECTION 11.7  Separate Counterparts.............................................................  29
     SECTION 11.8  Third-Party Beneficiaries.........................................................  29
     SECTION 11.9  [Reserved]........................................................................  29
     SECTION 11.10 No Petition.......................................................................  29
     SECTION 11.11 No Recourse.......................................................................  29
     SECTION 11.12 Headings..........................................................................  30
     SECTION 11.13 GOVERNING LAW.....................................................................  30
     SECTION 11.14 Agreement Creates No Partnership Except for Tax  Purposes.........................  30
     SECTION 11.15 Servicer..........................................................................  30

     Form of Class A Certificate............................................................... Exhibit A

     Form of Class R Certificate

     Form of Certificate of Trust.............................................................. Exhibit B
</TABLE>

                                      iii
<PAGE>

     TRUST AGREEMENT dated as of June 1, 2000 between PRUDENTIAL SECURITIES
SECURED FINANCING CORPORATION, a Delaware corporation, as Depositor, and
WILMINGTON TRUST COMPANY, a Delaware banking corporation as Owner Trustee.

                                   ARTICLE I

                                  Definitions
                                  -----------

     SECTION 1.1.  Capitalized Terms.  For all purposes of this Agreement, the
                   -----------------
following terms shall have the meanings set forth below:

          "Actual Knowledge" means, with respect to the  Owner Trustee, any
           ----------------
officer within the Corporate Trust Administration office of the Owner Trustee
responsible for administering the Trust hereunder, or under the Basic Documents,
who has actual knowledge of an action taken or an action not taken with regard
to the Trust.  Actions taken or actions not taken of which the Owner Trustee
should have had knowledge, and constructive knowledge, do not meet the
definition of Actual Knowledge hereunder.

          "Agreement" shall mean this Trust Agreement, as the same may be
           ---------
amended and supplemented from time to time.

          "Basic Documents" shall mean Certificate of Trust, the Trust
           ---------------
Agreement, the Sale and Servicing Agreement, the Indenture, the Insurance
Agreement, the Reserve Account Agreement, the Custodial Agreement, the
Depository Agreement and the other documents and certificates delivered in
connection therewith.

          "Benefit Plan" shall have the meaning assigned to such term in Section
           ------------
3.13.

          "Business Trust Statute" shall mean Chapter 38 of Title 12 of the
           ----------------------
Delaware Code, 12 Del. Code Section 3801 et seq., as the same may be amended
from time to time.

          "Certificate" means a Trust Certificate evidencing the beneficial
           -----------
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit A-1 or Exhibit A-2 attached hereto.

          "Certificate Distribution Account" shall have the meaning assigned to
           --------------------------------
such term in Section 5.1.

          "Certificate Majority" means the Holders of more than 50% of the
           --------------------
Outstanding Amount of the Class A Certificates and more than 50% of Holders of
the Class R Certificates.

          "Certificate of Trust" shall mean the Certificate of Trust in the form
           --------------------
of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.

          "Certificate Paying Agent" shall mean any paying agent or co-paying
           ------------------------
agent appointed pursuant to Section 3.9 and shall initially be the Trustee.

          "Certificate Register" and "Certificate Registrar" shall mean the
           --------------------       ---------------------
register mentioned and the registrar appointed pursuant to Section 3.4.

          "Closing Date" means June 30, 2000.
           ------------

                                       1
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          "Code" shall mean the Internal Revenue Code of 1986, as amended from
           ----
time to time, and the Treasury Regulations promulgated thereunder.

          "Corporate Trust Office" shall mean, with respect to the Owner
           ----------------------
Trustee, the principal corporate trust office of the Owner Trustee located at
1100 North Market Street, North Rodney Square, Wilmington, Delaware, 19890, or
at such other address as the Owner Trustee may designate by notice to the
Certificateholders and the Depositor, or the principal corporate trust office of
any successor Owner Trustee (the address of which the successor owner trustee
will notify the Certificateholders and the Depositor).

          "Definitive Trust Certificates" shall mean Trust Certificates issued
           -----------------------------
in certificated, fully registered form as provided in Section 3.17 hereof.

          "Depositor" shall mean Prudential Securities Secured Financing
           ---------
Corporation in its capacity as Depositor hereunder.

          "ERISA" shall have the meaning assigned to such term in Section 3.13.
           -----

          "Expenses" shall have the meaning assigned to such term in Section
           --------
8.2.

          "Holder" or "Certificateholder" shall mean the Person in whose name a
           ------      -----------------
Trust Certificate is registered on the Certificate Register.

          "Indemnified Parties" shall have the meaning assigned to such term in
           -------------------
Section 8.2.

          "Insurer"  shall mean Financial Security Assurance, Inc. its
           -------
successors and assigns.

          "Owner Trust Estate" shall mean all right, title and interest of the
           ------------------
Trust in and to the Trust Property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and the Certificate Distribution Account and all
other property of the Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Sale and Servicing Agreement.

          "Owner Trustee" shall mean Wilmington Trust Company, a Delaware
           -------------
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.

          "Person" means any individual, corporation, limited liability company,
           ------
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.

          "Record Date" shall mean with respect to any Payment Date, the last
           -----------
day of the calendar month immediately preceding such Payment Date.

          "Responsible Officer" means, with respect to the Owner Trustee, any
           -------------------
officer within the Corporate Trust Administration office of the Owner Trustee,
including any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary or any other officer of the Owner Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.

                                       2
<PAGE>

          "Sale and Servicing Agreement" shall mean the Sale and Servicing
           ----------------------------
Agreement among the Trust, PF Funding II, LLC, the Depositor, the Seller, the
Servicer, the Indenture Trustee and the Backup Servicer, dated as of June 1,
2000, as the same may be amended and supplemented from time to time.

          "Secretary of State" shall mean the Secretary of State of the State of
           ------------------
Delaware.

          "Treasury Regulations" shall mean regulations, including proposed or
           --------------------
temporary regulations, promulgated under the Code.  References herein to
specific provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.

          "Trust" shall mean the trust established by this Agreement.
           -----

          "Trust Certificate" shall mean a Certificate.
           -----------------

     SECTION 1.2.  Other Definitional Provisions. (a) Capitalized terms used
                   -----------------------------
herein and not otherwise defined have the meanings assigned to them in the Sale
and Servicing Agreement or, if not defined therein, in the Indenture.

          (b)  All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.

As used in this Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such certificate or other document, as applicable.  To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.

          (c)  The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."

          (d)  The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.

                                  ARTICLE II

                                 Organization

     SECTION 2.1.  Name. There is hereby formed a trust to be known as
                   ----
"PeopleFirst.com Vehicle Receivables Owner Trust 2000-1" (hereinafter, the
"Trust"), in which name the Owner Trustee may conduct the business of the Trust,
make and execute contracts and other instruments on behalf of the Trust and sue
and be sued.

                                       3
<PAGE>

     SECTION 2.2.  Office. The office of the Trust shall be in care of the Owner
                   ------
Trustee at the Corporate Trust Office or at such other address as the Owner
Trustee may designate by written notice to the Certificateholders and the
Depositor.

     SECTION 2.3.  Purposes and Powers. (a) The purpose of the Trust is, and the
                   -------------------
Trust shall have the power and authority, to engage in the following activities:

                   (i)    to issue the Notes pursuant to the Indenture and the
     Trust Certificates pursuant to this Agreement, and to sell the Notes and
     the Trust Certificates;

                   (ii)   to enter into the transactions contemplated by the
     Sale and Servicing Agreement;

                   (iii)  with the proceeds of the sale of the Notes, to fund
     the Reserve Account, to pay the organizational, start-up and transactional
     expenses of the Trust and to pay the balance to the Transferor pursuant to
     the Sale and Servicing Agreement;

                   (iv)   to assign, grant, transfer, pledge, mortgage and
     convey the Owner Trust Estate (other than the Certificate Distribution
     Account) to the Indenture Trustee pursuant to the Indenture for the benefit
     of the Insurer and the Indenture Trustee on behalf of the Noteholders and
     to hold, manage and distribute to the Certificateholders and the Transferor
     pursuant to the terms of the Sale and Servicing Agreement any portion of
     the Owner Trust Estate released from the Lien of, and remitted to the Trust
     pursuant to, the Indenture;

                   (v)    to enter into and perform its obligations under the
     Basic Documents to which it is a party;

                   (vi)   to engage in those activities, including entering into
     agreements, that are necessary, suitable or convenient to accomplish the
     foregoing or are incidental thereto or connected therewith; and

                   (vii)  subject to compliance with the Basic Documents, to
     engage in such other activities as may be required in connection with
     conservation of the Owner Trust Estate and the making of distributions to
     the Certificateholders and the Noteholders.

            (b)    The Trust is hereby authorized to engage in the foregoing
activities. The Trust shall not engage in any activity other than in connection
with the foregoing or other than as required or authorized by the terms of this
Agreement or the Basic Documents.

     SECTION 2.4.  Appointment of Owner Trustee. The Depositor hereby appoints
                   ----------------------------
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.

     SECTION 2.5.  Initial Capital Contribution of Trust Estate. The Depositor
                   --------------------------------------------
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges receipt
in trust from the Depositor, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate and shall be
deposited in the Certificate Distribution Account. The Depositor shall pay
organizational expenses of the Trust as they may arise.

     SECTION 2.6.  Declaration of Trust. The Owner Trustee hereby declares that
                   --------------------
it will hold the Owner Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of

                                       4
<PAGE>

the Holders, subject to the obligations of the Trust under the Basic Documents.
It is the intention of the parties hereto that the Trust constitute a business
trust under the Business Trust Statute and that this Agreement constitute the
governing instrument of such business trust. It is the intention of the parties
hereto that, solely for income and franchise tax purposes, the Trust shall be
treated as a partnership if the Certificates are treated as held by more than
one person and a disregarded entity if the Certificates are treated as held by a
single person. The parties agree that, unless otherwise required by appropriate
tax authorities, the Trust will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with this intention.
Effective as of the date hereof, the Owner Trustee shall have all rights, powers
and duties set forth herein and to the extent not inconsistent herewith, in the
Business Trust Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee shall file the Certificate of Trust with the Secretary of
State.

     SECTION 2.7.  Liability of the Transferor. (a) The Transferor shall pay
                   ---------------------------
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.

          (b)      No Holder, other than to the extent set forth in clause (a),
shall have any personal liability for any liability or obligation of the Trust.

     SECTION 2.8.  Title to Trust Property. (a) Legal title to all the Owner
                   -----------------------
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.

          (b)      The Holders shall not have legal title to any part of the
Trust Property. The Holders shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
Articles V and IX. No transfer, by operation of law or otherwise, of any right,
title or interest by any Certificateholder of its ownership interest in the
Owner Trust Estate shall operate to terminate this Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it of
legal title to any part of the Trust Property.

     SECTION 2.9.  Situs of Trust. The Trust will be located and administered
                   --------------
in the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware or the State of
New York. Payments will be received by the Trust only in Delaware or New York,
and payments will be made by the Trust only from Delaware or New York. The Trust
shall not have any employees in any state other than Delaware; provided however,
that nothing herein shall restrict or prohibit the Owner Trustee, in its
individual capacity, the Servicer or any agent of the Trust from having
employees within or without the State of Delaware. The only office of the Trust
will be at the Corporate Trust Office in Delaware.

     SECTION 2.10. Representations and Warranties of the Depositor. The
                   -----------------------------------------------
Depositor makes the following representations and warranties on which the Owner
Trustee relies in accepting the Owner Trust Estate in trust and issuing the
Certificates and upon which the Insurer relies in issuing the Policy.

          (a)      Organization and Good Standing. The Depositor is duly
                   ------------------------------
organized and validly existing as a Delaware corporation with power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted and is proposed to
be conducted pursuant to this Agreement and the Basic Documents.

                                       5
<PAGE>

          (b)  Due Qualification.  It is duly qualified to do business as a
               -----------------
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property, the conduct of its business and the performance of its obligations
under this Agreement and the Basic Documents requires such qualification.

          (c)  Power and Authority.  The Depositor has the corporate power and
               -------------------
authority to execute and deliver this Agreement and to carry out its terms; the
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Trust and the Depositor has duly
authorized such sale and assignment and deposit to the Trust by all necessary
corporate action; and the execution, delivery and performance of this Agreement
has been duly authorized by the Depositor by all necessary corporate action.

          (d)  No Consent Required.  No consent, license, approval or
               -------------------
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Basic Documents,
except for such as have been obtained, effected or made.

          (e)  No Violation.  The consummation of the transactions contemplated
               ------------
by this Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of the Depositor, or any material indenture, agreement
or other instrument to which the Depositor is a party or by which it is bound;
nor result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); nor violate any law or, to the
best of the Depositor's knowledge, any order, rule or regulation applicable to
the Depositor of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties.

          (f)  No Proceedings.  There are no proceedings or investigations
               --------------
pending or, to its knowledge threatened against it before any court, regulatory
body, administrative agency or other tribunal or governmental instrumentality
having jurisdiction over it or its properties (A) asserting the invalidity of
this Agreement or any of the Basic Documents, (B) seeking to prevent the
issuance of the Certificates or the Notes or the consummation of any of the
transactions contemplated by this Agreement or any of the Basic Documents, (C)
seeking any determination or ruling that might materially and adversely affect
its performance of its obligations under, or the validity or enforceability of,
this Agreement or any of the Basic Documents, or (D) seeking to adversely affect
the Federal, state or local income tax attributes of the Certificates.

     SECTION 2.11.  Federal Income Taxes.
                    --------------------

          (a)  If Certificates are treated as held by more than one person or
the Trust is recharacterized as an entity separate from its owner, each
Certificateholder acknowledges and agrees that the Trust will be treated as a
partnership solely for income tax purposes and that this Agreement does not
create a partnership for any other purpose. No election to treat the Trust other
than as a disregarded entity if the Certificates are treated as held by a single
person or as a partnership if the Certificates are treated as held by more than
one person for Federal income tax purposes or any relevant state tax purposes
shall be made by or on behalf of the Trust, or by any Certificateholder.

          (b)  Net income of the Trust for any month as determined for Federal
income tax purposes (and each item of income, gain, loss, credit and deduction
entering into the computation thereof) shall be allocated:

                                       6
<PAGE>

               (i)  to the extent of available net income and in accordance
     with Federal income tax accounting and allocation principles, among the
     Certificateholders as of the first Record Date following the end of such
     month, in proportion to their ownership of principal amount of Trust
     Certificates on such date, in the priorities set forth in Section 5.2
     herein.

          (c)  If the net income of the Trust for any month is insufficient for
the allocation described in clause (b) above, subsequent net income shall first
be allocated to make up such shortfall before being allocated as provided in
clause (b).

          (d)  Net losses of the Trust, if any, for any month as determined for
Federal income tax accounting and allocation purposes (and each item of income,
gain, loss, credit and deduction entering into the computation thereof) shall be
allocated among the Certificateholders as of the first Record Date following the
end of such month in proportion to their ownership of principal amount of Trust
Certificates on such Record Date until the principal balance of the Trust
Certificates is reduced to zero.

     Notwithstanding anything provided in this Section 2.11, if the Certificates
                                               ------------
are treated as held solely by one person or the Trust has not been
recharacterized as an entity separate from its owner, the application of clause
(b), clause (c) and clause (d) of this section shall be disregarded.

     SECTION 2.12.  [Reserved].

     SECTION 2.13.  Covenants of the Holders. Each Holder agrees:
                    ------------------------

          (a)  to be bound by the terms and conditions of the Certificates and
of this Agreement, including any supplements or amendments hereto and to perform
the obligations of a Holder as set forth therein or herein, in all respects as
if it were a signatory hereto. This undertaking is made for the benefit of the
Trust, the Insurer, the Owner Trustee and all other Holders present and future;

          (b)  to hereby appoint the Owner Trustee as such Holder's agent and
attorney-in-fact to sign any federal income tax information return filed on
behalf of the Trust and agree that, if requested by the Trust, it will sign such
federal income tax information return in its capacity as holder of an interest
in the Trust. Each Holder also hereby agrees that in its tax returns it will not
take any position inconsistent with those taken in any tax returns filed by the
Trust;

          (c)  to notify the Owner Trustee of any transfer by it of a
Certificate in a taxable sale or exchange, within 30 days of the date of the
transfer; and

          (d)  until the completion of the events specified in Section 9.1, not
to, for any reason, institute proceedings for the Trust to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against the Trust, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trust or a substantial
part of its property, or cause or permit the Trust to make any assignment for
the benefit of its creditors, or admit in writing its inability to pay its debts
generally as they become due, or declare or effect a moratorium on its debt or
take any action in furtherance of any such action.

                                       7
<PAGE>

                                  ARTICLE III

                 Trust Certificates and Transfer of Interests
                 --------------------------------------------

     SECTION 3.1.  Initial Ownership. Upon the formation of the Trust by the
                   -----------------
contribution by the Depositor pursuant to Section 2.5 and until the issuance of
the Trust Certificates, the Depositor shall be the sole beneficiary of the
Trust.

     SECTION 3.2.  The Trust Certificates. The Trust Certificates shall be
                   ----------------------
issued in denominations of $1,000 and integral multiples thereof. The Trust
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of an authorized officer of the Owner Trustee. Trust Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be validly issued and entitled to the benefit of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Trust Certificates or did not hold such offices at the date of authentication
and delivery of such Trust Certificates. A transferee of a Trust Certificate
shall become a Certificateholder, and shall be entitled to the rights and
subject to the obligations of a Certificateholder hereunder, upon due
registration of such Trust Certificate in such transferee's name pursuant to
Section 3.4.

     SECTION 3.3.  Authentication of Trust Certificates. Concurrently with the
                   ------------------------------------
initial transfer of the Receivables to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee shall cause the Trust Certificates in an
aggregate principal amount equal to the initial Certificate Balance (if
applicable) to be executed on behalf of the Trust, authenticated and delivered
to or upon the written order of the Depositor, signed by its chairman of the
board, its president or any vice president, its treasurer or any assistant
treasurer without further corporate action by the Depositor, in authorized
denominations.  No Trust Certificate shall entitle its holder to any benefit
under this Agreement, or shall be valid for any purpose, unless there shall
appear on such Trust Certificate a certificate of authentication substantially
in the form set forth in Exhibit A, executed by the Owner Trustee or the Owner
Trustee's authentication agent, by manual signature; such authentication shall
constitute conclusive evidence that such Trust Certificate shall have been duly
authenticated and delivered hereunder.  All Trust Certificates shall be dated
the date of their authentication.

     SECTION 3.4.  Registration of Transfer and Exchange of Trust Certificates.
                   -----------------------------------------------------------
(a) The Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 3.8, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Certificate
Registrar shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided. The Depositor
hereby appoints the Indenture Trustee as the initial Certificate Registrar.

          (b)      Upon surrender for registration of transfer of any Trust
Certificate at the office or agency maintained pursuant to Section 3.8,
accompanied by the certification appearing on the reverse of the form of the
Certificate relating to Rule 144A, executed by the Holder of such Certificate,
the Owner Trustee shall execute, authenticate and deliver, (or cause the
Certificate Registrar as its authenticating agent to authenticate and deliver)
in the name of the designated transferee or transferees, one or more new Trust
Certificates in authorized denominations of a like class and aggregate face
amount dated the date of authentication by the Owner Trustee or any
authenticating agent. At the option of a Holder, Trust Certificates may be
exchanged for other Trust Certificates of the same class in authorized
denominations of a like aggregate amount upon surrender of the Trust
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.8.

                                       8
<PAGE>

          (c)  Every Trust Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Certificateholder or his attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Certificate Registrar, which requirements include
membership or participation in the Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Trust Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Certificate Registrar in accordance with its customary practice.

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

          (e)  Transfer Restrictions.

               (A)  No Certificateholder may, in any transaction or series of
transactions, directly or indirectly (each of the following, a "transfer"), (i)
sell, assign or otherwise in any manner dispose of all or any part of its
interest in any Certificate issued to it, whether by act, deed, merger or
otherwise or (ii) mortgage, pledge or create a lien or security interest in such
beneficial interest unless such transfer is made to a Qualified Institutional
Buyer in accordance with Rule 144A, under the Securities Act. Each
Certificateholder (other than the initial Holder which shall be deemed to have
represented that it is an "institutional accredited investor" under Rule 501 of
the Securities Act) by acquiring any Certificate or any interest therein shall
be deemed to represent to the Issuer and the Owner Trustee that it is a
Qualified Institutional Buyer. Notwithstanding anything contained herein to the
contrary, neither the Certificate Registrar nor shall the Owner Trustee be
responsible for compliance with the Securities Act or applicable securities law.

               (B)  At any time during the taxable year of the Trust, there
shall be no more than 100 Holders. The Certificate Registrar shall take such
action as may be necessary to ensure that this Section 3.4(e) is satisfied,
including, without limitation, refusing to register the transfer of any
Certificate. The Certificate Registrar shall comply with all reasonable written
directions given by the Owner Trustee.

               (C)  Each Certificate issued hereunder shall contain the
following legend:

THIS CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH CERTAIN PROVISIONS OF
A TRUST AGREEMENT BETWEEN PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
AND WILMINGTON TRUST COMPANY (THE "TRUST AGREEMENT"). THIS CERTIFICATE HAS NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY SECURITIES LAWS, AND ISSUER HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
AND PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TRUST
AGREEMENT AND APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND
TO "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), AND SOLELY WITH RESPECT TO THE INITIAL OFFERING OF THE
CERTIFICATES, TO INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE 501(A)
(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) UPON DELIVERY OF A REPRESENTATION
LETTER TO THE TRUSTEE.

                                       9
<PAGE>

NO EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") AND NO OTHER PLAN SUBJECT TO SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY
ENTITY THE ASSETS OF WHICH CONSTITUTE OR ARE DEEMED FOR PURPOSES OF ERISA OR
SECTION 4975 OF THE CODE TO CONSTITUTE THE ASSETS OF ANY SUCH PLAN, MAY PURCHASE
THIS CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE AND THE HOLDING OF
THIS CERTIFICATE OR SUCH INTEREST BY SUCH PLAN (OR ANY ENTITY THE ASSETS OF
WHICH CONSTITUTE "PLAN ASSETS" OF ANY SUCH PLAN) IS SUBJECT TO A STATUTORY OR
ADMINISTRATIVE EXEMPTION. ANY HOLDER HEREOF OR ANY INTEREST HEREIN THAT IS, OR
IS ACTING ON BEHALF OF OR WITH "PLAN ASSETS" OF, AN EMPLOYEE BENEFIT PLAN
SUBJECT TO ERISA OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, AND WITH RESPECT
TO WHICH THE TRUSTEE OR THE OWNER TRUSTEE IS A "PARTY IN INTEREST" OR A
"DISQUALIFIED PERSON", BY PURCHASING THIS CERTIFICATE OR SUCH INTEREST
REPRESENTS THAT ITS PURCHASE OF THIS CERTIFICATE OR SUCH INTEREST IS SUBJECT TO
A STATUTORY OR ADMINISTRATIVE EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF
ERISA AND SECTION 4975 OF THE CODE.

EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF THE ISSUER THAT SUCH
PURCHASER HAS NOT ACQUIRED NOR WILL IT SELL, TRADE, TRANSFER, ASSIGN,
PARTICIPATE, PLEDGE, HYPOTHECATE, CAUSE TO BE MARKETED, OR OTHERWISE DISPOSE OF
THIS CERTIFICATE (OR ANY INTEREST HEREIN) ON OR THROUGH (I) AN "ESTABLISHED
SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(B)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, INCLUDING, WITHOUT LIMITATION, AN OVER-THE-
COUNTER-MARKET OR AN "INTERDEALER QUOTATION SYSTEM" THAT REGULARLY DISSEMINATES
FIRM BUY OR SELL QUOTATIONS, OR (II) A "SECONDARY MARKET (OR THE SUBSTANTIAL
EQUIVALENT THEREOF)" WITHIN THE MEANING OF CODE SECTION 7704(B)(2).

[THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.]

     SECTION 3.5.  Mutilated, Destroyed, Lost or Stolen Trust Certificates.
                   -------------------------------------------------------
If (a) any mutilated Trust Certificate shall be surrendered to the Certificate
Registrar, or if the Owner Trustee and the Certificate Registrar shall receive
evidence to their satisfaction of the destruction, loss or theft of any Trust
Certificate and (b) there shall be delivered to the Certificate Registrar and
the Owner Trustee, such security or indemnity as may be required by them to save
each of them harmless, then in the absence of notice that such Trust Certificate
shall have been acquired by a bona fide purchaser, the Owner Trustee on behalf
of the Trust shall execute and the Owner Trustee or the Owner Trustee's
authentication agent or Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Certificate, a new Trust Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Certificate under this Section,
the Owner Trustee or the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Certificate shall be found at any time.

     SECTION 3.6.  Persons Deemed Certificateholders.  Every Person by virtue of
                   ---------------------------------
becoming a Certificateholder in accordance with this Agreement shall be deemed
to be bound by the terms of this Agreement.  Prior to due presentation of a
Trust Certificate for registration of transfer, the Owner Trustee,

                                       10
<PAGE>

the Certificate Registrar and any agent of the Owner Trustee and the Certificate
Registrar may treat the Person in whose name any Trust Certificate shall be
registered in the Certificate Register as the Holder of such Trust Certificate
for the purpose of receiving distributions pursuant to Section 5.2 and for all
other purposes whatsoever, and none of the Owner Trustee or the Certificate
Registrar nor any agent of the Owner Trustee or the Certificate Registrar shall
be bound by any notice to the contrary.

     SECTION 3.7.   Access to List of Certificateholders' Names and Addresses.
                    ---------------------------------------------------------
The Certificate Registrar shall furnish or cause to be furnished to the Owner
Trustee, the Insurer, the Servicer or the Depositor, within 15 days after
receipt by the Certificate Registrar of a request therefor from such Person in
writing, a list, of the names and addresses of the Certificateholders as of the
most recent Record Date.  If three or more Holders of Trust Certificates or one
or more Holders of Trust Certificates evidencing not less than 25% of the
Certificate Balance apply in writing to the Certificate Registrar, and such
application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Trust Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Certificate
Registrar shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Certificateholders.  Each Holder, by receiving and holding a
Trust Certificate, shall be deemed to have agreed not to hold any of the
Depositor, the Servicer, the Insurer, the Certificate Registrar or the Owner
Trustee or any agent thereof accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.

     SECTION 3.8.   Maintenance of Office or Agency.  The Owner Trustee shall
                    -------------------------------
maintain an office or offices or agency or agencies where Trust Certificates may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Owner Trustee in respect of the Trust Certificates and
the Basic Documents may be served. The Owner Trustee initially designates
Norwest Bank Minnesota, National Association, Norwest Center, Sixth Street &
Marquette Avenue, Minneapolis, Minnesota 55479, as its office for such purposes.
The Owner Trustee shall give prompt written notice to the Depositor, the Insurer
and the Certificateholders of any change in the location of the Certificate
Register or any such office or agency.

     SECTION 3.9.   Appointment of Certificate Paying Agent.  The Certificate
                    ---------------------------------------
Paying Agent shall make distributions to Certificateholders from the Certificate
Distribution Account pursuant to Section 5.2 and shall report the amounts of
such distributions to the Owner Trustee.  The Certificate Paying Agent shall
invest amounts on deposit in the Certificate Distribution Account in accordance
with Section 5.1 hereof.  Any Certificate Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above.  The Owner Trustee may
revoke such power and remove the Certificate Paying Agent if the Owner Trustee
determines in its sole discretion that the Certificate Paying Agent shall have
failed to perform its obligations under this Agreement in any material respect.
The Certificate Paying Agent shall initially be the Indenture Trustee, and any
co-paying agent chosen by the Owner Trustee, and acceptable to the Servicer.
The Certificate Paying Agent shall be permitted to resign upon 30 days' written
notice to the Owner Trustee and the Servicer.  In the event that the Indenture
Trustee shall no longer be the Certificate Paying Agent, the Owner Trustee shall
appoint a successor to act as Certificate Paying Agent (which shall be a bank or
trust company).  The Owner Trustee shall cause such successor Certificate Paying
Agent or any additional Certificate Paying Agent appointed by the Owner Trustee
to execute and deliver to the Owner Trustee an instrument in which such
successor Certificate Paying Agent or additional Certificate Paying Agent shall
agree with the Owner Trustee that as Certificate Paying Agent, such successor
Certificate Paying Agent or additional Certificate Paying Agent will hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders.  The Certificate Paying Agent shall return all
unclaimed funds to the Owner Trustee and upon removal of a Certificate Paying
Agent such Certificate

                                       11
<PAGE>

Paying Agent shall also return all funds in its possession to the Owner Trustee.
The provisions of Sections 7.1, 7.3, 7.4, 8.1 and 8.2 shall apply to the Owner
Trustee also in its role as Certificate Paying Agent, for so long as the Owner
Trustee shall act as Certificate Paying Agent and, to the extent applicable, to
any other paying agent appointed hereunder. Any reference in this Agreement to
the Certificate Paying Agent shall include any co-paying agent unless the
context requires otherwise. The Indenture Trustee, in acting as Certificate
Registrar and Certificate Paying Agent hereunder shall be entitled to the
benefit of the same protective and exculpatory provisions and the indemnity and
compensation provisions applicable to the Indenture Trustee in the Indenture and
Sale and Servicing Agreement.

     SECTION 3.10.  [Reserved].

     SECTION 3.11.  [Reserved].

     SECTION 3.12.  [Reserved].

     SECTION 3.13.  ERISA Restrictions. The Certificates may not be acquired by
                    ------------------
or for the account of (i) an employee benefit plan (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
that is subject to the provisions of Title 1 of ERISA, (ii) a plan described in
Section 4975(e)(1) of the Internal Revenue Code of 1985, as amended, or (iii)
any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding a
Certificate, the Holder thereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.

     SECTION 3.14.  [Reserved].

     SECTION 3.15.  [Reserved].

     SECTION 3.16.  [Reserved].

     SECTION 3.17.  Original Issuance.  The Trust Certificates, upon original
                    ------------------
issuance, will be issued in the form of Definitive Trust Certificates to be
delivered by or on behalf of the Trust in accordance with the written
instructions of the Depositor.  The Owner Trustee shall recognize the Holders of
the Definitive Trust Certificates as Certificateholders.  The Trust Certificate
shall be printed, lithographed or engraved or may be reproduced in any other
manner as so reasonably acceptable to the Owner Trustee, as evidence by its
execution thereof.

     SECTION 3.18.  Actions of Certificateholders
                    -----------------------------

               (a)  Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by the Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by agent duly appointed in writing; and except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Owner Trustee and, when required, to the
Depositor or the Servicer. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Owner Trustee, the Depositor and the
Servicer, if made in the manner provided in this Section 3.18.

                                       12
<PAGE>

               (b)  The fact and date of the execution by any Certificateholder
of any such instrument or writing may be proved in any reasonable manner which
the Owner Trustee deems sufficient.

               (c)  Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind every Holder of
every Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, or omitted to
be done, by the Owner Trustee, the Depositor or the Servicer in reliance
thereon, regardless of whether notation of such action is made upon such
Certificate.

               (d)  The Owner Trustee may require such additional proof of any
matter referred to in this Section 3.18 as it shall deem necessary.

                                  ARTICLE IV

                           Actions by Owner Trustee
                           ------------------------

     SECTION 4.1.   Prior Notice to Holders with Respect to Certain Matters.
                    -------------------------------------------------------
(a) With respect to the following matters, the Owner Trustee shall not take
action unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Certificateholders and the Insurer in writing of
the proposed action and the Certificateholders shall not have notified the Owner
Trustee in writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:

                    (i)   the election by the Trust to file an amendment to the
     Certificate of Trust (unless such amendment is required to be filed under
     the Business Trust Statute or unless such amendment would not materially
     and adversely affect the interests of the Holders);

                    (ii)  the amendment of the Indenture by a supplemental
     indenture in circumstances where the consent of any Noteholder is required;

                    (iii) the amendment of the Indenture by a supplemental
     indenture in circumstances where the consent of any Noteholder is not
     required and such amendment materially adversely affects the interest of
     the Certificateholders; or

                    (iv)  except pursuant to Section 11.1 of the Sale and
     Servicing Agreement, the amendment, change or modification of the Sale and
     Servicing Agreement, except to cure any ambiguity or defect or to amend or
     supplement any provision in a manner that would not materially adversely
     affect the interests of the Certificateholders.

               (b)  The Owner Trustee shall notify the Certificateholders in
writing of any appointment of a successor Note Registrar, Certificate Paying
Agent or Certificate Registrar within five Business Days of the effective date
of such appointment.

     SECTION 4.2.   Action by Certificateholders with Respect to Certain
                    ----------------------------------------------------
Matters. The Owner Trustee shall not have the power, except upon the direction
-------
of the Certificateholders in accordance with the Basic Documents, to (a) remove
the Servicer under the Sale and Servicing Agreement pursuant to Section 8.1
thereof following payment of the Notes in full or (b) except as expressly
provided in the Basic Documents, sell the Receivables after the termination of
the Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the

                                       13
<PAGE>

Certificateholders and the furnishing of indemnification satisfactory to the
Owner Trustee by the Certificateholders.

     SECTION 4.3.  Action by Certificateholders with Respect to Bankruptcy. The
                   -------------------------------------------------------
Owner Trustee shall not have the power to, and shall not, institute proceedings
for the Trust to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust, or file a
petition seeking or consenting to reorganization or relief under any applicable
federal or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action relating to the
Trust without the unanimous prior approval of all Certificateholders and the
delivery to the Owner Trustee by each such Certificateholder of a certificate
certifying that such Certificateholder reasonably believes that the Trust is
insolvent.

     SECTION 4.4.  Restrictions on Certificateholders' Power. (a) The
                   -----------------------------------------
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.3 nor shall the Owner Trustee be
obligated to follow any such direction, if given.

               (b) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to this
Agreement or any Basic Document, unless the Certificateholders are the
Instructing Party pursuant to Section 6.3 of this Agreement and unless a
Certificateholder previously shall have given to the Owner Trustee a written
notice of default and of the continuance thereof, as provided in this Agreement,
and also unless Certificateholders evidencing not less than 25% of the
Certificate Balance shall have made written request upon the Owner Trustee to
institute such action, suit or proceeding in its own name as Owner Trustee under
this Agreement and shall have offered to the Owner Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Owner Trustee, for 30 days after its
receipt of such notice, request, and offer of indemnity, shall have neglected or
refused to institute any such action, suit, or proceeding, and during such 30-
day period no request or waiver inconsistent with such written request has been
given to the Owner Trustee pursuant to and in compliance with this Section or
Section 6.3 of this Agreement; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Owner Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, each and every Certificateholder and the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.

     SECTION 4.5.  Majority Control. No Certificateholder shall have any right
                   ----------------
to vote or in any manner otherwise control the operation and management of the
Trust except as expressly provided in this Agreement.  Except as expressly
provided herein, any action that may be taken by the Certificateholders under
this Agreement may be taken by the Holders of each class of Trust Certificates
evidencing not less than a majority of the Certificate Balance or, in the case
of the Class R Certificates, a majority percentage interest.  Except as
expressly provided herein, any written notice of the Certificateholders
delivered

                                       14
<PAGE>

pursuant to this Agreement shall be effective if signed by Holders of each Class
of Certificates evidencing not less than a majority of the Certificate Balance
or, in the case of the Class R Certificates, a majority percentage interest at
the time of the delivery of such notice.

     SECTION 4.6.  Rights of Insurer.  Notwithstanding anything to the contrary
                   -----------------
in the Basic Documents, for so long as any Notes are Outstanding under the
Indenture, without the prior written consent of the Insurer (so long as no
Insurer Default shall have occurred and be continuing), the Owner Trustee shall
not (i) remove the Servicer, (ii) initiate any claim, suit or proceeding by the
Trust or compromise any claim, suit or proceeding brought by or against the
Trust, other than with respect to the enforcement of any Receivable or any
rights of the Trust thereunder, (iii) authorize the merger or consolidation of
the Trust with or into any other business trust or other entity (other than in
accordance with Section 3.10 of the Indenture) or (iv) amend the Certificate of
Trust.

                                   ARTICLE V

                  Application of Trust Funds:  Certain Duties
                  -------------------------------------------

     SECTION 5.1.  Establishment of Certificate Distribution Account.  (a) The
                   -------------------------------------------------
Owner Trustee, for the benefit of the Certificateholders, shall establish or
cause to be established and maintain in the name of the Trust an Eligible
Deposit Account (the "Certificate Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Certificateholders. The Certificate Distribution Account shall be initially
established with the Certificate Paying Agent.

               (b) The Owner Trustee shall possess all right, title and interest
in all funds on deposit from time to time in the Certificate Distribution
Account and in all proceeds thereof. If, at any time, the Certificate
Distribution Account ceases to be an Eligible Deposit Account, the Owner Trustee
shall within five (5) Business Days (or such longer period, not to exceed thirty
(30) calendar days, as to which each Rating Agency may consent) establish or
cause to be established a new Certificate Distribution Account as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such new
Certificate Distribution Account.

               (c) All amounts held in the Certificate Distribution Account
shall, to the extent permitted by applicable laws, rules and regulations, be
invested, by the Certificate Paying Agent at the Servicer's written direction,
in Eligible Investments that mature not later than one (1) Business Day prior to
the Payment Date for the Monthly Period to which such amounts relate.
Investments in Eligible Investments shall be made in the name of the Trust, and
such investments shall not be sold or disposed of prior to their maturity.
Subject to the other provisions hereof, the Owner Trustee shall have sole
control over each such investment and the income thereon, and any certificate or
other instrument evidencing any such investment, if any, shall be delivered
directly to the Owner Trustee. All Investment Earnings on funds in the
Certificate Distribution Account shall be distributed on the next Payment Date
pursuant to Section 5.6 of the Sale and Servicing Agreement.

     SECTION 5.2.  Application of Funds in Certificate Distribution Account. (a)
                   --------------------------------------------------------
On each Payment Date, the Certificate Paying Agent will, based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 4.9 of the Sale and Servicing Agreement,
distribute to the Owner Trustee (as necessary) and the Certificateholders, to
the extent of the funds available, amounts deposited in the Certificate
Distribution Account pursuant to Section 5.6(a)(vii) of the Sale and Servicing
Agreement on such Payment Date in the following order of priority:

                   (i)  first, to the Owner Trustee for any unpaid fees and
     expenses due and owing;

                                       15
<PAGE>

                   (ii)  second, to the Class A Certificateholders, on a pro
     rata basis, an amount equal to the Certificateholders' Principal
     Distributable Amount; and

                   (iii) third, to the Class R Certificateholders, in accordance
     with the percentage interest held, an amount equal to the remaining amounts
     on deposit in the Certificate Distribution Account.

               (b) On the Payment Date following the date on which amounts
received in respect of the Transferor's exercise of its option to purchase the
corpus of the Trust pursuant to Section 9.1(a) of the Sale and Servicing
Agreement are deposited in the Certificate Distribution Account, the Certificate
Paying Agent will distribute such amounts taking into account any concurrent
distribution made pursuant to Section 5.2(a):

                   (i)   first, to the Owner Trustee for any unpaid fees and
     expenses due and owing;

                   (ii)  second, to the Class A Certificateholders, on a pro
     rata basis, an amount equal to the Certificateholders' Principal
     Distributable Amount; and

                   (iii) third, to the Class R Certificateholders, in accordance
     with the percentage interest held, an amount equal to the remaining amounts
     on deposit in the Certificate Distribution Account.

               (c) On the Payment Date following the date on which the Indenture
Trustee makes payments of money or property in respect of liquidation of the
Trust Property pursuant to Section 5.6 of the Indenture and deposits funds
received in connection with such liquidation in the Certificate Distribution
Account, the Certificate Paying Agent will distribute such funds taking into
account any concurrent distribution made pursuant to Section 5.2(a):

                   (i)   first, to the Owner Trustee for any unpaid fees and
     expenses due and owing;

                   (ii)  second, to the Class A Certificateholders, on a pro
     rata basis, an amount equal to the Certificateholders' Principal
     Distributable Amount; and

                   (iii) third, to the Class R Certificateholders, in accordance
     with the percentage interest held, an amount equal to the remaining amounts
     on deposit in the Certificate Distribution Account.

               (d) On each Payment Date, the Certificate Paying Agent shall send
to each Certificateholder the statement provided to the Owner Trustee by the
Servicer pursuant to Section 5.8 of the Sale and Servicing Agreement on such
Payment Date.

               (e) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section. The Certificate Paying Agent is hereby authorized
and directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is legally
owed by the Trust (but such authorization shall not prevent the Owner Trustee or
Certificate Paying Agent from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash

                                       16
<PAGE>

distributed to such Certificateholder at the time it is withheld by the Trust
and remitted to the appropriate taxing authority. If there is a possibility that
withholding tax is payable with respect to a distribution (such as a
distribution to a non-US Certificateholder), the Certificate Paying Agent may in
it sole discretion withhold such amounts in accordance with this clause (e). In
the event that an Holder wishes to apply for a refund of any such withholding
tax, the Owner Trustee or Certificate Paying Agent shall reasonably cooperate
with such Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Owner Trustee or Certificate Paying
Agent for any out-of-pocket expenses incurred.

     SECTION 5.3.  [Reserved].

     SECTION 5.4.  Method of Payment.  Subject to Section 9.1(c), distributions
                   -----------------
required to be made to Certificateholders on any Payment Date shall be made to
each Certificateholder of record on the preceding Record Date either by wire
transfer, in immediately available funds, to the account of such Holder at a
bank or other entity having appropriate facilities therefor, if (i) such
Certificateholder shall have provided to the Certificate Registrar appropriate
written instructions at least five Business Days prior to such Payment Date and
such Holder's Trust Certificates in the aggregate evidence a denomination of not
less than $1,000,000 or (ii) such Certificateholder is the Depositor, or an
Affiliate thereof or of the Servicer, or, if not, by check mailed to such
Certificateholder at the address of such holder appearing in the Certificate
Register.  Notwithstanding the foregoing, the final distribution in respect of
any Trust Certificate (whether on the Final Scheduled Payment Date or otherwise)
will be payable only upon presentation and surrender of such Trust Certificate
at the office or agency maintained for that purpose by the Owner Trustee
pursuant to Section 3.8.

     SECTION 5.5.  No Segregation of Monies; No Interest.  Subject to Sections
                   -------------------------------------
5.1 and 5.2, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law and may be
deposited under such general conditions as may be prescribed by law, and the
Owner Trustee shall not be liable for any interest thereon.

     SECTION 5.6.  Accounting and Reports to the Noteholders,
                   ------------------------------------------
Certificateholders, the Internal Revenue Service and Others. Subject to Article
-----------------------------------------------------------
X of the Sale and Servicing Agreement and to Section 2.11 herein, the Owner
Trustee shall (a) maintain (or cause to be maintained) the books of the Trust on
a calendar year basis on the accrual method of accounting, (b) deliver (or cause
to be delivered) to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required (including
Schedule K-1, if applicable) to enable the Certificateholders to prepare their
Federal and state income tax returns, (c) file or cause to be filed such tax
returns relating to the Trust (including a partnership information return, Form
1065, if applicable) and direct the Owner Trustee to make such elections as may
from time to time be required or appropriate under any applicable state or
Federal statute or rule or regulation thereunder so as to maintain the Trust's
characterization as a disregarded entity if the Certificates are treated as held
by a single person or as a partnership if the Certificates are treated as held
by more than one person for Federal income tax purposes and (d) collect or cause
to be collected any withholding tax as described in and in accordance with
Section 5.2(e) with respect to income or distributions to Certificateholders.
The Owner Trustee shall make all elections pursuant to this Section as directed
by the "tax matters partner". The Owner Trustee shall sign any tax information
returns filed pursuant to this Section 5.6 and any other returns as may be
required by law, and in doing so shall rely entirely upon, and shall have no
liability for information provided by, or calculations provided by, the "tax
matters partner". The Owner Trustee shall elect under Section 1278 of the Code
to include in income currently any market discount that accrues with respect to
the Receivables. The Owner Trustee shall make the election provided under
Section 754 of the Code only upon written request of the Holder of the Class R
Certificate.

                                       17
<PAGE>

     SECTION 5.7.  Signature on Returns; Tax Matters Partner. (a)
                   -----------------------------------------
Notwithstanding the provisions of Section 5.6, the Owner Trustee shall sign on
behalf of the Trust any tax returns of the Trust, unless applicable law requires
a Certificateholder to sign such documents, in which case such documents shall
be signed by the Holder of the Class R Certificate.

               (b) If the Trust is characterized as a partnership for U.S.
Federal income tax purposes, the Holder of the Class R Certificate shall be the
"tax matters partner" of the Trust pursuant to the Code.

                                  ARTICLE VI

                     Authority and Duties of Owner Trustee
                     -------------------------------------

     SECTION 6.1.  General Authority. The Owner Trustee is authorized and
                   -----------------
directed to execute and deliver the Basic Documents to which the Trust is named
as a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is named as a party and
any amendment thereto, in each case, in such form as the Depositor shall approve
as evidenced conclusively by the Owner Trustee's execution thereof, and on
behalf of the Trust, to direct the Indenture Trustee to authenticate and deliver
the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes in the
aggregate principal amounts, of $31,000,000, $109,000,000, $34,000,000 and
$71,000,000, respectively. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents.

     SECTION 6.2.  General Duties. It shall be the duty of the Owner Trustee to
                   --------------
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the Sale and Servicing Agreement and to
administer the Trust in the interest of the Holders, subject to the Basic
Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Servicer has agreed in the Sale and Servicing
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be liable
for the default or failure of the Servicer to carry out its obligations under
the Sale and Servicing Agreement.

     SECTION 6.3.  Action upon Instruction.  (a) Subject to Article IV, the
                   -----------------------
Holders of a majority of the Outstanding Amount of the Class A Certificates and
a majority percentage interest of the Class R Certificates shall have the
exclusive right to direct the actions of the Owner Trustee in the management of
the Trust, so long as such instructions are not inconsistent with the express
terms set forth herein or in any Basic Document. Such majority of
Certificateholders shall not instruct the Owner Trustee in a manner inconsistent
with this Agreement or the Basic Documents.

               (b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.

               (c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Certificateholders received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner

                                       18
<PAGE>

Trustee shall not have received appropriate instruction within ten days of such
notice (or within such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action, not inconsistent with
this Agreement or the Basic Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any Person
for such action or inaction.

               (d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within ten (10) days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action, not inconsistent with this Agreement or the
Basic Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.

     SECTION 6.4.  No Duties Except as Specified in this Agreement or in
                   -----------------------------------------------------
Instructions.  The Owner Trustee shall not have any duty or obligation to
------------
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee.  The Owner Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare or file any Commission filing for the
Trust or to record this Agreement or any Basic Document.  The Owner Trustee
nevertheless agrees that it will, at its own cost and expense, promptly take all
action as may be necessary to discharge any Liens on any part of the Owner Trust
Estate that result from actions by, or claims against, the Owner Trustee (solely
in its individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.

     SECTION 6.5.  No Action Except under Specified Documents or Instructions.
                   ----------------------------------------------------------
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Owner Trust Estate except (i) in accordance with the
powers granted to and the authority conferred upon the Owner Trustee pursuant to
this Agreement, (ii) in accordance with the Basic Documents and (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 6.3.

     SECTION 6.6.  Restrictions.  The Owner Trustee shall not take any action
                   ------------
(a) that is inconsistent with the purposes of the Trust set forth in Section 2.3
or (b) that, to the actual knowledge of the Owner Trustee would result in the
Trust becoming taxable as a corporation for Federal income tax purposes. The
Certificateholders shall not direct the Owner Trustee to take action that would
violate the provisions of this Section.

                                       19
<PAGE>

                                  ARTICLE VII

                         Concerning the Owner Trustee
                         ----------------------------

     SECTION 7.1.  Acceptance of Trusts and Duties.  The Owner Trustee accepts
                   -------------------------------
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee, in its individual capacity, and the Certificate Paying Agent also agree
to disburse all moneys actually received by them constituting part of the Owner
Trust Estate upon the terms of the Basic Documents and this Agreement. The Owner
Trustee in its individual capacity shall not be answerable or accountable
hereunder or under any Basic Document under any circumstances, except (i) for
its own willful misconduct, bad faith or gross negligence, (ii) in the case of
the inaccuracy of any representation or warranty contained in Section 7.3
expressly made by the Owner Trustee, in its individual capacity, (iii) for
liabilities arising from the failure of the Owner Trustee to perform obligations
expressly undertaken by it in the last sentence of Section 6.4 hereof, (iv) for
any investments issued by the Owner Trustee or any branch or affiliate thereof
in its commercial capacity or (v) for taxes, fees or other charges on, based on
or measured by, any fees, commissions or compensation received by the Owner
Trustee, in its individual capacity. In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence):

               (a) the Owner Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Owner Trustee;

               (b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the instructions of
the Servicer or any Certificateholder;

               (c) no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Basic Document if the Owner Trustee shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured or provided to it;

               (d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;

               (e) the Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Agreement or for the due execution hereof
by the Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate or for or in respect of the validity
or sufficiency of the Basic Documents, other than the certificate of
authentication on the Trust Certificates, and the Owner Trustee shall in no
event assume or incur any liability, duty or obligation to the Insurer,
Indenture Trustee, any Noteholder or to any Certificateholder, other than as
expressly provided for herein and in the Basic Documents;

               (f) the Owner Trustee shall not be liable for the default or
misconduct of the Insurer, Indenture Trustee or the Servicer under any of the
Basic Documents or otherwise and the Owner Trustee shall have no obligation or
liability to perform the obligations of the Trust under this Agreement or the
Basic Documents that are required to be performed by the Indenture Trustee under
the Indenture or the Servicer under the Sale and Servicing Agreement; and

               (g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this

                                       20
<PAGE>

Agreement or otherwise or in relation to this Agreement or any Basic Document,
at the request, order or direction of any of the Certificateholders, unless such
Certificateholders have offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of the Owner Trustee
to perform any discretionary act enumerated in this Agreement or in any Basic
Document shall not be construed as a duty, and the Owner Trustee shall not be
answerable for other than its gross negligence, bad faith or willful misconduct
in the performance of any such act.

     SECTION 7.2.  Furnishing of Documents.  The Owner Trustee shall furnish to
                   -----------------------
the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.

     SECTION 7.3.  Representations and Warranties.  The Owner Trustee in its
                   ------------------------------
individual capacity hereby represents and warrants to the Depositor and to the
Holders and the Insurer (which shall have relied on such representations and
warranties in issuing the Policy), that:

               (a) It is a Delaware banking corporation, duly organized and
validly existing in good standing under the laws of the State of Delaware. It
has all requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement.

               (b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.

               (c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.

               (d) The execution, delivery and performance by the Owner Trustee
of this Agreement does not require the authorization, consent, or approval of,
the giving of notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or agency of the State of
Delaware or the United States of America regulating the banking or trust powers
of the Owner Trustee.

               (e) This Agreement has been duly authorized, executed and
delivered by the Owner Trustee and shall constitute the legal, valid, and
binding agreement of the Owner Trustee, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization and other laws affecting the rights of creditors generally, and
by general principles of equity regardless of whether enforcement is pursuant to
a proceeding in equity or at law.

     SECTION 7.4.  Reliance; Advice of Counsel.  (a) The Owner Trustee shall
                   ---------------------------
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties.  The Owner Trustee may accept a certified copy
of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect.  As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner

                                       21
<PAGE>

Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.

               (b) In the exercise or administration of the trusts hereunder and
in the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the opinion or advice of any such counsel,
accountants or other such persons and such opinion or advice is not contrary to
this Agreement or any Basic Document herein.

     SECTION 7.5.  Not Acting in Individual Capacity.  Except as provided herein
                   ---------------------------------
or in any other Basic Document, in accepting the trusts hereby created
Wilmington Trust Company acts solely as Owner Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Owner Trustee
by reason of the transactions contemplated by this Agreement or any Basic
Document shall look only to the Owner Trust Estate for payment or satisfaction
thereof.

     SECTION 7.6.  Owner Trustee Not Liable for Trust Certificates or
                   --------------------------------------------------
Receivables. The statements contained herein and in the Trust Certificates
-----------
(other than the signature and countersignature of the Owner Trustee on the Trust
Certificates) shall be taken as the statements of the Depositor and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this Agreement, of
any Basic Document or of the Trust Certificates (other than the signature and
countersignature of the Owner Trustee on the Trust Certificates) or the Notes,
or of any Receivable or related documents. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Receivable, or the perfection and priority of
any security interest created by any Receivable in any Financed Vehicle or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Owner Trust Estate or its ability to generate the payments to
be distributed to Certificateholders under this Agreement or the Noteholders
under the Indenture, including, without limitation: the existence, condition and
ownership of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable on any computer
or other record thereof; the validity of the assignment of any Receivable to the
Trust or of any intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Depositor or
the Servicer with any warranty or representation made under any Basic Document
or in any related document or the accuracy of any such warranty or
representation or any action of the Trustee or the Servicer or any subservicer
taken in the name of the Owner Trustee.

     SECTION 7.7.  Owner Trustee May Own Trust Certificates and Notes. The Owner
                   --------------------------------------------------
Trustee in its individual or any other capacity may become the owner or pledgee
of Trust Certificates or Notes and may deal with the Depositor, the Trustee and
the Servicer in banking transactions with the same rights as it would have if it
were not Owner Trustee.

     SECTION 7.8.  Payments from Owner Trust Estate. All payments to be made by
                   --------------------------------
the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trust
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Wilmington Trust Company, or any
successor thereto, in

                                       22
<PAGE>

its individual capacity, shall not be liable for any amounts payable under this
Agreement or any of the Basic Documents to which the Trust or the Owner Trustee
is a party.

     SECTION 7.9. Doing Business in Other Jurisdictions.  Notwithstanding
                  -------------------------------------
anything contained to the contrary, neither Wilmington Trust Company or any
successor thereto, nor the Owner Trustee shall be required to take any action in
any jurisdiction other than in the State of Delaware if the taking of such
action will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Wilmington Trust Company (or any successor
thereto); or (iii) subject Wilmington Trust Company (or any successor thereto)to
personal jurisdiction in any jurisdiction other than the State of Delaware for
causes of action arising from acts unrelated to the consummation of the
transactions by Wilmington Trust Company (or any successor thereto) or the Owner
Trustee, as the case may be, contemplated hereby.

                                 ARTICLE VIII

                         Compensation of Owner Trustee
                         -----------------------------

     SECTION 8.1. Owner Trustee's Fees and Expenses.  The Owner Trustee shall
                  ---------------------------------
receive from the Servicer as compensation for its services hereunder such fees
as have been separately agreed upon with the Servicer before the date hereof,
and the Owner Trustee shall be entitled to be reimbursed from the Servicer in
accordance with the terms of such agreement for its other reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Owner Trustee may
employ in connection with the exercise and performance of its rights and its
duties in accordance with the terms of such agreement.

     SECTION 8.2. Indemnification.  The Owner Trustee and its successors,
                  ---------------
assigns, agents and servants (collectively, the "Indemnified Parties") shall be
indemnified by the Servicer from and against, any and all liabilities,
obligations, losses, damages, taxes, claims, actions and suits, and any and all
reasonable costs, expenses and disbursements (including reasonable legal fees
and expenses) of any kind and nature whatsoever (collectively, "Expenses") which
may at any time be imposed on, incurred by, or asserted against the Owner
Trustee or any Indemnified Party in any way relating to or arising out of this
Agreement, the Basic Documents, the Owner Trust Estate, the administration of
the Owner Trust Estate or the action or inaction of the Owner Trustee hereunder,
except only that the Owner Trustee shall not be indemnified from and against
Expenses arising or resulting from any of the matters described in the third
sentence of Section 7.1.  The indemnities contained in this Section shall
survive the resignation or termination of the Owner Trustee or the termination
of this Agreement.  All amounts payable to the Owner Trustee under this Section
8.2 shall be paid in accordance with the terms of the Sale and Servicing
Agreement.

     SECTION 8.3. Payments of Owner Trustee.  Any amounts paid to the Owner
                  -------------------------
Trustee pursuant to this Article VIII shall be deemed not to be a part of the
Owner Trust Estate immediately after such payment. To the extent that the Owner
Trustee's fees and expenses have not been paid, the Owner Trustee shall have a
lien on the Certificate Distribution Account.

     SECTION 8.4. Non-recourse Obligations.  Notwithstanding anything in this
                  ------------------------
Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for

                                       23
<PAGE>

the Trust shall be recourse to the Owner Trust Estate only and specifically
shall not be recourse to the assets of any Holder.

                                  ARTICLE IX

                        Termination of Trust Agreement
                        ------------------------------

     SECTION 9.1. Termination of Trust Agreement.  (a) This Agreement and the
                  ------------------------------
Trust shall terminate and be of no further force or effect upon the latest of
(i) the maturity or other liquidation of the last Receivable (including the
purchase by the Servicer at its option of the corpus of the Trust as described
in Section 9.1 of the Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as provided in the Basic
Documents and (ii) six (6) months after distributions of all moneys and other
property or proceeds of Owner Trust Estate in accordance with the Indenture,
Sale and Servicing Agreement and Article V of this Agreement, including the
payment to Certificateholders of all amounts required to be paid to them
pursuant to this Agreement; provided, however, that the rights to
indemnification under Section 8.2 shall survive the termination of the Trust.
The Servicer shall promptly notify the Owner Trustee of any prospective
termination pursuant to this Section 9.1. The bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder, shall not (x) operate
to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all
or any part of the Trust or Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.

          (b)  Except as provided in clause (a), neither the Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Trust.

          (c)  Notice of any termination of the Trust, specifying the Payment
Date upon which the Certificateholders shall surrender their Trust Certificates
to the Certificate Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five (5) Business Days of receipt of notice of
such termination from the Servicer given pursuant to Section 9.1(c) of the Sale
and Servicing Agreement, stating (i) the Payment Date upon or with respect to
which final payment of the Trust Certificates shall be made upon presentation
and surrender of the Trust Certificates at the office of the Certificate Paying
Agent therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Payment Date is not
applicable, payments being made only upon presentation and surrender of the
Trust Certificates at the office of the Certificate Paying Agent therein
specified. The Owner Trustee shall give such notice to the Certificate Registrar
(if other than the Owner Trustee) and the Certificate Paying Agent at the time
such notice is given to Certificateholders. Upon presentation and surrender of
the Trust Certificates, the Certificate Paying Agent shall cause to be
distributed to Certificateholders amounts distributable on such Payment Date
pursuant to Section 5.2.

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

                                       24
<PAGE>

          (d) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the Class R Certificateholder.

          (e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall upon the written direction of the Depositor cause the Certificate
of Trust to be canceled by filing a certificate of cancellation with the
Secretary of State in accordance with the provisions of Section 3810 of the
Business Trust Statute.

                                   ARTICLE X

            Successor Owner Trustees and Additional Owner Trustees
            ------------------------------------------------------

     SECTION 10.1.  Eligibility Requirements for Owner Trustee.  The Owner
                    ------------------------------------------
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; and (iii) having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by Federal or State
authorities and (iv) acceptable to the Insurer in its sole discretion, so long
as an Insurer Default shall not have occurred and be continuing. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and with
the effect specified in Section 10.2.

     SECTION 10.2.  Resignation or Removal of Owner Trustee.  The Owner Trustee
                    ---------------------------------------
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Insurer, the Certificateholders, the
Depositor and the Servicer. Upon receiving such notice of resignation, the
Depositor or a Certificate Majority shall, with the prior written consent of the
Insurer, promptly appoint a successor Owner Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Owner Trustee and one copy to the successor Owner Trustee, provided that the
Depositor shall have received written confirmation from each of the Rating
Agencies that the proposed appointment will not result in an increased capital
charge to the Insurer by either of the Rating Agencies. If no successor Owner
Trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Owner Trustee
or the Insurer may petition any court of competent jurisdiction for the
appointment of a successor the Owner Trustee.

          If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Depositor or a Certificate Majority, or if at
any time the Owner Trustee shall be legally unable to act, or shall be adjudged
bankrupt or insolvent, or a receiver of the Owner Trustee or of its property
shall be appointed, or any public officer shall take charge or control of the
Owner Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor or a Certificate Majority may
remove the Owner Trustee.  If the Depositor or a Certificate Majority shall
remove the Owner Trustee under the authority of the immediately preceding
sentence, the Depositor or a Certificate Majority, as applicable, with the prior
written consent of the Insurer, so long as no Insurer Default has occurred and
is continuing, shall promptly appoint a successor Owner Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
outgoing Owner Trustee so removed and one copy to the Depositor, if the
Certificate Majority is acting, and one copy to the successor Owner Trustee and
payment of all fees owed to the outgoing Owner Trustee.

                                       25
<PAGE>

          Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee.  The Depositor shall provide notice of such
resignation or removal of the Owner Trustee and to each of the Rating Agencies.

     SECTION 10.3. Successor Owner Trustee.  Any successor Owner Trustee
                   -----------------------
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Depositor, the Servicer, the Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective
and such successor Owner Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor under this Agreement, with like effect as if originally named as
Owner Trustee.  The predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement; and the Depositor and the predecessor
Owner Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties and
obligations.

          No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.

          Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Trustee, the Noteholders and the Rating
Agencies.  If the Servicer shall fail to mail such notice within 10 days after
acceptance of appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of the Servicer.

     SECTION 10.4.  Merger or Consolidation of Owner Trustee.  Any Person into
                    ----------------------------------------
which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such Person shall be eligible pursuant to Section 10.1, without the execution or
filing of any instrument or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, provided further that
the Owner Trustee shall mail notice of any such merger or consolidation to the
Rating Agencies.

     SECTION 10.5.  Appointment of Co-Trustee or Separate Trustee.
                    ---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee, and if Notes are Outstanding, the Insurer to act as co-
trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Owner Trust Estate, and to vest in such
Person, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Servicer and the Owner Trustee may
consider necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Owner Trustee subject, unless an Insurer Default shall have occurred and be
continuing or no Notes remain Outstanding, to the approval of the Insurer (which
approval shall not be unreasonably withheld) shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a

                                       26
<PAGE>

successor trustee pursuant to Section 10.1 and no notice of the appointment of
any co-trustee or separate trustee shall be required pursuant to Section 10.3.

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

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

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

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

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

          Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name.  If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.

                                  ARTICLE XI

                                 Miscellaneous
                                 -------------

     SECTION 11.1.  Supplements and Amendments.  (a) This Agreement may be
                    --------------------------
amended by the Depositor and the Owner Trustee, with the prior written consent
of the Insurer (so long as any Notes are Outstanding and an Insurer Default
shall not have occurred and be continuing) and with prior written notice to the
Rating Agencies, without the consent of any of the Noteholders or the
Certificateholders, (i) to cure any ambiguity or defect or (ii) to correct,
supplement or modify any provisions in this Agreement; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Noteholder or Certificateholder.

                                       27
<PAGE>

          (b) This Agreement may also be amended by the Depositor and the Owner
Trustee from time to time, (i) with the prior written consent of the Insurer (so
long as any Notes are Outstanding and an Insurer Default shall not have occurred
and be continuing) but without the consent of any Noteholders or
Certificateholders or, (ii) if an Insurer Default shall have occurred and be
continuing, with (x) the consent of a Note Majority, if Notes are Outstanding
and to the extent such amendment materially and adversely affects the interests
of the Noteholders, and (y) the consent of the Holders of Certificates
evidencing not less than a majority of the Certificate Balance (which consent of
any Holder of a Certificate or Note given pursuant to this Section or pursuant
to any other provision of this Agreement shall be conclusive and binding on such
Holder and on all future Holders of such Certificate or Note and of any
Certificate or Note issued upon the transfer thereof or in exchange thereof or
in lieu thereof whether or not notation of such consent is made upon the
Certificate or Note) with prior written notice to the Rating Agencies, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Noteholders or the Certificateholders; provided, however, that, subject to
the express rights of the Insurer under the Basic Documents, no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on Receivables or distributions that
shall be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes and
Holders of all outstanding Certificates; provided, further, that no such
amendment shall affect the rights or obligations of the Certificate Registrar or
Certificate Paying Agent without its consent

          Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies.

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

          Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.

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

     SECTION 11.2.  No Legal Title to Owner Trust Estate in Certificateholders.
                    ----------------------------------------------------------
The Certificateholders shall not have legal title to any part of the Owner Trust
Estate.  The Certificateholders shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
Articles V and IX.  No transfer, by operation of law or otherwise, of any right,
title or interest of the Certificateholders to and in their ownership interest
in the Owner Trust Estate shall operate to terminate this Agreement or the
trusts hereunder or entitle any transferee to an accounting or to the transfer
to it of legal title to any part of the Owner Trust Estate.

                                       28
<PAGE>

     SECTION 11.3. Limitations on Rights of Others.  Except for Section 2.7, the
                   -------------------------------
provisions of this Agreement are solely for the benefit of the Owner Trustee,
the Depositor, the Certificateholders, the Servicer and, to the extent expressly
provided herein, the Indenture Trustee, the Insurer and the Noteholders, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Owner Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.

     SECTION 11.4. Notices.  (a) Unless otherwise expressly specified or
                   -------
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed first class mail or certified mail, in each case return receipt
requested, and shall be deemed to have been duly given upon receipt, if to the
Owner Trustee, addressed to Wilmington Trust Company, at its Corporate Trust
Office, Attention:  Corporate Trust Administration; if to the Insurer, addressed
to Insurer, Financial Security Assurance Inc., 350 Park Avenue, New York, NY
10022, Attention: Surveillance Department, Telex No.: (212) 688-3101,
Confirmation: (212) 826-0100, Telecopy Nos.: (212) 339-3518, (212) 339-3529 (in
each case in which notice or other communication to Financial Security refers to
an Event of Default, a claim on the Policies or with respect to which failure on
the part of Financial Security to respond shall be deemed to constitute consent
or acceptance, then a copy of such notice or other communication should also be
sent to the attention of the General Counsel and the Head-Financial Guaranty
Group "URGENT MATERIAL ENCLOSED"); or, as to each party, at such other address
as shall be designated by such party in a written notice to each other party.

          (b)  Any notice required or permitted to be given to a
Certificateholder shall be given by personal delivery, overnight courier or by
first-class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register.  Any notice so given within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice.

     SECTION 11.5. [Reserved].

     SECTION 11.6. Severability.  Any provision of this Agreement that is
                   ------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     SECTION 11.7. Separate Counterparts. This Agreement may be executed by the
                   ---------------------
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

     SECTION 11.8. Third-Party Beneficiaries.  This Agreement shall inure to the
                   -------------------------
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.  Except as otherwise provided in this
Agreement, no other Person shall have any right or obligation hereunder.  Upon
issuance of the Policy, this Agreement shall also inure to the benefit of the
Insurer for so long as an Insurer Default shall not have occurred and be
continuing.  Without limiting the generality of the foregoing, all covenants and
agreements in this Agreement which confer rights upon the Insurer shall be for
the benefit of and run directly to the Insurer and the Insurer shall be entitled
to rely on and enforce such covenants, subject, however, to the limitations on
such rights provided in this Agreement and the Basic Documents.  The Insurer may
disclaim any of its rights and powers  under this Agreement (but not its duties
and obligations under the Policy) upon delivery of a written notice to the Owner
Trustee.

                                       29
<PAGE>

     SECTION 11.9.  [Reserved].

     SECTION 11.10.  No Petition.  The Owner Trustee (not in its individual
                     -----------
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Trust Certificate, and the Indenture Trustee
and each Noteholder by accepting the benefits of this Agreement, hereby
covenants and agrees that they will not at any time institute against the
Depositor, or join in any institution against the Depositor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Trust Certificates, the
Notes, this Agreement or any of the Basic Documents.

     SECTION 11.11.  No Recourse.  Each Certificateholder by accepting a Trust
                     -----------
Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Seller, the Servicer, the Transferor, the Depositor,
the Owner Trustee, the Indenture Trustee, the Insurer or any Affiliate thereof
and no recourse may be had against such parties or their assets, except as may
be expressly set forth or contemplated in this Agreement, the Trust Certificates
or the Basic Documents.

     SECTION 11.12.  Headings.  The headings of the various Articles and
                     --------
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

     SECTION 11.13.  GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN
                     -------------
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     SECTION 11.14.  Agreement Creates No Partnership Except for Tax  Purposes.
                     ---------------------------------------------------------
Except as provided in Section 2.11, by acceptance of their Certificates, each
Holder and transferee of a Certificate acknowledges that it understands and
intends that if the Certificates are treated as held by two or more persons, the
arrangement created hereby is a partnership for income tax purposes and that it
intends and expects to be treated as a partner for such purposes.  The
provisions of the agreement shall be interpreted and applied in a manner
consistent with such intent.  Each Holder acknowledges and agrees that if the
Certificates are treated as held by two or more persons, any tax partnership
created hereby is created solely for income tax purposes and that this Agreement
does not create a partnership for any other purpose.

     SECTION 11.15.  Servicer.  The Servicer is authorized to prepare, or
                     --------
cause to be prepared, execute and deliver on behalf of the Trust all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Trust or Owner Trustee to prepare, file or deliver pursuant
to the Basic Documents. Upon written request, the Owner Trustee shall execute
and deliver to the Servicer a limited power of attorney appointing the Servicer
the Trust's agent and attorney-in-fact to prepare, or cause to be prepared,
execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.

                                       30
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be
duly executed by their respective officers hereunto duly authorized as of the
day and year first above written.

                              WILMINGTON TRUST COMPANY,
                              Owner Trustee

                              By:  /s/ Kathleen A. Pedelini
                                 -----------------------------------------------
                                 Name:  Kathleen A. Pedelini
                                 Title: Administrative Account Manager

                              PRUDENTIAL SECURITIES SECURED
                              FINANCING CORPORATION,
                              as Depositor

                              By:  /s/ Evan J. Mitnick
                                 -----------------------------------------------
                                 Name:  Evan J. Mitnick
                                 Title: Vice President

                              PEOPLEFIRST FINANCE, LLC,
                              with respect to Article VIII and Section 11.4, as
                              Servicer

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

Acknowledged and Agreed
Indenture Trustee
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
As Certificate Paying Agent and Certificate Registrar

By:  /s/ S. Dignan
   ---------------------------------------------------
  Name:  S. Dignan
  Title: Corporate Trust Officer

                                       31
<PAGE>

                                                                       EXHIBIT A

                       CLASS A ASSET BACKED CERTIFICATE

$5,004,168.29             __________________________
-------------
Original Principal             Registered Owner
Amount                                                                 No. A-001

                      SEE REVERSE FOR CERTAIN DEFINITIONS

THIS CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH CERTAIN PROVISIONS OF
A TRUST AGREEMENT BETWEEN PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
AND WILMINGTON TRUST COMPANY (THE "TRUST AGREEMENT"). THIS CERTIFICATE HAS NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY SECURITIES LAWS, AND ISSUER HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
AND PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TRUST
INDENTURE AND APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND
TO "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), AND SOLELY WITH RESPECT TO THE INITIAL OFFERING OF THE
CERTIFICATES, TO INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE 501(A)
(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) UPON DELIVERY OF A REPRESENTATION
LETTER TO THE TRUSTEE.

NO EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") AND NO OTHER PLAN SUBJECT TO SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY
ENTITY THE ASSETS OF WHICH CONSTITUTE OR ARE DEEMED FOR PURPOSES OF ERISA OR
SECTION 4975 OF THE CODE TO CONSTITUTE THE ASSETS OF ANY SUCH PLAN, MAY PURCHASE
THIS CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE AND THE HOLDING OF
THIS CERTIFICATE OR SUCH INTEREST BY SUCH PLAN (OR ANY ENTITY THE ASSETS OF
WHICH CONSTITUTE "PLAN ASSETS" OF ANY SUCH PLAN) IS SUBJECT TO A STATUTORY OR
ADMINISTRATIVE EXEMPTION. ANY HOLDER HEREOF OR ANY INTEREST HEREIN THAT IS, OR
IS ACTING ON BEHALF OF OR WITH "PLAN ASSETS" OF, AN EMPLOYEE BENEFIT PLAN
SUBJECT TO ERISA OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, AND WITH RESPECT
TO WHICH THE TRUSTEE OR THE OWNER TRUSTEE IS A "PARTY IN INTEREST" OR A
"DISQUALIFIED PERSON", BY PURCHASING THIS CERTIFICATE OR SUCH INTEREST
REPRESENTS THAT ITS PURCHASE OF THIS CERTIFICATE OR SUCH INTEREST IS SUBJECT TO
A STATUTORY OR ADMINISTRATIVE EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF
ERISA AND SECTION 4975 OF THE CODE.

EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF THE ISSUER THAT SUCH
PURCHASER HAS NOT ACQUIRED NOR WILL IT SELL, TRADE, TRANSFER, ASSIGN,
PARTICIPATE, PLEDGE, HYPOTHECATE, CAUSE TO BE MARKETED, OR OTHERWISE DISPOSE OF
THIS CERTIFICATE (OR ANY INTEREST HEREIN) ON OR THROUGH (i) AN "ESTABLISHED
SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(B)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, INCLUDING, WITHOUT LIMITATION, AN OVER-THE-
COUNTER-MARKET OR AN

                                     A-1-1
<PAGE>

"INTERDEALER QUOTATION SYSTEM" THAT REGULARLY DISSEMINATES FIRM BUY OR SELL
QUOTATIONS, OR (ii) A "SECONDARY MARKET (OR THE SUBSTANTIAL EQUIVALENT THEREOF)"
WITHIN THE MEANING OF CODE SECTION 7704(B)(2).

THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

            PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-1

                       CLASS A ASSET BACKED CERTIFICATE

evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of motor vehicle
loans secured by new or used automobiles, vans, light duty trucks or motorcycles
and transferred to the Trust by Prudential Securities Secured Financing
Corporation.

          (This Trust Certificate does not represent an interest in or
obligation of PeopleFirst Finance, LLC, Wilmington Trust Company, the Owner
Trustee or any of their Affiliates, except to the extent described below.)

          THIS CERTIFIES THAT [____________] is the registered owner of [
] ($     ) nonassessable, fully-paid, beneficial ownership interest in certain
distributions of PeopleFirst.com Vehicle Receivables Owner Trust 2000-1 (the
"Trust") formed by Prudential Securities Secured Financing Corporation.

                 OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

<TABLE>
<S>                                                         <C>
WILMINGTON TRUST COMPANY, not in its individual             WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee                 or     capacity but solely as Owner Trustee

                                                            By ____________________,
By__________________________________________
                                                            Authenticating Agent

                                                            By______________________________________________
</TABLE>

                                     A-1-2
<PAGE>

          The Trust was created pursuant to a Trust Agreement dated as of June
1, 2000 (the "Trust Agreement"), between the Depositor and Wilmington Trust
Company, as owner trustee (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Trust Agreement.

          This Certificate is one of the duly authorized Trust Certificates
designated as a Class A Asset Backed Certificates (together with the Class R
Asset Backed Certificates, the "Trust Certificates"). Also issued under the
Indenture dated as of June 1, 2000, between the Trust and Norwest Bank
Minnesota, National Association, as trustee and indenture collateral agent, are
four classes of Notes designated as "Class A-1 6.713% Asset Backed Notes" (the
"Class A-1 Notes"), "Class A-2 7.275% Asset Backed Notes" (the "Class A-2
Notes"), "Class A-3 7.365% Asset Backed Notes" (the "Class A-3 Notes") and
"Class A-4 7.405% Asset Backed Notes" (the "Class A-4 Notes", and together with
the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the "Notes").
This Trust Certificate is issued under and is subject to the terms, provisions
and conditions of the Trust Agreement, to which Trust Agreement the holder of
this Trust Certificate by virtue of the acceptance hereof assents and by which
such holder is bound. The property of the Trust includes a pool of retail
installment loan contracts secured by new and used automobiles, vans, light duty
trucks or motorcycles (the "Receivables"), all monies due or to become due
thereunder on or after the Cutoff Date, security interests in the vehicles
financed thereby, certain bank accounts and the proceeds thereof, proceeds from
claims on certain insurance policies and certain other rights under the Trust
Agreement and the Sale and Servicing Agreement and all proceeds of the
foregoing.

          Under the Trust Agreement, there will be distributed on the fifteenth
day of each month or, if such fifteenth day is not a Business Day, the next
succeeding Business Day (the "Payment Date"), commencing in July 2000, to the
Person in whose name this Trust Certificate is registered at the close of
business on the Business Day preceding such Payment Date (the "Record Date")
such Certificateholder's fractional undivided interest in the amount to be
distributed to Certificateholders on such Payment Date. No principal will be
paid on the Trust Certificate until the Class A Notes have been paid in full.

          The holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.

          It is the intent of the Seller, Servicer, the Depositor and
Certificateholders that, for purposes of Federal income taxes, if the
Certificates are treated as held by a single person, the Trust will be
disregarded as an entity separate from its owner and if the Certificates are
treated or held by two or more persons, the Trust will be treated as a
partnership and the Certificateholders will be treated as partners in that
partnership. The Certificateholders by acceptance of a Trust Certificate, agree
to treat, and to take no action inconsistent with such treatment of, the Trust
Certificates for such tax purposes.

          Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Trust, the Transferor or the Depositor, or join in any institution
against the Trust, the Transferor or the Depositor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Trust Certificates, the
Notes, the Trust Agreement or any of the Basic Documents.

          Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by or on behalf of the Owner Trustee by wire transfer or
check mailed to the Certificateholder of record in the Trust Certificate
Register without the presentation or surrender of this Trust Certificate or the
making

                                     A-1-3
<PAGE>

of any notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Trust Certificate will
be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Trust Certificate
at the office or agency maintained for the purpose by the Owner Trustee in the
Borough of Manhattan, The City of New York.

          Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

          Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.

          THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

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

                                    PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER
                                    TRUST 2000-1

                                    By: WILMINGTON TRUST COMPANY, not in its
                                    individual capacity but solely as Owner
                                    Trustee

Dated:                              By:_________________________________________

                                     A-1-4
<PAGE>

                        (Reverse of Trust Certificate)

          The Trust Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Transferor, the Depositor, the Owner
Trustee or any Affiliates of any of them and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated
herein or in the Trust Agreement, the Indenture or the Basic Documents. In
addition, this Trust Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections with
respect to the Receivables, all as more specifically set forth herein and in the
Sale and Servicing Agreement. The Trust Certificates are limited in right of
payment to certain collections and recoveries respecting the Receivables, all as
more specifically set forth in the Sale and Servicing Agreement. A copy of each
of the Sale and Servicing Agreement and the Trust Agreement may be examined
during normal business hours at the principal office of the Seller, and at such
other places, if any, designated by the Seller, by any Certificateholder upon
written request.

          The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Trust Agreement at any
time by the Seller and the Owner Trustee with the consent of the holders of the
Notes and the Trust Certificates evidencing not less than a majority of the
outstanding Notes and the Certificate Balance. Any such consent by the holder of
this Trust Certificate shall be conclusive and binding on such holder and on all
future holders of this Trust Certificate and of any Trust Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Trust Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the holders of any of the Trust Certificates.

          As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in the
Certificate Register upon surrender of this Trust Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Owner Trustee in the Borough of Manhattan, The City of New York,
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Trust Certificates in authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is Norwest Bank
Minnesota, National Association.

          The Class A Certificates are issuable only as registered Trust
Certificates without coupons in denominations of $1,000 or integral multiples
thereof; except as otherwise provided in the Trust Agreement. As provided in the
Trust Agreement and subject to certain limitations therein set forth, Trust
Certificates are exchangeable for new Trust Certificates in authorized
denominations evidencing the same aggregate denomination, as requested by the
holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any Tax or
governmental charge payable in connection therewith.

          The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the person in whose name
this Trust Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar, nor any such agent shall
be affected by any notice to the contrary.

          The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them

                                     A-1-5
<PAGE>

pursuant to the Trust Agreement and the Sale and Servicing Agreement and the
disposition of all property held as part of the Trust. The Transferor of the
Receivables may at its option purchase the corpus of the Trust at a price
specified in the Sale and Servicing Agreement, and such purchase of the
Receivables and other property of the Trust will effect early retirement of the
Trust Certificates; however, such right of purchase is exercisable, subject to
certain restrictions, only as of the last day of any Collection Period as of
which the Pool Balance is 15% or less of the Original Pool Balance.

          The Trust Certificates may not be acquired by (a) an employee benefit
plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of
Title 1 of ERISA, (b) a plan described in Section 4975(e) (l) of the Code or (c)
any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding this
Trust Certificate, the Holder hereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.

          The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Certificate or of any
Receivable or related document.

          Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.

                                     A-1-6
<PAGE>

                                  ASSIGNMENT

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)

the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ______________________________________________
Attorney to transfer said Trust Certificate on the books of the Trust
Certificate Registrar, with full power of substitution in the premises.

     The undersigned has requested an exchange or transfer of this Certificate
in the form of an equal principal amount of Certificates evidenced by one or
more Definitive Certificates, to be delivered to the undersigned or, in the case
of a transfer of such Certificate, to such Person as the undersigned instructs
the Trustee.

     In connection with such request and in respect of the Certificates
surrendered to the Trustee herewith for transfer (the "Surrendered
Certificate"), the Holder of such Surrendered Certificates hereby certifies that
the Surrendered Certificate is being transferred pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the undersigned reasonably believes is
purchasing the Surrendered Certificates for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is "qualified institutional buyer" within
the meaning of Rule 144A, in each case in a transaction meeting the requirements
of Rule 144 and the Surrendered Certificate is being transferred in compliance
with any applicable blue sky or securities laws of any state of the United
States or any other applicable jurisdiction.

     This certificate and the statements contained herein are made for the
benefit of the Issuer and the Owner Trustee. The undersigned acknowledges that
the Issuer and the Owner Trustee will rely upon the undersigned's confirmation,
acknowledgements and agreements set forth herein, and the undersigned agrees to
notify the Owner Trustee promptly in writing if any of the undersigned's
representations or warranties herein ceases to be accurate and complete.

Dated:
                                         *

                                         _______________________________________
                                         Signature Guaranteed:

                                         *

______________
*    NOTICE: The signature to this assignment must correspond with the name of
     the registered owner as it appears on the face of the within Certificate in
     every particular, without alteration, enlargement or any change whatever.
     Such signature must be guaranteed by an "eligible guarantor institution"
     meeting the requirements of the Certificate Registrar, which requirements
     include membership or participation in STAMP or such other "signature
     guarantee program" as may be determined by the Certificate Registrar in
     addition to, or in substitution for, STAMP, all in accordance with the
     Securities Exchange Act of 1934, as amended.

                                     A-1-7
<PAGE>

                       CLASS R ASSET BACKED CERTIFICATE

100%                      __________________________
----
Percentage                     Registered Owner
Interest                                                               No. R-001

                      SEE REVERSE FOR CERTAIN DEFINITIONS

THIS CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH CERTAIN PROVISIONS OF
A TRUST AGREEMENT BETWEEN PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
AND WILMINGTON TRUST COMPANY (THE "TRUST AGREEMENT"). THIS CERTIFICATE HAS NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY SECURITIES LAWS, AND ISSUER HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
AND PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TRUST
INDENTURE AND APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND
TO "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), AND SOLELY WITH RESPECT TO THE INITIAL OFFERING OF THE
CERTIFICATES, TO INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE 501(A)
(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) UPON DELIVERY OF A REPRESENTATION
LETTER TO THE TRUSTEE.

NO EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") AND NO OTHER PLAN SUBJECT TO SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY
ENTITY THE ASSETS OF WHICH CONSTITUTE OR ARE DEEMED FOR PURPOSES OF ERISA OR
SECTION 4975 OF THE CODE TO CONSTITUTE THE ASSETS OF ANY SUCH PLAN, MAY PURCHASE
THIS CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE AND THE HOLDING OF
THIS CERTIFICATE OR SUCH INTEREST BY SUCH PLAN (OR ANY ENTITY THE ASSETS OF
WHICH CONSTITUTE "PLAN ASSETS" OF ANY SUCH PLAN) IS SUBJECT TO A STATUTORY OR
ADMINISTRATIVE EXEMPTION. ANY HOLDER HEREOF OR ANY INTEREST HEREIN THAT IS, OR
IS ACTING ON BEHALF OF OR WITH "PLAN ASSETS" OF, AN EMPLOYEE BENEFIT PLAN
SUBJECT TO ERISA OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, AND WITH RESPECT
TO WHICH THE TRUSTEE OR THE OWNER TRUSTEE IS A "PARTY IN INTEREST" OR A
"DISQUALIFIED PERSON", BY PURCHASING THIS CERTIFICATE OR SUCH INTEREST
REPRESENTS THAT ITS PURCHASE OF THIS CERTIFICATE OR SUCH INTEREST IS SUBJECT TO
A STATUTORY OR ADMINISTRATIVE EXEMPTION FROM THE PROHIBITED TRANSACTION RULES OF
ERISA AND SECTION 4975 OF THE CODE.

EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF THE ISSUER THAT SUCH
PURCHASER HAS NOT ACQUIRED NOR WILL IT SELL, TRADE, TRANSFER, ASSIGN,
PARTICIPATE, PLEDGE, HYPOTHECATE, CAUSE TO BE MARKETED, OR OTHERWISE DISPOSE OF
THIS CERTIFICATE (OR ANY INTEREST HEREIN) ON OR THROUGH (i) AN "ESTABLISHED
SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(B)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, INCLUDING, WITHOUT LIMITATION, AN OVER-THE-
COUNTER-MARKET OR AN "INTERDEALER QUOTATION SYSTEM" THAT REGULARLY DISSEMINATES
FIRM BUY OR SELL QUOTATIONS, OR (ii) A "SECONDARY MARKET (OR THE SUBSTANTIAL
EQUIVALENT THEREOF)" WITHIN THE MEANING OF CODE SECTION 7704(B)(2).

                                     A-2-1
<PAGE>

            PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-1

                       CLASS R ASSET BACKED CERTIFICATE

evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of motor vehicle
loans secured by new or used automobiles, vans or light duty trucks and
transferred to the Trust by Prudential Securities Secured Financing Corporation.

          (This Trust Certificate does not represent an interest in or
obligation of PeopleFirst Finance, LLC, Wilmington Trust Company, the Owner
Trustee or any of their Affiliates, except to the extent described below.)

          THIS CERTIFIES THAT [_______________] is the registered owner of a
beneficial ownership interest in certain distributions of PeopleFirst.com
Vehicle Receivables Owner Trust 2000-1 (the "Trust") formed by Prudential
Securities Secured Financing Corporation.

                 OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

WILMINGTON TRUST COMPANY, not in its        WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as           individual capacity but solely as
Owner Trustee                         or    Owner Trustee

                                            By ____________________,
By_______________________________
                                            Authenticating Agent

                                            By__________________________________

                                     A-2-2
<PAGE>

          The Trust was created pursuant to a Trust Agreement dated as of June
1, 2000 (the "Trust Agreement"), between the Depositor and Wilmington Trust
Company, as owner trustee (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Trust Agreement.

          This Certificate is one of the duly authorized Trust Certificates
designated as a Class R Asset Backed Certificates (together with the Class A
Asset Backed Certificates, the "Trust Certificates"). Also issued under the
Indenture dated as of June 1, 2000, the Trust and Norwest Bank Minnesota,
National Association, as trustee and indenture collateral agent, are four
classes of Notes designated as "Class A-1 6.713% Asset Backed Notes" (the "Class
A-1 Notes"), "Class A-2 7.275% Asset Backed Notes" (the "Class A-2 Notes"), the
"Class A-3 7.365% Asset Backed Notes" (the "Class A-3 Notes") and the "Class A-4
7.405% Asset Backed Notes" (the "Class A-4 Notes, and together with the Class A-
1 Notes, the Class A-2 Notes and the Class A-3 Notes, the "Notes"). This Trust
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the holder of this
Trust Certificate by virtue of the acceptance hereof assents and by which such
holder is bound. The property of the Trust includes a pool of retail installment
loan contracts secured by new and used automobiles, vans, light duty trucks or
motorcycles (the "Receivables"), all monies due or to become due thereunder on
or after the Cutoff Date, security interests in the vehicles financed thereby,
certain bank accounts and the proceeds thereof, proceeds from claims on certain
insurance policies and certain other rights under the Trust Agreement and the
Sale and Servicing Agreement and all proceeds of the foregoing.

          Under the Trust Agreement, there will be distributed on the fifteenth
day of each month or, if such fifteenth day is not a Business Day, the next
succeeding Business Day (the "Payment Date"), commencing in July 2000, to the
Person in whose name this Trust Certificate is registered at the close of
business on the Business Day preceding such Payment Date (the "Record Date")
such Certificateholder's fractional undivided interest in the amount to be
distributed to Class R Certificateholders, if any, on such Payment Date. No
payments will be paid on this Class R Certificate until the Class A Notes and
the Class A Certificates have been paid in full.

          The holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders and the Class A Certificateholders
as described in the Sale and Servicing Agreement, the Indenture and the Trust
Agreement, as applicable.

          It is the intent of the Seller, Servicer, the Depositor and
Certificateholders that, for purposes of Federal income taxes, if the
Certificates are treated as held by a single person, the Trust will be
disregarded as an entity separate from its owner and if the Certificates are
treated or held by two or more persons, the Trust will be treated as a
partnership and the Certificateholders will be treated as partners in that
partnership. The Certificateholders by acceptance of a Trust Certificate, agree
to treat, and to take no action inconsistent with such treatment of, the Trust
Certificates for such tax purposes.

          Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Trust, the Transferor or the Depositor, or join in any institution
against the Trust, the Transferor or the Depositor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Trust Certificates, the
Notes, the Trust Agreement or any of the Basic Documents.

          Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by or on behalf of the Owner Trustee by wire transfer or
check mailed to the Certificateholder of record in the

                                     A-2-3
<PAGE>

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

          Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

          Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.

          THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

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

                                    PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER
                                    TRUST 2000-1

                                    By: WILMINGTON TRUST COMPANY, not in its
                                    individual capacity but solely as Owner
                                    Trustee

Dated:                              By:_________________________________________

                                     A-2-4
<PAGE>

                        (Reverse of Trust Certificate)

          The Trust Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Transferor, the Depositor, the Owner
Trustee or any Affiliates of any of them and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated
herein or in the Trust Agreement, the Indenture or the Basic Documents. In
addition, this Trust Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections with
respect to the Receivables, all as more specifically set forth herein and in the
Sale and Servicing Agreement. The Trust Certificates are limited in right of
payment to certain collections and recoveries respecting the Receivables, all as
more specifically set forth in the Sale and Servicing Agreement. A copy of each
of the Sale and Servicing Agreement and the Trust Agreement may be examined
during normal business hours at the principal office of the Seller, and at such
other places, if any, designated by the Seller, by any Certificateholder upon
written request.

          The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Trust Agreement at any
time by the Seller and the Owner Trustee with the consent of the holders of the
Notes and the Trust Certificates evidencing not less than a majority of the
outstanding Notes and the Certificate Balance. Any such consent by the holder of
this Trust Certificate shall be conclusive and binding on such holder and on all
future holders of this Trust Certificate and of any Trust Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Trust Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the holders of any of the Trust Certificates.

          As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in the
Certificate Register upon surrender of this Trust Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Owner Trustee in the Borough of Manhattan, The City of New York,
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Trust Certificates in authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is Norwest Bank
Minnesota, National Association.

          As provided in the Trust Agreement and subject to certain limitations
therein set forth, Trust Certificates are exchangeable for new Trust
Certificates in authorized denominations evidencing the same aggregate
denomination, as requested by the holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any Tax or governmental charge payable in connection
therewith.

          The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the person in whose name
this Trust Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar, nor any such agent shall
be affected by any notice to the contrary.

          The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Trust. The Transferor may at its option purchase
the corpus of the Trust at a price specified in the Sale and Servicing
Agreement, and such purchase of the Receivables and other property of

                                     A-2-5
<PAGE>

the Trust will effect early retirement of the Trust Certificates; however, such
right of purchase is exercisable, subject to certain restrictions, only as of
the last day of any Collection Period as of which the Pool Balance is 15% or
less of the Original Pool Balance.

          The Trust Certificates may not be acquired by (a) an employee benefit
plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of
Title 1 of ERISA, (b) a plan described in Section 4975(e) (l) of the Code or (c)
any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding this
Trust Certificate, the Holder hereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.

          The recitals contained herein shall be taken as the statements of the
Depositor, the Transferor or the Servicer, as the case may be, and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this Certificate
or of any Receivable or related document.

          Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.

                                     A-2-6
<PAGE>

                                  ASSIGNMENT

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)

the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing _______________________________________________
Attorney to transfer said Trust Certificate on the books of the Trust
Certificate Registrar, with full power of substitution in the premises.

     The undersigned has requested an exchange or transfer of this Certificate
in the form of an equal principal amount of Certificates evidenced by one or
more Definitive Certificates, to be delivered to the undersigned or, in the case
of a transfer of such Certificate, to such Person as the undersigned instructs
the Trustee.

     In connection with such request and in respect of the Certificates
surrendered to the Trustee herewith for transfer (the "Surrendered
Certificate"), the Holder of such Surrendered Certificates hereby certifies that
the Surrendered Certificate is being transferred pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the undersigned reasonably believes is
purchasing the Surrendered Certificates for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is "qualified institutional buyer" within
the meaning of Rule 144A, in each case in a transaction meeting the requirements
of Rule 144 and the Surrendered Certificate is being transferred in compliance
with any applicable blue sky or securities laws of any state of the United
States or any other applicable jurisdiction.

     This certificate and the statements contained herein are made for the
benefit of the Issuer and the Owner Trustee. The undersigned acknowledges that
the Issuer and the Owner Trustee will rely upon the undersigned's confirmation,
acknowledgements and agreements set forth herein, and the undersigned agrees to
notify the Owner Trustee promptly in writing if any of the undersigned's
representations or warranties herein ceases to be accurate and complete.

Dated:
                                         *

                                         _______________________________________
                                         Signature Guaranteed:

                                         *

______________
*    NOTICE: The signature to this assignment must correspond with the name of
     the registered owner as it appears on the face of the within Certificate in
     every particular, without alteration, enlargement or any change whatever.
     Such signature must be guaranteed by an "eligible guarantor institution"
     meeting the requirements of the Certificate Registrar, which requirements
     include membership or participation in STAMP or such other "signature
     guarantee program" as may be determined by the Certificate Registrar in
     addition to, or in substitution for, STAMP, all in accordance with the
     Securities Exchange Act of 1934, as amended.

                                     A-2-7
<PAGE>

                                                                       EXHIBIT B

                                   [FORM OF]

                            CERTIFICATE OF TRUST OF

                      PEOPLEFIRST.COM VEHICLE RECEIVABLES
                              OWNER TRUST 2000-1

          THIS Certificate of Trust of PeopleFirst.com Vehicle Receivables Owner
Trust 2000-1 (the "Trust"), dated as of __________ __, 2000, is being duly
executed and filed by _____________________ , a _______________ and ____________
[______________] 1, an individual, as trustees, to form a business trust under
the Delaware Business Trust Act (12 Del. Code, (S) 3801 et seq.).

     1.   Name. The name of the business trust formed hereby is PeopleFirst.com
Vehicle Receivables Owner Trust 2000-1.

     2.   This Certificate of Trust will be effective __, 2000.

          IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.

                                    WILMINGTON TRUST COMPANY, not in its
                                    individual capacity but solely as Owner
                                    Trustee of the Trust.

                                    By:_________________________________________
                                       Name:
                                       Title:

                                      B-1<PAGE>

                                                                     Exhibit 4.3

                         SALE AND SERVICING AGREEMENT

                                     among

            PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-1,

                                    Issuer,

                              PF FUNDING II, LLC,

                                  Transferor,

                           PEOPLEFIRST FINANCE, LLC,

                             Seller and Servicer,

             PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION,

                                   Depositor

                                      and

                 NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,

                   as Indenture Trustee and Backup Servicer

                           Dated as of June 1, 2000
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                    Page

<S>                                                                                                 <C>
ARTICLE I      DEFINITIONS......................................................................      1

     SECTION 1.1.   Definitions.................................................................      1
     SECTION 1.2.   Other Definitional Provisions...............................................     16

ARTICLE II     CONVEYANCE OF RECEIVABLES........................................................     17

     SECTION 2.1.   Conveyance of Receivables...................................................     17
     SECTION 2.2.   [RESERVED]..................................................................     18
     SECTION 2.3.   Conveyance from Transferor to Depositor.....................................     18
     SECTION 2.4.   Conveyance from Depositor to Trust..........................................     18
     SECTION 2.5.   Closing.....................................................................     19

ARTICLE III    THE RECEIVABLES..................................................................     19

     SECTION 3.1.   Representations and Warranties..............................................     19
     SECTION 3.2.   Repurchase upon Breach......................................................     23
     SECTION 3.3.   Custody of Receivables Files................................................     23
     SECTION 3.4.   Duties of Custodian.........................................................     23
     SECTION 3.5.   Retention and Termination of Servicer.......................................     23

ARTICLE IV     ADMINISTRATION AND SERVICING OF RECEIVABLES......................................     24

     SECTION 4.1.   Appointment and Duties of Servicer..........................................     24
     SECTION 4.2.   Collection and Allocation of Receivable Payments............................     25
     SECTION 4.3.   Realization upon Receivables................................................     26
     SECTION 4.4.   [RESERVED]..................................................................     26
     SECTION 4.5.   Maintenance of Security Interests in Financed Vehicles......................     26
     SECTION 4.6.   Covenants of Servicer.......................................................     27
     SECTION 4.7.   Purchase of Receivables upon Breach.........................................     27
     SECTION 4.8.   Servicing Fee...............................................................     27
     SECTION 4.9.   Servicer's Certificate......................................................     28
     SECTION 4.10.  Annual Statement as to Compliance; Notice of Default........................     28
     SECTION 4.11.  Financial Statements........................................................     29
     SECTION 4.12.  Access to Certain Documentation and Information Regarding Receivables.......     29
     SECTION 4.13.  Servicer Expenses...........................................................     29
     SECTION 4.14.  Appointment of Subservicer..................................................     29
     SECTION 4.15.  Obligations under Basic Documents...........................................     30
     SECTION 4.16.  Reports to the Commission...................................................     30
</TABLE>

                                      -i-
<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                         Page
<S>                                                                                                      <C>
ARTICLE V      DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS.......................     30

     SECTION 5.1.   Establishment of Trust Accounts..................................................     30
     SECTION 5.2.   Collections......................................................................     32
     SECTION 5.3.   Application of Collections.......................................................     33
     SECTION 5.4.   Deficiency Notice................................................................     33
     SECTION 5.5.   Additional Deposits..............................................................     33
     SECTION 5.6.   Distributions....................................................................     33
     SECTION 5.7.   [RESERVED].......................................................................     34
     SECTION 5.8.   Statements to Certificateholders and Noteholders.................................     34
     SECTION 5.9.   Net Deposits.....................................................................     35
     SECTION 5.10.  Optional Deposits by the Insurer.................................................     36

ARTICLE V-A    THE POLICY............................................................................     36

SECTION 5A.1   CLAIMS UNDER POLICY...................................................................     36
SECTION 5A.2   PREFERENCE CLAIMS; DIRECTION OF PROCEEDINGS...........................................     37
SECTION 5A.3   SURRENDER OF POLICY...................................................................     37

ARTICLE VI     THE SELLER............................................................................     38

     SECTION 6.1.   Representations of the Seller....................................................     38
     SECTION 6.2.   Existence........................................................................     39
     SECTION 6.3.   Liability of Seller; Indemnities.................................................     40
     SECTION 6.4.   Merger or Consolidation of, or Assumption of the Obligations of, Seller..........     41
     SECTION 6.5.   Limitation on Liability of Seller and Others.....................................     41
     SECTION 6.6.   Seller May Own Certificates or Notes.............................................     41

ARTICLE VII    THE SERVICER..........................................................................     42

     SECTION 7.1.   Representations of Servicer......................................................     42
     SECTION 7.2.   Indemnities of Servicer..........................................................     43
     SECTION 7.3.   Merger or Consolidation of, or Assumption of the Obligations of, Servicer........     44
     SECTION 7.4.   Limitation on Liability of Servicer and Others...................................     44
     SECTION 7.5.   Servicer Not To Resign...........................................................     45

ARTICLE VII-A  THE TRANSFEROR........................................................................     45
SECTION 7A.1   REPRESENTATIONS OF THE TRANSFEROR.....................................................     45
SECTION 7A.2   EXISTENCE.............................................................................     47
</TABLE>

                                     -ii-
<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                                  Page
<S>                                                                                                               <C>
SECTION 7A.3   LIABILITY OF TRANSFEROR; INDEMNITIES............................................................    47
SECTION 7A.4   LIMITATION ON LIABILITY OF TRANSFEROR AND OTHERS................................................    48
SECTION 7A.5   TRANSFEROR MAY OWN CERTIFICATES OR NOTES........................................................    48

ARTICLE VII-B  THE DEPOSITOR...................................................................................    48

SECTION 7B.1   REPRESENTATIONS OF THE DEPOSITOR................................................................    48
SECTION 7B.2   EXISTENCE.......................................................................................    50
SECTION 7B.3   LIABILITY OF DEPOSITOR; INDEMNITIES.............................................................    51
SECTION 7B.4   LIMITATION ON LIABILITY OF DEPOSITOR AND OTHERS.................................................    51
SECTION 7B.5   DEPOSITOR MAY OWN CERTIFICATES OR NOTES.........................................................    51

ARTICLE VIII   DEFAULT.........................................................................................    51

     SECTION 8.1.   Servicer Default...........................................................................    51
     SECTION 8.2.   Appointment of Successor...................................................................    53
     SECTION 8.3.   Notification to Noteholders, Certificateholders and Backup Servicer........................    54
     SECTION 8.4.   Waiver of Past Defaults....................................................................    54

ARTICLE VIII-A THE BACKUP SERVICER.............................................................................    54

SECTION 8A.1   APPOINTMENT OF BACKUP SERVICER..................................................................    54
SECTION 8A.2   DUTIES OF BACKUP SERVICER.......................................................................    54
SECTION 8A.3   BACKUP SERVICING STANDARD.......................................................................    55
SECTION 8A.4   LIMITATION ON RESIGNATION OF THE BACKUP SERVICER................................................    55
SECTION 8A.5   RIGHTS IN RESPECT OF THE BACKUP SERVICER........................................................    55
SECTION 8A.6   TERMINATION.....................................................................................    55
SECTION 8A.7   RESIGNATION OR TERMINATION OF BACKUP SERVICER...................................................    56
SECTION 8A.8   BACKUP SERVICING FEE............................................................................    56
SECTION 8A.9   INDEMNITY.......................................................................................    56
SECTION 8A.10  LIMITATION OF LIABILITY.........................................................................    57

ARTICLE IX     TERMINATION.....................................................................................    57

     SECTION 9.1.   Optional Purchase of All Receivables.......................................................    57

ARTICLE X      ADMINISTRATIVE DUTIES OF THE SERVICER...........................................................    58

     SECTION 10.1.  (a)  Duties with respect to the Indenture, the Trust Agreement and Depository Agreement....    58
     SECTION 10.2.  Records....................................................................................    60
     SECTION 10.3.  Additional Information to be Furnished to the Issuer.......................................    60

ARTICLE XI     MISCELLANEOUS PROVISIONS........................................................................    60

     SECTION 11.1.  Amendment..................................................................................    60
</TABLE>

                                     -iii-
<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                          Page
<S>                                                                                       <C>
     SECTION 11.2.  Protection of Title to the Trust..................................     61
     SECTION 11.3.  Assignments.......................................................     63
     SECTION 11.3.  Notices...........................................................     63
     SECTION 11.5.  Limitations on Rights of Others...................................     63
     SECTION 11.6.  Severability......................................................     64
     SECTION 11.7.  Separate Counterparts.............................................     64
     SECTION 11.8.  Headings..........................................................     64
     SECTION 11.9.  Governing Law.....................................................     64
     SECTION 11.10. Assignment to Indenture Trustee...................................     64
     SECTION 11.11. Nonpetition Covenants.............................................     64
     SECTION 11.12. Limitation of Liability of Owner Trustee and Indenture Trustee....     64
     SECTION 11.13. Independence of the Servicer......................................     65
     SECTION 11.14. No Joint Venture..................................................     65
     SECTION 11.15. Third-Party Beneficiaries.........................................     65
     SECTION 11.16. Disclaimer by Insurer.............................................     65
     SECTION 11.17. Insurer as Controlling Party......................................     66
     SECTION 11.18. Limited Recourse..................................................     66
</TABLE>

Exhibit A      - [Reserved]
Exhibit B      - Form of Monthly Certificateholder Statement
Exhibit C      - Form of Monthly Noteholder Statement
Exhibit D      - Form of Servicer's Certificate
Exhibit E      - Form of Policy
Exhibit F      - Form of Stamp
Schedule A     - Schedule of Receivables
Schedule B     - Location of Receivables

                                     -iv-
<PAGE>

     SALE AND SERVICING AGREEMENT dated as of June 1, 2000, among
PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-1, a Delaware business
trust (the "Issuer"), PF FUNDING II, LLC, a Delaware limited liability company,
as transferor (the "Transferor"), PEOPLEFIRST FINANCE, LLC, a California limited
liability company, as seller and servicer (the "Seller" and the "Servicer"),
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, a Delaware corporation, as
depositor (the "Depositor) and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association, as Indenture Trustee and Backup Servicer.

     WHEREAS the Transferor desires to purchase a portfolio of receivables
arising in connection with motor vehicle loans originated by the Seller;

     WHEREAS the Seller is willing to sell such receivables to the Transferor;

     WHEREAS the Depositor desires to obtain a transfer of such receivables from
the Transferor and the Transferor is willing to assign its interest in such
receivables to the Depositor;

     WHEREAS the Issuer desires to obtain a transfer of the Depositor's interest
in such receivables and the Depositor desires to transfer its interest in such
receivables to the Issuer;

     WHEREAS the Servicer is willing to service all such receivables;

     WHEREAS the Backup Servicer is willing to act as backup servicer pursuant
to the terms hereof;

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

                                   ARTICLE I

                                  Definitions
                                  -----------

     SECTION 1.1.  Definitions.  Whenever used in this Agreement, the following
                   -----------
words and phrases shall have the following meanings:

     "Affiliate" means, with respect to any specified Person, any other Person
      ---------
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
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. A Person shall not be deemed to be an
Affiliate of any person solely because such other Person has the contractual
right or obligation to manage such Person unless such other Person controls such
Person through equity ownership or otherwise.

     "Aggregate Principal Balance" means, with respect to any date of
      ---------------------------
determination, the sum of the Principal Balances for all Receivables (other than
(i) any Receivable (other than a Purchased Receivable) that became a Liquidated
Receivable during the related Collection Period and (ii) any Receivable (other
than a Liquidated Receivable) that was purchased or repurchased by any Person
pursuant to this Agreement during the related Collection Period) as of the date
of determination.

     "Agreement" means this Sale and Servicing Agreement, as the same may be
      ---------
amended and supplemented from time to time.
<PAGE>

     "Amount Financed" means, with respect to a Receivable, the amount advanced
      ---------------
under such Receivable toward the purchase price or refinancing of the Financed
Vehicle and any related costs, including amounts advanced in respect of
accessories, insurance premiums, service, car club and warranty contracts, and
other items customarily financed as part of motor vehicle loans.

     "Annual Percentage Rate" or "APR" of a Receivable means the annual
      ----------------------      ---
percentage rate of finance charges or service charges, as stated in the related
Contract.

     "Available Funds" means, with respect to any Determination Date, the sum of
      ---------------
(i) the Collected Funds for the related Collection Period, (ii) all Purchase
Amounts deposited in the Collection Account during the related Collection
Period, and (iii) following the acceleration of the Notes pursuant to Section
5.2 of the Indenture, the amount of money or property collected pursuant to
Section 5.4 of the Indenture since the preceding Determination Date by the
Indenture Trustee for distribution pursuant to Section 5.6 of the Indenture.

     "Average Principal Balance" means, with respect to any Collection Period,
      -------------------------
the sum of the Principal Balance of the Receivables as of the close of business
on the last day of the immediately preceding Collection Period and the Principal
Balance of the Receivables as of the close of business on the last day of such
Collection Period, divided by two.

     "Backup Servicer" means Norwest Bank Minnesota, National Association, as
      ---------------
the Backup Servicer, and each successor Backup Servicer pursuant to Section 8A.1
of the Agreement.

     "Backup Servicer Duties" has the meaning assigned to such term in Section
      ----------------------
8A.2.

     "Backup Servicing Fee" means the monthly fee payable to the Backup
      --------------------
Servicer, in an amount equal to the greater of (A) the product of one-twelfth of
0.03% per annum multiplied by the Outstanding Amount on the preceding Payment
Date after giving effect to distributions on such date or (B) $500.

     "Backup Servicing Standard" has the meaning assigned to that term in
      -------------------------
Section 8A.3.

     "Backup Servicing Tape" has the meaning assigned to such term in Section
      ---------------------
8A.1 hereof.

     "Base Servicing Fee" means, with respect to any Collection Period, the fee
      ------------------
payable to the Servicer for services rendered during such Collection Period,
which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by the
Pool Balance as of the first day of such Collection Period.

     "Basic Documents" means the Certificate of Trust, the Trust Agreement, the
      ---------------
Sale and Servicing Agreement, the Indenture, the Insurance Agreement, the
Reserve Account Agreement, the Custodial Agreement, the Depository Agreement,
the Policy, the Premium Letter, the FSA Indemnification Agreement, the Depositor
Indemnification Agreement, the Notes, the Certificates and the Pledge Agreement
and other documents and certificates delivered in connection therewith.

     "Business Day" means any day other than a Saturday, a Sunday or other day
      ------------
on which commercial banks located in San Diego, California, Wilmington,
Delaware, Minneapolis, Minnesota or New York, New York are authorized or
obligated by law, executive order or governmental decree to be closed or the
principal place of business of any successor Servicer, successor Indenture
Trustee or successor Owner Trustee.

     "Certificate" means a Trust Certificate (as defined in the Trust
      -----------
Agreement).

                                       2
<PAGE>

     "Certificate Balance" means, (i) with respect to the Class A Certificates,
      -------------------
initially, $5,004,168.29 and thereafter equals the initial Certificate Balance
reduced by all amounts allocable to principal previously distributed to
Certificateholders, and (ii) with respect to the Class R Certificateholders,
zero.

     "Certificate Distribution Account" has the meaning assigned to such term in
      --------------------------------
Section 5.1(a) of the Trust Agreement.

     "Certificate Pool Factor" as of the close of business on a Payment Date
      -----------------------
means a seven digit decimal figure equal to the Certificate Balance as of such
Payment Date after giving effect to principal distributions on such date divided
by the initial Certificate Balance.

     "Certificate Majority" means the Holders of over 50% of the Outstanding
      --------------------
Amount of the Class A Certificates and over 50% of Holders of the Class R
Certificates.

     "Certificateholder" has the meaning assigned to such term in the Trust
      -----------------
Agreement.

     "Certificateholders' Distributable Amount" means with respect to any
      ----------------------------------------
Payment Date, the sum of the Certificateholders' Principal Distributable Amount
and the Class R Certificateholders' Distributable Amount.

     "Certificateholders' Percentage" means (i) for each Payment Date prior to
      ------------------------------
the Payment Date on which the Class A-4 Notes are paid in full, 2%, (ii) on the
Payment Date on which the Class A-4 Notes are paid in full, the percentage
equivalent of a fraction, the numerator of which is the excess, if any, of (x)
the Principal Distributable Amount for such Payment Date over (y) the
outstanding principal amount of the Class A-4 Notes immediately prior to such
Payment Date, and the denominator of which is the Principal Distributable Amount
for such Payment Date, and (iii) for each Payment Date thereafter to and
including the Payment Date on which the Certificate Balance is reduced to zero,
100%.

     "Certificateholders' Principal Distributable Amount" means, with respect to
      --------------------------------------------------
any Payment Date, the Certificateholders' Percentage of the Principal
Distributable Amount.

     "Class" means any of the Class A-1 Notes, the Class A-2 Notes, the Class A-
      -----
3 Notes, the Class A-4 Notes, the Class A Certificates or the Class R
Certificates, as the context requires.

     "Class A Certificate" has the meaning assigned to such term in the Trust
      -------------------
Agreement.

     "Class A-1 Note" has the meaning assigned to such term in the Indenture.
      --------------

     "Class A-2 Note" has the meaning assigned to such term in the Indenture.
      --------------

     "Class A-3 Note" has the meaning assigned to such term in the Indenture.
      --------------

     "Class A-4 Note" has the meaning assigned to such term in the Indenture.
      --------------

     "Class R Certificate" has the meaning assigned to such term in the Trust
      -------------------
Agreement.

     "Class R Certificateholders' Distributable Amount" means the amount
      ------------------------------------------------
available for distribution to the Class R Certificateholders pursuant to Section
5.6(a)(viii) hereof.

     "Clearing Agency" means an organization registered as a "clearing agency"
      ---------------
pursuant to Section 17A of the Exchange Act.

                                       3
<PAGE>

     "Closing Date" means June 30, 2000.
      ------------

     "Collateral" has the meaning assigned to such term in the Indenture.
      ----------

     "Collected Funds" means, with respect to any Determination Date, the amount
      ---------------
of funds in the Collection Account representing collections on the Receivables
during the related Collection Period, including all Net Liquidation Proceeds
collected during the related Collection Period.

     "Collection Account" means the account designated as such, established and
      ------------------
maintained pursuant to Section 5.1(a) hereof.

     "Collection Period" means the calendar month preceding the month in which
      -----------------
each Payment Date occurs (or in the case of the initial Payment Date, from the
Cutoff Date to and including June 30, 2000).

     "Computer Tape" means the computer tape or other electronic media furnished
      -------------
by the Seller to the Transferor and its assigns describing certain
characteristics of the Receivables as of the Cutoff Date.

     "Contract" means a motor vehicle loan evidenced by a note and security
      --------
agreement.

     "Controlling Party" means, if no Insurer Default has occurred and is
      -----------------
continuing, the Insurer, otherwise if Notes remain Outstanding, the Indenture
Trustee for the benefit of the Noteholders, or, after all unpaid principal and
interest on the Notes and all amounts owing to the Insurer have been paid in
full, the Owner Trustee for the benefit of the Certificateholders.

     "Corporate Trust Office" means (i) with respect to the Owner Trustee, the
      ----------------------
principal corporate trust office of the Owner Trustee, which at the time of
execution of this Agreement is 1100 North Market Street, Rodney Square North,
Wilmington, Delaware 19898, Attention: Corporate Trust Administration and (ii)
with respect to the Indenture Trustee and the Indenture Collateral Agent, the
principal corporate trust office of the Indenture Trustee, which at the time of
execution of this Agreement is located at Norwest Center, Sixth Street and
Marquette Avenue, MAC N9311-161 Minneapolis, Minnesota 55479, Attention:
Corporate Trust Services/Asset Backed Administration.

     "Cram Down Loss" means, with respect to a Receivable, if a court of
      --------------
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on such Receivable or otherwise modifying or
restructuring the Scheduled Payments to be made on such Receivable, an amount
equal to (i) the excess of the principal balance of such Receivable immediately
prior to such order over the principal balance of such Receivable as so reduced
and/or (ii) if such court shall have issued an order reducing the effective rate
of interest on such Receivable, the excess of the net present value of the
remaining Scheduled Payments with respect to the Receivable before such court
order (using as the discount rate the APR on such remaining Scheduled Payments
with respect to such Receivable) over the net present value of the remaining
Scheduled Payments with respect to such Receivable after such court order (using
as the discount rate the higher of the APR on such Receivable and the rate of
interest, if any, specified by the court in such order) of the scheduled
payments as so modified or restructured.  A "Cram Down Loss" shall be deemed to
have occurred on the date of issuance of such order.

     "Custodial Agreement" means the agreement dated as of June 1, 2000 among
      -------------------
the Seller, the Servicer, the Issuer, the Indenture Trustee and the Custodian,
as amended, modified and supplemented from time to time.

     "Custodian" means The Bank of New York, its successors in interest and any
      ---------
successor Custodian under the Custodial Agreement.

                                       4
<PAGE>

     "Custodian Fee" shall have the meaning assigned to such term in the
      -------------
Custodial Agreement.

     "Cutoff Date" means the beginning of business on June 1, 2000.
      -----------

     "Default Rate" means, for any Determination Date, the product (expressed as
      ------------
a percentage) of (a) twelve and (b) a fraction, (i) the numerator of which is
the sum of (x) the aggregate Principal Balance of all Receivables that became
Defaulted Receivables during the related Collection Period and (y) the aggregate
Principal Balance of all Receivables that became Purchased Receivables during
the Collection Period and that were 31 or more days delinquent at the time of
repurchase, and (ii) the denominator of which is the Average Principal Balance
for the related Collection Period.

     "Defaulted Receivable" means a Receivable with respect to which: (i) all or
      --------------------
a portion of any Scheduled Payment is 90 or more days delinquent, (ii) the
Servicer has repossessed the related Financed Vehicle (and any applicable
redemption period has expired) or (iii) such Receivable is in default and the
Servicer has determined in good faith that payments thereunder are not likely to
be resumed.

     "Deficiency Claim Amount" shall have the meaning set forth in Section 5.4
      -----------------------
of this Agreement.

     "Deficiency Claim Date" means, with respect to any Payment Date, the fourth
      ---------------------
Business Day immediately preceding such Payment Date.

     "Deficiency Notice" shall have the meaning set forth in Section 5.4 of this
      -----------------
Agreement.

     "Delinquency Ratio" means, with respect to any Collection Period, the
      -----------------
quotient, expressed as a percentage, of (i) the Aggregate Principal Balance of
all Receivables with respect to which one or more payments are 31 or more days
past due at the last day of such Collection Period and (ii) the Pool Balance as
of the close of business on the last day of such Collection Period.

     "Delivery" or "Deliver" when used with respect to Trust Account Property
      --------      -------
means the following and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of ownership of any
such Trust Account Property to the Indenture Trustee or the Indenture Collateral
Agent, as applicable, free and clear of any adverse claims, consistent with
changes in applicable law or regulations or the interpretation thereof:

          (a)  with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
instruments and are susceptible of physical delivery ("Physical Property"):

               (i)   transfer of possession thereof to the Indenture Trustee,
          indorsed to, or registered in the name of, the Indenture Trustee, or
          its nominee or indorsed in blank;

          (b)  with respect to a certificated security:

               (i)   delivery thereof in bearer form to the Indenture Trustee;
          or

               (ii)  delivery thereof in registered form to the Indenture
          Trustee; and

                     (A)  the certificate is indorsed to the Indenture Trustee
               or in blank by effective endorsement; or

                                       5
<PAGE>

                     (B)  the certificate is registered in the name of the
               Indenture Trustee, upon original issue or registration of
               transfer by the issuer thereof;

          (c)  with respect to an uncertificated security:

               (i)   the delivery of the uncertificated security to the
          Indenture Trustee; or

               (ii)  the issuer thereof has agreed that it will comply with
          instructions originated by the Indenture Trustee without further
          consent by the registered owner;

          (d)  with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations;

               (i)   a Federal Reserve Bank by book entry credits the book-entry
          security to the securities account (as defined in 31 CFR Part 357) of
          a participant (as defined in 31 CFR Part 357) which is also a
          securities intermediary; and

               (ii)  the participant indicates by book entry that the book-entry
          security has been credited to the Indenture Trustee's securities
          account;

          (e)  with respect to a security entitlement:

               (i)   the Indenture Trustee, becomes the entitlement holder; or

               (ii)  the securities intermediary has agreed that it will comply
          with entitlement orders originated by the Indenture Trustee without
          further consent by the entitlement holder;

          (f)  for the purpose of clauses (b) and (c) hereof "delivery" means:

               (i)   with respect to a certificated security:

                     (A)  the Indenture Trustee acquires possession thereof;

                     (B)  another person (other than a securities intermediary)
               either acquires possession thereof on behalf of the Indenture
               Trustee or, having previously acquired possession thereof,
               acknowledges that it holds for the Indenture Trustee; or

                     (C)  a securities intermediary acting on behalf of the
               Indenture Trustee acquires possession of thereof, only if the
               certificate is in registered form and has been specially indorsed
               to the Indenture Trustee by an effective endorsement;

               (ii)  with respect to an uncertificated security:

                     (A)  the issuer registers the Indenture Trustee as the
               registered owner, upon original issue or registration of
               transfer; or

                     (B)  another person (other than a securities intermediary)
               either becomes the registered owner thereof on behalf of the
               Indenture Trustee or,

                                       6
<PAGE>

               having previously become the registered owner, acknowledges that
               it holds for the Indenture Trustee;

          (g)  for purposes of this definition, except as otherwise indicated,
the following terms shall have the meaning assigned to each such term in the
UCC:

               (i)     "certificated security"

               (ii)    "effective endorsement"

               (iii)   "entitlement holder"

               (iv)    "instrument"

               (v)     "securities account"

               (vi)    "security entitlement"

               (vii)   "securities intermediary"

               (viii)  "uncertificated security"

          (h)  in each case of Delivery contemplated herein, the Indenture
Trustee shall make appropriate notations on its records, and shall cause the
same to be made on the records of its nominees, indicating that securities are
held in trust pursuant to and as provided in this Agreement.

     "Depositor" means Prudential Securities Secured Financing Corporation, and
      ---------
its successors in interest.

     "Depositor Indemnification Agreement" has the meaning assigned to such term
      -----------------------------------
in the Underwriting Agreement.

     "Depositor Property" has the meaning assigned to such term in Section 2.3
      ------------------
hereof.

     "Depository Agreement" means a Note Depository Agreement.
      --------------------

     "Determination Date"  means, with respect to any Payment Date, the fifth
      ------------------
Business Day prior to the related Payment Date.

     "Distribution Amount" means, with respect to a Payment Date, the sum of (i)
      -------------------
the Available Funds for the immediately preceding Determination Date, plus (ii)
any amounts received with respect to the Deficiency Claim Amount from the
Reserve Account, an Insurer Optional Deposit or otherwise, other than from draws
under the Policy, received by the Indenture Trustee from the Insurer with
respect to such Payment Date.

     "Draw Date" has the meaning assigned to such term in the Insurance
      ---------
Agreement.

     "Eligible Deposit Account" means either (a) a segregated account with an
      ------------------------
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers and
acting as trustee for funds

                                       7
<PAGE>

deposited in such account, so long as any of the securities of such depository
institution have a credit rating from each Rating Agency in one of its generic
rating categories which signifies investment grade.

     "Eligible Institution" means (a) the corporate trust department of the
      --------------------
Indenture Trustee or any other entity specified in this Agreement or (b) a
depository institution organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia (or any domestic
branch of a foreign bank), which (i) has either (A) a long-term unsecured debt
rating of AAA or better by Standard & Poor's and Aaa or better by Moody's or (B)
a certificate of deposit rating of A-1+ by Standard & Poor's and P-1 or better
by Moody's or any other short-term or certificate of deposit rating acceptable
to the Rating Agencies and the Insurer and (ii) whose deposits are insured by
the FDIC.  If so qualified under clause (b) above, the Owner Trustee or the
Indenture Trustee may be considered an Eligible Institution.

     "Eligible Investments" means book-entry securities, negotiable instruments
      --------------------
or securities represented by instruments in bearer or registered form which
evidence:

          (i)  certain obligations of, or obligations guaranteed as to principal
and interest by, the U.S. government or any agency or instrumentality of the
U.S. government, when such obligations are backed by the full faith and credit
of the U.S., provided however, such obligation (i) must be limited to those
instruments that have a predetermined fixed-dollar amount of principal due at
maturity that cannot vary or change, (ii) if the obligation is rated, it should
not have an 'r' highlighter affixed to its rating, (iii) if the investments may
be liquidated before their maturity or are being relied on to meet a certain
yield, subject to the applicable Rating Agency restrictions are necessary, and
(iv) has an interest rate tied to a single interest rate index plus a single
fixed spread, if any, and which changes proportionately with such index;

          (j)  demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof or the District of Columbia (or
any domestic branch of a foreign bank) and subject to supervision and
examination by Federal or state banking or depository institution authorities
(including depository receipts issued by any such institution or trust company
as custodian with respect to any obligation referred to in clause (a) above or
portion of such obligation for the benefit of the holders of such depository
receipts); provided, however, that at the time of the investment or contractual
commitment to invest therein (which shall be deemed to be made again each time
funds are reinvested following each Payment Date), the commercial paper or other
short-term senior unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such depository
institution or trust company) of such depository institution or trust company
shall have a credit rating from Standard & Poor's of A-1+ and from Moody's of P-
1;

          (k)  commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from Standard & Poor's of A-
1+ and from Moody's of P-1;

          (l)  investments in money market funds (including funds for which the
Indenture Trustee or the Owner Trustee or any of their respective Affiliates is
investment manager or advisor) having a rating from Standard & Poor's of AAA-m
or AAAm-G and from Moody's of Aaa and having been approved by the Insurer;

          (m)  bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;

                                       8
<PAGE>

          (n)  repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal) rated
A-1+ by S&P and P-1 by Moody's; and

          (o)  any other investment which would satisfy the Rating Agency
Condition and is consistent with the ratings of the Notes and which, so long as
no Insurer Default shall have occurred and be continuing, has been approved by
the Insurer.

     Any of the foregoing Eligible Investments may be purchased by or through
the Owner Trustee or the Indenture Trustee or any of its Affiliates.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.
      ------------

     "FDIC" means the Federal Deposit Insurance Corporation.
      ----

     "Final Scheduled Payment Date" means with respect to (i) the Class A-1
      ----------------------------
Notes, July 15, 2001, (ii) the Class A-2 Notes, June 15, 2003, (iii) the Class
A-3 Notes, February 15, 2004, and the Class A-4 Notes, December 15, 2006.

     "Financed Vehicle" means a new or used automobile, light-duty truck, van or
      ----------------
motorcycle, securing an Obligor's indebtedness under the respective Receivable.

     "FSA Indemnification Agreement" has the meaning assigned to the term
      -----------------------------
"Indemnification Agreement" in the Insurance Agreement.

     "Indenture" means the Indenture dated as of June 1, 2000, among the Issuer
      ---------
and the Indenture Trustee, as the same may be amended and supplemented from time
to time.

     "Indenture Collateral Agent" means the Person appointed pursuant to the
      --------------------------
terms of the Reserve Account Agreement and acting as Collateral Agent under the
Reserve Account Agreement, its successors in interest and any successor
Collateral Agent under the Reserve Account Agreement.

     "Indenture Trustee" means the Person acting as Indenture Trustee under the
      -----------------
Indenture and the other Basic Documents, its successors in interest and any
successor trustee under the Indenture.

     "Indenture Trustee Fee" means the monthly fee payable to the Indenture
      ---------------------
Trustee in an amount equal to the product of (i) 1/12 and (ii) .005 percent per
annum and (iii) the Outstanding Amount on the preceding Payment Date after
giving effect to distributions on such date.

     "Insolvency Event" means, with respect to a specified Person, (a) the
      ----------------
filing of a petition against such Person or the entry of a decree or order for
relief by a court or supervisory authority having jurisdiction in the premises
in respect of such Person or any substantial part of its property in an
involuntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
conservator, liquidator, assignee, custodian, trustee, sequestrator, or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation or such Person's affairs, and such
petition, decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of an
order for relief in an involuntary case

                                       9
<PAGE>

under any such law, or the consent by such Person to the appointment of or
taking possession by, a receiver, conservator, liquidator, assignee, custodian,
trustee, sequestrator, or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or such Person admitting its
inability to pay its debts when due or the taking of action by such Person in
furtherance of any of the foregoing.

     "Insurance Agreement" means the Insurance and Indemnity Agreement, dated as
      -------------------
of June 1, 2000, among the Insurer, the Issuer, the Transferor, the Seller and
the Servicer.

     "Insurance Agreement Event of Default" means an "Event of Default", as
      ------------------------------------
defined in the Insurance Agreement.

     "Insurer" means Financial Security Assurance Inc., a monoline insurance
      -------
company incorporated under the laws of the State of New York, its successors and
assigns.

     "Insurer Default" means the occurrence and continuance of any of the
      ---------------
following events:

          (p)  the Insurer shall have failed to make a payment required under
the Policy in accordance with its terms; or

          (q)  The Insurer shall have (i) filed a petition or commenced any case
or proceeding under any provision or chapter of the United States Bankruptcy
Code or any other similar federal or state any law relating to insolvency,
bankruptcy, rehabilitation, liquidation or reorganization, (ii) made a general
assignment for the benefit of its creditors, or (iii) had an order for relief
entered against it under the United States Bankruptcy Code or any other similar
federal or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization which is final and nonappealable; or

          (r)  a court of competent jurisdiction, the New York Department of
Insurance or other competent regulatory authority shall have entered a final and
nonappealable order, judgment or decree (i) appointing a custodian, trustee,
agent or receiver for the Insurer or for all or any material portion of its
property or (ii) authorizing the taking of possession by a custodian, trustee,
agent or receiver of the Insurer (or the taking of possession of all or any
material portion of the property of the Insurer).

     "Insurer Optional Deposit" means, with respect to any Payment Date, an
      ------------------------
amount delivered by the Insurer pursuant to Section 5.10 hereof, at its sole
option, to the Indenture Trustee for deposit into the Collection Account.

     "Interest Period" means, with respect to (i) the initial Payment Date, the
      ---------------
period from and including June 15, 2000 to but excluding such initial Payment
Date and (ii) with respect to any subsequent Payment Date, from and including
the most recent Payment Date on which interest has been paid to but excluding
such Payment Date.

     "Interest Rate" means (i) with respect to the Class A-1 Notes, 6.713% per
      -------------
annum, (ii) the Class A-2 Notes, 7.275% per annum, (iii) the Class A-3 Notes,
7.365% per annum and (iv) the Class A-4 Notes, 7.405% per annum.  The Interest
Rate for the Class A-1 Notes shall be computed on the basis of the actual number
of days elapsed in a 360 day year.  The Interest Rate for each of the Class A-2
Notes, Class A-3 Notes and Class A-4 Notes shall be computed on the basis of a
360 day year consisting of twelve 30 day months.

                                       10
<PAGE>

     "Investment Earnings" means, with respect to any Payment Date, the
      -------------------
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts and the Certificate Distribution Account.

     "Issuer" means PeopleFirst.com Vehicle Receivables Owner Trust 2000-1.
      ------

     "Lien" means a security interest, lien, charge, pledge, equity, or
      ----
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.

     "Lien Certificate" means, with respect to a Financed Vehicle, an original
      ----------------
certificate of title, certificate of lien or other notification issued by the
Registrar of Titles of the applicable state to a secured party which indicates
that the lien of the secured party on the Financed Vehicle is recorded on the
original certificate of title.  In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" shall mean only a certificate or notification issued to a secured
party.

     "Liquidated Receivable" means, with respect to any Determination Date, a
      ---------------------
Receivable as to which, as of the last day of the related Collection Period, (i)
60 days have elapsed since the Servicer repossessed the Financed Vehicle, (ii)
the Servicer has determined in good faith that all amounts it expects to recover
have been received, (iii) all or a portion part of a Scheduled Payment is 120
days or more delinquent or (iv) the Financed Vehicle has been sold and the
proceeds received.

     "Moody's" means Moody's Investors Services, Inc., or its successors.
      -------

     "Net Liquidation Losses" means, with respect to any Collection Period, (a)
      ----------------------
the sum of the Principal Balances (plus accrued interest through the end of such
Collection Period) of all Receivables that became Liquidated Receivables since
the Cutoff Date, minus (b) any Net Liquidation Proceeds received during such
Collection Period.

     "Net Liquidation Proceeds" means as to any Liquidated Receivable, all
      ------------------------
amounts (including insurance proceeds) realized with respect to such Receivable
(other than amounts withdrawn from the Reserve Account, amounts paid pursuant to
Section 5.10 of this Agreement and drawings under the Policy) net of (i)
reasonable expenses incurred by the Servicer in connection with the collection
of such Receivable and the repossession and disposition of the Financed Vehicle
and (ii) amounts that are required to be refunded to the Obligor on such
Receivable; provided, however, that the Net Liquidation Proceeds with respect to
any Receivable shall in no event be less than zero.

     "Net Loss Rate" means, for any Determination Date, the quotient (expressed
      -------------
as a percentage) of (a) the product of (i) twelve and (ii) Net Liquidation
Losses, divided by (b) the Average Principal Balance for the related Collection
Period.

     "Norwest" means Norwest Bank Minnesota, National Association, and its
      -------
successors in interest.

     "Note" means any of the Notes issued pursuant to the terms of the
      ----
Indenture.

     "Noteholder" has the meaning assigned to such term in the Indenture.
      ----------

     "Note Depository Agreement" means the agreement, if any, among the Issuer,
      -------------------------
the Indenture Trustee and The Depository Trust Company, as initial Clearing
Agency.

                                       11
<PAGE>

     "Note Distribution Account" means the account designated as such,
      -------------------------
established and maintained pursuant to Section 5.1(a) hereof.

     "Note Majority" means the Holders of a majority in outstanding principal
      -------------
amount of the Notes.

     "Noteholders' Distributable Amount" means, with respect to any Payment
      ---------------------------------
Date, the sum of the Noteholders' Principal Distributable Amount and the
Noteholders' Interest Distributable Amount.

     "Noteholders' Interest Carryover Shortfall" means, with respect to any
      -----------------------------------------
Payment Date, the excess of the Noteholders' Interest Distributable Amount for
the preceding Payment Date, over the amount in respect of interest that was
actually deposited in the Note Distribution Account on such preceding Payment
Date, plus interest on the amount of interest due but not paid to Noteholders on
the preceding Payment Date, to the extent permitted by law, at the respective
Interest Rate borne by each such Class of Notes from such preceding Payment Date
to but excluding the current Payment Date.

     "Noteholders' Interest Distributable Amount" means, with respect to any
      ------------------------------------------
Payment Date, the sum of the Noteholders' Monthly Interest Distributable Amount
for such Payment Date and the Noteholders' Interest Carryover Shortfall for such
Payment Date.

     "Noteholders' Monthly Interest Distributable Amount" means, with respect to
      --------------------------------------------------
any Payment Date, (x) for the Class A-1 Notes, the product of (i) the applicable
Interest Rate for the Class A-1 Notes (ii) the actual number of days elapsed
during the applicable period divided by 360 and (iii) the Outstanding Amount of
the Class A-1 Notes immediately preceding such Payment Date and (y) for the
Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, the sum of the
amount for each Class of Notes equal to the product of (i) the Interest Rate for
each Class of Notes, (ii) 1/12 and (iii) the Outstanding Amount of the Notes of
each such Class immediately preceding such Payment Date

     "Noteholders' Percentage" means with respect to any Determination Date (i)
      -----------------------
relating to a Payment Date prior to the Payment Date on which the principal
amount of the Class A-4 Notes is reduced to zero, 98%; (ii) relating to the
Payment Date on which the principal amount of the Class A-4 Notes is reduced to
zero, the percentage equivalent of a fraction, the numerator of which is the
principal amount of the Class A-4 Notes immediately prior to such Payment Date,
and the denominator of which is the Principal Distributable Amount; and (iii)
relating to any other Payment Date, 0%.

     "Noteholders' Principal Distributable Amount" means, with respect to any
      -------------------------------------------
Payment Date, (other than the Final Scheduled Payment Date for any Class of
Notes), the Noteholders' Percentage of the Principal Distributable Amount. The
Noteholders' Principal Distributable Amount on the Final Scheduled Payment Date
for any Class of Notes will equal the greater of (x) the Noteholders' Percentage
of the Principal Distributable Amount or (y) the Outstanding Amount of such
Class of Notes on such Payment Date.

     "Note Pool Factor" for each Class of Notes as of the close of business on a
      ----------------
Payment Date means a seven-digit decimal figure equal to the outstanding
principal amount of such Class of Notes as of such Payment Date after giving
effect to principal distributions on such date divided by the original
Outstanding Amount of such Class of Notes.

     "Notice of Claim" has the meaning assigned to such term in Section 5A.1(b)
      ---------------
hereof.

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

                                       12
<PAGE>

     "Officer's Certificate" means a certificate signed by the (a) chairman of
      ---------------------
the board, the president, any executive vice president or any vice president and
(b) any treasurer, assistant treasurer, secretary or assistant secretary of the
Seller or the Servicer, as appropriate.

     "Opinion of Counsel" means one or more written opinions of counsel who may
      ------------------
be an employee of or counsel to the Seller or the Servicer, which counsel shall
be acceptable to the Indenture Trustee, the Owner Trustee, the Insurer or the
Rating Agencies, as applicable.

     "Original Pool Balance" means the sum, as of any date, of the Pool Balance
      ---------------------
as of the Cutoff Date.

     "Outstanding" has the meaning assigned to such term in the Indenture.
      -----------

     "Outstanding Amount" means the aggregate principal amount of all Notes or
      ------------------
Class of Notes or the Class of Certificates, as applicable, outstanding at the
date of determination.

     "Owner Trust Estate" has the meaning assigned to such term in the Trust
      ------------------
Agreement.

     "Owner Trustee" means Wilmington Trust Company, not in its individual
      -------------
capacity but solely as Owner Trustee under the Trust Agreement, its successors
in interest or any successor Owner Trustee under the Trust Agreement.

     "Payment Date" means the fifteenth day of each calendar month and if such
      ------------
day is not a Business Day, the next succeeding Business Day, commencing on July
17, 2000.

     "PeopleFirst" means PeopleFirst Finance, LLC, and its successors in
      -----------
interest.

     "Person" means any individual, corporation, limited liability company,
      ------
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.

     "Physical Property" has the meaning assigned to such term in the definition
      -----------------
of "Delivery" above.

     "Policy" means the financial guaranty insurance policy issued by the
      ------
Insurer in accordance with the terms of the Insurance Agreement.

     "Policy Claim Amount" has the meaning assigned to such term in Section
      -------------------
5A.1(a) hereof.

     "Pool Balance" means, as of any date of determination, the sum of the
      ------------
Principal Balances of the Receivables (excluding Purchased Receivables and
Liquidated Receivables provided, however, that the Principal Balance of the
                       --------  -------
Receivables that were required to be purchased by the Servicer or the Seller but
were not purchased shall only be excluded at the option of the Insurer).

     "Preference Claim" has the meaning assigned to such term in Section 5A.2(b)
      ----------------
hereof.

     "Premium Letter" has the meaning assigned to such term in the Insurance
      --------------
Agreement.

     "Pledge Agreement" has the meaning assigned to such term in the Insurance
      ----------------
Agreement.

     "Principal Balance" means, with respect to any Receivable, as of any date,
      -----------------
the Amount Financed minus (i) that portion of all amounts received on or prior
to such date and allocable to principal in accordance with the terms of the
Receivable and the Simple Interest Method, and (ii) any Cram Down Loss in
respect of such Receivable.

                                       13
<PAGE>

     "Principal Distributable Amount" means, with respect to any Payment Date,
      ------------------------------
the excess of (i) the Outstanding Amount of the Notes and Certificates as of the
day immediately preceding such Payment Date over (ii) the Pool Balance at the
end of the related Collection Period  less the Yield Supplement
Overcollateralization Amount.

     "Purchase Amount" means with respect to a Receivable, the Principal Balance
      ---------------
and all accrued and unpaid interest on the Principal Balance of such Receivable
(including one month's interest thereon, in the month of payment, at the APR
less, so long as PeopleFirst is the Servicer, the Servicing Fee), after giving
effect to the receipt of any moneys collected (from whatever source) on such
Receivable, if any.

     "Purchased Receivable" means a Receivable purchased as of the close of
      --------------------
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.7 of this Agreement or repurchased by the Seller pursuant to Section
3.2 of the Agreement.

     "Rating Agency" means each of Standard & Poor's and Moody's, and together,
      -------------
the "Ratings Agencies".  If no such organization or successor maintains a rating
on the Notes, "Rating Agency" shall be a nationally recognized statistical
rating organization or other comparable Person designated by the Seller and
acceptable to the Insurer (so long as an Insurer Default shall not have occurred
and be continuing), notice of which designation shall be given to the Indenture
Trustee, Owner Trustee and the Servicer.

     "Rating Agency Condition" means, with respect to any action, that each
      -----------------------
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that the Rating
Agencies shall have notified the Seller, the Servicer, the Owner Trustee,
Insurer, the Depositor, the Issuer and the Indenture Trustee in writing that
such action will not result in a reduction, qualification or withdrawal of the
then current rating of any Class of Notes.

     "Realized Losses" means, with respect to any Receivable that becomes a
      ---------------
Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable over Net Liquidation Proceeds to the extent allocable to principal.

     "Receivable" means any Contract listed on Schedule A (which Schedule may be
      ----------
in the form of microfiche).

     "Receivable Files" means the documents specified in Section 3 of the
      ----------------
Custodial Agreement.

     "Record Date" means, with respect to each Payment Date, the close of
      -----------
business on the Business Day preceding such Payment Date, unless otherwise
specified in this Agreement.

     "Registrar of Titles" means, with respect to any state, the governmental
      -------------------
agency or body responsible for the registration of, and the issuance of
certificates of title relating to, motor vehicles and liens thereon.

     "Reserve Account" means the account designated as such, established and
      ---------------
maintained pursuant to the Reserve Account Agreement.

     "Reserve Account Agreement"  means the Master Reserve Account Agreement
      -------------------------
dated as of November 1, 2000 as supplemented by the Series 2000-1 Supplement to
Reserve Account Agreement dated as of June 1, 2000, each among the Transferor,
the Insurer and the Indenture Collateral Agent, as the same may be amended,
supplemented or otherwise modified from time to time.

                                       14
<PAGE>

     "Reserve Account Balance" means, for any Payment Date, the amount on
      -----------------------
deposit in the Reserve Account.  Unless specifically stated to the contrary, the
Reserve Account Balance shall be calculated after giving effect to all deposits
and withdrawals therefrom on the prior Payment Date (or, in the case of the
first Payment Date, the Closing Date) and all interest and other income (net of
losses and investment expenses) on such amounts during the related Collection
Period.

     "Reserve Account Initial Deposit" means $2,500,041.68.
      -------------------------------

     "Scheduled Payment" on a Receivable means that portion of the payment
      -----------------
required to be made by the Obligor during the respective Collection Period
sufficient to amortize the Principle Balance thereof under the Simple Interest
Method over the term of the Receivable and to provide interest at the APR.

     "Seller" means PeopleFirst Finance, LLC, a California limited liability
      ------
company, as Seller under this Agreement and its successors in interest to the
extent permitted hereunder.

     "Service Contract" means, with respect to a Financed Vehicle, the
      ----------------
agreement, if any, financed under the related Receivable that provides for the
repair of such Financed Vehicle, including any extended warranties.

     "Servicer" means PeopleFirst Finance, LLC, as the servicer of the
      --------
Receivables, and each successor Servicer pursuant to Section 7.3 or 8.2 of the
Agreement.

     "Servicer Default" means an event specified in Section 8.1 of this
      ----------------
Agreement.

     "Servicer's Certificate" means an Officer's Certificate of the Servicer
      ----------------------
delivered pursuant to Section 4.9 of this Agreement, substantially in the form
of Exhibit D hereto.

     "Servicing Fee" has the meaning specified in Section 4.8 of this Agreement.
      -------------

     "Servicing Fee Rate" means 0.50% per annum.
      ------------------

     "Servicing Standard" shall have the meaning assigned to such term in
      ------------------
Section 4.1 hereof.

     "Simple Interest Method" means the method of allocating a fixed level
      ----------------------
payment to principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the product of the fixed rate of
interest multiplied by the unpaid principal balance multiplied by the period of
time elapsed since the preceding payment of interest was made (in some states
assuming 30 day months), divided by the actual number of days in a year (360
days in states which assume 30 day months) and the remainder of such payment is
allocable to principal.

     "Simple Interest Receivable" means any Receivable under which the portion
      --------------------------
of a payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.

     "Standard & Poor's" means Standard & Poor's Ratings Group, a division of
      -----------------
The McGraw-Hill Companies, Inc., or its successors.

     "Transferor" means PF Funding II, LLC, and its successors in interest.
      ----------

     "Transferor Property"  has the meaning assigned to such term in Section 2.1
      -------------------
hereof.

     "Trust" means the Issuer.
      -----

                                       15
<PAGE>

     "Trust Account Property" means the Trust Accounts, all amounts and
      ----------------------
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.

     "Trust Accounts" has the meaning assigned thereto in Section 5.1 of the
      --------------
Agreement.

     "Trust Agreement" means the Trust Agreement dated as of June 1, 2000,
      ---------------
between the Depositor and the Owner Trustee, as the same may be amended and
supplemented from time to time.

     "Trust Officer" means, (i) in the case of the Indenture Trustee, the
      -------------
chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the president,
any vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller and any assistant controller or any
other officer of the Indenture Trustee customarily performing functions similar
to those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject, and (ii) in the case of the Owner Trustee, any officer
in the corporate trust office of the Owner Trustee with direct responsibility
for the administration of this Agreement or any of the Basic Documents on behalf
of the Owner Trustee.

     "Trust Property" has the meaning assigned to such term in Section 2.4
      --------------
hereof.

     "UCC" means the Uniform Commercial Code as in effect in the State of New
      ---
York on the date of the Agreement.

     "Underwriting Agreement" means the agreement dated as of June 21, 2000,
      ----------------------
among the Depositor, PeopleFirst, PeopleFirst.com Inc., the Transferor, and
Prudential Securities Incorporated, as the same may be amended and supplemented
from time to time.

     "Weighted Average Rate" means, with respect to any date of determination, a
      ---------------------
per annum rate equal to (A) the sum of (i) the product of (x) the Outstanding
Amount of the Class A-1 Notes on such date and (y) the Class A-1 Interest Rate,
plus (ii) the product of (x) the Outstanding Amount of the Class A-2 Notes on
such date and (y) the Class A-2 Interest Rate, plus (iii) the product of (x) the
Outstanding Amount of the Class A-3 Notes on such date and (y) the Class A-3
Interest Rate plus (iv) the product of (x) the Outstanding Amount of the Class
A-4 Notes on such date and (y) the Class A-4 Interest Rate divided by (B) the
Outstanding Amount of the Notes on such date; provided that if the date of
determination is a Payment Date, then the Outstanding Amount of any class of
Notes shall be determined after giving effect to all payments made on such date.

     "Yield Supplement Overcollateralization Amount" means, with respect to any
      ---------------------------------------------
Payment Date the dollar amount set forth next to such Payment Date on Exhibit A
hereto.

     SECTION 1.2.   Other Definitional Provisions
                    -----------------------------

          (a)  Capitalized terms used herein and not otherwise defined herein
have the meanings assigned to them in the Indenture, or, if not defined therein,
in the Trust Agreement.

          (b)  All terms defined in this Agreement shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.

                                       16
<PAGE>

          (c)  As used in this Agreement, in any instrument governed hereby and
in any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in this Agreement or in any such
instrument, certificate or other document, and accounting terms partly defined
in this Agreement or in any such instrument, certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such instrument, certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.

          (d)  The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation."

          (e)  The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.

          (f)  Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.

                                  ARTICLE II

                           Conveyance of Receivables
                           -------------------------

     SECTION 2.1.   Conveyance of Receivables.  In consideration of the
                    -------------------------
Transferor's delivery to or upon the order of the Seller on the Closing Date of
the net proceeds from the sale of the Notes and the Certificates and the other
amounts to be distributed from time to time to the Seller in accordance with the
terms of this Agreement, the Seller does hereby sell, transfer, assign, set over
and otherwise convey to Transferor, without recourse (subject to the obligations
set forth herein), all right, title and interest of the Seller in and to:

          (a)  the Receivables, and all moneys received thereon after the Cutoff
Date and all Net Liquidation Proceeds with respect to such Receivables;

          (b)  the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the Seller in
such Financed Vehicles;

          (c)  any proceeds with respect to the Receivables from claims on any
theft, physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors and any proceeds from the liquidation of the
Receivables;

          (d)  all rights under any Service Contracts on the related Financed
Vehicles;

          (e)  the related Receivables Files; and

                                       17
<PAGE>

          (f)  the proceeds of any and all of the foregoing (the items specified
in clauses (a) through (e) are referred to herein as the "Transferor Property").

     In connection with such sale, the Seller agrees to record and file, at its
own expense, financing statements (and continuation statements with respect to
such financing statements when applicable) with respect to the Receivables for
the sale of accounts and chattel paper meeting the requirements of applicable
state law in such manner and in such jurisdictions as are necessary to perfect
the sale and assignment of the Receivables to the Issuer.

     It is the intention of the Seller that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables and
other Transferor Property from the Seller to the Transferor and the beneficial
interest in and title to the Receivables and the other Transferor Property shall
not be part of the Seller's estate in the event of the filing of a bankruptcy
petition by or against the Seller under any bankruptcy law.  In the event that,
notwithstanding the intent of the Seller, the transfer and assignment
contemplated hereby is held not to be a sale, this Agreement shall constitute a
security agreement and the Seller does hereby grant a security interest in the
property referred to in this Section 2.1 for the benefit of the Transferor.

     SECTION 2.2.   [RESERVED].

     SECTION 2.3.   Conveyance from Transferor to Depositor. For valuable
                    ---------------------------------------
consideration, the transfer of which is hereby acknowledged, the Transferor does
hereby transfer, assign, set over and otherwise convey to the Depositor, all
right title and interest of the Transferor (but none of its obligations) in the
Transferor Property, this Agreement and the Custodial Agreement, including all
of the duties and obligations of each party hereto and thereto (collectively,
the "Depositor Property").

     It is the intention of the Transferor that the transfer and assignment
contemplated by this Section 2.3 shall constitute a sale of the Receivables and
other Depositor Property from the Transferor to the Depositor and the beneficial
interest in and title to the Receivables and the other Depositor Property shall
not be part of the Transferor's estate in the event of the filing of a
bankruptcy petition by or against the Transferor under any bankruptcy law.  In
the event that, notwithstanding the intent of the Transferor, the transfer and
assignment contemplated hereby is held not to be a sale, this Agreement shall
constitute a security agreement and the Transferor does hereby grant a security
interest in the property referred to in this Section 2.3 for the benefit of the
Depositor.

     SECTION 2.4.   Conveyance from Depositor to Trust. For valuable
                    ----------------------------------
consideration, the transfer of which is hereby acknowledged, the Depositor does
hereby transfer, assign, set over and otherwise convey to the Trust, all right
title and interest of the Depositor (but none of its obligations) in the
Depositor Property, this Agreement and the Custodial Agreement, including all of
the duties and obligations of each party hereto and thereto collectively, the
"Trust Property").

     It is the intention of the Depositor that the transfer and assignment
contemplated by this Section 2.4 shall constitute a sale of the Receivables and
other Trust Property from the Depositor to the Trust and the beneficial interest
in and title to the Receivables and the other Trust Property shall not be part
of the Depositor's estate in the event of the filing of a bankruptcy petition by
or against the Depositor under any bankruptcy law.  In the event that,
notwithstanding the intent of the Depositor, the transfer and assignment
contemplated hereby is held not to be a sale, this Agreement shall constitute a
security agreement and the Depositor does hereby grant a security interest in
the property referred to in this Section 2.4 for the benefit of the Noteholders,
Certificateholders and the Insurer.

                                       18
<PAGE>

     SECTION 2.5.   Closing.  The conveyance of the Receivables shall take place
                    -------
at the offices of Clifford Chance Rogers & Wells LLP, 200 Park Avenue, New York,
New York 10166 on the Closing Date, simultaneously with the closing of the
transactions related to the Notes and the Certificates. Upon the acceptance by
the Depositor of the net proceeds from the sale of the Notes, the ownership of
each Receivable and the contents of the related Receivable File will be vested
in the Issuer, subject to the lien of the Indenture.

                                  ARTICLE III

                                The Receivables
                                ---------------

     SECTION 3.1.   Representations and Warranties. The Seller makes the
                    ------------------------------
following representations and warranties to the Transferor, on which the
Transferor, is deemed to have relied in acquiring the Receivables and (ii)
Transferor makes the following representations and warranties upon which each of
the Depositor and the Issuer is deemed to have relied in acquiring the
Receivables and upon which the Insurer shall be deemed to rely in issuing the
Policy.  Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date, but shall survive the
sale, transfer and assignment of the Receivables to the Transferor, the
Depositor and the Trust and the pledge thereof to the Indenture Trustee pursuant
to the Indenture.

          (a)  Title.  It is the intention of (i) the Seller that the transfer
               -----
and assignment herein contemplated constitute a sale of the Receivables from the
Seller to the Transferor and that the beneficial interest in and title to such
Receivables not be part of the debtor's estate in the event of the filing of a
petition for receivership by or against the Seller under any bankruptcy law,
(ii) the Transferor that the transfer and assignment herein contemplated
constitute an assignment of the Receivables from the Transferor to the Depositor
and that the beneficial interest in and title to such Receivables not be part of
the debtor's estate in the event of the filing of a petition for receivership by
or against the Transferor under any bankruptcy law and (iii) the Depositor that
the transfer and assignment herein contemplated constitute an assignment of the
Receivables from the Depositor to the Trust and that the beneficial interest in
and title to such Receivables not be part of the debtor's estate in the event of
the filing of a petition for receivership by or against the Depositor under any
bankruptcy law.  Immediately prior to the transfer and assignment herein
contemplated, (i) the Seller had good and marketable title to each Receivable,
free and clear of all Liens and, immediately upon the transfer thereof, (ii) the
Transferor shall have good and marketable title to each such Receivable, free
and clear of all Liens, and (iii) the Depositor shall have good and marketable
title to each such Receivable, free and clear of all Liens; and the transfer of
the Receivables to the Transferor, the Depositor and the Issuer has been
perfected under the UCC.  No Dealer or any other Person has any right to receive
proceeds of any Receivables.

          (b)  All Filings Made. All filings (including, without limitation, UCC
               ----------------
filings) necessary in any jurisdiction to give the Transferor, Depositor, the
Issuer and Indenture Trustee, a first priority perfected ownership interest in
the Receivables, and to give the Transferor, Depositor and Indenture Trustee a
first priority perfected security interest therein, shall have been made.

          (c)  Characteristics of Receivables.  Each Receivable (i) shall have
               ------------------------------
been originated in the United States of America by the Seller in the ordinary
course of the Seller's business in accordance with its underwriting guidelines
and shall have been fully and properly executed by the parties thereto, (ii)
shall have created or shall create a valid, subsisting and enforceable first
priority security interest in favor of the Seller in the Financed Vehicle, which
security interest has been assigned by the Seller to the Transferor which
security interest has been assigned from the Transferor to the Depositor and
from the Depositor to the Issuer, which has assigned such security interest to
the Indenture Trustee, (iii) shall contain customary and enforceable provisions
such that the rights and remedies of the holder thereof shall

                                       19
<PAGE>

be adequate for realization against the collateral of the benefits of the
security, (iv) shall be Simple Interest Receivables and shall provide for level
monthly payments (provided that the payment in the first or last month in the
life of the Receivable may be minimally different from the level payment) that
fully amortize the Amount Financed over the original term and yield interest at
the rate per annum specified on Schedule A hereto, and has not been amended or
collections with respect to which have been waived and (v) shall be denominated
in U.S. dollars.

          (d)  Not more than [1.0%] of Obligors with respect to the Receivables
shall have a minimum FICO score of less than [680].

          (e)  As of the Cutoff Date, at least 90% of Obligors make their
Scheduled Payments by means of ACH withdrawal by or on behalf of the Servicer.

          (f)  Schedule of Receivables.  The information set forth in Schedule A
               -----------------------
to this Agreement is true and correct in all material respects as of the close
of business on the Cutoff Date and no selection procedures believed by the
Seller to be adverse to the Noteholders, the Certificateholders or the Insurer
were utilized in selecting the Receivables.  The Computer Tape regarding the
Receivables is true and correct in all material respects as of the Cutoff Date
and will be true and correct as of each Subsequent Cutoff Date.

          (g)  Compliance With Law.  Each Receivable complied at the time it was
               -------------------
originated or made and at the execution of this Agreement complies  in all
material respects with all requirements of applicable Federal, state and local
laws and regulations thereunder, including, without limitation, usury laws, the
Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Rees-Levering Act, the
Federal Reserve Board's Regulations B and Z, the Soldiers' and Sailors' Civil
Relief Act of 1940, state adaptations of the National Consumer Act, the Uniform
Consumer Credit Code and other consumer credit laws and equal credit opportunity
and disclosure laws.

          (h)  Binding Obligation.  Each Receivable represents the legal, valid
               ------------------
and binding payment obligation in writing of the Obligor thereunder, enforceable
by the holder thereof in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect related
to or affecting creditors' rights generally and subject to general principles of
equity (whether applied in a proceeding at law or in equity); and all parties to
each Receivable had full legal capacity to execute and deliver such Receivable
and all other documents related thereto and to grant the security interest
purported to be granted thereby.

          (i)  No Government Obligor.  None of the Receivables are due from the
               ---------------------
United States of America or any State or from any agency, department,
instrumentality or political subdivision of the United States of America or any
state.

          (j)  Security Interest in Financed Vehicle.  Immediately prior to the
               -------------------------------------
assignment and transfer thereof to the Trust, each Receivable is secured by a
validly perfected first priority security interest in the Financed Vehicle in
favor of PeopleFirst as secured party or all necessary and appropriate actions
have been commenced that will result in the valid perfection of a first priority
security interest in the Financed Vehicle in favor of PeopleFirst as secured
party within 120 days of the origination of each such Receivable.  Immediately
after the assignment and transfer thereof to the Trust, although the Lien
Certificate (or such other document kept by the Servicer consistent with its
customary servicing procedures) will not indicate the Trust or the Owner Trustee
as secured party, each Receivable will be

                                       20
<PAGE>

secured by an enforceable and perfected security interest in the Financed
Vehicle in favor of the Trust as secured party, which security interest is prior
to all other Liens in such Financed Vehicle.

          (k)  Receivables in Force.  No Receivable has been satisfied,
               --------------------
subordinated or rescinded, nor has any Financed Vehicle been released from the
Lien granted by the related Receivable in whole or in part unless another
vehicle has been substituted as collateral securing the Receivable without any
other modification to such Receivable.

          (l)  No Waiver or Amendment.  No provision of a Receivable has been
               ----------------------
waived or amended except as permitted pursuant to Section 4.2 hereof.  Such
Receivable has not been modified as a result of application of the Soldiers' and
Sailors' Civil Relief Act of 1940, as amended.

          (m)  No Defenses.  No right of rescission, setoff, counterclaim or
               -----------
defense has been asserted or threatened with respect to any Receivable.

          (n)  No Liens. There are no Liens or claims, including Liens for work,
               --------
labor, storage, materials or unpaid state or federal taxes relating to any
Financed Vehicle securing the related Receivable, that are or may be prior to or
equal to the Lien granted by such Receivable.

          (o)  No Default. No Receivable has a payment that is more than 30 days
               ----------
delinquent as of the Cutoff Date and, except as permitted in this paragraph, no
default, breach, violation or event (in any such case) permitting acceleration
under the terms of any Receivable has occurred; and no continuing condition that
with notice or the lapse of time would constitute a default, breach, violation
or event (in any such case) permitting acceleration under the terms of any
Receivable shall have arisen as of the Cutoff Date; and the Seller has not
waived and shall not waive any of the foregoing.

          (p)  No Bankruptcies.  No Obligor on any Receivable was the subject of
               ---------------
a bankruptcy proceeding commenced following the execution of the related
Contract.

          (q)  No Repossessions.  As of the Cutoff Date, no Financed Vehicle
               ----------------
securing any Receivable is in repossession status.

          (r)  Adverse Selection.  No selection procedures adverse to the
               -----------------
Noteholders, the Certificateholders or the Insurer were utilized in selecting
the Receivables from those owned by the Seller which met the selection criteria
contained in this Agreement.

          (s)  Chattel Paper.  Each Receivable constitutes "chattel paper" as
               -------------
defined in the UCC.

          (t)  Insurance. The Obligor with respect to each Receivable agreed in
               ---------
the related Contract to obtain insurance covering the Financed Vehicle insuring
against loss and damage due to fire, theft, transportation, collision and other
risks generally covered by comprehensive and collision insurance coverage (i) in
an amount at least equal to the lesser of (x) its maximum insurable value or (y)
the Principal Balance due from the Obligor under such Receivable and (ii) naming
PeopleFirst as loss payee.

          (u)  Lawful Assignment.  No Receivable was originated as of the Cutoff
               -----------------
Date, is subject to the laws of, any jurisdiction under which the sale, transfer
and assignment of such Receivable under this Agreement is unlawful, void or
voidable.  The Seller has not entered into any agreement with any Obligor or
other Person that prohibits, restricts or conditions the assignment of any
portion of the Receivables.

                                       21
<PAGE>

          (v)  One Original.  There is only one original executed copy of each
               ------------
Receivable.

          (w)  Location of Receivable Files.  The Receivable Files shall be kept
               ----------------------------
at one or more of the locations listed in Schedule B and each item required to
be in a Receivable File is in such Receivable File.

          (x)  Computer Records.  As of the Closing Date, the accounting and
               ----------------
computer records relating to the Receivables of the Seller have been marked to
show the absolute ownership by the Owner Trustee on behalf of the Trust of the
Receivables.

          (y)  Taxes.  There are no state or local taxing jurisdictions which
               -----
have asserted that nonresident holders of certificates in, or notes issued by,
an entity which holds assets similar to the assets to be held by the Trust are
subject to the jurisdiction's income or other taxes solely by reason of the
location in the jurisdiction of the Owner Trustee, the Seller, the Servicer or
the Obligors or the assets securing the Receivables held by the Trust, or the
issuer of a financial guaranty insurance policy.

          (z)  Maturity of Receivables.  Each Receivable has a final maturity
               -----------------------
date not later than six (6) months before November 30, 2006; each Receivable has
an original term to stated maturity of not more than 72 months; the weighted
average original term of the Receivables is approximately 55.599 months; the
weighted average remaining term of the Receivables is approximately 52.832
months as of the Cutoff Date.

          (aa) Financing.  Approximately 55.17% of the aggregate Principal
               ---------
Balance of the Receivables, constituting approximately 6,661 of the Receivables
as of the Cutoff Date, represent new vehicles; approximately 29.59% of the
aggregate Principal Balance of the Receivables, constituting approximately 5,183
Receivables as of the Cutoff Date, represent used vehicles; approximately 10.48%
of the aggregate Principal Balance of the Receivables, constituting
approximately 1,672 of the Receivables as of the Cutoff Date, represent
refinances of existing loans; and approximately 4.75% of the aggregate Principal
Balance of the Receivables, constituting approximately 782 of the Receivables as
of the Cutoff Date, represent lease buyouts; all of the aggregate Principal
Balance of the Receivables as of the Cutoff Date represent Simple Interest
Receivables. The aggregate Principal Balance of the Receivables, as of the
Cutoff Date, is $252,514,897.94.

          (bb) APR.  The weighted average Annual Percentage Rate of the
               ---
Receivables as of the Cutoff Date is approximately 7.911%.  Each Receivable has
an APR equal to or greater than 6.750%.

          (cc) Number.  As of the Cutoff Date, there are 14,298 Receivables.
               ------

          (dd) Balance.  Each Receivable has a remaining principal balance of
               -------
not less than $712.35 and not more than $84,500; as of the Cutoff Date, the
average Principal Balance of the Receivables is $17,660.85.

          (ee) Security.  Each Receivable is secured by a new or used
               --------
automobile, light-duty truck, van or motorcycle.

          (ff) Advance Payments.  Each Receivable had not been paid more than
               ----------------
three months in advance as of the close of business on the Cutoff Date.

          (gg) No Force Placed Insurance.  As of the close of business on the
               -------------------------
Cutoff Date with respect to Receivables, each Receivable was secured by a
Financed Vehicle that was not insured by a force placed insurance policy or any
vendor's single interest and non-filing insurance policy.

                                       22
<PAGE>

     SECTION 3.2.   Repurchase upon Breach.  (a)  The Seller, the Servicer, the
                    ----------------------
Insurer or the Indenture Trustee, as the case may be, shall inform the other
parties to this Agreement and the Insurer promptly, in writing, upon the
discovery of any breach of the Seller's representations and warranties made
pursuant to Section 3.1 hereof.  As of the last day of the second (or, if the
Seller so elects, the first) month following the discovery by the Seller or
receipt by the Seller of notice from any of the Servicer, the Insurer or the
Indenture Trustee of such breach, unless such breach is cured by such date, the
Seller shall repurchase from the Trust any Receivable in which the interests of
the Noteholders, the Certificateholders or the Insurer are materially and
adversely affected by any such breach as of such date.  The "second month" shall
mean the month following the month in which discovery occurs or notice is given,
and the "first month" shall mean the month in which discovery occurs or notice
is given.  In consideration of and simultaneously with the repurchase of a such
Receivable, the Seller shall remit to the Indenture Trustee for deposit to the
Collection Account the Purchase Amount in the manner specified in Section 5.5
and the Issuer shall execute such assignments and other documents reasonably
requested by such person in order to effect such repurchase.  The sole remedy of
the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders or the Insurer with respect to a breach of representations
and warranties made pursuant to Section 3.1 hereof shall be the repurchase of
Receivables pursuant to this Section.  Subject to the conditions contained
herein, neither the Owner Trustee, the Issuer nor the Indenture Trustee shall
have a duty to conduct any affirmative investigation as to the occurrence of any
conditions requiring the repurchase of any Receivable pursuant to this Section.

          (b)  Pursuant to (i) Section 2.3 hereof, the Transferor conveyed to
the Depositor and (ii) Section 2.4 hereof, the Depositor conveyed to the Trust,
all of the such party's right, title and interest in its rights and benefits,
but none of its obligations or burdens, under this Agreement including the
Seller's and the Transferor's representations and warranties and the cure or
repurchase obligations of the Seller hereunder. Each of the Seller and the
Transferor hereby represents and warrants to the Trust that such assignment is
valid, enforceable and effective to permit the Trust to enforce such obligations
of the Seller hereunder.

     SECTION 3.3.   Custody of Receivables Files.  To assure uniform quality in
                    ----------------------------
servicing the Receivables and to reduce administrative costs, a custodian shall
be appointed pursuant to the terms of the Custodial Agreement, to act
exclusively as the agent for the Indenture Trustee, on behalf of the
Noteholders, and the Insurer until the Notes are paid in full and thereafter, on
behalf of the Owner Trustee, on behalf of the Certificateholders as custodian of
certain documents or instruments which shall be delivered to the Custodian, as
of the Cutoff Date in accordance with the terms of the Custodial Agreement.

     SECTION 3.4.   Duties of Custodian. The duties and obligations of the
                    -------------------
Custodian are set forth in full in the Custodial Agreement.

     SECTION 3.5.   Retention and Termination of Servicer. The Servicer hereby
                    -------------------------------------
covenants and agrees to act as such under this Agreement for an initial term,
commencing on the Closing Date and ending on September 30, 2000, which term
shall be extendible by the Insurer (provided no Insurer Default has occurred and
is continuing) for successive quarterly terms ending on each successive December
31, March 31, June 30 and September 30 (or, pursuant to revocable written
standing instructions from time to time to the Servicer and the Indenture
Trustee for any specific number of terms greater than one), until the Notes are
paid in full.  Each such notice (including each notice pursuant to standing
instructions, which shall be deemed delivered at the end of successive quarterly
terms for so long as such instructions are in effect) (a "Servicer Extension
Notice") shall be delivered by the Insurer to the Indenture Trustee and the
Servicer.  The Servicer hereby agrees that, as of the date hereof and upon its
receipt of any such Servicer Extension Notice, the Servicer shall become bound,
for the initial term beginning on the Closing Date and for the duration of the
term covered by Servicer Extension Notice, to continue as Servicer subject to
and

                                       23
<PAGE>

in accordance with the other provisions of this Agreement. Until such time as an
Insurer Default shall have occurred and be continuing, the Indenture Trustee
agrees that if as of the fifteenth day prior to the last day of any term of the
Servicer, the Indenture Trustee shall not have received any Servicer Extension
Notice from the Insurer, the Indenture Trustee shall, within five (5) days
after, give written notice of such non-receipt to the Insurer and the Servicer
and the Servicer's term shall not be extended unless a Servicer Extension Notice
is received on or before the last day of such term. Notwithstanding the
foregoing, in the event an Insurer Default has occurred and is continuing, the
Servicer Extension Notice shall be deemed to have been delivered as of the last
day of the current term of the Servicer and extended until the next quarterly
period.

                                  ARTICLE IV

                  Administration and Servicing of Receivables
                  -------------------------------------------

     SECTION 4.1.   Appointment and Duties of Servicer.  (a)  The managing,
                    ----------------------------------
servicing, administering and making collections on the Contracts shall be
conducted by the Person so designated from time to time as Servicer in
accordance with this Agreement.  PeopleFirst is hereby initially designated as,
and hereby agrees to perform, the duties and obligations of the Servicer
pursuant to the terms hereof and the other Basic Documents.  Subject to the
resignation of PeopleFirst as Servicer pursuant to Section 7.5 or the
termination of PeopleFirst as Servicer pursuant to Section 8.1 and, in either
case, the assumption by the Backup Servicer, or the designation of a successor
Servicer hereunder as the case may be, of the Servicer's duties and
responsibilities in accordance with Section 8A.7, PeopleFirst shall continue to
manage, service, administer and collect on the Receivables pursuant to this
Agreement, unless and until expressly agreed otherwise by the Seller, the Issuer
and the Controlling Party.  The Servicer, as agent for the Issuer and the
Insurer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) in
accordance with all applicable federal, state or local laws and regulations and
with reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others, and in any event with no less degree of skill and care
than would be exercised by a prudent servicer of motor vehicle loans (the
"Servicing Standard"), except that the Servicer shall not be obligated, and does
not currently intend, to (i) obtain force-placed insurance concerning any
Financed Vehicle or (ii) monitor any Obligor's maintenance of such insurance.
The Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Obligors on such Receivables, investigating
delinquencies, sending payment statements to Obligors, accounting for
collections and furnishing monthly and annual statements to the Owner Trustee,
Indenture Trustee and the Insurer with respect to distributions, reporting tax
information, if any, to Obligors and delivering Receivable Files to the
Custodian.  Subject to the provisions of Section 4.2, the Servicer shall follow
its customary standards, policies and procedures in performing its duties as
Servicer.  Without limiting the generality of the foregoing, the Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Insurer, the
Certificateholders and the Noteholders or any of them, any and all instruments
of satisfaction or cancellation, or partial or full release or discharge, and
all other comparable instruments without recourse to the Trust, with respect to
such Receivables or to the Financed Vehicles securing such Receivables.  If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Trust
(in the case of a Receivable other than a Purchased Receivable) shall thereupon
be deemed to have automatically assigned, solely for the purpose of collection,
such Receivable to the Servicer.  If in any enforcement suit or legal proceeding
it shall be held that the Servicer may not enforce a Receivable on the ground
that it shall not be a real party in interest or a holder entitled to enforce
such Receivable, the Owner Trustee or the Indenture Trustee shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Trust, the Owner Trustee,
the Certificateholders, Indenture Trustee or the Noteholders.  The Owner Trustee
and the Insurer shall upon the written request of the Servicer furnish the
Servicer with any powers

                                       24
<PAGE>

of attorney and other documents reasonably necessary or appropriate (as
certified to the Owner Trustee and/or the Insurer by the Servicer) to enable the
Servicer to carry out its servicing and administrative duties hereunder.

          (b)  PeopleFirst hereby agrees that upon the designation of a
successor Servicer hereunder or the assumption by the Backup Servicer of the
Servicer's duties and responsibilities in accordance with Section 8A.7,
PeopleFirst will terminate its activities as Servicer hereunder in accordance
with Section 8.1 and, in any case, in a manner which the Indenture Trustee
reasonably determines will facilitate the transition of the performance of such
activities to such successor Servicer or the Backup Servicer, as the case may
be, and PeopleFirst shall cooperate with and assist such successor Servicer or
the Backup Servicer, as the case may be.

     SECTION 4.2.   Collection and Allocation of Receivable Payments.  (a)  The
                    ------------------------------------------------
Servicer shall collect all payments called for under the terms and provisions of
the Receivables as and when the same shall become due and shall follow such
collection procedures as is consistent with the Servicing Standard.  The
Servicer shall allocate collections between principal and interest in accordance
with its customary servicing procedures.

          (b)  The Servicer may at any time agree to a modification, amendment
or extension of a Receivable in order to (i) change the Obligor's regular due
date to a date within the Collection Period in which such due date occurs, (ii)
reamortize the scheduled payments on the Receivable following a partial
prepayment of principal and (iii) grant extensions of a Receivable, provided
that the Servicer shall not be permitted to extend the monthly payments on a
Receivable more than two times in any twelve-month period, and provided further
that the aggregate period of all extensions on a Receivable shall not exceed six
months. The Servicer may in its discretion waive any late payment charge or any
other fees that may be collected in the ordinary course of servicing a
Receivable.

          (c)  The Servicer may grant payment extensions or deferrals on, or
other modifications or amendments to, a Receivable (in addition to those
modifications permitted by Section 4.2(a)) in accordance with its customary
procedures if the Servicer believes in good faith that such extension, deferral,
modification or amendment is necessary to avoid a default on such Receivable,
will maximize the amount to be received by the Trust with respect to such
Receivable, and is otherwise in the best interests of the Trust; provided
                                                                 --------
however, that:
-------

               (i)    In no event may a Receivable be extended beyond the
          Collection Period immediately preceding the Final Scheduled
          Distribution Date;

               (ii)   So long as an Insurer Default shall not have occurred and
          be continuing, the Servicer shall not amend or modify a Receivable
          (except as provided in Section 4.2(b)) without the consent of the
          Insurer;

               (iii)  So long as an Insurer Default shall not have occurred and
          be continuing, the Aggregate Principal Balance of Receivables which
          have been extended during any Collection Period (A) shall not exceed
          1.0% of the Aggregate Principal Balance of Receivables during such
          Collection Period (computed as of the Accounting Date immediately
          prior to the first date of the related Collection Period) and (B)
          shall not exceed 1.0% of the average of the Aggregate Principal
          Balance of Receivables for such Collection Period and the three prior
          Collection Periods (computed as of the Determination Date immediately
          prior to the first day of the related Collection Period);

                                       25
<PAGE>

               (iv)   So long as an Insurer Default shall not have occurred and
          be continuing, the Aggregate Principal Balance of Receivables for
          which payment deferrals have been granted during any Collection Period
          (A) shall not exceed 1.0% of the Aggregate Principal Balance of
          Receivables during such Collection Period (computed as of the
          Accounting Date immediately prior to the first day of the related
          Collection Period) and (B) shall not exceed 1.0% of the average of the
          Aggregate Principal Balance of Receivables for such Collection Period
          and the three prior Collection Periods (computed as of the
          Determination Date immediately prior to the first day of the related
          Collection Period);

               (v)    No such extension, modification or amendment shall be
          granted if such action, when aggregated with all previous extensions,
          modifications and amendments of Receivables, would have the effect of
          causing any Notes to be deemed to have been exchanged for other Notes
          within the meaning of Section 1001 of the Internal Revenue Code of
          1986, as amended, or any proposed, temporary or final Treasury
          Regulations issued thereunder; and

               (vi)   If an Insurer Default shall have occurred and be
          continuing, the Servicer may not extend or modify any Receivable
          (other than as permitted by Section 4.2(b)).

          (d)  Notwithstanding anything in this Agreement to the contrary, the
Servicer may refinance any Receivable by accepting a new promissory note from
the related Obligor and depositing the full outstanding Principal Balance of
such Receivable into the Collection Account.  The receivable created by the
refinancing shall not be property of the Issuer.

     SECTION 4.3.   Realization upon Receivables.  The Servicer shall, in
                    ----------------------------
accordance with the Servicing Standard and in a manner consistent with its
customary servicing procedures, repossess or otherwise convert the ownership of
the Financed Vehicle securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely.  From time to time, as
appropriate for servicing or foreclosing upon any Receivable, the Owner Trustee
shall, upon written request of the Servicer, execute or shall cause to be
executed such documents as shall be reasonably necessary to prosecute any such
proceedings.  The Servicer shall follow such customary and usual practices and
procedures as it shall deem necessary or advisable, consistent with the
Servicing Standard, which practices and procedures may include the sale of the
related Financed Vehicles at a public or private sale, the submission of claims
under an insurance policy and other actions by the Servicer to realize upon a
Receivable.  The foregoing shall be subject to the provision that, in any case
in which the Financed Vehicle shall have suffered damage, the Servicer shall not
expend funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its reasonable discretion that such repair
and/or repossession will increase the Net Liquidation Proceeds by an amount
greater than the amount of such expenses.

     SECTION 4.4.   [RESERVED]

     SECTION 4.5.   Maintenance of Security Interests in Financed Vehicles.  (a)
                    ------------------------------------------------------
The Servicer shall, in accordance with the Servicing Standard and its customary
procedures, take such steps as are necessary to maintain perfection of the first
priority security interest created by each Receivable in the related Financed
Vehicle in favor of the Seller.  The Servicer is hereby authorized to take such
steps as are necessary to re-perfect such security interest on behalf of the
Issuer and the Indenture Trustee in the event of the relocation of a Financed
Vehicle or for any other reason.

                                       26
<PAGE>

          (b)  Upon the occurrence of an Insurance Agreement Event of Default,
and subject to the other provisions of this Agreement, the Controlling Party may
instruct the Indenture Trustee and the Servicer to take or cause to be taken,
upon the occurrence of a Servicer Default, the Owner Trustee and the Servicer
shall take or cause to be taken such action as may, in the opinion of counsel to
the Controlling Party, be necessary to perfect or reperfect the security
interests in the Financed Vehicles securing the Receivables in the name of the
Indenture Trustee by amending the title documents of such Financed Vehicles or
by such other reasonable means as may, in the opinion of counsel to the
Controlling Party, be necessary or prudent.  The Servicer hereby agrees to pay
all expenses related to such perfection or reperfection and to take all action
necessary therefor.

     SECTION 4.6.   Covenants of Servicer.  The Servicer shall not release the
                    ---------------------
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or payment in full less a deficiency which the Servicer
would not attempt to collect in accordance with the Servicing Standard and its
customary procedures or in connection with repossession or except as may be
required by an insurer in order to receive proceeds from insurance covering such
Financed Vehicle, nor shall the Servicer impair the rights of the Issuer, the
Indenture Trustee, the Owner Trustee, the Certificateholders, the Insurer or the
Noteholders in such Receivables, nor shall the Servicer amend or otherwise
modify a Receivable (including the grant of any extension thereunder), except as
provided in Section 4.2 hereof.

     SECTION 4.7.   Purchase of Receivables upon Breach.  The Seller, the
                    -----------------------------------
Servicer, the Owner Trustee, or the Insurer, as the case may be, shall inform
the other parties and the Indenture Trustee promptly, in writing, upon the
discovery of any breach of the Servicer's covenants pursuant to Section 4.2(b),
4.5 or 4.6, or of any breach of the Servicer's representations and warranties
made pursuant to Section 7.1; provided, however, that the failure to give any
                              --------  -------
such notice shall not affect the obligation of the Servicer under this Section
4.7.  As of the last day of the first month following the discovery by the
Servicer or receipt by the Servicer of notice from any of the Seller, the
Servicer, the Owner Trustee, Insurer or the Indenture Trustee of such breach,
unless such breach is cured by such date, the Servicer shall (i) purchase any
Receivable in which the interests of the Insurer, the Noteholders or the
Certificateholders are materially and adversely affected by such breach as of
such date.  The "first month" shall mean the calendar month following the month
in which discovery occurs or notice is given.  In consideration of the purchase
of any such Receivable pursuant to the preceding sentence, the Servicer shall
remit the Purchase Amount in the manner specified in Section 5.5.  The sole
remedy of the Issuer, the Indenture Trustee, the Insurer, the Noteholders or the
Certificateholders with respect to a breach pursuant to Section 4.2(b), 4.5 or
4.6, or to a breach of representations and warranties pursuant to Section 7.1,
shall be limited to the purchase of Receivables in accordance with this Section
4.7.  The Indenture Trustee and the Owner Trustee shall have no duty to conduct
any affirmative investigation as to the occurrence of any condition requiring
the purchase of any Receivable pursuant to this Section 4.7.

     SECTION 4.8.   Servicing Fee.  The Servicing Fee for a Payment Date shall
                    -------------
equal the sum of the Base Servicing Fee, all Investment Earnings on the
Collection Account plus any reimbursement pursuant to Section 5.2.  The Servicer
also shall be entitled to retain from collections the Base Servicing Fee as
provided herein.  The Servicer, in its discretion at its election, may defer
receipt of all or any portion of the Servicing Fee for any Collection Period to
and until a later Collection Period for any reason, including in order to avoid
a shortfall in any payments due on any Notes or Certificates.  Any such deferred
amount shall be payable to (or may be retained from subsequent collections by)
the Servicer on demand.

     SECTION 4.9.   Servicer's Certificate.  No later than 12:00 noon New York
                    ----------------------
City time on each Determination Date, the Servicer shall deliver to the Owner
Trustee, the Indenture Trustee, the Insurer, the Backup Servicer, the Indenture
Collateral Agent and each Rating Agency, a Servicer's Certificate containing,
among other things, (i) all information necessary to enable the Indenture
Trustee to make any

                                       27
<PAGE>

withdrawal and deposit required by Section 5.6, to give any notice required by
Section 5.4 and make the distributions required by Section 5.6 and 5.7; (ii) all
information necessary to enable the Indenture Trustee to send the statements
required by Section 5.8 to the Owner Trustee, the Noteholders, each Rating
Agency and the Insurer; (iii) a listing of all Purchased Receivables for the
related Collection Period; (iv) all information necessary to enable the
Indenture Trustee to reconcile all deposits to, and withdrawals from, the
Collection Account for the related Collection Period and Payment Date, including
the accounting required by Section 5.9; (v) the Delinquency Ratio, the
Cumulative Default Rate and the Cumulative Net Loss Rate for such Determination
Date; (vi) whether any Insurance Agreement Event of Default has occurred as of
such Determination Date; (vii) whether any Insurance Agreement Event of Default
that may have occurred as of a prior Determination Date is cured as of such
Determination Date; (viii) whether to the knowledge of the Servicer an Insurer
Default has occurred; (ix) if the Servicer has granted payment extensions on, or
other modifications or amendments to, any Receivables during the related
Collection Period, the number of such Receivables extended, modified or amended,
the Aggregate Principal Balance of such Receivables and the Principal Balance of
such Receivables expressed as a percentage of the outstanding Aggregate
Principal Balance as of the related Determination Date and (x) the amount of any
unpaid fees and expenses of the Owner Trustee. Receivables purchased by the
Servicer, the Seller and each receivable which became a Liquidated Receivable or
which was paid in full during the related Collection Period shall be identified
by account number (as set forth in the Schedule of Receivables on Schedule A
hereof). A copy of such certificate may be obtained by any Noteholder or by any
Certificateholder by a request in writing to the Indenture Trustee or the Owner
Trustee, respectively, addressed to the applicable Corporate Trust Office. The
Indenture Trustee shall not be under any obligation to confirm or reconcile the
information provided pursuant to this Section 4.9.

     If a Servicer's Certificate contains a manifest error, the Insurer's
written notice to the Servicer, the Owner Trustee, and the Indenture Trustee,
containing the corrected information shall be deemed to amend such Servicer's
Certificate.

     SECTION 4.10.  Annual Statement as to Compliance; Notice of Default.  (a)
                    ----------------------------------------------------
The Servicer shall deliver to the Indenture Trustee, the Owner Trustee, the
Backup Servicer, and the Insurer, on or before April 30 of each year beginning
April 30, 2001, an Officer's Certificate, dated as of the preceding December 31,
stating that (i) a review of the activities of the Servicer during the preceding
12-month period and of its performance under this Agreement has been made under
such officer's supervision and (ii) based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officers and the nature and status thereof.  The
Indenture Trustee shall send a copy of such certificate and the report referred
to in Section 4.11 to the Rating Agencies.  A copy of such certificate and the
report referred to in Section 4.11 may be obtained by any Certificateholder by a
request in writing to the Owner Trustee addressed to the Corporate Trust Office
or by any Noteholder by a request in writing to the Indenture Trustee addressed
to the Corporate Trust Office.

          (b)  The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee, the Backup Servicer, the Indenture Collateral Agent, the Insurer and
the Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than five (5) Business Days thereafter, an Officer's Certificate
specifying any event which with the giving of notice or lapse of time, or both,
would become a Servicer Default under Section 8.1.

     SECTION 4.11.  Financial Statements.  (a)  The Servicer shall cause a
                    --------------------
firm of nationally recognized independent certified public accountants, which
may also render other services to the Servicer or the Seller, to deliver to the
Seller, the Backup Servicer, the Indenture Trustee, the Owner Trustee and the
Insurer on or before April 30 of each year beginning April 30, 2001, an agreed-
upon procedures report addressed to the Servicer, the Seller, the Owner Trustee,
the Indenture Trustee, the Insurer and each

                                       28
<PAGE>

Rating Agency, expressing a summary of findings (based on certain procedures
performed on the documents, records and accounting records that such accountants
considered appropriate under the circumstances) relating to the servicing of the
Receivables, or the administration of the Receivables and of the Trust, as the
case may be, during the preceding calendar year and that, on the basis of the
accounting and auditing procedures considered appropriate under the
circumstances, such firm is of the opinion that such servicing or administration
was conducted in compliance with the terms of this Agreement, except for (i)
such exceptions as such firm shall believe to be immaterial and (ii) such other
exceptions as shall be set forth in such report. In the event such accounting
firm requires the Backup Servicer to agree to the procedures to be reported on
by such accounting firm in any report delivered pursuant to this Section 4.11,
the Servicer shall direct the Backup Servicer in writing to so agree. It is
understood and agreed that the Backup Servicer will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and that
the Backup Servicer will not make any independent inquiry or investigation as
to, and shall have no obligation or liability with respect to, the sufficiency,
validity or correctness of such procedures.

     Such report will also indicate that the firm is independent of the Servicer
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.

          (b)  The Servicer shall deliver to the Owner Trustee, the Backup
Servicer, the Indenture Trustee and the Insurer on or before the 45/th/ day
following the end of each calendar quarter the unaudited balance sheet of the
Servicer as of the end of the most recent calendar quarter and the related
unaudited statements of income and retained earnings of the Servicer for such
calendar quarter and for the period equal to the portion of the calendar year
ending with such calendar quarter.

     SECTION 4.12.  Access to Certain Documentation and Information Regarding
                    ---------------------------------------------------------
Receivables.  The Servicer shall provide to representatives of the Indenture
-----------
Trustee, the Owner Trustee, the Insurer, and the Backup Servicer reasonable
access to the Receivable Files and if there is a single Holder of the Notes or
if there is a single Holder of the Certificates, each such Holder.  The Servicer
shall provide to the Certificateholders and Noteholders access to the Receivable
Files in such cases where the Certificateholders or Noteholders shall be
required by applicable statutes or regulations to review such documentation as
demonstrated by evidence satisfactory to the Servicer in its reasonable
judgment.  Access shall be afforded without charge, but only upon reasonable
request and during the normal business hours at the respective offices of the
Servicer.  Nothing in this Section shall affect the obligation of the Servicer
to observe any applicable law prohibiting disclosure of information regarding
the Obligors and the failure of the Servicer to provide access to information as
a result of such obligation shall not constitute a breach of this Section.

     SECTION 4.13.  Servicer Expenses.  The Servicer shall be required to pay
                    -----------------
all expenses incurred by it in connection with its activities hereunder and
under any of the Basic Documents, including fees and disbursements of
independent accountants, taxes imposed on the Servicer and expenses incurred in
connection with distributions and reports to Certificateholders and Noteholders.

     SECTION 4.14.  Appointment of Subservicer.  The Servicer may at any time,
                    --------------------------
with the consent of the Insurer (unless an Insurer Default shall have occurred
and be continuing), appoint a subservicer to perform all or any portion of its
obligations as Servicer hereunder; provided, however, that the Rating Agency
Condition shall have been satisfied in connection therewith; provided further,
that the Servicer shall remain obligated and be liable to the Transferor, the
Depositor, the Issuer, the Indenture Trustee, the Owner Trustee, the
Certificateholders, the Insurer and the Noteholders for the servicing and
administering of the Receivables in accordance with the provisions hereof
without diminution of such obligation and liability by virtue of the appointment
of such subservicer and to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering the
Receivables. The Insurer's

                                       29
<PAGE>

consent shall not be required for appointment of subservicers or agents in
connection with repossession of any Financed Vehicle. The fees and expenses of
the subservicer shall be as agreed between the Servicer and its subservicer from
time to time and none of the Transferor, the Depositor, the Issuer, the
Indenture Trustee, the Owner Trustee, the Certificateholders, the Insurer or the
Noteholders shall have any responsibility therefor. Any such subservicer shall
perform its duties with the same standard of care applicable to the Servicer
pursuant to Section 4.1 of this Agreement.

     SECTION 4.15.  Obligations under Basic Documents.  The Servicer shall
                    ---------------------------------
perform all of its obligations under the Basic Documents.

     SECTION 4.16.  Reports to the Commission.  The Servicer shall, on behalf
                    -------------------------
of the Trust, cooperate with Depositor in connection with the filing with the
Commission any periodic reports required to be filed under the provisions of the
Exchange Act, and the rules and the regulations of the Commission thereunder.

     SECTION 4.17.  Autodebit Account Power of Attorney.  On the Closing Date,
                    -----------------------------------
the Servicer shall execute and deliver an express power of attorney (stating
therein that such power is irrevocable and coupled with an interest) granting
the Controlling Party, upon the occurrence of an event that constitutes a
Servicer Default (or that constitutes a servicer default, as defined in the
prior and any future securitization series for which the Servicer and
Controlling Party are also parties thereto (a "Related Transaction")), the power
to control and direct any autodebit account payments on the Receivables and all
receivables under all Related Transactions.

                                   ARTICLE V

        Distributions; Statements to Certificateholders and Noteholders
        ---------------------------------------------------------------

     SECTION 5.1.   Establishment of Trust Accounts.
                    -------------------------------

          (a)       (i)    On or prior to the Closing Date, the Servicer, for
          the benefit of the Indenture Trustee on behalf of the Noteholders, the
          Owner Trustee on behalf of the Certificateholders, and the Insurer,
          shall establish and maintain in the name of the Indenture Trustee an
          Eligible Deposit Account (the "Collection Account"), bearing a
          designation clearly indicating that the funds deposited therein are
          held for the benefit of the Indenture Trustee on behalf of the
          Noteholders, the Owner Trustee on behalf of the Certificateholders and
          the Insurer. Investment Earnings on funds in the Collection Account
          shall be paid to the Servicer. The Collection Account shall initially
          be established with the Indenture Trustee.

                    (ii)   On or prior to the Closing Date, the Reserve Account
          shall be established in accordance with the terms of the Reserve
          Account Agreement. On the Closing Date, the Transferor will deposit
          the Reserve Account Initial Deposit into the Reserve Account from the
          net proceeds of the sale of the Receivables.

                    (iii)  On or prior to the Closing Date, the Servicer, for
          the benefit of the Indenture Trustee on behalf of the Noteholders,
          shall establish and maintain in the name of the Indenture Trustee an
          Eligible Deposit Account (the "Note Distribution Account"), bearing a
          designation clearly indicating that the funds deposited therein are
          held for the benefit of the Indenture Trustee on behalf of the
          Noteholders and the Insurer. The Note Distribution Account shall
          initially be established with the Indenture Trustee.

                                       30
<PAGE>

          (b)  Funds on deposit in the Collection Account and the Note
Distribution Account (the "Trust Accounts") and the Certificate Distribution
Account shall be invested by the Indenture Trustee (or any custodian with
respect to funds on deposit in any such account) in Eligible Investments
selected in writing by the Servicer (pursuant to standing instructions or
otherwise); provided, however, it is understood and agreed that the Indenture
Trustee shall not be liable for any loss arising from such investment in
Eligible Investments.  If the Servicer does not provide the Indenture Trustee,
with written direction as to the Eligible Investments, the funds in the Trust
Accounts and Certificate Distribution Account shall be invested in the
investments specified in clause (1) of the definition of Eligible Investments.
All such Eligible Investments shall be held by or on behalf of the Indenture
Trustee, for the benefit of the Noteholders and/or the Certificateholders, as
applicable.  Other than as permitted by the Rating Agencies and the Insurer,
funds on deposit in the Collection Account, the Note Distribution Account and
the Certificate Distribution Account shall be invested in Eligible Investments
that will mature so that such funds will be available at the close of business
on the Business Day immediately preceding the following Payment Date.  Funds
deposited in a Trust Account or the Certificate Distribution Account on the day
immediately preceding a Payment Date upon the maturity of any Eligible
Investments are not required to be invested overnight.

          (c)  (i)  The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and in
all proceeds thereof (excluding all Investment Earnings on the Collection
Account) and all such funds, investments, proceeds and income shall be part of
the Owner Trust Estate.  Except as otherwise provided herein, the Trust Accounts
shall be under the sole dominion and control of the Indenture Trustee.  If, at
any time, any of the Trust Accounts or the Certificate Distribution Account
ceases to be an Eligible Deposit Account, the Indenture Trustee (or the Servicer
on its behalf) shall within ten (10) Business Days (or such longer period as to
which each Rating Agency and the Insurer may consent) establish a new Trust
Account or a new Certificate Distribution Account, as applicable, as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such new
Trust Account or a new Certificate Distribution Account, as applicable.  In
connection with the foregoing, the Servicer agrees that, in the event that any
of the Trust Accounts are not accounts with the Indenture Trustee, the Servicer
shall notify the Indenture Trustee in writing promptly upon any of such Trust
Accounts ceasing to be an Eligible Deposit Account.

               (ii) With respect to the Trust Account Property, the Indenture
          Trustee, and with respect to the Certificate Distribution Account, the
          Owner Trustee agrees, by its respective acceptance hereof, that:

                    (A)  any Trust Account Property or any property in the
               Certificate Distribution Account that is held in deposit accounts
               shall be held solely in the Eligible Deposit Accounts subject to
               the penultimate sentence of Section 5.1(c)(i); and, except as
               otherwise provided herein, each such Eligible Deposit Account
               shall be subject to the exclusive custody and control of the
               Indenture Trustee with respect to the Trust Accounts and the
               Owner Trustee (and Certificate Paying Agent) with respect to the
               Certificate Distribution Account, and the Indenture Trustee or
               the Owner Trustee (and Certificate Paying Agent), as applicable,
               shall have sole signature authority with respect thereto;

                    (B)  any Trust Account Property that constitutes Physical
               Property shall be delivered to the Indenture Trustee in
               accordance with paragraph (a) of the definition of "Delivery" and
               shall be held, pending maturity or disposition, solely by the
               Indenture Trustee or a securities intermediary (as such term is
               defined in Section 8-102(a)(14) of the UCC) acting for the
               Indenture Trustee;

                                       31
<PAGE>

                    (C)  any Trust Account Property that is a "certificated
               security" under Article 8 of the UCC shall be delivered to the
               Indenture Trustee in accordance with paragraph (b) of the
               definition of "Delivery" and shall be held, pending maturity or
               disposition, solely by the Indenture Trustee or a securities
               intermediary (as such term is defined in Section 8-102(a)(14) of
               the UCC) acting for the Indenture Trustee;

                    (D)  any Trust Account Property that is a book-entry
               security held through the Federal Reserve System pursuant to
               Federal book-entry regulations shall be delivered in accordance
               with paragraph (d) of the definition of "Delivery" and shall be
               maintained by the Indenture Trustee, pending maturity or
               disposition, through continued book-entry registration of such
               Trust Account Property in the name of the Indenture Trustee or a
               securities intermediary (as such term is defined in Section 8-
               102(a)(14) of the UCC) acting for the Indenture Trustee's;

                    (E)  any Trust Account Property that is an "uncertificated
               security" under Article 8 of the UCC and that is not governed by
               clause (D) above shall be delivered to the Indenture Trustee in
               accordance with paragraph (c) of the definition of "Delivery" and
               shall be maintained by the Indenture Trustee, pending maturity or
               disposition, through continued registration of the Indenture
               Trustee's (or its nominee's) ownership of such security; and

                    (F)  any Trust Account Property held through a securities
               intermediary (as such term is defined in Section 8-102(a)(14) of
               the UCC) shall be held in a securities account (as such term is
               defined in Section 8-501(a) of the UCC) that is established by
               such securities intermediary in the name of the Indenture Trustee
               for which the Indenture Trustee is the sole entitlement holder
               (as defined in Section 8-102(a)(7) of the UCC).

     SECTION 5.2.   Collections.  (a)  The Servicer shall remit within two (2)
                    -----------
Business Days of receipt thereof to the Collection Account all payments by or on
behalf of the Obligors with respect to the Receivables (other than Purchased
Receivables) and all Liquidation Proceeds, both as collected during the
Collection Period less any payments owed thereon to the Servicer. For purposes
of this Article V, the phrase "payments by or on behalf of Obligors" shall mean
payments made with respect to the Receivables by Persons other than the Servicer
or the Seller.

          (b)  The Servicer will be entitled to be reimbursed from amounts on
deposit in the Collection Account with respect to a Collection Period for
amounts previously deposited in the Collection Account but later determined by
the Servicer to have resulted from mistaken deposits or postings or checks
returned for insufficient funds.  The amount to be reimbursed hereunder shall be
paid to the Servicer on the related Payment Date pursuant to Section 5.6(a) upon
certification by the Servicer of such amounts and the provision of such
information to the Indenture Trustee and the Insurer as may be necessary in the
opinion of the Insurer to verify the accuracy of such certification.  In the
event that the Insurer has not received evidence satisfactory to it of the
Servicer's entitlement to reimbursement pursuant to Section 5.2(b), the Insurer
(unless an Insurer Default shall have occurred and be continuing) shall give the
Indenture Trustee notice to such effect following receipt of which the Indenture
Trustee shall not make a distribution to the Servicer in respect of such amount
pursuant to Section 5.6, or if the Servicer prior thereto has been reimbursed
pursuant to Section 5.6 or Section 5.9, the Indenture Trustee shall withhold
such amounts from amounts otherwise distributable to the Servicer on the next
succeeding Payment Date.

                                       32
<PAGE>

          (c)  If at any time the percentage of Obligors using the automated
payment option, which percentage shall be the equivalent of a fraction, the
numerator of which is the aggregate Principal Balance of such Obligors'
Receivables calculated as of the last day of the immediately preceding
Collection Period and the denominator of which is the Aggregate Principal
Balance calculated as of the last day of the immediately preceding Collection
Period, is below 75%, then the Servicer shall cause all payments by or on behalf
of the Obligors that are not using the automated payment option to be deposited
into a lockbox account established at a depository institution acceptable to
Insurer.

     SECTION 5.3.   Application of Collections.  All collections for the
                    --------------------------
Collection Period shall be applied by the Servicer as follows:

     With respect to each Receivable (other than a Purchased Receivable),
payments by or on behalf of the Obligor shall be applied first to interest and
then to principal in accordance with the Simple Interest Method.

     SECTION 5.4.   Deficiency Notice.  (a)  In the event that the Servicer's
                    -----------------
Certificate with respect to any Determination Date shall state that the amount
of the Available Funds with respect to such Determination Date is less than the
sum of the amounts payable on the related Payment Date pursuant to clauses (i)
through (v) of Section 5.6(a) (such deficiency being a "Deficiency Claim
Amount"), then on the Deficiency Claim Date immediately preceding such Payment
Date, the Indenture Trustee shall deliver to the Indenture Collateral Agent, the
Insurer, the Owner Trustee, the Servicer and the Backup Servicer, by hand
delivery, telex or facsimile transmission, a written notice (a "Deficiency
Notice"), specifying the Deficiency Claim Amount for such Payment Date.

          (b)  Any Deficiency Notice shall be delivered by 10:00 am, New York
City time, on the related Deficiency Claim Date.

     SECTION 5.5.   Additional Deposits.  The Servicer and the Seller, as
                    -------------------
applicable, shall deposit or cause to be deposited in the Collection Account on
the Determination Date following the date on which such obligations are due the
aggregate Purchase Amount with respect to Purchased Receivables.  The Indenture
Trustee shall remit to the Collection Account any amounts delivered to the
Indenture Trustee pursuant to Section 5.10 hereof.  All such deposits with
respect to a Collection Period shall be made in immediately available funds no
later than 10:00 a.m. New York City time, on the Business Day immediately
preceding the Payment Date related to such Collection Period.

     SECTION 5.6.   Distributions.
                    -------------

          (a)  On each Payment Date, the Indenture Trustee shall (based solely
on the information contained in the Servicer's Certificate delivered with
respect to the related Determination Date) distribute the following amounts and
in the following order of priority:

               (i)   from the Distribution Amount, to the Servicer, the Base
          Servicing Fee for the related Collection Period, and any amounts
          specified in Section 5.2(b), to the extent the Servicer has not
          reimbursed itself in respect of such amounts pursuant to Section 5.9
          and to the extent not retained by the Servicer;

               (ii)   from the Distribution Amount, pro rata,  to the Indenture
                                                    --- ----
          Trustee, the Indenture Trustee Fee, to the Backup Servicer, the Backup
          Servicer Fee and expenses (provided that all expenses incurred by the
          Backup Servicer in connection with its assumption of the role of
          Servicer shall not exceed $35,000 in the aggregate, at any time when
          the Notes are Outstanding);

                                       33
<PAGE>

               (iii)  from the Distribution Amount, to the Note Distribution
          Account, the Noteholders' Interest Distributable Amount;

               (iv)   from the Distribution Amount, to the Note Distribution
          Account, the Noteholders' Principal Distributable Amount;

               (v)    from the Distribution Amount, to the Insurer, to the
          extent of any amounts owing to the Insurer under the Insurance
          Agreement and not paid;

               (vi)   from the Available Funds, to the Reserve Account, all
          Available Funds remaining after distributions pursuant to clauses (i)
          through (v) above;

               (vii)  from amounts, if any, released from the Reserve Account on
          such Payment Date pursuant to the terms of the Reserve Account
          Agreement for deposit in the Certificate Distribution Account.

     provided, however, that, (A) following an acceleration of the Notes or, (B)
if an Insurer Default shall have occurred and be continuing, following the
occurrence of an Event of Default pursuant to Section 5.1(i), 5.1(ii), 5.1(iii),
5.1(v) or 5.1(vi) of the Indenture, amounts deposited in the Note Distribution
Account and the Certificate Distribution Account shall be paid to the
Noteholders and the Certificateholders in accordance with the provisions of
Section 5.6 of the Indenture.

          (b)  In the event that the Collection Account is maintained with an
institution other than the Indenture Trustee, the Servicer shall instruct and
cause such institution to make all deposits and distributions pursuant to
Section 5.6(a) on the related Payment Date.

     SECTION 5.7.  [RESERVED].
                   ---------

     SECTION 5.8.  Statements to Certificateholders and Noteholders.  On or
                   ------------------------------------------------
prior to each Determination Date, the Servicer shall provide to the Indenture
Trustee (with a copy to the Insurer and the Rating Agencies) for the Indenture
Trustee to forward to each Noteholder of record, and to the Owner Trustee (or
Certificate Paying Agent) for the Owner Trustee to forward to each
Certificateholder of record, statements substantially in the form of Exhibit B
and Exhibit C, respectively, setting forth at least the following information
with respect to distributions on the related Payment Date as to the Notes and
the Certificates to the extent applicable:

               (i)    the amount of such distribution allocable to principal of
          each Class of Notes and to the Certificate Balance of the Class A
          Certificates;

               (ii)   the amount of such distribution allocable to interest on
          or with respect to each Class of Notes;

               (iii)  the amount of such distribution payable pursuant to a
          Deficiency Notice;

               (iv)   the amount of such distribution payable pursuant to a
          Notice of Claim, specifying, in addition to the foregoing, any
          remaining amount available to be draw under the Policy;

               (v)    the Pool Balance as of the close of business on the last
          day of the preceding Collection Period;

                                       34
<PAGE>

               (vi)   the aggregate outstanding principal amount of each Class
          of the Notes, the Note Pool Factor for each such Class, the
          Certificate Balance and the Certificate Pool Factor after giving
          effect to payments allocated to principal reported under (i) above;

               (vii)  the amount of the Servicing Fee paid to the Servicer with
          respect to the related Collection Period and/or due but unpaid with
          respect to such Collection Period or prior Collection Periods, as the
          case may be;

               (viii) the Noteholders' Interest Carryover Shortfall;

               (ix)   the amount of the aggregate Realized Losses, if any, for
          the second preceding Collection Period;

               (x)    the aggregate Purchase Amounts for Receivables, if any,
          that were repurchased in such period;

               (xi)   the Yield Supplement Overcollateralization Amount for the
          next Payment Date;

               (xii)  the amounts which were collected by the Servicer;

               (xiii) the aggregate amount which was received by the Trust from
          the Servicer;

               (xiv)  any reimbursements to the Insurer; and

               (xv)   delinquency information relating to Receivables which are
          30, 60 or 90 days delinquent.

     Each amount set forth pursuant to paragraph (i), (ii), (iii), (iv) and
(viii) above shall be expressed as a dollar amount per $1,000 of the initial
principal balance of the Notes (or Class thereof) or the initial Certificate
Balance, as applicable.

     SECTION 5.9.  Net Deposits.  As an administrative convenience, unless a
                   ------------
Servicer Default has occurred and is continuing, the Servicer is required to
remit collections within two (2) Business Days of receipt thereof.  The Servicer
will be permitted to make the deposit of collections on the Receivables and
Purchase Amounts for or with respect to each Collection Period net of
distributions to be made to the Servicer with respect to such Collection Period;
provided, however, that if an error is made by the Servicer in calculating the
--------  -------
amount to be deposited or retained by it, with the result that an amount less
than required is deposited into the Collection Account, the Servicer shall make
a payment of the deficiency to the Collection Account immediately upon becoming
aware or receiving notice from the Indenture Trustee, the Servicer, the Insurer
or any Noteholders of such error.  The Servicer, however, will account to the
Owner Trustee, the Indenture Trustee, the Indenture Collateral Agent, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.

     SECTION 5.10. Optional Deposits by the Insurer.  The Insurer shall at
                   --------------------------------
any time, and from time to time, with respect to a Payment Date, have the option
(but shall not be required, except in accordance with the terms of the Policy)
to deliver amounts from its own funds to the Indenture Trustee for deposit into
the Collection Account for any of the following purposes: (i) to provide funds
in respect of the payment of fees or expenses of any provider of services to the
Issuer with respect to such Payment Date, or (ii) to include such amount to the
extent that without such amount a draw would be required to be made on the
Policy.

                                       35
<PAGE>

                                  ARTICLE V-A

                                  The Policy
                                  ----------

     SECTION 5A.1  Claims Under Policy.
                   -------------------

          (a)  In the event that the Indenture Trustee has delivered a
Deficiency Notice with respect to any Determination Date, if the Policy Claim
Amount for the related Payment Date is greater than zero, the Indenture Trustee
shall furnish to the Insurer (with a copy to the Servicer) no later than 12:00
noon New York City time on the related Deficiency Claim Date a completed Notice
of Claim in the amount of the Policy Claim Amount. Amounts paid by the Insurer
under the Policy shall be deposited by the Indenture Trustee into the Note
Distribution Account on the Business Day immediately preceding the Payment Date
for payment to Noteholders on the related Payment Date. The "Policy Claim
Amount" for any Payment Date shall equal the lesser of (i) the sum of the
Noteholders' Interest Distributable Amount and the Noteholders' Principal
Distributable Amount for such Payment Date and (ii) the excess, if any, of the
amount required to be distributed pursuant to clauses (i) through (iv) of
Section 5.6(a) over the Distribution Amount for such Payment Date.

          (b)  Any notice delivered by the Indenture Trustee to the Insurer
pursuant to subsection 5A.1(a) shall specify the Policy Claim Amount claimed
under the Policy and shall constitute a "Notice of Claim" under the Policy.  In
accordance with the provisions of the Policy, the Insurer is required to pay to
the Indenture Trustee the Policy Claim Amount properly claimed thereunder by
12:00 noon, New York City time, on the later of (i) the third Business Day
following receipt on a Business Day of the Notice of Claim, and (ii) the
Business Day preceding the applicable Payment Date.  Any payment made by the
Insurer under the Policy shall be applied solely to the payment of the Notes,
and for no other purpose.

          (c)  The Indenture Trustee shall (i) receive as attorney-in-fact of
each Noteholder any Policy Claim Amount from the Insurer and (ii) deposit the
same in the Collection Account for disbursement to the Noteholders as set forth
in the Indenture.  Any and all Policy Claim Amounts disbursed by the Indenture
Trustee from claims made under the Policy shall not be considered payment by the
Issuer with respect to such Notes, and shall not discharge the obligations of
the Issuer with respect thereto.  The Insurer shall, to the extent it makes any
payment with respect to the Notes, become subrogated to the rights of the
recipients of such payments to the extent of such payments.  Subject to and
conditioned upon any payment with respect to the Notes by or on behalf of the
Insurer, the Indenture Trustee shall assign to the Insurer all rights to the
payment of interest or principal with respect to the Notes which are then due
for payment to the extent of all payments made by the Insurer and the Insurer
may exercise any option, vote, right, power or the like with respect to the
Notes to the extent that it has made payment pursuant to the Policy.  To
evidence such subrogation, the Note Registrar shall note the Insurer's rights as
subrogee upon the register of Noteholders upon receipt from the Insurer of proof
of payment by the Insurer of any Noteholders' Interest Distributable Amount or
Noteholders' Principal Distributable Amount.

          (d)  The Indenture Trustee shall be entitled to enforce on behalf of
the Noteholders the obligations of the Insurer under the Policy.
Notwithstanding any other provision of this Agreement or any Basic Document, the
Noteholders are not entitled to make a claim directly under the Policy or
institute proceedings directly against the Insurer.

          (e)  The Indenture Trustee shall keep a complete and accurate record
of all funds on deposit in the Collection Account and the Note Distribution
Account and the allocation of such funds to payments of interest on and
principal paid in respect of any Note. The Insurer shall have the right to

                                       36
<PAGE>

inspect such records at reasonable times upon one (1) Business Day's prior
notice to the Indenture Trustee.

     SECTION 5A.2  Preference Claims; Direction of Proceedings.
                   -------------------------------------------

          (a)  In the event that the Indenture Trustee has received a certified
copy of an order of the appropriate court that any Noteholders' Interest
Distributable Amount or Noteholders' Principal Distributable Amount paid on a
Note has been avoided in whole or in part as a preference payment under
applicable bankruptcy law, the Indenture Trustee shall so notify the Insurer,
shall comply with the provisions of the Policy to obtain payment by the Insurer
of such avoided payment, and shall, at the time it provides notice to the
Insurer, notify Holders of the Notes by mail that, in the event that any
Noteholder's payment is so recoverable, such Noteholder will be entitled to
payment pursuant to the terms of the Policy.  Pursuant to the terms of the
Policy, the Insurer will make such payment on behalf of the Noteholder to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Order (as defined in the Policy) and not to the Indenture Trustee or any
Noteholder directly (unless a Noteholder has previously paid such payment to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy, in which
case the Insurer will make such payment to the Indenture Trustee for
distribution to such Noteholder upon proof of such payment satisfactory to the
Insurer).

          (b)  The Indenture Trustee shall promptly notify the Insurer of any
proceeding or the institution of any action (of which a responsible officer of
the Indenture Trustee has actual knowledge) seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law (a "Preference Claim") of any distribution made
with respect to the Notes.  Each Holder, by its purchase of Notes, and the
Indenture Trustee hereby agree that so long as an Insurer Default shall not have
occurred and be continuing, the Insurer may at any time during the continuation
of any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim including, without limitation, (i) the direction of any
appeal of any order relating to any Preference Claim and (ii) the posting of any
surety, supercede as or performance bond pending any such appeal at the expense
of the Insurer, but subject to reimbursement as provided in the Insurance
Agreement.  In addition, and without limitation of the foregoing, as set forth
in Section 5A.1(c), the Insurer shall be subrogated to, and each Noteholder and
the Indenture Trustee hereby delegate and assign, to the fullest extent
permitted by law, the rights of the Indenture Trustee and each Noteholder in the
conduct of any proceeding with respect to a Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim.

     SECTION 5A.3  Surrender of Policy.  The Indenture Trustee shall surrender
                   -------------------
the Policy to the Insurer for cancellation upon the expiration of such Policy in
accordance with the terms thereof.

                                  ARTICLE VI

                                  The Seller
                                  ----------

     SECTION 6.1.  Representations of the Seller. The Seller makes the
                   -----------------------------
following representations on which each of the Transferor, the Depositor and the
Issuer are deemed to have relied in acquiring its interest in the Receivables.
The representations speak as of the execution and delivery of this Agreement and
as of the Closing Date, and shall survive the sale of the Receivables to the
Transferor, the transfer thereof to the Depositor, the transfer by the Depositor
to the Issuer and pledge thereof to the Indenture Trustee pursuant to the
Indenture.

                                       37
<PAGE>

          (a)  Organization and Good Standing.  The Seller is duly organized and
               ------------------------------
validly existing as a limited liability company in good standing under the laws
of the State of California with the limited liability company power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and had at all
relevant times, and has, the power, authority and legal right to acquire and own
the Receivables.

          (b)  Due Qualification. The Seller is duly qualified to do business as
               -----------------
a foreign company in good standing, and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property,
including the Receivables, or the conduct of its business shall require such
qualifications.

          (c)  Power and Authority of the Seller.  The Seller has the power and
               ---------------------------------
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement and each of the Basic Documents to which the Seller is a
party; the Seller has full power and authority to sell and assign the property
to be sold and assigned to and deposited with the Transferor, and the Seller has
duly authorized such sale and assignment to the Transferor by all necessary
limited liability company action, and the execution, delivery and performance of
each of the Basic Documents to which the Seller is a party has been duly
authorized by the Seller by all necessary limited liability company action.

          (d)  Binding Obligation; Valid Sale.  This Agreement effects a valid
               ------------------------------
sale, transfer, and assignment of the Receivables, enforceable against creditors
of and purchasers from the Seller. This Agreement and each of the Basic
Documents to which the Seller is a party constitute legal, valid and binding
obligations of the Seller, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally and subject to general principles of equity (whether
applied in a proceeding at law or in equity).

          (e)  No Violation.  The consummation of the transactions contemplated
               ------------
by this Agreement and each of the Basic Documents to which the Seller is a party
and the fulfillment of the terms hereof and thereof do not result in any breach
of any of the terms and provisions of, nor constitute (with or without notice or
lapse of time or both) a default under, the operating agreement of the Seller,
or any indenture, agreement or other instrument to which the Seller is a party
or by which it is bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents); nor
violate any law or, to the best of its knowledge, any order, rule or regulation
applicable to the Seller of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.

          (f)  No Proceedings.  There are no proceedings or investigations
               --------------
pending against the Seller or, to its best knowledge, threatened against the
Seller, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties: (i) asserting the invalidity of this Agreement or any of the Basic
Documents to which the Seller is a party, the Notes or the Certificates, (ii)
seeking to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement or any of
the Basic Documents, (iii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the performance
by the Seller of its obligations under, or the validity or enforceability of,
this Agreement, the Basic Documents to which the Seller is a party, or the Notes
or the Certificates or (iv) that might adversely affect the federal, state and
local income tax attributes of the Issuer, the Notes or the Certificates or
seeking to impose any excise, franchise, transfer or similar tax upon the Notes,
the Certificates or the sale and assignment of the Receivables and the other
Transferor Property hereunder.

                                       38
<PAGE>

          (g)  All Consents.  All authorizations, consents, orders or approvals
               ------------
of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Seller in connection with the execution and
delivery by the Seller of this Agreement or any of the Basic Documents to which
it is a party and the performance by the Seller of the transactions contemplated
by this Agreement or any of the Basic Documents to which it is a party, have
been duly obtained, effected or given and are in full force and effect, except
where failure to obtain the same would not have a material and adverse effect
upon the rights of the Issuer, or the Noteholders.

          (h)  Chief Executive Office.  The chief executive office of the Seller
               ----------------------
is at 401 West A Street, Suite 1000, San Diego, California, 92101.

          (i)  Upon the transfer of each Receivable to the Transferor and other
items of Transferor Property delivered by the Seller to the Transferor under
this Agreement or any Subsequent Transfer Agreement, the Transferor will have
good title to such Receivable and such other items of Transferor Property, free
and clear of any lien, charge, mortgage, encumbrance or rights of others (other
than liens that will be simultaneously released).

     SECTION 6.2.  Existence.  (a)  During the term of this Agreement, the
                   ---------
Seller will keep in full force and effect its existence, rights and franchises
as a limited liability company under the laws of the jurisdiction of its
organization and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, any Subsequent
Transfer Agreement, the Basic Documents and each other instrument or agreement
necessary or appropriate to the proper administration of this Agreement and the
transactions contemplated hereby.

          (b)  During the term of this Agreement, the Seller shall observe the
applicable legal requirements for the recognition of the Transferor as a legal
entity separate and apart from the Seller and its other Affiliates, including as
follows:

               (i)   the Transferor shall maintain corporate records and books
          of account separate from those of the Seller and its other Affiliates;

               (ii)  except as otherwise provided in this Agreement, the
          Transferor shall not commingle its assets and funds with those of the
          Seller or its other Affiliates;

               (iii) the Transferor shall hold such appropriate meetings of its
          Board of Directors as are necessary to authorize all the Transferor's
          limited liability company actions required by law to be authorized by
          the Board of Directors, shall keep minutes of such meetings and of
          meetings of its members and observe all other customary limited
          liability company formalities (and any successor Transferor not a
          corporation shall observe similar procedures in accordance with its
          governing documents and applicable law);

               (iv)  the Transferor shall at all times hold itself out to the
          public under its own name as a legal entity separate and distinct from
          the Seller and its other Affiliates; and

               (v)   all transactions and dealings between the Transferor and
          the Seller and its other Affiliates will be conducted on an arm's-
          length basis.

                                       39
<PAGE>

     SECTION 6.3.  Liability of Seller; Indemnities.  (a)  The Seller shall be
                   --------------------------------
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.

          (b)  The Seller shall indemnify, defend and hold harmless the
Transferor, the Depositor, the Backup Servicer, the Insurer, the Owner Trustee,
the Issuer, the Indenture Trustee and the Indenture Collateral Agent from and
against any taxes that may at any time be asserted against any such Person with
respect to the transactions contemplated in this Agreement and any of the Basic
Documents (except any income taxes arising out of fees paid to the Owner Trustee
or the Indenture Trustee and except any taxes to which the Owner Trustee or the
Indenture Trustee may otherwise be subject to), including any sales, gross
receipts, general corporation, tangible personal property, privilege or license
taxes (but, in the case of the Issuer, not including any taxes asserted with
respect to, federal or other income taxes arising out of distributions on the
Certificates and the Notes) and costs and expenses in defending against the
same.

          (c)  The Seller shall indemnify, defend and hold harmless the
Depositor, the Backup Servicer, the Transferor, the Issuer, the Indenture
Trustee, the Owner Trustee, the Indenture Collateral Agent, the Insurer, the
Certificateholders and the Noteholders from and against any loss, liability or
expense incurred by reason of (i) the Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement, or by reason
of reckless disregard of its obligations and duties under this Agreement or (ii)
the Seller's, the Transferor's or the Issuer's violation of Federal or state
securities laws in connection with the offering and sale of the Notes and the
Certificates or (iii) the failure of any Receivable conveyed to the Transferor
hereunder to comply with all requirements of applicable law and for breach of
its representations and warranties contained herein or failure to perform in all
material respects its obligations and duties contained herein.

          (d)  The Seller shall indemnify, defend and hold harmless the Owner
Trustee, the Indenture Trustee, the Insurer and the Indenture Collateral Agent
and their respective officers, directors, employees and agents from and against
any and all costs, expenses, losses, claims, damages and liabilities arising out
of, or incurred in connection with the acceptance or performance of the trusts
and duties set forth herein and in the Basic Documents except to the extent that
such cost, expense, loss, claim, damage or liability shall be due to the
misfeasance, bad faith or negligence (except for errors in judgment) of the
Insurer or the Indenture Trustee or the Indenture Collateral Agent, as the case
may be or, in the case of the Owner Trustee, if such cost, expense, loss, claim,
damage or liability arises or results from any of the matters described in the
third sentence of Section 7.1 of the Trust Agreement.

     Indemnification under this Section shall survive the resignation or removal
of the Owner Trustee, the Indenture Trustee, the Backup Servicer or the
Indenture Collateral Agent and the termination of this Agreement, the Indenture
or the Trust Agreement, as applicable and shall include reasonable fees and
expenses of counsel and other expenses of litigation.  If the Seller shall have
made any indemnity payments pursuant to this Section and the Person to or on
behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to the
Seller, without interest.

     SECTION 6.4.  Merger or Consolidation of, or Assumption of the Obligations
                   ------------------------------------------------------------
of, Seller.  Any Person (a) into which the Seller may be merged or consolidated,
----------
(b) which may result from any merger or consolidation to which the Seller shall
be a party or (c) which may succeed to the properties and assets of the Seller
substantially as a whole, which Person in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Seller under this
Agreement, shall be the successor to the Seller hereunder without the execution
or filing of any document or any further act by any of the parties to this
Agreement; provided, however, that (i) the Seller shall have received the
written consent of the Controlling Party prior to entering into any such
transaction, (ii) immediately after giving effect to such

                                       40
<PAGE>

transaction, no representation or warranty made pursuant to Section 3.1 shall
have been breached and no Servicer Default or an Insurance Agreement Event of
Default, and no event which, after notice or lapse of time, or both, would
become a Servicer Default or Insurance Agreement Event of Default shall have
occurred and be continuing, (iii) the Seller shall have delivered to the Owner
Trustee, the Indenture Trustee, the Rating Agencies and the Insurer an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, (iv) the Rating Agency
Condition shall have been satisfied with respect to such transaction and (v) the
Seller shall have delivered to the Owner Trustee, the Indenture Trustee and the
Insurer an Opinion of Counsel stating that, in the opinion of such counsel,
either (A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Transferor, the Depositor, the Issuer, the Owner
Trustee and the Indenture Trustee, respectively, in the Receivables and reciting
the details of such filings or (B) no such action shall be necessary to preserve
and protect such interest. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement of assumption and compliance with clauses
(i), (ii), (iii), (iv) and (v) above shall be conditions to the consummation of
the transactions referred to in clauses (a), (b) or (c) above.

     SECTION 6.5.  Limitation on Liability of Seller and Others.  The Seller
                   --------------------------------------------
and any director or officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
under any Basic Document.  The Seller shall not be under any obligation to
appear in, prosecute or defend any legal action that shall not be incidental to
its obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.

     SECTION 6.6.  Seller May Own Certificates or Notes.  The Seller and any
                   ------------------------------------
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as expressly provided herein
or in any Basic Document.  Notes or Certificates so owned by the Seller or such
Affiliate shall have an equal and proportionate benefit under the provisions of
the Basic Documents, without preference, priority, or distinction as among all
of the Notes or Certificates, provided, however, that any Notes or Certificates
owned by the Seller or any Affiliate thereof, during the time such Notes or
Certificates are owned by them, shall be without voting rights for any purpose
set forth in the Basic Documents and will not be entitled to the benefits of the
Policy.  The Seller shall notify the Owner Trustee, the Indenture Trustee and
the Insurer promptly after it or any of its Affiliates become the owner of a
Certificate or a Note.

                                  ARTICLE VII

                                 The Servicer
                                 ------------

     SECTION 7.1.  Representations of Servicer.  The Servicer makes the
                   ---------------------------
following representations on which the Insurer shall be deemed to have relied in
executing and delivering the Policy and on which each of the Transferor, the
Depositor and the Issuer is deemed to have relied in acquiring the Receivables.
The representations speak as of the execution and delivery of this Agreement and
as of the Closing Date, and shall survive the sale of the Receivables from the
Seller to the Transferor, the Transferor to the Depositor and the Depositor to
the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.

          (a)  Organization and Good Standing.  The Servicer is duly organized
               ------------------------------
and validly existing as a limited liability company in good standing under the
laws of the state of its formation, with the limited liability company power and
authority to own its properties and to conduct its business as such

                                       41
<PAGE>

properties are currently owned and such business is presently conducted, and had
at all relevant times, and has, the power, authority and legal right to acquire,
own, sell and service the Receivables.

          (b)  Due Qualification.  The Servicer is duly qualified to do business
               -----------------
and has obtained all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of property or the conduct of its business
(including the servicing of the Receivables as required by this Agreement) shall
require such qualifications, and was duly qualified and had all licenses in all
relevant jurisdictions required for the origination of the Receivables.

          (c)  Power and Authority of the Servicer.  The Servicer has the power
               -----------------------------------
and authority to execute and deliver this Agreement and to perform its
obligations hereunder, and the execution, delivery and performance of this
Agreement have been duly authorized by the Servicer by all necessary action.
All authorizations, consents, orders or approvals of or registrations or
declarations with any court, regulatory body, administrative agency or other
government instrumentality required to be obtained, effected or given by the
Servicer in connection with the execution and delivery by the Servicer of this
Agreement or any of the Basic Documents to which it is a party and the
performance by the Servicer of the transactions contemplated by this Agreement
or any of the Basic Documents to which it is a party, have been duly obtained,
effected or given and are in full force and effect, except where failure to
obtain the same would not have a material adverse effect upon the rights of the
Issuer, the Insurer, the Noteholders or the Certificateholders.

          (d)  Binding Obligation. This Agreement constitutes a legal, valid and
               ------------------
binding obligation of the Servicer, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally, and subject to general principles of equity
(whether applied in a proceeding at law or in equity).

          (e)  No Violation.  The consummation of the transactions contemplated
               ------------
by this Agreement and the Basic Documents and the fulfillment of the terms
hereof and thereof do not result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a default
under the organizational documents of the Servicer, or any indenture, agreement
or other instrument to which the Servicer is a party or by which it shall be
bound; or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); or violate any law or,
to the best of the Servicer's knowledge, any order, rule or regulation
applicable to the Servicer of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties.

          (f)  No Proceedings.  There are no proceedings or investigations
               --------------
pending against the Servicer, or, to its best knowledge, threatened against the
Servicer, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or its
properties: (i) asserting the invalidity of this Agreement or any of the Basic
Documents to which the Servicer is a party or the Notes or the Certificates,
(ii) seeking to prevent the issuance of the Notes or the consummation of any of
the transactions contemplated by this Agreement or any of the Basic Documents to
which the Servicer is a party, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of this Agreement or any of
the Basic Documents to which the Servicer is a party or the Notes or the
Certificates or (iv) relating to the Servicer and which might adversely affect
the federal income tax or ERISA attributes of the Issuer or the Notes or the
Certificates or seeking to impose any excise, franchise, transfer or similar tax
upon the Notes or the Certificates or the sale and assignment of the Receivables
hereunder.

                                       42
<PAGE>

          (g)  Fidelity Bond.  The Servicer maintains a fidelity bond in such
               -------------
form and amount as is customary for finance companies acting as custodian of
funds and documents in respect of motor vehicle loans.

          (h)  [The Servicer shall not re-direct autodebit payments nor revoke
the automated payment option with respect to any Obligors using such option,
without prior written consent of the Controlling Party.]

     SECTION 7.2.  Indemnities of Servicer.  (a)  The Servicer shall be liable
                   -----------------------
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement and the representations made by
the Servicer herein.

          (b)  The Servicer shall defend, indemnify and hold harmless the
Transferor, the Depositor, the Backup Servicer, the Owner Trustee, the Indenture
Trustee, the Issuer, the Indenture Collateral Agent, the Insurer, the
Noteholders, the Certificateholders and the Seller from and against any and all
costs, expenses, losses, damages, claims, and liabilities, arising out of or
resulting from the use, ownership or operation by the Servicer or any Affiliate
thereof of a Financed Vehicle.

          (c)  The Servicer shall indemnify, defend and hold harmless the
Transferor, the Depositor, the Backup Servicer, the Owner Trustee, the Indenture
Trustee, the Seller, the Issuer, the Indenture Collateral Agent, the Insurer,
their respective officers, directors, agents and employees and the Noteholders
and the Certificateholders from and against any and all costs, expenses, losses,
claims, damages, and liabilities to the extent that such cost, expense, loss,
claim, damage, or liability arose out of, or was imposed upon any such Person
through, (i) the negligence, misfeasance or bad faith of the Servicer in the
performance of its duties under this Agreement or (ii) by reason of disregard of
its obligations and duties under this Agreement.

          (d)  The Servicer shall indemnify, defend and hold harmless the
Transferor, the Depositor, the Backup Servicer, the Owner Trustee, the Indenture
Trustee, the Insurer and the Indenture Collateral Agent and their respective
officers, directors, employees and agents from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in connection
with the acceptance or performance of the trusts and duties herein contained and
in the Trust Agreement, except to the extent that such costs, expense, loss,
claim, damage or liability shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Transferor, the Depositor, the
Backup Servicer, or in the case of the Owner Trustee, if such cost, expense,
loss, claim, damage or liability arises or results from any of the matters
described in the third sentence of Section 7.1 of the Trust Agreement, the
Indenture Trustee, the Insurer or the Indenture Collateral Agent, as the case
may be.

     For purposes of this Section, in the event of the termination of the rights
and obligations of PeopleFirst (or any successor thereto pursuant to Section
7.3) as Servicer pursuant to Section 8.1, or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Indenture Trustee)
pursuant to Section 8.2.

     Indemnification under this Section shall survive the resignation or removal
of the Backup Servicer, Owner Trustee, the Indenture Trustee or the Indenture
Collateral Agent, and the termination of this Agreement or the Indenture or the
Trust Agreement, as applicable, and shall include reasonable fees and expenses
of counsel and expenses of litigation.  If the Servicer shall have made any
indemnity payments pursuant to this Section and the recipient thereafter
collects any of such amounts from others, such Person shall promptly repay such
amounts to the Servicer, without interest.

                                       43
<PAGE>

     SECTION 7.3.  Merger or Consolidation of, or Assumption of the Obligations
                   ------------------------------------------------------------
of, Servicer.  Any Person (a) into which the Servicer may be merged or
------------
consolidated, (b) which may result from any merger, conversion or consolidation
to which the Servicer shall be a party or (c) which may succeed to the
properties and assets of the Servicer, substantially as a whole or (d) with
respect to the Servicer's obligations hereunder, which is a corporation or
limited liability company 50% or more of the voting interest of which is owned,
directly or indirectly, by PeopleFirst, which Person executed an agreement of
assumption to perform every obligation of the Servicer hereunder shall be the
successor to the Servicer under the Agreement without further act on the part of
any of the parties to the Agreement; provided, however, that (i) the Servicer
shall have received the written consent of the Controlling Party prior to
entering into any such transaction; (ii) immediately after giving effect to such
transaction, no Servicer Default or Insurance Agreement Event of Default and no
event which, after notice or lapse of time, or both, would become a Servicer
Default or Insurance Agreement Event of Default shall have occurred and be
continuing, (iii) the Servicer shall have delivered to the Owner Trustee, the
Indenture Trustee, the Rating Agencies and the Insurer an Officer's Certificate
and an Opinion of Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section and that
all conditions precedent provided for in this Agreement relating to such
transaction have been complied with, (iv) the Rating Agency Condition shall have
been satisfied with respect to such transaction and (v) the Servicer shall have
delivered to the Owner Trustee, the Indenture Trustee, the Rating Agencies and
the Insurer an Opinion of Counsel stating that, in the opinion of such counsel,
either (A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Owner Trustee and, the Indenture Trustee in the
Receivables and reciting the details of such filings or (B) no such action shall
be necessary to preserve and protect such interest.  Notwithstanding anything
herein to the contrary, the execution of the foregoing agreement of assumption
and compliance with clauses (i), (ii),(iii), (iv) and (v) above shall be
conditions to the consummation of the transactions referred to in clauses (a),
(b), (c) or (d) above.  Notwithstanding anything herein to the contrary,
compliance with clause (i) shall not apply if the Backup Servicer becomes the
Servicer.

     SECTION 7.4.  Limitation on Liability of Servicer and Others.  Neither the
                   ----------------------------------------------
Servicer nor any of its directors, officers, employees or agents shall be under
any liability to the Issuer, the Noteholders or the Certificateholders except as
provided under this Agreement, for any action taken or for refraining from the
taking of any action pursuant to this Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Servicer or any
such person against any liability that would otherwise be imposed by reason of
misfeasance, bad faith or negligence in the performance of duties or by reason
of reckless disregard of obligations and duties under this Agreement.  The
Servicer or any subservicer and any of their respective directors, officers,
employees or agents may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement.

     Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer, may (but shall not be required to)
undertake any reasonable action that it may deem necessary or desirable to
protect the interests the Certificateholders under the Trust Agreement of the
Noteholders under the Indenture.

     SECTION 7.5.  Servicer Not To Resign.  Subject to the provisions of
                   ----------------------
Section 7.3, the Servicer may not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon determination that by
reason of a change in legal requirements the performance of its duties under
this Agreement would cause it to be in violation of such legal requirements in a
manner which would result in a material adverse effect on the Servicer and the
Controlling Party does not elect to waive

                                       44
<PAGE>

the obligations of the Servicer to perform the duties which render it legally
unable to act or does not elect to delegate those duties to another Person.
Notice of any such determination permitting the resignation of the Servicer
shall be communicated to the Issuer, the Indenture Trustee and the Controlling
Party at the earliest practicable time (and, if such communication is not in
writing, shall be confirmed in writing at the earliest practicable time) and any
such determination shall be evidenced by an Opinion of Counsel to such effect
delivered to and satisfactory to the Owner Trustee, the Indenture Trustee and
the Insurer concurrently with or promptly after such notice. No such resignation
of the Servicer shall become effective until a successor servicer shall have
assumed the responsibilities and obligations of the resigning servicer in
accordance with Section 8.2 of this Agreement.

                                 ARTICLE VII-A

                                The Transferor
                                --------------

     SECTION 7A.1  Representations of the Transferor. The Transferor makes the
                   ---------------------------------
following representations to the Depositor and the Issuer on which the Depositor
and the Issuer are deemed to have relied in acquiring the Receivables and the
Insurer is deemed to have relied in issuing the Policy.  The representations
speak as of the execution and delivery of this Agreement and as of the Closing
Date and shall survive the sale of the Receivables to the Depositor and the
Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.

          (a)  Organization and Good Standing.  The Transferor is duly organized
               ------------------------------
and validly existing as a limited liability company in good standing under the
laws of the State of Delaware with the power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and has, the
power, authority and legal right to acquire and own the Receivables.

          (b)  Due Qualification.  The Transferor is duly qualified to do
               -----------------
business as a foreign company in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property, including the Receivables, or the conduct of its business shall
require such qualifications.

          (c)  Power and Authority of the Transferor.  The Transferor has the
               -------------------------------------
power and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement and each of the Basic Documents to which the
Transferor is a party; the Transferor has full power and authority to sell and
assign the property to be sold and assigned to the Depositor and deposited with
the Issuer, and the Transferor has duly authorized such sale and assignment to
the Issuer by all necessary limited liability company action, and the execution,
delivery and performance of each of the Basic Documents to which the Transferor
is a party has been duly authorized by the Transferor by all necessary limited
liability company action.

          (d)  Binding Obligation; Valid Transfer.  This Agreement effects a
               ----------------------------------
valid transfer, and assignment of the Receivables, enforceable against creditors
of and purchasers from the Transferor. This Agreement and each of the Basic
Documents to which the Transferor is a party constitute legal, valid and binding
obligations of the Transferor, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally and subject to general principles of equity (whether
applied in a proceeding at law or in equity).

          (e)  No Violation.  The consummation of the transactions contemplated
               ------------
by this Agreement and each of the Basic Documents to which the Transferor is a
party and the fulfillment of the

                                       45
<PAGE>

terms hereof and thereof do not result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time or both)
a default under, the operating agreement of the Transferor, or any indenture,
agreement or other instrument to which the Transferor is a party or by which it
is bound; nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any law or,
to the best of its knowledge, any order, rule or regulation applicable to the
Transferor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Transferor or its properties.

          (f)  No Proceedings.  There are no proceedings or investigations
               --------------
pending against the Transferor or, to its best knowledge, threatened against the
Transferor, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Transferor or its
properties: (i) asserting the invalidity of this Agreement or any of the Basic
Documents to which the Transferor is a party, the Notes or the Certificates,
(ii) seeking to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement or any of
the Basic Documents to which the Transferor is a party, (iii) seeking any
determination or ruling that could reasonably be expected to have a material and
adverse effect on the performance by the Transferor of its obligations under, or
the validity or enforceability of, this Agreement, the Basic Documents to which
the Transferor is a party, or the Notes or the Certificates or (iv) that might
adversely affect the federal, state or local income tax attributes of the
Issuer, the Notes or the Certificates or seeking to impose any excise,
franchise, transfer or similar tax upon the Notes, the Certificates or the sale
and assignment of the Receivables and other Depositor Property hereunder.

          (g)  All Consents.  All authorizations, consents, orders or approvals
               ------------
of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Transferor in connection with the execution
and delivery by the Transferor of this Agreement or any of the Basic Documents
to which it is a party and the performance by the Transferor of the transactions
contemplated by this Agreement or any of the Basic Documents to which it is a
party, have been duly obtained, effected or given and are in full force and
effect, except where failure to obtain the same would not have a material and
adverse effect upon the rights of the Issuer, or the Noteholders.

          (h)  Chief Executive Office.  The chief executive office of the
               ----------------------
Transferor is at 401 West A Street, Suite 1000, San Diego, California, 92101.

          (i)  Upon the transfer of each Receivable to the Depositor and other
items of Depositor Property delivered by the Transferor to the Depositor under
this Agreement, the Depositor will have good title to such Receivable and such
other items of Depositor Property, free and clear of any lien, charge, mortgage,
encumbrance or rights of others (other than liens that will be simultaneously
released).

     SECTION 7A.2  Existence.
                   ---------

          (a)  During the term of this Agreement, the Transferor will keep in
full force and effect its existence, rights and franchises as a limited
liability company under the laws of the jurisdiction of its organization and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Basic Documents and each other instrument
or agreement necessary or appropriate to the proper administration of this
Agreement and the transactions contemplated hereby.

                                       46
<PAGE>

          (b)  During the term of this Agreement, the Transferor shall observe
the applicable legal requirements for the recognition of the Transferor as a
legal entity separate and apart from its Affiliates, including as follows:

               (i)   the Transferor shall maintain limited liability company
          records and books of account separate from those of its Affiliates;

               (ii)  except as otherwise provided in this Agreement, the
          Transferor shall not commingle its assets and funds with those of its
          Affiliates;

               (iii) the Transferor shall hold such appropriate meetings of its
          Board of Directors as are necessary to authorize all the Transferor's
          limited liability company actions required by law to be authorized by
          the Board of Directors, shall keep minutes of such meetings and of
          meetings of its members and observe all other customary limited
          liability company formalities (and any successor Transferor not a
          corporation shall observe similar procedures in accordance with its
          governing documents and applicable law);

               (iv)  the Transferor shall at all times hold itself out to the
          public under the Transferor's own name as a legal entity separate and
          distinct from its Affiliates; and

               (v)   all transactions and dealings between the Transferor and
          its Affiliates will be conducted on an arm's-length basis.

     SECTION 7A.3  Liability of Transferor; Indemnities.
                   ------------------------------------

          (a)  The Transferor shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Transferor under this
Agreement.

          (b)  The Transferor shall indemnify, defend and hold harmless the
Depositor, the Backup Servicer, the Issuer, the Insurer, the Owner Trustee, the
Indenture Trustee, the Indenture Collateral Agent,  the Certificateholders and
the Noteholders from and against any taxes that may at any time be asserted
against any such Person with respect to the transactions contemplated in this
Agreement and any of the Basic Documents (except any income taxes arising out of
fees paid to the Owner Trustee or the Indenture Trustee and except any taxes to
which the Owner Trustee or the Indenture Trustee may otherwise be subject to),
including any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but, in the case of the Issuer, not
including any taxes asserted with respect to, federal or other income taxes
arising out of distributions on the Certificates and the Notes) and costs and
expenses in defending against the same.

          (c)  The Transferor shall indemnify, defend and hold harmless the
Depositor, the Backup Servicer, the Issuer, the Insurer, the Owner Trustee, the
Indenture Trustee, the Indenture Collateral Agent,  the Certificateholders and
the Noteholders from and against any loss, liability or expense incurred by
reason of (i) the Transferor's willful misfeasance, bad faith or negligence in
the performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement or (ii) the failure
of any Receivable conveyed to the Depositor hereunder to comply with all
requirements of applicable law and for breach of its representations and
warranties contained herein or failure to perform in all material respects its
obligations and duties contained herein.

     Indemnification under this Section shall survive the resignation or removal
of the Owner Trustee, the Indenture Trustee, the Backup Servicer or the
Indenture Collateral Agent and the termination of this

                                       47
<PAGE>

Agreement, the Indenture or the Trust Agreement, as applicable and shall include
reasonable fees and expenses of counsel and other expenses of litigation
provided however, that the liability of the Transferor for payments under this
-------- -------
Section 7A.3 shall be subject to the availability of funds therefor. If the
Transferor shall have made any indemnity payments pursuant to this Section and
the Person to or on behalf of whom such payments are made thereafter shall
collect any of such amounts from others, such Person shall promptly repay such
amounts to the Transferor, without interest.

     SECTION 7A.4  Limitation on Liability of Transferor and Others.  The
                   ------------------------------------------------
Transferor and any director or officer or employee or agent of the Transferor
may rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising under any Basic Document.  The Transferor shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion may
involve it in any expense or liability.

     SECTION 7A.5  Transferor May Own Certificates or Notes.  The Transferor and
                   ----------------------------------------
any Affiliate thereof may in its individual or any other capacity become the
owner or pledgee of Certificates or Notes with the same rights as it would have
if it were not the Transferor or an Affiliate thereof, except as expressly
provided herein or in any Basic Document.  Notes or Certificates so owned by the
Transferor or such Affiliate shall have an equal and proportionate benefit under
the provisions of the Basic Documents, without preference, priority, or
distinction as among all of the Notes or Certificates, provided, however, that
any Notes or Certificates owned by the Transferor or any Affiliate thereof,
during the time such Notes or Certificates are owned by them, shall be without
voting rights for any purpose set forth in the Basic Documents and will not be
entitled to the benefits of the Policy.  The Transferor shall notify the Owner
Trustee, the Indenture Trustee and the Insurer promptly after it or any of its
Affiliates become the owner of a Certificate or a Note.

                                 ARTICLE VII-B

                                 The Depositor
                                 -------------

     SECTION 7B.1  Representations of the Depositor. The Depositor makes the
                   --------------------------------
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables and on which the Insurer is deemed to have relied in
issued in the Policy.  The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, and shall survive the
sale of the Receivables to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.

          (a)  Organization and Good Standing.  The Depositor is duly organized
               ------------------------------
and validly existing as a corporation in good standing under the laws of the
State of Delaware with the power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and has, the power,
authority and legal right to acquire and own the Receivables.

          (b)  Due Qualification. The Depositor is duly qualified to do business
               -----------------
as a foreign company in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property,
including the Receivables, or the conduct of its business shall require such
qualifications.

          (c)  Power and Authority of the Depositor. The Depositor has the power
               ------------------------------------
and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement and each of the Basic Documents to which the
Depositor is a party; the Depositor has full power and authority to sell and
assign the property to be sold and assigned to and deposited with the Issuer,
and the Depositor

                                       48
<PAGE>

has duly authorized such sale and assignment to the Issuer by all necessary
corporate action, and the execution, delivery and performance of each of the
Basic Documents to which the Depositor is a party has been duly authorized by
the Depositor by all necessary corporate action.

          (d)  Binding Obligation; Valid Transfer.  This Agreement effects a
               ----------------------------------
valid transfer, and assignment of the Receivables, enforceable against creditors
of and purchasers from the Depositor. This Agreement and each of the Basic
Documents to which the Depositor is a party constitute legal, valid and binding
obligations of the Depositor, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally and subject to general principles of equity (whether
applied in a proceeding at law or in equity).

          (e)  No Violation.  The consummation of the transactions contemplated
               ------------
by this Agreement and each of the Basic Documents to which the Depositor is a
party and the fulfillment of the terms hereof and thereof do not result in any
breach of any of the terms and provisions of, nor constitute (with or without
notice or lapse of time or both) a default under, the certificate of
incorporation or by-laws of the Depositor, or any indenture, agreement or other
instrument to which the Depositor is a party or by which it is bound; nor result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); nor violate any law or, to the best of its
knowledge, any order, rule or regulation applicable to the Depositor of any
court or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its
properties.

          (f)  No Proceedings.  There are no proceedings or investigations
               --------------
pending against the Depositor or, to its best knowledge, threatened against the
Depositor, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its
properties: (i) asserting the invalidity of this Agreement or any of the Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the issuance
of the Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (iii) seeking any
determination or ruling that could reasonably be expected to have a material and
adverse effect on the performance by the Depositor of its obligations under, or
the validity or enforceability of, this Agreement, the Basic Documents, or the
Notes or the Certificates or (iv) that might adversely affect the federal, state
or local income tax attributes of the Issuer, the Notes or the Certificates or
seeking to impose any excise, franchise, transfer or similar tax upon the Notes,
the Certificates or the sale and assignment of the Receivables and other Trust
Property hereunder.

          (g)  All Consents.  All authorizations, consents, orders or approvals
               ------------
of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Depositor in connection with the execution
and delivery by the Depositor of this Agreement or any of the Basic Documents to
which it is a party and the performance by the Depositor of the transactions
contemplated by this Agreement or any of the Basic Documents to which it is a
party, have been duly obtained, effected or given and are in full force and
effect, except where failure to obtain the same would not have a material and
adverse effect upon the rights of the Issuer, or the Noteholders.

          (h)  Chief Executive Office.  The chief executive office of the
               ----------------------
Depositor is at One New York Plaza, New York, New York, 10292.

          (i)  Upon the transfer of each Receivable or interests therein to the
Issuer and other items of Trust Property delivered by the Depositor to the
Issuer under this Agreement the Issuer will have good title to such Receivable
or interests therein and such other items of Trust Property, free and clear of

                                       49
<PAGE>

any lien, charge, mortgage, encumbrance or rights of others (other than liens
that will be simultaneously released) granted by the Depositor.

     SECTION 7B.2  Existence.
                   ---------

          (a)  During the term of this Agreement, the Depositor will keep in
full force and effect its existence, rights and franchises as a corporation
under the laws of the jurisdiction of its organization and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Basic Documents and each other instrument
or agreement necessary or appropriate to the proper administration of this
Agreement and the transactions contemplated hereby.

          (b)  During the term of this Agreement, the Depositor shall observe
the applicable legal requirements for the recognition of the Depositor as a
legal entity separate and apart from its Affiliates, including as follows:

               (i)   the Depositor shall maintain corporate records and books of
          account separate from those of its Affiliates;

               (ii)  except as otherwise provided in this Agreement and except
          as expressly permitted by any other agreement to which it is a party,
          the Depositor shall not commingle its assets and funds with those of
          its Affiliates;

               (iii) the Depositor shall hold such appropriate meetings of its
          Board of Directors as are necessary to authorize all the Depositor's
          corporate actions required by law to be authorized by the Board of
          Directors, shall keep minutes of such meetings and of meetings of its
          stockholder(s) and observe all other customary corporate formalities
          (and any successor Depositor not a corporation shall observe similar
          procedures in accordance with its governing documents and applicable
          law);

               (iv)  the Depositor shall at all times hold itself out to the
          public under the Depositor's own name as a legal entity separate and
          distinct from its Affiliates; and

               (v)   all transactions and dealings between the Depositor and its
          Affiliates will be conducted on an arm's-length basis.

  SECTION 7B.3  Liability of Depositor; Indemnities.
                -----------------------------------

          (a)  The Depositor shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Depositor under this
Agreement.

          (b)  The Depositor shall indemnify, defend and hold harmless the
Backup Servicer, the Servicer, the Insurer, the Owner Trustee, the Issuer, the
Indenture Trustee, the Indenture Collateral Agent, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred by
reason of (i) the Depositor's willful misfeasance, bad faith or negligence in
the performance of its duties under this Agreement, or (ii) by reason of
reckless disregard of its obligations and duties under this Agreement or (iii)
for breach of its representations and warranties contained herein or failure to
perform in all material respects its obligations and duties contained herein.

     Indemnification under this Section shall survive the resignation or removal
of the Owner Trustee, the Indenture Trustee or the Indenture Collateral Agent
and the termination of this Agreement, the

                                       50
<PAGE>

Indenture or the Trust Agreement, as applicable and shall include reasonable
fees and expenses of counsel and other expenses of litigation. If the Depositor
shall have made any indemnity payments pursuant to this Section and the Person
to or on behalf of whom such payments are made thereafter shall collect any of
such amounts from others, such Person shall promptly repay such amounts to the
Depositor, without interest.

     SECTION 7B.4  Limitation on Liability of Depositor and Others.  The
                   -----------------------------------------------
Depositor and any director or officer or employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising under any Basic Document. The Depositor shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion may
involve it in any expense or liability.

     SECTION 7B.5  Depositor May Own Certificates or Notes.  The Depositor and
                   ---------------------------------------
any Affiliate thereof may in its individual or any other capacity become the
owner or pledgee of Certificates or Notes with the same rights as it would have
if it were not the Depositor or an Affiliate thereof, except as expressly
provided herein or in any Basic Document. Notes or Certificates so owned by the
Depositor or such Affiliate shall have an equal and proportionate benefit under
the provisions of the Basic Documents, without preference, priority, or
distinction as among all of the Notes or Certificates, provided, however, that
any Notes or Certificates owned by the Depositor or any Affiliate thereof,
during the time such Notes or Certificates are owned by them, shall be without
voting rights for any purpose set forth in the Basic Documents and will not be
entitled to the benefits of the Policy. The Depositor shall notify the Owner
Trustee, the Indenture Trustee and the Insurer promptly after it or any of its
Affiliates become the owner of a Certificate or a Note.

                                 ARTICLE VIII

                                    Default
                                    -------

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

          (a)  Any failure by the Servicer to deliver to the Owner Trustee or
the Indenture Trustee any deposit or payment proceeds or payment required to be
so made, which failure continues unremedied for a period of one Business Day
after the written notice of such failure is received by the Servicer from the
Insurer, the Owner Trustee or the Indenture Trustee or after discovery of such
failure by the Servicer; or

          (b)  The breach of any representation or warranty or covenant of the
Servicer or failure by the Servicer duly to observe or to perform in any
material respect any covenants or agreements of the Servicer or the Seller (as
the case may be) set forth in the Notes, the Certificates, this Agreement or any
other Basic Document, which breach or failure shall (i) materially and adversely
affect the rights of the Insurer, Certificateholders or the Noteholders and (ii)
continue unremedied for a period of 30 days after the date on which written
notice of such breach or failure, requiring the same to be remedied, shall have
been given (A) to the Servicer by the Indenture Trustee or the Controlling Party
or (B) to the Servicer, the Insurer, the Owner Trustee and the Indenture Trustee
by the Holders of Notes evidencing not less than 25% of the outstanding
principal amount of the Notes or Holders of Certificates evidencing not less
than 25% of the outstanding Certificate Balance, as applicable (or for such
longer period, not in excess of 60 days, as may be reasonably necessary to
remedy such default; provided that such default is capable of remedy within 60
days and the Servicer delivers an Officers' Certificate to the Insurer, the

                                       51
<PAGE>

Owner Trustee and the Indenture Trustee to such effect and to the effect that
the Servicer has commenced or will promptly commence, and will diligently
pursue, all reasonable efforts to remedy such default); or

          (c)  An Insolvency Event occurs with respect to the Servicer or any
successor;

          (d)  Failure to deliver a Servicer's Certificate within 3 days of the
related Determination Date;

          (e)  Failure to deliver the annual statement of compliance required to
be delivered pursuant to Section 4.10 hereof within 30 days of the date on which
such statement is required to be delivered.

          (f)  Unless an Insurer Default shall have occurred and be continuing,
an Insurance Agreement Event of Default described in Section 5.1 of the
Insurance Agreement shall have occurred.

          (g)  Unless an Insurer Default shall have occurred and be continuing,
failure of the Insurer to deliver a Servicer Extension Notice pursuant to
Section 3.5 hereof.

     then, and in each and every case, the Controlling Party or holders of Notes
representing not less than 25% of the voting rights thereof (or, if the Notes
have been paid in full and the Indenture has been discharged in accordance with
its terms, by holders of Certificates evidencing not less than 25% of the voting
interest thereof) in any case by notice given in writing to the Servicer (and to
the Indenture Trustee if given by the Insurer or, as applicable, the Noteholders
or the Certificateholders) may terminate all of the rights and obligations of
the Servicer under this Agreement. For purposes of Section 8.1(b), any
determination of an adverse effect on the interest of the Certificateholders or
the Noteholders pursuant to Section 8.1(b) shall be made without consideration
of the availability of funds under the Policy.  On or after the receipt by the
Servicer of such written notice, all authority, power, obligations and
responsibilities of the Servicer under this Agreement, whether with respect to
the Notes, the Certificates, the Receivables, the autodebit account payments,
the other Trust Property or otherwise, automatically shall pass to, be vested in
and become obligations and responsibilities of the Backup Servicer (or such
other successor Servicer appointed by the Controlling Party); provided, however,
that the successor Servicer shall have no liability with respect to any
obligation which was required to be performed by the prior Servicer prior to the
date that the successor Servicer becomes the Servicer or any claim of a third
party based on any alleged action or inaction of the prior Servicer.  The
successor Servicer is authorized and empowered by this Agreement, as successor
Servicer to execute and deliver, on behalf of the prior Servicer, as attorney-
in-fact or otherwise, any and all documents and other instruments and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and the other Trust Property and related
documents, to show the Issuer or Indenture Trustee as lienholder or secured
party on the related Lien Certificates, or otherwise.  The prior Servicer agrees
to cooperate with the successor Servicer in effecting the termination of the
responsibilities and rights of the prior Servicer under this Agreement,
including, without limitation, the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by the
prior Servicer for deposit, or have been deposited by the prior Servicer, in the
Collection Account or thereafter received with respect to the Receivables and
the delivery to the successor Servicer of all Receivables Files, records and a
computer tape in readable form containing all information necessary to enable
the successor Servicer to service the Receivables and the other Trust Property.
The terminated Servicer shall grant the successor Servicer, the Indenture
Trustee, the Insurer (so long as no Insurer Default shall have occurred and be
continuing) and the Owner Trustee reasonable access to the terminated Servicer's
premises at the terminated Servicer's expense.

                                       52
<PAGE>

     SECTION 8.2.  Appointment of Successor.  (a)  Upon the Servicer's receipt
                   ------------------------
of notice of termination pursuant to Section 8.1 or the Servicer's resignation
in accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (x) the date 45 days
from the delivery to the Owner Trustee, the Controlling Party, the Backup
Servicer and the Indenture Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of this
Agreement and (y) the date upon which the predecessor Servicer shall become
unable to act as Servicer, as specified in the notice of resignation and
accompanying Opinion of Counsel.  In the event of the Servicer's termination
hereunder, the Backup Servicer shall assume the obligations of Servicer
hereunder and shall accept its appointment by a written assumption in form
acceptable to the Controlling Party.  Notwithstanding the above, the Indenture
Trustee with the prior written consent of the Controlling Party, or the
Controlling Party shall, if the Indenture Trustee shall be unwilling or legally
unable so to act, appoint, or petition a court of competent jurisdiction to
appoint, any established institution having a net worth of not less than
$50,000,000 and whose regular business shall include the servicing of automotive
receivables as the successor to the Servicer under the Agreement.

          (b)  Upon appointment, the successor Servicer (including the Backup
Servicer acting as successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer, and shall be entitled to the Servicing Fee and all the
rights granted to the predecessor Servicer by the terms and provisions of this
Agreement.  In addition, the successor Servicer shall have (i) no obligation to
perform any repurchase or advancing obligations, if any, of the Servicer, (ii)
no obligation to pay any taxes required to be paid by the Servicer, (iii) no
obligation to pay any of the fees and expenses of any other party involved in
this transaction and (iv) no liability or obligation with respect to any
Servicer indemnification obligations of any prior Servicer including the
original Servicer.  The terminated Servicer shall also grant an express power of
attorney to the successor Servicer so that the successor Servicer as Servicer
shall have control over and the right to direct any autodebit account payments.
Furthermore, notwithstanding anything contained in this Agreement to the
contrary, the successor Servicer as Servicer is authorized to accept and rely on
all of the accounting, records and work of the prior Servicer relating to the
Receivables (collectively, "Predecessor Servicer Work Product") without any
audit or other examination thereof, and the successor Servicer as Servicer shall
have no duty, responsibility, obligation or liability for the acts and omissions
of any prior Servicer.  If any error, inaccuracy or omission (collectively,
"Errors") exist in any Predecessor Servicer Work Product received by the
successor Servicer from the prior Servicer and such Errors should cause or
materially contribute to the successor Servicer as Servicer making or continuing
any Errors (collectively, "Continued Errors"), the successor Servicer as
Servicer shall have no duty, responsibility, obligation or liability for such
Continued Errors; provided, however, that the successor Servicer agrees to
                  --------  -------
perform its duties as successor Servicer in accordance with the standard of care
set forth in Section 4.1.  In the event that the successor Servicer as Servicer
becomes aware of Errors or Continued Errors, the successor Servicer shall use
its best efforts to reconstruct and reconcile such data as is commercially
reasonable to correct such Errors and Continued Errors and to prevent future
Continued Errors.  The successor Servicer as Servicer shall be entitled to
recover from the Trust its costs thereby expended.

     SECTION 8.3.  Notification to Noteholders, Certificateholders and Backup
                   ----------------------------------------------------------
Servicer.  Upon any Servicer Default or any termination of, or appointment of a
--------
successor to, the Servicer pursuant to this Article VIII the Owner Trustee shall
give prompt written notice thereof to Certificateholders and the Indenture
Trustee shall give prompt written notice thereof to Noteholders, the Insurer and
to the Rating Agencies.

                                       53
<PAGE>

     SECTION 8.4.  Waiver of Past Defaults.  So long as no Insurer Default
                   -----------------------
shall have occurred and be continuing, the Insurer (or, if an Insurer Default
shall have occurred and be continuing, the Controlling Party) may, on behalf of
all Noteholders and Certificateholders, waive any default by the Servicer in the
performance of its obligations hereunder and its consequences, except a default
in making any required deposits to or payments from any of the Trust Accounts in
accordance with this Agreement.  Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement.  No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.

                                ARTICLE VIII-A

                              THE BACKUP SERVICER
                              --------------------

     SECTION 8A.1  Appointment of Backup Servicer.  On or before each
                   ------------------------------
Determination Date, the Servicer shall deliver to the Indenture Trustee and the
Backup Servicer a computer tape in a format acceptable to the Indenture Trustee
and the Backup Servicer containing the information with respect to the
Receivables for the preceding Collection Period necessary for the preparation of
the Servicer's Certificate and the verification required under Section 8A.2
relating to such Collection Period (the "Backup Servicer Tape"). The duties of
the Backup Servicer set forth in Section 8A.2 (the "Backup Servicer Duties")
shall be conducted by the Person so designated from time to time as Backup
Servicer in accordance with this Agreement. Norwest is hereby initially
designated as, and hereby agrees to perform, the duties and obligations of the
Backup Servicer pursuant to the terms hereof and each other Basic Document to
which the Backup Servicer is a party. Subject to the resignation of Norwest as
Backup Servicer pursuant to Section 8A.4 or the termination of Norwest as Backup
Servicer pursuant to Section 8A.6 and, in either case, the designation of a
successor Backup Servicer hereunder, Norwest shall continue to perform the
Backup Servicer Duties, unless and until expressly agreed otherwise by the
Issuer, the Servicer, the Indenture Trustee and the Insurer.

     SECTION 8A.2  Duties of Backup Servicer.  The Backup Servicer, for the
                   -------------------------
benefit of the Issuer, the Insurer and the Noteholders, shall perform the
following duties:

          (a)  use the Backup Servicer Tape to verify the following information:
(w) the aggregate Principal Balance of each Receivable, (x) a list of
Receivables that are (I) 1-30; (II) 31-60, (III) 61-90, (IV) 91-120 days or (V)
121+ delinquent in any scheduled payment, (y) the amount of principal and
interest payments on the Receivables received during the Collection Period, and
(z) the Default Rate and the Delinquency Ratio for the Collection Period;

          (b)  in the event that the Backup Servicer discovers a discrepancy or
discrepancies, with respect to such independent reconciliation described above,
the Backup Servicer shall (x) notify the Issuer, the Seller, the Depositor, the
Insurer, the Servicer and the Indenture Trustee of such discrepancy or
discrepancies, and (y) attempt to reconcile such discrepancy or discrepancies
with the Servicer; and

          (c)  such other duties as may be agreed to in writing by the Issuer,
the Seller, the Depositor, the Backup Servicer and the Insurer from time to
time.

     SECTION 8A.3  Backup Servicing Standard.  The Backup Servicer, for the
                   -------------------------
benefit of the Issuer, the Indenture Trustee, the Insurer, the Noteholders and
the Certificateholders, shall perform the Backup Servicer Duties in accordance
with all applicable federal, state or local laws and regulations and with the
degree of skill, care and diligence of prudent lenders in the industry for the
servicing of comparable assets, but in no event, with less skill, care and
diligence that the Backup Servicer exercises with respect to all comparable
assets that it services for itself or others (such standards, the "Backup
Servicing

                                       54
<PAGE>

Standard"). Other than the duties specifically set forth in this Agreement, the
Backup Servicer shall have no obligations hereunder, including, without
limitation to supervise, verify, monitor, or administer the performance of the
Servicer. The duties and obligations of the Backup Servicer shall be determined
solely by the express provisions of this Agreement and no implied covenants or
obligations shall be read into this Agreement against the Backup Servicer.

     SECTION 8A.4  Limitation on Resignation of the Backup Servicer.  The Backup
                   ------------------------------------------------
Servicer shall not resign from the obligations and duties hereby imposed on it
except (a) by mutual agreement among the Backup Servicer, the Issuer, the
Indenture Trustee and the Insurer or (b) upon determination that its duties
hereunder are no longer permissible under applicable law.  Any determination
under clause (b) above permitting the resignation of the Backup Servicer shall
be evidenced by an opinion of counsel (which counsel shall be acceptable to the
Issuer, the Indenture Trustee and the Insurer) to such effect delivered to the
Issuer, the Depositor, the Indenture Trustee and the Insurer.  No such
resignation shall become effective until a successor backup servicer shall have
assumed the Backup Servicer's responsibilities, duties, liabilities and
obligations hereunder.  Any such successor backup servicer must be an
established servicer of consumer motor vehicle loans and must be approved in
writing by the Issuer, the Depositor, Indenture Trustee and Insurer.

     SECTION 8A.5  Rights in Respect of the Backup Servicer.  The Backup
                   ----------------------------------------
Servicer shall afford the Indenture Trustee, the Issuer, the Depositor, and the
Insurer, upon two (2) Business Days prior notice, during normal business hours
access to all records maintained by the Backup Servicer in respect of its rights
and obligations hereunder and access to officers of the Backup Servicer
responsible for such obligations. Upon request, the Backup Servicer shall
furnish the Indenture Trustee, the Issuer, the Depositor, and the Insurer such
information as the Backup Servicer possesses regarding the transactions
contemplated hereby and any circumstance that could reasonably be expected to
affect the Backup Servicer's ability to perform its obligations hereunder. The
Indenture Trustee, the Issuer and the Insurer shall not have any responsibility
or liability for any action or failure to act by the Backup Servicer, and are
not obligated to supervise the performance of the Backup Servicer under this
Agreement or otherwise.

     SECTION 8A.6  Termination.
                   -----------

          (a)  Upon 30 days' written notice, the Controlling Party may terminate
all the rights and obligations of the Backup Servicer under this Agreement as to
any or all of the Receivables or Backup Servicer Duties.

          (b)  In the event that (a) notice of termination of this Agreement, or
of termination of the rights and obligations of the Backup Servicer hereunder,
is given, or (b) the Backup Servicer resigns in accordance with Section 8A.4,
the Backup Servicer covenants that all funds and any item comprising a
Receivable File in its possession relating to the affected Receivables
(collectively, the "Backup Contract Records") shall, at the option of the
Controlling Party, immediately upon receipt of notice of termination or the
resignation of the Backup Servicer, be submitted to the control of the Indenture
Trustee.

          (c)  Notwithstanding any termination of this Agreement, or of all or a
portion of the rights and obligations of the Backup Servicer hereunder, the
Backup Servicer shall not be relieved of liability for all amounts due, or
responsibilities owed the Issuer, the Indenture Trustee, the Insurer, the
Noteholders or the Certificateholders in respect of its obligations hereunder
while it served as the Backup Servicer.  The Backup Servicer forthwith upon such
termination or resignation shall (a) use its best efforts to effect the orderly
and efficient transfer of Backup Servicer Duties to a new backup servicer or
other designee selected by the Controlling Party, and (b) arrange for the
physical transfer and delivery to the Controlling Party or to a new backup
servicer or other designee selected by the Controlling Party of all Contract
Receivable Records and copies thereof in its possession.  Any successor servicer
hereunder shall

                                       55
<PAGE>

meet the requirements and be selected in accordance with the procedures
specified in Section 8A.4. Notwithstanding any termination of this Agreement, or
any termination of all the rights and obligations of the Backup Servicer
hereunder as to all or any number of Receivables, or any resignation of the
Backup Servicer, in any case pursuant to any provision of this Agreement, the
Backup Servicer shall be entitled to receive all amounts accrued and owing to it
under this Agreement from the Borrower in accordance with Section 8A.8 hereof.

     SECTION 8A.7  Resignation or Termination of Backup Servicer.  Upon the
                   ---------------------------------------------
termination of the Servicer in accordance with Article VIII or the resignation
of the Servicer in accordance with Section 7.5, the Backup Servicer shall either
(i) assume all of the responsibilities, duties, liabilities and obligations the
Servicer hereunder, without further action by any Person, or (ii) designate a
successor Servicer who shall (x) assume all of the responsibilities, duties,
liabilities and obligations the Servicer hereunder, without further action by
any Person, and (y) be acceptable to the Controlling Party in its sole
discretion.  Any such assumption or appointment by the Backup Servicer pursuant
to this Section 8A.7 shall occur as soon as reasonably practical (but, in any
event, no later than 30 days) after the Indenture Trustee provides notice to the
Backup Servicer of any such resignation or termination of the Servicer.  Neither
the Backup Servicer nor any successor Backup Servicer shall have (i) any
liability with respect to any obligation which was required to be performed by
the terminated Backup Servicer prior to the date that the successor Backup
Servicer or the Backup Servicer became the Servicer or any claim of a third
party based on any alleged action or inaction of the terminated Backup Servicer
and (ii) any obligation to pay any of the fees and expense of any other party
involved in this transaction.

     SECTION 8A.8  Backup Servicing Fee.  At any time the Backup Servicer or
                   --------------------
one of its Affiliates is not the Servicer hereunder, the Backup Servicer shall
be paid the Backup Servicer Fee for the performance of its obligations as Backup
Servicer hereunder and under the Basic Documents.

     SECTION 8A.9  Indemnity.  The Backup Servicer its officers, directors,
                   ---------
agents and employees shall be indemnified and held harmless in accordance with
the terms of the separate agreement between the Servicer and the Backup
Servicer, against any and all claims, losses, liabilities, damages or expenses
(including, but not limited to, attorney's fees, court costs and costs of
investigation) of any kind or nature whatsoever arising out of or in connection
with this Agreement that may be imposed upon, incurred by or asserted against
the Backup Servicer, except in each case to the extent arising from the Backup
Servicer's misfeasance, bad faith or negligence. The provisions of this Section
8A.9 shall survive the resignation or removal of the Backup Servicer and the
termination of this Agreement.

     SECTION 8A.10 Limitation of Liability.
                   -----------------------

          (a)  In the absence of bad faith, negligence or misconduct on the part
of the Backup Servicer, the Backup Servicer shall not be liable to the Issuer,
the Indenture Trustee, the Seller, the Indenture Collateral Agent, the Insurer
or any other Person with respect to any action taken or not taken by it in the
performance of its obligations under this Agreement.  The obligations of the
Backup Servicer shall be determined solely by the express provisions of this
Agreement.  No representation, warranty, covenant, agreement, obligation or duty
of the Backup Servicer shall be implied with respect to this Agreement or the
Backup Servicer's services hereunder.

          (b)  The Backup Servicer may rely, and shall be protected in acting or
refraining to act, upon and need not verify the accuracy of, any written
instruction, notice, order, request, direction, certificate, opinion or other
instrument or document believed by the Backup Servicer to be genuine and to have
been signed and presented by the proper party or parties, which, with respect to
the Issuer, Indenture Trustee, Indenture Collateral Agent or Insurer, shall mean
signature and presentation by Authorized

                                       56
<PAGE>

Representatives (as such term is defined in the Custodial Agreement) whether
such presentation is by personal delivery, express delivery or facsimile.

          (c)  The Backup Servicer may consult with counsel selected by it with
regard to legal questions arising out of or in connection with this Agreement,
and the advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, omitted or suffered
by the Backup Servicer in reasonable reliance, in good faith, and in accordance
therewith.

          (d)  Except as expressly provided for herein, the provisions of this
Agreement shall not require the Backup Servicer to expend or risk its own funds
or otherwise incur financial liability in the performance of its duties under
this Agreement if it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity is not reasonably assured to it.

          (e)  The Backup Servicer shall not be responsible or liable for, and
makes no representation or warranty with respect, the validity, adequacy or
perfection of any lien upon, or security interest in any Receivables or
Custodian's Receivable Files (as such term is defined in the Custodial
Agreement) purported to be granted at any time to the Indenture Trustee.

                                  ARTICLE IX

                                  Termination
                                  -----------

     SECTION 9.1.  Optional Purchase of All Receivables.  (a)  On the last day
                   ------------------------------------
of any Collection Period as of which the Pool Balance shall be less than or
equal to 15% of the Original Pool Balance, the Transferor shall have the option
to purchase the Owner Trust Estate, other than the Trust Accounts and the
Certificate Distribution Account (with the consent of the Insurer if such
purchase would result in a claim on either Policy or would result in any amount
owing to the Insurer under the Insurance Agreement remaining unpaid); provided
however, that the amount to be paid for such purchase (as set forth in the
following sentence) shall be sufficient to pay the full amount of principal,
premium, if any, and interest then due and payable on the Notes and the
Certificates.  To exercise such option, the Servicer shall deposit pursuant to
Section 5.5 in the Collection Account an amount equal to the amount set forth in
the preceding sentence.

          (b)  Notice of any termination of the Trust pursuant to subsection (a)
of this Section 9.1 shall be given by the Servicer to the Owner Trustee, Issuer
and the Indenture Trustee, the Insurer and the Rating Agencies as soon as
practicable after the Servicer has received notice thereof.

     FOLLOWING THE SATISFACTION AND DISCHARGE OF THE INDENTURE AND THE PAYMENT
IN FULL OF THE PRINCIPAL OF AND INTEREST ON THE NOTES AND ALL AMOUNTS DUE TO THE
INSURER UNDER THE INSURANCE AGREEMENT, THE CERTIFICATEHOLDERS WILL SUCCEED TO
THE RIGHTS OF THE NOTEHOLDERS AND THE INSURER HEREUNDER AND THE OWNER TRUSTEE
WILL SUCCEED TO THE RIGHTS OF, AND ASSUME THE OBLIGATIONS (OTHER THAN ANY
SERVICING OBLIGATION) OF, THE INDENTURE TRUSTEE PURSUANT TO THIS AGREEMENT.

                                   ARTICLE X

                     Administrative Duties of the Servicer
                     -------------------------------------

     SECTION 10.1. (a)  Duties with respect to the Indenture, the Trust
                        -----------------------------------------------
Agreement and Depository Agreement.  The Servicer shall perform all its duties
----------------------------------
and the duties of the Issuer under the Indenture, the

                                       57
<PAGE>

Trust Agreement and the Depository Agreement. In addition, the Servicer shall
consult with the Owner Trustee as the Servicer deems appropriate regarding the
duties of the Issuer under the Indenture, the Trust Agreement and the Depository
Agreement. The Servicer shall monitor the performance of the Issuer and shall
advise Owner Trustee when action is necessary to comply with the Issuer's duties
under the Indenture, the Trust Agreement and the Depository Agreement. The
Servicer shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture, the Trust
Agreement and the Depository Agreement. In furtherance of the foregoing, the
Servicer shall take all necessary action that is the duty of the Issuer to take
pursuant to the Indenture, the Trust Agreement and the Depository Agreement,
including, without limitation, pursuant to Sections 2.7, 3.5, 3.6, 3.7, 3.9,
7.2, 7.3, 11.1 and 11.15 of the Indenture.

          (b)  Duties with Respect to the Issuer.
               ---------------------------------

               (i)   In addition to the duties of the Servicer set forth in this
          Agreement or any of the Basic Documents, the Servicer shall perform
          such calculations and shall prepare for execution by the Issuer or the
          Owner Trustee or shall cause the preparation by other appropriate
          Persons of all such documents, reports, filings, instruments,
          certificates and opinions as it shall be the duty of the Issuer or the
          Owner Trustee to prepare, file or deliver pursuant to this Agreement
          or any of the Basic Documents, and at the request of the Owner
          Trustee, shall take all appropriate action that it is the duty of the
          Issuer to take pursuant to this Agreement or any of the Basic
          Documents, including, without limitation, pursuant to Sections 2.6 and
          2.11 of the Trust Agreement.  In accordance with the directions of the
          Issuer or the Owner Trustee, the Servicer shall administer, perform or
          supervise the performance of such other activities in connection with
          the Collateral (including the Basic Documents) as are not covered by
          any of the foregoing provisions and as are expressly requested by the
          Issuer or the Owner Trustee and are reasonably within the capability
          of the Servicer.

               (ii)  Notwithstanding anything in this Agreement or any of the
          Basic Documents to the contrary, the Servicer shall be responsible for
          promptly notifying the Owner Trustee in the event that any withholding
          tax is imposed on the Issuer's payments (or allocations of income) to
          a Certificateholder as contemplated in Section 5.2(f) of the Trust
          Agreement.  Any such notice shall be in writing and specify the amount
          of any withholding tax required to be withheld by the Owner Trustee
          pursuant to such provision.

               (iii) Notwithstanding anything in this Agreement or the Basic
          Documents to the contrary, the Servicer shall be responsible for
          performance of the duties of the Issuer or the Owner Trustee and the
          Depositor set forth in Section 5.6(a), (b), (c) and (d) of the Trust
          Agreement with respect to, among other things, accounting and reports
          to Holders (as defined in the Trust Agreement); provided, however,
          that once prepared by the Servicer the Owner Trustee shall retain
          responsibility for the distribution of the Schedule K-1s necessary to
          enable each Certificateholder to prepare its federal and state income
          tax returns.

               (iv)  The Servicer shall perform the duties of the Servicer
          specified in Section 10.2 of the Trust Agreement required to be
          performed in connection with the resignation or removal of the Owner
          Trustee, and any other duties expressly required to be performed by
          the Servicer under this Agreement or any of the Basic Documents.

                                       58
<PAGE>

               (v)  In carrying out the foregoing duties or any of its other
          obligations under this Agreement, the Servicer may enter into
          transactions with or otherwise deal with any of its Affiliates;
          provided, however, that the terms of any such transactions or dealings
          shall be in accordance with any directions received from the Issuer
          and shall be, in the Servicer's opinion, no less favorable to the
          Issuer in any material respect.

          (c)  Tax Matters.  The Servicer shall prepare and the Owner Trustee
               -----------
shall file, on behalf of the Depositor, all tax returns, tax elections,
financial statements and such annual or other reports of the Issuer as are
necessary for preparation of tax reports as provided in Article V of the Trust
Agreement, including without limitation Forms 1099 and 1066.  All tax returns
will be signed by the Transferor.

          (d)  Non-Ministerial Matters.  With respect to matters that in the
               -----------------------
reasonable judgment of the Servicer are non-ministerial, the Servicer shall not
take any action pursuant to this Article X unless within a reasonable time
before the taking of such action, the Servicer shall have notified the Owner
Trustee and the Indenture Trustee of the proposed action and the Owner Trustee
and, with respect to items (A), (B), (C) and (D) below, the Indenture Trustee
shall not have withheld consent or provided an alternative direction.  For the
purpose of the preceding sentence, "non-ministerial matters" shall include:

                    (A)  the amendment of or any supplement to the Indenture;

                    (B)  the initiation of any claim or lawsuit by the Issuer
               and the compromise of any action, claim or lawsuit brought by or
               against the Issuer (other than in connection with the collection
               of the Receivables);

                    (C)  the amendment, change or modification of this Agreement
               or any of the Basic Documents;

                    (D)  the appointment of successor Note Registrars, successor
               Paying Agents and successor Indenture Trustees pursuant to the
               Indenture or the appointment of successor Servicers or the
               consent to the assignment by the Note Registrar, Paying Agent or
               Indenture Trustee of its obligations under the Indenture; and

                    (E)  the removal of the Indenture Trustee.

          (e)  Exceptions.  Notwithstanding anything to the contrary in this
               ----------
Agreement, except as expressly provided herein or in the other Basic Documents,
the Servicer, in its capacity hereunder, shall not be obligated to, and shall
not, (1) make any payments to the Noteholders or Certificateholders under the
Basic Documents, (2) sell the Owner Trust Estate pursuant to Section 5.5 of the
Indenture, (3) take any other action that the Issuer directs the Servicer not to
take on its behalf or (4) in connection with its duties hereunder assume any
indemnification obligation of any other Person.

     SECTION 10.2. Records. The Servicer shall maintain appropriate books of
                   -------
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Issuer
and the Insurer at any time during normal business hours.

     SECTION 10.3. Additional Information to be Furnished to the Issuer. The
                   ----------------------------------------------------
Servicer shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.

                                       59
<PAGE>

                                  ARTICLE XI

                           Miscellaneous Provisions
                           ------------------------

     SECTION 11.1.  Amendment. This Agreement may not be amended except that
                    ---------
this Agreement may be amended from time to time by the Seller, the Transferor,
the Depositor, the Servicer the Backup Servicer, the Issuer and the Indenture
Trustee, with the prior written consent of the Insurer (so long as no Insurer
Default has occurred and is continuing), but without the consent of any of the
Noteholders or Certificateholders to cure any ambiguity, to correct or
supplement any provisions in this Agreement, to comply with any changes in the
Code, or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement or the Insurance Agreement; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel delivered to the Owner
Trustee, Insurer, the Rating Agencies and the Indenture Trustee, adversely
affect in any material respect the interests of any Noteholder or
Certificateholder.

     This Agreement may also be amended from time to time by the Seller, the
Transferor, the Depositor, the Servicer, the Backup Servicer and the Indenture
Trustee, with (i) the consent of the Insurer, if the Insurer is the Controlling
Party, but without the consent of any Noteholders or Certificateholders, or (ii)
if the Insurer is no longer the Controlling Party, with the consent of a Note
Majority and the consent of the holders of Certificates evidencing not less than
a majority of the aggregate outstanding principal amount of the Certificates,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made for the benefit
of the Noteholders or the Certificateholders or (b) reduce the aforesaid
percentage of the outstanding principal amount of the Notes and the Certificate
Balance, the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes and the Holders
(as defined in the Trust Agreement) of all the outstanding Certificates, of each
class affected thereby provided further, that if an Insurer Default has occurred
and is continuing, such action shall not materially adversely affect the
interest of the Insurer.

     Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder and the Rating Agencies.  It shall not be
necessary for the consent of Noteholders or Certificateholders pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.  The
manner of obtaining such consents (and any other consents of Noteholders or
Certificateholders provided for in this Agreement) and of evidencing the
authorization of any action by Noteholders or Certificateholders shall be
subject to such reasonable requirements as the Indenture Trustee or the Owner
Trustee, as may prescribe.

     Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the Opinion of Counsel referred to in Section
11.2(b) has been delivered.  The Owner Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Issuer's, the Owner Trustee's or the Indenture Trustee's, as applicable, own
rights, duties or immunities under this Agreement or otherwise.

     SECTION 11.2.  Protection of Title to the Trust.  (a)  The Seller, the
                    --------------------------------
Transferor and the Depositor shall execute and file such financing statements
and cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve, maintain

                                       60
<PAGE>

and protect the interest of the Issuer and the interests of the Indenture
Trustee in the Receivables and in the proceeds thereof. The Seller, the
Transferor and the Depositor shall deliver (or cause to be delivered) to the
Insurer, the Owner Trustee and the Indenture Trustee file-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as available
following such filing.

          (b)  None of the Seller, the Transferor and the Depositor or the
Servicer shall change its name, identity or organizational structure in any
manner that would, could or might make any financing statement or continuation
statement filed in accordance with paragraph (a) above seriously misleading
within the meaning of Section 9-402(7) of the UCC, unless it shall have given
the Insurer, Owner Trustee and the Indenture Trustee at least five (5) days'
prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.  Promptly upon such filing, the Seller or the Servicer, the
Transferor and the Depositor, as the case may be, shall deliver an Opinion of
Counsel to the Insurer and the Indenture Trustee, in form and substance
reasonably satisfactory to the Insurer, stating either (A) all financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Transferor, the
Depositor, the Issuer and the Indenture Trustee, as the case may be, in the
Receivables and the other Transferor Property, other Depositor Property and
other Trust Property, as the case may be, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (B) no such action shall be necessary to preserve and protect such
interest.

          (c)  Each of the Seller, the Servicer, the Transferor and the
Depositor shall have an obligation to give the Insurer, the Owner Trustee, the
Backup Servicer and the Indenture Trustee at least 60 days' prior written notice
of any relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement and shall promptly file any such amendment. The Servicer
shall at all times maintain each office from which it shall service Receivables,
and its principal executive office, within the United States of America.

          (d)  The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.

          (e)  The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to the
Issuer, the Servicer's master computer records (including any backup archives)
that refer to a Receivable shall indicate clearly the interest of the Issuer and
the Indenture Trustee in such Receivable and that such Receivable is owned by
the Issuer and has been pledged to the Indenture Trustee. Indication of the
Issuer's and the Indenture Trustee's interest in a Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when, the
related Receivable shall have been paid in full or repurchased.

          (f)  If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Issuer and has been pledged to the Indenture Trustee.

          (g)  The Servicer shall permit the Indenture Trustee, the Backup
Servicer, and the Insurer and their respective agents at any time during normal
business hours to inspect, audit and make

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<PAGE>

copies of and abstracts from the Servicer's records regarding any Receivable or
any other portion of the Trust Property. The preceding sentence shall not create
any duty or obligation on the part of the Indenture Trustee to perform any such
acts.

          (h)  Upon request, the Servicer shall furnish to the Insurer, the
Owner Trustee, the Backup Servicer, the Depositor, or to the Indenture Trustee,
within five (5) Business Days, a list of all Receivables (by contract number and
name of Obligor) then held as part of the Trust Property, together with a
reconciliation of such list to the Schedule of Receivables and to each of the
Servicer's Certificates furnished before such request indicating removal of
Receivables from the Trust Property.

          (i)  The Servicer shall deliver to the Insurer, the Depositor, Owner
Trustee and the Indenture Trustee:

                    (1)  promptly after the execution and delivery of the
          Agreement and, if required pursuant to Section 11.1, of each
          amendment, an Opinion of Counsel stating that, in the opinion of such
          counsel, in form and substance reasonably satisfactory to the
          Indenture Trustee, either (A) all financing statements and
          continuation statements have been executed and filed that are
          necessary fully to preserve and protect the interest of the Trust and
          the Indenture Trustee in the Receivables, and reciting the details of
          such filings or referring to prior Opinions of Counsel in which such
          details are given, or (B) no such action shall be necessary to
          preserve and protect such interest; and

                    (2)  within 90 days after the beginning of each calendar
          year beginning with the first calendar year beginning more than three
          months after the Cutoff Date, an Opinion of Counsel, dated as of a
          date during such 90-day period, stating that, in the opinion of such
          counsel, either (A) all financing statements and continuation
          statements have been executed and filed that are necessary fully to
          preserve and protect the interest of the Trust and the Indenture
          Trustee in the Receivables, and reciting the details of such filings
          or referring to prior Opinions of Counsel in which such details are
          given, or (B) no such action shall be necessary to preserve and
          protect such interest.

     Each Opinion of Counsel referred to in clause (l) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.

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

     SECTION 11.3.  Notices. All demands, notices and communications upon or
                    -------
to the Seller, the Servicer, the Owner Trustee, the Indenture Trustee or the
Rating Agencies under this Agreement shall be in writing, personally delivered,
or mailed by certified mail, return receipt requested, and shall be deemed to
have been duly given upon receipt (a) in the case of the Seller and the
Servicer, to PeopleFirst Finance LLC, 401 West A Street, Suite 1000, San Diego,
California, 92101 Attention: W. Randolph Ellspermann, (b) in the case of the
Issuer or the Owner Trustee, at the Corporate Trust Office of the Owner Trustee,
(c) in the case of PF Funding II, LLC, c/o PeopleFirst Finance LLC, 401 West A
Street, Suite 1000, San Diego, California, 92101, Attention:  W. Randolph
Ellspermann, (d) in the case of the Depositor, to Prudential Securities Secured
Financing Corporation, One New York Plaza, 14/th/ Floor, New York, New York,
10292, Attention: Asset-Backed Group, (e) in the case of the Indenture Trustee,
the Indenture Collateral Agent or the Backup Servicer, at the Corporate Trust
Office, (f) in the case of the Insurer, to Financial Security Assurance Inc.,
350 Park Avenue, New York, New York 10022; Attention: Senior Vice President,
Surveillance (in each case in which notice or other communication to the Insurer
refers to

                                       62
<PAGE>

a Servicer Default, a claim on the Policy, a Deficiency Notice pursuant to
Section 5.4 of this Agreement or with respect to which failure on the part of
the Insurer to respond shall be deemed to constitute consent or acceptance, then
a copy of such notice or other communication should also be sent to the
attention of each of the General Counsel and the Head Financial Guaranty Group
and shall be marked to indicate "URGENT MATERIAL ENCLOSED"); (g) in the case of
Moody's, to Moody's Investors Service, Inc., ABS Monitoring Department, 99
Church Street, New York, New York 10007; and (h) in the case of Standard &
Poor's, to Standard & Poor's Structured Finance Ratings, 55 Water Street, 41st
Floor, New York, New York 10041-0003, Attention: Asset Backed Surveillance
Department. Upon the written request of the Owner Trustee, the Indenture Trustee
will promptly furnish the Owner Trustee a list of Noteholders as of the date
specified by the Owner Trustee. Each Noteholder, by its acceptance of a Note,
shall be deemed to agree that the Indenture Trustee shall be under no liability
for providing the list of Noteholders to the Owner Trustee as described in the
immediately preceding sentence. Any notice required or permitted to be mailed to
a Noteholder or Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register or
Note Register, as applicable. Any notice so mailed within the time prescribed in
the Agreement shall be conclusively presumed to have been duly given, whether or
not the Certificateholder or Noteholder shall receive such notice.

     SECTION 11.4.    Assignment.  Notwithstanding anything to the contrary
                      ----------
contained herein, except as provided in Sections 6.4 and 7.3 and as provided in
the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Seller or the Servicer without the
prior written consent of the Owner Trustee, the Depositor, the Indenture Trustee
and the Insurer (or if an Insurer Default shall have occurred and be continuing
the Holders of Notes evidencing not less than 66% of the principal amount of the
outstanding Notes and the Holders of Certificates evidencing not less than 66%
of the Certificate Balance).

     SECTION 11.5.    Limitations on Rights of Others.  The provisions of this
                      -------------------------------
Agreement are solely for the benefit of the parties hereto, the Insurer and the
Noteholders, as third-party beneficiaries.  Nothing in this Agreement, whether
express or implied, shall be construed to give to any other Person, other than
express third-party beneficiaries, any legal or equitable right, remedy or claim
in the Owner Trustee Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.

     SECTION 11.6.    Severability.  Any provision of this Agreement that is
                      ------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     SECTION 11.7.    Separate Counterparts.  This Agreement may be executed by
                      ---------------------
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

     SECTION 11.8.    Headings.  The headings of the various Articles and
                      --------
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

     SECTION 11.9.    Governing Law.  THIS AGREEMENT SHALL BE CONSTRUED IN
                      -------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATION LAW, BUT OTHERWISE WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                                       63
<PAGE>

     SECTION 11.10.    Assignment to Indenture Trustee.  Each of the Seller, the
                       -------------------------------
Transferor and the Depositor hereby acknowledge and consent to any mortgage,
pledge, assignment and grant of a security interest expressly as contemplated by
this Agreement and by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest of
the Issuer in, to and under the Receivables and/or the assignment of any or all
of the Issuer's rights and obligations hereunder to the Indenture Trustee.

     SECTION 11.11.    Nonpetition Covenants.  (a)  Notwithstanding any prior
                       ---------------------
termination of this Agreement, none of the Backup Servicer, the Servicer, the
Seller, the Transferor (with respect to the Issuer) or the Depositor shall,
prior to the date which is one year and one day after the termination of this
Agreement with respect to the Transferor or the Issuer, acquiesce, petition or
otherwise invoke or cause any of the Transferor or the Issuer to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of any of the
Transferor or the Issuer or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of the Issuer.

          (b)  Notwithstanding any prior termination of this Agreement, none of
the Backup Servicer, the Custodian, the Transferor, the Seller or the Servicer
shall, prior to the date that is one year and one day after the termination of
this Agreement with respect to the Depositor, acquiesce to, petition or
otherwise invoke or cause the Depositor to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Depositor under any federal or state bankruptcy, insolvency or similar law,
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator,
or other similar official of the Depositor or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Depositor.

     SECTION 11.12.    Limitation of Liability of Owner Trustee and Indenture
                       ------------------------------------------------------
Trustee.  (a)  Notwithstanding anything contained herein to the contrary, this
-------
Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Wilmington Trust Company in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer.  For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.

          (b)  Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Norwest, not in its individual capacity but
solely as Indenture Trustee and Backup Servicer and in no event shall Norwest
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer.

          (c)  It is expressly understood and agreed by the parties hereto that
(a) this Sale and Servicing Agreement is executed and delivered by Wilmington
Trust Company, not individually or personally but solely as Owner Trustee of
PeopleFirst.com Vehicle Receivables Owner Trust 2000-1, in the exercise of the
powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Trust, (c) nothing herein contained shall be construed as
creating any

                                       64
<PAGE>

liability on Wilmington Trust Company, individually or personally, to perform
any covenant either expressed or implied contained herein, all such liability,
if any, being expressly waived by the parties hereto and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Sale and Servicing Agreement or any other
related documents.

     SECTION 11.13.    Independence of the Servicer.  For all purposes of this
                       ----------------------------
Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder.  Unless expressly authorized by the Issuer or the Owner Trustee, the
Servicer shall have no authority to act for or represent the Issuer in any way
and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.

     SECTION 11.14.    No Joint Venture.  Nothing contained in this Agreement
                       ----------------
(i) shall constitute the Servicer and any of the Issuer, the Depositor, the
Transferor or the Owner Trustee as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity, (ii)
shall be construed to impose any liability as such on any of them or (iii) shall
be deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.

     SECTION 11.15.    Third-Party Beneficiaries.  This Agreement shall inure to
                       -------------------------
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.  The Insurer and its successors and assigns
shall be a third-party beneficiary to the provisions of this Agreement, and
shall be entitled to rely upon and directly to enforce such provisions of this
Agreement so long as no Insurer Default shall have occurred and be continuing.
Except as expressly stated otherwise herein or in the Basic Documents, any right
of the Insurer to direct, appoint, consent to, approve of, or take any action
under this Agreement, shall be a right exercised by the Insurer in its sole and
absolute discretion.

     SECTION 11.16.    Disclaimer by Insurer. The Insurer may disclaim any of
                       ---------------------
its rights and powers under this Agreement (but not its duties and obligations
under the Policies) upon delivery of a written notice to the Owner Trustee and
the Indenture Trustee.

     SECTION 11.17.    Insurer as Controlling Party.  Each Noteholder by
                       ----------------------------
purchase of Notes and Certificateholder by purchase of a Certificate
acknowledges that the Indenture Trustee on behalf of the Noteholders, and the
Owner Trustee on behalf of the Certificateholders, as partial consideration for
issuance of the Policy, has agreed that the Insurer shall have certain rights
hereunder for so long as no Insurer Default shall have occurred and be
continuing.  Any provision giving the Insurer the right to direct, appoint or
consent to, approve of, or take any action under this Agreement shall be
inoperative during the prior of such Insurer Default and shall instead vest in
the Servicer, or in the event that Notes remain Outstanding, the Indenture
Trustee at the direction of a Note Majority or in the event that no Notes remain
Outstanding, the Owner Trustee, at the direction of a Certificate Majority, as
applicable.

     SECTION 11.18.    Limited Recourse.  Notwithstanding anything to the
                       ----------------
contrary contained in this Agreement, the obligations of each of the Depositor,
the Transferor and Issuer under this Agreement are solely the limited liability
company obligations of the Transferor, corporate obligations of the Depositor or
the trust obligations of Issuer, as applicable, and shall be payable by the
Depositor, Transferor or Issuer, as applicable, solely as provided in this
Section 11.18  Each of the Depositor, Transferor and the Issuer shall only be
required to pay (a) any fees, expenses, indemnities or other liabilities that it
may incur under this Agreement to the extent it has funds available therefor on
the date of such determination and (b) any expenses, indemnities or other
liabilities that it may incur under this Agreement only to the extent

                                       65
<PAGE>

it receives funds designated for such purposes or to the extent it has funds
available therefor. In addition, no amount owing by any of the Depositor, the
Transferor or Issuer hereunder (other than principal and interest in respect of
the Notes) in excess of the liabilities that it is required to pay in accordance
with the preceding sentence shall constitute a "claim" (as defined in
Section101(5) of the Bankruptcy Code) against it. No recourse shall be had for
the payment of any amount owing hereunder or for the payment of any fee
hereunder or any other obligation of, or claim against, the Depositor,
Transferor or the Issuer arising out of or based upon this Agreement, against
any member, employee, officer, agent, director or authorized person of the
Depositor, Transferor or affiliate thereof or any stockholder, employee,
officer, director, incorporator or Affiliate thereof; provided, however, that
                                                      --------  -------
the foregoing shall not relieve any such person or entity of any liability they
might otherwise have as a result of fraudulent actions or omissions taken by
them.  The obligation of the parties under this Section 11.18 shall survive
termination of this Agreement.

                                       66
<PAGE>

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

                         PEOPLEFIRST.COM VEHICLE
                         RECEIVABLES OWNER TRUST 2000-1

                         By Wilmington Trust Company,
                         not in its individual capacity but solely as Owner
                         Trustee on behalf of the Issuer,

                         By /s/ James Lawler
                            _____________________________
                         Name: James Lawler
                         Title: Vice-President

                         PEOPLEFIRST FINANCE, LLC,
                         Seller and Servicer,

                         By /s/ Justin Tisler
                            _____________________________
                         Name: Justin Tisler
                         Title: Attorney-in-Fact

                         PF FUNDING II, LLC,
                         as Transferor,

                         By /s/ Justin Tisler
                            _____________________________
                         Name: Justin Tisler
                         Title: Assistant Treasurer

                         PRUDENTIAL SECURITIES SECURED
                         FINANCING CORPORATION,
                         as Depositor,

                         By /s/ Evan J. Mitnick
                             _____________________________
                         Name: Evan J. Mitnick
                         Title: Vice-President

                                       67
<PAGE>

                         NORWEST BANK MINNESOTA,
                         NATIONAL ASSOCIATION
                         as Backup Servicer,

                         By /s/ S. Dignan
                            _____________________________
                         Name: S. Dignan
                         Title: Corporate Trust Officer

                         NORWEST BANK MINNESOTA,
                         NATIONAL ASSOCIATION, not in its
                         individual capacity, but solely as Indenture
                         Trustee,

                         By /s/ S. Dignan
                            _____________________________
                         Name: S. Dignan
                         Title: Corporate Trust Officer

                                       68
<PAGE>

                                                                       EXHIBIT A

                                      A-1
<PAGE>

                                                                       EXHIBIT B

                  FORM OF MONTHLY CERTIFICATEHOLDER STATEMENT

                      PEOPLEFIRST.COM VEHICLE RECEIVABLES
                              OWNER TRUST 2000-1
                              CLASS A CERTIFICATES
                              CLASS R CERTIFICATES

Payment Date:

Collection Period:

     Under the Sale and Servicing Agreement dated as of June 1, 2000 among
PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-1, a Delaware business
trust (the "Issuer"), PF FUNDING II, LLC, a Delaware limited liability company,
as transferor (the "Transferor") PEOPLEFIRST FINANCE, LLC, a California limited
liability company and as seller and servicer (the "Seller" and the "Servicer"),
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, as depositor (the
"Depositor") and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Indenture
Trustee and Backup Servicer, the Servicer is required to prepare certain
information each month regarding current distributions to Certificateholders and
the performance of the Trust during the previous month. The information that is
required to be prepared with respect to the Payment Date and Collection Period
listed above is set forth below. Certain of the information is presented on the
basis of an original principal amount of $1,000 per Certificate, and certain
other information is presented based upon the aggregate amounts for the Trust as
a whole.

     A.   Information Regarding the Current Monthly Distribution.

          1.   Certificates.
               ------------

               (a)  The aggregate amount of the distribution to the
                    Certificateholders...............................$________

               (b)  The amount of the distribution set forth in paragraph
                    A.1.(a) above in respect of interest on the
                    Certificates.....................................$________

               (c)  The amount of the distribution set forth in paragraph
                    A.1.(a) above in respect of principal of the
                    Certificates.....................................$________

               (d)  The amount of the distribution set forth in paragraph
                    A.1.(a) above per $1,000 interest in the
                    Certificates.....................................$________

               (e)  The amount of the distribution set forth in paragraph
                    A.1.(b) above per $1,000 interest in the
                    Certificates.....................................$________

               (f)  The amount of the distribution set forth in paragraph
                    A.1.(c) above per $1,000 interest in the
                    Certificates.....................................$________

               (g)  The amount of the distribution set forth in paragraph
                    A.1.(d) above per $1,000 interest in the
                    Certificates.....................................$________

                                      B-1
<PAGE>

     B.   Information Regarding the Performance of the Trust.

          1.   Pool Balance and Certificate Principal Balance.
               ----------------------------------------------

               (a)  The Pool Balance at the close of business on the last day of
                    the Collection
                    Period...........................................$________

               (b)  The Certificate Principal Balance after giving effect to
                    payments allocated to principal as set forth in Paragraph
                    A.1(c)...........................................$________

               (c)  The Certificate Pool Factor after giving affect to the
                    payments set forth in paragraph A.1(c)...........$________

               (d)  The amount of aggregate Realized Losses for the second
                    preceding Collection
                    Period...........................................$________

               (e)  The aggregate Purchase Amount for all Receivables that were
                    repurchased in the Collection
                    Period...........................................$________

          2.   Servicing Fee.
               -------------

               (a)  The aggregate amount of the Servicing Fee paid to the
                    Servicer with respect to the preceding Collection
                    Period...........................................$________

          3.   (a)  The aggregate amount of collections by the Servicer during
                    the preceding Collection
                    Period...........................................$________

               (b)  The aggregate amount which was received by the Trust from
                    the Servicer.....................................$________

               (c)  The aggregate amount of reimbursements to the Security
                    Insurer..........................................$________

               (d)  The number of Receivables that are delinquent for over:
                    30 days..........................................$________
                    60 days..........................................$________
                    90 days..........................................$________

                                      B-2
<PAGE>

                                                                       EXHIBIT C

                     FORM OF MONTHLY NOTEHOLDER STATEMENT

                      PEOPLEFIRST.COM VEHICLE RECEIVABLES
                              OWNER TRUST 2000-1

                      Class A-1 6.713% Asset Backed Notes
                      Class A-2 7.275% Asset Backed Notes
                      Class A-3 7.365% Asset Backed Notes
                      Class A-4 7.405% Asset Backed Notes

Payment Date:

Collection Period:

          Under the Sale and Servicing Agreement dated as of June 1, 2000 among
PEOPLEFIRST.COM VEHICLE RECEIVABLES OWNER TRUST 2000-1, a Delaware business
trust (the "Issuer"), PF FUNDING II, LLC, a Delaware limited liability company,
as transferor (the "Transferor") PEOPLEFIRST FINANCE, LLC, a California limited
liability company and as seller and servicer (the "Seller" and the "Servicer"),
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, as depositor (the
"Depositor") and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Indenture
Trustee and Backup Servicer, the Servicer is required to prepare certain
information each month regarding current distributions to Noteholders and the
performance of the Trust during the previous month. The information that is
required to be prepared with respect to the Payment Date and Collection Period
listed above is set forth below. Certain of the information is presented on the
basis of an original principal amount of $1,000 per Note, and certain other
information is presented based upon the aggregate amounts for the Trust as a
whole.

     A.   Information Regarding the Current Monthly Distribution.

          1.   Notes.
               -----

               (a)  The aggregate amount of the distribution with respect to:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

               (b)  The amount of the distribution set forth in paragraph
                    A.1.(a) above in respect of interest on:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

                                      C-1
<PAGE>

               (c)  The amount of the distribution set forth in paragraph
                    A.1.(a) above in respect of principal of:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

               (d)  The amount of the distribution in A.1.(a) payable pursuant
                    to a claim on the Policy with respect to:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

               (e)  The remaining outstanding balance available to be drawn
                    under the Policy.................................$________

               (f)  The amount of the distribution set forth in paragraph
                    A.1.(a) above per $1,000 interest in:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

               (g)  The amount of the distribution set forth in paragraph
                    A.1.(b) above per $1,000 interest in:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

               (h)  The amount of the distribution set forth in paragraph
                    A.1.(c) above per $1,000 interest in:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

               (i)  The amount of the distribution set forth in paragraph
                    A.1.(d) above per $1,000 interest in:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

                                      C-2
<PAGE>

     B.   Information Regarding the Performance of the Trust.

          1.   Pool Balance and Note Principal Balance.
               ---------------------------------------

               (a)  The Pool Balance at the close of business on the last day of
                    the Collection
                    Period...........................................$________

               (b)  The aggregate outstanding principal amount of each Class of
                    Notes after giving effect to payments allocated to principal
                    as set forth in Paragraph A.1(c) above with respect to:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

               (c)  The Note Pool Factor for each Class of Notes after giving
                    affect to the payments set forth in paragraph A.1(c) with
                    respect to:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

               (d)  The amount of aggregate Realized Losses for the second
                    preceding Collection
                    Period...........................................$________

               (e)  The aggregate Purchase Amount for all Receivables that were
                    repurchased in the Collection
                    Period.......................................... $________

          2.   Servicing Fee.
               -------------

               The aggregate amount of the Servicing Fee paid to the Servicer
               with respect to the preceding Collection
               Period............................................... $________

          3.   Payment Shortfalls.
               ------------------

               (a)  The amount of the Noteholders' Interest Carryover Shortfall
                    after giving effect to the payments set forth in paragraph
                    A.1(b) above with respect to:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

                                      C-3
<PAGE>

               (b)  The amount of the Noteholders' Interest Carryover Shortfall
                    set forth in paragraph B.3.(a) above per $1,000 interest
                    with respect to:
                    the Class A-1 Notes..............................$________
                    the Class A-2 Notes..............................$________
                    the Class A-3 Notes..............................$________
                    the Class A-4 Notes..............................$________

          4.        The aggregate amount of collections by the Servicer during
                    preceding Collection
                    Period...........................................$________

               (a)  The aggregate amount which was received by the Trust from
                    the Servicer.....................................$________

               (b)  The aggregate amount of reimbursements to the
                    insurer..........................................$________

               (c)  The number of Receivables that are delinquent for over:
                    30 days..........................................$________
                    60 days..........................................$________
                    90 days..........................................$________

                                      C-4
<PAGE>

                                                                       EXHIBIT D

                        Form of Servicer's Certificate

                                   [Omitted]

                                      D-1
<PAGE>

                                                                       EXHIBIT E

                                Form of Policy

                                      E-1
<PAGE>

                                                                       EXHIBIT F

                                 Form of Stamp

               THIS CONTRACT/NOTE IS SUBJECT TO A SECURITY INTEREST GRANTED TO
               NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, AS TRUSTEE, FOR
               WHICH UCC-1 FINANCING STATEMENTS HAVE BEEN FILED WITH THE
               SECRETARY OF STATE OF DELAWARE. AS THE LIEN WILL BE RELEASED ONLY
               BY FILINGS IN SUCH OFFICES, PURCHASE DOCUMENTS MUST REFER TO SUCH
               FILINGS TO DETERMINE WHETHER THE LIEN HAS BEEN RELEASED.

                      PEOPLEFIRST.COM VEHICLE RECEIVABLES

                               OWNER TRUST 2000-1

                      CLASS A-1 6.713% Asset Backed Notes
                      CLASS A-2 7.275% Asset Backed Notes
                      CLASS A-3 7.365% Asset Backed Notes
                      CLASS A-4 7.405% Asset Backed Notes

                       ________________________________

                                   INDENTURE

                           Dated as of June 1, 2000

                        ______________________________

                 NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
                    Trustee, and Indenture Collateral Agent

                                      F-1
<PAGE>

                                  SCHEDULE A
                            Schedule of Receivables

                                      A-1
<PAGE>

                                  SCHEDULE B

                            Location of Receivables

The Bank of New York
700 South Flower Street
Second Floor
Los Angeles, California 90017

                                      B-1

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